What to Know About Product Safety Challenges in European Business

Manufacturing a product in accordance with U.S. Product safety regulations is by itself not sufficient if the product is sold within the European Union.

Are you selling products in Europe? If so, you need to be aware that Europe has very high consumer protection standards. Failure to comply with these standards may result not only in severe disputes with market surveillance authorities in Europe's 27 member states but also in lawsuits brought by consumers in product liability cases under each individual states' civil laws or -- more and more frequently -- in competitors complaints questioning your products' safety.

The facts: Europe is a huge market with an enormous number of industrial enterprises and almost 400 million consumers. It offers U.S. companies extraordinary business opportunities for both B2B and B2C transactions. Europe is, however, a divided legal landscape: On the one hand, there are many "made in Brussels" European legal regulations which set an identical standard throughout the entire EU. On the other hand, the 27 member states (Croatia is likely to join in 2013) maintain their peculiarities in litigation, competition law and liability structures.

Precisely for this reason, U.S. businesses need to be familiar with the commercial advantages of uniform product safety regulations. Key words such as CE-marking, declaration of conformity and risk assessment apply to many industries, from machinery to medical devices and from toys to radio equipment, from electrical appliances to sports boats. Being unaware of legal requirements in Europe poses the risk of considerable disputes with the market surveillance authorities. Particularly in the area of B2C transactions, the level of consumer protection in Europe is exceptionally high and extremely ambitious.

Keep in mind:
  1. Check your product's compliance with European legal requirements.
  2. Ensure your product's compliance with European technical standards.
  3. Make certain that your product is in compliance with "local laws" of the respective EU member states.
  4. Ensure that your instruction manual includes the language of the sales territory.
  5. Check whether your instruction manual uses the correct pictograms (not ANSI, but EN/IEC).
  6. Contact legal experts, if necessary.
  7. Keep an eye on RAPEX, if you are in the B2C-business.
Furthermore, consumer protection laws entail certain marking obligations and require information of product manufacturers. In case of product safety defects -- similarly to the CPSC -- a dangerous product must be timely reported to the national authorities. Formal questions and deadlines must also be observed.

Above all, U.S. businesses must, when exporting to Europe, be aware of the European Union's regulatory requirements on product safety. Manufacturing a product in accordance with U.S.-product safety regulations is -- by itself not sufficient if the product is sold within the European Union and fails to meet the requirements set forth in EU regulations and individual product safety laws passed by the relevant EU member state(s). Failure to comply may result both in product liability proceedings and competition law complaints (in a nutshell: success by breaking the law) if deviations from European safety standards are discovered.

The RAPEX system of the European Commission -- updated weekly -- provides information on B2C issues. Through the ICSMS-database, fundamental information about market surveillance can be requested and, at least partially, communication with the national authorities established. For risk assessment of consumer products, the new 2010 Product Safety Guidelines of the European Commission must be referred to.

Above all, the aim must always be: it is the customer who should return, not the product!

Dr. Thomas Klindt is a partner with Noerr LLP in the Munich office.

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