COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on the mutual recognition on goods lawfully marketed in another Member State
Date: 2017-12-19
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: EU Member State, administrative cooperation, exchange of information, free movement of goods, goods and services, market approval, mutual recognition principle, single market, technical rule

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 19.12.2017  SWD(2017) 471 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT  Accompanying the document Proposal for a Regulation of the European Parliament and of the Council  on the mutual recognition on goods lawfully marketed in another Member State {COM(2017) 796 final} - {SWD(2017) 472 final} - {SWD(2017) 475 final} - {SWD(2017) 476 final} - {SWD(2017) 477 final}  
 
 
Contents 

INTRODUCTION ............................................................................................................... 5 

1. 

2. 

3. 

3.1. 

3.2. 

3.2.1. 

3.2.2. 

3.2.3. 

REGULATORY CONTEXT .............................................................................. 7 

ECONOMIC CONTEXT: NON-HARMONISED PRODUCTS IN THE EU . 10 

PROBLEM DEFINITION ................................................................................ 12 

Magnitude of the problem ................................................................................. 13 

The drivers of the problem ................................................................................ 16 

Lack of awareness about the mutual recognition principle and Regulation .... 17 

Legal uncertainty as regards the scope of mutual recognition ......................... 18 

Legal  uncertainty  as  regards  the  application  of  mutual  recognition  and 
unreliability of the outcome .............................................................................. 20 

3.2.4. 

Lack of trust and cooperation among authorities .............................................. 23 

3.3. 

3.4. 

4. 

4.1. 

4.2. 

5. 

5.1. 

5.2. 

6. 

6.1. 

7. 

7.1. 

8. 

8.1. 

8.2. 

8.3. 

8.4. 

9. 

9.1. 

The consequences of the problem/ Who is affected and how ........................... 24 

Foreseen evolution of the problem ................................................................... 28 

ANALYSIS OF SUBSIDIARITY .................................................................... 30 

Legal Basis ........................................................................................................ 30 

Subsidiarity and Proportionality ....................................................................... 30 

OBJECTIVES ................................................................................................... 31 

General Policy Objectives ................................................................................. 31 

Specific Policy Objectives ................................................................................ 31 

POLICY OPTIONS .......................................................................................... 32 

Discarded options.............................................................................................. 32 

ANALYSIS OF IMPACTS .............................................................................. 41 

Assessment of the impacts ................................................................................ 41 

COMPARISON OF OPTIONS ........................................................................ 56 

Effectiveness ..................................................................................................... 56 

Efficiency .......................................................................................................... 57 

Coherence ......................................................................................................... 57 

Potential for reduction of administrative burdens for companies ..................... 59 

MONITORING AND EVALUATION ............................................................ 59 

Operational Objectives ...................................................................................... 60 

1 

 
 
9.2. 

Indicators for the monitoring ............................................................................ 61 

ANNEX  1  PROCEDURAL  ISSUES  AND  CONSULTATION  OF  INTERESTED 
PARTIES ........................................................................................................................... 62 

1. 

2. 

3. 

4. 

5. 

IDENTIFICATION........................................................................................... 62 

ORGANISATION AND TIMING ................................................................... 62 

CONSULTATION OF THE REGULATORY SCRUTINY BOARD ............. 62 

CONSULTATION AND EXPERTISE ............................................................ 65 

LIMITATIONS AND ASSESSMENT OF ROBUSTNESS OF FINDINGS .. 67 

ANNEX 2 SYNOPSIS REPORT OF THE STAKEHOLDER CONSULTATION ......... 70 

1. 

1.1. 

2. 

2.1. 

2.2. 

2.2.1. 

2.2.2. 

2.3. 

2.3.1. 

2.3.2. 

2.3.3. 

2.3.4. 

2.3.5. 

2.4. 

2.5. 

3. 

OBJECTIVES OF THE CONSULTATION .................................................... 70 

Consultation methods and tools ........................................................................ 70 

RESULTS OF THE CONSULTATION ACTIVITIES ................................... 70 

Meetings of the Mutual Recognition Consultative Committee ........................ 70 

Stakeholder conference of 17 June 2016 .......................................................... 72 

Main meeting .................................................................................................... 72 

Workshops ......................................................................................................... 72 

Public Consultation ........................................................................................... 73 

How stakeholders see mutual recognition and its potential shortcomings....... 73 

Functioning of the Mutual Recognition Regulation.......................................... 74 

Assessment of communication when using Mutual Recognition....................... 75 

Priorities to improve Mutual Recognition ........................................................ 76 

Options   ........................................................................................................... 77 

Surveys carried out by the external contractors ................................................ 79 

Other contributions received (position papers or e-mail) ................................. 80 

FEEDBACK TO STAKEHOLDERS ............................................................... 81 

ANNEX 3 WHO IS AFFECTED AND HOW.................................................................. 84 

ANNEX  4  ANALYTICAL  MODELS  USED  IN  PREPARING  THE  IMPACT 
ASSESSMENT ................................................................................................................. 86 

1. 

2. 

METHODOLOGY FOR THE MARKET ANALYSIS ................................... 86 

METHODOLOGY  FOR  THE  ESTIMATION  OF  THE  MAGNITUDE  OF 
THE PROBLEM ............................................................................................... 89 

2 

 
 
3. 

4. 

4.1. 

4.1.1. 

4.1.2. 

4.2. 

4.2.1. 

4.2.2. 

4.2.3. 

4.2.4. 

4.2.5. 

4.2.6. 

METHODOLOGY FOR CASE STUDIES ...................................................... 90 

ESTIMATION OF THE MARKET FOR NON-HARMONISED PRODUCTS
........................................................................................................................... 91 

Estimate  of  the  market  value  of  current  intra-EU  trade  in  non-harmonised 
products falling under the mutual recognition principle ................................... 91 

Analysis at the sectorial level ........................................................................... 92 

Analysis at product level ................................................................................... 97 

Estimating the magnitude of the problem triggered by suboptimal functioning 
of the mutual recognition principle ................................................................. 102 

Introduction and exporting decision tree ........................................................ 102 

The Sub-optimal Functioning of the Mutual Recognition model .................... 107 

Number of enterprises undertaking non-harmonised trade ............................ 108 

Lost Opportunity ............................................................................................. 111 

The Sub-optimal Functioning of the Mutual Recognition (SFMR) model ...... 112 

Conclusion ...................................................................................................... 114 

ANNEX 5 HARMONISED NON HARMONISED AND PARTIALLY HARMONISED 
PRODUCTS- SECTOR AND PRODUCT LEVEL ANALYSIS ................................... 115 

1. 

2. 

HARMONISED,  NON-HARMONISED  AND  PARTIALLY  HARMONISED 
SECTORS  -  CLASSIFICATION  USED  IN  THE  MARKET  ANALYSIS 
(SECTORIAL LEVEL) .................................................................................. 115 

PRODUCTS  CLASSIFIED  AS  NON  OR  PARTIALLY  HARMONISED  IN 
THE MARKET ANALYSIS (PRODUCT LEVEL)  BY SECTOR .............. 119 

ANNEX  6  –  MAIN  FINDINGS  OF  THE  EVALUATION  OF  THE  REFIT 
EVALUATION  ON  THE  PRINCIPLE  OF  MUTUAL  RECOGNITION  AND  THE 
MUTUAL RECOGNITION REGULATION NO (EC) 764/2008 ................................. 126 

ANNEX 7 ASSESSED LITERATURE AND JURISPRUDENCE ............................... 140 

1. 

2. 

LITERATURE ................................................................................................ 140 

RECENT CASE LAW OF THE CJEU ON MUTUAL RECOGNITION ..... 144 

ANNEX  8 THE DECLARATION OF COMPLIANCE ................................................ 149 

1. 

2. 

EU PRODUCT LEGISLATION UNDER THE 'NEW APPROACH' ........... 149 

THE  EU  DECLARATION  OF  CONFORMITY 
IN  EU  PRODUCT 
LEGISLATION .............................................................................................. 151 

3 

 
 
3. 

4. 

5. 

5.1. 

5.2. 

5.3. 

5.4. 

5.5. 

5.5.1. 

5.5.2. 

5.5.3. 

COMPARISON BETWEEN THE ROLE OF THE MANUFACTURER IN EU 
THE  MUTUAL 
HARMONISATION 
RECOGNITION PROPOSAL ........................................................................ 154 

LEGISLATION  AND 

IN 

COMPARISON BETWEEN THE DECLARATIONS OF CONFORMITY 155 

THE 
IN 
INTERNATIONAL TRADE .......................................................................... 156 

DECLARATION 

CONFORMITY 

SUPPLIERS 

OF 

The use of the suppliers' Declaration of Conformity in global trade .............. 156 

International standard EN ISO/IEC 17050-1 .................................................. 159 

U.S. International Trade Commission ............................................................ 161 

The Use of Supplier’s Declaration of Conformity in the U.S......................... 161 

Case study: Australia ...................................................................................... 162 

Introduction..................................................................................................... 162 

Supplier’s Declaration: an Assessment .......................................................... 162 

Impact of SDoC on Stakeholders .................................................................... 163 

5.5.3.1.  Regulator ......................................................................................................... 163 

5.5.3.2.  Suppliers ......................................................................................................... 164 

5.5.3.3.  End User.......................................................................................................... 164 

6. 

EVALUATING  THE  TRADE  EFFECTS  OF  SUPPLIERS'  DECLARATION 
OF CONFORMITY ........................................................................................ 168 

ANNEX 9 THE SME TEST – SUMMARY OF RESULTS .......................................... 173 

ANNEX 10 GLOSSARY OF TECHNICAL TERMS AND ABBREVIATIONS ......... 175 

4 

 
 
 
INTRODUCTION 

Achieving a deeper and fairer single market, that builds on its strengths and fully exploits 
its  potential  in  all  its  dimensions,  represents  one  of  the  key  political  priorities  of  the 
European  Commission.1  The  follow-up  and  the  implementation  of  the  Single  Market 
Strategy,  Upgrading  the  Single  Market:  more  opportunities  for  people  and  business, 
adopted  on  28  October  20152  constitute  one  of  the  main  objectives  of  the  2017 
Commission Work Programme.3 

Within  the  Single  Market,  free  movement  of  goods  is  the  most  developed  of  all  four 
fundamental freedoms and generates around 25 % of EU GDP, 75 % of intra-EU trade. 
The  EU  accounts  for  around  one  sixth  of  the  world’s  trade  in  goods.  Trade  in  goods 
between EU Member States (intra-EU trade) was valued at EUR 3 063 billion in 20154. 
However, there is still work to do to ensure a deep and fair European Single Market. The 
enforcement of common safety and environmental rules is still not functioning optimally 
and, where there are no common rules, the principle of mutual recognition is not being 
applied.  The  'Goods  Package'  announced  in  the  2017  Commission  Work  Programme, 
intends to address both these fundamental problems, with proposals on compliance and 
enforcement of EU harmonisation legislation and on mutual recognition. 

In the Single Market for goods, regulatory obstacles are prevented and removed through 
relevant EU legislation on specific products (i.e. through EU harmonisation legislation). 
This  is  for  example  in  the  case  of  toys,  cosmetic  products  or  pyrotechnical  articles. 
Where no EU rules exist (non-harmonised areas), the Directive (EU) 2015/1535 on the 
notificaiton of national  technical rules (the former Directive 98/34/EC)  aims to  prevent 
regulatory  obstacles  within  the  EU,  at  an  earlier  stage,  and  the  principle  of  mutual 
recognition would be used to overcome them, at a later stage.  

Mutual  recognition  is  seminal  for  a  proper  functioning  of  the  single  market  for  goods, 
through the elimination of technical obstacles to genuine free movement. In areas where 
no specific EU legislation is in place, national rules that lay down requirements to be met 
by  such  products  co-exist.  In  principle,  national  regulations  may  still  create  barriers  to 
intra-EU  trade  if  rules  in  different  Member  States  diverge.  The  principle  of  mutual 
recognition requires however that a good that is lawfully marketed in one Member State 
should not be prohibited in another Member State, unless the latter has sound reasons for 
banning  its  sale.  Mutual  recognition  applies  to  products  that  are  not  subject  to  EU 
harmonisation legislation or only partly covered by it; this is the case, for example, of a 
wide range of consumer products such as textile, footwear, childcare articles, jewellery, 
tableware or furniture, for example. 

1  

2  

3  
4      

Jean-Claude Juncker, ‘A New Start for Europe: My Agenda for Jobs, Growth, Fairness and Democratic Change’, Political 
Guidelines  for  the  next  European  Commission,  Opening  Statement  in  the  European  Parliament  Plenary  Session,  15  July 
2014: http://ec.europa.eu/about/juncker-commission/priorities/index_en.htm. 
Communication from Commission to the European Parliament, the Council, the European Economic and Social Committee 
and the Committee of the Regions, Upgrading the Single Market:  more opportunities for people and business, COM 2015 
550/2. 
COM(2016) 710 final: http://ec.europa.eu/atwork/key-documents/index_en.htm 
Source Eurostat.  

5 

 
 
                                                 
The adoption of Regulation (EC) No 764/2008 (‘the Regulation’)5 was a partial6 response 
to  the  weak  application  of  the  principle  of  mutual  recognition  in  the  field  of  goods, 
triggered  by  the  lack  of  awareness  about  the  mutual  recognition  principle,  legal 
uncertainty  when  applying  the  principle  and  the  lack  of  administrative  cooperation 
among  national  authorities.  The  Regulation  was  aimed  mainly  at  establishing  a 
procedural  framework  to  minimise  the  possibility  of  national  technical  rules  creating 
unlawful obstacles to the free movement of goods between Member States7.  

In  December  2013,  the  Conclusions  on  Single  Market  Policy,  adopted  by  the 
Competitiveness Council, noted that to improve framework conditions for businesses and 
consumers  in  the  Single  Market,  all  relevant  instruments  should  be  appropriately 
employed,  including  harmonisation  and  mutual  recognition.8  The  Commission  was 
therefore  requested  to  report  to  the  Council  on  the  sectors  and  markets  where  the 
application  of  the  principle  of  mutual  recognition  is  economically  most  advantageous, 
but  where  its  functioning  remains  insufficient  or  problematic.  In  its  Conclusions  on 
Single  Market  Policy  of  February  2015,  the  Competitiveness  Council  urged  the 
Commission to ensure that the principle of mutual recognition would function effectively 
and to bring forward proposals to that effect, as appropriate9. 

In response to the indications that the functioning of the principle might not be optimal, 
and  taking  into  account  the  request  of  the  Council,  the  application  of  the  principle  of 
mutual  recognition  was  subject  to  an  evaluation.10  Building  on  the  external  evaluation, 
the  Commission's  Evaluation  on  the  functioning  of  mutual  recognition  included  an 
assessment of the functioning of the Regulation as well, in order to have a full picture of 
the  obstacles  impeding  the  optimal  functioning  of  mutual  recognition  (hereafter,  the 
Evaluation)11.   

This  Evaluation  has  concluded  that  mutual  recognition  is  not  functioning  well  and  that 
the principle and the Regulation had limited  effects  in  meeting the foreseen objectives. 
With regards to supportive information and data, this impact assessment is also supported 
by  the  information  contained  in  the  Evaluation.  The  initiative  has  been  linked  to  the 
REFIT programme due to the impacts the malfunctioning of mutual recognition have on 
the functioning of the internal market.  

This initiative should be looked at along with other initiatives currently under preparation 
and  in  particular  the  initiative  on  enforcement  and  compliance  with  the  EU 
harmonisation legislation on products, the Action Plan on SOLVIT and the proposal for a 
Single Digital Gateway to complement each other and contribute to reducing barriers to 

5        COM(2014) 910 final: http://ec.europa.eu/atwork/pdf/cwp_2015_en.pdf. 
6  

Several other tools allow for the correct application of the mutual recognition principle, such as the mutual recognition clause 
and the complaints and infringements related to articles 34-36 TFEU. For more information, see the Evaluation  
See the Evaluation. 
Conclusions  on  Single  Market  Policy,  Competitiveness  Council  meeting;  Brussels  2  and  3  December  2013: 
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/intm/139846.pdf.    
Conclusions  on  Single  Market  Policy,  Competitiveness  Council  meeting;  Brussels  2-3  March  2015: 
http://register.consilium.europa.eu/doc/srv?l=EN&f=ST%206197%202015%20INIT  
European Commission, Study commissioned  to Technopolis Group (2015): ‘Evaluation of the application of the principle of 
mutual recognition in the field of goods,’ ENTR/172/PP/2012/FC  – LOT 4 carried out between April 2014 and May 2015: 
http://ec.europa.eu/growth/single-market/goods/free-movement-sectors/mutual-recognition/index_en.htm. 
See annex 6 for a summary of the results of the Evaluation. 

7  
8  

9  

10  

11  

6 

 
 
                                                 
trade  in  the  Single  Market.  Further  and  better  compliance  and  enforcement  will  reduce 
unfair  competition  and  ensure  a  more  level  playing  field  for  businesses.  An  enhanced 
SOLVIT will facilitate informal problem resolution and the Single Digital Gateway will 
not only ensure visibility for the Product Contact Points established under the Regulation 
(PCPs)  but  also  improve  their  functioning  by  subjecting  them  to  the  quality  criteria  in 
terms of online availability and quality of information and services provided to economic 
operators.  

1.  REGULATORY CONTEXT 

Free movement of goods in the internal market and the principle of mutual recognition 

As one of the four main fundamental freedoms, free movement of goods is a cornerstone 
of European integration and essential  for European competitiveness. Free  movement of 
goods  in  the  internal  market  is  ensured  through  EU  common  rules  on  products  (EU 
harmonisation legislation) and the principle of mutual recognition.  

EU harmonisation legislation sets out common requirements on how a product has to be 
manufactured,  which  includes  rules  on  i.e.  characteristics  of  the  product,  size, 
composition, etc. Its aim is not only the elimination of barriers and the free movement of 
goods  in  the  single  market,  but  also  ensuring  that  only  safe  and  otherwise  compliant 
products find their way into the EU market, in such a way that honest economic operators 
can  benefit  from  a  level  playing  field,  thus  promoting  at  the  same  time  an  effective 
protection of EU consumers and professional users and a competitive single market. The 
adoption  of  EU  common  rules  prevents  Member  State  from  regulating  those  technical 
aspects  of  products  and  products  complying  with  such  rules  are  guaranteed  free 
movement across the single market. 

However, EU harmonisation legislation covering every product and aspect of a product is 
neither a feasible nor a desirable objective 12. Adopting EU common rules is a costly and 
time  consuming  process,  where  a  balance  needs  to  be  struck  between  different 
approaches  and  should  be  reserved  for  those  products  and  aspects  of  products  where 
there are significant barriers to the free movement across the Single Market which cannot 
be addressed otherwise.   

Where  there  are  no  EU  common  rules,  or  when  only  some  aspects  of  the  products  are 
covered  by  EU  common  rules,  Member  States  remain  free  to  adopt  national  technical 
rules  laying  down  requirements  to  be  met  by  those  products,  such  as  rules  relating  to 
designation, form, size, weight, composition, presentation, labelling or packaging. These 
national technical regulations are however subject to the provisions of Articles 34 to 36 
of  the  Treaty  on  the  Functioning  of  the  European  Union  (TFEU),  which  prohibit 
quantitative  restrictions  or  measures  having  equivalent  effect,  and  to  the  principle  of 
mutual  recognition.  In  addition,  they  also  need  to  be  notified  under  the  Directive  (EU) 

12  

See, for example, J. Pelkmans, Mutual Recognition: economic and regulatory logic in goods and services, Bruges European 
Economic Research Papers 24/2012, p 5 : "The lesson of four decades of EU harmonisation is that one has to find a suitable 
balance between, on the one hand, not suppressing the preferences of the (or some) Member States too much (as this may be 
welfare  decreasing),  and,  on  the  other  hand,  avoiding  overly  costly  common  regulation  by  incorporating  each  and  every 
specific element of national (often diverse) rules, prompting 'regulatory failure'". 

7 

 
 
                                                 
2015/153513  in  order  to  ensure  that  no  unjustified  barriers  to  the  Single  Market  are 
allowed.  

The principle of mutual recognition is embedded in Articles 34 and 36 of the TFEU and 
has been further elaborated on case law, especially the "Cassis de Dijon" case14. 

It means that in the absence of EU harmonised rules, if a business is lawfully  selling a 
product in one Member State, in compliance with the applicable national technical rules 
of that Member State, it should be able to sell it in other Member States without having 
to adapt it to the national rules of that Member State where such products already meet 
equivalent  levels  of  protection  to  those  imposed  by  the  importing  Member  State15. 
Barriers to free movement which result from differences in national legislation may only 
be accepted if the national measures: 

- 

- 

are necessary to satisfy mandatory requirements (those being public interests such 
as  health,  safety,  consumer  protection  and  environmental  protection)  which 
justified overriding the principle of free movement of goods, and 
can be justified with regard to the legitimate purpose and are proportionate with the 
aims. 

Exceptions  to  the  mutual  recognition  rule  should  be  interpreted  narrowly.  Considering 
the  exceptions,  mutual  recognition  should  not  be  viewed  as  entailing  lower  health  and 
safety  standards,  or  as  limiting  the  market  surveillance  capabilities  of  national 
authorities; but rather as striking a careful balance between free movement and objectives 
of public interest.  

Figure 1-116 

13  

14  

15  

16  

Directive (EU) 2015/1535 of the European Parliament and of the Council of 9 September 2015 laying down a procedure for 
the provision of information in the field of technical regulations and of rules on Information Society services (codification). 
OJ L 241, 17.9.2015, p. 1 
Judgement of the Court of Justice of 20 February 1979 – Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein C 
120/78. 
For  instance,  ground  37  of  the  Judgment  of  the  Court  of  22  January  2002,  Canal  Satélite  Digital  SL  v  Administración 
General del Estado, in the presence of Distribuidora de Televisión Digital SA (DTS), case C-390/99, confirms this principle: 
‘It is well established in case law that a product which is lawfully marketed in one Member State must in principle be able to 
be marketed in any other Member States without being subject to additional control, save in the case of exceptions provided 
for or allowed by [EU] law.’ 
Source: Commission services 

8 

 
 
                                                 
Free movement of 
goods 

Articles 34-36 TFEU 
Mutual recognition  

Article 114 TFEU 
Harmonisation 
legislation  

Products lawfully marketed 
in one Member State can 
be sold  in other Member 
States without adapting it 
to national technical rules 

Exception: if national 
technical rules are 
necessary and 
proportionate to achieve 
protection of public 
interest 

Common requirements on 
products: to eliminate barriers 
in the single market and ensure 
that only safe and compliant 
products are on the EU market 

EU  harmonisation  legislation  and  mutual  recognition  are  both  necessary  to  achieve  a 
fairer  and  deeper  internal  market.  Mutual  recognition  is  essential  to  guarantee  the  free 
movement  of  goods  in  the  European  Single  Market  where  diverse  and  sometimes 
conflicting  national  technical  rules  can  continue  to  coexist.  When  properly  applied, 
mutual  recognition  guarantees  the  protection  of  the  public  interest  whilst  not  creating 
excessive red tape.  

The practical application of the principle of mutual recognition 

The  application  of  this  general  principle is,  in  practice,  extremely  complex.  It  requires, 
inter  alia,  an  assessment  of  whether  a  product  has  been  lawfully  marketed  in  another 
Member State and an assessment of the equivalence of the rules in the Member State of 
origin to allow the non-application of the technical rules in the importing Member State. 
The  latter  should  not  be  understood  as  a  comparison  of  the  theoretical  intrinsic 
equivalence  of  the  two  Member  States  rules,  but  of  the  practical  results  produced  by 
applying  them  in  terms  of  how  a  particular  product  adequately  protects  the  public 
interests at stake.  

1.  

Some practical modalities on how mutual recognition should work in practice are 
defined by the Regulation.  

In particular, the Regulation introduced: 

 

Product  Contact  Points:  to  provide,  upon  request,  information  on  the 
technical  rules  applicable  to  a  specific  product,  the  contact  details  of  the 
competent  authorities  in  charge  of  supervising  the  implementation  of  the 
technical  rule  in  question  and  the  remedies  available  in  case  of  dispute 
between the economic operator and the competent authority.  

9 

 
 
 
 

 

 

Non-exhaustive  list  of  products:  Mutual  recognition  does  not  apply  to 
products  fully  or  to  those  aspects  partially  covered  by  EU  harmonisation 
legislation.  To  facilitate  the  identification  of  products  to  which  the  mutual 
recognition principle may apply, the Regulation introduced an obligation for 
the  Commission  to  put  in  place  a  non-exhaustive  list  of  products  which are 
not subject to EU harmonisation legislation.  
. 

Procedure for decisions denying market access: The Regulation lays down in 
particular the rules and procedures to be followed by the national authorities 
of a Member State when taking or intending to take a decision, in accordance 
with the national technical rules, which would hinder the free movement of a 
product lawfully marketed in another Member State and subject to Article 34 
TFEU.  In  particular,  the  Regulation  places  the  burden  of  proof  on  the 
national authorities intending to deny market access. A written notice has to 
be sent to the economic operator, informing him about their intention to deny 
market  access,  and  specifying  the  technical  rule  on  which  the  decision  is 
based,  and  the  supporting  technical  or  scientific  evidence  which  makes  the 
decision  justified  and  proportionate. The economic operator  has  the  right  to 
submit comments. Any decision denying market access taken after receiving 
comments  from  the  economic  operator  shall  be  notified  to  him,  and  shall 
state  the  grounds  on  which  it  is  based,  the  technical  or  scientific  evidence 
supporting  the  decision  and,  when  applicable,  the  reasons  for  rejecting  the 
economic operator's arguments. The decision shall also indicate the remedies 
available under national law in order to challenge the decision.  
Reporting  obligations:  Member  States  have  to  submit  yearly  reports  on  the 
application  of  the  Regulation.  Furthermore,  every  decision  denying  market 
access,  as  well  as  the  grounds  on  which  it  is  based,  has  to  be  individually 
notified by Member States to the Commission, in addition to the notification 
of the economic operator.  

2.   The application of the principle of mutual recognition is also made possible by the 
inclusion  of  a  mutual  recognition  clause17  in  national  technical  regulations.  It 
provides  legal  certainty  for  economic  operators,  as  they  are  informed  about  their 
rights, thereby actually putting the aforementioned principle into practice.  

3.   The  Commission  monitors  whether  Member  States  comply  with  the  EU  law  and 
whether their national rules undermine the free movement of goods. To ensure that 
internal  market  rules  are  respected  and  applied  correctly  in  the  area  of  non-
harmonised  goods,  the  Commission  follows  up  complaints  based  on  alleged 
breaches  of  Article  34  TFEU  and  takes  action,  where  necessary,  to  ensure  that 
those restrictions which cannot be justified are eliminated.  

2.  ECONOMIC CONTEXT: NON-HARMONISED PRODUCTS IN THE EU 

17  

The  mutual  recognition clause, when inserted in national regulations, raises awareness  about the application of the  mutual 
recognition principle and the Mutual Recognition Regulation to products coming from other Member States and which are 
not in line with that particular technical rule. 

10 

 
 
                                                 
Mutual  recognition  applies  to  non-harmonised  products  and  to  partially  harmonised 
products,  i.e.  products  which  are  in  part  covered  by  EU  harmonisation  legislation  but 
which still have other aspects which are subject to national rules. It is difficult to have a 
strict  separation  between  these  two  categories  of  products:  while  there  are  products 
which  are  subject  to  detailed  EU  rules  (and  considered  as  harmonised)  such  as  toys, 
pyrotechnical  articles  or  cosmetics,  many  products  are  however  subject  to  EU 
harmonisation for at least specific aspects while the rest is left for national legislation and 
therefore  subject  to  mutual  recognition.  Mutual  recognition  therefore  applies  to  many 
consumer products where EU harmonisation measure is almost absent such as childcare 
articles,  clothing,  textile  and  footwear,  furniture,  jewellery,  sports  accessories.  It  also 
applies  to  products  more  heavily  regulated  by  EU  harmonisation  measures  regarding 
those  elements  not  covered  by  these  measures,  for  example,  to  food  and  food 
supplements, fertilising or construction products.  

Whatever the scope for national rules (the totality of the product or many aspects of it), 
mutual recognition should apply to address any differences in technical requirements in 
the  Member  States.  Therefore,  for  the  purposes  of  this  impact  assessment,  non-
harmonised  products  should  be  understood  as  also  including  those  products  which  are 
partially  harmonised  as  they  are  still  subject  to  national  rules  and  thus,  mutual 
recognition. More information on the economic relevance of products subject to mutual 
recognition can be found in Annexes 4 and 5. 

Over  the  period  from  2008  and  2014,  around  0.89  million  enterprises  were  operating 
within  non-harmonised  sectors,  representing  more  than  50%  of  the  total  number  of 
active enterprises in the manufacturing economy18.   

Figure  2-1:  Number  of  active  enterprises:  non-harmonised  sectors  vs  overall 
manufacturing sectors (EU28, 2012-2014) NACE Digit-3 level 

18   

Around  2  million  active  enterprises  are  operating  under  Section  C  of  NACE  classification  named  Manufacturing.  The 
correspondence  between  the  list  of  NACE  DIGIT-3  codes  and  the  way  they  have  been  considered  in  the  analysis  (i.e. 
harmonised or non/partially harmonised) can be found in annex 5 

11 

 
 
 
                                                 
Source: Structural Business Statistics, Annual enterprise statistics by size class for special aggregates of activities 
(NACE Rev. 2) (sbs_sc_sca_r2), EUROSTAT (2016) 

Around 87% of the enterprises operating within the non-harmonised sectors are micro 
enterprises (i.e.  with less than 9 employees) and around  11% are  small  and medium 
enterprises (i.e. with a number of employees between 50 and 250)19. 

In terms of turnover, non-harmonised sectors represent a significant contribution to the 
economy.  As  shown  in  the  figure  below,  enterprises  operating  within  non-harmonised 
sectors contribute to around 20% of the total value of market sales of manufacturing 
sectors  (€1,158  billion  out  of  €5,690  billion,  corresponding  to  the  overall  turnover 
produced within the manufacturing sectors). 

In addition, considering the period 2008 – 2015, the following was observed:  

 

 

The  (average)  annual  value  of  intra  EU  exports  of  non  (or  partially)  harmonised 
products has been equal to €335 billion ; 

The value on intra EU exports of non-harmonised products represented the 18% of 
the value of intra EU exports. 

Figure 2-2: Value on non (or partially) harmonised products. Intra EU Exports, € 
billions, 2008 -2015 

3.  PROBLEM DEFINITION  

Mutual  recognition  is  instrumental  to  removing  barriers  to  intra-EU  trade  when 
harmonisation  is  either  not  desired  or  technically  impossible.  However,  mutual 

19  

These figures have been computed for the period 2011 – 2013 since the enterprise statistics by size class for aggregates of 
activities (NACE rev.2) are only available for this period. 

12 

 
 
 
 
                                                 
recognition  is  not  functioning  well20.  The  weak  use  of  the  principle  of  mutual 
recognition  and  the  limited  impacts  the  Regulation  had  in  achieving  the  foreseen 
objectives of ensuring free movement of goods in the Single Market points that there 
is a lot of potential to be unleashed.  

Businesses  rarely  rely  on  mutual  recognition  to  sell  their  products  in  another  Member 
State. Companies check the applicable rules in the Member State where they want to sell 
their products and if national rules prevent them from selling them, most of them adapt 
their product to those rules (87% adapt their products to national rules straight away or 
have tried to rely on mutual recognition but received a negative decision and after they 
adapted their product)21. For other companies, particularly SMEs, national technical rules 
act as barriers to enter those national markets, and they refrain from selling their products 
in those countries22. Where companies try to rely on the principle of mutual recognition, 
national authorities find it difficult to accept, on the basis of mutual recognition, products 
on their markets that do not conform to their national rules, to which technical, historical 
and cultural background they are well acquainted.  Therefore, they deny market access to 
those  products.  68%  of  companies  which  replied  to  the  2016  public  consultation  have 
tried  to  rely  on  mutual  recognition,  and  for  half  of  them,  market  access  was  denied. 
When  market  access  is  denied,  it  appears  that  companies  find  it  extremely  difficult  to 
challenge these national decisions23. 

Stakeholders reported recurrent problems with the application of the principle of mutual 
recognition  in  certain  specific  sectors  such  as  construction  products,  food  and  food 
supplements,  food  contact  materials,  fertilisers  or  childcare  products;  some  of  these 
sectors are of particular economic relevance24. 

Whilst the Regulation was adopted to facilitate the application of the principle of mutual 
recognition,  it  has  not  achieved  its  objectives.  Generally,  the  2016  public  consultation 
shows that only half of the economic operators responding consider that it is easier to sell 
products in other Member States since the Regulation entered into force.25 

3.1.  Magnitude of the problem 

Due  to  the  complex  nature  of  mutual  recognition  and  the  wide  variety  of  products  to 
which  it  applies,  accurately  estimating  the  magnitude  of  the  problem  triggered  by  its 
suboptimal  functioning  is  not  straightforward.  Therefore,  several  elements  were  taken 

20  
21   
22  

23  
24  

25  

For more information see the Evaluation.  
Data from the public consultation carried out in 2016. 
More than half of SMEs say that administrative procedures related to exporting to other Member States are too difficult to 
comply  with  and  therefore  deter  many  firms  from  exporting.  Flash  Eurobarometer  421:  Internationalisation  of  Small  and 
Medium-sized Enterprises  
https://data.europa.eu/euodp/en/data/dataset/S2090_421_ENG               
Only 2% of companies challenged this decision successfully. Data from the 2016 public consultation 
The construction sector is a major economic activity in the European Union, with a total value of production corresponding 
to over 9% of GDP, and a value added contributing for 3.1% to GDP formation in the EU28 countries in 2012. In 2014, there 
were  over  3  million  firms  active  in  the  construction  of  buildings,  with  a  total  turnover  of  about  €  1,300  billion  and  a 
workforce of nearly 11 million persons. The EU fertilising product market is an economic sector that has between EUR 20 
billion 
(see 
jobs 
food  and  drink 
http://ec.europa.eu/enterprise/sectors/chemicals/files/fertilizers/final_report__23jan2012_en.pdf.).  The 
industry stands as the largest manufacturing sector in the EU in terms of turnover (14.9%) and value added (12.9%) and the 
leading employer in the EU manufacturing sector (15% representing 4.25 million jobs) and generates 7% of GDP. 
See annex 2  

approximately  100  000  million 

and  EUR  25  billion 

turnover 

annual 

and 

in 

13 

 
 
                                                 
 
into  account  in  the  analysis,  in  order  to  illustrate  the  significance  of  the  effects  that  a 
suboptimal mutual recognition may have.  

First,  the  model26  presented  in  figure  3-1  has  been  used  to  determine  the  costs  that  a 
company  might  incur  when  entering  the  market  without  fully  benefiting  from  mutual 
recognition. The objective of the model is to distinguish the socio-economic costs of the 
malfunctioning  of  mutual  recognition;  the  model  contains  seven  components,  and  uses 
data about the value of intra-EU trade to calculate key costs. The model is underpinned 
by  an  enterprise  decisions  tree  that  considers  routes  to  successful  market  entry  and 
decisions  not  to  export.  By  estimating  the  number  of  enterprises  entering  new  markets 
with non-harmonised products, it is possible to apply an estimate of the number of days 
work required by enterprises to  overcome sub-optimal functioning. This  element of the 
model provides details of transactions costs. The second component of the model (cost of 
delayed market entry) estimates the cost per week of enterprises note being able to trade. 
These costs can then be treated separately, or combined to give a total estimate of costs 
associated with sub-optimal functioning of the Mutual Recognition principle. 

Figure 3-1: Decision tree diagram for export decisions associated with products not 
covered by the Mutual Recognition principle27 

26   
27  

The full description and methodology used for this model are described in Annex 4 
Study on the costs and benefits of mutual recognition performed by E&Y and J. Pelkmans, Draft Final Report February 2017 
(Service Request No 567/PP/GRO/IMA/16/1133/8852). 

14 

 
 
 
 
 
 
                                                 
This diagram represents the route that enterprises can follow when deciding not to export 
or when entering another EU Member State market. The model provides a representation 
for an enterprise considering intra-EU exporting one product in one EU Member State. 
This model has been designed as a simplified framework to illustrate a complex process, 
and is a simplified representation of the reality of the market. A model where the values 
can  be  changed,  based  on  the  type  of  products,  company  and  feedback  received  was 
preferred, as it allows an evolving estimation,  reflecting the reality  of the  market.  The 
values used for calculating the size of the problem based on this model are assumptions 
based  on  feedback  from  a  very  limited  number  of  stakeholders  and  thus  need  to  be 
treated with caution as they are not necessarily representative 28.  They vary substantially 
upon  the  number  of  products  intended  to  be  marketed  and  the  number  of  markets 
targeted. Details can be found in Annex 4.   

Second,  the  comparison  of  the  value  of  the  intra  EU  exports  with  domestic 
consumption29 shows that for harmonised products the value of intra EU exports is 55% 
of domestic consumption, while for the non-harmonised and partially harmonised goods 
it  represents  only  35%.  This  might  be  also  a  sign  of  the  effects  that  suboptimal 
functioning  of  mutual  recognition  has  on  trade,  based  on  the  assumption  that  in  the 
harmonised  area,  due  to  uniform  and  standardised  rules  applicable  in  all  EU  Member 
State, there are no (or few) barriers to trade.  

28  
29   

9 stakeholders interviewed on February 2017 , with very consistent results among them  
Value of production-value of extra EU exports +value of intra EU imports  

15 

 
 
 
                                                 
65%

60%

55%

50%

45%

40%

Figure  3-2:  Intra  EU  exports  as  %  of  the  domestic  consumption:  harmonised  vs 
non- harmonised or partially harmonised products, 2008-201530 

51,8% 

52,9% 

50,6% 

54,2% 

54,8% 

57,9% 

59,2% 

56,5% 

34,5% 

35,6% 

35,8% 

37,1% 

37,7% 

37,4% 

35%

32,9% 

32,5% 

30%

2008

2009

2010

2011

2012

2013

2014

2015

Harmonised

Non/Partially Harmonised

Lastly,  a  global  estimation  of  trade  barriers  in  general  can  be  used  to  compliment  the 
previous findings. The fact that most companies feel compelled to adapt their products to 
national requirements constitutes a barrier to trade on the internal market. The magnitude 
of  these  barriers  is  also  likely  to  be  significant.  A  study  done  for  the  European 
Parliament31 tried to estimate the magnitude of the impact that non-tariff barriers to trade 
have on the internal market. It concluded that a reduction of such barriers could lead to 
an increase in intra-EU trade of more than 100 billion EUR per year. While the concept 
of  non-tariff  barriers  in  the  paper  is  broader  (including  not  only  lack  of  mutual 
recognition or harmonisation but also discriminatory procedures and less favourable tax 
or  subsidy  treatment),  it  provides  an  indication  that  the  problem  of  mutual  recognition 
not working well in practice is economically significant.   

3.2.  The drivers of the problem 

A number of factors explain the fact that mutual recognition is currently not functioning 
well, in particular, the lack of awareness about mutual recognition, the legal uncertainty 
with regards to its scope and the practical obstacles related to its application. According 
to the 2016 public consultations, businesses find that the difficulty to challenge a national 
decision  denying  market  access  is  the  main  obstacle  to  the  functioning  of  mutual 
recognition32, followed by the insufficient communication between national authorities of 

30   
31  

32   

Source: PRODCOM statistics, EUROSTAT (2016) 
The  Cost  of  Non-  Europe  in  the  Single  Market,  'Cecchini  Revisited',  An  overview  of  the  potential  economic  gains  from 
further completion of the European Single Market, CoNE 1/2014 
http://www.europarl.europa.eu/RegData/etudes/STUD/2014/510981/EPRS_STU(2014)510981_REV1_EN.pdf 
62% of respondents ranked this obstacle as being the most important one. 

16 

 
 
 
                                                 
  
different Member States, the lack of awareness and the legal uncertainty with regards to 
its scope.  

There  is  still  a  significant  lack  of  awareness  and  an  important  lack  of  legal  certainty 
which  hampers  the  effective  functioning  of  mutual  recognition.  When  businesses  are 
aware  of  mutual  recognition,  the  uncertainty  with  regards  to  its  scope  and  application 
makes  them  reluctant  to  use  the  principle  for  entering  new  markets.  First  of  all,  it  is 
difficult to know if mutual recognition applies to a particular product or not33. Secondly, 
when businesses rely on mutual recognition, the outcome is uncertain. In particular, the 
evidence that will be required to demonstrate that the product has been lawfully marketed 
in another Member State or the tests that will have to be completed vary among Member 
States. Furthermore, Member States are entitled to argue that mutual recognition does not 
apply where overriding  public interests  such  as health,  safety,  consumer  protection and 
environmental protection justify specific national requirements. Finally, if market access 
is denied, businesses can only challenge these decisions in the national courts which is a 
long and costly process.  

3.2.1. Lack of awareness about the mutual recognition principle and Regulation 

The  first  condition  for  businesses  and  national  authorities  to  use  and  apply  mutual 
recognition is to be aware of it and what it means in practice for companies. However, 
there  are  still  a  significant  number  of  businesses  and  national  authorities  unaware  of 
mutual  recognition.  One  of  the  specific  objectives  of  the  Regulation  was  to  increase 
awareness  of  the  mutual  recognition  principle.  The  stakeholders'  consultation  and  the 
desk research performed by the Commission services show that there are businesses and 
national authorities still unaware about the mutual recognition principle and Regulation. 
Lack of awareness about the principle triggers lack of awareness about how this principle 
should be applied or the conditions under which mutual recognition could be denied. In 
many  cases  businesses  simply  assume  that  they  need  to  adapt  their  products  to  the 
national rules if they want to sell them in another Member State. In other cases, this is 
required by the national authorities, to the detriment of mutual recognition34.   

Surveys  carried  out  in  200435  and  201436show  a  low  level  of  awareness  about  mutual 
recognition among businesses. In 2004, 46% of the respondents declared being aware of 
mutual  recognition;  54  %  of  the  companies  interviewed  in  2014  declared  not  knowing 
about  it  or  having  heard  of  it  but  not  being  familiar  with  the  details.  The  public 
consultation  carried  out  in  201637  shows  however  a  significantly  higher  level  of 
awareness;  7%  of  the  respondents  declared  being  aware  of  mutual  recognition.  The 

33  

34  

35  
36  

37  

This  issue  was  already  highlighted  in  the  First  Report  on  the  application  of  the  Mutual  Recognition  Regulation,  COM 
(2012)292 final: http://eur-lex.europa.eu/LexUriServ.do?uri=COM:2012:0292:FIN:EN:PDF  
As  indicated  in  the  Evaluation,  according  to  the  2014  survey,  more  than  40%  of  the  companies  simply  assumed  it  was 
necessary to undertake steps to adapt their product to the requirements of the country of destination as they did not know if 
the mutual recognition principle applied to their product; more than 30% considered such steps because they were required 
for acceptance in the local market and did not check whether mutual recognition could apply, and nearly 30% relied on the 
principle, but it turned out it did not work in practice, as the national authorities still asked for testing or adaptation.  
Survey carried out in the framework of the impact assessment supporting the proposal for the Mutual Recognition Regulation 
European Commission, Study commissioned to Technopolis Group (2015): ‘Evaluation of the application of the principle of 
mutual recognition in the field of goods,’ ENTR/172/PP/2012/FC  – LOT 4 carried out between April 2014 and May 2015: 
http://ec.europa.eu/growth/single-market/goods/free-movement-sectors/mutual-recognition/index_en.htm. 
See annex 5 

17 

 
 
                                                 
differences  in  the  declared  level  of  awareness  can  be  explained  by  the  fact  that  the 
consultation process was different (targeted surveys versus open consultation).   

The  level  of  awareness  about  mutual  recognition  among  national  authorities  is  mixed. 
The  results  of  the  public  consultation  carried  out  in  2016  shows  that  when  national 
authorities  check  if  products  available  on  their  market  coming  from  another  Member 
State  comply  with  the  national  rules  they  are  enforcing,  53%  verify  if  they  are  already 
lawfully marketed in the Member State of origin while 46% don’t. 

Furthermore, confusion arises with regards to prior authorisation procedures; when such 
procedures  are  in  place,  economic  operators  cannot  rely  on  the  principle  of  mutual 
recognition  to  place  their  products  on  the  national  market.  In  fact,  the  Regulation  does 
not  apply  to  prior  authorisation  procedures,  as  the  requirement  that  the  placing  of  a 
product on the market is subject to prior authorisation is not a technical rule within the 
scope  of  the  Regulation.  However,  the  decision  to  deny  prior  authorisation  merely 
because the product does not comply with the national rules in the Member States having 
the prior authorisation procedure is a decision within the scope of the Regulation38.  

Despite the fact that businesses indicated in the 2016 public consultation a high level of 
awareness,  they  still  very  much  support  the  need  for  additional  awareness  raising 
campaigns: 95% of them replied39  that awareness raising is still necessary, and ranked 
the lack of awareness as being the third main obstacle to a smooth functioning of mutual 
recognition.  Also,  Member  States  addressed  the  need  for  additional  awareness 
campaigns.  During  the 2016  public  consultation40,  84%  of  national  authorities  consider 
that  awareness-raising  is  still  necessary.  When  asked  to  rank  priorities  for  improving 
mutual recognition by order of importance, awareness-raising was ranked as the first 
priority,  with  52%  of  responding  national  authorities  supporting  it.  National 
authorities  replying  to  this  consultation  are  representing  PCPs  (31%)  but  also  other 
authorities than PCPs (69%). The need for additional awareness raising campaigns is also 
highlighted by numerous Member States in their annual reports on the application of the 
Regulation. The outcome of the stakeholders' event held in June 2016 "Single market for 
products: fresh ideas to unleash full potential"  41 points into the same direction; national 
authorities participating stressed that awareness raising, for both economic operators and 
national authorities is essential for improving the functioning of mutual recognition. 

The  Regulation  had  a  limited  effect  in  increasing  awareness  of  the  mutual  recognition 
principle, mainly due to the suboptimal functioning of the PCPs. This makes it difficult 
for businesses to know when mutual recognition can be used for entering a market and 
what their rights are. Most stakeholders agreed however that PCPs are a very useful tool, 
with a lot of potential. They need however to be strengthened in terms of administrative 
cooperation and network, in order to be efficient with regards to their objectives. 

3.2.2. Legal uncertainty as regards the scope of mutual recognition  

38  
39  
40  
41    

See recital 12 of the Mutual Recognition Regulation  
See annex 5 
See annex 5 
See annex 2.  

18 

 
 
                                                 
Determining  if  a  product  might  benefit  from  the  mutual  recognition  principle  is  not 
straightforward,  as  mutual  recognition  applies  to  a  very  wide  range  of  products,  i.e. 
products  or  aspects  of  products  which  are  not  covered,  fully  or  partially,  by  EU 
harmonisation legislation. Therefore, clarifying whether mutual recognition should apply 
to a given product requires detailed knowledge of rules on products42.  

The  main  tools  to  guide  economic  operators  to  knowing  if  mutual  recognition  can  be 
invoked for a product are: 

1. 

The Product Contact Points (PCPs) established by the Regulation. However, there 
are  problems  with  the  functioning  of  PCPs.  In  the  period  between  the  entry  into 
force of the Regulation on 13 May 2009 and today  43, the Product Contact Points 
received 8024 questions from economic operators.  

2010-201144 

1402 

2012 

1439 

2013 

1826 

2014 

1793 

2015 

1564 

The PCPs that were most contacted are France and the Czech Republic, followed 
by  Slovakia.  The  low  number  of  inquiries  received  shows  that  PCPs  and  the 
assistance they can offer are sub-optimally used45, the main issues underlined by 
economic operators in relation to PCPs are the long delays for receiving an answer, 
the  quality  of  the  answer  or  even  the  absence  of  it.  The  activity  of  PCPs  is  also 
undermined by the lack of administrative cooperation. They are also affected by the 
complexity of the questions they receive, the variety of products covered by mutual 
recognition and language limitations. 

The  list  of  products  to  which  mutual  recognition  might  apply  put  in  place  by  the 
Regulation.  This  was  done  as  a  database,  which  is  available  online  on  the 
Commission's website on  mutual  recognition. The list  of products  contains  goods 
classified  according  to  the  Combined  Nomenclature46  but  it  has  not  provided 
sufficient  or  reliable  information  to  users.  This  is  because  the  list  lacks  user-
friendliness,  it  is  extremely  difficult  to  take  into  account  products  partially 
harmonised  appropriately  and  it  does  not  reflect  harmonisation  legislation  newly 
adopted or repealed. 

See  for  instance  Court  judgment  of  8  May  2003,  ATRAL  SA  v  État  belge,  (Case  C-14/02)  concerning  alarm  systems 
regulated  by  nothing  less  than  three  instruments  of  EU  law  (Low  Voltage  Directive  73/23/EEC,  Electromagnetic 
Compatibility  Directive  89/336/EEC,  and  Radio  Equipment  and  Telecommunications  Directive  1999/5/EEC).  Still,  the 
functionality testing, climatic tests and efficiency testing of these products are not covered by the  mentioned EU common 
rules and, therefore, fall within the scope of the principle of mutual recognition. 
Requests received in 2016 are not taken into account, as these will be reported by Member States in the 2017 reports 
The  reporting  in  annual  since  2012.  However,  the  number  of  questions  indicated  above  is  only  indicative  and  does  not 
constitute an accurate picture of all  questions received or treated by the  PCPs.   This is because not all Member States  are 
indicating in their annual reports the number of questions received and treated by the PCPs.    
This is also supported by the 2016: 72% of economic operators declared that they have never contacted a PCP and 46% were 
not aware of them. 
The Common Nomenclature is a method for designating goods and merchandise which was established to meet, at one and 
the same time, the requirements both of the Common Customs Tariff and of the external trade statistics of the Community. 
See 
http://ec.europa.eu/taxation_customs/business/calculation-customs-duties/what-is-common-customs-tariff/combined-
nomenclature_en 

2. 

42  

43  
44  

45  

46  

19 

 
 
                                                 
3. 

The  mutual  recognition  clause47,  when  inserted  in  national  regulations,  raises 
awareness (for businesses and relevant national authorities) about the application of 
the  mutual  recognition  principle  and  the  Mutual  Recognition  Regulation  to 
products  coming  from  other  Member  States  and  which  are  not  in  line  with  that 
particular technical rule. However, the use of the clause is still poor and it has not 
shed  sufficient  light  on  when  mutual  recognition  is  applicable.  During  the  PCPs 
survey  carried  out  in  2014,  only  28%  of  the  respondents  indicated  that  a  mutual 
recognition  clause  is  included  systematically  in  all  relevant  national  rules48.  The 
overview49  of  the  draft  national  technical  regulations  notified  between  2012  and 
2014 shows poor use of the mutual recognition clause: 

2012 

2013 

2014 

Total 

MRC50 
inserted 

Total 

MRC inserted 

Total 

MRC inserted 

755 

69 

728 

79 

685 

57 

3.2.3. Legal  uncertainty  as  regards 
unreliability of the outcome 

the  application  of  mutual  recognition  and 

The  application  of  the  principle  of  mutual  recognition  is  also  hindered  by  practical 
obstacles. Technical barriers may be intentionally adopted to protect national or regional 
markets or be the result of lack of trust that other national regulations offer an adequate 
protection of public interest. In addition, national authorities are entrusted with enforcing 
their national technical rules and it is difficult for them to accept a product which does 
not  conform  to  such  rules.  This  is  for  example  the  case  for  compulsory,  nationally 
conducted tests; extra labelling requirements; stringent rules on the use of languages51 or 
reference to mandatory national conformity marks. In other instances, , the application of 
the  mutual  recognition  principle  is  sometimes  knowingly  disregarded  because  potential 
users  find  that  the  outcome  when  trying  to  invoke  the  principle  is  uncertain  and 
unreliable.  

In  particular,  the  following  elements  that  hinder  in  practice  the  application  of  mutual 
recognition were identified: 

1. 

