Explanatory Memorandum to COM(2017)795 - Rules and procedures for compliance with and enforcement of Union harmonisation legislation on products - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2017)795 - Rules and procedures for compliance with and enforcement of Union harmonisation legislation on products. |
|---|---|
| source | COM(2017)795  |
| date | 19-12-2017 |
1. CONTEXTOFTHEPROPOSAL
1.1. Reasons for and objectives of the proposal
Achieving a deeper and fairer single market, that builds on its strengths and fully exploits its potential in all its dimensions, is one of the key political priorities of the European Commission's main political priorities.1 Following up and implementing the 2015 Communication on Upgrading the Single Market: more opportunities for people and business, is one of the main objectives of the 2017 Commission work programme.2
Within the single market, free movement of goods is the most developed of all four fundamental freedoms. It generates around 25 % of EU GDP and 75 % of trade in goods between EU Member States. The EU accounts for around one sixth of the world’s trade in goods. Trade in goods between EU Member States was valued at EUR 3 063 billion in 2015.3 However, there is still work to do to ensure a deep and fair European single market.
The increasing number of illegal and non-compliant products on the market distorts competition and puts consumers at risk. Many economic operators disregard the rules either through lack of knowledge or intentionally to gain a competitive advantage. Greater deterrents are needed, yet market surveillance authorities are often underfunded and constrained by national boundaries. Businesses are often active both within the EU and worldwide, and modern supply chains are evolving rapidly. In e-commerce in particular, market surveillance authorities have great difficulty tracing non-compliant products imported into the Union and identifying the responsible entity within their jurisdiction.
In its 2017 work programme4, the Commission
its 2017 work programme , the Commission announced an initiative to strengthen product compliance and enforcement Union harmonisation legislation on products, as part of the Goods Package. The initiative is to address the increasing amount of non-compliant products on the Union market while offering incentives to boost regulatory compliance and ensuring fair and equal treatment that will benefit of businesses and citizens.
initiative is mainly aimed at providing the right incentives to businesses, intensifying
compliance checks and promoting closer cross-border cooperation among enforcement authorities. It will:
• consolidate the existing framework for market surveillance activities;
• encourage joint actions by market surveillance authorities from several Member States;
• improve the exchange of information and promote the coordination of market surveillance programmes;
• create a strengthened framework for controls on products entering the Union market and for improved cooperation between market surveillance authorities and customs auth orities.
Jean-Claude Juncker, ‘A New Start for Europe: My Agenda for Jobs, Growth, Fairness and Democratic Change’, Political Guidelines for the next European Commission, Opening Statement in the European Parliament Plenary Session, 15 July 2014: ec.europa.eu/about/juncker-commission/priorities. COM(2016) 710 final: ec.europa.eu/atwork/key-documents/index_en Source Eurostat.
with existing policy provisions in the policy area
1.2. Consistency
(a) Regulation (EC) No 765/2008 of the European Parliament and of the Council5
Decision No 768/2008/EC of the European Parliament and of the Council6
Regulation (EC) No 765/2008 provides the current framework for the market surveillance of products and is complementary to Decision No 768/2008/EC. The Decision establishes reference provisions for Union legislation to harmonise marketing conditions for products, in particular the obligations for businesses in the supply chain.
It is proposed that Articles 15 to 29 of the Regulation (EC) No 765/2008 will no longer apply to the legislation listed in the Annex to this legislative proposal.
The reference provisions established under Decision No 768/2008/EC will continue to provide the general framework for the obligations of manufacturers, authorised representatives, importers and distributors.
(b) Proposal for a Regulation of the European Parliament and of the Council on market
surveillance of products and amending Council Directives 89/686/EEC and 93/15/EEC, and Directives 94/9/EC, 94/25/EC, 95/16/EC, 97/23/EC, 1999/5/EC, 2000/9/EC, 2000/14/EC, 2001/95/EC, 2004/108/EC, 2006/42/EC, 2006/95/EC, 2007/23/EC, 2008/57/EC, 2009/48/EC, 2009/105/EC, 2009/142/EC, 2011/65/EU, Regulation (EU) No 305/2011, Regulation (EC) No 764/2008 and Regulation (EC) the
No 765/2008 of the European Parliament and of the Council7
This proposal is consistent with the proposal for a Regulation on market surveillance of products which was adopted by the Commission in February 2013 [COM(2013)75] as part of the Consumer Product Safety and Market Surveillance Package. The overarching objective of COM(2013)75 was to simplify fundamentally the Union market surveillance framework in the field of non-food products through the reduction of the number of pieces of legislation containing market surveillance rules, and to produce a one-tier system in which all of those rules are brought together in a single instrument. In particular, COM(2013)75 was conceived to revise and streamline the rules on market surveillance of the General Product Safety Directive 2001/95/EC, Regulation (EC) 765/2008 and many sector-specific pieces of Union harmonisation legislation into a single legal instrument that would apply horizontally across all sectors.
