The free movement of goods is one of the building blocks of the E.U. Single Market.
Now that companies can sell their products in any E.U. 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 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) In detail, 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) Coupled with the 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 remove them better and protect customers.
Improving the Single Market.
Goods will reinforce consumers’ trust in the products they buy.
Likewise, it will 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 reducing trade barriers could increase intra-EU trade by more than € 100 billion annually.
In the 2015 Single Market Strategy, the Commission committed to removing the obstacles that still hamper free movement across the E.U.
Therefore, it has already taken action to boost the Single Market for services, enhance compliance with E.U. rules, improve public procurement, help protect Intellectual Property, 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 E.U. can move freely across borders since they fall under standard E.U. rules.
The E.U. rules set only the essential health, safety, and environmental protection requirements for some products, such as electronic and electric equipment, machinery, or lifts.
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 C.E. marking.
To explain, by affixing the C.E. marking, the manufacturer declares that the product meets the European safety, health, and environmental protection requirements and can start selling throughout the E.U.
Some products are not subject to standard E.U. rules or only partially.
While this may be true, the products 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.
Above all, new legislation should not create barriers. That’s why the Member States sent their new draft national rules on these products to the other Member States and the Commission to examine whether these rules create unjustified trade barriers.
What stands for mutual recognition?
To put it differently, the principle of mutual recognition governs the trade-in products not subject to standard E.U. rules.
This principle states that a product legally sold in one country can be sold in any other E.U. country without any changes or adaptations.
Theoretically, 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?
Currently, the rules do not ensure an easy, reliable, and user-friendly application of the mutual recognition principle.
On the positive side, this new proposal will address the main issues businesses currently face and make it easier for them to access new markets:
- For one thing, finding out whether mutual recognition applies:
- Problem. Companies 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.
- Then, 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 E.U. country;
- Solution. The new mutual recognition declaration will simplify this and streamline the company and national authorities’ dialogue.
- Similarly, 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.
What’s the national problem-solving network “SOLVIT.”
Moreover, the Commission can intervene if dialogue fails and issue opinions when amicable and hands-on solutions don’t come.
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.
They are improving the application of the principle and reinforcing trust and administrative cooperation among the Member States.
Cooperation 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 can refuse a product sale, although it is 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.
With this, they 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 the equivalence between safety and other legal requirements functional to goods. The mutual recognition space is smaller in International Trade.
The E.U. 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 E.U. has such mutual-recognition agreements with countries outside of it.
Pointing out that the E.U. requirements apply to products placed on the E.U. market is essential in all cases. Safety requirements of other countries wouldn’t be equivalent.
MARKET SURVEILLANCE AND ENFORCEMENT OF SAFETY RULES.
What is the current system for monitoring products in our markets, and why must we improve it?
Across the E.U., 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 are applied in practice.
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% 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 E.U. rules.
Honest businesses that meet E.U. safety requirements face unfair competition from companies that cut corners and sell these unsafe and illicit products without sanction.
That’s why the Commission proposes to step up the enforcement of standard E.U. 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 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 E.U. legislation is the best way to ensure products are safe.
For example, E.U. 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 E.U.
That way, the products they trade will meet E.U. 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 E.U.
Consumers want assurance that products meet the legislation requirements, so we have C.E. marking.
There are two routes to C.E. marking – some products, such as weighing scales, must be independently tested.
In contrast, the manufacturer is responsible for ensuring the product meets the safety requirements of others.
When a manufacturer declares that their product meets the rules or an independent center has tested it satisfactorily, a product bears the C.E. mark.
Market surveillance authorities frequently run product tests, showing the matter of the scarce liability of manufacturers’ reliability.
Of course, not every non-compliant product is dangerous.
But all too often, 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 E.U. 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.
- 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 I.T. 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.
- Using another Member State’s evidence, test reports, and decisions will be more accessible;
- If a product does not comply with E.U. product rules in one Member State, the evidence and conclusions can be transferred to another to facilitate enforcement across the E.U.;
- enforcement authorities can coordinate better and share more information about investigations and illegal products through regular meetings and standard I.T. tools.
The proposal fosters closer collaboration between enterprises and authorities.
All businesses selling products in the E.U. will have to designate a person in the E.U. 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.
- 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 online products comply with E.U. rules?
All E.U. products must comply with the rules, whether purchased online or offline.
With sharply rising e-commerce sales, authorities are already stepping up enforcement against illicit products sold online.
To help them do this within the current legal framework, in July 2017, the Commission issued a 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 E.U. already have a readily available representative within the E.U.
This practice will now become mandatory.
It will help authorities quickly identify and get manufacturers selling products in the E.U.
It will also help manufacturers because they will be better positioned to discuss problems with national inspectors and correct possible product shortcomings more easily and quickly.
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.
Memoranda of Understandings about joint projects to identify incompliant products will finely work, for example.
Fewer obstacles to the free movement of safe and compliant products will also help boost e-commerce.
The Commission supports the abovementioned through its proposal for a more affordable and smoother cross-border parcel delivery.
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 E.U. Single Market.
Products from the E.U. and third countries are not compliant. How will you improve the controls?
Third countries exported over 30% of non-food products to the E.U. markets in 2015.
The proposal aims to improve the information exchange and joint action of all E.U. 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 E.U. or arriving at customs should be shared more widely among authorities.
Otherwise, already refused products could continue to be sold or enter the E.U. market elsewhere.
Every company dealing in the E.U. will have to have a responsible person in the E.U. 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 European 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 ((E.U.) 2017/625) was adopted in March 2017 and has not changed. This proposal does not refer to feed or medicinal human and veterinary products.
This new proposal covers products for which the E.U. 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 E.U. Single Market and help citizens and companies make the best of it.
Ensuring compliance with E.U. rules and improving enforcement is integral to this effort and reveals links to the Commission’s previous 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 E.U.
As well as providing information when indications of severe difficulties with applying E.U. Single Market legislation arise.
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“Italynlaw” Law Firm Communications Office issued this Article.
Image 13: blue-red cargo ship.
Source: photo by Ian Taylor on Unsplash.com