In 2003, the European Commission proposed a major overhaul of European chemicals legislation. The proposal, called the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), entered into force on 1 June 2007. REACH will have far reaching effects not only on the European chemical industry, but also on non-European companies that ship products into the European Union (EU). Not only will manufacturers, importers and users of industrial chemical products be impacted, but also companies that produce non-industrial chemical products, such as food packaging materials, cosmetic ingredients, and pesticidal and biocide inerts. There is no question that REACH will be costly for industry to comply and the major challenge for companies is to manage the REACH obligations strategically and efficiently.
As noted, REACH entered into force on 1 June 2007. There are specific deadlines that will need to be satisfied in order to stay on the market. Obligations began in earnest on 1 June 2008 and many companies will need to fulfill the bulk of their REACH responsibilities by 1 December 2010. There is thus little time to prepare to meet these challenges. Companies will need to expend considerable resources to comply with REACH and advance planning is necessary.
THE REACH SYSTEM
The Four Legs of REACH
REACH is a four-part regulatory system comprised of:
Registration of most chemicals, both new and old, that are manufactured or imported into the EU in quantities exceeding 1 metric ton per year. The registration obligation falls on manufacturers and importers, but downstream users will also need to ensure that their specific uses are registered. The amount of information and data needed for registration will depend on the quantities or tonnage of the chemicals with more data needed at higher tonnage levels. Built into the REACH system are provisions for avoiding unnecessary animal testing and data sharing among registrants. Where new animal testing is needed to support registration, the registrant must first submit a testing proposal to the regulatory authorities. REACH also requires the preparation of a Chemical Safety Report (CSR), essentially a risk assessment and management report that describes the chemical, its uses, the hazard and exposure potential, and recommends practices for reducing risk and exposure.
Evaluation of registration dossiers and animal testing proposals by the regulatory authorities, as well as special provisions to allow the call-in of additional data on chemicals of highest concern to the EU regulators.
Authorization of substances of very high concern, defined as carcinogens, reproductive toxicants, mutagens, persistent and bioaccumulative toxicants, and substances that pose similar problems. The Authorization is user and product specific and depends in part on the availability of lower risk substitutes.
Restrictions of high risk chemicals or uses where the risks can not adequately be managed and community-wide regulation is needed.
REACH also establishes a European Chemical Agency (ECA) to be headquartered in Helsinki, Finland, that will administer the regulations with the assistance of the Competent Authorities within the various European Member States. REACH will also establish a classification and labeling inventory of all industrial chemicals, provide new enforcement authority to the Member States, and establish various administrative and legal procedures.
The Timetable for REACH Compliance
As currently formulated, companies will have little time to comply with the core REACH obligations. New chemicals will be subject to the Registration provisions of REACH at 12 months after entry into force. For existing chemicals, there is a pre-registration phase that extends from months 12 to 18 after entry into force. Companies that fail to pre-register their chemicals during that six month window of opportunity will lose the special benefits afforded existing chemicals. The Registration dossiers for pre-registered existing chemicals are due in three phases of 3.5, 6, and 11 years after entry into force, with high volume and high risk chemicals required to be registered first. Companies that manufacture or import substances in the first category will need to organize or join consortia or justify a stand alone Registration. The CSRs will need to be drafted as part of the Registration process. REACH also envisions the creation of a candidate list of substances of very high concern that will trigger obligations for article producers and forms the basis for nominating substances to be subject to use authorizations. The candidate list will be developed within 2 years after entry in force. Obviously, companies that have an interest in substances that may be listed will need to take proactive measures to defend their products.
Preparing for REACH
Companies are actively taking steps now to prepare for REACH, including:
(1) conducting reviews of product portfolios to determine which substances are imported into Europe, the current and anticipated future tonnage volumes, confirming that the substances qualify as Phase-in substances, and determining whether the substances are subject to or exempt from Registration. Not all substances are subject to Registration. Certain uses of a substance also do not count as part of the tonnage volume that must be registered.
(2) reviewing the available data on subject chemicals to determine whether there are any data gaps.
(3) making decisions on whether to conduct testing now or wait until REACH begins. REACH requires a mandatory sharing of existing vertebrate animal studies among registrants of the same substance. The data owner is compensated for the use of its data by the other registrants. No new animal testing can be conducted after REACH enters into force without obtaining the approval of the Authorities.
(4) working with EU customers to identify the uses of the substance that should be supported for Registration. All identified uses must be supported with few exceptions. If a use is not identified, the customer will need to provide information directly to the Authorities.
(5) working on developing appropriate safe practices for handling the substance in cases where the data suggest there may be some risk.
Keller and Heckman LLP and REACH
Working in close collaboration with our offices in Washington, D.C., San Francisco, and Shanghai, Keller and Heckman clients conducting business in the EU have been assisted since 1982 by attorneys and scientists in the firm's Brussels office. With respect to the REACH proposal, our Brussels office has been actively involved in REACH counseling and assistance since the release of the 2001 Commission White Paper on the Strategy for a Future Community Policy for Chemicals, the internet consultation, the publication of the Commission's 2003 proposal, and the more recent processes at the Council and European Parliament to adopt a consensus and final REACH regulatory text. With the release of the Council Common Position in December 2005, we have been counseling clients on strategies for implementing REACH on a near daily basis. Our Brussels and Washington D.C. professional staff have also organized a series of well-received courses designed to help clients understand the practical aspects of REACH for their businesses and to begin preparing for REACH compliance.
Keller and Heckman has long-standing experience in testing consortia management under the U.S. High Production Volume (HPV) chemicals challenge program, as well as under the EU Biocidal Products Directive (BPD). We are also expert on various aspects of EU competition law.
