Annexes to COM(2017)787 - Goods Package: Reinforcing trust in the single market

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dossier COM(2017)787 - Goods Package: Reinforcing trust in the single market.
document COM(2017)787 EN
date December 19, 2017
Agreements' with their local authorities will allow businesses to get advice on compliance issues.

• Businesses and authorities can conclude 'memoranda of understanding' about joint proj ects to identify incompliant prod ucts .

• As prevention and enforcement go hand in hand, businesses in the EU and around the globe can seek regulatory advice from national Product Contact Points

For a safe and functioning single market, businesses and consumers must be aware of the rules and have information they need to react and adapt. Mark et surveillance authorities will have to publish their findings, especially when they restrict the marketing of certain products.

b) Enforcement at external borders

Consumers should expect the same level of protection for goods manufactured inside or outside the EU. In a globalised world, it remains a challenge to ensure that imported products also meet EU requirements and do not compete unfairly by breaking EU rules. In principle, imported products should be checked on entry into the single market. Yet the sheer volume of imports makes it impossible to check all consignments. Over 30 % of all goods on the EU markets were

imports in 2015. They had an estimated value of almost EUR 750 billion20.

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 and shall keep the required relevant technical documentation including the EU declaration of conformity, when applicable, of the product and shared it with the market surveillance authorities upon request.

In the context of intellectual property rights infringements, Memoranda of Understanding are used between industry partners, see the Commission Communication of Communication on a balanced IP enforcement system responding to today's societal challenges (SWD(2017) 430 final), p. 8-9.

https://ec.europa.eu/growth/single-market/goods/free-movement-sectors/mutual-recognition/contacts-list_fr. SWD(2017)466 — Commission services staff working document, Impact Assessment accompanying the document Proposal for a Regulation of the European Parliament and of the Council laying down rules and procedures for compliance with and enforcement of Union harmonisation legislation on products and amending Regulations (EU) No 305/2011, (EU) 2016/424, (EU) 2016/425, (EU) 2016/426 and (EU) 2017/1369 of the European Parliament and of the Council, and Directives 2009/48/EC, 2010/35/EU, 2013/29/EU, 2013/53/EU, 2014/28/EU, 2014/29/EU, 2014/30/EU, 2014/31/EU, 2014/32/EU, 2014/33/EU, 2014/34/EU, 2014/35/EU, 2014/53/EU, 2014/68/EU and 2014/90/EU of the European Parliament and of the Council.

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Trade in harmonised products: sold production and trade with non-EU countries (2008-2015, EU-28), € billions


2.810                           2536         2.777         2.747          2.770         2.752

2.750                       2.201

1.750

750 (250)

73         2.201

5       §609      I746      I807       I817       I765       I81

Il II II II II II

2008             2009             2010             2011              2012             2013             2014

(1.250)                (824)            (692) (849)                                 (.040) (1085) (1062)

■ Production            ■ Imports (Extra EU)            ■ 1 xports (Extra EU)

Source: Prodcom — statistics by product, EUROSTAT (2016)

The rules on the enforcement at the external borders need to be adapted to the new realities of the 21 century, including the increasing number of online sales, and the new Union Customs Code.

The new proposal adapts the current legal setting to the new customs rules. It provides for more clarity for controls on products entering the EU, and for coordination of and cooperation between customs and market surveillance authorities.

It also simplifies the paperwork for importers. Trusted businesses will benefit from lighter controls and, as a result, authorities will be able to concentrate their efforts where the risk to product safety is greatest.

Also, when enforcement authorities have doubts about the legality of a product, they will suspend release for free circulation in the EU until they receive appropriate evidence that the product is fit to be sold in the EU.

c) Accreditation and CE-marking

While the current market surveillance rules are in need of improvement, the EU rules for accreditation and the CE marking have shown to work reasonably well. This communication is accompanied by a report that highlights the importance of a well-run and reliable accreditation and conformity assessment system that underpins EU policy and reinforces trust in product safety.

