Explanatory Memorandum to COM(2021)346 - General product safety - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2021)346 - General product safety. |
|---|---|
| source | COM(2021)346  |
| date | 30-06-2021 |
Contents
• Reasons for and objectives of the proposal3
• Consistency with other EU policies5
• Legal basis6
• Subsidiarity (for non-exclusive competence)7
• Proportionality8
• Choice of the instrument8
• Ex post evaluations/fitness checks of existing legislation8
• Stakeholder consultations9
• Collection and use of expertise11
• Impact assessment11
• Regulatory fitness and simplification13
• Fundamental rights14
15
• Implementation plans and monitoring, evaluation and reporting arrangements15
• Detailed explanation of the specific provisions of the proposal15
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on general product safety, amending Regulation (EU) No 1025/2012 of the European Parliament and of the Council, and repealing Council Directive 87/357/EEC and Directive 2001/95/EC of the European Parliament and of the Council
CHAPTER I 32
General provisions 32
CHAPTER II 35
Safety requirements 35
CHAPTER III 37
Obligations of economic operators 37
Section 1 37
Section 2 43
CHAPTER IV 44
Online marketplaces 44
CHAPTER V 46
Market surveillance and implementation 46
CHAPTER VI 47
Safety Gate rapid alert system 47
CHAPTER VII 48
Commission role and enforcement coordination 48
CHAPTER VIII 51
Right to information and remedy 51
CHAPTER IX 53
International cooperation 53
CHAPTER X 54
Financial provisions 54
CHAPTER XI 57
Final provisions 57
LEGISLATIVE FINANCIAL STATEMENT 62
EXPLANATORY MEMORANDUM
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
This proposal for a Regulation on consumer product safety is in line with the New Consumer Agenda of 2020 1 aiming to: (i) update and modernise the general framework for the safety of non-food consumer products; (ii) preserve its role as a safety net for consumers; (iii) adapt the provisions to challenges posed by new technologies and online selling; and (iv) ensure a level playing field for businesses. While the proposal will replace the Directive 2001/95/EC on general product safety 2 (‘GPSD’), it will continue applying to manufactured non-food consumer products. The proposed Regulation will also provide continuity with the GPSD by: (i) requiring that consumer products be ‘safe’; (ii) setting certain obligations for economic operators; and (iii) containing provisions for the development of standards in support of the general safety requirement. It also aligns the market surveillance rules for products falling outside the scope of the EU harmonisation legislation (‘non-harmonised products’) with those applying to products falling under the scope of the EU harmonisation legislation (‘harmonised products’) as set out in Regulation (EU) 2019/1020. The proposed Regulation aims therefore both to update the rules currently set out in Directive 2001/95/EC to ensure a safety net for all products, and, at the same time, to ensure that the regime provides greater consistency between harmonised and non-harmonised products.
Already in 2011, the Single Market Act 3 identified the revision of the GPSD and of Regulation (EC) No 765/2008 4 as key actions ‘to improve the safety of products circulating in the EU through better coherence and enforcement of product safety and market surveillance rules’. Such revision was proposed in 2013 in a package including the revision of both legal instruments, the purpose being to introduce a single legislative framework for harmonised and non-harmonised products. It was considered that overlaps in market surveillance rules and obligations of economic operators laid down in various pieces of EU legislation (GPSD, Regulation (EC) No 765/2008 and sector-specific EU harmonisation legislation) have led to confusion among economic operators and national authorities and have hampered the effectiveness of market surveillance activity in the EU. The proposed package stalled in negotiations for its adoption and was withdrawn. In the meantime, in 2017, following up on the 2015 Communication Upgrading the Single Market: more opportunities for people and business 5 , the Commission adopted a proposal to revise Regulation (EC) 765/2008 to strengthen product compliance and enforcement of EU harmonisation legislation on products, as part of the ‘goods package’, e.g. a package of initiatives to ensure a better functioning of the single market for goods. This led to the adoption, in 2019, of Regulation (EU) 2019/1020 6 .
• Consistency with existing policy provisions in the policy area
Regulation (EU) 2019/1020 7
Regulation (EU) 2019/1020 lays down rules and procedures for compliance with, and enforcement of, EU harmonisation legislation on products. The proposal seeks to enable better cooperation among national market surveillance authorities. To that end, it aims to clarify the procedures for the mutual assistance mechanism between them, and, for some product categories, it will require non-EU manufacturers to designate a natural or legal person responsible for compliance information. The proposal covers market surveillance of non-food products (‘industrial products’) whose placement on the single market is subject to EU harmonising acts. It is applicable, except for Chapter VII, to harmonised products only.
