Breakfast seminar - 17 September 2008
Investment banks: where do you fit into the
REACH equation?
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
Contact
Matt Townsend
Partner
Environment
Tel: +44 (0)20 3088 3174
matthew.townsend@allenovery.com
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
OR
Destination of Goods
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
Contact
Rebecca Lawson
Associate
Environment
Tel: +44 (0)20 3088 4618
rebecca.lawson@allenovery.com
Contact
Catherine Weller
Associate
Environment
Tel: +44 (0)20 3088 2559
catherine.weller@allenovery.com
Q&A session
Matt
Townsend
Rebecca
Lawson
Catherine
Weller
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.