REACH-EN-FORCE 3----Highest OR Non-Compliance Rate

Background

The final report of the 3rd enforcement project: “Inspection and enforcement of compliance with registration obligations by manufacturers, importers and only representatives in close cooperation with customs.” (REACH-EN-FORCE 3) has been officially published on 10 December 2015. There are 2 phases in the 3rd project, there are in total 1169 companies and 5746 substances involved.

  • The Phase I inspection was initiated in 2013 in the 28 member states, the report was published in June 2014.
  • The Phase II inspection was initiated during Feb 2014 to Nov 2014 in 24 countries involving 641 companies and 2681 substances. The inspection targets include EU manufacturers, importers and Only Representative (OR).
The emphasis in this project of inspection was to check if companies comply with registration obligation in the article 5 and 6. There were about 13% of the inspected companies did not fulfill their registration obligations, which includes 2% companies did not register anything under the regulation. SME occupies about 70% of the inspected companies. 


Severe Non-Compliance Existed among Only Representatives (OR)

It is shown that there were about 34% of the Ors were non-compliant, which was the highest percentage. The second was importer (15%), then, manufacturer (6%). The reasons of the OR non-compliance, except for the non-fulfillment of article 8 under REACH, are as follows:

1.   OR did not fulfill registration obligations, did not provide the supply chain information on time, such as Tonnage Coverage Certificate (TCC), SDS and etc.

2. Poor communication between OR and downstream users on the supply chain information. The reason is that EU importer did not know who was the OR for the non-EU supplier and OR did not know the related information of the EU importer.

ECHA states that grate attention should be paid on this, especially for the non-EU suppliers that they should let the ORs know the exact tonnage they provide to the EU importers every year, so that the ORs can clarify the registration obligations. ECHA also commented to EU Commission that to revise article 8 under REACH to clarify and detail the responsibilities and obligations that ORs should fulfill. EU Commission should force the ORs to provide the importer list and TCC to the EU downstream users. During the inspection, it was found that many ORs were actually unqualified. Also, though many companies assigned ORs, they still did not completely fulfill the responsibilities and obligations under REACH. Moreover, many downstream users even did not know who the ORs were for their non-EU suppliers, which was a serve issue. So, it is recommended that EU Commission revise and detail the article 8 under REACH and do an emphasized inspection on ORs to check their qualification and compliance, and punishment will be made to the non-compliant ORs, respectively. 


Main Reasons for Non-Compliance

Non-compliance includes the following aspects:

  • Not an OR, 23%
  • OR did not know importer/downstream user, 21%
  • No OR assignment, 10%
  • OR not capable of complying with REACH, 8%
  • OR failed to record/update the exported tonnage and usage of each substance each year, 6%
  • OR did not submit registration/pre-late registration for substance, 5%
  • Wrong CAS number, 3%
  • OR failed to provide Power of Attorney (POA), 2%
  • OR did not know the non-EU manufacturer, 2%
Based on these, inspect agent requires companies to take the correct actions to be compliant, otherwise, punishment or lawsuit will be initiated for the serve cases. 


Recommendations and Conclusion

Based on the REACH-EN-FORCE 3 and advices from CIRS experts, recommendations are as follows:

1. Downstream users need to cooperate directly with ORs and to be certain that their ORs are complying with their responsibilities and obligation under article 8 under REACH. This is very significant for the downstream users to make sure that their imported substances can be legally imported with the complete fulfillment of OR obligations.

a.   The EU importer needs to require Power of Attorney and confirmation letter of registration from the Non-EU manufacturer or Only Representative once they are informed that an OR is nominated.

b.  The EU importer needs to remind their Non-EU manufacturer to apply tonnage coverage certificate through CIRS RCUM system or notify the Only Representative of the place of the order from Non-EU manufacturer by sending email to service@cirs-reach.com to apply the tonnage coverage certificate to make sure their imported tonnages are covered by the registration made by OR so that they don’t need to undertake the imported tonnages themselves.

c.   The EU importer needs to acquire REACH compliant SDS/ESDS translated in importing country’s language.  If the SDS/ESDS is not available, the importer may need to prepare it themselves.

d.  The EU importer needs to check with the OR whether the substances have been registered or not. If yes, they need to acquire registration certificate from the OR.  If not, they may need to prepare the registration themselves so as to fully comply with REACH Regulation. As REACH formal registration is much more expensive and much data fee is involved, many Non-EU manufacturers finally give up the registration and won’t appoint the OR to register the substance. In this case, the importer shall check the registration intention and make plans as early as possible.

2. Importers are often not familiar or do not know their obligation for registration of substances under REACH. This issue should be addressed by the industries and industry stakeholders concerned.

3. The high non-compliance percentage for SMEs, companies relating to the chemical industry and chemical distribution sectors also needs to be addressed by the industries and industry stakeholders concerned, respectively.

The overall conclusion of the REACH-EN-FORCE 3 project was that there is a considerable number of non-compliant companies that do not fully see REACH registration duties. In the future, great attention will be drawn on these issues, all the roles inside this compliance circle should take some actions to reduce the risks and be compliant. 


Choosing OR is very Significant

REACH inspection is becoming stricter. CIRS has received the inspection notification from the Ireland HSA to demonstrate the RCUM system (a system we provide to our client for free for the supply chain information management), and to provide related documents to the authorities. It can be observed that the inspection becomes stricter that the inspected substance number increased from double-digit to three-digit, as well as the related POA and TCC and etc. At the meantime, CIRS also received some enquires from importers that to help them with the related documents, such as TCC, SDS, ESDS and etc. It can be seen that the cooperation between the EU Customs and authorities of each country is becoming more mature.

Also the successful cooperation between EU Customs and authorities of each country is being appreciated, and it is stated that such cooperation will continue being used to strengthen supervision enforcement. The inspection on ORs will be more frequent and more detailed.

REACH compliance is not just simply completing the registration, but the following importer enquiry, related document providing, inspection by ECHA and member state and etc. will be required to be carried out by ORs. Thus, choosing a high-quality OR is very significant for companies.

Being one of the largest Only Representative and service providers in the world, CIRS has represented more than 4000 companies including Non-EU manufacturers and EU importers (technical support) and completed more than 800 formal registrations. We are very experienced in dealing with issues in registration and we have established very good relationships with LRs of different SIEFs and with ECHA, so we are able to get information very quickly. In order to remove the trade block and keep your business going smoothly, CIRS will always provide the best tailored regulatory service to you. Should you have any concerns or question, please do not hesitate to contact us at service@cirs-reach.com