Welcome

Compliance Trends 2019January 2019

Webinar Outline

Regulatory Overview of 2018:

Recap of the regulatory highlights of 2018 and their impact on manufacturers,

particularly those in the electronics sector, retailers & supply chain partners.

What Lies Ahead:

A global look what to expect in the year ahead

Agenda

● Brexit

● Internet of Things

● Circular Economy

● Plastics Strategy

● Ecodesign, Energy Efficiency & Energy Labelling

● Batteries

Agenda

● RoHS

● Chemicals

● Low Voltage

● Prop 65

● Climate Change

● Modern Slavery

Brexit

Brexit

● June 2018 : "Great Repeal" Bill passed into law in the UK - known as European Union

(Withdrawal) Act 2018

● Ends primacy of EU law in the UK on Brexit Day & incorporates all EU legislation into UK law in

one lump. The government will then decide over a period of time which parts to keep, change or

remove

● Following months of negotiation, the UK and EU agreed a Brexit deal. It came in two parts:

Brexit● Withdrawal Agreement:

585-page legally-binding text that sets the terms of the UK's divorce from the EU. It covers how much

money the UK owes the EU - an estimated £39bn - and what happens to UK citizens living elsewhere in the

EU and EU citizens living in the UK. It also proposes a method of avoiding the return of a physical Northern

Ireland border. Implementation period until December 2020.

● Political Declaration:

Setting out the framework for the future relationship between the European Union and the United

Kingdom. This is not legally-binding and sketches out the kind of long-term relationship the UK and EU

want to have in a range of areas, including trade, defence and security.

Brexit - What next ?Per Withdrawal Agreement UK due to leave on 29 March 2019 at 11pm.

But the Withdrawal Agreement was resoundingly rejected by House of Commons on 15th

January.

Options:

● Referendum - May ruled out this possibility as it would create concerning precedent.

● Revoke or Extend Article 50 - May ruled out as it would go against Referendum

● Resign - May ruled out quitting before Brexit

Brexit - What next ?● Plan B: consult with MPs about possible changes & return to Brussels.

● Number of proposed amendments to the Agreement submitted including that of Conservative

Legislator Graham Brady on (‘alternative arrangements’ to the backstop) and Cooper-Boles

(extend Article 50, thereby taking no deal off the table)

● Today the amendments to be voted on will be selected by the Speaker of the House & the vote

will take place this evening.

Hard Brexit

● No transition period and UK will crash out of EU

● EU rules and regulations will cease to apply to UK

● Additionally, agreements between EU & UK on how manage trade, customs and citizens rights

will cease to exist

● Without bilateral agreement with EU, UK will become a ‘third country’ and be subject to the

World Trade Organisation (WTO) rules & UK exports will be subject to same customs checks

and tariffs as countries outside EU

BrexitDraft Regulations:

UK: Product Safety and Metrology etc. (Amendment etc.) (EU Exit), Draft Regulation, January

2019

UK: REACH etc. (Amendment etc.) (EU Exit) Draft Regulation, January 2019

UK: Ecodesign for Energy-Related Products and Energy Information (Amendment) (EU Exit)

Regulations, Draft Regulation, December 2018

Guidance:

UK: Trading Goods Regulated under the 'New Approach' if there is No Brexit Deal, Guidance

Document, September 2018

UK: REACH Additional Guidance if There is No Brexit Deal, Guidance Document, December 2018

UK: Data Protection If There Is No Brexit Deal, Guidance Document, September 2018

Internet of Things

Internet of ThingsWith smart or connected products come sophisticated interdependencies

between hardware, software, network & the data.

Liability becomes more complicated, making it more difficult to determine who is

responsible when something goes wrong. Is it the :

Manufacturer

Individual in their use of the product

Software designer

App provider

Network provider

3rd party cyber attacker ?

Internet of Things

Given developments in the internet of things, digitalisation, artificial intelligence,

robotics and concerns around cybersecurity, it has prompted the EU to consider :

Whether the EU Product Liability Directive 85/374/EEC was fit for purpose?

Internet of Things

● 2017 Public consultation launched

● 2018 Conclusion of consultation was that the Product Liability Directive was still broadly fit for

purpose and conducive to innovation.

● But certain issues were causing problems. Traditional concepts of “producer”, “product”,

“defect” and “damage” were being challenged by the emergence of new technologies and

increasingly complex products.

Internet of Things

Consequently, Commission has set up an expert group on liability and new technologies. The

group has 2 formations:

● The 'product liability formation' will assist the Commission in drawing up guidance on the

Directive.

