AudioCodes' Confidential Information ILTAM Green Directives Workgroup Meeting #7 (fourth meeting-2009) Yoav Gilad

AudioCodes' Confidential Information Updates and News

AudioCodes' Confidential Information RoHS-2 (1) Highlight of the draft proposal published by the European Parliament on Dec (in addition to the highlights we discussed in our meeting of ): Directive will cover all EEE unless specifically excluded. Will add new Category 11 (“other EEE not covered by any of the categories 1-10”). Come into scope in July The current exclusion of large-scale stationary industrial tools has been deleted (meaning manufacturing production line equipment would be in scope). EEE used in building and transport would be in scope too (unless covered by other legislation, like ELV).

AudioCodes' Confidential Information RoHS-2 (2)  On Nov. 4 th 2009, the EP’s Environmental Committee (ENVI) indicated that it will most likely reject the European Commission’s proposal not to expand the scope of the RoHS Directive to cover all electrical goods.  The EP rapporteur announced that the ENVI Committee will propose additional substance restrictions, and that all new substances restrictions should be subject to 3.5 year transition period.  The ENVI Committee is due to vote on the proposals in April 2010, ahead of a plenary vote by the full Parliament in May 2010.

AudioCodes' Confidential Information New EU Regulatory Framework may include ROHS - 1  The European Union (EU) has adopted three new regulations (768/2008; 764/2008 ; 765/2008) that aim to modernize the “New Approach” or NRF (New Regulatory Framework) for EU directives.  The regulation that most affects manufacturers of electrical equipment is 768/2008: “A common framework for the marketing of products.”  All three come into force on January 1,  They specify the format for any new directives adopted by the EU, for which CE marking is required.  Currently, the RoHS directive is not a CE mark directive, but the EC’s (European Commission’s) proposals to amend RoHS include changes that make RoHS a “new approach” directive requiring CE marking of products. Therefore, RoHS could be the first directive to adopt the NRF approach.

AudioCodes' Confidential Information New EU Regulatory Framework may include ROHS - 2 Main aims of the NRF:  Provide more effective market surveillance. Market surveillance is currently variable across the EU with some Member States being very vigilant, but others doing almost nothing. Minimum market surveillance obligations will be imposed on all EU States.  Harmonize rules for notified bodies and make greater efforts to ensure that these organizations provide a high quality service.  Make the CE mark a community trade mark, so there will be additional legal measures that can be employed against those that abuse its use.  Introduce common definitions and procedures, which will harmonize CE mark legislation.

AudioCodes' Confidential Information New EU Regulatory Framework may include ROHS - 3 The NLF approach  All “economic operators” are responsible for compliance. Economic operators are manufacturers, importers, distributors and authorized representatives operating on behalf of manufacturers or importers.  The conformity assessment procedure is defined with several alternative options provided, described as “modules.” Each new directive would specify which option is to be used. Self-declaration (module A) has been selected for RoHS as the risk is minimal.

AudioCodes' Confidential Information New EU Regulatory Framework may include ROHS - 4 Annexes  Annex I provides definitions of terms that would be used by all future EU directives (placing on the market, manufacturer, importer, distributor, technical specification, and harmonized standard).  Annex II specify the requirements for demonstration of compliance.  All products that need to comply with CE mark directives shall have declarations of conformity “DoC” (as they are currently required) and the format is given in Annex III. Only one declaration is required for each product and this must list all applicable directives and the current versions of standards that apply and were used for conformity assessment. DoCs must be continuously updated (as directives and standards change) and translated into the language required by the States where products are placed on the market. Ref:

AudioCodes' Confidential Information China RoHS “Phase 2” Phase 2 Highlights:  Substance restrictions are imposed Only Electronic Information Products (EIPs) in categories listed in the Key Administrative Catalog are impacted Testing is required by SPECIFIED Chinese Labs only (labs and test standards are not published yet).  China MIIT (Ministry of Industry and Information Technology) has proposed EIP Categories for the initial Catalog (The first draft lists principally telephones and printers)

AudioCodes' Confidential Information What is the Key Administrative Catalog?  The Key Administrative Catalog (Article 18) will define Which EIPs are subject to substance restrictions The extent of the substance restrictions (including exemptions, if required) The in-force date for the restrictions  To be reviewed/amended annually  Approval shall be bounded by a CCC mark.

