• Environmental

• Chemicals

REACH Compliance

Regulation No. 1907/2006, concerning the Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH), is the new chemical control regime in the European Union (EU) that went into effect in June 2007.  REACH will have far-reaching effects for a wide range of companies doing business in the EU.  Beveridge & Diamond, P.C. has been advising clients and closely following the development and implementation of REACH, which falls at the intersection of our strong chemicals and international environmental law practices.  Although REACH primarily affects the chemical industry, virtually any industry sector that uses chemicals to do business in the EU has already faced significant burdens under REACH or will do so in the future. 

As supply chains stretch around the globe, REACH requires an unprecedented level of due diligence, cooperation, and communication to ensure continued market access and regulatory compliance.  In addition, the requirements for the generation, collection, sharing, and publication of data on chemical hazards and risks have heightened the potential for disclosure of confidential business information, disputes over data rights, and the filing of tort liability lawsuits.  To supplement the internal resources they have devoted to addressing these substantial challenges, many of our clients have sought outside assistance. 

Beveridge & Diamond’s REACH team has assisted companies in a variety of industry sectors to address a wide range of REACH issues.  Our primary focus to date has been on REACH’s implications for non-EU manufacturers, but as our non-European clients often have facilities in the EU, we have addressed the obligations of those facilities as well. 

The following summary highlights some of our experience working with the chemicals, pharmaceuticals, electronics, and other industry sectors.

We have assisted a U.S.-based multinational chemicals company with various tasks, including:

• establishing a qualified Only Representative (OR) to handle direct and indirect imports to the EU;

• advising on OR compliance with the registration obligations;

• benchmarking on supply chain management issues;

• evaluating and managing the potential costs and legal risks of (pre-) registering certain “phase-in” substances;

• preparing for data sharing and compensation negotiations with potential registrants in Substance Information Exchange Fora (SIEF); and

• advising on the structure and content of agreements with Asian toll and contract manufacturers to ensure compliance with REACH registration obligations.

We have advised U.S.-based biotechnology, pharmaceutical, and medical device companies on:

• registration obligations for import, export, and manufacturing of components of biotechnology products and medical devices, as well as pharmaceutical products, ingredients, and intermediates;

• the requisite due diligence to identify the contents of certain complex products;

• supply chain communication obligations for potential Substances of Very High Concern (SVHCs);

• the recycling exemption and waste exclusion for EU manufacturing operations;

• the use of Third Party Representatives to mask a registrant’s identity;

• the registration and notification obligations applicable to “articles”; and

• drafting contracts with key suppliers to ensure comprehensive REACH compliance.

We have advised several U.S.-based Information Technology (IT) companies regarding:

• compliance with the registration, notification, and communication obligations for “articles”;

• compliance with the registration obligations associated with importing formulated chemical products used in IT equipment;

• due diligence protocols to evaluate the compliance of potential acquisition targets; and

• supply chain due diligence strategies to address the potential for SVHCs in manufactured "articles" imported into the EU.

The evolution and implementation of REACH will continue to present companies with both immediate and future challenges requiring dedicated resources.  For instance, the European Chemicals Agency (ECHA) and the Member States will periodically nominate substances to the “Candidate List” of “Substances of Very High Concern.”  The Candidate List is significant inasmuch as it identifies those substances that may eventually be prohibited from further use, unless specifically “authorized.”  As more substances are nominated, affected companies may want to submit comments, either directly or through trade groups, during the public consultation process.  Others may want to expand their product due diligence efforts, or revisit their contractual arrangements or communications with customers and suppliers. 

Until at least June 1, 2018, when the final registration deadline passes, companies that have pre-registered phase-in substances will continue to participate, or prepare to participate, in consortia and SIEFs.  The activities of these groups will involve a number of important issues, including contractual and other arrangements for data collection, sharing, compensation, confidentiality, and use.  Even the entrance of new companies to the EU market beyond 2018 may raise some of these issues as they seek access to existing data to register their substances. 

The Firm’s experience in related practice areas, such as data sharing, compensation, and confidentiality under U.S., Canadian, and other pesticide laws, will be of substantial value to our clients facing these challenges.  Beveridge & Diamond has one of the most highly developed practices in this area, with longstanding and extensive experience representing individual companies in some instances and serving as general counsel to consortia in others.  Our advice to our clients is borne of years of experience successfully addressing issues associated with the establishment and management of consortia, their data sharing and generation activities, the appropriate mechanisms to protect confidential business information, and effective strategies for addressing non-member issues.

Lastly, we partner with local counsel in the EU on particular REACH matters when local knowledge or contacts are necessary.  Our clients have found that our ability to work efficiently with local counsel on discrete, targeted issues provides a cost-effective model for many aspects of their REACH planning and compliance.