1-11. What is the REACH Regulation? Key Points Japanese Companies Must Understand for Chemical Management

The REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) regulation is a comprehensive regulation for chemical substance management in the EU that came into effect in 2007. Its purpose is to protect human health and the environment from risks posed by chemical substances while ensuring the smooth distribution of chemical substances within the EU market. All companies that supply products to the EU market are bound by the REACH regulation, regardless of whether they are in the EU or overseas, making it an extremely important legal regulation for Japanese companies as well.

The most notable feature of the REACH Regulation is the principle of "No data, no market." Chemical substances manufactured or imported into the EU in quantities of one ton or more per year cannot be placed on the market unless data on the properties and hazardous properties of the substance is registered. In principle, registration is carried out by the manufacturer or importer, but Japanese companies outside the EU must register through a local "Only Representative (OR)." If exports are carried out without selecting an OR, the registration obligation will be transferred to the importer, putting you at risk of losing business opportunities.

REACH also has three mechanisms: evaluation, authorization, and restriction. Evaluation involves verifying the scientific validity of submitted data and risk information. Under the authorization system, permission from the European Commission is required when using certain Substances of Very High Concern (SVHC). Under the restriction system, the manufacture and sale of substances for specific uses is prohibited. Once a substance is designated as an SVHC, its use in products is significantly restricted and alternative substances must be considered throughout the supply chain, making this a point of particular importance for Japanese companies.

The REACH Regulation affects not only raw chemical substances, but also preparations and final products. If an exported product contains more than 0.1% by weight of an SVHC, the company is obligated to provide information to its business partners and consumers. Furthermore, registration of information in the EU's SCIP database is now mandatory, further tightening information management. In particular, in industries where many Japanese companies are involved, such as electronic devices, automotive parts, paints, and resin products, it is essential to establish a system for obtaining accurate content information from suppliers.

The challenges facing Japanese companies include (1) the difficulty of collecting information on chemical substances from the supply chain, (2) dealing with frequent regulatory revisions and SVHC list updates, (3) delays in registration due to insufficient coordination with OR, and (4) insufficient internal information management and documentation. Failure to address these issues could lead to export suspensions and a loss of trust from business partners.

As a countermeasure, it is first necessary to cooperate with suppliers and establish a system for systematically collecting and managing information on contained substances. It is also important to constantly monitor updates to the SVHC list, identify affected products, and promptly consider alternative substances. Furthermore, it is essential to carefully select ORs and ensure that registration procedures are carried out properly.

In conclusion, the REACH Regulation can be considered a "passport to entry" for accessing the EU market. Japanese companies are not only required to meet legal requirements, but also to view chemical substance management as a management issue and to strike a balance between risk reduction and strengthening competitiveness.