AudioCodes' Confidential Information Key Administrative Catalog Development Procedure  Announcement [2008] No. 6 –10 October 2008  Development process is to be “open and transparent” Led by MIIT  Product Selection Criteria includes: Greatest exposure or potential for harm Toxic substances are readily replaced in a cost-effective manner Toxic substances can be replaced with residual levels under the defined MCVs Products restricted elsewhere due to environmental problems (e.g. EU RoHS) Other Products (another catch-all!)

AudioCodes' Confidential Information Proposed Catalog, Batch 1  Mobile user terminals: Cellular mobile terminal equipment based on the GSM (TDMA), CDMA, TD-SCDMA, WCDMA, or CDMA2000 standards, for use in the public service mobile communication networks  Telephone sets (including corded and cordless phone terminals): Corded-Various telephone sets which are connected to user phone lines, for uses as terminals of PSTNs, without working through wireless technologies. Cordless-Telephone sets for uses as terminals of PSTNs, which consist of base stations and wireless handsets.  Printing equipment connected with computers: Printing equipment with communication ports for the computer, which are capable of printing texts, invoices/receipts or photos when connected to IT equipment or can work independently

AudioCodes' Confidential Information The Defined Process 1.Products can be proposed by  Relevant government entities & (Chinese) Industry Associations 2.MIIT submits the recommended list to the Inter-ministerial Task Coordination Group for discussion in order to finalize  Members are not defined in the procedure 3.MIIT gets inputs from their “Expert Advisory Committee” (EAC)  Pulled from people identified by “relevant government agencies, industry/trade associations and enterprises” 4.EAC produces an evaluation 5.MIIT produces a proposal, and submits for public comments  Only 1 month for comments –need to pay attention 6.Finalized after considering public inputs 7.The proposal goes through the WTO/TBT process 8.The Key Administrative Catalog (KAC) is finally promulgated 9.In-force date is no less than 6 months after promulgation 10. Potential annual updates, if not more frequently

AudioCodes' Confidential Information Timeline for Batch 1  Proposed Catalog was issued October 9  30 Day Comment Period ended November 9  Resolve comments  Finalized and Issue through WTO/TBT for international comment  Promulgation In-force date is 10 months from Promulgation  Note that this is ONLY Batch 1…keep your eyes on this

AudioCodes' Confidential Information Certification Requirements (Art. 18)  All Covered Products listed in the KAC: subject to compulsory pre-market certification by the State certification and accreditation authorities Will be added to existing CCC (China Compulsory Certification) mark system  Imports Into China: subject to examination and inspection at the entry port by inspection and quarantine authorities  No EU RoHS analog  Testing required to homogeneous material level  No Procedure, Forms, Guidance on Approved labs yet!  This is required by industry prior to promulgation!

AudioCodes' Confidential Information Other Outstanding China RoHS Issues  EFUP Guidance was never finalized Has been promised for over a year…  Clarification of “Other” in the EIP Listing Update has been expected for years  Testing standard SJ/T is based on draft of IEC Electrotechnical products – Determination of levels of six regulated substances; issued late 2008 Needs to be revised to be consistent with final IEC standard prior to promulgation of catalog!

AudioCodes' Confidential Information Japan Green Initiative J-MOSS (the Japanese RoHS) has recently updated to a newer version with more substances in constrain: Originally, it had same 6 substances as EU RoHS In the new version, the J-Moss covers all the JIG-101 Ed. 2 substances. The spec is voluntary. J-MOSS = Japan Marking of Specific chemical Substances

AudioCodes' Confidential Information REACH Update “Substances of Very High Concern” Final first candidate list as published on echa.euon 10/28/08 First Substances Recommended for Authorization 6/1/2009

