REACH Penalties: Belgium Found Guilty

Belgium is the first EU Member State to be condemned by European Court of Justice for breach of REACH.  This is the result of a May 5 judgment in Case 265/10 Commission vs. Belgium.

REACH has been very clear from the beginning that Member States have their own responsibilities and their own penalty structures.  For instance, the chart (above) shows comparative REACH compliance fines between countries across Europe.  Belgium has among the highest penalties in the EU.  Moreover, the chart shows the incredible discrepancies between how Member States choose to implement and moderate REACH compliance.  (The chart is from the EC December report on penalties, from a study conducted by Milieu Ltd. for the European Commission.)

Brussels fails to comply. REACH Article 126 imposes the obligation on EU Member States to adopt whatever measures necessary to ensure sufficient and correct enforcement of REACH.  Crucially, EU Member States were obligated to notify their enforcement/sanctions-systems to the Commission by Dec. 1, 2008.

Brussels-based Peter Kugel, Partner at Kugel Legal, a firm specializing in EU Law & Litigation, reports that “Belgium evidently failed to comply with that obligation because the Regions of Wallonia and Brussels-capital had not yet adopted any measures to comply with Article 126 REACH.”

REACH “cooperation agreement.” The Commission argued that Belgium failed to comply with Article 126 because there was no “cooperation agreement” in place between the Federal Government and the Regional governments.  A “cooperation agreement” would be an agreement that paves the way for cooperation between the different inspection services in a Member State, largely by implementing modalities of cooperation and information exchange pathways.

The Court dismissed the argument that lack of such an agreement would necessarily lead to lack of compliance.

The court found that, yes, such an agreement could certainly be an appropriate instrument towards the implementation of an effective sanctions-system in connection with violations of REACH (as foreseen by Article 126).

“However,” points out Kugel, “the Court ruled that neither Article 126 REACH nor any other provision of REACH oblige Member States to engage in such domestic ‘cooperation agreements’ for a correct implementation of Article 126 REACH.”

In other words:  it’s each country’s responsibility to figure out its compliance infrastructrue.  It is not up to any outside (federal) agent to coordinate or install procedures to ensure clear compliance processes for a Member State.

REACH breach ruling insight. Many were surprised that Belgium was the first to receive a judgement against their REACH compliance efforts.

Politically, in the longer term, to crack down on Belgium first could be a smart decision.  It shows lack of favoritism when it comes to compliance breach judgements.  In the short term, though, Belgium comes away with a bruised ego and a bruised Public Relations team.  Overall?  It’s nothing a month or two and a few more condemnations in other directions won’t fix.

In saying that, however, we must not be glib.  Businesses in America are watching compliance rulings on REACH like hawks.  Rightly so.  As court action heats up, so will fines, and then all import/export companies will really begin take REACH compliance risk management more seriously.

Apparently, and refreshingly perhaps, the “we didn’t know how to do it; we didn’t know what was going on” argument isn’t flying far in European courts.