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Although the UK will not be obliged to implement the Regulation if/when it is adopted, the UK is carrying out a review of its own product safety regime which may be influenced by developments in the EU and, in any event, the proposals raise potentially significant issues for UK and other non-EU companies doing business in the EU and for their EU (commercial) customers.
Background
The General Product Safety Directive applies by default to all products that are not covered by a product-specific regulation. Its aim is to protect consumer health and safety by ensuring that unsafe products are not placed on the EU market and, if they are, that businesses take corrective action. It is now 20 years old and has long been considered outdated.
The Commission proposal, in line with the 2020 New Consumer Agenda to strengthen consumer protection, aims to update the rules primarily to address the safety risks from new technologies and online sales, to impose more stringent measures to protect consumers, and to establish greater consistency with the rules for harmonised products (typically those requiring the CE mark), in line with the new Market Surveillance Regulation (EU) 2019/1020.
Current obligations
In summary, under the Directive most obligations fall on ‘producers’. These are either manufacturers if they are established in the EU or, if they are not, their representatives or, if there is no representative, the importer or other professionals in the supply chain. Producers are required to ensure that a product is safe on the basis of applicable standards, provide consumers with relevant safety information, put their contact details on the product, alert the authorities in the event of any safety issues, and on a voluntary basis (unless requested by the authorities) carry out sample testing and keep a register of complaints.
What would change
There is a mass of detail in the Commission’s proposals but there are five main areas that could impact supply chains and EU customers.
- Expanded regulatory obligations
- The manufacturer (any person who manufactures a product or has it designed or manufactured, and markets it under its name or trademark - whether or not established in the EU) would be required to: ensure that products meet a general safety requirement (i.e. conform with relevant European Standards or national requirements); provide communications channels for complaints, and investigate and keep a register of complaints; draw up technical documentation including an analysis of the possible risks related to the product; put an identification number and their contact details on the product; provide instructions and safety information if necessary; and alert consumers and the authorities if a product presents a risk or if there has been an accident (within two days);
- Modifications: all the obligations of a manufacturer would apply to another economic operator if it ‘substantially modifies’ a product;
- An authorised representative (any person established in the EU with a written mandate from a manufacturer to act on its behalf in relation to specified tasks) could take on at least the roles of: informing the manufacturer if a product presents a risk; responding to requests from the authorities for information to demonstrate the safety of the product; and cooperating with the authorities to eliminate any risks. It is unclear what other roles an authorised representative could or could not take on;
- The importer (any person established in the EU who places a product from a third country on the EU market) must: ensure that the product is compliant with the general safety requirement and that the manufacturer has met its obligations to draw up technical information and to provide an identification number, their contact details, safety instructions and complaints channels; inform the manufacturer, the authorities and consumers if a product presents a risk; alert the manufacturer in the event of an accident; put their contact details on the product; and investigate and keep a register of complaints;
- The distributor (any other person in the supply chain who makes a product available on the market) would be required to check that the manufacturer and importer have met their responsibilities and to inform them and the authorities of any safety issues. For products which may pose a serious health and safety risk, the Commission may also require a system of traceability to enable the identification of the product, its components and the economic operators involved in its supply chain.
- Responsible economic operator
The new Regulation would create a role of ‘responsible economic operator’. This would be: the manufacturer if it is established in the EU or, if it is not, its authorised representative; if no authorised representative has been appointed, it would be the importer; or, if a sale is direct to a consumer and there is therefore no importer as such, the fulfilment provider - the person handling warehousing, packaging or dispatching of the product in the EU.
The responsible economic operator would be required to: ensure the technical information has been drawn up and make it available to the authorities on request; inform the authorities of any risks related to the product and cooperating with them as necessary; put their contact details on the product; and periodically carry out sample testing.
If a fulfilment provider was unwilling to accept these responsibilities (as is likely), it would in effect be mandatory for a non-EU manufacturer to appoint an authorised representative.
- Online and distance sales
Products offered for sale online or through other means of distance sales would be deemed to be made available on the EU market if the offer is ‘targeted at consumers in the Union’. The offer would need to provide information to identify the product and the details of the manufacturer or the responsible economic operator established in the EU.
Online marketplaces would be required to establish a single contact point for the national authorities (through a ‘Safety Gate portal’), to set up internal mechanisms to comply with their new obligations relating to product safety, and to provide trader and product details as above.
Market surveillance authorities would have the power to order online marketplaces to remove specific illegal content referring to a dangerous product from its online marketplace, to disable access to it or display an explicit warning to end users.
Online marketplaces would have to cooperate with market surveillance authorities to facilitate any action taken in relation to dangerous products sold through their online services, including cooperation with product recalls.
- New technologies
The proposed Regulation aims to provide greater legal certainty for business and protection for consumers through a number of measures including: expanding the definition of ‘product’ to items that are ‘interconnected or not to other items’, to address new risks linked to connectivity such as ‘Internet of Things’ devices; and expanding the criteria for assessing the safety of products to include cybersecurity and learning and predictive functionalities of a product.
- Market surveillance and product recalls
Market surveillance would be strengthened through:
- a Consumer Safety Network to facilitate the exchange of information, joint surveillance and testing, tracing, withdrawal and recall of dangerous products, and product safety enforcement;
- standardised notices to be used in product recalls, including a description of the product and the hazard and actions taken;
- a general ‘right to remedy’ for the consumer in case of a product recall, with the economic operator obliged either to repair or replace the product or to provide a refund; and
- Member States would be able to lay down rules relating to penalties applicable to violations, with a maximum fine of 4% of annual turnover.
Conclusion
The Commission’s proposals would impose a significant new regulatory burden on manufacturers and importers, similar to that for products that are subject to specific regulations to address their substantially greater safety risks. Even if a manufacturer that is not established in the EU appointed an authorised representative, its EU commercial customers would nonetheless have to assume some responsibilities as importers.
Although the adoption of any new rules remains some time away and may be subject to significant amendment by the Parliament or Council, those potentially affected may wish to keep informed of developments.
Fieldfisher's London and Brussels regulatory teams are well-placed to help you understand the potential impact of these changes on your business and help to manage your exports and online trading with the EU.