Enforcement! What the (new) Market Surveillance Regulation brings to product safety and compliance

Read on for a summary of key items in relation to the new Market Surveillance Regulation: we expect change is on the horizon.

The new Market Surveillance Regulation

Market Surveillance Regulation 2019/1020 applies to any products (sold online and/or in stores) which are subject to at least one of the 70 EU product Regulations and Directives listed under Annex I, unless that legislation contains more specific, equivalent provisions regulating market surveillance and enforcement. The list of “Annex I products” includes medical devices and in vitro diagnostic medical devices, cosmetics, hazardous substances, electronic and electrical equipment, construction products, toys, and machinery. You can read about the full scope of the new regulation here.

The goal of the new Market Surveillance Regulation can be broadly described as to further enhance and broaden existing market surveillance powers and activities, to reinforce trust in the EU single market, to further protect citizens in relation to the safety and compliance of products, and to improve coordination and collaboration between regulators. The recitals of the new regulation are certainly worth a read in the eyes of the authors of this article: they are comprehensive in explaining that “there’s a new sheriff in town” when it comes to the enforcement of product laws in the EU.

In a nutshell, the new regulation aims to:

• improve compliance by business operators up front.
• strengthen market surveillance cooperation and effectiveness.
• clearly define obligations for economic operators, Member States, and market surveillance authorities.
• modernise the framework to cover new supply chains and address online sales.

When does the new Market Surveillance Regulation come into force?

Broadly speaking, the key date for product companies to have on their radar is 16 July 2021.

Companies should be prepared to feel the impact of the new regulation, in particular in relation to their interactions with regulators, who have increased surveillance and control powers, as well as the increased potential to be coordinated and to have access to resources.

How might the new Market Surveillance Regulation have the most impact?

It is too soon to tell which aspects of the new Market Surveillance Regulation will “make their presence known” first. Our Global Products Law team has summarised below some of our expectations:

• The significant expansion in market surveillance powers will likely lead to greater market surveillance activity in the future, which is likely to have a significant impact when it comes to e.g. product compliance audits, test purchases, and other proactive enquiries from market surveillance authorities.
• Although the focus of market surveillance should be on safety, the new wide-ranging powers to investigate and enforce may result in greater administrative and compliance costs on companies, especially from the investigatory powers to request information, make unannounced visits, conduct system audits, and, in some cases, reverse engineer products and embedded software.
• We anticipate that all products companies will benefit from ensuring that all compliance and product information is easily available, up-to-date, accessible in all the EU languages where their products are sold, and the marking and labelling and packaging is compliant.
• The impact of the new database for national market surveillance authorities to share compliance data with each other, allowing authorities across member states to work in unison, could well lead to an increasingly coordinated and joined-up approach between member states. This means, for example, that a carefully mapped out strategy in relation to potential safety issues and non-compliances will become even more important in future where products have been sold in multiple jurisdictions.
• There is a particular focus on products sold online and ensuring that they are compliant with product laws in the EU. This will require some considerable changes to the current expectations of some companies who supply products to the EU via online sales channels.
• Economic operators” in the supply chain are subject to compliance obligations contained in the new regulation. The definition of this is broad, namely: “the manufacturer, the authorised representative, the importer, the distributor, the fulfilment service provider or any other natural or legal person who is subject to obligations in relation to the manufacture of products, making them available on the market or putting them into service in accordance with the relevant Union harmonisation legislation”. This broad definition will have a significant impact in terms of the diligence to be applied in future when it comes to ensuring compliance with EU product laws.
• While the new regulation was adopted before the end of the Brexit transition period, most of the relevant provisions do not come into force until 16 July 2021. How the regulation might impact on the United Kingdom remains an open question. However, we anticipate that the UK market surveillance authorities will continue to show a proactive, coordinated, well-resourced approach and will be keen to keep pace (or move ahead of) other market surveillance regulators in the European Union and around the world.

Final word

Our team works across all EU member states and the United Kingdom to help global products companies to navigate product laws, safety, and compliance. We have close links with regulators and will keep you updated as trends develop.

Authored by Christelle Coslin, Valerie Kenyon, Lucy Ward, Magdalena Bakowska, Karen Jelsma, and Eshana Subherwal.