SVHC in imported articles: REACH authorisation requirement justified under WTO rules

The purpose of the REACH Regulation is to ensure a high level of protection of human health and the environment as well as the free circulation of substances on the internal market while enhancing competitiveness and innovation. To this end, REACH introduces, among other instruments, the authorisation regime for substances of very high concern (SVHC) that are listed on Annex XIV of the regulation. After expiration of the transitional period for each Annex XIV-SVHC, articles, such as most products of daily use, produced in the European Economic Area (EEA) may not contain such substances unless an authorisation was granted for the specific use or this use falls within the scope of an exemption from the authorisation requirement. The authorisation scheme does, however, only apply to SVHC used in the EEA. As a consequence, REACH does not regulate SVHC entering the European market as part of imported articles which burden human health and the environment. Moreover, from an economic perspective, domestic articles are subject to stricter requirements than those which are produced abroad, putting actors from within the EEA at competitive disadvantage and thus impeding the intention of REACH to enhance competitiveness and innovation. One option to close this regulatory gap could be to extend the authorisation requirement to SVHC present in imported articles. A legal appraisal on behalf of the German Environment Agency (UBA) assesses whether such option would be in accordance with the specifications of WTO world trade law. It concludes that, measured by the standards of the WTO dispute settlement practice, such an extended authorisation scheme would neither violate the principles of national treatment and most-favoured nation treatment. Also, such regulation would not constitute an unnecessary obstacle to trade, since the extended authorisation requirement would pursue a legitimate objective covered by the regulatory autonomy of the EU and, furthermore, the regulation would not be more trade-restrictive than necessary. The contribution at hand summarises the main findings while taking into account first reactions to the legal appraisal.