Documents considered by the Committee on 9 May 2018 Contents

2Market surveillance

Committee’s assessment

Legally and politically important

Committee’s decision

Not cleared from scrutiny; further information requested

Document details

Proposal for a Regulation of the European Parliament and of the Council laying down rules and procedures for compliance with and enforcement of Union harmonisation legislation on products and amending Regulations (EU) No 305/2011, (EU) No 528/2012, (EU) 2016/424, (EU) 2016/425, (EU) 2016/426 and (EU) 2017/1369 of the European Parliament and of the Council, and Directives 2004/42/EC, 2009/48/EC, 2010/35/EU, 2013/29/EU, 2013/53/EU, 2014/28/EU, 2014/29/EU, 2014/30/EU, 2014/31/EU, 2014/32/EU, 2014/33/EU, 2014/34/EU, 2014/35/EU, 2014/53/EU, 2014/68/EU and 2014/90/EU of the European Parliament and of the Council

Legal base

Articles 33 (customs co-operation), 114 (internal market), and 207 (common commercial policy) TFEU; OLP; QMV

Department

Business, Energy and Industrial Strategy

Document Number

(39394), 15950/17 + ADDs 1–11, COM(17) 795

Summary and Committee’s conclusions

2.1The European Commission has introduced a package of measures on the Single Market for Goods which it intends to make it easier for companies to sell their products across Europe, and to strengthen controls by national authorities and customs officers to prevent unsafe products from being sold to European consumers.

2.2As part of this package, an amending Regulation is proposed which sets out a range of provisions aimed at increasing the levels of deterrence to non-compliant economic operators, increasing market surveillance, strengthening the controls on products entering the EU, and offering incentives for regulatory compliance.

2.3The proposal would replace the market surveillance provisions of the 2008 Regulation on Accreditation and Market Surveillance (RAMS).

2.4Key new elements in the compliance and enforcement proposal include:

2.5In a detailed Explanatory Memorandum the Minister of State for Consumers at the Department for Business, Energy and Industrial Strategy (Andrew Griffiths) says that the Government supports measures which address non-compliant products, but indicates that it intends to investigate various aspects of the proposal to ensure that they are proportionate, not overly prescriptive, and will not constrain UK market surveillance authorities.

2.6We have taken note of the Minister’s assessment of the proposed amending Regulation, which seeks to achieve increased consistency in the enforcement of EU product rules across the single market. We note that the Government supports better enforcement of single market rules, that a minimum harmonisation approach is proposed, and that the Minister’s subsidiarity assessment concludes that the proposed policy objective can only be achieved at EU level.

2.7Nonetheless, given the wide-ranging nature of the proposal and the lack of clarity about some of its impacts, we welcome the Government’s intention to critically evaluate the proposal in order to determine whether specific provisions within it are necessary, proportionate, allow sufficient national flexibility, and would not restrict the competence of UK surveillance authorities to act. We request an update on the Government’s analysis in this regard, highlighting any areas in which concerns remain and how the Government intends to proceed. We particularly request an update regarding the Union Product Compliance Network—potentially the most problematic aspect of the proposal in our assessment—including an assessment as to whether it could limit the ability of the Member States and their competent authorities to act, and an indication of how the Government intends to proceed regarding this aspect of the proposal.

2.8The proposed Regulation would have implications for the UK post-exit. A system of pre-export checks and controls is proposed (the detail of which will be specified in a subsequent implementing act) which could reduce the need for compliance checks at the EU’s external borders. Conversely, it proposes to reduce the number of non-compliant goods entering free circulation at the EU’s external borders, which could conceivably lead to increased checks at its external borders. A requirement would be introduced for there to be established within the Union a person responsible for proving compliance information to competent authorities before a product can be made available, which would have cost implications for UK-based businesses post-exit.

2.9In relation to these implications, we ask the Government:

2.10We retain this proposal under scrutiny, and request a response by 20 June 2018, or sooner if progress in Council necessitates it.

Full details of the documents

Proposal for a Regulation of the European Parliament and of the Council laying down rules and procedures for compliance with and enforcement of Union harmonisation legislation on products and amending Regulations (EU) No 305/2011, (EU) No 528/2012, (EU) 2016/424, (EU) 2016/425, (EU) 2016/426 and (EU) 2017/1369 of the European Parliament and of the Council, and Directives 2004/42/EC, 2009/48/EC, 2010/35/EU, 2013/29/EU, 2013/53/EU, 2014/28/EU, 2014/29/EU, 2014/30/EU, 2014/31/EU, 2014/32/EU, 2014/33/EU, 2014/34/EU, 2014/35/EU, 2014/53/EU, 2014/68/EU and 2014/90/EU of the European Parliament and of the Council.: (39394), 15950/17 + ADDs 1–11, COM(17) 795.

Background

2.11The functioning of the UK’s system of market surveillance in the context of the EU regulatory framework is set out in the UK National Market Surveillance Programme 2016–17. Within the UK:

The Government’s view

2.12The Minister of State at the Department for Business, Energy and Industrial Strategy (Andrew Griffiths) indicates in the Government’s Explanatory Memorandum that the Government supports measures which address non-compliant products, but that the proposal is more prescriptive than the current framework and that careful analysis is necessary of each of its elements, to determine whether they are warranted and “whether voluntary measures would be more effective”.