The European Parliament adopted its position at first reading on the proposal on 15 April 2014. However, the legislative discussions stalled in 2015. If the legislative discussions on COM(2013)75 were to resume, an analysis of the Union harmonisation legislation that applies at that moment, taking into account the developments since 2013, and the present proposal, could feed into the progress made by the co-legislators on the proposal, in accordance with the Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission on Better Law-Making.
The present proposal contains lex generalis provisions in order to avoid any possible risk of overlapping or contradictory provisions with the market surveillance proposal COM(2013)75.
(c) Union harmonisation legislation on products
Regulation (EC) No 765/2008 of the European Parliament and of the Council setting out the requirements for accreditation and market surveillance relating to the marketing of products and repealing Regulation (EEC) No 339/93 (OJ L 218, 13.8.2008, p.30). Decision No 768/2008/EC of the European Parliament and of the Council on a common framework for the marketing of products and repealing Council Decision 93/465/EEC (OJ L 218, 13.8.2008, p. 82).
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Union harmonisation legislation on products sets out common requirements on how a product has to be manufactured, including rules on its product, size and composition. Its aim is not only to eliminate barriers to the free movement of goods in the single market, but also to ensure that only safe and compliant products are sold in the EU. In this way, honest traders will benefit from a level playing field, thus protecting consumers and professional users and promoting a competitive single market.
Union harmonisation legislation on products as listed in the Annex to this proposed Regulation provides the specific framework for marketing each category of products it covers, and thus the obligations of each business in the supply chain.
Smooth cooperation and good contacts between manufacturers and market surveillance authorities are key to ensuring that products comply with the Union harmonisation legislation. Under this initiative, a product can only be made available on the market if a person responsible for compliance information is established in the Union and can be a direct interlocutor for market surveillance authorities. This person could be the manufacturer, the importer or any other economic operator mandated by the manufacturer.
(d) Directive 2001/95/EC on General Product Safety8
The Directive ensures that products placed on the Union market are safe, in particular by targeting products that pose a serious risk and where a Member State's authorities intend to deny or prohibit its marketing or use to mitigate the risk to consumer health and safety.
(e) Regulation (EU) No 952/2013 of the European Parliament and of the Council (Union Customs Code)9
Cooperation between market surveillance authorities and customs authorities is crucial to effectively enforce Union harmonisation legislation on products. This is because the most important filter for non-compliant products is at the EU's external borders, where the authorities have a complete overview of trade flows.
Furthermore, rules on safety and compliance controls need to be enforced in a more uniform manner. This can only be achieved through systematic cooperation between market surveillance authorities and authorities in charge of checking products at the EU’s external borders.
Effective and efficient cooperation is also important when more than one authority in the Member States is responsible for checking that imported goods comply with product safety rules. Those authorities have to cooperate, in particular by sharing relevant information.
1.3. Consistency with other Union policies
encourage and help Member States improve their capacity to enforce Union law and to make
sure that administrative authorities and inspectorates are adequately equipped to perform their tasks10.
In order to strengthen enforcement of Union harmonisation legislation on products, the Commission took into account similar recent work to improve enforcement in other areas. One such area was food and feed, where Regulation (EU) 2017/625 on official controls and other official activities performed to ensure the application of food and feed law, rules on
Directive 2001/95/EC of the European Parliament and of the Council of 3 December 2001 on general product safety (OJ L 11, 15.1.2002, p.
4).
Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (OJ L 269, 10.10.2013, p.1).
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animal health and welfare, plant health and plant protection products11 will improve Member States’ ability to prevent, eliminate or reduce health risks to humans, animals and plants. The Commission also put forward a proposal to reform the Consumer Protection Cooperation Regulation12 on the powers of enforcement authorities and the manner in which they can cooperate.
The Commission also proposed new rules to further empower Member States’ competition authorities and ensure they have all the tools they need to enforce EU antitrust rules more effectively13. Stronger enforcement powers are also a key issue in other recent legislative initiatives14 and data protection laws15 and recent legislation on fertilisers16.
