As an example of cross-border trade, manufacturers and merchants are based in China while consumers and the market surveillance authorities that check for product safety are based in the EU.
From July 2021, new EU legislation came into place which is intended to strengthen the monitoring of the European single market. Products that fall under what are known as the ‘harmonisation rules’ will be subject to closer monitoring.
This applies to all products where CE-marking is mandatory, including many common products such as toys and electrical equipment. The Regulation, known as the EU Regulation 2019/1020 on Market Surveillance and Compliance of Products, contains a list of sectoral legislations in an annex to which the Regulation applies.
One important requirement is that businesses that want to target EU consumers and sell the product groups listed in Art. 4(5) of the Regulation on Market Surveillance and Compliance of Products into EU markets must always have a responsible person in the EU that can be contacted by EU authorities and consumers.
The regulation lists four types of businesses that can be the responsible person, in a cascade logic:
- A manufacturer established in the EU. ‘Manufacturer’ means any natural or legal person who manufactures a product or has a product designed or manufactured and markets that product under its own name or trademark.
- An importer established in the EU. ‘Importer’ means any natural or legal person established within the European Union who places a product from a third country such as China on the union market.
- An ‘authorised representative’ which means any natural or legal person established within the European Union who has received a written mandate from a manufacturer to act on its behalf in relation to specified tasks with regard to the manufacturer’s obligations.
- A ‘fulfilment service provider’ which means any natural or legal person that stores, packages, addresses and dispatches products for a manufacturer without actually owning the product.
The EU legislation establishes strict requirements for the authorised representative and the fulfilment service provider and places heavy obligations on them similar to the requirements and obligations placed on manufacturers and importers established in the EU. They are expected to be able to speak on behalf of a third county manufacturer if an EU authority contacts them, and the EU legislation describes 4 distinct tasks for them:
- They must verify that the declaration of conformity and the technical file have been drawn up and they must also store the declaration of conformity for at least 10 years
- During these 10 years, they must be prepared to provide the declaration of conformity and the technical file to an EU market surveillance authority in less than 10 days if the authority asks for it.
- They must contact the market surveillance authorities on their own initiative, if they have reason to believe that the product is unsafe.
- They must cooperate with the market surveillance authorities or even take action themselves to remove unsafe products from the market or mitigate risks posed by unsafe products on the market.
In order to fulfil these obligations, the authorised representative or the fulfilment service provider, in case they act as a responsible person, must prepare well and ask the third country manufacturer to provide all this information upfront. If a business doesn’t have a responsible person to represent them in the EU but still tries to sell their products in the EU, then this would be illegal. A business cannot deal directly with individual consumers without having someone in the EU who can take responsibility for the products they sell. EU customs officers will be prepared to block entry to products at the EU border, it is important for business outside the EU to ensure they don’t end up in this situation.
To benefit from the huge single market of the EU of 500 million consumers, all businesses must adhere to the same rules, as set out by this EU regulation, which came into force in 2021. All must be accountable, whether a business is manufacturing and trading from inside the EU or from outside the EU.
