4 March 2016
Latest REACH Enforcement Report Shows Lack of Compliance is Greater Among Importers and “Only Representatives”
The European Chemicals Agency (ECHA) has reported that the third REACH-EN-FORCE project, organised by ECHA's Enforcement Forum, shows that 13% of inspected companies have missed some of their REACH registration duties. It may be of interest for Hong Kong companies selling to EU customers to know that “only representatives” acting on behalf of non-EU manufacturers, and EU importers, were found to be more at risk of non-compliance than EU manufacturers of substances.
REACH-EN-FORCE-3 is the third enforcement project of the REACH Enforcement Forum. It encompassed the “inspection and enforcement of compliance with registration obligations by manufacturers, importers and only representatives in close cooperation with customs”.
The project was coordinated by ECHA's Enforcement Forum and implemented in close cooperation with national customs authorities. The aim was to investigate the registration obligations of manufacturers, importers and only representatives.
To ensure that any risk posed by substances is assessed appropriately and to make the relevant information generally available, manufacturers, importers and only representatives of non-EU manufacturers are obliged to register their substances. This is the main aim of the REACH principle, known as “no data, no market”.
Only representatives, namely, natural or legal persons established in the EU that register substances on behalf of importing downstream users, were found to be more likely to be in breach of their REACH-related obligations than other registrants. A dedicated investigation of supply chains involving more than one Member State was carried out by inspecting 104 only representatives. A third of them (32%) did not comply with their specific only representative information duties as described by Article 8 of the REACH Regulation.
In a novel and broad approach, all participating European countries used data on substances and mixtures from import declarations to target their inspections of importers and only representatives. Typically, an annual data set of predefined CN codes from various chapters of TARIC was used. Most inspected companies were small and medium-sized enterprises (70%).
Within the REACH-EN-FORCE-3 project, enforcement authorities in 28 countries inspected 1,169 companies and 5,746 substances in 2013-2014. In total, 13% of companies did not fulfil some of their registration obligations. In most of these cases, the non-compliant companies failed with registration duties related to one or two substances from their portfolio. However, 2% of companies had not registered any substances at all.
During inspections, it was observed that some companies only have a role as a downstream user/distributor and not as a manufacturer, importer or only representative, as was expected during the company selection. Varying economic conditions, disparity in the availability of resources and/or the size of the country could provide an explanation as to the difference in numbers of enforcement actions performed within the scope of the project by the participating countries. Moreover, additional inspections were carried out under the REACH Regulation within the scope of other national projects.
The reactions of enforcement authorities in cases of non–compliant companies was focused on immediate actions, by advising (69% of the cases) or ordering (23% of the cases) remediation and restoring the respective company and substance into compliance. Due to the complex regulatory nature of the cases, a focus of enforcement was also to act beyond short-term administrative measures and to commence various kinds of follow-up activities, in 41% of cases.
The flow of information in the supply chain between only representatives and importing downstream users was also found to be poor. It was often difficult to establish the structure of the supply chain as the respective importers could not specify the correct relevant only representative, and the only representatives did not keep reliable records of represented importers.
ECHA's Executive Director, Geert Dancet, strongly advises “third country exporting companies to keep their only representatives informed annually of the exported volumes to all their importers in the EU/EEA so that registration obligations are correctly identified.”
It is indicated that the project has proven that REACH enforcement authorities in the 28 participating countries have established effective cooperation with their relevant customs authorities. This cooperation allowed enforcement authorities to make use of data from individual customs declarations in their routine inspections of REACH duties. Hong Kong traders should be aware that enforcement authorities and customs are encouraged to continue this type of cooperation in the future.
Please click on the following to read the Forum REACH-EN-FORCE 3 – Final Report.