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Investment banks: where do you fit into the REACH equation?
Breakfast seminar - 17 September 2008
CO-#8771105-v1-Banking_briefing.PPT
This morning…
The REACH revolution and its vocabulary Are your commodities likely to be caught by the
definition of ‘substance’ in REACH? How are traders caught by REACH - registration
obligations Only Representatives - how do they fit in? Allocation of REACH risk - contractual issues Next steps:
Pre-registration SIEFs and Consortia
I am a commodity trader - does REACH affect me?
The REACH revolution
Putting the burden on industry
Registration Evaluation Authorisation Restriction … of Chemicals
Pre-registration
Timeline
The REACH vocabulary
ECHA No data, no market SIEF = Substance Information Exchange Forum Consortia Lead Registrant SVHC = Substance of Very High Concern Candidate List
REACH - key things to remember
REACH is about… Substances not “products” The EU The one tonne per year per registrant threshold Registration per legal entity Generating information through registration Sharing information to enable joint submission Controlling risks to human health and the
environment Substitution
What are you thinking???
I am a commodity trader - does REACH affect me? They’re just bothered about chemicals, right? Someone else will be registering so I don’t have to
bother, right? I don’t know much about these substances so I don’t
have to do anything, right? My products aren’t nasty, REACH doesn’t affect me,
right? This is all a bit of a headache, I can deal with it next
year, right? If I don’t have a registration obligation, there’s nothing
I need to bother about, right?
Townsend Trading Bank - a case study
Townsend Trading Bank has two subsidiaries involved in commodity trading: Townsend SARL - established in Switzerland Townsend UK - established in the United Kingdom
They trade in commodities such as: Wheat Coffee Aluminium Gold Natural gas LPG
What is being traded? Why does it make a difference?
Substance = 1 registration Preparation = 2 or more registrations Article = No registration UNLESS a substance is
“intentionally released in normal and foreseeable conditions of use” = Possible notification IF substance on Candidate List
is present in the article above a concentration of 0.1% weight for weight
Specific exemption = 0 registrations
What is being traded?
Substance which occurs in nature means a naturally occurring substance as such, unprocessed or processed only by manual, mechanical or gravitational means, by dissolution in water, by flotation, by extraction with water, by steam distillation or by heating solely to remove water, or which is extracted from air by any means
Not chemically modified substance means a substance whose chemical structure remains unchanged, even if it has undergone a chemical process or treatment, or a physical mineralogical transformation, for instance to remove impurities
How am I caught - will I have registration obligations?
Manufacturer, Importer or Downstream User? Importer most likely role Natural or Legal Person established in the EU who is
responsible for physical introduction into the customs territory of the Community
Factors relevant to physical introduction Payment Ownership Customs Transport/Insurance
Significance of Incoterms Who is not an importer – sales agencies/carriers?
EU manufacturer to EU customer
manufacturer
Destination of Goods
Non-EU manufacturer – Non-EU trader – EU customer
manufacturer
Destination of Goods
Non-EU manufacturer – EU trader – EU customer
manufacturer
Destination of Goods
Lightening the load - the role of an Only Representative
Check further up supply chain if goods sourced from non-EU Manufacturer
Article 8 of REACH allows non-EU Manufacturers/Formulators to appoint an Only Representative to be responsible for REACH registration
Only Representative legally becomes the Importer Importers becomes downstream-users - reduced
obligations
Only Representative
manufacturer
Destination of Goods
OR
Contracts - Allocating the REACH risk
Consider contractual implications of your role in the supply chain
Forward contracts - what are the REACH consequences?
Consider REACH effect on compliance with laws, warranties, liability and termination
How do I ensure the commodities I am sourcing and trading within the EU are REACH registered?
Examples of basic contract wording - Seller is an EU Manufacturer/Importer or Only Representative
“The Seller warrants that every delivery of Product will comply with the requirements of REACH”
“Seller shall comply with the Registration obligations of the REACH Regulation and shall Pre-register and Register the Products within the timeframes required by the REACH Regulation”
“The Seller warrants that it will pre-register or has pre-registered each Substance before 1st December 2008”
Pre-registration - what do I need to do?
Sign up in REACH-IT Gather information
Identify substance EINECS number
Submit the information IUCLID
And all before the pre-registration window ends!
1 DECEMBER 2008
What else do I need to be thinking about now?
Resourcing REACH - time and people Data gathering Communicating with suppliers and customers
Attending SIEFs or appointing representatives to attend
Joining a consortium? Due Diligence defence
Document your decision making
Q&A session
These are presentation slides only. The information within these slides does not constitute definitive advice and should not be used as the basis for giving definitive advice without checking the primary sources.
Allen & Overy means Allen & Overy LLP and/or its affiliated undertakings. The term partner is used to refer to a member of Allen & Overy LLP or an employee or consultant with equivalent standing and qualifications or an individual with equivalent status in one of Allen & Overy LLP's affiliated undertakings.
Matt Rebecca Catherine
Townsend Lawson Weller