Increasing product imports yet declining resources for customs mean that the Customs Union’s governance needs to be better geared to current and future challenges. The provisions of this proposal take into account the advocated coordination and inter-agency cooperation mechanisms, and improved risk assessments, including at the level of the Customs Union, to make controls more efficient and effective17.
Regarding global trade, the Commission reaffirmed its policy based on openness and cooperation. However, to combat situations where rules exist but are not respected, the EU would need to have the instruments at its disposal to restore a level playing field and act decisively against countries or companies that engage in unfair practices. Strong enforcement of Union rules would also ensure that penalties are imposed on all companies present or active in Union which break the rules. This will be done in cooperation with Member State authorities and strengthened Union customs risk management in order to facilitate and accelerate legitimate EU trade, while ensuring the safety and security of citizens by stopping fake or dangerous goods permeating EU borders18.
2. LEGALBASIS, SUBSIDIARITYAND PROPORTIONALITY
2.1. Legal basis
The proposal is based on Articles 33, 114 and 207 of the Treaty on the Functioning of the European Union.
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Regulation (EU) 2017/625 of the European Parliament and of the Council of 15 March 2017 on official controls and other official
activities performed to ensure the application of food and feed law, rules on animal health and welfare, plant health and plant
protection products, amending Regulations (EC) No 999/2001, (EC) No 396/2005, (EC) No 1069/2009, (EC) No 1107/2009,
(EU) No 1151/2012, (EU) No 652/2014, (EU) 2016/429 and (EU) 2016/2031 of the European Parliament and of the Council,
Directives 98/58/EC, 1999/74/EC, 2007/43/EC, 2008/119/EC and 2008/120/EC, and repealing Regulations (EC) No 854/2004
and (EC) No 882/2004 of the European Parliament and of the Council, Council Directives 89/608/EEC, 89/662/EEC,
90/425/EEC, 91/496/EEC, 96/23/EC, 96/93/EC and 97/78/EC and Council Decision 92/438/EEC (Official Controls Regulation),
OJ L 95, 7.4.2017, p. 1-142.
COM(2016)283 — Proposal for a Regulation of the European Parliament and of the Council on cooperation between national
authorities responsible for the enforcement of consumer protection laws.
COM(2017)142 — Proposal for a Directive of the European Parliament and of the Council to empower the competition
authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market.
Regulation (EU) 2017/745 of the European Parliament and of the Council of 5 April 2017 on medical devices, amending
Directive 2001/83/EC, Regulation (EC) No 178/2002 and Regulation (EC) No 1223/2009 and repealing Council
Directives 90/385/EEC and 93/42/EEC (Medical Devices); Regulation (EU); Regulation (EU) 2017/1369 of the European
Parliament and of the Council of 4 July 2017 setting a framework for energy labelling and repealing Directive 2010/30/EU (OJ
L 198, 28.7.2017, p. 1-23); COM(2016)31 final - Proposal for a Regulation of the European Parliament and of the Council on the
approval and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units
intended for such vehicles.
Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons
with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/ EC (General
Data Protection Regulation).
COM(2016)157, SWD(2016)64 and 65.
Developing the EU Customs Union and its governance, COM(2016)813 final, 21.12.2016.
Point 3.3, Commission Reflection paper on harnessing globalisation, 10 May 2017:
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2.2. Subsidiarity
Market surveillance activities, and in particular enforcement of Union harmonisation legislation on products, fall within the competence of Member States’ national authorities. This will not change. However, in order to be effective, the market surveillance effort must be uniform across the Union. If market surveillance is ‘softer’ in some parts of the EU, weak spots are created which threaten the public interest, create unfair trading conditions and encourage forum shopping.
The risk to the various public interests that Union harmonisation legislation tries to protect should be considered also as regards products imported into the Union. There must therefore be effective market surveillance along the entire length of the Union’s external borders.
It is therefore necessary to strengthen the enforcement of Union harmonisation legislation on products, preserve the public interests defended in this context, in particular health protection, and to ensure a level playing field for businesses established within and outside the EU. Market surveillance authorities should receive a set of powers allowing them to effectively enforce the Union harmonisation legislation on products. Their cooperation across borders and with customs authorities should be increased. Controls at the external borders of the Union should also be strengthened. Consequently, market surveillance instruments and mechanisms must be established to make possible and facilitate these endeavours, in particular by establishing an Union Product Compliance Network whose main task will be coordinating enforcement across the Union. Financing and reporting also all need to be addressed at Union level.
