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1. Conclusions
that can be drawn from the first five years of REACH: To what extent
have REACH restrictions been implemented and enforced? What impact have
the REACH provisions had on the internal market for restricted
substances?
Overall the
majority of the Member States had not noticed changes in the approach to
the implementation and enforcement of restrictions, and where there were
changes these were of a positive nature. The enforcement of REACH
restrictions places great responsibility on companies to manage and
control the risk from dangerous chemicals. Prior to adopting REACH a
large number of chemical substances were manufactured and placed on the
market with insufficient information on the hazards they caused.
Through the
introduction of the restriction and authorisation processes,
stakeholders said that they had noticed that companies are paying more
attention to the choice and use of chemicals, and showing a greater
interest in the research and development of “green” new raw materials
and products to reduce the overall impact to the human health and
environment.
The market
surveillance measures taken in order to enforce restrictions under REACH
vary across the 27 Member States. In general, in each Member State at
least some form of market surveillance is carried out, covering either
physical and laboratory checks on the basis of samples, checking
documentation and information made available by operators, entering
premises of economic operators, inspecting and/or taking samples of
products and withdrawal or destruction of products presenting a serious
risk, or a number of these measures.
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2. What are the
main difficulties that authorities and companies have faced in
implementing the restrictions?
Member State
authorities identified a number of difficulties faced by them in
carrying out market surveillance and enforcement of restrictions in
Annex XVII of REACH.
Testing and
availability of laboratories
Almost half of
the Member States that comply with REACH regulations referred to
difficulties regarding the analytical methods or the availability of
laboratories within their Member State.
Resources
A number of
Member States also referred to a lack of resources as being the main
difficulty.
Prioritisation
Other Member
States reflect on difficulties arisen from the specificity of the
restrictions, that therefore require detailed investigation and
sophisticated laboratory analysis.
Obtaining
information on the market/supply chain
Inspection
campaigns are often hindered due to lack of information of the market of
the supply chain. In particular, there are problems in obtaining
information on the supply chain, which are often very complex, in order
to select those companies that supply products which contain substances
subject to restriction. Member States authorities are unable to target
the manufacturing stage and therefore the next best route is to identify
companies importing restricted products, which can be a challenge.
Also, many
safety data sheets are out of date and incorrect and many companies use
obscure synonyms or generic chemical names. All these issues make it
difficult to identify non-compliant products.
Exchange of
information
A number of
other Member States also referred to the problems with obtaining
information generally, such as all of the information contained within
REACH registration dossiers, which makes it difficult to verify company
information.
Wording of
restrictions
There is an
overall risk that Member States interpret a restriction differently and
thus create discrepancies across Europe. Member States commented also
that there was a lack of clarity in the scope of some of the entries in
Annex XVII, for instances as to whether the second hand market is
included or not. Complicated exemptions also represent challenges.
Cooperation
with customs and Market surveillance authorities
There are
numerous guidelines on REACH-related issues for operators, competent
authorities etc, which however, do not refer to the specific tasks of
customs authorities.
Industry
knowledge
Reference was
also made to problems associated with companies’ lack of knowledge of
the products and the applicable legislation, which raises practical
problem during the surveillance/administrative control. Moreover,
companies are not always willing to provide the authorities with the
documentation necessary within the administrative control processes.
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3. New REACH
deadlines: What are the differences between 2010 and 2013? What are the
costs and fees?
REACH requires
all companies manufacturing or placing a substance on the EU market in
quantities greater than 1 tonne per year to register that substance with
the European Chemicals Agency (ECHA). Late pre-registration is only
obligatory if companies want to benefit from the extended registration
deadlines.
The deadline for
REACH registration depends on the tonnage band of a substance and its
classification. Late pre-registrations have to be submitted within six
months after the manufacturing or importing of the substance that
exceeds the one-tonne threshold and no later than twelve months before
the relevant registration deadline. Therefore, the late pre-registration
period ended on 31 May 2012 for substances to be registered by 31 May
2013, and ends 31 May 2017 for substances to be registered by 31 May
2018.
The cost of late
REACH pre-registration is moderately low. The market price is between
EUR 100 and EUR 500 per substance with a discount available for multiple
substances. If you appoint an Only Representative, you need to pay an
annual maintenance fee of between EUR 100 and EUR 500 per substance per
year.
REACH
registration is much more expensive. The total cost of registering one
substance could be millions of Euros if your tonnage is very high and
your company is the only company registering it.
Luckily, REACH
encourages data sharing through joint submission, in which case the lead
registrant and consortium will do most of the work, such as GLP testing
and preparation of technical dossiers and Chemical Safety Reports.
