Case C-535/15, Freie und Hansestadt Hamburg v Jost Pinckernelle, Judgment of 27 April 2017, ECLI:EU:C:2017:2015
The ECJ has confirmed that substances that are imported into the EU with the purpose of being subsequently exported, and which are not placed on the EU market, do not need to be registered under REACH. Maximilian Kemp comments here that this interpretation is not consistent with the objectives of REACH.
Mr Pickernelle was a trader in chemical substances, who had imported 19.4 tonnes of nicotine sulphate – a substance classified as highly toxic – into Germany in order to sell it in Russia, without however having registered the imported chemicals according to the requirements of REACH. The City of Hamburg considered that this was contrary to the obligation in Article 5 of REACH to register substances in order for them to be “manufactured in the Community or placed on the market”, and therefore decided that Mr Pinkernelle would not be able to proceed with the planned export, as the product was there illegally
Following the rejection of his complaint to the City of Hamburg, Mr Pinkernelle sought to challenge this rejection before the German courts. The Administrative Court of first instance ruled in his favour, but the judgment was overturned on appeal, leading to the case coming before the Federal Administrative Court, which decided to refer a question to the Court of Justice. Separately from these administrative proceedings, he was sentenced to 18 months imprisonment, suspended on probation for a period of 3 years, and subject to a fine of €340.000, mainly on the basis of breach of Article 5 of REACH.
In order to answer the referred question, the Court considered it necessary to determine the scope of the obligation to register contained in Article 5 of REACH, a question which it approached by interpreting that provision in its context. The Court therefore undertook to interpret the meaning of the terms “in the Community” and “placed on the market” by examining the language used in several of REACH’s provisions. With regards to the first notion, the Court compared the different language version of REACH in order to determine that “in the Community” was likely to refer both to the manufacturing and placing on the market, as this interpretation was possible in some language versions but its contrary was not in others.
Concerning the notion of “placed on the market”, the result of the Court’s analysis was to find that it did not cover exports, and that it referred exclusively to the internal market. This was, amongst other things, because products leaving the Community are referred to in REACH as being “exported” rather than “placed on the market”. The Court furthermore considered that this interpretation was consistent with the objectives of REACH, given that it was adopted under powers granted by the Treaty for harmonisation of Member State legislation in order to facilitate the establishment and functioning of the internal market (Article 114 TFEU).
As for the City of Hamburg’s argument according to which a negative answer to the referred question would encourage rogue importers to wilfully breach EU chemical registration requirement in the knowledge they could simply export these substances, the Court reminded that it was the responsibility of the Member States to adopt and apply sanctions for breaches of REACH, which the City of Hamburg was in any case doing with regards to Mr Pinkernelle.
In this decision, the Court appears to be trying to restrict REACH’s extraterritorial effect, by considering that its provisions do not concern the export of products imported from outside the Union. In order to justify this conclusion, the Court argues that such an interpretation is consistent with the objectives of REACH, stating that its purpose is first and foremost to facilitate the functioning of the internal market. However, this conclusion is perhaps questionable in light of some of REACH’s other recitals, which the Court did mention as part of the legal context to the case, even if it did not refer to them in its reasoning.
Thus, for example, the Regulation’s 3rd recital states that “[REACH] should be applied in a non-discriminatory manner whether substances are traded on the internal market or internationally in accordance with the Community’s international commitments”. Recital 7 of REACH further indicates that “to preserve the integrity of the internal market and to ensure a high level of protection for human health, especially the health of workers, and the environment, it is necessary to ensure that manufacturing of substances in the Community complies with Community law, even if those substances are exported”. Therefore, if REACH applies to products imported within the Community, and is intended to also apply to substances manufactured for export, it is difficult to see why it would not apply to substances imported for subsequent export.