RoHS directive: Understanding "put on the market" impacts inventory decisions

The date on which a product is "put on the market" according to the European Union's Restrictions of Hazardous Substances Directive (RoHS) Directive (2002/95/EC) is now driving many electronics companies to make inventory or stockpiling decisions. However, few concepts surrounding RoHS have generated as much confusion and controversy as how "put on the market" will be interpreted by EU member states and their respective regulators.

An accurate understanding of the concept "put on the market" is critically important to companies looking to make the right inventory decision because the effective date — July 1, 2006 — of the directive is tied to this concept:

"Member States shall ensure that, from 1 July 2006, new electrical and electronic equipment put on the market does not contain lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls (PBB) or polybrominated diphenyl ethers (PBDE) . . ." (Article 4.1 of the RoHS Directive).

The European Commission and the Technical Adaptation Committee have agreed that the date that products are "put on the market" from a RoHS perspective is to be defined in accordance with the Blue Book Guide definition for "placing on the market". The Blue Guide states that a product is "placed on the market" if it is made available for the first time, but only when the product is "transferred from the stage of the manufacturer with the intention of distribution or use on the EU market".

Transfer may be between manufacturer and importer or EU distributor or between manufacturer and final EU consumer or end user, and is considered to occur when there is either a physical handover or legal transfer of ownership.

Sources of misunderstanding

Member state variation: Certain EU member states have adopted conflicting national legislation or taken different interpretations of when product is "put on the market", and instead are taking the position that a product has not been "put on the market" until it has been "put on the market" within their national boundaries.

This is at odds with the RoHS Directive's status as a "single market directive" under Article 95 of the European Treaty, and may have resulted in some cases from Member States' combined adoption of RoHS and WEEE regulations with the same definition of "put on the market". Under WEEE, it is acceptable for Member States to define "put on the market" as when the product is put on the national market, however under RoHS this would not be acceptable since RoHS is a "single market directive".

The European Commission and various industry groups have been proactive in pointing out to these member states that their legislation and/or interpretations of "put on the market" are at odds with the free market principal and so should be revised. While it seems likely that all member states will ultimately change to come into alignment with European Commission's definition of "put on the market", it now appears clear that actual legislation will not be in place to accomplish this by July 1, 2006. And, if some Member States refuse to adopt the single market principle for RoHS, the matter could end up in the courts and take years to resolve.

Shipment does not mean put on the market

Some companies have asked whether or not a product is considered "put on the market" when it is shipped from a port overseas on FOB or Ex Works shipping terms. This is not considered to be the interpretation of the Blue Book Guide. A product is only "put on the market" when it is generally available for sale in the EU, which it would not be until it has cleared import procedures at a point of entry in Europe.

Manufacturers of non-RoHS compliant product should understand and anticipate the EU and EU Member State regulations and interpretations regarding "put on the market" and the effect that this may have on the manufacturer's ability to sell the product in applicable Member States after July 1, 2006.

You can reach Doug Lockwood, WSP Environmental, at doug.lockwood@WSPGroup.com

Original text is here