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Enforcement and compliance - Single Market for goods

Overall State of Play:

Evaluation: finalised, SWD(2017)469 and 470, 19 December 2017
Commission proposal: adopted by the Commission on 19 December 2017, COM(2017)795
Legal act: adopted on the 20 June 2019 as Regulation (EU) 2019/1020 on market surveillance and compliance of products

State of play, main conclusions, outlook

The purpose of Union legislation on non-food products is to protect European citizens from risks regarding health and safety and the environment and to improve the competitiveness of businesses by eliminating technical barriers within the internal market. However, not all businesses operating in the internal market for products apply all of these rules correctly.

The findings of the evaluation of the existing market surveillance rules indicate that the current system of controls is not sufficiently effective to prevent non-compliant products from entering the EU market. A number of problematic issues have been identified. For instance, the competences for market surveillance are very fragmented in the Single Market; the level of resources allocated to controls is clearly suboptimal with respect to its size; authorities' toolbox does not seem to have kept pace with market developments (e.g. e-commerce). Many economic operators disregard the rules either through lack of knowledge or intentionally to gain a competitive advantage. As a result unsafe and non-compliant products still find their way onto the market, thereby distorting competition. Health and safety risks persist and non-compliant products still pollute the environment.

The Commission's proposal addressed the identified shortcomings by consolidating the existing framework for market surveillance activities; encouraging joint actions by market surveillance authorities from several Member States; improving the exchange of information and promoting the coordination of market surveillance programmes; creating a strengthened framework for controls on products entering the Union market and for improved cooperation between market surveillance authorities and customs authorities. The adopted Regulation includes all these elements.

Estimated savings and benefits

The total efficiency gains or savings linked to greater reliance on other authorities' test reports are difficult to project, given the gaps and variability of information on cost as well as on restrictive measures that could be concerned. However, there is a high savings potential considering that hundreds of non-compliant cases are currently recorded per year.

Furthermore, the streamlining of procedures and tools to exchange information on non-compliant products, market surveillance programmes and reports on activities carried out will reduce administrative burden to Member States.

State of Play:

Finalised, SWD(2017)469 and 470, 19 December 2017

Scope:

Evaluation of the market surveillance rules of Regulation (EC) No 765/2008

Evaluation findings:

The market surveillance provisions of Regulation (EC) No 765/2008 were adopted to address the lack of coherence in the implementation and enforcement of Union technical legislation ensuring the free movement of non-food products within the EU. The purpose of these provisions is to ensure that these products are subject to adequate controls by public authorities and can be withdrawn from the market promptly in case risks are identified.

The evaluation concluded that the Regulation has been only partly effective in terms of protecting public interests and the level playing field for EU businesses. Coordination and cooperation have not reached a level that can be considered satisfactory. For instance, the tools (i.e. RAPEX, ICSMS) in place to ensure cross-border market surveillance cooperation are not sufficiently used by market surveillance authorities; also, these authorities rarely restrict the marketing of a product following the exchange of information on measures taken by other market surveillance authorities and find it difficult to contact the economic operator even if it is based in another EU Member State.

The Regulation appears overall still relevant when considering its general and specific objectives (protecting public interests and the level playing field for EU businesses, improving the cooperation and exchange of information among market surveillance authorities and strengthening border controls) but there are shortcomings regarding i.e. increasing online trade, budgetary constraints at national level and in cases where fast reaction is required.

Estimated savings and benefits

Most of the costs of the market surveillance provisions are borne by Member States and their market surveillance authorities, whereas costs for business only relate to information obligations and are regarded by them as limited. Costs incurred by Market surveillance authorities vary considerably from one Member State to another. An accurate analysis of those costs and potential savings was not possible due to limited data availability both in terms of completeness and comparability.

The evaluation identified the following main areas where regulatory burdens could be minimised for public authorities:

• The scope of the market surveillance provisions could become clearer and a few discrepancies in the definitions provided in the different sector specific legislations could be addressed when these are reviewed;

• The different procedures available for the exchange of information on non-compliant products could be streamlined in the context of ongoing improvements to the IT tools in order to avoid duplication of work and reduce administrative burden;

• More clarity of common requirements could reduce inconsistencies in the approach followed by Member States authorities while carrying out market surveillance;

• The 'market surveillance programmes' and reports on activities carried out could also benefit from simplification and more strategic use;

• Exchange of information and coordination among the authorities involved in the control of imports could be improved.

