Key points to note in relation to the EU's new Market Surveillance Regulation (2019/1020 ("MSR")
1. What is the MSR and what does it aim to achieve?
The MSR, which comes into force on 16 July 2021, aims to "complement and strengthen" existing EU product legislation.
The MSR will amend the market surveillance provisions of Regulation (EC) No 765/2008 and will bolster that Regulation by, among other things:
- Outlining the creation of a database for national Market Surveillance Authorities ("MSAs") to share compliance data with each other, allowing authorities across Member States to work in unison.
- Establishing new processes and frameworks for market surveillance, customs, and enabling the collaboration between national MSAs to remove non-compliant products from the EU market, with a particular focus on online sales.
- Determining how product warnings are to be shown on websites.
2. What does the MSR apply to?
The MSR applies to any products which are subject to at least one of the 70 EU product Regulations and Directives listed under Annex I, save where that legislation contains more specific, equivalent provisions regulating market surveillance and enforcement. Annex I includes, but is not limited to, medical devices and in vitro diagnostic medical devices, cosmetics, hazardous substances, electronic and electrical equipment, construction products, toys and machinery. The MSR applies to products sold both online and offline.
3. Who is affected by the MSR?
- Economic operators in the supply chain are subject to compliance obligations contained in the MSR.
- "Economic operator" is broadly defined as "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".
- All economic operators are obliged under the MSR to cooperate with MSAs in eliminating or mitigating risks presented by products that they have made available on the market.
- Under the MSR, Member States are responsible for enforcing market surveillance and designating the MSAs in their territory. MSAs are authorised, among other things, to carry out documentary checks and on-site inspections in order to ensure the conformity of the products.
- Where a MSA finds that a product may affect the health or safety of users or does not comply with the relevant EU harmonisation rules, it may require the economic operator to take appropriate and proportionate corrective measures; for example, bringing the product into conformity, withdrawal, recall, destruction or issuing a public warning about the risk posed by the product.
4. Further requirements for certain products
Notwithstanding the general obligations imposed by the MSR, Article 4 of the MSR prohibits 18 categories of products from being placed on the market unless an economic operator for these products is established in the EU and is responsible for the tasks listed under Article 4(3). Importantly, the definition of an "economic operator" for the purposes of Article 4 is narrower in scope than the general definition outlined above, and only includes the:
- Importer (in circumstances where the manufacturer is not established in the EU);
- authorised representative (who has a written mandate from the manufacturer pursuant to article 5); or
- fulfilment service provider (where none of the above are established in the EU).
Note that a "fulfilment service provider" is defined as person or company offering in the course of business at least two of the following services (but without having ownership of the products involved): warehousing, packaging, addressing and dispatching. Notably, postal and parcel delivery companies are specifically excluded from the definition of "fulfilment service provider".
5. Union Product Compliance Network
This is a key new initiative under the MSR. The database allows Member States to centralise all enforcement data to improve verification of compliance data and identification of high-risk articles. The database will contain information on, among other things:
- Product testing;
- Enforcement and remediation actions;
- Market surveillance data; and
- Any information on shared initiatives.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.