For many American companies, the European Union (EU) market is an interesting opportunity, despite its current economic crisis. Marketing in general and promotional products in particular remain challenging, especially in terms of the business-to-consumer market.
The EU is a sales territory regulated by many legal requirements, and European law is considered complex and challenging. Here is a brief overview of some of the important aspects to know about product safety when exporting American-made products to European customers.
1. Know all laws relevant to your product. It is only an assumed truism that you merely have to comply with the laws that are known to you. However, it is essential, in particular with respect to foreign markets, that you inform yourself in advance about the regulatory requirements that exist. If you have not identified these laws and regulations, you cannot reflect these in your own technical specifications. There are harmonized product safety regulations in the European Union that apply only to specific products. The EU General Product Safety Directive 2001/95/EC covers all consumer products, and the so-called New Approach Directives cover specific groups of products (i.e., machinery, low-voltage appliances). The safety requirements codified in these European Directives must be implemented into the national law of every EU member state. As a consequence, details of product safety requirements might be handled differently by the market surveillance authorities of the different EU member states.
A good overview on the European General Product Liability Directive 2001/95/EC relevant for consumer products can be found at http://europa.eu/legislation_summaries/consumers/consumer_information/l21253_en.htm.
The website http://www.newapproach.org/Directives/DirectiveList.asp gives a good overview on the New Approach Directives with further links to more detailed information on the single New Approach Directives.
The European Commission’s “Blue Guide,” available at http://ec.europa.eu/enterprise/policies/single-market-goods/documents/blue-guide, provides information on the system of European product safety law and gives further guidance on some concepts relevant for all product safety provisions (e.g., “making available on the market”).
One special feature of EU law is that it requires what is referred to as a CE marking for some products. The letters CE are taken to be an abbreviation of “Conformité Européenne” (“European Conformity”).
This is not just a visual label, but visible proof that a complex conformity assessment procedure has successfully been completed. Individual industries, such as those engaged in the manufacture and distribution of toys, furniture, cosmetics, medical products, machines and electrical equipment, also have their own industry-specific product regulations. In some cases, several of these regulations can apply at the same time. Requirements tend to be overlooked with respect to electromagnetic compatibility (EMC Directive). If, for example, a manufacturer of home appliances found the EU Directive 2006/95/EC on the harmonization of the laws of member states relating to electrical equipment designed for use within certain voltage limits (Low Voltage Directive) applicable to his products, it would be insufficient to stop there and comply with the safety requirements of this EU directive. Additionally, the EMC Directive might be applicable. It limits electromagnetic emissions of equipment in order to ensure that, when used as intended, such equipment does not disturb radio and telecommunication as well as other equipment.
Similarly, the safety requirements of the European R&TTE Directive might easily be missed. This directive contains specific provisions on equipment that uses the radio frequency spectrum, such as mobile phones. It also covers other radio equipment, such as car-door openers.
2. Product compliance is more than just product safety. The significance of product safety has increased enormously in the EU in recent years. Today, product safety as a part of consumer policy is one of the top issues for the day-to-day operations of any undertaking. Consumer associations and Non Governmental Organizations (NGO) are also making their contribution to the fact that consumers have a high level of awareness regarding product safety. There is, however, one area where the European legislature, compared to its counterparts in the U.S., has adopted stricter regulations, namely with regard to the environmental impact of products. Keywords such as carbon footprint, electronic waste, skin compatibility or biodegradability refer to issues representing only the tip of the iceberg. The European Union set up a very complex system for the registration, evaluation, authorization and restriction of chemicals (REACH).
Further information is available from the European Commission on its website at http://ec.europa.eu/enterprise/sectors/chemicals/reach/index_en.htm. There are specific restrictions for the use of hazardous substances in electrical and electronic equipment (Restrictions on Hazardous Substances Directive, “RoHS”) and a directive on collection, recycling and recovery of all types of electrical goods (Waste Electrical and Electronic Equipment Directive, “WEEE”).