2.3. Proportionality
The proposal does not affect the Member States’ competences in enforcement. However, some Member States may need to adapt their national procedural laws to ensure that their market surveillance authorities can effectively use their enforcement powers in the crossborder context, to cooperate and address product non-compliance within the EU.
The measures set out in this proposal do not extent beyond what is necessary to solve the problems identified and to achieve its objectives. The proposal provides for a common set of powers for all competent authorities in the Member States which should help strengthen enforcement and compliance with Union harmonisation rules on products. The level of harmonisation chosen is necessary to ensure smooth cooperation and exchanges of evidence among competent authorities. Furthermore, it is necessary to remedy the current situation where certain product requirements laid down in Union harmonisation legislation are not enforced consistently and coherently in the single market because the market surveillance authorities in some Member States lack the powers needed to investigate and put an end to non-compliance.
The proposal will improve enforcement cooperation without imposing a disproportionate or excessive burden on Member States' authorities. Therefore, the proposal does not exceed what is necessary to attain its objectives.
2.4. Choice of the instrument
The only suitable instrument to achieve the objective of improving enforcement of and compliance with Union harmonisation legislation on products is a Regulation. A Directive would not achieve the objectives as jurisdictional boundaries and potential jurisdictional conflicts would persist following its transposition.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER
Contents
- CONSULTATIONS
- The
- The Commission recognised the essential role of enforcement networks and set out to
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- Council Regulations (EC) No 1/2005 and (EC) No 1099/2009 and Council
- Regulation (EU) 2017/745 of the European Parliament and of the Council of 5 April 2017 on medical devices, amending
- Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons
- of the European Parliament and of the Council on Enforcement of Union harmonisation legislation
- When exercising these powers, Member States retain the possibility to decide whether the competent authorities will exercise the minimum powers directly under their own authority or
- It also strengthens the exchange of information between market surveillance authorities and customs authorities, in particular through procedures for releasing products, suspending and
- Directive 2004/42/EC of the European Parliament and of the Council on the limitation of emissions of volatile organic
ANDIMPACTASSESSMENTS
3.1. Ex-post evaluations/fitness checks of existing legislation
As part of the 2017 Commission work programme, an evaluation of the current legal framework for market surveillance, notably of provisions of Article 15 to 29 of Regulation (EC) No 765/2008 was undertaken.19 The evaluation covered the period from 2010 (date of application of the Regulation) to 2015.
Effectiveness
The evaluation of Regulation (EC) No 765/2008 indicated that it has been only partly effective in achieving its specific and strategic objectives. This is mainly because coordination and cooperation have still not reached a satisfactory level. Tools such as the Union Rapid Alert System for dangerous non-food products (RAPEX) and the Information and Communication System on Market Surveillance (ICSMS) are in place to ensure cross-border market surveillance cooperation, but they are not sufficiently used by Member States. As a result, market surveillance authorities rarely restrict the marketing of a product if their counterpart in another Member State notifies them of measures related to the product. There seems to be limited scope for market surveillance and customs authorities to make use of findings (including test reports) made by peer authorities in another Member State and, therefore, to avoid duplicating efforts. Furthermore, Regulation (EC) No 765/2008 is not yet uniformly applied, due to the significant differences in how Member States implement it. This concerns the organisation of market surveillance at national level, the availability of financial, human and technical resources, the strategies of market surveillance, the powers of inspection and of sanctions and the systems of monitoring and reporting. Last but not least, border controls on imported products seem insufficient. The main difficulties caused by market surveillance authorities not having jurisdiction outside of their Member State, particularly in the context of online sales.
Therefore, it is safe to assess that Regulation (EC) No 765/2008 does not fully meet its strategic objectives of strengthening the protection of public interests and of ensuring fair trading conditions for economic operators by reducing the number of non-compliant products on the single market. The data available suggest that non-compliant products continue to be placed on the market, and are possibly increasing.
Efficiency
Most of the costs of the market surveillance are borne by Member States and their market surveillance authorities, and vary considerably from one Member State to another. This is because different national organisational models require different levels of both human and financial resources, but also results from the different approaches of market surveillance authorities when reporting data on financial resources used and the activities performed.
Economic operators’ information costs due to Regulation (EC) No 765/2008 are perceived as insignificant. However, businesses point to the negative impact that across-the-board inconsistencies in Member States’ approach to market surveillance have on them, stressing that the current enforcement mechanism is not able to create equal conditions for businesses.
