CELEX: 51998PC0271
Language: en
Date: 1998-05-06
Title: Proposal for a Council Decision on the conclusion af an Agreement between the European Community and Canada on Mutual Recognition in relation to Conformity Assessment

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                              Brussels, 06.05.1998
                                                              COM( 1998) 271 final
                                                              98/0167 (ACC)
                                      Proposal for a Council Decision
 •."to       on the conclusion of an Agreement between the European Community and Canada
                        on Mutual Recognition in relation to Conformity Assessment
                                        (presented by the Commission)
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 ---pagebreak---  ---pagebreak---                                             i-6
                            EXPLANATORY MEMORANDUM
 I. The Agreement
 On the basis of the negotiating directives issued by the Council on 21.9.92. the European
 Commission has negotiated and initialled an agreement on the mutual recognition of
 conformity assessment (Mutual Recognition Agreement, or MRA) with Canada. A Text
 of the Agreement initialled in June 1997 is annexed.
 This memorandum provides an assessment of the Agreement in the light of the
 negotiating directives approved by the Council, and recommends that the Council decide
 to approve the Agreement by means of a Council decision to that effect.
 LI Assessment of the Agreement
 The Commission considers that the initialled Agreement is in conformity with the
 Council's negotiating directives, takes account of the views expressed by the 113 MRA
 Committee, which gave detailed advice to the Commission during the negotiations, and
 provides benefits to the European Community. The Agreement does not contain a rule of
 origin. As for the United States this proved to be non-negotiable with Canada.
 Member States are in the process of designating a considerable number of conformity
 assessment bodies (CABs). Once these bodies have been provisionally accepted by
Canada subject to formal acceptance by decision of the Joint Committee, the Secretariat
 of the Council will receive this list of CABs by way of a Commission Staff paper.
 Sufficient confidence exists between the Parties to the Agreement to allow them to
proceed.
Ll.l Framework Agreement
The Agreement consists of a framework agreement and a series of sectoral annexes. An
article-by-article assessment of the framework follows:
Pre-amble : this sets out the basic objectives of the mutual recognition agreement in
terms of trade facilitation
Article I: Definitions: these are self-explanatory.
 ---pagebreak--- Article H: General Obligations: this sets out the obligation of each Party to accept the
conformity assessment results carried out to its requirements by the other Party,
 according to the terms of the sectoral annexes. Notably, the provision establishes
 acceptance of product certifications and authorisations of each Party. This Article also
 establishes the link between the basic obligations of the Agreement and its sectoral
 annexes.
 Article HI: Sectoral Coverage: this Article provides that the conformity assessment
procedures to which the Agreement applies are specified in the individual sectoral
 annexes, and describes the content of the annexes.
Article IV: Transitional Arrangements: this Article refers to the transitional
 arrangements set out in the annex, to the necessity of a time period for completion and
the possibility of amending it, and the need to move to full implementation by the end of
the period unless there is documentary evidence of a failure of competence.
Article V: Civil Liability: this Article confirms the existing civil liability laws and
responsibilities in the territories of the parties and provides for adequate arrangements to
be made for such liabilities. It also provides for notification and mutual assistance in the
event of a suit.
Article VI: Conformity Assessment Bodies (CABs): this Article recognises that CABs
operate to the requirements of the importing Party and that a designation constitutes a
formal recognition by the designating Party that a CAB has the technical competence and
has undertaken to comply with the importing Party's requirements.
Article VII: Designating Authorities: this is a key provision requiring designating
authorities to have the necessary formal powers over the bodies they designate. This
article thus provides a treaty guarantee that Canada has the necessary authority to
designate, suspend or withdraw bodies.
Article VIII: Verification of Compliance By Conformity Assessment Bodies: this
Article establishes the right for one Party to challenge the compliance of bodies in the
other Party. Verification will be carried out by the Party in whose territory the CAB is
located. The CAB will be suspended where disagreement over its status has been
confirmed by the Joint Committee, unless otherwise decided by that Committee. As
advised by Member States in the 113 Committee MRA Group, the right of verification
has been closely circumscribed to prevent it from being carried out routinely or
unilaterally.
Article IX: Exchange of Information: a basic transparency provision.
Article X: Monitoring of the Agreement: this Article ensures that bodies of each Party
remain coordinated so as to be able, continuously, to correctly interpret the regulatory
requirements of the other Party.
Article XI: Joint Committee: this Article requires the establishment of a Joint
Committee to administer the Agreement on behalf of the Parties. Duties of the Joint
Committee include formally adopting changes to the Sectoral annexes to add or remove
conformity assessment bodies, and discussing divergence of view.
 ---pagebreak---  Article XI.4 sets out detailed procedures for designation of bodies and the right of the
 other Party to contest such designations according to certain rules. The Article does not
 give the Joint Committee the right to extend the scope and coverage of the agreement to
 include new sectors. This has to be mandated by the Parties.
 Article XII: Joint Sectoral Groups: this Article provides for the establishment of joint
 sectoral groups for individual sectoral annexes comprising the appropriate authorities and
 experts to assist the Joint Committee.
 Article XIII: Sectoral Contact Point, Management of Information, Assistance and
 Emergency Action: this provides for contact points to handle exchange of information,
 management of the agreement and emergency action.
 Article XIV: Safeguards: this Article provides that an importing Party retains all powers
 under its domestic law, and within its territory, to take measures against products
 certified by another Party. These powers must be exercised in accordance with the
 principle of non-discrimination.
 Article XV: Market Access: this Article provides that recognition by one Party is
 dependent on continued access being granted by the other Party for duly certified
products, and on the continued existence of authorities capable of implementing the
Agreement by that other. New conformity assessment procedures applying to covered
products will be brought within the scope of the Agreement, unless jointly decided
otherwise, so as to preserve negotiated market access benefits.
Article XVI: Fees: this provides that a Party shall not charge fees for conformity
assessments carried out by other Parties in accordance with the Agreement.
Article XVII: Agreements with other countries: this Article provides that Mutual
Recognition Agreements between Parties to this Agreement and other countries shall
have no force in regard to the other Party to this Agreement.
Articles XVIII, XIX, XX: these are standard institutional and legal provisions. It should
be noted that the Agreement is of unlimited duration, and that there is no scope for a
Party unilaterally to terminate an individual sectoral annex.
1.1.2 The Sectoral Annexes
There follows an assessment of the content of each sectoral annex in terms of its
coverage, the type of mutual recognition arrangements envisaged for the sector, and the
trade and other implications. In making this assessment, the Commission has kept in
mind the following elements:
a)      whether the sectoral annex provides for genuine mutual recognition, i.e. whether all
        relevant conformity assessment procedures for a particular sector have been
       captured;
b)     whether the sectoral arrangements include evaluation of conformity not only to
       Federal law in Canada, but also to sub-Federal regulations where they exist;
 ---pagebreak---  c)    the level of trade between the Community and Canada for the sectors and products
       covered;
 d)    the views expressed by Member States and European industry groups on the
       benefits of mutual recognition;
 e)    the precedential nature (if any) of arriving at a mutual recognition agreement with
       Canada in the sectors covered;
 f)    overall consistency with Community policy objectives in the field of
       standardisation, certification, designation of conformity assessment bodies and the
       removal of technical barriers to trade.
 The sectoral assessment is followed by an overall appreciation of the benefits of the
 Agreement.
 The Commission draws Member States' attention to the trade figures for each covered
 sector in the Annex to this note. These figures show that for every sector concerned, the
 Community has a rough trade balance with Canada. Third party certification (the subject
 of the MRA) applies most commonly to industrial products at the higher end of
 technology, in respect of which both the Community and Canada are major exporters.
A priori, this may indicate that the trade facilitation benefits of the Mutual Recognition
 should accrue to both the Community and Canada. We note however, that trade flows
 only give a partial picture of the likely benefits. The balance of benefits depends on
 additional factors, in particular the following:
a)     the range of products within a sector subject to third party certification. Obviously,
       if in a given sector one Party has more comprehensive certification requirements,
       the trade facilitation benefits to the other i.e. exporting Party may be
       proportionately greater,
b)     the complexity and accessibility of the conformity assessment requirements of each
       Party, including the extent to which each Party applies internationally recognised
       standards or technical requirements for the sector in question. Generally, this is not
       a major issue in the case of Canada which has adopted international standards,
       regulations and conformity systems fairly systematically.
The Commission notes that industrial groups consulted throughout the negotiations, such
as Eurobit and Orgalime, while supporting the agreement, have not always been able to
quantify the costs or time taken to obtain conformity assessment of their products in third
countries, including Canada. It is therefore not feasible in every case to determine the
extent of savings in time, cost or market opportunity of the arrangements set out in this
agreement. This may only be possible once the agreement has been in operation for some
time. What can be ascertained however is whether we have addressed industry's concern
that any agreement provide reciprocal levels of market access, in terms of conformity
assessment procedures.
The Agreement also presents important advantages from the point of transparency,
market access, avoidance of duplication especially of cost, and general facilitation of
trade. This is of particular importance for small and medium sized companies.
                                                                                            I
 ---pagebreak---                                                10
 On the basis of a rough calculation it is estimated that this Agreement will create cost
 savings for the exporting industry of at least 20 MECU and an equivalent amount in
 terms of cost savings to exporters to the EU, some part of which will be passed on to
 European importers or consumers.
 Where relevant, the above factors are taken into account in the assessment of each
 sectoral annex.
 Pharmaceuticals Good Manufacturing Practice (GMP)
This annex establishes mutual recognition of each Party's inspections of pharmaceutical
 sites according to the GMP standards of each, which are effectively equivalent.
Recognition of inspection results and the ensuing certificate of GMP compliance removes
the need for companies in each Party to be inspected by the authorities of the other Party.
Each party accepts the GMP certificate issued by the exporting Party's authority and the
products traded do not need further batch testing and control upon import.
European industry and Member States' inspection authorities (Working Group on
Inspection and control of medicinal products and the Pharmaceutical Committee) have
been consulted at every step of the negotiation and support the arrangements negotiated.
The Community is an important exporter to Canada, (see Annex).
The scope of the Agreement is as broad as possible and covers all medicinal products,
which have undergone one or a series of manufacturing processes, e.g. fabrication,
repackaging, labelling, testing, wholesaling to which GMP applies. An indicative list of
such products is also included (appendix 1 of sectoral annex). Veterinary immunologicals
are not covered.
The sectoral annex applies to all pharmaceutical products subject to GMP in either Party.
This permits inspections to be carried out against each Party's domestic GMP
requirements in most cases. In (marginal) cases where a product is classed as a
pharmaceutical in one Party but not the other, the agreement enables the exporting party's
inspection authority to certify GMP to the importing Party's requirements on a voluntary
basis.
The Agreement also lists the applicable legislation and relevant certifying authorities. It
also sets out in a series of appendices (3 to 6) to the sectoral annex, guidelines for the
setting up and functioning of a Joint Sectoral Group which will play an important role in
the management of the Agreement, components of a GMP compliance programme,
components of a two-way alert programme and the phases of a confidence-building
period.
The MR A on medicinal products / Drug GMP is built on three pillars:
1) a GMP Compliance Program. Only certification by authorities with GMP Compliance
    Programs (including the supporting infrastructure of regulatory requirements,
    standards, processes, and quality systems, etc.) mutually recognised as equivalent will
    be accepted.
 ---pagebreak---                                                11
    The elements of such a system are described in Appendix 4 of the sectoral annex to
    the Agreement. The European Community and Canada both operate such systems at
    present;
2) a two-way alert system. The Joint Sectoral Group to be set up to manage this sector
    will ensure that an efficient and effective "two-way" alert system is in place at all
    times. Elements of such a system are described in Appendix 5 of the sectoral annex;
3) a transition period of 18 months including a confidence building exercise. At the
    beginning of the transition period, the Joint Sectoral Group will elaborate a Joint
    Confidence Building Program. The implementation of this program will permit the
    determination of the capacity of each Party's authority to perform GMP compliance
    certification (guidance provided in Appendix 6 of the sectoral annex). This will
    comprise three phases, review and evaluation of laws and other documentation,
    evaluation of processes and procedures, and decision making on the success of the
    exercise and conclusions.
While providing mutual benefits to pharmaceutical companies, and some savings to
inspection authorities, we consider that the MRA in this sector establishes a good
precedent for other negotiations. The present agreement also establishes mechanisms for
longer-term cooperation between respective inspection authorities which will not only
ensure the agreement continues to be properly applied, but will stimulate further
harmonisation initiatives in other fields of medicines controls, such as Good Clinical and
Laboratory Practices. The systems in place are largely similar and with equivalent
coverage, and the Agreement is a very balanced one for these reasons.
Medical Devices
The sectoral annex provides for mutual recognition of certificates for medical devices
subject to third party certification procedures in either Party, with a few specific
exceptions. Coverage is therefore determined according to the two existing Community
Directives for medical devices, and for Canada their domestic legislation in this field.
The annex thus covers all conformity assessment procedures in the Parties, including
final certification and approval.
The Agreement provides for the full recognition of certificates issued by either side (with
an additional brief supporting report to be issued with European certificates).
Attachments I and II contain lists of designation authorities and Conformity Assessment
Bodies (to be filled out after the confidence building exercise).
The Agreement also provides that each Party shall respect the criteria laid down in the
other Party's regulations or guidelines in designation of CABs (non-binding guidance is
provided in Attachment V of the sectoral annex).
The Parties will also ensure that a two-way alert system is in place at all times.
The Agreement also provides for a transition period (18 months) which will evaluate the
capabilities of the Regulatory / Designating Authorities, the designated Conformity
Assessment Bodies and the functioning of a two-way alert system in accordance with a
set of steps and criteria set out in Attachments III to IV of the sectoral annex.
 ---pagebreak---                                                12
The system to determine Conformity Assessment bodies capabilities will include both
accreditation and other means. The Parties will also, during the transition, work to
harmonise their assessment dossier.
The requirements of third party premarket assessment are extensive on both sides and
cover up to 90% of the field. In this respect therefore we consider that the agreement
presents a balance of advantages to both parties.
In the light of the above, we believe European industry is content with the proposed
MRA in this sector.
The Commission considers that the MRA in this sector sets the right precedents in terms
of our long term objectives. All certification procedures are covered and a link between
mutual recognition and harmonised procedures has been made. The prospect of an MRA
with the Community was a major factor in Canada's recent overhauling of its legislation,
which now closely resembles the EC system.
Electrical Safety
This Annex covers the testing and certification requirements set out in the EC's Low
Voltage Directive and corresponding Canadian legislation and regulations at provincial
level, including medical devices which are not covered by the EC Low Voltage Directive.
European industry groups have been consulted on the proposed MRA and have expressed
support provided that we ensure that any agreement provide for reciprocity of market
access and not lead to the introduction of new and more onerous requirements. Given the
existing openness of the EC regime, and the fact that the necessary Canadian legislation
is covered under the sectoral annex, these requirements have clearly been met. While
manufacturers self certification exists* in the EC third party certification is required for
certain categories of products in Canada. It is also the case that in the past certification
was required under each Provincial regulation. This is no longer the case as a result of the
Agreement and one certificate issued by a designated European CAB will now suffice.
There are therefore clear advantages in the Agreement from an EC perspective.
The Agreement provides for a transitional arrangement of 18 months to provide the
Responsible Designating Authorities with an opportunity to build confidence and
understanding of each other's procedures for recognising CABs and in the ability of those
bodies to carry out their mandates. During the transition period EC and Canadian CABs
shall accept test reports issued by designated CABs in each others' territory provided they
fulfil certain conditions.
Electromagnetic Compatibility (EMC)
In view of the "horizontal" application of EMC requirements to a wide range of electrical,
machinery and telecommunications products, coverage of the EMC phenomenon in the
MRA is necessary to achieve the objective of covering all relevant conformity assessment
procedures.
Each Party agrees to recognise all of the other Party's reports, certificates and Technical
Construction Files, as required under their respective legislation, without any further
assessment of the products. Both Parties also agree to recognise each 'other's suppliers
declaration of compliance as required under their respective legislation.
 ---pagebreak---                                                 13
The Agreement also provides for a transitional arrangement of 18 months. During this
period the Parties will work together to ensure familiarity with each other's regulatory
 requirements, exchange information and review the work carried out by designated
Conformity Assessment Bodies and demonstrate to each other's satisfaction their
 capability to carry out conformity assessment to the requirements of the other Party.
Telecommunications Terminal Equipment
There is a special annex oil Telecommunications equipment but both sectoral annexes on
electrical safety and electromagnetic compatibility also apply. These annexes apply to all
telecommunications terminal equipment (TTE) regulated under the relevant Community
Directives, non-harmonised national legislation for analogue, and radio transmitters, and
the corresponding Canadian legislation.
The Agreement provides for recognition of the conformity assessment certificates (set out
in detail in Art. 4 of the sectoral annex) of Conformity Assessment Bodies designated by
the Parties. The Conformity Assessment Bodies will be required to comply with the
criteria and standards set out in the regulatory requirements of the other Party (a list of
Designating and Approval Bodies and Designated Bodies with an indication of the
products and procedures for which the latter have been designated, have or will be set out
in Attachments 3, 4 and 5 of the sectoral annex). The Agreement also lists the relevant
Canadian standards (appendix 1).
The Agreement provides for a transitional period of 18 months, during which time the
Parties will recognise test reports issued by designated CABs, Also during this period the
Parties will exchange information and develop a better understanding of the Parties'
respective regulatory requirements, to develop mechanisms for exchanging information
on changes to technical requirements to maintain and evaluate the work carried out by the
designated Conformity Assessment Bodies during the transitional period. At the end of
the transitional period the Parties will grant full mutual recognition of certificates of
compliance.
European industry' organisations have been consulted extensively on the MRA
negotiations and have supported the objectives provided that access by means of
recognition to all Canadian conformity assessment systems, including product approvals,
is achieved. In this connection, the agreement provides for reciprocal recognition of all
conformity assessment procedures including final certification without further product
assessment by the importing party.
Recreational Craft
The sectoral annex for recreational craft applies to all recreational craft, including
personal watercraft, which are subject to third party certification in the European
Community or Canada. The Agreement covers all relevant legislation (Directive 94/25)
and the Federal regulations in Canada (none exist at the Provincial level). While the
Canadian system is largely based on manufacturer's self declaration, a limited third party
intervention is still required and there is therefore a mutual advantage in concluding an
agreement.
The Parties will recognise certificates issues by each other's designated Conformity
Assessment Bodies without any further assessment of the products to which they relate.
 ---pagebreak---                                               14
The Agreement provides for a transitional arrangement of 18 months in which the Parties
 will exchange information on and develop greater familiarity with their respective
 regulatory requirements, and carry out the policy legislative and regulatory changes
necessary for the provisions of their annex.
 LI.3 Relations with EFTA States, members of the European Economic Area
 In accordance with the general information and consultation procedures set out in the
EEA Agreement and Protocol 12 of the said Agreement, the Commission has kept EFTA
/ EEA States regularly informed about developments in the negotiations and has informed
them on the final result of the negotiations.
The EFTA / EEA States have had preliminary talks with Canada for negotiating a mutual
recognition agreement equivalent to the one to be concluded between the Community and
Canada.
LI.4 Overall Appreciation
The Commission considers that the proposed MRAs create an acceptable balance of
benefits for all parties overall, when all sectors are taken together. The overall trade
balance with Canada would also suggest that the Agreement will work in favour of EC
exporters. In all sectors the Community has secured effective market access - in terms of
access to all mandatory procedures of the other party. Canada has accepted the
Community's approach of reciprocally recognising not only testing, but also certificates
and approvals of conformity to the other's requirements, including where applied through
sub-Federal legislation. This is a significant development, and establishes a good
precedent for other MRA negotiations. The agreement will allow Community exporters,
if they so choose, to test and certify their products to Canadian requirements prior to
export, and then access those markets without any further conformity assessment
requirements. This will facilitate Community exports. European industry federations have
been consulted on the agreement and have supported them.
