The free movement of goods is one of the building blocks of the EU Single Market. Companies can sell their products in any EU country without additional barriers. Goods free moving creates new business opportunities, giving consumers a wider choice and lowering prices.
Hence, the European Commission is tabling two legislative proposals, mainly concerning Small and Medium Enterprises and Companies, to let products circulate across Europe. Also, National authorities and customs officers will get to check to prevent unsafe products from being sold to European consumers.
With today’s initiatives, the Commission aims to tackle the 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 a lack of trust and cooperation between Member State 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 to better remove them and protect customers.
Improving the Single Market for goods will reinforce consumers’ trust 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 in intra-EU trade by more than €100 billion per year.
In the 2015 Single Market Strategy, the Commission committed to removing the obstacles that still hamper the free movement of goods and services across the EU. It has already taken action to boost the Single Market for services, enhance compliance with EU rules, improve public procurement, help protect intellectual property rights, and support start-ups to grow and expand in Europe.
How does the free circulation of goods work in the Sigle Market?
Most goods in the EU can move freely across borders because they fall under standard 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. The rules include more detailed requirements for other products, such as cars. If manufacturers follow these standard rules, they will get their effects on the Market at issue.
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 start selling throughout the EU.
Some products are not subject to standard EU rules or only partially and may come under national regulations. Even if there are no shared rules covering all aspects of products such as shoes, tableware, furniture, or jewelry, they should still benefit from free movement. New legislation should not create barriers. That’s why the Member States send their new draft national rules on these products to the other Member States and the Commission so that they can examine together whether these rules create unjustified trade barriers.
What stands for mutual recognition?
The principle of mutual recognition governs the trade-in products that are not subject to standard EU rules. 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 without additional costs and delays. This principle often doesn’t work as it should.
What obstacles do companies still face, and how can impediments 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:
- Finding out whether mutual recognition applies:
Problem: Businesses and authorities often do not know whether or not to use mutual recognition to access a new market. Sometimes the principle is knowingly not applied.
Solution: A network of contact points will facilitate communication between authorities and businesses and provide businesses with necessary information on product rules and procedures.
- Demonstrating that a product is already legally sold:
Problem: national rules can vary greatly, and it can be challenging for businesses to prove that a product is already lawfully marketed in another EU country;
Solution: the new mutual recognition declaration will make this easier and streamline the company and national authorities’ dialogue.
- Challenging a decision denying access to a new market:
Problem: it is complex, lengthy, and costly to challenge these national decisions. Businesses can only do so via Member State’s 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 come 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 primarily boost the competitiveness of innovative firms. Innovative products are often not very well known or not much regulated and thus may cause the Authority to be cautious or suspicious. Improving the application of the principle and reinforcing trust and administrative cooperation among the Member States will make it easier for innovative products to enter new markets.
Will the Member States still be able to deny access to their Market to “bad” products?
National authorities keep the right to refuse a product sale, although lawfully sold in another country. It only happens when necessary and justified to pursue legitimate public interests like health or the environment, and other ways or less restrictive means to achieve those objectives are lacking.
How can trust between national authorities be regained?
It is possible through cooperation and communication. The Commission will build connections between the responsible authorities to get to know each other. Training and exchanges will allow officials to learn more about regulatory systems in different countries and help them find constructive solutions when there are doubts about whether a product should be allowed on the Market based on 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 the Member States. It concerns equivalence between safety and other legal requirements functional to goods. The mutual recognition space is smaller in International Trade. The EU can arrange shared test results or certificates from another country’s facility. It will regard a particular group of products as long as the partner quality infrastructure’s accountability is equating. The EU has such mutual-recognition agreements with countries outside it. Pointing out that the EU requirements apply to products placed on the EU market is essential in all cases. Safety requirements of other countries wouldn’t be equivalent.
2) MARKET SURVEILLANCE AND ENFORCEMENT OF SAFETY RULES
What is the current system for monitoring products in our markets, and why do we need to improve it?
Across the EU, we have agreed on standard safety and environmental rules to protect us against safety hazards, pollution, and ecological damage. The role of national authorities is to monitor the Market, check products, and control businesses to ensure that these rules in practice are applied. If an officer detects a non-compliant product, it can order the company to take it off the Market, request corrective measures, and issue penalties.
