SME verification

In order to ensure fair competition and equal treatment of registrants with regard to fee payments, ECHA has the responsibility of checking the size category of companies who claim to be eligible for SME fee reductions.

If you indicate in REACH-IT your company as micro, small or medium-sized and therefore claim to be entitled to the SME fee reductions, ECHA may carry out at any time the SME verification of your company.

A wrong declaration of your company size could have severe consequences. Consult the section 'How to determine the company size category' and if you realise that you declared a wrong company size go to the section 'What to do if you incorrectly indicated the SME size category'.

During the SME verification procedure you will be requested to provide the documentary evidence supporting the declared size category. In the event that the documents provided are either not sufficient for the determination of the size category of the company concerned or do not support the declared size category of the company concerned, ECHA communicates this in a decision and issues the pertinent supplementary invoices.

In case the invoice for the balance to the applicable registration fee is not paid within the deadlines, this will result in the revocation of the original registration decision assigning a registration number. The use of the initially assigned registration number would no longer be allowed.

More detailed information regarding the procedure is provided in the sections below.

 

Documentary evidence requested
  1. Documentary evidence* showing the ownership structure at the date of the submission (registration, update of registration, notification etc.) in REACH-IT of the enterprise including all direct and indirect partner and linked enterprises, upstream and downstream, taking into consideration any shares, voting rights or other exercise of influence relevant to determining linkages/partnerships in the meaning of Article 3 of the Annex to the Commission Recommendation 2003/361/EC.

    *As documentary evidence showing the shareholders of a company, some of the following might come to question including the latest amendments with the allotment of shares: Commercial registry extract, Articles of association, Incorporation documents, Memorandum of association, company's shareholders book, etc.

  2. Copies of the full set of official financial accounts (audited if applicable) together with the accompanying notes and annual reports, or the full set of annual tax declarations for the two latest approved accounting periods prior the time of each submission, as well as those of any partner and/or linked enterprises, in accordance with Articles 3, 4 and 6 of the Annex to the Commission Recommendation.

  3. Official certificate/information from an Official Authority** confirming the headcount of staff that corresponds to the number of annual work units (AWU), in accordance with Article 5 of the Annex to the Commission Recommendation, for each of the two latest approved accounting periods preceding the time of each submission. If this information is included in the annual reports or the notes to the audited financial statements, you are not required to present these documents.

    **An official certificate giving information on the company's headcount of staff may be obtained from, but not limited to, some of the following national/local institutions: tax office, revenue agency, insurance office, labour office, statistical office, health insurance institute, private health insurance company etc.

Make sure to send the documents specified in point 1, 2 and 3 above for all direct and indirect partner and linked enterprises, upstream and downstream, taking into consideration any shares, voting rights or other exercise of influence relevant to determining linkages/partnerships in the meaning of Article 3 of the Commission Recommendation.

Note: If the enterprise and/or any of its partner and linked enterprises are drawing up consolidated accounts or are included through consolidation in the accounts of another enterprise, please send the consolidated statements with the accompanying notes to them.

If you are acting as an Only Representative, the assessment of whether the SME reduction applies should be done by reference to the headcount, turnover and balance sheet information of the non-Community manufacturer, formulator of a preparation, or producer of an article that is represented, including relevant information from linked and partner companies of the non-Community manufacturer, formulator of a preparation, or producer of an article, in accordance with Recommendation 2003/361/EC.

 

Outcome of the verification

Following the analysis ECHA will ask further documentation if needed. Once the complete documentation has been provided, ECHA will communicate the outcome to you.

  • Where the entitlement to the reduced fees is confirmed, ECHA will simply communicate the result of the verification and will not issue any supplementary (top-up or administrative charge) invoices.
  • Where the documentary evidence proves a size that is larger than the size category declared at the time of the submissions, ECHA will send a decision specifying the identified size category and issue invoices for the balance of the registration fee applicable to the correct size category and an applicable administrative charge.

However, where in the SME verification procedure, the registrant does not provide sufficient or any supporting documents, the registrant will be considered as non-eligible for SME fee reductions. As a result, ECHA will charge the registrant the balance to the standard fee and the administrative charge for large (non-SME) enterprises.

In accordance with Article 94(1) of the REACH Regulation and Article 263 of the Treaty on the Functioning of the European Union, you may bring an action for the review of the legality of the decision to the General Court of the European Union within two months of receiving notification of the decision. You may find useful links to the legal texts governing the procedure and an aide-mémoire for applications at the General Court of the European Union website. 

 

Top-up invoices and administrative charges

As explained in the previous section, following the verification procedure on the declared SME category, ECHA collects the balance of the fee corresponding to the applicable company size category as well as an administrative charge from any registrant who incorrectly claimed to be entitled to a fee reduction, in accordance with Article 13(4) of Fee Regulation (EC) No 340/2008. The level of the charge has been initially defined by ECHA Management Board decision MB/D/29/2010 on the classification of services, which has been amended by Management Board decision MB/21/2012/D and Management Board decision MB/14/2015.

Therefore, if the documentary evidence you have provided during the SME verification procedure does not demonstrate the SME category declared at the time of the submission (registration, update of registration, notification, etc.), ECHA will charge you the balance to the fee applicable to the correct size category of the company concerned, as well as the applicable administrative charge.

If in the SME verification procedure, you do not provide sufficient or any supporting documents, you will be considered as non-eligible for SME fee reductions. As a result, ECHA will you the balance to the standard fee and the administrative charge for large (non-SME) enterprises.

Finally, if you correctly rectify your company size after being contacted by ECHA, you can benefit from a 50 per cent reduction of the applicable administrative charge under certain conditions, explained in details in the section on 'What to do if you incorrectly indicated the SME size category'.

Consult the section Administrative charges to find out the charges according to the company size.

 

Revocation of registration decisions

Registrants, who have failed to demonstrate their entitlement to the claimed SMEs fee reductions are required to pay the appropriate fees, as communicated in ECHA's decision concluding their SME verification procedure and in the relevant invoices, within the deadlines set.

An initial payment due date is indicated in the supplementary invoices issued after the SME verification. If the payment is not received, the due date will be extended one more time. If the registrant does not pay the full amount by the extended due date, ECHA will revoke the decision by which it previously accepted the registration. Use of the registration number will therefore no longer be allowed and the number will be de-activated in ECHA's database. Also, any part of the registration fee already paid at the time of submission of the registration will not be refunded. The revocation decision will be communicated to the company and ECHA will inform the relevant Member State competent authorities.

In accordance with Article 20(5) of the REACH Regulation, registrants may appeal against the revocation decision to the Board of Appeal of ECHA within three months of receiving notification of this decision. The procedure for lodging an appeal is described in the Board of Appeal web section. 

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