Market surveillance and product compliance enforcement have historically posed a challenge for European Union (EU) regulatory authorities. As a result, the EU has introduced the Regulation on Market Surveillance and Compliance of Products (Regulation 2019/1020/EU).
This new regulation gives member state authorities additional powers to ensure products in the EU market are compliant with harmonized legislation.
This regulation has unique impacts for both businesses and economic operators alike, with particular emphasis on the regulatory responsibilities of companies selling products online to EU consumers.
A Uniform Framework to Address Challenges
In the past, a large volume of non-compliant products made their way into the EU market due to several factors — chief among them was the lack of a cohesive approach to market surveillance and enforcement amongst member state authorities.
European Union authorities frequently lack the resources and powers necessary to enforce harmonized legislation. Coupled with complex global supply chains and greater numbers of non-EU economic operators selling directly to EU end users, authorities experience difficulty to appropriately conduct market surveillance and enforcement.
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New Powers for Regulatory Authorities
This new regulation introduces a uniform framework to support authorities, providing new powers to conduct these activities throughout the EU.
At a minimum, these powers include the ability to:
- Carry out unannounced site inspections and/or physical product checks.
- Prohibit products from accessing the EU market.
- Order a product withdrawal or recall.
- Require economic operators to take appropriate actions to bring instances of non-compliance to an end or otherwise reduce risks.
- Order the removal of a product from an online interface, or to have a product displayed with an explicit warning for the end user, assuming no other means to eliminate serious product risks exist.
Authorities are also required to take appropriate measures if a product will harm the health and safety of a user, either through intended or foreseeable use. Additionally, member states may allow authorities to reclaim the costs of their activities from economic operators.
Impacts on Economic Operators
This new regulation defines economic operators as “the manufacturer, the authorised representative, the importer, the distributor, the fulfillment service provider or any other natural or legal person” who manufactures products or makes them available on the market. With the scope provided by this definition, economic operators face a variety of significant impacts, detailed below.
Restricted Product Requirements
Products found to be non-compliant with one or more of 18 pieces of designated legislation can only be placed onto the EU market when an established economic operator can take responsibility for certain tasks.
These tasks include:
- Verifying that declarations of conformity, performance and technical documentation have been produced.
- Liaising and cooperating with member state market surveillance authorities.
- Ensuring that their name and contact information is included on the restricted product, its packaging, the parcel or an accompanying document.
The 18 pieces of designated legislation includes the Restriction of Hazardous Substances (RoHS) Directive, the Personal Protective Equipment Regulation, the Electromagnetic Compatibility Directive, the Pressure Equipment Directive and the Measuring Instruments Directive.
Products for sale online (or by other means of distance selling) and targeted at EU-based end users are deemed to be available on the EU market, and are thus subject to EU legislation. In this case, targeting is considered to have occurred if the economic operator directs its activities to an EU member state.
This regulation creates two general cooperation requirements:
- Economic operators must cooperate with market surveillance authorities with regards to actions that could eliminate or mitigate the risks presented by the products they make and that are available on the market.
- Information society service providers (providers of any service normally offered at a distance for remuneration by electronic means at the individual request of the service recipient) must cooperate with authorities to facilitate the elimination or mitigation of the risks presented by the products they offer for sale online.
Market Surveillance Will Impact 70 Pieces of EU Legislation
As mentioned, this new regulation will impact the RoHS Directive in addition to a broad range of additional EU legislation. The Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) Regulation, Classification, Labelling and Packaging (CLP) regulation, and the Waste Electrical and Electronic Equipment (WEEE) Directive are just a few examples.
It remains to be seen exactly how these impacts will play out, but economic operators must ensure they are aware of their responsibilities under this new regulation. Provisions for the regulation will start to apply on January 1, 2021, with key obligations for economic operators following on July 16, 2021.
Using an effective supply chain data management system such as the Assent Compliance Platform can help companies collect supply chain data to ensure their products are compliant with a variety of regulations, including the RoHS Directive and REACH Regulation. For more information, contact our experts.