SWD(2017)469 - Commission services staff working document on the evaluation of the market surveillance provisions of Regulation (EC) No 765/2008 of the European Parliament and of the Council of 9 July 2008 setting out the requirements for
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In terms of benefits, Regulation (EC) No 765/2008 did not improve safety for consumers and other end-users as expected. The persistence of and increase in non-compliant products show that it did not create fair trading conditions for businesses either.
Coherence
The evaluation pointed to problems of consistency with the General Product Safety Directive 2001/95/EC (GPSD), whose definitions are not always aligned with those of the Regulation. This proposal clarifies the boundaries between the GPSD and Regulation (EC) No 765/2008. The coherence of Regulation (EC) No 765/2008 with sectoral directives is sufficiently safeguarded by the lex specialis provision. Nonetheless, in certain cases, discrepancies and gaps in the definitions and terminology provided in the different pieces of legislation diminish the overall clarity of the framework for market surveillance, without hindering the implementation of Regulation (EC) No 765/2008.
Relevance
The evaluation highlighted some difficulties in understanding the scope of Regulation (EC) No 765/2008. While its definitions are generally clear and appropriate, they are not complete and up-to-date, especially as regards online sales. Regulation (EC) No 765/2008 is relevant when considering current stakeholders’ needs such as cooperation and exchange of information, and border controls, but it becomes less relevant when looking at needs related to current market dynamics (increasing online trade, budgetary constraints at national level), that requires a fast reaction.
Only a revised framework for market surveillance could help reach the expected level of protection of public interests and of ensure fair trading conditions for market operators.
EU added value
Member States are responsible for enforcing Union harmonisation legislation and taking effective action against products that pose a risk. A single market without internal borders poses challenges for public authorities in enforcing this legislation since they are constrained by jurisdictional boundaries. Furthermore, weaknesses in the market surveillance organisation in a single Member State create weak links in the chain.
To ensure consistent enforcement and to efficiently tackle non-compliance spanning over several Member States, it is necessary to coordinate activities across the Union. The evaluation indicated that the benefits of having a single piece of European legislation on harmonising market surveillance instead of several different pieces of national legislation are widely recognised.
The EU added value of Regulation (EC) No 765/2008 mainly stems from provisions envisaging common information systems that will favour administrative cooperation and enhance cooperation between market surveillance authorities and authorities in charge of checking products at the EU’s external borders.
Full EU added value is still hindered by the currently sub-optimal cross-border exchange of information and cooperation, by inconsistent implementation of the market surveillance framework at national level, and by a lack of resources.
3.2. Stakeholder consultations
The market surveillance authorities were consulted during several meetings of the Expert Group on the Internal Market for Products held on 1 February 2016, 21 October 2016 and 31 March 2017. The last meeting focused on the legislative proposal and its main objectives and especially on how to enhance cooperation between the Member States, create a uniform and
sufficient level of market surveillance and have stronger border controls on products imported into the Union market.
A stakeholder conference open to industry, consumers, authorities, etc. was organised by the Commission on 17 June 2016. The aim was to identify the main issues related to the compliance of products in the single market, how to better enforce harmonisation legislation, and to identify possible ways forward.
A public consultation in all EU official languages was published on a consultation website hosted on Europa. The consultation ran from 1 July to 31 October 2016. Its objective was to gather evidence and views on the actions to enhance enforcement and compliance in the single market for Goods. The European Enterprise Network encouraged and supported small and medium-sized enterprises in the consultation. 239 replies were received from businesses (127), public authorities (80), and citizens (32).
The consultation results show action is needed to increase product compliance in the single market because non-compliance negatively affects consumers and other end-users, but also sales and/or market shares of businesses that do comply with legal obligations. Furthermore, respondents suggested that the best way to reduce non-compliance is a mix of information, support and enforcement by the public authorities. As regards non-compliant products traded by businesses located in a non-EU country, the results of the consultation point to the need for customs and market surveillance authorities to better coordinate controls on products entering the Union market. It also noted the need to oblige businesses established in non-EU countries to designate a person located in the Union to be responsible for compliance information.
3.3. Collection and use of expertise
The Commission or external contractors carried out several surveys, consultations and studies between 2012 and 2016. Member States were also consulted on how effectively market surveillance functions across the Union.
An external evaluation on the application of Regulation (EC) No 765/2008 was carried out between July 2016 and May 2017.
The results have been taken into account in this legislative proposal with the view to improve the enforcement of Union harmonisation legislation on products.