Despite the rules in place, non-compliant products are still in large amounts. Violations range from mislabelled, missing information, counterfeiting, and piracy to actual safety risks to health or the environment. Every year, Member States notice more than 2000 hazardous products through the European rapid alert system ‘RAPEX’ that enables a 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% o 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 companies 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 standard EU rules. Consumers need to trust that the goods they buy are safe. Honest businesses cannot incur a disadvantage from rogue operators. If problems arise, we need to have the proper 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 to ensure products are safe. For example, EU legislation on toys and chemicals is among the strictest in the world. This proposal is a significant step toward improving cooperation between market surveillance authorities and businesses within and outside the EU to ensure that the products they trade meet EU safety requirements. Measures range from concluding compliance partnerships and memoranda of understanding to boosting international cooperation through specific systems of control of products before they enter the EU.
Consumers want assurance that products meet the requirements of legislation, which is why we have CE marking. There are two routes to CE marking – some products, such as weighing scales, must be independently tested. In contrast, 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 an independent center has tested it satisfactorily, a product bears the CE mark. Market Surveillance Authorities frequently run product tests, showing the matter about the scarce liability of manufacturers’ reliability. Of course, not every non-compliant product is dangerous. But it does happen that genuinely scary products reach the Market, which 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 practical when authorities collaborate and share more information about investigations and illegal products. The Commission proposes the following:
A European Union network of market surveillance authorities will help said authorities better coordinate their controls and work more efficiently. It will allow them to pool knowledge, support each other, develop a standard intelligence picture, and devise efficient methods for more targeted and risk-based controls. The network will give market surveillance a joint 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 communal 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 – using another Member State’s evidence, test reports, and decisions will be more accessible. If a product does not comply with EU product rules in one Member State, the evidence and conclusions can be transferred to another to facilitate enforcement across the EU. Enforcement authorities can coordinate better and share more information about investigations and illegal products through regular meetings and standard IT tools.
The proposal fosters closer collaboration between enterprises and authorities. All businesses selling products in the EU will have to designate a person in the EU and arrange for their easy availability when officers have a question about the 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 significantly when restricting the marketing of certain products.
Single contact point – a single liaison office will have to be set up in each Member State. It will facilitate the coordination of cross-border enforcement and channel requests quickly and efficiently to the right people.
E-commerce is rising – how do you ensure that online products comply with EU rules?
All products in the EU have to comply with the rules, whether purchasing is 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. Currently, most manufacturers who trade in the EU already have a readily available representative within the EU. This practice will now become mandatory. It will help authorities quickly identify and get 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 product shortcomings. Authorities will also be able to require information from companies trading online and intermediaries that could be relevant to an investigation. They will be able to perform online test purchases and, ultimately, require the 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 the free movement of safe and compliant products will also help boost e-commerce, which the Commission supports through 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 come from the EU and third countries – how will you improve the controls?
Third countries exported over 30% of non-food products to the EU markets in 2015. The proposal aims to improve the information exchange and joint action of all EU countries’ customs and market surveillance authorities to target controls and take corrective measures more effectively. Results of rules and decisions against non-compliant products found in the EU or arriving at customs should be shared more widely among authorities to avoid that already refused products could continue to be sold or enter the EU market elsewhere. Every company dealing in the EU will have to have a responsible person in the EU that market surveillance authorities can turn to and 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 do not change. This proposal does not refer to feed or medicinal human and veterinary products.
This new proposal covers products for which the EU has adopted standard rules. The annex to the proposal contains the list of the product legislation included.
How does this initiative complement other recent initiatives regarding the Single Market?
Today’s initiatives are part of the Commission’s effort to boost the EU Single Market and help citizens and companies make the best out of it. Ensuring compliance with EU rules and improving enforcement is an integral part of this effort and reveals linked to the previous Commission’s proposals. The Commission’s actions aim to strengthen the protection of intellectual property rights and remove obstacles in the services sector. Also, they mean to provide citizens and businesses with easy access to information about living, working, studying, and doing business in the EU, as well as about getting information there where indications of severe difficulties with the application of EU Single Market legislation arise.
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