Since Canada generally bases its product standards and regulations, and criteria for
accepting Community bodies on established international or European norms, this will
enable European conformity assessment bodies to participate in the agreement and offer
their services to European exporters. The Commission has received indications that a
large number of EC conformity assessment bodies would be interested to work in the
framework of this Agreement, and this indicates both their technical capacity and
economic interest in the Agreement.
                            *•©*
In several sectors the agreement caters for the further development of the parties'
regulatory regimes, with the aim of ensuring that future rules do not undermine the
benefits of the agreement And in several sectors, the agreement will help to promote
wider acceptance of the Community's regulatory approach and technical requirements.
EL The Draft Council Decision
A proposal for a Council decision on the conclusion of the Agreement is attached. The
decision has two objectives:
 ---pagebreak---                                                15
a) to approve, on the basis of Articles 113 and 228 of the Treaty, the draft Agreement;
and
b) to establish the appropriate Community procedure to enable the Commission, assisted
by the 113 Committee (Mutual Recognition), to represent the Community in the Joint
Committee and in the Joint Sectoral Groups established by the Sectoral Annexes, and that
the Community position in that Joint Committee and in the Joint Sectoral Groups in case
of changes to the annexes and other sectoral questions be determined, in conformity with
Article 228, paragraph 4 of the Treaty, by the Commission in consultation with the 113
Committee.
On this second aspect, it is noted that in Article XI of the Agreement, a Joint Committee
of the Parties operates. This Joint Committee is responsible for the management of the
Agreement and has the delegated power to amend existing sectoral annexes. Such right of
amendment is restricted only to procedural issues concerned with implementation,
essentially: amending the references to the regulations applicable to covered sectors;
amending the annexes further to decisions to recognise, suspend, remove, or alter the
scope of activity of conformity assessment bodies or designating authorities in the
Agreement. The power to amend the framework agreement, to delete sectoral annexes or
to add new sectoral annexes rests with the Parties.
It is accordingly proposed that:
a) the Commission, assisted by the 113 Committee (Mutual Recognition) should
represent the Community in the Joint Committee and in the Joint Sectoral Groups
established by the Sectoral Annexes, and that the Community position in that Joint
Committee and in the Joint Sectoral Groups in case of changes to the annexes and other
sectoral questions be determined, in conformity with Article 228, paragraph 4 of the
Treaty, by the Commission following consultation of the above mentioned Committee.
b) for all other issues, the Community position shall be determined by the Council, acting
by qualified majority on a proposal from the Commission.
The Commission therefore proposes that the Council adopts the appended decisions, and
indicates the person who, on behalf of the Community, signs the Agreement.
 ---pagebreak---                                    Proposal for a Council Decision
                                 on the conclusion of an Agreement
                         between the European Community and Canada
               on Mutual Recognition in relation to Conformity Assessment
                                                (.../.../EC)
 The Council of the European Union,
 Having regard to the Treaty establishing the European Community, and in particular
 Article 113 in conjunction with Article 228, paragraph (2), (3), first subparagraph, and
 (4) thereof,
Having regard to the proposal of the Commission,
Whereas the Agreement on Mutual Recognition in relation to Conformity Assessment
between the European Community and Canada, initialled on 30 May / 10 June 1997, has
been negotiated and should be approved,
Whereas certain tasks for implementation have been attributed to the Joint Committee
established by the Agreement, and in particular the power to amend the Sectoral Annexes
thereto;
Whereas the appropriate internal procedures should be established to ensure the good
functioning of the Agreement, and whereas it is therefore necessary to delegate to the
Commission the power to proceed to certain technical amendments of the Agreement and
to take certain decisions for its implementation.
Decides:
                                                Article 1
The Agreement on Mutual Recognition in relation to Conformity Assessment between
the European Community and Canada, including its Annexes are hereby approved on
behalf of the European Community.
The text of the Agreement and the Annexes are attached to this Decision.
                                                Article 2
The President of the Council shall, on behalf of the Community, transmit the note
provided for in Article XIX of the Agreement1.
1
     The date of entry into force of the Agreement will be published in the Official Journal of the European
     Communities.
 ---pagebreak---                                                 17
                                            Article 3
1.   The Commission shall represent the Community in the Joint Committee and in the Joint
     Sectoral Groups established by the Sectoral Annexes, provided for in Articles XI and XII
     of the Agreement, assisted by the special committee established under Article 113 of the
     EC Treaty (Mutual Recognition). The Commission shall proceed, after consultation with
     this committee, to the appointments, exchange of information and requests for
     verifications referred to in Articles DC, X, XI, paragraph 3, letters (c) and (e), XII (b) and
     XHI of the Agreement and the equivalent provisions of its Sectoral Annexes.
2.   The position to be taken by the Community in the Joint Committee or if appropriate by the
     Joint Sectoral Groups shall be determined, with regard to amendments of the Sectoral
     Annexes (Article XI, paragraph 3, letter (a) and paragraph 4 of the Agreement) and
     verification of compliance in accordance with Articles VIII and XI para 4 letter (c) of the
     Agreement by the Commission following consultation of the above mentioned special
     committee.
     In all other cases the position of the Community for a decision in the Joint Committee or
     Joint Sectoral Groups shall be determined by the Council, acting by qualified majority on
     a proposal from the Commission. The same procedure shall apply to decisions taken by
     the EC in the framework of Articles XV.3 and XIX.4.
Done at Brussels,                                               For the Council
                                                                The President
 ---pagebreak---                         EU TRADE WITH CANADA 1995 (MECU)
                    IMPORT                                            EXPORT
          ctl
J22SM                                             *MMJ^ÙÎt^^i,-
 Pharmaceuticals                   95      0.8     Pharmaceuticals                 351      3.4
 Medical Devices                   79      0.7     Medical Devices                  97      0.9
 Telephonic & Telegraphic         266      2.3     Telephonic &                     38      0.4
 Equipment                                         Telegraphic Equipment
 Electrical Equipment             834      7.1     Electrical Equipment            838      8.1
 Recreational Craft                27      0.2     Recreational Craft               18      0.2
                     Total      1300      11.1                        Total      1342     13.0
 TOTAL                         11707     100.0     TOTAL                        10 337   100.0
                        EU TRADE WITH CANADA 1996 (MECU)
                    IMPORT                                            EXPORT
 Products                    Canada
 Pharmaceuticals                   88      0.8     Pharmaceuticals                 411      3.8
 Medical Device                   104      0.9     Medical Devices                 116      1.1
 Telephonic & Telegraphic         213      1.9     Telephonic &                     53      0.5
 Equipment                                         Telegraphic Equipment
 Electrical Equipment             988      8.6     Electrical Equipment            881      8.2
 Recreational Craft                24      0.2     Recreational Craft                4      0.3
                     Total      1416      12.3                        Total      1465      13.9
 TOTAL                         11478     100.0     TOTAL                        10 689   100.0
 SOURCE:
                   Pharmaceuticals: (ch 30)
                   Medical Devices: (ch 9018, 9019, 9020, 9021, 9022)
                   Telephonic & telegraphic Equipment: (ch 8517)
                   Electrical Equipment: (ch 85)
                   Recreational Craft: (ch 8903)
 Source: EUROSTAT (COMEXT)                                       Brussels, 29 October 1997
 ---pagebreak---                                    21
                  AGREEMENT ON MUTUAL RECOGNITION
       BETWEEN CANADA AND THE EUROPEAN COMMUNITY
                      TABLE OF CONTENTS
1. Framework                                    Page 1
2. Telecommunications Terminal Equipment        Page 10
3. Electromagnetic Compatibility (EMC)          Page 29
4. Electrical Safety                            Page 41
5. Recreational Craft                           Page 49
6. Good Manufacturing Practices                 Page 55
7. Medical Devices                              Page 73
                                          Initialled on 30 May 1997
 ---pagebreak---                                                  22
         AGREEMENT ON MUTUAL RECOGNITION IN RELATION TO CONFORMITY
           ASSESSMENT BETWEEN CANADA AND THE EUROPEAN COMMUNITY
The Government of Canada and the European Community ("the Parties")
 Considering the traditional links of friendship that exist between Canada and the European
 Community
Considering that on the basis of past experience under the 1976 Framework Agreement on
commercial and economic cooperation between the European Communities and Canada,
and in order to further develop their dialogue in the area of standards as specified in the
 1990 Declaration on EC-Canada Relations, both Parties have expressed a desire to
establish a more formal framework for the conduct of collaboration in the field of mutual
 recognition- in relation to conformity assessment,
Considering the Parties' interest in strengthening the rules governing free and unhindered
international trade,
Considering the improved conditions for trade between the Parties which the mutual
recognition of tests, certificates and marks of conformity will bring about,
Recognising the importance of maintaining their respective high standards of health and
safety,
Bearing in mind their status as Parties to the Agreement Establishing the World Trade
Organisation and conscious in particular of their obligations under the World Trade
Organisation Agreement on Technical Barriers To Trade,
Have agreed as follows:
ARTICLE 1: DEFINITIONS
General terms concerning conformity assessment used in this Agreement and its annexes
shall have the meaning given in the definitions contained in Guide 2 (1996 edition) of the
International Organisation for Standardisation and the International Electrotechnical
Commission, unless specifically defined otherwise in this Agreement and its Sectoral
Annexes. In addition, the following terms and definitions shall apply to this Agreement:
- Agreement means the Framework Agreement and all the Sectoral Annexes.
- Conformity Assessment means systematic examination to determine the extent to which
a product, process or service fulfils specified requirements.
- Conformity Assessment Body means a body engaged in the performance of procedures
for determining whether the relevant requirements in technical regulations or standards are
fulfilled.
                                                                        Initialled on 30 May 1997
 ---pagebreak---                                                  23
- Designating Authority means a. body with power to designate, monitor, suspend
designation or withdraw designation of Conformity Assessment Bodies under its jurisdiction
  - Designation means the authorisation by a Designating Authority of a Conformity
Assessment Body to perform conformity assessment activities.
- Regulatory Authority means a government agency or other entity, that exercises a legal
right to control the use or sale of products within a Party's jurisdiction, and may take
enforcement action to ensure that products marketed within its jurisdiction comply with legal
requirements.
In the event of an inconsistency between ISO/IEC Guide 2 and definitions in this Agreement
or its Annexes, the definition in this Agreement shall prevail.
ARTICLE II: GENERAL OBLIGATIONS
1. The Sectoral Annexes to this Framework Agreement constitute integral parts of this
Agreement.
2. The Government of Canada shall accept the results of conformity assessment
procedures, including certifications of compliance, as required by the Canadian legislation
and regulations identified in the Sectoral Annexes, produced by designated Conformity
Assessment Bodies or Authorities in the European Community in accordance with this
Agreement.
3. The European Community shall accept the results of conformity assessment procedures,
including certifications of compliance, as required by the European Community and Member
State legislation and regulations identified in the Sectoral Annexes, produced by designated
Conformity Assessment Bodies or Authorities in Canada in accordance with this Agreement.
4. Where transitional rules have been specified in Sectoral Annexes, the above rules will
apply following the successful completion of the transitional phase.
5. This Agreement shall not be construed to entail mutual acceptance of standards or
technical regulations of the Parties and, unless otherwise specified in a Sectoral Annex,
shall not entail the mutual recognition of the equivalence of standards or technical
regulations.
                                                                       Initialled on 30 Mav 1997
 ---pagebreak---                                                   24
 ARTICLE III: GENERAL COVERAGE OF THE AGREEMENT
 1. This Agreement applies to conformity assessment procedures for products covered by its
 Sectoral Annexes;
 2. Each Sectoral Annex shall contain the following items, as appropriate:
 a) a statement on the product scope and coverage;
 b) a description of the relevant legislative, regulatory and administrative provisions
 pertaining to the conformity assessment procedures and technical regulations;
 c) a list of designated Conformity Assessment Bodies or Authorities, or a source from which
to obtain such a list;
 d) a list of authorities responsible for designating the Conformity Assessment Bodies and
the source of the procedures and criteria;
 e) a description of the mutual recognition obligations;
f) a Sectoral Transition Plan;
g) a description of the Joint Sectoral Group;
h) a sectoral contact point in each Party's territory;
i) guidelines for corrective actions.
3. For a given product or sector, the specific rules contained in the relevant Sectoral Annex
shall prevail over the more general provisions of the Framework Agreement.
ARTICLE IV: TRANSITIONAL ARRANGEMENTS
1. The Parties agree to implement the transition commitments on-confidence building where
included in the Sectoral Annexes.
2. The Parties agree that each Sectoral Transition Plan shall specify a time period for
completion;
3. The Parties may amend any transition period by mutual agreement through the Joint
Committee established under this Agreement, taking account of recommendations made by
the relevant Joint Sectoral Groups;
4. Passage from the transitional phase to conditions of full mutual recognition shall proceed
unless there is documented evidence demonstrating a lack of technical competence in a
Party's conformity assessment.
                                                                      Initialled on 30 Mav 1997
 ---pagebreak---                                                 25
ARTICLE V: CIVIL LIABILITY
 1. Nothing in this Agreement is intended to change or modify the law in the territory of either
 Party applicable to civil liability of manufacturers, distributors, suppliers, Conformity
Assessment Bodies, Designating Bodies, Regulatory Authorities or governments, to
consumers or among each other, in respect of the design, manufacture, testing, inspection,
distribution or sale of products that have undergone conformity assessment pursuant to this
Agreement.
2. The Parties agree that their respective Conformity Assessment Bodies are required to
make adequate arrangements for liabilities arising from their operations and activities under
this Agreement. The Parties, through the Joint Committee, shall from time to time consider
whether their respective Conformity Assessment Bodies continue to meet that requirement
and whether the interests of the Parties are adequately protected.
3. Each Party shall promptly notify the other Party of any suit or other proceedings
threatened or commenced in the territory of such Party arising from or in connection with
conformity assessment performed by a Conformity Assessment Body of the other Party.
4. Each Party shall cooperate with the other Party in the investigation and defence of any
suit or proceeding where the interests of either Party are at risk. In particular, the Parties
shall render reasonable assistance in obtaining relevant documents and access to material
witnesses required in the investigation and defence of such suits or proceedings.
ARTICLE VI: DESIGNATING AUTHORITIES
1. The Parties shall ensure that the Designating authorities responsible for designating the
Conformity Assessment Bodies specified in the Sectoral Annexes shall have the necessary
authority to designate, monitor, suspend and withdraw the designations of such Bodies.
2. In the case of suspension of a designation or removal of such a suspension, the
Designating authority of the Party concerned shall immediately inform the other Party and
the Joint Committee.
3. The Parties shall exchange information concerning the procedures used to ensure that
their designated Conformity Assessment Bodies continue to comply with the legislative,
regulatory and administrative provisions of this Agreement.
ARTICLE VII: CONFORMITY ASSESSMENT BODIES
1. The Conformity Assessment Bodies designated in the territory of the exporting Party shall
operate to the requirements of the importing Party and fulfil the conditions of eligibility for
conformity in relation to those requirements.
2. In designating such bodies, the Designating Authorities shall specify, in each Annex, the
scope of conformity assessment activities for which such Bodies have been designated.
                                                                      Initialled on 30 Mav 1997
 ---pagebreak---                                                  26
3. The designation constitutes a formal judgement by the Party that the Conformity
Assessment Body has demonstrated an acceptable level of technical competence in
providing services identified in the designation and further has agreed to comply with the
requirements of the other Party, as set out in a Sectoral Annex.
4. In accordance with the terms of the Sectoral Annexes, each Designating Authority will
make available, if requested, a statement of technical competence of their designated
Conformity Assessment Bodies.
ARTICLE VllhVERIFICATION AND SUSPENSION
 OF CONFORMITY ASSESSMENT BODIES
1. Each Party has the right to challenge the technical competence and compliance of
Conformity Assessment Bodies under the jurisdiction of the other Party. This right will be
exercised under exceptional circumstances only and justified, in an objective and reasoned
manner in writing, to the Joint Committee. The Joint Committee will discuss such requests.
2. Where the Joint Committee, either on its own initiative or on a recommendation from the
relevant sectoral group, comes to the conclusion that verification of technical competence or
compliance of a Conformity Assessment Body operating in the territory of the other Party is
required, it will be carried out in a timely manner by the Party in whose territory the Body in
question is located, or by the Parties jointly if they agree. The Party may seek the
assistance of its Designating Authority in carrying out the verification.
3. Unless decided otherwise by the Joint Committee, the contested Conformity Assessment
Body will be suspended by the competent Designating Authority from the time that a
disagreement over the status of that body has been confirmed in the Joint Committee. The
body in question shall remain suspended until agreement has been reached in the Joint
Committee on the future status of that Body.
4. A certificate of conformity or other documentation for a product issued by a Conformity
Assessment Body, that is subsequently removed by the Joint Committee or Designating
Authority, shall remain valid unless there is a specific decision by the appropriate Regulatory
Authority based on health and safety considerations for the removal of the product from the
market.
ARTICLE IX: EXCHANGE OF INFORMATION
1. The Parties shall exchange information concerning the implementation of the legislative,
regulatory and administrative provisions identified in the Sectoral Annexes.
2. Each Party shall inform the other Party of changes related to the subject matter of this
Agreement, and shall, except where considerations of safety, health and environmental
protection require more urgent action, notify the other Party of the new provisions at least 60
days before their entry into force.
3. Each Party shall promptly notify the other Party of any changes of its Designating
Authorities and Conformity Assessment Bodies.
                                                                         Initialled on 30 May 1997
 ---pagebreak---                                                   27
 ARTICLE X: MONITORING OF THE AGREEMENT
  1. The Parties may hold ad hoc consultations within the Joint Committee to ensure the
 satisfactory functioning of this Agreement.
 2. One Party may request the other to carry out, on its behalf, audits and re-evaluations of
 Conformity Assessment Bodies working to the requirements of the requesting Party. The
  requesting Party will bear the costs of the audit.
 3. In the interests of promoting a uniform application of the conformity assessment
 procedures provided for in the laws and regulations of the Parties, the designated
 Conformity Assessment Bodies shall take part, as appropriate, in interpretation sessions
 conducted by the regulatory authorities in each Party in the relevant areas covered by the
 Sectoral Annexes to this Agreement.
 ARTICLE XI: JOINT COMMITTEE
 1. There shall be established under this Agreement a Joint Committee of the two Parties,
 which will be responsible for the effective functioning of the Agreement.
   2. The Joint Committee shall take its decisions and adopt its recommendations by
 consensus of the Parties. It will meet at least once a year unless it decides otherwise. It
 shall determine its own rules of procedure. It may establish a Joint Sectoral Group under a
 Sectoral Annex, and may delegate specific tasks to those Groups. Each Party may invite its
 representatives from the Joint Sectoral Groups to attend meetings of the Joint Committee
when its sectoral interests are the subject of an agenda item.
3. The Joint Committee may consider any matter related to the operation of this Agreement.
 In particular it shall be responsible for:
a) amending Sectoral annexes;
b) giving effect to the decision to designate or withdraw the designation of a particular
Conformity Assessment Body;
c) exchanging information concerning the procedures used by each Party to ensure that the
Conformity Assessment Bodies specified in the Sectoral Annexes maintain the necessary
level of competence;
d) determining the status of Conformity Assessment Bodies whose technical competence
has been contested;
e) exchanging information and notifying the Parties of modifications of legislative, regulatory
and administrative provisions referred to in the Sectoral Annexes; and
f) addressing any questions relating to the operation of this Agreement and its Sectoral
Annexes, including questions related to health and safety, market access and the balance of
rights and obligations under the Agreement.
