The EU Regulation on Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) has been described as "the most complex and far-reaching foreign technical barrier that China has ever encountered," highlighting its significant impact. The effects of REACH on various manufacturing industries are readily available in various media and professional journals, providing valuable information for manufacturing companies. However, does REACH only affect product manufacturers? Does it impose direct requirements on distributors exporting to the EU? Will it have any impact? What are the impacts? What measures need to be taken to ensure smooth trade? These are the main focuses of this article and are issues that distributors in the EU must pay attention to.
1. Distributors and Export Trade Categories
The REACH regulation clearly defines "distributor" as a natural or legal person within the EU who stores or places substances on the market solely for third parties, including retailers.
The distributors defined in this context clearly refer to companies established in the EU that are engaged in the storage or sale of products; domestic distributors do not fall under the EU's distributor category.
This article considers distributors who only engage in import and export trade and do not produce goods themselves, especially those that export to the EU. Distributors who also produce goods are, within the scope of REACH, actually considered "non-EU manufacturers" and subject to the "non-EU manufacturer" provisions, and are not within the scope of this article.
Based on their registered address and scope of operation, distributors can be divided into "domestic export distributors" and "international import/export distributors." "Domestic export distributors" are only responsible for procuring products from China and then selling them to importers or companies in the EU; while "international import/export distributors" not only procure products from China but also import products from outside the EU and may distribute them in the European market. Such international import/export distributors can actually be considered EU "importers" and also possess the status of "suppliers" and "distributors" as defined by REACH regulations. Large international buyers generally fall under the category of "international import/export distributors."
In fact, by extension, the REACH regulation is an EU regulation, and none of its requirements directly regulate domestic distributors. Distributors must understand this correctly. So, does the REACH regulation actually affect domestic distributors? Undoubtedly, yes! And the impact is significant! The REACH regulation directly regulates product manufacturers, importers, downstream users, suppliers, and distributors. Please note that these refer to natural or legal persons residing in the EU.
In fact, by extension, the REACH regulation is an EU regulation, and none of its requirements directly regulate domestic distributors. Distributors must understand this correctly. So, does the REACH regulation actually affect domestic distributors? Undoubtedly, yes! And the impact is significant! The REACH regulation directly regulates product manufacturers, importers, downstream users, suppliers, and distributors. Please note that these refer to natural or legal persons residing in the EU.
As mentioned earlier, "international import/export distributors" in REACH are not only "distributors" within the EU, but also "importers" and "suppliers" as defined in the REACH regulations. Therefore, international importers must meet all the requirements for "importers," "suppliers," and "distributors" under the REACH regulations. These requirements can be summarized in the following ten aspects:
Pre-registration; registration; registration inquiries; receiving registration information/substance assessments; maintenance and renewal of registration; application for authorization; restriction of hazardous substance content;
Information communication within the supply chain; close attention to material information reporting; reporting of material classification and labeling. |
Originally, the ten requirements of REACH applicable to importers were not for all products, but rather applied differently to the three categories of products defined by REACH: "substances," "preparations," and "articles." For example, the "application for authorization" requirement does not apply to "articles" imported into the EU, while the "notification of information on substances of very high concern" requirement is specifically for "articles." However, since many distributors deal with products covering all three categories, especially large international buyers purchasing thousands of items, distributors must have a comprehensive understanding of REACH requirements and respond effectively.
"Domestic export distributors" do not fall under any of the roles of manufacturers, importers, suppliers, downstream users, or distributors regulated by the REACH regulation. Therefore, the REACH regulation does not directly apply to "domestic export distributors." However, because the REACH regulation directly requires "domestic export distributors'" EU customers—importers—the distributors must ensure that the products sold in Europe meet the relevant REACH requirements and can cooperate with importers to fulfill their obligations under REACH. The work that "domestic export distributors" should undertake can be inferred from the importers' obligations under REACH. For "domestic export distributors," EU customers often make the following requirements:
Ensure that the product itself does not contain any substances specified in Annex XVII of the REACH Regulation, or contains them but in amounts not exceeding the limits; provide information required by importers for pre-registration, registration, registration inquiries, supplemental registration, application for authorization, notification of substance classification and labelling, and information on the presence of substances of high concern; provide importers with information that must be transmitted from upstream suppliers to downstream suppliers as required by the REACH Regulation; if EU importers require distributors to consider compliance with REACH requirements themselves, then all REACH-related requirements must be considered.