To ensure coherence and consistency between the regimes for harmonised and non-harmonised products, this proposal takes up and adapts a number of provisions of Regulation 2019/1020, such as Chapters IV, V and VI on market surveillance and Article 4.
Decision 768/2008/EC 8
Decision 768/2008/EC sets out common principles and procedures that EU legislation must follow when harmonising conditions for marketing products in the EU and the EEA. It includes reference requirements to be incorporated whenever product legislation is revised. As such, it is a template for future product harmonisation legislation.
To ensure consistency between the legislation for harmonised and non-harmonised products, this proposal takes up some of the provisions of Decision 768/2008/EC, such as those on traceability requirements and the obligations of economic operators.
Regulation (EU) 1025/2012 9
Regulation (EU) 1025/2012 provides a legal basis to use European standards for products and services, identify ICT technical specifications, and finance the European standardisation process. It also sets an obligation for European standardisation organisations (CEN, CENELEC, ETSI) and national standardisation bodies on transparency and participation.
To ensure consistency with the general regime for standardisation as provided for by Regulation (EU) 1025/2012, this proposal provides for a number of amendments to Regulation (EU) 1025/2012 to adapt it to the specific characteristics of the proposed regulation, in particular to the fact that this Regulation requires the adoption of specific safety requirements and to the fact that the standards adopted under this regulation cannot be assimilated to harmonised standards and are indicated therefore as “European standards”.
Directive (EU) 2019/771 10
Directive 2019/771 introduces rules on the conformity of goods, remedies in the event of a lack of conformity and how to make use of those remedies.
The proposal provides remedies specifically for dangerous products that have been recalled from the market. This particular situation justifies having a set of rules that are partially different and easier to activate, in particular because the consumer does not need to demonstrate the non-conformity of the product. These rules are applicable only if products are recalled. Therefore they do not amend Directive 2019/771 but only add additional protection in the case of recall.
Regulation (EU) 2019/881 11
The Cybersecurity Act introduces an EU-wide cybersecurity certification framework for ICT products, services and processes. However, it does not include minimum cybersecurity legal requirements for ICT products. This proposal clarifies that cybersecurity risks that have an impact on the safety of consumers are covered by the concept of safety under the proposed Regulation.
• Consistency with other EU policies
The following ongoing or planned initiatives at EU level play an important role for product safety:
The Digital Services Act (DSA), adopted by the Commission on 15 December 2020 12 , aims to regulate the responsibilities of providers of intermediary services online, including online platforms such as social media and online marketplaces, with regard to illegal content, goods or services offered by their users. That proposal sets out a number of due diligence obligations for online platforms relevant for the proposed regulation, including the introduction of the ‘traceability of traders’ principle and the obligation to take into consideration product safety law in structuring the interface (Article 22). The DSA covers all types of illegal content, as defined by national or EU law, including the sale of dangerous products online. As the DSA is a legislative instrument of general application, it does not include specific provisions addressing such type of content. The DSA also sets out the framework for the notice and action procedure (Article 14). The proposed regulation specifies certain obligations for online marketplaces in the product safety field.
The legislative proposal on artificial intelligence (AI) lays down harmonised rules for the placing on the market, putting into service and use of artificial intelligence systems in the EU. The rules need to ensure a high level of protection of the public interests, in particular on health and safety, and people’s fundamental rights and freedoms. It lays down specific requirements with which high-risk AI systems must comply and imposes obligations on providers and users of such systems.
This proposal takes into consideration these provisions and provides a safety net for products and risks to health and safety of consumers that do not enter into the scope of application of the AI proposal.
The chemicals strategy adopted in October 2020 13 points to the fact that the already widespread use of chemicals will increase, including in consumer products, and that it is necessary to ban the most harmful chemicals in consumer products to ensure their safety. The REACH Regulation 14 has introduced obligations for the industry to assess and manage the risks posed by chemicals and provide appropriate safety information for their users. It also provides for restrictions to protect human health and the environment from unacceptable risks posed by chemicals. This proposal maintains a safety net for chemical risks in products not covered by specific legislation.
The Circular economy action plan adopted in March 2020 15 aims to reduce waste through reuse, repair, remanufacturing and high-quality recycling - in particular concerning secondary raw materials where dangerous substances can persist - and states that the safety of products must be taken into consideration as a primary objective. This proposal acknowledges that, when economic operators or authorities face a choice of corrective actions, the most sustainable action (i.e. the one with the lowest environmental impact) should be preferred, provided that it does not result in a lower level of safety.”
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The legal basis for the proposed Regulation is Article 114 TFEU, with due regard to Article 169 16 . Its objective is to ensure product safety and improve the functioning of the internal market. At the same time, it aims to ensure a high level of consumer protection, by contributing to protect the health and safety of European consumers and promoting their right to information 17 .