● The 'new technologies formation' will assess the implications of emerging digital technologies

for the wider liability frameworks at EU and national level.

Internet of Things

Commission is expected to issue guidance on the Product Liability Directive in

mid 2019 and a report on the broader implications for the liability and safety

frameworks for artificial intelligence, the Internet of Things and robotics.

Circular Economy

Circular Economy - Closing the Loop

Circular EconomyDominating EU agenda in 2018: Interface Between Chemical, Product & Waste Legislation

❖ Jan 2018 EU Commission Communication

❖ Aug 2018 European Economic Social Committee (EESC) Opinion

❖ Sep 2018: EU Parliament Resolution

Aims include :

● preventing hazardous chemicals from entering the material cycle;

● promoting the substitution of substances of very high concern and to restrict substances that pose

unacceptable risks to human health in the context of REACH;

● Improved tracking of substances of concern & the making available of information relating to these

substances to all those involved in the supply chain, to recyclers and to the public.

Circular Economy

● European Commission by end of 2019 ECHA is to establish a new database on the presence of

hazardous substances in articles, comprising of information submitted by companies

producing, importing or selling articles containing Candidate List substances.

● Information will be available to to waste treatment operators and consumers & aims to help

waste operators in treating waste & recycling materials.

● Aims to improve risk management of chemicals during waste recovery, promote non-toxic

material cycles, help consumers make informed choices about safer products & increase

pressure to substitute substances of concern

● Deadline for submission of information will be 5 January 2021

Circular Economy - upcoming initiatives

● European Commission has indicated that the initiative “Towards an EU Product Policy

Framework Contributing to the Circular Economy” will be published in the first quarter of 2019.

It will examine the potential for the circular economy in certain product groups and to what

extent the potential is currently being addressed by EU policy tools.

● EU Commission is also expected to report on its contribution to the circular transition through a

Circular Economy Action Plan Implementation Report due for publication by February 2019.

Strategy for Plastics

First-ever European Strategy for Plastics - January 2018 :

● transform the way plastic products are designed, used, produced and recycled in the EU,

● Better design of plastic products,

● higher plastic waste recycling rates,

● more and better quality recyclates will help boosting the market for recycled plastics.

Strategy for Plastics

16 January 2019 Alliance to End Plastic Waste was launched.

An alliance of global companies from the plastics and consumer goods value chain with the aim

of advancing solutions to eliminate plastic waste in the environment, especially in the ocean.

Laws tackling plastics are trending beyond the EU

Costa Rica: Solving the Problem of Pollution from Plastic Waste, Draft Law No. 21159, December

2018

Chile: Prohibition on Plastic Packaging, Draft Law No. 12275-12, November 2018

Peru: Single Use Plastics, Law No. 30884, 2018

Ecodesign, Energy Efficiency & Energy Labelling

Ecodesign & Energy EfficiencyIn the European Commission’s Action Plan for a Circular Economy it indicated that it would

promote:

repairability, upgradability, durability & recyclability of products by extending the scope of

ecodesign requirements beyond energy efficiency

This has resulted in a number of draft regulations being proposed which include ecodesign

requirements which go beyond energy efficiency & also a growth in the movement of the ‘right to

repairability’

Ecodesign & Energy Efficiency

EU: Ecodesign Requirements for Electronic Displays, Draft Regulation, December 2014 2018

EU: Ecodesign of Household Clothes Washing Machines and Washer-Dryers, Draft Regulation,

January 2018

EU: Ecodesign Requirements for Household Dishwashers, Draft Regulation, January 2018

EU: Ecodesign Requirements for Lighting Products, Draft Regulation, 2018

EU: Ecodesign Requirements for Refrigerating Appliances, Draft Regulation, November 2017

EU: Ecodesign Requirements for External Power Supplies (EPS), Draft Regulation, 2018

EU: Ecodesign Requirements for Servers and Data Storage Products, Draft Regulation, July 2018

Ecodesign & Energy Efficiency

These draft measures include provisions on material efficiency & oblige manufacturers to design

products with repairability & longer product lifetimes in mind and to allow repairs to be carried out

by third parties, other than OEMs

In the US legislative session 2017-2018 18 Fair Repair Bills were introduced - none of which were

enacted prior to the end of the session.

Already 4 States have introduced Bills on this in 2019 : Minnesota, South Dakota, New York & New

Hampshire - provisions, inter alia, require OEMs to make documents, parts & tools available to

independent repair providers so that they may be able to carry out maintenance and repair.

