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Key Takeaways for Claiming CBI on Korean MSDS (Updated)

To protect the public’s right to know and increase the transparence in chemical management, necessary information should be disclosed on MSDS and transferred to the downstreams. However, companies have their needs to withhold some key information of ingredients to ensure their competitiveness and commercial interests in the open market. In this article we will introduce how Korea’s new rules regulate CBI issues with regards to application, extension, provision of the approval number on the MSDS, etc. 

According to revised Occupational Safety and Health Act, MSDS submission and CBI non-disclosure approval through the IT system is mandatory before manufacture or import of chemicals since January 16, 2021. The detailed requirements for disclosure of information and application for CBI protection are stipulated in the revised Standards for Classification and Labeling of Chemical Substances and Material Safety Data Sheet (MOEL Public Notice 2020-130, hereafter referred to as the Standard).

Scope

Chemicals categorized as hazardous factors (OSHA, Article 104) are subject to preparation and submission of MSDS. The hazardous factors are divided into 3 categories, which are chemical factors (16 physical, 11 health, and 2 environmental hazards), physical factors (noise, vibration, radiation, extreme pressure, and extreme temperature) and biological factors (bloodborne infection, airborne infection, insect- and animal-borne infection). With regards to confidential business information, alternative name and content range of the chemical substance are allowed to be used in Section 3 of the MSDS to keep trade secrets after obtaining prior approval from the MoEL.

Ingredients present below the corresponding cut-off limits (Annex 6 of the Standard) for GHS classification are not legally obligated to be disclosed on the MSDS, so are the ingredients that do not meet the requirements of Article 104 of OSHA. Therefore, they are not subject to CBI protection application. However, if such ingredients are deemed trade secrets and the company is intended to indicate them on the MSDS, alternative name and content range provided according to the Standard can be applied directly without CBI protection application.

Inapplicable scope for CBI protection

Not all hazardous chemical substances are eligible for CBI protection. If belonging to any of the below categories (Article 16 of the Standard), enterprises shall not apply for CBI protection:

  1. Prohibited substances (Article 117 of OSHA);

  2. Substances requiring permission (Article 118 of OSHA);

  3. Hazardous substances subject to control (Article 420 of Standard of Industrial Safety and Health);

  4. Harmful factors subject to work environment measurement (Annex 21 of OSHA Enforcement Rules);

  5. Hazardous factors subject to a special health examination (Annex 22 of OSHA Enforcement Rules);

  6. Substances prescribed in Article 35 Paragraph 2 of K-REACH Enforcement Rules (toxic, restricted, prohibited substances, substances subject to authorization, CMRs, etc. defined under K-REACH)

Applicants

Korean manufacturers or importers are obliged to submit MSDS and apply for CBI non-disclosure. Overseas manufacturers who do not want to disclose product information to Korean importers can choose to appoint an only representative (OR) to fulfill such requirements.

The OR can be a natural person or legal entity based in Korea. There are no other restrictions on qualifications, such as capital or expertise. However, the appointment and dismissal of the OR shall be reported to the MoEL. Obtaining a certificate for OR appointment is a prerequisite for performing such tasks. 

Grace period

For chemicals circulated in Korea MSDS prepared before January 16, 2021, the new requirements regarding MSDS submission and CBI non-disclosure will be granted with grace period (1~5 years based on the tonnage) to buffer industry, including:

  • >1,000 t/y: before January 16, 2022

  • 100-1,000 t/y: before January 16, 2023

  • 10-100 t/y: before January 16, 2024

  • 1-10 t/y: before January 16, 2025

  • <1 t/y: before January 16, 2026

The grace period is not appliable to chemicals manufactured or imported after January 16, 2021, which should prepare MSDS and apply for CBI non-disclosure acoording to the new regulations prior to manufacture or import. 

Online system

MSDS submission, CBI non-disclosure application, extension application, appeal of rejected/partial approved applications, etc. should be made through the MSDS system: http://msds.kosha.or.kr/

Necessary information for CBI protection application

For application for CBI protection, the following information shall be submitted.

1. Evidence materials for justification of CBI claim;

The basis and justification for this claim should be provided in consideration of three criteria, including:

  • Non-publicity (e.g., the scope of persons who know the information, whether it is disclosed under other law);

  • Confidentiality management (e.g., measures taken to protect CBI, degree of ease of access to and acquisition of the information); and

  • Economic usefulness (e.g., benefits to competitors if disclosed, efforts made and costs paid for development).

The details can refer to the Annex 7 of the Standard.

2. Alternative chemical name and content range;

The alternative chemical name and content range will appear in section 3 of the MSDS instead of the full chemical name and actual content. The applicant shall refer to the Annex: Nomenclature of Generic Names of the Regulations on Preparation of Information Protection Application and Management of Protected Information, etc., announced by the Ministry of Environment Public Notice No.2018-237, to determine the alternative chemical name.