                                                                       Initialled on 30 Mav 1997
 ---pagebreak---                                                  28
 4. The following procedure shall apply to the inclusion in or withdrawal from a Sectoral
 Annex of a Conformity Assessment Body:
                a)      a Party designating or withdrawing designation of a Conformity
                Assessment Body shall forward its proposal in writing to the other Party;
                b)      in the event that the other Party consents to the proposal or upon the
                expiry of 60 days without an objection having been made, the inclusion in or
                withdrawal from the Sectoral Annex of the Conformity Assessment Body shall
                take effect; and
                c)      in the event that the other Party challenges the technical competence
                or compliance of a proposed Conformity Assessment Body within the said 60-
                day period, the Joint Committee may request the proposing Party to carry out
                a verification, which may include an audit, of the Body concerned, in
                accordance with the provisions of this Agreement.
ARTICLE XII: JOINT SECTORAL GROUPS
 1. The Joint Committee may establish Joint Sectoral Groups for individual Sectoral Annexes
comprising the appropriate designating and regulatory authorities and experts of the Parties.
These groups will address the specific conformity assessment and regulatory issues related
to a given sector.
2. The responsibility of the Joint Sectoral Groups may include the following:
a) at the request of a Party, to examine specific problems arising in the implementation of
any transitional plans for mutual recognition and to give advisory opinions to the Joint
Committee on issues of mutual concern;
b) furnish information and advice on any matters relating to implementation, and on the
regulations, procedures and conformity assessment system related to a particular Annex, as
may be requested by a Party;
c) review various aspects of the implementation and operation of each Sectoral Annex,
including health and safety aspects; and
d) consider issues of interpretation of requirements in the Sectoral Annexes, and where
appropriate to make recommendations to the Joint Committee.
ARTICLE XIII: SECTORAL CONTACT POINT. MANAGEMENT OF INFORMATION.
ASSISTANCE AND EMERGENCY ACTION
1. Each Party shall appoint and confirm in writing the names and addresses of Contact
Points to be responsible for activities under each Sectoral Annex.
2. Communications regarding confidence-building activities, emergency actions and
regulatory enforcement for products subject to this Agreement will normally be handled
directly by the Sectoral Contact Points.
                                                                       Initialled on 30 May 1997
 ---pagebreak---                                                     29
ARTICLE XIV: SAFEGUARDS
 1. The appropriate Regulatory Authorities of each Party retain all authority under the
applicable law of that Party, to interpret and, as set out paragraph 2 below, enforce their
 respective legislative and regulatory provisions. A Regulatory Authority of the importing
 Party is not the legal representative of the exporting Party.
2. When a Party or one of its Regulatory Authorities has reasons to believe that a product
from the other Party, covered under a Sectoral Annex, may compromise the health or safety
of persons in its territory, or otherwise fails to satisfy a requirement of the applicable sectoral
Annex, the Party in the receiving territory retains all powers under its applicable domestic
law to take all appropriate and immediate measures to withdraw such products from the
market, prohibit their placement on the market, restrict their free movement, or initiate a
product recall. The Regulatory Authority in whose territory the action has been taken shall
inform its counterparts and the Joint Committee within fifteen days of taking such action,
giving its reasons.
3. The Parties agree that border inspections and checks of products certified to the
importing Party's requirements shall be completed as expeditiously as possible. With regard
to any inspections related to internal movement within their respective territories, the Parties
agree that these shall be completed in a manner no less favourable than for like domestic
goods.
ARTICLE XV: MARKET ACCESS
1. Each Party's obligation to accord mutual recognition within the terms of a Sectoral Annex
to this Agreement is conditional upon the other Party continuing
a) to provide access to its market for products that, having been subjected to conformity
assessment procedures, can be demonstrated to meet the applicable technical
requirements; and
b) to maintain in existence legal and regulatory authorities capable of implementing the
provisions of this Agreement.
2. Where a Party introduces new or additional conformity assessment procedures affecting
a sector covered by a Sectoral Annex the Joint Committee shall, unless the Parties agree
otherwise, bring such procedures within the scope of this Agreement and the relevant
Annex.
3. If, upon implementation of such new or additional requirements, Conformity Assessment
Bodies designated by the other Party in order to meet such requirements have not been
recognised by the Party implementing the requirements, the other Party may suspend its
obligations under the Sectoral Annex in question.
                                                                          Initialled on 30 May 1997
 ---pagebreak---                                                  Zo
 ARTICLE XVI: FEES
 Each Party shall ensure that, for conformity assessment procedures carried out pursuant to
 this Agreement and its Sectoral Annexes, no fees are charged in its territory for conformity
 assessment services provided by the other Party.
 ARTICLE XVII: AGREEMENTS WITH OTHER COUNTRIES
 Except where there is written agreement between the Parties, obligations contained in
 mutual recognition agreements concluded by either Party with a country not party to this
 Agreement shall have no force and effect with regard to the other Party.
 ARTICLE XVIII: TERRITORIAL APPLICATION
 This Agreement and its Annexes shall apply to the territory of Canada and to the territories in
 which the Treaty establishing the European Community is applied, and under the conditions
 laid down in that Treaty.
 ARTICLE XIX: ENTRY INTO FORCE, MODIFICATION AND DURATION
 1. This Agreement and its Annexes shall enter into force on the first day of the second month
following the date on which the Parties have exchanged diplomatic notes confirming the
 completion of their respective procedures for the entry into force of this Agreement.
2. This Agreement may be amended by the written agreement of the Parties. Amendments
to, or decisions to terminate Sectoral Annexes will be made by the Parties through the Joint
Committee.
3. The Parties may add Sectoral Annexes upon exchange of diplomatic notes. Such
Annexes shall take effect as part of this Agreement 30 days following the date on which the
Parties have exchanged diplomatic notes confirming the addition of such an Annex.
4. Either Party may terminate this Agreement by giving the other Party six months notice in
writing.
ARTICLE XX: FINAL PROVISIONS
1. This Agreement and the Sectoral Annexes are drawn up in two originals in the Danish,
Dutch, English, Finnish, French, German, Greek, Italian, Portugese, Spanish and Swedish
languages, each text being equally authentic.
                                               |                         Initialled on 30 May 1997
 ---pagebreak---                         31
                EU-CANADA MRA
SECTORAL ANNEX ON TELECOMMUNICATIONS TERMINAL
 EQUIPMENT, INFORMATION TECHNOLOGY EQUIPMENT
             AND RADIO TRANSMITTERS
                       * *             Initialled on 30 May 1997
 ---pagebreak---                                              32
1.   PURPOSE
     The purpose of this Annex is to establish a framework for the acceptance of test
     reports and, at the end of a transitional period, certificates of conformity issued in
     the territory of one Party in accordance with the regulatory requirements of the other
     Party, as referenced in Attachment 1.
     This Annex constitutes a sectoral annex to the framework Agreement on Mutual
     Recognition of Conformity Assessment between Canada and the European
     Community.
2.   SCOPE AND COVERAGE
2.1  The provisions of this Annex shall apply to the following types of telecommunications
     terminal equipment, radio transmitters and information technology equipment:
     (a) equipment intended for connection to the public telecommunications network in
     order to send, process or receive information, whether the equipment is to be
     connected directly to the "termination" of the network or to interwork with such a
     network, being connected directly or indirectly to the termination point. The system of
     connection may be wire, radio, optical or other electro-magnetic means;
     (b) equipment capable of being connected to a public telecommunications network
     even if it is not its intended purpose, including information technology equipment
     having a communication port;
     (c) those categories of radio transmitters defined and specified in Attachment 2.
2.2  A list of the interfaces and services covered by each Party is referenced at
     Attachment 2.
2.3. Both Parties agree that the following is an illustrative but not exhaustive list of
     covered categories of radio transmitters:
     - Short range devices, including low power devices such as cordless telephones /
       microphones;
     - Land mobile, including:
              - Private Mobile Radio (PMR/PAMR)
              - Mobile telecom
              - Paging systems
     -Terrestrial fixed
     - Satellite mobile
     - Satellite fixed
     - Broadcast
     - Radio determination
                                                                     Initialled on 30 Mav 1997
 ---pagebreak---                                               33
3.  THE APPROVAL REQUIREMENTS
3.1 This Annex shall apply to all mandatory approval requirements, adopted within the
    territories of the Parties, by government organizations and/or bodies which have the
    legal powers to enforce a technical requirement, for the equipment referenced in
    Attachment 2. The relevant technical requirements are specified under the legislation
    referenced in Attachment 1.
3.2 Any requirements and conformity assessment procedures applied to domestic
    products shall be applied with no additional requirements or variations to products or
    conformity assessment results originating from the other Party.
4.   CONFORMITY ASSESSMENT ACTIVITIES
4.1 Both Parties affirm that their Conformity Assessment Bodies, recognized under this
    Annex, are authorized to perform the following activities with regard to each other's
    technical requirements for telecommunications terminal equipment, radio
    transmitters and information technology equipment :
    for terminal attachment and radio transmission requirements - testing , issuing and
    acceptance of test reports, performance of required technical evaluation and
    certification of compliance to the requirements of the laws and regulations applicable
    in the territories of the Parties for products covered under this Annex;
    for electro-magnetic compatibility (EMC) -- the recognition of each other's certificates
    of compliance, suppliers' declaration and Technical Construction File, as required.
    The detailed provisions are described in the sectoral annex on EMC;
    for electrical safety/low voltage - the acceptance of testing and certification of the
    covered products to the electrical safety requirements of the other Party. The
    detailed provisions are described in the sectoral annex on electrical safety;
    for quality management - the recognition of one Party's quality management
    certificates in accordance with the regulatory requirements of the other Party.
4.2 Certificates of conformity delivered by the designated Conformity Assessment
    Bodies of each Party under the provisions of this Annex will be recognized by the
    authorities of the other Party without any further assessment of the products.
5.  INSTITUTIONS
5.1 DESIGNATING AUTHORITIES
(a) Designating Authorities are those authorities and organizations responsible for
    designating and assuring the competence of Conformity Assessment Bodies to test
    and certify equipment covered by this annex to the requirements of the other Party.
    The Designating Authorities for the purpose of this annex are listed in Attachment 3.
    The Designating Authorities may seek the services of their accreditation system in
    carrying out these responsibilities.
                                                                     Initialled on 30 May 1997
 ---pagebreak---                                              34
(b)  Each Party shall notify the other within ten (10) working days of changes in the
     identity of their Designating Authorities and their authority to carry out the
     obligations under this Annex.
5.2  DESIGNATED CONFORMITY ASSESSMENT BODIES
(a)  For the purpose of this Annex, each Party will designate competent Conformity
     Assessment Bodies to carry out conformity assessment to the requirements of the
     other Party. Each Party shall ensure that the designated bodies comply with the
     criteria and standards set out in the regulatory requirements of the other Party. In
     making designations, the Parties shall indicate the products and procedures for
     which they have been designated. A list of designated bodies, together with an
     indication of the products and procedures for which they have been designated, is
     included in Attachment 4.
(b)  Conformity Assessment Bodies designated under this Annex shall be recognized as
     competent to perform the conformity assessment activities for which they have been
     designated.
(c)  Designation, suspension or withdrawal of Conformity Assessment Bodies under this
     Annex shall be in conformance with procedures determined by the Joint Committee
     established under the Framework Mutual Recognition Agreement.
(d)  Where a complaint or any other circumstance arises concerning a Conformity
     Assessment Body's ability to perform under this Annex, the appropriate Designating
     Authority must take action to the mutual satisfaction of the Parties. Where
     necessary, such problems may be considered by the Joint Committee established
    under the Framework Mutual Recognition Agreement in order to reach a solution.
6.  TRANSITIONAL ARRANGEMENT
6.1 There will be a transitional period of 18 months before the provisions of this Annex,
    notably Section 4, become fully operational.
6.2 This transitional period will be used by the Parties:
    a) to exchange information on and develop better understanding of their respective
    regulatory requirements;
    b) to develop mutually agreed mechanisms for exchanging information on changes
    in technical requirements or methods of designating Conformity Assessment Bodies;
    c) to monitor and evaluate the work carried out by designated Conformity
    Assessment Bodies operating during the transitional period.
                                                                 Initialled on 30 Mav 1997
 ---pagebreak---                                               35
6.3 During the transitional period the Parties will also reciprocally recognize test reports
    and related documents issued by designated Conformity Assessment Bodies of the
    other party in accordance with the provisions of this Annex. To this end, the
    approving authorities listed in Attachment 5 shall accept test reports and related
    documents, and evaluations from the designated bodies in the territory of the other
    Party, for the purposes of approval, without imposing additional requirements, and
    shall ensure that:
    on receipt of test reports, related documents and a first evaluation of conformity, the
    dossiers are promptly examined for completeness;
    the applicant is informed in a precise and complete manner of any deficiency;
    any request for additional information is limited to omissions, inconsistencies or
    variances from the technical regulations or standards;
    procedures for equipment modified subsequent to a determination of compliance,
    are limited to procedures necessary to determine continued conformance;
    requirements and conformity assessment procedures applied to domestic products
    shall be applied with no additional requirements or variations to products or test
    results originating from the other Party.
6.4 Each approving authority commits itself to issuing approvals or advising the applicant
    no later than six (6) weeks from receipt of the test report and evaluation from a
    designated body in the territory of the other Party.
6.5 At the end of the transitional period the Parties will proceed to full mutual recognition
    of certificates of compliance issued by designated bodies in the other Party. Any
    proposal made during or at the end of the transitional period to limit the scope of
    recognition of any designated Conformity Assessment Body or to exclude it from the
    list of bodies designated under this Annex shall be based on objective criteria and
    documented. Any such body may apply for reconsideration once the necessary
    corrective action has been taken. To the extent possible, the Parties will implement
    such action prior to the expiry of the transitional period.
7.  ADDITIONAL PROVISIONS
    SUB-CONTRACTING
7.1 Any sub-contracting shall be in accordance with the sub-contracting requirements of
    the other Party.
7.2 The Conformity Assessment Bodies shall record and retain details of its investigation
    of the competence and compliance of its subcontractors and maintain a register of
    all sub-contracting. These details will be available to the other Party on request.
                                                                     Initialled on 30 May 1997
 ---pagebreak---                                               36
     POST-MARKET SURVEILLANCE
7.3  For the purpose of post-market surveillance, the Parties may maintain any existing
     labeling and numbering requirements. The assignment of the numbers may take
     place in the territory of the exporting Party. The numbers will be allocated by the
     importing Party.
7.4  When a report of misuse of a mark of conformity or of a hazard involving an
     approved product covered under this Annex has occurred, both Parties will jointly
     determine the scope of the misuse and the nature and degree of corrective action to
     be taken.
     JOINT TELECOMMUNICATIONS GROUP
7.5  The Joint Committee established under the Framework Mutual Recognition
     Agreement may appoint a Joint Telecommunications Group which shall meet as
     required to discuss technical, conformity assessment and technology issues relating
     to this Annex.
     EXCHANGE OF INFORMATION AND MUTUAL ASSISTANCE
7.6  Each Party shall establish a contact point to provide answers to all reasonable
     inquiries from the other Party regarding procedures, regulations and complaints.
7.7  As provided in the transitional arrangements set out in Section 6.2 above the Parties
     may jointly sponsor two seminars, one in Canada and one in the European
     Community, concerning the relevant technical and product approval requirements
     during the first year after the Annex enters into force.
7.8  The Parties shall also inform each other of changes to relevant regulations,
     specifications, test methods, standards and administrative procedures within thirty
     (30) working days of their domestic notification.
     REGULATORY CHANGES AND UPDATING THE ANNEX
7.9  In the event that there are changes to the regulations referenced in Attachment 1 or
     the introduction of new regulations affecting conformity assessment procedures
     taking place in either Party, the Parties will update this Annex.
     CROSS-REFERENCING
7.10 Where products covered by this Annex are subject also to Electrical Safety or
     EMC requirements the relevant provisions of the sectoral annexes on Electrical
     Safety and EMC would (also) apply.
                                                                      Initialled on 30 May 1997
 ---pagebreak---                                                 37
ATTACHMENT 1
              LEGISLATIVE. REGULATORY AND ADMINISTRATIVE PROVISIONS
 EUROPEAN COMMUNITY                                CANADA.
 Council       Directive     91/263/EEC,      as   Telecommunications Act
 supplemented         by    Council    Directive
 93/97/EEC and amended by Council                  Radiocommunication Act
 Directive 93/68/EEC
                                                   CRTC Telecom Decision No 82-14
 Council Directive 73/23/EEC as amended by
 Council Directive 93/68/EEC                       Certification Standard CS-03
 Council Directive 89/336/EEC, as amended          Certification Procedure CP-01
 by Council Directives 92/31/EEC and
 93/68/EEC                                         Radiocommunication Regulations
 European Commission Decisions established         Radio Standards Procedure (RSP) #100:
 under Council Directives 91/263/EEC and           Radio Equipment Certification Procedure
 93/97/EEC.
                                                   Canadian Electrical Code
 The EC Member States' legislations and
 regulations in respect of:                        Terminal Equipment List (TEL)
 (a) non-harmonized analogue connection to
 the public switched telecommunications            Radio Equipment List (REL)
 network;
 (b)     non-harmonized      radio transmitters    Licence Exempt Radio Apparatus Standards
 (civilian application).                           List
 Handbook        of the     implementation    of   Broadcasting Certificate        Exempt    Radio
 91/263/EEC (ADLNB and ACTE approved).             Apparatus Standards List
                                                   The Category I Equipment Standards List
                                                   The Category II Equipment Standards List
                                                                       Initialled on 30 Mav 1997
 ---pagebreak---                                              38
ATTACHMENT 2
COVERAGE
 EUROPEAN COMMUNITY                                     CANADA
 In specific terms, the following interfaces    In specific terms, the following interfaces
 and services are included:                     and services are included:
 ISDN Basic Rate Access                         ISDN Basic Access
 ISDN Primary Rate Access                       ISDN Primary Rate Access
 ISDN Telephony                                 X.21 Access
 X21A/.24A/.35 Access                           X.25 Access
 X25 Access                                     Digital Service Access
 PSTN Non-Voice                                   -1.2 kbps
 ONP Leased Line Terminal types:                  -2.4 kbps
  -64 kbits/sec                                   -9.6 kbps
  -2048 kbit/s unstructured                       -4.8 kbps
  -2048 kbit/s structured                         -19.2 kbps
  -34 Mbit/s access                               -56.0 kbps
  -140 Mbit/s access                              -64.0 kbps
  -2 wire analogue                                -1,544 kbps
  -4 wire analogue                                -45 Mbps
                                                2 wire analogue tie-trunks/ops
                                                4 wire analogue tie-trunks/ops
 Analogue connections to the public             Analogue connections to the public
 switched telecommunications networks           switched telecommunications networks
                                                All      radio     transmitters             to
                                                Radiocommunication Regulations           (See
                                                Appendix 1 ) with the exception of:
                                                                   Initialled on 30 May 1997
 ---pagebreak---                                                39
EUROPEAN COMMUNITY                                           CANADA
                                                   * Medical devices and active implantable
All harmonised and non-harmonised radio            medical devices including all radio
transmitters, with the exception of:               transmitters in connection with the medical
                                                   service including instruments, telemetry
• a medical device within the meaning of           radio links and other radio equipment
   Article 1 of Council Directive 93/42/EEC        primarily used in hospitals and health care
   of 14 June 1993;                                facilities.
• an active implantable medical device
   within the meaning of Article 1 of             * spark ignition systems of vehicles
   Council Directive 90/385/EEC of 20              including all radio transmitters in connection
   June 1990;                                     with the spark ignition systems of vehicles.