AudioCodes' Confidential Information The Impact of Authorization  Move from Candidate List of SVHCs ⇒ Annex XIV (the “authorization list”)  Continued use after the “sunset date” must be Authorized! By EC for A Specific Manufacturer Downstream use of a substance for the authorized use only is OK IFF the source is the AUTHORIZED Manufacturer  To use an SVHC, make sure your supplier is officially authorized if your Supply Chain goes through the EEA (European Economic Area) Notify ECHA of your use of the SVHC  Articles, Mixtures containing the authorized substance, and the substance itself may not be placed on the market unless Substance use is authorized in the supply chain, OR Use is exempted from authorization per article 58(2)- OR Article is imported (!) (but still subject to restriction)  No authorized use ≡ Restricted Moved out of Annex XIV to Annex XVII (Restrictions on the manufacture, placing on the market and use of certain dangerous substances, preparations and articles)

AudioCodes' Confidential Information Proposed Annex XIV Substances Note: BOLD items potentially in electronic articles  ECHA received close to 400 comments from stakeholders during the public consultation Many related to requests for exemptions!

AudioCodes' Confidential Information Proposed SVHC Candidate List #2 Consultation period ended 15/10/2009

AudioCodes' Confidential Information Remember, Candidate Lists are ADDITIVE Once the second group is issued, Article 7 (Registration and notification of substances in articles) & 33 (Duty to communicate information on substances in articles requirements) STILL APPLY to the initial group Until a substance on the list is added to Annex XIV (subject to Authorization)  If a SVHC on the Candidate List is not selected for the Authorization process immediately after being placed on the list, it can be selected at some point in the future You’re not out of the woods…

AudioCodes' Confidential Information USA Environmental Regulations As discussed in our meeting of , the Environmental Design of Electrical Equipment Act (HR 2420) “die a quite death.” E-West Export Bill (HR 2595): Introduced on ; would prohibit export of certain waste electronics to non-OECD countries. California AB 147 (“California RoHS”) was amended on Aug. 17 th : Provisions would only apply to currently covered devices under SB 20/SB 50. Manufacturer shall prepare and, at the request of the department, submit within 28 days from the request date, technical documentation or other information demonstrating RoHS conformance.

AudioCodes' Confidential Information California Green Chemistry Initiative  2 bills signed into law in 2008: AB 1879 and SB 509:  Chapter 559: Recommandation 5 (Assembly Bill 1879): develop framework for addressing chemicals of concern, evaluating chemical alternatives, and moving toward safer consumer products  Chapter 560: Recommandation 4 (Senate Bill 509): increase information about toxicity and other “end-points” for chemicals via an online portal

AudioCodes' Confidential Information Canada Bans Rosin Flux Canada’s Chemical Management Plan (part of the Canadian Environmental Protection Act of 1999) proposed to ban five rosin-containing substances from all products manufactured and sold in the country. Dead line for comments was Oct. 20 th Rosin is used in manufacture of more than 75% of electronic products (used in soldering flux and solder paste). Status: Not clear.

AudioCodes' Confidential Information ECO Design (1) In our meeting of , this slide was presented: The European Parliament ENVI Committee has backed a proposal to widen the scope of the Eco-design Directive (EuP) to include all energy-related products, which are products that do not consume energy during use but have an indirect impact on energy consumption (such as water-using devices or windows). A vote in EP plenary is scheduled to take place in April If there is agreement between the two, adoption will take place rapidly afterwards.

AudioCodes' Confidential Information ECO Design (2) On Oct. 31th 2009 Directive 2009/125/EC was published in the EU’s official journal. The Directive establishes a framework for the setting of eco-design requirements that energy-related products must meet in order to benefit from free movement within the EC. Replaces and extend the scope of the current Directive 2005/32/EC. Entered into force on

AudioCodes' Confidential Information Verizon to OEMs: Get the heat out As part of a new energy-saving strategy, Verizon’s OEMs are required to supply thermal models for circuit boards and cabinets starting July The target is to show 20% power efficiency gain.

AudioCodes' Confidential Information Thanks! !

AudioCodes' Confidential Information China RoHS After a long delay, a draft of Phase-2 of the Chinese legislation (“the catalog”, published in Chinese only!) was published on , listing the products on which it will be enforced: 1.The first draft lists principally telephones and printers. The list will be updated periodically of the EU exemptions for telephones and 12 for printers are included. 3.Testing shall be done by approved Chinese labs only (labs and test standards are not published yet). 4.Approval shall be bounded by a CCC mark. 5.Allows one month consultation period (already elapsed…). 6.Will come into force 10 months after the adoption of the legislation.