Manufacture, import, use and supply of substances, mixtures and articles in the European Economic Area (EEA) and Northern Ireland (NI) attracts duties under the registration, evaluation, authorisation and restriction of chemicals (EU REACH) regulation.
If your company is based outside the EEA or NI then you do not have any obligations under the EU REACH regulation. Your supplier or customers in the EEA or NI, however, do and it is their compliance that impacts your business and products.
Companies based outside of the EEA or NI can use this guide to find out how to maintain market access, competitiveness and protect your confidential business information.
Compliance is a supply chain issue
REACH compliance is achieved when a duty holder complies with all relevant enacting terms of the regulation. If your EEA or NI suppliers or customers have sufficient information, capital and dependence on your product then they may take unilateral action to fulfil their own duties.
But what if they require information that is your intellectual property? What if the additional compliance costs make your product commercially unviable? What if you have multiple customers who duplicate compliance costs for your supply chain? What if your customer is a preferred partner and you want to do more business? What if your products contain substances of concern and are banned from the EEA market?
If any of these questions create doubt about a ‘do-nothing’ approach then there are actions you can take.
Support compliance for your product
Pass information through the supply chain
Customers may ask about the REACH compliance status for your product or information on the substances contained within it. This information will be used to identify actions required to achieve compliance when importing, using or placing your product on the market.
For example, some substance and their uses must be authorised by the European Commission before they can be imported, used or placed on the market. Additionally, some substances, on their own, in mixtures or in articles may be restricted for specific uses. Customers will need information on substances in your product to comply with these requirements and/or mitigate obsolescence risks.
Providing product information to other supply chain actors, however, may reveal your intellectual property. A non-disclosure agreement may address this risk but becoming a duty holder under the regulation may be a more robust way to protect IP and market access.
Become a duty holder
Appoint an Only Representative
Manufacturers and formulators of substances and producers of articles based outside the EEA or NI can appoint an Only Representative (OR) to shoulder some REACH duties incumbent on the importer. Technically, it will be the OR that becomes a duty holder under the regulation, and you will have a commercial contract with them.
Only Representatives have to be:
- A natural person or legal entity established physically in the EEA or NI;
- Equipped with sufficient knowledge in the practical handling of the substances and information related to them;
- Appointed by a mutual agreement with a manufacturer, formulator or article producer, established outside the EEA or NI; and
- Responsible for complying with the legal requirements for importers under EU REACH.
An OR can be a legal entity owned by your company or a third party such as a consultancy. Once appointed, you must inform the importer(s) of your products about the OR arrangement. The importers are regarded as downstream users under REACH and are relieved of some duties placed on importers.
For example, substances imported in volumes greater than one tonne per year must be registered with the European Chemicals Agency (ECHA) unless an exemption applies. An OR can register substances in your product so that all importers are relieved of the obligation and costs of registration. In fact, one significant benefit of using an OR for registration is the reduction of compliance costs across the supply chain. This will make your product more commercially attractive in the European markets.
Companies that do not manufacture or formulate a substance cannot benefit from an OR. For example, distributors typically do not manufacture or formulate and are not able to appoint an OR. Additionally, companies that use toll manufacturers cannot appoint an OR. In this scenario, only the toller can appoint the OR, which creates additional costs and risks for the product owner.
Establish an EEA or NI entity
A legal entity established physically in the EEA or NI can act as an OR, importer or sales agency for the products supplied by your company. This entity will be a duty holder and is able to take direct action to achieve compliance for your products. The specific role taken by the entity, influences the available options, the cost for compliance and the risk profile.
Acting as an OR
As described above, your EEA or NI entity can act as OR of your non-EEA or NI manufacturing or formulating entity.
Acting as an importer
Importing products from your non-EEA or NI entity entitles the importer to fulfil all compliance obligations incumbent on importers. In addition to non-EEA or NI manufacturers and formulators, this option allows distributors to achieve compliance for their products.
Acting as a sales agency
An EEA or NI-based entity acting as a sales agency for your products can also register substances contained within those products. This could be described as a hybrid between the OR and importer scenarios.
Achieving and maintaining compliance
Compliance actions will be required once the actor has been determined. The enacting terms of the regulation specify what must be done to achieve compliance for your product.
These actions can include:
- Register a substance;
- Send notifications or report information to ECHA;
- Create and provide a Safety Data Sheet (SDS);
- Provide information to a customer or a supplier;
- Keep information on duties related to compliance;
- Identify, apply and recommend risk reduction measures;
- Respond to information requests from ECHA;
- Apply for an authorisation;
- Submit review reports; and
- Comply with the terms of a restriction.
We recommend that you work with an expert to identify all obligations that apply to your business operations and product.
Once compliance is achieved it is essential to be informed of any changes to regulatory requirements. For example, the restriction list is frequently updated with new substances which may ban your current formulation on the European Markets. Staying ahead of changes may allow you to reformulate and maintain market access after restrictions enter into force.
Companies not established in the EEA or NI do not have any REACH requirements. Your suppliers or customers based in the EEA or NI probably do and this can affect market access for your products.
As a non-EEA or NI actor, there are multiple compliance options available for your product. The best approach depends on your business operations, appetite for risk, product and budget. Get in touch to speak with our experts and find the best solution for you.
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