The growing number of non-compliant products from e-commerce businesses has caused a series of problems in the EU market, including unfair competition and consumer risk. The EU subsequently developed the ‘Strategic Agenda 2019-2024’ (which includes Regulation 2019/1020), in order to address the regulation on market surveillance and product compliance. This update ensures that both physical and e-commerce businesses can continue to thrive and that the economic playing field remains fair and compliant.
Regulation (EU) 2019/1020 aims to strengthen the market surveillance of products covered by EU harmonisation legislation. This is to ensure the protection of health and safety, consumers, the environment, and public interests. In the realm of e-commerce, the Regulation means that a ‘fifth’ economic operator will now be included in the supply chain. Traditionally, economic operators were divided into four groups: manufacturers, Authorised Representatives, importers, and distributors. The fifth economic operator now being introduced is the Fulfilment Service Provider. The Fulfilment Service Provider is defined as an operator who is undertaking any two of the following services: warehousing, packaging, addressing, and dispatching, without having ownership of the actual products in question.
Traditionally, e-commerce operators could skirt around the obligations of product compliance and conformity in some cases, if they could identify as any of the aforementioned. Now, it is likely that e-commerce site operators and owners will have to bear some liability in the same way as the four existing roles do. Some of the current responsibilities that Fulfilment Service Providers will also have to take on include:
- Maintaining EU conformity (such as a Declaration of Conformity) and performance declarations, and presenting technical documentation to authorities upon request
- Informing authorities when they believe a product poses a risk
- Cooperating with authorities and taking corrective actions relating to product faults, recalls or non-compliance.
Products may also not be offered for sale to EU consumers without an Economic Operator established in the EU. This is probably the most impactful change for e-commerce operators. Unless non-EU third-party retail companies have economic operators within the EU, they will not be authorised to sell products in the region. An example of such an Economic Operator could be an EU Authorised Representative.
A Fulfilment Service Provider will only be considered the economic operator when none of the other economic operators are established in the EU. In other words, when there is no manufacturer, importer or authorised representative based in the EU. The Fulfilment Service Provider must fulfil at least two of the services mentioned earlier. Whether they are considered the economic operator, the Fulfilment Service Provider should make arrangements with their clients if they are the economic operator. Fulfilment Service Providers do not automatically have a connection with the manufacturer of the product, meaning that the correct compliance measures will need to be taken into account and assessed thoroughly. Otherwise, they will not be able to fulfil the requirements of the Market Surveillance Regulation.
Essentially, it is important that e-commerce operators take necessary action and establish correct methods to ensure that their product distribution, packaging, and manufacturing remain compliant when importing to the EU. At Certification Experts, we can help you to ensure that your products meet these standards and remain compliant with this regulation.