• Subsidiarity (for non-exclusive competence)
The proposal harmonises the general product safety requirement in the EU. Ensuring the safety of products in the single market cannot be achieved sufficiently by Member States acting alone for the following reasons:
–Products circulate freely across the single market. When a dangerous product is identified in a certain country it is very likely that the same product could be found in other Member States too, not least because of the exponential growth of online selling.
–Different rules on product safety at national level can create uneven costs for businesses to comply with product safety legislation, and therefore can cause distortions in the level playing field on the internal market.
–To ensure a high level of consumer protection, the EU must contribute to protecting the health and safety of consumers. If different countries have different rules, consumers will not be protected against dangerous products in the same way across the EU.
–To be effective, market surveillance must be uniform across the EU. If market surveillance is ‘softer’ in some parts of the EU, weak spots are created. These threaten the public interest, create unfair trading conditions and encourage ‘forum shopping’ 18 .
EU-level action on product safety for non-harmonised products has the following added value:
–Common rules and standards for product safety at EU level mean that businesses no longer have to comply with heterogeneous sets of national rules. This generates benefits in terms of costs savings, a lower administrative burden and a less complex legal regime for businesses. This also enables free circulation of goods in the EU and allows for closer cooperation between Member States.
–Common EU rules allow economies of scale in market surveillance, particularly important with the exponential development of online selling, which intensifies cross-border sales and direct imports from outside the EU. The costs of market surveillance are also shared through joint market surveillance actions and the exchange of information among EU countries.
–The functioning of the single market will be improved by EU-level action. Common product safety and market surveillance rules across the EU will ensure a more even treatment of businesses, and therefore will be less likely to distort the level playing field on the EU single market.
–EU action allows for faster and more efficient circulation of information, in particular via the Safety Gate/RAPEX system, thus ensuring fast action against dangerous products across the EU and a level playing field.
–At international level, the common set of provisions established under the GPSD has also enabled the EU to be stronger in promoting a high level of safety both bilaterally and multilaterally, thus tackling the increasing circulation of goods from third countries via online selling.
• Proportionality
This proposal strikes a careful balance between, on the one hand, EU countries’ regulatory autonomy in setting the level of consumer protection and market surveillance they consider necessary, and, on the other hand, the need to address product safety issues that have to be tackled centrally. As underlined in Chapter 7 of the impact assessment, the challenges remain considerable, with a high presence of unsafe consumer products on the EU market. The costs and regulatory burdens associated with this proposal have been kept as limited as possible. Total costs for businesses in the EU27 in the first year of implementation of this Regulation is estimated at 0.02% of turnover of EU companies for manufacturing, wholesale and retail of non-harmonised products. The measures included in this proposal do not extend beyond what is necessary to solve the identified problems and to achieve the objectives set. The foreseen costs for the Commission and Member States are considered as acceptable, and will be compensated by the savings incurred by businesses, and benefits for businesses, consumers and Member States alike.
• Choice of the instrument
A regulation is the only suitable instrument to achieve the objective of improving enforcement of, and compliance with EU legislation on product safety ensuring coherence in the implementation of its legal framework. A directive would not sufficiently achieve the objectives, as jurisdictional boundaries and potential jurisdictional conflicts would persist following its transposition. The choice of Regulation instead of Directive also allows to better deliver on the objective to ensure coherence with the market surveillance legislative framework for harmonised products, where the applicable legal instrument is also a Regulation (Regulation (EU) 2019/1020). Finally, such a choice will further reduce the regulatory burden through a consistent application of product safety rules across the EU.
3. RESULTS OF EX POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex post evaluations/fitness checks of existing legislation
This proposal for a regulation builds on the evaluation of the General Product Safety Directive, conducted as a ‘back-to-back’ evaluation with the impact assessment accompanying the proposal. The GPSD has a twofold objective. It pursues the aim of improving the functioning of the single market, by introducing a common legislative framework to avoid disparities between Member States that could have emerged in the absence of EU law. At the same time, the GPSD intends to achieve a high level of consumer protection by introducing a general product safety requirement and other measures. Both aims are interrelated: the harmonised safety requirement for consumer products envisaged by the GPSD prevents disparities that would lead to the creation of barriers to trade and distortion of the level playing field within the single market.
The evaluation concluded that the role of the GPSD as a cornerstone of consumer safety and the functioning of the single market is uncontested. Its objectives remain fully relevant, and its EU added value cannot be denied. The GPSD’s role as a ‘safety net’ remains essential for consumer protection, as it provides a legal basis aimed to ensure that no dangerous products end up in consumers’ hands. The establishment of the rapid alert system for dangerous non-food products under the GPSD has proven to be a success. However, the evaluation has exposed a number of factors that question how far some provisions of the GPSD still contribute to the proper achievement of its goals.