2.13The chief elements of the Commission’s proposal are summarised below, with the Government’s views interleaved.

(i) Market surveillance organisation: single liaison office and mutual assistance procedure

2.14Member States would still determine the internal organisation of their market surveillance authorities, however the proposal sets out at a high-level their obligations as regards organisation of market surveillance within their territory, including specifying the types of procedures they must establish, and general principles for the activities of market surveillance authorities (e.g. that measures be proportional and authorities take a risk-based approach and act with transparency, independence and impartiality).

2.15Two specific requirements are introduced, with the aim of facilitating better coordination and more effective cross-border enforcement in the event of non-compliance:

2.16The Government does not raise any specific concerns about these aspects of the proposal, but the Minister notes that the Government will carefully evaluate the extent to which the proposed measures are necessary.

(ii) Market surveillance powers and measures

2.17Article 14 of the Regulation would harmonise the minimum powers of national market surveillance authorities. These would include:

2.18Article 20 of the Regulation also permits the Commission to designate Union testing facilities for specific products or a specific category or group of products or for specific risks related to a category or group of products which are made available on the market.

2.19The proposal is not a maximum harmonisation and Member States would retain freedom to grant their national market surveillance authorities additional powers. Member States would also retain the freedom to determine whether the competent authorities would exercise the powers directly or by application to national courts.

2.20While the Government agrees that a more consistent approach to enforcement would send a clear message to economic operators, the Minister emphasises that “it will also be important that the powers do not have unintended consequences”. Regarding the proposal for market surveillance authorities to have the power to order the recovery of profits obtained as a result of non-compliance, the Minister states that the Government’s approach will be to ensure that the provisions “allow national flexibility to ensure proportionality of approach”.

(iii) Union Product Compliance Network

2.21It is proposed that an EU Product Compliance Network be created within the Commission which would be responsible for coordinating market surveillance cooperation at EU level. The network would consist of representatives of the Commission, national single liaison offices, competent national surveillance authorities, and, in some cases, representatives of business and consumer associations.

2.22Article 33 of the Regulation identifies a wide range of “coordinated enforcement tasks” for the Commission, including:

2.23The tasks of the Union Product Compliance Network Board, which would consist of one representative from each of the national single liaison offices referred to in Article 11, and two representatives from the Commission, would include:

2.24Although the Government supports measures that would increase cooperation between the market surveillance authorities of Member States, the Minister states that the Government is concerned that this group might be indirectly empowered to impose obligations on market surveillance authorities that could remove competence from national governments. The Government will scrutinise the proposals to ensure that the network and its membership will support good market surveillance, rather than directing it.

(iv) Information and communication systems

2.25The proposal also sets out measures for maintaining and developing the existing Information and Communication System for Market Surveillance (ICSMS). An electronic interface would also be developed to allow the effective exchange of information between national customs systems and market surveillance authorities. The Union Product Compliance Network will be placed in charge of maintaining this system, which would collect and store information on the enforcement of Union harmonisation legislation on products. The system is available to the Commission and market surveillance authorities in the Member States and will have a public interface. The detailed operation of this system will be set out in implementing acts.

(v) Products entering the Union market

2.26On the basis that the most effective way to ensure that unsafe products are not placed on the market is to carry out adequate checks before they are released for free circulation, a requirement is introduced for market surveillance authorities to provide customs authorities with information on categories of products or the identity of economic operators where a higher risk of non-compliance has been identified.

2.27The Minister states that the Government supports a risk-based approach to market surveillance and controls at the border, and that “it will closely analyse the proposal to ensure that the actions proposed are proportionate.”

(v) Framework for international cooperation

2.28The proposal also sets out a framework for international cooperation with third countries.

2.29This would include a system for product related pre-export controls carried out by a third country on products, before they are exported to the Union. The details of the implementation of this system will be established by implementing acts.

2.30The Minister notes that the effect of the proposed system would be to reduce the number and frequency of import controls for certain products or categories of product if they satisfy the requirements set out in EU harmonisation legislation, where the controls carried out in those third countries are considered sufficiently effective and efficient. He states that the Government is broadly supportive of these measures, which it considers will expedite legitimate trade with countries outside the Union.

2.31The Commission proposal would also give it the power to exchange market surveillance related information with the regulatory authorities of third countries and organisations, also with a view to ensuring compliance prior to their export of products to the Union market. The Minister indicates that the Government will need to consider the full implications of this aspect of the proposal as the UK’s relationship with the EU changes.

(vi) Responsible person

2.32For products subject to EU harmonisation legislation, Article 4 of the proposal would require a person responsible for compliance information to be established in the EU to engage and communicate with market surveillance authorities. The proposal states that the person responsible for compliance information can be the manufacturer, an importer or another natural or legal person with a written mandate from the manufacturer but that, whichever of these roles the person occupies, they must be established in the Union.

2.33The Minister states that the Government will analyse this aspect of the proposal to ensure that this is managed in a way that does not compromise business growth, in particular small businesses.

2.34In an update to the Lords which was shared with the Committee, the Minister explains that:

Previous Committee Reports

None.





Published: 15 May 2018