EUROPEAN COMMISSION Brussels, 19.12.2017 COM(2017) 795 final 2017/0353(COD) Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL laying down rules and procedures for compliance with and enforcement of Union harmonisation legislation on products and amending Regulations (EU) No 305/2011, (EU) No 528/2012, (EU) 2016/424, (EU) 2016/425, (EU) 2016/426 and (EU) 2017/1369 of the European Parliament and of the Council, and Directives 2004/42/EC, 2009/48/EC, 2010/35/EU, 2013/29/EU, 2013/53/EU, 2014/28/EU, 2014/29/EU, 2014/30/EU, 2014/31/EU, 2014/32/EU, 2014/33/EU, 2014/34/EU, 2014/35/EU, 2014/53/EU, 2014/68/EU and 2014/90/EU of the European Parliament and of the Council (Text with EEA relevance) {SWD(2017) 466 final}

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EXPLANATORY MEMORANDUM 1.CONTEXT OF THE PROPOSAL 1.1.Reasons for and objectives of the proposal Achieving a deeper and fairer single market, that builds on its strengths and fully exploits its potential in all its dimensions, is one of the key political priorities of the European Commission's main political priorities. Following up and implementing the 2015 Communication on Upgrading the Single Market: more opportunities for people and business, is one of the main objectives of the 2017 Commission work programme. Within the single market, free movement of goods is the most developed of all four fundamental freedoms. It generates around 25 % of EU GDP and 75 % of trade in goods between EU Member States. The EU accounts for around one sixth of the world’s trade in goods. Trade in goods between EU Member States was valued at EUR 3 063 billion in 2015. However, there is still work to do to ensure a deep and fair European single market. The increasing number of illegal and non-compliant products on the market distorts competition and puts consumers at risk. Many economic operators disregard the rules either through lack of knowledge or intentionally to gain a competitive advantage. Greater deterrents are needed, yet market surveillance authorities are often underfunded and constrained by national boundaries. Businesses are often active both within the EU and worldwide, and modern supply chains are evolving rapidly. In e-commerce in particular, market surveillance authorities have great difficulty tracing non-compliant products imported into the Union and identifying the responsible entity within their jurisdiction. In its 2017 work programme, the Commission announced an initiative to strengthen product compliance and enforcement Union harmonisation legislation on products, as part of the 'Goods Package'. The initiative is to address the increasing amount of non-compliant products on the Union market while offering incentives to boost regulatory compliance and ensuring fair and equal treatment that will benefit of businesses and citizens. The initiative is mainly aimed at providing the right incentives to businesses, intensifying compliance checks and promoting closer cross-border cooperation among enforcement authorities. It will: ·consolidate the existing framework for market surveillance activities; ·encourage joint actions by market surveillance authorities from several Member States; ·improve the exchange of information and promote the coordination of market surveillance programmes; ·create a strengthened framework for controls on products entering the Union market and for improved cooperation between market surveillance authorities and customs authorities. 1.2.Consistency with existing policy provisions in the policy area (a)Regulation (EC) No 765/2008 of the European Parliament and of the Council and Decision No 768/2008/EC of the European Parliament and of the Council Regulation (EC) No 765/2008 provides the current framework for the market surveillance of products and is complementary to Decision No 768/2008/EC. The Decision establishes reference provisions for Union legislation to harmonise marketing conditions for products, in particular the obligations for businesses in the supply chain. It is proposed that Articles 15 to 29 of the Regulation (EC) No 765/2008 will no longer apply to the legislation listed in the Annex to this legislative proposal. The reference provisions established under Decision No 768/2008/EC will continue to provide the general framework for the obligations of manufacturers, authorised representatives, importers and distributors. (b)Proposal for a Regulation of the European Parliament and of the Council on market surveillance of products and amending Council Directives 89/686/EEC and 93/15/EEC, and Directives 94/9/EC, 94/25/EC, 95/16/EC, 97/23/EC, 1999/5/EC, 2000/9/EC, 2000/14/EC, 2001/95/EC, 2004/108/EC, 2006/42/EC, 2006/95/EC, 2007/23/EC, 2008/57/EC, 2009/48/EC, 2009/105/EC, 2009/142/EC, 2011/65/EU, Regulation (EU) No 305/2011, Regulation (EC) No 764/2008 and Regulation (EC) No 765/2008 of the European Parliament and of the Council This proposal is consistent with the proposal for a Regulation on market surveillance of products which was adopted by the Commission in February 2013 [COM(2013)75] as part of the 'Consumer Product Safety and Market Surveillance Package'. The overarching objective of COM(2013)75 was to simplify fundamentally the Union market surveillance framework in the field of non-food products through the reduction of the number of pieces of legislation containing market surveillance rules, and to produce a one-tier system in which all of those rules are brought together in a single instrument. In particular, COM(2013)75 was conceived to revise and streamline the rules on market surveillance of the General Product Safety Directive 2001/95/EC, Regulation (EC) 765/2008 and many sector-specific pieces of Union harmonisation legislation into a single legal instrument that would apply horizontally across all sectors.

The European Parliament adopted its position at first reading on the proposal on 15 April 2014. However, the legislative discussions stalled in 2015. If the legislative discussions on COM(2013)75 were to resume, an analysis of the Union harmonisation legislation that applies at that moment, taking into account the developments since 2013, and the present proposal, could feed into the progress made by the co-legislators on the proposal, in accordance with the Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission on Better Law-Making. The present proposal contains 'lex generalis provisions' in order to avoid any possible risk of overlapping or contradictory provisions with the 'market surveillance proposal' COM(2013)75. (c)Union harmonisation legislation on products Union harmonisation legislation on products sets out common requirements on how a product has to be manufactured, including rules on its product, size and composition. Its aim is not only to eliminate barriers to the free movement of goods in the single market, but also to ensure that only safe and compliant products are sold in the EU. In this way, honest traders will benefit from a level playing field, thus protecting consumers and professional users and promoting a competitive single market. Union harmonisation legislation on products as listed in the Annex to this proposed Regulation provides the specific framework for marketing each category of products it covers, and thus the obligations of each business in the supply chain. Smooth cooperation and good contacts between manufacturers and market surveillance authorities are key to ensuring that products comply with the Union harmonisation legislation. Under this initiative, a product can only be made available on the market if a person responsible for compliance information is established in the Union and can be a direct interlocutor for market surveillance authorities. This person could be the manufacturer, the importer or any other economic operator mandated by the manufacturer. (d)Directive 2001/95/EC on General Product Safety The Directive ensures that products placed on the Union market are safe, in particular by targeting products that pose a serious risk and where a Member State's authorities intend to deny or prohibit its marketing or use to mitigate the risk to consumer health and safety. (e)Regulation (EU) No 952/2013 of the European Parliament and of the Council (Union Customs Code) Cooperation between market surveillance authorities and customs authorities is crucial to effectively enforce Union harmonisation legislation on products. This is because the most important filter for non-compliant products is at the EU's external borders, where the authorities have a complete overview of trade flows. Furthermore, rules on safety and compliance controls need to be enforced in a more uniform manner. This can only be achieved through systematic cooperation between market surveillance authorities and authorities in charge of checking products at the EU’s external borders. Effective and efficient cooperation is also important when more than one authority in the Member States is responsible for checking that imported goods comply with product safety rules. Those authorities have to cooperate, in particular by sharing relevant information. 1.3.Consistency with other Union policies The Commission recognised the essential role of enforcement networks and set out to encourage and help Member States improve their capacity to enforce Union law and to make sure that administrative authorities and inspectorates are adequately equipped to perform their tasks. In order to strengthen enforcement of Union harmonisation legislation on products, the Commission took into account similar recent work to improve enforcement in other areas. One such area was food and feed, where Regulation (EU) 2017/625 on official controls and other official activities performed to ensure the application of food and feed law, rules on animal health and welfare, plant health and plant protection products will improve Member States’ ability to prevent, eliminate or reduce health risks to humans, animals and plants. The Commission also put forward a proposal to reform the Consumer Protection Cooperation Regulation on the powers of enforcement authorities and the manner in which they can cooperate. The Commission also proposed new rules to further empower Member States’ competition authorities and ensure they have all the tools they need to enforce EU antitrust rules more effectively. Stronger enforcement powers are also a key issue in other recent legislative initiatives and data protection laws and recent legislation on fertilisers. Increasing product imports yet declining resources for customs mean that the Customs Union’s governance needs to be better geared to current and future challenges. The provisions of this proposal take into account the advocated coordination and inter-agency cooperation mechanisms, and improved risk assessments, including at the level of the Customs Union, to make controls more efficient and effective. Regarding global trade, the Commission reaffirmed its policy based on openness and cooperation. However, to combat situations where rules exist but are not respected, the EU would need to have the instruments at its disposal to restore a level playing field and act decisively against countries or companies that engage in unfair practices. Strong enforcement of Union rules would also ensure that penalties are imposed on all companies present or active in Union which break the rules. This will be done in cooperation with Member State authorities and strengthened Union customs risk management in order to facilitate and accelerate legitimate EU trade, while ensuring the safety and security of citizens by stopping fake or dangerous goods permeating EU borders. 2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 2.1.Legal basis

