15 December 2015

Companies that believed REACH to be of little concern to them, because they themselves do not come into contact with chemical substances and mixtures, may be disappointed. In a judgment dated 10 September 2015, the European Court of Justice confirmed that the duty to notify (article 7, section 2-4 REACH) and the duty to inform (article 33 REACH), imposed by REACH for certain articles containing substances of concern applies throughout the entire supply chain.

Once a substance of concern has been included in the so-called candidate list for authorisation (to be consulted on http://www.echa.europa.eu/en/candidate-list-table), the presence of that substance in a product triggers certain obligations. On the one hand, comes a duty to notify the European Chemicals Agency (ECHA), which consists of notifying some limited information regarding the substance (article 7, section 2-4 REACH). On the other hand, there is a duty to inform its customers (professional recipients and even consumers upon their request), which consists of providing sufficient information, available to the supplier, to its customers to allow safe use of the article (including, as a minimum, the name of that substance) (article 33 REACH).

Those obligations are only applicable if the substance is present in the product in a concentration of more than 0.1% (w/w).

In a judgment dated 10 September 2015 the Court of Justice settles the disagreement that had arisen between the European Commission and various Member States with regard to the calculation method for the 0.1% (w/w) threshold for so-called complex articles. Complex articles are themselves composed of several other articles.

A previous contribution (Eubelius Spotlights March 2015) already discussed Advocate General Kokott’s point of view on that issue. With the aforementioned judgment, the Court of Justice mainly followed that point of view, which is among others also supported by Belgium.

The Court decides that the threshold is applicable to each component article individually and that the producer or importer of a complex article must in principle also verify if a substance of the candidate list is present in a concentration of more than 0.1% in the component articles of which the complex article consists. The impact of that decision for producers and importers of complex articles is not to be neglected, because they might be obliged to fulfil REACH-obligations for component articles of that complex article and hence also incur liability.

The consequences for producers of complex articles who buy their components within the European Economic Area are rather limited, even if the judgment has some importance for them too.

A producer of a complex article will, as part of the duty to inform, receive information from its European suppliers with regard to the presence of substances of concern in the components of the complex article delivered by them. If a substance of the candidate list is present in that component in a concentration of 0.1% or more, those suppliers are obliged to inform the producer of the complex article, who is their customer, thereof. The producer of the complex article can then estimate the concentration of the substance in the complex article by using the information received from its suppliers. If necessary, it will also have to provide the required information to its recipients for that complex article.

If the producer of the complex article receives information from one of its suppliers that a substance of the candidate list is present in the component of the complex product, delivered by them, that producer must also inform its customers thereof. That is also a fact when the final complex article delivered by that producer does not exceed the 0.1% threshold. The Court of Justice explicitly considered that the inclusion of an article as input in a complex product cannot interrupt the transmission of the duty to provide information to each of the operators along the supply chain. The duty to provide information must follow the article to which it relates throughout the chain to the final consumer.

As part of the duty to notify the European producer must, according to the Court, only verify if a substance of concern is present in a concentration of more than 0.1% in the complex articles he produced (or merely assembled). If so, he is obliged to notify the required information to ECHA, if he uses the substance in question in a quantity that exceeds one tonne per year, if the use of the substance has not been previously registered and if the possibility of risk of exposure cannot be ruled out. The European producer does not have those obligations for the components (component articles) of the complex product, given that the producers of those component articles will already have notified the ECHA of the required information, if necessary.

Companies that import their products or components of their products from outside the European Economic Area - the importers of articles - must in fact comply with a duty to investigate those imported articles and the components thereof. Indeed, the Court has decided that both for the imported articles as for the components thereof, the notification and information obligation must be observed in as far as the (component) article contains a substance of the candidate list in a concentration of more than 0.1%.

Importers will not automatically receive the information they need to assess the threshold from their non-European suppliers, as the latter are not bound by REACH. If those suppliers refuse to provide the information or the correctness of the information received is questionable, the European company will have to investigate not only the complex product, but also the components thereof, to verify if substances of the candidate list are present. The Court has clearly indicated that potential difficulties to obtain the required information from non-EU suppliers do not affect the importer’s obligation to carry out the necessary investigations.

If the complex product or one of its articles contains a substance of the candidate list in a concentration of more than 0.1%, the importer must perform the notification and information obligation for each of the relevant components. The importer can still escape from the notification obligation if he only imports the substance in small quantities (a maximum of 1 ton) or if the risk of exposure can be excluded.

Advocate General Kokott had considered that such duty to investigate was not imposed by article 33 REACH, because the article only refers to sufficient information that is available to the supplier. The Court of Justice did not adhere to that reasoning. In its considerations, the Court indicated that the scope of the duty to provide information is limited by article 33 which states that “sufficient information, available to the supplier, to allow safe use of the article in question”, must include, as a minimum, the name of that substance. But when answering the preliminary ruling request, the Court does not consider that criterion of sufficient availability anymore. The Court decides that it is for the supplier of a product to inform its recipient of the presence of a substance of the candidate list in its product, which includes, as a minimum, the name of the substance concerned.