Three of the more common myths about REACH (Registration, Evaluation, Authorization and Restriction of Chemical substances) are partially based on a misunderstanding of how regulatory requirements ripple through today’s globally dispersed supply chains with often wide-reaching and unpredictable consequences.
Myth 1: Non-EU based companies are exempt from REACH
From a legal perspective, it is accurate if you are not based in the European Union (EU), the EU cannot enforce your compliance with REACH, since you have no legal persona in the EU against which legal actions can be initiated.
However, REACH’s ripple effect will extend its impact through the enterprise value chain like rows of dominos as its requirements are cascaded down supply chains. This effect is demonstrated in Figure 1.
Figure 1: The REACH Ripple Effect
You sell into a supply chain that ‘imports’ into EU
In this scenario, you sell to Customer A, who, in turn, sells to the EU-based Customer D. Customer D is required by the EU to know which substances are in its products, and there is no possible way he can obtain that knowledge without Customer A’s assistance.
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Customer A, in turn, has no source of this knowledge other than from you, as supplier of the product. While you will not be directly asked by the EU to comply with REACH, your customers will require your support in order to comply.
This effect also works in reverse as detailed in Figure 2, below. In this case, you purchase a material from Supplier D. Supplier D formulates this material from a variety of material ingredients, one of which is Material C, purchased from Supplier C. Supplier C is based in the EU, and is legally obligated to comply with REACH.
Figure 2: The REACH Ripple Effect
You purchase from a supply chain that ‘exports’ from EU
In this second scenario, if Supplier C does not comply, Material C will not be available because it will be off the market. It is in your interest to ensure continued supply of Material C by communicating with Suppliers C and D, and securing their assurances Material C will be REACH compliant, and hence available to you.
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