In the first place, the growth of e-commerce has decreased the effectiveness of the GPSD. The GPSD applies to all consumer products, regardless of whether they are sold in bricks-and-mortar shops or online. However, the lack of explicit provisions in the GPSD to address the specificities of online selling, in particular the appearance of new actors in the online supply chain, has negatively affected the safety of EU consumers and the level playing field for compliant EU businesses.
The rapid development of new technologies also raises questions about the scope of some of the key concepts of the GPSD. The appearance of some new risks linked to connectivity, the applicability of the Directive to software updates and downloads as well as the evolving functionalities of AI-powered products raise the question whether the GPSD is clear enough to provide legal certainty for businesses and protection to consumers.
The evaluation has also identified a lack of internal coherence in the EU legal framework, with the existence of two different sets of rules on market surveillance for harmonised and non-harmonised products.
Finally, it is apparent from the evaluation that it would be necessary to fine-tune some of the provisions to improve the effectiveness of the GPSD. In particular, legislative changes or further actions are needed to improve the effectiveness of product recalls. There is also a need for a mechanism to arbitrate disputes between Member States regarding risk assessments. The traceability system under the Directive and the resources constraints of market surveillance authorities make it difficult to effectively control the safety of products, and consequently need to be tackled to ensure the proper protection of consumers and functioning of the Single market. Also, the Food-Imitating Products Directive (FIPD) is currently not enforced in a harmonised manner among Member States, so a solution to address this issue is needed.
• Stakeholder consultations
In preparing this proposal, the Commission consulted stakeholders via a public consultation on the inception impact assessment and roadmap, an open public consultation (OPC), stakeholder workshops, as well as ad hoc contributions and targeted consultations with Member States and other stakeholders. The results from the consultation activities have been incorporated throughout the impact assessment and are reflected in this proposal. The main points raised during the consultations are the following:
Preserving the safety net: The overall feedback among all stakeholder groups was that the GPSD is a useful piece of legislation and its safety net principle should be preserved. However, a large majority of respondents stated that current EU safety rules for non-food consumer products covered by the GPSD could be improved in specific areas so that they better protect consumers (71% of answers in the OPC).
Tackling the challenges posed by new technologies: While all stakeholders acknowledged that new technologies raise many challenges, they put forward divergent approaches to tackle them. In the consultations, consumer representatives and several Member State authorities expressed support for expanding the definition of ‘safety’ to include (cyber)security aspects that have an impact on safety. However, in the consultation on the roadmap/inception impact assessment, technology-oriented businesses were more reluctant to include new technologies and new risks related to them in the GPSD. They would prefer the GPSD to remain technology-neutral, with risks linked to new technologies covered in other, more specific pieces of legislation. Nevertheless, the proposal for a regulation includes such aspects to make sure that risks posed by new technologies are in the scope of the safety net, in case they are not covered by more specific pieces of EU legislation 19 .
Addressing safety issues associated with products sold online: The issue of products coming directly or via online platforms from outside the EU was a recurrent issue mentioned in the consultations. Businesses and business representatives stressed the importance of having a level playing field and pointed out that currently many EU retailers suffer as a result of unfair competition from operators based in third countries. Member State authorities stressed that it was difficult to control products coming from third countries and to take enforcement action against economic operators outside the EU. Views diverged between stakeholders regarding the obligations of online marketplaces:
–Online marketplaces providing their feedback on the roadmap indicated that they would accept some of the obligations under the current voluntary Product Safety Pledge being binding, but would not be in favour of further obligations. 20 Retailers argued that online marketplaces play a key role in the supply chain, and therefore they should have corresponding responsibilities.
–Consumer representatives and Member States authorities were in favour of strengthening responsibilities across the supply chain.
Improving market surveillance rules and enforcement: As regards market surveillance and enforcement, stakeholders from all categories were in favour of an alignment of market surveillance rules between harmonised and non-harmonised products. This is included in the proposal. Regarding the introduction of a ‘responsible person’ in the revised GPSD, a large majority of respondents in the OPC considered that products covered by the GPSD should only be placed on the EU market if there is an economic operator established in the EU responsible for product safety purposes (70% of respondents in favour).
Revision of the standardisation process: A majority of stakeholders was in favour of simplifying the standardisation process for developing new standards under the GPSD and now under this Regulation. This is provided for in this proposal.