3. Work that distributors should undertake
3.1 International import and export distributors
As mentioned earlier, international import/export distributors essentially act as "importers" to ensure that products sourced from outside the EU meet REACH requirements. Strategically, there are two options: one is to directly meet REACH requirements themselves; the other is to require suppliers to meet the requirements, acting as the downstream user. However, due to differences in supplier size, willingness, and capabilities, it's difficult to require all suppliers to meet REACH requirements themselves; some suppliers, whom they cannot afford to ignore, will not directly comply. Therefore, generally speaking, choosing to directly meet REACH requirements is a more realistic strategy. In this case, all suppliers need to cooperate by providing relevant information and controlling the content of restricted substances in the products.
Therefore, international import and export distributors can follow these steps to comply with REACH: establishing REACH compliance organizations and raising REACH awareness within the supply chain; classifying suppliers and identifying REACH-related requirements.
Manufacturers can be categorized into three types: substance manufacturers, preparation manufacturers, and article manufacturers. The requirements and control methods for substance manufacturers and preparation manufacturers are largely similar, so they can be grouped together. Generally, substance and preparation manufacturers' products will involve REACH requirements such as pre-registration, registration inquiries, registration, supplementary registration information, registration renewal, authorization applications, supply chain communication, limiting the content of restricted substances in products, and classification and labeling of substances. Article manufacturers may be involved in REACH requirements such as pre-registration, registration inquiries, registration, supplementary registration information, registration renewal, notification of substances of very high concern, supply chain communication, and limiting the content of restricted substances in products. However, the first six requirements are very unlikely to actually occur, and distributors must have the ability to make such judgments. Additionally, there are suppliers who claim to be REACH exempt or partially exempt; it is necessary to verify the authenticity of these suppliers' claims.
Randomly check suppliers' REACH compliance status to understand needs: Conduct gap analysis to understand suppliers' capabilities in order to develop targeted implementation standards; Develop REACH compliance standards for different supplier categories: Generally, the content should include information transmission requirements such as identification and transmission information, format, and time limits; material restriction requirements such as the types, content, and time limits of restricted substances; testing requirements; and change management requirements; Provide REACH compliance standard training for different supplier categories: Given the complexity of REACH regulations, it is generally difficult for suppliers to understand the REACH regulations themselves and the implementation standards proposed by distributors, so it is necessary to arrange about 2 days of training for suppliers; Urge suppliers to meet REACH compliance standards: This will be a long-term, phased process, determined by the requirements of REACH regulations themselves; Review the compliance of suppliers' REACH responses: This mainly ensures the authenticity of the data provided by suppliers and the effectiveness of restricted substance control; In addition, some suppliers believe that their products are REACH exempt or partially exempt, and as a distributor, it is necessary to verify the authenticity of this claim, otherwise there may be significant risks; As an importer, carry out the following ten aspects of work.
3.2 Domestic export distributors
As mentioned earlier, the "domestic export distributors" discussed here do not engage in manufacturing. Otherwise, they could directly designate a "sole representative" to meet REACH requirements. The REACH regulation stipulates that non-EU manufacturers can designate a natural or legal person located in the EU as their "sole representative" to fulfill the importer's obligations. In this case, the importer becomes a "downstream user," and many REACH obligations are no longer required.