Further information on both can be found at these sites: http://ec.europa.eu/environment/waste/rohs_eee
Regulations relating to energy-using products contain mandatory statutory provisions, for which compliance can be checked not only by regulatory authorities, but also by competitors.
3. The EU is comprised of 27 individual countries. Although EU law is harmonized and therefore applies across the EU, this does not apply to regulatory controls. These remain the responsibility of the individual member states, and their interpretation of one provision or regulation in Spain can therefore be very different than that of the competent authorities in Germany or Poland. An undertaking should be taken seriously when it is confronted by inquiries from individual market surveillance authorities. In this case, the potential impact in other EU member states should also then be considered.
4. Europe is bigger than the EU.
Remember that the successful distribution of several products in Europe is, in most cases, not limited to the European Union. There are some countries that geographically form part of Europe but are not EU member states. This does not only apply for Switzerland or Turkey but also for smaller countries such as Croatia, Montenegro, Kosovo and, at the eastern edge of Europe, Ukraine and Russia, which are not EU member states and can therefore also have different statutory regulations. Hence, it is necessary for manufacturers placing their products on the European market in a geographical sense to check whether all applicable safety requirements are fulfilled. It would be wise to consider a set of the safety requirements from European law plus very specific national provisions of non-EU member states.
Thomas Klindt is a lawyer and a partner with European law firm Noerr LLP (www.Noerr.com), based in the Munich office. He is head of Noerr´s Compliance Group and specializes in product compliance in the business-to-consumer and the business-to-business sector, CE-markings, product recalls, notifications to market surveillance authorities and litigation (commercial and product liability). His team has in-depth experience with legal requirements for promotional products.
>>New European Code Of Conduct Supports Responsible Entrepreneurship
In January, the European Promotional Products Association (EPPA) launched the EPPA Certification Program during the opening ceremony at the PSI Show in Dusseldorf, Germany.
The certification program is built around the need to increase the level of professionalism in the industry and contribute to a positive image for the industry. Its objective is straightforward: compliance with the law and regulations, and adherence to human rights and International Labor Organization (ILO) standards.
The program has a three-level approach in which companies can start and mature toward full compliance. The first level is to sign the Code of Conduct, showing a company respects the rules and regulations governments have set to, for example, protect consumers or guarantee product safety, and respects the ILO’s conventions and basic human rights. Each next level drives responsible business activities throughout the company and requires it to meet certain criteria. Decision-making processes will be verified, including a company’s supply chain, by an independent auditor.
The code requires specific social standards to be met based on international human rights norms and international labor laws that will protect and empower all personnel with a company’s scope of control and influence.
- The use of child labor is absolutely unacceptable. Workers must not be younger than the legal minimum age for working in any specific country and no younger than 14 years, whichever is greater;
- We will not tolerate forced labor or labor that involves physical or mental abuse or any form of mental or corporal punishment;
- Manufacturers must ensure that all manufacturing processes are carried out under conditions that have proper and adequate regard for the health and safety of those involved;
- We recognize and respect the freedom of employees to choose whether to associate with any group of their own choosing. If local laws prevent that, manufacturers have to allow employees to freely elect their own representative;
- Under no circumstances will the exploitation of any vulnerable individual or group be tolerated;
- Working hours shall comply with applicable laws and industry standards and overtime shall not exceed ILO standards;
- Wages and benefits must be fully comparable with local norms.
EPPA and PSI announced their partnership for the program this past November and have joined forces to create a communication platform to inform the industry. The EPPA is an umbrella organization for the European promotional products market consisting of membership associations from 14 European countries representing suppliers and distributors. More information about EPPA and the code is available on the EPPA website at www.eppa-org.eu or by e-mailing email@example.com.
>>A Projected View
With the Code of Conduct, the EPPA believes the promotional products industry will look like this in five years:
- A substantial number of companies have subscribed to the Code of Conduct and have been verified to comply;
- The code is a known and trusted standard for end customers due to the persuasive campaigns;
- End customers acknowledge power of promotional products and its share in the advertising budget is increased by five percent;
- EPPA is a trusted body for EU parliament to consult;
- The Code of Conduct 2.0 is released, incorporating environment and waste.