REACH Update: Importer Or Only Representative Options For (Pre-)Registration Of Multinational Groups

Registration Options for Non-EU

Companies1

At the core of the REACH Regulation is the requirement that

all substances2 imported into the European Union

(EU)3 must first be registered with the European

Chemicals Agency (ECHA). REACH, however, prescribes that only a

company established in the EU can register. This requirement

raises important compliance questions for multinational company

groups with multiple non-EU entities importing substances into

the EU -.whether traders or manufacturers. In such cases, the

EU-based group companies can register their substances, while

the group companies based outside the EU cannot register their

substances themselves.

A non-EU company in a multinational group must ensure the

registration of its substances under REACH in order to continue

marketing and selling those substances in the EU. Such a non-EU

company has essentially three options to secure the

registration of its substances:

It could use an Only Representative to register the

substances (typically a group company in the EU would be

used, but an unrelated third party could also be

contracted).

It could rely on its customers in the EU to register the

substances as importers.

The group could utilize an EU-based company within the

group to undertake the role of importer for the group.

In most cases, it is unlikely that customers will be willing

to incur the time, effort and cost to register substances they

import from non-EU manufacturers or traders. Moreover,

obtaining customer commitments to register where a company

markets and sells a range of substances to numerous customers

in the EU would prove prohibitively impractical.

Appointing an EU company within the group as an Only

Representative is a straightforward option for non-EU group

companies involved in manufacturing. On the other hand, this

option would appear unavailable for non-EU group companies

involved only in trading or distribution activities. Even where

this option is available, however, it would require that the EU

company submit to ECHA one registration per substance for every

non-EU manufacturer in the group. In addition to administrative

burden, this would result in higher registration fees, as each

substance manufactured by each non-EU company would have to be

registered separately by the Only Representative, and a filing

fee would be payable for each registration (i.e.,

aggregation of tonnages among all non-EU group companies is not

possible).

In contrast, designating an EU company in a multinational

group to act as an importer and assume the REACH registration

obligations for all the non-EU subsidiaries.manufacturers or

traders.could be a third available option. Indeed, this

approach may be the only viable option for a group of trading

companies that cannot use an Only Representative.

The choice of designating a group company as importer is

straightforward where the EU-based company that is chosen to

register for the group is included in the .chain of title. for

the substances imported into the EU. Where the ownership of the

substances passes directly from the non-EU subsidiary to its EU

customer, however, the choice may be more complicated. In those

cases, registering the EU company as an importer may at first

raise a concern that the commercial relationship between the

non-EU company and the EU customer must be disrupted to enable

the EU entity to take over the role of importer under REACH.

However, given the broad definition of an .importer. under

REACH, in many cases it may be possible for group companies to

designate an EU company as an importer without materially

changing the business relationships within the supply

chain.

An Importer for REACH Purposes Need Not Take

Ownership of the Substances

Importer under REACH means any natural or legal person

established within the EU that is responsible for import. REACH

defines .import. as the physical introduction of goods

(i.e., substances) into the customs territory of the

EU. These definitions do not include a requirement...