Evidence required by national authorities 

One  of  the  main  reasons  is  the  lack  of  clarity  in  the  concept  of  "lawfully 
marketed", as Member States have different requirements as regards the evidence 
to be submitted and are often very cautious towards products lawfully marketed in 

47  

48  

49  
50  
51  

The "Commission interpretative communication on facilitating the access of products to the markets of other Member States: 
the practical application of mutual recognition" (OJEU, 2003/C 265/2) provides a standard example of a mutual recognition 
clause.  
8% replied that MRCs are not used at all, 20% replied that MRCs are included in few rules, and 44% replied that MRCs are 
included in more than half of the adopted national rules.   
Carried out  internally by the Commission services 
Mutual recognition clause 
Like those demanding for instance that solely the official language(s) of the country of destination be used in the labelling, 
barring the use of multilingual labels.  

20 

 
 
                                                 
another  Member  State.  The  objective  of  the  Regulation  was  to  reduce  the  risk  of 
seeing  market  access  denied,  by  allowing  communication  between  the  businesses 
and  the  national  authorities  in  order  to  prevent  problems  of  free  movement  of 
goods. In practice, however, the outcome is not very positive. Placing the burden of 
proof on Member States did not have any added value as regards the lack of clarity 
in the concept of "lawfully marketed", which triggers the possibility for economic 
operators to invoke the mutual recognition principle to sell their products in other 
Member States. This is because the Regulation only indicates who has the burden 
of  proof,  without  defining  the  concept  of  "lawfully  marketed",  nor  the  kind  of 
lawfully  marketed. 
evidence  needed 
Furthermore,  there  is  no  jurisprudence  from  the  Court  of  Justice  on  this  concept. 
Thus,  businesses  report  that  Member  States  have  different  requirements  with 
regards  to  the  evidence  to  be  submitted  in  order  to  demonstrate  that  a  product  is 
"lawfully marketed".    

that  a  product  was 

to  demonstrate 

In  the  2016  public  consultation,  businesses  ranked  the  need  to  increase  legal 
certainty when using mutual recognition as the second priority for the Commission.  

Furthermore,  the  principle  of  mutual  recognition  excludes  the  unnecessary 
duplication of controls already carried out by another Member State and presumes 
recognition  of  tests  carried  out  in  another  Member  State  especially  where  the 
results are available and may, at request, be given. In this respect, the Regulation 
sets out an obligation on Member States authorities to accept any test performed by 
conformity  assessment  bodies  covered  by  an  accreditation  certificate  in  line  with 
Regulation (EC) No 765/2008. 

Still,  in  practice,  tests  already  conducted  in  another  Member  State,  also  by 
accredited bodies, are often not recognized in other Member States52. This places a 
burden  on  the  economic  operator  to  duplicate  tests  in  the  Member  State  of 
destination. Duplication of testing comes at an economic cost – not only of the test 
but also for the delay of accessing a market.  

2.  Assessment  of  the  need  to  apply  national  requirements  to  products  lawfully 

marketed in another Member State 

Member States can deny market access where the Member State of origin does not 
provide  an  adequate  level  of  protection  of  the  public  interests  in  question;  this 
requires  national  authorities  to  look  at  the  practical  effects  that  the  application  of 
their  national  rule  would  produce  and  the  level  of  protection  that  would  be 
achieved. The burden of proof that the restriction on the free movement of goods is 
justified53 and necessary54 to effectively protect the public interests invoked falls on 
the  Member  States  and  not  on  the  economic  operator.  Such  analysis  is  not 

52  

53  

54  

A  recent  study  on  the  EU  harmonisation  of  the  requirements  for  the  road  circulation  of  mobile  machinery  (FWC 
ENTR/172/PP/2012/FC/Lot1) indicated that the fees of the national type approval and third party testing bodies are estimated 
to be of about €75 million across the EU. In total, type approval is estimated to generate costs of €78 million for the sector, 
representing 1.2% of their turnover.  
http://ec.europa.eu/DocsRoom/documents/17786/attachments/1/translations/en/renditions/native  
See for example the Judgments of the Court of 6 September 2012 in case C-150/11, Commission v Belgium, paragraph 54; 
and of 23 September 2003 in case C-192/01, Commission v Denmark. 
See, to that effect, the Judgment of the Court of 28 January 2010 in case C-333/08 Commission v France, paragraph 87. 

21 

 
 
                                                 
 
straightforward  and  national  authorities  tend  to  automatically  apply  the  national 
rules at the cost of mutual recognition. The Regulation requires these decisions to 
be notified to the Commission, however in many instances, no notification is sent. 

The  obligation to  notify every  administrative decision denying market  access 
was  also  intended  to  bring  more  legal  certainty  for  economic  operators  when 
invoking  their  right  to  mutual  recognition.  In  the  period  between  the  entry  into 
force of the Regulation on 13 May 2009 and today, the Commission has received 
3918  notifications.  All  notifications  received  come  from  6  Member  States,  and 
one Member State, namely Portugal, accounts for around 80% of the notifications 
received.  Most  of  notifications  refer  to  precious  metals,  and  some  relate  to 
foodstuff,  fertilisers,  food  additives  and  electrical  equipment.  There  are 
discrepancies between the number of notifications received by the Commission and 
the  number  of  administrative  decisions  indicated  by  Member  States  in  the  annual 
reports.  For  example,  some  Member  States  are  indicating  in  their  annual  reports 
that a certain number of administrative decisions have been taken, while these have 
never been notified to the Commission. Other Member States are reporting that no 
administrative  decisions  have  been  taken,  while  complaints  received  show  the 
contrary.  This  points  to  the  fact  that  Member  States  are  not  always  notifying 
administrative decisions denying or restricting market access to the Commission. 

3.  Difficulty challenging administrative decisions that deny or restrict market access.  

The  Regulation  does  not  put  in  place  any  specific  procedure  to  challenge 
administrative decisions denying market access; it only mentions the obligation on 
Member States to specify, in the administrative decision denying market access, the 
legal remedies available under the law in force in that Member State and the time 
limits applying to these remedies. The only option for challenging such decisions 
lies therefore in the legal means offered by national law (national courts, tribunals 
or  other  instances  of  appeal).  Such  proceedings  are  very  long  and  costly  for 
businesses,  estimated  between  5000  and  100  000  Euro  per  product  and  per 
market55.  Other  alternative  non-judicial  problem-solving  mechanisms,  such  as 
SOLVIT,  have  not  proved  to  be  an  effective  solution  for  businesses  up  to  now. 
Only a fraction of the cases submitted in SOLVIT are coming from businesses (107 
out  of  2414  in  2016).  Within  these  106  cases  only  27  concerned  goods  and  5 
mutual  recognition  related  issues.  Furthermore,  the  resolution  rate  of  businesses 
cases is lower, especially for goods related cases.  Most goods cases are about the 
justification  of  a  national  measure  restricting  the  marketing  of  a  good  or  the 
provision of a service. It is often very hard to analyze, prove and successfully argue 
before  a  national  authority  in  an  informal  way  that  a  given  measure  is 
disproportionate,  especially  where  large  sums  are  involved.  Demonstrating  that  a 
particular  national  restrictive  measure  is  unjustified  would  require  technical 
expertise  and  formal  powers  that  SOLVIT  centers  do  not  enjoy  nowadays  (for 
example in the area of mutual recognition and non-harmonised goods)56.  

55  

56    

Public consultation 1.06.2016-30.09.2016; 11% of respondents indicated an estimate of the costs incurred, the other choose 
not to reply or indicated that such estimation is impossible. There are considerable variations in the answers.  
Source: SOLVIT database  

22 

 
 
                                                 
When asked to rank obstacles to mutual recognition by order of importance57, the 
difficulty  in  challenging  administrative  decisions  denying  or  restricting  market 
access  was  considered  as  the  main  obstacle  by  businesses  (62%  of  businesses 
responding  to  the  2016  public  consultation),  and  72%  considered  that  ensuring 
effective  remedies  for  taking  action  against  such  decisions  should  constitute  the 
Commission's main priority.   

3.2.4. Lack of trust and cooperation among authorities 

The lack of trust among authorities and the lack of efficient administrative cooperation, 
further  contribute  to  these  drivers.  Before  the  adoption  of  the  Regulation,  dialogue 
between  the  national  authorities  of  different  Member  States  was  very  difficult,  mostly 
due to the lack of a common address book /network.  The Regulation tried to remedy to 
this  problem  by  introducing  the  Product  Contact  Points  and  the  telematic  network58. 
Despite  this, administrative cooperation remains suboptimal, for various  reasons. Many 
Member  States  highlighted,  in  their  annual  report,  the  difficulties  PCPs  have  in 
identifying and contacting the responsible authorities in their own administration in order 
to  reply  to  requests  received  from  economic  operators.  Some  Member  States  managed 
over the years to put in place a network of experts, but the variety of products covered by 
mutual  recognition  and  national  legislation  involved,  as  well  as  the  different  internal 
organisation in certain Member States make this task very difficult. Also, there is a lack 
of administrative cooperation between PCPs. The absence of a network, allowing rapid 
communication and exchange of information delays the work of the PCP when replying 
to a request from economic operators. Many are complaining about the absence of reply 
from  their  colleagues  from  other  Member  States,  or  about  long  delays  to  receiving  an 
answer.  Often,  the  answers  received  are  of  low  quality  as  regards  the  information 
transmitted59. 

During the survey carried out in 2014, the interviewed PCPs indicated the main problems 
with regard to administrative cooperation: 

Figure 3-3: 2016 public consultation  

Main issues related to administrative cooperation 

67 

47 

73 

Lack of information on whom to contact
on another Member State

Unduly long response time

No response at all

One PCP indicated that sometimes the delay for receiving a reply is 40-50 working days. 
Another  indicated  that  the  intervention  of  the  Commission  was  necessary  in  order  to 
obtain a reply. 

57  

58  
59  

Public  consultation  1.06.2016-30.09.2016;  the  other  obstacles  and  priorities  indicated  are  listed  in  annex  2  and  in  the 
Evaluation 
Article 11 of the Regulation 
See the Evaluation. 

23 

 
 
 
                                                 
Additionally,  the  administrative  cooperation  between  PCPs  is  also  undermined  by  the 
difficulty  to  communicate  in  a  common  language,  especially  when  technical  terms  are 
involved.    This  issue  is  almost  unanimous  among  PCPs,  and  was  raised  during  the 
surveys,  interviews,  in  the  annual  reports  as  well  as  during  the  meetings  of  the 
Consultative Committee on mutual recognition.  

3.3.  The consequences of the problem/ Who is affected and how  

Due  to  the  suboptimal  use  of  mutual  recognition,  barriers  to  free  movement  of  non-
harmonised  goods  remain;  thus,  a  single  market  for  goods  is  far  from  being  achieved. 
Those  most  affected  by  the  problem  are  economic  operators,  who  are  not  benefitting 
fully from the internal market and their existing rights. They face additional costs to enter 
a  new  market  or  even  lose  market  opportunities.  National  authorities  rely  on  their  own 
national  rules  and  this  undermines  the  free  movement  of  goods.  Consumers  and  final 
users cannot fully benefit from more choices on the market and thus lower prices that the 
single  market  for  goods  should  provide,  while  maintaining  the  level  of  protection  of 
public interest they are entitled to. 

The  following  consequences  can  be  identified  for  economic  operators,  consumers  and 
national authorities, resulting from the non-functioning of mutual recognition: 

Economic Operators 

Consumers 

National Authorities 

1.  Lost opportunities 

1.  Less choice in terms of 
available products 

1. 

2.  Transaction costs: tests and 

adaptations  

2.  Higher prices  

3.  Delays in accessing the national 

market 

4.  Information costs due to the 

lack of effective functioning of 
PCPs 

5.  Costs of challenging national 

decisions 

Information and 
assessment related costs to 
find out whether a product  
should benefit from 
mutual recognition, due to 
the lack of efficient 
administrative cooperation  

The  financial  costs  caused  by  lack  of  mutual  recognition  are  high  for  the  business 
operators.  

First of all, business need to find out what the applicable national rules, requirements 
and  administrative  procedures  are  in  the  Member  State  of  destination  and  assess  if 
mutual recognition can be used to sell products in another Member State without being 
able to rely effectively on PCPs in order to obtain this information. This is particularly 
challenging for SMEs; according to the public consultation on the start-up and scale-up 
initiative, resources required to navigate the regulatory complexity are the third-biggest 

24 

 
 
 
 
problem for SMEs.60 Costs also related to assessing if mutual recognition can be used to 
sell  products  in  another  Member  State.  Very  few  economic  operators  (2%)  are 
outsourcing  this  assessment,  while  26%  are  doing  it  internally.  46%    are  doing  both, 
depending  on  the  product.  The  lack  of  additional  information  does  not  allow  for  an 
estimate  of  the  actual  costs  incurred  when  the  assessment  of  whether  or  not  mutual 
recognition can be used is outsourced. When done internally, economic operators spend 
on  average  54  hours  on  doing  the  assessment;  however,  the  number  of  hours  indicated 
varies  from  one  company  to  another.  Most  indicated  only  a  few  hours  (less  than  10) 
while two indicated spending more than 500 hours on this. The average cost per hour is 
78  Euro.  When  trying  to  demonstrate  that  a  product  is  already  lawfully  marketed  in  a 
Member State, businesses indicate that the average number of hours spent is 16, and the 
average cost per hour is 76 Euro. 

High  costs  are  also  triggered  by  the  need  to  adapt  the  products  to  the  applicable 
national rules,  when  mutual  recognition is  either denied or not  used  for penetrating the 
market. These adaptation costs are estimated to be 61 between 1000 and 150 000 Euro per 
product and per market.  

Other  indirect  costs  may  be  generated  by  the  lack  of  well-functioning  mutual 
recognition. There is a distortion of competition and of the level-playing field as cross-
border operators face higher costs than local operators. Also, companies may be able to 
pass  on  these  costs  to  the  consumers,  leading  to  higher  prices.  If  the  market  is  not  big 
enough,  or  if  the  costs  are  too  high,  businesses  may  be  discouraged  and  give  up  on 
entering that market. This is particularly relevant for SMEs. For example, more than half 
of SMEs say that administrative procedures related to exporting to other Member States 
are  too  difficult  to  comply  with  and  therefore  deter  many  firms  from  exporting.62 
According  to  the  Commission’s  2014  Competitiveness  report,  only  14%  of  SMEs  are 
trading  across  borders  in  the  EU  compared  to  85.4  %  of  large  manufacturing  firms63.  
This  translates  into  lost  opportunities  for  businesses  as  well  as  costs  resulting  from 
delays for entering a market. In addition, it also generates a loss of competitiveness and 
innovation.  High  costs  are  also  relating  to  delays  for  entering  a  market,  estimated64 
between 3000 and 500 000 Euro per product and per market, and to lost opportunities, 
when businesses renounce entering a market because of different national rules requiring 
adaptation of the products. On average, the latest are estimated to be65 between 10 000 
and  500  000  Euro  per  product  and  per  market.  The  estimate  of  the  adaptation  costs 
appears to be lower than the estimation of costs linked to lost opportunities and delayed 

60    
61  

62    

63  

64  

65  

Public consultation of the start-up and scale-up initiative available at http://ec.europa.eu/DocsRoom/documents/20222. 
26% of respondents indicated an estimate of the costs incurred, the other choose not to reply or indicated that such estimation 
is impossible 
Flash Eurobarometer 421: Internationalisation of Small and Medium-sized Enterprises  
https://data.europa.eu/euodp/en/data/dataset/S2090_421_ENG  and Flash Eurobarometer 413: Companies engaged in online 
activities https://data.europa.eu/euodp/en/data/dataset/S2058_413_ENG 
More specifically, the 2014 Competitiveness report indicates that among the roughly two million manufacturing SMEs (0-
249  employees)  in  the  EU-28,  14.3  %  export  goods  to  EU  countries.  One  can  observe  that  export  participation  increases 
strongly  with  firm  size.  Meanwhile,  7.9  %  of  micro  enterprises,  37.5  %  of  small  firms,  and  67.0  %  of  medium-sized 
enterprises  export  to  internal  markets,  compared  to  85.4  %  of  large  manufacturing  firms.  This  indicates  that  the  export 
participation  of 
that  of  micro  enterprises.  SWD(2014)277  final: 
http://ec.europa.eu/DocsRoom/documents/6706/attachments/1/translations/en/renditions/native 
20% of respondents indicated an estimate of the costs incurred, the other choose not to reply or indicated that such estimation 
is impossible 
13% of respondents indicated an estimate of the costs incurred, the other choose not to reply or indicated that such estimation 
is impossible 

times  higher 

is  about  10 

large  firms 

than 

25 

 
 
                                                 
 
entry  on  the  market.  This  may  be  due  to  the  specific  profile  of  the  respondents  to  the 
public  consultation  who  were  able  to  provide  estimates,  as  testing  costs  can  vary 
significantly from one product to another. The variety of products and how this translates 
in terms of costs is also highlighted later on (see table 7-8).    

Economies of scale are crucially important for innovative firms that spend a large fixed 
cost in research and development (R&D) and need a large internal market to cover these 
costs66. 

Economic  operators  also  face  costs  related  to  challenging  administrative  decisions 
denying market access; but they considered them as less important, mainly because few 
economic  operators  choose  to  do  so.  The  estimates67  are  between  10  000  and  100  000 
Euro per product and per market.  

Figure 3-4: Public consultation 2016 

54% 

53% 

Costs in case mutual recognition has been denied 

52% 

38% 

18% 

18% 

7% 

21% 

19% 

21% 

20% 

4% 

7% 

29% 

Highly important

15% 

Relatively important

Of little importance

2% 

I don't know

Costs related to aligning
products on national
rules

Costs caused by the
delayed entry on the
market

Costs related to the
challenge before courts

Costs related to lost
opportunities

These  results  confirm  the  findings  of  the  external  study  carried  out  in  201568,  where 
businesses  underlined  transaction  and  adaptation  costs  as  being  very  significant.  They 
perceived testing as being costly – more than 40% of them have rated testing as being a 

66  

67  

68  

See  OECD  Economic  Surveys:  European  Union  2014,  Thematic  Chapter  Reinvigorating  the  EU  single  market: 
http://www.oecd-ilibrary.org/economics/reinvigorating-the-eu-single-market_5jxx3d3hk437-en.  It  is  argued  that  the  small 
size of firms in the EU relative to the United States is one indicator of costs of fragmentation. Van Ark et al. (2013) suggest 
substantial  growth  gains  from  further  Single  Market  integration,  in  large  part  due  to  scale  advantages.  The  correlation 
between the size of firms and their productivity in the manufacturing sector suggests that firms may have some potential to 
generate economies of scale.  
11% of respondents indicated an estimate of the costs incurred, the other choose not to reply or indicated that such estimation 
is impossible 
See the Evaluation. 

26 

 
 
 
 
 
 
 
 
                                                 
very significant cost. The testing costs vary considerably, depending on the sector and the 
product, but some examples from different sectors are provided in Figure 7-18. Internal 
company staff time and administrative costs are perceived to be very significant by 32% 
and 30% of the companies, respectively. In the interviews carried out by the contractor, 
many  companies  mentioned  that  these  types  of  costs  naturally  follow  the  testing  costs 
and  are  therefore  closely  related  to  the  issue  of  Member  States  demanding  additional 
tests.  Lastly,  around  26%  of  businesses  perceive  the  adaptation  of  products  to  local 
technical requirements to be a very significant cost. Furthermore, it is interesting that for 
all four categories, over half of the companies perceive the costs as either very significant 
or significant.  

Figure  3-5:  Company  survey:  What  are  the  typical  cost  items  involved  and  how 
significant are they?69 

Note: N=28-31 (not all companies answered all questions) 

As  regards  the  costs,  the  survey  and  the  subsequent  interviews  carried  out  by  the 
contractor  revealed  the  same  wide  range  of  costs  as  those  from  the  2016  public 
consultation, depending on the different sectors. Similarly, few economic operators were 
able  to  put  a  figure  on  the  costs  faced  due  to  the  incorrect  application  of  the  mutual 
recognition principle. Of those that provided estimates, the costs ranged from 0.5% of the 
annual  turnover,  to  20%  of  the  turnover.  This  is  mainly  due  to  the  variety  of  products 
covered by mutual recognition.   

The problem also affects national authorities, who are faced with lack of legal certainty 
regarding  whether  national  rules  should  be  applied  to  a  product  or  not.  Administrative 
costs are also incurred resulting mainly from the complexity of the legislations in place, 
which  make  it  difficult  to  identify  all  rules  applicable  to  a  product  and  the  scope  for 
applying mutual recognition, and the difficulty of demonstrating that a product has been 
'lawfully  marketed'  in  another  Member  States  (the  latter  being  estimated  for  example 
EUR 420 000 in one sector such as fertilisers). 

69  

Source: Questionnaire survey among companies, running from 9 October 2014 to 5 January 2015, carried out by DTI 

27 

 
 
 
                                                 
The lack of effective communication and cooperation further contributes to these indirect 
costs.  The  fact  that  PCPs  don't  efficiently  exchange  information,  within  their  own 
administration  and  with  PCPs  from  other  Member  States,  delays  the  replies  that  they 
provide to businesses and impacts their quality. Furthermore, the assessment by national 
authorities  of  whether  a  product  can  be  placed  on  their  market  based  on  mutual 
recognition is delayed and undermined by the fact that they don't properly cooperate and 
communicate  with  their  colleagues  in  the  Member  State  where  the  product  under 
assessment has been lawfully marketed.   

Figure 3-6: Problem tree 

3.4.  Foreseen evolution of the problem 

Absent any action at EU level, it is foreseen that in the medium term, the problem of the 
lack of functioning of mutual recognition, and the underlying reasons, will remain.  

The current procedures to support the use of mutual recognition would remain in place.  

As  such,  obstacles  to  free  movement  of  goods  stemming  from  national  rules  will 
continue being addressed via existing tools:  ex ante by the Directive (EU) 2015/1535, at 
the time of their adoption, and ex-post by the Regulation, at the time of their application 
to individual cases (national decisions denying market access). The clarification of legal 
uncertainties will be left to the case law of the Court of Justice of the European Union. 
Businesses  and  national  authorities  will  continue  to  use  the  tools  available  (list  of 
products to which mutual recognition may apply, guidelines, mutual recognition clause, 
Product Contact Points) to try to understand when mutual recognition applies in relation 
to a specific product.  

The  Product  Contact  Points  network  will  continue  functioning  as  up  until  now,  and 
possibly benefit from being integrated into a wider network, which would act as a single 
entry  point  for  all  available  business-related  services.  Under  this  wider  network,  the 

28 

 
 
 
provision of online information on products for economic operators would be facilitated 
through  the  'Single  Digital  Gateway'  (proposal  forthcoming).  The  proposal  for  an  EU 
Single Digital Gateway is expected to introduce a new obligation to provide information 
on national product rules online on a website, instead of upon request as now. Member 
States will need to provide a summary of the applicable rules for product categories, but 
may also refer to the assistance services for more detailed information tailored to specific 
products.  This  follows  good  practices  already  adopted  by  many  Member  States.70  It  is 
expected that having access to the information online will facilitate the accessibility and 
awareness of the role of PCPs and of national product rules by businesses. In addition, 
this  initiative  is  expected  to  improve  the  functioning  of  PCPs  by  setting  out  quality 
criteria and the obligation to provide information online. However, the lack of awareness 
of the principle of mutual recognition, as well as the shortcomings in the functioning of 
PCPs, which have been constant despite the adoption of the Regulation, are expected to 
remain given that there are no current factors which could promote a higher awareness of 
the principle and its functioning.  

Under the current provisions of the Regulation the Commission could undertake further 
work to update the list of products which may be subject to mutual recognition and make 
it more helpful and user friendly. The Commission will continue to ask for the inclusion 
of a mutual recognition clause for draft national technical rules notified under Directive 
(EU)  2015/1535,  but  its  use  is  not  expected  to  increase  in  the  future  given  that  the 
Commission has been encouraging the use of the clause in the past without it leading to 
significant results in terms of use or clarity. 

Complexity and uncertainty around the application of the principle of mutual recognition 
will  also  remain.  Businesses  and  national  authorities  will  continue  relying  on  guidance 
from the Commission in order to demonstrate that a product has been lawfully marketed; 
which  however  has  not  significantly  solved  the  practical  problems  encountered  while 
trying to rely on the application of mutual recognition. The outcome to be expected by 
businesses  when  trying  to  rely  on  the  principle  will  remain  uncertain.  The  burden  of 
proof  that  a  product  should  not  be  allowed  market  access  remains  on  the  national 
authorities.  National  authorities  would  remain  obliged  to  notify  both  the  economic 
operator  and  the  Commission  of  all  administrative  decisions  denying  market  access. 
Since  its  entry  into  force,  the  Commission  services  published  several  guidelines  on  the 
application of the principle of mutual recognition in various sectors and on what 'lawfully 
marketed' stands for. These elements do not appear as sufficient to address the problems 
described. These have not resulted in the expected improvement, in particular as regards 
the proof of lawful marketing of a product in a Member State. The Commission can use 
an  existing  IT  system  to  support  the  notification  process,  however,  the  number  of 
notifications of national decisions denying market access is also not expected to increase 
in the future.  

The  use  of  SOLVIT  would  remain  an  alternative  for  economic  operators  who  wish  to 
challenge  administrative  decisions  denying  market  access.  The  foreseen  Commission's 
action  plan  for  improving  SOLVIT  aims  to  improve  the  awareness  of  its  services  to 
businesses,  inter  alia  to  increase  the  number  of  cases  submitted  against  a  national 

70    

For example, good practices on how to provide product information can be found in Austria, France,  Denmark and the UK. 
See Annex 12 of the Evaluation. 

29 

 
 
                                                 
decision  denying  market  on  mutual  recognition  grounds  and  the  legal  expertise  of  the 
SOLVIT  centres  in  areas  of  interest  to  businesses  such  as  the  mutual  recognition  on 
goods. But it does not alter the informal character of SOLVIT and thus would still have 
limitations  in  offering  efficient  remedies  for  challenging  unjustified  decisions  denying 
market access. Furthermore, without providing for the Commission technical assistance 
and further involvement for the goods cases, it is not expected that SOLVIT will produce 
better results for these cases as compared to the current situation. 

It  is  not  expected  that  Member  States  undertake  any  specific  initiative  to  facilitate  the 
functioning  of  mutual  recognition.  Furthermore,  in  problematic  sectors  where  mutual 
recognition  cannot  facilitate  free  movement  of  goods,  harmonisation  of  essential 
requirements can be used in order to ensure market assess for businesses. This is the case 
for  example  for  fertilising  products,  for  which  a  Commission  proposal  for  an  EU 
regulation  was  adopted  on  17  March  201671.  This  proposal  will  replace  the  current 
Regulation  (EC)  No  2003/2003  by,  inter  alia,  extending  it  to  currently  non-harmonised 
products.  

However,  whilst  harmonisation  may  take  place  where  this  is  justified,  necessary  and 
proportionate, such  measures cannot cover the totality of products  and aspects  of those 
products in the internal market, without there being any scope anymore for national rules. 
Whenever  there  are  national  technical  rules,  there  will  be  a  need  to  ensure  the  mutual 
recognition of those in order to guarantee the free movement of goods.  

4.  ANALYSIS OF SUBSIDIARITY 

4.1.  Legal Basis 

The  right  to  act  is  established  on  the  basis  of  Article  114(1)  TFEU  dealing  with  the 
establishment and functioning of the internal market and specifying that measures can be 
adopted  for  the  approximation  of  the  provisions  laid  down  by  law,  regulation  or 
administrative action in Member States which have as their object the establishment and 
functioning of the internal market. 

4.2.  Subsidiarity and Proportionality 

Mutual  recognition  only  applies  in  cross  border  situations  where  an  economic  operator 
would like to trade in a Member States a product already lawfully marketed in another 
Member State.  

Action by Member States alone cannot solve problems associated with the application of 
the  principle  of  mutual  recognition  across  the  single  market.  To  be  effective,  the 
application of the principle needs to be based on common solutions to be applied equally 

71  

Proposal for a Regulation of the European Parliament and of the Council laying down rules on the making available on the 
market  of  CE  marked  fertilising  products  and  amending  Regulations  (EC)  No  1069/2009  and  (EC)  No  1107/2009 
(COM(2016) 157 final) 

30 

 
 
 
 
                                                 
by  all  national  authorities.  Only  such  common  procedures  can  guarantee  that  national 
authorities  will  apply  the  principle  in  the  same  manner,  thus  allowing  companies  to 
benefit from an equal treatment regardless of the country where they try to market their 
product.  Leaving  the  procedural  aspects  of  the  application  of  the  mutual  recognition 
principle  to  each  Member  State  would  weaken  the  principle  by  dismantling  the  modus 
operandi into 28 different and possibly contradictory procedures.  

Therefore, EU action is both appropriate and justified to ensure the effective application 
of the principle.  

The European added value of the mutual recognition rules was strongly underlined by the 
respondents to the 2016 public consultation. Most of them agreed that having a common 
set  of  rules  guarantees  equal  treatment,  and  that  relying  on  national  rules  only  would 
undermine the internal market. 

The  EU  has  the  right  to  act  to  ensure  the  functioning  of  the  single  market  for  goods. 
Pursuant  to  Article  26(2)  of  the  Treaty  on  the  Functioning  of  the  European  Union 
(TFEU), the internal market shall comprise an area without internal frontiers in which the 
free movement of goods, persons, services and capital is ensured in accordance with the 
provisions  of  the  Treaties.  The  prohibition,  as  between  Member  States,  of  measures 
having  equivalent  effect  to  quantitative  restrictions  on  imports  of  goods  is  one  of  the 
main principles of the Treaty (Articles 34 to 36).  

5.  OBJECTIVES  

Based  on  the  problems  described  in  section  4,  the  following  objectives  have  been 
identified.  

5.1.  General Policy Objectives 

The overall objective of the initiative is to achieve a fairer and deeper single market for 
goods through a higher level of and better mutual recognition.  

5.2.  Specific Policy Objectives 

The specific objective will be to improve the functioning of mutual recognition by: 

 

 

 

Increasing awareness of mutual recognition. 

Increasing  legal  certainty  for  businesses  and  national  authorities  on  when  the 
mutual recognition principle can be used. 

Increasing  legal  certainty  about  the  application  of  mutual  recognition;  both 
business  and  national  authorities  should  know  what  they  can  reasonably  expect 
when  mutual  recognition  is,  or  ought  to  be,  applied.  This  will  reduce the  risk  for 
businesses that their products will not get access to, or will have to be unjustifiably 
withdrawn from the market.  

31 

 
 
 

Enhancing  communication,  cooperation  and  trust  among  national  authorities,  so 
that  they  can  act  as  a  facilitating  tool  to  ensure  the  functioning  of  mutual 
recognition.  

6.  POLICY OPTIONS 

In  order  to  address  the  problem  identified  in  section  3  and  its  underlying  drivers,  a 
number of policy options have been identified. These options include a baseline scenario, 
soft law and legislative measures. The measures are presented from the softest to more 
far-reaching  means  to  tackle  the  drivers  and  render  mutual  recognition  fully  effective. 
The  soft  law  option  2  could  be  combined  with  any  of  the  other  legislative  options 
(options  3,  4  or  5).  Options  3,  4  and  5  would  be  mutually  exclusive.  Option  3a  (free 
movement  for  products  complying  with  European  Standards)  and  3b  (transparency  for 
administrative  decisions)  would  be  superseded  by  option  4.  Option  4  provides  for  a 
voluntary declaration of compliance which would contain information on the compliance 
of  the  product  with  the  applicable  requirements.  When  European  standards  have  been 
applied,  the  reference  to  such  standards  would  be  mentioned  in  the  declaration  and 
national  authorities  would  now  that  compliance  with  those  standards  is  ensured.  In 
addition,  option  4  provides  for  a  fast-track  appeal  procedure  where  administrative 
decisions  denying  market access can be challenged, at last resort, by a binding opinion 
from  of  the  Commission.  This  is  in  principle  a  more  powerful  incentive  for  Member 
States  to  apply  correctly  the  principle  of  mutual  recognition  than  the  transparency  of 
administrative decisions mentioned in option 3b. 

Option  5  is  construed  as  a  self-standing  option  in  that,  providing  for  a  pre-marketing 
authorisation  procedure,  intends  to  provide  a  different  approach  to  offer  a  definitive 
answer  on  market  access  for  the  product  and  would  not  necessitate  addressing  the 
different drivers individually by additional means.  

6.1.  Discarded options 

The option relating to repealing the Mutual Recognition Regulation has been discarded at 
an early stage. The Evaluation has concluded that, despite its current shortcomings, the 
Regulation remains relevant and that common procedures for the application  of  mutual 
recognition are still necessary. The lack of effectiveness was not triggered by the way the 
measures  where  designed  but  rather  by  their  lack  of  ambition.  The  measures  had  the 
potential  to  achieve  its  objectives  but  were  not  strong  enough  to  deliver  the  expected 
results.  In  particular,  during  the  2016  public  consultation,  there  was  overwhelming 
support from stakeholders in this respect even if their opinion on whether the objectives 
of the Regulation had been achieved was more mixed72. This is why repealing the Mutual 
Recognition  Regulation  altogether  is  discarded  and  other  options  have  been  envisaged 
building  on  the  measures  currently  set  out  in  the  Regulation  and  enhancing  them. 
However,  if  one  of  the  options  leading  to  a  review  of  the  Regulation  is  retained,  this 
revision  may  also  lead  to  removing  certain  provisions  of  the  current  Regulation  which 
have not proved effective such as the obligation for Member States to report annually on 

72     

52%  of  businesses  believe  that  the  Regulation  did  not  bring  more  legal  certainty,  whilst  only  8%  of  Member  States 
authorities share this view. Also, 60% of businesses responded that the Regulation did not reduce the risk of having market 
access denied whilst only 15% of Member States authorities share this view. 

32 

 
 
                                                 
the  functioning  of  the  Regulation.  The  information  provided  by  Member  States  in  this 
context was limited in terms of content and usefulness.  

Also,  the  option  of  proposing  further  harmonisation  measures  on  specific  basic 
requirements  which  would  cover  certain  aspects  of  all  products  (such  as  traceability 
requirements, for example, since labelling requirements are often subject to national rules 
and  have  proved  to  be  problematic  for  the  application  of  mutual  recognition)  has  been 
discarded.  Adopting  EU  harmonisation  legislation  on  specific  products  which  appear 
particularly  problematic,  where  this  is  justified,  necessary  and  proportionate  is  always 
possible.  Conversely,  adopting  horizontal  harmonisation  measures  covering  certain 
common aspects for all products is not likely to address the current problem drivers and 
the current situation is expected to be maintained, i.e. obstacles for companies in getting 
access  to  new  markets,  implying  costs  related  to  re-testing,  lost  markets  and 
opportunities, etc. This is because these products will remain partly harmonised products, 
and  for  the  elements  not  subject  to  the  EU  harmonisation  legislation,  they  will  still  be 
subject  to  mutual  recognition  and  to  potentially  conflicting  national  rules.  This  option 
would therefore not improve the functioning of mutual recognition. 

The option of introducing a third party declaration of compliance has also been discarded 
at an early stage. This option looked into the possibility of introducing a declaration of 
compliance to be issued by a third party. Such a third party would be a body designated 
by  the  Member  State  in  which  the  product  is  legally  marketed,  e.g.  by  the  national 
Product  Contact  Point  established  in  accordance  with  the  Regulation.  By  issuing  the 
declaration,  this  third  party  would  take  responsibility  as  regards  the  content  of  the 
declaration  which  would  give  more  reassurance  as  to  the  compliance  of  the  product; 
however,  the  responsibility  as  regards  the  compliance  of  the  product  would  always 
remain  with  the  economic  operator.  Such  third  party  declaration  of  compliance  could 
have  been  voluntary  or  mandatory.  In  both  cases,  such  declaration  would  imply  heavy 
costs for businesses as it would require the intervention of a third party in the drafting of 
the declaration.  

Also,  it  would  appear  disproportionate,  as  it  would  apply  to  all  types  of  products, 
contrary to the current situation for harmonised products. In the harmonised sectors, the 
type  of  conformity  assessment  procedure  (requiring  or  not  the  intervention  of  a  third 
party) is chosen by the legislator depending on the level of complexity and risk posed by 
a  product.  For  example,  electrical  products  (such  an  electrical  kitchen  appliance  or  a 
lamp)73  do  not  require  the  intervention  of  a  third  party  conformity  assessment  body, 
while other more complex products such as lifts74 or fuel dispensers75 do.  

The  intervention  of  third  party  certification  also  represents  an  important  cost  for 
business76.  

73  
74  
75  
76  

Subject to the Low Voltage Directive 2014/35/EU. 
Subject to the Lifts Directive 2014/33/EU. 
Subject to the Measuring Instruments Directive 2014/32/EU. 
The Evaluation of the Internal Market Legislation for Industrial Products Accompanying the document the Communication 
from the Commission to the European Parliament, the Council and the European Economic and Social Committee - A vision 
for  the  internal  market  for  products  (SWD  (2014)23  final)  indicated  in  its  case  studies  that  in  the  sector  for  gardening 
equipment  the  annual  budget  of  firms  for  services  of  Notified  Bodies  is  in  the  range  of  €30-80k,  around  €4,000  for 
certification of a single product and representing 20-25% of the total estimated costs for compliance. Similar figures were 

33 

 
 
                                                 
 
6.2.  Option 1: Baseline  

The  baseline  scenario  is  the  "no  policy  change"  option.  This  implies  that  the  Mutual 
Recognition  Regulation  in  its  current  version  remains  the  applicable  legal  framework. 
See more details in section 3.3. 

6.3.  Option  2:  Soft  law  instruments  to  improve  the  functioning  of  mutual 

recognition 

This option refers to the adoption of an action plan containing non-legislative measures 
to further boost the application of the mutual recognition principle. This option would not 
include a revision of the Regulation, and therefore the PCP network and the procedure to 
be followed by national authorities for denying market access would remain as they are 
today. 

The action plan would contain, in particular, the following measures: 

a) Awareness raising and training 

Increasing the general awareness of the mutual recognition principle was considered in 
the 2016 public consultation as the first priority for Member States (51%) and citizens 
(64%),  and  as  the  last  priority  for  businesses,  even  if  supported  by  52%  of  economic 
operators responding to the consultation. Furthermore, 84% of Member States, 95% of 
businesses and 88% of citizens considered in this consultation that awareness-raising is 
still necessary.  

Awareness  among  economic  operators  and  national  authorities  on  mutual  recognition 
and  how  it  works  in  practice  would  have  to  be  raised.  Effective  awareness-raising 
campaigns  and  specific  sectorial  training  on  the  implementation  of  the  mutual 
recognition principle would be provided at EU level. 

The following tools could be included in the Action Plan: 

a)  Training at general and sectoral level. A training package to be adapted to targeted 
groups could be developed in all EU languages. The concept would be "train the 
trainer" whereby the Commission would develop the training package and would 
train  the  trainer.  The  targeted  groups  could  include  national  administrations: 
PCP, national authorities responsible for product-related legislation in problematic 
areas, national courts/ judges, market surveillance authorities or SOLVIT staff. The 
same concept would be duplicated for businesses, where the trainer could be drawn 
from European Enterprise Network (EEN) staff. 

b)  As an outcome of the training courses, a comprehensive guidance document could 
be  developed  i.e.  a  Mutual  Recognition  rule  book.  This  would  include,  for 
example,  detailed  guidance  on  the  application  of  the  principle,  building  on  and 
updating  the  Commission  interpretative  Communication  on  facilitating  access  of 
products to the markets of other Member States: the practical application of mutual 

provided  by  manufacturers  of  fuel  dispensers.  Manufacturers  of  fuel  dispensers  estimated  that  Notified  Bodies  fees 
represented 55% of the conformity assessment costs, 35% relating to initial inspections and 20% to periodic inspections. 

34 

 
 
                                                                                                                                                 
recognition adopted in 200377, as well as identifying best practices. 

c)  The list of products to which mutual recognition would be reassessed to determine 
how it can be rendered more user friendly so that it can provide more meaningful 
information to stakeholders. 

b) A clearer mutual recognition clause 

The Commission would design a clearer mutual recognition clause as part of a guidance 
document to be included in national technical rules adopted by Member States.  

The new mutual recognition clause would be further supported by guidance to Member 
States on how and when the clause should be included in the national legislation, and on 
the consequences of its inclusion. 

c) Exchange of officials in the area of mutual recognition  

Exchanges  of  officials  from  Member  States  working  in  the  relevant  national 
administrations  would  concern  Product  Contact  Points  but  also  national  authorities 
working  in  problematic  areas,  such  as  construction  products,  food  area,  etc.  The 
exchange would take place over a short period of time, for example 1 week.  

6.4.  Option  3:  Minimum  legislative  changes  to  Regulation  (EC)  No  764/2008  to 

improve the functioning of mutual recognition 

Under this option, containing several complementary sub-options, the Regulation would 
be  revised;  the  changes  to  be  introduced  would  address  the  drivers  identified  while 
allowing for more flexibility in the use of the mutual recognition principle.  

In particular, the following changes would be introduced in the Regulation: 

a) Free movement of goods guaranteed by compliance with European standards 

During  the  2016  public  consultation,  57%  of  Member  States,  84%  of  businesses  and 
82% of citizens supported this option.  

A possible solution to address the differences in the technical requirements in national 
laws would be to guarantee that products lawfully marketed in one Member State and 
complying with  specifically identified European standards would effectively enjoy the 
right  of  free  movement  in  the  EU.  This  option  builds  on  the  role  that  European 
standards already have in the harmonised sector. In particular, European standards the 
reference of which has  been published in the Official Journal, provide presumption of 
conformity  of  a  product  with  the  specific  requirements  of  a  harmonisation  legislation 
they covered. Such referenced European standards become thus "harmonised standards" 
and by applying them, the manufacturer enjoys the presumption of conformity with the 
applicable requirements and does not need to prove by other means the compliance of 

77  

2003/C 265/02 

35 

 
 
                                                 
its  product.  In  the  current  context  of  mutual  recognition,  this  option  refers  only  to 
already existing or future European standards but not to mandating the developments of 
specific European standards. The recognition of particular European standards would be 
done  by  the  Commission  via  implementing  acts,  and  after  consultation  of  Member 
States. Compliance with these standards would give a presumption of compliance with 
the  relevant  technical  rules  applicable  in  any  Member  State,  as  the  standards  usually 
cover the design of the product and the testing methods, which are the core of technical 
rules.  A  product  complying  with  the  European  standards  would  benefit  from  market 
access  in  the  Member  State  of  destination,  unless  the  national  authorities  demonstrate 
that it does not offer adequate protection of the relevant public interests; thereby shifting 
the  burden  of  proof  to  national  authorities.  Such  presumption  of  compliance  would 
facilitate the free movement of goods already lawfully manufactured in a Member State. 
It would provide legal certainty and reliability as to the outcome when businesses could 
invoke  mutual  recognition.  Compliance  with  these  standards  would  remain  voluntary 
for economic operators, who would need to be aware and apply any particular European 
standards  identified  in  the  context  of  mutual  recognition  if  they  want  to  access  other 
Member  States  markets.  However,  the  limits  of  this  option  would  be  that  currently, 
European standards do not exist for every product or aspect of product, and therefore it 
would not provide a solution for those other products or aspects of products. Also, the 
process for recognising them for the purposes of mutual recognition via implementing 
acts would be time consuming. 

b) Transparency for administrative decisions denying market access 

During  the  2016  public  consultation,  46%  of  Member  States,  81%  of  businesses  and 
64%  of  citizens  agreed  that  dissuasive  means  are  necessary  to  ensure  the  notification 
obligation is respected. 

The  Regulation  would  reinforce  the  obligation  to  notify  administrative  decisions 
denying or restricting mutual recognition. Under this option, the notification obligations 
would be strengthened and administrative decisions which have not been notified to the 
Commission  and  the  economic  operator  concerned  would  be  considered  as  void  and 
thus could not be enforced vis-à-vis the operator. More transparency for these decisions 
would  be  an  incentive  for  Member  States  to  apply  the  mutual  recognition  principle 
properly, as the lack of proper justification supporting the administrative decisions to be 
notified  could  be  spotted  easily  by  the  Commission  and  any  other  Member  State, 
including the Member State of origin. Using an IT tool for allowing Member States to 
notify  would  also  give  all  notifications  more  visibility.  The  IT  tool  to  be  considered 
could  be,  e.g.,  the  Internal  Market  Information  tool  (IMI)  or  ICSMS  (i.e.  the  General 
Information Support System referred to in Article 23 of Regulation (EC) No 765/2008).  

c) Enlarging the role of Product Contact Points 

During  the  2016  public  consultation,  64%  of  Member  States,  64%  of  businesses  and 
70% of citizens agreed that PCPs need to be strengthened. Member States (31%) and 
citizens  (23%)  ranked  this  as  the  last  priority  for  the  Commission,  while  businesses 
ranked it second to last (54%). 

The  efficiency  of  PCPs  in  raising  awareness  of  mutual  recognition  and  in  providing 

36 

 
 
useful information to businesses was limited. However, the need to keep a network able 
to  provide  basic  information  and  connect  economic  operators  with  the  responsible 
authorities for more complex information remains. This is why it is proposed that PCPs 
remain  as  the  main  information  points  for  mutual  recognition,  but  that  their  role  is 
enhanced.  The  role  of  PCPs  would  be  enlarged in  order  to  provide  information  on  all 
applicable rules for all products, i.e. information on Union harmonisation legislation and 
on  national  technical  rules  adopted  in  the  non-harmonised  area.  This  would  be 
particularly  relevant  for  products  where  certain  aspects  are  covered  by  harmonised 
legislation and others subject to national technical rules, since it would offer economic 
operators information on all rules applicable to their product and thus a more complete 
overview of the regulatory situation in the Member State of destination. 

6.5.  Option 4: Comprehensive legislative changes to Regulation (EC) No 764/2008 

to improve the functioning of mutual recognition 

Under  this  option,  comprehensive  regulatory  changes  would  be  made  to  the  current 
legislation.  

In particular, the following changes would be introduced in the Regulation: 

a) Clarifying the scope of mutual recognition   

During  the  2016  public  consultation,  84%  of  Member  States,  85%  of  businesses  and 
82% of citizens supported this option.  

The  Regulation  would  be  clarified  and  extended  beyond  its  current  scope  of  defining 
procedural guarantees for decisions denying market access. It would expressly mention 
that  mutual  recognition  applies  not  only  to  products  not  subject  to  harmonisation 
legislation  but  also  to  products  for  which  only  certain  aspects  are  covered  by 
harmonisation  legislation  in  whatever  aspects  are  left  for  national  rules.  Clarifications 
would  be  provided  also  as  regards  the  areas  where  measures  restricting  or  denying 
market  access  can  be  taken  on  the  basis  of  the  mutual  recognition  principle  and  how 
these should be notified to the Commission and other concerned parties. 

b) Declaration of compliance 

During  the  2016  public  consultation,  75%  of  Member  States,  80%  of  businesses  and 
76% of citizens agreed that a declaration would simplify the demonstration of the lawful 
marketing  of  the  products.  Increasing  legal  certainty  has  been  ranked  by  businesses 
(67%) and citizens (52%) as the 2nd priority for the Commission, while Member States 
(33%) ranked it second to last.  

The Regulation would introduce a declaration of compliance with the technical rules of 
the Member State where the product is being lawfully marketed, to facilitate the access 
of  this  product  to  the  market  of  the  other  Member  States.  A  similar  declaration  of 
compliance  is  already  required  for  products  within  the  scope  of  Union  harmonisation 
legislation,  giving  Member  States  authorities  the  first  information  regarding  the 
legislation the product complies with, and the conformity assessment procedure which 
has been followed, as appropriate. The aim of the declaration for mutual recognition is 

37 

 
 
to  bring  administrative  simplification,  as  it  will  allow  economic  operators  to  show 
compliance with applicable national rules in the Member State where their products are 
lawfully  marketed  in  a  single  standardised  manner.  It  would  replace  the  various  and 
numerous  existing  means  for  requesting  evidence  to  prove  that  a  product  is  already 
lawfully  marketed  in  a  certain  Member  State  by  one  single  standardised  document.  It 
would  bring  legal  certainty  for  both  economic  operators  and  national  authorities,  as  it 
offers  all  the  information  necessary  for  carrying  out  the  assessment  of  whether  or  not 
the  product  is  allowed  on  the  market.  Moreover,  it  would  facilitate  the  mutual 
recognition  by  the  authorities  of  the  Member  State  of  destination  of  the  requirements 
already met in the Member State of origin.  

When entering a new market, economic operators would rely on the same declaration to 
attest  that  their  product  is  already  lawfully  marketed.  All  national  authorities  would 
have  to  accept  this  declaration  and,  while  they  would  be  able  to  ask  for  evidence 
substantiating the information stated therein, they would not be able to require different 
means  of  evidence.  The  Regulation  would  define  the  standardised  content  this 
declaration of compliance would have. It would include at least the identification of the 
economic  operator  and  of  the  product,  the  relevant  legislation  and  /or  standards  the 
product  complies  with  and,  when  applicable,  the  relevant  conformity  assessment 
procedure  and  specific  tests  carried  out.  It  would  be  drafted  in  the  language  of  the 
Member State where the economic operator intends to market his products, by making 
use of multilingual forms, which would be introduced as an Annex to the Regulation. It 
would be made available by the economic operator to national authorities upon request. 

By signing the declaration, the economic operator takes full responsibility as regards the 
compliance of his product with the applicable rules in the Member State of origin and 
the  lawfulness  of  what  he  is  declaring.  The  limit  of  this  option  is  that  it  will  not 
guarantee absolute market access for the relevant products, given that the application of 
mutual recognition can be objected to by national authorities when this is justified and 
proportionate for the protection of legitimate public interests. This  option contains the 
following sub-options: 

a)Voluntary self-declaration of compliance 

The declaration would be issued by the economic operator and would be voluntary for 
all those relying on mutual recognition to enter a new market. 

b) Mandatory self-declaration of compliance  

The declaration would be issued by the economic operator but would be mandatory for 
all relying on mutual recognition to enter a new market. 

c)  Fast-track  appeal  procedure  –  effective  remedies  against  national  decisions 
denying market access   

During  the  2016  public  consultation,  66%  of  Member  States,  90%  of  businesses  and 
76%  of  citizens  agreed  that  effective  remedies  to  challenge  administrative  decisions 
denying market access are necessary. Businesses ranked this as the 1st priority for the 
Commission  (72%),  while  Member  States  (40%)  and  citizens  ranked  it  as  the  3rd 

38 

 
 
priority.  

The  Regulation  would  put  in  place  a  business  friendly  and  non-intrusive  mechanism, 
allowing  for  a  fast  and  efficient  resolution  of  problems  triggered  by  a  problematic 
national administrative decision denying or restricting market access. A similar system 
of objecting to national decisions denying market access exists in the harmonised area78 
which  is  called  the  Union  safeguard  procedure.  By  means  of  this  procedure,  Member 
States authorities taking a decision restricting market access to a particular product need 
to notify such decision to the Commission and other Member States who may object to 
the  measure.  If  objections  are  raised,  it  is  for  the  Commission  to  decide  whether  the 
measure is considered justified or not.  

This mechanism would be a two-step procedure: 

Firstly, it would built on existing problem resolutions tools, such as SOLVIT, in order 
to  allow  economic  operators  wishing  to  do  so  to  challenge,  in  an  informal  way,  an 
administrative  decision  allegedly  incompatible  with  the  mutual  recognition  principle. 
When faced with a decision denying market access, the economic operator would thus 
have  the  possibility  to  refer  the  case  to  SOLVIT  to  benefit  from  an  informal  problem 
resolution system. During this phase, the Commission would informally assist SOLVIT 
with  the  necessary  technical  expertise  on  demand.  It  would  be  expected  that  this 
assistance  would  increase  the  resolution  rate  of  the  goods  related  cases  involving 
technical expertise which can be provided by the Commission on request. 

Secondly, if the dialogue phase started by SOLVIT fails to achieve a suitable solution, a 
Commission  binding  opinion  (fast  track  appeal  procedure)  can  be  required.  The 
Commission, during this second phase, would have the choice of intervening or not, on 
opportunity grounds (strong case, systemic issues, multiplier effect in terms of impacts). 
The Commission binding opinion would be a powerful deterrent, particularly useful in 
the  first  step  of  the  procedure  and  intervening  only  as  a  last  resort  tool.  The 
Commission's  assessment  would  be  purely  technical,  as  it  would  not  concern  the 
national rule as such and its merits, but only the practical results produced by applying a 
national rule to a specific product which has been lawfully marketed in another Member 
State.  It  would  ensure  a  consistent  and  correct  application  of  the  mutual  recognition 
principle.    

d) Strengthening the Product Contact Points and the cooperation between relevant 
authorities 

During the 2016 public consultation, 64% of Member State, 64% of businesses and 70% 
of citizens agreed that PCPs needs to strengthen the PCPs. Member States (31%) and 
citizens  (23%)  ranked  this  as  the  last  priority  for  the  Commission,  while  businesses 
ranked it second to last (54%).  

