The European Commission is considering establishing a comprehensive audit system covering all levels of EU REACH compliance and targeted controls to strengthen and coordinate enforcement across EU member states. This system, which will be part of the newly established European Audit Capacity (EAC), forms part of the EU executive's planned overhaul of enforcement regulations.
The uneven reporting rates among EU member states for RAPEX 2021 have led to unfair trade practices among operators in different member states.
Over the years, there have been differences in the resources available for law enforcement among EU member states, resulting in different policies and efforts in conducting regulatory compliance audits. According to the 2021 RAPEX annual report released by the European Commission, the European Commission received a total of 2,142 notifications of non-compliant products in 2021, of which
- About 26% of the non-compliant products (554 items) were reported from Germany.
- About 10% of the non-compliant products (212 items) were reported from France.
- About 8.5% of the non-compliant products (182 items) were reported from Sweden.
- About 7.6% of the non-compliant products (162 items) were reported from Hungary.
- About 7.4% of the non-compliant products (158 items) were reported from Poland.
The 2021 RAPEX annual report reveals that the aforementioned five markets alone accounted for 60% of all reported violations in 2021. This situation creates unfair trade practices among operators in member states. Furthermore, the inability to conduct extensive audits has led to a proliferation of product violations. For example, last year, reports of consumer products containing hazardous substances accounted for 25% of all RAPEX notifications, while 75% of online products failed to comply with at least one requirement of EU chemicals regulations.
The European Commission asked the investigative agency to conduct research and assist in establishing a comprehensive audit system, proposing three audit options.
To address these issues, the European Commission commissioned the investigative agency Milieu to conduct research and assist in establishing a comprehensive audit system. This system will cover all areas of audit, including online sales, imported goods, classification and labeling, chemical substance restrictions, and other known high-risk areas for violations. Milieu released its latest research report on May 24, 2022, proposing the following three audit options:
- Targeted audits, such as those triggered by safety alerts or targeted inspections of recurring issues in the enforcement of specific regulations
- Establishing new Annex enforcement standards in the EU REACH Regulation
- Pass a completely new regulation that sets enforcement standards not only for EU REACH, but also for the Classification, Labelling and Packaging of Substances and Mixtures (CLP), the Persistent Organic Pollutants (POP) Regulation and the Prior Notice and Consent (PIC) Regulation
In the future, the system will be part of the newly established European Audit Capacity (EAC) and will become part of the EU executive body's plan to revise law enforcement regulations, hoping to strengthen and coordinate the formulation of EU laws and regulations across EU members.
Sources:European Commission Safety Gate、Milieu report
We recommend that companies conduct risk management and deployment in advance, as well as clarify common misunderstandings.
Although the audit model of the current audit system has not yet been finalized, recent developments of the European Commission (European Commission discusses establishment of whistleblower oversight mechanism at high-level roundtable and EU Member States share case studies on reporting violations of REACH and POPs regulations RAPEX) indicate that the European Commission intends to gradually strengthen audits of product compliance requirements and recommends that companies conduct risk management for banned and restricted chemical substances in their products.