Including food-imitating products in the scope of the revised GPSD: Most stakeholders were in favour of incorporating the food-imitating legislation into the revised GPSD. A large majority of respondents to the OPC stated that products which resemble foodstuff should be incorporated into the general product safety legal instrument (69% of respondents in favour). In the consultation on the inception impact assessment, respondents favoured including this element in the product safety risk assessment. This approach is reflected in the proposal. No support was expressed for a full ban of food-imitating products.
Improving the framework for product recalls: Stakeholders repeatedly stressed the crucial importance of contacting affected consumers directly in the case of recalls whenever possible, for instance because the product was registered, bought online, or bought with the use of loyalty card. Several stakeholders mentioned that consumers should be able to choose to receive safety notifications only (when registering a product or subscribing to a loyalty scheme). There was a broad agreement that some key elements and ground rules, applicable to all recall notices, should be standardised and made compulsory, which is the case in the proposed regulation. Several stakeholders mentioned the need to make recall participation less burdensome and more attractive to consumers.
Improving traceability along the supply chain: A large majority of stakeholders agreed that the system of product traceability should be strengthened in the GPSD (82% in favour in the OPC). Moreover, the role of online marketplaces in improving product traceability was also stressed, with respondents notably arguing that marketplaces should check that traceability information is available before listing a product.
Addressing counterfeit products: Brand owner organisations stressed that the GPSD should be amended to tackle counterfeit unsafe products. This issue was duly taken into consideration but not included in this proposal, as counterfeit products are already addressed by EU legislation, and unsafe products are covered in the GPSD and in this proposal regardless of their authenticity. Even though counterfeit products can pose safety risks, the safety of a given product has to be analysed based on a risk assessment.
• Collection and use of expertise
The preparatory steps for this proposal rest on expert advice and a number of studies. This includes studies with a focus on the GPSD’s implementation, to support the evaluation and impact assessment, as well as on the effectiveness of product recalls.
The Commission also gathered expertise and views through targeted consultations and engagement activities, including a series of workshops, conferences, interviews with experts and authorities, and the opinion of the Sub-group of the Consumer Safety Network on artificial intelligence, connected products and other new challenges on product safety. The Commission held numerous bilateral meetings and carried out an analysis of ad-hoc position papers from consumer organisations, industry representatives and academia.
• Impact assessment
This proposal is supported by an impact assessment report (SWD (2021) 169, SWD (2021) 168). The impact assessment report has been scrutinised by the Regulatory Scrutiny Board and received a positive opinion (SEC 280 (avis du RSB)
In the context of this initiative, the Commission examined several policy alternatives as presented in the impact assessment report. The range of policy alternatives analysed included both non-legislative and legislative actions to address the different specific objectives as presented in the report: (i) ensure the EU legal framework provides general safety rules for all consumer products and risks, including products and risks linked to new technologies; (ii) address product safety challenges in the online sales channels; (iii) make product recalls more effective and efficient to keep unsafe products away from consumers; (iv) enhance market surveillance and ensure better alignment of rules for harmonised and non-harmonised consumer products; and finally (v) address safety issues related to food-imitating products.
A number of options were assessed. First, the Commission considered how it could respond to the specific objectives without revising the GPSD (Option 1). Several non-legislative measures have been considered, in particular: (i) issuing guidance documents on the applicability of the GPSD to new technologies and on recalls and; (ii) exploring expansion of the voluntary measures under the Product Safety Pledge for online sales. However, the different consultations showed that such non-legally binding measures would not tackle the identified shortcomings.
The Commission considered several legislative options to tackle the specific objectives: a targeted legislative revision of the GPSD (Option 2) focusing on a limited number of changes and a full revision of the GPSD proposing a comprehensive action on all objectives (Option 3). The impact assessment shows that Option 3, which is more ambitious than Option 2, also better addresses the identified shortcomings and better meets the specific objectives to be addressed, while keeping the economic impacts still limited. Option 4 considered a full integration of market surveillance instruments, as proposed in the 2013 product safety and market surveillance package, to analyse whether this option would still be valid after the recent adoption of Regulation (EU) 2019/1020. The impact assessment showed that Option 4, although similar on substance to Option 3, might generate higher costs for EU businesses. Therefore, the Commission chose Option 3 (full revision of the GPSD including change to a regulation) as the best policy choice for the current proposal since it addresses best the policy objectives while limiting the costs for businesses and market surveillance authorities.
