25.10.2007  Öffentliches Wirtschaftsrecht • 

REACH – The new EU Chemicals Regulation and how it affects Indian chemical manufacturers

On 18 December 2006, the Council of Ministers of the European Union (EU) adopted a new Chemicals Regulation, known as REACH. REACH stands for Registration, Evaluation, Authorization and Restriction of Chemicals. This regulation, which has come into force on 1 June 2007, will centralize chemicals law throughout Europe and introduce extensive new rules. A “European Agency for Chemical Substances” (Chemicals Agency) will be established in Helsinki and, in cooperation with the competent national bodies, will be responsible for the implementation of REACH. The primary objective is to make trade in chemical substances as safe as possible and to gather all data which are necessary for this purpose.

To achieve these goals, REACH uses four main instruments:

  • A general obligation of manufacturers or importers in the EU to register substances or preparations containing such substances and the duty to register or notify substances in articles;
  • A requirement for examination and evaluation of the registration dossiers and testing proposals as well as evaluation of the registered substances themselves; 
  • A requirement for authorization of the substances of very high concern;
  • Restrictions on the manufacture, placing on the market and use of certain hazardous substances.

REACH applies in principle to all chemical elements and their compounds unless they are expressly exempted from its scope of application, as is the case for a whole range of substances. In addition, within a certain scope, substances contained in plant protection agents and biocidal articles are deemed registered. The addressees of REACH are primarily the manufacturers and importers of substances, of compounds and articles containing such substances, but also downstream users of such substances, compounds or articles. Under REACH, the principle “no data, no market” applies. Accordingly, substances as such as well as substances contained in compounds or in articles may only be manufactured or placed on the market in the EU if they have been registered in accordance with the provisions of REACH. The use and placing on the market of the substances of very high concern is subject to a specific authorization. In this case, an application for authorization must include an analysis of the alternatives; if suitable alternatives are available, substitution is compulsory on the basis of a substitution plan, which must also be submitted.

REACH also provides for a registration procedure and timetable: Initially, all substances that are produced or imported in the EU by a manufacturer or importer in a quantity of at least 1 tonne per annum must be registered. For these substances, the registrant must submit a registration dossier to the Chemicals Agency; if these substances are registered for quantities of 10 tonnes or more per annum and registrant, a safety assessment must be conducted for the substance and a Chemical Safety Report submitted.

Manufacturers and importers of articles are subject to a registration obligation if the substance concerned is contained in the product in a quantity of 1 tonne or more per year and manufacturer/ importer, provided that the substance is (intentionally) released upon the use of the product. Irrespective of whether or not the substance is released, the substances in this group are subject to a registration duty if they are substances of very high concern and are manufactured in a certain quantity and concentration.

The implementation of REACH will begin in an initial phase with the pre-registration of “phase-in substances”. These are substances which, at the time of REACH coming into force, are already on the market within the European Union. During this pre-registration phase, which will begin on 1 June 2008 and end on 1 December 2008, all potential registrants of “phase-in substances” in quantities of 1 tonne or more must furnish certain information (identity of the enterprise, identity of the substances and envisaged deadline for registration) to the Chemicals Agency if they wish to make use of the transitional arrangements provided for in Article 23. Article 23 specifies three different time limits for registration:

  • 30 November 2010 is the deadline for registration of so-called CMRs (substances classified in Category 1 or 2 of Directive 67/548/EEC as carcinogenic, mutagenic or reprotoxic) in a quantity of 1 tonne or more per year and registrant; environmentally hazardous substances which are classified as R 50/53 under directive 67/548/EWG in a quantity of 100 tonnes or more per year and registrant; as well as substances with a quantity of 1000 tonnes or more per year and registrant;
  • 31 May 2013 is the deadline for registration of all substances which are produced or imported in a quantity of 100 tonnes or more per year and registrant; 
  • 31 May 2018 is the deadline for registration of all other substances which are produced or imported in a quantity of 1 tonne or more per year and registrant.

Registrants who fail to furnish the information required during the pre-registration phase may not avail themselves of the transitional arrangements. Compliance with the deadline set for pre-registration is therefore of considerable importance. An exemption is provided according to which potential registrants who are manufacturing, importing or using a phase-in substance that would require registration for the first time after 1 December 2008 shall be entitled to rely on the aforementioned deadlines on condition that they submit the necessary information to the Agency within six months and no later than 12 months before the relevant deadline. Companies outside the European Union need to take into account the “only representative” provision.

According to this provision, an Indian manufacturer may – already during the pre-registration phase – appoint a natural or legal person established in the EU to fulfil, as his only representative, all the obligations on importers. Although an Indian manufacturer as such has no obligations under REACH, recourse to this opportunity may be useful for an Indian manufacturer to get more control over the registration process and to avoid having to disclose potentially sensitive information to the importer. Importers of substances as such, in compounds or in articles of an Indian manufacturer would thereby be released from their duties as importers and will be regarded as downstream users.

By applying for pre-registration every registrant of the same phase-in substance automatically becomes a member of an internet-based “Substance Information Exchange Forum” (so-called SIEF). The aim of each SIEF shall be mainly to facilitate the exchange and the sharing of relevant information between potential registrants, thereby avoiding the duplication of studies, as well as to agree classification and labeling. Furthermore, the pre-registration phase may be used for the formation of registration consortia among registrants. The possibility and/or necessity to form consortia results from the joint submission of data by multiple registrants. Certain substance-related information shall be submitted by one so-called "lead registrant" acting with the agreement of the other assenting registrants. The joint submission of data aims to increase the efficiency of the registration system, to reduce costs and to reduce testing on vertebrate animals. A registrant may only submit the information separately (so called “opt-out”) if a joint submission (a) would be disproportionately costly for him or (b) would lead to disclosure of information which he considers to be commercially sensitive and is likely to cause him substantial commercial detriment, or (c) if he disagrees with the lead registrant on the selection of such information.

The formation and management of consortia not only raises regulatory issues (the REACH requirements have to be met), but also competition law issues and issues relating to the protection of confidential business information. The definition of membership and its conditions, the decisionmaking process and dispute resolution, data sharing, cost sharing and the handling of confidential business information are only a few to be mentioned.

In summary, in order to make sure that their products may still be placed on the EU market in the future without any disadvantages, all non EU-manufacturers under the obligation to register certain substances should

(a)   not miss the deadlines set for pre-registration of phase-in substances;

 (b)   take into consideration the possibility to appoint an “only representative”;

 (c)    be prepared for the formation of consortia with other potential registrants.