• a component or separate technical unit of
                                                  * Radio equipment used by radio amateurs
   a vehicle within the meaning of Council        within Article 1, definition 53, of the ITU
   Directive 72/245/EEC of 20 June 1972 of         radio regulations unless the equipment is
   Council Directive 92/61/EEC of 30 June          available commercially;
    1992;
• radio equipment used by radio amateurs          * Maritime equipment including all radio
   within Article 1, definition 53, of the ITU    transmitters in connection with the maritime
   radio regulations unless the equipment is      service, either ship-bome or shore
   available commercially;                        installations;
• equipment within the scope of Directive         * Cable and wiring
   96/98/EC (The Marine Directive);
• cable and wiring;                               * receive only radio equipment intended to
• receive only radio equipment intended to        be used solely for the reception of sound
   be used solely for the reception of sound      and TV Broadcasting Services;
   and TV Broadcasting Services;
• products, appliances and components             Aeronautical equipment including all radio
                                                  transmitters in connection with the
   within the meaning of Article 2 of             aeronautical (civil) service either air-borne
   Council Regulation (EEC) 3922/91 of 16         or terrestrial installations, for the purpose of
   December 1991 on the harmonisation of          aircraft navigation, air traffic control, air
   technical requirements and                     safety and radio communication for the air
   administrative procedures in the field of      traffic service (i.e. this does not include
   civil aviation;                                commercial telephone service to and from
• Air-traffic-management equipment and            aircraft);
   systems within the meaning of Article 1
                                                  * Apparatus exclusively used for activities
   of Council Directive 93/65/EEC of 19
                                                  concerning public security, defense, State
   July 1993 on the definition and use of         security (including the economic well-being
   compatible technical specifications for        of the State when the activities relate to
   the procurement of air-traffic-                State security matters) and the activities of
   management equipment and systems;              the State in areas of criminal law.
                                                                        In^-^d on 30 May 1997
 ---pagebreak---                                                  40
 EUROPEAN COMMUNITY                                          CANADA
 • Apparatus exclusively used for activities
    concerning public security, defence, State
    security (including the economic well-
    being of the State when the activities
    relate to State security matters) and the
    activities of the State in areas of criminal
    law.
A radio transmitter is defined as being any         A radio transmitter is defined as being any
radio frequency device or combination of             radio frequency device or combination of
devices intended for, or capable of being           devices intended for, or capable of being
used for any transmission or emission of            used for any transmission or emission of
signs, signals, writing, images, sounds or          signs, signals, writing, images, sounds or
intelligence of any nature by means of              intelligence of any nature by means of
electro-magnetic waves of frequencies               electro-magnetic waves of frequencies
lower than 3 000 GHz propagated in space            lower than 3 000 GHz propagated in space
without artificial guide. For the purpose of        without artificial guide. For the purpose of
this Annex no radiotransmitters using               this Annex no radiotransmitters           using
frequencies lower than 9 Khz are covered.           frequencies lower than 9 Khz are covered
                                                                        Initialled on 30 May 1997
 ---pagebreak---                                                 41
ATTACHMENT 3
                                  DESIGNATING AUTHORITIES
  EUROPEAN COMMUNITY &                           I CANADA
 MEMBER STATES
 Austria Bundesministerium fur wirtschaftliche Industry Canada for terminal attachment,
         Angelegenheiten, Sektion IX/2             radio transmitters and EMC
  Belgium        BIPT
 Denmark         Telestyrelsen                     Standards Council of Canada for electrical
  Finland        Ministry                      of safety
 Telecommunications
  Germany        Bundesministerium            fur Standards Council of Canada for quality
 Wirtschaft                                        management systems registrars
  Greece        Ministry of Transport          &
 Communications
 France         Ministere de PEconomie , des
 finances et de I'industrie
 Ireland        Dept. Of Transport, Energy &
 Communications
  Italy Ministero della Communicazione
 DGRQS and ISETI (radio transmitters)
 Luxembourg Administration des Postes et
 Telecommunications
  Netherlands Min Verkeer en Waterstaat,
 Telecom, en Post Dept
 Portugal        Institute das Communicacoes
 Spain Ministerio de Obras Publicas y
 Transportes
 Sweden          Styrelsen for ackreditering och
 teknisk kontroll (SWEDAC)
 U.K. Dept of Trade & Industry (DTI)
                                                                       Initialled on 30 May 1997
 ---pagebreak---                                          42
ATTACHMENT 4
DESIGNATED CONFORMITY ASSESSMENT BODIES
(This should give name, address, telephone and fax no., contact point,
products, standards and conformity assessment procedures for which
designation has been made, by reference to the legislative requirements
of the other Party.)
                                                               Initialled on 30 May 1997
 ---pagebreak---                                   43
ATTACHMENT 5
APPROVAL AUTHORITIES
 European    Community and Member    Canada
 States
 (To be determined)                  Industry Canada
                                                     Initialled on 30 Mav 1997
 ---pagebreak---                                                44
    APPENDIX 1
    RADIO TRANSMITTERS STANDARDS LIST
    UNDER RADIOCOMMUNICATION REGULATIONS
    INTERFERENCE-CAUSING EQUIPMENT STANDARDS
Specification   Title                                               Issue          Date
ICES 001       Industrial, Scientific and Medical Radio Frequency   2             August 13,
                Generators                                                        1994
ICES 003       Digital Apparatus                                     3            November
                                                                                  22,1997
ICES 0040      Alternating Current High Voltage Power Systems       1             June 1991
                                                                  Initialled on 30 May 1997
 ---pagebreak---                                          45
RADIO STANDARDS SPECIFICATIONS
 Specification     Title                                            Issue         Date
 RSS 118          Land and Subscriber Stations: Voice,               2           Aug. 19,
                   Data and Tone Modulated, Angle                                 1990
                  Modulation Radiotelephone
                  Transmitters and Receivers Operating in the
                  Cellular Mobile Bands
                  824 - 849 MHz and 869 - 894 MHz
 Addendum to 118                                                    '1            Sept. 1,
                                                                                  1990
 Annex A to 118   Cellular System Mobile Station - Land                           Oct. 22,
                  Station Compatibility Standard                                  1983
 Supplement 1993-    Supplement 1993-1 to Radio        Standards                 June 12,
 1                Specifications (RSSs) Nos. 118                                  1993
 RSS 118. mod     Amendment N° 2 to RSS 118                                      Aug. 24,
                                                                                  1996
 RSS 119          Land Mobile And Fixed Radio                        5           Aug. 24,
                  Transmitters and Receivers,                                     1996
                  27.41 - 960 MHz
 RSS 123           Low Power Licensed                                1           Feb. 24,
                  Radiocommunication Devices                       Provisional    1996
                  Land Mobile And Fixed Radio
 RSS 125          Transmitters and Receivers, 1.705 to              2            Aug. 24,
                  50.0 MHz, Primarily Amplitude Modulated                         1996
 RSS 128          800 MHz Dual-Mode Cellular Telephones              1          June 12,
                                                                   D
                                                                     rovisional   1993
                                                              Initialled on 30 May 1997
 ---pagebreak---                                         46
RSS 128. mod    Amendments to RSS 128                                      Aug. 24,
                                                                          1996
RSS 129                  800 MHz Dual-Mode CDMA Cellular 1                  Feb. 24,
                 Telephones                              Provisional       1996
RSS 129. mod    Amendments to RSS-129                                      Aug. 24,
                                                                           1996
RSS 130         Digital Cordless Telephones in the Band    2              Jan. 23,
                944 to 948.5 MHz                                           1993
Annex 1 to RSS  CT2Plus Class 2: Specification for the     2                Jan. 23,
130             Canadian Common Air Interface for                          1993
                 Digital Cordless Telephony, Including
                Public Access Services
Attachment 1 to European Telecommunications                                    April
RSS 130         Standards Institute Interim Standard                      1992
                /I-ETS300 131
RSS 131         Radio Signal Enhancers for the Mobile      1                Feb. 24,
                Telephone Service                          Provisional    1996
RSS 133         2 Ghz Personal Communications Services    1                Nov. 29,
                                                         Provisional      1997
RSS 134          900 MHz Narrowband Personal               1              Aug. 24,
                Communications Service                     Provisional       1996
RSS 135         Digital Scanner Receivers                  1                Oct. 26,
                                                           Provisional    1996
                Land and Mobile Station
RSS 136         Radiotelephone Transmitters and            5              Jan. 1,
                Receivers Operating in the 26.960 -                       1977
                27.410 MHz General Radio Service
                                                        Initialled on 30 May 1997
 ---pagebreak---                                           ^
 RSS 137              cation and Monitoring Services (902-928 MHz)    1              ov. 29,
                                                                      rovisional     1997
                                                                                     Feb.24,
 RSS 210              Low Power Licence-Exempt                        2              1996
                      Radiocommunication Devices
Note 1: Supplement 1993-1 issued June 12, 1993 applies to RSS-118 and 182.
Additional Radio Standards Specifications may be found in the Broadcasting Regulatory
Section of the Index.
                                                                  Initialled on 30 May 1997
 ---pagebreak---                                              48
BROADCAST EQUIPMENT TECHNICAL STANDARDS
 Specification Title                                     Issue            Date
 BETS-1        Technical Standards and Requirements for  1                Nov. 1,1996
               Low Power Announce Transmitters in the
               Frequency Bands 525-1,705 kHz and
               88-107.5 MHz
 BETS-3        Technical Standards and Requirements for  1                Nov. 1,1996
               Radio Apparatus that Form Part of a
               Master Antenna Television (MATV)
               Broadcasting Undertaking
 BETS-4        Technical Standards and Requirements      1                Nov. 1,1996
                for Television Broadcasting Transmitters
 BETS-5        Technical Standards and Requirements      1                Nov. 1,1996
                for AM Broadcasting Transmitters
 BETS-6        Technical Standards and Requirements      1                Nov. 1, 1996
                for FM Broadcasting Transmitters
 BETS-8         Technical Standards and Requirements     1                Nov. 1,1996
                for FM Transmitters Operating in Small
                Remote Communities
 BETS-9        Technical Standards and Requirements      1                Nov. 1,1996
                for Television Transmitters Operating in
                small
               Remote Communities
 BETS-10       Technical Standards and Requirements      1                Nov. 1,1996
                for Television Transmitters in the
                2,596-2,686 Mhz Band
 BETS-11       Technical Requirements Respecting the     1                Nov. 1, 1996
               Identifications of Broadcasting Stations
                                                              Initialled on 30 May 1997
 ---pagebreak---                                            49
           BROADCAST SPECIFICATIONS AND STANDARDS
Specification Title                                Issue            Date
BTS1-1         Broadcast Transmission Standard AM       1           Feb. 6, 1988
               Broadcasting Stereophonic Operation Provisional
BTS1-2         Broadcast Transmission Standard: AM      1           Nov. 1989
               Broadcasting RF Emission Limits     Provisional
BTS3           Broadcasting Transmission Standard: 2               May 1990
               Television Broadcasting
BS.14          Broadcast Specification: Television      1          June 19, 1981
               Broadcast Videotext                 Provisional
                                                       Initialled on 30 May 1997
 ---pagebreak---                50
       EU-CANADA MRA
      SECTORAL ANNEX ON
ELECTRO-MAGNETIC COMPATIBILITY
            (EMC)
                               Initialled on 30 Mav 1997
 ---pagebreak---                                                  51
1. SCOPE AND COVERAGE
1.1. The provisions of this Annex shall apply to the following:
• Electro-magnetic compatibility of equipment as defined in EC Council Directive
    89/336/EEC of May 3, 1989, on the approximation of the laws of the Member States
    relating to electro-magnetic compatibility and amendments thereto;
• Electromagnetic compatibility of equipment regulated under Sections of the Canadian
    Radiocommunications Act.
    2. THE REQUIREMENTS
2.1.     The relevant technical requirements are specified under the legislation and
         regulations referenced in Attachment 1.
2.2      Any requirements and conformity assessment procedures applied by one party to its
         domestic products shall be applied with no additional requirements or variations to
         products or conformity assessment results originating from the other Party.
    3. CONFORMITY ASSESSMENT ACTIVITIES
3.1      Each Party agrees to recognize all of the other Party's reports, certificates, and
Technical Construction Files, as required, under their respective legislation without any
further assessment of the products.
3.2      Both Parties agree to recognize each other's suppliers declarations of compliance,
as required under their respective legislation
    4. INSTITUTIONS
4.1      DESIGNATING AUTHORITIES
(a)      The Designating Authorities for the purpose of this annex are listed in
         Attachment 2.
(b)      Each Party shall notify the other within ten (10) working days of changes in the
         identity of their Designating Authorities and their authority to carry out the
         obligations under this Annex.
                                                                       Initialled on 30 May 1997
 ---pagebreak---                                                  52
4.2     DESIGNATED CONFORMITY ASSESSMENT BODIES
(a)     Conformity Assessment Bodies designated under this Annex shall be recognized as
        competent to perform the conformity assessment activities for EMC. Each Party
        shall ensure that the designated bodies comply with the criteria and standards set
        out in the regulatory requirements of the other Party. A list of designated bodies is
        included in Attachment 3.
(b)      Designation, suspension or withdrawal of Conformity Assessment Bodies under this
        Annex shall be in conformance with procedures determined by the Joint Committee
        established under the Framework Mutual Recognition Agreement.
5. TRANSITIONAL ARRANGEMENT
5.1     The mutual recognition provisions of this Annex, notably Section 3 , will take effect
         18 months following the entry into force of this Annex.
5.2     During the period between the signing of the agreement and its coming into effect,
        the Parties will work together to 1) enhance their respective familiarity with each
        other's regulatory requirements; 2) exchange information and review the work
        carried out by designated conformity assessment bodies; and 3) demonstrate to
        each other's satisfaction their capability to carry out conformity assessment to the
        requirements of the other Party.
    6. ADDITIONAL PROVISIONS
        SUB-CONTRACTING
6.1     Any sub-contracting of conformity assessment         shall be in accordance with the
        sub-contracting requirements of the other Party.
6.2     The Conformity Assessment Bodies shall record and retain details of its investigation
        into the competence and compliance of its subcontractors and maintain a register of
        all sub-contracting. These details will be available promptly to the other Party on
        request.
        POST-MARKET SURVEILLANCE
6.3     For the purpose of post-market surveillance, the Parties may establish labelling,
        numbering or marking requirements. The assignment of numbers or affixing of
        labels or marks may take place in the territory of the exporting Party.
        EXCHANGE OF INFORMATION AND MUTUAL ASSISTANCE
6.4     Each Party shall establish a contact point to provide answers to all reasonable
        inquiries from the other Party regarding procedures, regulations and complaints.
6.5     The Parties shall also inform each other of changes to relevant regulations,
        specifications, test methods, standards and administrative procedures within thirty
        (30) working days of their domestic notification.
                                                                        Initialled on 30 May 1997
 ---pagebreak---                                          53
    REGULATORY CHANGES AND UPDATING THE ANNEX
6.6 In the event that there are changes to the technical regulations and conformity
    assessment procedures referenced in Attachment 1 or in the event of the
    introduction of new regulations in the jurisdiction of either Party, the Parties will
    update this Annex.
    CROSS REFERENCING
6.7 Where products covered by this Annex are subject also to electrical safety or radio
    or telecommunication attachment requirements the relevant provisions of the
    sectoral Annexes on electrical safety, telecommunication terminal equipment,
    Information Technology equipment and radio transmitters would also apply.
                                                                 Initialled on 30 Mav 1997
 ---pagebreak---                                             54
ATTACHMENT 1
LEGISLATIVE. REGULATORY AND ADMINISTRATIVE PROVISIONS
 EUROPEAN COMMUNITY                          I CANADA
 Council Directive 89/336/EEC, as amended      Radiocommunication Act
 by     Council    Directives  91/263/EEC,
 92/31 /EEC, 93/68/EEC and 93/97/EEC            Radiocommunication Regulations
                                               (Appendix I)
 The EC Member States' legislation and
 regulations in respect of EMC for             The Category II Equipment Standards List
 non-harmonized radio transmitters (civilian
 application).
                                                                 Initialled on 30 May 1997
 ---pagebreak---                                           55
ATTACHMENT 2
DESIGNATING AUTHORITIES
The Designating Authority for Canada is Industry Canada.
The Designating Authorities for the European Community are as in the following
table:
Member State     Competent Authorities             Sectors of Activity
Austria          Bundesministerium            fur  All     equipment          except
                 wirtschaftliche                   telecommunication equipment
                 Angelegenheiten       Abteilung
                 IX/4
                 Landstrasser Haupstrasse 55-57
                 1031 WIEN
Austria          Bundesministerium fur             Telecommunication equipment
                 offentliche Wirtschaft und
                 Verkehr
                 Radetzkystrasse 2
                 1030 WIEN
Austria          Zulassungsburo                    Telecommunication equipment
                 Nordbergstrasse 15
                 1091 WIEN
Austria          Fernmeldeburo      fur    Wien,   Telecommunication equipment
                 Niederosterreich            und
                 Burgenland
                 Nordbergstrass 15
                 1091 WIEN
Austria          Fernmeldeburo fur Steiermark      Telecommunication equipment
                 und Karten
                 Neutorgasse 46
                 8011 GRAZ
Austria          Fernmeldeburo                fur  Telecommunication equipment
                 Oberosterreich und Salzburg
                 Domgasse 1
                 4010 LINZ
                                                               Initialled on 30 May 1997
 ---pagebreak---                                     56
Austria   Fernmeldeburo fur Tirol und          Telecommunication equipment
          Voralberg
          Maximilianstrasse 2
          6010 INNSBRUCK
Belgium   Ministere       des      Affaires    Autorite    federate       pour     la
          Economiques                          coordination de la mise en
          Administration de PEnergie           application de la legislation
          Service       Equipements       et   CEM
          Produits Energetiques                Haute        surveillance          et
          154, Bd Emile Jacqmain               surveillance du marche pour
          1210 BRUXELLES                       tout produit
Belgium   Ministere de I'Emploi et du          Surveillance du marche dans le
          Travail                              domaine des produits relevant
          Administration de la Securite        de la protection des travailleurs
          du Travail
          Rue Belliard, 51
          1040 BRUXELLES
Belgium   Institut Beige des Services          Surveillance du marche dans le
          Postaux           et         des     domaine des produits relevant
          Telecommunications (aupres           des       perturbations         radio
          du          Ministere        des     emetteurs et recepteurs radio.
          Communications         et      de    Reseau de telecommunication.
          Plnfrastucture)
          Tour Astro
          Av. de I'Astronomie, 14, BP21
          1030 BRUXELLES
Denmark   Telestyrelsen
          Holsteinsgade 63
          2100 COPENHAGEN
Finland   Ministry of Trade and Industry       Industrial           manufacturing
          P.O. Box 230                         equipment
          00171 Helsinki                       Medical and scientific apparatus
                                               Information              technology
                                               equipment
                                               Domestic       appliances        and
                                               household electronic equipment
                                               Educational                electronic
                                               equipment
                                               Lights and fluorescent lamps
Finland   Telecommunications                   Telecommunications           terminal
          Administration Centre                equipment
          P.O. Box 53                          Radio equipment
        I 00211 HELSINKI                     | Telecommunications networks
                                                             Initialled on 30 Mav 1997
 ---pagebreak---                                      57
 Finland  Turvatekniikan             keskus
          (TUKES)
          Safety Technology Authority
          P.O. Box 123
          Lonnrotinkatu 37
          00181 HELSINKI
 France   Ministere de Plndustrie, des
          Postes            et           des
         Telecommunications et du
          Commerce Exterieur
          Direction       Generate       des
          Strategies Industrielles
         Sous-Direction de la Qualite pour
         I'lndustrie et la Normalisation
         22, rue Monge
         75005 PARIS
Germany  Bundesamt fur Post und              All equipment
         Telekommunikation (BAPT)
         Referat124
         Postfach 8001
         55003 MAINZ
Germany  Bundesministerium fur Post          All equipment
         und           Telekommunikation
         (BMPT)
         Referat314
         Postfach 8001 53105 BONN
Greece   Ministry of Transport &
         Communications
         49, Syngrou Avenue
         11780 ATHENS
Ireland  Department        of    Transport,
         Energy and Communications
         44 Kildare Street
         Dublin 2
Italy    Ministero                     delle
         Communicazioni (DGRQS)
         Viale America 201
         00144 ROMA
Italy    Ministero dell'lndustria, del
         Commercio e dell'Artigianato
         (DGSPC)
         Via Molise 2
         00187 ROMA
                                                         Initialled on 30 Mav 1997
 ---pagebreak---                                       58
Luxemburg   Service de PEnergie de L' Etat
            B.P. 10
            2010 LUXEMBOURG
Netherlands Ministerie van Verkeer         en
            Waterstaat
            Hoofdirectie
            Telecommunicatie en Post
            Postbus 450
            9700ALGRONINGEN
Portugal    Instituto das Comunicacoes
            de
            Portugal (ICP)
            Av. J. Malhoa, 12
            1070LISBOA
Spain       Ministerio de Fomento             Equipos de telecomunicacion
            Direccion       General        de
            Telecomunicaciones
            Palacio de Telecomunicaciones
            Plaza de Cibeles, s/n. Planta 5a
            28014 MADRID
Spain       Ministerio de Industria y         Todos los equipos afectos a la
            Energia                           Directiva excepto los equipos
            Direccion General de Calidad y    de telecomunicacion.