3. United in diversity in the single market for goods: Mutual recognition

Where there are no common EU product rules, for example in the area of childcare articles or cash registers, the principle of mutual recognition should ensure that a product that is lawfully marketed in one Member State can also be sold in any other Member State — as long as it is safe and respects the public interest.21 However, too often businesses today cannot rely on mutual recognition to access markets across the EU. Especially small and medium-sized enterprises report serious difficulties when attempting to rely on mutual recognition to sell

These interests include for instance: public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property.

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their products in another Member State. Member States introduce additional requirements and duplication of testing, thus unnecessarily increasing red tape and costs. This deprives economic operators from the efficiencies of scale of the single market, increases the prices for consumers and decreases trade to the detriment of all.22

National authorities often lack trust in the judgment of authorities from other Member States, which results in additional requirements and duplication of testing, thus unnecessarily increasing red tape and costs. In addition, challenges via court decisions which deny or restrict market access are lengthy and costly for operators. Consequently, businesses are facing unwarranted costs because they must adapt their products to the requirements of several national markets and they encounter market entry delays and lost opportunities. This hits small and medium-sized

enterprises in particular.23

This must change. The current system can and needs to be improved. The Commission therefore proposes to boost and clarify the existing opportunities and to facilitate market access.

A targeted and cooperative approach will also be followed with regard to the implementation of the Single Market Transparency Directive (EU) No 2015/1535. This Directive is an important tool for the prevention of barriers for products which are not or only partially harmonised. Member States are obliged to notify any draft legislation concerning these products so that barriers can be prevented ex-ante. In line with the results of the report on the implementation of the Directive, also published today, the Commission and the Member States need to solve difficulties at an earlier stage, focus on the most widespread concerns and the most economically significant areas in Member States.

a) Making it work

The principle of mutual recognition for goods is derived from the Treaty on the Functioning of the European Union (TFEU)24. It has been repeatedly upheld and strengthened by the Court of Justice of the European Union. However, the current framework has not proven sufficient to ensure consistent and effective application. Therefore, it is proposed to replace the Mutual Recognition Regulation25 with a new Regulation that clarifies and simplifies the procedures to be followed by businesses and public administrations.

Market access based on mutual recognition should only be denied if there is a legitimate and proportionate public interest at stake. Today, if the denial is illegitimate or disproportionate, the only way to challenge the decision is via national courts. Such processes are long and costly, and do not meet the specific needs of mutual recognition. Challenging a decision denying market access can cost between EUR 10 000 and EUR 100 000 per product and per market. Businesses state that this is the biggest obstacle to the smooth functioning of the mutual recognition system. In many cases, rather than facing uncertain outcomes, businesses

See also: "The Cost of Non- Europe in the Single Market, 'Cecchini Revisited', An overview of the potential economic        gains        from        further        completion        of        the        European        Single        Market,"

http://www.europarl.europa.eu/RegData/etudes/STUD/2014/510981 /EPRS STU(2014)510981 REVl_EN.pdf. Idem.

Articles 34 and 36 of the Treaty.

Regulation (EC) No 764/2008 of the European Parliament and of the Council of 9 July 2008 laying down procedures relating to the application of certain national technical rules to products lawfully marketed in another Member State and repealing Decision No 3052/95/EC, OJ L 218, 13.8.2008, p. 21.

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end up adapting their products at extra cost — with a corresponding cost to consumers and loss to the efficiency of the European economy.

The new mutual recognition proposal introduces a problem solving procedure to provide effective remedies and re-establish trust in mutual recognition. First, amicable and hands-on solutions will be sought by making use of the existing SOLVIT mechanisms. If dialogue fails, the Commission may intervene on the matter by issuing an Opinion, and where appropriate, making recommendations to assist the parties in solving the case. In this way, businesses and exporting Member States, instead of waiting for years to have their products and laws recognised by other Member States, will know what to expect in a matter of weeks or months. In addition, the Commission will be able to strategically implement its enforcement powers under Article 258 TFEU where systemic problems in specific sectors are identified.