The proposal is based on Articles 33, 114 and 207 of the Treaty on the Functioning of the European Union. 2.2.Subsidiarity Market surveillance activities, and in particular enforcement of Union harmonisation legislation on products, fall within the competence of Member States’ national authorities. This will not change. However, in order to be effective, the market surveillance effort must be uniform across the Union. If market surveillance is ‘softer’ in some parts of the EU, weak spots are created which threaten the public interest, create unfair trading conditions and encourage 'forum shopping'. The risk to the various public interests that Union harmonisation legislation tries to protect should be considered also as regards products imported into the Union. There must therefore be effective market surveillance along the entire length of the Union’s external borders. It is therefore necessary to strengthen the enforcement of Union harmonisation legislation on products, preserve the public interests defended in this context, in particular health protection, and to ensure a level playing field for businesses established within and outside the EU. Market surveillance authorities should receive a set of powers allowing them to effectively enforce the Union harmonisation legislation on products. Their cooperation across borders and with customs authorities should be increased. Controls at the external borders of the Union should also be strengthened. Consequently, market surveillance instruments and mechanisms must be established to make possible and facilitate these endeavours, in particular by establishing an Union Product Compliance Network whose main task will be coordinating enforcement across the Union. Financing and reporting also all need to be addressed at Union level. 2.3.Proportionality The proposal does not affect the Member States’ competences in enforcement. However, some Member States may need to adapt their national procedural laws to ensure that their market surveillance authorities can effectively use their enforcement powers in the cross-border context, to cooperate and address product non-compliance within the EU. The measures set out in this proposal do not extent beyond what is necessary to solve the problems identified and to achieve its objectives. The proposal provides for a common set of powers for all competent authorities in the Member States which should help strengthen enforcement and compliance with Union harmonisation rules on products. The level of harmonisation chosen is necessary to ensure smooth cooperation and exchanges of evidence among competent authorities. Furthermore, it is necessary to remedy the current situation where certain product requirements laid down in Union harmonisation legislation are not enforced consistently and coherently in the single market because the market surveillance authorities in some Member States lack the powers needed to investigate and put an end to non-compliance. The proposal will improve enforcement cooperation without imposing a disproportionate or excessive burden on Member States' authorities. Therefore, the proposal does not exceed what is necessary to attain its objectives. 2.4.Choice of the instrument The only suitable instrument to achieve the objective of improving enforcement of and compliance with Union harmonisation legislation on products is a Regulation. A Directive would not achieve the objectives as jurisdictional boundaries and potential jurisdictional conflicts would persist following its transposition. 3.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS 3.1.Ex-post evaluations/fitness checks of existing legislation As part of the 2017 Commission work programme, an evaluation of the current legal framework for market surveillance, notably of provisions of Article 15 to 29 of Regulation (EC) No 765/2008 was undertaken. The evaluation covered the period from 2010 (date of application of the Regulation) to 2015. Effectiveness The evaluation of Regulation (EC) No 765/2008 indicated that it has been only partly effective in achieving its specific and strategic objectives. This is mainly because coordination and cooperation have still not reached a satisfactory level. Tools such as the Union Rapid Alert System for dangerous non-food products (RAPEX) and the Information and Communication System on Market Surveillance (ICSMS) are in place to ensure cross-border market surveillance cooperation, but they are not sufficiently used by Member States. As a result, market surveillance authorities rarely restrict the marketing of a product if their counterpart in another Member State notifies them of measures related to the product. There seems to be limited scope for market surveillance and customs authorities to make use of findings (including test reports) made by peer authorities in another Member State and, therefore, to avoid duplicating efforts. Furthermore, Regulation (EC) No 765/2008 is not yet uniformly applied, due to the significant differences in how Member States implement it. This concerns the organisation of market surveillance at national level, the availability of financial, human and technical resources, the strategies of market surveillance, the powers of inspection and of sanctions and the systems of monitoring and reporting. Last but not least, border controls on imported products seem insufficient. The main difficulties caused by market surveillance authorities not having jurisdiction outside of their Member State, particularly in the context of online sales. Therefore, it is safe to assess that Regulation (EC) No 765/2008 does not fully meet its strategic objectives of strengthening the protection of public interests and of ensuring fair trading conditions for economic operators by reducing the number of non-compliant products on the single market. The data available suggest that non-compliant products continue to be placed on the market, and are possibly increasing. Efficiency Most of the costs of the market surveillance are borne by Member States and their market surveillance authorities, and vary considerably from one Member State to another. This is because different national organisational models require different levels of both human and financial resources, but also results from the different approaches of market surveillance authorities when reporting data on financial resources used and the activities performed. Economic operators’ information costs due to Regulation (EC) No 765/2008 are perceived as insignificant. However, businesses point to the negative impact that across-the-board inconsistencies in Member States’ approach to market surveillance have on them, stressing that the current enforcement mechanism is not able to create equal conditions for businesses.

In terms of benefits, Regulation (EC) No 765/2008 did not improve safety for consumers and other end-users as expected. The persistence of and increase in non-compliant products show that it did not create fair trading conditions for businesses either. Coherence The evaluation pointed to problems of consistency with the General Product Safety Directive 2001/95/EC (GPSD), whose definitions are not always aligned with those of the Regulation. This proposal clarifies the boundaries between the GPSD and Regulation (EC) No 765/2008. The coherence of Regulation (EC) No 765/2008 with sectoral directives is sufficiently safeguarded by the lex specialis provision. Nonetheless, in certain cases, discrepancies and gaps in the definitions and terminology provided in the different pieces of legislation diminish the overall clarity of the framework for market surveillance, without hindering the implementation of Regulation (EC) No 765/2008. Relevance The evaluation highlighted some difficulties in understanding the scope of Regulation (EC) No 765/2008. While its definitions are generally clear and appropriate, they are not complete and up-to-date, especially as regards online sales. Regulation (EC) No 765/2008 is relevant when considering current stakeholders’ needs such as cooperation and exchange of information, and border controls, but it becomes less relevant when looking at needs related to current market dynamics (increasing online trade, budgetary constraints at national level), that requires a fast reaction. Only a revised framework for market surveillance could help reach the expected level of protection of public interests and of ensure fair trading conditions for market operators. EU added value Member States are responsible for enforcing Union harmonisation legislation and taking effective action against products that pose a risk. A single market without internal borders poses challenges for public authorities in enforcing this legislation since they are constrained by jurisdictional boundaries. Furthermore, weaknesses in the market surveillance organisation in a single Member State create weak links in the chain. To ensure consistent enforcement and to efficiently tackle non-compliance spanning over several Member States, it is necessary to coordinate activities across the Union. The evaluation indicated that the benefits of having a single piece of European legislation on harmonising market surveillance instead of several different pieces of national legislation are widely recognised. The EU added value of Regulation (EC) No 765/2008 mainly stems from provisions envisaging common information systems that will favour administrative cooperation and enhance cooperation between market surveillance authorities and authorities in charge of checking products at the EU’s external borders. Full EU added value is still hindered by the currently sub-optimal cross-border exchange of information and cooperation, by inconsistent implementation of the market surveillance framework at national level, and by a lack of resources. 3.2.Stakeholder consultations The market surveillance authorities were consulted during several meetings of the Expert Group on the Internal Market for Products held on 1 February 2016, 21 October 2016 and 31 March 2017. The last meeting focused on the legislative proposal and its main objectives and especially on how to enhance cooperation between the Member States, create a uniform and sufficient level of market surveillance and have stronger border controls on products imported into the Union market. A stakeholder conference open to industry, consumers, authorities, etc. was organised by the Commission on 17 June 2016. The aim was to identify the main issues related to the compliance of products in the single market, how to better enforce harmonisation legislation, and to identify possible ways forward. A public consultation in all EU official languages was published on a consultation website hosted on Europa. The consultation ran from 1 July to 31 October 2016. Its objective was to gather evidence and views on the actions to enhance enforcement and compliance in the single market for Goods. The European Enterprise Network encouraged and supported small and medium-sized enterprises in the consultation. 239 replies were received from businesses (127), public authorities (80), and citizens (32). The consultation results show action is needed to increase product compliance in the single market because non-compliance negatively affects consumers and other end-users, but also sales and/or market shares of businesses that do comply with legal obligations. Furthermore, respondents suggested that the best way to reduce non-compliance is a mix of information, support and enforcement by the public authorities. As regards non-compliant products traded by businesses located in a non-EU country, the results of the consultation point to the need for customs and market surveillance authorities to better coordinate controls on products entering the Union market. It also noted the need to oblige businesses established in non-EU countries to designate a person located in the Union to be responsible for compliance information. 3.3.Collection and use of expertise The Commission or external contractors carried out several surveys, consultations and studies between 2012 and 2016. Member States were also consulted on how effectively market surveillance functions across the Union. An external evaluation on the application of Regulation (EC) No 765/2008 was carried out between July 2016 and May 2017. The results have been taken into account in this legislative proposal with the view to improve the enforcement of Union harmonisation legislation on products.

