The European Commission has adopted three new guidance documents, which will be relevant to product stakeholders. Two relate to the so-called Goods Package (see our Productwise Bitesize articles here and here), which establishes new rules on mutual recognition, market surveillance and compliance of products applicable from July this year. The third addresses the free movement of goods in the EU.

Our summary of the key points in this guidance is as follows.

  1. Mutual recognition guidance. The Guidance of the implementation of Regulation (EU) 2019/515(here) covers a range of topics including the scope of the new regulation and how mutual recognition will work under the regulation. In the EU, mutual recognition is the principle under which goods that are legally sold in one EEA country can be marketed and sold in any other. For the exporter, this means that a product legally on sale in one country should not have to meet a second set of requirements in the country to which they are exporting. Mutual recognition also applies to administrative decisions made by Member State authorities in relation to marketing goods (including where the direct or indirect effect of these decisions is to restrict or deny market access). Amongst other things, you will find useful guidance here on:
    • what constitutes an “administrative decision”;
    • what rights entities have to lawfully market products in another Member State;
    • the content and structure of a “Mutual Recognition” declaration, who can draw it up, as well as how and when it can be used; and
    • the SOLVIT system (a problem solving service that EU citizens or businesses if they are in dispute with a public authority in a Member State) and Product Contact Points (who can provide free of charge information on request, for example information on the principle of mutual recognition and the application of Regulation 2019/515).
  1. Compliance and enforcement guidance. The Guidance on the market surveillance of goods clarifying Article 4 of Regulation (EU) 2019/1020 on compliance and enforcement (here) will be of relevant to stakeholders whose goods are sold on online marketplaces. Products in scope of the new requirements under Article 4 of Regulation 2019/1020 must have an economic operator established in the EU, responsible for certain compliance tasks, prior to being placed on the market.
    • The guidance gives more information on the scope of this requirement and which economic operators should fill this role (including a useful flowchart which shows the analysis), the tasks they must fulfil and the practical application of Article 4.
    • There is additional detail on how the traceability and labelling requirements can be met.
    • You’ll find specific guidance on the sale of products online into the EU – note that the Regulation specifically addresses distance sales, so international stakeholders should consider whether new requirements apply to your products.
    • It also sets out how authorities “can make use of the requirement in practice”, which gives a good indication of what you can expect in terms of enforcement when this requirement comes into force in July of this year and the potential effects of non-compliance.
  2. Free movement guidance. The new Guidance on the application of treaty provisions regarding the free movement of goods (here) has been developed in the context of the long-term action plan for better implementation and enforcement of single market rules, which puts “the single market and its enforcement at its core”. The guidance was last updated in 2009 and incorporates the most relevant CJEU guidance on the application of Article 34-36 TFEU. It also reflects changes necessitated by the new Mutual Recognition regulation referred to above.  

Why does this guidance matter?

The background to the compliance and enforcement guidance is especially interesting, given its focus on increasing enforcement amid concerns about sales of non-compliant products online. The new requirements were designed to tackle in particular products sold directly from foreign sellers to EU consumers. Accordingly, Article 4 of Regulation 2019/1020 creates a requirement for many products to have an economic operator established in the EU who is responsible for the compliance of products sold in the EU. The responsible economic operator will have obligations including verifying that compliance documentation have been drawn up and labelling products with their contact details. Where products are sold via a fulfilment service provider, this provider will have responsibility for the products by default if there is no other responsible economic operator (manufacturer, importer, authorised representative) established in the EU. This represents a big change for many online marketplace models and there have been questions raised as to how these requirements will work in practice. The guidance is designed to address these concerns and bring greater clarity, which will be critical in order for businesses to understand how to comply with these new requirements in time for July.  

The free movement guidance provides useful clarifications about the EU’s prohibitions on unjustified restrictions on intra-EU trade. For example, it addresses when Member State laws requiring the translation of product packaging and documentation may be disproportionate and result in additional burdens for economic operators. In addition, the guidance on mutual recognition provides important additional information on the new Mutual Recognition Regulation, which was introduced in an attempt to improve the operation of this regime. Taken together, this guidance seeks to lower unjustifiable barriers to trade between different EU countries and should be of benefit to all stakeholders intending to sell their goods across the EU.

You can read more about the new guidance here: https://ec.europa.eu/growth/content/single-market-commission-adopts-new-guidance-documents-facilitate-free-movement-goods_en

Posted by Carol Holley, Edward Turtle, Edward Turtle and Edward Turtle

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