Complex regulation of complex articles

Introduction
Facts
Once an article always an article?
Comment

Introduction

In October 2014 the Chemicals Agency published new guidelines for suppliers of articles, concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) duties to inform about candidate list substances. Such duties derive from the EU REACH Regulation (1907/2006). The new guidelines (which were previously published in English as a result of cooperation between the Swedish, Belgian, Danish, French, German and Norwegian authorities) underline the importance for Swedish suppliers to comply with the Swedish interpretation of how to calculate the level of substances in an article. This interpretation differs from that of a majority of EU countries and the European Chemicals Agency (ECHA) guidelines, putting Swedish suppliers in a difficult position in relation to their European suppliers and competitors.

Facts

REACH's overall aim is to ensure a high level of protection of human health and the environment against risks from chemicals, as well as to ensure free circulation of chemicals on the market, while enhancing competitiveness and innovation. Certain chemicals of high concern due to their hazardous intrinsic properties are enumerated on the Candidates List (Annex XIV of REACH). Article 33 of REACH requires suppliers to provide information to customers if an article that they provide contains a substance on the list in a concentration exceeding 0.1% weight by weight. This information must be passed on to the customer even if it is not requested, except for end consumers who receive the information only if they ask for it.

REACH defines an article as "an object which during production is given a special shape, surface or design which determines its function to a greater degree than does its chemical composition". However, the regulation provides no further guidance on how the weight-by-weight calculation in Article 33 is to be carried out. The question is especially pertinent when it comes to articles that have been assembled out of many parts (a complex article – eg, a bicycle or computer). This uncertainty has given rise to two different views, whereby a majority of EU members have adopted the ECHA's interpretation that weight of a complex article should be calculated as a whole (eg, a bicycle), whereas in Sweden and a certain group of other member states the weight of each component is calculated (eg, a bicycle handle, saddle or wheel).

Once an article always an article?

According to ECHA guidance on requirements for substances in articles (Version 2 of the ECHA guidelines, April 2011), the substance concentration threshold of 0.1% weight by weight applies to the article as supplied. In the case of a complex article it is the substance of the entire article that is relevant when calculating the weight-by-weight concentration. Although the ECHA guidelines do not support this interpretation, the European Commission (which agrees with the ECHA's interpretation) has argued that individual articles should be regarded as components of the complex article. The components cease to have an autonomous function once they are integrated into a complex article and it is the complex article that presents the intended function of the finished product. According to the commission, such an interpretation is consistent with the provisions on restrictions (Annex XVII of REACH), whereby the particular restriction targets substances over certain concentration thresholds in specific parts or components whenever it is explicitly specified in the respective restriction entry.

In discussions of the ECHA guidelines, the following countries manifested a dissenting opinion:

• Austria;
• Belgium;
• Denmark;
• France;
• Germany;
• Norway; and
• Sweden.

The argument put forward by the dissenting countries was that once an object meets the REACH definition of an article, it remains an article even if it is joined with other articles to form a complex article (once an article, always an article). The weight-by-weight concentration should therefore be calculated for every component of a complex article, meaning that each component should be defined as an article according to REACH. The Swedish guidelines use the example of a bicycle, arguing that it would run counter to the purpose of the provision that a bicycle handle sold separately should entail the duty to inform, whereas the same bicycle handle mounted on the bicycle would not entail such a duty, given that the exposure of the person using the bicycle is the same in both scenarios.

Comment

As a consequence of the countries' dissenting opinion, the ECHA guidelines have been published with a disclaimer that companies may face diverging enforcement practices regarding certain aspects. This is the case for Swedish companies.

The new Swedish guidelines make it clear that Sweden is retaining its interpretation of Article 33 and enforces it by this standard. The guidelines observe that the guidelines give the crucial message that "the same information on content of Candidate List substances shall be provided irrespective if the article is sold separately or as a part of an article assembled from several articles".

The Swedish guidelines include practical advice for suppliers on how they can handle their duty to inform – this includes how to:

• use a probability-based approach;
• ask suppliers for specific substances that are more likely to be present in the article; and
• carry out their own tests on the article supplied.

However, no matter which method the supplier chooses, the supplier is responsible for any misinformation.

REACH leaves it to the member state to choose its method of enforcement. Sweden has opted for both criminal and civil enforcement. Thus, it is important for Swedish companies to comply with the obligation to provide information. Given the differences between Sweden and many other member states, this can prove difficult. Whereas REACH's aim is that information shall be passed down through the supply chain, Swedish companies receiving articles from suppliers that follow ECHA guidelines are at risk of missing out on crucial information. Further, while companies can ask their suppliers, suppliers are not obliged to provide this information.

Swedish companies are confronted with two unattractive choices:

• spending time and money carrying out extensive investigations and costly scientific tests; or
• risk facing Swedish enforcement.

The good news is that France has requested a preliminary ruling on the interpretation of Article 33 of REACH. The case (C-106/14) is presently before the European Court of Justice and the member states have been given the opportunity to present their opinions and arguments before the court.

For further information on this topic please contact Mikael Wärnsby or Sofia Waadeland Grönesjö at Advokatfirman Lindahl KB by telephone (+46 40 664 66 50), fax (+46 40 664 66 55) or email (mikael.warnsby@lindahl.se or sofia.waadeland.gronesjo@lindahl.se). The Advokatfirman Lindahl KB website can be accessed at www.lindahl.se.