Member registrants only need to pay the lead registrant a fee (in the
form of buying a letter of access) to refer to the joint
registration data and dossier prepared by the lead registrant or
consortium, and prepare their individual section of the registration
dossier.
Data fees paid
to lead registrants or consortiums to purchase letters of access to
refer to the common parts of registration dossier are tonnage dependent.
Data fees vary from substance to substance and are fixed by the
consortium or lead registrant. The price of a letter of access for a
typical substance is between EUR 2,500 and EUR 15,000.
The fees paid to
the ECHA are dependent on the annual tonnage of the substance and
company size. Small and medium-sized enterprises may enjoy discounts on
ECHA fees.
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4. What
requirements are there for substances in articles?
Under REACH
regulations, an article means “an object which during production is
given a special shape, surface or design which determines its function
to a greater degree than its chemical composition”. Therefore, when
determining whether or not an article is subject to REACH, it is
essential to define the function of the object, and to which extent this
article is determined by its chemical composition or its shape, surface
or design.
Furthermore,
only articles that contain substances which can be intended to be
release during service life are submitted to REACH provisions. A release
of substances from articles is intended if it fulfils an accessory
function which is deliberately planned and would not be achieved if the
substance were not released.
For these
substances, registration is required if the total amount of the
substance present in such articles exceeds 1 tonne per year per producer
or importer.
Producers and
importers of articles with an intended release of a substance can also
submit a late pre-registration.
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5. What
benefits are there for non-EU companies of appointing an EU-based Only
Representative?
Companies
established outside the EU that are exporting their substances or
articles into the EU customs territory are not bound by the REACH
obligations. The responsibility for fulfilling the main REACH
requirements, such as pre-registration or registration, lies with
importers established in the EU, or with the “Only Representative” of a
non-EU manufacturer established in the EU.
Even though some
customers are prepared to register substances as importers, others are
reluctant to do so, as they lack the resources and experience required.
That is why
non-EU manufacturers may have concerns about the logistics of supporting
a number of individual importers in the registration of their substances
and they may prefer to retain control over their confidential data and
their exports. To that end, they appoint an Only Representative to
represent their interests and to retain control of their exports.
By doing this
the non-EU manufacturers relieve importers of their obligations to
register and obtain continued market access in the EU (many EU importers
will try to avoid registration by purchasing REACH registered chemicals);
avoid dependence on a single importer and keep market access should one
EU importer cease trading and gain advantages over other non-EU
suppliers who do not appoint Only Representative to register their
substances.
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6. What is the
Community Rolling Action Plan (CoRAP) and what are the consequences for
a substance to be included on the CoRAP list?
The Community
Rolling Action Plan (CoRAP) specifies the substances that are to be
evaluated over a period of three years. The substance evaluation process
is triggered as a result of risk-based concerns detected during the
registration process. Substance evaluation is carried out by the Member
States, and the European Chemicals Agency (ECHA) only has a coordination
role in the substance evaluation process.
As regards the
timeline, on 28 February 2012, the ECHA finalised the first CoRAP and
included 90 substances for evaluation by the Member States over the next
three years. This first CoRAP will thus include substances to be
evaluated in 2012, 2013 and 2014.
The rolling
nature of the plan means that the list will be updated annually
following the same procedure as for its establishment. The ECHA must
submit the next draft of the update to Member States by 28 February
2013.
The evaluation
aims to clarify an initial suspicion that the manufacture or use of
these substances could pose a risk to human health or the environment.
The plan includes the names of the substances to be evaluated and the
names of the Member States responsible for the evaluation of each
substance together with a short description of the initial concern
raised by each substance. While Member States may focus their assessment
on the initial area of concern, the scope of the evaluation need not be
limited to this.
Following the
evaluation by Member States, further information may be requested from
the registrants of the substances if additional data is considered
necessary to clarify the suspected risk. Alternatively, it may be
concluded that the substance does not pose a risk and that no further
data is needed.
From the
publication of the final CoRAP, the respective Member States have one
year, to evaluate substances listed for 2012 and, where regarded as
necessary to prepare a draft for requesting further information to
clarify the suspected risks. The evaluation of the substances listed for
the second and third year only starts after the publication of the CoRAP
update in 2013 and 2014 respectively.
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7. Substance of
very high concern (SVHC): How can I achieve SVHC compliance? How can I
handle authorisation applications and restrictions?
According to the
REACH regulations, the following substances can be regarded as substance
of very high concern (SVHC):
- carcinogenic,
mutagenic or toxic to reproduction;
- persistent,
bio-accumulative and toxic;
- very
persistent and bio-accumulative;
- seriously and
/ or irreversibly damaging the environment or human health, as
substances damaging the hormone system;
The use of SVHC
(which may be included in the Annex XIV of the REACH) and their placing
on the market can be made subject to an authorisation.
