The European Commission tabled two legislative proposals on 19 December 2017 to make it easier for companies, especially SMEs, to sell their products across Europe, and to strengthen controls by national authorities and customs officers to prevent unsafe products from being sold to European consumers.
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What is the Commission proposing and why?
The free movement of goods is one of the building blocks of the EU Single Market. It means that companies can sell their products in any EU country without additional barriers. This creates new opportunities for businesses, but also gives consumers a wider choice and lowers prices. But it still doesn’t function as smoothly as it should.
That is why the Commission is tabling two legislative proposals to make it easier for companies, especially SMEs, to sell their products across Europe, and to strengthen controls by national authorities and customs officers to prevent unsafe products from being sold to European consumers.
With today’s initiatives, the Commission aims to tackle remaining structural weaknesses in the Single Market for goods:
1) Mutual recognition perfectly safe products sometimes cannot move freely within the Single Market because of diverging national rules and lack of trust and cooperation between national authorities.
2) Enforcement of the rules too many dangerous or non-compliant products can still find their way onto the market, so national authorities need to cooperate better to remove them and protect customers.
Improving the Single Market for goods will reinforce trust of consumers in the products they buy, create a level playing field for businesses and bring economic benefits. A recent study on “The Costs of Non-Europe in the Single Market” shows that a reduction of trade barriers could lead to an increase of intra-EU trade by more than 100 billion per year.
How does the free movement of goods in the Single Market work in practice?
The majority of goods in the EU can move freely across borders, because they fall under common EU rules. For some products, such as electronic and electric equipment, machinery or lifts, the EU rules set only the essential health, safety, and environmental protection requirements. For other products, such as cars, the rules include more detailed requirements. If manufacturers follow these common rules, their products can be sold freely in the market.
Most of these products must carry the CE marking by affixing the CE marking, the manufacturer declares that the product meets the European safety, health, and environmental protection requirements and can be sold throughout the EU.
Some products are not subject to common EU rules or only partially and may come under national rules. Even if there are no common rules covering all aspects of products such as shoes, tableware, furniture or jewellery, they should still benefit from free movement. New legislation should not create barriers. That’s why Member States send their new draft national rules on these products to other Member States and the Commission so that they can examine together whether these rules create unjustified barriers to trade.
1) MUTUAL RECOGNITION
What is mutual recognition?
The trade in products that are not subject to common EU rules is governed by the principle of mutual recognition. This principle states that a product legally sold in one country can be sold in any other EU country without any changes or adaptations. In theory, if a company sells a product in one country, it can enter a new market with no additional costs, and no delays. This principle often doesn’t work as it should.
What kind of obstacles do companies still face and how can they be reduced?
The current rules do not ensure an easy, reliable and user friendly application of the mutual recognition principle.This new proposal will address the main issues businesses currently face and make it easier for them to access new markets:
1. Finding out whether mutual recognition applies:
Problem: Businesses and authorities often do not know whether or not mutual recognition can be used to access a new market. Sometimes the principle is knowingly not applied.
Solution: A network of contact points will facilitate the communication between authorities and businesses and will provide businesses with necessary information on product rules and procedures.
2. Demonstrating that a product is already legally sold:
Problem: national rules can vary greatly and it can be difficult for businesses to demonstrate that a product is already lawfully sold in another EU country;
Solution: the new mutual recognition declaration will make this easier and it will streamline the dialogue between the companies and national authorities.
3. Challenging a decision denying access to a new market:
Problem: it is difficult, lengthy and costly to challenge these national decisions. Businesses can only do so via national courts and often only the big ones can afford it;
Solution: the problem solving mechanism will allow for a smooth, quick and constructive approach to finding a solution. At first, amicable and hands-on solutions will be sought through the national problem solving network SOLVIT. If dialogue fails, the Commission can intervene and issue an opinion.
Improved mutual recognition will make life easier for all businesses, but it will especially boost the competitiveness of innovative businesses. Innovative products are often not very well known or not much regulated, and thus may be received with caution or suspicion. Improving the application of the principle and reinforcing trust and administrative cooperation among Member States will make it easier for innovative products to enter new markets.
Will Member States still be able to deny access to their market to “bad” products?