            Seguridad Industrial
            Paseo de la Castellana, 160
            Planta 12
            28071 MADRID
Sweden      National    Electrical     Safety National co-ordinating authority
            Board                             for implementing the EMC
            P.O.B. 1371                       legislation. Supervision and
            11193 Stockholm                   market surveillance authority
                                              concerning EMC for all products
                                              with the exception of radio
                                              transmitters    and     equipment
                                              intended for connection to the
                                              public       telecommunications
                                              network
Sweden      National Post and Telecom         Supervision       and       market
            Agency                            surveillance
            P.O.B. 5398                       authority concerning EMC for
            10249 Stockholm                   radiotransmitters              and
                                              equipment intended
                                              for connection to the public
                                              telecommunications network
                                                           Initialled on 30 May 1997
 ---pagebreak---                                       59
United Kingdom Department of Trade and
               Industry
               Standards Policy Unit
               151 Buckingham Palace Road
               LONDON SW1W9SS
                                          Initialled on 30 Mav 1997
 ---pagebreak---                                             60
ATTACHMENT 3
DESIGNATED CONFORMITY ASSESSMENT BODIES
(This should give name, address, telephone and fax no., contact point, products,
standards and conformity assessment procedures for which designation has been
made, by reference to the legislative requirements of the other Party.)
                                                                 Initialled on 30 May 1997
 ---pagebreak---                                               61
   APPENDIX 1
    INTERFERENCE-CAUSING EQUIPMENT STANDARDS
Specification  Title                                               Issue          Date
ICES 001      Industrial, Scientific and Medical Radio Frequency   2             August 13,
               Generators                                                         1994
ICES 003      Digital Apparatus                                     3             November
                                                                                 22,1997
ICES 0040     Alternating Current High Voltage Power Systems       1             June 1991
                                                                 Initialled on 30 May 1997
 ---pagebreak---          62
 EU-CANADA MRA
 SECTORAL ANNEX
       ON
ELECTRICAL SAFETY
                  Initialled on 30 May 1997
 ---pagebreak---                                                            63
 1,         PURPOSE
 1.1. The purpose of this Annex is to establish a framework for the acceptance of electrical
        products through the recognition of conformity assessment carried out by bodies which
        comply with the requirements of the other Party, white maintaining the integrity of the
       safety system in each of the Parties.
 1.2. This Annex also sets out procedures for the recognition of:
           a)        Conformity Assessment             Bodies (CABs) in Canada by the European
                     Community (EC); and
           b)        CABs in the EC by Canada.
 2.        SCOPE AND COVERAGE
           2.1       For access to the EC: The safety of electrical equipment falling within the
                     scope of the Low Voltage Directive (Council Directive 73/23/EEC of 19
                     February 1973 as amended by 93/68/EEC) (Footnote 1 ).
           2.2       For access to Canada: Low voltage electrical equipment, including medical
                     devices, covered by the Canadian Electrical Code, except for those products
                    specifically excluded under the EC LVD (other than Medical devices).
           2.3      The legislative, regulatory and administrative requirements applicable in each
                     Party and the regulatory authorities responsible for electrical safety are listed
                     in attachment 1.
           RESPONSIBLE/DESIGNATING AUTHORITIES
           3.1      Authorities set out in Attachment 2,are those organisations/public authorities
                    responsible for assuring the competence and the control of CABs to certify
                    electrical equipment in their territories to the requirements of the other Party.
4.         TRANSITION PHASE
           4.1      The transitional arrangements shall operate for a term of eighteen (18) months
                    from the time this MRA enters into force.
           4.2      The purpose of the transition phase is to provide the Responsible/Designating
                    Authorities with an opportunity to build confidence and understanding of each
                    other's procedures for recognizing CABs and in the ability of those bodies to
                    carry out their mandates. Successful completion of the transition phase should
1
   The categories of equipment outside the scope of the LVD are: electrical equipmetn for use in an explosive
atmosphere; electrical Equipment for radiology and medical purposes; electrical parts for goods and passenger
lifts; electricity meters; plugs and socket oulets for domestic use; electric fence controllers; radio-electrical
interference.
                                                                                         Initialled on 30 May 1997
 ---pagebreak---                                             64
        result in the determination by the Responsible Authorities that nominated CABs
        comply with the applicable criteria and are competent to conduct conformity
        assessment activities acceptable to the other Party.
   4.3  During the transition phase, the authorities may jointly sponsor two seminars,
        one in Canada and one in the EC, concerning the relevant technical and
        product approval requirements.
5. OPERATION OF THE TRANSITION PHASE
   5.1  During the transition phase, Canadian CABs shall accept test reports and
        related documents issued by nominated CABs in the other Territory. For EC
        CABs, they must satisfy the following requirements:
        a)       be a participant in the International Electrotechnical Commission (IEC)
                 Scheme of the IECEE for Recognition of Results of Testing to
                 Standards for Safety of Electrical Equipment [Certification Bodies
                 (CB) Scheme] under the I EC System for Conformity Testing to
                 Standards for Safety of Electrical Equipment (IECEE) as defined in
                 IECEE Document 02/1992-05; or
        b)       have a contractual arrangement for acceptance of test data with a
                 Certification Organization accredited by the Standards Council of
                 Canada.
   5.2  During the transition phase, EC CABs will:
        a)       test products to Canadian requirements;
        b)       issue a comprehensive testing and evaluation file (i.e. assessment
                 data, reports) for submission by the manufacturer of the tested
                 products to a Certification Organization in Canada.
   5.3  Canadian Certification Organizations shall ensure that:
        a)       they inform the applicant and the EC CAB in a precise and complete
                 manner of any deficiency;
       b)       they limit any request for additional information or samples to
                omissions, inconsistencies or variances from the technical regulations
                or standards; and
       c)        certification is done on the basis of existing procedures, including the
                          application of their mark.
                                                                   Initialled on 30 May 1997
 ---pagebreak---                                             65
    MARKING OF CONFORMITY
    6.1  During the transition phase, the Joint Committee shall develop mutually-
         acceptable mechanisms and procedures for marking of products to be
         exported to Canada in order to indicate their conformity with Canadian
         requirements. Such markings shall be under the control of CABs recognized
         by the Responsible/Designating Authorities, provide for traceability, give
         sufficient information to consumers, and not give rise to confusion with other
         markings of conforrhity. For access to the EC market, the CE marking shall
         apply.
7.  OPERATIONAL PHASE
   (7.1  During the operational phase, the Parties will proceed to full mutual
         recognition of results of conformity assessment activities, as required under
         their respective legislation. CABs recognized by the Responsible/Designating
         Authorities shall operate as follows:
         a)      For access to the EC market:
         If a product is challenged under the LVD, a report drawn up by a Canadian
         CAB recognized under this agreement shall be considered by the EC as if it
         were a report drawn up by a European notified body.
         b)      For access to the Canadian market:
         CABs from the EC will be accredited in accordance with Standards Council of
         Canada (SCC) criteria for accreditation of certification bodies recognized in
         Canada and will be issued a Certificate of Accreditation. The following
         conditions are deemed to be equivalent to those prescribed criteria:
                 i)       Evidence of satisfactory performance in the transition phase;
                          and
                 ii)      Accreditation by a European accreditation organization
                 according        to applicable and relevant I SO/I EC Guides adapted to
                 Canadian         and European conditions for accreditation of
                 certification organizations; and
                 iii)     Evidence of procedures for follow-up of certification activities
                          including the identification of a contact point who shall be
                          responsible for initiating action with manufacturers of the *
                          products when necessary.
    7.2  The Parties will encourage the establishment of mutual recognition
         agreements between the European accreditation organizations and the SCC.
    7.3  Following the entry into force of the operational phase, the inclusion of
         additional CABs will be done in accordance with the rules set out in the
         Framework Agreement and in this Annex.
                                                                    Initialled on 30 May 1997
 ---pagebreak---                                             66
8.  LIMITED SCOPE OR DENIAL OF RECOGNITION FOR THE PURPOSES OF
    CERTIFICATION
    8.1   Upon request, a CAB may be required to provide additional documentary
          evidence to facilitate its passage from the transitional to the operational
          phase.
    8.2   In the event that a proposal is made during, or at the end of the transition
          phase, requesting a responsible/designating authority to limit the scope of
          recognition of any designated CAB or to exclude it from the list of bodies
          accredited/designated, in accordance with the procedures outlined in the
          Framework Agreement, such a proposal shall be based on objective reasons
          and shall be properly documented in writing to the Joint Committee.
    8.3   A CAB which has been granted limited recognition or has been denied
          recognition, may apply for re-evaluation after corrective action has been
          taken.
9.   FOLLOW UP OF CERTIFICATION ACTIVITIES
    9.1   The Authorities in each Party (see attachments 1 and 2) retain the right to
          question the performance of CABs operating in the context of this annex.
          (Upon reasoned request, the Authorities in one Party may request a copy of
          the certification report prepared to its requirements in the territory of the
          exporting Party. This report shall be provided promptly and without charge).
    9.2   CABs shall have in place a plan of action with their certification clients, for
          enabling the withdrawal of non-conforming or hazardous products from the
          marketplace. That plan shall identify a contact point who shall be responsible
          for initiating action with manufacturers of the products in question.
10. JOINT ELECTRICAL SAFETY GROUP
    10.1  The Joint Committee established under the Mutual Recognition Agreement
          shall appoint a Joint Electrical Safety Group (JESG).
    10.2  The Group (JESG) shall consist of a equal number of representatives from
          Canada and the EC.
    10.3  The Group may review issues of concern to either Party and no one shall
          refuse a request by the other to address such issues.
    10.4  The Group may issue recommendations to the Joint Committee regarding
          concerns raised by the representatives of either Canada or the EC.
    10.5  The Group shall establish its own rules of procedures,and take its decisions
          and adopt its recommendations by consensus of the Parties.
                                                                   Initialled on 30 May 1997
 ---pagebreak---                                             67
 ATTACHMENT 1
 LEGISLATIVE, REGULATORY AND ADMINISTRATIVE                         REQUIREMENTS           AND
 REGULATORY AUTHORITIES (Re. Articles 2.3 and 9.1)
            European Community                                     Canada
 Council Directive 73/23/EEC as amended by The Canadian Electrical Code as referenced
 Council Directive 93/68/EEC                  in the provincial / territorial legislation is
                                              under the responsibility of the following
 EU Regulatory Authorities: list is the same provincial / territorial Regulatory Authorities:
 as per Attachment 2
                                              Alberta:
                                              The Safety Codes Act,
                                              Statutes of Alberta, 1991, Chapter S-0.5;
                                              Alberta Department of Labour, Technical
                                              and Safety Services;
                                              British Columbia:
                                              Electrical Safety Act, Chapter 109
                                              Electrical Safety Regulation,
                                              B.C. Reg 253/96
__                                            Ministry of Municipal Affairs & Housing;
                                              Manitoba:
                                              The Manitoba Hydro Act, 1976
                                              Provincial Regulations 126-94 amended in
                                              September 1995
                                              Manitoba Hydro;
                                              New Brunswick:
                                              The Electrical Installation and Inspection Act
                                              84-165 The General Regulation
                                              82-215 The Lighting Protection Regulation
                                              Department of Advanced Education and
                                              Labour;
                                              Newfoundland:
                                              Public Safety Act
                                              Electrical Regulations, 1996
                                              Department of Government Services and
                                              Lands;
                                              Northwest Territories:
                                              Electrical Protection Act,
                                              R.S.N.W.T. 1988, C.E-3
                                            I Department of Public Works and Services;
                                                                      Initialled on 30 May 1997
 ---pagebreak--- 68
  Nova Scotia:
  The Electrical Installation and Inspection Act
  Nova Scotia Department of Labour;
  Ontario:
  The Power Corporation Act,
  Revised Statutes of Ontario, 1990,
  Chapter P18, Section III
  Ontario Regulation 612-94
  Ontario Hydro;
  Prince Edward Island:
  The Electrical Inspection Act
  The Electrical Inspection Act Regulations
  Department of Community Affairs and
  Attorney General;
  Quebec:
  Loi sur les installations electriques,
  L.R.Q., Chapter 1-13.01
  Reglement sur les installations electriques,
  1-13.01, R.3
  Code de 1'electricite du Quebec
  Regie du batiment du Quebec;
  Saskatchewan:
  The Electrical Inspection Act, 1993
  Electrical Inspection Regulations
  SaskPower;
  Yukon:
  The Electrical Protection Act
  OIC 1992-017 Electrical Protection Act
  Yukon Regulations
  Yukon Department of Community                 and
I Transportation Services
                          Initialled on 30 May 1997
 ---pagebreak---                                               69
ATTACHMENT 2
DESIGNATING AUTHORITIES
1. The Authorities responsible for the designation of conformity assessment bodies under
   this agreement are:
   a) For the European Community:
      -  Austria: Bundesministerium fur wirtschaftliche Angelegenheiten
      -  Belgium: Ministère des Affaires Economiques/Ministerie van Economische Zaken
      -  Denmark: Elektricitetsradet
      -  Finland: Ministry of Trade and Industry
      -  France: Ministère de l'Economie, des Finances et de l'Industrie
      -  Germany: Bundesministerium fur Arbeit und Sozialordnung
      -  Greece: Ministry of Development
      -  Ireland: Department of Enterprise, Trade and Employment
      -  Italy: Ministero dell'lndustria
      -  Luxembourg: Service de l'Energie de l'Etat
      -  Netherlands: Ministerie van Economische Zaken
      -  Portugal: gnder authority of the Ministry of Industry: Instituto Portugees da
         Qualidade
      - Spain: Ministerio de Industria y Energia
      - Sweden: under authority of the Government of Sweden: Styrelsen for
         ackreditering och teknisk controll (SWEDAC)
      - United Kingdom: Department of Trade and Industry
   b) For Canada:
      - The Standards Council of Canada, a Federal Crown corporation established by an
         Act of Parliament in 1970.
                                                                   Initialled on 30 May 1997
 ---pagebreak---            70
  EU-CANADA MRA
  SECTORAL ANNEX
          FOR
RECREATIONAL CRAFT
       72
 ---pagebreak---                                                   71
Section I: Scope and Coverage
 1.1 This annex applies to all recreational craft, including personal watercraft, which in the
European Community or in Canada are subject to a conformity assessment or approval
procedure by an independent conformity assessment or approval body.
 1.2. The product coverage shall be as determined by the relevant legislation of each party,
which is:
a)       for the European Community:
         Recreational craft as defined in Article 1 of Directive 94/25 EC.
 b)      for Canada:
         Pleasure craft as defined by the Canada Shipping Act, Chapter 1487, Small Vessel
         Regulations as referenced in Transport Canada's Publication #TP1332.
 t.3. Parties agree that mutual recognition will operate under this annex according to the
following arrangements:
a)       for evaluation against European Community requirements, conformity assessment
         bodies designated by Canada will establish certificates of compliance according to
         the provisions of Directives 94/25 EEC. These certificates will be recognized in the
         European Community without any further assessment of the products to which they
         relate.
b)       for approval to Canadian requirements, conformity assessment bodies designated
         by the European Community will certify the product according to the requirements
         set out in Chapter 1487 of the Canada Shipping Act Small Vessel Regulations, and
         issue the appropriate compliance plates and other required documentation.
         Products so certified may be placed on the Canadian market without undergoing any
        further approval procedures.
Section II: Legislative. Regulatory and Administrative Requirements
2.1. for the European Community
European Parliament and European Council Directive 94/25 EEC on The Approximation of
the Laws, Regulations and Administration Provisions of the Member States Relating to
Recreational Craft.
2.2. for Canada
Regulatory Requirements - The Canada Shipping Act, Chapter 1487, Small Vessel
Regulations which referenced in Transport Canada's Publication #TP1332 Construction
Standards for Small Vessels which includes Personal Watercraft as defined by and certified
to ISO/DIS 13590.
                                                                         Initialled on 30 May 1997
 ---pagebreak---                                                    72
Section III: Authorities Responsible for Designating the Conformity Assessment Bodies as
Specified bv Conformity Assessment Modules
3.1. for the European Community
Member States Administrations or entities as indicated in Attachment 1
3.2. for Canada
Canadian Coast Guard
Section IV Procedures for Designating Conformity Bodies
4.1. For the purpose of the annex, each Party will designate competent Conformity
Assessment Bodies to carry out conformity assessment and approvals to the requirements
of the other Party. Such designation will be carried out according to the procedures set out
in the Mutual Recognition Framework Agreement. A list of designated Conformity
Assessment Bodies, together with the products and procedures for which they have been
designated, is in Attachment 2.
4.2. Each Party will accept that the designated Conformity Assessment Bodies comply with
the requirements for such bodies established by the other Party.
These are:
a)      for the European Community, bodies which are Notified Bodies in accordance with
        Directive 94/25 EC, are deemed to be in compliance with Canadian requirements;
        A "Notified Body" for the EC is a third party authorized to perform the conformity
        assessment tasks specified in Directive 94/25 EC, which has been appointed by a
        Member State from the bodies falling within its jurisdiction. The Notified Body has
        the necessary qualifications to meet the requirements laid down in Directive 94/25
        EC and has been notified to the Commission and to the other Member States.
b)      for Canada, the procedures and criteria for designation of Conformity Assessment
        bodies shall comply with the relevant provisions of Directive 94/25 EC.
Section V: Transitional Arrangement
There will be a transitional arrangement of 18 months prior to the operation of this annex.
During this transitional period, the parties will:
a)      exchange information on, and develop greater familiarity with their respective
        regulatory requirements; and
b)      carry out the policy, legislative and regulatory changes necessary for the provisions
        of this Annex.
                                                                       Initialled on 30 May 1997
 ---pagebreak---                                                     73
Section VI: Additional Provisions
6.1. In accordance with the relevant provisions of the Mutual Recognition Framework
Agreement, the Parties shall ensure the continued availability of the names of their
respective Notified Bodies or Conformity Assessment Bodies, and will regularly supply
details of certifications issued in order to facilitate post-market surveillance.
6.2. The Parties note that, to the extent that requirements for electrical safety or
electromagnetic compatibility apply to products covered by this sectoral Annex, the
provisions of the sectoral Annexes on Electrical Equipment and Electromagnetic
Compatibility shall apply.
                                                                         Initialled on 30 May 1997
 ---pagebreak---                                              74
        Attachment 1 : Designating Authorities.
       For the European Community                        For Canada
Member States Administrations as indicated The Canadian Coast Guard
in the Directive 94/25/EEC, Article 9.1      |
                                                              Initialled on 30 May 1997
 ---pagebreak---                                            75
        Attachment 2: Designated Conformity Assessment Bodies.
European Community
Notified bodies which have been notified by the Member States of the European
Community, and whose names and reference numbers have been published in the Official
Journal of the European Communities.
Canada
To be determined.