The Regulation would strengthen the role of PCPs in order to provide information on all 

78  See  articles  R31  and  32  of  Decision  No  768/2008/EC  which  has  been  incorporated  into  most  pieces  of  Union  harmonisation 

legislation, providing for a Union safeguard procedure. 

39 

 
 
                                                 
applicable rules for all products, i.e. information on Union harmonisation legislation and 
on  national  technical  rules  adopted  in  the  non-harmonised  area,  as  in  option  3  c).  In 
addition, mandatory administrative cooperation among Member States would be put in 
place  to  ensure  communication  and  exchanges  among  the  national  authorities 
responsible  for  the  application  of  the  principle.  This  network  would,  for  example, 
discuss  difficult  cases,  identify  problematic  sectors,  make  recommendations  for 
standardisation mandates, etc.   

6.6.  Option 5: Legislative changes to the Regulation to introduce a voluntary prior 

authorisation to placing on the market 

Under this option, the suboptimal functioning of the mutual recognition principle would 
be  addressed  by  intervening  in  a  pre-marketing  phase  to  prevent  obstacles  to  free 
movement  of  goods  rather  than  in  a  post-marketing  phase  as  it  is  the  case  today.  By 
introducing a system of prior authorisation to placing products on the market, economic 
operators  would  have  confirmation  that  their  products  can  have  market  access  in  the 
Member  State  of  destination  before  actually  entering  that  market.  This  voluntary 
procedure is currently not available at the moment. The Regulation would be amended to 
reflect the introduction of such a pre-marketing procedure.  

Voluntary prior authorisation to placing on the market  

Increasing legal certainty has been ranked by businesses (67%) and citizens (52%) as 
the  2nd  priority  for  the  Commission,  while  Member  States  (33%)  ranked  it  second  to 
last. 

This option is inspired from existing systems at national level, where the marketing of 
certain  specific  goods  is  subject  to  a  mandatory  prior  authorisation  system.  Products 
lawfully marketed in the market of one Member State would be placed on the market of 
another Member State only after a prior examination and authorisation of the product by 
the receiving Member State. Such examination would consist in assessing if the product 
can  be accepted in  the Member State or not, i.e. the Member State would confirm (or 
disallow in certain specified cases) that a product, although not compliant with its own 
national  legislation,  can  be  marketed  in  its  territory.  This  option  would  remove  all 
uncertainties economic operators currently face when relying on the principle of mutual 
recognition  to  enter  new  national  markets.  Such  a  procedure  would  be  voluntary  for 
economic operators but if market access is denied, remedies under national law should 
be made available to the economic operator. 

Figure 6-1: Table with options in relation to the objectives and problem drivers 

40 

 
 
 
7.  ANALYSIS OF IMPACTS 

7.1.  Assessment of the impacts  

Policy option 1- Baseline 

The impacts of this option can be found in sections 3.1, 3.3 and 3.4. 

Policy option 2- Soft law instruments 

Economic Impacts   

Economic impacts for businesses  

It is expected that those economic operators who were not aware of mutual recognition or 
not very familiar with the details will try to use it in order to penetrate new markets. This 
assumption  is  limited  by  the  fact  that  the  decision  to  market  products  in  other  Member 
States  is  influenced  by  many  other  factors;  economic  operators  behaviour  and 
organisation  do  not  necessarily  occur  in  sequence  but  are  rather  continuous  and 
dynamic79.  Furthermore, as this option addresses effectively only the lack of awareness, 

79  

See:  Adriaan  Dierx,  Fabienne  Ilzkovitz  and  Khalid  Sekkat  (Ed.),  European  Integration  and  the  Functioning  of  Product 
Markets, Edward Elgar Publshing Ltd, 2004 

41 

 
 
 
 
 
                                                 
without  touching  upon  the  substantial  issues  related  to  the  lack  of  legal  certainty  in 
particular in the application of mutual recognition, it is also expected that these economic 
operators will face the same problems as those already using mutual recognition (e.g. high 
information costs, unjustified market access denial, adaptation costs, etc.). 

This  option  will  not  entail  additional  costs  for  businesses;  the  trainings  for  businesses 
(sub-option 2a) would be organised by the European Enterprise Network and they would 
have  the  possibility  to  attend  these  or  access  information  made  available  online.  The 
mutual  recognition  clause  (sub-option  2b)  and  the  exchange  of  officials  (sub-option  2c) 
would not entail any costs for businesses either.  

Costs currently faced by economic operators due to the suboptimal functioning of mutual 
recognition  are  expected  to  be  reduced  but  to  a  limited  extent.  While  the  exchange  of 
officials  (2c)  would  not  have  any  direct  impact  on  businesses,  the  trainings  (2a)  are 
expected to lead to certain cost savings for businesses, albeit not significant, in finding out 
the applicable rules in the Member State of destination. This is because, on the one hand, 
they would be aware that they can access the Member State of destination without having 
to comply with the applicable rules in that Member State and, on the other, because they 
would  be  made  more  aware  of  the  role  of  PCPs  which  can  facilitate  any  further 
information as appropriate. However, since this option only addresses effectively one of 
the  policy  objectives,  but  not  the  others  related  to  the  legal  uncertainty,  the  economic 
benefits  for  businesses  in  particular  in  terms  of  reduced  adaptation  costs,  lost 
opportunities,  or  costs  related  to  challenging  administrative  decisions  denying  market 
access are not expected to be substantial by this option alone. The benefits that a clearer 
mutual recognition clause would bring (2b) would also be limited since these would only 
impact  new  national  rules  which  will  be  adopted  as  from  now  on,  and  not  all  those 
existing rules. 

Since  SMEs  need  to  allocate  proportionately  higher  resources  in  finding  out  the 
applicable  rules  and  are  the  most  discouraged  to  internationalisation  by  the  regulatory 
complexity; this option (particularly the awareness raising (2a)) is likely to benefit these 
companies particularly. 

Given that this option (including all sub-options) does not address all problem drivers but 
only the awareness, it is not likely to lead, alone, to a significant increase in trade across 
Member  States  in  non-harmonised  sectors  due  to  a  better  functioning  of  mutual 
recognition.  

Economic impacts for Member States 

National  authorities  would  bear  some  costs  related  to  the  organisation  of  trainings  and 
awareness  campaigns  (2a);  however  these  costs  are  not  expected  to  be  substantial.  The 
training campaigns would take the form of a "train the trainer" and in that regard, national 
administrations would be required to organise trainings to other national officials (such as 
specific administrations in problematic sectors, national judges…). However, part of the 
training would be developed and available as an online package. Furthermore, for national 
officials, these trainings could also be integrated into more comprehensive trainings that 
national officials receive (for example, when taking up their duties) so that it is put in the 
context of the overall tasks they have to perform, which would also limit the costs.  

42 

 
 
There are no costs associated with the introduction of a clearer mutual recognition clause 
(2b).  The  exchange  of  officials  (2c)  would  have  an  impact  for  national  administrations 
insofar  as  during  a  very  short  period  of  time  (1  week),  a  salary  would  be  paid  to  an 
official who would be in  another Member State and, therefore, not actively performing 
his  or  her  duties.  However,  given  the  short  period  envisaged,  these  costs  related  to  the 
absence  of  the  officials  are  not  considered  significant  and  this  short  absence  can  be 
assimilated to the attendance of training by the official. Other travel and accommodation 
costs would not be borne by the Member State but by the EU budget.  

Economic impacts for the EU budget 

Developing the training packages and coordinating the awareness raising campaigns (sub-
option  2a)  would  imply  costs  for  the  Commission.  These  costs  are  considered  to  be 
normal costs related to the implementation of new legislation and should not have major 
impacts in terms of resources. As for the organisation of events in the Member States, if 
the  Commission  would  organise  events  in  all  Member  States  for  a  wide  audience,  this 
would entail costs. For example, in similar campaigns organised by the Commission, the 
organisation of 28 national events over a period of 2 years with an average audience of 75 
people per event was carried out with an external consultant with a budget of €1 million80. 
The Commission would however envisage that this training is structured with a "train the 
trainer"  concept  together  with  an  online  training  package,  for  which  a  lower  budget  of 
€500.000 could be established.  

A clearer mutual recognition clause (sub-option 2b) does not imply any costs for the EU 
budget.  

The exchange of officials (sub-option 2c) would be financed by the EU budget as regards 
travel and accommodation costs. Similar schemes implemented at EU level in the area of 
product safety can be used to give an estimate for these costs. Such schemes required an 
annual  budget  of  €170  000,  covering  for  the  travel  and  subsistence  allowances  for  the 
officials  participating  in  the  scheme.  This  budget  covered  around  100  exchanges, 
involving 23 Member States81. On the basis of this estimate if the number of exchanges 
would be raised to 300, this could be realised with a budget of around €510 000. 

Social Impacts 

This option is not expected to have social impacts to the extent that these can be assessed 
and quantified.  

Environmental impacts 

This option is not expected to have environmental impacts to the extent that these can be 
assessed and quantified. 

Administrative simplifications 

80  

81  

The Late Payment Information Campaign was organised from October 2012 to November 2014to support the transposition 
of the new Late Payment Directive 2011/7/EU. See https://ec.europa.eu/growth/smes/support/late-payment/campaign/ 
http://ec.europa.eu/chafea/consumers/exchange-of-officials-index_en.html 

43 

 
 
                                                 
No major administrative simplifications are expected under this option.   

Stakeholders views on the option 

During the last meeting of the Consultative Committee on mutual recognition (25 October 
2016), there was a consensus among Member States representatives on the fact that this 
option  will  be  extremely  effective  in  increasing  awareness  of  the  mutual  recognition 
principle and therefore Member States representatives highly supported it.  

During  the additional  survey  and  interviews  conducted  by  an  external  contractor during 
2016-201782, stakeholders shared the following views on this option: 

Effectiveness 
for raising 
awareness 
(Policy 
objective 1) 

Effectiveness 
for legal 
certainty on 
the scope 
(Policy 
objective 2) 

Effectiveness 
for legal 
certainty on 
the 
application of 
MR (Policy 
objective 3) 

MS 

EO83  MS 

EO 

MS 

EO 

Effects on reducing costs for 
economic operators 

Transaction 
costs 

Appeals 

Delayed 
market 
access 

58% 

50% 

42% 

42% 

42% 

33% 

42% 

25% 

25% 

68% 

50% 

63% 

42% 

69% 

33% 

42% 

25% 

25% 

32% 

33% 

27% 

33% 

37% 

58% 

34% 

25% 

33% 

Sub-options 

Awareness 
raising and 
training 

Clearer 
mutual 
recognition 
clause 

Exchange of 
officials 

Assessment of the option  

Effectiveness in achieving the policy objectives                                                       

Increase awareness about mutual recognition                                                               +++ 

Increase legal certainty on the scope of mutual recognition                                          + 

Increase legal certainty on the application of mutual recognition                                 + 

Enhance administrative cooperation and communication                                             ++ 

82  
83  

See Annex 2  
Economic operators 

44 

 
 
 
 
                                                 
Economic impacts for economic operators                                                                     0 

Economic impacts for Member States                                                                                  -                                                                                                                               

Economic impacts on the EU budget                                                                            -                                               

Administrative simplification                                                                                       0 

Magnitude  of  impact  as  compared  with  the  baseline  scenario  (the  baseline  is  indicated  as  0):  +++  very  positive; 
++moderately positive, + positive; - - - strongly negative; - - moderately negative, - negative; neutral 0.  

Policy  option  3  –  Minimum  legislative  changes  to  regulation  (EC)  No  764/2008  to 
improve the functioning of mutual recognition  

Economic impacts   

Economic impacts for businesses   

Due  to  the  complexity  of  mutual  recognition  and  the  variety  of  products  involved,  it  is 
very difficult to provide a quantitative assessment of the reduction of costs that this option 
would  trigger.  It  is  expected  that  information  costs  would  be  partially  reduced,  as 
economic operators will receive more accurate information in light of the enlargement of 
PCPs (sub-option 3c); this will impact mostly those products which are considered to be 
partially harmonised.  

As  a  result  of  sub-option  3a  (free  movement  for  products  complying  with  European 
standards)  information  costs,  adaptation  costs  as  well  as  costs  linked  to  delays  in 
accessing  markets  and  lost  opportunities  are  expected  to  be  reduced;  this  view  is 
supported  by  businesses.  However,  this  sub-option  would  only  lead  to  cost-savings  in 
those sectors and for those products where economic operators would be able to rely on 
European  standards.  Such  sectors  are  relatively  limited  (e.g.  childcare  articles). 
Furthermore,  this  option  would  only  apply  to  products  for which  the  Commission,  after 
consultation  of  Member  States  and  via  implementing  acts,  has  also  recognised  the 
European standard in the context of mutual recognition; which may be a time-consuming 
process. For those products in the area of which European standards do not exist, or have 
not been formally recognised by the Commission, including in the area of new, innovative 
products, this would not lead to benefits. This is supported by views at sector level, where 
this sub-option is considered to have a lot of potential, but no practical application, due to 
the lack of existing EU standards in particular sectors84.  

Denial  of  market  access  and  associated  costs  are  also  expected  to  be  partially  reduced, 
due to the modification of national authorities' behaviour triggered by the transparency of 
administrative decisions (sub-option 3b).  

This  option  (in  particular  sub-option  3a)  would  also  entail  a  number  of  costs  for 
businesses. Companies wanting to benefit from free movement by complying with certain 

84  

See case study on Food supplements, annex to the Evaluation. 

45 

 
 
 
                                                 
European  standards  would  need  to  purchase  these  standards.  The  costs  of  the  purchase 
and/or  update  of  standards  for  a  specific  product  group  have  been  estimated  in  the 
harmonised sector to account for less than €2,000 on an annual basis, and in many cases 
less  than  €1,00085.  This  option  would  remain  voluntary  for  companies  even  in  those 
sectors where European standards exist and have been recognised by the Commission in 
the context of facilitating mutual recognition. 

Furthermore, large firms participate much more actively in EU standardisation processes 
and  they  are  often  involved  in  drafting  standards,  ensuring  that  SMEs  are  sufficiently 
represented in the standardisation process and that their concerns are taken into account is 
one  of  the  concerns  of  the  Commission86.  Therefore,  large  firms  are  more  likely  to 
benefit  from  this  option  than  SMEs,  and  the  impact  on  the  functioning  of  mutual 
recognition may be less substantial in particular in view of the fact that 87% of companies 
involved in the non-harmonised sector are micro enterprises.  

This  option,  in  particular  by  ensuring  the  free  movement  of  goods  is  complying  with 
European  standards  (sub-option  3a)  and  the  transparency  of  administrative  decisions 
denying  market  access (sub-option 3b),  is  expected  to have an  impact, albeit limited, in 
increasing  trade  flows  among  Member  States  and  thus,  a  positive  impact  on  the 
competitiveness of European industry.  

Economic impacts for Member States 

Sub-option 3a (free movement for goods complying with European standards) would not 
trigger any costs for Member States; this would only require national authorities to stay 
informed of all the European standards which are recognised by the Commission for the 
purposes  of  mutual  recognition  and  the  products  it  affects.  The  transparency  of 
administrative decisions denying market access (sub-option 3b) would also not entail any 
costs  for  Member  States,  given  that  they  would  submit  a  copy  of  such  decisions  via  a 
supporting IT system and that an obligation to notify already exists under the baseline. 

Member  States  are  expected  to  bear  certain  costs  as  regards  enlarging  the  role  of  PCPs 
(3c).  National  authorities  have  already  incurred  costs  related  to  implementing  their 
obligation  to  establish  PCP  (putting  them  in  place  and  having  them  functioning  on  an 
annual  basis).  Most  of  the  time,  the  PCP  has  been  integrated  in  an  already  existing 
department dealing with internal market issues. Based on the annual reports87, one person 
on  average  is  fulfilling  the  task  of  PCP.  Since  PCPs  would  be  required  to  provide 
information  on  harmonised  sectors  as  well,  they  would  need  to  be  enlarged.  It  is  likely 
that  the  number  of  information  requests  will  increase  quite  sharply  by  including  the 
provision  of  information  on  EU  harmonised  rules  as  well  so  that,  under  this  option,  it 
would require between 1 and 3 supplementary FTE per PCP88.    

85  
86  

87  
88  

Evaluation of the internal market for products, see footnote 76. 
See  the  Joint  Initiative  for  Standardisation;  while  the  presence  of  SMEs  and  their  associations  is  already  improving  at 
European  level,  more  should  be  done  to  ensure  appropriate  representation  and  effective  participation  in  international 
standardisation processes. http://ec.europa.eu/growth/tools-databases/newsroom/cf/itemdetail.cfm?item_id=8852 
See the Evaluation 
This assumption is based on the current number of FTEs employed in the PCP network in the different Member States (see 
the Evaluation, section 7). 

46 

 
 
                                                 
Economic impacts for the EU budget 

In case of ensuring transparency of decisions denying market access (sub-option 3b), the 
Commission would have to invest certain resources in the making available of an IT tool 
to support the notification system. However, this option would not imply setting up a new 
IT tool but it would rather rely on existing IT tools (such as ICSMS89 or IMI90).  
Accordingly, the impact on resources would be minor, as it would require only certain 
(internal) technical work and adaptations in order to put in place the necessary procedures 
and functionalities necessary for the purposes of these notifications.  
Sub-  options  3a  (European  standards)  and  3c  (enlarging  the  role  of  PCPs)  would  not 
trigger any costs on the EU budget. 

Social impacts   

Since  this  option,  in  particular  by  ensuring  free  movement  of  goods  complying  with 
European  standards  (sub-option  3a)  and  the  transparency  of  administrative  decisions 
denying market access (sub-option 3b), is expected to have a limited impact in increasing 
trade and thus, a positive impact on competitiveness of European industry; it would also 
have  limited  positive  social  impacts  on  the  creation  of  employment.  However,  these 
impacts cannot be quantified. 

Environmental impacts 

Environmental impacts of this option cannot be quantified. Yet, an increase in trade flows 
between Member States may lead to some additional transport emissions, although they 
are not considered to be significant. 

Administrative simplifications 

The  free  movement  for  products  complying  with  European  standards  would  bring 
administrative  simplification  for  companies  when  ensuring  market  access  but  it  would 
only be for those products where a European standard exists and it has been recognised by 
the  Commission  for  the  purposes  of  mutual  recognition.  This  is  because  for  such 
products, companies would be able to rely on the compliance with the European standard 
and would not be required to further document that the product should be allowed market 
access  on  the  basis  of  mutual  recognition.  If  the  Member  State  of  destination  would 
consider that the product does not adequately protect the public interests at stake despite 
complying with the European standard, it would be for the authorities to prove this.    

The use of an IT tool to notify administrative decisions denying market access is seen as 
an  administrative  simplification.  It  would  replace  the  many  divergent  notification 
channels  used  until  now,  would  streamline  the  coordination  and  overview  of  the 
notifications, and would facilitate their assessment.  

89  

90  

The Information and Communication System on Market Surveillance (ICSMS) is an IT platform to facilitate communication 
between market surveillance bodies in the EU and in EFTA countries. 
Internal Market Information Tool. 

47 

 
 
                                                 
Stakeholders views on the option 

During the 2016 public consultation, 46% of national authorities, 81% of businesses and 
64% of citizens agreed with the need to introduce dissuasive measures to ensure that the 
obligation for national authorities to notify administrative decisions denying or restricting 
mutual  recognition  is  respected.  In  addition,  57%  of  national  authorities,  84%  of 
businesses and 82%. 

During  the additional  survey  and  interviews  conducted  by  an  external  contractor  during 
2016-201791, stakeholders shared the following views on this option: 

Effectiveness 
for raising 
awareness 
(Policy 
objective 1) 

Effectiveness 
for legal 
certainty on 
the scope 
(Policy 
objective 2) 

Effectiveness 
for legal 
certainty on 
the 
application of 
MR (Policy 
objective 3) 

Effects on reducing costs for 
economic operators 

MS 

EO92  MS 

EO 

MS 

EO 

Transaction 
costs 

Appeals 

Delayed 
market 
access 

48% 

75% 

48% 

75% 

53% 

58% 

66% 

42% 

42% 

58% 

58% 

58% 

58% 

74% 

50% 

50% 

50% 

50% 

Sub-options 

European 
Standards 

Transparency 
of national 
decisions 

PCPs 

42% 

33% 

37% 

33% 

37% 

58% 

42% 

34% 

34% 

Assessment of the option  

Effectiveness in achieving the policy objectives                                                      

Increase awareness about mutual recognition                                                             + 

Increase legal certainty on the scope of mutual recognition                                         + 

Increase legal certainty on the application of mutual recognition                                 ++ 

Enhance administrative cooperation and communication                                             + 

Economic impacts for economic operators                                                                  + 

Economic impacts for Member States                                                                            - 

91  
92  

See Annex 2  
Economic operators 

48 

 
 
                                                 
Economic impacts on the EU budget                                                                            0                                                              

Administrative simplification                                                                                  +                                                                     

Magnitude  of  impact  as  compared  with  the  baseline  scenario  (the  baseline  is  indicated  as  0):  +++  very  positive; 
++moderately positive, + positive; - - - strongly negative; - - moderately negative, - negative; neutral 0.  

Policy  option  4-  Comprehensive  legislative  changes  to  Regulation  to  improve  the 
functioning of mutual recognition 

Economic impacts   

Economic impacts for businesses 

Under this option and its related sub-options, costs related to demonstrating that a product 
has been lawfully marketed in another Member State would be reduced, as well as costs 
related  to  a  delayed  entry  on  the  market  due  to  extensive  discussions  with  national 
authorities as whether or not the product is lawfully marketed in another Member State.  

Sub option 4b (Declaration  of Compliance)93, if voluntary, would not trigger any out of 
the ordinary costs for economic operators; economic operators would need to fill it in and 
keep  it  updated  whenever  necessary,  such  as  when  legislation  or  standards  are  revised. 
The  Declaration  of  Compliance  is  only  a  summary  of  the  conformity  assessment 
procedures  already  carried  out,  and  does  not  require  any  additional  testing.  It  would  be 
used only when judged necessary by economic operators, in situations involving products 
heavily  regulated  at  national  level  and  therefore  where  the  Declaration  of  Compliance 
would really have a real added value in terms of streamlining and framing the discussions 
between economic operators and national authorities. A similar declaration is also used in 
the harmonised area,  and had  positive effects  in terms of reducing costs and facilitating 
trade94. The study supporting the evaluation of the internal market for goods95 shows that 
generally,  drafting  the  declaration  of  conformity  used  in  the  harmonised  area  is  not 
viewed as problematic or costly. Economic operators96 see it rather as a minor step, not 
very  costly  and  not  very  complex,  which  involves  minimal  administrative  work  for 
drafting  the  declaration.  Similarly  to  the  current  situation  in  the  harmonised  area,  it  is 
expected that this declaration will be straightforward to complete, taking not more than 30 
minutes.  Given  the  diversity  of  the  means  of  evidence  that  economic  operators  may  be 
asked  to  provide  at  present  to  demonstrate  that  a  product  is  lawfully  marketed  in  a 
Member  State,  the  time  spent  in  completing  the  declaration  is  expected  to  constitute  an 
improvement to the current situation. 

On  the  contrary,  a  mandatory  Declaration  of  Compliance  in  the  non-harmonised  area 
would be an administrative burden for economic operators, as economic operators would 

93  
94  
95  
96  

See annex 8for detailed information on this option. 
See Annex 8.  
See footnote 76. 
As estimated based on case studies performed in sectors such as lifts, air conditioning, domestic refrigerators and freezers, 
electric motors, see study supporting the evaluation of the internal market for goods quoted above. For example, for electric 
motors  it  was  estimated  that  the  average  costs  for  declaration  of  conformity  or  other  statement  of  compliance  and  CE 
marking of the interviewed companies amount to approximately 0.1% of turnover.  More than 90% of these costs are costs of 
human resources. 

49 

 
 
                                                 
have to draft it and present it no matter what, even for simple products where there are no 
(or few) applicable national rules and therefore no real need for such a declaration and no 
real added value in terms of facilitating dialogue and market access.  

The  Fast  Track  Appeal  Procedure  (sub-option  4c)  would  avoid  costs  related  to  court 
proceedings,  and  reduce  significantly  costs  linked  to  adaptation  of  products,  delayed 
market  access  and  lost  opportunities97.  Furthermore,  the  use  of  SOLVIT  is  particularly 
useful  and adapted  for  SMEs,  who, contrary to  large companies,  don't  have  the internal 
resources (e.g. a legal department) or the financial means to afford long and costly court 
procedures.  The  use  of  SOLVIT  is  free  of  charge,  and  the  average  duration  of  the 
procedure is 12 weeks. During 2016, 83% of economic operators who introduced a case 
in SOLVIT were SMEs. 

Economic impacts for Member States 

Costs  on  Member  States  relate  to  sub  option  4d  (Strengthen  PCPs  and  administrative 
cooperation),  as  PCPs  would  need  to  be  integrated  in  a  wider  network  and  cover 
harmonised  products  as  well.  National  authorities  already  incurred  costs  related  to 
implementing  their  obligation  to  establish  PCP  (putting  them  in  place  and  having  them 
functioning  on  an  annual  basis).  Most  of  the  time,  the  PCP  has  been  integrated  in  an 
already  existing  department  dealing  with  internal  market  issues.  Based  on  the  annual 
reports98, one person on average is fulfilling the task of PCP.  It is likely that the number 
of  information  requests  will  increase  quite  sharply  by  including  the  provision  of 
information  on EU harmonised rules as  well so that,  under  this  option,  it would require 
between  1  and  3  supplementary  Full  Time  Equivalent  (FTE)  per  PCP.  As  regards 
mandatory  administrative  cooperation,  some  estimation  can  be  drawn  based  with  on  a 
comparison  with  the  harmonised  area,  where  the  annual  costs  of  administrative 
cooperation  amount  to  approximately  1  200  000  EURO99.  The  costs  in  the  non-
harmonised  area  are  expected  to  be  lower,  as  the  harmonised  sector  represents  a  higher 
proportion of the total manufacturing sector100.  
Other costs are linked to option 4c (Fast-track appeal). The use of SOLVIT by economic 
operators is expected to increase, because this tool would become more business friendly 
due to the informal assistance and technical expertise offered by the Commission services 
and  the  possibility  of  having  a  Commission  binding  opinion.  Currently,  the  number  of 
cases  relating  to  the  application  of  mutual  recognition  in  SOLVIT  is  very  low101,  and 
accounts to 5 cases in 2016. While it is impossible to estimate with accuracy the number 
of  cases  that  would  be  submitted  to  SOLVIT  following  the  implementation  of  this 
procedure,  an  estimation  can  be  made  on  the  basis  of  the  number  of  cases  registered  in 
SOLVIT  in (1) the most successful areas and (2) and the less successful areas. In (1), the 
number  of  cases  submitted  in  the  area  of  social  security  accounted  in  2015  to 

97   

98  
99  

100  
101  

Following the 2016 public consultation (see annex 2), adaptation costs were estimated between 1000 and 150 000 Euro per 
product and per market. Delays for entering a market were estimated between 3000 and 500 000 Euro per product and per 
market, and lost opportunities, were estimated between 10 000 and 500 000 Euro per product and per market. 
See annex 7 to the Evaluation. 
This covers the organisation of the networking meetings, the refund of travel fees for the participants and for the person in 
charge of the administrative secretariat (e.g. preparation of the agenda of the meetings and relevant documents).      
Annex 5 offers an overview of harmonised and non-harmonised sectors  
The reasons for this low number of cases are provided in section 3.2.3 

50 

 
 
 
                                                 
approximately 1400, representing more than 50% of the total number of cases submitted 
to  SOLVIT.  In  (2),  the  number  of  cases  submitted  in  the  area  of  goods  (other  than  the 
application  of  the  mutual  recognition  principle)  accounted  in  2015  to  102,  representing 
less than 5% of the total number of cases submitted to SOLVIT. It is considered that, in 
order to deal with 16 to 50 cases, a SOVLIT centre needs to have 1 FTE102.  Therefore, in 
(1) the increase in terms of SOLVIT centres staffing accounts for 28 FTEs, while in (2) it 
accounts to 2 FTEs. However, the costs triggered by the implementation of this option are 
expected  to  be  limited,  as  one  of  the  objectives  of  the  Action  Plan103  for  reinforcing 
SOLVIT is to increase the number of business cases. Furthermore, the action plan already 
foresees  that  Member  States  will  ensure  adequate  and  stable  staffing  and  continuity  of 
service for their centres.  

The other sub options (4a-clarify scope, 4b Declaration of Compliance) are not expected 
to involve any other costs for Member States. On the contrary, sub- option 4a (clarify the 
scope) is expected to reduce costs for Member States, as the functioning of PCPs would 
be  more  efficient  due  to  the  clarity  as  regards  the  instances  where  mutual  recognition 
applies  or  not.  Sub-option  4b  (Declaration  of  Compliance)  would  also  reduce  costs  for 
public authorities assessing whether or not a products can be placed on the market based 
on  mutual  recognition,  because  the  Declaration  of  Compliance  would  frame  and 
streamline the dialogue and the assessment of the product intended to be marketed.  

Economic impacts for the EU budget 

Sub option 4a (clarify scope) and 4b (Declaration of Compliance) are not expected to cost 
the Commission anything.  

Sub option 4c (Fast-track appeal) would have impacts on the Commission, in terms work 
load. The number of cases to be submitted to SOLVIT, as explained above, is expected to 
increase. Also, staff will need to deal with the appeals following the Fast Track Appeal 
procedure.  While  it  is  impossible  to  estimate  with  accuracy  the  increase  of  cases  and 
related  workload,  an  analogy  can  be  made  with  the  resources  necessary  to  deal  with 
complaints  and  infringements  following  Articles  34-36  TFEU.  These  costs  can  be 
estimated  on  the  basis  of  FTEs,  for  which  a  yearly  gross  salary  of  kEUR  60  has  been 
assumed, to which also 25% of overhead was added (75 000). Currently, 4 FTEs deal with 
complains and infringements pursuant to Articles 34-36. It is estimated that a maximum 3 
additional FTEs will be needed to deal with the appeals, representing EUR 225 000 per 
year. 

Social impacts   

This option would facilitate trade for businesses in the non-harmonised area. Therefore it 
is  expected  that  more  economic  operators  will  engage  in  cross  border  trade  and  will 
expand  to  new  markets.  This  is  expected  to  create  more  wealth,  i.e.  value  added  and 
turnover, and to have indirect positive impacts on the employment trend in those sectors. 

102  
103  

See SWD Assessment of the performance of SOLVIT and SOLVIT database. 
[Communication on an action plan on the reinforcing of SOLVIT]  

51 

 
 
                                                 
Currently,  more  than  8  million  persons  are  employed  in  the  non-harmonised  area  of 
goods,  representing  31%  of  all  persons  employed  in  the  manufacturing  sector104. 
Moreover, more trade means more products on the market, and therefore more choices at 
lower prices for consumers. They are thus likely to benefit from this option. 

Environmental impacts 

The  potential  use  of  digital  means  for  supplying  the  Declaration  of  Compliance  (sub-
option 4b) is likely to ensure a higher level of protection of the environment (less paper). 
Yet,  an  increase  in  trade  flows  between  Member  States  may  lead  to  some  additional 
transport emissions, although not considered to be significant. 

Administrative simplifications 

Sub-option  4b  would  bring  significant  administrative  simplifications  for  businesses;  it 
would  replace  the  various  and  numerous  means  of  proving  that  a  product  is  already 
lawfully marketed in a certain Member State by one single standardised document which 
is  expected to  be  filled in  in  around 30 minutes.  One of the main drivers of  suboptimal 
mutual recognition is the difficulty that economic operators have in terms of showing that 
their  product  is  already  lawfully  marketed  elsewhere,  due  mainly  to  the  diversity  of 
approaches at national level as regards the type of documents to be submitted.   

Sub-options 4a (clarify scope) 4c (fast-track appeal) and 4 d (strengthened PCPs) are not 
expected to have significant impacts in terms of administrative burdens. 

Stakeholders views on the option  

During the 2016 public consultation105, the sub-options assessed above received a lot of 
support from stakeholders. 84% of member States, 85% of businesses and 82% of citizens 
supported sub-option 4a (clarify scope), while 75% of Member States, 80% of businesses 
and  76%  of  citizens  agreed  that  sub-option  4b  (Declaration  of  compliance)  would 
simplify the demonstration of the lawfulness of the marketing of a product. Furthermore, 
66%  of  Member  States,  90%  of  businesses  and  76%  of  citizens  agreed  that  efficient 
remedies for challenging administrative decisions denying market access (sub-option 4c-
fast-track  appeal)  are  necessary.  Strengthening  PCPs  (sub-option  4d)  was  supported  by 
64% of Member States, 64% of businesses and 70% of citizens.  

During  the additional  survey  and  interviews  conducted  by  an  external  contractor during 
2016-2017106, stakeholders shared the following views on this option: 

Sub-
options 

Effectiveness 
for raising 
awareness 
(Policy 
objective 1) 

Effectiveness 
for legal 
certainty on the 
scope (Policy 
objective 2) 

Effectiveness 
for legal 
certainty on the 
application of 
MR (Policy 
objective 3) 

Effects on reducing costs for 
economic operators 

104  
105  
106  

See section 2 and Annex 4 
See Annex 2 
See Annex 2  

52 

 
 
                                                 
MS 

EO107  MS 

EO 

MS 

EO 

Transaction 
costs 

Appeals 

Delayed 
market 
access 

Clarify 
scope 

68% 

84% 

68% 

75% 

63% 

50% 

58% 

50% 

50% 

DoC 

58% 

83% 

52% 

67% 

48% 

59% 

58% 

50% 

50% 

Fast-track 
appeal 

16% 

75% 

37% 

75% 

32% 

58% 

58% 

59% 

59% 

PCPs 

37% 

83% 

37% 

33% 

32% 

42% 

59% 

59% 

49% 

Assessment of the option  

Effectiveness in achieving the policy objectives                                                                            

Increase awareness about mutual recognition                                                            + 

Increase legal certainty on the scope of mutual recognition                                         +++ 

Increase legal certainty on the application of mutual recognition                                 +++ 

Enhance administrative cooperation and communication                                             +++ 

Economic impacts for economic operators                                                                +++                             

Economic impacts for Member States                                                                                - 

Economic impacts on the EU budget                                                                              -                                        

Administrative simplification                                                                                    ++                                                 

Magnitude  of  impact  as  compared  with  the  baseline  scenario  (the  baseline  is  indicated  as  0):  +++  very  positive; 
++moderately positive, + positive; - - - strongly negative; - - moderately negative, - negative; neutral 0.  

Policy option 5- Voluntary prior authorization to placing on the market 

Economic impacts   

Economic impacts for businesses 

This  option  is  supposed  to  reduce  to  a  certain  extent  some  of  the  costs  incurred  by 
businesses, such  as costs related to court  proceedings and lost  opportunities, due to the 
lack of legal certainty when using mutual recognition. Those who are not aware or very 
familiar  with  mutual  recognition  in  the  first  place  are  not  likely  to  benefit  from  this 
option.  However,  certain  costs,  such  as  adaptation  costs,  are  expected  to  remain 
unchanged,  as  there  is  no  guarantee  that  Member  States  will  modify  their  behaviour 

107  

Economic operators 

53 

 
 
                                                 
towards  mutual  recognition  solely  because  they  will  have  to  assess  its  application  in  a 
pre-marketing  phase.  Moreover,  costs  related  to  delayed  entry  on  the  market  would 
remain unchanged, as the economic operator would have to wait for the reply from the 
authorities in the prior authorisation procedure which is expected to be long.  

Economic impacts for Member States   

This option would create excessive costs on the Member States. They would have to put 
in place the infrastructure and make available the necessary national resources in order to 
perform the assessment of the demands requiring prior authorisation. 

Even if this option is voluntary, given its important impacts in terms of legal certainty, it 
is  expected  to  become  a  market  driven  demand,  and  required  by  almost  all  economic 
operators wishing to have legal certainty when placing their products on new markets.  

The value of the non-harmonised goods area has been estimated at 18% of the total value 
of  intra  EU  exports,  and  mutual  recognition  potentially  applies  to  a  huge  variety  or 
products in the food and non-food area (Annex 5 provides an overview of the categories 
of  products  falling  under  the  scope  of  mutual  recognition,  by  NACE  codes).  For  each 
category  of  products,  national  authorities  would  have  to  put  in  place  the  necessary 
structures  and  human  resources  with  the  necessary  technical  and  scientific  expertise  in 
order  to  deal  with  the  request.  While  it  is  impossible  to  assess  with  accuracy  the 
magnitude  of  the  costs  Member  States  would  have  to  bear  in  order  to  implement  this 
procedure, estimates are possible based on the costs of prior authorisations in a specific 
(biocides) sector and on the number of economic operators active in the non-harmonised 
areas.  There  are  10  major  sectors  subject  to  the  application  of  the  mutual  recognition 
principle108,  accounting  for  770  430  active  enterprises109.  One  scenario  would  be  to 
assume  that,  because  of  the  positive  impacts  in  terms  of  legal  certainty,  80%  of  the 
economic operators active in the non-harmonised area will ask for a prior authorisation, 
accounting for 616 344 enterprises; another scenario would be to assume that despite the 
positive impacts in terms of legal certainty, a reasonable number of economic operators, 
(in complex problematic sectors) i.e. 30%, accounting for 231 129 enterprises, will ask 
for  this  authorisation.  In  the  specific  sector  of  biocides,  is  was  assessed  that  100-150 
FTEs  would  be  needed  to  run  a  central  prior  authorisation  such  a  system,  and  that  the 
administrative costs related to this procedure would be  between 18 and 20 million Euro 
per year110.  

Therefore, this option would rather create more barriers in the single market for goods, 
and would result in a new generation of administrative procedures very burdensome and 
long  for  economic  operators.  It  also  contradicts  the  general  EU  policy  favouring  the 
reduction of administrative burdens, and the jurisprudence of the Court of Justice which 

108  
109  
110  

See section 2 and Annex 5 
See Annex 4 
See  SWD  Accompanying  document  to  the  Proposal  for  a  Regulation  Of  The  European  Parliament  And  Of  The  Council 
concerning the placing on the market and use of biocidal products, SEC(2009) 773 Final 

54 

 
 
                                                 
considers  prior  authorisations  to  placing  on  the  market  as  de  facto  infringing  the  free 
movement of goods fundamental principle111.    

Economic impacts on the EU budget 

No costs for the EU budget have been identified. 

Social impacts 

As  this  option  would  have  some  impacts  in  terms  of  increasing  legal  certainty  for 
economic operators when using mutual recognition, it is expected that it would generate 
an  increase  in  trade  of  non-harmonised  or  partially  harmonised  goods.  This  increase 
would translate into more products on the market, thus a wider variety for consumer at 
lower  prices.  However,  it  is  expected  for  these  impacts  to  be  limited,  as  the  procedure 
described above is quite heavy and long for Member States.   

Environmental impacts 

No environmental impacts have been identified.  

Administrative simplifications 

This  option  is  not  expected  to  bring  any  administrative  simplification;  it  is  rather  an 
important administrative burden for Member States and for economic operators. 

Stakeholders views on the option  

During  the  last  meeting  of  the  Consultative  Committee  on  mutual  recognition  (25 
October 2016), there was a consensus among Member States representatives on the fact 
that  this  option  constitutes  a  major  administrative  burden  and  therefore  Member  States 
representatives advocated against it.  

During the additional survey and interviews conducted by an external contractor during 
2016-2017112, stakeholders shared the following views on this option: 

Effectiveness 
for raising 
awareness 
(Policy 
objective 1) 

Effectiveness 
for legal 
certainty on 
the scope 
(Policy 
objective 2) 

Effectiveness 
for legal 
certainty on 
the application 
of MR (Policy 
objective 3) 

Sub-options 

Effects on reducing costs for 
economic operators 

MS 

EO113  MS 

EO 

MS 

EO 

Transaction 
costs 

Appeals 

Delayed 
market 
access 

111  

112  
113  

See C-390/99 Canal Satelite Digital, where the Court sets very strict conditions for prior authorisations procedures, which are 
measures having an effect equivalent to a quantitative restriction on imports.  
See Annex 2  
Economic operators 

55 

 
 
                                                 
Voluntary 
prior 
authorisation 

16% 

58% 

32% 

59% 

27% 

33% 

58% 

58% 

33% 

Assessment of the option  

Effectiveness in achieving the policy objectives                                                                                        

Increase awareness about mutual recognition                                                                   0 

Increase legal certainty on the scope of mutual recognition                                              0 

Increase legal certainty on the application of mutual recognition                                   ++ 

Enhance administrative cooperation and communication                                                  0 

Economic impacts for economic operators                                                                         +                                    

Economic impacts for Member States                                                                               --- 

Economic impacts on the EU budget                                                                                  0                                                    

Administrative simplification                                                                                              0                                                     

Magnitude of impact as compared with the baseline scenario (the baseline is indicated as 0): +++ very positive; 
++moderately positive, + positive; - - - strongly negative; - - moderately negative, - negative; neutral 0.  

8.  COMPARISON OF OPTIONS 

8.1.  Effectiveness 

As  regards  the  effectiveness  of  the  different  options  to  achieve  the  policy  objectives 
identified  it  is  considered  that  option  2  (soft  law)  is  the  most  effective  to  increase 
awareness on mutual recognition, since it will consist of  training and awareness raising 
campaigns  targeting  not  only  national  authorities  but  also  stakeholders.  This  is  why  a 
score of +++ was given. However, this option alone will only have a limited impact in 
addressing  the  policy  objectives  for  ensuring  legal  certainty  on  the  scope  of  mutual 
recognition  and  on  the  outcome  that  can  be  expected,  and  thus  ensuring  the  free 
movement of goods based on mutual recognition; this is why a score of + was given for 
these policy objectives. Since this option will also provide for a system of exchange of 
officials,  it  is  expected  to  address  the  need  for  better  trust  and  cooperation  among 
authorities. However, in view of the fact that it will necessarily apply to a limited number 
of officials, a score of ++ has been given. Option 3 (European standards, transparency of 
decisions  and  enlarged  role  of  PCPs)  will  address  all  policy  objectives  but  only  to  a 
limited extent. Increased awareness of the principle of mutual recognition will be ensured 
via the PCPs; this is why it is expected to only have a limited effectiveness and a score of 
+ has been given. Similarly, it is expected to be only slightly efficient in ensuring more 
legal  certainty  on  the  scope  of  the  principle.  This  option  will  be  very  effective  in 
providing  legal  certainty  on  the  outcome  to  be  expected  when  relying  on  European 
standards,  but  only  for  those  products  or  aspects  of  products  for  which  European 

56 

 
 
standards  exist  and  have  been  identified  for  the  purposes  of  mutual  recognition;  this  is 
why a score of ++ has been given. Option 4 (declaration of compliance, fast track appeal 
and strengthened PCPs) is expected to achieve all policy objectives in the most effective 
manner.  Option  5  (voluntary  prior  authorisation)  will  bring  more  legal  certainty  on  the 
application  of  mutual  recognition  for  those  economic  operators  requesting  it  who  will 
know in a definite manner whether they can have market access for a specific product, 
but  for  the  rest  of  products  and/or  economic  operators  it  will  not  address  the  policy 
objectives  in  a  sufficient  manner.  This  is  why  a  score  of  ++  has  been  given  for  the 
efficiency for achieving the policy objective of ensuring legal certainty on the application 
of  mutual  recognition.  However,  by  providing  for  a  pre-marketing  assessment  of  the 
product,  this  option  will  not  be  addressing  the  awareness  or  the  legal  certainty  on  the 
scope, nor the cooperation among authorities and this is why a neutral score (0) against 
those policy objectives has been given. 

8.2.  Efficiency 

When  comparing  the  costs  and  benefits  of  each  option,  Option  2  (soft  law)  will  entail 
costs for the EU budget and minimum costs for the Member States, while it will not lead 
to  costs  for  economic  operators;  but  it  will  have  the  most  benefits  in  terms  of  raising 
awareness of mutual recognition. However, since it will not be sufficiently effective for 
the other policy objectives, a score of ++ has been given. Option 3 (European standards, 
transparency  of  decisions  and  enlarged  role  of  PCPs)  does  not  trigger  an  important 
economic  burden  for  any  of  the  stakeholders  but  it  is  also  not  expected  to  lead  to 
substantial  benefits  in  the  context  of  the  policy  objectives.  The  process  for  referencing 
European  standards  in  the  context  of  mutual  recognition  will  be  time  consuming  and 
burdensome, involving a  committee of Member States representatives and the adoption 
of implementing acts. This is why a score of + has been given. Option 4 (declaration of 
compliance,  fast  track  appeal  and  strengthened  PCPs)  will  lead  to  costs  for  economic 
operators  (in  terms  of  drafting  the  declaration  of  compliance)  which  have  not  been 
deemed as very high and for Member States (for enlarging the PCPs) but will also lead to 
cost-saving for businesses when demonstrating that their products are lawfully marketed 
in  the  Member  State  of  origin  and  when  appealing  national  decisions  denying  market 
access. It is also expected to produce the highest benefits in terms of better functioning of 
mutual recognition and increasing intra-EU trade flows and thus, competitiveness of EU 
companies including SMEs. This  is why a score of +++ has  been  given.  Finally, while 
option 5 (voluntary prior authorisation) will lead to certain benefits for those economic 
operators  requesting  it,  it  will  trigger  the  highest  identified  administrative  burden  and 
costs for both Member States and businesses. This is why a score of -- has been given.  

8.3.  Coherence 

Option  2  (soft  law)  consists  of  training  and  information  campaigns  and  as  such  is  not 
considered inconsistent with any other EU policies. This is why a score of ++ has been 
given.  Option  3  (European  standards,  transparency  of  decisions  and  enlarged  role  of 
PCPs) is coherent with the European standardisation policy and by enlarging the role of 
PCPs,  it  will  also  help  in  facilitating  a joint  assessment  of  EU  harmonisation  rules and 
the application of mutual recognition for economic operators. In addition, this will also 
be  consistent  with  the  current  initiatives  to  ensure  that  economic  operators  have  better 
access to information to benefit from the Single Market, in particular online (the Single 

57 

 
 
Digital  Gateway).  This  is  why  a  score  of  ++  has  been  given.  Option  4  (declaration  of 
compliance, fast track appeal and strengthened PCPs) will also be consistent with current 
initiatives such as the Single Digital Gateway and facilitate a joint assessment of all rules 
applicable to the product (harmonisation rules and mutual recognition). This is not only 
due to the strengthened role of PCPs, but also because of the fact that the Declaration of 
Conformity  is  a  document  required  by  all  EU  harmonised  rules.  Setting  up  a  similar 
documentary form of evidence for mutual recognition will be particularly useful for those 
products  which  are  partially  covered  by  EU  harmonisation  rules  and  for  which  this 
Declaration of Conformity has to be prepared in any case in accordance with those rules. 
Also, the fast-track appeal procedure would be supported by current initiatives which aim 
to  improve  SOLVIT114  so  that  it  becomes  a  useful  tool  for  businesses.  This  is  why  a 
score of +++ has been given. Option 5 (voluntary prior authorisation) contradicts the EU 
policy  for  free  movement  of  goods  in  general,  favouring  a  post  market  approach  in 
controlling the compliance of the products and will represent in this respect a step back 
on  what  has  been  achieved  for  the  Single  Market  for  goods  to  date.  This  is  why  this 
option is considered very incoherent with other EU policies, and a score of  -- has been 
given.  

Table 8-1: Comparison of the options  

Policy 
option 2 

Policy 
option 3 

Policy 
option 4 

Policy 
option 5 

Effectiveness 

Policy objective 1 

Increase awareness about mutual recognition 

Policy objective 2 

Increase legal certainty on the scope of mutual 
recognition for businesses and authorities 

Policy objective 3 

Increase legal certainty on the application of 
mutual recognition and what to expect 

+++ 

+ 

+ 

+ 

+ 

+ 

+++ 

0 

0 

++ 

+++ 

++ 

Policy objective 4 

++ 

+ 

+++ 

Enhance administrative cooperation and 
communication 

Efficiency 

Coherence 

++ 

++ 

+ 

++ 

+++ 

+++ 

0 

- 

-- 

The  scores  are  given  on  the  basis  of  Commission  expected  results  against  the  specific 
policy  objectives  as  explained  above;  +++  being  very  positive,  ++  positive,  +  slightly 
positive, 0 neutral, - negative and – very negative. 

114  

See the current work towards an Action Plan for Reinforcing SOLVIT.  

58 

 
 
 
 
 
 
 
 
                                                 
Accordingly,  the  preferred  option  would  be  a  combination  of  Option  2  (soft  law 
instruments) and Option 4 (clarification of the scope of the regulation, introduction of a 
declaration  of  compliance  and  of  a  fast-track  appeal  procedure  for  businesses  and 
strengthening the role of PCPs). This combination will address in the most effective and 
efficient manner all policy objectives to lead to a better functioning of the Single Market 
for non-harmonised products through more and better mutual recognition. 

The Action Plan on mutual recognition is expected to raise awareness and understanding 
on  the  rights  and  obligations  that  all  stakeholders  involved  (national  authorities  and 
businesses alike) have when relying on mutual recognition. This is expected to facilitate 
acceptance of products lawfully marketed in one Member State in other national markets 
without requiring it to follow technical adaptations. Economic operators will be able to 
gather  more  reliable  and  complete  information  from  PCPs.  When  Member  States 
authorities  want  to  assess  a  product  relying  on  mutual  recognition,  the  voluntary 
declaration  of  compliance  is  expected  to  simplify  the  dialogue  between  businesses  and 
national  authorities,  and  provide  more  legal  certainty  on  what  to  expect.  Finally,  when 
market access is denied, businesses will have the possibility to seek a solution via a fast 
track  appeal  procedure,  which  will  ensure  that  market  access  is  denied  only  where 
legitimate  and  proportionate  public  interests  need  to  be  protected.  Administrative 
cooperation  and  better  communication  channels  will  increase  trust  among  national 
authorities;  all  of  this  contributing  to  creating  a  favourable  environment  for  mutual 
recognition and to ensure that companies can rely on this principle to reap the benefits of 
the Single Market. 

As  mentioned  previously,  a  study  done  for  the  European  Parliament115  shows  that  a 
reduction of barriers to trade could lead to an increase in intra-EU trade of more than 100 
billion EUR per year. The fact that mutual recognition does not function well is, de facto, 
a  regulatory  burden  triggering  barriers  to  trade.  Therefore,  the  actions  described  in  the 
preferred  option  will  improve  the  functioning  of  mutual  recognition  and  thus  result  in 
simplifications for businesses, e.g. easier access to markets.   

8.4.  Potential for reduction of administrative burdens for companies 

The  mutual  recognition  principle  and  the  supporting  measures  currently  set  out  in  the 
Regulation  were  designed  to  facilitate  free  movement  of  goods  in  those  areas  where 
marketing  conditions  for  products  are  not  harmonised  at  EU  level.  Therefore,  the  sub-
optimal  functioning  of  mutual  recognition  is  as  such  a  burden  for  businesses  and  any 
efforts  in  improving  the  functioning  of  the  principle  and  adapting  the  regulatory 
measures  to  the  reality  of  the  market  should  be  considered  as  a  simplification  and  a 
reduction of administrative burdens. 

9.  MONITORING AND EVALUATION 

Monitoring  and  evaluation  have  traditionally  been  a  major  problem  for  mutual 
recognition.  The  monitoring  and  evaluation  system  to  be  put  in  place  must  avoid  the 

115  

The  Cost  of  Non-  Europe  in  the  Single  Market,  'Cecchini  Revisited',  An  overview  of  the  potential  economic  gains  from 
further completion of the European Single Market, CoNE 1/2014 
http://www.europarl.europa.eu/RegData/etudes/STUD/2014/510981/EPRS_STU(2014)510981_REV1_EN.pdf 

59 

 
 
                                                 
  
shortcomings  identified  in  the  Evaluation.  The  proposal  will  therefore  specify  that  the 
reporting  of  activities  and  of  the  administrative  decisions  taken  will  be  enhanced,  and 
reported  via  an  IT  tool (this  will  be  implemented  via  existing  tools,  such  as  ICSMS  or 
IMI), to ensure full transparency and follow-up.  