For the content, a range of within ±10% can be used if the ingredient is present in the mixture at a concentration of less than 25% and a range of within ±20% is allowed in the case of at or above 25%

3. Chemical name, content, information on health, environmental and physical hazards that to be claimed as confidential;

4. MSDS of the product;

5. Name and content of ingredients that are not falling under hazardous factors criteria (100% composition disclosure to the authority is mandatory for CBI non-disclosure application);

6. Others specified by the MoEL

R&D chemicals

It should be noted that although chemical substances or chemical products for research and development (R&D) are exempt from the obligation of submitting MSDS to the authority, they are still required to prepare MSDS and apply for CBI non-disclosure. The above-mentioned materials 1 and 6 can be omitted for CBI non-disclosure application.

The scope of chemical substances or chemical products for R&D purposes is stipulated in Article 19 of the Standard, including those for:

  1. scientific experiments, analysis or research, such as reagents

  2. developing chemical substances or chemical products

  3. improving and developing the production process

  4. testing the application scope of chemical substances at the workplace

  5. pilot production of chemical substances or chemical products, etc.

Cost

The fee for applying CBI non-disclosure depends. Basically, after submitting an application, the online system will issue the payment information upon accepting the application. The review work will start after the payment is made.

Item

Basic fee

Review fee per ingredient

CBI non-disclosure application

70,000 KRW (30,000 KWR for R&D chemicals)

40000 KRW 

CBI non-disclosure extension application

35,000 KRW (15,000 KWR for R&D chemicals)

20000 KRW

Review fee = Basic fee + X (number of ingredients subject to CBI protection) * Review fee per ingredient

The CBI non-disclosure application fee is up to 270,000 KRW (230,000 KWR for R&D chemicals), and the extension application fee is up to 135,000 KRW (115,000 KWR for R&D chemicals). SMEs can enjoy some reductions in review fee. 

Review Period

The Korean Occupational Safety and Health Agency (KOSHA) will determine whether or not to approve applications for CBI non-disclosure or extension within a month (within two weeks for R&D chemicals) and may be extended up to an additional 10 days if necessary. The KOSHA may request correcting or supplementing materials (within 15 days upon receipt the request), and the time consumed in this regard is not included in the review period.

If there is any objection against the results of approval, the applicant can within 30 days upon receipt of the result file online the reason for objection for once only. The KOSHA will review the details and notify the result within 20 days upon receipt of the objection.

The CBI protection will be valid for 5 years and extension application for another 5 years is allowed up to 30 days before expiration.

Approval number

There are three kinds of results after reviewing the application for CBI non-disclosure, including 

  • Approval;

  • Partial approval; and

  • Non-approval.

The approval/partial approval number will be assigned by the IT system as below. It should be noted that the approval/partial approval number is associated to the product itself rather than assigning different approval numbers for each ingredient deemed trade secret. Different products of a same confidential ingredient should apply for CBI non-closure application respectively. 

cbi-approval-number-1.png

20210819172319.jpgKorea CBI non-disclosure approval number

For partial approval, it means there are only some ingredients are approved for CBI non-disclosure. You can (1) accept the partial approval results and only have the approved ingredients confidential with the partial approval number and valid period; or (2) raise objections for once only and see if it can get approved later.

The approval/partial approval number should be provided in Section 3 of MSDS as well as the validity period (can be a period of time, or the due date) of CBI protection. There are two formats provided in the FAQ document issued by the OSHA.

Example 1

Chemical name

Common name and synonym

CAS number or other identifiers

Content (%)

 

approval/partial approval number and validity period

Alternative chemical name



Content range


Example 2

Chemical name

Common name and synonym

CAS number or other identifiers

Content (%)

Alternative chemical name



Content range

* approval/partial approval number and validity period

Penalty

According to Article 175 of OSHA regulation, a penalty of no more than 5 million KRW will be imposed for violations that use alternative chemical name and content range on MSDS without obtaining prior approval from the authority.

Suggestion

Companies should check the existing MSDS and verify if there are ingredients deemed trade secrets. Although there are grace periods, considering the review period for CBI non-disclosure, the companies are recommended to prepare early and avoid trade disruptions. For chemcial products to be circulated in Korea after January 16, 2021, the new rules should be complied with before manufacture or import.

For imported chemicals, the overseas manufacturers are recommended to appoint OR to apply for CBI non-disclosure. Considering the low entrance barriers for OR, appointing a reliable and professional OR is very important to ensure trade secrets. It should be noted that this OR can be different from the OR under K-REACH for chemical registration. For different products, you can also appoint different ORs. 

** ChemLinked has held a webinar focused on MSDS submission and CBI non-disclosure application in South Korea. The webinar proceedings are now accessible. If you have got any questions regarding the MSDS preparation and CBI protection, please feel free to contact ChemLinked/REACH24H Consulting Group. 

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