3.4. Regulatory fitness and simplification
The evaluation carried out on the current legal framework for market surveillance (see section 3.1. above) concluded that most of the enforcement costs stemming from current market surveillance rules are borne by public authorities, while costs on businesses only relate to information obligations (responding to requests from authorities, information on non-compliances detected) and are therefore regarded as insignificant by them. The enhanced enforcement coordination and priority setting supported by the Union Product Compliance Network and peer reviewed enforcement strategies would results in a better level-playing field, reducing some of the negative impacts of across-the-board enforcement inconsistencies that businesses face.
The main potential for simplification and burden reduction lie nonetheless with authorities. The impact assessment underlying this proposal examined for each objective possible simplifications and/or administrative burden reduction, such as better use of IT tools used for simpler and quicker exchange information on planned controls, more effective mutual assistance requests, transferability of enforcement evidence and decisions to avoid duplication of work by authorities, a common set of investigative and enforcement powers, and easier
access to compliance information for market surveillance authorities through the availability of a person responsible for compliance information.
3.5. Impact assessment
An impact assessment report prepared by the Commission covers all aspects related to the legislative proposal20.
The policy options envisaged range from maintaining the status quo, to more ambitious measures and EU coordination and action, as follows:
baseline;
improving existing tools and cooperation mechanisms;
option i plus increased deterrence effect to enforcement tools and stepped up EU coordination; and
further added-on centralised EU level enforcement in certain cases. The preferred option is option i, including in particular:
(a) extending Product Contact Points’ advisory role to businesses and ad-hoc public-private partnerships;
(b) creating digital systems through which manufacturers or importers would make compliance information available to both consumers and market surveillance authorities, the obligation of manufacturers to designate a person responsible for compliance information established in the Union and setting up a common European portal for voluntary measures;
(c) establishing rules on how to publicise decisions to restrict the marketing of products, fine-tune authorities’ powers (notably in relation to online sales imports from non-EU countries), recovering the costs of controls on products found to be non-compliant; and
(d) stricter obligations for mutual assistance and legal presumption that products found to be noncompliant in one Member State are non-compliant throughout the EU.
Furthermore, Member States’ enforcement strategies setting out national control activities and capacity building requires an Union Product Compliance Network. This network would provide administrative support structure to peer review Member States’ performance and coordinate and help implement Member States’ joint enforcement activities.
The impact assessment received an initial negative opinion, on 7 April 2017, and subsequently a positive opinion with reservations from the Regulatory Scrutiny Board on 8 June 2017. The recommendations contained in the opinions have been incorporated into the report21. The amended report includes more extensive descriptions of the current market surveillance framework, the relation to the 2013 Consumer Product Safety and Market Surveillance Package and the evaluation results. The presentation of the problems, objectives and options were reworked and supporting evidence and cost estimates added. In relation to the Union Product Compliance Network, the report sets out the expected outputs and cost in different scenarios and discusses the impacts and feasibility of governance options to host the Union Product Compliance Network either in an existing agency or by the Commission. Considering the complexity of amending founding regulations of an existing agency, this
20 SWD (2017) 466, Commission services staff working document Impact assessment accompanying the proposal for a Regulation
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The summary sheet and the positive opinion of the Regulatory Scrutiny Board are available at [link to be inserted].
proposal tasks the Commission with the supporting secretariat of the Network. In relation to the obligation of manufacturers to designate a person responsible for compliance information established in the Union, the impact assessment report describes the main trade and business models affected, in particular distance sales from outside the EU. The report clarifies the mandate of the person responsible for compliance information. It also estimates the cost related to compliance information facilitation and discusses the impacts on 3rd country traders and the fair market conditions for businesses operating in the Union.
3.6. Fundamental rights
The impact of various options examined took into account the impact on concerned fundamental rights. The legislative proposal respects fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union. It is to be interpreted and applied with respect to those rights and principles. Market surveillance authorities would exercise the powers set out in this Regulation, on the basis of proportionality and necessity, and subject to national procedural safeguards.
This legislative proposal strikes a careful balance between the interests protected by fundamental rights health and safety, consumer protection, environmental protection the freedom to conduct business and freedom of information.
4. BUDGETARYIMPLICATIONS
The proposal requires human and administrative resources, as well as operational appropriations, as highlighted in the financial statement.
