Changes to the General Product Safety Directive (GPSD) are currently being discussed by the European Parliament and Council. These are likely to become law this year, and all manufacturers, importers, distributers and retailers of consumer products should be aware of them.
The European Commission wants to improve consumer product safety and to strengthen market surveillance of products in the EU. This new package of legislative and non-legislative (regulatory) measures is designed to achieve this. After public consultation on the revision of the current General Product Safety Directive, the Commission has proposed a new Product Safety and Market Surveillance Package. This consists of a proposal for two new European Regulations: (1) a Regulation on consumer product safety; and (2) a Regulation aimed at improving the functioning of the European Internal Market through effective market surveillance. The Package also contains non-legislative material.
Currently the rules on product safety and market surveillance are spread across a number of pieces of legislation. They are therefore fragmented – which has led to overlaps, gaps and confusion. The proposed package is designed to simplify this. It aims to create greater coherence in the rules regulating consumer product safety, product identification and traceability. It also seeks to improve coordination of the ways in which authorities check products and enforce regulatory compliance and market surveillance, thereby creating a more level playing field in the internal market.
Product safety and technical document retention, including risk assessment
The proposed General Product Safety Regulation will be directly applicable and enforceable in every member state of the EU. It will encapsulate the current legislation in product safety within EU Directives and will include additional wider and more onerous obligations. An exception is where there are specific safety requirements such as the Toy Safety Directive or the Personal Protective Equipment Directive where these product specific requirements will remain.
Manufacturers will be obliged to provide technical documents about the product, which include a risk assessment and solutions to show mitigation or elimination of risks. This requirement will add to compliance costs and will need to be managed with care by all product manufacturers. All economic operators must be able to identify the economic operator that previously handled the product, and to whom they supplied the product, up to 10 years later.
Traceability
One of the key issues addressed by new Regulations is the concept of traceability of potentially dangerous products. In the Commission’s words, this is to “reflect the challenges of a globalised market”. There are significantly enhanced labelling requirements, including the labelling of all products with country of origin, the manufacturer and importer, type, batch and serial numbers.
Where products are likely to pose a serious risk to consumer health and safety, the Commission can require operators to put in place an electronic traceability system.
Duties down the chain
The proposed changes prescribe more explicit obligations on parties in the supply chain to take responsibility for the safety of products they are handling. Each economic operator below the manufacturer in the supply chain will be expected to ensure that the economic operator above them has complied with certain key duties, in particular:
• explicit obligations on importers to ensure that the manufacturer has complied with its obligations on labelling for manufacturer’s identity and product identification, and has produced technical documents for the product.
• distributors must verify that the manufacturer and the importer have complied with their obligations on labelling for identity and product identification, and that the product is accompanied by consumer instructions and safety information in the appropriate language as produced by the manufacturer or importer.
Market surveillance regulation
The current rules on market surveillance are spread across the current legislation on Consumer Product Safety, creating uncertainties for both economic operators and national authorities. The proposed Regulation on market surveillance of products is intended to enhance and strengthen co-operation and exchange of information between national authorities, as well as with those outside the EU.
A further key development relates to the concept of “risk” in the Regulation. It will set out powers and responsibilities for authorities to deal with any “product having the potential to affect adversely health and safety of persons in general, health and safety in the workplace, consumer protection, the environment and public security…”. Where a product presents a risk, economic operators must take corrective action, ranging from affixing warning labels, to product recalls.
The communication from the Commission on more product safety and better market surveillance in the Single Market for products states: The proposal would strengthen controls at external borders by making clear that the release for free circulation in the Union of any product within the scope of the regulation should be suspended if the authorities responsible for external border controls have cause to believe that it presented a risk. Market surveillance authorities would then check whether the product did in fact present a risk before instructing the border authorities to release or refuse release, as appropriate. Only products entering the Union in the physical possession of natural persons and destined for their personal use would be exempt. Thus internet purchases of product from third countries may be controlled.
The regulation promotes the exchange and retention of information relating to market surveillance activities in an easily accessible database. One particular intended consequence is that the market surveillance authorities should not repeat tests and assessments already carried out in relation to a particular product by the authorities of another Member State. It should become standard practice to search the database for records of such tests and assessments. Given the high cost of product test this will lead to high savings for the Member State competent authorities and facilitate better surveillance in smaller markets within the Union.
Penalties
Member states would be free to determine national penalties for infringements by the relevant economic operator, despite the fact that the proposed EU Regulations will be directly applicable. Penalties must be calculated with reference to the size of the offending economic operator.
There are more explicit, and expanded obligations on national authorities to investigate and exchange information on product risks, including obligations to share information with authorities outside the EU, even where information is confidential to the business. There are also powers for national authorities to require manufacturers, importers and distributors to undertake recalls, and for the authorities to carry out recalls and other activities at the expense of the business.
The regime has been expressed as a zero tolerance of formal breaches of labelling and documentation requirements.
Conclusion
If these proposals do become law in their current form, then the CPSR and MSR will place significant obligations on economic operators in producer supply chains into the EU. Some of these obligations are new, and some simply add to previous requirements under the GPSD. Manufacturers should ensure their products comply with all requirements before they are distributed, and importers and distributors must be vigilant to check that any products they make available comply with EU legislation, as well as ensuring product and component traceability. If you are unsure about how this may affect your business, would like some further explanation of the implications, or would like to know how Track Record Global can help you with compliance, feel free to contact us.
The reform package is now being considered by the European Parliament and Council of the EU. The new legislation is expected to come into force in the current year: 2015.
The current drafts of the CPSR and MSR can be found here and here.