The EU Regulation on the Registration, Evaluation, Authorisation and Restriction of Chemicals ("REACH") has cast a long shadow over the regulatory landscape for many years. It has been described as the most complex legislation on the Union's history, and its sheer size (849 pages, fifteen titles, 17 Annexes) has led to concerns about the scope of the compliance burden placed on business, particularly SMEs.
REACH entered into force on 1 June 2007 and, as an EU Regulation, it has direct legal effect in all EU Member States, plus Iceland, Liechtenstein and Norway.
Put simply, REACH requires companies to provide information on the hazards, risks and safe use of chemical substances that they manufacture or import. REACH aims to improve the protection of human health and the environment via provision and management of this information. The rationale behind REACH was a lack of knowledge about chemicals on the market REACH seeks to manage chemicals and their lifecycles through better and earlier identification of the intrinsic properties of chemical substances.
REACH places the burden of proof on companies to identify and manage risks associated with the substances they manufacture and market in the EU. Companies must demonstrate to ECHA how the substance can be safely used, and they must communicate the risk management measures to the users.
It is important to remember that REACH applies to all chemical substances. Substances that feature in our day-to-day lives (for example, in cleaning products and paints) are regulated, as are chemicals used in intensive industrial processes. As a result, REACH has an impact on most companies across the EU.
Since REACH entered into force in 2007, a "phased implementation" has been place. We are currently in the "final" phase, with arguably the most important deadline upon us. That will be the focus of this article.
REACH operates via four processes registration, evaluation, authorisation and restriction of chemicals. It is the registration process that is currently in sharp focus for our clients.
Article 6 of REACH requires anyone who manufactures or imports a substance (either on its own or in a mixture) in quantities of one tonne or more per year to submit a registration to the European Chemicals Agency ("ECHA"). Article 5 prohibits the manufacture or placing on the market of substances if they have not been registered in accordance with REACH. This is prohibition is called the "no data, no market" principle. A registration is, in effect, a licence to market a substance in the EU/EEA.
The registration requirement is subject to certain exemptions, for example substances in food and feedstuffs, and medical products. REACH regulates substances that are not caught by "sectoral" legislation.
Because of the sheer amount of substances on the market, REACH has been implemented by way of a "phased" approach. The transition to full REACH compliance has been facilitated by prioritising chemicals of the highest concern, and then a staged registration process for "phase-in" substances. Phase-in substances are those that have an established use that is, those listed in the European Inventory of Existing Commercial Substances ("EINECS"), or that have been manufactured (but not placed on the market) in the EU at least once after 1 June, or are so-called "no longer polymers".
Relaxed registration deadlines have applied apply to phase-in substances, but only if the manufacturer or importer "pre-registered" the substance with ECHA between 1 June 2008 and 1 December 2008. We are currently within the period of the final registration deadline. That is, by 31 May 2018, registration is required for the manufacture or import of phase-in substances in amounts of 1 tonne per annum. Late pre-registration has been available to "first time" manufacturers of importers of phase-in substances, however the latest pre-registration deadline is 31 May 2017.
THE CURRENT SITUATION
Recently, we have been involved in advising clients on the registration of "new" substances. However, the impending 2018 deadline for phase-in substances is also a potential issue for manufacturers and importers.
It is important to remember that it is the substance that must be registered under REACH, not the company. A substance is to be registered once only the so-called "one substance, one registration" principle. The Commission Implementing Regulation (EU) 2016/9 of 5 January 2016 on joint submission of data and data-sharing came into force on 26 January 2016. This Regulation requires all companies registering the same substance to be part of the same registration, as opposed to submitting a separate registration dossier. The rationale for the principle is the encouragement of data sharing, and the minimisation of animal testing.
The registration process is complex, but to summarise:
- To register a phase-in substance, companies who have pre-registered a substance must join a Substance Information Exchange Forum ("SIEF"). The participants in a SIEF must share information, test data and existing studies, in exchange for sharing the cost burden of registration. A "lead registrant" is elected, and that entity will go on to collect data, prepare the registration dossier, and submit the registration to ECHA.
- To register a new substance, a company must first make an inquiry to ECHA as to whether a registration has already been submitted for the substance. ECHA will then assess the substance for "sameness" with other substances. If there are existing registrants for the substance, ECHA will indicate what data is available for sharing, and inform the company of the contact details of other potential registrants. The registrants will then need to work together to prepare the registration. If there are no other potential registrants, the company will have to carry out all tests, and submit all information necessary, to satisfy registration requirements.
According to ECHA, 60,000 registration dossiers are expected to be lodged ahead of the 2018 deadline. This has consequences from a regulatory perspective, in that any delay in obtaining a registration could impact on the ability of a company to participate in the market, with attendant supply chain issues. We recommend that companies take proactive steps to ensure that the substance registration process is commenced and progressed now.
IMPACT OF BREXIT
In principle it appears that the REACH Regulation as with other EU legislation, will effectively be reenacted as UK legislation under the "Great Repeal" Bill announced by the Government. In early March the Environment Minister Thrse Coffey confirmed that the UK's regulatory regime will broadly follow REACH, rather than seeking alignment with UK standards. However, it is clear that it would be impracticable to duplicate ECHA in short order for the purposes of a parallel scheme. It may well be therefore that one of the UK's goals in the Brexit negotiations may be to seek a continuing relationship with ECHA, at least for a transitional period. Whatever the outcome in this respect, it is clear that REACH compliance will continue to be a key issue for all UK businesses exporting substances into the EU single market, in the same was as it currently is for many of our US clients selling into the UK and other parts of that market.