On September 10, 2015, the Court of Justice of the European Union issued a ruling that the duty to notify as to the presence of Substances of Very High Concern (SVHCs) under the EU’s REACH regulation extends to components of complex articles, not to the entire complex article. This puts to rest contradictory prior interpretations of this issue — and will trigger significant shifts in information obligations throughout global supply chains for assembled products.
SVHCs are chemicals proposed for authorization under REACH. Under the regulation, producers and importers of articles must notify the European Chemicals Agency (ECHA) if the SVHC is present in the articles they produce and/or import at a total of >1 tonne per producer/importer per year and the substance is present in those articles above a concentration of 0.1% (weight by weight). REACH also requires suppliers of articles containing an SVHC above 0.1% to provide recipients with sufficient information to allow safe use of the article.
Prior interpretations of the notification and information requirements stated that for articles incorporated into goods, i.e., complex articles, the duty to notify and provide information applied only if the SVHC exceeded 0.1% in the entire complex article, as distinct from the article’s individual components. A number of EU Member States disagreed with that interpretation, ultimately triggering the formal dispute brought to the Court of Justice for resolution to ensure uniformity of interpretation across the EU.
Acknowledging that REACH did not specifically address the issue of complex articles, the Court of Justice concluded that the regulation’s intent was not to create a distinction between individual component articles and the final assembled complex article. Under the Court’s analysis, components do not cease to be “articles” simply because they are assembled or joined together with other components. And, according to the Court, REACH “aims to ensure a high level of protection of human health and the environment.” In light of that goal, the Court ultimately reasoned that each component of a complex product is covered by the relevant duties to notify and provide information.
That said, the Court clarified that the duty to notify ECHA rested on the producer of the component, not the downstream assembler. Otherwise, REACH’s obligations would be duplicated — i.e., with the component producer and the downstream assembler each notifying about the same component. “Such a redundant and needless burden is difficult to reconcile with the principle of proportionality observance….” according to the Court.
In contrast to the duty to notify ECHA, however, the duty to provide information to recipients is broader. First, REACH imposes the duty to provide information on all operators across the supply chain. Second, the duty is triggered simply when the SVHC concentration exceeds 0.1% (i.e., no tonnage or other limitations apply). Third, its goal is to promote safe use of SVHCs. Thus, according to the Court, each entity in a complex article supply chain is obliged to provide the required information for each component of the complex article, even if that results in duplicative efforts.
Significantly, the Court also concluded that an importer of a complex product is to be considered the importer of the individual components. Acknowledging the challenges for importers in obtaining necessary component information, the Court cautioned, “Difficulties of that nature do not, however, affect the interpretation” of REACH’s duties. Thus, the importer of a complex article must determine, for each component, whether an SVHC is present above 0.1%, in order to: (1) make any necessary notification to ECHA; and (2) provide any necessary information to recipients.