5. OTHERELEMENTS
5.1. Implementation plans and monitoring, evaluation and reporting arrangements
The Commission will review the implementation of this Regulation 5 years after the date on which it starts to apply, and will submit an evaluation report to the European Parliament and the Council. The report will assess whether the Regulation achieved its objectives, in particular with regard to reducing the number of non-compliant products, ensuring effective and efficient enforcement of Union harmonisation legislation, improving cooperation between competent authorities and strengthening the controls on products entering the Union market, taking into account its impact on business and in particular on small and medium-sized enterprises.
5.2. Entry into application
The proposal would delay the entry into application of the Regulation until 1 January 2020 to allow Member States, market surveillance authorities, and the European Commission through the Union Product Compliance Network to make the necessary practical arrangements and legislative changes.
5.3. Detailed explanation of the specific provisions of the proposal
The proposal consists of 11 chapters comprising 64 articles and one Annex.
Chapter I – General provisions
This Chapter defines the scope and the main terms used in the Regulation. It updates the definitions used in Regulation (EC) No 765/2008, in particular to take into account the diversity of actors in the supply chain and the need to make them all subject to enforcement of the Union harmonisation legislation on products. The proposed definition of ‘economic operator’ encompasses all actors directly concerned by this legislation.
Chapter II – Compliance information
This Chapter introduces the concept of a ‘person responsible for compliance information established within the Union’ as a necessary condition for making the products available on the market. The main objectives are to enforce of Union harmonisation legislation on products by ensuring good contacts between manufacturers or their designated representatives and the market surveillance authorities, and to create fair trading conditions on the Union market.
The person responsible for compliance information can be the manufacturer, the importer or any other economic operator designated by the manufacturer.
The tasks of the person responsible for compliance information are essentially to provide information on the product to market surveillance authorities and to cooperate with the authorities.
Chapter III – Assistance to and cooperation with economic operators
This Chapter defines how to designate competent authorities and single liaison offices for this Regulation and clarifies the roles of the single liaison offices. It calls on the Member States to ensure smooth cooperation among the members of the enforcement network in their territory. It requires Member States to ensure that other national authorities support the work of the competent authorities, in particular in cases where criminal measures are needed to stop the infringement.
Chapter IV – Organisation and general principles of market surveillance
The Regulation sets out the Member States’ obligations as regards organisation of market surveillance within their territory. It also lays down the procedures they must establish to follow up complaints or issues relating to risks; monitor accidents and harm to the health of end-users; verify corrective actions taken by economic operators; and follow up scientific and technical knowledge of safety issues.
The Regulation defines how Member States should designate market surveillance authorities and single liaison offices. It also lays down principles for the activities of market surveillance authorities, namely that surveillance must be effective, measures be proportional to compliance, that the authorities must take a risk-based approach against the background of defined factors, and act with transparency, independence and impartiality.
The Regulation also requires Member States to issue regular national market surveillance strategies and lists what they must include.
Chapter V – Market surveillance powers and measures
The Regulation provides for a set of powers for market surveillance authorities, defined with the view to ensure effective enforcement of Union harmonisation legislation on products is enforced effectively across borders. These powers include the power to access data and documents related to an instance of non-compliance, to require economic operators and public entities to provide all information related to an instance of non-compliance; to carry out on sit inspections; to make test purchases and carry out mystery shopping; to adopt temporary measures; to initiate investigations or procedures aimed at ceasing non-compliance; to prohibit the supply of products, or withdraw and recall and destroy them; to impose penalties and order the recovery of profits obtained as a result of non-compliance; and to publish decisions, including the identity of the concerned economic operator.
When exercising these powers, Member States retain the possibility to decide whether the competent authorities will exercise the minimum powers directly under their own authority or
whether these powers will be exercised by application to courts, in accordance with national law.
The Regulation also defines market surveillance measures and establishes the procedures and principles to be observed. As regards products which present a serious risk requiring rapid intervention, the Chapter links with Directive 2001/95/EC and the Union Rapid Alert System established under that Directive.
The Regulation also introduces the possibility of designating Union testing facilities and specifies their tasks.
In addition to the principle of financing market surveillance, this Chapter provides for market surveillance authorities to recover their costs by charging economic operators administrative fees for non-compliance.
Chapter VI— Cooperation and procedure for mutual assistance
Mutual assistance may take two forms:
• requests for information, which enable market surveillance authorities in one Member State to obtain information and evidence from another; and
• requests for enforcement measures which enable market surveillance authorities to request their counterparts in another Member State to take enforcement measures.
