26th May 2021
Brexit has and continues to have a significant impact on the necessary considerations for manufacturers and distributors with international reach.
Most British manufacturers supplying to the EU will now be familiar with the concept that (as of 1 January 2021) what were previously their distributors and suppliers in the EU have potentially become their importers by virtue of placing on the EU market products from outside the EU (i.e. the UK). Unless a product is sold directly from a manufacturer outside the EU to an end user within the EU, then there will always be an importer somewhere in the transaction; a party who places a product from outside the EU on the EU market becomes an importer by default. The importer identified for the purposes of the Single Market requirements is not necessarily the same person as the importer who deals with customs, transport arrangements, warehousing etc.
Manufacturers may have put in place arrangements with their EU suppliers to recognise this new set of circumstances. Manufacturers may have taken the decision to either set up an entity within the EU or agree with an existing EU entity that it will take on the role of the importer by virtue of an amended supply chain.
The requirements of an importer include, significantly, the need to identify themselves as the importer and provide their name and address on the product, packaging or instructions/other documentation. Other obligations include:
In the alternative or in addition, manufacturers may have put in place arrangements with an EU entity to act as an authorised representative (AR). Such arrangements need to be codified by way of a written mandate. The primary function of an AR is to act as a contact point through which market surveillance authorities can obtain the technical documentation for the product from the manufacturer. An AR is required to (at least):
The AR may also have other responsibilities and this can include marking the AR’s EU name and address on the product.
The Market Surveillance Regulation 2019/1020 (the MSR), which will apply in all EU member states and Northern Ireland (NI) from 16 July 2021, introduces a number of measures to bolster product compliance and specifically traceability requirements in the EU. It builds on the roles and requirements imposed by various sector specific legislation and Decision No 768/2008/EC of the European Parliament on a common framework for the marketing of products, better known as the New Legislative Framework (NLF). It is however of most significance in relation to e-commerce and where manufacturers supply their goods directly to end users.
The MSR explicitly includes a requirement that certain goods can only be placed on the EU market (or the NI market) where there is an EU established EU or NI economic operator responsible for the following:
The economic operator can be any one of the first three (EU/NI based manufacturer, EU/NI based importer, EU/NI based authorised representative), or it can be a newly defined entity known as a ‘fulfilment service provider’ (FSP) which is “any natural or legal person offering, in the course of commercial activity, at least two of the following services: warehousing, packaging, addressing and dispatching, without having ownership of the products involved, excluding postal services… or freight transport services”.
The creation of the status of FSP seeks to address the increased prevalence of e-commerce and requires non-EU manufacturers to appoint an EU based economic operator even where they are selling direct to end users. By way of example, a GB or US manufacturer looking to sell their products to EU consumers (on Amazon© for example) will now not be able to avoid the traceability requirements in relation to the product, packaging or information. This effectively brings the position into line with that of a non-EU manufacturer who sells through physical distribution channels. In that instance, those suppliers would automatically become importers.
GB and other non-EU manufacturers should therefore as part of their continued review and refresh of supply chains factor in these new requirements particularly when looking to sell products through the likes of Amazon© to EU/NI consumers.
The UK has not adopted the requirements set out in the MSR into UK national laws and they will not apply in the UK from 16 July 2021. However, for most products the Product Safety and Metrology etc. (Amendment etc.) (EU Exit) Regulations 2019, as amended requires the details of a UK based importer or authorised representative.