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13/09/2018

ECHA Board of Appeal decisions in the Symrise AG and SI Group UK Ltd et al. cases

By Anna Roubier

Decision of ECHA Board of Appeal in Case A-009-2016 Symrise AG v. ECHA

The background of the Symrise AG appeal lies in the European Chemicals Agency's (ECHA) request for the registrant Symrise AG to submit additional data on the basis of further animal tests, most notably an extended one-generation reproductive toxicity study (EOGRTS).

According to the registrant, as the substance is used exclusively as an ingredient in cosmetic products, ban on animal testing as provided for by the EU's Cosmetics Regulation (EC) No 1223/2009 applied. The registrant also raised other pleas alleging infringement of procedural rights, including a violation of the right to comment the draft decision imposing further testing requirements and the right to be heard. 

The decision of the Board of Appeal, delivered on 8 August 2018, is premised on procedural issues, sidestepping altogether the interface and application of (vertebrate animal) testing requirements under the REACH Regulation, on the one hand, and the EU Cosmetics Regulation, on the other.

In a relatively succinct decision, the Board of Appeal found that the appellant's right to comment, as laid down in Article 50 to 52 of the REACH Regulation had not been breached, there being no right to comment a revised draft decision. Further, while the appellant had been invited to attend the meeting of ECHA's Member States Committee at which the draft decision was discussed, the procedural rules do not foresee a right for registrants to speak at such meetings. 

Conversely, the Board of Appeal did find that the appellant's right to be heard had been violated as regards the adoption of the EOGRTS study. The appellate body considered that while the appellant had had the opportunity to comment the initially proposed OECD 422 study (reproductive toxicity), it had been deprived of such possibility regarding the Danish proposal for the EOGRTS study, which finally was the only study requested to examine concerns regarding the substance's reproductive toxicity properties.

Consequently, the Board of Appeal annulled the contested decision insofar as it required the appellant to conduct the EOGRTS study and remitted the case in this respect to ECHA for further action. 

At the same time, the decision seems to avoid the underlying issue, namely whether ECHA was competent to request the reproductive toxicity study in the first place considering the substance's exclusive use in cosmetics and the EU Cosmetics Regulation's ban on animal testing.

The factual background of the case appear to fit perfectly the scenarios explained in a note published by ECHA and the European Commission in 2014, according to which registrants of substances, which are used exclusively in cosmetics, may not perform animal testing to meet REACH information requirements on human health endpoints.

It remains to be seen whether ECHA will still require Symrise AG to conduct further animal studies and how the Board of Appeal will address the issue if the case re-appears before it in due course, considering that there exists already very clear guidance on the issue from the regulators themselves. 

Decision of ECHA Board of Appeal in Case A-006-2016 SI Group UK Ltd. et al. v. ECHA

In the SI Group UK Ltd. et al. case, a decision issued by the Board of Appeal on 6 June 2018, the appellate body was called upon to assess the legality of ECHA decision on polymers in the context of substance evaluation. More specifically, ECHA had requested information on a monomer, including its presence in polymers as an unreacted impurity after polymerisation or as a degradation product of the polymers.

The appellants (in total 12 companies) claimed that ECHA had exceeded its competences in view that polymers are exempted from the provisions of the REACH Regulation regarding registration and evaluation. 

Contrary to the appellants' arguments, the Board of Appeal found, having had regard to the specific provisions, their context and the general objectives of the REACH Regulation, that the exemption of polymers from the registration and evaluation provisions could not be interpreted to exclude monomers in polymers as unreacted impurity after polymerisation or as a degradation product of such polymers. Accordingly, ECHA had been within its rights to request further information.

At the same time, insofar as ECHA's information request related to information that was only available to downstream users, as opposed to the appellants themselves, or requiring the appellants to make "reasonable worst case assumptions", the Board of Appeal concurred with the appellants that the request breached the principles of legal certainty and proportionality. 

Conversely, with respect to ECHA's request for further information available to the appellants, or which information the appellants could themselves generate, the Board of Appeal dismissed the appellants' arguments claiming violations of the same principles. Contrary to the appellants' claims, the Board of Appeal considered that ECHA was not required to establish or explain the existence of a potential risk with respect to each individual polymer but only as regards the substance in question (nonylphenol, a substance with potential endocrine disrupting properties).

