Candidate list expanded up to 38 substances of very high concern

Effective June 18, 2010, the European Chemicals Agency (ECHA) has added another eight substances to the candidate list of substances of very high concern (svhc) after the committee of the member states of the European Union had taken a respective decision a few days before, June 14, 2010. The substances are the following:  

 • Trichloroethylene: CAS No. 201-167-4
 • Boric acid: CAS No. 233-139-2, 234-343-4
 • Disodium tetraborate, anhydrous: CAS No. 215-540-4
 • Tetraboron disodium heptaoxide, hydrate: CAS No. 235-541-3
 • Sodium chromate: CAS No. 231-889-5
 • Potassium chromate: CAS No. 232-140-5
 • Ammonium dichromate: CAS No. 232-143-1
 • Potassium dichromate: CAS No. 231-906-6

This has direct impact on suppliers of articles containing those substances in a concentration higher than 0.1 mass%. They are subject to information obligations according to art. 33 REACH regulation. The candidate list now defines 38 substances. The list is available (including background information) on the following webpage of ECHA: http://echa.europa.eu/chem_data/authorisation_process/candidate_list_table_en.asp

Facts Report of the REACH Enforcement Project

In a ‘Facts Report of the REACH-EN-FORCE-1 project’ ECHA has published a status report on enforcement of the regulation throughout the EU member countries, Norway, and Iceland. However, three EU member countries did not participate in the project: Lithuania, Luxemburg, and Italy. As has been largely disputed, the number of controls of companies per countries varies broadly: France e.g. completed 14 controls, Germany 257, although the number of companies concerned by REACH will not differ that much. In roughly one fourth of the 1.589 companies checked, the authorities discovered cases of non-compliance. Infringements, however, vary on a broad range, so that in only three cases litigation in form of criminal cases ensued.

More than half of the companies inspected play a role as a manufacturer, whereas the others were importers, downstream users or Only representatives. Some of the companies assumed more than one of these qualities. The most common case of non-compliance was missing or insufficient synchronisation of safety data sheets with the demands of the REACH regulation. With enforcement speeding up and in several countries to start at all, inspection results will receive more and more attention as the deadline December 1, 2010, for high volume substances is coming closer.

Agreement about new copyright levies in Germany

The Industry Association BITKOM and the Collecting Society ZPÜ have concluded a new agreement about the extension of copyright levies in Germany. According to the decision of the Arbeitskreis Urheberrechtsabgaben (Committee of Industry Associations and Collecting Societies) of 13 January 2010, the new contract, including new tariffs for USB-Sticks and Memory Cards, is released. The agreement closes an important gap in the levies system, which has been a cause of uncertainty among suppliers of such media. They can now rely on planning security for the next two years.

Moreover, the declaration is a clear indication of the trend that levies are charged for an increasing number of device categories. Especially in Central Europe, the collecting societies impose virtually universal blanket levies on both analogue and digital memory media, and on analogue and digital information technology and consumer electronics devices. This increases the profits of the collecting societies, but also the expenses of end users. The further development seems predetermined.

New tariffs for BITKOM members, the discount (20 %) is already included:

– USB-Sticks: 0.08 €
– Memory Cards: 0.08 €

The duration of the contract is from 1 January 2010 to 31 December 2011; if it is not cancelled, the contract will automatically extend for one year.

Enrolment for BITKOM members:

In case the declaration is accessed until 31 May 2010, the accession shall take effect retroactively on 1 January 2010. After the expiration of this deadline, the declaration shall take effect at the beginning of the following semi-annual period.

The first date of reporting is 15 August 2010 and the first date of payment is the 31. October 2010.

Information obligations according to Article 33 of the REACH regulation

Special information obligations apply to substances in finished articles suspected to be particularly hazardous (candidate substances), according to Article 33 of the REACH regulation. The respective substances are published by ECHA (European Chemicals Agency) in the so-called candidate list. If an article contains one of these substances in a concentration of more than of 0,1 mass percentage, suppliers are obliged to inform their commercial customers actively about this fact and about a safe use of the product. The minimum information is the name of the substance. Private consumers have also the right to get information about the presence of candidate substances in an article on request within 45 days. The information obligations apply to all members of the supply chain, from the manufacturer to the retailer. If their articles contain candidate substances in a volume of more than one ton per year, manufacturers or importers have to report this fact to ECHA as of June 1, 2011.

“Candidate list“ specifies particularly hazardous substances

The so-called candidate list names substances suspected to be particularly hazardous because they manifest an extraordinary risk potential for man and environment. Substances which are named in the candidate list, are subject to special information obligations according to article 33 of the REACH regulation. Particularly hazardous substances will be listed step by step in the index of substances liable to authorisation (Annex XIV of the REACH regulation.)

