ITA Helps California Companies Avoid Unnecessary Costs of Exporting to Europe
The Department of Commerce’s International Trade Administration (ITA) worked with KLA-Tencor Corporation of Milpitas, California and other semiconductor equipment manufacturers to provide clarity as to whether spare parts for large machines fall within the scope of the revised European Union Directive on the restriction of hazardous substances in electrical and electronic equipment (RoHS II). ITA’s assistance helped save these companies hundreds of thousands of dollars in unnecessary costs per year.
Why it Matters
The RoHS II Directive initially did not provide a clear scope statement regarding spare parts provided in support of large-scale machines. This resulted in confusion and could have led to inadvertent non-compliance, or excessive resource allocation to inapplicable regulations, depending on how the Directive would be interpreted. If the scope of the RoHS II Directive had been deemed to include spare parts for large-scale machines, semiconductor equipment manufacturers and other companies in the large machine sector would have had to expend significant resources to certify spare parts to the Directive’s requirements. One company, KLA-Tencor, estimated RoHS II compliance costs for spare parts would have cost it hundreds of thousands of dollars per year. This additional cost could have reduced U.S. exports of semiconductor equipment machinery and other large machine sectors to Europe.
Courtesy of KLA-Tencor Corporation
The RoHS II Directive, which became mandatory in January 2013, was poorly worded and potentially subject to a narrow interpretation that could have brought almost all spare parts for large-scale stationary machines or large-scale fixed installations into scope. If this interpretation had been upheld, all manufacturers of large-scale machines, which are otherwise excluded from the scope of RoHS II, would have had to prove that spare parts met the requirements of RoHS II and thus would have to absorb this incongruous cost of compliance. (RoHS II, among other restrictions, requires that electrical and electronic equipment not contain more than a restricted amount of lead, cadmium, hexavalent chromium and mercury.)
ITA’s Market Access and Compliance (MAC) unit helped organize a Commerce-wide advocacy effort to help persuade the EU RoHS Technical Advisory Committee to provide a clearly worded interpretation covering the exclusion of spare parts from RoHS II. The Commission’s Frequently Asked Questions Guide subsequently clarified the relevant RoHS II provisions to ensure that spare parts for large-scale machines actually fall outside the scope of the Directive. ITA provided strategic advice, conferences, and meetings with key European officials instrumental in RoHS policy development.
Working closely with U.S. companies, ITA creates, expands and defends market access for U.S. goods and services overseas through the Trade Agreements Compliance Program. “We promote policy that develops a more favorable business climate for U.S. companies in global markets; we employ commercial diplomacy to resolve trade barriers; and we leverage our bilateral and multilateral trade agreements to ensure our trading partners live up to their commitments so that our businesses can compete on a level playing field.” - Assistant Secretary for Market Access and Compliance, Michael C. Camuñez.