Further, the Board of Appeal also dismissed the appellants' claims that compliance with ECHA's request would result in the sharing of sensitive information, in contravention of the EU Treaty's provisions on anti-competitive conduct. According to the appellate body, the decision did not stipulate how the requested additional information was to be provided and thus the appellants' could rely on a third party to gather and submit any confidential and sensitive information. 

Judgment of the General Court of the European Union in CaseT-283/15 Esso Raffinage v. ECHA

Finally, Germany has appealed against the General Court's judgment in Case T-283/15 Esso Raffinage v. ECHA, delivered in May 2018. In its judgment, the General Court found a "Statement of Non-compliance" ('SONC') letter, issued by ECHA to the French enforcement authority, to amount to a decision for the purposes of judicial review and annulled the said measure.

In upholding the appellant's main contention, the General Court dismissed ECHA's arguments, supported by Germany and France, on the non-binding effect of the SONC letter and also the appellant's lack of legal standing to challenge the letter. The background of the dispute relates to a compliance check conducted by ECHA pursuant to the REACH Regulation. ECHA found the appellant's dossier not to have complied with the standard REACH information requirements and requested the appellant to submit additional data. 

Further to ECHA's dossier compliance decision, the appellant proceeded to a dossier update but rather than submitting all the information and data requested by ECHA in its decision, the appellant relied on an adaptation to the standard information requirements and a weight of evidence approach, in support of its view that the studies requested (including a second specifies prenatal developmental toxicity study) were not necessary.

Further to the dossier update, ECHA sent the contested SONC letter to the French enforcement authorities, stating that the dossier remained incomplete (the update having been unacceptable) and instructing, in reliance of Article 126 of the REACH Regulation, the national authority to undertake enforcement action in accordance with national law. 

The General Court first examined whether the SONC letter was open to challenge, in that although not addressed to the appellant (the addressee having been the French enforcement authorities), it produced binding legal effects vis-à-vis the applicant. To answer this question, the General Court analysed Article 42 of the REACH Regulation on the "follow-up to dossier evaluation", according to which ECHA shall examine any information submitted in consequence of a dossier evaluation decision.

The EU judicature held that a dossier compliance decision, taken pursuant to Article 41 of the REACH Regulation, and the consequent assessment of information submitted in accordance with Article 42 of the REACH Regulation, constitute a single procedure. Thus, although Member States are responsible for enforcement action where a registration is and remains non-compliant, it is for ECHA to examine any information submitted following a request for further information in the context of dossier evaluation.

Further, and importantly, it is for ECHA to assess, in the context of the follow-up to dossier evaluation, any adaptation to the standard information requirements, including even if such submission does not rest on substantial and new facts (i.e., these were known and could have been raised already during dossier evaluation or initial registration) provided that the submissions are not manifestly unreasonable and do not therefore amount to an abuse of procedure.

In light of these considerations, the General Court noted that the SONC letter did not merely provide a technical opinion or a factual record of the reasons for non-compliance. 

Rather, ECHA had analysed the additional documentation submitted by the appellant, including the proposed adaptations to the standard information obligations. Therefore, the letter addressed to the French enforcement authorities produced binding legal effects vis-à-vis the appellant.

In siding with the appellant on the substance, the General Court found that in view of the allocation of competences between ECHA (dossier evaluation and follow-up thereto) and the Member States (enforcement action for non-compliance), ECHA could not "act independently of that legal framework by having recourse to an instrument other than the decision" taken in accordance with Articles 41 and 42 of the REACH Regulation. 

The General Court also rejected ECHA's argument that the system would create an "endless loop of new decisions" or an "endless spiral or evaluations and adaptations". It noted that a decision pursuant to Article 42 of the REACH Regulation is to be taken "if necessary". Therefore, an adaptation based on manifestly unreasonable elements, which would therefore constitute an abuse of process (and akin to a complete failure to respond to ECHA's dossier evaluation decision), would allow ECHA to find non-compliance by means of a simple information to the Member State(s) concerned.

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