Environmental Alert: Korea Proposes "REACH-SMART"

Date: Jan 31, 2011

The Korean Ministry of the Environment ("MOE") has released a draft of the "Act on the Registration and Evaluation of Chemicals" ("Draft Act"), a Korean version of REACH. The Draft Act currently is under inter-ministerial review and will soon be released for public consultation. The Draft Act is expected to enter into force two years after publication in the Official Journal.

The Draft Act would wholly amend the current Korean Toxic Chemicals Control Act ("TCCA"). Specifically, it would introduce many of the same legal concepts as REACH into Korean law, (i.e. pre-registration, registration, evaluation, authorization and restriction). However, in practice, these legal concepts will apply very differently under the Draft Act than as compared to REACH, in particular with respect to the registration of substances.

Most notably, registration will apply to new substances and to priority existing chemical substances selected on the basis of potential risk, the scope of the draft Act excludes cosmetic ingredients that are approved for use and fertilizers as well as some of the other classes of substances exempted under REACH, there are additional exemptions from registration for which the potential registrant must seek confirmation of exempt status, risk assessment information is automatically required as part of the registration dossier at the 100 tonnes level as opposed to the 10 tonnes level under REACH, there is a maximum 8-year transitional period for pre-registered priority existing chemicals, the MOE will prepare a hazard assessment for all registered substances and will prepare risk assessments to identify chemicals for authorization, restriction, or prohibition as appropriate, there is an obligation to submit data jointly to avoid unnecessary animal testing and to provide proof of the right to use the data where appropriate, and there is a provision for an only representative to be appointed by the foreign exporter.

I. Scope

A number of substances are specifically excluded from the scope of the Draft Act (Article 3). These are:

1. Radioactive substances under the Atomic Energy Act;

2. Pharmaceuticals and non-pharmaceutical drugs under the Pharmaceutical Affairs Act;

3. Narcotics under the Act on the Control of Narcotics;

4. Cosmetics under the Cosmetics Act (including raw materials requiring safety review in

accordance with Article 4, Section 3 of the Cosmetics Act and cosmetic ingredients designated and announced by the Korea Food and Drug Administration);

5. Ingredients and agrochemicals under the Agrochemicals Control Act;

6. Fertilizers under the Fertilizer Control Act;

7. Foods and food additives under the Food Sanitation Act;

8. Livestock feeds under the Act on Control of Livestock and Fish Feeds.

II. Registration – Preliminary Requirements to Set Priorities

Notification of the Manufacture or Import of Chemical Substances (Article 9)

A manufacturer or importer of an existing chemical must submit by the end of February of each year certain information, as specified by the MOE, including the quantities produced or imported in the previous year.

Designation of Priority Chemical Substances (Article 10)

After reviewing the above data submitted on existing chemicals as well as hazard data, the MOE will designate certain existing chemicals as "priority chemicals." Priority chemicals are existing chemicals that pose potential risk to human health or the environment and require further risk assessment, and are announced by the MOE.

Identification of chemicals (Article 11) Any person that intends to manufacture or import a chemical substance in Korea will be required to identify to the MOE whether that substance or an "ingredient" falls within any or all of the following categories: "(1) New chemicals; (2) Existing chemicals; (3) Priority chemicals; (4) Chemicals for authorization; (5) Chemicals for restriction or prohibition; (6) Toxic chemicals; (7) Substances requiring emergency response under Article 38 of Toxic Chemicals Control Act" (Article 11 ).

Pre-registration of Priority Chemicals (Articles 12-13) Manufacturers and importers of pre-registered priority existing chemicals are not required to register their substances before manufacture/import during the transitional period (Article 13(2)). In order to benefit from the transitional arrangements, manufacturers or importers of substances classified as ‘priority chemicals' in quantities above 0.5 MT must pre-register the substances within 6 months from the date of announcement that the substance is a ‘priority chemical' (Article 12(2)). First time manufacturers/importers of priority chemicals may pre-register after this period, on the condition that they pre-register (i) within six months of first manufacture/import; and (ii) 12 months before the end of the transitional period (Article 12(3)). The MOE may grant a maximum of eight years as a transitional period for a priority chemical (Article 13(1)). The results of pre-registration applications will be made publicly available (Article 12(5)). For substances notified by the MOE as ‘priority chemicals' before the entry into force of the Draft Act, the pre-registration period is currently set as from 1 June 2014 to 1 December 2014 (Schedule, Article 3).

Preliminary Requirements: Confirmation of registration status (Article 14) If a person intends to manufacture or import any chemical substance that may fall within the following categories, it must request confirmation on the requirement to register these substances from the MOE: "(i) New chemicals; (ii) Among existing chemicals, chemicals announced in trade names; (iii) Priority chemicals which are not pre-registered as stipulated in [Article 12]" (Article 14).

