Eversheds SHINE Reach, September 2013 presentation slides

Is REACH impacting on your business?
Elizabeth Shepherd, Partner,
Sonya Veitch, Associate Eversheds LLP
26 September 2013

Today’s speakers
Elizabeth Shepherd
Partner
Sonya Veitch
Associate

• What is REACH?
• REACH Registration
• Supply Chain Communication
• Enforcement and penalties
• Overlaps with other regimes e.g. CLP and biocides
• REACH – the future
Agenda

• REACH Regulation No. 1907/2006
• Registration, Evaluation, Authorisation, and Restriction of
Chemicals
• In force 1 June 2007
• ECHA
• Affects substances manufactured or imported into EU 1 tonne or
more per year
• European Economic Area e.g. includes Norway
• “REACH is a journey that takes place over the years up until
2020” (ECHA's Kevin Pollard)
What is REACH?

REACH Registration
Do you have the registrations you need?

Which company could potentially be caught by REACH?
A. EU Chemicals manufacturer
B. Importer of shoes into EU
C. Oil and gas service company operating in EU
D. All of the above
Polling question

• D - All of the above
• Wide variety of companies affected
• Includes toy shops, fireworks display companies and mining and
quarrying companies
The answer is...

• Manufacturer
• Importer
• Downstream user
• Only Representative - Non-EU manufacturer
Key roles under REACH

1. One registration per substance, per legal entity
2. Only an EU importer or EU manufacturer must register
3. Late pre-registration may be an option, depending on the type
and quantities of the substance being imported or manufactured
Registration – the rules

• Who is the “importer”?
– not necessarily a straightforward question
– REACH definition not the same as customs
– keep under review
• Legal entity basis – not business units/plants
Are your pre-registrations/registrations held
by the correct company?

Outside EU EU
Registration obligations – practical example
Non-EU
manufacturer
Company B
(facility 2)
Group
Company A
Company B
(facility 1)
Imports 200 tonnes per
calendar year
calendar year
calendar year

Company A and B are in the same group. Which one of the following
statements is true?
A. The non-EU manufacturer must register
B. Either Company A or Company B can register for the group
C. Each of Company A, Company B (facility 1) and Company B
(facility 2) must register (ie 3 registrations)
D. Company A and Company B must each register in respect of its
own imports
Polling question

• D – both Group Company A and B will need their own
registrations for the quantities they import
• The registration for Company B will cover imports to both facility
1 and facility 2
• The non-EU manufacturer cannot hold registrations/pre-
registration
• More about Only Representatives later...
The answer is...

• Acquisitions, supply chain restructuring, moving your HQ outside
the EU?
• Re-evaluate your REACH compliance
• Limited circumstances where registrations can be transferred - is
it a qualifying legal change?
• KEY QUESTION: Do you have the registrations/pre-registrations
that you need?
Registration obligations – issue spotting

Restructuring – practical example
EU Outside EU
Company A1
(manufacturer)
Company A2
Original
supply
chain
Company B
(manufacturer)
Manufacturing
relocated outside the
EU

Despite the changes to the supply chain no changes to the REACH
registrations are required.
A. True
B. False
Polling question

• False
• Company A2 should now hold the registration
• The registration/pre-registration held by A1 is no longer effective
• It is only possible to transfer registrations where a qualifying
legal entity change occurs
The answer is...

• Are you entitled to appoint an Only Representative?
• Understanding your role in the supply chain for REACH purposes
– non EU-manufacturer
– toll manufacturing
– distributor
Non-EU manufacturers and distributors

• “R” = Registration
• Places burden on industry
• Data sharing – key requirement
• “E” = Evaluation
• 5% of dossiers – targeted checking
• REACH Review: “many dossiers non-compliant”
• Industry asked to improve quality
• Updating dossiers when required
Registration dossiers

Supply chain communication
What should you be doing?

• Recognised as a challenge
– significant cost for companies
– lack of understanding of requirements
– Safety Data Sheets (“SDSs”) have doubled in length
• Industry must respond
Supply chain communication

• Would your SDSs stand up to regulatory scrutiny?
• Dutch State Supervision of Mines guidance on common problems
• Ensuring systems in place to review and update
Focus on SDSs

• Particular challenge
• IT systems inadequate
• Long and complex supply chains
• 30 – 100 pages
• Mixtures – different approaches
• Costly translations
Focus on exposure scenarios

• Passing information up and down the
supply chain
• “Less aware of their role in REACH”
(REACH Review)
• Have you considered your duties?
• Do your suppliers understand their
duties?
• SDSs
– is your use covered?
– what are your options if not
– challenge of managing exposure
scenarios
Focus on downstream users
EU Supplier
DU
Communication of
uses
SDS

Other challenges
Confidential information and keeping up to
date

• ECHA dossier dissemination
– public database
– extra information now published
• Only certain information can be kept confidential
• Registration – using Third Party Representatives
• SDSs – alternative chemical names
• Non- EU suppliers
Confidential business information

• 2010, 2013 registration deadlines have passed
• SIEFs active until 2018
• Monitoring tonnage bands
• New ECHA Guidance
• SVHCs – additional obligations
Keeping up to date

Enforcement and penalties
What’s the risk?

• “no data, no market” (Article 5)
• Member State level
• Variations across the EU
• Range of civil and criminal penalties
• Forum for exchange of information on enforcement
Enforcement and penalties

• Business interruption
• Contractual/customer relations
• Negative PR
Potential business consequences

Overlaps with other regimes
Biocidal Products Regulation, CLP

• Classification, Labelling and Packaging (CLP)
– transitional provisions until 2015
– closely linked to REACH
• Biocides
– still under the scope of REACH
– new Biocidal Products Regulation (September 2013)
– ECHA regulator
Overlaps with other regimes

• Ongoing obligations
• 2018 Registration deadline – 1 tonne or more
• More companies must register
• New issues e.g. application for authorisation
• Nanomaterials – future developments
• Adopting REACH principles around the world
– K-REACH
– co-ordinated global approach
Looking to the future

• REACH is Law - ensure you comply
• Business changes – monitor, review and update
• Addressing particular challenges
• Enforcement – withstanding regulatory scrutiny
Key points to take away

Any questions

Elizabeth Shepherd
DD: 0845 497 8215
elizabethshepherd@eversheds.com
Sonya Veitch
DD: 0845 497 8159
sonyaveitch@eversheds.com
Contact us

Eversheds SHINE Reach, September 2013 presentation slides

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Eversheds SHINE Reach, September 2013 presentation slides