French Interpretation of REACH Reporting Rules Could Hurt Competitiveness, Hike Costs

PARIS—New French guidelines on how companies should report the presence of substances of very high concern in products under the European Union's REACH chemicals law are sharply at odds with official EU guidance and could raise compliance costs and image problems for French importers and manufacturers, industry representatives have told BNA.

Five other EU countries, including Germany, have stated positions similar to France's, although they have not yet published guidelines.

On June 8, France published in its official journal legally binding guidance on notification requirements under articles 7.2 and 33 of REACH (Regulation (EC) No. 1907/2006 on the registration, evaluation, and authorization of chemicals). These sections address reporting requirements for so-called complex manufactured items that contain chemicals appearing on the EU list of candidate substances of very high concern (SVCH).

Article 7.2 requires that the Helsinki-based European Chemicals Agency (ECHA) be notified if the SVCH represents more than of 0.1 percent of a product by weight and if the substance is present in the product in quantities totaling more than 1 metric ton per producer or importer per year. Article 33 requires suppliers of affected products to report safety information to consumers and other recipients.

The French guidance applies the reporting requirements to each product component, while ECHA's guidance requires notification only if the entire product exceeds the SVCH threshold.

Ursula Schliessner, a Brussels-based partner for McKenna Long & Aldridge, told BNA July 7 that France's tougher interpretation poses especially thorny problems for importers, potentially putting them at a competitive disadvantage.

The European Commission has said it plans to look into the matter.

Sonia Benacquista, who follows REACH for the French chemical manufacturers' industry group, said the more stringent French reporting requirement “will pose real practical difficulties for French importers and producers of articles.”

Manufacturers of aircraft or automobiles could find themselves required to report to ECHA—and their supply chains—for literally thousands of components, she said.

Could Hurt Sales

Schliessner gave the example of a bicycle importer. In the 22 EU member states that follow the ECHA interpretation, the importer of a bicycle in which only the tires exceed the 0.1 percent threshold for SVHCs would not have to supply the information to its distribution chain in France because the entire bicycle would be considered one article. However, the importer would have to supply that information to its French supply chain. “You would also have to inform consumers accordingly, if they ask for this information, and this could hurt your sales to retailers,” Schliessner said.

Martine Meyer, who handles environment and health matters at French automaker Renault, told BNA July 8 that France's strict technical position, if enforced, “will subject manufacturers to constraints both for their public image and in financial terms.”

Although the 0.1 percent limit has so far posed no reporting requirements for a complete automobile, it already required more effort for replacement parts because of their smaller mass. Renault has had to install an information technology system capable of automatically supplying certain customers with the required data, she said.

Supplying purchasers of complete cars with data at a level of detail below the complete car would require a specific tracking system for information that today is not stored, other than for safety equipment, Meyer said.

“Furthermore, [the French technical requirements] would also require an IT system that could automatically extract information for something that would become a kind of telephone directory of substances and parts, with the level of detail potentially going down as far as screws, to furnish to the customer along with other documentation,” she said. “The detriment for the [company] image would be considerable, even though for most parts, there is no contact between the user of the car and the substance,” Meyer said.

Commission to Investigate

Carlo Corazza, a spokesman for the European Commission, told BNA the Commission plans to discuss the issue with France. “The Commission will raise the matter bilaterally with the French authorities and consider further steps in the light of the outcome of these discussions,” he said.

Schliessner noted that EU law requires member states to notify the European Commission if they enact any kind of technical regulation that could affect the free flow of goods within the European Union. The member state is supposed to wait for the Commission's assessment before implementing such a measure.

However, in this case, the French have not adopted a law, just an opinion. “So there is a question of whether the overall notification obligation applies, and it probably doesn't,” she said.

As the guardian of the EU treaties and law, the Commission can check the French measure to ensure it complies with EU law; however, it has no formal means to prevent France from implementing its guidelines in the meantime, Schliessner said.

Threat of Enforcement

The French position is supported by five other member states—Austria, Belgium, Denmark, Germany, and Sweden—as well as Norway, a non-EU member that is part of the European Economic Area, according to Schliessner, making direct Commission action against France unlikely.

Benacquista said, “I don't think this exposes France to legal action by the Commission.”

More likely, the Commission will wait for companies to challenge the measure in French courts, and French courts could eventually send the question to the European Court of Justice, sources said.

Schliessner said French authorities are unlikely to begin enforcement before the fall, meaning they could start issuing fines in early 2012. If some companies chose to challenge fines in French courts, the question could reach the European Court of Justice by 2013.

“In the meantime, the operators will have uncertainty on this question. Because of the threat of enforcement measures, companies may decide it's cheaper to comply rather to force the issue in front of the courts,” Schliessner said.

In any case, companies are unlikely to leave the French market due to this measure, she said.

By Rick Mitchell

The French guidance on notification for products with content appearing on the candidate list for substances of very high concern is available, in French, at .