                                                               Initialled on 30 Mav 1997
 ---pagebreak---               76
         EU-CANADA MRA
     SECTORAL ANNEX ON
GOOD MANUFACTURING PRACTICES
            (GMP)
                          Initiallad on 30 May 1997
 ---pagebreak---                                              77
1 Purpose
1.1.This Mutual Recognition Agreement (MRA) Sectoral Annex on Good
Manufacturing Practices (GMP) Compliance Certification pertaining to medicinal
products / drugs has been developed by the European Community (EC) and Canada
to:
a) enhance bilateral regulatory cooperation;
b) establish mutual recognition for GMP compliance certification and acceptance of
Manufacturing Authorizations / Licences directly issued by the authorities designated
equivalent after the successful completion of a confidence building exercise;
c) develop an infrastructure for on-going communications / consultations between
Canada, the European Commission, and the Regulatory Authorities of the EC
Member States to enable regulators to determine and maintain the equivalency of
their GMP compliance programmes.
2. General Considerations
2.1.   The underlying premise behind a MRA for GMP compliance certification is
       that it can be demonstrated that Canada and the EC Member States have
       equivalent GMP compliance programmes, and therefore the issuance of a
       Certificate of Manufacturing Authorization / Licence by an authority of one
       Party certifying that a facility is in compliance with GMPs, would be all the
       evidence required by the other Party to accept that facility as being in
       compliance for the manufacturing / control of medicinal / drug products or to
       issue a similar Certificate of Manufacturing Authorization / Licence. It should
       be understood that equivalent does not mean identical but it does mean
       leading to the same result.
2.2.   The acceptance by an authority of a certificate of manufacturing
       authorisation/licence issued by the other authority will depend on the
       successful completion of a confidence building exercise and on an evaluation
       of its results. Only certification by authorities with GMP compliance
       programmes (including the supporting infrastructure of regulatory
       requirements, standards, processes, and quality systems, etc.) mutually
       recognized as equivalent will be accepted.
2.3.   The MRA on Medicinal Products / Drug GMP is built on three pillars:
       a)      the concept of a GMP compliance programme (Appendix 4 )
       b)      a "two-way" alert system (Appendix 5 )
       c)      a transition period including a confidence building exercise (Appendix
               6)
                                                               Initiallad on 30 May 1997
 ---pagebreak---                                              78
3. Scope and Coverage
3.1.   The provisions of this Annex will cover all medicinal products / drugs which
       have undergone one or a series of manufacturing process(es) (eg fabrication,
       repackaging, labelling, testing, wholesaling activities) in Canada and in the
       European Community, and to which Good Manufacturing Practice (GMP)
       requirements apply in both jurisdictions. Recognition will be limited to the
       manufacturing process(es) carried out and subject to inspections in the
       respective territories of the Parties.
3.2.   This Annex may also apply, on a voluntary basis, to products covered by the
       legislation of one Party but not the other if agreed to by the authorities
       concerned.
3.3.   The product coverage shall be as determined by the relevant legislation of
       each Party. The Appendix 1 names the legislations and contains an indicative
       list of products concerned.
3.4.   For the purpose of this Annex, GMP includes the system whereby the
       manufacturer receives the specifications of the product and / or process from
       the MA / DIN or Licence holder or applicant and ensures the product is made
       in compliance with the specifications (equivalent to Qualified Person
       certification in the EC).
      The Good Manufacturing Practice (GMP) is that part of quality assurance
      which ensures that products are consistently produced and controlled to the
       quality standards:
                -appropriate to their intended use, and
                -required by the Marketing Authorization (MA) or product
                  specifications and by assignment procedure of the Drug
                  Identification Number (DIN) or the Licence.
3.5.   Product or process oriented inspections will be carried out by one Party at the
       request of the other Party. For pre-approval inspections, the Parties agree to
       exchange pre-approval inspection reports to the extent required under the
       importing Party's Jaws and regulations, for the purpose of their respective
       product approval procedures. Lot-to-lot release for biologicals is excluded
      from this Agreement
                                                               Initiallad on 10 June 1997
 ---pagebreak---                                              79
4. Confidentiality
4.1.     Each Party will protect from public disclosure any non-public confidential
        technical, commercial and scientific information, including trade secrets and
        proprietary information that is provided by the other Party.
 4.2.    Each Party reserves the right to make public the results of any conformity
        assessment, including the conclusions of inspection reports, provided by the
        other Party, in situations in which public health safety may be affected.
 5. Management Mechanisms
 5.1.  A Joint Sectoral Group will be established for the purposes of the
        management of this sectoral agreement. The Joint Sectoral Group will
        establish its composition and determine its own rules and procedures. Its role
        is described in Appendix 3. The Group will include representatives of the
       Therapeutic Products Programme in Health Canada, of the European
        Commission, and of the the relevant EC authorities. It will be co-chaired by a
        member of each of the two Parties.
 6. Resolution of Divergent Views
 6.1.   Divergent views which have not been resolved between the authorities will be
        referred to the Joint Sectoral Group for resolution. In the case of inability of
       the Joint Sectoral Group to resolve these divergent views, either Party may
       bring the matter to the attention of the Joint Committee.
7. Transition Period
7.1. Time Frame
The confidence building period will commence upon the signing of the MRA and is
expected to be completed within 18 months.
7.2. Confidence Building Programme
At the beginning of the transitional period, the Joint Sectoral Group will elaborate a
joint Confidence Building Programme. The implementation of this programme will
permit the determination of the capability of each Parly's authority to perform GMP
compliance certification (guidance provided in AppendixG ).
                                                                 Initiallad on 30 May 1997
 ---pagebreak---                                              80
7.3. Budget
Each of the Parties to the MRA will be responsible for the costs of its participation in
the confidence building activities.
7.4. Administrative provision
Medicinal products / drugs from manufacturing sites with a good track record of
compliance in the importing Party, and that have been placed on a list of qualified
sites, will be exempted from retesting requirements. The list will be developed by the
Joint Sectoral Group.
7.5. End of Transitional Period
7.5.1   At the end of the transitional period, the Joint Sectoral Group will proceed to
        a joint evaluation of the equivalency and capabilities of the compliance
        programmes of the participating authorities (Appendix 2 ).
7.5.2   Those determined as not being equivalent to the other Party's GMP
        compliance programme will not be listed in Appendix 2 at the end of the
        transitional period. Proposals to limit the recognition of the equivalence of an
        authority or exclude it from the appendix should be based on objective criteria
        and documented evidence.
7.5.3   Authorities may be placed in this Appendix for specific categories of
        manufacturing processes (e.g. biologicals, radiopharmaceuticals). Excluded
        authorities (or not included for a given manufacturing process) may apply for
        re-consideration of their status once the necessary corrective measures have
        been taken.
8. Operational Phase
8.1. General provisions
8.1.1   The European Community and Canada agree that, for medicinal products /
        drugs covered by this Annex, each Party will recognize the conclusions of the
        GMP compliance programme carried out by the other Party in- its territory,
        and the relevant Certificates of Manufacturing Authorizations / Licences
        granted by the deemed equivalent authorities of the other Party listed in
        Appendix 2 . In addition, the certification by the manufacturer on the
        conformity of each batch will be recognised by the other Party without re-
        control at import.
                                                                Initiallad on 30 May 1997
 ---pagebreak---                                             81
8.1.2 Manufacturers located in Canada or a Member State of the European
      Community whose relevant authority is not listed in Appendix 2 or is not
      included for the relevant category manufacturing processes may ask that an
      inspection be carried out by any of the authorities listed in Appendix 2 . The
      batch and the compliance certificates issued according to this procedure will
      be recognized by the other Party provided that equivalent enforcement
      procedures against that facility can be subsequently ensured in case of non-
      compliance.
8.1.3 With respect to medicinal products / drugs covered by the pharmaceutical
      legislation of the importing Party but not the exporting one, the locally
      competent inspection service willing to carry out an inspection of the relevant
      manufacturing operations shall inspect against its own GMPs if relevant, or,
      in the absence of specific GMP requirements, against the applicable GMPs of
      the importing Party. This will also be the case when the locally applicable
      GMPs are not considered equivalent, in. terms of quality assurance of the
      finished products, to the GMPs of the importing Party.
      This provision may also apply to the manufacturer of active pharmaceutical
      ingredients, intermediate products, and products intended for use in clinical
      trials.
8.1.4 It will be the responsibility of the authorities covered by the Annex to ensure
      that any suspension or withdrawal (total or partial) of a manufacturing
      authorization, which could affect the protection of public health, is
      communicated to the other Party with the appropriate degree of urgency as
      defined in the "two-way" alert programme.
      Contact points will be agreed between both Parties to permit authorities and
      manufacturers to inform the authorities of the other Party with the appropriate
      speed in case of quality defect, batch recalls, counterfeiting and other
      problems concerning quality, which could necessitate additional controls or
      suspension of the distribution of the product.
8.1.5 Certification of manufacturers
      At the request of an exporter, an importer or of an authority of the other
      Party, the authorities responsible for granting Certificates of Manufacturing
      Authorizations / Licences and for the supervision of the manufacture of
      medicinal products / drugs will certify that the sites used for manufacture and
      / or control:
      a)       are appropriately authorised, to manufacture and/or control the
               relevant medicinal product / drug or to carry out the relevant specified
               operations,
      b)       are regularly inspected by the authorities, and
      c)       comply with the GMP requirements recognised as equivalent by the
               two Parties.
      The Certificates of Manufacturing Authorization / Licence will also identify the
      site(s) of manufacture. A Canadian and a European Community example of
      such certificates are attached at Appendix 7 for illustrative purposes.
                                                               InitiaUad on 30 May 1997
 ---pagebreak---                                              82
        Certificates of manufacturing authorisations/licences will be issued
        expeditiously, and the time taken should not exceed 30 calendar days. In
        cases when a new inspection has to be carried out, this period may be
        extended to 60 calendar days.
8.1.6   Batch certification
        Each batch exported will be accompanied by a batch certificate issued by the
        manufacturer ("self certification") after a full qualitative and quantitative
        analysis of all active constituents to ensure that the quality of the products
        complies with the requirements of the Marketing Authorization / Product
        Approval.
        When issuing this certificate, the manufacturer will take into account the
        provisions of the current WHO certification scheme on the quality of
        medicinal products/drugs moving in international commerce. This certificate
        will attest that the batch meets the specifications and has been manufactured
        in accordance with the relevant Marketing Authorization / Product Approval,
        detailing the specifications of the product, the analytical methods referenced,
        the analytical results obtained, and containing a statement that the batch
        processing and packaging records were reviewed and found in conformity
        with GMPs.
       The batch certificate will be signed by the person responsible for releasing
       the batch for sale or supply. In the European Community the "qualified
        person" is referred to in article 21 of Directive 75/319/EEC, and in Canada,
       the nominated person responsible for manufacturing quality control is as
       specified in the Food and Drug Regulations, Division 2, Section C.02.014 (1).
8.1.7. Fees
       The regime of inspection / establishment licence fees is determined by the
       location of the manufacturer. The cost recovery programmes and the fees
       pertaining to the issuance of Manufacturing Authorizations / Licences in each
       jurisdiction will remain the responsibility of that jurisdiction.
       The Parties shall endeavour to ensure that any fees imposed for services will
       be cost-oriented and take into account relevant cost factors. If no services
       are rendered by one Party, fees should not be charged.
8.1.8. Each Party reserves the right to conduct its own inspection for reasons
       identified to the other Party. Such inspections are to be notified in advance to
       the other Party, which has the option of joining the inspection. Recourse to
       this safeguard clause should be an exception.
8.1.9. The decision to suspend or revoke a licence will rest with the issuing Party.
                                                                   Initiallad on 30 May 1997
 ---pagebreak---                                                83
8.2. Information Sharing
8.2.1    In accordance with the general provisions of the Annex, the Parties will
         exchange all information necessary to determine and maintain the
         equivalence of GMP compliance programmes. In addition, the relevant
         authorities in Canada and in the EC will keep each other informed of all new
        technical guidance, inspection procedures, or changes in regulation (these
         include: guidance documents, publications of references to standards, forms,
         documents relating to the application of legal requirements). Each Party will
         consult the other before adopting these changes to ensure the continued
        equivalency of the GMP compliance programmes. Concerns will be raised to
        the Joint Sectoral Group.
8.2.2    Upon reasoned request, the relevant inspection service shall forward a copy
        of the last inspection report of the manufacturing or control site, in case
        analytical operations are contracted out. The request may concern a "full
        inspection report" or a "detailed report". A "full inspection report" comprises a
        Site Master File (compiled by the manufacturer or by the inspectorate) and a
        narrative report by the inspectorate. A "detailed report" responds to specific
        queries about a firm by the other Party. Parties will ensure that such
        inspection reports are forwarded in no more than 30 calendar days, this
        period being extended to 60 calendar days should a new inspection be
        carried out.
8.3. Two-way Alert System
8.3.1 The Joint Sectoral Group will ensure that an efficient and effective "two-way"
        alert system is in place at all times. Elements of such a system are described
        in Appendix 5.
8.3.2   It shall be the responsibility of the authorities covered by the Annex to ensure
     !
        that any suspension or cancellation (total or partial) of certification of
        compliance is communicated to the other relevant authorities with the
        appropriate degree of urgency.
8.3.3   Each Party shall notify the other Party of any confirmed problem reports,
        corrective actions, or recalls related to products covered under the scope of
        this Annex. Each Party will respond to special requests for information and
        will ensure that authorities make available relevant information, as requested.
Contact points are identified in Appendix 5.
                                                                  Initiallad on 30 May 1997
 ---pagebreak---                                           84
9. Monitoring of the Agreement
9.1.   The continuous monitoring of the GMP compliance programmes determined
       to be equivalent at the conclusion of the confidence building period and any
       subsequent decisions concerning that equivalence must be made according
       to a mutually developed and managed equivalence maintenance programme.
       This programme will be managed by the Joint Sectoral Group.
9.2.   The Parties undertake to hold regular consultations, under the auspices of
       the Joint Sectoral Group set up under this Annex, to ensure the continued
       relevancy and accuracy of this annex. Canada and Member State authorities
       may organize meetings to discuss specific questions and issues.
9.3.  Authorities must participate in maintenance activities, as established under
      the Joint Sectoral Group, in order to maintain their status as listed in
      Appendix 2.
10. Appendices
10.1. Appendices 1 and 2 constitute integral parts of this annex.
10.2. Appendices 3,4, 5, 6 and 7 are general guidelines.
                                                             Initiallad on 30 May 1997
 ---pagebreak---                                             85
Appendix 1
1. List of Applicable Legislation
1.1     For the European Community
        Directive 65/65 EEC as modified
        Directive 75/319 EEC as modified
        Directive 81/352 EEC as modified
        Directive 91/356 EEC as modified
        Directive 91/412 EEC as modified
        Regulation N° (EC) 2309/93
        Directive 25/92 & Guide to Good Distribution Practice
        Current version of the Guide To Good Manufacturing Practice, Volume IV of
        Rules Governing Medicinal Products in the European Community.
1.2      For Canada:
        Food and Drugs Act and Regulations, Health of Animals Act and Regulations
        for the issuance of permits for materials of animal origin.
2. Indicative list of Products
Recognizing that precise definitions of medicinal products and drugs are to be found
in the legislations referred to above, an indicative list of products covered by the
agreement is given below:
        human pharmaceuticals including prescription and non-prescription drugs,
        and medicinal gases;
        human biologicals including vaccines, stable medicinal products derived from
        human blood or human plasma, biotherapeutics, and immunologicals;
        human radiopharmaceuticals;
        veterinary pharmaceuticals, including prescription and non-prescription drugs,
        and pre-mixes for the preparation of veterinary medicated feeds;
        where appropriate, vitamins, minerals, herbal remedies and homeopathic
        medicinal products; and
        active pharmaceutical ingredients or bulk pharmaceuticals (Note: APIs are
        not GMP regulated)
                                                                 Initiallad on 30 May 1997
 ---pagebreak---                                         86
Appendix 2
AUTHORITIES
For the European Community:
Austria:           Austrian Inspection Service, Federal Ministry of Health and
                   Consumer Protection, Vienna
Belgium:           Pharmaceutical Inspectorate, Ministry of Social Affairs, Public
                   Health and Environment; Brussels
Denmark:           Medicines Inspectorate, Medicines Division, National Board of
                   Health, Bronshoj
Finland:           National Agency for Medicines, Ministry of Social Affairs and
                   Health, Helsinki
France:            Agency of Medicine, Paris
                   National Agency of Veterinary Medicine, Paris
Germany:           Federal Ministry of Health, Bonn
                   Paul-Ehrlich Institute, Langen
                   16 Landers
Greece:            National Drug Organization (EOF), Ministry of Health, Athens
Ireland:                   National Drugs Advisory Board, Department of Health,
                   Dublin
Italy:             Central Inspectorate, Ministry of Health, Rome
Luxembourg:        National Laboratory of Health, Luxembourg
The Netherlands:   Inspectorate for Health Care; Ministry of Health, Welfare, and
                   Sport, Rijswijk
Portugal:          Pharmacies and Pharmaceutical Inspection, National Institute
                   of Pharmacy and of Medicine (INFARMED), Lisbon
Spain:             Sub-directorate General for Pharmaceutical Control,
                   Directorate General for Pharmacies and Sanitary Products,
                   Ministry of Health and Consumers, Madrid
Sweden:            Medical Products Agency, Uppsala
United Kingdom:    Medicines Control Agency, London
                   Veterinary Medicines Directorate, Surrey
                                                           Initiallad on 30 May 1997
 ---pagebreak---                                 87
For Canada:
            Therapeutic Products Programme, Health Canada, Ottawa.
            Bureau of Veterinary Drugs, Food Directorate, Health Canada,
            Ottawa
                                                 Initiallad on 30 May 1997
 ---pagebreak---                                              88
Appendix 3
                                    JOINT SECTORAL GROUP
A Joint Sectoral Group (JSG) will be established to manage the confidence building
process and to monitor the operations of the MRA thereafter.
The JSG will be co-chaired by a member from each Party and will determine its own
composition, ensuring, to as great a degree as possible, consistent membership .
The role of the JSG will be to ensure communications with the Joint Committee and
to manage the transition period and to monitor the continued implementation of this
annex including, but not limited to:
        making decisions on activities required to define and establish the
        equivalence of compliance programmes and the "two way" alert system;
        assessing the results of the confidence building exercise, and determining
        which regulatory authorities are deemed equivalent. The JSG will prepare a
        list of the equivalent regulatory agencies and provide its recommendations to
        the Joint Committee;
        providing directions to experts that will conduct the evaluation of the
        respective GMP compliances programmes, and undertake joint activities (e.g.
        inspections, workshops); and
        making decisions on the necessary arrangements of the MRA maintenance
programme.
The JSG will meet as needed to adopt the confidence building working plan* resolve
issues, and monitor the progress of the confidence building exercise. The Joint
Committee will be kept informed of the agendas and conclusions of meetings as well
as on the progress made during the transition period.
