Why this is important to Wisconsin businesses: Companies exporting goods to EU markets must designate an economic operator to serve as a clear point of contact for questions or problems with the product.
The common market is the foundation of the European Union (EU), and because of this EU authorities continuously try to improve its functioning. This year a new goods package was adopted—good good news for U.S. exporters, as it better ensures that an imported product that has been approved for distribution in one EU state can also be distributed to all other member states.
Due to the increased complexity of supply chains and ambiguous product origins in some online shops, it is sometimes hard to establish who can be held responsible when it is determined that a product endangers the well-being of the consumer. This current state may give a competitive advantage to manufacturers that skip EU market procedures and access the market directly. This is why the EU bodies are now introducing more specific rules about the enforcement of product legislation, the ultimate goal being a further opening of the EU market, which will also benefit Wisconsin businesses wishing to export to the EU.
The new regulation does not apply to all products, but targets non-foodstuffs that may pose potential risks to consumers, such as construction products, machinery, toys, radio equipment, pressure equipment, and electrical and electronic equipment. Under this regulation, new EU market surveillance bodies in every member state will be responsible for ensuring that products comply with EU harmonization requirements.
The most important change for U.S. companies is the expansion of the definition of who can be an economic operator and what their role is. The main function of this economic operator is to represent the products and be held accountable in case any issues arise. While this would currently be an importer or an authorized representative, the new regulation will also allow for a fulfillment service provider to take this role. The goal of this change is to make online shops that are not based in the EU more accountable for the quality of their products.
A second major change is that the designated economic operator for a U.S. company must be established in the EU (excluding the UK because of Brexit). The idea behind this is to make it possible for the new surveillance authorities to have a specific physical or legal contact person within the EU who can provide them with documentation and certificates, ascertain the ownership of product websites and cooperate if a product has to be adjusted to market specifications or withdrawn completely from the market.
Additionally, the EU economic operator and its address must be printed on the product, its package or the accompanying documentation, so this information can easily be found in case the monitoring authority wishes to make contact. Since it is not specified who should put this information on the product, it is up to the U.S. manufacturer and its EU economic operator to agree on who will do it. Free customs entry to the EU does not automatically mean free market distribution, as additional processing for adjustments of a product or its packaging could still take place after the product enters within EU borders.
U.S. companies and their EU partners can find information on market requirements on the Your Europe portal. If U.S. companies have already been working with EU-based importers and/or representatives, there is no change for them, and the only thing that may need adjustment is the inclusion of their EU economic operator on the packaging. However, if current importers/representatives are based outside of the EU, including the UK, a new economic operator within EU borders has to be designated, so that there is a physical or a legal entity within the EU that monitoring authorities can contact directly. This applies to business-to-consumer companies, such as online shops, too. The regulation enters into force on July 16, 2021.
With the new regulation, controls governing economic operators are stricter and more defined. These operators become more accountable for the products they represent in EU markets. U.S. companies that are currently not working with an economic operator, including online retailers, must appoint such a person within the EU. Packaging must be adjusted, too, and in addition to the existing requirement for CE marking signaling compliance with EU market standards, should contain the economic operator’s name and contact details.
View the full EU regulation number 2019/1020 on market surveillance and compliance of products: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32019R1020