The competent
authority or agency of a Member State can suggest the inclusion of a
potential substance of very concern on SVHC candidate list. Interested
parties are then invited to comment on the substance. The resulting
outcome of this identification process is the creation of a list of
identified substances, which are then deemed candidates for
authorization. Some substances from the candidate list will be included
in Annex XIV of REACH. Those substances will not be allowed to be used,
placed on the market or imported into the EU after a date to be set
unless the company is granted an Authorization.
On June 2012
there were 84 substances on SVHC candidate list and 14 substances
subjected to authorisation. It is expected more substances to be
included in the future.
There are also
59 categories of restricted substances involving more than 1000
substances. These hazardous substances have specific restrictions, and
as such certain chemical substances in the specific product are not
allowed to be used, so as to avoid any unnecessary testing.
In order to
comply with SVCH regulations, operators must identify (e.g. by testing
the products themselves) all possible hazardous substances in their
products finding out which type of substance it is (SVHC of the
candidate list, or substances subject to
restrictions or to
authorization). Then, the following requirements must be fulfilled
to achieve REACH compliance if a SVHC is present in these products:
- Submit a
notification to ECHA if any SVCH on candidate list present in an
article has a concentration above 0.1% (w/w) and the total amount of
the SVHC exceeds 1 tonne per annum per producer or importer.
- If any
SVHC on candidate list is present in the product with a
concentration above 0.1% (w/w), it is necessary to inform the
recipients of the article along the supply chain about the chemical
name(s) and how the article can be safely used. This information must
be available within 45 days upon consumer request;
- If a
substance is subject to
restrictions, involved parties must screen the REACH restriction
list for the restriction most relevant to the products and ensure that
the presence of restricted substances in products do not exceed
threshold limits set by REACH;
- An specific
authorisation is required for those substances identified by the
European Authorities to be used, placed on the market or imported into
the EU.
8. What
are the main concerns for companies sharing information in the context
of REACH? Does antitrust law apply to my activities in a SIEF or in
consortia formed in the context of REACH?
Information
exchange
REACH encourages
the sharing of information between companies in order to increase
the efficiency of the registration system, to reduce costs and to reduce
testing on vertebrate animals.
For instance,
REACH provides for the formation of "Substance Information Exchange
Forums" (SIEF) to share data among manufacturers, importers and Only
Representatives of the same phase-in substance, as well as allowing
downstream users and other stakeholders who have, and are willing to
share, relevant data to provide or sell their information to potential
registrants.
Good faith
participation in SIEFs or exchange of information at other venues within
the context of REACH does not grant the participants with any type of
immunity or legal protection from the perspective of EU (or other
jurisdictions) antitrust laws, even if such information exchange is
expressly allowed by REACH (or even if is mandatory). Non-EU entities
exchanging information under REACH may also be caught by EU antitrust
infringements, regardless of whether they were aware or not of their
obligations under EU antitrust laws.
EU antitrust law
prohibits all agreements between companies or decisions by associations
or concerted practices which may affect trade between Member States and
which have as their object or effect the prevention, restriction or
distortion of competition within the internal market It also prohibits
any abuse by one or more companies in a dominant position. Any agreement
or practice that infringes the above mentioned prohibition is void and
unenforceable. In addition, in case of an investigation by the European
Commission or by an EU national competition authority, companies that
have implemented a prohibited conduct may face significant fines.
The exchange of
information may be considered a prohibited practice whenever it leads to
a restriction of competition. This may happen in particular in
situations where the information exchanged is liable to enable companies
to be aware of market strategies of their competitors. The exchange of
strategic information between competitors can facilitate coordination of
companies’ competitive behavior and result in restrictive effects on
competition.
Although the
information to be exchanged under REACH is generally unlikely to be
problematic (as it is mostly purely scientific or technical information),
there are instances where actors need to be especially careful. This is
the case where sensitive information (such as production or import
volumes, costs or uses of substances) is exchanged. In these cases,
specific training of the staff involved in the SIEF or in the
information exchange as well as the implementation of certain security
measures may be appropriate in order to eliminate the risk of antitrust
infringements and potential fines.
In addition,
special care should be adopted in cases where several non-EU
manufacturers provide certain sensitive information to the same Only
Representative. In these scenario, the staff involved in the process may
be induced to exchange information - for instance import or production
volumes - through their common Only Representative.
Other
antitrust issues
Other antitrust
concerns may arise from the participation of companies in consortia
formed to comply with REACH obligations (for instance, for the joint
submission of data). Consortia are forms of cooperation more organized
and formal than SIEF, implying either a signed agreement or the adoption
of operating rules. In contrast with SIEF, participation in a consortium
is not mandatory and thus a consortium may not necessarily regroup all
participants related to a given substance.