3.4. Regulatory fitness and simplification The evaluation carried out on the current legal framework for market surveillance (see section 3.1. above) concluded that most of the enforcement costs stemming from current market surveillance rules are borne by public authorities, while costs on businesses only relate to information obligations (responding to requests from authorities, information on non-compliances detected) and are therefore regarded as insignificant by them. The enhanced enforcement coordination and priority setting supported by the Union Product Compliance Network and peer reviewed enforcement strategies would results in a better level-playing field, reducing some of the negative impacts of across-the-board enforcement inconsistencies that businesses face. The main potential for simplification and burden reduction lie nonetheless with authorities. The impact assessment underlying this proposal examined for each objective possible simplifications and/or administrative burden reduction, such as better use of IT tools used for simpler and quicker exchange information on planned controls, more effective mutual assistance requests, transferability of enforcement evidence and decisions to avoid duplication of work by authorities, a common set of investigative and enforcement powers, and easier access to compliance information for market surveillance authorities through the availability of a person responsible for compliance information. 3.5. Impact assessment An impact assessment report prepared by the Commission covers all aspects related to the legislative proposal. The policy options envisaged range from maintaining the status quo, to more ambitious measures and EU coordination and action, as follows: (1)baseline; (2)improving existing tools and cooperation mechanisms; (3)option (2) plus increased deterrence effect to enforcement tools and stepped up EU coordination; and (4)further added-on centralised EU level enforcement in certain cases. The preferred option is option (3), including in particular: (a)extending Product Contact Points’ advisory role to businesses and ad-hoc public-private partnerships; (b)creating digital systems through which manufacturers or importers would make compliance information available to both consumers and market surveillance authorities, the obligation of manufacturers to designate a person responsible for compliance information established in the Union and setting up a common European portal for voluntary measures; (c)establishing rules on how to publicise decisions to restrict the marketing of products, fine-tune authorities’ powers (notably in relation to online sales imports from non-EU countries), recovering the costs of controls on products found to be non-compliant; and (d)stricter obligations for mutual assistance and legal presumption that products found to be noncompliant in one Member State are non-compliant throughout the EU. Furthermore, Member States’ enforcement strategies setting out national control activities and capacity building requires an Union Product Compliance Network. This network would provide administrative support structure to peer review Member States’ performance and coordinate and help implement Member States’ joint enforcement activities. The impact assessment received an initial negative opinion, on 7 April 2017, and subsequently a positive opinion with reservations from the Regulatory Scrutiny Board on 8 June 2017. The recommendations contained in the opinions have been incorporated into the report. The amended report includes more extensive descriptions of the current market surveillance framework, the relation to the 2013 'Consumer Product Safety and Market Surveillance Package' and the evaluation results. The presentation of the problems, objectives and options were reworked and supporting evidence and cost estimates added. In relation to the Union Product Compliance Network, the report sets out the expected outputs and cost in different scenarios and discusses the impacts and feasibility of governance options to host the Union Product Compliance Network either in an existing agency or by the Commission. Considering the complexity of amending founding regulations of an existing agency, this proposal tasks the Commission with the supporting secretariat of the Network. In relation to the obligation of manufacturers to designate a person responsible for compliance information established in the Union, the impact assessment report describes the main trade and business models affected, in particular distance sales from outside the EU. The report clarifies the mandate of the person responsible for compliance information. It also estimates the cost related to compliance information facilitation and discusses the impacts on 3rd country traders and the fair market conditions for businesses operating in the Union. 3.6.Fundamental rights The impact of various options examined took into account the impact on concerned fundamental rights. The legislative proposal respects fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union. It is to be interpreted and applied with respect to those rights and principles. Market surveillance authorities would exercise the powers set out in this Regulation, on the basis of proportionality and necessity, and subject to national procedural safeguards. This legislative proposal strikes a careful balance between the interests protected by fundamental rights health and safety, consumer protection, environmental protection the freedom to conduct business and freedom of information.

4.BUDGETARY IMPLICATIONS The proposal requires human and administrative resources, as well as operational appropriations, as highlighted in the financial statement. 5.OTHER ELEMENTS 5.1.Implementation plans and monitoring, evaluation and reporting arrangements The Commission will review the implementation of this Regulation 5 years after the date on which it starts to apply, and will submit an evaluation report to the European Parliament and the Council. The report will assess whether the Regulation achieved its objectives, in particular with regard to reducing the number of non-compliant products, ensuring effective and efficient enforcement of Union harmonisation legislation, improving cooperation between competent authorities and strengthening the controls on products entering the Union market, taking into account its impact on business and in particular on small and medium-sized enterprises. 5.2.Entry into application The proposal would delay the entry into application of the Regulation until 1 January 2020 to allow Member States, market surveillance authorities, and the European Commission through the Union Product Compliance Network to make the necessary practical arrangements and legislative changes. 5.3.Detailed explanation of the specific provisions of the proposal The proposal consists of 11 chapters comprising 64 articles and one Annex. Chapter I – General provisions This Chapter defines the scope and the main terms used in the Regulation. It updates the definitions used in Regulation (EC) No 765/2008, in particular to take into account the diversity of actors in the supply chain and the need to make them all subject to enforcement of the Union harmonisation legislation on products. The proposed definition of ‘economic operator’ encompasses all actors directly concerned by this legislation. Chapter II – Compliance information This Chapter introduces the concept of a ‘person responsible for compliance information established within the Union’ as a necessary condition for making the products available on the market. The main objectives are to enforce of Union harmonisation legislation on products by ensuring good contacts between manufacturers or their designated representatives and the market surveillance authorities, and to create fair trading conditions on the Union market. The person responsible for compliance information can be the manufacturer, the importer or any other economic operator designated by the manufacturer. The tasks of the person responsible for compliance information are essentially to provide information on the product to market surveillance authorities and to cooperate with the authorities. Chapter III – Assistance to and cooperation with economic operators This Chapter defines how to designate competent authorities and single liaison offices for this Regulation and clarifies the roles of the single liaison offices. It calls on the Member States to ensure smooth cooperation among the members of the enforcement network in their territory. It requires Member States to ensure that other national authorities support the work of the competent authorities, in particular in cases where criminal measures are needed to stop the infringement. Chapter IV – Organisation and general principles of market surveillance The Regulation sets out the Member States’ obligations as regards organisation of market surveillance within their territory. It also lays down the procedures they must establish to follow up complaints or issues relating to risks; monitor accidents and harm to the health of end-users; verify corrective actions taken by economic operators; and follow up scientific and technical knowledge of safety issues. The Regulation defines how Member States should designate market surveillance authorities and single liaison offices. It also lays down principles for the activities of market surveillance authorities, namely that surveillance must be effective, measures be proportional to compliance, that the authorities must take a risk-based approach against the background of defined factors, and act with transparency, independence and impartiality.