                                                               Initiallad on 30 May 1997
 ---pagebreak---                                                   89
Appendix 4
                     COMPONENTS OF A GMP COMPLIANCE PROGRAMME
1. Legislative and Regulatory Requirements and Scope
                e
        Empowering legislation and regulations including authority to enforce laws
        and regulations, powers given to inspectors to conduct inspections, authority
        to remove violative products from the market, etc
        Suitable controls on conflict of interest
2. Regulatory Directives and Policies
        Procedures for designating inspectors
        Enforcement policies/guidelines/procedures (inspection, re-inspection,
        corrective action)
        Codes of conduct/ethics
        Training/certification policies/guidelines
        Alert/crisis management policies/procedures/guidelines
        Organizational structure, including roles, responsibilities and reporting
        relationships
3. Good Manufacturing Practices (GMP) Standards
        Scope/details of GMPs necessary for the control of the manufacturing of drug
        products
        Process validation requirements
4. Inspection Resources
        Staffing - initial qualifications, certification of inspectors
        Number of inspectors in relation to size of industry (in-house, contract, third
        Party)
       Training/certification programmes/processes (e.g. frequency of training)
        Quality assurance mechanisms to ensure effectiveness of training
        programmes
5. Inspection Procedures (pre-inspection, inspection, and post-inspection activities)
       Inspection strategy (type, scope, scheduling, focus of inspection, notification
       of inspections, risk based inspections)
       Pre-inspection preparation/requirements
       Format and content of inspection reports (including support tools e.g.
       hardware)
       Inspection methodology (access to and review of firm's files and databases,
       collection of evidence, data review, sample collection, interviews)
       Standard Operating Procedures (SOPs)for inspection
       Post-inspection activities (procedures for report issuance, follow-up, decision
       making)
       Storage of inspection data
                                                                     Initiallad on 30 Mav 1997
 ---pagebreak---                                               90
6. Inspection Performance Standards
        Frequency/number of inspections, quality and timeliness of inspection
        reports, norms/frequency/procedures for re-inspection and corrective action
7. Enforcement Powers and Procedures
        Provision of written notices of violation to firms
        Non-compliance management procedures/mechanisms (recall, suspension,
        quarantine of products, licence revocation, seizure, prosecution)
       Appeal mechanisms
       Other measures to promote voluntary compliance by firm
8. Alert and Crisis Systems
       Alert mechanisms
       Crisis management mechanisms
       Alert performance standards (appropriateness and timeliness of alert)
9. Analytical Capability
       Access to laboratories with capacity to handle necessary analysis
       Standard Operating Procedures (SOPs) for analytical support
       Processes for validation of analytical methods
10. Surveillance Programme/Measures (used by firm and by regulatory authority)
       Sampling and audit procedures
       Recall monitoring (including effectiveness controls and verifications of
       procedures)
       Consumer complaint system/procedures
       Adverse reaction reporting system/procedures
       Drug product defect reporting system/procedures
11 . Quality Management Systems
       Quality management/assurance system/procedures to ensure the ongoing
       suitability and effectiveness of policies, procedures, guidelines and systems
       used to achieve the objectives of the G MP compliance programme, including
       establishment of standards and annual audit and review.
                                                               Initiallad on 30 May 1997
 ---pagebreak---                                            91
 Appendix 5
                    COMPONENTS OF A "TWO-WAY" ALERT PROGRAMME
 1. Documentation
         Definition of a crisis/emergency and under what circumstances an alert is
         required
         Standard Operating Procedures (SOPs)
         Mechanism of health hazards evaluation and classification
         Language of communication and transmission of information
2. Crisis Management System
         Crisis analysis and communication mechanisms
         Establishment of contact points
         Reporting mechanisms
3. Enforcement Procedures
         Follow-up mechanisms
         Corrective action procedures
4. Quality Assurance System
         Pharmacovigilance programme
        Surveillance/monitoring of implementation of corrective action
Contact points
For the purpose of this agreement, the contact points for any technical question,
such as exchange of inspection reports, inspectors training sessions, technical
requirements, will be:
for Canada,
        the Director General, Therapeutic products Programme, Health
        Canada , 2nd Floor, Health Protection Building, AL: 0702A, Tunney's
        Pasture, Ottawa, Ontario, K1A OL2, Canada. Telephone 1-613-957-
        0369, Fax 1-613-952-7756; and
for the European Community,
        the Director of the Evaluation of Medicinal Products Agency, 7,
        Westferry Circus, Canary Wharf, UK - London E14 4HB, England.
        Telephone +44-171 -418 8400, Fax 418 8416.
                                                              Initialladon30Mavl997
 ---pagebreak---                                             92 h 3
Appendix 6
                       PHASES OF A CONFIDENCE BUILDING PERIOD
The determination of the equivalency of the G MP compliance programmes by the
Joint Sectoral Group will be designed around the following three phases :
       1. Review and evaluation of documentation (exchange of documentation).
               Legal Instruments (Regulations/Legislations Directives)/Guidelines on
               GMPs.
               Inspection programmes (scope, policies, directives, procedures).
               Crisis management systems (scope, criteria, policies, directives,
               procedures).
               Requirements for inspection reports.
               Analytical laboratory systems.
               Alert reports.
       2. Evaluation of processes and procedures.
               Audit of systems and procedures.
               Exchange/evaluation of reports.
               Monitoring of alert systems including handling of recalls.
               Joint inspections of manufacturers to determine equivalency of
               inspection methods.
               Exchange of inspectors or organization of joint workshops (optional).
       3. Decision making on the success of the exercise and conclusions.
               Evaluation of results of the confidence building exercise.
               Action to take, development of options and solutions to address
               issues.
               Determination of competent agencies that meet evaluation criteria.
               Establishment of the conditions and mechanisms for on-going
               maintenance of the certification . programme (develop quality
               management system, audit mechanism and a consultation/on-going
               dialogue process).
                                                               Initiallad on 30 May 1997
 ---pagebreak---        94
  EU-CANADA MRA
SECTORAL ANNEX
      ON
MEDICAL DEVICES
                InitiaUad on 30 May 1997
 ---pagebreak---                                             95
1     PURPOSE
1.1. This Mutual Recognition Agreement (MRA) annex on conformity assessment
     and compliance certification pertaining to medical devices has been
     developed by the European Community and Canada to enhance bilateral
     medical device regulatory cooperation while facilitating global trade and
     maintaining the same high standards of health and safety in both
     jurisdictions.
1.2.  Furthermore, this Annex calls for the development of an infrastructure for on-
     going communications/consultations between Regulatory and/or Designating
     Authorities and Conformity Assessment Bodies of each Party to enable
      regulators to determine and maintain the equivalence of their medical device
     conformity assessment capabilities and to develop a cooperative approach to
     post-market vigilance.
2.    SCOPE AND COVERAGE
2.1. This Annex applies to all medical devices which in Canada or the European
     Community are subject to conformity assessment procedures, including
     scientific technical evaluations of high risk medical devices and quality
     systems assessments, by a Conformity Assessment Body.
2.2. The product coverage shall be as determined by the relevant legislation of
     each Party, which is:
     (a) for the European Community
         - Directive 90/385/EEC relating to active implantable medical devices (OJL
         189 of 20 July 1990), as amended.
         - Directive 93/42/EEC relating to medical devices (OJL 169 of 12 July
         1993), as amended.
     (b) for Canada
         - The Food and Drugs Act and Medical Devices Regulations (proposed for
         promulgation 1997) as amended from time to time.
         - the Canadian Electrical Code (as it relates to medical devices).
         - the Radiation Emitting Devices Act and Regulations as amended from
         time to time (as they relate to medical devices).
     It shall not, however, apply to the following products:
         - in vitro diagnostic medical devices
         - devices incorporating, as an integral part, a substance which, if used
             separately, may be considered to be a medicinal product
         - breast implants
         - medical devices incorporating tissues of human or animal origin.
             However, medical devices incorporating tissues of animal origin and
             where the device is intended to come into contact with intact skin only,
             will be included within the scope of this Sectoral Annex.
                                                                Initiallad on 30 May 1997
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         Both Parties may, however, decide by common agreement, to extend the
         application of this Annex to the aforementioned or any other medical devices.
 3.      CONFIDENTIALITY
 3.1.    Each Party will protect from public disclosure any non-public confidential
        technical, commercial and scientific information, including trade secrets and
         proprietary information provided by the other Party.
 3.2.    Each Party reserves the right to make public the results of any conformity
        assessment reports in situations where public health may be affected.
 4.      RESOLUTION OF DIVERGENT VIEWS
 4.1.    Divergent views which have not been resolved between the regulatory
        authorities will be referred to the Joint Sectoral Group for resolution. In the
        event that the Joint Sectoral Group is ubable to resolve these divergent
        views, either Party may bring the matter to the attention of the Joint
        Committee.
 5.      MANAGEMENT MECHANISM
 5.1.   A Joint Sectoral Group will be established for the purposes of management of
        this sectoral Annex. Its role will be to make decisions concerning the
        definition, establishment, and evaluation of conformity assessment
        procedures and programmes, the establishment of the "two-way" alert
        programme, the management of the confidence building period and the
        definition of a maintenance program supporting the continued operation of
        the MRA. The Group will include representatives of Health Canada and of
        the European Community's Competent Authorities and co-chaired by a
        member of each of the two Parties.
 6.     TRANSITION PERIOD
 6.1    Time Frame
The confidence building period will commence upon the signing of the MRA and is
expected to be completed within 18 months.
6.2     Confidence Building Program
At the beginning of the transitional period, the Joint Sectoral Group will elaborate a
joint Confidence Building Program (guidance provided in Attachment III). The
implementation of this program shall establish each Party's capability to perform
conformity assessments in compliance with the requirements and procedures of the
other Party. The evidence shall provide practical relevance to the decisions
 regarding the operational phase.
                                                               Initiallad on 30 May 1997
 ---pagebreak---                                                 97
 The Confidence Building Programme should include the following actions and
 activities:
 a)       The organization of seminars aiming to inform Regulatory/Designating
          Authorities and Conformity Assessment Bodies on each Party's regulatory
          system, procedures and requirements;
 b)       The conduct of workshops aiming to provide, for Regulatory/Designating
          Authorities, a common understanding and exchange of information regarding
          requirements and procedures for the designation and surveillance of
          Conformity Assessment Bodies (CABs);
 c)       For scientific technical evaluations, an inter-comparison exercise which would
          consist of parallel evaluations (double blind evaluations), made by the
          Conformity Assessment Body in each territory, of a manufacturers technical
          submission against the requirements of the intended market for that device,
          will be undertaken. Full reports and recommendations shall be exchanged
          for comparison. A certificate of compliance can be issued by the body
          responsible for the relevant market during this inter-comparison study. The
          inter-comparison study should take place on a sampling basis comprising a
          sufficient number of cases spread over the range of different medium to high-
          risk technologies with the involvement of each Party's Regulatory/Designating
          Authorities and CABs. Additional evidence with respect to the competency of
          Regulatory/Designating Authorities or CABs can be requested by either
          Party;
d)        For quality systems assessments, an inter-comparison exercise which would
          consist of the participation of Regulatory/Designating Authorities in audits
          carried out by CABs of the other Party on the basis of requirements of the
          other Party. Audit management, methods and reports will be compared. The
          inter-comparison study should take place on a sampling basis comprising a
          sufficient number of cases spread over the range of different technologies
          with the involvement of each Party's regulatory/designating authorities and
          CABs.       Additional evidence with respect to the competency of
          regulatory/designating authorities or CABs can be requested by either Party;
e)        The design, development and testing of a two-way alert system (see
          guidance in Attachment IV);
f)        The establishment of contact points           between    Regulatory/Designating
          Authorities and CABs of both Parties;
g)        The participation in information exchange meetings with particular focus on
          conformity assessment and vigilance, including participation in staff training
          sessions. The exchange of staff will also be encouraged; and
h)        During the Confidence Building Program, where one Party           has developed
          sufficient confidence in the evaluation methods and results       of the other, it
          may at its own discretion, establish the relevant document         of compliance
          permitting market access for its own jurisdiction based on        the evaluation
          reports of the other Party without the full submission.
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 ---pagebreak---                                              98
Participation in activities referenced under c) and d) should be understood as
means to provide, on an exemplary basis, supplementary evidence in relation to
the process of designation and surveillance of CABs.
6.3     Budget
Each of the Parties to the MRA will be responsible for the costs of its participation in
the confidence building activities.
6.4     End of Transition Period
No later than eighteen months after the entry into force of this agreement, the Joint
Sectoral Group shall proceed to a joint evaluation of the experience gained. This
evaluation will cover the adequacy of the Confidence Building Program, the
capabilities of Regulatory/Designating Authorities and the capabilities of the
designated Conformity Assessment Bodies.
Recommendations to list CABs in Attachment II of this Annex shall be made by
participating Designating/Regulatory Authorities, listed in Attachment I, to the Joint
Sectoral Group on the basis of the results of the Confidence Building Program.
Conformity Assessment Bodies that have been accepted by the Joint Sectoral Group
will be listed in Attachment II with an indication of their specific conformity
assessment expertise and the fields of medical device technologies for which they
are recognized. The corresponding Regulatory/Designating Authority responsible for
a CAB will also be listed in Attachment II. Proposals to limit the recognition of
capabilities of CABs should be based on objective evidence and documented. The
Joint Sectoral Group may recommend that a CAB not be listed in Attachment II,
provided there is documented evidence demonstrating its lack of capabilities.
Excluded CABs may apply for re-consideration of their status once the necessary
corrective measures have been taken and confirmed.
Where no agreement on any of the above matters has been reached in the Joint
Sectoral Group, the matter will be referred to the Joint Committee under the
Framework Agreement.
The Parties shall enter into the operational phase provided that there is
representation of each Party's CABs in Attachment II.
The agreement will also be re-examined at the end of the transitional period to
take account of the regulatory evolution of each Party. Consideration shall be
given to a single submission/evaluation/quality systems assessment which
simultaneously satisfies the requirements of each jurisdiction.
7.      OPERATIONAL PHASE
7.1     General Obligations
The provisions of this Section will apply only to conformity assessment carried out in
the Parties' respective territories by Conformity Assessment Bodies recognised
under this sectoral Annex.
                                                                Initiallad on 30 May 1997
 ---pagebreak---                                              99
 The European Community and Canada agree that, for medical devices covered by
 this Annex, each Party will recognize the conclusions of the conformity assessment
 carried out by the other Party and the certificate of compliance granted by the
 Conformity Assessment Body of the other Party, without further re-assessment.
 For evaluation against European requirements, Health Canada or other Conformity
 Assessment Bodies designated by Canada shall establish the conclusions of
 completed conformity assessments as referred to in the Active Implantable Medical
 Device and the Medical Device Directives, and issue the appropriate certificate of
 compliance. The responsible authorities in the European Community will, without
 any further re-assessment, accept the certification as evidence of compliance with
 the premarket requirements of the relevant European Directives.
 For evaluating against Canadian requirements, the European CABs shall establish
 the conclusions of the: examination and submit to Health Canada an abbreviated
 supporting report and certificate of compliance which includes such conclusions.
 Based on these documents, and without any further re-assessment, Health Canada
 will accept the certification as evidence of compliance with the premarket
 requirements of the Canadian Medical Devices Regulations.
 Each Party shall make available to the other Party, upon reasoned request, any
 information which has been reviewed as part of the assessment of a medical device
for the purpose of issuing certificates of compliance.
 Each Party reserves the right, at any time, to question information with respect to the
 designation process or the performance of conformity assessments against the
 requirements of its regulatory regime. Furthermore, each party reserves the right to
conduct its own conformity assessments for reasons identified to the other Party.
Justification for such action shall be based on documented evidence and notification
is to be provided in advance to the other Party. Recourse to this action should be an
exception.
7.2     Procedures for Designation of CABs
The procedures to be followed by the Designating Authorities of each Party in
designating CABs shall respect the criteria laid down in the other Party's regulations
or guidelines (non-binding guidance is provided in Attachment V).
7.3     Information Sharing
In accordance with the general provisions of the Annex, the Parties will exchange all
information necessary to determine and maintain equivalence of conformity
assessment procedures. In addition, each Party shall share with the other Party
information generated within the framework of its regulatory system which is relevant
for the operation of conformity assessment procedures (i.e. guidance documents,
publications of references to standards, forms, documents relating to the application
of legal requirements).        Each Party shall associate Regulatory/Designating
Authorities and Conformity Assessment Bodies of the other Party in activities of
exchange of information and experience.
                                                               Initiallad on 30 Mav 1997
 ---pagebreak---                                               100
 In special cases, particularly emergency situations, all those involved in the
 implementation of this Annex will endeavour to provide all documentation requested
 by one of the Parties in an expeditious manner.
 7.4      Two-way Alert System
 The Joint Sectoral Group will ensure that an efficient and effective "two-way" Alert
 System is in place at all times. Elements of such a system are described in
 Attachment IV.
 Each Party shall notify the other Party of any confirmed problem reports, corrective
 actions, or recalls related to products that it has evaluated under the terms of this
 agreement. Each party will respond to special requests for information on particular
 devices and will ensure that its Designated Authorities and Conformity Assessment
 Bodies make available relevant information on these devices, as requested.
 It shall be the responsibility of the Regulatory Authorities covered by this Annex to
 ensure that any suspension or cancellation (total or partial) of a certificate of
 compliance is communicated to each other with the appropriate degree of urgency.
7.5       Fees
The regime of registration or conformity assessment fees is determined by the
location of the manufacturer. The cost recovery programmes and the fees pertaining
to the issuance of a certificate of compliance in each jurisdiction will remain the
 responsibility of that jurisdiction. Conformity assessment fees will not be charged by
one Party to manufacturers located on the territory of the other Party, where the
conformity assessment was conducted by a Conformity Assessment Body located in
the other Party's territory.
7.6       Monitoring of the Agreement
The continuous monitoring of the equivalency of designation processes and
conformity assessments for each Party's requirements that have been determined to
be equivalent at the conclusion of the Confidence Building Program, and any
subsequent decisions concerning that equivalence, must be made according to
mutually developed and managed equivalence maintenance and implementation
activities. This will be managed by the Joint Sectoral Group.
The Parties will undertake to hold regular consultations, within the Joint Sectoral
Group set up under this Annex to ensure the continued relevancy and accuracy of
this Annex. The Regulatory/Designating Authorities and Conformity Assessment
Bodies will organize meetings to discuss specific questions and issues.
Conformity Assessment Bodies and Regulatory/Designating Authorities must
continue participation in maintenance activities, as established by the Joint Sectoral
Group, within the framework of this Annex in order to maintain their status under this
Annex as indicated in Attachment II.
                                                                Initiallad on 30 May 1997
 ---pagebreak---                                              101
Parties may request the addition of Regulatory/Designating authorities or Conformity
Assessment Bodies to Attachment II. The procedure for the acceptance of new
Regulatory/Designating authorities will be as described in the Confidence Building
Program. Conformity Assessment Bodies will be added to Attachment II upon
recommendation from a Regulatory/Designating Authority and joint decision by the
Joint Sectoral Group.
7.7     Contact Points
Contact points are identified in order to permit Regulatory Authorities and
manufacturers to inform the Regulatory Authorities of the other Party with the
appropriate speed in case of quality defects, recalls, and adverse incidents, which
could necessitate additional controls or, suspension of the distribution of the product
or, suspension or cancellation of a certificate of compliance.
For the purpose of this agreement, the contact points will be:
for Canada                        and
for the European Community [15 member states and the Commission]
8.      ATTACHMENTS
Attachments I and II constitute integral parts of this Annex. Attachments III, IV and V
are general guidelines.
                                           «*                  Initiallad on 30 May 1997
 ---pagebreak---                                          102
ATTACHMENT!
REGULATORY / DESIGNATING AUTHORITIES ELIGIBLE TO PARTICIPATE IN
THIS AGREEMENT
 For the Conformity Assessment         Bodies For the Conformity Assessment Bodies
 Designated by Canada                           Designated by the European Community
 Canada                                         Austria
 Medical    Devices     Bureau,    Therapeutic Federal Ministry of Health and Consumer
 Products Directorate, Health Canada            Protection
                                                Belgium
                                                Ministere de la Sante publique, de
                                                I'Environment et de Integration sociale
                                                Ministerie van Volksgezondheid, Leefmilieu en
                                                Sociale Integratie
                                                Denmark
                                                Sundhedsministeriet
                                                Finland
                                                Sosiaali-ja terveysministerio
                                                Germany
                                                Bundesministerium fur Gesundheit
                                                Greece
                                                Ministry of Health
                                                Spain
                                                Ministerio Sanidad y Consumo
                                                France
                                                Ministere de I'Emploi et de la Solidarity
                                                Ireland
                                                Department of Health
                                                Italy
                                                Ministero della Sanita
                                                Luxembourg
                                                Ministere de la Sante
                                               Netherlands
                                                Ministerie van Volksgezondheid, Welzijn en
                                               Sport
                                                Portugal
                                                Ministerio da Saude
                                                Sweden
                                                Under the authority of the Government of
                                                Sweden:
                                                Styrelsen for ackreditering och teknisk controll
                                                (SWEDAC)
                                                United Kingdom
                                              I Department of Health
                                                             Initiallad on 30 May 1997
 ---pagebreak---                                        103
ATTACHMENT II
DESIGNATED CONFORMITY ASSESSMENT BODIES AND THEIR RESPECTIVE
DESIGNATING AUTHORITIES
 For Canada                                    For the European Community
To be completed after the Confidence Building To be completed after the Confidence Building
 Program                                     | Program
                                                          Initiallad on 30 May 1997
 ---pagebreak---                                            104
ATTACHMENT III
PHASES AND ELEMENTS OF A CONFIDENCE BUILDING PROGRAM
A.    Review and Evaluation of Elements of Conformity Assessment (exchange of
     documentation).