Furthermore, traditional tools such as the monitoring of complain and infringements, the 
SOLVIT  and  TRIS  mechanisms  will  remain  monitoring  tools  to  be  used.  The  Single 
Digital Gateway (SDG) can also be used to monitor the actives of PCPs, as they will be 
integrated into this network and access to their services will be facilitated by the single 
entry  point  offered  by  the  SDG.  Additionally,  the  lack  of  accurate  quantitative  data  on 
mutual  recognition  (size  of  the  market,  number  of  products,  costs  and benefits)  will  be 
addressed by a systematic survey intended to gather the missing data and to prepare and 
service  future  evaluations.    For this  purpose,  existing  survey  tools  at  EU  level,  such  as 
the Commission's Innobarometer116, could be used. 

9.1.  Operational Objectives  

 

 

 

 

 

 

Enhance  awareness  of  mutual  recognition,  inter  alia  through  regular  training 
sessions  for  businesses  and  national  authorities  and  the  exchange  of  officials  in 
national  authorities.  The  Commission  expects  that,  after  the  train  the  trainer  has 
been ensured where it is expected that around 20 to 40 trainers be trained, at least 
2-5 national events will be organised per year. Also, the Commission expects that 
around 5 to 15 exchanges of officials will take place each year. 

Ensure  that  Member  States  introduce  a  clear  mutual  recognition  clause  in  all 
relevant  national  technical  rules  which  are  notified  under  Directive  (EU) 
2015/1535. The Commission expects that with a clearer clause, easier to integrate 
in notified drafts, the use of the clause would increase by 50%.  

Introduce  a  voluntary  declaration  of  compliance  facilitating  the  effective  right  to 
free  movement  within  the  internal  market  for  products  lawfully  marketed  in 
another  Member  States.  The  Commission  expects  that  the  declaration  would  be 
used by 60% of businesses operating in the non-harmonised area.  

Ensure  that  businesses  can  appeal  national  decisions  denying  market  access 
through  a  fast-track  procedure.  This  will  be  based  on  SOLVIT  and,  where 
appropriate,  by  the  Commission  intervention.  The  Commission  expects  that  the 
resolution rate of goods related cases by SOLVIT would increase by 200%.  

Streamline the notification procedure for administrative decisions denying mutual 
recognition via an IT tool. The Commission expects that the IT tool would increase 
the  number  of  notifications,  reaching  a  level  of  at  least  90%  of  decisions  being 
notified.  

Strengthen  the  role  of  PCPs  to  become  a  central  point  for  information  on  all 
products (including harmonized ones). The Commission expects that the number of 
requests and that the level of awareness and satisfaction would increase by 50%. 

116  

http://ec.europa.eu/growth/industry/innovation/facts-figures/innobarometer_fr 

60 

 
 
                                                 
 

Set up an administrative cooperation forum which would meet at least once a year 
where  all  national  authorities  would  participate  and  discuss  issues  related  to  the 
application  of  mutual  recognition.  The  Commission  expects  to  have  at  least  one 
meeting per year, reaching participation from at least 25 Member States.  

9.2.  Indicators for the monitoring  

  Number of events organised (awareness campaigns and trainings), and number of 
persons participating in the events or receiving the training, as well as their level of 
satisfaction  

  Number of officials participating in the exchange of officials' scheme 

  Number  of  notifications  of  draft  national  rules  containing  a  mutual  recognition 

clause 

  Number of economic operators using the declaration,  their level of satisfaction and 

their input in terms of costs reduction  

  Number  of  notifications  of  administrative  decisions  denying  or  restricting  market 

access 

  Number of cases introduced by business in SOLVIT and resolution rate  

  Number of appeals to the Commission and number of binding decisions adopted by 

the Commission 

  Number  of  complaints  received  on  the  misapplication  of  the  mutual  recognition 

principle  

  Number  of  requests  received  by  PCPs,  deadlines  for  responding  and  level  of 

satisfaction of economic operators  

  Number  of  administrative  cooperation  meetings  organised  and  number  of 

participants 

61 

 
 
 
 
ANNEX 1 PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES 

1. 

IDENTIFICATION  

Lead  Directorate  General:  Internal  Market,  Industry,  Entrepreneurship  and  SMEs  (DG 
GROW). 

This initiative is identified in the Agenda Planning with the reference 2017/GROW/005. 

2.  ORGANISATION AND TIMING 

Work  on  the  Impact  Assessment  started  after  the  adoption  of  the  Commission's  Single 
Market Strategy in October 2015. The Inception Impact Assessment was published on 13 
May 2016.  

An  Inter-Service  Steering  Group  (ISSG)  chaired  by  DG  GROW  was  set  up  in  October 
2015 and with the participation of the following Directorates General: Legal Service of 
the Commission (LS), Secretariat General (SG), DG Agriculture and Rural Development 
(AGRI),  DG  Economic  and  Financial  Affairs  (ECFIN),  DG  Energy  (ENER),    DG 
Environment  (ENV),  DG  Justice  and  Consumers  (JUST),  DG  For  Mobility  and 
Transport (MOVE),  DG  Health  and  Food  Safety  (SANTE),  DG  Taxation  and  Customs 
Union (TAXUD), DG Trade (TRADE), DG Maritime Affairs and Fisheries (MARE). 

The  ISSG  met  in  total  nine  times  (29/01/2016,  07/03/2016,  21/04/2016,  29/09/2016, 
28/11/2016,  27/01/2017,  13/02/2017,  27/02/2017  and  06/03/2017).    The  minutes  of  the 
last ISSG meeting were submitted to the RSB together with the draft IA report. 

3.  CONSULTATION OF THE REGULATORY SCRUTINY BOARD 

The Regulatory Scrutiny Board of the European Commission assessed a draft version of 
the  present  impact  assessment  and  issued  its  opinion  on  7  April2017.  The  Regulatory 
Scrutiny  Board gave  a  positive opinion  on the Impact Assessment report. It considered 
that  the  report  had  an  overall  good  presentation  and  recommended,  as  further 
improvement,  to  better  explain  the  choice  of  options  and  how  these  would  work  in 
practice.  The  report  should  also  draw  clearer  conclusions  on  how  far  the  expected 
outcome of the revision will have an impact on the functioning of the mutual recognition 
on  the  ground  and  contribute  to  a  well-functioning  internal  market.  Finally,  it  should 
better  assess  the  potential  to  simplify  administration  and  reduce  burdens  (REFIT).  The 
Impact Assessment has been amended to address the comments made by the Regulatory 
Scrutiny Board in its opinion. 

Follow-up 

RSB opinion 
(B) Main considerations  
The  Board  notes 
the  overall  good 
presentation  of  this  impact  assessment 
report. 
The Board gives a positive opinion, with a 
recommendation to further improve the 
report  with  respect  to  the  key  aspects 

62 

 
 
 
 
 
 
 
 
 
mentioned hereafter. 

(1) The report does not clearly explain the 
choice of the options and how these would 
work in practice. 

(2)  The  report  does  not  draw  clear 
conclusions  on  how  far  the  expected 
outcome  of  the  revision  will  have  an 
impact  on  the  functioning  of  the  mutual 
recognition  on  the  ground  and  contribute 
to a well-functioning internal market. 

(3)  The  report  has  not  assessed 
the 
potential  to  simplify  administration  and 
reduce burdens (REFIT). 

has 

lack  of 

(C) Further considerations and 
adjustment recommendations 
(1) Problem definition 
Based  on  available  evidence,  the  report 
should  more  clearly  explain  the  most 
problematic aspects of mutual recognition. 
It should explain to what extent the Mutual 
Recognition 
been 
Regulation 
ineffective. It should elaborate on the issue 
trust  between  national 
of 
administrations:  the  evaluation  identifies 
this  as  one  of  the  factors  for  the  non-
functioning  of  the  mutual  recognition. 
Moreover,  the  report  should  better  assess 
why  mutual  recognition  is  not  working  in 
the  Member  States 
presenting 
additional evidence. 
The  IA  report  should  be  a  self-standing 
document. Therefore, it should summarize 
the 
In 
particular,  the  report  should  present  in 
more detail the problems encountered with 
the  current  Regulation,  including  why 
Product Contact Points are not functioning. 
(2) Options 
In 
acknowledged 
view 
ineffectiveness  of  the  current  Regulation, 
the  report  should  explain  whether  certain 

the  evaluation. 

findings  of 

the 

by 

of 

1)  Section  6  on  the  Options  has  been 
amended  to  better  explain  the  different 
options  and  the  interaction  between  them, 
as well as how the options would work in 
practice. 

2)  The  conclusion  of  section  8  has  been 
expected 
explain 
amended 
consequences  on 
the 
preferred option.  

the 
the  market  of 

to 

the 

3)  A  new  dedicated  section  8.4  explains 
that the current regulatory burdens are due 
to 
of  mutual 
recognition and indicates the effects of the 
preferred  option  is  expected  to  have  in 
reducing those. 

non-functioning 

The  Impact  Assessment  report  has  been 
made  a  stand-alone  document  separated 
from  the  Evaluation.  A  summary  of  the 
results of the Evaluation has been added as 
a  new  annex  6,  and  evidence  that  was 
included  only  in  the  Evaluation  has  been 
the  problem 
throughout 
incorporated 
definition. 

lack  of 

The 
trust  among  national 
administrations has been further elaborated 
and  is  now  presented  as  a  problem  driver 
in section 3.2.4. 

The report includes further evidence on the 
problem  definition  on 
the  problems 
encountered  with  the  current  Regulation 
and  also  more  detailed  information  on 
Product Contact Points. 

In  Section  6.1  on  discarded  options,  it  is 
explained  in  more  detail  while,  despite  its 
is  not 
ineffectiveness, 

the  Regulation 

63 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
provisions of the current Regulation could 
be removed or amended. 

repealed  but  that  certain  of  its  provisions 
can be removed. 

their 

despite 

particular 

For  instance,  it  should  clarify  why  it  is 
necessary  to  preserve  the  Product  Contact 
suboptimal 
Points 
functioning. 
The  report  should  clarify  the  construction 
of the options and how they would work in 
practice. For instance, it should explain the 
design  of  options  3  and  4.  The  report 
should  clarify  the  limits  of  options  3a 
(compliance  with  European  standards)  to 
better demonstrate the benefits of option 4 
(in 
of 
4b: 
compliance).  For  both  options,  it  should 
and 
clearly  mention 
responsibilities 
In 
particular, the report should clarify that the 
burden on proof will shift from companies 
to  national  administrations.  In  short,  it 
should  explain  how  the  more  ambitious 
alternatives  in  option  4  would  supersede 
options 3a and 3b.  
The report should make clear how the fast-
track provision would work in practice and 
what will happen to the list of products. 

stakeholders. 

declaration 

risks 

the 

for 

(3) Impacts 
The  analysis  of  impacts  should  refer  to 
experience  from  existing  single  market 
tools  (in  particular  from  the  harmonised 
field)  and  the  risks  involved.  The  report 
should  outline  the  existing  Commission 
and  Member  State  commitments, 
in 
particular in terms of resources. 
It  should  explain  the  changes  which  the 
initiative would make for them. 
Given  the  likely  increase  in  burden  for 
national  administrations,  the  report  should 
make  realistic  (quantified)  estimates  of 
resource  implications.  It  should  further 
justify that the legal certainty provided by 
the  declaration  of  compliance  (option  4b) 
would 
corresponding 
administrative burden. 
Given  the  initiative's  REFIT  dimension, 

outweigh 

the 

The  advantages  of  preserving  Product 
contact  Points  has  been  further  explained 
in  the  description  of  option  3  in  section 
6.4. 
The  introduction  to  section  6  on  the 
Options 
the 
the  options.  Further 
construction  of 
explanations  have  also  been  added  on 
options  3  and  4  to  clarify  how  they  relate 
to each other. 

explains  more 

clearly 

Option  4  has  been  further  elaborated  to 
clarify the fast-track appeal procedure. 
The  possibility  to  review  and  make  more 
user  friendly  the  list  of  product  is  now 
specifically included in option 2, in section 
6.3. 

Section  7  on 
the  Impacts  has  been 
amended  to  address  these  remarks  and 
explanations  on  the  experience  from  the 
harmonised  field  have  also  been  added  to 
Section 6 on the description of the options. 

An  estimation  of  the  burden  that  the 
declaration  of  compliance  will  represent 
for  companies  and  the  expected  benefits 
which  are  expected  to  result  from  it  has 
been  included  in  the  analysis  of  the 
impacts of option 4. 
The  conclusion  on  the  comparison  of  the 
options  in  section  8  has  been  revised  to 
indicate more clearly the expected benefits 
of  the  preferred  options  for  the  free 
movement of goods ant the functioning of 
the single market.  

64 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
the  potential 

the report should more clearly identify the 
potential  for  simplification.  It  should  also 
reduction  of 
estimate 
administrative  burden 
for  companies 
(identified in the related evaluation). 
The  report  should  explain  to  what  extent 
this  initiative  and  others  under  revision 
(e.g.  market  surveillance,  Solvit,  Single 
Digital Gateway) would have a meaningful 
impact  on  the  functioning  of  the  internal 
market for goods. 
(4) Comparison of options 
In the absence of solid evidence, the report 
should  better  substantiate  the  high  scores 
given to some of the options. For instance, 
what  evidence  is  there  to  show  that  the 
action  plan  (option  2)  would  have  a  very 
positive  impact  ('++')  on  the  increase  of 
awareness? 

A  new  section  8.4  has  been  included  to 
address  the  potential  for  reduction  of 
administrative burden in the context of the 
REFIT initiative. 
The Introduction has also been amended to 
reflect how this initiative links with others 
under  revision  to  have  an  impact  on  the 
internal market. 

The  report  now  includes  explanations  on 
the  scores  given  to  the  different  options 
against each of the policy drivers.     

(5) Future monitoring and evaluation 
The  report  should  outline  more  clearly 
operational  monitoring  and  evaluation 
indicate 
arrangements. 
benchmarks 
the 
against 
Commission will assess the success of the 
initiative. 
Some more technical comments have been 
transmitted directly to the author DG 

should 

which 

It 

Section  9  on  monitoring  and  evaluation 
has been amended to include more specific 
benchmarks. 

The report also includes a number of other 
changes  to  address  the  more  detailed 
comments received ahead of the meeting of 
the RSB. 

4.  CONSULTATION AND EXPERTISE 

The application of the principle of mutual  recognition,  including the functioning of the 
Regulation  has  been  subject  to  an  evaluation117.  As  part  of  that  process,  an  external 
evaluation on the application of the principle of mutual recognition was conducted118. Its 
aim  was  to  evaluate  the  application  of  the  mutual  recognition  principle  by  Member 
States, in order to identify shortcomings and to present possible ways of enhancing the 
application of the principle. The external evaluation was based on a combination of data 
sources and data collection tools, which included a literature review, statistical data, web-
based surveys among different target groups and in-depth interviews with Member States 
and  relevant  stakeholders.  The  study  was  conducted  between  2014  and  2015,  over  the 
course of 9 months.  

117  
118   

Commission Staff Working Document "Evaluation of the functioning of mutual recognition in the area of goods". 
European Commission, Study commissioned to Technopolis Group (2015): ‘Evaluation of the application of the principle of 
mutual recognition in the field of goods,’ ENTR/172/PP/2012/FC – LOT 4 carried out between April 2014 and May 2015: 
http://ec.europa.eu/growth/single-market/goods/free-movement-sectors/mutual-recognition/index_en.htm. 

65 

 
 
 
 
 
 
 
 
                                                 
In the framework of the external study for the evaluation mentioned above, four different 
surveys were launched on 9 October 2014 and completed on 5 January 2015. These were 
a company survey, a survey of national business associations, a survey of national sector 
associations,  and  a  product  contact  point  survey.  Following  the  survey,  qualitative 
interviews  with  national  business  associations  and  Product  Contact  Points  in  each 
Member  State  were  also  carried  out.  The  objective  of  the  qualitative  interviews  was  to 
shed more light on the implementation of the mutual recognition principle in the Member 
States, in particular with respect to ‘sensitive’ areas such as notification practices (or lack 
thereof).  

In  addition,  a  stakeholders'  event  titled  "Single  Market  for  Products:  Fresh  ideas  to 
unleash the full potential" was organised on 17 June 2016 and dealt with, amongst other 
things,  the  application  of  mutual  recognition,  to  identify  the  main  issues  related  to  its 
functioning  and  to  identify  possible  ways  forward.  144  participants  attended  the  event, 
representing businesses (62), national authorities (60) and others (22).  

Following  the  delimitation  of  the  scope  of  this  Impact  Assessment,  an  online  public 
consultation  was  carried  on  from  the  1st  of  June  until  the  30  of  September  2016  (17 
weeks)  accessible  via  the  Your  voice  in  Europe  website.  The  consultation  was  made 
available  to  the  general  public,  and  aimed  to  gather  data  on  the  functioning  of  mutual 
recognition,  the  current  problems  as  well  as  possible  options  for  improvement.  153 
replies  were  received  during  the  public  consultation,  representing  91  companies,  45 
national authorities and 17 citizens. 

Simultaneously with the online public consultation, or shortly thereafter, the Commission 
received  position  papers  from  a  number  of  stakeholders, 
including  consumer 
organisations, business associations, Member States, individual economic  operators etc. 
The summary of opinions of these stakeholders is set out in Annex 2. 

Stakeholders'  views  were  also  discussed  in  bilateral  meetings  that  took  place  during 
2016. 

During the 8th meeting of the Consultative Committee on mutual recognition which took 
place  on  25  October  2016,  the  problem  definition  and  drivers  as  well  as  the  envisaged 
options were presented and discussed with Member States representatives. 

The  Commission  presented  the  initiative  and  sought  the  views  of  SMEs  at  the  Small 
Business Act regular meeting with European SME associations on 7 December 2016. 

To  provide  input  for  this  Impact  Assessment,  a  study  on  the  costs  and  benefits  of  the 
revision of the Mutual Recognition Regulation was carried out between September 2016 
and  March  2017  in  order  to  estimate  the  magnitude  of  the  problem  triggered  by  a 
suboptimal functioning of mutual recognition and to analyse the impacts of the different 
options envisaged for addressing this problem. In the context of this study, a survey was 
conducted  in  December  2016  and  January  2017,  addressing  different  categories  of 
stakeholders.  In  parallel,  the  contractor  carried  out  25  targeted  interviews,  addressing 
different  categories  of  stakeholders  such  as  Member  States  and  business  associations. 
Five case studies were also further investigated, in order to corroborate the findings and 
ensure their robustness, while illustrating in practical terms the implication and impacts 
of the specific issues at stake. 

66 

 
 
Desk research was conducted for the purpose of the evaluation of the mutual recognition 
principle  and  Regulation,  by  the  contractors  in  the  framework  of  the  external  studies 
mentioned under 2.1 and by the Commission's services.  Available literature on the topic, 
annual reports from the Member States as well as all notifications119 received between 
2009 and 2016 were scrutinised. Also, the Commission services examined the complaints 
received  from  economic  operators  concerning  a  malfunctioning  of  mutual  recognition 
and the draft national regulations notified on the basis of Directive (EU) 2015/1535. The 
desk  research  involved  case  studies  in  sectors  where  the  application  of  mutual 
recognition is problematic and cases from the SOLVIT database.  The literature review 
comprised a review of existing business and academic literature on the non-harmonised 
areas  in  the  EU  internal  market.  Annex  7  contains  a  full  overview  of  the  assessed 
literature, and a summary of the notifications and annual reports received.  

5.  LIMITATIONS AND ASSESSMENT OF ROBUSTNESS OF FINDINGS 

Assessing  the  magnitude  of  the  difficulties  linked  to  the  functioning  of  mutual 
recognition  and  its  actual  and  potential  impacts  on  stakeholders  is  not  straightforward. 
Indeed, several factors are making the evaluation of the application of mutual recognition 
a difficult exercise.  

First,  mutual  recognition,  when  it  is  working  properly, is  invisible;  this  is  because  it  is 
impossible to monitor when and how many times goods are allowed to enter a market on 
the  basis  of  the  mutual  recognition  principle.  Only  the  number  of  products  for  which 
market access has been denied can be estimated, on the basis of the monitoring tools in 
place by the Regulation (notification of administrative decisions denying market access 
and annual reports). However, this doesn't represent a full picture of the situation, as only 
6  Member  States  are  notifying  decisions  to  deny  market  access120.  The  complaints 
received and the divergences noticed between the annual reports and notifications show 
that not all decisions taken are being notified to the Commission.  

It  is  possible  to  estimate,  based  on  intra  EU  trade  statistics,  the  number  of  non-
harmonised products lawfully marketed in one Member State and placed on the market of 
other Member States. However, this doesn't show how many products were marketed on 
the basis of the mutual recognition principle.   This is because businesses may decide, on 
commercial  grounds,  not  to  use  mutual  recognition,  and  to  align  their  products  on  the 
existing  national  rules  in  the  Member  States  where  they  want  to  market  their  products. 
Some  large  companies  choose  to  design  and  produce  products  fitting  the  highest 
requirements, and thus complying with all national technical rules.  

Second,  the  results  of  the  stakeholders'  consultation  might  need  to  be  treated  with 
caution,  as  the  consultations,  targeted  or  opened,  were  not  representative  of  different 
sectors, Member States and company types.  

The surveys carried out in 2014-2015 by the external consultant registered a low rate of 
responses.  199  businesses  and  20  national  or  sectoral  associations  participated  in  the 
survey.  The  businesses  survey  did  not  result  in  a  representative  sample.  There  was  a 

119  

120  

Notifications  of  national  administrative  decisions  denying  or  restricting  market  access,  on  the  basis  of  article  6  of  the 
Regulation 
See for more details section 7.1 

67 

 
 
                                                 
significant geographical bias with respect to the geographical coverage. Companies from 
Portugal (36), the UK (22) and Lithuania (21) were significantly overrepresented, while 
there  were  no  responses  from  9  EU  Member  States  or  from  any  of  the  EEA  countries. 
Also, large companies were overrepresented in the survey, while small companies were 
underrepresented.  29% of the  participating companies  were large companies  with more 
than 250 employees, while they represent around 1% of the EU's company population121.  
26%  were  medium-sized  companies  with  50  to  250  employees  and  27%  are  small 
companies  with  10  to  49  employees.  Micro  companies  with  less  than  10  employees 
accounted for 18%. Also, the business associations had generally not put a high priority 
on  responding  to  the  survey,  which  can  be  either  because  they  don't  monitor  issues 
related to mutual recognition, or because their members don't approach them in relation 
to  these  issues.  Only  a  minority  of  sectors  and  Member  States  were  represented  in  the 
survey. As regards the survey targeting PCPs, its main limitation came from the fact that 
PCPs  are  only  the  interface  between  business  and  national  authorities  in  charge  of 
applying  the  mutual  recognition  principle.  Thus,  they  are  not  always  familiar  with  the 
practicalities of the application of the mutual recognition principle, and they don't always 
have insight as regards the denial of market access for certain products. Furthermore, not 
all PCPs across the EU participated in the survey. PCPs from Austria, Bulgaria, France, 
Germany,  Italy  and  Spain  did  not  submit  any  responses  to  the  survey,  but,  with  the 
exception  of  Italy,  they  were  subsequently  interviewed.    PCPS  from  Portugal  and 
Romania were represented twice (as they have several PCPs), and out of the EEA/EFTA 
countries,  Liechtenstein  and  Norway  participated.  More  details  are  provided  in  the 
synopsis report.  

As regards the public consultation carried out by the Commission, it gathered 153 replies 
only.  Businesses actively participated (91) but without reaching a representative sample; 
large companies were overrepresented (19%), while, as mentioned previously, they only 
represent  1%  of  the  EU's  company  population.  Also,  when  asked  to  quantify  the  costs 
and  benefits  of  the  Regulation,  most  businesses  indicated  that  such  estimation  is 
impossible. Only a few replied (between 11% and 26% depending on the questions), and 
the replies contain considerable variations. This is why case studies were used in order to 
complement the lack of accurate information on costs and benefits.  Member States were 
represented in the consultation by both PCPs (13) and other authorities (32), but without 
reaching a good geographical balance: no replies were received from Cyprus, Denmark, 
Finland, France, Greece, Ireland, Luxembourg, Malta and UK122.   

The overview of the notifications of draft national technical rules for the assessment of 
their compatibility with EU law by the Commission under Directive 2015/1535 provides 
some  insight  on  the  sectors  were  a  high  regulatory  activity  at  national  level  can  be 
observed,  and  where  the  use  of  mutual  recognition  is  more  relevant123.  From  2011  to 
2013, 2114 notifications were received (675 in 2011, 734 in 2012 and 705 in 2013). The 
construction sector saw the highest number of notifications, with many measures related 
to energy efficiency of buildings and concrete structures, road pavements and constituent 
materials, fire safety of buildings. Construction was followed by agricultural products, 

121  
122  

123  

http://ec.europa.eu/growth/smes_en 
Some  of  these  Member  States  choose  sending  a  position  paper  instead  of  participating  in  the  public  consultation,  e.g. 
Denmark and France 
Latest 
available: 
report 
informed/reports/report-to-the-european-parliament-2011-2013/ 

http://ec.europa.eu/growth/tools-databases/tris/en/the-20151535-and-you/being-

68 

 
 
                                                 
foodstuffs and beverages (food hygiene, the composition and labelling of foodstuffs and 
beverages,  food  packaging,  minimum  price  for  alcoholic  beverages,  composition  and 
marketing of alcoholic and non-alcoholic beverages).  Notifications were also received in 
the  telecommunications  sector  (radio  equipment  and  telecommunications  terminal 
equipment, radio  interfaces, hardware and  software  for the collection, management and 
use of data gathered by electronic mechanisms installed on board vehicles (black box)) 
and  in  the  environment  sector  (packaging  and  packaging  waste,  recyclable  products, 
processing  of  biodegradable  waste).  This  information  was  used  in  order  to  identify 
sectors where numerous national technical rules exists or were introduced, in order to see 
if  market  access  problems  can  be  linked  to  important  regulatory  activity.  However,  the 
use  of  this  information  is  limited  and  should  be  treated  with  caution,  as  many  issues 
related to compatibility with EU law are solved before the adoption of the national rule, 
during the stand still period. Furthermore, the assessment performed under this Directive 
is  linked  to  the  compatibility  of  the  national  rule  with  EU  law,  while  the  Mutual 
Recognition Regulation covers the application of a national rule to a specific individual 
case. Thus, while the national rule is compatible with EU law, its application in a specific 
individual case may be incompatible. Therefore, the notifications alone cannot be used as 
a good proxy for estimating the number of market access denials in specific sectors.  

All  these  factors  make  the  precise  measuring  of  the  mutual  recognition  principle  and 
Regulation's  effect  quite  challenging.  The  contributions  received  following  the  various 
surveys and consultations carried out did not allow to a statistically representative result 
to be reached. However, the stakeholders' consultation was very wide, and, together with 
the multitude of information sources used, it allows the gathering of a strong indicative 
picture of the functioning of mutual recognition, reliable enough to be used as a basis for 
further decision making. 

69 

 
 
 
 
ANNEX 2 SYNOPSIS REPORT OF THE STAKEHOLDER CONSULTATION 

1.  OBJECTIVES OF THE CONSULTATION  

The  'Single  Market  Strategy'  (COM(2015)550  of  28.10.2015)  highlights  the  need  to 
strengthen the single market for goods in the field of mutual recognition. This principle 
allows  products  lawfully  marketed  in  a  Member  State  and  not  subject  to  European 
harmonisation legislation to enjoy the right to free movement, despite lack of compliance 
with national technical rules of the Member State of destination. However, the principle 
is  not  yet  used  at  its  full  potential  as  shown  in  a  recent  evaluation  of  the  mutual 
recognition principle.  

To  improve  the  application  of  the  mutual  recognition  principle,  the  Commission  will 
present  an  EU-wide  Action  Plan  to  raise  awareness  of  the  principle  of  mutual 
recognition.  The  plan  will  also  include  specific  actions  for  sectors  in  which  mutual 
recognition could achieve the greatest increase in EU competitiveness (e.g. construction). 
The  Commission  will  also  investigate  the  need  for  a  revision  of  Regulation  (EC)  No 
764/2008  to  ensure  a  better  application  among  businesses  and  national  authorities.  The 
objective of the consultation was therefore to seek stakeholders' views on the current and 
future application of Mutual Recognition.   

1.1.  Consultation methods and tools 

The  members  of  the  Mutual  Recognition  Consultative  Committee124  were  asked  to 
provide their feedback on the previous meetings on 2 December 2015 and 25 October 
2016. 

A public consultation in all EU official languages has been published on a consultation 
website hosted on Europa. The consultation has run from June to September 2016.  

The public consultation has been supplemented by a stakeholder conference organised 
by the Commission on 17 June 2016.  

2.  RESULTS OF THE CONSULTATION ACTIVITIES 

2.1.  Meetings of the Mutual Recognition Consultative Committee 

The consultative “Mutual Recognition Committee” held its seventh and eighth meetings 
on 2 December 2015 and 25 October 2016 respectively. The Committee's members are 
representatives  of  Member  States  dealing  with  mutual  recognition  issues.  The 
Commission presented the envisaged actions for raising awareness of mutual recognition 
and  asked  for  feedback  and  input  on  these  actions.  Member  States  welcomed  the 
activities  presented  and  stressed  the  importance  of  awareness  raising  in  relation  to  the 
correct application of the mutual recognition principle.  The Commission presented also a 

124  

The members of this Committee are the national authorities responsible for mutual recognition in the 28 Member States and 
in  Iceland,  Liechtenstein,  Norway,  Switzerland  and  Turkey.  Representatives  of  other third  parties  or other  experts  may  be 
invited to participate on a specifc topic, on a case by case basis. 

70 

 
 
                                                 
preliminary  analysis  of  the  main  problems  generated  by  the  suboptimal  functioning  of 
mutual  recognition,  as  identified  in  the  framework  of  the  ongoing  evaluation.    The 
delegates  agreed  that  mutual  recognition  should  not  be  only  a  right  that  economic 
operators  may  invoke,  but  also  a  principle  that  national  authorities  should  apply.  
Furthermore,  the  Commission  presented  the  preliminary  options  for  improving  mutual 
recognition and asked for feedback from the delegations. Some representatives were not 
convinced  that  there  are  benefits  in  fully  revising  the  Regulation,  whilst  all  of  them 
agreed that some adjustments are necessary and that many of the problems can be solved 
with the actions foreseen in the Action Plan.  

The  participants  supported  also  the  option  to  clarify  the  scope  of  the  Regulation,  and 
mainly the mutual recognition principle, thus articles 34-36 TFEU, where guidelines are 
more  appropriate  to  achieve  this  objective.  The  Commission  also  proposed  having  a 
clearer mutual recognition clause, such as a standard model, which could be adapted to 
particular cases, would be proposed, for systematic integration in new national technical 
rules.    Another  point  discussed  was  the  need  for  an  updated  and  user  friendly  product 
database.  

The Commission presented then the possible introduction of a declaration of compliance 
with  the  technical  rules  of  the  Member  State  where  the  product  is  being  lawfully 
marketed,  to  facilitate  the  access  of  this  product  to  the  market  of  the  other  Member 
States.    The  declaration  would  offer  a  presumption  of  compliance  for  the  economic 
operator; this presumption could be rebutted by national authorities, who would have the 
duty  to  prove  the  non-compliance.  Some  Member  States  considered  that  this  option 
would  introduce  a  significant  administrative  burden  on  economic  operators  but  market 
surveillance authorities would welcome such declaration, as it would facilitate their tasks.  

Another  point  discussed  was  the  introduction  of  incentives  for  national  authorities  to 
ensure  they  comply  with  the  obligation  to  notify  administrative  decisions  denying  or 
restricting  mutual  recognition.  More  transparency  for  these  decisions  would  be  an 
incentive for Member States to apply the mutual recognition principle, as it would render 
less acceptable the absence of notifications or the lack of proper justification supporting 
the administrative decisions to be notified. Using an IT tool allowing Member States to 
notify  would  also  give  all  notifications  more  visibility.  Furthermore,  the  Commission 
examines  the  possibility  of  creating  a  new  fast  track  mechanism  which  would  be  an 
alternative  to  the  costly  and  lengthy  court  procedures  currently  available.  It  would  be 
inspired by the "safeguard procedure" operating in the area of products covered by Union 
harmonisation legislation, which allows a Member State or the Commission to intervene 
in order to challenge a national decision which is considered as potentially breaching EU 
law. The fast track appeal procedure would be very quick (no longer than 3 months), and 
free  of  charge  for  businesses  and  any  other  complaint  they  may  address  to  the 
Commission.  The  option  of  a  system  of  prior  authorisation  to  placing  products  on  the 
market  was  presented  afterwards.  Products  lawfully  marketed  in  the  market  of  one 
Member State would be placed on the market of another Member State only after a prior 
examination  of  the  product  by  the  receiving  Member  State.  Many  Member  States 
expressed their opposition to this option, as it would hinder the free movement of goods.   

Another  point  of  discussion  was  the  option  of  ensuring  free  movement  of  goods 
guaranteed by compliance with European standards. This implies the recognition, by the 

71 

 
 
Commission, and after consultation of Member States, of certain European standards in 
the  area  of  non-harmonised  goods  via  implementing  acts.  This  option  refers  only  to 
already existing European standards and not to mandating the developments of new ones.  
Member States considered that focusing on essential requirements is more beneficial than 
using standards.  

Additionally,  the  Commission  sought  Member  States'  opinion  on  the  option  of 
strengthening of the role of the Product Contact Points in order to provide information on 
all applicable rules for all products. Member States supported this option as the Product 
Contact Points lack resources and staff. The Commission proposed also the integration of 
the  Product  Contact  Points  in  a  wider  network,  e.g.  the  Single  Digital  Gateway. 
Delegations consider that the Single Digital Gateway initiative is not advanced enough in 
order to able to provide input on this option.  

Another option presented was the harmonisation of certain basis requirements. Member 
States were strongly against this option, since partial harmonisation only for the sake of 
free movement does not bring benefits proportionate to the level red tape it adds.   

2.2.  Stakeholder conference of 17 June 2016 

A stakeholders' event was organised on 17 June 2016, to identify the main issues related 
to  the  functioning  of  mutual  recognition  and  to  identify  possible  ways  forward.  144 
participants attended the event, representing businesses (62), national authorities (60) and 
others (22), such as consumer organisations, representatives of trade unions. The detailed 
minutes can be found at: http://ec.europa.eu/DocsRoom/documents/17963. 

2.2.1. Main meeting 

Knut  Sauerbier,  responsible  for  product  compliance  and  IP  at  BRITA,  explained  how 
mutual recognition functions for businesses by providing the example of drinking water 
treatment.  

Camilla Hjermind, Head of Division of International Relations of the Danish Business 
Authority  of  the  Ministry  of  Business  and  Growth  presented  the  practical  difficulties 
encountered while applying the principle of mutual recognition.  

Jacques  Pelkmans,  Senior  Fellow  at  CEPS  in  Brussels  and  visiting  Professor  at  the 
College of Europe, outlined the main problems faced with mutual recognition, one of the 
EU's greatest innovation.  

Following  the  three  presentations,  the  floor  was  given  to  the  participants  at  the 
conference to discuss the topics.  

2.2.2. Workshops 

Workshop  1:  Proving  and  assessing  lawful  marketing  of  products  in  other  Member 
States: a more practical approach 

The first workshop was held on the topic of proving and assessing the lawful marketing 
of products in another Member State. The participants were to discuss a more practical 

72 

 
 
approach on this issue. The workshop gathered around 30 participants and had a balanced 
representation of national authorities, businesses and associations.  

Workshop 2: How to make mutual recognition a practical tool for businesses 

The  second  workshop  discussed  how  to  make  mutual  recognition  a  practical  tool  for 
businesses.  The  workshop  involved  46  stakeholders.  Participation  was  well  balanced 
among  national  authorities,  businesses,  associations  and  Commission  services.  The 
workshop was moderated by Annette Dragsdahl, Senior Adviser at the Confederation of 
Danish Industry.  

2.3.  Public Consultation 

153  replies  were  received  during  the  public  consultation.  Businesses  were  strongly 
represented  (91),  followed  by  Member  States  authorities  (45),  and  citizens  (17).  This 
includes  respondents  that  did  not  want  their  replies  published:  16  businesses,  9 
authorities  and  one  citizen.  The  remainder  of  the  respondents  agreed  to  have  their 
response published either fully or anonymously. All replies are included in the statistics.  

45 authorities from Member States replied to the public consultation. 31% are Product 
Contact Points, the rest are other authorities involved in this area. Among the group  of 
citizens  there  are  two  consumer  organisations.  Individual  companies  (44)  and  business 
organisations (44) were equally represented, while only 3 chambers of commerce replied 
to  the  consultation.  In  terms  of  company  size,  the  responses  are  roughly  balanced 
between small and large125 companies.  

In  terms  of  activity  sectors,  manufacturing  is  the  most  represented  sector  (46%), 
followed by wholesale and retail trade (13%), agriculture, forestry and fishing (8%) 
and water supply (6%).  

The  geographical  representation  is  quite  well  balanced  for  businesses.  As  for  national 
authorities,  18  Member  States  and  Norway  participated  in  the  public  consultation.  No 
replies  were  received  from  Cyprus,  Denmark,  Finland,  France,  Greece,  Ireland, 
Luxembourg,  Malta  and  UK.  The  majority  of  consumers  chose  not  to  indicate  their 
country of establishment.  

The  numbers  and  percentages  used  to  describe  the  distribution  of  the  responses  to  the 
public consultation come from the answers provided under the EU-Survey tool. 

2.3.1. How stakeholders see mutual recognition and its potential shortcomings 

The majority of responding companies wishing to sell products in another Member State 
check  the  applicable  rules  in  that  Member  State,  and,  if  these  rules  prevent  them  from 
selling the product, most of them adapt it. This happens despite the fact that 70% of them 

125  

Enterprises  can  be  classified  in  different  categories  according  to  their  size;  for  this  purpose  different  criteria  may  be  used 
(e.g. number of persons employed, employees, balance sheet total, investments, ...), but the one most common in a statistical 
context is number of persons employed : small and medium-sized enterprises, abbreviated as SMEs: fewer than 250 persons 
employed (  SMEs are further subdivided into: micro enterprises: fewer than 10 persons employed; small enterprises: 10 to 
49  persons  employed;  medium-sized  enterprises:  50  to  249  persons  employed);  large  enterprises:  250  or  more  persons 
employed. 

73 

 
 
                                                 
are  fully  aware  of  the  mutual  recognition  principle.  More  than  half  of  the  businesses 
responding tried to use mutual recognition for entering a new market. Among them, half 
had their market access denied, and only 2% challenged this decision successfully.  

35%  replied  that  they  do  not  rely  on  mutual  recognition  for  entering  a  new  market, 
mainly because they do not know about it (15%) or because they do not trust it (4%).  

When national authorities check if products available on their market and coming from 
another Member State comply with the national rules they are enforcing, 53% verify if 
they are already lawfully marketed in the Member State of origin while 46% do not.  

Despite the indicated high level of awareness about mutual recognition, the majority of 
respondents consider that awareness-raising remains necessary. 

As  regards  the  obstacles  to  the  functioning  of  mutual  recognition,  businesses  identified 
the lack of quick remedies  for challenging national decisions denying  market access as 
the highest one, followed by insufficient communication among authorities. 52% of the 
respondents faced such obstacles themselves.  

2.3.2. Functioning of the Mutual Recognition Regulation 

Effectiveness: to what extent has the Regulation achieved its objectives?  

The majority of respondents are aware of the  Regulation, and consider that most of the 
tools put in place are useful and still necessary. As regards whether or not the Regulation 
has  met  its  objective,  the  feeling  is  mixed  among  businesses  and  national  authorities. 
Generally, very few economic operators consider that it is easier to sell products in other 
Member  States  since  the  Regulation  entered  into  force.  The  majority  consider  that  the 
Regulation has not improved the situation, or do not know, either because they do not use 
mutual recognition or they do not sell products abroad.  

Efficiency: costs and benefits of the Regulation  

As regards the costs of implementing the Regulation, national authorities ranked them as 
average.  On  top  of  the  choices  provided  by  the  consultation,  authorities  also  indicated 
additional  costs  linked  to  the  absence  of  an  updated  list  of  products  to  which  mutual 
recognition  may  apply.  Some  consider  that  additional  costs  are  triggered  by  the 
administrative procedures, seen as long and time-consuming. Despite the costs, national 
authorities  agree,  fully  or  partially,  that  the  Regulation  brings  benefits  in  terms  of 
facilitating market access.  

As  regards  businesses,  the  main  costs  incurred  are  triggered  by  the  need  to  adapt  the 
products to the applicable national rules, when mutual recognition is either denied or not 
used for penetrating the market. These costs are estimated126 on average at 23 000 Euro 
per  product  and  per  market.  High  costs  are  also  related  to  delays  in  entering  a  market, 

126  

26% of respondents indicated an estimate of the costs incurred, the other choose not to reply or indicated that such estimation 
is impossible 

74 

 
 
                                                 
estimated127 at 115 000 Euro per product and per market, and to lost opportunities, when 
businesses  relinquish  entering  a  market  because  of  different  national  rules  that  require 
their products to be adapted. On average, the latest are estimated128 at 136 000 Euro per 
product  and  per  market.  The  costs  related  to  challenging  administrative  decisions 
denying  market  access  are  considered  as  less  important,  mainly  because  few  economic 
operators choose to do so. The estimates129 are around 32 000 Euro per product and per 
market. There are however considerable variations in the answers.  

Costs were also related to assessing if mutual recognition can be used to sell products in 
another  Member  State.  Very  few  economic  operators  (2%)  are  outsourcing  this 
assessment,  while  26%  are  doing  it  internally.  46%    are  doing  both,  depending  on  the 
product.  

In terms of benefits that the regulation brings, the perceptions of responding businesses 
are quite mixed. While Member States tend to consider that the costs of the Regulation 
are  proportionate  to  the  benefits  it  generates,  businesses  mostly  disagree  with  only  9% 
agreeing.  

Coherence 

There  is  a  consensus  among  respondents  as  regards  the  coherence  of  the  Regulation. 
Most of the respondents are not aware of any overlaps between the Regulation and other 
initiatives/legislation/policies.  The  overlaps  indicated  by  those  replying  positively  are 
linked to Solvit, RAPEX, ICSMS and Regulation 765/2008 on market surveillance.  

EU added value  

The European added value of the mutual recognition rules is also strongly underlined by 
the respondents. Most of them agree that having a common set of rules guarantees equal 
treatment, and that relying on national rules only would undermine the internal market.  

2.3.3. Assessment of communication when using Mutual Recognition 

Most  of  the  responding  businesses  have  never  contacted  a  Product  Contact  Point  to 
obtain information on the applicable product rules, mainly because they are not aware of 
their existence. Among those having contacted Product Contact Points, it is quite difficult 
to identify their level of satisfaction or the reasons behind it.  

Responding  Member  States  consider  the  communication  with  authorities  within  their 
own country as good, while communication with authorities from other Member States is 
rather average or poor. As regards communication between national administrations and 
businesses, the assessment by authorities is quite mixed between good, average and poor. 
The  main  reasons  for  poor  communication  are  related  to  the  lack  of  knowledge  about 

127  

128  

129  

20% of respondents indicated an estimate of the costs incurred, the other choose not to reply or indicated that such estimation 
is impossible 
13% of respondents indicated an estimate of the costs incurred, the other choose not to reply or indicated that such estimation 
is impossible 
11% of respondents indicated an estimate of the costs incurred, the other choose not to reply or indicated that such estimation 
is impossible 

75 

 
 
                                                 
mutual recognition, language issues and the absence of an appropriate IT tool to facilitate 
communication.  

2.3.4. Priorities to improve Mutual Recognition 

Stakeholders have different views as regards the possible priorities with regard to mutual 
recognition.  If  businesses  rank  the  need  for  effective  remedies  as  being  the  highest 
priority, Member States and citizens opt in favour of increasing awareness about mutual 
recognition.  

Ranking of priorities by businesses 

Ensure that businesses have effective remedies at their disposal to take action  against decisions 
denying mutual recognition when needed 

Increase legal certainty for businesses when using mutual recognition to sell products abroad 

Ensure that the procedures are duly followed when decisions denying market access are taken by 
national authorities 

Increase effectiveness of mutual recognition to facilitate access to the internal market 

Facilitate  communication  between  all  actors  involved  in  mutual  recognition  (business,  national 
authorities, European Commission) 

Increase general awareness of the mutual recognition principle 

Ranking of priorities by Member States 

Increase general awareness of the mutual recognition principle 

Ensure that the procedures are duly followed when decisions denying market access are taken by 
national authorities 

Ensure that businesses have effective remedies at their disposal to take action against decisions 
denying mutual recognition when needed 

Increase effectiveness of mutual recognition to facilitate access to the internal market 

Increase legal certainty for businesses when using mutual recognition to sell products abroad 

Facilitate  communication  between  all  actors  involved  in  mutual  recognition  (business,  national 
authorities, European Commission) 

Ranking of priorities by citizens   

Increase general awareness on the mutual recognition principle 

Increase legal certainty for businesses when using mutual recognition to sell products abroad 

76 

72% 

67% 

65% 

64% 

54% 

52% 

51% 

42% 

40% 

35% 

33% 

31% 

64% 

52% 

 
 
 
 
Ensure that businesses have effective remedies at their disposal to take action against decisions 
denying mutual recognition when needed 

Increase effectiveness of mutual recognition to facilitate access to the internal market 

Ensure that the procedures are duly followed when decisions denying market access are taken by 
national authorities 

Facilitate  communication  between  all  actors  involved  in  mutual  recognition  (business,  national 
authorities, European Commission) 

47% 

41% 

35% 

23% 

2.3.5. Options 

All options put forward for making mutual recognition easier to apply and more reliable 
received a high level of support among stakeholders.  

Clarify the scope of the Regulation as regards the circumstances under which 
mutual recognition could apply 

84% 

85% 

82% 

8% 

2% 

5% 

12% 

11% 

6% 

I agree

I don't agree

I don't know

Member States

Businesses

Citizens

Facilitate the identification of products to which mutual recognition applies, by 
updating the Product list (Article 12.4 of the Regulation) and make it more user 
friendly 

77% 

74% 

82% 

14% 

17% 

4% 

17% 

10% 

0% 

I agree

I don't agree

I don't know

Member States

Businesses

Citizens

Make it simpler for businesses to demonstrate that their product is lawfully sold 
in a Member State by issuing a declaration indicating the technical rules with 
which the product complies 

80% 

76% 

75% 

11% 

10% 

17% 

13% 

8% 

5% 

I agree

I don't agree

I don't know

Member States

Businesses

Citizens

77 

 
 
 
 
 
 
 
 
 
Introduce dissuasive measures to ensure that the obligation for national 
authorities to notify administrative decisions denying or restricting mutual 
recognition is respected  

81% 

64% 

46% 

24% 

29% 

28% 

3% 

15% 

5% 

I agree

I don't agree

I don't know

Member States

Businesses

Citizens

Ensure that effective remedies are available to businesses who wish to take action 
against an administrative decision denying mutual recognition 

90% 

76% 

66% 

20% 

2% 

5% 

13% 

7% 

17% 

I agree

I don't agree

I don't know

Strengthen the role of Product Contact Points 

64% 

64% 

70% 

15% 

11% 

4% 

30% 

20% 

17% 

I agree

I don't agree

I don't know

Strict deadlines to reply to requests made from one authority to the other 

83% 

62% 

58% 

20% 

23% 

4% 

17% 

12% 

17% 

I agree

I don't agree

I don't know

Member States

Businesses

Citizens

Member States

Businesses

Citizens

Member States

Businesses

Citizens

As to what would be the most appropriate alternative to mutual recognition, the majority 
of stakeholders agree that harmonisation is the most appropriate tool to use when mutual 
recognition doesn't work properly.  

78 

 
 
 
 
 
 
 
 
 
 
Would harmonisation of technical requirements in specific fields where mutual 
recognition does not appear as sufficient be the most appropriate alternative to 
mutual recognition?  

78% 

82% 

76% 

9% 

13% 

12% 

13% 

11% 

4% 

I agree

I do not agree

I do not know

Member States

Businesses

Citizens

Would harmonisation of certain basic requirements that a product needs to 
satisfy be the most appropriate alternative to mutual recognition? 

79% 

82% 

71% 

14% 

9% 

5% 

20% 

11% 

6% 

I agree

I do not agree

I do not know

Member States

Businesses

Citizens

Would facilitating market access for products lawfully sold in one Member State 
and complying with European standards be the most appropriate alternative to 
mutual recognition?  

84% 

82% 

57% 

22% 

17% 

8% 

20% 

6% 

0% 

I agree

I do not agree

I do not know

Member States

Businesses

Citizens

2.4.  Surveys carried out by the external contractors 

In  the  framework  of  the  external  study  evaluating  the  functioning  of  the  mutual 
recognition  principle130  ,  four  different  surveys  were  launched  on  9  October  2014  and 
completed on 5 January 2015. These were a company survey (199 participants), a survey 
of national business associations and of national sector associations (20 participants), and 
a  product  contact  point  survey  (26  participants).  Following  the  survey,  qualitative 
interviews  with  national  business  associations  and  Product  Contact  Points  in  each 
Member State were also carried out.  

The  findings  of  the  surveys  and  interviews  show  that  the  application  of  the  mutual 
recognition principle is challenging. Stakeholders outlined that there are still barriers to 
free  movement  of  lawfully  marketed  goods  due  to  additional  requirements  and  tests 

130  

http://ec.europa.eu/DocsRoom/documents/13381 

79 

 
 
 
 
 
                                                 
existing in  certain Member  States. The lack of  knowledge and  awareness about mutual 
recognition  was  also  pointed  out  as  being  problematic,  as  companies  and  national 
authorities do not know when and how the principle should be applied, in particular with 
regard  to  the  type  of  products  falling  under  the  scope  of  mutual  recognition  and  to  the 
type  of  documentation  required  for  demonstrating  that  a  product  has  been  already 
lawfully marketed. Poor communication and cooperation among national authorities has 
also  been  pointed  out  as  a  weakness,  contributing  to  the  poor  functioning  of  mutual 
recognition.  In  terms  of  efficiency,  many  businesses  declared  having  to  carry  out 
additional  tests  at  the  request  of  the  Member  States  on  the  territory  of  which  they  are 
trying to sell their products.  

In  the  framework  of  the  study  assessing  the  costs  and  benefits  of  the  different  options 
envisaged for improving mutual recognition, a survey and interviews were carried out by 
the  external  contactor.  The  stakeholder  consultation  focused  not  only  on  the  current 
functioning of mutual recognition – and its main issues – but also on how to revise the 
Regulation,  through  the  policy  options  proposed  by  the  Commission.  Targeted  surveys 
and interviews allowed an understanding of stakeholders’ point of view about the Policy 
Options.  With  respect  the  obstacles  to  the  implementation  of  MR  National  authorities 
highlight that: the wide scope, size and fragmentation of the market falling under mutual 
recognition  and  the  presence  of  many  different  national  legislations  may  create 
difficulties  in  having  clear,  structured  and  smooth  procedures  to  apply  mutual 
recognition;  products  falling  in  areas  where  partial  harmonisation  and/or  some  EU 
standards  exist  create  difficulties  for  authorities,  since  a  mix  of  national  and  EU  rules 
may apply,  requiring  more effort from their side to  check and decide; a certain lack of 
communication  exists  also  across  Member  States.  This  may  result  in  difficulties  for  a 
national  body  to  understand  why  a  product  was  lawfully  marketed  in  another  Member 
State  and  what  relevant  rules  apply,  without  investigating  and  asking  for  further 
in 
information or clarification.   Businesses  highlighted  several  obstacles  as  well, 
particular  relating  to  the  interaction  with  national  authorities,  especially  in  terms  of 
obtaining  easy  access  to  information,  concerning  mainly  relevant  legislation  and 
procedures in place  especially because  of language  barriers, proving that the product is 
already  lawfully  marketed  in  another  Member  State  since  National  Authorities  require 
different  information  and  evidence.  Time  required  to  receive  a  response  from  national 
authorities  has  a  significant  impact  in  delaying  the  entry  into  the  market  or  even 
discouraging  them  to  enter.  Considering  the  issues  highlighted  by  stakeholders  both 
economic  operators  and  national  authorities  agree  that  measures  to  improve  the  MR 
Regulation  have  to  be  taken.  Within  each  category  of  stakeholder,  preferences  and 
opinions about the feasibility and priority of policy options (and sub-options) seem to be 
heterogeneous. While among National Authorities there is quite a spread consensus about 
the  need  for  intervention,  either  through  soft-law  or  hard-law  instruments,  economic 
operators  appear  to  be  more  cautious  on  the  effectiveness  of  the  proposed  options  in 
avoiding  delayed  market  access  and  reducing  costs  for  them.  However,  economic 
operators and national authorities appear to be in favour of mixing different sub-options, 
rather than the adoption of a single, full policy option. 