The Regulation also requires Member States to issue regular national market surveillance strategies and lists what they must include. Chapter V – Market surveillance powers and measures The Regulation provides for a set of powers for market surveillance authorities, defined with the view to ensure effective enforcement of Union harmonisation legislation on products is enforced effectively across borders. These powers include the power to access data and documents related to an instance of non-compliance, to require economic operators and public entities to provide all information related to an instance of non-compliance; to carry out on sit inspections; to make test purchases and carry out mystery shopping; to adopt temporary measures; to initiate investigations or procedures aimed at ceasing non-compliance; to prohibit the supply of products, or withdraw and recall and destroy them; to impose penalties and order the recovery of profits obtained as a result of non-compliance; and to publish decisions, including the identity of the concerned economic operator. When exercising these powers, Member States retain the possibility to decide whether the competent authorities will exercise the minimum powers directly under their own authority or whether these powers will be exercised by application to courts, in accordance with national law. The Regulation also defines market surveillance measures and establishes the procedures and principles to be observed. As regards products which present a serious risk requiring rapid intervention, the Chapter links with Directive 2001/95/EC and the Union Rapid Alert System established under that Directive. The Regulation also introduces the possibility of designating Union testing facilities and specifies their tasks. In addition to the principle of financing market surveillance, this Chapter provides for market surveillance authorities to recover their costs by charging economic operators administrative fees for non-compliance. Chapter VI – Cooperation and procedure for mutual assistance Mutual assistance may take two forms: ·requests for information, which enable market surveillance authorities in one Member State to obtain information and evidence from another; and ·requests for enforcement measures which enable market surveillance authorities to request their counterparts in another Member State to take enforcement measures. The Regulation sets out the procedure for mutual assistance requests. These requests must be sent to the single liaison offices in the Member States of both the requesting and the requested authorities, using standard forms by means of an information and communication system. The Regulation also provides for that evidence obtained and investigation findings in one Member State may be used in another Member State. The underlying principle that is that products deemed to be non-compliant on the basis of a decision taken by market surveillance authorities in one Member State are presumed to be non-compliant by market surveillance authorities in another Member State, unless the concerned economic operator can provide evidence to the contrary. The aim of the instruments of mutual assistance is to address instances of non-compliance of a product in cross-border context, and to allow measures to end the non-compliance or the ban the product in all Member States. The Regulation will also help evidence and investigation findings obtained through the use of minimum powers of market surveillance authorities can be used across the borders. Under the Regulation, the requested authority must reply to a mutual assistance request within the time limit set the implementing measures. The Regulation ensures the protection of professional and commercial secrets by providing that information communicated to market surveillance authorities will only be used to ensure compliance with Union harmonisation legislation. Chapter VII – Products entering the Union market The Regulation provides for a strengthened framework for controls on products entering the Union market. It starts from the assumption that the most effective way to ensure that unsafe or non-compliant products are not placed on the Union market is to carry out adequate checks before they are released for free circulation. Customs authorities execute controls based on risk analysis. It also strengthens the exchange of information between market surveillance authorities and customs authorities, in particular through procedures for releasing products, suspending and refusing of release for free circulation. Market surveillance authorities can be asked to provide information on products and economic operators where a higher risk of non-compliance is detected. Customs authorities are required to inform the market surveillance authorities in timely manner on the placing of products under release for free circulation and the results of controls if that information is relevant for enforcing of Union harmonisation legislation. The release for free circulation may be suspended if: ·the product is not accompanied by the required documentation, is not marked or labelled as required, does not bear the CE marking or other marking required under the Union harmonisation legislation;

·no person responsible for compliance information established within the Union can be identified; or ·there is cause to believe that the product is not placed on the market in accordance with requirements set out by Union harmonisation legislation. The Regulation also provides for the favourable treatment of products declared for free circulation by authorised economic operators with special status under Regulation (EU) No 952/2013. It also lays down conditions for suspending this favourable treatment if non-compliance is detected during the controls. Procedural rules for exchanging information on authorised economic operators, between market surveillance authorities and customs authorities, will be established in implementing measures. Chapter VIII – Coordinated enforcement and international cooperation The Regulation establishes a Union Product Compliance Network ('Network'), within the Commission. The Network is composed of a board, administrative coordination groups and a secretariat; its tasks are detailed in the Regulation. The role of the Network will be to coordinate enforcement tasks, thereby boosting market surveillance cooperation at EU level. Furthermore, the Network will be in charge of maintaining an information and communication system for collecting and storing information on the enforcement of Union harmonisation legislation on products. The system is available to the Commission and market surveillance authorities in the Member States and will have a public interface in order to comply with the obligation to inform the general public and ensure transparency. The Regulation sets out the framework for international cooperation with third countries or international organisations to ensure Union harmonisation legislation on products is enforced. It also provides for a system for product related pre-export controls carried out by a third country on products, before they are exported to the Union. The details of the implementation of this system will be established by implementing acts. Chapter IX – Financial provisions The Regulation provides for the financing by the Commission of activities in all matters falling under the general market surveillance policy for the Union. The Regulation includes for general clauses on protecting the financial interests of the Union. Chapter X – Final provisions The Regulation provides that Union harmonisation legislation listed its Annex will not be governed by Articles 15 to 29 of Regulation (EC) No 765/2008. 23 legal instruments set out in the Annex to this Regulation have to be amended, by deleting references to Article 15 to 29 of Regulation (EC) No 765/2008. The Regulation also amends Directive 2004/42/EC of the European Parliament and of the Council. Chapter XI – Penalties, evaluation, committee procedure and entry into force and application While recognising that establishing penalties is a national competence, this Regulation sets out guiding principle for penalties. The Regulation also lays down for standard provisions on evaluating of the application of this Regulation and on the committee procedure for adopting of implementing acts. Annex The Annex lists the Union harmonisation legal instruments for products, thus determining the scope of the application of the Regulation.

2017/0353 (COD) Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL laying down rules and procedures for compliance with and enforcement of Union harmonisation legislation on products and amending Regulations (EU) No 305/2011, (EU) No 528/2012, (EU) 2016/424, (EU) 2016/425, (EU) 2016/426 and (EU) 2017/1369 of the European Parliament and of the Council, and Directives 2004/42/EC, 2009/48/EC, 2010/35/EU, 2013/29/EU, 2013/53/EU, 2014/28/EU, 2014/29/EU, 2014/30/EU, 2014/31/EU, 2014/32/EU, 2014/33/EU, 2014/34/EU, 2014/35/EU, 2014/53/EU, 2014/68/EU and 2014/90/EU of the European Parliament and of the Council (Text with EEA relevance) THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 33, 114 and 207 thereof, Having regard to the proposal from the European Commission, After transmission of the draft legislative act to the national parliaments, Having regard to the opinion of the European Economic and Social Committee, Acting in accordance with the ordinary legislative procedure, Whereas: (1)In order to guarantee the free movement of products within the Union, it is necessary to ensure that products fulfil requirements providing a high level of protection of public interests such as health and safety in general, health and safety in the workplace, protection of consumers, protection of the environment and public security. Robust enforcement of these requirements is essential to the proper protection of these interests and to create the conditions in which fair competition in the Union market for goods can thrive. Rules are therefore necessary to ensure this enforcement throughout the internal market, including on products entering the Union from third countries. (2)Strengthening the Single Market for goods through further enhancing efforts to keep non-compliant products from being placed on the Union market was identified as a priority in the Communication from the Commission ‘Upgrading the Single Market: more opportunities for people and businesses’. This should be achieved by strengthening market surveillance, providing the right incentives to economic operators, intensifying compliance controls and promoting closer cross-border cooperation among enforcement authorities, including through cooperation with customs authorities. (3)The framework for market surveillance should be strengthened, with a view to further improving compliance with and enforcement of Union harmonisation legislation on products. (4)Directive 2001/95/EC of the European Parliament and of the Council lays down the general safety requirements for all consumer products and provides for specific obligations and powers of the Member States in relation to dangerous products as well as for the exchange of information to that effect through the Union Rapid Alert System for dangerous non-food products (RAPEX). Market surveillance authorities should have the possibility of taking the more specific measures available to them under that Directive. In order to achieve a higher level of safety for consumer products, the mechanisms for exchanges of information and rapid intervention situations provided for in Directive 2001/95/EC and reinforced by Regulation (EC) No 765/2008 of the European Parliament and of the Council should be complemented to make them more effective. (5)This Regulation should cover products that are subject to the Union harmonisation legislation listed in the Annex. The legislation listed in the Annex should cover all Union harmonisation legislation concerning manufactured products other than food, feed, medicinal products for human and veterinary use, living plants and animals, products of human origin and products of plants and animals relating directly to their future reproduction. This will ensure a uniform framework for market surveillance of those products at Union level. Several instruments of Union harmonisation legislation on products need to be amended in consequence, in particular to remove references to certain provisions of Regulation (EC) No 765/2008. If new Union harmonisation legislation is adopted in the future, it will be for that legislation to provide whether this Regulation is also to apply to that legislation. (6)In order to rationalise and simplify the overall legislative framework, whilst simultaneously pursuing the objective of Better Regulation, the rules applicable to controls on products entering the Union market should be revisited and integrated into a single legislative framework for controls on products at the external borders. (7)Safety of consumers largely depends on the active enforcement of Union harmonisation legislation on products providing for safety requirements. It is therefore necessary to strengthen enforcement measures. These measures should be continuously improved and increasingly effective with a view to meeting the current challenges of a global market and an increasingly complex supply chain. (8)The framework established by this Regulation should complement and strengthen existing provisions in Union harmonisation legislation relating to the provision of compliance information about products and the framework for cooperation with economic operators, the market surveillance of products and controls on those products entering the Union. However, in accordance with the principle of lex specialis, this Regulation should apply only in so far as there are no specific provisions with the same objective, nature or effect in other existing or future rules of Union harmonisation legislation. The corresponding provisions of this Regulation should not therefore apply in the areas covered by such specific provisions, for instance those set out in Regulation (EC) No 273/2004 of the European Parliament and of the Council on drug precursors, Regulation (EC) No 1223/2009 of the European Parliament and of the Council on cosmetic products, Regulation (EU) 2017/745 of the European Parliament and of the Council on medical devices and Regulation (EU) 2017/746 of the European Parliament and of the Council on in vitro diagnostic medical devices. (9)Responsibility for enforcing Union harmonisation legislation should lie with the Member States, whose market surveillance authorities should be required to ensure that the legislation is fully complied with. The Member States should, therefore, establish systematic approaches to ensure effectiveness of market surveillance and other enforcement activities. (10)Certain definitions currently set out in Regulation (EC) No 765/2008 should be aligned with definitions set out in other Union acts and, where appropriate, reflect the architecture of modern supply chains.