Neither the use
of a full consortium agreement nor the use of another formal, written
agreement is legally required by REACH. However, it is advisable that,
whatever the form of the cooperation is chosen, when writing the rules
of the organization and putting them in practice, certain precautions
are adopted in order to avoid the risk of antitrust infringements. In
particular, antitrust concerns may arise from restrictions in the scope
of the consortium or the drafting of membership rules that can be
considered discriminatory or that may have the effect of excluding
competitors from the market. Other consortia issues that may be a
potential source of concern are refusals to grant access to third
parties to the consortium’s data, membership denials, or the setting up
of discriminatory or excessively high membership fees.
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9. What
are the main concerns for importers of substances or mixtures when
dealing with the Regulation on classification, labelling and packaging (CLP)?
The obligations
that may be applicable to a supplier of substances or mixtures under CLP
will depend of the role of that supplier within the substance or mixture
supply chain. It is therefore important that any company identify its
role under CLP (producer or importer of articles, distributor or
downstream user).
It is important
to highlight that CLP obligations to classify, label and package are
generally linked to the supply of substances or mixtures. However,
classification is also relevant for the correct preparation of a
registration or notification for the purposes of REACH.
The following
are the main general obligations applicable under CLP. That obligations
may vary depending on the role of the specific operator within the
substance or mixture supply chain:
- classify,
label and package substances and mixtures according to CLP before
placing them on the market In case of changing of the composition of
the substance or mixture by the operator, it should be classified
according to CLP regulations;
- notify the
classification and labelling elements in case of placing substances on
the market;
- take all
reasonable measures to be aware of new scientific or technical
information that may affect the classification of the substances or
mixtures in order to carry out a new evaluation of the relevant
classification when necessary;
- update the
label in case of any change to the classification and labelling of
that substance or mixture;
- in case of
new information which may lead to a change of the harmonised
classification and labelling elements of a substance a proposal to the
national competent authority in which the substance is placed on the
market must be submitted;
- assemble and
keep available all the information required for the purposes of
classification and labelling under CLP for a period of at least 10
years after you have last supplied a substance or mixture. This
information should be kept together with the information required in
Article 36 of REACH.
10. What
decisions can be challenged under REACH and CLP and what legal remedies
do I have?
Without
prejudice companies and non-governmental organisations have the right to
participate in several proceedings under REACH and CLP and to be heard
in the course of such proceedings, REACH regulations implement an
specific administrative system to challenge some of the resolutions or
decisions taken under the REACH regulations.
In this regard,
REACH creates an specific administrative body called as “Board of
Appeal”. The Board of Appeal is an independent body within ECHA, which
is formed by three members that must have enough legal and technical
expertise to deal with the issues related to the REACH implementation.
Companies are allowed to appeal before the Board of Appeal certain ECHA
decisions.
In addition and
according to the general European rules on the judicial proceedings,
private entities can claim before the General Court and the Court of
Justice of the European Union against decisions of the ECHA and its
Board of Appeal and other measures adopted by the Commission or the
Council concerning the implementation of REACH.
Moreover,
according to the specific national legal regimen, the operators are
entitled to claim internally against the decisions and resolutions
issued by each of the EU Member States.
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11. How can I avoid
REACH and CLP offences and penalties in EU Member States.
According to the
REACH and CLP Regulations, European States must set up an appropriate
framework for penalties to impose effective and dissuasive
administrative penalties for noncompliance. The penalties must be higher
than the costs of compliance until a production or import of 1000 tonnes
or less in order to comply with the principle of dissuasiveness.
The most common
offences under REACH regulations are the following:
- failure to
register before the placing on the market of substances, in
preparation, articles;
- failure of
the producer or importer to supply appropriate instructions to the
recipient of the article; failure to designate a representative;
- failure to
comply with the principle of good laboratory practice when carrying
ecotoxicological and toxicological tests;
- failure to
apply the appropriate measures to adequately control the risks
identified; failure to keep available and up to date the chemical
composition of products and substances;
- failure to
submit information or failure to update its registration and notify
when the quantity of a notified substance reaches the next tonnage
threshold, among others.
Penalties, which
are imposed by EU Member States, usually consist of administrative
fines, confiscation and deprivation and even destruction of objects, the
closing of the establishment, temporary prohibition to practice specific
professional tasks, prohibition of the importation or exportation of the
product, withdrawal or modification of permits, publication of the
judgment at the cost of the condemned person, among others.
Obviously, the
surest way to avoid penalties in EU Member States is the strict
compliance of REACH formal and material requirements and obligations
from the first commercial step. For that purpose, a correct and complete
advise on the specific REACH obligations and requirements is essential
together with the permanent contact and cooperation with the national
and European relevant authorities.
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