European Court of Justice delivers landmark judgment with major repercussions for the supply chain. The European Court of Justice confirmed that the presence of Substances of Very High Concern (SVHC) in products needs to be calculated at component level. In future, a washing machine will need every component in it – the hoses the drum and the pump – to have a separate calculation for its SVHC content, where before it was the overall content of the washing machine that needed to be calculated, and, where necessary, tested.
The Court also confirmed that it is the person supplying a product, or one or more constituent articles, to provide the recipient and the consumer of the product, as a minimum, with the name of the substance.
According to the Regulation on the Evaluation, Authorisation of Chemicals (REACH), importers, producers and distributors of products containing SVHCs in quantities above 0.1% are subject to a series of obligations.
This decision will change the way all actors in the value chain will need to calculate, and report any level of SVHCs, and is likely to require a lot more testing without any significant benefit to consumers. Director-General Christian Verschueren commented “We will need to live with this decision, but it will cause difficulties and extra cost without any tangible benefit to consumers. Where products involve complex supply chains, this will create additional burdens, particularly for importers. While these new burdens are unhelpful, the decision has the merit of providing economic operators with legal certainty, something which has been lacking for a key aspect of REACH”.
This calculation approach is not only burdensome, it also upsets sourcing practices that have been developed over decades. At a time when supply chains are increasingly global, this adds to what are already complex rules for importers. Importers will need time for the supply chain to adapt. The European Chemicals Agency (ECHA), needs to update the relevant guidance documents. EuroCommerce therefore calls for a moratorium pending these documents being available before this interpretation is implemented and enforced by member states.
We also would wish the Commission to look again in the context of better regulation procedures at the relevant provisions of REACH to see whether the burdens arising from the Court’s ruling are proportionate.