(11)Economic operators throughout the entire supply chain should be expected to act responsibly and in full accordance with the legal requirements applicable when placing or making products available on the market, so as to ensure compliance with the Union harmonisation legislation on products. This Regulation should be without prejudice to the obligations which correspond to the role of each economic operator in the supply and distribution process pursuant to specific provisions in Union harmonisation legislation, with the manufacturer retaining ultimate responsibility for compliance of the product with requirements in the Union harmonisation legislation. (12)Modern supply chains encompass a wide variety of economic operators who should all be subject to enforcement of Union harmonisation legislation, while taking due consideration of their respective role in the supply chain, and the extent to which they contribute to the making available of products on the Union market. Therefore, it is necessary to apply this Regulation to economic operators that are directly concerned by Regulation (EC) No 273/2004 of the European Parliament and of the Council, Regulation (EC) No 1907/2006 of the European Parliament and of the Council, Regulation (EC) No 1272/2008 of the European Parliament and of the Council, Regulation (EC) No 1222/2009 of the European Parliament and of the Council, Regulation (EC) No 1223/2009, Regulation (EU) 2016/424 of the European Parliament and of the Council, Regulation (EU) 2016/425 of the European Parliament and of the Council, Regulation (EU) 2016/426 of the European Parliament and of the Council and Regulation (EU) 2017/1369 of the European Parliament and of the Council, Regulation (EU) 2017/745 and Regulation (EU) 2017/746, and in Directive 2006/42/EC of the European Parliament and of the Council, Directive 2006/66/EC of the European Parliament and of the Council, Directive 2009/48/EC of the European Parliament and of the Council, Directive 2010/35/EU of the European Parliament and of the Council, Directive 2013/29/EU of the European Parliament and of the Council, Directive 2013/53/EU of the European Parliament and of the Council, Directive 2014/28/EU of the European Parliament and of the Council, Directive 2014/29/EU of the European Parliament and of the Council, Directive 2014/30/EU of the European Parliament and of the Council, Directive 2014/31/EU of the European Parliament and of the Council, Directive 2014/32/EU of the European Parliament and of the Council, Directive 2014/33/EU of the European Parliament and of the Council, Directive 2014/34/EU of the European Parliament and of the Council, Directive 2014/35/EU of the European Parliament and of the Council, Directive 2014/68/EU of the European Parliament and of the Council, and Directive 2014/90/EU of the European Parliament and of the Council. (13)The development of e-commerce is also due to a great extent to the proliferation of information society service providers, normally through platforms and for remuneration, which offer intermediary services by storing third party content, but without exercising any control over such content, thus not acting on behalf of an economic operator. Removal of content regarding non-compliant products or where it is not feasible blocking access to non-compliant products offered through their services should be without prejudice to the rules laid down in Directive 2000/31/EC of the European Parliament and of the Council. In particular, no general obligation should be imposed on service providers to monitor the information which they transmit or store, nor should a general obligation be imposed upon them to actively seek facts or circumstances indicating illegal activity. Furthermore, hosting service providers should not be held liable as long as they do not have actual knowledge of illegal activity or information and are not aware of the facts or circumstances from which the illegal activity or information is apparent. (14)A fairer single market should ensure equal conditions for competition to all economic operators and protection against unfair competition. To this purpose, strengthened enforcement of Union harmonisation legislation on products is necessary. Good cooperation between manufacturers and the market surveillance authorities is a key element allowing immediate intervention and corrective action in relation to the product. It is important that there should be a contact person established in the Union so that market surveillance authorities have someone to whom questions can be addressed regarding a product’s compliance with Union harmonisation legislation. The person responsible for providing such compliance information should be the manufacturer, or the importer, or another person designated by the manufacturer for this purpose, for example another economic operator. The role of a person responsible for compliance information established in the Union is essential for providing market surveillance authorities with an interlocutor established in the Union, and for performing specific tasks in a timely manner to ensure that the products comply with the requirements of Union harmonisation legislation, for the benefit of consumers, workers and businesses within the Union. The provisions in this Regulation requiring there to be a person established in the Union responsible for compliance information should not apply where specific requirements set out in certain legal instruments on products achieve the same result in effect, namely Article 4 of Regulation (EC) No 1223/2009 , Article 15 of Regulation (EU) 2017/745 and Article 15 of Regulation 2017/746. (15)Member States should provide assistance to economic operators either through information on the applicable Union harmonisation legislation by the Product Contact Points established under Regulation (EU) [Reference to new Regulation on mutual recognition to be inserted], or through guidance on the applicable Union harmonisation legislation by the market surveillance authority within the framework of compliance partnership arrangements. Market surveillance authorities should able to build on the existing cooperation with stakeholders and be permitted to conclude memoranda of understanding with stakeholders, with a view to promoting compliance or identifying non-compliance with regard to categories of product within a given geographical area. (16)Member States should designate their own market surveillance authorities. In order to facilitate administrative assistance and cooperation, Member States should also designate a single liaison office. Liaison offices should ensure the coordination of enforcement and market surveillance activities, as well as communication with the market surveillance of other Member States and with the Commission. (17)It is necessary to establish a Union Product Compliance Network, hosted by the Commission, aimed at coordinating and facilitating the implementation of joint enforcement activities by Member States, such as joint investigations. This administrative support structure should allow the pooling of resources and maintain a communication and information system between Member States and the Commission, thereby helping to strengthen enforcement of Union harmonisation legislation on products and deter infringements. (18)Market surveillance activities should be thorough and effective, to ensure that Union harmonisation legislation on products is applied correctly. Given that controls may represent a burden for economic operators, market surveillance authorities should organise and conduct inspection activities, taking their interests into account and limiting the said burden to what is necessary for the performance of efficient and effective controls. Furthermore, market surveillance activities should be performed with the same level of care by the competent authorities of the Member State irrespective of whether non-compliance of the given product is relevant on the territory of that Member State or is likely to have an impact on the market of another Member State. (19)In order to ensure that the Union harmonisation legislation on products is correctly enforced, market surveillance authorities should have a common set of investigative and enforcement powers, allowing for enhanced cooperation between market surveillance authorities and more effective deterrence for economic operators that willingly infringe Union harmonisation legislation. Those powers should be sufficiently robust to tackle the enforcement challenges of Union harmonisation legislation, along with the challenges of e-commerce and the digital environment and to prevent economic operators from exploiting gaps in the enforcement system by relocating to Member States whose market surveillance authorities are not equipped to tackle unlawful practices. In particular, the powers should ensure that information and evidence can be exchanged between competent authorities so that enforcement can be undertaken equally in all Member States. (20)This Regulation should be without prejudice to the freedom of Member States to choose the enforcement system that they deem appropriate. Member States should be free to choose whether their market surveillance authorities can exercise investigation and enforcement directly under their own authority or by application to the competent courts. (21)Market surveillance authorities should be in a position to open investigations on their own initiative if they become aware of non-compliant products placed on the market. (22)Market surveillance authorities should have access to all necessary evidence, data and information relating to the subject matter of an investigation in order to determine whether applicable Union harmonisation legislation has been infringed, and in particular to identify the economic operator responsible, irrespective of who possesses the evidence, information or data in question and regardless of where it is located and of the format in which it is held. Market surveillance authorities should be able to request third parties in the digital value chain to provide all the evidence, data and information necessary. (23)Market surveillance authorities should be able to carry out the necessary on-site inspections, and should have the power to enter any premises, land or means of transport, that the economic operator uses for purposes relating to his trade, business, craft or profession. (24)Market surveillance authorities should be able to require any representative or member of staff of the economic operator concerned to give explanations or provide facts, information or documents relating to the subject matter of the on-site inspection, and to record the answers given by that representative or staff member. (25)Market surveillance authorities should be able to check the compliance of products to be made available on the market with Union harmonisation legislation and to obtain evidence of non-compliance. They should, therefore, have the power to make test purchases and, where the evidence cannot be obtained by other means, to purchase products under a cover identity. (26)In the digital environment in particular, market surveillance authorities should be able to bring non-compliance to an end quickly and effectively, notably where the economic operator selling the product conceals his identity or relocates within the Union or to a third country in order to avoid enforcement. In cases where there is a risk of serious and irreparable harm to end-users due to non-compliance, market surveillance authorities should be able to take temporary measures, where there are no other means available to prevent or mitigate such harm, including, where necessary, the suspension of a website, service or account, or putting a fully qualified domain name on hold for a specific period of time, in accordance with the principles laid down in Directive 2000/31/EC. Furthermore, market surveillance authorities should have the power to close down or require a third party service provider to close down a website, service or account or a part of it, or to delete a fully qualified domain name. (27)Market surveillance authorities act in the interest of economic operators, end-users, and of the general public, to ensure that public interests established by Union harmonisation legislation on products are consistently preserved and protected through appropriate enforcement action, and that compliance with such legislation is ensured across the supply chain through appropriate controls. Consequently, market surveillance authorities should account to economic operators, end-users and the general public for the efficiency and effectiveness of the activities they perform. They should provide access to information concerning the organisation and performance of their activities, including controls, and regularly publish information on activities performed and the results of such activities. They should also, subject to certain conditions, be entitled to publish or to make available information about the compliance record of individual economic operators based on the outcome of market surveillance controls. (28)Economic operators should fully cooperate with market surveillance authorities and other competent authorities to ensure the smooth performance of market surveillance activities and to enable the authorities to perform their tasks. (29)This Regulation should be without prejudice to the functioning of RAPEX in accordance with Directive 2001/95/EC and Regulation (EC) No 765/2008. (30)This Regulation should be without prejudice to the safeguard clause procedure provided for by sectoral Union harmonisation legislation, pursuant to Article 114(10) of the Treaty. With a view to ensuring an equivalent level of protection throughout the Union, Member States should be authorised to take restrictive measures in relation to products presenting a risk to health and safety, or other aspects of public interest protection. They should also be required to notify those measures to other Member States and the Commission, allowing the Commission to take a position on the national measures that restrict the free movement of products with a view to ensuring the functioning of the internal market.