2.5.  Other contributions received (position papers or e-mail) 

Several  interested  parties  submitted  separate  position  papers,  many  of  which  revealed 
that indeed national technical rules are being used as a basis to deny mutual recognition 

80 

 
 
and  that  no  effective  mechanisms  exist  for  businesses  to  question  national  decisions 
denying mutual recognition. For this reason, they consider that more ambition is needed 
to improve trust among Member States and the improvement of transparency of national 
decisions will alleviate this lack of trust.  

Concerning  the  principle  of  mutual  recognition,  some  stakeholders  mentioned  that  it 
could  further  be  strengthened  by  the  introduction  of  a  presumption  of  conformity  to 
independently  tested  products.  They  argue  that  the  Commission  should  provide  for  a 
conformity assessment by independent third parties as a precondition for a corresponding 
presumption of conformity with regard to the product marketed in another member state 
because they are not involved in the design, manufacture, supply, repair or maintenance 
of the item to be assessed.  

The scope of the Mutual Recognition Regulation should be clarified, better structures for 
proportionality assessments should be put in place, and an informal set-up could ensure 
better sharing of best practices among Member States. Also, dissuasive means should be 
introduced  to  ensure  that  Member  States  notify  according  to  their  obligations  in  the 
Regulation.  Moreover,  effective  remedies  must  be  available  to  businesses  in  order  for 
them  to  get  quicker  clarity  on  decisions  taken  against  their  products  on  the  Single 
Market,  including  enhanced  transparency  to  see  the  decisions.  In  addition,  the  Product 
Contact Points should be optimised and give businesses easy access to information about 
national decisions and technical rules. Also, there is an overall need for redeeming trust 
and strengthening cooperation among Member State authorities across the Single Market.  

One  proposal,  made  by  some  stakeholders,  is  that  the  notification  of  article  2.1 
administrative  decisions  (Regulation  (EC)  No  764/2008)  is  brought  together  with  the 
procedure  used  in  the  harmonised  sectors.  The  Commission  should  also  consider  other 
measures in order to integrate the non-harmonised and harmonised goods sector not only 
at  the  practical  level  but  also  in  the  policy  level  still  fully  respecting  the  principle  of 
mutual recognition.  

The  lack  of  trust  between  competent  authorities  should  be  overcome  and  national 
decisions should become more transparent. A Quick Assessment Procedure, allowing an 
evaluation of decisions denying market access without a binding decision, is a potential 
tool  that  can  lead  to  better  understanding  of  the  Mutual  Recognition  principle  and 
improve the functioning of the current Regulation. 

3.  FEEDBACK TO STAKEHOLDERS 

The consultation processes provided a wide range of views regarding the implementation 
of  the  Regulation  in  terms  of  what  has  worked  well  and  what  has  not  worked  so  well, 
seen through the eyes of these stakeholders. The meetings with the stakeholders provided 
an  early  opportunity  to  promote  the  engagement  of  the  national  authorities,  thus 
enhancing the chances of a good response rate.  

The  overall  objective  of  this  initiative  is  to  achieve  a  deeper  single  market  for  goods 
through higher and better mutual recognition. This will be done by increasing awareness 
on  mutual  recognition, enhancing legal certainty for businesses  and national  authorities 
when  using  mutual  recognition  and  improving  administrative  cooperation  and  trust 

81 

 
 
among authorities. This will result in unleashing the full potential of the internal market, 
by  facilitating  the  use  and  application  of  mutual  recognition,  reducing  the  risk  for 
businesses  that  their  products  will  not  get  access  to  or  will  have  to  be  unjustifiably 
withdrawn from the market and offering more choices at lower prices for consumers.  

In  line  with  the  assessment  carried  out,  and  presented  in  Section  7  of  the  Impact 
Assessment,  the  preferred  option  would  thus  be  a  combination  of  Option  2  (soft  law 
instruments) and Option 4 (clarification of the scope of the regulation, introduction of a 
declaration  of  compliance  and  of  a  fast-track  appeal  procedure  for  businesses  and 
strengthening the role of PCPs). This combination will address in the most effective and 
efficient manner all policy objectives to lead to a better functioning of the Single market 
for non-harmonised products through more and better mutual recognition.  

Option  2  (Soft  law)  was  supported by  all  stakeholders,  but  considered effective  only  if 
complemented by other comprehensive tools. Furthermore, during the last meeting of the 
Consultative Committee on mutual recognition (25 October 2016), there was consensus 
among  Member  States  representatives  on  the  fact  that  this  option  will  be  extremely 
effective  in  increasing  awareness  of  the  mutual  recognition  principle  and  therefore 
Member States representatives highly supported it. 

Option  3  (minimum  legislative  changes  to  the  Regulation)  was  considered  by  Member 
States  and  economic  operators  as  potentially  effective,  but  to  a  lesser extent  than  other 
options.    During  the  2016  public  consultation,  46%  of  national  authorities,  81%  of 
businesses and 64% of citizens agreed with the need to introduce dissuasive measures to 
ensure  that  the  obligation  for  national  authorities  to  notify  administrative  decisions 
denying  or  restricting  mutual  recognition  is  respected.  This  option  was  however  not 
retained since it was considered that it would not address the problem in an effective and 
efficient manner. 

Option  4  (clarification  of  the  scope  of  the  regulation,  introduction  of  a  declaration  of 
compliance and of a fast-track appeal procedure for businesses and strengthening the role 
of PCPs) was considered as the most effective way to achieve the policy objectives and 
in  reducing  costs  for  business.  During  the  2016  public  consultation,  the  sub-options 
assessed  above  received  a  lot  of  support  from  stakeholders  and  74%  of  businesses 
considered  ensuring  effective  remedies  to  challenge  national  decisions  should  be  the 
Commission's  first  priority.  This  option  has  been  assessed  as  the  most  effective  and 
efficient  to  ensure  legal  certainty  regarding  the  scope  and  the  application  of  mutual 
recognition and this is why it has been retained. 

There was a consensus among stakeholders that option 5 (voluntary prior authorisation) 
cannot  remove  the  existing  obstacles  to  mutual  recognition.  As  demonstrated  in  the 
Impact Assessment this option will entail a high administrative burden and costs, both for 
Member States and companies, while not effectively addressing the problem, so it has not 
been retained. 

The  option  related  to  repealing  the  Regulation  and  the  option  of  proposing  further 
harmonisation  measures  on  specific  basic  requirements  covering  certain  aspects  of 
products have been discarded at an early stage, as well as the introduction of a third party 
declaration of compliance.  

82 

 
 
More  information  on  how  the  different  options  have  been  assessed  and  the  option 
retained, and on the views of the different stakeholders on each of these options can be 
found in Sections 7 and 8 of the Impact Assessment. 

83 

 
 
 
 
ANNEX 3 WHO IS AFFECTED AND HOW 

The  preferred  options  are  option  1-  soft  law,  combined  with  option  4-  comprehensive 
legislative changes.  

Affected 
stakeholders  

Member States  

Commission 

How  

Member  States  will  have  the  obligation  to  organise  the  training 
and awareness campaigns foreseen in the soft law option and to 
contribute to more administrative cooperation foreseen in option 
4d  by  gaining  knowledge  about  mutual  recognition  and  trust  in 
other Member States regulatory systems.  

When  assessing  whether  or  not  a  product  lawfully  marketed  in 
another  Member  State  can  be  placed  on  the  market,  Member 
States authorities will have to accept the voluntary declaration of 
compliance  (option  4c)  and  only  ask  for  additional  evidence 
which  supports  what  is  indicated  therein.  Member  States  will 
have to provide for additional resources for the PCPs (option 4d), 
integrating them in a wider network and providing the necessary 
tools  for  a  proper  and  efficient  administrative  cooperation.  In 
case  of  doubt,  Member  States  will  be  able  to  rely  on  the  PCP 
network and on the reinforced administrative cooperation (option 
4d) in order to ask for clarification.   

National  decisions  denying  market  access  will  be  subject  to  the 
fast  track  appeal  procedure  (option  4c).  This  will  discipline 
national authorities  for strongly encouraging  a decision  denying 
market  access,  and  in  thoroughly  considering  the  application  of 
the mutual recognition principle to products lawfully marketed in 
other  Member  States.  This  will  result  in  a  more  consistent  and 
correct application of the mutual recognition principle.  

The Commission will ultimately have to adopt a binding opinion 
in the fast track appeal procedure (option 4c). This is expected to 
bring an increase of workload for the Commission services. This 
increased workload is expected to decrease over time, when the 
implementation  of  all  the  other  options  will  trigger  a  smother 
application of the mutual recognition principle and therefore, less 
needs  and  grounds  to  challenge  the  administrative  decisions 
denying market access.   

Economic operators   Following  the  implementation  of  the  soft  law  measures  and  of 
option 4d (PCPs), economic operators will gain in awareness and 
knowledge  on  mutual  recognition  and  therefore  use  more  the 
principle of mutual recognition in order to access new markets.  

Economic  operators  will  also  gain  in  legal  certainty  as  regards 

84 

 
 
the  scope  of  mutual  recognition  and  also  as  regards  its 
applicability.  A  clearer  mutual  recognition  clause  (soft  law 
option)  and  the  clarification  of  the  scope  of  mutual  recognition 
(option  4a)  will  allow  them  to  know  precisely  when  and  how 
they  can  invoke  mutual  recognition  in  order  to  market  their 
products in other Member States.  

Economic operators will have the possibility to have recourse to 
the fast track appeal procedure (option 4c). This will allow them 
to  fight  against  unjustified  administrative  decisions  denying 
market access in a fast and business friendly way.  

Economic operators will have the opportunity to demonstrate that 
their  products  have  been  lawfully  marketed  in  another  Member 
State by means of a voluntary declaration of compliance (option 
4c).  On  top  of  legal  certainty,  the  voluntary  declaration  of 
compliance  will  bring  administrative  simplifications,  as  it  will 
replace  many  administrative  documents  with  one  single 
standardised document.  

Following  these  changes,  economic  operators  are  expected  to 
have an easier access to the markets of other Member States, to 
reduce  information  costs,  as  well  as  adaptation  costs  and  costs 
linked to lost opportunities or delayed entry on the market.  

Consumers  will  benefit  from  an  increased  number  of  products 
and  variety  or  products  available  on  the  market,  and  also  from 
lower  prices,  resulting  from  the  economies  of  scale  made  by 
economic operators.   

Consumers  

85 

 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 4 ANALYTICAL MODELS USED IN PREPARING THE IMPACT ASSESSMENT 

This  section  presents  the  methodology  followed  to  estimate  the  market  value  and  the 
magnitude of the problem, as well as to collect information among stakeholders about the 
current  implementation  of  mutual  recognition,  its  main  obstacles  and  issues  and 
sentiment about the proposed policy options.  

1.  METHODOLOGY FOR THE MARKET ANALYSIS 

The  approach  for  the  market  analysis  has  been  based  on  the  identification  of  non-
harmonised  and  partially  harmonised  products  in  a  “residual  way”  (e.g.  excluding  all 
sectors/products  for  which  EU  harmonised  product  rules  exist,  hereafter  harmonised 
sectors). After that, we implemented a two-stage approach. Namely: 

 

An analysis at sectorial level oriented towards the macro dimension of the market 
for non (or partially) harmonised products, looking at: 

o 

o 

The  number  of  economic  operators  that  are  active  within  the  economic 
sectors for which EU harmonised product rules do not exist (here after non-
harmonised sectors);131  

The  current  contribution  of  the  non-harmonised  sectors 
manufacturing economy. 

to  the  EU 

 

An analysis at product level focused on the value of non-harmonised products that 
are traded within the EU Single Market. 

Results from the analysis at sectorial and product level have been combined to identify 
the sectors for which the value of trade of non (or partially) harmonised products is more 
relevant. 

Furthermore, in order to identify the variables to be included in the analysis, we tried to 
identify  the  available  statistics  that  are  useful  for  the  scope  of  the  study.  All  data  used 
within this study have been extracted from two databases: 

 

 

Structural business statistics (SBS)132 provided by EUROSTAT have been used to 
describe  the  structure  of  non-harmonised  and  partially  harmonised  sectors  and 
measure their economic performance; 

EU  trade  since  1988  by  Standard  International  Trade  Classification  (SITC)133 
provided  by  EUROSTAT  allowed  us  to  estimate  the  value  of  intra  EU  trades  of 
non-harmonised and partially harmonised products. 

More in detail, the approach followed consisted of the following steps:  

131  
132  
133  

Each time we refer to non harmonised products/sectors we also include partially harmonised sectors/products. 
http://ec.europa.eu/eurostat/web/structural-business-statistics  
http://ec.europa.eu/eurostat/web/international-trade-in-goods/data/database 

86 

 
 
                                                 
 

 

 

 

 

Step 1. Identification of EU legislative acts introducing harmonised product rules 
(i.e. harmonising legislation) 

Step 2. Review of EU legislation introducing harmonised product rules; 

Step 3. Identification of the corresponding NACE Divisions (DIGIT 2) and NACE 
group (DIGIT 3) that are impacted by the EU Regulation (i.e. harmonised sector) 
and that should be excluded from the analysis.  

Step 5. Identification of the NACE Divisions (DIGIT 2) and NACE group (DIGIT 
3)  for  which  harmonised  product  rules  do  not  exist  (i.e.  non  or  partially 
harmonised sectors) and that should be included in the analysis 

Step 6. Selection  of the most appropriate products (NACE group  – DIGIT  4)  for 
which  no  harmonised  product  rules  exist  and  that  should  be  included  in  the 
analysis. 

Figure A4-1: Methodological approach. Example for “medical devices” 

Results from this exercise are presented in annex 5. In particular: 

 

 

Annex  5.1.  presents  the  list  of  harmonised,  non-harmonised  and  partially 
harmonised  economic  sectors  (as  per  NACE  DIGIT-3  classification)  that  have 
been used for the analysis at sectorial level;  

Annex 5.2.  presents the list of products (as per NACE DIGIT-4 classification) that 
have been considered as non (or partially) harmonised for the analysis at product 
level. 

87 

 
 
 
All the steps presented so far were needed to overcome the following issues: 

 

 

 

 

There  is  not  an  updated  list  of  non-harmonised  and  partially  harmonised 
products/sectors; 

Definitions  of  sectors/products  in  the  regulation  are  usually  different  from 
nomenclatures used within statistics; 

Statistics at sectorial/product level use different nomenclatures (e.g. intra EU trade 
uses the Standard International Trade Classification [SITC], production values use 
the 
business 
demographics  uses  the  Statistical  Classification  of  Economic  Activities  in  the 
European Community [NACE]); 

PRODuction  COMmunautaire 

nomenclature, 

[Prodcom] 

Difficulties in identifying non (or partially) harmonised products within sectors that 
are  highly  harmonised.  One  of  the  most  complicated  cases  is  represented  by  the 
Food and Drink sector (see Box 1). 

Box 1: Food and drink products 

The food and drink industry is the EU's biggest manufacturing sector in terms of jobs 
and value added. It is also an asset in trade with non-EU countries. The EU boasts an 
important trade surplus in trade in food and EU food specialities are well appreciated 
overseas. In the last 10 years, EU food and drink exports have doubled, reaching over 
€90 billion and contributing to a positive balance of almost €30 billion. 

The EU food legislation is highly harmonised and the sector benefits significantly from 
the opportunities offered by the EU Single Market. At the same time, however, there are 
some EU legislative acts that imply the application of the Mutual Recognition principle 
such as: 

Food contact materials (FCM) (Regulation (EC) No 1935/2004). Materials and articles 
intended to come in contact with food fall under a framework regulation that establishes 
the  principles  of  safety  assessment  and  management  regarding  the  risk  of  transfer  of 
chemicals  from  such  materials  into  foods.  While  some  materials  are  covered  by  EU-
wide  specific  measures,  others134  remain  overseen  by  national  rules  and  depend  on 
mutual recognition, raising concerns that inconsistencies can affect safety and trade.  

Food  supplements135  (Directive  2002/46/EC)  and 
labelling,  presentation  and 
advertising of foodstuffs (Directive 2000/13/E). Although the EU legislation harmonised 
various  aspects  (definition  of  food  supplements,  composition,  specific  labelling 
requirements,  etc.)  some  non  harmonised  areas  remained  (for  instance  the  maximum 
amounts  of  vitamins  and  minerals,  other  substances  than  vitamins  and  minerals, 

134  

135  

The  materials covered only by national  measures are adhesives, printing inks, coatings, glass, ion exchange resins, waxes, 
metals, cork, wood, paper and board, silicones, rubber, textiles and combinations of materials. 
Food  supplements  are  foodstuffs  that  are  meant  to  supplement  the  normal  diet  and  which  are  concentrated  sources  of 
nutrients or other substances with a nutritional or physiological effect. These can be found alone or in combination, marketed 
in dose form, namely forms such as capsules, pastilles, tablets, pills and other similar forms, sachets of powder, ampoules of 
liquids, drop dispensing bottles, and other similar forms of liquids and powders designed to be taken in measured small unit 
quantities. Moreover nutrients could be vitamins, minerals, herbal extracts and other ingredients. 

88 

 
 
                                                 
obligation for product registration at national level). 

Thus in the scope of the analysis:  

 

Concerning  FCM  some  specific  products  have  been  identified  within  the 
following sectors  

  Manufacture of paper and paper products; 

  Manufacture of rubber and plastic product; 

  Manufacture of other non-metallic mineral products. 

Concerning  the  food  supplement  and  foodstuffs  some  specific  products  have  been 
identifies within the sectors “Manufacture of other food products” 

For the complete list of products that are considered as non (or partially harmonised) 
within the scope of this study please refer to 2. 

2.  METHODOLOGY FOR THE ESTIMATION OF THE MAGNITUDE OF THE PROBLEM  

The  objective  of  the  model  is  to  distinguish  the  socio-economic  costs  of  a  sub-optimal 
functioning of the mutual recognition principle by identifying and investigating relevant 
socio-economic costs. Figure A4-2 provides an overview of the key components of the 
model  to  estimate  the  impact  of  sub-optimal  functioning  of  the  Mutual  Recognition 
principle, henceforth called the SFMR model. The model is underpinned by an enterprise 
decisions  tree  that  considers  routes  to  successful  market  entry  and  decisions  not  to 
export, further details are provided in chapter 4.  

Figure  A4-2  highlights  that  the  model  is  comprised  of  seven  components  or  stages. 
Calculations for components one, two and four were  presented in the previous chapter. 
The model uses data from the value of intra-EU trade by EU Member States to calculate 
key  cost  elements  associated  with  sub-optimal  functioning  of  the  Mutual  Recognition 
principle. These include unnecessary compliance costs and adjustment costs.  

By  estimating  the  number  of  enterprises  entering  new  cross-border  markets  with  non-
harmonised products (stage three of the model), it is possible to apply an estimate of the 
number of days work required by enterprises to overcome sub-optimal functioning (stage 
five).  This  element  of  the  model  provides  details  of  transactions  costs.  The  second 
component of the model (stage six - cost of delayed market entry) estimates the cost per 
week of enterprises note being able to trade. 

Components  five  and  six  can  then  be  treated  separately,  or  combined  to  give  a  total 
estimate  of  costs  associated  with  sub-optimal  functioning  of  the  Mutual  Recognition 
principle. 

89 

 
 
 
 
Figure  A4-2:  Key  components  of  the  model  to  estimate  the  cost  of  sub-optimal 
functioning of the Mutual Recognition principle 

Note:  Elements  with  asterisks  can  be  changed  in  the  model  and/or  updated  when  data  from  field  research  becomes 
available. 

As  noted,  the  model  is  underpinned  by  clear  and  transparent  assumptions  that  can  be 
adjusted to enable sensitivity analysis in the model.  

3.  METHODOLOGY FOR CASE STUDIES 

Five  case  studies  were  constructed  and  carried  out  in  this  project.  Their  objective  is  to 
allow us: 

 

 

To  ensure  a  higher  level  of  detail,  which  would  not  be  feasible  to  obtain  only 
through desk research and online survey, on specific topics emerged throughout the 
study that can help to better understand the impacts of the problems that emerged 
in the application of the mutual recognition principle and of the options envisioned; 

To  provide  enriched  and  more  robust  estimation  of  the  cost  and  benefits  of 
problems encountered in the application of the mutual recognition principle and of 
the options under analysis; 

90 

 
 
 
 
 
 
 
 

To illustrate in practical terms the implication and impacts of specific issues in the 
application of mutual recognition.  

Based  on  the  results  of  the  desk  and  field  research,  the  team  identified  possible  case 
studies, approved by the Commission, considering products or categories of products that 
appear relevant to be explored in a more detailed analysis. 

Case studies were carried out through: 

 

 

Brief  desk  research  that  provides  an  overview  of  the  product  and  collecting 
economic data and information; 

Interviews  to  collect  information  on  the  current  actual  implementation  of  mutual 
recognition in the sector – and in specific Member States, main costs and potential 
benefits of the proposed policy options, involving both: 

o 

o 

Relevant  national  authorities,  to  understand  the  actual  implementation  of 
the  Regulation,  the  main  procedures  in  place  and  the  possible  revision  that 
could be made in the light of the proposed options; 

Economic operators – both businesses and business associations – active in 
the  relevant  sector,  to  collect  information  on  the  actual  problems/obstacles 
faced and costs incurred by companies trying to enter the relevant market, as 
well as understanding the impact the proposed policy options would have in 
addressing them. 

Each case study is presented below, providing both an overview of the case and relevant 
product/sector, as well as the issue and the details based on desk and field research. 

4.  ESTIMATION OF THE MARKET FOR NON-HARMONISED PRODUCTS  

This  section  provides  an  estimate  of  the  market  value  of  current  intra-EU  trade  in 
non-harmonised  products  falling  under  the  mutual  recognition  principle,  in  order  to 
understand the size of the EU market currently affected by the Regulation; 

4.1.  Estimate  of  the  market  value  of  current  intra-EU  trade  in  non-harmonised 

products falling under the mutual recognition principle 

As described above, the market analysis follows a twofold approach.  

 

 

An analysis at sectorial level oriented towards the macro dimension of the market 
for non (or partially) harmonised products,  

An analysis at product level focused on the value of non-harmonised products that 
are traded within the EU Single Market. 

The  size  of  the  market  and  of  the  value  of  traded  goods  for  which  the  Mutual 
Recognition should apply to allow the research team to have figures for the estimate of 

91 

 
 
 
the magnitude of the problem and  for the next steps, with  the assessment of the policy 
options. 

4.1.1.  Analysis at the sectorial level 

For the analysis at sectorial level, we extracted from SBS data related to the following 
dimensions:  

 

 

 

Business Demographic; 

Input related; 

Output related. 

The analysis has been undertaken on the indicators detailed in the following table. 

Table A4-1: List of indicators for the sector-level analysis 

Dimension 

Indicator 

Definition 

Business 
demography 

Number of 
enterprises 

Number of active enterprises 

Input 

Number of 
persons employed 

Number of person aged 15 and over (or 16 and over in IE) who 
worked - even if just for one hour per week - for pay, profit or 
family gain. 

Output 

Value added at 
factor cost 

The value added at factor cost is the gross income from operating 
activities after adjusting for operating subsidies and indirect 
taxes. 

The value added at factor costs is calculated "gross" as value 
adjustments (such as depreciation) are not subtracted.136 

Turnover 

“Turnover” comprises the totals invoiced and corresponds to 
market sales of goods supplied to third parties.137 

We identified the economic sectors (i.e. sectors identified with a 3-digit NACE code) that 
are  potentially  impacted  by  Regulation  (EC)  No  764/2008  and  for  which  the  Mutual 
Recognition principle should be applied (see annex5).  

136 

137  

http://ec.europa.eu/eurostat/ramon/nomenclatures/index.cfm?TargetUrl=DSP_GLOSSARY_NOM_DTL_VIEW&StrNom=
CODED2&StrLanguageCode=EN&IntKey=16619885&RdoSearch=BEGIN&TxtSearch=value%20added%20at%20factor%
20cost&CboTheme=&IsTer=&IntCurrentPage=1&ter_valid=0  
It includes all duties and taxes on the goods or services invoiced by the unit with the exception of the VAT invoiced by the 
unit vis-à-vis its customer and other similar deductible taxes directly linked to turnover. 
It  also  includes  all  other  charges  (transport,  packaging,  etc.)  passed  on  to  the  customer,  even  if  these  charges  are  listed 
separately  in  the  invoice.  Reduction  in  prices,  rebates  and  discounts  as  well  as  the  value  of  returned  packing  must  be 
deducted. 
Income classified as other operating income, financial income and extra-ordinary income in company accounts is excluded 
from  turnover.  Operating  subsidies  received  from  public  authorities  or  the  institutions  of  the  European  Union  are  also 
excluded. 

92 

 
 
                                                 
 
 
As regards this sectorial analysis it is important to underline that: 

 

 

Data is available at NACE Digit 3 – level only for the period  2012 – 2014. Thus it 
is almost difficult to identify some trends 

All results should be considered as an upper estimate  because some economic 
sectors  might  contain  one  of  more  products  for  which  harmonised  product  rules 
exist. 

As  shown  in  Figure  A4-3,  over  the  period  from  2012  and  2014,  around  0.99  million 
enterprises  were  operating  within  non-harmonised  sectors,  representing  more  than 
50%  of the total  number of active enterprises in the  manufacturing economy (around 2 
million active enterprises  are operating under Section  C of NACE  classification named 
Manufacturing). 1 presents the correspondence between the list of NACE DIGIT-3 codes 
and the way they have been considered in the analysis (i.e. harmonised or non/partially 
harmonised.  

Figure  A4-3:  Number  of  active  enterprises:  non-harmonised  sectors  vs  overall 
manufacturing sectors (EU28, 2012 – 2014), NACE Digit-3 level 

Source: Structural Business Statistics, Annual enterprise statistics by size class for special aggregates of activities 
(NACE Rev. 2) (sbs_sc_sca_r2), EUROSTAT (2016) 

It is very important to underline that around 87% of the enterprises operating within the 
non  (or  partially)  harmonised  sectors  are  micro  enterprises  (i.e.  with  less  than  9 
employees) and around 11% are Small and Medium Enterprises (i.e. with a number of 
employees  between  10  and  250).  If  compared  to  harmonised  sectors  the  relevance  of 
micro enterprises is higher in non/partially harmonised sectors. 

Figure A4-4: Size of enterprises operating (2012 – 2014, EU 28), NACE Digit-3 level 

93 

 
 
 
Source: Structural Business Statistics, Annual enterprise statistics by size class for special aggregates of activities 
(NACE Rev. 2) (sbs_sc_sca_r2), EUROSTAT (2016) 

Furthermore, at EU28 level more than 8 million person are employed within the non 
(or  partially)  harmonised  sectors  (i.e.  around  31%  of  all  people  employed  in  the 
manufacturing sectors), with no significant variation over the period considered. 

Figure A4-5: Number of persons employed: non (or partially) harmonised sectors vs 
overall manufacturing sectors (2012 – 2014, EU28, millions) 

Source: Structural Business Statistics, Annual enterprise statistics by size class for special aggregates of activities 
(NACE Rev. 2) (sbs_sc_sca_r2), EUROSTAT (2016) 

The  magnitude  of  the  non-  (or  partially)  harmonised  sectors  can  be  also  appreciated  if 
wealth  creation  (i.e.  added  value  and  turnover)  is  considered.  In  particular,  the  value 
added produced in non (or partially) harmonised sectors decreased by 15% during 
the period 2012-2014 (i.e. passing from €360 to €305 billion) and its contribution to the 
overall value added of the manufacturing sectors passed from 24.4% in 2012 to 22.9% in 
2014. 

94 

 
 
 
 
Figure  A4-6:  Value  added  at  factor  cost:  non-harmonised  sectors  vs  overall 
manufacturing sectors (2012 -2014, EU28), € billion 

Source: Structural Business Statistics, Annual enterprise statistics by size class for special aggregates of activities 
(NACE Rev. 2) (sbs_sc_sca_r2), EUROSTAT (2016) 

Also  in  this  case,  within  the  period  2012–2014,  micro  enterprises  and  SMEs 
contributed to the 59.5% of the value added produced operating in non-harmonised 
sectors  (i.e.  €200.2  billion  out  of  €336.5  billion)  that  corresponds  to  the  14.1%  of  the 
overall added value produced in the manufacturing sectors (€ 1,417.2 billion). 

Table  A4-2:  Value  added  at  factor  cost  per  size  of  enterprises:  non-harmonised 
sectors vs overall manufacturing sectors (average 2012-2014, EU28), € billion 

Non-Harmonised 

Sectors 

Manufacturing 

Non-Harmonised S./ 

Manufacturing 

Size of enterprises 

Total 

(€ Million) 

% 

(a) 

Total 

(€ Million) 

% 

(a)/(b) 

% 

Micro (< 9 employees) 

43.158 

12.8% 

104.026 

7.3% 

3.0% 

Small (between 10 
and 49 employees) 

Medium (between 50 
and 249 employees) 

Large (>250 
employees) 

70.528 

21.0% 

219.824 

15.5% 

5.0% 

86.528 

25.7% 

339.206 

23.9% 

6.1% 

136.272 

40.5% 

754.117 

53.2% 

9.6% 

95 

 
 
 
Size of enterprises 

Non-Harmonised 

Sectors 

Manufacturing 

Non-Harmonised S./ 

Manufacturing 

Total 

336.485 

100.0% 

1,417.17 (b) 

100.0% 

23.7% 

Source: Structural Business Statistics, Annual enterprise statistics by size class for special aggregates of activities 
(NACE Rev. 2) (sbs_sc_sca_r2), EUROSTAT (2016) 

Finally, relevant results emerged also considering the turnover. As shown in the figure 
below,  enterprises  operating  within  non  (or  partially)  harmonised  sectors  contribute  to 
around  20%  of  the  total  value  of  market sales  of  manufacturing  sectors  (€1,158  billion 
out  of  €5,690  billion,  corresponding  to  the  overall  turnover  produced  within  the 
manufacturing sectors). 

Figure  A4-7:  Turnover:  Non-harmonised  sectors  vs  overall  manufacturing  sectors 
(2012-2014, EU28), € billion 

Source: Structural Business Statistics, Annual enterprise statistics by size class for special aggregates of activities 
(NACE Rev. 2) (sbs_sc_sca_r2), EUROSTAT (2016) 

If  the  size  of  enterprises  is  considered,  micro  enterprises  and  SMEs  that  are  doing 
business in non (or partially) harmonised sectors generated the 11.7% of the turnover 
generated  within  the  entire  manufacturing  economy  (€662.2  billion  out  of  €5,690 
billion).  

96 

 
 
 
 
 
 
 
 
 
 
Table  A4-3:  Turnover  per  size  of  enterprise:  non-harmonised  sectors  vs  overall 
manufacturing sectors (average 2012-2014, EU28), € Billion 

Non-Harmonised 

Sectors 

Manufacturing 

Non-Harmonised 
S./ 

Manufacturing 

Size of enterprises 

Total 

(€ Million) 

% 

(a) 

Total 

(€ Million) 

% 

(a)/(b) 

% 

128,872 

11.1% 

319,955 

5.6% 

2.3% 

222,107 

19.2% 

725,176 

12.7% 

3.9% 

311,212 

26.9% 

1,300,562 

22.9% 

5.5% 

495,825 

42.8% 

3,344,326 

58.8% 

8.7% 

Micro (< 9 
employees) 

Small (between 10 
and 49 employees) 

Medium (between 
50 and 249 
employees) 

Large (>250 
employees) 

Total 

1,158,016 

100.0% 

5,690,019 

100.0% 

20.4% 

Source: Structural Business Statistics, Annual enterprise statistics by size class for special aggregates of activities 
(NACE Rev. 2) (sbs_sc_sca_r2), EUROSTAT (2016) 

4.1.2.  Analysis at product level 

The second type of analysis, at product level, is aimed at understanding the market value 
of all traded products for which EU harmonised product rules do not exist.138  

The  indicators  considered  in  the  analysis  have  been  also  extracted  from  Eurostat 
statistics currently available and are presented in the following table. 

Table A4-4: Indicators computed for the analysis at product level 

Indicator 

Definition 

Value of intra EU 
exports for 
manufacturing products 

This indicator provides the 
monetary value of exported 
manufactured products from all 

Geographical 
coverage 

EU-28 

Timeframe  Source 

2008 - 
2015 

EU trade 
since 1998 
by SITC139 

138  
139  

Only intra EU exports are considered for the analysis. 
http://ec.europa.eu/eurostat/web/international-trade-in-goods/data/database  

97 

 
 
                                                 
Indicator 

Definition 

Geographical 
coverage 

Timeframe  Source 

Value of intra EU 
exports for non-
harmonised and 
partially harmonised 
products 

EU countries to other EU 
countries 

This indicator provides the 
monetary value of non-
harmonised and partially 
harmonised products from all 
EU countries to other EU 
countries 

EU-28 

2008 - 
2015 

EU trade 
since 1998 
by SITC 

All EU-28 Member States have been considered and the time period covered by data is 
2008-2015.  In  terms  of  sectors,  the  manufacturing  sectors  listed  in  the  following  table 
have  been  included  in  the  analysis.  In  particular  the  NACE  codes  used  in  the  analysis 
have  been  grouped  using  the  International  Standard  Industrial  Classification  of  All 
Economic Activities (ISIC)140. Each sector contains both harmonised and non or partially 
harmonised products. Annex 5 lists all non or partially harmonised products per each 
sector that have been used for the analysis at product level. 

Table A4-5: Manufacturing Sectors included in the analysis at product level 

Sectors 

Manufacture of food products, beverages and tobacco products 

Manufacture of textiles, apparel, leather and related products 

Manufacture of wood and paper products, and printing 

Manufacture of coke, and refined petroleum products 

Manufacture of chemicals and chemical products 

Manufacture of pharmaceuticals, medicinal chemical and botanical products 

NACE 
DIVISION 

10 to 12 

13 to 15 

16 to 18 

19 

20 

21 

Manufacture of rubber and plastics products, and other non-metallic mineral products 

22-23 

Manufacture  of  basic  metals  and  fabricated  metal  products,  except  machinery  and 
equipment 

24-25 

Manufacture of computer, electronic and optical products 

Manufacture of electrical equipment 

26 

27 

140 

http://ec.europa.eu/eurostat/documents/3859598/5902521/KS-RA-07-015-EN.PDF (pag. 44) 

98 

 
 
                                                 
Sectors 

Manufacture of machinery and equipment n.e.c. 

Manufacture of transport equipment 

NACE 
DIVISION 

28 

29-30 

Other manufacturing, and repair and installation of machinery and equipment 

31 to 33 

While  the  analysis  at  sectorial  level  provided  an  estimate  of  the  number  of  economic 
operators  that  are  potentially  impacted  by  a  sub  optimal  functioning  of  the  Mutual 
Recognition and  how they are contributing to  the  EU  economy, the analysis at product 
level  provides  an  assessment  of  the  value  of  traded  goods  that  should  comply  with  the 
existing harmonised product rules. 

The value  of non (or partially)  harmonised products has  been estimated by considering 
the  value  of  intra  EU  exports  for  these  types  of  product.  The  2  presents  the  list  of 
products (as per NACE DIGIT-4 classification) that have been considered as being non 
(or partially) harmonised. 

In particular, considering the period 2008 - 2015: 

 

 

 

The  (average)  annual  value  of  intra  EU  exports  of  non  (or  partially)  harmonised 
products has been equal to €335 billion (Figure A4-8); 

The value on intra EU exports of non-harmonised products represented the 18% of 
the value of intra EU exports (Figure A4-8); 

The value of intra EU exports  of non or  partially harmonised goods increased by 
14.2%  (i.e.  passing  from  €  338  to  €  386  billion),  the  same  variation  can  be 
observed  for  harmonised  good  (i.e.  the  value  passing  from  €  1,513  to  €  1,725 
billion). 

Figure A4-8: Value on non (or partially) harmonised products. Intra EU Exports, € 
billions, 2008 -2015  

99 

 
 
 
 
 
The following table shows the average value of intra EU exports for non-harmonised and 
partially harmonised products for each sector, where the 83% (around €515 billion out of 
€681 billion) of products are manufactured by:  

  Manufacture of basic metals and fabricated metal products, except machinery and 

equipment; 

  Manufacture  of  textiles,  apparel,  leather  and  related  products  basic  metals  and 

fabricated metal products; 

  Manufacture of transport equipment; 

  Manufacture of wood and paper products, and printing. 

Please  refer  to  Annex  5  for  the  list  of  products  that  have  been  classified  as  non  or 
partially harmonised for each sector. 

Table A4-6: Value of non-harmonised products per sector (Intra EU trade, average 
2008 – 2015, € billions) 

Average 
Annual 
value 

% 

 Manufacture of basic metals and fabricated metal products, except machinery and 
equipment  

41.81 

12% 

 Manufacture of coke, and refined petroleum products  

0.05 

0% 

 Manufacture of computer, electronic and optical products  

15.69 

5% 

 Manufacture of electrical equipment  

2.90 

1% 

100 

 
 
 
 
Average 
Annual 
value 

% 

 Manufacture of food products, beverages and tobacco products  

3.37 

1% 

 Manufacture of rubber and plastics products, and other non-metallic mineral 
products  

12.41 

4% 

 Manufacture of textiles, apparel, leather and related products  

55.91 

17% 

 Manufacture of transport equipment  

104.01 

31% 

 Manufacture of wood and paper products, and printing  

76.40 

23% 

 Other manufacturing, and repair and installation of machinery and equipment  

22.66 

7% 

Total 

335.22 

100% 

Source: EU trade since 1998 by SITC, EUROSTAT (2016) 

Another  interesting  element  emerged  if  the  value  of  the  intra  EU  Exports  is  compared 
with the domestic consumption (i.e. value of production – value of extra EU exports + 
value  of  extra  EU  imports):  while  for  harmonised  products  the  value  of  Intra  EU 
exports  is  55%  of  the  domestic  consumption,  for  non  or  partially  harmonised  products 
the Intra EU exports represent only 35% of the domestic consumption. This might be a 
sign  of  a  suboptimal  functioning  of  the  Mutual  Recognition  that  leads  to  potential 
barriers for intra EU trade in the case of non- or partially harmonised products. 

Figure  A4-9:  Intra  EU  trades  (exports)  as  %  of  the  domestic  consumption: 
Harmonised vs non or partially harmonised products, 2008-2015 

101 

 
 
 
65%

60%

55%

50%

45%

40%

51,8% 

52,9% 

50,6% 

54,2% 

54,8% 

57,9% 

59,2% 

56,5% 

34,5% 

35,6% 

35,8% 

37,1% 

37,7% 

37,4% 

35%

32,9% 

32,5% 

30%

2008

2009

2010

2011

2012

2013

2014

2015

Harmonised

Non/Partially Harmonised

Source: PRODCOM statistics, EUROSTAT (2016) 

The  results  presented  so  far,  as  already  mentioned,  should  be  considered  as  an  upper 
estimate of the market value for non-harmonised and partially harmonised products, due 
to  the  degree  of  sectoral  aggregation.  Even  if,  as  showed  in  2,  we  used  up  to  4  digits 
statistics,  the  estimated  value  cannot  indicate  itself  if  the  MR  is  working  or  not.  The 
implementation of the MR principle might be optimal in many subsectors, even if non-
harmonised. This can be related to the fact that there is little regulation anyway or that, 
may be, countries rely on the same (European) standards, or that MR problems are more 
sector specific. 

This  chapter  presents  the  revised  model  for  the  estimation  of  the  magnitude  of  the 
problem arising from sub-optimal functioning of the Mutual Recognition principle.  

4.2.  Estimating the magnitude of the problem triggered by suboptimal functioning 

of the mutual recognition principle  

4.2.1. Introduction and exporting decision tree  

This  section  presents  a  model  for  estimating  the  costs  associated  with  the  current  sub-
optimal functioning of the Mutual Recognition principle.  

The  approach  adopted  is  innovative.  No  previous  studies  could  be  found  that  model  or 
calculate  costs  arising  from  the  current  sub-optimal  functioning  of  the  Mutual 
Recognition principle  141. In 2003 Pelkmans142 identified three core costs – information, 

141  

Renda  A  et  al.    2014.    Towards  indicators  for  measuring  the  performance  of  the  Single  Market.    Briefing  for  the  IMCO 
Committee.  Directorate General for Internal Policy. A theoretical-economic approach is developed from the work of Ronald 
Coase  from  1937  onwards  on  transaction  costs  and  the  nature of  the  firm  and  Oliver  Williamson’s  work  in  the  1990’s  on 
transaction cost economics. These approaches employ a very different idea of ‘transaction costs’ and cannot be employed for 
this empirical study. 

102 

 
 
 
                                                 
transaction  and  compliance.    These  elements  are  utilised  and  further  developed  in  this 
study. Pelkmans also identified that there will also be waiting costs associated with the 
‘number  of  products  waiting  for  EU  regulation  before  free  movement  could  become  a 
reality  for  business’143.    These  are  included  in  the  model  as  ‘Costs  of  delayed  market 
entry’. Discussions with Pelkmans have identified that these elements are as relevant now 
as they were when his conceptual study was completed in 2003. 

The previous section presented a number of options for enterprises to follow in order to 
export  products.    Figure  A4-10  provides  a  decision  tree  diagram  to  represent  the  route 
that  enterprises  can  follow  when  deciding  not  to  export  or  when  entering  another  EU 
Member State market with a product not covered by the Mutual Recognition principle. 

Figure  A4-10. Decision tree  diagram for export  decisions associated  with products 
not covered by the Mutual Recognition principle 

142  

143  

Pelkmans J.  2003.  Mutual recognition in goods and services: An economic perspective.  European Network of Economic 
Policy Research Institutes. Working Paper 16.  p14. 
Ibid  Pelkmans. 2003. p8. 

103 

 
 
 
 
 
 
 
                                                                                                                                                 
The  decision  tree  captures  the  three  main  options  (and  subsequent  steps)  that  an 
enterprise  undertaking  intra-EU exports  of  partial  or  non-harmonised  products  needs  to 
consider.  These key options are incorporated in the model developed within this section.  
The model provides a representation for an enterprise considering intra-EU exporting of 
one product in one EU Member State144, this includes: 

  Market entry decision – The starting point for figure A4-10 is the consideration 
by an enterprise to export.  At that point they can decide to proceed and incur time 
and  other  costs  before  entering  a  market.    Alternatively,  they  can  decide  not  to 
attempt  to  export,  these  decisions  will  generally  be  underpinned  by  economic 
rationale (e.g. the perceived costs of exporting do not offer  sufficient rewards) or 
enterprise staff may not welcome the risk or other pressures of exporting.   

 

 

If an enterprise decides to export they can follow one of two routes.  Adjust their 
products to meet the requirements of the Member State markets they want to enter.  
Even if this strategy is followed the enterprise will have to demonstrate to national 
authorities  that  their  product  does  meet  the  requirements  of  the  Member  State 
targeted for exporting. 

Demonstrating  meeting  regulatory  requirements  (action  2  in  decision  tree 
graphic) – Interviews are ongoing with enterprises to provide insight on how they 
meet  regulatory  requirements.  As  noted  previously  Pelkmans  identified  three 

144    

It is useful to highlight that Pelkmans’ earlier work highlighted that Mutual Recognition, if implemented properly, also has 
costs.  But these have rarely been considered in studies that generally examine benefits. Consideration of these is not within 
the scope of this study. 

104 

 
 
 
                                                 
components  to  this  action.    A  two-stage  process  is  usually  evident.    Firstly,  this 
option requires an assessment of information about Mutual Recognition principles 
for  their  product  and  the  requirements  for  the  target  Market  State  (Pelkmans 
described  these  as  ‘information  costs’).    There  was  a  relatively  high  level  of 
agreement amongst those interviewed that this, on average, takes between 10 and 
30  hours  for  a  single  product.  However,  some  larger  businesses  with  many 
products reported undertaking continual monitoring of relevant information. 

The  second  step  is  demonstrating  to  relevant  authorities  that  the  product  can  be 
sold lawfully in another Member State – Pelkmans described these as ‘transaction 
costs’.  Interviewees suggested that this took between 30 and 50 hours.  Pelkmans 
noted  that  undertaking  these  two  activities  should  usually  ensure  that  the  third 
component  identified  –  compliance  costs;  associated  with  judicial  presentation  or 
review  –  should  be  avoided.    None  of  the  businesses  interviewed  in  connection 
with the decision tree model had incurred judicial costs.  Since these judicial costs 
can usually be avoided by incurring ‘information’ and ‘transaction’ costs these are 
not included in the model. 

At the average personnel costs quoted by enterprises (€60 per hour) the maximum 
time  period  of  80  hours  (30  hours  for  information  costs  and  50  hours  for 
transaction  costs)  equates  to  a  cost  of  €4,800  per  enterprise  (per  product  per 
Member State). In the model this value can be adjusted, the default value is €4,800. 

 

 

Adjusting  the  product  to  meet  market  requirements  (action  3  in  decision  tree 
graphic) –  As noted above interviews are ongoing with enterprises to provide an 
insight  to  how  many  adjust  products  and  the  cost  of  adjusting  products.  
Interviewees found it difficult to provide a precise cost for adjusting products due 
to different circumstances and the adjustments required.  But the average estimate 
was two per cent of production costs.  In the model this value can be adjusted, the 
default value is €16,800145. 

After adjusting the product an enterprise would still need to demonstrate to relevant 
authorities  that  the  product  can  be  sold  lawfully  in  another  Member  State  (hence 
the  arrow  ‘feeding  back’  to  the  preceding  element  (demonstrating  meetings 
regulatory requirements) of the decision tree in figure A4-10.  

However, it is possible that after undertaking product adjustments that the enterprise may 
decide not to continue.  Hence the vertical ‘no’ arrow in figure A4-10 which indicates a 
‘lost opportunity’ 

 

145  

Cost of delayed market entry (action 4 in decision tree graphic) – The preceding 
elements take time and prevent immediate entry to the market.  Enterprises suggest 
the average length of delay is about a month.  They also report that the average cost 

The average turnover of an intra-EU exporting enterprises is €215,000 per annum, see later research.  Assuming production 
of  a  single  product  two  per  cent  would  represent  €4,300.    For  the  sake  of  simplicity,  and  to  prevent  making  inaccurate 
assumptions  about  production  costs  in  relation  to  turnover,  it  assumed  that  production  costs  of  a  single  product  could  be 
equal to turnover (if margins on a product were small or the company was operating at break-even levels).  This assumption 
could be a slight over-estimation, but users are able to adjust the model to reduce this assumption if this value is considered 
too high.  

105 

 
 
                                                 
of delay is between one and ten per cent of turnover, the average value is four per 
cent.  In the model this value can be adjusted, the default value is €8,600146. 

The  preceding  elements  of  the  decision  tree  model  have  focused  on  the  costs  for 
businesses that decide to try and enter a market.  Fairly robust insights to these costs have 
been obtained from businesses.   

A further significant element that needs to be considered is the potential lost opportunity 
to  those  businesses  that  decide  not  to  try  and  enter  markets.    These  costs  (from  a  lost 
opportunity)  are  independent  from  those  of  the  business  that  do  export  and  should 
regarded separately. 

Lost opportunity costs are much harder to estimate.  The majority of businesses in most 
sectors  do  not  export  for  a  wide  variety  of  reasons.    The  proportion  of  businesses 
deciding  not  to  export  due  to  one  reason  -  the  sub-optimal  functioning  of  the  Mutual 
Recognition principle - is very difficult to estimate.  Nonetheless, for completeness this 
study provides a transparent estimate of the possible number of businesses and the value 
of lost trade.  These subjective assumptions are explicitly presented below and the spread 
sheet model enables relevant values to be adjusted to enable sensitivity analysis. 

 

Lost opportunity (action 1 in decision tree graphic) – Lost opportunity is difficult 
to investigate because it represents the outcome of a ‘do nothing’ option.  However, 
logic  would  dictate  that  if  rewards  were  high  enough  all  enterprises  would  do 
something.    Therefore  the  enterprises  that  ‘do  nothing’  are  probably  those  that 
predict  that  perceived  costs  of  the  preceding  elements  (actions  2  and  3)  will  be 
greater than the benefits they might receive, plus a small ‘premium for the risk’ of 
‘doing something’.   

Enterprises suggest their estimate of lost opportunities was between one and ten per cent 
of turnover, with an average value of 3.5 per cent of turnover.  This represents an average 
value for of intra-EU exporting enterprises of €7,525 per annum.   

The  other  difficulty  concerning  ‘lost  opportunities’  is  the  number  of  enterprises  that 
might  have  seriously  considered  exporting.    The  average  number  of  enterprises 
undertaking  intra-EU  exporting  of  non-harmonised  products  is  14.7  per  cent  (262,940 
enterprises).    Clearly  it would  not  be  reasonable  to  assume  that  the remaining  85.3 per 
cent  (approx.  1,520,000)  of  enterprises  producing  non-harmonised  products  but  not 
exporting  should  be  included  in  ‘lost  opportunity’  calculations.    Interviews  with 
enterprises  did  not  provide  an  insight  to  their  perceptions  of  lost  opportunity  because 
those  willing  to  respond  were  all  exporters.    The  model  therefore  assumes  that  the 
number  of  enterprises  seriously  considering  intra-EU  exporting,  but  deciding  not  to  go 
ahead,  will  be  twice  the  number  that  actually  do  export.    In  the  model  the  number  of 
enterprises that incur a ‘lost opportunity’ is set at 29 per cent (twice the 14.7 per cent that 
export; 441,000 enterprises) of non-harmonised producing enterprises that do not export, 
this value can be adjusted in the model.      

146  

See the above footnote for an explanation of turnover in relation to production costs.  

106 

 
 
                                                 
The  decision  tree  has  been  developed  into  a  model  that  can  be  adjusted  (for  the  key 
components documented above, in a manner similar to sensitivity analysis), to estimate 
the  costs  of  sub-optimal  functioning  of  the  Mutual  Recognition  principle.    The 
methodology  is  founded  on  the  analysis  of  the  value  of  intra  EU  exports  (in  non-
harmonised products) presented in the preceding chapter.  Previous analysis in this study 
focused on the Standard International Trade Classification (a classification of goods used 
to  classify  the  exports  and  imports  -  SITC).    Data  related  to  this  classification  did  not 
provide an accurate insight into the number of enterprises in the sectors or the proportion 
undertaking Intra-EU exporting.   

The  decision  tree  has  been  developed  into  a  model  that  can  be  adjusted  (for  the  key 
components documented above, in a manner similar to sensitivity analysis), to estimate 
the  cost  of  sub-optimal  functioning  of  the  Mutual  Recognition  principle.    The 
methodology is founded on analysis of the value of intra EU exports (in non-harmonised 
products) presented in the preceding chapter.  Previous analysis in this study (submitted 
in  December  2016)  focused  on  the  Standard  International  Trade  Classification  (a 
classification of goods used to classify the exports and imports - SITC).  Data related to 
this classification did not provide an accurate insight into the number of enterprises in the 
sectors or the proportion undertaking Intra-EU exporting. 

The current approach therefore uses the statistical classification of economic activities in 
the  European  Community,  abbreviated  as  NACE147.    This  approach  provides  more 
granular  insights  and  importantly  detailed  insights  into  the  number  of  enterprises  in 
sectors and exporting.  Enterprise level data enables ‘real-world’ insights from interviews 
with  enterprises,  undertaken  during  the  study,  to  be  introduced  into  the  model.    This 
overcomes  the  shortcoming  earlier  in  the  study (due  to  a lack  of  information  about  the 
number of enterprises with SITC data) of making assumptions about enterprise exports 
and the number of companies undertaking intra-EU exports.  

