ECHA Updates Fee Structure for Administrative Penalties Affecting SMEs

On July 23, 2024, the European Chemicals Agency (ECHA) announced adjustments to administrative fines under the EU REACH Regulation, effective from July 22, 2024. This update aims to increase transparency, ensure fairness in fee structures, and align fees with actual business costs.

Fee Adjustment Background

ECHA charges fees for specific services under the REACH Regulation. It offers reduced fees for eligible small enterprises to ease their financial burden, while companies unable to verify their eligibility face additional fines.

Fee Definitions

Service Fee: For services covered by the REACH Regulation.

Administrative Fine: Imposed on companies failing to prove reduction eligibility.

Decision Details

Original Penalty Standards: SMEs that accurately declare their size during registration are granted fee reductions. However, if an applicant cannot validate their discount eligibility, ECHA will charge a fee equal to the avoided amount due to false information.

Updated Penalty Standards: Companies failing to verify eligibility for reductions face additional penalties. In joint applications, only the highest fee is charged, payable by the principal applicant. If a company corrects a misreported size and verifies this promptly, the penalty is halved.

Additionally, the concept of 'financial benefits' has been expanded to include pre-invoice verification, extending its reach.

Administrative penalties remain unchanged from previous years. Details are provided below.

Size of Company	Type of violation	Administrative charge
Large (non-SME)	If a large (non-SME) enterprise incorrectly claims to be an SME	€19 900 or 2.5 times the financial gain*, whichever is lower
Medium	If a medium-sized enterprise incorrectly claims to be a small or micro-sized company	€13 900 or 2.5 times the financial gain*, whichever is lower
Small	If a small enterprise incorrectly claims to be a micro-sized company	€7 960 or 2.5 times the financial gain*, whichever is lower

Note: Financial gain refers to the difference between the fees reduced due to false or incomplete information and the full fees owed.

Service Fee Policy

ECHA engages with applicants to agree on a maximum service charge before the commencement of specific services. The current daily rate is set at €600.

Entities seeking to qualify as SMEs must submit specific documents: the ownership structure as recorded during the year of application, financial audits from the two preceding years, and the official count of employees. These documents must be translated into English by translators certified by a recognized European body before they can be submitted. Moreover, businesses classified as either partnership enterprises (those with 25-50% of shares held by or holding shares in other companies) or joint enterprises (those with over 50% of shares held by or holding shares in other companies) must also aggregate the total employees and balance sheets of all associated enterprises. Applicants are advised to carefully consider these requirements as non-compliance may result in the need to pay the difference in administrative fees and incur significant additional penalties.

If you need any assistance or have any questions, please get in touch with us via service@hfoushi.com.

Further Information

ECHA News