(31)Information exchanged between market surveillance authorities, and the use of evidence and investigation findings should be subject to the strictest guarantees of confidentiality and of professional and commercial secrecy. Information should be handled according to applicable national law, in order to ensure that investigations are not compromised and that the reputation of the economic operator is not prejudiced. (32)Where for the purposes of this Regulation it is necessary to process personal data, this should be carried out in accordance with Union law on the protection of personal data. Any processing of personal data under this Regulation is subject to Regulation (EU) 2016/679 of the European Parliament and of the Council and Regulation (EC) No 45/2001 of the European Parliament and of the Council, as the case may be. (33)To ensure the reliability and consistency of testing across the Union in the market surveillance framework, the Commission should designate Union testing facilities. Furthermore, a more comprehensive information system should be developed for sharing test results within the Union in order to avoid unnecessary duplication and to ensure greater consistency at Union level. (34)Laboratories designated by the Commission as Union testing facilities should possess the expertise, equipment, infrastructure and staff to carry out tasks to the highest standards. To ensure sound and reliable results, Union testing facilities should be accredited according to the relevant Union harmonised standards. The accreditation should be delivered by a national accreditation body operating in accordance with Regulation (EC) No 765/2008. (35)Member States should be required to ensure that adequate financial resources are always available in order to staff and equip the market surveillance authorities appropriately. An efficient market surveillance activity is demanding in terms of resources, and stable resources should be provided, at a level appropriate to the enforcement needs at any given moment. Public financing should therefore be supplemented by the collection of fees to cover the costs incurred when performing market surveillance activities in relation to products that were found to be non-compliant, and taking due account of the economic operator's compliance record. (36)The financing of market surveillance activities through fees collected from economic operators should take place in full transparency, so as to enable citizens and businesses to understand the method and data used to establish fees and to be informed on the use of revenue from fees. (37)It is appropriate that Member States designate the authorities responsible for applying the customs legislation and any other authorities in charge under national law of control on products entering the Union market; (38)An effective way to ensure that unsafe or non-compliant products are not placed on the Union market would be to detect such products before they are released for free circulation. Customs authorities, as authorities in charge of the control on products entering the customs territory of the Union, enjoy a complete overview of trade flows across the external borders, and should therefore be required to carry out adequate controls on a risk assessment basis, to contribute to a safer market place. A uniform enforcement of Union harmonisation legislation on products can only be achieved through systematic cooperation and exchange of information between market surveillance and customs authorities. These authorities should receive well in advance from the market surveillance authorities all the necessary information concerning non-compliant products or information on economic operators where a higher risk of non-compliance has been identified. In turn, customs authorities should inform the market surveillance authorities in a timely manner of the release of products for free circulation, and the results of controls, where such information is relevant for the enforcement of Union harmonisation legislation on products. Furthermore, where the Commission becomes aware of a serious risk posed by an imported product, it should inform the Member States about those risks in order to ensure coordinated and more effective compliance and enforcement controls at the first points of entry to the Union. (39)In order to support customs and market surveillance authorities in carrying out tasks related to controls on products entering the customs territory of the Union, a more favourable treatment should be granted for products declared for free circulation by an authorised economic operator, as defined in Article 38(2) of Regulation (EU) No 952/2013, pending the establishment of the procedure for the exchange of information on the status of the authorised economic operators and their record of compliance related to product safety. Such an approach should allow a more targeted control, on a risk basis, of products released for free circulation. (40)The Commission should be able to exchange market surveillance related information with regulatory authorities of third countries or international organisations, with a view to ensuring compliance prior to their export of products to the Union market. (41)In that context, it is necessary to maintain and further develop the existing Information and Communication System for Market Surveillance (ICSMS). For the purpose of collecting information relating to the enforcement of Union harmonisation legislation on products, ICSMS should be upgraded and be accessible to the Commission, single liaison offices, and market surveillance authorities, as well as to the general public through a public interface. Furthermore, an electronic interface should be developed to allow effective exchange of information between national customs systems and market surveillance authorities. (42)The Commission should carry out an evaluation of this Regulation against the objectives it pursues. Pursuant to point 22 of the Interinstitutional Agreement of 13 April 2016 on Better Law Making, the evaluation, based on efficiency, effectiveness, relevance, coherence and value added, should provide the basis for impact assessments of options for further action. (43)The financial interests of the Union should be protected through proportionate measures throughout the expenditure cycle, including the prevention, detection and investigation of irregularities, the recovery of funds lost, wrongly paid or incorrectly used and, where appropriate, administrative and financial penalties. (44)The diversity of sanctions across the Union is one of the main reasons for inadequate deterrence and uneven protection. Rules on establishing sanctions, including monetary penalties, are a matter of national jurisdiction and should, therefore, be determined by national law. However, common criteria and guidance principles in determining the level of penalties should be established in order to achieve uniform and effective deterrence across the Union. Defining a set of criteria for determining effective, proportionate and dissuasive levels of penalty across the Union, in particular as regards the past behaviour of the economic operators, their cooperation during investigation by market surveillance authorities, and the level of harm, is essential to avoid weak spots that could encourage forum-shopping. (45)In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission in relation to the procedures for designating Union testing facilities, to the procedure for requests for information and requests for enforcement measures, to statistical data covering controls performed by customs authorities with respect to products subject to Union harmonisation legislation, to the data to be exchanged and the procedure to be followed for the exchange of information between customs authorities and market surveillance authorities on the status of authorised economic operators, to details of implementation arrangements for the information and communication system and data relating to the placing of products under the customs procedure ‘release for free circulation’ transmitted by customs authorities, and to the implementation of the system of product-related pre-export controls, including a model for the certificates of compliance or verification to be used. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council. (46)Since the objective of this Regulation, namely to ensure that products placed on the Union market fulfil the requirements of Union harmonisation legislation cannot be sufficiently achieved by the Member States given the need for a very high degree of cooperation, interaction and coherent action of all of the competent authorities in all Member States, but can rather, by reason of its scale and effects, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective. (47)This Regulation respects fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union. Accordingly this Regulation must be interpreted and applied respecting those rights and principles. In particular, this Regulation seeks to ensure full respect for consumer protection, the freedom to conduct a business, the freedom of expression and information, the right to property and the protection of personal data, HAVE ADOPTED THIS REGULATION: Chapter I General provisions

Article 1 Subject matter This Regulation lays down rules and procedures for the provision of compliance information about certain products that are the subject of Union acts harmonising the conditions for the marketing of those products. It establishes a framework for cooperation with economic operators in relation to such products. It also provides a framework for the market surveillance of such products to ensure that those products fulfil requirements providing a high level of protection of public interests such as health and safety in general, health and safety in the workplace, the protection of consumers, protection of the environment and security. This Regulation also provides a framework for controls on such products entering the Union market. Article 2 Scope 1.This Regulation applies to all products that are subject to the Union harmonisation legislation set out in the Annex to this Regulation (‘Union harmonisation legislation’). 2.Each of the provisions of this Regulation shall apply in so far as there are no specific provisions with the same objective in the Union harmonisation legislation, which regulate in a more specific manner particular aspects of market surveillance and enforcement. 3. The application of this Regulation shall not prevent market surveillance authorities from taking more specific measures as provided for in Directive 2001/95/EC. 4.This Regulation is without prejudice to Articles 12, 13, 14 and 15 of Directive 2000/31/EC. Article 3 Definitions For the purposes of this Regulation, the following definitions shall apply: (1)‘making available on the market’ means any supply of a product for distribution, consumption or use on the Union market in the course of a commercial activity, whether in return for payment or free of charge; (2)‘placing on the market’ means the first making available of a product on the Union market; (3)‘market surveillance’ means the activities carried out and measures taken by market surveillance authorities to ensure that products comply with the requirements under Union harmonisation legislation and do not endanger health, safety or any other aspect of public interest protection; (4)‘market surveillance authority’ means an authority designated by a Member State under Article 11 as a market surveillance authority in the territory of that Member State; (5)‘applicant authority’ means the market surveillance authority that makes a request for mutual assistance; (6)‘requested authority’ means the market surveillance authority that receives a request for mutual assistance;