4.2.2.  The Sub-optimal Functioning of the Mutual Recognition model 

Like  any  model  the  Sub-optimal  Functioning  of  the  Mutual  Recognition  model 
(henceforth  called  the  SFMR  model)  is  a  simplified  framework  designed  to  illustrate 
complex  processes,  using  mathematical 
techniques.  The  model  establishes  an 
argumentative framework for applying logic and mathematics that can be independently 
discussed  and  tested  and  that  can  be  applied  in  various  instances.  The  model  does  not 
pretend to be a theoretical representation (such theories do not exist).  Instead, it builds 
on previous conceptual studies and provides the basis for discussing key parameters and 
drawing  conclusions  from  a  model  that  is  an  approximate  representation  of  economic 
facts. Feedback from the Commission has been beneficial in further refining the model 
and its underlying assumptions. 

As noted above the model is a representation of reality.  However, the values presented in 
the various components of the new model are founded on feedback from enterprises148.  
The default values, described earlier, are based on input from nine enterprises that took 

147  

148  

http://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Statistical_classification_of_economic 
_activities_in_the_European_Community_(NACE).  
The previous SITC model was not based on enterprises so assumptions were generally ‘unfounded’. 

107 

 
 
                                                 
part in the first round of interviews.  As more interviews with enterprises are completed 
the values presented in the various components of the model can be further refined.  But 
it is not expected that values will change very much. 

The  model  provides  estimates  of  costs. It  will  probably  be most  useful in  providing  an 
insight to the relative differences of costs in different parts of the model and the different 
non-harmonised sectors.  This should help policymakers to focus activities in the areas or 
sectors that offer the highest level of returns. 

4.2.3.  Number of enterprises undertaking non-harmonised trade 

The research team have developed an approach that converts SITC Trade volume (€) to 
NACE codes whilst aligning non-harmonised NACE categories. This can then be reliably 
cross-tabulated  with  Eurostat  data  on  the  number  of  enterprises  exporting.  EC  studies 
have also investigated worldwide exports and intra-EU exporting at enterprise level. We 
have  thus  found  a  method  to  robustly  estimate  (from  Eurostat  data)  the  number  of 
enterprises at EU28 level undertaking intra-EU exports. 

Table  A-4-7  provides  an  overview  of  trade  volumes  and  the  number  of  enterprises 
producing  and  intra-EU  exporting  non-harmonised  products.    The  average  number  of 
enterprises  intra-EU  exporting  is  14.7  per  cent  of  enterprises  (262,940)  in  the  non-
harmonised  sectors.    However,  as  the  table  indicates  there  is  considerable  variation 
between sectors – ranging from 10.6 per cent of enterprises in the ‘Other manufacturing, 
and repair and installation of machinery and equipment’ (but this still represents 65,227 
enterprises)  to  35.2  per  cent  in  the  ‘Manufacture  of  computer,  electronic  and  optical 
products’ sector, despite the relatively high percentage figure the number of enterprises 
intra-EU exporting is only 1,766. 

If policymakers decided to focus improvements on the sectors with the highest number of 
enterprises  they  should  select  the  ‘Manufacture  of  wood  and  paper  products,  and 
printing’ (71,706) intra-EU exporting enterprises) and ‘Other manufacturing, and repair 
and  installation  of  machinery  and  equipment’  (65,227).    These  two  sectors  comprise 
136,933 enterprises or 52 per cent of intra-EU exporting enterprises. 

Interestingly  these  two  sectors  also  comprise  the  enterprises  with  some  of  the  lowest 
average  turnover  in  the  nine  non-harmonised  sectors  examined  in  this  analysis  (wood 
€156,000  per  enterprise  per  annum,  other  manufacturing  €44,000).    These  relatively 
small sized/turnover enterprises are probably the least able to afford costs associated with 
meeting or demonstrating market requirements in other EU Member States (estimated at 
€9073 for enterprises adjusting products and demonstrating market compliance).  It must 
be  highlighted  that  these  observations  relate  to  average  enterprises  sizes,  larger  and 
smaller enterprises will obviously operate in the markets.    

Table  A4-7:  Trade  volume  and  enterprises  undertaking  non-harmonised  intra-EU 
exporting 

108 

 
 
Non-harmonised 
intra-EU trade 
 (€ million) 

Non 
harmonised 
enterprises 

% Intra-EU 
exporting 
enterprises 

Intra-EU 
exporting 
enterprises 

Avg, Non 
harmonised 
enterprise 
turnover 
(€m) 

46,370 

105,361 

16.6 

17,490 

0.440 

17 

101 

33.0 

33 

0.168 

16,019 

5,017 

35.2 

1,766 

3.193 

4,187 

42,976 

12.0 

5,157 

0.097 

13,834 

110,615 

32.5 

35,950 

0.125 

66,094 

368,439 

17.0 

62,635 

0.179 

127,466 

8,728 

34.1 

2,976 

14.604 

82,438 

527,248 

13.6 

71,706 

0.156 

26,927 

615,353 

10.6 

65,227 

0.044 

Manufacture of basic 
metals and fabricated 
metal products, 
except machinery 
and equipment  

Manufacture of 
coke, and refined 
petroleum products 

Manufacture of 
computer, electronic 
and optical products 

Manufacture of food 
products, beverages 
and tobacco products  

Manufacture of 
rubber and plastics 
products, and other 
non-metallic 
products 

Manufacture of 
textiles, apparel, 
leather and related 
products  

Manufacture of 
transport equipment  

Manufacture of 
wood and paper 
products, and 
printing  

Other 
manufacturing, and 
repair and 
installation of 
machinery and 
equipment  

 Total  

€383,352 

1,783,838 

14.7% 

262,940 

€0.215m 

Source: Structural Business Statistics 

Costs associated with the decision tree model 

109 

 
 
 
Table A4-8 uses the evidence based default values presented in section 4.2.1 to provide 
an overview of costs associated with market entry for non-harmonised products. 

Table  A4-8:  Enterprise  costs  associated  with  market  entry  for  non-harmonised 
products 

Demonstrating 
regulatory 
requirements  
(Model Action 2)  
(€m) 

Product 
adjustment and 
demonstrating 
requirements 
(Actions 2 & 3) 
 (€m) 

Cost of delayed 
market entry 
(Action 4)  
(€m) 

Total Cost   
(€m) 

41.8 

79.3 

308 

429 

0.1 

4.2 

12.3 

85.8 

0.2 

8.0 

23.4 

0.2 

226 

20 

0.5 

238 

56 

163.1 

180 

429 

149.5 

284.2 

449 

883 

7.1 

171.2 

13.5 

325.3 

1,739 

1,759 

448 

945 

155.7 

295.9 

114 

566 

Manufacture of basic 
metals and fabricated 
metal products, 
except machinery and 
equipment  

Manufacture of coke, 
and refined petroleum 
products 

Manufacture of 
computer, electronic 
and optical products 

Manufacture of food 
products, beverages 
and tobacco products  

Manufacture of 
rubber and plastics 
products, and other 
non-metallic products 

Manufacture of 
textiles, apparel, 
leather and related 
products  

Manufacture of 
transport equipment  

Manufacture of wood 
and paper products, 
and printing  

Other manufacturing, 
and repair and 
installation of 
machinery and 
equipment  

Total 

€628m 

€1,193m 

€3,484m 

€5,305m 

110 

 
 
 
 
 
 
Demonstrating 
regulatory 
requirements  
(Model Action 2)  
(€m) 

Product 
adjustment and 
demonstrating 
requirements 
(Actions 2 & 3) 
 (€m) 

€4,775 

€9,073 

Cost of delayed 
market entry 
(Action 4)  
(€m) 

€8,596 

Total Cost   
(€m) 

Average per 
enterprise 

Table A4-8 provides an overview of the costs of getting one non-harmonised product into 
a  single  EU  Member  State.    The  table  shows  that  in  nearly  all  sectors  the  lowest 
proportion  of  costs  (average  €4,775  per  enterprise)  is  associated  with  demonstrating 
meeting regulatory requirements.  Section 4.2.1 noted that on average these represented 
only 80 hours of time per enterprise.   

Costs are obviously increased for enterprises that incur this regulatory cost and undertake 
product  adjustments,  on  average  these  costs  are  €9,073  per  enterprise  undertaking  this 
route to intra-EU exporting. 

The largest costs are associated with a delay in market entry, this was estimated to cost 
four per cent of turnover or approximately €8,596 per enterprise. 

4.2.4.  Lost Opportunity  

The  estimate  presented  in  Error!  Not  a  valid  bookmark  self-reference.  uses  a 
multiplicand  of  441,000  enterprises  (previously  described  in  section  4.1  as  the  number 
suffering a lost opportunity at twice the number that actually do export, this equates to 29 
per cent of non-harmonised non-exporting enterprises).  This provides an average value 
for intra-EU exporting enterprises of €7,525 per annum.    

Table A4-9 provides an overview of the level and cost of lost opportunities in the sectors 
examined.    Section  4.2.1  noted  that  this  element  of  the  model  is  more  subjective  and 
enterprises choose not export for a wide variety of reasons.  The proportion of enterprises 
not exporting due to the sub-optimal functioning of the Mutual Recognition principle is 
very  difficult  to  estimate.    The  model  assumes  that  the  number  of  enterprises  seriously 
considering intra-EU exporting, but deciding not to go ahead, will be twice the number 
that actually do export. The number of enterprises that incur a ‘lost opportunity’ is set at 
27  per  cent  in  the  model  (twice  the  14.7  per  cent  that  do  export  of  non-harmonised 
products),  this  value  can  be  adjusted  in  the  model.  Section  4.2.1  also  highlighted  that 
enterprises estimated lost opportunities averaged a value of 3.5 per cent of turnover. The 
estimate presented in Error! Not a valid bookmark self-reference. uses a multiplicand 
of 441,000 enterprises (previously described in section 4.1 as the number suffering a lost 
opportunity  at  twice  the  number  that  actually  do  export,  this  equates  to  29  per  cent  of 
non-harmonised non-exporting enterprises).  This provides an average value for intra-EU 
exporting enterprises of €7,525 per annum.    

Table A4-9: Enterprise costs associated with lost opportunities for intra-EU exporting 

Estimate of lost opportunity 
(€m) 

111 

 
 
 
 
 
Estimate of lost opportunity 
(€m) 

Manufacture of basic metals and fabricated metal products, 
except machinery and equipment  

Manufacture of coke, and refined petroleum products 

Manufacture of computer, electronic and optical products 

Manufacture of food products, beverages and tobacco products  

Manufacture of rubber and plastics products, and other non-
metallic products 

Manufacture of textiles, apparel, leather and related products  

Manufacture of transport equipment  

Manufacture of wood and paper products, and printing  

Other manufacturing, and repair and installation of machinery 
and equipment  

Total 

Average per enterprise 

393 

0.1 

105 

37 

95 

557 

853 

723 

244 

€3,007m 

€7,525 

4.2.5.  The Sub-optimal Functioning of the Mutual Recognition (SFMR) model 

Figure A4-11 provides an overview of the key components of the model to estimate the 
costs of sub-optimal functioning of the Mutual Recognition principle. Preceding sections 
have described each component of the model and the assumptions used in calculations. 
As noted earlier, it is important to stress that the model provides costs associated with an 
enterprise introducing one product into one EU Member State.   

Figure  A4-11:  Costs  and  lost  opportunity  calculations  associated  with  the  decision 
tree  diagram  for  export  decisions  associated  with  products  not  covered  by  the 
Mutual Recognition principle 

112 

 
 
 
 
 
As noted earlier The SFMR model has been developed as an MS excel spreadsheet.  It 
enables users to change the values of all the key assumptions.  

The  final  component  of  the  model  enables  users  to  enter  values  for  enterprises 
introducing  more  than  one  product  into  more  than  one  EU  Member  States  per  annum. 
The model does not take account of whether exporting enterprises will continue to export 
in  later  years,  nor  does  it  examine  any  further  costs  associated  with  the  sub-optimal 
functioning of the Mutual Recognition principle. 

Table  A4-10:    Results  of  sensitivity  analysis  examining  different  numbers  of 
products and Member States targeted by exporters per annum 

Demonstrating 
regulatory 
requirements  
(€m) 

Product 
adjustment and 
demonstrating 
requirements 
(€m) 

Cost of delayed 
market entry  
(€m) 

Total Cost 
(€m) 

Avg. per 
enterprise 
(€) 

628 

1,193 

3,484 

5,305 

€20,175 

8,789 

16,700 

48,780 

74,270 

€282,460 

17,579 

33,400 

97,561 

148,540 

€564,919 

3,140 

5,960 

17,420 

26,525 

€100,879 

43,946 

83,501 

243,902 

371,350 

€1,412,299 

One product in one EU 
Member State 

One product in 14 EU 
Member States 

One product in 28 EU 
Member States 

Five products in one EU 
Member State 

Five products in 14 EU 
Member State 

113 

 
 
 
 
Demonstrating 
regulatory 
requirements  
(€m) 

Product 
adjustment and 
demonstrating 
requirements 
(€m) 

Cost of delayed 
market entry  
(€m) 

Total Cost 
(€m) 

Avg. per 
enterprise 
(€) 

Five products in 28 EU 
Member State 

87,900 

167,000 

487,800 

742,700 

€2,824,598 

Table A4-10 provides an overview of costs associated with different numbers of products 
and different numbers of Member States targeted for exporting.  

Table  A4-7  highlighted  that  the  value  of  intra-EU  exporting  is  €383  billion  and  the 
average turnover per intra-EU exporting enterprise is €215,000.  Many of the scenarios 
presented  in  Table  A4-10  would  therefore  appear  to  be  unrealistic.    Most  enterprises 
would not  be able to  afford  the costs associated with  multiple products or  markets (for 
many  of  the  scenarios  in  Table  A4-10  costs  per  enterprise  are  above  the  average 
enterprise turnover).  Equally, it is unrealistic to assume that costs associated with market 
entry  would  come  close  to  or  exceed  the  total  size  of  the  market  (see  the  two  final 
scenarios in Table A4-10; in relation to the value of intra-EU exporting [€383 billion]. 

This observation about the number of products being developed matches the results from 
the enterprises.  Only one claimed to be developing more than one product a year for EU 
exports.  This company, with 48 employees, was also the only one providing an insight to 
the  number  of  EU  countries  targeted  for  new  products  –  it  was  targeting  only  two 
Member States. 

4.2.6.  Conclusion 

The  SFMR  presents  a  model  to  estimate  the  magnitude  of  the  problem.  It  should  be 
possible  to  make  revisions  to  the  model  when  additional  feedback  from  enterprises  is 
derived from the case study component of the research. 

Due  to  the  nature  of  the  problem  and  complexities  and  costs  that  would  be  associated 
with  a  detailed  evaluation  it  is  not  possible  to  undertake  a  complete  evaluation  of  the 
problem.  The  model  therefore  contains  assumptions  that  have  been  fully  explained  in 
preceding  sections.  Assumptions  in  the  model  are  based  on  feedback  from  exporting 
enterprises149. Commentators and observers might have different views concerning some 
of the assumptions. Without further evidence no single viewpoint should be regarded as 
‘correct’.  For  this  reason  values  associated  with  assumptions  in  the  model  can  be 
changed. And changes (to ‘default’ values) can be made when field research is complete. 

Nonetheless,  the  model  still  has  provided  an  estimate  of  costs  associated  with  the  sub-
optimal  functioning  of  the  Mutual  Recognition  principle.  Table  A4-8  provides  an 
overview  of  the  assumptions  (in  brackets)  and  key  results  described  in  preceding 
sections.  

149  

Eight in total as at 24th February.  But results are surprisingly consistent between enterprises.  The decision tree and model 
have evolved as the product has developed (this has posed new areas to discuss with enterprises as the study has developed); 
so further information is being sought during case study interviews. 

114 

 
 
 
 
                                                 
ANNEX  5  HARMONISED  NON-HARMONISED  AND  PARTIALLY  HARMONISED  PRODUCTS- 
SECTOR AND PRODUCT LEVEL ANALYSIS  

1.  HARMONISED,  NON-HARMONISED  AND  PARTIALLY  HARMONISED  SECTORS  - 

CLASSIFICATION USED IN THE MARKET ANALYSIS (SECTORIAL LEVEL)150 

NACE 
Group 

Description 

Harmonized 

C101 

Processing and preserving of meat and production of meat products 

harmonized 

C102 

Processing and preserving of fish, crustaceans and molluscs 

harmonized 

C103 

Processing and preserving of fruit and vegetables 

C104 

Manufacture of vegetable and animal oils and fats 

C105 

Manufacture of dairy products 

harmonized 

harmonized 

harmonized 

C106 

Manufacture of grain mill products, starches and starch products 

harmonized 

C107 

Manufacture of bakery and farinaceous products 

C108 

Manufacture of other food products 

C109 

Manufacture of prepared animal feeds 

C110 

Manufacture of beverages 

C120 

Manufacture of tobacco products 

C131 

Preparation and spinning of textile fibres 

C132 

Weaving of textiles 

C133 

Finishing of textiles 

C139 

Manufacture of other textiles 

C141 

Manufacture of wearing apparel, except fur apparel 

C142 

Manufacture of articles of fur 

C143 

Manufacture of knitted and crocheted apparel 

150  

A level 3 (three-digit code) of the hierarchy of codes in NACE was used 

115 

harmonized 

no/partially 

no/partially 

no/partially 

no/partially 

no/partially 

no/partially 

no/partially 

harmonized 

harmonized 

no/partially 

harmonized 

 
 
                                                 
NACE 
Group 

C151 

Description 

Harmonized 

Tanning and dressing of leather; manufacture of luggage, handbags, saddlery 
and harness; dressing and dyeing of fur 

no/partially 

C152 

Manufacture of footwear 

C161 

Sawmilling and planning of wood 

harmonized 

no/partially 

C162 

Manufacture of products of wood, cork, straw and plaiting materials 

no/partially 

C171 

Manufacture of pulp, paper and paperboard 

C172 

Manufacture of articles of paper and paperboard 

C181 

Printing and service activities related to printing 

C182 

Reproduction of recorded media 

C191 

Manufacture of coke oven products 

C192 

Manufacture of refined petroleum products 

no/partially 

no/partially 

no/partially 

no/partially 

no/partially 

no/partially 

C201 

Manufacture of basic chemicals, fertilisers and nitrogen compounds, plastics 
and synthetic rubber in primary forms 

harmonized 

C202 

Manufacture of pesticides and other agrochemical products 

harmonized 

C203 

Manufacture of paints, varnishes and similar coatings, printing ink and 
mastics 

harmonized 

C204 

Manufacture of soap and detergents, cleaning and polishing preparations, 
perfumes and toilet preparations 

harmonized 

C205 

Manufacture of other chemical products 

C206 

Manufacture of man-made fibres 

C211 

Manufacture of basic pharmaceutical products 

C212 

Manufacture of pharmaceutical preparations 

C221 

Manufacture of rubber products 

C222 

Manufacture of plastics products 

C231 

Manufacture of glass and glass products 

116 

harmonized 

no/partially 

no/partially 

harmonized 

harmonized 

harmonized 

harmonized 

 
 
NACE 
Group 

Description 

C232 

Manufacture of refractory products 

C233 

Manufacture of clay building materials 

C234 

Manufacture of other porcelain and ceramic products 

C235 

Manufacture of cement, lime and plaster 

C236 

Manufacture of articles of concrete, cement and plaster 

C237 

Cutting, shaping and finishing of stone 

Harmonized 

no/partially 

harmonized 

no/partially 

harmonized 

harmonized 

no/partially 

C239 

Manufacture of abrasive products and non-metallic mineral products n.e.c. 

no/partially 

C241 

Manufacture of basic iron and steel and of ferro-alloys 

no/partially 

C242 

Manufacture of tubes, pipes, hollow profiles and related fittings, of steel 

harmonized 

C243 

Manufacture of other products of first processing of steel 

no/partially 

C244 

Manufacture of basic precious and other non-ferrous metals 

no/partially 

C245 

Casting of metals 

C251 

Manufacture of structural metal products 

C252 

Manufacture of tanks, reservoirs and containers of metal 

harmonized 

harmonized 

harmonized 

C253 

Manufacture of steam generators, except central heating hot water boilers 

harmonized 

C254 

Manufacture of weapons and ammunition 

no/partially 

C255 

Forging, pressing, stamping and roll-forming of metal; powder metallurgy 

no/partially 

C256 

Treatment and coating of metals; machining 

C257 

Manufacture of cutlery, tools and general hardware 

C259 

Manufacture of other fabricated metal products 

C261 

Manufacture of electronic components and boards 

C262 

Manufacture of computers and peripheral equipment 

harmonized 

no/partially 

harmonized 

harmonized 

harmonized 

117 

 
 
NACE 
Group 

Description 

C263 

Manufacture of communication equipment 

C264 

Manufacture of consumer electronics 

C265 

Manufacture of instruments and appliances for measuring, testing and 
navigation; watches and clocks 

Harmonized 

harmonized 

harmonized 

harmonized 

C266 

Manufacture of irradiation, electromedical and electrotherapeutic equipment 

harmonized 

C267 

Manufacture of optical instruments and photographic equipment 

no/partially 

C268 

Manufacture of magnetic and optical media 

C271 

Manufacture of electric motors, generators, transformers and electricity 
distribution and control apparatus 

C272 

Manufacture of batteries and accumulators 

C273 

Manufacture of wiring and wiring devices 

C274 

Manufacture of electric lighting equipment 

C275 

Manufacture of domestic appliances 

C279 

Manufacture of other electrical equipment 

C281 

Manufacture of general-purpose machinery 

C282 

Manufacture of other general-purpose machinery 

C283 

Manufacture of agricultural and forestry machinery 

no/partially 

harmonized 

harmonized 

harmonized 

harmonized 

harmonized 

harmonized 

harmonized 

harmonized 

harmonized 

C284 

Manufacture of metal forming machinery and machine tools 

harmonized 

C289 

Manufacture of other special-purpose machinery 

C291 

Manufacture of motor vehicles 

C292 

Manufacture of bodies (coachwork) for motor vehicles; manufacture of 
trailers and semi-trailers 

C293 

Manufacture of parts and accessories for motor vehicles 

C301 

Building of ships and boats 

harmonized 

harmonized 

no/partially 

no/partially 

harmonized 

118 

 
 
NACE 
Group 

Description 

Harmonized 

C302 

Manufacture of railway locomotives and rolling stock 

harmonized 

C303 

Manufacture of air and spacecraft and related machinery 

C304 

Manufacture of military fighting vehicles 

C309 

Manufacture of transport equipment n.e.c. 

C310 

Manufacture of furniture 

C321 

Manufacture of jewellery, bijouterie and related articles 

C322 

Manufacture of musical instruments 

C323 

Manufacture of sports goods 

C324 

Manufacture of games and toys 

no/partially 

no/partially 

no/partially 

no/partially 

no/partially 

no/partially 

harmonized 

harmonized 

C325 

Manufacture of medical and dental instruments and supplies 

harmonized 

C329 

Manufacturing n.e.c. 

harmonized 

C331 

Repair of fabricated metal products, machinery and equipment 

no/partially 

C332 

Installation of industrial machinery and equipment 

no/partially 

2.  PRODUCTS  CLASSIFIED  AS  NON  OR  PARTIALLY  HARMONISED  IN  THE  MARKET 

ANALYSIS (PRODUCT LEVEL) 

Nace 
code 

Description 

151

 BY SECTOR 

Manufacture of food products, beverages and tobacco products 

10.89 

Manufacture of other food products n.e.c. 

12.00 

Manufacture of tobacco products 

Manufacture of textiles, apparel, leather and related products 

13.10 

Preparation and spinning of textile fibres 

151  

All PRODCOM codes under the level 4 (four-digit code) NACE hierarchy included in the table are considered as non or 
partially harmonised in the Market Analysis at product level. 

119 

 
 
                                                 
13.20 

Weaving of textiles 

13.30 

Finishing of textiles 

13.91 

Manufacture of knitted and crocheted fabrics 

13.93 

Manufacture of carpets and rugs 

13.94 

Manufacture of cordage, rope, twine and netting 

13.95 

Manufacture of non-wovens and articles made from non-wovens, except apparel 

13.96 

Manufacture of other technical and industrial textiles 

13.99 

Manufacture of other textiles n.e.c. 

14.11 

Manufacture of leather clothes 

14.20 

Manufacture of articles of fur 

15.11 

Tanning and dressing of leather; dressing and dyeing of fur 

15.12 

Manufacture of luggage, handbags and the like, saddlery and harness 

15.20 

Manufature of footware  

Manufacture of wood and paper products, and printing  

16.10 

Sawmilling and planing of wood 

16.21 

Manufacture of veneer sheets and wood-based panels 

16.22 

Manufacture of assembled parquet floors 

16.23 

Manufacture of other builders' carpentry and joinery 

16.24 

Manufacture of wooden containers 

16.29 

Manufacture of other products of wood; manufacture of articles of cork, straw and plaiting 
materials 

17.11 

Manufacture of pulp 

17.12 

Manufacture of paper and paperboard 

17.21 

Manufacture of corrugated paper and paperboard and of containers of paper and paperboard 

17.22 

Manufacture of household and sanitary goods and of toilet requisites 

17.23 

Manufacture of paper stationery 

17.24 

Manufacture of wallpaper 

17.29 

Manufacture of other articles of paper and paperboard 

120 

 
 
18.11 

Printing of newspapers 

18.12 

Other printing 

18.13 

Pre-press and pre-media services 

18.14 

Binding and related services 

18.20 

Reproduction of recorded media 

Manufacture of coke, and refined petroleum products 

19.10 

Manufacture of coke oven products 

121 

 
 
 
 
Manufacture of chemicals and chemical products 

All products within this sector have been considered as harmonised 

Manufacture of pharmaceuticals, medicinal chemical and botanical products 

All products within this sector have been considered as harmonised 

Manufacture of rubber and plastics products, and other non-metallic mineral products  

23.19 

Manufacture and processing of other glass, including technical glassware 

23.41 

Manufacture of ceramic household and ornamental articles 

23.44 

Manufacture of other technical ceramic products 

23.49 

Manufacture of other ceramic products 

23.69 

Manufacture of other articles of concrete, plaster and cement 

23.70 

Cutting, shaping and finishing of stone 

23.91 

Production of abrasive products 

23.99 

Manufacture of other non-metallic mineral products n.e.c. 

Manufacture of basic metals and fabricated metal products, except machinery and equipment  

24.31 

Cold drawing of bars 

24.32 

Cold rolling of narrow strip 

24.33 

Cold forming or folding 

24.34 

Cold drawing of wire 

25.12 

Manufacture of doors and windows of metal 

25.40 

Manufacture of weapons and ammunition 

25.50 

Forging, pressing, stamping and roll-forming of metal; powder metallurgy 

25.71 

Manufacture of cutlery 

25.72 

Manufacture of locks and hinges 

25.73 

Manufacture of tools 

Manufacture of computer, electronic and optical products 

26.52 

Manufacture of watches and clocks 

26.70 

Manufacture of optical instruments and photographic equipment 

122 

 
 
26.80 

Manufacture of magnetic and optical media 

123 

 
 
 
 
Manufacture of electrical equipment 

27.52 

Manufacture of non-electric domestic appliances 

Manufacture of machinery and equipment n.e.c. 

All products within this sector have been considered as harmonised 

Manufacture of transport equipment 

29.20 

Manufacture of bodies (coachwork) for motor vehicles; manufacture of trailers and semi-trailers 

29.31 

Manufacture of electrical and electronic equipment for motor vehicles 

29.32 

Manufacture of other parts and accessories for motor vehicles 

30.99 

Manufacture of other transport equipment n.e.c. 

Other manufacturing, and repair and installation of machinery and equipment  

31.01 

Manufacture of office and shop furniture 

31.02 

Manufacture of kitchen furniture 

31.03 

Manufacture of mattresses 

31.09 

Manufacture of other furniture 

32.11 

Striking of coins 

32.12 

Manufacture of jewellery and related articles 

32.13 

Manufacture of imitation jewellery and related articles 

32.20 

Manufacture of musical instruments 

32.91 

Manufacture of brooms and brushes 

33.11 

Repair of fabricated metal products 

33.12 

Repair of machinery 

33.13 

Repair of electronic and optical equipment 

33.14 

Repair of electrical equipment 

33.15 

Repair and maintenance of ships and boats 

33.16 

Repair and maintenance of aircraft and spacecraft 

33.17 

Repair and maintenance of other transport equipment 

33.19 

Repair of other equipment 

124 

 
 
33.20 

Installation of industrial machinery and equipment 

125 

 
 
 
 
ANNEX 6 – MAIN FINDINGS OF THE EVALUATION OF THE REFIT EVALUATION ON THE 
PRINCIPLE OF MUTUAL RECOGNITION AND THE MUTUAL RECOGNITION REGULATION 
NO (EC) 764/2008 

Mutual recognition is seminal for a proper functioning of the single market for goods. It 
consists of a principle, embedded in Articles 34 and 36 of the Treaty on the Functioning 
of the European  Union (TFEU),  and further elaborated on case law, and of a legal act, 
Regulation  (EC)  No  764/2008  (the  Mutual  Recognition  Regulation),  defining  the 
practical modalities of its implementation.  

If a business is lawfully selling a product in one Member State, it should be able to sell it 
in  other  Member  States  without  adapting  it  to  the  national  rules  of  that  Member  State, 
even  when  there  are  no  common  European  rules  on  how  the  product  has  to  be 
manufactured  (rules  on  i.e.  characteristics  of  the  product,  size,  composition,  etc.).  The 
right to sell a product lawfully marketed in another Member State152 can be refused only 
when  the  Member  State  of  destination  has  diverging  product  requirements  whose 
mandatory  imposition  is  justified  by  the  need  to  protect  a  certain  public  interests,  and 
those requirements are necessary and proportionate for achieving that objective. This is 
the principle of mutual recognition in the field of goods. The application of the principle 
proved  to  be  problematic  in  practice.  Therefore,  in  2008,  the  Mutual  Recognition 
Regulation was adopted. It introduces procedural guarantees to ensure on one hand that 
businesses can easily invoke their right to mutual recognition, and on the other hand that 
Member  States  use  their  right  to  deny  mutual  recognition  in  the  light  of  the 
proportionality principle.  

This evaluation assessed the functioning of mutual recognition in the field of goods, i.e. 
the  mutual  recognition  principle  and  the  Mutual  Recognition  Regulation.  It  looked  to 
what  extent  mutual  recognition  has  achieved  its  original  objectives  in  term  of 
effectiveness, efficiency, relevance, coherence, and EU value-added.  

Effectiveness 

The evaluation assessed the extent to which mutual recognition achieved its objectives. 
The  general  objective  of  the  mutual  recognition  principle  and  Regulation  was  to 
facilitate  free  movement  of  goods  in  the  non-harmonised  area.  Additionally,  the 
Regulation had the following specific objectives: 

 
 
 

To increase awareness about the mutual recognition principle ,  
To ensure legal certainty when using the mutual recognition principle,  
To improve administrative cooperation among national authorities when applying 
the mutual recognition principle  

Overall, the findings of the evaluation show that the principle and the Regulation did not 
meet  their  objectives.  Businesses  are  still  encountering  numerous  obstacles  to  the  free 
movement  of  products  lawfully  marketed  in  another  Member  State.  During  the  2016 
public consultation, they were ranked as the main obstacle to challenging administrative 
decisions denying market access, followed by insufficient administrative cooperation and 

152      Applies also to EEA products 

126 

 
 
                                                 
lack of awareness about mutual recognition. The tools put in place by the Regulation in 
order  to  ensure  awareness,  i.e.  the  Product  Contact  Points,  had  a  limited  effect,  mainly 
due to their suboptimal functioning. Businesses still don't know when mutual recognition 
can  be  used  for  entering  a  market  and  what  their  rights  are.  Furthermore,  the  mutual 
recognition clause has not shed sufficient light on when mutual recognition is applicable. 
Despite  the  regular  recommendations  by  the  Commission  to  insert  the  clause  in  draft 
national  legislation  notified  following  Directive  (EU)  2015/1535153,  or  to  redraft  it  in 
order to ensure clarity, its use is still poor. 

The  tools  put  in  place  by  the  Regulation  had  also  a  very  limited  effect  on  increasing  legal 
certainty  when  using  the  mutual  recognition  principle.  The  lack  of  legal  certainty  appears  to 
remain a major obstacle to unleashing the full potential of the principle, and the main reason why 
Member States and businesses are reluctant towards mutual recognition.    

As  regards  administrative  cooperation,  it  still  needs  to  be  enhanced  in  order  to  facilitate  the 
application of the mutual recognition principle.  

The weak use of the principle of mutual recognition and the very limited impacts the Regulation 
had  in  achieving  the  foreseen  objectives  of  ensuring  free  movement  of  goods  in  the  Single 
Market points that there is a lot of potential to be unleashed. Estimating accurately the magnitude 
of  this  unleashed  potential  is  not  straightforward,  due  to  the  complex  nature  of  mutual 
recognition  and  the  wide  variety  of  products  to  which  it  applies.  However,  several  elements 
indicate  that  the  suboptimal  use  of  mutual  recognition  triggers  significant  costs  and  that 
improving  its  functioning  would  bring  significant  benefits.  The  comparison  of  the  value  of  the 
intra EU exports with domestic consumption154 shows that for harmonised products the value of 
intra EU exports is 110% of domestic consumption, while for the non-harmonised and partially 
harmonised goods it represents only 39%. Therefore, in terms of priorities for the Commission to 
remedy to the ineffectiveness of the regulation, national authorities and citizens ranked first the 
need  to  increase  awareness  of  the  mutual  recognition  principle,  while  businesses  stressed  their 
need  for  effective  remedies  to  take  action  against  decisions  denying  market  access.  If  the 
consultation  did  not  result  in  a  representative  sample  of  sectors,  company  type  and  Member 
States, it provides however a good indication of areas where the scope of mutual recognition can 
be improved. Furthermore, the difficulties in terms of gathering useful data on the functioning of 
mutual recognition needs to be addressed, in order to allow a clearer picture of how the principle 
functions and on its impacts on the free movement of goods.  

Table A6-1: 2016 public consultation  

Ranking of priorities by businesses 

Ensure  that  businesses  have  effective  remedies  at  their  disposal  to  take  action 
against decisions denying mutual recognition when needed 

72% 

Increase  legal  certainty  for  businesses  when  using  mutual  recognition  to  sell 
products abroad 

67% 

Ensure  that  the  procedures  are  duly  followed  when  decisions  denying  market  65% 

153  
154    Value of production-value of extra EU exports +value of intra EU imports  

OJ L 241, 17.9.2015, p. 1–15 

127 

 
 
                                                 
access are taken by national authorities 

Increase  effectiveness  of  mutual  recognition  to  facilitate  access  to  the  internal 
market 

64% 

Facilitate  communication  between  all  actors  involved  in  mutual  recognition 
(business, national authorities, European Commission) 

54% 

Increase general awareness of the mutual recognition principle 

52% 

Table A6-2: 2016 public consultation  

Ranking of priorities by Member States 

Increase general awareness of the mutual recognition principle 

Ensure  that  the  procedures  are  duly  followed  when  decisions  denying  market 
access are taken by national authorities 

51% 

42% 

Ensure  that  businesses  have  effective  remedies  at  their  disposal  to  take  action 
against decisions denying mutual recognition when needed 

40% 

Increase  effectiveness  of  mutual  recognition  to  facilitate  access  to  the  internal 
market 

35% 

Increase  legal  certainty  for  businesses  when  using  mutual  recognition  to  sell 
products abroad 

33% 

Facilitate  communication  between  all  actors  involved  in  mutual  recognition 
(business, national authorities, European Commission) 

31% 

Table A6-3: 2016 public consultation  

Ranking of priorities by citizens 

Increase general awareness on the mutual recognition principle 

Increase  legal  certainty  for  businesses  when  using  mutual  recognition  to  sell 
products abroad 

64% 

52% 

Ensure  that  businesses  have  effective  remedies  at  their  disposal  to  take  action 
against decisions denying mutual recognition when needed 

47% 

Increase  effectiveness  of  mutual  recognition  to  facilitate  access  to  the  internal 
market 

41% 

Ensure  that  the  procedures  are  duly  followed  when  decisions  denying  market  35% 

128 

 
 
 
 
access are taken by national authorities 

Facilitate  communication  between  all  actors  involved  in  mutual  recognition 
(business, national authorities, European Commission) 

23% 

Efficiency  

Overall, the evaluation concluded that the suboptimal use of mutual recognition creates 
additional costs for businesses and prevents them from taking advantage of the benefits 
that mutual recognition might bring. Due to the difficulty of gathering accurate data on 
mutual  recognition,  it  was  not  possible  to  establish  the  global  costs  incurred  by 
businesses.  But  sectoral  evidence  and  the  results  of  the  different  surveys  and 
consultations carried out although not representative show that the costs are significant.  
Relevant  stakeholders  were  consulted  in  order  to  evaluate  to  what  extend  the  costs 
generated  by  using  the  principle  and  the  Regulation  are  proportionate  to  the  benefits  it 
achieved. In terms of costs, the Regulation generated few costs for national authorities: 
the implementation and functioning of the PCPs (EURO 7417-47 450, based on 1 FTE) 
and the costs related to the assessment of products lawfully marketed in another Member 
State (EURO 420 000 in one sector such as fertilisers). They consider these costs to be 
average. The main costs incurred by businesses are rather due to the incorrect application 
of mutual recognition. They have to adapt their products, duplicate tests and procedures 
(EURO 1000-150 000 per product and market), or lose opportunities (EURO 40 000-500 
000 per product and market) because they are obliged to renounce entering a new market. 
Most  of  these  costs  were  considered  to  be  important.  In  terms  of  costs-benefits,  the 
perception  is  quite  mixed.  While  national  authorities  tend  to  agree  that  the  costs  are 
proportionate to the benefits, businesses mostly disagree. They consider that the costs are 
significant, while the benefits were not achieved.   

A  better  functioning  mutual  recognition  would  reduce  the  costs  incurred  by  businesses 
when  they  are  obliged  to  adapt  their  products  or  to  give  up  entering  a  market,  while 
allowing  all  of  the  benefits  listed  above.  A  study  done  for  the  European  Parliament155 
shows that a reduction of barriers to trade could lead to an increase in intra-EU trade of 
more than 100 billion EUR per year. The fact that mutual recognition does not function 
well is, de facto, a regulatory burden triggering barriers to trade. Therefore, any efforts to 
improve  the  functioning  of  mutual  recognition  would  result  in  simplifications  for 
businesses,  e.g.  easier  access  to  markets.    The  remaining  costs  (information  costs  and 
costs related to implementing the Regulation) would become negligible in the light of the 
full benefits achieved.  

Some practical illustrations at sectorial level 

Fertilisers 

155  

The  Cost  of  Non-  Europe  in  the  Single  Market,  'Cecchini  Revisited',  An  overview  of  the  potential  economic  gains  from 
further completion of the European Single Market, CoNE 1/2014 
http://www.europarl.europa.eu/RegData/etudes/STUD/2014/510981/EPRS_STU(2014)510981_REV1_EN.pdf 

129 

 
 
 
 
                                                 
  
The EU fertiliser product market is an economic sector that has between EUR 20 billion 
and  EUR  25  billion  in  annual  turnover  and  approximately  100  000  jobs156.  It  is  partly 
covered by the harmonised legislation157 regulating inorganic fertilisers, leaving the other 
fertilising  materials  regulated  at  national  level.  Thus,  intra-EU  movement  of  national 
fertilisers  should  be  covered  by  the  principle  of  mutual  recognition,  but  most  Member 
States  expressed a strong reluctance to  accept mutual  recognition  due to  environmental 
and  human  health  concerns,  socio-economic  aspects,  and  alleged  administrative  burden 
and introduced prior authorisation procedures158. 

The ex-post evaluation of the Fertilisers Regulation and the implications of the entry into 
force  of  the  Mutual  Recognition  Regulation  for  the  fertilising  products  sector159  found 
that in 2009, the year of entry into force of MRR, an annual average of no more than 5 to 
10  fertilising  products  had  been  placed  on  the  market  under  the  application  of  the 
procedures for mutual recognition in most Member States. Since then, the yearly reports 
of  the  Member  States  on  the  implementation  of  the  Regulation  show  that  20  Member 
States  out  of  27  specifically  mentioned  issues  relating  to  fertilising  products.  They  are 
reported  as  one  of  the  product  categories  for  which  economic  operators  submit  many 
information requests to PCPs, which means that there is a significant interest in intra-EU 
trade,  but  that  economic  operators  are  uncertain  about  the  requirements  applicable  in 
different Member States. 

National  producers  often  lack  knowledge  of  the  legal  situation  in  other  Member  States  and  are 
unsure  whether  they  should  adapt  their  products  to  the  requirements  of  the  Member  State  of 
destination  by  modifying  the  product  (which  means  additional  costs)  or  if  they  can  rely  on 
Mutual Recognition procedures (which may cause a delay for access to the market and costs of 
prior authorisation procedure in some Member States). 160161 

In  order  to  solve  the  recurrent  issues  faced  by  economic  operators  in  the  area  of 
fertilisers, an optional  harmonisation solution was preferred for fertilising  products that 
have not been harmonised.   

Food supplements 

Food supplements162 are concentrated sources of nutrients (or other substances) with nutritional 
and physiological effect,  marketed by business operators in the food sector. Such goods can be 
sold in “dose” form, such as pills, tablets and capsules, and could contain: 

 

 

156  
157  

158  

159  
160  

161  

162  

Nutrients (vitamins and minerals); 

Botanicals;163 

See http://ec.europa.eu/enterprise/sectors/chemicals/files/fertilizers/final_report__23jan2012_en.pdf 
Regulation (EC) No 2003/2003 of the European Parliament and of the Council of 13 October 2003 relating to fertilisers, OJ 
L 304, 21.11.2003, p. 1 
See also the guidance document on the application of the Mutual Recognition Regulation to prior authorisation procedures, 
2010: http://ec.europa.eu/growth/single-market/goods/free-movement-sectors/mutual-recognition/index_en.htm   
Available at: http://ec.europa.eu/growth/sectors/chemicals/specific-chemicals/index_en.htmas 
See  the  Commission  Staff  Working  Document  -  Impact  Assessment  accompanying  the  Proposal  for  a  Regulation  of  the 
European Parliament and of the Council laying down rules on the making available on the market of CE marked fertilising 
products and amending Regulations (EC) No 1069/2009 and (EC) No 1107/2009 (COM(2016) 157 final) 
See  the  Commission  Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  laying  down  rules  on  the 
making available on the market of CE marked fertilising products and amending Regulations (EC) No 1069/2009 and (EC) 
No 1107/2009, (COM(2016) 157 final). 
See annex 13 of the Evaluation for the full case study on food supplements  

130 

 
 
                                                 
 

Other substances (e.g. amino acids). 

The three main issues linked to mutual recognition164 are: 

 

 

 

Maximum levels of vitamins and minerals165 

Substances other than Vitamins and Minerals166 

Botanicals and botanical preparation167 

Information collected from stakeholders show a very heterogeneous picture of the application of 
mutual  recognition  in  the  sector,  with  many  issues  faced  by  companies,  relating  to  both 
differences in national procedures/requirements and to the specific nature of the various products 
included in the sector. Regarding the former, different Member States follow different procedures 
and  rules,  in  addition  to  a  very  dissimilar  recognition  and  application  of  the  principle,  creating 
issues and obstacles that companies may have to deal with when trying to enter a new market and 
often  culminating  in  having  different  products  for  different  countries.  Regarding  the  latter, 
stakeholders highlight the complexity of a sector with  many different products, ingredients and 
their  combinations,  under  different  levels  of  controls  and  requirements  among  Member  States, 
making  it  difficult  to  have  a  uniform  and  clear  picture  of  the  whole  sector  and  the  possible 
strategies to overcome barriers.168  

Different countries, different rules 

Since the sector is not fully harmonised and has limited regulation at EU level,169 companies and 
their  products  are  subject  to  national  legislation  and  mutual  recognition.  The  main  issues  for 
companies arise from:  

 

 

Different classification of ingredients or substances: as already mentioned, some products 
may  be  classified  as  food  supplements  by  a  Member  State,  while  another  country  – 
sometimes  the  very  neighbour  –  can  consider  them  to  be  medicines,  therefore  with 
completely different requirements, rules and procedures to be followed for their marketing;  

Different  levels  of  ingredients  or  substances  allowed.  One  of  the  most  (and  most 
differently) regulated elements is the level of ingredients (e.g. vitamins, minerals and other 
substances)  allowed  in  a  specific  products  at  national  level.  Member  States  tend  to  have 

163  
164  
165   Many Member States established national maximum levels for the amounts of vitamins and minerals in food supplements, 

Plant parts, concentrated sources of plants or their extracts or derivatives with a physiological effect. 
Food Supplement Europe (2016), Input into the REFIT of the Mutual Recognition Regulation 764/2008. 

166  

167  

168  

169  

while others preferred not to have specific maximum levels. The existence of particularly low levels applied in certain 
Member States, together with the large differences between the levels applied for the same substances across the EU, make it 
extremely difficult for companies to manufacture one single product for whole of the EU 
Some Member States apply positive lists166 with specific conditions to their use. In addition, some Member States may 
consider certain ingredients as for medicinal use only 
Botanicals are used in a wide variety of food supplements. Many Member States have positive lists, including conditions of 
use. The content of these lists differ widely, and certain botanicals are banned in different Member States because of 
medicinal status, while they are widely marketed as food supplements in others. 
This is particularly true for botanical products: while the use of botanicals and other derived preparations need to be 
compliant with requirements of Regulation (EC) No 178/2002, stakeholders underlined how no real steps forward seem to 
have been made to clarify the framework, without a centralised authorisation procedure – which would be extremely helpful 
– for the use of botanicals or to determine the classification of botanicals as either medicines or food supplements. This, as 
well as the large differences among Member States in the definition of botanicals and lists of products/ingredients which are 
allowed or not, create an uncertain and difficult environment for companies to operate. 
Some exceptions include the Regulation (EC) No 1924/2006 on nutrition and health claims, or Directive 2002/46/EC, with a 
list of substances that can be used for food supplement production, but whose implementation and monitoring is entrusted to 
the individual Member States. 

131 

 
 
                                                                                                                                                 
their own levels that apply to the same products, creating problems for companies which 
need to adapt their products and formulas to comply; 

 

Terminology and labels: there may occur that terms and labels are not uniformly accepted 
across  Europe  (e.g.  probiotic).  This  requires  companies  to  change  and  adapt  labels  and 
packaging if it is the case.  

In addition, it appears that there is not full uniformity in the national systems in place, with few 
Member  States170  that,  unlike  the  others,  do  not  rely  on  a  notification-based  system,  which, 
according to stakeholders, may tend to constitute a sort of pre-market authorisation instead of a 
procedure to simply notifying national authorities about the products to be marketed and register 
information on labels.  

In the end, what emerges is that there is not a real issue of complexity of procedures, but rather 
the  co-existence  of  many  different  rules,  requirements  and  practices  at  national  level  that  help 
companies  investing  time  and  resources  learn  and  cope  with  them,  especially  in  countries  with 
high  levels  of  restrictions.171  However,  since  most  of  the  companies  present  in  this  sector  are 
SMEs, resources and time become crucial elements for their survival.   

The application of mutual recognition  

Stakeholders  find  the  application  of  mutual  recognition  to  be  difficult  in  the  complex 
environment described above. They underline how national authorities tend to focus on national 
legislation when deciding, without taking into account other EU Member States certifications or 
proof of the fact that the product is already lawfully marketed in another Member State.  

In addition, existing instruments meant to favour the application of mutual recognition – such as 
Product Contact Points – are not really instrumental in helping companies, given their role of as 
information hubs, with no real consultative or assessing capabilities and tasks.  

Companies emphasise how the main reason used by national authorities to delay or even block a 
product from being marketed in a Member State concerns the existence of potential safety issues 
and the need for the authorities to protect the consumers, which cannot be easily challenged by 
companies.    Sometimes,  however,  companies  report  a  lack  of  transparency  in  the  reason  for 
denial.  

In this regard, stakeholders suggest how the fact the burden of proof is on companies – and not 
on  national  authorities  –  when  demonstrating  that  a  product  is  not  dangerous,  may  limit  their 
action and ability to challenge a decision, considering time and resources needed.  

Companies may see also a potential effort of national authorities not to allow (or delay) foreign 
companies in entering the local market in order to reduce competition for national companies.  

Considering  the  potential expenses  and  (considerable)  use  of  time  and  resources  to  challenge a 
decision  taken  by national authorities through  judicial procedures, sometimes  such an option  is 
not considered by companies. According to stakeholders, this can be due to: 

 

Resources  needed,  as  mentioned.  For  a  company  –  especially  an  SME  –  such  resources 
needed  can  be  high  to  discourage  it  from  pursuing  such  action.  For  instance,  an  Italian 
SME active in the area of food supplement suggested how, on average, costs for lawyers 

170  
171  

AT, NL, SE, SI and UK.  
Such as AT, DE, FI, HR, SE. 

132 

 
 
                                                 
and  appealing  procedures  can  amount  to  around  EUR  20,000  per  product,  but  other 
stakeholders provided more extreme examples; 

Uncertainty of the final outcome of the procedure, which can result in another and definite 
loss for the company; 

Preference not to antagonise national authorities, which will be crucial for the approval of 
the many other products that a company in this sector usually has and tries to market. 

 

 

In the light of these difficulties, stakeholders tend to:  

 

Adapt  the  product  to  the  national  requirements.  Clearly  also  this  decision  entails  some 
costs.  

o 

o 

An Italian SME indicated how adapting the product to sell it as a medicine could be 
virtually unbearable for an SME in terms of time and costs (with the need to develop 
a complete dossier, with testing, clinical tests and documentation), easily amounting 
to thousands of EUR.  

Adapting a product to different limits of ingredients or substances can also require 
some  effort from the company, since it requires  a new technological development, 
with  lab  costs  and  feasibility  studies.  Such  costs  can  be  important  for  an  SME  (at 
least  EUR30-50,000  in  each  case),  not  considering  the  potential  impact  on  the 
production lines, which need to be differentiated even for a single ingredient. This 
strategy  is  not  likely  to  result  in  regaining  the  amount  spent  when  the  targeted 
market is too small not to justify such investments. 

 

 

Not entering the market at all, when companies realise that costs and efforts will not lead 
to a positive solution or, even if it is the case, they will be too high to be sustained. In this 
case  it  can  be  very  difficult  to  estimate  the  costs  and  potential  losses  for  companies,  but 
there  is  no doubt that  this  can  result  in  losing  money  as  well  as  possible  damages  to  the 
company’s image and reputation, especially after a judicial procedure; 

Trying  to  look  for  a  “least  common  denominator”  among  a  group  of  Member  States, 
which  can  have  similar  rules  and  requirements  and  targeting  this  group  with  a  single 
product that would easily comply with all different national regulations. 

Products in contacts with drinking water172 

Considering  available  information,  it  is  possible  to  estimate  the  total  turnover  of  the  sector 
between  40  and  43  billion  per  annum,173  while  the  number  of  companies  operating  can  be 
estimated  at  around  7,000  units,  with  a  heterogeneous  distribution  among  small  medium  and 
large enterprises.174 

Tests and certifications concerning the products in contact with drinking water fall mainly under 
several  categories:  mechanical,  hygienic  and  audits.  The  cost-spread  for  these  certifications  as 
well  as  statutory  audits  is different  among  EU  Member  States.  In  Germany,  for  example,  audit 

172  
173  

174  

See annex 13 of the Evaluation for the full case study on products in contact with drinking water  
Eurostat  data  for  product  categories  is  not  specific  to  drinking  water  contact  products,  some  estimation  based  on  expert 
evaluation are available thanks to data and document collection 
Panteia, Economic Effects of Article 10 of the Drinking Water Directive, 2016 

133 

 
 
                                                 
costs amount to a figure around 14% of the total costs for tests and certifications, while in other 
countries like U.K., Netherlands and France such a cost is around 1% of the total.175 

Water  taps  are  among  the  products  whose  commercialization  is  more  problematic, 
according to stakeholders. Water taps segment covers about  35% of the entire turnover 
of companies active in the area of products in contacts with drinking water.  

