Print version

Legal Spotlight: C&L notification: issues and solutions for EU importers

The classification, labelling and packaging (CLP) Regulation has taken over the provisions of the REACH Regulation regarding the classification and labelling (C&L) inventory and the requirements for companies to notify the C&L they use when placing substances as such, or in preparations, on the EU market. Jean-Philippe Montfort assesses the issues for importers.

Most companies have now realised that this requirement, which initially seemed relatively minor in comparison to the REACH Registration requirements, is actually very broad and difficult to meet at the same time as complying with the registration deadline for high-volume substances. This is even more so for EU importers and their foreign suppliers, for whom practical solutions need to be found in time before the notification deadline.

C&L notification

The CLP Regulation (Articles 39 and 40) provides that any manufacturer or importer should notify the European Chemicals Agency (ECHA) of the classification and labelling of the substances they place on the market on their own (if the substance is classified as hazardous or subject to REACH registration), or in a mixture (if the substance is hazardous and above the concentration limits which results in the classification of the mixture as hazardous). Notification shall take place by 3 January 2011 for substances already on the market prior to 1 December 2010, or within one month of placing it on the market after that date.

Notification must be made by each and every manufacturer or importer, therefore including any EU-based company importing into the EU foreign products, even in very small quantities, that contain substances subject to C&L Notification.

Notification is not needed for substances for which the C&L information has already been submitted as part of a registration under REACH. But notification is needed for any other hazardous substances, irrespective of tonnage, and for any other substances that are subject to REACH registration, including non hazardous substances.

Once the notification is made, some of the notified information will be published on ECHA’s C&L Inventory and, where there are differences in C&L notifications for the same substances, notifiers and registrants are required to make every effort to come to an agreed C&L to be included in the inventory and to inform ECHA accordingly.

Issues for importers and non-EU suppliers

EU importers are only exempt from the notification obligation if the information to be notified has been submitted as part of a REACH registration dossier submitted by 1 December 2010, by themselves or by the only representative (OR) designated by the non-EU manufacturer of the substance or the mixture they import. In contrast, the CLP Regulation does not allow for the notification of C&L information by ORs. The problem is that in many cases, non-EU suppliers, and in particular formulators of mixtures, are exporting their products into the EU through a series of channels and with multiple EU importers. Also, the formulations and portfolios of importers change rapidly. In many cases the same substances are used in various quantities in various formulated products. Many of these substances may be classified as hazardous and, because they are not high-volume substances, are not subject to registration by the EU importers in December 2010. They will therefore need to be notified by the EU importers.

While notification through an OR designated by the non-EU manufacturer is not possible under the CLP Regulation as it stands, ECHA has accepted that an OR, if also an importer, could also notify on behalf of a “group” of importers. Indeed, the CLP Regulation allows a single notification to be made by one manufacturer or importer on behalf of a “group of manufacturers or importers”.

The fact that the OR must also be an importer however will be a real challenge, even if it only can import a sample of a representative mixture. Third party ORs are not usually equipped to import, handle and store hundreds or thousands samples of hazardous substances and preparations.

Assuming that this problem can be overcome, a group notification is only the beginning of the solution…

Is a group notification the solution?

Regarding group notifications, the ECHA Practical Guide on “How to notify substances in the C&L Inventory” specifies that the members of a group are recommended to document fully their agreement and the basis on which classification decisions have been made. On request, they have to make available to authorities all the information used for the purposes of C&L under the CLP Regulation.

This means that non-EU manufacturers/formulators should contractually organise the notification of the substances they export into the EU through one of their EU importers, possibly an EU subsidiary or an OR and documenting the agreement of the EU importer to be part of the group.

Article 40(1)(a) of the CLP Regulation requires that the notification should include “the identity of the notifier(s) responsible for placing the substance(s) on the market” and this has been interpreted by EU authorities as requiring a group notification to list all the members of the group, ie. all the EU based legal entities that are importing a given substance and that agree to the C&L notification submitted on behalf of the group.

This also creates a concern, since non-EU manufacturers/importers may have a legitimate interest in protecting the confidentiality of their list of EU importers. Disclosure of that list to their competitors, but also to their customers, could mean that they reveal confidential business information and could create antitrust problems.

In principle, only the lead notifier has access to the list during the preparation and submission stages. Also, according to the ECHA Guidance document, the other members of the group will not receive the “submission report” of the notification (which includes the list of all group members). But the ECHA document also suggests that it is required to provide the submission report to all members of the group. Practical arrangements will therefore need to be made to avoid disclosing the identities of group members while providing them with the information they are entitled to receive.

C&L Inventory publication and right of access

According to Article 42(1) of the CLP, only some of the information notified to ECHA will be published as part of the C&L Inventory. This does not include the identity of the notifier(s) and therefore of the group members.

However, this article also provides that ECHA shall grant access to the “other information” that has been notified, therefore potentially including the identity of the notifier(s) to (1) the notifiers and registrants who have submitted information on that substance; and (2) other parties.

The purpose of disclosing the identity of notifiers and registrants is to allow them to agree on the C&L if there are discrepancies, as required by Article 41 of the CLP Regulation, which is legitimate. However, it should be sufficient for only the name of the group leader to be disclosed as he will be the only one able to contribute to the discussion. Disclosure to other parties will be made only on request, which should be processed in accordance with Regulation (EC) 1049/2001 regarding public access to European Parliament, Council and Commission documents.

Protecting identity

In both cases, non-EU manufacturers/formulators should seek to protect the confidentiality of the identity of group members through proper references in the notification itself and through contractual provisions requiring the group members to not request information on the identity of other group members, and also specifying that they cannot be held liable if the list of group members is eventually disclosed by ECHA.

From a policy standpoint, it is obvious that only the foreign manufacturers/formulators have information concerning the substances they use and EU importers will rarely be able to contribute to the discussion on what is the proper C&L for these substances. They also have no means of participating in any discussion under Article 41. Also it does not seem to make sense that, once the notification is made and once a single C&L is agreed and published on the EU C&L inventory, new importers of formulators containing that substance, or new importers of that substance, are required to notify the same C&L to ECHA. If they have new information and believe another C&L is needed, then a new notification makes sense, but not if it is only to notify the same C&L.

Time needed

The issues raised here could be resolved through legislative changes, including by allowing ORs to notify on behalf of foreign formulators with the EU importers becoming downstream users and by limiting the number of C&L notifications required, but this will take time.

Importantly, preamble 55 of the CLP Regulation specifies that: “The Agency should study the possibilities for further simplification of the notification procedure, in particular taking into account the needs of SMEs”. This provides ECHA with the necessary mandate to address an issue that will no doubt create a hugely bureaucratic system without real benefits to anyone and that will use up valuable resources from both industry and ECHA.

In the meantime, non-EU manufacturers and formulators should be creative and develop contractual arrangements to best deal with the current legislative framework, to the benefit of their EU customers and of all concerned.

Jean-Philippe Montfort leads the REACH team of Mayer Brown, a global law firm with extensive experience in the field of chemicals regulation. For further details, please contact Jean-Philippe Montfort

JPMontfort@mayerbrown.com

www.mayerbrown.com

© CW Research Ltd. You may circulate web links to our articles, but you may not copy our articles in whole or in part without permission.