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REACH (EU)

The REACH Regulation and Your Business

REACH (Regulation (EC) 1907/2006) is a complex regulation and its evolving requirements place increasing demands on manufacturers to comply or lose market share therefore it is critical that your company react quickly to these changing requirements.

Need background?

Click here for basic information about the Registration, Evaluation and Authorization of Chemicals (REACH) regulation:

  • Requirements
  • Risks (Business, market, competitor, legal)
  • Solutions

Looking for Updates and Alerts?  

1

What Happened – September 11, 2015

Yesterday (September 10), the European Court of Justice (ECJ) issued a bombshell ruling that shifts the basis of REACH compliance from the fully-assembled product to each component incorporated into a product.

When REACH was originally enacted in 2006, the European Commission supported the fully-assembled product basis for compliance. Understandably, manufacturing industries also supported this basis, since compliance for many products would be substantially easier to document than the “homogenous material” basis for compliance that was enacted within both the End-of-Life Vehicle (ELV) directive and the Restrictions on Hazardous Substances (RoHS) directive.

What Impact It Might Have

For firms that sell products in the EU market, the ECJ ruling means that there is now a significantly greater danger of legal liability and/or loss of business from customers – either of which can result in substantial financial loss.
 
Additionally, there is a far more compelling reason for firms to:

  • Collaborate with their suppliers to gather accurate, complete substance data
  • Utilize the cross-industry CDX data-exchange infrastructure that flexibly allows compliance with not only REACH, but also Conflict Minerals, RoHS and other laws that require substance documentation
  • Leverage their compliance data to reduce their long-term compliance costs and to capitalize on sales, marketing, sourcing and other opportunities

Why those implications? Because the vast majority of manufacturing firm will likely have more components that contain SVHCs exceeding the 0.1% threshold that triggers Article 7 “Notifications to ECHA” and/or Article 33 “Notifications to Downstream Users.” Plus, with the required addition of new SVHCs at least twice a year, there is a greater likelihood that components will contain SVHCs in concentrations that trigger those Notification and Communications requirements.
 
Additionally, suppliers will likely experience far more pressure from their customers to supply quality data, because the potential for losing business due to inadequate substance documentation is now substantially greater as a result of the ECJ ruling.

What We Recommend

Take the ECJ ruling very seriously. If you sell into the EU directly – or if your products wind up in larger products that are sold into the EU – the financial risk to your company has just escalated.

Get external help. The complexity of complying has also just escalated.

Assess your risk. More than ever, a Product Risk Assessment and an Organizational Compliance Gap Analysis are needed to evaluate your regulatory and/or customer risk.

Implement a Supplier Communication program and a data-collection process – or accelerate your current activities so that you can meet your regulatory and/or customer requirements.

2

What Happened

The 30+ REACH Enforcement Forum nations are each investigating a sub-set of 14 Restrictions List substances identified by ECHA

What Impact It Might Have

Greater regulatory or customer scrutiny. Why? Because Restrictions List substances are far more likely than SVHCs to result in non-compliance. They are typically banned from products, including products exported to the EU, or they have very narrowly limited concentrations and/or applications.

What We Recommend

Act quickly. Implement – or have implemented – a Product Risk Assessment to determine whether your highest-revenue products sold into the EU contain any of these Restrictions List substances.

3

What Happened

ECHA is publicly reminding companies that the 2018 deadline for registering substances is around the corner.

What Impact It Might Have

The good news: unless you’re an EU substance manufacturer or importer, this deadline doesn’t directly impact you.

The bad news: “As this deadline concerns lower volume uses, the commercial imperative to continue supplying non-registered substances will be less than for previous registration deadlines. In fact, there is widespread concern in the manufacturing sector that there may be many unexpected withdrawals of substances and mixtures from the market, as the deadline approaches.” Source: Association of Equipment Manufacturers (AEM) Regulatory Substance Brief, July, 2015

This upcoming 2018 deadline could impact both products and production processes using these substances.

What We Recommend

Accelerate your data-collection activities. Achieve Full Material Disclosure (FMD) of purchased inventory. Begin communicating to your supply chains about use of process chemicals and risks of availability of non-register substances.

Subscribe to AEM’s Regulated Substances Brief or other sources that are likely to track and publicize these substance withdrawals.