Costs of EU chemical regulations reach US businesses

17 February 2010 20:56  [Source: ICIS news]

SAN FRANCISCO (ICIS news)--US firms are facing the costs of complying with the EU’s chemical regulations, even if they have no offices in Europe, executives said on Wednesday.

The EU’s programme for the registration, evaluation and authorisation of chemicals (Reach) went into force in 2007. One of several deadlines under Reach falls in December, when high-production-volume chemicals must be registered.

While the EU regulations have no effect on US soil, they still can affect some of the nation’s producers and their business operations.

US producers exporting an additive or solvent or other substances for use by an EU manufacturer may find their product within Reach jurisdiction if its end-use destination is the EU.

Dixie Chemical has no offices in the EU, but it is registering some of its products because the EU is such a large market for the company, said Mal Johnson, vice president of marketing for the US specialty chemicals firm.

Johnson made his comments during a presentation at the InformexUSA fine-chemicals trade show in San Francisco.

US producers eager to comply with Reach are forming consortia, under which they divide testing and other Reach costs, Johnson said.

The consortia help producers control costs, which otherwise could be overwhelming, said Jim DeLisi, president of Fanwood Chemical, a regulation, sales and marketing consultant in the US.  If no consortium exists for a product, then a company should start one.

US companies participating in Reach should be cautious about disclosing confidential business information during the registration process, DeLisi said.

The registration process is based on the size of annual sales. As a result, the mere news of a company registering could alert companies and customers about the approximate size of the producer’s sales to the EU, DeLisi said.

Also, competitors and other members of a consortium could discover details about a producer’s processes, DeLisi said.

Dixie Chemical is doing some of the Reach registration procedures itself, Johnson said, because competitors otherwise might learn details about novel end uses of its products.

To avoid revealing such details to competitors, DeLisi recommended that producers include their marketing officers in the Reach registration process, since they are often sensitive about business confidential information.

US producers subject to the December deadline should try to meet the target early, DeLisi said.

Many Reach applications have been returned to producers because they were incomplete, he said. Conesquently, producers had to re-file.

An earlier self-imposed deadline will help producers meet the December target if any mishaps occur with the initial application, he said.

For some US producers, the size of their EU business does not justify the costs of complying with Reach.

However, more countries, such as China and Japan, also are considering similar programmes.

The US might impose Reach-like requirements as part of the pending reform of the Toxic Substances Control Act (TSCA), the principal US statute for regulating chemicals in commerce.

Some US senators planning reform legislation to update and broaden the 33-year-old TSCA favour Reach-like provisions.

To discuss issues facing the chemical industry and join the ICIS Reach discussion forum go to ICIS connect

By: Al Greenwood
+1 713 525 2645

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