Different options have also been considered regarding the safety of food-imitating products. These were: (i) to maintain a separate regime for these products under a separate directive (revising Directive 87/357/EEC); (ii) to integrate the specific provisions of the current Directive 87/357/EEC into the new GPSD with a specific legal regime; (iii) to abandon targeted provisions on food-imitating products and use the general provisions to ensure safety of such products based on the case-by-case risk assessment instead. For the first two options, the Commission also considered developing guidance to overcome the issue of different interpretation by Member States; however, consulting the Member States showed that the divergences in interpretation of the Food-Imitating Products Directive were so great that a legal revision of the rules was necessary to ensure its even application. The Commission chose as the best policy option discontinuing the specific regime for food-imitating products and assessing their safety according to the same risk assessment principles as for the other non-harmonised consumer products (the food-imitating aspect will be taken into account in the risk assessment of the given product).
The preferred option, which includes: a) clarification on how this legislation would apply to risks posed by new technologies and online selling, b) provisions enhancing the effectiveness of product recalls, c) alignment with harmonised market surveillance rules and ensuring better responsibilities related to products safety of economic operators and online marketplaces, d) simplification of standardisation procedures and e) integration of the provisions of the Food Imitating Products Directive, is expected to have the following impacts:
On economic impacts, the preferred option is expected to lead to major benefits for consumers and society. The estimated consumer detriment should decrease by approximately EUR 1.0 billion in the first year of implementation of the preferred option and by approximately EUR 5.5 billion over the next decade. This option should also reduce consumer detriment related to ineffective recalls by more than EUR 400 million per year. Moreover, by reducing the number of unsafe products, the proposed measures should also reduce the current detriment suffered by EU consumers and society due to preventable product-related accidents (estimated today at EUR 11.5 billion per year) and the current cost of healthcare for product-related injuries (current estimate EUR 6.7 billion per year). The precise impact could not been quantified due to lack of injury data to estimate trends. Estimated cost savings caused by reducing the differences in national implementation and legal fragmentation are estimated at EUR 59 million annually for businesses and EUR 0.7 million per year for market surveillance authorities.
Total costs for businesses in the EU (active in manufacturing, wholesale and retail of non-harmonised products) are estimated at EUR 196.6 million, equivalent to 0.02% of their turnover in the first year of implementation. In the following years, the recurrent costs would amount to EUR 177.8 million for EU businesses. These costs are linked to the increased obligations for businesses mainly for online sales, sales of new technology products and recalls of unsafe products, and to the alignment of market surveillance rules with those for harmonised products. Market surveillance authorities in Member States would face total additional recurrent costs under this proposal of approximatively EUR 6.7 million annually due to their increased powers in the market surveillance of unsafe products, and only relatively moderate one-off adaptation and implementation costs.
• Regulatory fitness and simplification
This proposal envisages revising two existing legislative instruments: the General Product Safety Directive and the Food-Imitating Product Directive. To simplify the legislation, the Commission proposes to repeal the Food-Imitating Product Directive and assess the safety of food-imitating products under the current proposal for a new general product safety regulation.
The Commission also identified several areas where the administrative burden and related costs could be reduced.
First, this proposal would reduce regulatory costs and burdens for businesses, since the legally binding clarifications and the choice of a regulation as instrument will reduce regulatory uncertainty and ensure more even implementation of the product safety legislation compared to today under the GPSD. Also, aligning the general market surveillance and safety requirements for harmonised and non-harmonised products will reduce implementation differences and improve the traceability of the supply chain. Cost reductions will occur for all businesses, and in particular for the 42% of businesses who reported additional costs related to the uneven implementation of the GPSD. Cost savings for businesses through more harmonised implementation are estimated at around EUR 59 million annually (EUR 34 million saved by EU SMEs and EUR 26 million saved by EU large businesses respectively).
Second, this proposal will bring efficiency gains in market surveillance and enforcement to Member States. This is due to aligning market surveillance provisions between harmonised and non-harmonised products, more aligned enforcement powers, increased deterrent effect and a new arbitration mechanism. Therefore, this proposal brings cost reductions for all market surveillance authorities in Member States, and in particular for the 16% of them who reported related additional costs due to the different legal frameworks between harmonised and non-harmonised products. These cost savings for Member States are estimated at EUR 0.7 million per year across the EU.
Finally, the proposed simplification of the standardisation process will reduce the administrative burden for Member States and the Commission. Such streamlining of the standardisation EU process will accelerate standardisation work and thus increase legal certainty and help companies to comply with the general product safety requirement.
This proposal does not exempt micro-enterprises and SMEs from any of the obligations. EU product safety legislation does not allow for ‘lighter’ regimes for SMEs since any consumer product must be safe whatever the characteristics of its supply chain in order to meet the general objective of product safety and consumer protection. The Commission estimates the total compliance costs of this proposal for EU SMEs at EUR 111.1 million (one-off and recurrent costs) in the first year of implementation. In the subsequent years, the recurrent costs would amount to around EUR 100 million for EU SMEs. Estimated savings caused by reduced differences in national implementation and legal fragmentation would amount to EUR 34 million for EU SMEs.
