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Editorial

[SOUTH KOREA] Potential Regulatory Compliance Systems to Enhance the Safe Control of Chemical ...

February 2018 - Corporate & Commercial. Legal Developments by Kim & Chang .

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Potential Regulatory Compliance Systems to Enhance the Safe Control of Chemical Substances

Continuing its policy to enhance the safe control of chemical substances, the Ministry of Environment (“MOE”) has been making legislative efforts to further heighten regulations of chemical substances. 

MOE’s Regulatory Enhancement Efforts & What Companies Would Need to Do:  

On August 16, 2017, the MOE finalized an amendment to the Act on the Registration and Evaluation, Etc. of Chemical Substances (“K-REACH”), and a new Act on the Safe Control of Common Household Chemical Products & Biocides (“K-BPR”), and submitted them to the National Assembly for its approval. If passed, the K-BPR is expected to become effective on January 1, 2019.

Few days later, on August 22, the MOE also published a Notice of an Amendment to the Designated Potentially Risky Products & Safety/Labeling Standards (“Potentially Risky Products Notice”).  

1. Changes to the registration of chemical substances  

If the amendment to the K-REACH becomes law, the current 510 “phase-in substances subject to registration” would not need to be registered. Rather, all phase-in substances manufactured/imported one ton or more per year would need to be registered (expected to be approximately 7,000 chemical substances).  

Also, the grace period may vary depending on the amount of chemical substances manufactured/imported. Thus, it is necessary to prepare a long-term plan to register chemical substances given the anticipated usage amount per substance. 

Under the proposed amendment, companies would need to file a declaration (not a registration) if non-phase-in substances are manufactured/imported less than 100 kg per year.  

In addition to criminal sanctions, the proposed amendment will allow the MOE to impose an administrative fine of up to 5% of the relevant revenue for failure to register or update registration. Therefore, particular attention should be paid to ensure that the registration of chemical substances is properly done.  

2. Heightened regulations on household chemical products & introduction of regulations on biocides  

The K-BPR, which is currently under the National Assembly’s review, mainly consists of two parts: (i) regulations on the household chemical products and (ii) regulations on biocides (i.e., active substances, biocidal products, and related articles).  

Household Chemical Products – the current category of “Potentially Risky Products” under the K-REACH will be replaced with “Household Chemical Product Subject to Conformity Confirmation” under the K-BPR, to which new safety/labeling requirements will be applied.  

Biocides – the proposed legislation mainly includes the approval system for active substances and biocidal products, and labeling requirements for biocidal products and treated articles.  

Since the proposed K-BPR is expected to become effective on January 1, 2019, it would be prudent for companies to: (i) confirm whether they have any chemical substances subject to the proposed K-BPR; (ii) prepare compliance with the proposed K-BRP; and (iii) incorporate such efforts into their business plans.  

3. Five newly designated Potentially Risk Products & enhanced safety/labeling standards  

On August 22, 2017, the MOE published the Potentially Risky Products Notice to add antifreeze, washer fluid, desiccant, and candle (all of which were regulated under the Electrical Appliances and Consumer Products Safety Control Act), and sealant as new “Potentially Risky Products.”  

If any of these products is newly released after August 22, 2017, those products must comply with the applicable safety/labeling requirements without any grace period. However, if those products were already released on or before August 22, 2017, then the new products to be released after February 23, 2018 (as for the safety requirement) and June 30, 2018 (as for the labeling requirement) must comply with the safety and labelling requirements, respectively.  

Significance:

As one of the major policies of this administration, we expect that the regulations on the safe control of chemical substances will continue to be enhanced.  

Past experience has shown that when there is a heightened regulatory scrutiny, in addition to chemical companies, companies that are not traditionally considered to be subject to chemical regulations (e.g., auto, distribution, fashion), often also become subject to chemical regulations. Hence, it is important to pay close attention to ensure compliance through close monitoring of new and revised regulations and the enforcement practice of relevant government authorities. 

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