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Opinion of Advocate General Kokott on the future of SVHCs notification obligations

11/03/2015

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Belgium

On 12 February 2015, Advocate General Kokott delivered an important Opinion in case C-106/14, FCD and FMB

On 12 February 2015, Advocate General Kokott delivered an important Opinion in case C-106/14, FCD and FMB. The case is a request for a preliminary ruling from the French Conseil d’État (Supreme Court) and it concerns the concept of ''article'' under the REACH Regulation, and the duty to notify concentrations of Substances of Very High Concern (SVHCs).


The legal and factual background of the dispute is summarised as follows. Article 7(2) of REACH in conjunction with Articles 57 and 59 imposes on producers and importers the obligation to provide information to the European Chemicals Agency (ECHA) when an article contains more than 0.1% of a SVHC. The same duty is imposed by Article 33 on suppliers vis-à-vis recipients and consumers of these articles. The issue of how that concentration is to be calculated where an article contains several components which are themselves articles has been subject to many disagreements between Member States, since the entry into force of REACH in 2007.


In particular, the European Commission, supported by the majority of the Member States, takes the view that the proportion of a SVHC should be calculated by reference to the assembled article. Other Member States — like France in these proceedings — contend that it is sufficient if the proportion is reached in the individual components. It is in this context, that the two French federations of trading companies contested the government's position.


Essentially, Kokott is analysing two legal points – first, the concept of an ''article'' under Article 3(3) of REACH; and second, its relevance for the duties to provide information under Articles 7(2) and 33 of REACH.
The definition under Article 3(3) of REACH stipulates that an ''article'' is ''an object which during production is given a special shape, surface or design which determines its function to a greater degree than does its chemical composition''. The legal interpretation provided by Kokott is that despite being integrated into an entire article, a component article retains a shape, surface or design of its own which determines its function to a greater degree than does its chemical composition, it should still be regarded as an article. Logically, this means that in calculating the concentration of certain substances regard should be given to the component article rather than to the entire article.


Pertaining to the second legal question, Kokott believes that EU producers must notify ECHA about the presence of a SVHC only on the level of the entire article and not in each component, since most of the components are coming from third parties and not from the manufacturer itself. Therefore, reporting obligations should not be triggered.


On the contrary, she states that an importer of an entire article is obliged to do so. The main reason is that if the concentration in the component articles is to be determined in any event, it is not evident why it should entail excessive disadvantages to report that available information to ECHA. Moreover, as some Member States submit, if the notification relates to component articles, the burden is actually smaller because the concentration does not have to be determined precisely.


On the allegations of infringement of the EU principle of equal treatment between producers and importers, the Advocate General is citing case law, which states that: ''[..] protecting European Union producers against competitive disadvantages which might result from a different situation for importers is a permissible objective of the EU legislature'' (case C-558/07 S.P.C.M. and Others, para.57).


Finally, concerning the suppliers of entire articles, she is of the opinion that they must provide information on SVHCs if they are present in any of its components and the relevant information is actually available.


In general, the CJEU tends to follow the opinions of Advocate Generals. However, in the present case, it could still disagree with Kokott and decide differently. If the Court decides to follow Kokott's advice, this would have far-reaching consequences for the chemicals industry since companies would have to calculate the concentration of a SVHC for each component and the obligations to notify and provide information on the presence of a SVHC in articles provided by Articles 7 and 33 of REACH would be triggered much more frequently. This will ultimately mean a greater compliance burden.

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