(7)‘non-compliance’ means any failure to comply with any of the requirements under the Union harmonisation legislation applicable to the product in question; (8) ‘manufacturer’ means any natural or legal person who manufactures a product or has a product designed or manufactured, and markets that product under his name or trademark; (9)‘importer’ means any natural or legal person established within the Union who places a product from a third country on the Union market; (10)‘distributor’ means any natural or legal person in the supply chain, other than the manufacturer or the importer, who makes a product available on the market; (11) 'authorised representative' means any natural or legal person established within the Union who has received a written mandate from a manufacturer to act on his behalf in relation to specified tasks with regards to the manufacturer’s obligations under the relevant Union harmonisation legislation; (12)‘economic operator’ means the manufacturer, the authorised representative, the importer or the distributor, and including: (a)any of the economic operators as referred to in Directives 2006/66/EC, 2009/48/EC, 2010/35/EU, 2013/29/EU, 2013/53/EU, 2014/28/EU, 2014/29/EU, 2014/30/EU, 2014/31/EU, 2014/32/EU, 2014/33/EU, 2014/34/EU, 2014/35/EU, 2014/53/EU, 2014/68/EU, 2014/90/EU, Regulations (EU) No 305/2011, (EU) 2016/424, (EU) 2016/425, (EU) 2016/426, (EU) 2017/745 and (EU) 2017/746; (b)the operators as defined in Regulation (EC) No 273/2004; (c)the producer of an article and the downstream user as defined in each case in Regulation (EC) No 1907/2006 and Regulation (EC) No 1272/2008; (d)the private importer as defined in Directive 2013/53/EU; (e)the installer as defined in Directives 2006/42/EC and 2014/33/EU; (f)the supplier and the distributor as defined in Regulation (EC) No 1222/2009; (g)the dealer as defined in Regulation (EU) 2017/1369; (h)any other natural or legal person established in the Union and other than a distributor, who warehouses, packages and ships products to or within the Union market; (13)‘corrective action’ means any action taken by an economic operator to bring any non-compliance to an end, including action to restrict the making available of products on the market or to destroy a product on the market; (14)‘temporary measure’ means any temporary measure taken by a market surveillance authority aimed at suspending or restricting the making available of products on the market pending a final assessment on non-compliance, without prejudging any subsequent decisions; (15)‘serious risk’ means any serious risk, including a serious risk where the effects are not immediate, requiring rapid intervention by the market surveillance authorities; (16)‘end-user’ means any natural or legal person, residing or established in the Union, to whom a product was made available either as a consumer, outside any trade, business, craft or profession, or as a professional end-user in the course of his industrial or professional activities; (17)‘recall’ means any measure aimed at achieving the return of a product that has already been made available to the end-user; (18)‘withdrawal’ means any measure aimed at preventing a product in the supply chain from being made available on the market;

(19)‘customs authorities’ means customs authorities as defined in Article 5(1) of Regulation (EU) No 952/2013; (20)‘release for free circulation’ means the procedure laid down in Article 201 of Regulation (EU) No 952/2013; (21)‘products entering the Union market’ means products from third countries intended to be placed on the Union market or intended for private use or consumption within the customs territory of the Union and placed under the customs procedure ‘release for free circulation’; (22)‘authorised economic operator’ means an economic operator enjoying the status granted pursuant to Article 38(1) of Regulation (EU) No 952/2013. Chapter II Compliance information Article 4 Person responsible for compliance information 1. A product may be made available on the market only if the following conditions are met: (a)the manufacturer is established in the Union or there is at least one of the following in place with respect to the product: (i) an importer; (ii) a natural or legal person established in the Union who has a written mandate from the manufacturer designating him as a person responsible for performing the tasks listed in paragraph 3 and requiring him to perform those tasks on the manufacturer's behalf; (b)the identity and contact details of the manufacturer, importer or other person meeting the requirements of point (a) are publicly available in accordance with paragraph 4 and are indicated or identifiable in accordance with paragraph 5. 2.For the purposes of this Article, ‘the person responsible for compliance information’ means the person, whether the manufacturer, importer or other person, meeting the requirements of paragraph 1(a) with respect to the product or, if there is more than one such person, any of them. 3.The person responsible for compliance information shall perform the following tasks: (a)if the Union harmonisation legislation applicable to the product provides for an EU declaration of conformity and technical documentation, keeping the declaration and technical documentation at the disposal of market surveillance authorities for the period required by that legislation; (b)further to a reasoned request from a market surveillance authority, providing that authority with all the information and documentation necessary to demonstrate the conformity of the product in an official Union language determined by the Member State concerned; (c)cooperating with the market surveillance authorities, at their request, on any action taken to eliminate or, if that is not possible, mitigate the risks posed by the product. 4. Manufacturers shall make the identity and contacts details of the person responsible for compliance information with respect to the product publicly available either on their website or, in the absence of a website, by any other means that allows the information to be readily accessed by the general public in the Union free of charge.

5.The identity and contact details of the person responsible for compliance information with respect to the product shall be indicated on or identifiable from information indicated on the product, its packaging, the parcel or an accompanying document. 6.For the purposes of paragraph 1: (a)manufacturers may designate a person under paragraph 1(a)(ii) whether or not they have a right or obligation to appoint an authorised representative under the Union harmonisation legislation applicable to the product; (b)where the manufacturer has such a right or obligation under the Union harmonisation legislation, the appointment of an authorised representative under that legislation may count as a designation for the purposes of paragraph 1(a)(ii) provided the appointment meets the requirements of that paragraph. 7.This Article shall not apply in relation to a product that is subject to Regulation (EC) No 1223/2009 , Regulation (EU) 2017/745, Regulation 2017/746 or Regulation 2017/1369. Article 5 Declaration of conformity Where Union harmonisation legislation provides for the drawing up of an EU declaration of conformity, manufacturers shall make the declaration publicly available on their website or, in the absence of a website, by any other means that allows the declaration to be readily accessed by the general public in the Union free of charge. Chapter III Assistance to and cooperation with economic operators Article 6 Information to economic operators The Product Contact Points referred to in [Regulation (EC) No 764/2008 of the European Parliament and the Council / Regulation (EU)…. of the European Parliament and the Council] shall provide economic operators, at their request and free of charge, with information with respect to the Union harmonisation legislation applicable to a product. Article 7 Compliance partnership arrangements 1.A market surveillance authority may enter into a partnership arrangement with an economic operator established in its territory under which the authority agrees to provide the economic operator with advice and guidance in relation to the Union harmonisation legislation applicable to the products for which the economic operator is responsible. The arrangement shall not cover the provision of conformity assessment activities that are entrusted to notified bodies under the Union harmonisation legislation. 2.If a market surveillance authority enters into a partnership arrangement under paragraph 1, it shall enter that fact in the system referred to in Article 34, along with details of the scope of the arrangement and the names and addresses of itself and of the economic operator. 3.If a market surveillance authority enters into a partnership arrangement under paragraph 1, other market surveillance authorities shall inform that authority of any temporary measure taken by them against the economic operator, and any corrective action taken by the economic operator, in relation to compliance with the applicable Union harmonisation legislation. 4.A market surveillance authority that enters into a partnership arrangement under paragraph 1 may charge the economic operator fees representing the costs reasonably incurred by the authority in the exercise of its functions under paragraphs 1 and 2.

