1. Webinar: Complying with the New European Union Chemical Legislation Ursula Schliessner McKenna Long & Aldridge LLP, Brussels www.mckennalong.com November 6, 2008 at 12 noon (Eastern Time)

2. 2 Introduction

4. 4 Registration –Obligation of each manufacturer/importer –Substances, on their own or in preparations or if released from articles –1 tonne threshold (per manufacturer/ importer) Provide data No registration/data, no market

5. 5 Exemptions and Exclusions Exclusions from REACH –Radioactives within Directive 96/29 –Non-isolated intermediates –Waste as defined in Directive 2006/12 –Defense (to be determined by Member States) –GMOs

6. 6 Exemptions and Exclusions (cont’d) Exemptions from Registration Substances notified under existing “new” substances legislation Below 1 tonne per year per manufacturer/importer Substances in medicinal products* Substances in food or feed incl. additives, flavorings* Annex IV substances (e.g. cellulose pulp) ** Annex V substances** *Also exempt from downstream user requirements, evaluation and authorization **Also exempt from downstream user requirements and evaluation Attention: Revised Annexes IV and V published OJ L 268 of 2008: Reg 987/2008

7. 7 Exemptions and Exclusions (cont’d) Exemptions from Registration Recovered substances similar to registered substances Polymers*** PPORD for 5 years, but subject to notification Actives (and co-formulants) under Directive 91/414 and actives under Directive 98/8 if listed Reduced registration for on-site isolated or transported isolated intermediates ***Also exempt from evaluation

8. 8 Pre-Registration and Registration Issues

9. 9 Phase-In Substances A substance is a phase-in substance if it meets one of the following criteria: –EINECS listed or –Over 15 years preceding the entry into force of REACH, manufactured in the EU but not marketed by manufacturer/importer or

10. 10 Phase-In Substances (cont’d) Deferred Registration for Phase-In Substances: –December 2010: CMRs Category 1 and 2 R 50/53 (very toxic to aquatic organisms) >100 tonnes/year and >1000 tonnes per year –June 2013: >100 tonnes/year –June 2018: >1 tonne/year

11. 11 Pre-Registration Applies to phase-in substances Timing – 6 month window –1 June ’08 – 1 December ‘08 Failure to pre-register results in loss of phase-in status Attention: takes about 10 minutes online, but recently IT problems. Do not wait until last moment.

12. 12 Pre-Registration (cont’d) Data Requirements –Name of substance, plus EINECS/CAS numbers –Identification of registrant Manufacturer/Importer Contact (could be Third Party Representative) –Registration deadline (tonnage band) –(read-across) –(volunteer facilitator)

13. 13 Pre-Registration (cont’d) Additional Rules Agency to publish list of pre-registered substances –By name and by EINECS and CAS numbers Attention: ECHA has already published publicly available pre-List (substance names) http://apps.echa.europa.eu/preregistered/pre-registered-sub.aspx http://apps.echa.europa.eu/preregistered/pre-registered-sub.aspx Downstream user of a substance not on the list may notify the Agency –Agency to publish DU name

14. 14 Pre-Registration (cont’d) Additional Rules (cont’d) Late market entrants can obtain phase-in status if they submit required information –Within 6 months after crossing 1 tonne threshold –No later than 12 months before applicable registration deadline (3.5, 6, or 11 years)

15. 15 Pre-Registration (cont’d) Once pre-registration requirements fulfilled, no further registration obligations for 3.5 years 6 years 11 years BUT Possible testing complications; and Beware the SVHCs

16. 16 Pre-Registration (cont’d) Recent Issues with Pre-Registrations: ECHA press release October 6, 2008 ECHA consider that those exemptions that are available for substances “registered” are not available if the substances have just been pre-registered. “Nevertheless, ECHA recommends, following discussion with the European Commission services, that for certain types of substances, such as re-imported substances (Article 2.7c), recovered substances (Article 2.7d), monomers in polymers (Article 6.3), and substances intended to be released from articles (Article 7.6) companies should pre-register if they are not sure that the substance(s) concerned will be registered by 1st December 2008, the end of the pre-registration period.”

17. 17 SUBSTANCE INFORMATION EXCHANGE FORA (SIEF) Concept All pre-registrants of the same substance become members of a Substance Information Exchange Forum for that substance Attention: SIEFs seem far bigger than expected because of many “just-in-case’ pre-registrations

18. 18 SIEF (cont’d) Goals Facilitate Registration Facilitate exchange of information Avoid duplication of studies Identify and agree on needs for further studies Resolve differences on classification and labelling

19. 19 SIEF – Functioning By January 09, Agency to publish list of pre-registered substances on its website (no company names) Around the same time, Agency is expected to inform all pre- registrants of the same substance of the identity of the other companies Once all participants agree on substance identity, SIEF is actually formed and data sharing can start Attention: Lots of pre-SIEF discussions already on-going. Do not participate in such discussions without at least agreement on confidentiality and undertaking to abide by EU competition law principles (Art. 81, 82 ECT) Upon publication of list of pre-registered substances on Agency’s website, other parties may seek to participate in certain SIEF activities –Companies manufacturing/importing below 1 tonne –Downstream users –Third parties holding information on substances