So, regarding the operations of "domestic export distributors," the first question to discuss is: are "domestic export distributors" qualified to designate a "sole representative" to fulfill REACH obligations? This is a very real issue for "domestic export distributors," because many domestic manufacturers are reluctant to designate a "sole representative" to directly address REACH due to the complexity and high costs of the registration process. If the distributor's EU importer or domestic supplier does not consider REACH issues, or if the distributor wants to avoid being subject to others' control, they must consider meeting REACH requirements themselves. In this case, a "sole representative" is necessary.
The latest version of the REACH regulation's registration guidance document (version 1.3), section 1.5.3.4, "Sole Representative of Non-EU Manufacturers," explicitly states: "Distributors are not mentioned in Article 8(1), therefore (they) cannot appoint a sole representative." However, those familiar with REACH practices know that many domestic export distributors actually employ "sole representatives" and have generally pre-registered. Is this permissible? If we strictly adhere to the REACH definition of "distributor," only those located within the EU can be considered distributors. Does this statement in the guidance mean that EU distributors cannot appoint a sole representative? Of course not. EU distributors do not have the right to appoint a "sole representative." In other words, this regulation is indeed intended to control distributors exporting to the EU, although its wording is not very precise.
Domestic distributors designate a "sole representative" for pre-registration, partly out of necessity, partly for easier uniformity, and partly out of a sense of complacency. This involves REACH enforcement issues. REACH is EU regulation and can only be enforced within the EU. It's difficult to determine whether products exported from outside the EU are directly exported by the manufacturer or re-exported by a distributor. If a distributor outside the EU identifies itself as the manufacturer, the required REACH documentation lacks information to verify this, especially since both methods rely on a "sole representative," making identification even more challenging. Furthermore, the EU cannot directly inspect companies outside the EU to determine whether they are distributors or manufacturers.
The guidelines are structured this way to ensure fairness for EU manufacturers. For example, if a substance from China is exported entirely through a single distributor, the entire Chinese company only needs to pay one registration fee, while EU companies would each need to pay their own. Therefore, this current practice still carries some risk, as it's their regulation, and anything is possible. Having clarified this, as a "domestic export distributor," you can follow these main steps to address REACH requirements:
Determining who should handle the response – importer, supplier, or distributor: For distributors, the best option is the supplier, followed by the importer, and the worst is the distributor themselves. However, this is often not a decision the distributor can make. If the supplier handles the response themselves, the distributor only needs to assess their compliance and relay relevant information. If the importer handles the response, the distributor mainly assists the importer in urging suppliers to provide necessary information, meet the control requirements for restricted substances, and monitor supplier compliance. The specific work required is similar to that of "International Import/Export Distributors" above, except the last point is not required. If the distributor handles the response themselves, the following work needs to be done: Select a sole representative and sign a contract stipulating the rights and obligations of both parties; under the guidance of the sole representative, classify suppliers and specify implementation standards for different categories of suppliers; distribute standards to suppliers and convene supplier training sessions; urge them to implement the standards; provide the necessary information for pre-registration, registration, authorization application, and notification as requested by the sole representative; and conduct information relay within the supply chain, such as pre-registration numbers, registration numbers, authorization numbers, SDS, SVHC, etc.
4. SGS's REACH service for distributors
The complexity and specialized nature of REACH regulations mean that distributors cannot handle REACH compliance across the entire supply chain on their own. For example, when different suppliers develop REACH implementation standards, relying on professional and authoritative organizations like SGS can actually achieve twice the result with half the effort. SGS provides consulting and training services on supply chain REACH compliance to major international buyers like Kingfisher, and also provides supplier auditing services to international brands like J&J. Having accumulated considerable experience in REACH compliance, SGS is a valuable partner for distributors.
As a professional third-party organization, SGS can provide services covering all requirements of the REACH regulation, including:
| REACH implementation training; Mini-REACH; REACH compliance consulting services; REACH compliance audit; MARCH; Sole Representative services; Substance characterization and registration document preparation; Substance testing; SDS preparation; SVHC screening; Formulation consulting. |