State of Play:

Adopted on 19 December 2017, COM(2017)795

Which objective(s) does the Commission pursue?

The proposal aimed at improving the efficiency of the current market surveillance system via:

1. Reinforcing market surveillance cooperation procedures, reducing fragmentation and inefficiencies;

2. Increasing operational enforcement capacity, improving efficiency of market surveillance action, targeting of controls, and availability of resources;

3. Strengthening the enforcement toolbox, allowing market surveillance authorities to use more deterrent, effective and future proof tools;

4. Promoting compliance with EU legislation on non-food products, improving accessibility of compliance information

For instance the common IT-tool (ICSMS) would be used for simpler and quicker notification of competent authorities and exchange information on planned controls.

In addition the following specific areas for reduction in regulatory costs or increased efficiency have been identified for authorities:

• The proposed infrastructures to support coordination and cooperation among authorities will allow to exploit synergies between enforcement actions carried out in different Member States, therefore increasing the efficiency of controls.

• The legal principle allowing for more reliance on test reports and decision taken by other market surveillance authorities will reduce overall enforcement costs (notably testing costs).

• The proposed minimum common set of investigative and enforcement powers directed to all actors in the supply chain will imply an important simplification for market surveillance authorities.

• Effective mutual assistance requests would facilitate targeting controls at manufacturers/importers in the Member State of establishment.

The general objective of this initiative was to improve the functioning of the Single Market by increasing compliance with EU product harmonisation legislation and, conversely, reducing the number of non-compliant products on the EU market. The objectives cover market surveillance within the EU and at the external borders and encompass digital and traditional supply chains.

Estimated savings and benefits

State of Play:

Adopted on 20 June 2019 Regulation (EU) 2019/1020

Outcome of legislative procedure

The adopted Regulation retains all the main elements of the Commission Proposal. Its title was renamed to Regulation on market surveillance and compliance of products. It applies to over 70 regulations and directives (most of which listed in its Annex I) that harmonise at EU level requirements on non-food products to protect consumers, health and safety, the environment and other public interests. It replaces the market surveillance provisions of Regulation (EC) No 765/2008 as of 16 July 2021, and improves them in particular by:

- preventing non-compliance by providing information to and joint activities with businesses

- providing more effective enforcement tools to address online sales

- improved cooperation: between EU countries, between market surveillance and customs authorities, and through an EU product compliance network

State of play:

The Regulation applies from 16 July 2021. However, the provisions on the Union Product Compliance Network (EUPCN) and on the financing applies from 1 January 2021. The Network met for the first time in January 2021, and held a total of 10 meetings in 2021. It has adopted its rules of procedure and the work programme for 2021-22 (18 tasks).

The financing of market surveillance will be done through the Single Market Programme. The budget for market surveillance will be around 100 million EUR for 2021-27, with a yearly budget around 15 million EUR. The main SMP-financed actions related to market surveillance are:

1. Joint actions (product testing and horizontal actions),

2. EUPCN meetings,

3. Administrative arrangement with JRC (indicators, peer reviews, etc),

4. ADCO meetings (Administrative Co-operation groups),

5. Testing facilities (EUTF),

6. Administrative arrangement with TAXUD (IT-customs: Single Window),

7. Maintenance of IT system (ICSMS).

The following main steps have been taken in the implementation:

EU Joint Actions: financing of product testing and various horizontal activities (Joint Action calls launched on a yearly basis).

IT support: development of ICSMS (Information and Communication System for Market Surveillance), which is a platform used by Market Surveillance Authorities to share product inspection results (hosted and maintained by the EC - continuous support).

Support to digitalisation of operations: support to financing tool for e-commerce surveillance (operational from Dec 2021), study on new technologies (finalised in Dec 2021), development of 3 IT pilot projects to support national inspectors (ongoing).

Support to testing capacity development: selection and financing of laboratories to address MSA needs in terms of product testing (procedure started in 2022, involves implementing acts and calls for expression of interest - financing from 2023).

Country knowledge: administrative arrangement with JRC to develop of a list of market surveillance indicators (finalised in 2021); implementation phase to collect indicators’ values at national level for 2020 and 2021 (finalised in 2022).

Market knowledge: administrative arrangement with JRC to develop a model to measure non-compliance by sector (finalised in 2020) - launch of a study on sectoral non-compliance to collect data sources (finalised in 2022) - launch of a study to collect general market data by sector (finalised in 2022).