III. Registration Requirements

Registration requirements (Article 15) Manufacturers or importers of "new chemical substance[s]" or "priority chemical substance[s]" are required to register those substances before manufacture/import (Article 15(1)). A manufacture / importer cannot manufacture/import until it receives notice of registration (Article 18). Producers who intend to rely on an exemption to registration (see below) must submit a request for confirmation of exemption to registration to the MOE (Articles 15(2)-(3)) and await confirmation of the exemption to registration (Article 18). "New chemical substances" are anything other than "Existing Chemical Substances" defined as substances which were: (i) distributed for commercial use domestically before 2 February 1991, which were announced by the MOE on 23 December 1996 through the consultation with the Minister of Employment and Labor; and (ii) chemicals which have undergone toxicity evaluation in accordance with the TCCA and were announced by the MOE since 2 February 1991 (Article 2(5)-(6)).

"Priority Chemicals" means "among existing chemicals, chemicals having potential risk to the human health or the environment and requiring further risk assessment, and are announced by the Minister of the Environment" (Article 2(7)).

A number of substances are excluded from the scope of the registration requirement including:
"1. Chemicals contained in machines 2. Chemicals imported together with machines or devices for trial operation 3. Chemicals contained in finished products of a solid form that have specific function, and are not released in their normal use 4. Among chemicals that are exempt from registration as stipulated in a Presidential Decree, those chemicals which are confirmed by the Minister of the Environment (hereinafter, "Registration Exemption Confirmation")" (Article 15).

Data required for registration (Article 16)

The data to be submitted in a registration dossier is dependent on the quantities manufactured / imported. Below 100 tonnes, registrants must submit the following data: "(1) Use of chemicals; (2) Data on physico-chemical property of chemicals; (3) Hazard data on chemicals; (4) Classification and labeling of chemicals; […and…] Other data specified in a Ministry of the Environment Ordinance". In addition to this information, registrants that manufacture/import above 100MT must submit "Risk assessment data of chemicals" (Article 16). There are reduced data requirements for certain polymers.

Other requirements relating to registration

Registrants are required to update their registrations with information on new uses, new data on chemical hazards to humans and the environment, etc (Article 19). Producers are required to submit joint registration dossiers unless specifically permitted to submit an individual dossier (Article 20). Producers are required to submit "Data Use Approval" documentation within registration dossiers where relevant (Article 21). Existing studies involving vertebrate animals must not be repeated by producers (Article 22).

IV. Evaluation

Following submission of a registration dossier, the MOE is required to conduct a hazard evaluation (Article 25 Draft Act). The MOE must communicate the result of the hazard assessment to the registrant within 30 days of submission of the registration dossier (Article 17(1)). Registrants may be required to submit additional data for the hazard assessment (Article 25).

Following the hazard assessment, if the MOE considers that a risk assessment is necessary, it must conduct a risk assessment (Articles 25 and 28). Producers may be required to submit data for the risk assessment (Article 25). The risk assessment will determine, among other things, whether the substance should be designated a priority for authorization, restrictions or prohibition (Article 28).

V. Authorisation

The MOE may designate certain substances as a priority for authorisation after Evaluation (see above) including: (1) CMRs; (2) highly bio-accumulative substances; (3) highly persistent substances; (4) endocrine disruptors; and (5) substances having equivalent or more serious effect (Article 31). Manufacturers, importers and users of substances subject to authorization must obtain permission from the MOE to manufacture/import/use the substance (Article 33(1)). The MOE may determine the permitted conditions of use, etc (Article 33(3)). Suppliers of substances subject to authorisation must provide certain information to recipients (Article 39).

VI. Restriction

The MOE may designate a substance as subject to restriction, if, among other things, the risk assessment of the substance identifies serious risk to human health or the environment or "an international organization identifies serious risk of the chemical substance to public health or the environment" (Article 35). Manufacturers/importers/users and sellers of substances subject to a restriction must identify the content of the substance contained within their mixtures/products (Article 36). If the content of the substance contained within a product exceeds a stipulated threshold level, manufacturers/importers must notify the use of these substances in their products to the MOE (Article 37). Suppliers of substances subject to restriction must provide certain information to recipients (Article 40).

VII. Other requirements

The Draft Act also contains other provisions including provisions on communication in the supply chain (Article 38), update of information supplied (Article 41), record keeping (Article 44), etc. VIII. Penalties

If a manufacturer / importer acts in breach of the requirement to register (Article 15(1)), the maximum penalties may apply: 7 years imprisonment or a fine of up to 200 million won (Article 52). The same penalty may apply if a manufacturer/importer/user acts in breach of the authorization provisions or the restriction provisions (Article 52). Other, lesser penalties apply as regards the other requirements detailed above (Articles 53-57).

This Article is part of a series on REACH-like developments around the world. The Brussels office of Keller and Heckman LLP has been assisting clients on REACH since its entry into force in 2007, and is now expanding its focus to include related developments in other countries such as Korea, Turkey, and Switzerland. For further information, contact Herb Estreicher (Tel: 01-202-434-4334; +32 (0)2 645 50 96; e-mail at estreicher@khlaw.com) or Marcus Navin-Jones (Tel: +32 (0)2 645 50 97); e-mail at navin-jones@khlaw.com)