Joint registration of substances in a consortium – K&L experience with pilot project

According to REACH, every substance can only be registered once. Therefore, REACH foresees the cooperation of manufacturers and importers for registration, even though they might be competitors on the market. REACH offers the possibility of a joint registration in a consortium. By this means, possible risks resulting from the generation of a joint technical dossier could be minimized and costs could be reduced. K&L offers a complete service package for the foundation and maintenance of a consortium, among these are administrative services, competition law, trustee services, IT platform. The appropriate procedures to run a consortium have been developed in a pilot project K&L has conducted in 2007 and 2008 together with the industry branch association TEGEWA (committee for textile chemistry), part of VCI (association of chemical industry in Germany), and 13 member companies, supported by the ministry of the environment of Baden-Wuerttemberg.

Enforcement takes on speed

December 1, 2010, coming closer, enforcement starts playing a larger role in the discussion about REACH compliance. In various member states of the European Union, commissions of either government or industry associations have initiated reports on the national situation. The European Commission, however, triggered theses initiatives by a report on enforcement[1], with a specific focus in the varieties of penalties on infringements determined by the national legislations. A key finding of the report lies in the conclusion that in most countries penalties for non-compliance in the high volume segment, i.e. substances with an annual market tonnage above 1.000 tons, are not sufficient to encourage compliance because the maximum penalty is lower than the assumed costs of an orderly registration in time.

On the background of the statistics of the European Chemicals Agency (ECHA), which estimate that even until March 2010 lead registrants have been nominated for only one fifth of the substances to be registered until Dec 1, it is very likely that there are lots of companies that really count on either inexpensive penalties, low probability of being detected as non-compliant or other ways to evade the cumbersome legal obligations.

A response of the Commission to this finding has not yet been perceived. Enforcement, however, lying in the hands of the member states, timeliness, synchronisation between the members, and appropriateness of the measures will once more prove to be a key issue for effectiveness and credibility of European legislation. Even more so, companies striving for compliance raise suspicion about competitive disadvantages they could suffer from uneven practices in the member states. The acid test for meaning enforcement – and not only preaching it – will come along when the REACH principle “No data – no market” would cause member states to close the business of non-compliant producers or importers – all in the face of vanishing jobs in many of EU’s national economies…

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[1] Report on penalties applicable for infringement of the provisions of the REACH Regulation in the Member States, submitted to the EU Commission Dec 17, 2009 by Milieu, Environmental Law & Policy.

The trustee model of K&L protects the confidentiality interests of companies

Manufacturers or importers who have pre-registered an identical substance have to share data. According to the REACH regulation they become automatically a member of a SIEF (Substance Information Exchange Forum). In order to protect the confidentiality interests of a company and to regard the competition law, a trustee is needed. It is only via a trustee that the necessary data can be provided and shared without jeopardizing the business interests of the obliged companies.

An Only Representative can fulfil registration obligations of companies based outside of the EU

Companies without a legal presence in the EU, producing substances or substances in preparations and at the same time importing them into the EU, have to register these substances according to REACH. However, the companies cannot do the registration themselves. Besides the importer, an Only Representative can be put in charge of the registration. The Only Representative takes over all registration obligations and further duties which would otherwise have to be fulfilled by the importer. In case of an Only Representative, the importer has the function of a downstream user without registration obligations.

Legal services for REACH

Complying with the REACH regulation does not only demand chemical and toxicological knowledge. In oder to fulfil all REACH requirements, comprehensive legal expertise is necessary. K&L consults companies in all legal questions concerning REACH by ccoperating with lawyers specializing in the REACH regulation.

Obligations of a company under REACH

In order to define the obligations of a company under REACH, the material and personal scope of the regulation has to be analysed case by case. Among others, the range of exceptions, deadlines or the responsibility of authorities are also important aspects for companies.

Common registration demands a contractual agreement

REACH requires the joint registration of identical substances. For this reason, manufacturers and importers have to participate in SIEFs (Substance Information Exchange Forum) or they can become a member of a consortium. The extent and the content of a cooperation have to be defined in a contract. For the purpose of sharing confidential information, an independent trustee – normally a lawyer – can guarantee the necessary confidentiality.

Cooperation versus European competition law

Companies which jointly register substances and exchange substance related information have to respect European competition law. Competition law has to be considered when it comes to drafting the consortium agreement, the decision on the acceptance of new members in a consortium or the provision of registration relevant information in a SIEF.