This proposal will have practical implications both on the economic operators handling products covered by the GPSD and on market surveillance authorities in the Member States.
Businesses will have to comply with additional requirements regarding traceability and transparency. Additional requirements on recalls will apply for businesses that have actually brought unsafe products onto the market. Online marketplaces will also have to make sure they set up internal mechanisms to comply with their new obligations relating to product safety. In addition, companies selling in the single market from outside the EU will have to set up arrangements to ensure that the products sold in the EU have a responsible economic operator.
Member States’ market surveillance authorities might require additional resources to cope with the broadening of market surveillance responsibilities and the new competences they would be given. For example, the new tools for market surveillance online broaden the possibilities for national authorities and may require additional resources and skills. However, with these new powers being largely aligned with the existing market surveillance provisions applicable to harmonised products under Regulation (EU) 2019/1020, market surveillance authorities are often familiar with them, in particular in those Member States where the same national market surveillance authorities handle already both harmonised and non-harmonised products. The practical implications for Member States are therefore rather better synergies and better use of existing structures and resources than new additional needs. The extended coverage of risks from new technologies (e.g. cybersecurity risks that have an impact on safety) would be expected to increase the need for professional staff and external expertise in Member States to check the safety of new technology products.
The most affected business sectors would be online sales and producers in some new technology sectors. However, thanks to harmonised EU requirements this should not have a major impact on their competitiveness.
This proposal operates effectively in both the digital and physical worlds and takes into account digital developments, in particular the development of online sales and new technology products. Addressing the digital challenges for product safety is one of the main objectives of this proposal. It improves market surveillance rules for online sales and sets product safety obligations for online marketplaces and online retailers to improve the safety of products sold online. This proposal also addresses new safety risks brought by new technologies and clarifies the application of product safety rules to software. This proposal is fully consistent with the EU’s digital policies in place and in particular with the proposal for the Digital Services Act and with the legislative work on artificial intelligence and the internet of things. This initiative is supported by existing ICT solutions, namely the EU Rapid Alert System for dangerous non-food products (‘Safety Gate’) and the related Business Gateway.
• Fundamental rights
This proposal aims to strengthen the protection of European consumers’ health and safety and promote their right to information. Thanks to clearer obligations and better product safety enforcement, this proposal is expected to have a positive impact on, and ensure a higher level of, consumer protection and environmental protection, in line with Articles 37 and 38 of the Charter of Fundamental Rights of the European Union.
The proposal imposes additional requirements on businesses that are necessary to pursue the general EU interest of increasing consumer protection. The resulting compliance costs are estimated to be comparatively low compared to businesses’ turnover. As such, these requirements do not affect the fundamental freedom to conduct a business and its proportionality under Article 52 of the Charter.
4. BUDGETARY IMPLICATIONS
The proposed regulation requires the Commission to support and facilitate the cooperation of market surveillance enforcement authorities, including coordinated market surveillance activities, the new arbitration mechanism and peer reviews. Furthermore, this proposal allows for enhanced cooperation and exchange of information with EU international partners in the product safety field. Finally, this proposal provides for the adoption of implementing acts and delegated acts (related to traceability and recalls) and possible higher standardisation activity through a simplified standardisation procedure. This will trigger additional workload for the Commission, estimated at four extra full-time officials (three administrators and one assistant). These resources will be obtained through the redistribution and refocusing of the existing personnel’s tasks.
The Commission will also finance electronic interfaces, namely the Safety Gate webpage, the Safety Gate portal (which provides notifications of dangerous products) and the Safety Business Gateway collecting notifications from economic operators to market surveillance authorities.
Additional costs for these coordination activities and electronic interfaces can be covered by the single market programme under the current multiannual financial framework 2021-2027. Similar financing possibilities may also be included under the successor programmes under future multiannual financial frameworks. The details are set out in the financial statement attached to this proposal.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
The implementation of the proposal will be accompanied by monitoring based on predefined core enforcement indicators. The Commission is carrying out a study to define a common set of feasible and relevant enforcement indicators in the product safety field, to be agreed with Member States.
In addition to the regular monitoring and reporting, an evaluation of the effectiveness, efficiency, relevance, coherence and EU added value of this legislative intervention is proposed after 5 years of implementation by Member States.
The Commission will support the implementation of the proposal by coordination actions, both in the context of the Consumer Safety Network (follow-up of implementation, exchange of best practices between Member States, etc.) and the market surveillance coordinated activities (CASPs).
• Detailed explanation of the specific provisions of the proposal
The proposed regulation consists of 11 chapters comprising 47 articles.
