Source: https://globalcompliancenews.com/eu-update-on-the-reach-article-in-article-debate/
Timestamp: 2020-07-16 13:34:55
Document Index: 11647000

Matched Legal Cases: ['Art 7', 'Art 33', 'Art 7', 'Art 33', 'Art 33', 'Art 33', 'Art 33']

EU: Update on the REACH "article in article" debate
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EU: Update on the REACH “article in article” debate
Graham Stuart and Rachel Barlow
March 12, 2015 Author: Graham Stuart and Rachel Barlow
On 12 February 2015, Advocate General (AG) Kokott published her non-binding opinion in a preliminary ruling referred to the Court of Justice of the European Union regarding the interpretation of the “article” concept under REACH Regulation (1907/2006/EC). The case was referred to the Court from the French Conseil d’État in early 2014 and, while the Court is not bound to follow the Advocate General’s opinion, it does generally do so more often than not. For the most part, the Advocate General’s opinion seems to align with the “once an article always an article” approach favoured by the so-called “dissenting Member States”. In addition, the Advocate General makes some interesting comments on the amount of information that suppliers need to have available to them in order to discharge their REACH “articles” obligations.
What is the “article in article” debate?
What constitutes an “article” is relevant to two key provisions of REACH:
Art 7(2), which requires a producer or importer of articles to notify ECHA if a substance of very high concern (SVHC) (i.e. a substance listed on ECHA’s “Candidate List“) is present in those articles above a concentration of 0.1% weight by weight (w/w) and in quantities exceeding one tonne per year (unless otherwise exempt).
Art 33, which requires a person supplying an article to provide information to recipients and, on request, consumers on any SVHCs present in articles in excess of the 0.1% w/w threshold.
The “article in article” debate revolves around what should be treated as the “article” for the purpose of these provisions where a complex article is made up of multiple component parts. Should it be each individual component article? Or should it be the assembled article (made up of individual component articles) as a whole? The latter is the position adopted by ECHA’s “Guidance on requirements for substances in articles” and supported by the European Commission, with the former being the position stated in a joint guidance document published by the national authorities in Belgium, Germany, Denmark, France, Norway (EEA) and Sweden in July 2013.
What has the Advocate General decided?
The position taken by the Advocate General seems to be broadly consistent with that of the dissenting Member States. The Advocate General breaks down her conclusions separately for each of the obligations described above. In respect of Art 7(2) the Advocate General takes the view that:
where a complex article is manufactured in the EU, the assembler of that article only has to discharge the notification obligation in respect of the content of SVHCs in the entire article as a whole. Whether a notification needs to be made in respect of the individual component article parts will already have been determined at an earlier stage in the supply chain, either by the entity manufacturing the component articles in the EU or, where the component was manufactured outside of the EU, by the entity responsible for import.
if the complex article is assembled outside of the EU and then imported, the notification obligation should apply to the individual component articles making up the entire article i.e. the approach advocated by the dissenting Member States. The Advocate General’s justification behind this is to avoid disadvantaging EU producers. If importers did not need to consider the individual component articles making up a complex article, it would be less onerous, from a REACH perspective, to manufacture the complex articles outside of the EU and import them, than manufacture them in the EU.
In respect of Art 33 the Advocate General takes the view that if a person supplies an entire article consisting of individual component articles, which despite being integrated retain a shape, surface or design of their own, it is required to provide information to recipients and, on request, consumers on any SVHCs present in any component article in excess of the 0.1% w/w threshold but only to the extent that the relevant information is available to the supplier. Ignoring the final caveat, this aligns with the approach favoured by the dissenting Member States.
A caveated approach to the Art 33 obligation?
Perhaps the most interesting point made in the Advocate General’s opinion is her view that the Art 33 obligation to provide information should be caveated so that it only applies to the extent that the relevant information is available to the supplier. The Advocate General states that, in her view, the English and German translations of REACH do not rule out this interpretation and that, on reading the French translation, this is in fact more plausible. The Advocate General goes on, however, to confirm that suppliers who do not have any knowledge of the presence of SVHCs would not be able to make claims that SVHCs were not present in an article and instead would have at least to acknowledge that they did not have any information from their supply chain. The Advocate General also points out that a lack of information on SVHCs would not mean that suppliers could completely ignore the risks of SVHCs being present in their products. They would still, for example, have to comply with other applicable product-related safety rules, such as those contained within the General Product Safety Directive.
Resolution of the long-running “article in article” debate will finally bring certainty to product manufacturers who, for a long time, have not known which position to follow. However, many will no doubt be concerned that the position favoured by the Advocate General is not consistent with that favoured by the majority of EU Member States, ECHA and the Commission. On the other hand, the Advocate General’s caveated view of Art 33, if followed by the Court in its final judgment, could potentially be viewed as a relaxation of the EU’s ever more complicated rules on the source and content of products destined for the EU market. The Advocate General’s suggested approach could arguably greatly change the level and amount of due diligence that manufacturers feel obliged to conduct on their suppliers to ascertain the potential presence of SVHCs and could, in fact, almost be an incentive not to conduct any supply chain due diligence. Given that this cuts across the EU’s general trend of requiring increased awareness of the content and origin of products destined for the EU market, it is possible that the Advocate General’s approach will not be followed by the Court or, if followed, will at least be construed narrowly. However, as these types of product-related issues do not come before the Court that often it is very difficult to predict what the outcome will be.
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Graham Stuart is a partner at Baker & McKenzie, practising in resources law, trade and projects. He heads the London office's Environmental Markets practice and is European regional head of the Firm's market-leading Global Climate Law and Finance practice. Rachel Barlow is an associate in Baker & McKenzie's Environmental Markets group in London.
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