Six Compliance Topics You Can’t Ignore This Year

Six Compliance Topics You Can’t Ignore This Year

Sometimes, ignorance is bliss — but when it comes to compliance and regulatory changes, this couldn’t be further from the truth.

Throughout 2019, changes in the trade compliance, product compliance, and corporate social responsibility spaces will cause shifts in regulatory programs. It’s important to factor these changes into regulatory efforts this year in order to maintain market access, and avoid penalties, fines or surprise tariff fees. Here are the top six areas of compliance you need to pay attention to throughout 2019.

1. Trade Compliance

As the U.S.-China trade war continues, trade compliance will be a major area of consideration for companies in 2019. Throughout 2018, mentions of tariffs on earnings calls surged; this will be a dominant trend in information requested by investors throughout this year.

Many companies are dependent on suppliers that will need to be evaluated based on tariff changes. A large number of products being traded between the U.S. and China are now subject to tariffs ranging from 10 to 25 percent. Meanwhile, sophisticated customs clearance databases (ACE) are allowing audits and enforcement activity to increase, with a corresponding increase in fines.

When it comes to trade compliance, the ability to collect and produce data required by customs will be a major challenge throughout the year. If companies do not have supplier data, such as Harmonized System (HS) code classifications, country of origin, and Export Control Classification Numbers (ECCN), they will need to acquire it from the supply chain in order to make appropriate judgments and maintain market access. Moreover, even if they have this data, they still need to be sure their information matches supplier data, which will inevitably end up on customs clearance paperwork.

Download our guide, Managing Data for Trade Compliance, to learn more about handling requirements in 2019.

2. EU REACH Adjustments Based on the Waste Framework Directive

The scope of the European Union (EU) Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) Regulation is expanding. With the new European centralized database, companies will be required to aggregate, roll up and submit data on the presence of Substances of Very High Concern (SVHCs) for every product entering the EU. This is expected to lead to full chemical transparency and disclosure.

The database will serve as a central repository for article declarations once complete, and will be established, piloted and tested by January 5, 2020. It will serve as a catalyst for the standardization and streamlining of declarations, but it will also facilitate simpler REACH enforcement for authorities.

3. EU Medical Device Regulation

With the EU Medical Device Regulation deadline coming in May 2020, companies need to begin and complete the data collection process this year in order for products to be certified in time. Every medical device company will have to complete multiple major projects — including gap assessments, data collection and product registration — to gain certification.

Companies that manufacture medical devices, or supply to companies that are in scope, need to look at the declarable substances list (DSL) for the MDR and prepare to declare against it, defending the use of any restricted substance that may appear. Companies will need to begin in early 2019 — now, essentially — to collect this data.

View the Evolving Regulatory Landscape: Top 10 Trends for 2019 webinar to learn about these trends, and more.

4. New EU & China RoHS changes

Changes are coming for both the EU and China Restriction of Hazardous Substances (RoHS) regulations.

The deadline for the four new EU RoHS phthalates is July, 22, 2019. This has been more significant than expected for some companies, as many resins, plasticizers and coatings have come into scope of RoHS. This has required some manufacturers to find substitutes for these substances to ensure their products are compliant.

As of March 12, 2019, there will be new requirements under China RoHS that impose concentration limits of 1,000 mg/kg for lead, mercury, hexavalent chromium (6+), polybrominated biphenyls (PBBs) and polybrominated diphenyl ethers (PBDEs), and 100 mg/kg for cadmium.

5. Proposition 65 Substantiation

Last year, many companies had to put a major focus on the Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65) due to changes including new labeling requirements.

The requirements introduced a long-form label, and a new short-form label intended for small packages that do not have sufficient space for the long-form label. However, without strict guidelines surrounding the use of the short-form label, some companies are still electing to use the short-form label ubiquitously on products. The Office of Environmental Health Hazard Assessment (OEHHA) may choose to amend short-form labeling guidelines in 2019, or pursue action against companies with unsubstantiated use of the short-form warning.

6. U.S. Conflict Minerals & Sanctions

Companies will need to remain vigilant in conducting due diligence for conflict minerals throughout the supply chain. For the first time, the U.S. Department of State has appointed a conflict minerals lead, and indications show there will be a focus on the Office of Foreign Assets Control (OFAC).

This means companies should pay closer attention to sanctions. They will need to support compliance programs with consistent due diligence, aligned with international standards, and ensure smelters and refiners under U.S. sanctions are removed from the supply chain.

Regulations and requirements are always changing. Assent’s regulatory team ensures our solutions are built on the most current regulatory insight, and that clients are well-informed with the latest information to adapt to change.

To learn more about how Assent’s supply chain data management solution can streamline your compliance programs in a variety of areas, contact