Chapter I – General provisions
This chapter sets out the scope and the main terms used in the proposed regulation. It provides a ‘safety net’ for all products falling under its scope of application establishing requirements to ensure the safety of consumer products and therefore the safety of consumers. It provides rules on the application of this Regulation to the non-harmonised legislation. It updates the definitions used in Directive 2001/95/EC, in particular to take into account the different scope of the definition of product, and introduces a specific definition of ‘online marketplace’
Chapter II – Safety requirements
It introduces the general safety requirement, confirms the importance of standards published in the EU Official Journal as providing presumption of safety and updates aspects for assessing the safety of products to take into consideration food-imitating products in the risk evaluation, following the repeal of Directive 87/357/EEC. New aspects for assessing product safety also include the possible risks related to products based on new technologies.
Chapter III – Obligations of economic operators
This Section set outs the obligations of the economic operators except those economic operators which fall under the scope of application of Regulation (EU) 2019/1020. This is to avoid that obligations contained in this Chapter could conflict with similar obligations contained in the harmonised legislation. Apart of the more general obligations of economic operators to ensure the safety of products, it introduces the concept of substantial modification, in which case responsibility for the safety of the product shifts to the person making the modification. Furthermore, it extends the concept of person responsible contained in Article 4 of Regulation (EU) 2019/1020 to non-harmonised products. This is a necessary condition for making the products available on the market to tackle the issues of direct imports from third countries. This chapter also contains the basic provisions on traceability, mostly taken from Decision 768/2008/EC, and the possibility, in the case of products susceptible to pose a serious risk to people’s health and safety, to adopt a more stringent system of traceability, to be adopted by a delegated act.
This Section contains the obligations of economic operators which are applicable also to economic operators falling under the scope of Regulation (EU) 2019/1020. These are obligations which do not have correspondence in the harmonised sectors and therefore their applicability also to this sector would not create conflict. It concerned the obligation of economic operators in case of distance sales and in case of accidents with a product.
Chapter IV – Online marketplaces
This Chapter examines the role played by online marketplaces and lays down specific obligations applicable to them.
Chapter V– Market surveillance and implementation
This chapter takes up and adapts the entire Chapters IV, V and VI of Regulation (EU) 2019/1020 on market surveillance. The aim is to create, as far as possible, a single regime for both harmonised and non-harmonised products.
Chapter VI – Safety Gate rapid alert system
This chapter lays down the principle for exchanging information in the case of a dangerous product and changes the name of the RAPEX system to Safety Gate, while maintaining the same characteristics of the system. The proposal adds more specific deadlines. The relation between Safety Gate and the Information and Communication System on Market Surveillance (ICSMS) is made clearer; the chapter also clarifies that Member State authorities can decide to entrust the task of single liaison officer to the Safety Gate National contact point.
Chapter VII – Commission role and enforcement coordination
This chapter provides the possibility for the Commission to adopt measures, through implementing acts, in case of a serious risk which cannot be contained satisfactorily by means of measures taken by the Member State(s) concerned or by any other procedure under EU legislation. This possibility already exists in the GPSD: the proposed regulation makes its scope of application more precise. Chapter V also introduces a voluntary arbitration mechanism where Member States can submit to the Commission questions concerning the identification or the level of a risk linked to a product in case of diverging risk assessments. This will make it possible to take more uniform action at EU level against dangerous products.
Chapter VIII – Right to information and remedy
This chapter provides provisions on information for consumers. It confirms the obligation for the Commission and Member States to make available to consumers information relating to risks to health and safety posed by products. It also sets the obligation for Member States to give consumers the opportunity to submit complaints to the competent national authorities. It confirms and further enhances the scope of the Safety Gate web portal, which already exists, adding a new section where consumers can consult warnings and recalls issued directly by economic operators. On recalls, the new provisions try to improve their effectiveness, thus ensuring a more complete and widespread provision of information for consumers, as well as an enhanced system of remedies available to consumers.
Chapter IX– International cooperation
This Chapter provides the legal basis for the Commission to establish forms of cooperation to improve product safety. These include common enforcement actions, technical support, exchange of officials, and the exchange of information on dangerous products and in particular information contained in the Safety Gate. In this respect, the provision allows either fully fledged participation in Safety Gate or an exchange of selected information.
Chapter X – Financial provisions
The proposed Regulation provides for the financing by the Commission of activities in all matters falling under its scope of application.
The proposed Regulation includes general clauses on protecting the financial interests of the EU.
This chapter provides in particular for a system of penalties: while recognising that establishing penalties is a national competence, it sets out guiding principle for penalties, in particular criteria for setting penalties, the types of infringements to be penalised, criteria on maximum ceilings, as well as the possibility to impose periodic penalty payments.