3 Myths about REACH you need to know

Three of the more common myths about REACH (Registration, Evaluation, Authorization and Restriction of Chemical substances) are partially based on a misunderstanding of how regulatory requirements ripple through today's globally dispersed supply chains with often wide-reaching and unpredictable consequences. Myth 1: Non-EU based companies are exempt from REACH From a legal perspective, it is accurate if you are not based in the European Union (EU), the EU cannot enforce your compliance with REACH, since you have no legal persona in the EU against which legal actions can be initiated. However, REACH's ripple effect will extend its impact through the enterprise value chain like rows of dominos as its requirements are cascaded down supply chains. This effect is demonstrated in Figure 1. In this scenario, you sell to Customer A, who, in turn, sells to the EU-based Customer D. Customer D is required by the EU to know which substances are in its products, and there is no possible way he can obtain that knowledge without Customer A's assistance. Customer A, in turn, has no source of this knowledge other than from you, as supplier of the product. While you will not be directly asked by the EU to comply with REACH, your customers will require your support in order to comply. This effect also works in reverse as detailed in Figure 2, below. In this case, you purchase a material from Supplier D. Supplier D formulates this material from a variety of material ingredients, one of which is Material C, purchased from Supplier C. Supplier C is based in the EU, and is legally obligated to comply with REACH. In this second scenario, if Supplier C does not comply, Material C will not be available because it will be off the market. It is in your interest to ensure continued supply of Material C by communicating with Suppliers C and D, and securing their assurances Material C will be REACH compliant, and hence available to you. Myth 2: Article / product manufacturers are exempt from REACH (a.k.a. "REACH only affects chemicals companies") It is true very few articles will require registration. In fact, only articles that intentionally release substances are subject to REACH registration requirement. However, registration is only one of the requirements of REACH. Some of the other legal obligations include notification; restriction, authorization, supply chain communication, downstream user obligations, classification and labeling requirements. This presents a gauntlet of obligations, many of which fall squarely upon product manufacturers. Product manufacturers cannot avoid the REACH ripple effect. Refer to Figure 2. Suppose you are a manufacture of products using Material C as a critical ingredient in an product you produce. If Supplier C does not ensure that Material C fully complies with REACH, it will be pulled from the market and you will no longer have access to that ingredient and cannot produce your product. Myth 3: My industry is exempt from REACH REACH does provide a variety of exemptions for certain products and applications. It is, however, generally not true that any industry can rely upon a blanket exemption thus excluding all products from being impacted. In seeking exemptions, the burden of proof is on the manufacturer, or importer, to evaluate the applicability of exemptions and, in most cases, the answers you come up with vary depending on the product. For example, if you sell a printed circuit board, the same circuit board may be used in automobiles (not exempt), medical electronics devices in direct contact with human body (exempt) and in airplanes (possibly exempt on a case-by-case basis in some EU Member States if a specific defense exemption is granted). Referring to Figure 1, the REACH ripple effect again applies. Your product may be incorporated into products for Customers C, D and E, based around the world. Customer D, in the EU, is going to be cascading the REACH requirement down to you. You may have little or no visibility as to whether Customer D uses your product in an exempt or non-exempt application. The complex, interdependent nature of global supply chains means that no one can hide from either the direct or indirect effects of REACH, no matter where in the world they do business or what type of product they manufacture. VentureOutsource.com