Energy Labelling

The EU Product Database for Energy Labelling (EPREL) :

Since 1 January 2019 suppliers i.e., manufacturers and importers, are required to register their

appliances which require an energy label in the EPREL before the products are placed on the EU

market.

Information to be entered relates to the energy label, technical documentation & compliance

programme.

Information in the database will be made public in April 2019.

Energy Labelling1 Jan 2019: All new products subject to energy labelling placed on the EU market after 1 January 2019 must first be registered in the database.

1 Apr 2019: Information in the database becomes visible to market surveillance authorities and the public.

30 Jun 2019: All products placed on the market between 1 August 2017 and 31 December 2019 must be registered in the database prior to this date.

1 Aug 2017: Products placed on the market before 1 August 2017 may be registered in the database as of 1 January 2019 on a voluntary basis.

Batteries

Batteries ● 09 January 2019 - EU Consultation opened on a Commission initiative to comprehensively

explore options to improve the sustainability, energy and environmental performance of

batteries placed on the EU’s internal market.

● Consultation runs until 6 February 2019.

● A meeting of the Ecodesign Consultation Forum will take place in Q2 or Q3 2019.

● Commission has noted that a range of voluntary and legal instruments is available to address

the objectives above:

Batteries Legal instruments include an ecodesign implementing regulation, energy labelling delegated

act, or provision in the forthcoming revision of the Batteries Directive.

The Commission has intimated that the outcome of the initiative is likely to be an ecodesign

and/or an energy labelling regulation, directly applicable in all Member States

Batteries ● The Saudi Arabian Standards, Metrology & Quality Organisation (SASO) approved, in December

2018, a Technical Regulation on Electric Batteries - sets out requirements on safety, chemicals,

labelling & instructions on recycling and waste treatment. Full text yet to be published.

● Brazil opened a public consultation in 2018 on a proposed sectoral agreement for

implementation of reverse logistics system for lead acid batteries.

● Mexico published a standard on maximum values for mercury & cadmium in primary lithium

batteries and accumulators & specifications for testing and labelling, effective Sep 2019. Also

there was a draft decree on take-back & recycling of batteries .

Waste Electrical & Electronic Equipment

● Kenya proposes draft strategy on national e-waste in January 2019. Aim is to analyse current

situation & help government and stakeholders to understand the need to come up with

regulations on e-waste management through a collaborative process.

● India enacted amendment to its E-waste management rules resulting in changes to its

collection targets

Waste Electrical & Electronic Equipment

Thailand saw its draft Act on WEEE, originally proposed in 2014, revised in 2018. Products

covered are:

Air conditioning equipment

Television receivers

Refrigerators

Computers

Mobile phones

Any other widely used EEE to be designated by Ministerial Regulations in the future

●

Waste Electrical & Electronic Equipment

RoHS

RoHS - Brazil ● Draft CONAMA RoHS Resolution proposed in September 2018

● Modelled on EU Directive reflects restrictions and product exclusions set out in EU legislation

● Batteries specifically excluded

● 10 substances restricted - on a phased basis - last substances 7 years after publication of

resolution

● The draft is still under examination of the Working Group as a number of industry associations

requested more time to review the text prior to CONAMA’s approval.

RoHS - GCC Countries

● Draft Regulation on the Restriction on the Use of Hazardous Substances in Electrical and

Electronic Equipment proposed in 2018

● Aligned with EU in respect of products, exclusions & substances

● Entry into force is 180 days from publication in Official Gazette

RoHS - China March 2019 - Substance restrictions for selected EEPs applies :

First Batch includes following 12 products :■ refrigerators ■ air conditioners■ washing machines■ electric water heaters■ printers■ copiers■ fax machines■ televisions■ monitors■ microcomputers■ mobile communication devices■ telephones

RoHS - China ● “Conformity Assessment System” to be defined by the government under Article 18 of China

RoHS has yet to be formalised.

● 26 December, Deputy Director of Chinese Consumer Product Certification Department provided

an update on RoHS to the Chinese Electrical & Electronic Industry Green Development Annual

Conference. First draft of implementation rules were circulated for comment 2 months

previously & are expected to be finalised and issued by March 2019. Likely to be along the lines

of EU ROHS conformity requirements., i.e. self declaration (IEC 63000:2016)

● Labelling and information disclosure still applies for all other EEPs

RoHS - EU: 2019 ● All Electrical & Electronic Equipment will be in scope - in July 2019;

● Transition period ends in July 2019 DEHP, BBP, DBP and DIBP all capped at 0.1% added by

Directive 2015/863 to Annex II;

● General review of Directive to be carried out by 22 July 2021 & report to presented to European

Parliament & Council accompanied, if appropriate, by a legislative proposal Tentative dates: 12

week public consultation commencing Spring 2019 Stakeholder conference Q4 2019;

● Consultations on Pack 15 substances in Apr & Oct - Commission to review and decide on likely

restrictions in 2019;

● Imminent publication of 9 Directives in Official Journal adopted by EC in November on

cadmium and lead exemptions.

