Amid the horsemeat scandal that recently rocked several EU member states resulting in meat products being taken off the shelves, causing multi-million losses to businesses, the European Commission announced a comprehensive package to improve consumer protection. These measures have been in the pipeline for the past three years as active discussions among stakeholders were taking place.
This regulation is not limited to consumer products
The main elements of this new legislative package are the proposal for a new regulation on consumer product safety and the proposal for a regulation on market surveillance of products.
Although this package is fire new, EU legislation on general product safety has been in place for the past decade and since the adoption of the current Consumer Product Safety Directive in 2001, consumer protection has been significantly increased.
The proposed regulation builds on current legislation and includes most of the key product safety measures already contained in the Directive. Yet the proposed legislation will be broader in scope and stipulates more onerous obligations. More importantly, it will be directly applicable and enforceable in every EU member state. Consequently, the proposed regulation has some important practical implications for those who manufacture, distribute or sell products.
One of the key issues on which the proposed regulation focuses is the concept of enhanced identification and traceability of potentially dangerous products. Towards this end, the proposed regulation introduces new, informative labelling requirements for all products. Manufacturers and importers are required to provide appropriate information on the product allowing its identification and traceability, including their contact details, information on the product’s origin together with a type, batch or serial number of the product. Distributors like wholesalers and retailers are bound to check that the manufacturer or importer has duly labelled the product before selling it to their customers or offering it for sale in their shops.
These requirements improve traceability of consumer products through the supply chain, enabling a swift response in the event of safety concerns or in case the removal of dangerous products from the market is necessary.
Under the new regulation, manufacturers, importers and distributors, including retailers, have the added obligation to notify the authorities about product risks. These obligations are placed on all parties in the supply chain that are collectively responsible towards consumers for the safety of the products they handle.
Furthermore, manufacturers are required to prepare and retain a technical file for their products that are destined for EU markets. This includes a new obligation to have a documented risk assessment on the file, and retain documentation detailing the identity of parties throughout the supply chain.
A new express provision then stipulates that breaches are penalised and the gravity of the penalties depends on the size of the business being prosecuted. It is clear that zero tolerance will be applied in the event of formal breaches of labelling and documentation obligations.
The new legislative framework includes a proposed regulation on product market surveillance. It targets products presenting risks to public interests such as human health and safety or the environment. Importantly, this regulation is not limited to consumer products and applies to any product that presents potential risks, irrespective of the intended user of that product.
This new piece of legislation sets out the powers and responsibilities of enforcement 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.
The proposed regulation provides for increased, new powers and obligations on national enforcement authorities in relation to active surveillance of marketed products.
National authorities are bound to proactively investigate the safety of products and share information on product risks with other similar authorities with which they are required to cooperate.
Enforcement authorities have the teeth either to require manufacturers, importers and distributors to undertake recalls, or to carry out recalls themselves at the expense of the business.
Manufacturers will need to start planning to deal with these added obligations since it is anticipated that the new proposals will be finalised and adopted in early 2014 and enforceable a year later.
jgrech@demarcoassociates.com
Josette Grech is an associate with Guido de Marco & Associates and heads its European law division.