The Regulation sets out the procedure for mutual assistance requests. These requests must be sent to the single liaison offices in the Member States of both the requesting and the requested authorities, using standard forms by means of an information and communication system . The Regulation also provides for that evidence obtained and investigation findings in one Member State may be used in another Member State.
The underlying principle that is that products deemed to be non - com pli ant on the basis of a decision taken by market surveillance authorities in one Member State are presumed to be non-compliant by market surveillance authorities in another Member State, unless the concerned economic operator can provide evidence to the contrary. The aim of the instruments of mutual assistance is to address instances of non-compliance of a product in cross-border context, and to allow measures to end the non-compliance or the ban the product in all Member States. The Regulation will also help evidence and investigation findings obtained through the use of minimum powers of market surveillance authorities can be used across the borders.
Under the Regulation, the requested authority must reply to a mutual assistance request within the time limit set the implementing measures.
The Regulation ensures the protection of professional and commercial secrets by providing that information communicated to market surveillance authorities will only be used to ensure com pliance with Union har m onisation legislation.
Chapter VII - Products entering the Union market
The Regulation provides for a strengthened framework for controls on products entering the Union market. It starts from the assumption that the most effective way to ensure that unsafe or non-compliant products are not placed on the Union market is to carry out adequate checks before they are released for free circulation. Customs authorities execute controls based on risk analysis.
It also strengthens the exchange of information between market surveillance authorities and customs authorities, in particular through procedures for releasing products, suspending and
refusing of release for free circulation. Market surveillance authorities can be asked to provide information on products and economic operators where a higher risk of non-compliance is detected. Customs authorities are required to inform the market surveillance authorities in timely manner on the placing of products under release for free circulation and the results of controls if that information is relevant for enforcing of Union harmonisation legislation.
The release for free circulation may be suspended if:
• the product is not accompanied by the required documentation, is not marked or labelled as required, does not bear the CE marking or other marking required under the Union h ar m onisati o n legislation;
• no person responsible for compliance information established within the Union can be identified; or
• there is cause to believe that the product is not placed on the market in accordance with requirements set out by Union harmonisation legislation.
The Regulation also provides for the favourable treatment of products declared for free circulation by authorised economic operators with special status under Regulation (EU) No 952/2013. It also lays down conditions for suspending this favourable treatment if noncompliance is detected during the controls. Procedural rules for exchanging information on authorised economic operators, between market surveillance authorities and customs authorities, will be established in implementing measures.
Chapter VIII - Coordinated enforcement and international cooperation
The Regulation establishes a Union Product Compliance Network ('Network'), within the Commission. The Network is composed of a board, administrative coordination groups and a secretariat; its tasks are detailed in the Regulation.
The role of the Network will be to coordinate enforcement tasks, thereby boosting market surveillance cooperation at EU level. Furthermore, the Network will be in charge of maintaining an information and communication system for collecting and storing information on the enforcement of Union harmonisation legislation on products. The system is available to the Commission and market surveillance authorities in the Member States and will have a public interface in order to comply with the obligation to inform the general public and ensure transparency.
The Regulation sets out the framework for international cooperation with third countries or international organisations to ensure Union harmonisation legislation on products is enforced. It also provides for a system for product related pre-export controls carried out by a third country on products, before they are exported to the Union. T he detai ls of the implementation of this syste m will be establ ished by implementing acts.
Chapter IX - Financial provisions
The Regulation provides for the financing by the Commission of activities in all matters falling under the general market surveillance policy for the Union.
The Regulation includes for general clauses on protecting the financial interests of the Union.
Chapter X - Final provisions
The Regulation provides that Union harmonisation legislation listed its Annex will not be governed by Arti c les 15 to 29 of Regulation (EC) No 765/2008.
23 legal instruments set out in the Annex to this Regulation have to be amended, by deleting references to Article 15 to 29 of Regulation (EC) No 765/2008. The Regulation also amends Directive 2004/42/EC of the European Parliament and of the Council22.
Chapter XI – Penalties, evaluation, committee procedure and entry into force and application
While recognising that establishing penalties is a national competence, this Regulation sets out guiding principle for penalties.
The Regulation also lays down for standard provisions on evaluating of the application of this Regulation and on the committee procedure for adopting of implementing acts.
Annex
The Annex lists the Union harmonisation legal instruments for products, thus determining the scope of the application of the Regulation.
22
Directive 2004/42/EC of the European Parliament and of the Council on the limitation of emissions of volatile organic
compounds due to the use of organic solvents in certain paints and varnishes and vehicle refinishing products (OJ L 143, 30.
4.2004, p. 87).