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May 19, 2008

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CBA- REACH discounts of ‘doubtful value’

The Chemical Business Association (CBA) has said that the recently announced discounts on REACH registration fees were of ‘doubtful value’ in making the new legislation affordable for small and medium-sized firms (SMEs).

The European Commission has now formally confirmed the scale of REACH registration fees, and announced a range of discounts for SMEs. Medium-sized firms qualify for a discount of 30 per cent; small firms 60 per cent; and micro firms qualify for a discount of 90 per cent.

“The Commission claims these discounts are designed to preserve the competitiveness of smaller firms and, at first glance, they appear generous,” said Melvyn Whyte, Chairman of CBA’s REACH Task Force. “But on closer examination they are of doubtful value to many smaller businesses because of the way the Commission is defining small and micro businesses,” he added.

The definition of each size-category is based on thresholds relating to headcount, annual turnover and balance sheet total.

“The thresholds contained in the definitions used by the Commission have remained at the level set when they were first announced in May 2003. In the intervening five years, chemicals have been subject to a period of significant price inflation. For many companies, this has resulted in sharply increasing levels of annual sales. It means that — today — only a very few firms will actually qualify for the 60 per cent and 90 per cent discounts, because their turnover will exceed the small and micro thresholds,” continued Whyte.

The CBA points to its own membership information to illustrate its point. Only 8 per cent of the member companies currently qualify as micro businesses under the Commission’s definition, as compared with 34 per cent which would have qualified in 2005.

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