20. 20 Exchange of data within SIEF Mandatory within a SIEF Missing vertebrate animal data must be queried Testing VA cannot be undertaken without querying first Other data may be queried Answering queries is always obligatory Exchange of data is optional between different SIEFs (read across) Cost sharing either agree on non discriminatory, fair and equitable cost sharing, or equal sharing

21. 21 Only Representative OR can be appointed by non-EU –Manufacturer of substances –Formulator of preparations –Producer of articles OR takes on registration and other REACH responsibilities OR will be fully liable as importer

22. 22 Only Representative (cont’d) Why use an OR? Solve customer as importer problem Solve CBI problem

23. 23 Issue 1 – Options for (Pre-)Registration Canada Manufacturers - OR - EU Subsidiary - EU customer acts as importer Points to consider: - Confidentiality - Registration cost - Flexibility EU Customer Special Issues for Non-EU Companies

24. 24 EU Customer Special Issues for Non-EU Companies (cont’d) Issue 2 – Number of OR European Commission has issued guidance that only one OR per substance per manufacturer is possible for full volume of EU imports. Attention: Rumors will that this policy may still change Issue 3 – Multiple Representation If OR represents multiple companies with same substance, one registration for each manufacturer represented has to be filed

25. 25 EU Customer Unsolved Issues Definition of non-EU manufacturer –Similar to EU manufacturer or not? Use of EU branch office of Canadian company instead of OR? Legal entity concept is left to national law Definition of REACH importer not similar to importer for customs purposes. Therefore potentially possible to contractually determine ‘REACH importer’ thereby avoiding OR engagement

26. 26 EU Customer Articles ‘Articles’ are manufactured products for which shape or design is more important than the chemical composition, e.g. micro processors Importers of articles must: –register substances intentionally released during normal and reasonably foreseeable handling and use conditions and present in articles above 1 ton/year, and –notify SVHCs contained in articles above 0.1% w/w and substances present in articles above 1 ton/year Main issues: –lack of knowledge on the presence of SVHCs in imported articles (SVHCs are likely to be in the thousands) –difficulties in tracing long supply chains (see experience with RoHS) –(legal and practical) uncertainties (many unresolved borderline cases)

27. 27 Substances in Articles – Timing The same registration deadlines as for all other substances –3.5, 6 and 11 years for “phase-in” –1 year for non “phase-in” Notification applies as of 48 months after entry into force (June 2011) and 6 months after new substances are included in the ‘candidate list’ –Most CMRs and R50/53 above 100 tonnes will be registered by December 2010, hence no notification if registration covers use in article

28. 28 Substances in Articles – Information in the Supply Chain Suppliers of articles containing SVHCs (listed in “candidate” lists) must provide sufficient information allowing safe use of the article (including, at a minimum, name of the substance) –to recipients of articles –to consumers Information must be provided within 45 days of receipt of request Attention: Applicable as of October 28, 2008 to substances on first candidate list

29. 29 Annex 1: The Candidate List

30. 30 Substances in Articles Canada vs. EU Article Manufacturer EU-based manufacturer purchases substance from its supplier –Supplier registers substance; customer exempt Canada-based manufacturer purchases substance from its supplier –Supplier not in EU –Substance introduced into EU by article manufacturer –Customer of article manufacturer must register the substance

31. 31 Substances in Articles (cont’d) Exemptions Neither Registration nor Notification required if a substance has “already been registered for that use” –Customer of Canada article manufacturer not exempt –Unless another EU M/I of same substance registers (for that use) If notifier can exclude substance exposure to humans and the environment during the normal or reasonably foreseeable conditions of use (including disposal)

32. 32 Substances of Very High Concern (SVHCs) See Authorization, Article 57 Category 1 and 2 Carcinogens (C) Category 1 and 2 Mutagens (M) Category 1 and 2 Reproductive Toxicants (R) Persistent, Bioaccumulative, Toxic (PBT) Very Persistent, Very Bioaccumulative (vPvB) Substances with Equivalent Concerns –e.g., Endocrine Disruptors

33. 33 Authorization SVHCs will be: Identified (“candidate list”) Listed on Annex XIV Subject to Authorization Small volume SVHCs (i.e., < 1 Tonne/Year) –May be placed on Annex XIV –Small volumes uses must then be authorized

34. 34 Authorization (cont’d) Substances placed on Annex XIV If on Annex XIV, substance may not be placed on the market after “sunset date” By a manufacturer, importer or downstream user Unless specific use authorization provided –Application > 18 months before sunset date

35. 35 Consortia do not necessarily strictly mirror SIEFs They can be formed before pre-registration They can cover more than one substance and consequently more than one SIEF They may not include all potential registrants There can be more than one consortium within one single SIEF (differences in substance identity, different uses, e.g.)

36. 36 Consortium formation Contract between interested parties (operating rules) Contractual freedom but there are limitations – EU competition law –Confidentiality must be ensured –REACH Regulation provisions Historically, consortium usually created as a “task force” –No legal personality –Flexible, limited in time and scope

37. 37 Consortia Issues Late membership/data compensation: –entry fee (to cover set up and administrative costs) –cost of the data (‘actual’ vs. ‘current’ cost) –‘risk premium’ to compensate founding members for higher risks in data development –‘investment premium’ to compensate founding members for lack of return on funds used for data development –‘interest adjustment’ on all payments

38. 38 Many consortia have been formed already or are in the process of being formed. For unofficial list, see http://chemicalwatch.com/REACH_consortia Consortia - Update