Yes. National authorities will continue to have the right to refuse the sale of a product lawfully sold in another country but only when it is necessary and justified to pursue legitimate public interest (e.g. health or environment) and there is no other way or available less restrictive means to achieve those objectives.
How will you reinforce trust between national authorities?
Through cooperation and communication. The Commission will build up connections between the responsible authorities to get to know each other. Training and exchanges will allow officials to learn more about regulatory systems in other countries and help them find constructive solutions when there are doubts about whether a product should be allowed on the market on the basis of mutual recognition.
Does the principle of mutual recognition also apply to non-EU countries?
The currently applicable regulation and today’s proposed regulation on mutual recognition only relate to trade between Member States, and it concerns equivalence between safety and other legal requirements applicable to goods. In the context of international trade, the scope of mutual recognition is more restricted: the EU can agree with a specific partner on recognition of test results or certificates of conformity carried out by a facility in another country in respect of a particular group of products. This is done only if the reliability of the quality infrastructure of our partner is equivalent to the one of the EU. The EU has a number of such mutual recognition agreements with countries outside the EU. It is important to point out, that, in all cases, it is the EU requirements which apply for products placed on the EU market, i.e. safety requirements of other countries are not recognised as equivalent.
2) MARKET SURVEILLANCE AND ENFORCEMENT OF SAFETY RULES
What is the current system for monitoring products on our markets and why do we need to improve it?
Across the EU, we have agreed on common safety and environmental rules to protect us against safety hazards, pollution and environmental damage. The role of national authorities is to monitor the market, check products and control businesses to make sure that these rules are applied in practice. If an authority detects a non-compliant product, it can order the business to take if off the market, request corrective measures and issue penalties.
Despite all these rules, there are still too many products on the market that do not comply with the rules. This ranges from mislabelled products, missing product information, counterfeiting and piracy to actual safety risks to health or the environment. Every year, Member States get a warning about more than 2000 dangerous products through the European rapid alert system ‘RAPEX’ that enables quick exchange of information between 31 European countries and the Commission. Joint inspections carried out by market surveillance authorities show that 32% of toys, 47% of construction products, 34% of low voltage electrical equipment, 58% of electromagnetic and radio equipment and 40% of personal protective equipment do not comply with EU rules. Honest businesses that meet EU safety requirements face unfair competition from businesses that cut corners and sell these unsafe and illicit products without being sanctioned.
That’s why the Commission proposes to step up the enforcement of common EU rules. Consumers need to trust that the goods they buy are safe. Honest businesses cannot be put at a disadvantage by rogue operators. If problems arise, we need to have the right framework for addressing the risks and restoring a level playing field. Only then can the Single Market work as it should.
How can I know if the product I am buying is safe? Does this mean that there are dangerous products out there?
Compliance with EU legislation is the best way of making sure products are safe. For example, EU legislation in areas like toys and chemicals is among the strictest in the world. This proposal is a major step to improve cooperation between market surveillance authorities and businesses within and outside the EU in order to ensure that products they trade meet EU’s safety requirements. Measures range from concluding compliance partnerships and memoranda of understanding to boosting international cooperation through specific systems of controls of products before they are exported to the EU.
Consumers want assurance that products meet the requirements of legislation and this is the reason we have CE marking. There are two routes to CE marking some products, such as weighing scales, have to be independently tested, while for others the manufacturer is responsible for making sure the product meets the safety requirements. When a manufacturer declares that their product meets the rules or when an independent centre has tested it satisfactorily, a CE mark is affixed to the product. So when you see a CE mark on your teddy bear or your phone, it means that a product has been assessed and can be sold in the EU. However sometimes manufacturers’ testing cannot be relied on. Tests carried out by market surveillance authorities show the extent of the problem. Of course, not every non-compliant product is dangerous. But it does happen that genuinely dangerous products reach the market and that is why we need reinforced cooperation and greater coordination between national authorities.
What will change with today’s proposal?
Actions against non-compliant products can only be effective when authorities work together and share more information about investigations and illegal products. The Commission proposes the following:
- A European Union network of market surveillance authorities the network will help authorities better coordinate their controls and work more efficiently. It will allow them to pool knowledge, support each other, develop a common intelligence picture, and devise efficient methods for more targeted and risk-based controls. The network will give market surveillance the common European perspective necessary in a common European market.