Chemicals

Chemicals 15 Jan 2019: ECHA announced addition of 6 substances to the REACH Candidate List of SVHC

● Benzo[k]fluoranthrene (BkFA)

● Fluoranthene,

● Phenanthrene,

● Pyrene,

● 2,2-bis(4'-hydroxyphenyl)-4-methylpentane,

● 3-Benzylidenecamphor, (3-BC).

ECHA also submitted proposals to restrict microplastics, formaldehyde and formaldehyde

releases and 3 siloxanes

Chemicals 8 Jan 2019: Chinese Ministry of Ecology & Environment published a draft regulation on Chemical

Environmental Risk Assessment & Control.

Opened to public comment until 20 February 2019.

Scope expands beyond new chemicals to include all chemical substances, both existing and new.

Risk assessment & control is managed under lists based on priority and risk.

11 Jan 2019: South Korea opened public consultation on updating existing chemical substances

inventory. End result would mean inventory would contain 44,480 substances. Also amendment

proposed to amend POPs decree to align with substances newly added to POPs Convention

(BDE-209 & SCCPs). Deadline for comments is 25 Feb 2019.

Chemicals - Flame Retardants Bills

In US a number of bills have been proposed in 2019 proposing to regulate flame retardants:

Alaska HB 27 Bill would prohibit flame retardants (organohalogen, organophosphorus,

organonitrogen, nanomaterial-based and antimony) in children's products, and would require

labeling of child-related products as to their content of flame retardant chemicals.

Virginia HB 2934 proposes to prohibit flame retardants in children’s products & upholstery.

Indiana HB 1134 proposes to prohibit flame retardants in upholstery.

New York SB 1367 on flame retardants and flammability standards for upholstered furniture,

Prop 65

Prop 65

30 August 2018:

Californian Office of Environmental Health Hazard Assessment (OEHHA) revisions to its

Proposition 65 (Prop 65) Article 6 “clear and reasonable warnings” regulations came into effect.

The most notable change is that related to the required warning language.

And adding a new warning symbol, consisting of a black exclamation point in a yellow equilateral

triangle with a bold black outline:

Prop 65

● Penalties for violating Prop 65 warning requirements may be assessed in the amount of $2,500

per day, per violation

● Enforcement of these new regulations through California’s AG Office, or more likely private

plaintiffs (i.e., bounty hunters), is expected to be immediate and potentially widespread.

Low Voltage

Low Voltage Directive - EU 10 January 2019 EU Commission launched the second phase of its evaluation LVD 2014/35/EU

● Aim is to assess if the Directive is “fit for purpose” in terms of effectiveness, efficiency,

relevance, coherence and EU added value.

● Consultation will run until 4 April 2019

● Hoped that the public consultation will help identify difficulties in the implementation that may

require regulatory or/and non-regulatory corrective measures.

● Commission adoption of corrective measures deemed necessary is planned for the second

quarter of 2019.

Climate Change

Climate Change1 January 2019 Kigali Agreement to Montreal Protocol entered into force

● Aims to reduce the global production & consumption of Hydrofluorocarbons (HFCs), harmful

man-made greenhouse gases

● Developed countries start on their commitment in 2019 with reduction to 90% of baseline,

decreasing in further steps until 15% level is reached in 2036 from onwards.

● Most developing countries follow in 2024 with a deferred phase-down schedule.

France included a provision on HFC tax in its 2019 Finance Bill, with effect from 2021

California likely to enact legislation this year containing further restrictions on use of HFCs in

ACs.

Modern Slavery

Modern Slavery1 January 2019 Australia’s Modern Slavery Act entered into force.

Requires entities based, or operating, in Australia, with annual consolidated revenue greater than

$100 million, to report annually on the risks of modern slavery in their operations and supply

chains, and actions to address those risks. Other entities based, or operating, in Australia may

report voluntarily.

UK Government published its second review on its Modern Slavery Act. Stakeholders had

reported a lack of clarity over which companies were in scope. Recommendations were made to

resolve this. Additionally, UK Home Office is to publicise names on non-compliant companies

under Modern Slavery Act from 31 March 2019.

Thank You