The Launch of Brazilian “REACH”

Brazilian Federal Law No. 15.022/2024 was enacted in November 2024, . The law is also known as the "Chemical Substances Registration Act" or as the "Brazilian REACH". The law establishes rules for creating a National Inventory of Chemical Substances, aiming at providing the government with the tools and information to assess and control risks of chemical substances used, produced or imported in Brazil, minimizing adverse impacts on human health and the environment.

Chemical substances are already subject to comprehensive legislation in several jurisdictions, especially in Europe, where the Regulation on Registration, Evaluation, Authorization and Restriction of Chemicals (or "REACH") legislation has been developed over the last two decades. In Asia, South Korea and China also have substance control rules in force, and other countries in South America, such as Colombia and Chile, are currently developing mechanisms similar to those provided by the Chemical Substances Registration Act.

Although the Brazilian REACH was enacted at the end of 2024, the general terms of its applicability are still under development. A working group comprising various sectors of the government and civil society is discussing the terms of the decree that will regulate various issues related to the referred law. In the coming months, it is expected that the draft of the decree may be subject to a public consultation and, after that, it will be enacted. By the end of the year, new ordinances and general guidance rules tend to be presented by the federal government.

Companies that manufacture or import chemical substances in Brazil will have to register the substances when they reach a quantity equal to or greater than one (1) ton of production or importation per year, considering the average of the last three (3) years. The Law also impacts other industries that use these chemical substances and are importers of them.

The primary objective of the Law is to enable the inclusion of as much information as possible in the upcoming registry. Companies will have three (3) years, from the date the system is made available, to register chemical substances. Unlike in other jurisdictions, at this initial stage, companies are not required to provide detailed data from studies related to the substances but only general information involving identification of the producer or importer, quantity, identification of the substance, classification and recommended uses.

Public authorities may select and prioritize certain substances, based on the information from the National Inventory of Chemical Substances and consider certain pre-established criteria regarding the hazardousness of the substances. The hazardousness criteria includes, for example: (i) persistence and toxicity to the environment; (ii) carcinogenicity, mutagenicity or toxicity to reproduction; and (iii) relevant potential for human or environmental exposure.

In spite of that, no studies will be required during the initial period in which the Inventory is being formed.It is likely that more data and information will be required after a particular substance is prioritized by the government, or in specific cases in which new substances need to be registered.

Considering that the Chemical Substances Registration Act requires companies to control the volume of substances marketed in the country, the new government registration system will need to be integrated with the ERP systems used by companies and will need to be compatible with data included in other systems required by Brazilian Law, such as the system related to importation, also known as Siscomex.

Companies will therefore need to coordinate internally across business functions such as: (i) the regulatory team identifying the applicable substances and registration requirements; (ii) the legal team interpreting legal obligations; (iii) the commercial team providing volume information; and (iv) the information technology team ensuring that all information made available to governmental agencies to be uniform.

The decree (which terms are under discussion) also creates the possibility of registering substances even if they do not reach a quantity equal to or greater than one (1) ton of production or importation per year provided for in the Chemical Substances Registration Act. This might be interesting to certain companies since there are specific requirements to substances which are not registered during the first 3-year period. Although the information to be provided in the registration of new substances will likely be the same as that initially requested during the aforementioned three (3) years, if the new chemical substance has certain toxicity characteristics (including carcinogenicity), manufacturers and importers may be required to provide additional information, varying in complexity, depending on the expected quantity produced or imported per year.

The Law provides for some exemptions. In general, such exclusions aim to determine that substances which are already regulated and controlled by governmental authorities through other regulations would not be subject to registration. Good examples of these exceptions are substances that constitute waste and pesticides, since there are specific regulations applicable to them.

Specific exceptions were also established for a number of other substances, such as those used exclusively as ingredients for tobacco and its derivative products, explosives and accessories, and metal alloys, among others. There are also exceptions for chemical substances that are intended exclusively for research or that are under customs supervision, that is, in temporary transit in the national territory without being subject to any type of treatment or transformation.

Considering that the Chemical Substances Registration Act allows for cooperation between Brazilian and international governmental authorities, coordination will be needed on the information provided regarding substances in Brazil and in other countries, in order to avoid non-uniform information that could lead to incorrect risk assessments.

To enable the implementation of the system and the maintenance of technical and deliberative bodies that will play a fundamental role in the evaluation and prioritization of chemical substances, it was established that companies subject to the registration, evaluation, and inspection of chemical substances will pay a fee. The terms and conditions for the payment of this fee will still be defined in the decree currently under discussion, but it is already known that their values will vary according to the volume of registered chemical substances and the size of the companies.

Failure to register chemical substances in the National Inventory of Chemical Substances may result in the imposition of administrative sanctions. The penalties provided for by law range from a warning and a simple fine to destruction of the chemical substance, suspension of the sale and manufacturing of the substance, and prohibition of the company’s activities. The maximum fine may amount to approximately 10 million dollars.

There are several sensitive issues for the industry that are still under discussion and may be addressed in the draft decree under discussion, including, for example, a detailed list of substances that could be excluded from registration in the National Inventory of Chemical Substances and the methodology for registering polymers.