- Commission support the Commission will be able to channel more administrative and financial support to top priority cross-border joint investigations and assist authorities with joint procurement of product testing capacity. It will also invest much more in common knowledge gathering among enforcement authorities and linking-up of different IT tools, such as RAPEX and ICSMS (Information and Communication System on Market Surveillance), used by market surveillance authorities and customs to inform each other about dangerous goods.
- Shared evidence use of another Member State’s evidence, test reports and decisions will be made easier. If a product is found not to comply with EU product rules in one Member State, the evidence and decisions can be transferred to another, to facilitate enforcement across the EU. Enforcement authorities will be able to coordinate better and to share more information about investigations and illegal products through regular meetings and common IT tools.
Collaboration with businesses closer collaboration between businesses and authorities will be fostered. All businesses selling products in the EU will have to designate a person in the EU who can be easily contacted when authorities have a question about compliance of their product. This person can be the manufacturer, importer or a natural or legal person with an appropriate mandate from the manufacturer.
- Transparency authorities will more systematically publish their findings, especially when restricting the marketing of certain products.
- Single contact point a single liaison office will have to be set up in each Member State. This will facilitate the coordination of cross-border enforcement and channel requests quickly and efficiently to the right people.
E-commerce is on the rise – how are you ensuring the products sold online comply with EU rules?
All products in the EU have to comply with the rules, whether they are bought online or offline. With sharply rising e-commerce sales, authorities are already now stepping up enforcement against illicit products sold online. To help them do this within the current legal framework, in July 2017 the Commission issued Guidance on market surveillance of products sold online. Today’s proposal introduces further measures to help Member States control products on their territory. At the moment, most manufacturers who sell in the EU already have a representative within the EU who can be easily contacted. This practice will now become mandatory. It will help authorities to easily identify and contact manufacturers selling products in the EU. It will also help manufacturers because they will be in a better position to discuss problems with national inspectors and correct more easily and quickly any possible shortcoming of the product. Authorities will also be able to require information not only from companies trading online, but also from intermediaries that could be relevant to an investigation. They will be able to perform on-line test-purchases and, ultimately, require removal of online content related to non-compliant products. They will also have more flexible tools to gather market intelligence and prevent non-compliance through collaborative enforcement with stakeholders (e.g. Memoranda of Understanding about joint projects to identify incompliant products).
Fewer obstacles to free movement of safe and compliant products will also help boost e-commerce, which the Commission is supporting though its proposal for a more affordable and smoother cross-border parcel delivery. To make these proposals a reality, the Commission calls on the European Parliament and the Council to move forward and adopt the new rules to help citizens and businesses fully benefit from the EU Single Market.
Non-compliant products do not only come from the EU but also from third countries – how are you going to improve the controls?
Over 30% of all non-food products on the EU markets were imports from third countries in 2015. The aim of the proposal is to improve the information exchange and joint action of customs and market surveillance authorities of all EU countries to target controls and take corrective measures more effectively. Results of controls and decisions against non-compliant products found in the EU or arriving at the customs should be shared more widely among authorities to avoid that products which are refused in one place could still continue to be sold or enter the EU-market elsewhere. Every company selling in the EU will have to have a responsible person in the EU that market surveillance authorities can turn to so as to ensure that all products are compliant.
Who can I contact if I have doubts about a product?
The best solution is to contact an authority in your country. A list of national authorities responsible for market surveillance is available on the Commission’s website.
What about food? Are rules going to change?
This proposal does not concern market surveillance for food products. The new Regulation on Food and Feed Official Controls ((EU) 2017/625) was adopted in March 2017 and does not change. This proposal does not concern either feed and medicinal products for human and veterinary use.
This new proposal covers products for which the EU has adopted common rules. The annex to the proposal contains the list of the product legislation included.
Factsheet: Single Market trading safe products across Europe
Proposal for a Regulation on the Mutual Recognition of Goods
Proposal for a Regulation on Compliance and Enforcement
Source: European Commission
