Chemical compliance enforcement for the EU market is undergoing a massive transformation, with a new Chemical Audit Agency being created to lead the charge on compliance auditing and enforcement. Product compliance enforcement as you thought you knew it is about to become faster and smarter. This article gives manufacturers an overview of upcoming EU enforcement changes so that you can be proactive in adapting your processes to stay ahead of tightening regulatory forces.
Enforcement Faces Challenges: Current Regulatory Shortcomings
The EU Market Surveillance Regulation (MSR), published June 2019, is a landmark example of enforcement legislation that obliges EU companies and importers to cooperate more closely with market surveillance authorities to provide declarations of conformity for any products placed on the market. This regulation will standardize enforcement activity across EU member states to provide more consistency in penalties. For manufacturers, this will level the playing field for those that have invested substantial sums in compliance processes, and remove any unfair advantage from those operating in countries where enforcement has been lower.
However, enforcement agencies in the EU have claimed they lack the resources, time, and expertise to properly audit for compliance. This is in part due to the sheer scale and complexity of certain chemical regulations, such as the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) regulation. So although policy is now in place to standardize enforcement, resource limitations and regulatory complexity undercut the MSR and mean that noncompliance can still slip through the cracks.
That’s why the European Chemicals Agency (ECHA) intends to create a new European Audit Capacity (EAC), a centralized task force mandated to provide EU Member States with curated audit information, enabling them to rapidly execute product recalls, recommend fines, and other enforcement actions. Although this new task force is already ramping up, regulatory experts expect that REACH’s next version — informally known as REACH 2.0 — will formally enshrine the EAC’s role and responsibilities. We expect ECHA will release the REACH 2.0 proposals for consultation in the next few months, kickstarting the negotiation process that will formalize the new auditing arrangements.
For manufacturers, this should be an alarm bell that auditing and corrective actions are about to get more frequent and dig much deeper.
Meet ECHA’s New European Audit Capacity
The new EAC’s role will be to bridge the gap between product compliance data and individual EU member state enforcement agencies, taking on the majority of the auditing burden so that agencies can focus on actions that remove non-compliant products from the market. Going forward, the EAC can act as as the new central auditing body for all things related to:
- EU Medical Device Regulation (MDR)
- EU Waste Framework Directive (WFD)
- REACH Regulation
- Restriction of Hazardous Substances (RoHS) Directive
Manufacturers will see a drastic ramping up in enforcement activity and even greater scrutiny on their product compliance data as this new audit agency comes into force.
Under the new model forecasted for REACH 2.0, ECHA will continue its role in data collection through various regulations, including the amendment to the Waste Framework Directive amendment that established the requirement to submit data to the Substances of Concern In articles as such or in complex objects (Products) (SCIP) database. However, rather than asking individual enforcement agencies to assess data submitted by companies under their jurisdiction, the EAC will take on assessment responsibilities including:
- Identifying missing information or gaps within a company’s SCIP dossier(s)
- Flag discrepancies in submissions to various databases which could indicate non-compliance or poor internal compliance processes
- Compare similar products in the SCIP database through business-to-business analysis to catch inconsistencies
- Create and share curated data dossiers about non-compliant companies to enforcement agencies
By delegating these data-analysis activities to trained experts, ECHA aims to remove the technical obstacles hindering member state action.
In addition to scouring the SCIP database, the EAC will also be using the new database platform, Information Communication System for Market Surveillance (ICMS), designed specifically to help separate surveillance bodies quickly communicate information about non-compliant products. The ICMS also includes a public-facing area listing non-compliant products.
These two databases form the auditing foundation, with the MSR and REACH 2.0 empowering the EAC to search for discrepancies and gaps. Together, this combination represents a total sea change in EU product compliance management.
Your Next Steps
While it will be at least another year or two before REACH 2.0 comes into effect, the product data you submit today is still fair game for enhanced auditing scrutiny. Here are some proactive things that manufacturers can do to protect themselves as enforcement gets smarter:
- Make sure to collect all relevant product data, down to the parts of parts level. Data gaps in your SCIP dossiers will be a top red flag for auditors & market surveillance authorities.
- Prioritize data hygiene by establishing a system to validate supply chain data submissions.
- Organize and centralize compliance data. If you do get audited, having your data in one place will be essential. The centralizing process is also an ideal time to self-audit for data gaps.
- Start planning now how to replace candidate substances of concern (SVHCs) in your supply chain.
ECHA’s goal is to create a zero-excuse and zero tolerance regulatory environment as they tighten the loop in the EU’s package of circular economy legislation. Manufacturers that delay establishing a comprehensive product compliance will be at a disadvantage the moment REACH 2.0 is finalized. However, by focusing on your supply chain product data now, you’ll face significantly lower risk of triggering an audit from ECHA.
Digital Product Passports
Product data is the heart of enforcement. The EU’s Circular Economy Action Plan (CEAP) is yet another initiative that requires deeper supply chain data from manufacturers. Under the CEAP, manufacturers will need to collect data and create robust digital product passports, which will be used to communicate sustainability data to support substance reuse and recycling. These digital product dashboards will also likely be another data source for EAC scrutiny.
Watch our on-demand webinar to learn how enforcement in the EU is continuing to evolve due to the public SCIP database: SCIP Dissemination Portal Goes Public: What You Need To Know.