Stakeholders revealed how currently the application of mutual recognition with regard to 
these products is seriously deficient, thus creating limitations to both competition among 
businesses and availability of products for consumers in the EU single market. The main 
issue  stems  from  the  absence  of  comprehensive  EU  harmonised  requirements  on  such 
products.  Article  10  of  Directive  98/83/EC  (Drinking  Water  Directive)176  requires 
Member  States  to  verify  that  the  materials  and  substances  used  in  the  treatment  and 
distribution  systems  are  not  present  in  drinking  water  “in  concentrations  higher  than  is 
necessary for the purpose of their use and do not, either directly or indirectly, reduce the 
protection of human health”.  

The  implementation  and  monitoring  measures  are  left  to  the  Member  States,  which  have 
established their own national test and certification bodies177 to assure the quality of materials and 
to issue licences for the sale of products in contact with drinking water. Each body assesses the 
conformity  of  materials  and  products  in  contact  with  water  for  human  consumption  against 
specific  requirements  and  criteria  that  vary  at  national  level  (for  example  as  regards  the 
compliance  of  products  with  a  specific  composition  or  the  effects  of  the  materials  on  the 
microbiological growth in the water). 

This framework creates the conditions for double or multiple testing of products in contact with 
drinking  water  in  the  EU  market.  Companies  willing  to  obtain  a  licence  for  marketing  their 
product  in  a  single  Member  State  have  to  comply  with  all  the  national  test  criteria  and 
requirements  as  defined  by  in  the  law  and  by  the  relevant  test  and  certifications  bodies  in  that 
Member  State.  However,  when  they  want  to  market  that  same  product  in  other  Member  State, 
they  are  typically  required  to  repeat  those  same  tests  by  the  relevant  bodies  in  each  individual 
Member State they want to enter, as Member States not only have different test criteria, but also 
do  not  recognise  each  other’s  tests.  This  practice  results  in  an  expensive  and  time  consuming 
reiteration of activities for businesses, which are forced to repeat tests and acquire certifications 
several times in the EU market, into higher final prices for consumers and – more importantly for 
our  analysis  –  into  the  infraction  of  mutual  recognition  principle.  As  pointed  out  by  a 
representative  of  one  of  the  largest  European  manufacturer  of  hydraulic  accessories  and 
components,  it  is  currently  not  possible  for  a  business  to  market  its  products  in  more  than  few 
countries178  at  the  same  time  in  Europe,  mainly  due  to  additional  testing  and  certifications  that 

175  
176  
177  

178  

Figawa, Member Survey, 2016 
Concerning the quality assurance of treatment, equipment and materials in contact with drinking water. 
FIGAWA reports the following list of national test and certification bodies: Österreichische Vereinigung für das Gas- und 
Wasserfach (AT), BELGAQUA (BE), Sekretariatet for byggevarer godkendt til drikkevand (DK), VTT Expert Services (FI), 
Centre Scientifique et Technique du Bâtiment (FR), Deutscher Verein des Gas- und Wasserfaches (DE), National Institute of 
Environmental  Health  (HU),  Ministerio  della  Salute  (IT),  Kiwa  NL  (NL),  Państwowy  Zakład  Higieny  (PL),  Instituto 
Nacional de Saude (PT), Institut Za Varovanje Zdravja Republike Slovenije (SI),  Asociación Española de Normalización y 
Certificación  (ES),  Kiwa  Swedcert  (SE),    Schweizerischer  Verein  des  Gas-  und  Wasserfaches  (CH),  Water  Regulations 
Advisory Scheme (UK). 
The countries mentioned by the interviewee in these respect are AT, DE, and NL. Indeed, the interviewee stated that initial 
product certifications are sought and obtained in these MS, as the laboratories having the necessary technical instrumentation 
and know-how for complex (mechanical and hygiene) testing  are mainly settled there. Moreover, the interviewee company 
has  a  preference  for  German  speaking  countries  due  to  the  absence  of  language  barrier  in  interacting  with  test  and 
certification bodies. 

134 

 
 
                                                 
shall be taken in each Member State requiring so. In some instances, the cost of additional testing 
may even exceed the cost of initial testing and certification.  

As an example, the interviewee reported that, in the context of EUR 2 million project aimed at 
selling  a  single  hydraulic  product  in  15  EU  Member  States,  the  total  cost  for  the  initial 
certification of such product amounted to EUR 35,000, while cost the double testing in a single 
country (FR) was EUR 38,000. Similarly, for a large project worth EUR 60 million concerning 
the renewal of product present on the market for a long time, interviewed stakeholder expects the 
costs  for  initial  certifications  (estimated  at  around  EUR  1  million)  to  double  when  trying  to 
market the product in all the 28 Member State due to additional certification. 

Moreover, companies have to deal with the auditors of the different national certification bodies 
who periodically conduct audit visits concerning the quality certifications already acquired. The 
current cost reported by the interviewed stakeholder for managing all these certifications (which 
are, for drinking water only, around 1,350) is around EUR 2.3 million per year. Remarkably, all 
of these costs faced by businesses are passed on to consumers via final prices. 

The problem of double and additional testing is particularly acute in some countries. Stakeholders 
mentioned how Member States such as Spain, France, UK, and more in general the Scandinavian 
countries, can be seen as the most problematic in this respect. Businesses may find double testing 
not only expensive in terms of fees to be paid to repeat the same test in different Member States, 
but also extremely time consuming. The time that elapses between the registration for tests and 
the certification of approval typically can span from six up to 12 months, and may even reach 24 
months  in  more  complex  circumstances.  For  companies,  this  obviously  results  into  foregone 
profits due to the delayed market access. 

Crucially,  when  businesses  make  the  point  of  mutual  recognition  in  dealing  with  national 
authorities in other MS, the latter typically refer to the application of the relevant national norms 
and legislation, rather than EU Legislation.  

From the point of view of businesses, there is a generalized lack of awareness (if not deliberate 
disregard) of the mutual recognition principle by national test and certification bodies.  

Moreover,  interviewees  reported  “cherry  picking”  by  national  authorities,  as  some  tests  and 
certifications  presented  by  businesses  can  be  accepted  by  some  MS,  while  other  tests  shall  be 
repeated.  Businesses  are  simply  asked  to  comply  with  national  requirements  and  test  criteria, 
even though their products underwent the same testing in other countries.  

However,  businesses  are  reluctant  to  bring  national  authorities  to  court  to  see  the  principle  of 
mutual recognition applied. There are two main reasons behind this. First, businesses do not want 
to  see  their  long-lasting  relationship  with  national  authorities  jeopardised  just  to  seek  the 
application  of  mutual  recognition  to  a  single  product.  In  other  words,  they  prefer  avoiding 
confrontation  with  national  authorities  and  complying  with  national  requirements  by  repeating 
tests,  mainly  because  they  are  concerned  of  being  treated  unfavourably  in  the  future.  Second, 
businesses are concerned that, in absence of harmonised rules at EU level on hygienic testing, the 
enforcement  of  mutual  recognition  with  respect  to  materials  and  products  in  contact  with 
drinking  water  may  start  a  “race  to  the  bottom”  among  producers  as  regards  the  quality  of 
products,  a  fact  which  is  expected  to  negatively  impact  the  safety  of  consumers.  Finally, 
interviewed  business  associations  also  reported  how  among  its  members  there  is  a  problem  of 
awareness  about  mutual  recognition.  While  companies  dealing  with  products  in  contact  with 
drinking water are aware of and well-versed in relevant legislation such as Regulation (EU) No 
305/2011 (Construction Products Regulation) or Directive 98/83/EC (Drinking Water Directive), 
are less aware about the possibility of benefiting from mutual recognition. 

135 

 
 
Food contact material179 

Food  contact  materials  (FCM),  including  food  packaging,  are  only  partially  harmonized  at  the 
EU level and subject both to extensive national regulation and to extended practical scrutiny by 
the  competent  authorities,  which  may  be  partially  justified  by  the  potential  impact  of  these 
products on public safety and more precisely public health. 

The food and drink industry in general is the EU's biggest manufacturing sector in terms of jobs 
and  value  added.  The  EU  boasts  an  important  trade  surplus  in  trade  in  food  and  EU  food 
specialities are well appreciated overseas. In the last 10 years, EU food and drink exports have 
doubled,  reaching  over  €90  billion  and  contributing  to  a  positive  balance  of  almost  30  billion. 
The FCM sector in particular has an approximate annual turnover of €100 billion.  

The range of the non-harmonised aspects of the FCM industry was recently examined through a 
2016  JRC  Study  on  the  European  regulatory  and  market  situation  of  non-harmonised  food 
contact  materials.180  The  Study  found  that  due  to  the  lack  of  harmonisation  of  materials  listed 
under  the  framework  regulation  the  sector  was  subject  to  mutual  recognition.   Specifically,  the 
study  highlighted  a  lack  of  detail  in  relation  to  requirements  and  quality  assurance  towards  the 
declaration  of  compliance  and  supporting  documents,  certification  where  applicable,  basis  for 
enforcement  and  sanctions.  Tellingly,  the  Study  argued  that  this  was  a  hurdle  for  competent 
authorities as well, rather than only for economic operators. Indeed, FCM is an industry in which 
the Member States have a complementary authority, allowing them to exercise a certain margin 
of  discretion,  but  only  within  the  limitations  permitted  by  the  FCM  Regulation,  the  procedural 
norms  established  in  relation  to  EFSA181,  and  the  logic  of  the  Mutual  Recognition  Regulation. 
From  a  Member  State  perspective,  the  mirror  image  of  this  competence  is  the  need  to  be 
relatively specific in relation to the criteria and processes that they apply to make their decisions. 
This can be problematic in practice. 

At  the  national  level,  requirements  on  declarations  of  conformity  to  be  provided  by 
economic  operators  and  supporting  documents  lack  guidance  and  associated  quality 
criteria. Self-regulation can address this to some extent by providing additional sectorial 
guidelines, but it is unclear whether these are known and applied in particular by SMEs.  

National  measures  on  specific  materials  are  mainly  based  on  lists  of  authorised 
substances and corresponding restrictions. Close to 8,000 substances were found. Some 
materials are regulated by more than 10 Member States (metal, glass) and some only by a 
few  (wood).  National  rules  for  ceramics,  glass  and  metals/alloys  cover  about  15  heavy 
metals and ban substances such as barium and mercury. There are between 100 and over 
5,000  substances  authorised  for  each  category  of  the  other  materials.  Only  15-35  %  of 
substances considered nationally are in the lists that EFSA reported as being adequately 
risk assessed. 

There  is  a  lack  of  concerted  strategies  for  the  monitoring  of  various  FCMs  among 
Member States. This can be perceived as grey area for the systematic assurance of food 
safety. The level of non-compliance is not greater overall for non-harmonised materials, 

179     See annex 13 of the Evaluation for the full case study  
180  

food  contact  materials 

Non-harmonised 
https://ec.europa.eu/jrc/en/publication/eur-scientific-and-technical-research-reports/non-harmonised-food-contact-materials-
eu-regulatory-and-market-situation-baseline-study  

regulatory  and  market 

situation,  2016, 

the  EU: 

JRC; 

in 

see 

181      European food and safety authority  

136 

 
 
                                                 
but it is prevalent for their imports.  Enforcement also suffers from lack of standards or 
test methods. 

To  economic  operators,  the  lack  of  transparency  and  accessibility  on  applicable 
requirements, rules and procedures is the key challenge: when moving from one Member 
State to the next, it is challenging to identify (a) whether national rules exist; (b) who the 
competent authority is; (c) what the applicable requirements for their specific FCMs are; 
and (d) whether the MR Regulation is a satisfactory solution.  

The  interrelationship  between  the  FCM  Regulation  and  the  Mutual  Recognition 
Regulation is not clear to economic operators. In practice, there is significant familiarity 
with  the  FCM  Regulation  as  such  and  with  applicable  rulesets  in  major  markets,  but 
economic operators are insufficiently aware of the principles and scope of application of 
the Mutual Recognition Regulation and its ability to facilitate compliance with specific 
national  rules.  As  noted  in  the  2016  study, this  lack  of  clarity  “leads  industries to  seek 
external  legal  advice,  which  adds  to  costs  and  may  result  in  lengthier  authorisation 
processes and delayed market access. It can also result in a greater focus on certification 
and accreditation systems at industrial level”. 

Road circulation of mobile machinery 

The mobile machinery industry182 consists of a series of products across sectors (such as 
agricultural  machinery  (excl.  tractors),  construction  machinery,  garden  equipment, 
municipal  equipment).  The  total  production  value  in  the  EU  amounted  to  €10.3bn  in 
2013183.  Despite  the  existence  of  a  number  of  EU  harmonisation  measures  applying  to 
mobile machinery184, the road approval aspect of mobile machinery is not subject to EU 
harmonisation and thus mutual recognition should apply. However, mobile machines are 
still facing a series of different requirements across EU Member States when requesting 
road approval causing costs for manufacturers, authorities, users and citizens. 

The absence of harmonised requirements for the road circulation of mobile machinery in 
the EU has led to these specific problems: 

-  

Different requirements for road circulation of mobile  machinery  are applicable in 
different  Member  States.  Road  approval  is  necessary  as  required  by  the  relevant 
Member  States.  This  procedure  causes  direct  costs  (administrative  burdens  for 
manufacturers  and  regulatory  charges  –  such  as  third  party  testing  and  other 
inspection activities) and indirect costs to industry (time delays in the introduction 

182   Mobile machinery refers to any self-propelled mobile machine or vehicle, with a maximum design speed higher than 6 km/h, 

183  

184  

running on tyres and that is not intended for carrying passengers or goods on public roads 
Study  on  the  EU  harmonisation  of  the  requirements  for  the  road  circulation  of  mobile  machinery  –  FWC 
ENTR/172/PP/2012/FC/Lot1. 
http://ec.europa.eu/DocsRoom/documents/17786/attachments/1/translations/en/renditions/native 
Amongst  others:  NRMM  Directive  97/68/EC,  Outdoor  Noise  Equipment  Directive  2000/14/EC,  Machinery  Directive 
2006/42/EC, Regulation (EU) No 167/2013 

137 

 
 
 
 
                                                 
of new products, reduced product innovation etc.) as well as indirect costs to others 
(administrative costs for MS governments, administrative burdens for dealers, time 
delay in delivery etc.). 

-  

(additional 

logistics,  administrative 

Compliance  costs  related  to  non-harmonised  requirements  are  causing  direct 
translation,  additional 
industry  costs 
manufacturing & design costs) which cause indirect industry costs (higher product 
prices,  barriers  to  market  entry  etc.).  Based  on  the  market  power  of  the  industry 
such  costs  may  be  further  passed-on  to  downstream  clients  (in  the  form  of 
increased prices or  different prices across Member States, differentiated access to 
machines); 

Costs  created  by  the  application  of  the  different  national  requirements  consist  of  both 
direct  and  indirect  costs.  Direct  costs  for  the  industry  in  complying  with  existing 
legislation  add  up  to  €90  m  in  the  EU.  This  corresponds  to  1.3%  of  their  turnover. 
Indirect  industry  costs  were  also  identified,  such  as  time  delays  on  the  introduction  of 
products, reduced innovation, higher product prices or barriers to entry as well as reduced 
choice for consumers and administrative burdens for national administrations. Barriers to 
market  entry  are  impacting  above  all  SMEs  who  consider  it  more  than  other  firms  too 
challenging to enter new Member States markets and to comply with their specific rules. 

Coherence 

Overall, the evaluation shows that there does not seem to be any contradiction between 
mutual  recognition  and  other  EU  policies  for  achieving  the  internal  market  and 
facilitating  the  free  movement  of  goods  in  the  EU.  This  conclusion  relies  on  the 
Commissions  internal  analysis  and  is  confirmed  by  the  results  of  the  2016  public 
consultation. There is a consensus among stakeholders as regards to the coherence of the 
Regulation with regard to other EU pieces of legislation. Most of the respondents are not 
aware  of  any  overlaps  between  the  Regulation  and  other  initiatives/legislation/policies. 
The  mutual  recognition  principle  and  the  Regulation  complement  each  other  and  are 
coherent with a number of initiatives for achieving the internal market and facilitating the 
free  movement  of  goods  in  the  EU,  such  as  the  "Transparency"185,  the  Construction 
Products  Regulation186,  The  SOLVIT  network187  and  EU  harmonisation  legislation.  A 
minor part of respondents to the 2016 public consultation indicated that there are some 
overlaps linked to  SOLVIT, RAPEX188, ICSMS189  and  Regulation  765/2008  on  market 
surveillance190.  However,  the  analysis  of  their  individual  replies  shows  that  their 
perception is due to a misunderstanding of the EU legislation identified rather than to real 
overlaps.  

Relevance  

185  

186  
187  
188  
189  
190  

Directive (EU) 2015/1535 laying down a procedure for the provision of information in the field of technical regulations and 
of rules on Information Society services OJ L 241, 17.9.2015, p. 1–15 
Regulation (EU) No 305/2011 on Construction products OJ L 88, 4.4.2011, p. 5–43 
http://ec.europa.eu/solvit/what-is-solvit/index_en.htm  
See above 139  
Internet-supported information and communication system for the pan-European market surveillance 
OJ L 218/30, 13.08.2008 

138 

 
 
                                                 
Mutual recognition is "one of the most appreciated innovations of the EU"191, as it aims 
to achieve a deep market integration while respecting diversity and regulatory autonomy 
among Member States. It is seen as an alternative to harmonisation, when the latest is not 
necessary,  justified  and  proportionate.  There  are  currently  0.99  million  enterprises 
operating  in  the  non-harmonised  area.    Furthermore,  mutual  recognition  is  particularly 
relevant for supporting innovation, where it represents the only alternative for businesses 
wishing  to  market  their  new/innovative  products  in  other  Member  States.    This 
conclusion justifies the need for a continued effort to refine and improve the functioning 
of mutual recognition and achieve full potential of the internal market.    

EU added value  

The  evaluation  shows  a  general  consensus  among  stakeholders  that  mutual  recognition 
brings  added  value  to  the  EU.  It  creates  the  possibility  to  market  products  in  other 
Member  States  that  are  already  lawfully  marketed  elsewhere,  while  maintaining  the 
Member  States'  regulatory  autonomy  and  diversity.  It  is  widely  acknowledged  that  the 
objectives it sets out can be met only by acting at EU level. Throughout the consultation 
process, stakeholders were almost unanimous as regards the necessity of having an EU 
legal instrument for achieving more and better mutual recognition. 

191  

"Mutual  recognition:  economic  and  regulatory  logic  in  goods  and  services", Bruges  European  Economic  Research  Papers, 
2012, Jacques Pelkmans 

139 

 
 
 
 
 
                                                 
ANNEX 7 ASSESSED LITERATURE AND JURISPRUDENCE  

1.  LITERATURE  

 

 

BIS  publication  (2011):  The  economic  consequences  for  the  UK  and  the  EU  of 
completing the Single Market 

BIS  publication  (2013)  :  Optimal  Integration  in  the  Single  market:  A  Synoptic 
Review  

  Moïsé, E. 2013. The impact of trade facilitation on developing countries. GREAT 

Insights, Volume 2, Issue 8. November 2013. Maastricht: ECDPM 

  M.  Vancauteren  and  D.  Weiserbs,  ULC  :Intra-European  Trade  of  Manufacturing 

Goods: An extension of the gravity model 

 

 

 

 

 

 

Jan  Guldareg  Jorgensen  and  Philipp  J.H.  Schroder,  Harmonisation  versus  Mutual 
Recognition,  Some  pitfalls  for  the  coordination  of  product  standards  under 
imperfect competition, Discussion papers on Business and Economics No.23/2014 

Natalie  Chen  and  Dennis  Novy,  International  Trade  Integration:  A  Disaggregated 
Approach, 2009, CEP Discussion Paper No 908 

Business  Europe  (2014):  Position  paper:  Evaluation  of  the  application  of  the 
principle of mutual recognition mutual recognition principle of goods 

CSES (2014): Evaluation of the Internal Market Legislation for Industrial Products 

Copenhagen Economics (2012): Delivering a stronger single market 

Laurens  Ankersmit,  What  if  Cassis  de  Dijon  were  Cassis  de  Quebec?  The 
assimilation  of  goods  of  third  countries  origin  in  the  internal  market,  Common 
Market Law Review 50: 1387-1410,2013 

  Markus  Mostl,  Preconditions  and  limits  of  mutual  recognition,  Common  Market 

Law Review 47:405-436, 2010 

 

 

 

Christine Janssens (2013): The principle of mutual recognition mutual recognition 
principle in EU law 

Kerber  and  Van  den  Bergh,  Mutual  Recognition  Revisited:  Misunderstandings, 
Inconsistencies, and Suggested reinterpretation, Kyklos, Vol.61, 2008, No. 3, 447-
465 

HM Government UK (2013): Review of the Balance of Competences between the 
United Kingdom and the European Union - The Single Market 

  Mattera, The principle of mutual recognition and respect for national, regional and 

local identities and traditions, Kostoris and Schiopa (Eds.) 

140 

 
 
  Weiler,  Mutual  recognition,  functional  equivalence  and  harmonisation  in  the 
evolution  of  the  European  commun  market  and  the  WTO,  Kostoris  and  Schiopa 
(Eds.) 

  Mattera,  The  principle  of  mutual  recognition in the European integration process, 

Palgrave Macmillan, 2005, pp. 1-24  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amstrong, Mutual recognition, Barnard and Scott(Eds.) 

Amstrong,  The  law  of  the  single  European  market:  unpacking  the  premises,  Hart 
Publishing, 2002, pp. 225-267 

Patrick A. Messerlin (2011) The European Union single market in goods: between 
mutual recognition and harmonisation, Australian journal of International Affairs, 
65:4, 410-435 

Davies, Is mutual recognition an alternative to harmonisation: lessons on trade and 
tolerance of diversity from the EU, Bartels and Ortino (Eds.),  

Davies, regional trade agreements and the WTO legal system, OUP, 2006, pp. 265-
280 

Bartels, The legality of the EC mutual recognition clause under WTO law, Journal 
of International Economic law, 2005, 691-720 

Toulemonde, A welfare analysis of the principle of mutual recognition, European 
Economic review 60, 2013,1-16 

OECD 
Challenges, OECD Publishing. 

(2013):  International  Regulatory  Co-operation:  Addressing  Global 

OECD  (2013):  Trends  in  international  regulatory  co-operation,  in  International 
Regulatory Co-operation: Addressing Global Challenges, OECD Publishing. 

Orgalime (2014): Position paper: Suggestions for improving the application of the 
mutual recognition principle 

Pelkmans, Jacques (2012): Mutual Recognition: economic and regulatory logic in 
goods and services 

Pelkmans, Jacques (2011): the case for “more Single Market” 

Pelkmans, Jacques (2010): Mutual Recognition: rationale, logic and application in 
the EU internal goods market 

Pelkmans,  Jacques  (2003):  Mutual  Recognition  in  Goods  and  Services:  An 
economic perspective 

Pelkmans, J., (2011), the case for “more Single Market” 

141 

 
 
 

 

 

 

 

 

 

 

 

 

Pelkmans, J., Correia de Brito, A. (2015), Transatlantic MRAs: Lessons for TTIP?, 
CEPS Special Report, no. 101, March, Brussels 

Pelkmans,  J.,  Labory  S.,  Majone,  G.  (2000),  Better  EU  regulatory  quality: 
assessing current initiatives and new proposals 

Pelkmans J., Correia de Brito, A., Enforcement in the single market, Brussels 

Schmidt, Susanne (2008): Mutual Recognition – a new mode of governance 

Commission  report  COM(2001)736  of  7  December  2001,  “Economic  Reform  : 
Report on the functioning of Community product and capital markets” 

Commission  Staff  Working  Paper  SEC(2001)1993  of  7  December  2001, 
“Statistical  and  technical  annex  to  the  “Report  on  the  functioning  of  Community 
product and capital markets;  

“Technical barriers to trade”, Volume 1 of Sub-series III (“Dismantling of Barriers: 
Technical Barriers to Trade”), Single Market Review, Luxembourg, 1998;  

Hagemejer  J.  and  Michalek  Jan  J.,  “The  Significance  of  Technical  Barriers  to 
Trade  for  Poland  and  other  CEECs  Acceding  to  the  EU:  Reconsidering  the 
Evidence”, Emergo – Journal of Transforming  Economies and Societies, 2004, v. 
11, No 1, p. 36;  

Brenton  P.  Sheehy  J.  and  Vancauteren  M.,  “Technical  Barriers  to  Trade  in  the 
European Union: Data, Trends and Implications for Accession Countries”, Journal 
of Common Market Studies, 2001, No 39, p. 241;  

Fabienne  Ilzkovitz,  Adriaan  Dierx,  Viktoria  Kovacs  and  Nuno  Sousa,  «  Steps 
towards  a  deeper  economic  integration:  the  internal  market  in  the  21st  century  “, 
European Economy, Economic Papers, No. 271. January 2007 

 

Rodrigue, J.P. et al. (2016), The Geography of Transport Systems, Routledge 

European Council conclusions 

 

 

 

Cardiff European Council, 15/16 June 1998: Presidency Conclusions 

Council resolution of 28 October 1999 on mutual recognition (2000/C 141/02) 

Competitiveness Council meeting; Brussels, 2 and 3 December 2013: Conclusions 
on Single Market Policy 

The Mutual Recognition Regulation 

 

Regulation (EC) No 764/2008 of the European Parliament and of the Council, of 9 
July  2008,  laying  down  procedures  relating  to  the  application  of  certain  national 

142 

 
 
 
technical  rules  to  products  lawfully  marketed  in  another  Member  State  and 
repealing Decision No 3052/95/EC 

Communications and other Commission documents 

 

 

 

 

 

 

 

 

 

European  Commission  (2007):  Accompanying  document  to  the  Proposal  for  a 
directive  of  the  European  Parliament  and  of  the  Council  laying  down  procedures 
relating  to  the  application  of  certain  national  technical  rules  to  products  lawfully 
marketed  in  another  Member  State  and  repealing  Decision  3052/95/EC  Impact 
assessment 

European  Commission  (2012):  First  report  on  the  application  of  Regulation  (EC) 
No 764/2008 2008 - COM(2012) 292 final 

interpretative  communication  of  3  October  1980, 
European  Commission 
concerning the consequences of the judgment given by the court of Justice on 20 
February 1979 in Case 120/78 (‘Cassis de Dijon’) 

European Commission COM(1999)299 final: Mutual recognition in the context of 
the follow up to the Action Plan for the Single Market - on the application of the 
mutual recognition principle, based on a detailed analysis of the cases of incorrect 
application of mutual recognition handled by the Commission 

European  Commission  (2002):  Second  biennial  Report  on  the  Application  of  the 
Principle of Mutual Recognition in the Single Market 

European Commission (1999): Commission Staff Working Paper: First Report on 
the  application  of  the  principle  of  mutual  recognition  in  product  and  services 
markets 

European  Commission  (1998):  Document  du 
Commission: L’application du principe de reconnaissance mutuelle 

travail  des  services  de 

la 

European Commission  (2014): Restarting  the EU’s Growth Engine  – A new start 
for the Internal Market 

Evaluation of the Application of the Principle of Mutual Recognition in the Field of 
Goods,  Directorate-General  for  Internal  Market,  Industry,  Entrepreneurship  and 
SMEs 2015 

Commission guidance documents  

 

European  Commission  (2010):  Guidance  document:  the  relationship  between 
Directive 98/34/EC and the Mutual Recognition Regulation 

http://ec.europa.eu/DocsRoom/documents/5801/attachments/1/translations 

143 

 
 
 
 
 

 

 

 

 

 

 

 

 

European  Commission  (2013):  Commission  Working  Document:  Guidance 
document.  The  concept  of  ‘lawfully  marketed’  in  the  Mutual  Recognition 
Regulation (EC) No 764/2008 

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52013DC0592 

European  Commission  (2010):  Guidance  document:  The  relationship  between 
Directive 2001/95/EC and the Mutual Recognition Regulation 

http://ec.europa.eu/DocsRoom/documents/5807/attachments/1/translations 

European  Commission  (2010):  Guidance  Document:  The  application  of  Mutual 
Recognition Regulation to prior authorisation procedures 

http://ec.europa.eu/DocsRoom/documents/5822/attachments/1/translations 

European  Commission  (2010):  Guidance  Document:  The  application  of  Mutual 
Recognition Regulation to narcotic drugs and psychotropic substances 

http://ec.europa.eu/DocsRoom/documents/5821/attachments/1/translations 

European  Commission  (2010):  Guidance  Document:  The  application  of  Mutual 
Recognition Regulation to food supplements 

http://ec.europa.eu/DocsRoom/documents/13481/attachments/1/translations 

European  Commission  (2010):  Guidance  Document:  The  application  of  Mutual 
Recognition Regulation to non-CE marked construction products 

http://ec.europa.eu/DocsRoom/documents/5881/attachments/1/translations 

European  Commission  (2010):  Guidance  Document:  The  application  of  Mutual 
Recognition Regulation to fertilisers and growing media 

http://ec.europa.eu/DocsRoom/documents/5825/attachments/1/translations 

European  Commission  (2010):  Guidance  Document:  The  application  of  Mutual 
Recognition Regulation to articles of precious metals 

http://ec.europa.eu/DocsRoom/documents/5806/attachments/1/translations 

European  Commission  (2010):  Guidance  Document:  The  application  of  Mutual 
Recognition Regulation to weapons and firearms 

http://ec.europa.eu/DocsRoom/documents/5824/attachments/1/translations 

2.  RECENT CASE LAW OF THE CJEU ON MUTUAL RECOGNITION 

144 

 
 
 
 
 
 
 
 
CJEU, Case C-227/06 Commission v Belgium, ECLI:EU:C:2008:160 

By  requiring  economic  operators  wishing  to  market  construction  products,  which  have 
been lawfully manufactured and / or marketed in another Member State, in Belgium to 
obtain  national  conformity  marks,  Belgium  has  failed  to  fulfil  its  obligations  under 
Articles 34 and 36 TFEU (ex 28 EC and 30 EC). 

CJEU, Case 88/07 Commission v Spain, ECLIEU:C:2009:123 

By withdrawing  from the  market products  based on  medicinal herbs lawfully produced 
and/or marketed in another Member State, under an administrative practice consisting in 
withdrawing from the market any product based on medicinal herbs not included either in 
the  annex  of  the  an  Order  on  the  creation  of  a  special  register  of  medicinal  herb-based 
preparations or the annex of an Order establishing the list of plants sale of which to the 
public  is  prohibited  or  restricted  because  of  their  toxicity,  other  than  a  preparation  the 
constituents of which are exclusively one or more medicinal herbs or whole parts of such 
herbs,  or  crushed  or  powdered  parts  of  such  herbs,  on  the  ground  that  that  product  is 
deemed 
the  requisite  marketing 
authorisation, Spain has failed to fulfil its obligations under Articles 34 and 36 TFEU (ex 
28  EC  and  30  EC)  and  Articles  1  and  4  of  Decision  No  3052/95/EC  of  13  December 
1995  establishing  a  procedure  for  the  exchange  of  information  on  national  measures 
derogating from the principle of the free movement of goods within the Community. 

to  be  a  medicinal  product  marketed  without 

CJEU, Case C- 132/08 Lidl, ECLI:EU:C:2009:281 

Member States cannot, under Directive 1999/5/EC of 9 March 1999 on radio equipment 
and  telecommunications  terminal  equipment  and  the  mutual  recognition  of  their 
conformity,  require  a  person  who  places  radio  equipment  on  the  market  to  provide  a 
declaration of conformity even though the producer of that equipment, whose head office 
is  situated  in  another  Member  State,  has  affixed  the  ‘CE’  marking  to  that  product  and 
issued a declaration of conformity in its regard. 

Where  a  matter  is  regulated  in  a  harmonised  manner  at  Community  level,  any  national 
measure  relating  thereto  must  be  assessed  in  the  light  of  the  provisions  of  that 
harmonising measure and not in that of Articles 34 and 36 TFEU (ex 28 EC and 30 EC).  

CJEU, Case C-100/08 Commission v Belgium. ECLI:EU:C:2009:537 

By making the import, possession and sale of birds born and bred in captivity that were 
legally  marketed  in  another  Member  States  subject  to  restrictive  conditions  requiring 

145 

 
 
 
 
 
 
 
economic operators to alter the specimen marking to respond to the specific requirements 
of  Belgian  law  and  by  not  allowing  the  marking  accepted  in  other  Member  States  or 
certificates issued (in accordance with  Regulation (EC) No 338/97  on the protection of 
species of wild fauna and flora by regulating trade) and by denying traders the ability to 
obtain exemptions from the prohibition to hold European native birds legally marketed in 
other Member States, Belgium has failed to fulfil its obligations under Article 34 TFEU 
(ex 28 EC). 

CJEU, Case C-333/08 Commission v France, ECLI:EU:C:2010:44 

By laying down, for processing aids and foodstuffs whose preparation involved the use 
of  processing  aids  from  other  Member  States  where  they  are  lawfully  manufactured 
and/or  marketed,  a  prior  authorisation  scheme  not  complying  with  the  principle  of 
proportionality, France has failed to fulfil its obligations under Article 34 TFEU (ex 28 
EC). 

CJEU, Case C-142/09 Vincent Willy Lahousse, ECLI:EU:C:2010:694 

Council  Directive  92/61/EEC  of  30  June  1992  relating  to  the  type-approval  of  two  or 
three-wheel motor vehicles, and Directive 2002/24/EC of 18 March 2002 relating to the 
type-approval of two or three-wheel motor vehicles and repealing Directive 92/61 are to 
be construed as meaning that, where a vehicle or a component or separate technical unit 
thereof does not qualify for the type-approval procedure established by those directives, 
on the ground that it does not come within their scope, the provisions of those directives 
do not prevent a Member State from introducing, in its domestic law and in relation to 
such vehicle, component or separate technical unit, a similar mechanism for recognising 
the  checks  carried  out  by  other  Member  States.  In  any  event,  such  legislation  must 
comply with EU law, in particular Articles 34 TFEU and 36 TFEU. 

CJEU, Case C-484/10 Ascafor and Asidac, ECLI:EU:C:2012:113 

Articles  34  TFEU  and  36  TFEU  must  be  interpreted  as  meaning  that  the  requirements 
laid down in Spanish legislation for official recognition of certificates demonstrating the 
quality level of reinforcing steel for concrete granted in a Member State other than Spain 
constitute a restriction on the free movement of goods. Such a restriction may be justified 
by  the  objective  of  the  protection  of  human  life  and  health,  provided  the  requirements 
laid down are not higher than the minimum standards required for the use of reinforcing 
steel  for  concrete  in  Spain.  In  such  a  case,  it  is  for  the  referring  court  to  ascertain  — 
where the entity granting the certificate of quality which must be officially recognised in 
Spain  is  an  approved body within the  meaning of Council Directive 89/106/EEC of  21 
December 1988 on the approximation of laws, regulations and administrative provisions 

146 

 
 
 
 
 
 
of the Member States relating to construction products, as amended by Council Directive 
93/68/EEC of 22 July 1993 — which of those requirement go beyond what is necessary 
for the purposes of attaining the objective of the protection of human life and health. 

CJEU, Case, C-171/11 Fra.bo, ECLI:EU:C:2012:453 

Article  34  TFEU  (ex  28  EC)  must  be  interpreted  as  meaning  that  it  applies  to 
standardisation  and  certification  activities  of  a  private-law  body,  where  the  national 
legislation considers the products certified by that body to be compliant with national law 
and that has the effect of restricting the marketing of products which are not certified by 
that body. 

CJEU, Case C-150/11 Commission v Belgium, ECLI:EU:C:2012:539 

By requiring systematically the production of a vehicle’s certificate of conformity for the 
purpose  of  a  roadworthiness  test  prior  to  the  registration  of  a  vehicle  previously 
registered  in  another  Member  State  (in  addition  to  production  of  a  certificate  of 
registration)  and by making such vehicles subject to a roadworthiness test prior to their 
registration due to a change in ownership, without taking into account the results of the 
roadworthiness test carried out in another Member State, Belgium has failed to fulfil its 
obligations  under  Article  4  of  Council  Directive  1999/37/EC  of  29  April  1999  on  the 
registration documents for vehicles, as amended by Council Directive 2006/103/EC of 20 
November 2006, and under Article 34 TFEU. 

CJEU, Case C-385/10 Elenca, ECLI:EU:C:2012:634 

Articles  34  TFEU  to  37  TFEU  must  be  interpreted  as  precluding  national  provisions 
which  automatically  make  the  marketing  of  construction  products,  originating  from 
another Member State, subject to the affixing of CE marking. 

CJEU, Case C-481/12 UAB Juvelta, ECLI:EU:C:2014:11 

Article 34 TFEU must be interpreted as precluding national legislation under which, for 
it  to  be  permissible  for  them  to  be  sold  on  the  market  of  a  Member  State,  articles  of 
precious metal imported from another Member State, in which they are authorised to be 
put on the market and which have been stamped with a hallmark in accordance with the 
legislation  of  that  second  Member  State,  must,  where  the  information  concerning  the 
standard of fineness of those articles provided in that hallmark does not comply with the 
requirements  of  the  legislation  of  that  first  Member  State,  be  stamped  again,  by  an 
independent  assay  office  authorised  by  that  first  Member  State,  with  a  hallmark 
confirming that those articles have been inspected and showing their standard of fineness 
in accordance with those requirements. 

147 

 
 
 
 
 
CJEU, Case C-423/13 Vilniaus Energija, ECLI:EU:C:2014:2186 

Article 34 TFEU and Directive 2004/22/EC of 31 March 2004 on measuring instruments 
must be interpreted as precluding national legislation and practice according to which a 
hot-water meter which satisfies all the requirements of that Directive and is connected to 
a  remote  (telemetric)  data-transmission  device is  to  be  regarded  as  a  measuring system 
and, as a result, cannot be used for its intended purpose so long as it has not been subject, 
together with that device, to a metrological verification as a measuring system.  

Competent  national  authorities  may  not,  in  any  event,  unnecessarily  require  technical 
analyses  where  those  analyses  have  already  been  carried  out  in  another  Member  State 
and  their results are  available to  those  authorities  or  may,  at  their  request,  be  placed  at 
their  disposal  (see,  to  that  effect,  Commission  v  Portugal,  ECLI:EU:C:2005:669, 
paragraph 46 and the case-law cited). 

CJEU, Case C-354/14 Capods Import-Export, ECLI:EU:C:2015:658 

Article  34  TFEU  and  Article  31(1)  and  (12)  of  Directive  2007/46/EC  of  5  September 
2007 establishing a framework for the approval of motor vehicles and their trailers, and 
of  systems,  components  and  separate  technical  units  intended  for  such  vehicles 
(Framework Directive) must be interpreted as not precluding national legislation, which 
makes the marketing in a Member State of new spare parts for road vehicles subject to 
the application of an approval or homologation procedure in that Member State, provided 
that  that  legislation  also  lays  down  exceptions  such  as  to  ensure  that  parts  lawfully 
produced  and  marketed  in  other  Member  States  are  exempted  or,  failing  this,  that  the 
parts  in  question  are  capable  of  posing  a  significant  risk  to  the  correct  functioning  of 
systems that are essential for the safety of the vehicle or its environmental performance 
and that that approval or homologation procedure is strictly necessary and proportionate 
in  relation  to  the  objectives  of  protection  of  road  safety  or  of  protection  of  the 
environment. 

The conditions for proving that such parts have already been approved or homologated or 
constitute  original  parts  or  parts  of  matching  quality  are  governed,  in  the  absence  of 
European  Union  rules  on  the  matter,  by  the  law  of  the  Member  States,  subject  to  the 
principles of equivalence and of effectiveness. 

148 

 
 
 
 
 
 
 
ANNEX  8 THE DECLARATION OF COMPLIANCE 

The  EU  has  a  comprehensive  policy  geared  to  ensure  that  only  safe  and  otherwise 
compliant products find their way on to the market, in such a way that honest economic 
operators  can  benefit  from  a  level  playing  field,  thus  promoting  at  the  same  time  an 
effective protection of EU consumers and professional users and a competitive single EU 
market. The ‘New Approach’ developed in 1985, restricted the content of legislation to 
‘essential requirements’ leaving the technical details to European harmonised standards. 
The  ‘New  Legislative  Framework’  adopted  in  July  2008,  builds  on  the  New  Approach 
and  completes  the  overall  legislative  framework  with  all  the  necessary  elements  for 
effective  conformity  assessment,  accreditation  and  market  surveillance  including  the 
control of products from outside the Union.  

1.  EU PRODUCT LEGISLATION UNDER THE 'NEW APPROACH' 

The 'Cassis de Dijon' judgement played an immense role in modifying the EU approach 
to technical harmonisation on three fundamental counts: 

(1) 

(2) 

(3) 

In  stating  that  Member  States  could  only  justify  forbidding  or  restricting  the 
marketing of products from other Member States on the basis of non-conformity 
with  ‘essential  requirements’,  the  Court  opened  a  reflection  on  the  content  of 
future  harmonisation 
since  non-respect  of  non-essential 
requirements  could  not  justify  restricting  the  marketing  of  a  product,  such  non-
essential  requirements  need  no  longer  figure  in  EU  harmonisation  texts.  This 
opened  the  door  to  the  'New  Approach  and  the  consequent  reflection  on  what 
constitutes an essential requirement and how to formulate it in such a manner that 
conformity can be demonstrated,  

legislation: 

In  stating  this  principle,  the  Court  clearly  placed  the  onus  on  national 
authorities  to  demonstrate  where  products  did  not  conform  to  essential 
requirements  but  it  also  begged  the  question  of  the  appropriate  means  for 
demonstrating conformity in a proportionate manner,  

By  noting  that  Member  States  were  obliged  to  accept  products  from  other 
Member  States  except  in  circumscribed  conditions,  the  Court  identified  a  legal 
principle  but  did  not  produce  the  means  to  create  the  trust  in  the  products  that 
could help authorities to accept products they could not vouch for. This led to the 
need to develop a policy on conformity assessment. 

The  'New  Approach'  legislative  technique  approved  by  the  Council  of  Ministers  on  7 
May  1985  in  its  Resolution  on  a  new  approach  to  technical  harmonisation  and 
standards192  was  the  logical  legislative  follow  up  to  the  Cassis  de  Dijon  case.  This 
regulatory technique established the following principles: 

 

Legislative  harmonisation  should  be  limited  to  the  essential  requirements 
(preferably performance or functional requirements) that products placed on the EU 
market must meet if they are to benefit from free movement within the EU; 

192  

OJ C 136, 4.6.1985, p. 1. 

149 

 
 
                                                 
 

 

 

The  technical  specifications  for  products  meeting  the  essential  requirements  set 
out  in  legislation  should  be  laid  down  in  harmonised  standards  which  can  be 
applied alongside the legislation; 

Products  manufactured  in  compliance  with  harmonised  standards  benefit  from  a 
presumption of conformity with the corresponding essential requirements of the 
applicable  legislation,  and,  in  some  cases,  the  manufacturer  may  benefit  from  a 
simplified  conformity  assessment  procedure 
the 
manufacturer's declaration of conformity, made more easily acceptable to public 
authorities by the existence of the product liability legislation); 

(in  many 

instances 

The application of harmonised or other standards remains voluntary, and the 
manufacturer  can  always  apply  other  technical  specifications  to  meet  the 
requirements  (but  will  carry  the  burden  of  demonstrating  that  these  technical 
specifications answer the needs of the essential requirements, more often than not, 
through a process involving a third party conformity assessment body). 

As  a  general  rule,  EU  product  legislation  under  the  'New  Approach'  obliges  the 
manufacturer,  when  placing  a  product  on  the  market  the  manufacturer,  to  take  all 
measures necessary to ensure that the manufacturing process assures compliance of the 
products and in particular: 

(1) 

carry out the applicable conformity assessment or have it carried out, in accordance 
with  the  procedure(s)  laid  down  by  the  relevant  Union  harmonisation  legislation. 
Depending  on  the  Union  harmonisation  act,  the  manufacturer  may  be  required  to 
submit the product to a third party (usually a notified body) to have the conformity 
assessment carried out, or to have a quality system approved by a notified body. In 
any case, the manufacturer bears full responsibility for product conformity; 

(2)  draw up the required technical documentation; 

(3)  draw up the EU declaration of conformity; 

(4) 

accompany  the product with instructions and safety information as required by the 
applicable  Union  harmonisation  legislation,  in  a  language  easily  understood  by 
consumers and other end-users, as determined by the Member State concerned.  

(5) 

satisfy the following traceability requirements: 

– 

– 

– 

keep  the  technical  documentation  and  the  EU  declaration  of  conformity  for 
10  years  after  the  product  has  been  placed  on  the  market  or  for  the  period 
specified in the relevant Union harmonisation act, 

ensure that the product bears a type, batch or serial number or other element 
allowing its identification, 

indicate  the  following  three  elements:  his  name,  registered  trade  name  or 
registered  trade  mark  and  a  single  contact  postal  address  on  the  product  or 
when  not  possible  because  of  the  size  or  physical  characteristics  of  the 
products, on its packaging and/or on the accompanying documentation. The 

150 

 
 
single  contact  point  may  not  necessarily  be  located  in  the  Member  State 
where the product is made available on the market; 

(6) 

(7) 

affix  the  conformity  marking  (CE  marking  and  where  relevant  other  markings  to 
the product in accordance with the applicable legislation;  

ensure that procedures are in place for series production to remain in conformity. 
Changes  in  product  design  or  characteristics  and  changes  in  the  harmonised 
standards or in other technical specifications by reference to which conformity of a 
product is declared must be adequately taken into account. The kind of action to be 
taken  by  the  manufacturer  depends  on  the  nature  of  changes  in  the  harmonised 
standards or other technical specifications, in particular whether these changes are 
material with regard to the coverage of the essential or other legal requirements and 
whether  they  concern  the  product  in  question.  This  might  require  for  instance  to 
update  the  EU  Declaration  of  conformity,  change  the  product  design,  contact  the 
notified body, etc.; 

(8)  Where relevant, certify the product and/or the quality system. 

2.  THE EU DECLARATION OF CONFORMITY IN EU PRODUCT LEGISLATION 

The EU Declaration of Conformity is obligatory in various sectors such as:  

SECTORS WITH DECLARATION OF CONFORMITY 

• 

• 

• 

• 

• 

• 

The  restriction  of  the  use  of  certain  hazardous  substances  in  electrical  and 
electronic equipment (Directive 2011/65/EU) 

Appliances burning gaseous fuels (Directive 2009/142/EC) 

Ecodesign requirements for energy-related products (Directive 2009/125/EC) 

Simple pressure vessels (Directive 2009/105/EC and Directive 2014/29/EU) 

Toys’ safety (Directive 2009/48/EC) 

Electrical equipment designed for use within certain voltage limits (Directive 
2006/95/EC and Directive 2014/35/EU) 

•  Machinery (Directive 2006/42/EC) 

• 

Electromagnetic 
2014/30/EU) 

compatibility 

(Directive  2004/108/EC  and  Directive 

•  Measuring instruments (Directive 2004/22/EC and Directive 2014/32/EU) 

• 

• 

Non-automatic  weighing  instruments  (Directive  2009/23/EC  and  Directive 
2014/31/EU) 

Cableway installations designed to carry persons (Directive 2000/9/EC) 

151 

 
 
• 

• 

Radio  equipment  and  telecommunications  terminal  equipment  (Directive 
1999/5/EC and Directive 2014/53/EU) 

Active implantable medical devices (Directive 90/385/EEC) 

•  Medical devices (Directive 93/42/EEC) 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

In vitro diagnostic medical devices (Directive 98/79/EC) 

Pressure equipment (Directive 97/23/EC and Directive 2014/68/EU) 

Transportable Pressure equipment (Directive 2010/35/EU) 

Aerosol Dispensers (Directive 75/324/EEC as amended) 

Lifts (Directive 95/16/EC and 2014/33/EU) 

Recreational craft (Directive 94/25/EC and Directive 2013/53/EU) 

Equipment  and  protective  systems  intended  for  use  in  potentially  explosive 
atmospheres (Directive 94/9/EC and Directive 2014/34/EU) 

Explosives for civil uses (Directive 93/15/EEC and Directive 2014/28/EU) 

Pyrotechnics (Directive 2013/29/EU) 

Regulation on the Labelling of Tyres (Regulation (EC) No 1222/2009) 

Personal protective equipment (Directive 89/686/EEC) 

•  Marine equipment (Directive 96/98/EC and Directive 2014/90/EU) 

• 

• 

• 

Noise  emission  in  the  environment  by  equipment  for  use  outdoors  (Directive 
2000/14/EC) 

Emissions from non-road mobile machinery (Directive 97/68/EC as amended) 

Energy labelling (Directive 2010/30/EU) 

The  Union  harmonisation  legislation  referred  to  above  imposes  an  obligation  on  the 
manufacturer to draw up and sign an EU Declaration of Conformity before placing 
a  product  on  the  market193.  The  manufacturer  or  his  authorised  representative 
established within the Union must draw up and sign an EU Declaration of Conformity as 
part  of  the  conformity  assessment  procedure  provided  for  in  the  Union  harmonisation 

193  

Please note that the Machinery Directive 2006/42/EC foresees the placing on the market of “partly completed machinery” to 
be  accompanied  by  a  so-  called  declaration  of  incorporation  which  is  different  from  the  EU  Declaration  of  conformity. 
According to Regulation (EC) No 552/2004, constituents of the European Air Traffic Management network are accompanied 
either by a declaration of conformity or a declaration of suitability for use. 

152 

 
 
                                                 
legislation.  The  EU  declaration  of  conformity  is  the  document  that  states  that  that  the 
product satisfies all the relevant requirements of the applicable legislation. 

By  drawing  up  and  signing  the  EU  Declaration  of  Conformity,  the  manufacturer 
assumes responsibility for the compliance of the product. 

The EU Declaration of Conformity must be kept for ten years from the date of placing 
the product on the market, unless the legislation specifies any other duration194. This is 
the responsibility of the manufacturer or the authorised representative established within 
the  Union.  For  imported  products,  the  importer  must  take  on  this  responsibility  for  the 
DoC195. 

The contents of the EU Declaration of Conformity either refer to the model declaration 
contained  in  Annex  III  of  Decision  No  768/2008/EC  or  a  model  declaration  directly 
annexed  to  the  sectoral  Union  harmonisation  legislation  at  stake.  The  declaration  may 
take  the  form  of  a  document,  a  label  or  equivalent,  and  must  contain  sufficient 
information to enable all products covered by it to be traced back to it. 

Where  several  pieces  of  Union  harmonisation  legislation  apply  to  a  product,  the 
manufacturer  or  the  authorised  representative  has  to  provide  a  single  declaration  of 
conformity  in  respect  of  all  such  Union  acts196.  In  order  to  reduce  the  administrative 
burden on economic operators and facilitate its adaptation to the modification of one of 
the  applicable  Union  acts,  the  single  declaration  may  be  a  dossier  made  up  of  relevant 
individual Declarations of conformity197. 

The EU declaration of conformity must be made  available to  the surveillance authority 
upon  request.  Moreover,  Union  harmonisation  legislation  relating  to  machinery, 
equipment  in  potentially  explosive  atmospheres,  radio  and  terminal  telecommunication 
equipment, measuring instruments, recreational craft, lifts, high-speed and conventional 
rail systems  and constituents of the European Air  Traffic Management network require 
products to be accompanied by the EU declaration of conformity. 

The  EU  declaration  of  conformity  must  be  translated  into  the  language  or  languages 
required  by  the  Member  State  in  which  the  product  is  placed  or  made  available  on  the 
market198.  Union  harmonisation  legislation  does  not  necessarily  specify  who  has  the 
obligation  to  translate.  Logically,  this  should  be  the  manufacturer  or  another  economic 
operator making the product available. The EU declaration of conformity must be signed 
by  the  manufacturer  or  his  authorised  representative.  If  a  translation  of  the  EU 
declaration  of  conformity  has  been  produced  by  another  economic  operator  and  is  not 
signed by the manufacturer, a copy of the original EU declaration of conformity signed 
by the manufacturer must also be provided together with the translated version. 

194  

195  
196  
197  
198  

According  to  the  Directives  relating  to  medical  devices  and  in  vitro  diagnostic  medical  devices  the  EU  Declaration  of 
Conformity must be kept for 5 years and in the case of implantable medical devices for 15 years. 
For responsibilities of the manufacturer, the authorised representative and the importer, see Chapter 3. 
Article 5 from Decision No 768/2008/EC. 
See for example recital 22 of Directive 2014/35/EU, or the similar recital 24 of Directive 2014/34/EU. 
Article R10(2) of Annex I of Decision No 768/2008/EC. 