Article 8 Memoranda of understanding with stakeholders 1. Market surveillance authorities may enter into memoranda of understanding with businesses or organisations representing businesses or end-users for the carrying out, or financing, of joint activities aimed at identifying non-compliance or promoting compliance in specific geographical areas or with respect to specific categories of product. The market surveillance authority in question shall make the memorandum available to the general public and shall enter it in the system referred to in Article 34. 2.A market surveillance authority may use any information resulting from activities carried out or financed by other parties to a memorandum of understanding entered into by it under paragraph 1 as part of any investigation undertaken by it into non-compliance, but only if the activity in question was carried out independently, impartially and without bias. 3.Any exchange of information between market surveillance authorities and businesses or organisations referred to in paragraph 1 for the purposes of preparing or implementing a memorandum of understanding entered into by them under that paragraph shall be deemed not to infringe the requirements of professional secrecy. Article 9 Publication of voluntary measures 1. The Commission shall develop and maintain an on-line portal on which economic operators may publish information about measures voluntarily taken by them in relation to a product as defined in Directive 2001/95/EC or a product made available by them on the market, where the risks posed by the product go beyond the territory of one Member State. The on-line portal shall be one to which end-users and market surveillance authorities are able to have access. 2. If an economic operator chooses to publish information on the portal referred to in paragraph 1, it shall ensure that the product can be precisely identified from the information published and that the risks are explained such that end-users can assess what action it might be appropriate for them to take in response to the risks. The information published shall be provided in all of the official languages of the Member States where the products are made available on the market and the economic operator shall be responsible for the provision and accuracy of the information. 3.Publication referred to in paragraph 1 is without prejudice to any obligations of economic operators under the applicable Union harmonisation legislation or under Directive 2001/95/EC. Chapter IV Organisation and general principles of market surveillance Article 10 Obligations of market surveillance authorities as regards organisation 1. Market surveillance authorities shall establish appropriate communication and coordination mechanisms with other market surveillance authorities. 2. Market surveillance authorities shall establish the following procedures in connection with products subject to the Union harmonisation legislation set out in the Annex: (a)procedures for following up of complaints or reports on issues relating to risks; (b)procedures for monitoring any accidents or any harm to the health or safety of end-users which are suspected of having been caused by such products;

(c)procedures for verifying that corrective action to be taken by economic operators has been taken; (d)procedures for collecting and exploring scientific and technical knowledge concerning safety issues. Article 11 Market surveillance authorities and single liaison offices 1. Each Member State shall designate one or more market surveillance authorities in its territory. It shall inform the Commission, through the Network established under Article 31, and the other Member States of the market surveillance authorities designated by it and the areas of competence of each of those authorities, using the information and communication system referred to in Article 34. 2.Each Member State shall designate one of its market surveillance authorities or any other competent authority as a single liaison office. 3. The single liaison office of a Member State shall be responsible for coordinating the enforcement and market surveillance activities of the market surveillance authorities designated by that Member State. 4. Member States shall ensure that their market surveillance authorities and single liaison office have the necessary resources, including sufficient budgetary and other resources, expertise, procedures and other arrangements for the proper performance of their duties. 5. Where there is more than one market surveillance authority in their territory, Member States shall ensure that the respective duties of those authorities are clearly defined and that those authorities collaborate closely so that they can discharge their duties effectively. Article 12 Activities of market surveillance authorities 1.Market surveillance authorities shall conduct their activities in order to ensure the following: (a)the effective surveillance of the market within their territory with respect to any products that are subject to the Union harmonisation legislation set out in the Annex; (b)the taking by them of appropriate and proportionate temporary measures and the taking by economic operators of appropriate and proportionate corrective action in relation to compliance with that legislation and this Regulation. 2.Market surveillance authorities shall perform controls as part of their activities set out in paragraph 1, on a risk-based approach, taking into account, as a minimum, the following factors: (a)the identified risks associated with: (i) the product, such as the number of products on the market and any hazards associated with that product; (ii) the activities and operations under the control of the economic operator; (b)the economic operator's past record of non-compliance, including the risk profiling and the status of an authorised economic operator; (c)any further information that might indicate non-compliance in relation to a particular product.

3.Market surveillance authorities shall ensure that a product is withdrawn or recalled from the market or that the making available of the product on the market is prohibited or restricted if, when it is being used either in accordance with its intended purpose or under conditions that can be reasonably foreseen and it is properly installed and maintained, either of the following conditions would be met: (a)the product is liable to compromise the health or safety of end-users; (b)the product does not conform to applicable requirements under Union harmonisation legislation. Where the products are withdrawn, recalled, prohibited or restricted, the market surveillance authority shall ensure that the Commission through the Network established under Article 31, the other Member States and end-users are informed accordingly. 4.Market surveillance authorities shall perform their activities with a high level of transparency and shall make available to the general public any information that they deem relevant for the general public. They shall also ensure that the following information is entered in the system referred to in Article 34: (a)the type, number and outcome of the checks performed by them; (b)the type and the number of non-compliances detected by them; (c)the nature of the temporary measures taken by them against economic operators and of the corrective action taken by economic operators; (d)details of the cases of non-compliance where penalties were imposed by them. 5. Market surveillance authorities shall exercise their powers and carry out their duties independently, impartially and without bias. Article 13 National market surveillance strategies 1. Each Member State shall draw up a national market surveillance strategy, as a minimum, every 3 years. The strategy shall promote a consistent, comprehensive and integrated approach to market surveillance and enforcement of Union harmonisation legislation within the territory of the Member State and shall include all sectors and stages of the product supply chain, including imports and digital supply chains. 2. The national market surveillance strategy shall include, as a minimum, the following elements: (a)an assessment of the occurrence of non-compliant products, in particular taking into account the risk-based controls referred to in Articles 12(2) and 26(3), and market trends that may affect non-compliance rates in the categories of product; (b)the areas identified as a priority for the enforcement of Union harmonisation legislation; (c)the enforcement actions planned in order to reduce the occurrence of non-compliance in those areas identified as a priority, including, where relevant, the minimum control levels envisaged for categories of product which have significant levels of non-compliance; (d)an assessment of the effective performance and coordination of market surveillance activities pursuant to this Regulation, and, where applicable, the identification of capacity building needs and measures; (e)an assessment of the cooperation with market surveillance authorities in other Member States and of joint actions, where applicable; (f)a monitoring programme for the purposes of measuring progress in the implementation of the strategy and verifying compliance with this Regulation.

3. Member States shall communicate their national market surveillance strategy through the system referred to under Article 34. Chapter V Market surveillance powers and measures Article 14 Powers and duties of market surveillance authorities 1. Member States shall confer on their market surveillance authorities the powers of market surveillance, investigation and enforcement necessary for the application of this Regulation and for the application of the Union harmonisation legislation set out in the Annex to this Regulation. 2.When conferring powers under paragraph 1, including a power required by paragraph 3, Member States may provide for the power to be exercisable in one of the following ways as appropriate: (a)directly by the market surveillance authorities under their own authority; (b)by recourse to other public authorities; (c)by application to courts competent to grant the necessary decision to approve the exercise of that power. 3.The powers conferred on market surveillance authorities under paragraph 1 shall include the following powers as a minimum: (a)the power to require economic operators to provide information necessary to determine the frequency of checks under Article 15, including information about the number of products on the market and the activities of those operators; (b)the power to perform system audits of economic operators’ organisations, including audits of any procedures that they have in place to ensure compliance with this Regulation and with applicable Union harmonisation legislation; (c)the power to have access to any relevant document, data or information related to an instance of non-compliance, in any form or format and irrespective of its storage medium or the place where it is stored; (d)the power to require any public authority, body or agency within the market surveillance authority's Member State, or any natural or legal person, to provide any information, data or document, in any form or format and irrespective of its storage medium or the place where it is stored, for the purposes of enabling the market surveillance authority to investigate whether any non-compliance has occurred or is occurring and to establish the details of that non-compliance, including in particular information, data or documents required for the purposes of identifying and tracing financial and data flows, ascertaining the identity and contact details of persons involved in financial and data flows and ascertaining bank account information and the ownership of websites; (e)the power to do any of the following, or to request another public authority to do any of the following, for the purposes of an investigation by the market surveillance authority or at the request of an applicant authority: (1)to carry out on-site inspections, including power to enter any premises, land or means of transport that the economic operator in question uses for purposes related to his trade, business, craft or profession, in order to examine, seize, take or obtain copies of information, data or documents, irrespective of their storage medium; (2)to seal any premises or seize any information, data or documents of an economic operator during the inspection for a necessary period and to the extent necessary for the purposes of the investigation; (3) to request any representative or member of staff of the economic operator to give explanations of facts, information or documents relating to the subject-matter of the inspection and to record their answers;

(f)the power to take samples of products free of charge in order to detect non-compliance and obtain evidence; (g)the power to purchase products as test purchases, including under a cover identity, in order to detect non-compliance and obtain evidence; (h)the power to take temporary measures, where there are no other effective means available to prevent a serious risk, including in particular temporary measures requiring hosting service providers to remove, disable or restrict access to content or to suspend or restrict access to a website, service or account or requiring domain registries or registrars to put a fully qualified domain name on hold for a specific period of time; (i)the power to start investigations or proceedings on their own initiative in order to bring an instance of non-compliance within the territory of the Member State concerned to an end and, where appropriate, to publish information about the investigation through the system referred to in Article 34; (j)the power to seek to obtain a commitment from an economic operator to bring an instance of non-compliance to an end; (k)the power to prohibit the making available of products on the market or to withdraw, recall or destroy products, where economic operators fail to provide the information requested by the market surveillance authority to verify the compliance of those products and while the failure persists; (l)the power to