Downstream users’ REACH questions answered

On 1 July 2009 Chemical Watch held the first in a series of three webinars specifically aimed at helping downstream user companies to understand their rights and obligations under the REACH Regulation (CW Webinars). Jean-Philippe Montfort and Giovanni Indirli of Mayer Brown summarise below the key messages from the webinar and tackle some of the questions posed by webinar delegates.

This first webinar focused on the roles, rights and obligations of downstream users, defined in REACH as follows: “Any natural or legal person established within the Community, other than the manufacturer or importer, who uses a substance, either on its own or in a preparation, in the course of his industrial or professional activities. A distributor or a consumer is not a downstream user. A re-importer pursuant to Article 2 .7(c) shall be regarded as a downstream user”.

Downstream user rights include the right to make a use known to the next actor up the supply chain (manufacturer/importer/downstream user/distributor) so that this can be covered in a substance registration.

Downstream users also have a number of obligations under REACH including:

• Not to place on the market substances, on their own, in preparations or articles, supplied after 1 June 2008 that have not been pre-registered or registered as required by an actor up the supply chain;
• To apply the Risk Management Measures (RMMs) recommended for their uses of substances. These could be specified by their EU suppliers in safety data sheets (SDS), or in chemical safety reports (CSRs) prepared by downstream users themselves or they may be recommended in other communications received from EU suppliers.
• Where necessary, to assess their own uses, prepare a CSR and report certain information to the European Chemicals Agency ( ECHA);
• To communicate new information on hazards and any other information relevant to the RMM up the supply chain;
• To provide their customers with an SDS or, where a SDS is not required, other information as listed in the Regulation;
• To comply with requirements related to authorisation and restrictions; and
• To keep records of compliance information and submit it or make it available without delay upon request to ECHA and enforcement authorities.

Below are our responses to some of the questions raised by webinar participants which are illustrative of the issues downstream users face in their daily application of REACH:

Pre-registration

Q: As a downstream user, if a supplier continues to supply us can we assume they have pre-registered since it would be illegal to supply if they had not?

A: Article 5 of REACH applies to all actors in the supply chain. While the text of Article 5 only specifically prohibits “manufacture” and “placing on the market” of non-registered substances, the ECHA Guidance Documents specify that a downstream user cannot “use” or place on the market substances that should have been (pre-)registered. Authorities may therefore seek to enforce this prohibition against any actor down the supply chain, including downstream users that “use” or place on the market a non-registered substance. Downstream users wishing to avoid enforcement action and potential liability should therefore be prepared to show that they have exercised downstream users’ diligence and, if possible, have at their disposal confirmation that the substances are being supplied in full compliance with the REACH registration provisions.

Identified Uses

Q: What is the timing for making a use known to a supplier after the phase-in period is passed?

A: A use can be made known to the next actor up the supply chain at any time before the relevant registration deadline, or after registration. However, a downstream user wishing its use to be addressed and covered at the time of registration by the manufacturer/importer up his supply chain, thereby avoiding creating further obligations for itself (see below), should ensure that its request, along with sufficient information for the assessment, reaches the future registrant at least 12 months before the relevant registration deadline.

Q: I hear that some downstream users are already submitting their uses to manufacturers – is this advisable at this stage?

A: It is advisable for downstream users to submit their use to manufacturers as soon as possible and in any event before 1 December 2009 if they want this use to be covered in registration dossiers submitted before 1 December 2010. However, we understand that some downstream users are waiting for the final version of the ECHA guidance on exposure scenario building before they do so.

Q: If importing finished goods for onward sale in Europe then the exposure scenarios would not have to reflect the manufacture if it occurs outside of Europe. Is that correct?

A: Yes. The importer’s registration dossier and CSR should only include and address his own uses and the uses for which he places the substance on the market.

Chemical safety reports

Q: Article 37(4) describes downstream users’ obligations to document a CSR. There is no requirement to submit the CSR to ECHA. Is it enough that the downstream user files his own CSR at site and makes it available on request to Member States and ECHA?

A: No, it is not enough. Although there is no obligation for downstream users to submit the CSR to ECHA, REACH requires downstream users that need to prepare a CSR to report to ECHA the information listed in Article 38(2) at the latest six months after they have received a registration number communicated to them by their suppliers in a SDS, unless the annual quantities of the substance used by the downstream users for a particular use is less than one tonne. REACH also requires downstream users to update reported information without delay in the event of any changes.

Q: How much time does a downstream user have to comply with the enhanced risk management measures specified in new, REACH compliant safety data sheets received from their supplier?

A: The downstream user must apply the risk management measures at the latest 12 months after receiving a registration number in a safety data sheet.

Q: Is there a deadline within which downstream users have to notify their suppliers of any changes in hazard properties that they have identified or if they feel risk management measures are insufficient?

A: No, there is no deadline, which means that the information should be communicated without undue delay after the relevant actor has become aware of it.

Imported products

Q: A non-EU formulator that has non-EU and EU suppliers does not fall under the description of a downstream user according to the REACH Regulation. Assuming that this non- EU formulator sells the formulated preparations to the EU market, what are your comments and suggestions for such companies other than supplying pre-registered substances? They play an important role in the supply chain.

A: The importers or the Only Representative (OR) of the non-EU formulator should have pre-registered any eligible phase-in substances in the imported preparations and will eventually have to register these. However, REACH allows importers and ORs to avoid registration of substances originating in the EU that have already been registered. In your example, if the non-EU formulator uses a substance supplied by a EU manufacturer who has registered it, the importer or the OR of the non-EU formulator does not need to register it again, providing they have met all the necessary conditions specified in Article 2.7(c). If the non-EU formulator is supplied by EU and non-EU suppliers, the importer or the formulator OR may still be required to register the substance to cover the quantities coming from the non-EU suppliers. In that case, only those quantities are subject to registration, not those already covered by the EU suppliers’ registration. The non-EU formulator can also play a role in providing information to help develop the relevant CSRs.

Q: Who are the downstream users of a manufacturer selling products through a distributor in the EU? The distributor or their customers?

A: The downstream user is the EU legal entity that uses a substance in the course of an industrial or professional activity . The definition excludes a distributor, which instead is defined as “the natural or legal person established within the EU, who only stores or places on the market a substance, on its own or in a preparation, for third parties”. In the example given, downstream users are the customers of the distributors to the extent that they are established within the EU. If they wish to identify their uses, they should communicate relevant information to the distributors, who should then pass the information back up the supply chain to the manufacturer.

Authorisation:

Q: Can you confirm that a downstream user cannot refer to an authorisation granted for a particular application to another downstream user in a different supply chain?

A: Any authorisation granted under Title VI of REACH is supply-chain specific, meaning that a downstream user in a supply chain cannot rely on authorisation granted to a manufacturer/importer/downstream user in another supply chain.

The answers given here are not a comprehensive treatment of the subject matter covered and are not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.