153 

 
 
                                                 
The standard model of the DoC is annexed to Decision 768/2008199, and to all relevant 
EU harmonisation legislation using it:  

EC DECLARATION OF CONFORMITY 

1.   No … (unique identification of the product): 

2.  Name and address of the manufacturer or his authorised representative: 

3.   This  declaration  of  conformity  is  issued  under  the  sole  responsibility  of  the 

manufacturer (or installer): 

4.   Object  of  the  declaration  (identification  of  product  allowing  traceability.  It  may 

include a photograph, where appropriate): 

5.   The  object  of  the  declaration  described  above  is  in  conformity  with  the  relevant 

Union harmonisation legislation: 

6.   References  to  the  relevant  harmonised  standards  used  or  references  to  the 

specifications in relation to which conformity is declared: 

7.   Where  applicable,  the  notified  body  ...  (name,  number)  …  performed  … 

(description of intervention) … and issued the certificate: … 

8.   Additional information: 

Signed for and on behalf of: ………………………………… 

(place and date of issue): 

(name, function) (signature): 

3.  COMPARISON  BETWEEN  THE  ROLE  OF  THE  MANUFACTURER 

IN  EU 

HARMONISATION LEGISLATION AND IN THE MUTUAL RECOGNITION PROPOSAL 

Manufacturer's tasks 

EU harmonisation 
legislation 

Mutual Recognition 
proposal 

(1) Conformity assessment 

Obligatory 

Requirement that 
product is lawfully 
marketed in another 
Member State 

(2) Technical documentation 

Obligatory 

-- 

(3) EU declaration of conformity 

Obligatory 

Voluntary 

199  

eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:218:0082:0128:en 

154 

 
 
                                                 
(4) Accompany  the product with 
instructions and safety information 

Obligatory 

(5) Traceability requirements 

Obligatory 

(6) Conformity marking 

(7) Ensure that procedures are in place 
for series production to remain in 
conformity. 

Obligatory 

Obligatory 

(8) Where relevant, certify the product 

Obligatory 

and/or the quality system. 

-- 

-- 

-- 

-- 

-- 

4.  COMPARISON BETWEEN THE DECLARATIONS OF CONFORMITY  

International standard EN 

ISO/IEC 17050-1 

EU harmonisation legislation 

Mutual Recognition 

proposal 

Unique identification   

1.  No  …  (unique  identification 

of the product) 

Name,  contact  address  and 
signature of the issuer; 

2.  Name  and  address  of  the 
his 

manufacturer 
authorised representative 

or 

3.  This 

of 
declaration 
conformity  is  issued  under 
the  sole  responsibility  of  the 
manufacturer (or installer) 

covers 

An identification of what the 
(for 
declaration 
product 
example, 
description,  type  and  extent 
of management system) 

4.  Object  of 

the  declaration 
(identification  of  product 
allowing  traceability.  It  may 
include  a  photograph,  where 
appropriate) 

complete 

of 
list 
The 
specified 
requirements, 
including  standards,  that  the 
is  based  on
declaration 

above 

5.  The object of the declaration 
described 
in 
conformity  with  the  relevant 
Union 
harmonisation 
legislation 

is 

6.  References  to  the  relevant 
harmonised  standards  used 
the 
or 
specifications  in  relation  to 
which 
is 
declared: 

conformity 

references 

to 

7.  Where 

applicable, 

the 
notified  body 
(name, 
number)  …  performed  … 

... 

155 

 
 
 
 
 
 
 
  
 
 
 
 
(description  of  intervention) 
… and issued the certificate: 
… 

Any limitation related to the 
validity of the declaration. 

8.  Additional information: 

Date and place of issue 

Signed for and on behalf of: 

………………………………… 

(place and date of issue): 

(name, function) (signature): 

5.  THE SUPPLIERS DECLARATION OF CONFORMITY IN INTERNATIONAL TRADE 

5.1.  The use of the suppliers' Declaration of Conformity in global trade 

The suppliers' Declaration of Conformity is a widely used feature in global trade. 

The preamble of the TBT Agreement recognizes the important contribution international 
standards  and  conformity  assessment  systems  can  make  by  improving  efficiency  of 
production and facilitating the conduct of international trade. That is also the reason why 
Members are encouraged to accept other Members' conformity assessment results. 

The  source  of  the  obligation  to  recognize  other  Members'  conformity  assessment 
procedures and conformity assessment results can be found in Article 6 - Recognition of 
Conformity Assessment by Central Government Bodies - which states that: 

With respect to their central government bodies: 

6.1   Without prejudice to the provisions of paragraphs 3 and 4, Members shall ensure, 
whenever  possible,  that  results  of  conformity  assessment  procedures  in  other 
Members  are  accepted,  even  when  those  procedures  differ  from  their  own, 
provided they are satisfied that those procedures offer an assurance of conformity 
with  applicable  technical  regulations  or  standards  equivalent  to  their  own 
procedures. It is recognized that prior consultations may be necessary in order to 
arrive at a mutually satisfactory understanding regarding, in particular: 

6.1.1  adequate and enduring technical competence of the relevant conformity assessment 
bodies in the exporting Member, so that confidence in the continued reliability of 
their conformity assessment  results can exist; in this regard, verified compliance, 
for  instance  through  accreditation,  with  relevant  guides  or  recommendations 
issued  by  international  standardizing  bodies  shall  be  taken  into  account  as  an 
indication of adequate technical competence; 

6.1.2  limitation of the acceptance of conformity assessment results to those produced by 

designated bodies in the exporting Member. 

156 

 
 
 
 
 
 
6.2   Members  shall  ensure  that  their  conformity  assessment  procedures  permit,  as  far 

as practicable, the implementation of the provisions in paragraph 1. 

6.3  Members are encouraged, at the request of other Members, to be willing to enter 
into  negotiations  for  the  conclusion  of  agreements  for  the  mutual  recognition  of 
results  of  each  other's  conformity  assessment  procedures.  Members  may  require 
that such agreements fulfil the criteria of paragraph 1 and give mutual satisfaction 
regarding their potential for facilitating trade in the products concerned. 

6.4   Members are encouraged to permit participation of conformity assessment bodies 
located  in  the  territories  of  other  Members  in  their  conformity  assessment 
procedures  under  conditions  no  less  favourable  than  those  accorded  to  bodies 
located within their territory or the territory of any other country. 

The  TBT  Committee  has  identified  five  approaches  to  facilitate  the  acceptance  of  the 
conformity assessment procedures (G/TBT/9): 

  accreditation; 

 

 

 

 

the unilateral recognition of results of foreign conformity assessment as equivalent, 
including  the  possibility  of  government  designation  of  specific  conformity 
assessment bodies; 

the  negotiation  and  conclusion  of  Mutual  Recognition  Agreements  (MRAs)  for 
conformity assessment between governments; 

the  conclusion  of  co-operative  (voluntary)  arrangements  between  domestic  and 
foreign conformity assessment bodies; and 

the use of Supplier's Declaration of Conformity (SDoC). 

Accreditation,  unilateral  recognition  and  mutual  recognition  agreements  are  expressly 
mentioned in the TBT Agreement. The other two approaches were proposed by the TBT 
Committee during the Second Triennial Review of the Agreement as part of an indicative 
list of existing mechanisms to facilitate the acceptance of conformity assessment results. 
This list was not intended to prescribe particular approaches that Members might choose 
to adopt, as it was recognized that the application of different approaches would depend 
on the situation of Members and the specific sectors involved. 

157 

 
 
Source: WTO200 

The TBT Agreement does not contain a specific reference to SDoC. However, Members 
at  the  TBT  Committee  have  recognized  that  SDoC  is  a  trade-friendly  approach  to 
conformity assessment: it is a flexible approach that can reduce the costs of conformity 
assessment,  since,  while  it  may  imply  certain  costs  for  administrations,  in  particular 
higher  costs  for  market  surveillance,  it  can  involve  lower  costs  for  industries  and 
importers,  resulting  in  cheaper  products  for  consumers  and  possibly,  in  the  long  run, 
higher levels of competitiveness. 

As  a  minimum,  an  SDoC  shall  identify  ("Development  Manual  2:  Conformity 
assessment", ISO, Second edition, 1998, page 47): 

 

 

 

the supplier making the declaration; 

the product(s) covered; and 

the relevant standard(s) or technical regulation(s). 

SDoC may be used to declare the conformity of a product with a standard or a technical 
regulation, or with both. The declaration is usually a separate document. Alternatively, it 
may  be  made  in  a  statement,  catalogue,  invoice,  or  users  instructions  relevant  to  the 
product. 

The  assessment  of  conformity  may  be  undertaken  either  by  the  suppliers'  own  internal 
test and inspection facilities, or by third-party test laboratories and inspection bodies. In 
addition, the supplier may use an accredited laboratory or inspection body and indicate 
this on the declaration. 

A  regulatory  authority  may  impose  by  law  that  suppliers  follow  certain  steps  in  the 
conformity assessment process, or include certain elements in the declaration, such as the 
use of the proper form, the preparation of a technical file about the product and its test 
reports, the requirement of a follow-up, etc. 

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158 

 
 
 
                                                 
Finally,  the  following  elements  have  been  mentioned  by  Members  in  relation  to  the 
decision to use SDoC201: 

 

 

Product Coverage: SDoC is mostly used for products and sectors which involve a 
low or medium risk to health, safety and the environment. In addition to the risk, 
consideration  of  the  characteristics and  infrastructure  of  the  given  sector;  number 
of  existing  voluntary  marking  schemes  for  the  product;  types  of  production 
methods  used;  level  of  commercial  confidence;  and  other  economic  and  social 
factors are used. 

Liability Regime: When conformity assessment is based on SDoC, it is the supplier 
rather than the regulatory authority that is responsible for ensuring compliance with 
relevant  technical  regulations.  SDoC  as  an  approach  has  a  better  chance  if  a 
product's  liability  law  is  in  place and  ensures  that  anyone  suffering  injury  from  a 
defective  product  can  claim  damages  from  the  supplier  of  the  product  at  the 
importing country. 

  Market  Surveillance:  Market  surveillance  consists  of  verifying  in  the  market  the 
current  conformity  of  products  with  existing  laws  and  regulations.  The  lesser  the 
involvement  by  a  third  party  during  the  conformity  assessment  process  before  a 
product  is  placed  on  the  market,  the  greater  the  need  for  efficient  market 
surveillance  (through  product  samples,  remedial  actions,  penalties  for  false 
declarations, "spot checks", etc). 

 

 

International  Standards:  the  use  of  relevant  international  standards  could  help  to 
make  the  SDoC  process  more  transparent,  and  support  its  value  and  usability.  In 
this context, the ISO/IEC Guide 22 on "General  criteria for SDoC"  developed  by 
the ISO Committee on Conformity Assessment (CASCO) in 1996 may be relevant 
(nowadays, ISO/IEC 17050 standard on "Conformity assessment – SDoC"). 

Combination of SDoC with other Conformity Assessment Procedures: The use of 
test/inspection  reports  or  certification  results  from  third  parties  or  in-house 
laboratories,  accredited  on  the  basis  of  relevant  international  standards,  could 
facilitate  the  use  of  SDoC.  Members  have  hence  suggested  the  possibility  of 
combining  SDoC  with  other  approaches  to  conformity  assessment,  such  as 
accreditation and certification. 

5.2.  International standard EN ISO/IEC 17050-1  

The international standard EN ISO/IEC 17050-1 has been drawn up with the objective 
of providing the general criteria for the declaration of conformity, and it can also be used 
as  a  guidance  document  provided  it  is  in  line  with  the  applicable  Union  harmonisation 
legislation.  ISO/IEC  17050-1:2004  specifies  general  requirements  for  a  supplier's 
declaration of conformity in cases where it is desirable, or necessary, that conformity of 
an  object  to  the  specified  requirements  be  attested,  irrespective  of  the  sector  involved. 
For the purposes of ISO/IEC 17050-1:2004, the object of a declaration of conformity can 
be a product, process, management system, person or body. 

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The  international  standard  EN  ISO/IEC  17050-1  addresses  one  of  the  three  types  of 
attestation  of  conformity,  namely  attestation  undertaken  by  the  first  party  (e.g.  the 
supplier of a product). Other types are second-party attestation (e.g. where a user issues 
an attestation for the product the user is using) or third-party attestation. Each of these 
three types is used in the market in order to increase confidence in the conformity of an 
object.  

Item 

Conformity 

assessment 

party 

Description 

First party (also 
known as supplier’s 
declaration of 
conformity, or SDoC) 

Manufacturer, importer, 
or other 

supplier 

Procedure by which the 
manufacturer, importer, 
or distributor provides 
written assurance of the 
conformity of its 
products to specified 
requirements 

Second Party 

Third Party 

Customer 

Regulatory body or 
independent testing 
body 

Buyer requires and 
certifies that the 
products it wishes to 
purchase from suppliers 
meet one or more 
standards. 

Purchaser’s own 
inspectors usually 
perform the assessment 
of the supplier’s 
products. 

Conformity assessment 
by technically 
competent body not 
under control of either 
buyer or seller. 
Assessment undertaken 
in government 
laboratories or by 
accredited third-party 
bodies. 

This  part  of  ISO/IEC  17050  specifies  requirements  applicable  when  the  individual  or 
organization  responsible  for  fulfilment  of  specified  requirements  (supplier)  provides  a 
declaration  that  a  product  (including  service),  process,  management  system,  person  or 
body  is  in  conformity  with  specified  requirements,  which  can  include  normative 
documents such as standards, guides, technical specifications, laws and regulations. Such 
a declaration of conformity can also make reference to the results of assessments by one 
or more first, second or third parties. Such references are not to be interpreted as reducing 
the responsibility of the supplier in any way. These general requirements are applicable 
to all sectors. However, these requirements might need to be supplemented for specific 
purposes, for example for use in connection with regulations. 

The standard specifies that the content of a supplier’s declaration of conformity should 
contain the following as a minimum: 

 

 

 

unique identification; 

name, contact address and signature of the issuer; 

an identification of what the declaration covers (for example, product description, 
type and extent of management system); 

160 

 
 
 

 

 

the complete list of specified requirements, including standards, that the declaration 
is based on; 

date and place of issue; 

any limitation related to the validity of the declaration. 

5.3.  U.S. International Trade Commission 

The Office of Industries of the U.S. International Trade Commission (USITC) analysed 
how conformity assessment measures impede trade and raise costs in specific industries 
and  examines  different  approaches  for  addressing  them.  It  looked  at  the  impact  of 
conformity assessment barriers on exporters. The paper discussed the relative advantages 
and  disadvantages  of  several  alternatives  for  reducing  the  impact  of  conformity 
assessment  barriers  to  trade:  mutual  recognition  agreements  (MRAs)  among  trading 
partners, unilateral recognition by a country of another country's conformity assessment 
results,  and  increased  acceptance  of  a  supplier's  declaration  of  conformity  (SDoC).  It 
found  that  when  conformity  assessment  is  mandatory,  companies  often  favour  SDoC 
over third-party conformity assessment as it provides them with greater flexibility, non-
discriminatory treatment, and lower costs when entering overseas markets. The challenge 
for  supporters  of  SDoC  is  convincing  the  regulatory  authorities  that  it  will  not 
compromise  regulators'  obligations  for  reducing  risks  to  human  and  animal  health  and 
safety, or to the environment202. 

5.4.  The Use of Supplier’s Declaration of Conformity in the U.S.  

In the United States, some regulatory agencies promote the use of SDOC for certain, but 
not all, equipment. For example, the U.S. Federal Communications Commission (FCC) 
has  adopted  a  rule  that  permits  recognition  of  Supplier’s  Declaration  of  Conformity 
(SDOC;  also  sometimes  called  Self  Declaration  of  Conformity)  for  certain  digital 
devices.  For  other  equipment,  such  as  personal  computers  and  attachments  thereto,  the 
FCC  allows  the  equipment  declared  compliant  by  the  supplier,  under  a  process  called 
Declaration  of  Conformity,  provided  supporting  test  results  are  obtained  from  an 
accredited laboratory.  

Other  U.S.  regulatory  agencies  rely  upon  SDOC  for  technical  regulations.  The  U.S. 
Department  of  Transportation,  for  example,  accepts  SDOC  from  manufacturers  or 
importers  of  motor  vehicles  and  motor  vehicle  equipment.  Under  U.S. 
law, 
manufacturers  are  required  to  certify  that  their  products  comply  with  all  applicable 
Federal Motor Vehicle Safety Standards (FMVSS). This certification is in the form of a 
permanent  label  affixed  to  the  product.  This  label  is  required  for  all  vehicles  and 
equipment  covered  by  the  FMVSS,  and  must  be  present  if  a  vehicle  or  equipment 
covered by the FMVSS is to enter the United States. A manufacturer outside the United 
States  who  offers  its  product  for  importation  into  the  U.S.  must  submit  itself  to  the 

202  

Johnson C., 'Technical Barriers to Trade: Reducing the Impact of Conformity Assessment Measures', Office of Industries of 
the U.S. International Trade Commission (USITC),  https://www.usitc.gov/publications/332/ca-dft-rev-final082008.pdf.  

161 

 
 
                                                 
jurisdiction of Federal courts in the US by designating an agent in the United States who 
will receive legal papers on behalf of the manufacturer203.  

5.5.  Case study: Australia204 

5.5.1. Introduction 

In  recent  years  regulation  in  Australia  has  been  subject  to  significant  scrutiny  to 
determine its impact both in terms of effectiveness and the underlying costs to industry, 
government  and  consumers.    The  high  profile  of  the  European  Union  in  developing  a 
Declaration  based  approach  as  part  of  its  overall  efforts  to  create  a  single  market  has 
dominated thinking in terms of product compliance.   

in  place  of  approval  processes  for 

Recent  regulatory  and  legislative  changes  have  seen  the  introduction  of  the  Supplier’s 
Declaration 
telecommunications  and  radio 
communications.    The  introduction of electromagnetic compatibility (EMC) regulation 
was supported by industry on the basis that it was to be a minimum impact compliance 
system based on the SDoC. 

The  information  technology  and  communications  sector  has  been  at  the  forefront  of 
supporting  regulatory  agencies  in  the  development  of  SDoC  based  compliance  regimes 
because of its urgent need to have compliance requirements that are consistent with short 
product cycles and rapid technology development.  

The  use  of  SDoC  currently  has  a  limited  application  in  the  area  of  electrical  safety  in 
Australia but was considered further in the context of the development of a compliance 
regime  based  on  a  definition  of  ‘essential  safety’  requirements  and  the  means  for 
demonstrating compliance with those requirements.   

5.5.2. Supplier’s Declaration: an Assessment 

Since the introduction of SDoC, regulators and industry have learnt a great deal about the 
nature of the changes that this type of regulatory system brings and the preconditions for 
its successful use, particularly from the point of view of the small economy.  

Overall the SDoC is strongly supported by industry in Australia as a system of regulation 
which is:  

 

 

 

consistent with the needs of competitive industry 

compatible with the direction of technology development; and importantly 

able to meet public objectives as expressed in legitimate regulatory outcomes 

The advantages that it offers are broadly:  

203  
204  

https://www.nist.gov/standardsgov/use-suppliers-declaration-conformity  
https://www.wto.org/english/tratop_e/inftec_e/gall.doc  

162 

 
 
                                                 
 

Lower  Cost:  direct  costs  associated  with  pre-market  regulatory  requirements  are 
removed.    There  is  much  greater  scope  for  the  supplier  to  manage  compliance 
costs. 

  Manufacturer  controls  time  and  access  to  market:  with  product  lifecycles  getting 
shorter, this is the most significant benefit of SDoC.   Pre-market approvals could 
take up to 90 days in some areas. 

 

 

 

Design  changes  easier  to  effect:  SDoC  offers  a  stimulus  to  product  range 
development  and  innovation  by  eliminating  requirements  to  re-submit  design 
changes  and  variants  for  regulatory  approval.    Manufacturers  are  able  to  declare 
ranges of products and new features.  Importers and those with less technical skill 
can  utilise  technical  services  of  certification/inspection  bodies  and  testing 
laboratories to develop an assessment plan.  

Flexibility over choice of suppliers of components and materials: Responsibility for 
compliance is focussed on the compliance of the end product.   The performance of 
components  and  materials  is  to  some  extent  not  critical,  provided  the  product 
represents a total solution. 

Permits an innovative approach to testing and assessment: Greater flexibility in use 
of testing and assessment services has emerged.  Also, compliance documentation 
can be upgraded as products are enhanced. 

In an environment of growing competition and accelerating technology development the 
advantages  that  supplier’s  declaration  offers  as  a  regulatory  mechanism  are  significant.   
However, the SDoC is not a ‘set and forget’ solution.  Nor is it de-regulation.  It involves 
serious commitment on the part of suppliers and regulators to ensure that it does not: 

 

 

introduce imbalances between suppliers, or 

compromise legitimate end user protections. 

To be successful in meeting regulatory objectives and industry needs SDoC requires the 
right  regulatory  environment  and  a  constructive  working  relationship  between  industry 
and regulator.    

5.5.3. Impact of SDoC on Stakeholders 

5.5.3.1.  Regulator 

Compliance  based  on  supplier  responsibility  has  not  eliminated  the role  of  government 
and its regulatory agencies in conformity assessment; it has significantly changed the role 
of  regulator  from  that  of  an  approval  body  to  a  technical  policy  and  audit  enforcement 
body.   

An adequate and visible audit enforcement mechanism has proved to be one of the most 
critical  functions  for  managing  SDoC.    Although  much  responsibility  for  product 
conformity has swung to the industry, the regulator retains a significant role in policy and 

163 

 
 
also in ensuring that the system of compliance is not undermined.   Post-market audit and 
surveillance become an essential requirement for ensuring integrity of the system.  

It  is  widely  accepted  that  without  audit  enforcement  there  are  risks  that  imbalances 
between suppliers may emerge and regulatory objectives will not be met.   

Audit  enforcement  has  been  essential  to  ensuring  that  competing  suppliers  have  not 
sought  to  gain  advantage  by  disregarding  their  obligations.    In  so  doing  it  has  reduced 
any loss in market confidence through exposure to sub-standard products.  

This changed role for the regulator has required a different set of skills and outlook than 
those  needed  to  successfully  manage  an  approval-based  system.      In  many  respects  the 
changing the role of regulatory staff has been one of the more difficult changes to make 
under the introductions of SDoC.  A managed implementation plan has been essential.   

5.5.3.2.  Suppliers 

SDoC relates to  suppliers (in the case of electromagnetic interference  (EMI)  regulation 
SDoC  is  required  from  manufacturers,  wholesalers  or  retailers)  and  not  just  to 
manufacturers.  It applies the same level of obligation to any person/company responsible 
for placing a product on the Australian market.   

Under the Supplier Declaration system as it has been introduced for telecommunications 
and  EMC,  the  supplier  is  now  expected  to  assume  greater  responsibility  for  regulatory 
outcomes.  As a consequence the level of technical skill maintained by regulators for the 
purpose  of  managing  an  approvals-based  system  has  diminished.    There  has  been  a 
corresponding need for suppliers to raise their level of technical skill.  Where the supplier 
is  a  manufacturer  it  has  not  been  difficult  to  respond  to  this  need.    However,  import 
distributors and some retailers have also fallen under the scope of suppliers and have not 
always been in a position to readily meet their responsibilities. 

This has been difficult for many suppliers to come to terms with, as the regulator is no 
longer  always  technically  skilled  or  empowered  to  exercise  discretionary  powers  in 
relation to compliance.  Nor is the regulator able to provide the level of information and 
support that is often expected from past experience.   

An  equally  acute  problem  for  suppliers  has  been  the  increased  administrative  load  that 
must  be  carried  because  of  the  need  to  support  the  declaration  of  conformity  with 
compliance folders or  technical construction  files.  The need for suppliers to  determine 
for themselves what constitutes an adequate compliance folder also created a good deal 
of  uncertainty  as  to  what  was  expected  by  the  regulator.    Addressing  these  problems 
required both a lengthy phase-in period and a significant commitment by the regulator to 
information dissemination. 

5.5.3.3.  End User 

In Australia SDoC is invisible to end-users.  However, the introduction of SDoC has not 
reduced end user protections in any measurable way.  

164 

 
 
 
Preconditions for SDoC  

Throughout  the  implementation  process  a  number  of  issues  have  emerged  as  having  a 
critical impact on the use of SDoC.  These include: 

 

 

 

 

 

the quality and content of standards 

the capacity to provide high-quality plain-language information 

a clearly articulated regulatory objective 

conformity assessment tools; and 

appropriate regulatory framework.  

The Quality and Content of the Standards  

The  quality  of  standards  is  critical  to  the  smooth  operation  of  SDoC.      Standards  are 
generally  the  means  for  setting  the  regulatory  objectives  required  of  products.    Where 
standards are unclear or capable of more than one interpretation it becomes increasingly 
difficult  to  exercise  a  declaration,  particularly  where  regulators’  technical  skills  are 
reduced.    Other  remedies  may  be  found  through  testing  and  certification  bodies,  but 
ideally  the  standards  themselves  should  be  capable  of  use  under  a  SDoC  regime.  
International  standards  developed  by  organisations  such  as 
International 
Electrotechnical Commission (IEC) increasingly show awareness that they are likely to 
be used in conjunction with SDoC and aim for greater clarity and useability. 

the 

WTO ITA could consider issues affecting participation by a broader range of countries in 
international standards writing bodies.  

Quality of Information 

The change of role for regulators implied by SDoC may result in a reduction of service 
levels by regulators.  SDoC is a system based on the responsibility of suppliers and under 
this  arrangement  resources  within  regulatory  organisations  have  been  reduced  or 
redirected.   Whereas  once  a  regulator  may  have  been  able  to  provide interpretations  of 
complex  regulatory  documents,  under  SDoC  they  may  not  always  be  resourced  to 
provide such advice.  One remedy to this is the publication of plain language information 
in the form of suppliers’ guides.    

When written in plain language rather than legal or technical jargon guides of this kind 
are  indispensable  for  communicating  to  suppliers—whether  they  be  local  or  foreign 
manufacturers, retailers or distribution agents—what the essential obligations are. 

Our  experience  in  working  within  the  APEC  Telecommunications  Working  Group  on 
mutual  recognition  and  related  matters  has  highlighted  the  critical  role  that  a  common 
understanding  of  requirements  in  each  member  economy  plays  in  creating  mutual 
confidence and a base for action on trade facilitation initiatives.   

165 

 
 
The  development  and  publication  of  accurate,  detailed  and  accessible  regulatory 
information  would  facilitate  trade  in  IT  products  and  provide  a  basis  for  considering 
further  mutually  beneficial  outcomes.    This  may  be  something  that  ITA  may  wish  to 
examine.  Information and communications technologies make this an achievable task at 
very little cost. 

SDoC and Conformity Assessment Tools 

The  use  of  Supplier’s  Declaration  of  Conformity  alongside  specific  conformity 
assessment requirements is a matter of much debate.  For some, SDoC is sufficient on its 
own;  others  regard  it  as  essential  that  some  reference  is  made  to  external  third  party 
assessment as the basis on which SDoC is made. 

First and foremost the mandatory use of accredited testing as the basis for SDoC should 
always be a matter of risk assessment.   

In some circumstances a supplier’s declaration alone may well be sufficient to ensure that 
a given regulatory objective is met particularly where the risk of harm to third parties is 
low.  But, as the risks posed by product failure become more serious it has become the 
case that suppliers are required to make a declaration based on the results of accredited 
testing, certification or inspection assessment. 

The  Australian  system  required  the  use  of  accredited  testing  (either  third  party  or 
manufacturer’s testing) for telecommunications network connection.  Accredited testing 
is  a benchmark for EMI testing, but is  mandatory  only for products deemed to  be high 
risk. 

This  may  appear  to  be  contrary  to  the  apparent  intent  of  a  SDoC  system  but  in  some 
cases  the  use  of  accredited  testing  has  proven  to  be  an  essential  requirement  for 
maintaining a viable SDoC system.  The use of accredited testing has been an important 
element is gaining acceptance for SDoC through: 

 

 

 

 

 

giving  an  initial  degree  of  confidence  to  allow  regulators  to  step  back  from  pre-
market approvals  

ensuring a common approach to testing amongst competing manufacturers  

providing  regulators  with  a  level  of  consistency  in  assessment  on  which  to  base 
audit enforcement 

maintaining  confidence  of  end  consumers  that  SDoC  could  assure  expected 
protections 

providing  technical  confidence  for  sections  of  the  supply  sector  that  are  not 
technically skilled. 

Importantly,  basing  conformity  assessment  requirements  on  international  arrangements 
such as IEC CB Scheme and agreements between accreditation systems have contributed 
to greater portability of conformity assessment.  

166 

 
 
Market conditions are also emerging as factors in determining whether SDoC should be 
tied to specific conformity assessment requirements.  But it is by no means clear how this 
might  be  applied.    For  instance,  in  a  situation  where  suppliers  to  a  market  are 
characterised by a small number of ethical suppliers then SDoC might be sufficient with 
no specific conformity assessment obligations, particularly where there are strong general 
consumer  protection  laws.    Where  the  supply  market  is  highly  fragmented,  setting  a 
minimum level of acceptable testing or certification performance may be an  acceptable 
and necessary constraint on SDoC.    

A further point worth considering in relation to conformity assessment tools is the role of 
third party accredited certification services.  It had been proposed that the introduction of 
SDoC in Australia would see a rapid decline in demand for certification services.  This 
has  not  been  the  case.    Many  suppliers,  particularly  those  without  internal  technical 
expertise,  have  chosen  to  buy  in  that  expertise  and  manage  their  exposure  to  increased 
responsibility through the use of third party certifiers. 

There  is  a  need  for  greater  risk-based  assessment  in  setting  regulation  and  achieving 
better decisions about conformity assessment requirements for regulated products. 

WTO  ITA  could  examine  the  application  of  risk-based  assessment  by  regulators  to  the 
setting of conformity assessment requirements.  

WTO  ITA  could  conduct  this  examination  with  a  view  to  supporting  the  work  being 
undertaken  by  organisations  such  as  the  International  Laboratory  Accreditation 
Cooperation  (ILAC)  and  IEC  to  implement  systems  of  portable  conformity  assessment 
based on equivalent processes of peer assessment and accreditation. 

Appropriate Regulatory Framework  

As  a  system  of  regulation  SDoC  requires  a  different  set  of  skills  and  functions  from  a 
regulator to those required in an approval system.  The skills and functions necessary in a 
regulatory  framework  that  utilises  SDoC  cannot  be  easily  stated  for  all  countries,  but 
some important considerations are: 

 

 

 

 

 

 

 

 

The capacity and powers to conduct audit and market surveillance 

Ability to support multiple conformity assessment routes   

Applying risk factors to regulation 

Properly stated regulatory objectives 

Use of international standards 

Open communications of requirements  

Appropriately trained staff 

Capacity to conduct and maintain industry liaison and consultation 

167 

 
 
 

 

Adequate checks and balances to support consumer confidence 

Referral to external experts in appointment of conformity assessment bodies. 

WTO  ITA  could  examine  the  principles  for  regulatory  practice  which  maximise  the 
benefits of greater trade facilitation while ensuring the integrity of legitimate regulatory 
protections.   

6.  EVALUATING THE TRADE EFFECTS OF SUPPLIERS' DECLARATION OF CONFORMITY 

The OECD investigated the impact of Supplier’s Declaration of Conformity (SDOC) on 
trade flows205. As under SDOC regimes suppliers themselves provide written assurance 
of conformity to applicable technical regulations of a market, the costs of compliance are 
assumed to be smaller than for CA regimes requiring certification by third parties. 

The study focuses on three cases of SDOC introduction in the European Union covering 
eligible  products  from  the  medical  devices,  telecommunications  equipment  and 
machinery sectors.  The paper explains the rationale for using SDOC, expected benefits 
and  design  characteristics  of  SDOC  regimes.  The  quantitative  analysis  uses  a  gravity 
model  and  finds  compelling  evidence  that  the  introduction  of  SDOC  in  the  EU  was  a 
factor that influenced the evolution of import flows into EU markets positively. Intra-EU 
trade  flows  and  imports  from  extra-EU  OECD  countries  increased  for  SDOC-eligible 
radio  and  telecommunications  equipment  and  low-risk  medical  devices,  whereas  the 
results  for  machinery  are  ambiguous.  The  most  striking  increases,  visible  in  all  three 
sectors,  are  found  for  exports  to  EU  markets  from  non-OECD  (developing)  countries 
included  in  the  sample.  Analysis  of  the  effect  of  SDOC  for  selected  individual  EU 
members furthermore suggest that the magnitude of effect depends on the nature of the 
CA regime that SDOC replaced. 

The study concluded the following: 

First,  introduction  of  SDOC  in  the  EU  region  was  indeed  one  factor  that  influenced 
positively the evolution of imports during the time period studied. Results from the two-
stage  Heckman  estimation  show  that  replacement  by  SDOC  of  CA  regimes  that  EU 
members applied to RTTE and Class I medical devices and that on average were stricter, 
made trade easier. For the products studied, the switch to SDOC enabled trade (imports) 
of SDOC products  among country pairs that did not  trade these products before, and it 
raised the level of trade that already existed. The situation for machinery is less clear; we 
have less confidence in the estimates obtained because of the peculiar behaviour of the 
machinery market, which renders the coefficients of the SDOC variables unstable across 
alternative equations. 

Second,  the  regression  analysis  reveals  an  intriguing  feature  of  the  import  behaviour 
observed. While the EU’s SDOC policy applies without discrimination to all producers, 
regardless of where they are located, the impact varies across different groups of source 
countries. Imports from non-OECD (developing) countries have benefited most. 

205  

Fliess,  B.,  F.  Gonzales  and  R.  Schonfeld  (2008),  “Technical  Barriers  to  Trade:  Evaluating  the  Trade  Effects  of  Supplier's 
Declaration of Conformity”, OECD Trade Policy Papers, No. 78, OECD Publishing, Paris. 

168 

 
 
                                                 
Third, the regression analysis confirms that bilateral trade flows between EU markets and 
with  extra-EU  countries  are  influenced  by  a  host  of  factors  other  than  SDOC,  some  of 
which  were  explicitly  taken  into  account  in  the  specification  of  the  gravity  equations. 
These were however not the variables of prime interest to this study. 

The  results  from  both  the  first  stage  selection  and  second-stage  regression  of  the 
Heckman  model  indicate  that  SDOC  has  facilitated  non-EU  countries’  entry  of  EU 
markets  for  eligible  RTTE  and  Class  1  medical  devices,  and  that  in  particular  firms 
located  in  non-OECD  (developing)  countries  have  rather  consistently  profited  from  the 
EU-wide switch to  SDOC in  all  three sectors. This  lends support to  the notion that the 
testing  and  other  requirements  of  the  national  CA  regimes  previously  in  place  created 
important  fixed  costs  that  effectively  acted  as  a  barrier  to  exporting.  Such  costs  do  not 
vary  with  the  volume  exported  to  a  foreign  market,  but  they  can  deter  firms  from 
pursuing sales opportunities abroad. SDOC appears to have lowered firms’ fixed costs. 

The evidence in this paper furthermore suggests that SDOC affects firms’ variable costs 
more  than  their  fixed  costs.  This  is  because  while  new  market  entries  occurred,  this 
response is weaker than the positive change found for already existing imports. Results 
from second-stage OLIS regressions confirm that the introduction of SDOC created more 
export opportunities for countries with firms already supplying EU markets. Here again, 
there was a very favourable impact of SDOC on imports from non-OECD (developing) 
countries, which emerge as clear winners from the change of the CA system. For extra-
EU OECD countries and for intra-EU trade, results tended to be positive and statistically 
significant,  but  less  consistently  so  -  e.g.,  SDOC  facilitated  imports  from  OECD 
countries of eligible medical devices, but not of RTTE, and it contributed to higher intra-
EU  imports  of  RTTE  and  medical  devices,  but  not  machinery.  This  observed  stronger 
impact on the level of existing imports differs from what Baller (2007) found in her study 
of MRAs. SDOC apparently has only a modest influence on a firm’s decision whether it 
should  enter  a  market,  but  once  a  supplier  has  entered  a  market  SDOC  makes  a 
difference  and  strengthens  sales.  In  the  case  of  MRAs  Baller  found  the  market  entry 
effect to dominate. 

The  question  whether  firms  actually  adjust  their  practices  of  demonstrating  conformity 
with  given  requirements  in  ways  that  would  allow  them  to  take  advantage  of  the  cost 
savings that the CA regime change offers is answered affirmatively by the results of this 
study.  This  clearly  happened  in  the  case  of  the  EU’s  SDOC  initiative,  an  additional 
incentive perhaps being that SDOC was introduced EU-wide so that potential gains were 
amplified by the prospect of further gains resulting from selling to a unified large market. 
Note also that the size of cost savings and hence the trade facilitation potential depends 
on the magnitude of the regime change. As this paper has explained, SDOC regimes can 
vary greatly in their complexity, and the EC opted for a relatively simple form of SDOC, 
which replaced national regulations that on average were more restrictive. The analysis 
of  individual  Member  States’  imports  of  medical  devices  and  machinery  represent  the 
first  attempt  to  formally  estimate  how  variation  in  the  magnitude  of  regime  change 
affects the trade response. 

That  the  estimation  results  of  the  Heckman  model  show  that  the  trade  effects  vary 
depending  on  the  different  groups  of  exporters  and  that  the  difference  is  particularly 
strong for OECD and non-OECD countries does not appear to be consistent with a policy 

169 

 
 
measure  (SDOC)  that  by  design  is  non-preferential.  Logic  and  non-statistical  evidence 
may  offer  some  help  in  understanding  why  the  variations  have  emerged.  It  is  widely 
accepted  that  in  what  is  sometimes  called  the  SQAM  field  (Standards,  Quality, 
Accreditation,  Metrology)  the  technical  infrastructure  in  developing  countries  is  weak, 
and  that  its  poor  quality  constitutes  a  barrier  to  development.  In  many  technical 
assistance  programmes,  the  SQAM  field  is  an  identifiably  separate  field  for  aid.  While 
SQAM infrastructure remains poor, complex processes of conformity assessment will be 
harder to master for local producers than for producers in more developed markets. The 
problem  is  compounded  when  mandatory  third-party  conformity  assessment  is  coupled 
with  the  requirement  to  use  a  conformity  assessment  body  (CAB)  in  the  destination 
market:  for  suppliers  from  most  OECD  member  countries  at  similar  stages  of 
development, it will be relatively easy to develop a relationship with a highly competent 
CAB  in  another  country  –  not  so  for  a  developing  country  supplier.  The  removal  of 
mandatory  third-party  CAB  in  a  destination  market  will  therefore  be  an  even  greater 
benefit to a developing country supplier who did not have the capability to master it in 
the first place. 

That argument, however, does not explain why imports between EU countries would be 
affected differently by SDOC than imports coming from other OECD countries outside 
the region – i.e., why exporters located in OECD countries benefit less from SDOC than 
their counterparts in EU countries. A logical explanation for that might be simply that EU 
suppliers  would  generally  be  more  keen  to  take  advantage  of  significant  new  benefits 
offered in their home market, which in many cases will count for a higher proportion of 
total revenues than for suppliers outside. 

One  less  palatable  argument  may  also  be  mentioned  –  and  indeed  sometimes  is 
mentioned  –  to  explain  the  apparently  disproportionate  benefit to  developing  countries: 
that  imports  from  non-OECD  countries  into  the  EU  have  increased  because  of 
widespread  rogue  practices  of  manufacturers  operating  in  developing  countries.  They 
self-certify compliance with the standards in the EU but in practice may not verify. This 
way  they  save  most  of  the  costs  associated  with  SDOC  and  can  offer  their  products  at 
very  competitive  prices.  Concern  about  the  dangers  to  public  safety  presented  by  the 
abandonment  of  ex  ante  technical  checks  by  bodies  under  the  direct  authority  of 
government in  the import market is well known and understood, and is consistent with 
this fear of rogue practice. The authors have, however, not come across official records 
that would indicate that such practices are indeed common in the three sectors studied. 

The  authors  made  a  special  comment  on  the  results  for  machinery,  which  are  partly 
ambiguous  and  partly  contradict  the  statistical  conclusions  from  the  other  two  sectors. 
Only for non-OECD (developing) countries are the results for machinery consistent with 
those  for  the  other  two  sectors:  SDOC  can  be  demonstrated  to  have  led  to  increased 
exports by developing countries to the EU. But for intra-EU trade and for imports from 
OECD countries, the results are ambiguous or negative. No statistical explanation for this 
exception emerges from the study, and a wider debate may be justified. 

The authors do feel, however, that it is possible to offer a logical hypothesis to explain 
the  difference.  It  is  based  on  the  complexity  of  the  other  changes  to  EU  technical 
regulation introduced simultaneously by the same technical regulation which introduced 
SDOC  in  this  sector:  notably,  the  commissioning  of  an  entire  new  generation  of 

170 

 
 
European  standards  which  may  have  led  in  some  cases  to  radical  changes  in 
manufacturing processes or documentation even for established, domestic suppliers. The 
changes were far more complex than those involved in the other two cases in this study – 
remember  notably  that  in  the  (admittedly  often  complex)  medical  devices  sector,  this 
study covered only the simple Class I medical devices, with a relatively limited number 
of  standards.  In  machinery,  on  the  other  hand,  several  hundred  new  standards  were 
involved,  and  the  process  of  identifying  the  combination  standards  applicable  to  a 
specific product was initially complex, and complicated further by the fact that for many 
products, product specific standards took years to develop, forcing suppliers to determine 
for themselves – or with the help of external specialists – how to meet the – also new – 
essential requirements of the directive itself. The process of adaptation might have been 
more  disruptive  for  producers  in  developed  countries  than  for  new  suppliers  in  the 
developing  world,  who  would  have  seen  the  simplification  and  uniformity  across  the 
entire EU as an opportunity rather than a burden. 

There  are  two  ways  in  which  regulatory  complexity  affects  measurement  of  the  trade 
impact of SDOC in the case of the EU. First, when SDOC was introduced it replaced all 
previous national systems at the same time; i.e. SDOC was harmonised across the region 
for applicable product classes. Second, in two of our three sectors the Directives which 
introduce  SDOC  also  introduce  other  changes  unrelated  to  SDOC,  such  as  the 
harmonisation of standards. This study’s model specification has tried to separate SDOC 
introduction  from  its  EU-wide  harmonisation and  from  the  Directives’  other  provisions 
by including a set of products in each sector that are not eligible for SDOC and taking 
into  account  also  the  imports  of  three  countries  that  did  not  join  the  EU’s  SDOC 
initiative. In addition, the authors have worked with product fixed effects that should also 
cover effects such as those generated by SDOC harmonisation. These are first estimates, 
and while the authors think their model has been well specified, they think that it would 
be useful to replicate this study for individual countries that have adopted SDOC in the 
absence of other regulatory changes. 

Factors  such  as  economic  growth  and  technological  developments,  have  undoubtedly 
contributed to a significant expansion over the last decade of exports of RTTE and other 
manufactured  products  from  such  countries  as  Brazil,  China  and  India,  which  are 
included in this study’s sample of non-OECD countries. But exports from these countries 
driven  by  such  factors  have  increased  not  only  with  respect  to  Europe  but  also  with 
respect to the United States and other major markets of the world. By differentiating the 
EU  from  the  control  group  countries  and  adding  country  and  time  fixed  effects,  the 
specifications of the gravity equation have controlled for the interference of these factors 
in the measurement of SDOC impact. 

The  authors  argue  that  the  econometric  procedures  used  are  appropriate  and,  with  the 
exception  of  the  machinery  sector,  the  specifications  have  performed  well  enough  to 
create confidence about the sign of the coefficients of the SDOC variable. The size of the 
effect (i.e., size of SDOC coefficients) is best taken as indicative, for two reasons: 

– 

First,  the  effect  of  SDOC  is  for  the  set  of  (SDOC  and  non-SDOC)  products 
included  in  the  study,  and  the  specific  products  covered  could  explain  the  big 
effects  observed  for  SDOC  in  the  estimations.  Import  behaviour  in  other  sectors 

171 

 
 
could be different, although it would be reasonable to expect to find SDOC having 
a positive effect where the transition is from a more restrictive regime. 

– 

Second,  the  gravity  model  is  most  widely  used  and  has  proven  itself  when 
modelling uses bilateral flows of trade at the aggregate level. Here, it was applied 
to trade in product segments in three sectors, making use of highly disaggregated 
trade data. Other empirical work has shown that the gravity model remains a useful 
analytical  tool  even  at  a  disaggregated  level  of  trade;  however,  disaggregation 
heightens  the  sensitivity  of  explanatory  variables  and  this  may  lead  to  surprising 
results.  This  warrants  caution  not  to  take  the  magnitude  of the  coefficients  of  the 
SDOC variable at face value. At this time it is not possible to provide external tests 
for our estimates, as other studies assessing SDOC’s trade effects are nonexistent to 
the authors' knowledge. 

172 

 
 
 
ANNEX 9 THE SME TEST – SUMMARY OF RESULTS 

(1) Preliminary assessment of businesses likely to be affected  

Around  87%  of  the  enterprises  operating  within  the  non-
harmonised sectors are micro enterprises (i.e. with less than 9 
employees)  and  around  11%  are  small  and  medium 
enterprises (i.e. with a number of employees between 50 and 
250)206. 

Therefore, the problem is likely to particularly affect SMEs. 

(See section 2 – 
Economic context and 
3.2  - The 
consequences of the 
problem as well as 
Annex 3- Who is 
affected and how and 
Annex 4 – Analytical 
tools and economic 
context) 

(2) Consultation with SMEs representatives 

An  online  public  consultation  was  carried  on  from  the  1st  of 
June until the 30 of September 2016 (17 weeks) accessible via 
the Your voice in Europe website. The consultation was made 
available to the general public, and aimed at gathering data on 
the functioning of mutual recognition, the current problems as 
well  as  possible  options  for  improvement.  153  replies  were 
received during the public consultation.  

(See Annex 1 - 
Procedural issues and 
Annex 2 – Synopsis 
report of the 
stakeholder 
consultation) 

Many  business  associations  which  replied  to  the  consultation 
represented  SMEs  and,  in  addition,  22  SMEs  and  8  micro 
enterprises  submitted  an  individual  reply  to  the  consultation. 
The results show that the majority of SMEs, when faced with 
national  rules  preventing  them  from  selling  their  products  as 
such tend to adapt their products instead on relying on mutual 
recognition.  This  happen  despite  the  fact  that  the  majority  of 
SMEs  tried  to  rely  on  mutual  recognition  for  entering  the 
market.    Market  access  denial  also  affected  SMEs,  as  up  to 
71% of SMEs were faced with a market access denial decision 
after  using  mutual  recognition  for  entering  a  market.  As 
regards challenging these decisions, 7% of SMEs successfully 
challenging  such  decision  (0%  for  micro  and  medium 
enterprises).  

The Commission presented the initiative and sought the views 
of  SMEs  at  the  Small  Business  Act  regular  meeting  with 
European SME associations on 7 December 2016.  

206  

These figures have been computed for the period 2011  – 2013 since the enterprise statistics by size class for aggregates of 
activities (NACE rev.2) are only available for this period. 

173 

 
 
 
                                                 
(3) Measurement of the impact on SMEs 

More  than  half  of  SMEs  say  that  administrative  procedures 
related to exporting to other Member States are too difficult to 
comply with and therefore deter many firms from exporting.207 
According to the Commission’s 2014 Competitiveness report, 
only  14%  of  SMEs  are  trading  across  borders  in  the  EU 
compared  to  85.4  %  of  large  manufacturing  firms208.    This 
translates  into  lost  opportunities  for  businesses  as  well  as 
costs  resulting  from  delays  for  entering  a  market.  In 
addition,  it  also  generates  a  loss  of  competitiveness  and 
innovation. 

Furthermore,  SMEs  are  more  impacted  by  information  costs, 
as  they  don't  have  the  necessary  internal  resources  to  allocate 
to finding the applicable rules in the member State where they 
want  to  sell  their  products,  nor  the  financial  means  to 
externalise this research. Alike, SMEs are heavily impacted by 
the  lack  of  efficient  means  to  challenge  administrative 
decisions  denying  market  access,  because  they  don’t  have 
internal  legal  departments  to  deal  with  these  long  and  costly 
procedures.  For  a  fact,  83%  of  businesses  using  alternative 
disputes resolution systems such as SOLVIT are SMEs209.  

4) Assess alternative options and mitigating measures 

At the end of the impact assessment, the selected option shows 
that the initiative might have a very positive economic impact 
on the stakeholders in general, including SMEs. Consequently, 
there  is  no  element  showing  the  need  for  SME  specific 
measures 
the 
proportionality principle.  

to  ensure  compliance  with 

in  order 

7 

(See 
– 
section 
Analysis of the impacts 
and  Annex 3  – Who is 
affected and how) 

7 

(See 
– 
section 
Analysis of the impacts 
and  Annex 3  – Who is 
affected and how) 

207   

Flash Eurobarometer 421: Internationalisation of Small and Medium-sized Enterprises  
https://data.europa.eu/euodp/en/data/dataset/S2090_421_ENG  and Flash Eurobarometer 413: Companies engaged in online 
activities https://data.europa.eu/euodp/en/data/dataset/S2058_413_ENG 

208   More specifically, the 2014 Competitiveness report indicates that among the roughly two million manufacturing SMEs (0-
249  employees)  in  the  EU-28,  14.3  %  export  goods  to  EU  countries.  One  can  observe  that  export  participation  increases 
strongly  with  firm  size.  Meanwhile,  7.9  %  of  micro  enterprises,  37.5  %  of  small  firms,  and  67.0  %  of  medium-sized 
enterprises  export  to  internal  markets,  compared  to  85.4  %  of  large  manufacturing  firms.  This  indicates  that  the  export 
participation  of 
that  of  micro  enterprises.  SWD(2014)277  final: 
http://ec.europa.eu/DocsRoom/documents/6706/attachments/1/translations/en/renditions/native 

times  higher 

is  about  10 

large  firms 

than 

209       Source: SOLVIT database 

174 

 
 
 
 
 
 
 
                                                 
 
ANNEX 10 GLOSSARY OF TECHNICAL TERMS AND ABBREVIATIONS 

List of acronyms and abbreviations  

BIS 

CBA 

CBT 

CE 

Business Innovation and skills  

Cost benefits analysis  

Computer based training  

Conformité Européenne  

CPCP 

Construction Products Contact Point  

DG 

Directorate General  

EEA 

European Economic Area 

EC 

EEN 

ECJ 

European Commission  

Enterprise Europe Network  

European Court of Justice  

EFTA 

European Free trade Association  

ESO 

European standardisation organisations  

EU 

IA 

European Union  

Impact assessment  

ICSMS 

Information and Communication System on Market Surveillance  

IMI 

IT 

MR 

MS 

Internal Market information System 

Information Technologies  

Mutual Recognition  

Member States  

NLF 

New legislative framework  

OECD 

Organisation for Economic Co-operation and development  

PCP 

Product Contact Point  

RAMON  Reference and Management of Nomenclatures 

SITC 

Standard international Trade Classification 

175 

 
 
SME 

Small And Medium Enterprises  

SOLVIT 

Service provided by national administrations offering assistance when your 
rights as a citizen or business are breached  by public authorities in another 
Member State 

SWOT 

Strengths, Weaknesses, Opportunities, Threats  

TFEU 

Treaty on the Functioning of the European Union  

TRIS 

Technical regulations Information Systems 

List of countries  

AT 

BE 

BG 

CY 

CZ 

DE 

Austria  

Belgium 

Bulgaria 

Cyprus  

Czech Republic  

Germany  

DK 

Denmark  

EE 

EL 

ES 

FI 

FR 

HR 

HU 

IE 

IT 

LT 

LU 

Estonia 

Greece 

Spain  

Finland  

France 

Croatia 

Hungary 

Ireland  

Italy 

Lithuania 

Luxemburg 

176 

 
 
 
LV 

MT 

NL 

PL 

PT 

Latvia 

Malta 

The Netherlands 

Poland  

Portugal 

RO 

Romania 

SE 

SI 

SK 

UK 

Sweden 

Slovenia 

Slovakia 

United Kingdom 

177