At present, businesses need to prove that their product is already on sale elsewhere in the EU if they want to obtain mutual recognition. The range of evidence required by the authorities varies from a simple invoice to a Member State’s declaration that the product has been lawfully marketed. To help businesses demonstrate that their product already meets the requirements of another Member State, to reassure the authorities and facilitate cross-border cooperation we propose a new simple voluntary ‘mutual recognition declaration’ to be completed by economic operators, which will reduce administrative burden.

Those involved in mutual recognition do not communicate sufficiently well with each other. This is often because powers and responsibilities for specific regulations are scattered, which complicates navigation around these — often very technical — matters. Therefore, we aim to reinforce product contact points as the communication channel for mutual recognition26. To make these contact points easily distinguishable, a common visual identity could be developed. Cross-border cooperation between contact points will be enhanced. An online platform will allow the authorities to connect with each other.

b) More cooperation and deeper trust

Cooperation and trust are needed for mutual recognition to work well. They will help to build mutual understanding of the different national approaches and concerns. This will be fostered by exchanges of officials working in particularly problematic sectors such as construction products. Equally important, the Commission will work more closely with specific countries and sectors to make mutual recognition work.

The Commission will further assess the possible benefits for businesses and public authorities of further developing the existing product list for mutual recognition27.

To increase national authorities’ reliance on and trust of the mutual recognition, the Commission will also try to raise awareness of national authorities on how mutual recognition works via dedicated training efforts. This will be aimed mainly at national administrations (e.g. at product contact points, departments responsible for problematic product areas, national courts, market surveillance authorities and SOLVIT staff) and businesses. A targeted ‘train the trainer’ package on mutual recognition for authorities and businesses and a ‘mutual

‘Product contact points’ are the interface between business and national administrations and the place to find information on all applicable national rules. http://ec.europa.eu/growth/single-market/goods/free-movement-sectors/mutual-recognition/products-list_en.

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recognition rule book’ will give comprehensive guidance on how to apply mutual recognition.

Finally, Member States should continue to explicitly provide for mutual recognition in their national technical rules, but they should do so in a comprehensible manner. The Commission therefore encourages Member States to insert a clear and unambiguous ‘single market clause’28 in national technical regulations, and will develop specific guidance for its use:

‘Goods lawfully marketed in another Member State of the European Union or in Turkey, or originating and lawfully marketed in an EFTA State that is a contracting party to the EEA agreement are presumed to be compatible with this measure. The application of this measure is subject to Regulation [reference].’

4. Conclusion

The single market for products is one of the EU’s best assets. It gives the EU a competitive advantage in meeting the challenges of globalised trade flows and value chains. To meet these challenges, we need to ensure that the Single market delivers successfully by offering market opportunities for businesses and a high level of protection for everyone. All those involved — the general public, workers, consumers, businesses and authorities — need to be assured that they can act and acquire safe products in a transparent and fair environment where the rules apply in an equal manner to all. They need to be able to trust that products are safe and comply with the law.

This Package is about making sure that we establish such a transparent and fair single market of safe products for everyone. Authorities and businesses will gain trust in mutual recognition as a principle that protects the public interest for all and opens up the Single Market. Improved compliance and enforcement will reinforce consumers' trust in the safety of products placed in the Single Market. This is even more important in an ever faster changing and more integrated world.

Alongside the legislative proposals of this Package, we will work closely with competent authorities and stakeholders, taking the necessary steps to build this trust. This will ensure that as of today already, real impact and benefits for all can make a difference in the Single market for goods of tomorrow.

This does not apply to products originating from EFTA States and Turkey that have been excluded from the EEA agreement or from the customs union with Turkey (e.g. fish and fish products).

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Appendix:     Proposed timeline for ‘soft law’ measures

2018:

2019:

Single market clause

Ongoing: Optimising the convergence of market surveillance IT

tools (such as RAPEX and ICSMS) in compliance with the

applicable legal basis.

Application of market surveillance indicators

Prepare awareness-raising campaign on mutual recognition

Elaborate train-the-trainer programme for mutual recognition

Cooperative approach to specific sectors under the Single Market

Transparency Directive

• Mutual recognition rulebook

• Exchange of officials

• Examine further development of existing product list for mutual recognition