REACH – a Challenge for Non-EU Enterprises

Dr. Mansur Pour Rafsendjani, Martin A. Ahlhaus

On 1 June 2007, EC-Regulation No.1907/2006 (REACH) came into effect. REACH contains a fundamental revision of the European policy on chemical substances. Quintessentially REACH leads to a shift of legal responsibilities in the context of a skilled handling of chemical substances to trade and industry. Thus, non-EU companies doing business with Europe will face new duties and responsibilities.

REACH seeks to close the current knowledge gaps in the patchwork of many different Directives and Regulations that formed the former EC legislative framework for chemical substances. This will be achieved through extensive registration duties for trade and industry. REACH, therefore, sets out obligations for the registration of chemical substances on their own, in preparations and in articles manufactured within and imported into the EU. Although basically only persons/companies domiciled in the EU have the obligation to register, being a non-EU company does not mean that there is no relevant responsibility with respect to registration.

According to Article 5 of the REACH Regulation, substances on their own, in preparations or in articles, shall not be placed on the market unless they have been registered where this is required. Therefore, only registration can ensure market access and a non-EU company has to make sure their goods are sufficiently registered either by the importer or a so-called only representative.

On the one hand, appointing an individual or legal entity established in the EU by mutual agreement to fulfil, as the only representative, the obligations on importers may for non-EU companies enlarge their influence on the registration procedure and market access. On the other hand, appointing an only representative will cause a lot more financial and operating effort.

Given this, in the event of a non-EU company deciding not to appoint an only representative, it should be taken into consideration that in such a case the importer has to fulfil the registration obligation in order to guarantee market access. However, an importer generally will not have all the relevant information to register properly. Thus, non-EU companies will face extensive requests by the importer with respect to information relevant for the registration process, which will also mean appropriate effort.

Notwithstanding the concrete decision about how registration shall be carried out the relevant substances — at least in general — have to be registered with the EU-agency ECHA at Helsinki from 1 June 2008. However, between 1 June and 1 December 2008 manufacturers or importers of socalled phase-in substances, a term that covers in particular substances listed in the European Inventory of Existing Commercial chemical Substances (EINECS) and No-Longer Polymers (NLP) according to Directive 67/548/EEC, planning to register according to REACH, had the opportunity to use the online pre-registration procedure. Such a pre-registration leads to a prolongation of the registration deadline — until 1 June 2018 at the latest.

Since the pre-registration period ended on 1 December 2008 non-EU companies have to ensure that their distribution partners in the EU have registered or pre-registered imported substances on their own, in preparations or in articles according to the REACH Regulation.

However, non-EU companies planning to export products to the EU for the first time do have the opportunity for late pre-registration. Companies exporting for the first time a phase-in substance in quantities of one tonne or more per year or import for the first time an article containing a phase-in substance that would require registration after 1 December 2008, are entitled to rely on the pre-registration procedure and submit the relevant information to the ECHA within six months of first importing the substance in quantities of one tonne or more per year into the EU.

Alongside the obligation to register with the ECHA non-EU companies will face further duties especially with respect to sufficient information transfer in the supply chain. REACH will take effect on every shipment to Europe because of the central meaning of the substantial composition of products in the course of the information transfer along the supply chain. Many EU companies are already bracing themselves for registration and get back to their customers as well as to their suppliers to get sufficient information about the substantial composition of the products in their business segments. Non-EU companies will, in fact, face such enquiries by all of their customers. But watch out: not all questions raised are necessary in terms of REACH and might aim to gain internal know-how by using REACH as a disguise. Therefore, Non-EU companies will have to take a close look at the REACH Regulation and its exact requirements to be adequately prepared for the expected requests from their EU trade partners.

Another REACH-related obligationshall be mentioned here. According to Article 33 of the REACH Regulation, EU or EEA suppliers of articles which contain substances of very high concern in a concentration above 0.1% (w/w) have to provide sufficient information, available to them, to their trade customers or upon requests, to a consumer within 45 days of the receipt of the request. This information must ensure safe use of the article and as minimum contain the name of the substance. The relevant substances of very high concern (SVHC) have been identified by the ECHA and the EU Member states and are published on the ECHA website.

In order to enable their EU trade partners to fulfil the named information duties, non-EU companies will be obliged to hand out the relevant information already in the course of the product delivery. Furthermore, it is useful to clarify details of the information requirements on a contractual basis in particular with respect to liability, since the EU-based distribution partner relies upon the information and has to forward the given information to his customers and/or to consumers.

This shows that communication about the relevant allocation of REACH related duties and the substantial composition of goods delivered to Europe will increase efforts considerably for non-EU companies. Thus, Ukrainian companies are well advised to familiarize themselves with the legal requirements of REACH to be responsive to the arising exigencies in the course of their daily business — especially with respect to the contractual relationship to EU trading partners.