1.    Legislative and Regulatory Requirements and Scope
     - Empowering legislation and regulations including authority to enforce laws
     and regulations, powers given to evaluators and auditors, authority to remove
     violative products from the market, etc
     - Suitable controls on conflict of interest
2.    Regulatory Directives and Policies
     - Procedures for determining competency of evaluators/auditors
     - Enforcement policies/guidelines/procedures
     - Codes of conduct/ethics
     - Training/certification policies/guidelines
     - Alert/crisis management policies/procedures/guidelines
     - Organizational structure, including roles, responsibilities and reporting
     relationships
3.   Quality Audit Management, Methodology and Practices
     - Scope/details of operating standards, etc.
     - Auditor qualifications, numbers, training, quality assurance, contracting,
     etc.
4.   Scientific Technical Evaluation Methodology and Practices
     - Scope/details of operating standards, etc.
     - Evaluator qualifications, numbers, training, quality assurance, contracting,
     etc.
5.   Evaluation and Auditing Reports
     - Scope and format of reports
     - Content requirements
     - Storage, retrieval and access to reports
     - scope and format of abbreviated reports, conclusions of conformity
     assessment and certificates
6.   Auditing and Evaluation Procedures
     - Audit and Evaluation strategy (type, scope, scheduling, focus, notification,
     risk)
     - Pre-audit or evaluation preparation/requirements
                                                            Initiallad on 30 May 1997
 ---pagebreak---                                        le>S
    - Methodology (access to and review of firm's files and databases, collection
    of evidence, data review, sample collection, interviews)
    - Post audit and evaluation activities (procedures for report issuance, follow-
    up, decision making)
    - Collection/storage of and access to data
7.  Auditing and Evaluation Performance Standards
               Frequency/number,      quality     and     timeliness      of   reports,
    norms/frequency/procedures for re-audit or re-evaluation and corrective
    action
8.  Enforcement Powers and Procedures
    - Provision of written notices of violations to firms
    - Non-compliance management procedures/mechanisms (recall, suspension,
    quarantine of products, certificate revocation, seizure, prosecution)
    - Appeal mechanisms
    - Other measures to promote voluntary compliance by firm
9.  Alert and Crisis Systems
    - Alert mechanisms
    - Crisis management mechanisms
    - Alert performance standards (appropriateness and timeliness of alert)
10. Analytical Capability
    - Access to laboratories with' capacity to handle necessary analysis
    - Standard Operating Procedures for analytical support
    - Processes for validation of analytical methods
11. Surveillance Programme/Measures (used by manufacturers and by regulatory
    authorities)
    - Sampling and audit procedures
    - Recall monitoring (including effectiveness controls and verifications of
    procedures)
    - Consumer complaint systems/procedures
    - Adverse incident reporting systems/procedures
12. Quality Management Systems
    - Quality management/assurance systems/procedures to ensure the ongoing
    suitability and effectiveness of policies, procedures, guidelines and systems
    used to achieve the objectives of the conformity assessment programme,
    including establishment of standards and annual audit and review.
                                                             Initiallad on 30 May 1997
 ---pagebreak---                                           106
B. Inter-Comparison Exercise
           Audit of Systems and Procedures.
           Conduct of Parallel Evaluations (double blind)
           Criteria for Clinical Trial Data
           Exchange/evaluation of reports.
           Monitoring of alert systems including handling of recalls.
             Joint audits of manufacturers to determine equivalency of audit
           methods.
           Exchange of evaluators/auditors or organization of joint workshops
           (optional).
C. Decision Makino on the Success of the Inter-Comparison Study
   - Evaluation of results
   - Action to take, development of options and solutions to address issues.
   - Determination of competent Conformity Assessment Bodies that meet
   evaluation criteria.
   - Establishment of the conditions and mechanisms for on-going maintenance
   of the MRA (develop quality management system, audit mechanism and a
   consultation/on-going dialogue process).
                                                          Initiallad on 30 May 1997
 ---pagebreak---                                         107
ATTACHMENT IV
COMPONENTS OF A "TWO-WAY" ALERT PROGRAMME
1.    Documentation
     - Definition of a crisis/emergency and under what circumstances an alert is
     required
     - Standard Operating Procedures (SOPS)
     - Mechanism of health hazards evaluation and classification
     - Language of communication and transmission of information
2.   Crisis Management System
     - Crisis analysis and communication mechanisms
     - Access to manufacturer's submissions, adverse incident reports and
     Conformity Assessment Body reports
     - Establishment of contact points
     - Reporting mechanisms
3.   Enforcement Procedures
     - Follow-up mechanisms
     - Corrective action procedures
4.   Quality Assurance System
     - Vigirance programme
     - Surveillance/monitoring of implementation of corrective action
                                                           Initiallad on 30 May 1997
 ---pagebreak---                                              108
ATTACHMENT V
GUIDELINES: PROCEDURES FOR THE DESIGNATION AND MONITORING OF
CONFORMITY ASSESSMENT BODIES
A.   . General requirements and conditions
1.     Designating Authorities shall only designate legally identifiable entities as
       Conformity Assessment Bodies.
2.     Designating Authorities shall only designate Conformity Assessment Bodies
able to demonstrate that they understand, have experience relevant to, and are
competent to apply the conformity assessment requirements and procedures of the
legislative, regulatory and administrative provisions of the other Party for which they
are designated.
3.     Demonstration of technical capabilities shall be based on:
                technological knowledge of the relevant products, processes or
                services;
       - understanding of the technical standards and the general risk protection
       requirements for which designation is sought;
            the experience relevant to the applicable legislative, regulatory and
       administrative provisions;
       - the physical capability to perform the relevant conformity assessment
       activity;
             an adequate management of the conformity assessment activities
       concerned; and
       - any other circumstance necessary to give assurance that the conformity
       assessment activity will be adequately performed on a continuous basis.
4.     The technical capability criteria shall be based on internationally accepted
       documents supplemented by specific interpretative documents developed as
       appropriate from time to time.
5.    The Parties shall encourage harmonisation of designation and conformity
       assessment procedures through cooperation between Designating Authorities
       and Conformity Assessment Bodies by means of coordination meetings,
       participation in mutual recognition arrangements, and working group meetings.
       Where accreditation bodies participate in the designation process they should
       be encouraged to participate in mutual recognition arrangements.
                                                                Initiallad on 30 May 1997
 ---pagebreak---                                               109
 B.     System to Determine Conformity Assessment Bodies' Capabilities
 6.     The Designating Authorities may apply the following processes to determine
       the technical capabilities of Conformity Assessment Bodies. If necessary, a
        Party will indicate to the Designating Authority the possible ways to
        demonstrate capabilities.
 (a)   Accreditation
 Accreditation shall constitute a presumption of technical capability in relation to the
 requirements of the other Party when;
       (i) the accreditation process is conducted in conformance with the relevant
       international documentation (EN 45000 series or ISO/I EC guides); and either,
       (ii) the accreditation body participates in mutual recognition arrangements
       where they are subject to peer evaluation which involves evaluation by
       individuals with recognised expertise in the field of the work being evaluated, of
       the capabilities of accreditation bodies and Conformity Assessment Bodies
       accredited by them, or
       (iii) the accreditation body, operating under the authority of a Designating
       Authority, takes part, in accordance with procedures to be agreed, in
       comparison programmes and exchanges of technical experience in order to
       ensure the continued confidence in the technical competence of the
       accreditation bodies and Conformity Assessment Bodies. Such programmes
       may include joint assessments, special cooperation programmes or peer
       evaluation.
When a Conformity Assessment Body is only accredited to evaluate a product,
process or service for compliance with particular technical specifications, designation
shall be limited to those technical specifications.
When a Conformity Assessment Body seeks designation to evaluate a particular
product, process or service for compliance with essential requirements, the
accreditation process shall incorporate elements which will permit assessment of the
capability (technological knowledge and understanding of the generally stated risk
protection requirements of the product, process or service or their use) of the
Conformity Assessment Body to evaluate compliance with those essential
requirements.
(b)   Other means
When appropriate accreditation is not available or when special circumstances apply,
the Designating Authorities shall require the Conformity Assessment Bodies to
demonstrate their capabilities through other means such as:
                                                                 Initiallad on 30 May 1997
 ---pagebreak---                                              110
      - participation in regional/international mutual recognition arrangements or
      certification systems;
      - regular peer evaluations;
      - proficiency testing; and
      - comparisons between Conformity Assessment Bodies.
C.    Evaluation of the Designation System
7.   Once the designation systems to evaluate the capabilities of Conformity
     Assessment Bodies have been defined by each Party, the other Party may, in
     consultation with the Designating Authorities, check that the systems give
     sufficient assurance that thé designation of the Conformity Assessment Bodies
     satisfies its requirements.
D.   Formal Designation
8.   Designating Authorities shall consult the Conformity Assessment Bodies within
     their jurisdiction in order to determine their willingness to be designated under
     the terms of this Agreement.           Such consultation should include those
     Conformity Assessment Bodies who do not operate under the respective
     legislative, regulatory, and administrative requirements of their own Party, but
     which may, nevertheless, be interested and capable of working to the
     legislative, regulatory, and administrative requirements of the other Party.
9.  Designating Authorities shall inform their Party's representatives on the Joint
    Sectoral Group, established under this Agreement, of the Conformity
    Assessment Bodies to be included in or withdrawn from Section XX of the
    Sectoral Annexes. Designation, suspension or withdrawal of designation of
    Conformity Assessment Bodies shall take place in accordance with the
    provisions of this Agreement and the rules of procedure of the Joint Sectoral
    Group.
10. When advising their Party's representative on the Joint Sectoral Group
    established under this Agreement, of the Conformity Assessment Bodies to be
    included in the Sectoral Annexes, the Designating Authority shall provide the
    following details in respect of each Conformity Assessment Body:
    (a) the name;
    (b) the postal address;
    (c) the facsimile (fax) number;
    (d) the range of products, processes, standards or services it is authorised to
    assess;
    (e) the conformity assessment procedures it is authorised to carry out; and
    (f) the designation procedure used to determine capabilities.
                                                               Initiallad on 30 Mav 1997
 ---pagebreak---                                          111
E.  Monitoring
11. Designating Authorities shall maintain, or cause to maintain, ongoing
    surveillance over designated Conformity Assessment Bodies by means of
    regular audit or assessment. The frequency and nature of such activities shall
    be consistent with international best practices or as agreed by the Joint
    Sectoral Group.
                                                 V
12. Designating Authorities shall require designated Conformity Assessment
    Bodies to participate in proficiency testing or other appropriate comparison
    exercises where such exercises are technically possible within reasonable
    cost.
13. Designating Authorities shall consult as necessary with their counterparts, to
    ensure the maintenance of confidence in conformity assessment processes
    and procedures. This consultation may include joint participation in audits
    related to conformity assessment activities or other assessments of designated
    Conformity Assessment Bodies, where such participation is appropriate and
    technically possible within reasonable cost.
14. Designating Authorities shall consult, as necessary, with the relevant
    regulatory authorities of the other Party to ensure that all regulatory
    requirements are identified and are satisfactorily addressed.
                                                             Initiallad on 30 May 1997
 ---pagebreak---                                               112
                            Financial Statement 1998-2002
                 External trade relations - Mutual Recognition Agreement
 1. TITLE
External Trade Relations-
 Mutual Recognition Agreements with United States, Canada, Australia, New Zealand and
 Israel.
2. BUDGETARY HEADINGS:                  B7-8500
                                        A-7010
3. LEGAL BASIS
• Article 113 of the Treaty of Rome
• Proposal for Council decisions N°.... on the implementation by the European
Commission of mutual recognition agreements with United States, Canada, Australia,
New Zealand and Israel.
    DESCRIPTION OF OPERATION :
          4.1 General objective:
     The purpose of these agreements is to establish mutual recognition of certification of
     conformity of products with technical regulations or standards of partners to the
     agreement.
     The major actions which will be pursued by the Commission under this budget line
    will be the following:
      •  Confidence-building activities to facilitate the proper implementation of the
         Agreement.
      •  Management of the Agreements and maintenance of the necessary degree of
         confidence.
    The Commission will be assisted by experts, particularly in regard to sectoral
    activities. It will however remain the final arbiter in the management of these
    agreements.
         4.2 Duration of the action: means foreseen for its renewal:
    The general action undertaken will be of an indefinite duration. The initial period of
    confidence-building required by the Agreements will require a more intensive effort
    and expenditure, but this should be substantially less after 2 years. However, during the
    life of the Agreements a continued effort will be needed to ensure management and
    maintenance of confidence.
5. CLASSIFICATION OF EXPENDITURE/REVENUE
    5.1 Non-compulsory expenditure ("DNO")
   5.2 Differentiated appropriation ("CD")
    5.3 Type of revenue involved:
   None
 ---pagebreak---                                               113
6. TYPE OF EXPENDITURE/REVENUE
         - 100% subsidy: No
         - subsidy for co-financing with other sources in the public or private sector?
    Yes, this may be envisaged as a method of funding. Subsidies not normally exceeding
    50% will be provided to professional associations and other responsible organisations
    for activities related to the implementation of the Agreement.
         - Interest subsidy: No
         - Others
   Financing of events, acquisition of studies, publications and conferences.
         - Should the action prove an economic success, is there provision for all, or part
            of the Community contribution to be reimbursed?
         Not relevant
         - Will the proposed operation cause any changes in the level of revenue ?
         No
7. FINANCIAL IMPACT ON APPROPRIATIONS FOR OPERATIONS
         7.1     Method of calculating the total cost of the operation:
   The estimation of costs is based on the anticipated requirements in terms of expenses
   related to training, seminars, workshops, travel of experts, verification of conformity
   assessment bodies, information and studies. The total estimated cost is based on the
   sum of the individual actions.
   A range of different actions are foreseen to meet the objectives of the budget-line and
   costs will vary depending on the nature of action undertaken. Even for similar types of
   action (e.g. seminars) costs will vary depending on the scope of the action and the
   degree of specialisation needed.
   The costs of specific actions will be determined either:
    •   by the Commission when it organises activities itself, e.g. seminars
    •   following invitations to tender issued by the Commission
    •   following requests for subsidies. In such cases, projects are selected according to
        how well they meet the criteria which have been established for selection.
        Subsidies are based on a percentage of total costs and usually the Community
        funding is limited to a maximum of 50%.
A. Attendance at Joint Committee
     These will be attended by Commission officials and some national experts. Travel
     and per diem expenses should be foreseen within the normal range of such expenses.
 ---pagebreak---                                            114
B. Attendance at Joint Sectoral Groups
    These will also be attended by Commission officials and given the nature of these
    meetings a larger contingent of national experts. Travel and per diem expenses
    should be foreseen within the normal range of such expenses.
C. Workshops and Seminars
    These will be held to familiarise economic and other operators with the requirements
    of the Agreement The cost of these seminars will vary according to the subject
    matter and location, and will include organisational costs (when in Europe) and
    substantial travel costs when in the territory of the partner country. Organisational
    costs in Europe will cost c. 3000 ECUs each. The number of seminars will vary
    depending on the individual industrial sectors covered by the Agreement.
D. Verification actions
    The competence of the conformity assessment bodies (CABs) will in many cases
    have to be checked, more so in the initial period of the Agreement, but as a matter of
    course throughout the life of the Agreement to maintain confidence in the system.
   This will involve on-site assessment by teams of experts of conformity assessment
    bodies in the partner country in the initial stages, and subsequently investigation of
   complaints. This expenditure will be essential in all sectors of the Agreement (... in
   number) and may involve numerous CABs in each sector including at subfederal or
   local level in certain cases.
E. Production and dissemination of information
   Certain costs may need to be incurred for the dissemination of information. Guides to
   regulations and assessment procedures may be needed typically at a cost of 10 000
   ECUs.
 ---pagebreak---                                                  115
          7.2       Breakdown by elements of the operation
          "Trade Agreements with important Trading Partners'
          For 1998, this involves the following calculation:
              Budget Heading         Amounts                        Method of calculation
                                       (Ecus)
                                                     No. of missions         Standard Unit cost
            Joint Committee                12 940 Bxl                  2     US: Travel: 2 000 Ecus;
                                                     Bxl               2     per diem: 185 Ecus
            B7-8500                                  Aus/NZ            2
                                                     Israel            1
            Sectoral Groups               57 680 Bxl                  16     CAN: Travel: 1 750
           B7-8500                                   US                8    Ecus; per diem: 170 Ecus
                                                     CAN               8
            Seminars                     103 540 US                   10    Aus / NZ: Travel: 3 200
                                                     CAN              10    Ecus; per diem: 190 Ecus
           B7-8500                                   Aus/NZ           14
                                                     Bxl              28
           Verifications                 142 150 US                   18    Brussels: Travel: 800
                                                     CAN              18    Ecus; perdiem: 110 Ecus
           B7-8500                                  Aus/NZ            12
                                                    Israel            1
           Information                    10 000
           B7-8500
           B7-8500       Total           326 310                     150
                                                                          In Ecus
                                                                          (current prices)
Breakdown                      Year         Year
                               1998         1999           2000         2001          2002        Total
                                                                                                1998-2002
A. Joint Committee               12.940       13 760         12 940        13 760      12 940       66 340
B. Joint Sectoral Groups         57 680       57 680         57 680       57 680       57 680      288 400
C. Seminars                     103 540       96 310                                               199 850
D. Verifications                142 150     142 150          48 430       48 430       48 430     429 590
E. Information                   10 000       10 000         10 000                                 30 000
Total                           326 310     319 900         129 050      119 870      119 050    1 014 180
From the year 2000 on the estimates are for information.
 ---pagebreak---                                               116
         7.3     Indication of the timetable for commitment and payment appropriations
                                                                       1000 Ecus
                          Year                                               2003
                          1998       1999     2000     2001      2002         and         Total
                                                                          following
                                                                            years
    Schedule of         326        319       129      119       119      119            1131
    Commitment
    Payment                                       •
    appropriations
    1998                326                                                               326
    1999                           319                                                    319
    2000                                     129                                          129
    2001                                              119                                 119
    2002                                                        119                       119
    2003                                                                 119              119
    Total               326        319       129      119       119      119            1131
8. WHAT ANTI-FRAUD MEASURES ARE PLANNED IN THE PROPOSAL FOR
    THE OPERATION ?
     Methods of control (submission of reports, etc.) will be included in all contracts
     between the Commission and beneficiaries.
     A close cooperation with the delegations of the Commission and the participation of
     a representative of the Commission at events in third countries will check on the spot
     the work to ensure that it corresponds with the terms of reference, contract provisions
     and required professionalism.
     The checks take place before the final payment The same rule applies to the financial
     incentives paid to participating companies. Where appropriate, agreements also
     require organisations to submit financial accounts certified by their auditors.
     In those cases involving cooperation with EU industrial federations the accounts are
     further checked at the Annual General Meeting of the federations concerned.
9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS
       9.1. Specific objectives of the proposed operation, population targeted
             - The specific objectives of mutual recognition agreements are:
  •    to avoid duplication of certification by economic operators.
  •    to promote exports, employment, competitivity and investment.
  •    to reduce costs, in particular for small and medium-sized enterprises and ultimately
      for the consumer.
             - Target population
     The target population are the exporting companies, business associations, chambers
     of commerce and public institutions of the European Union and the general consumer
     which will benefit, or have an interest in, the mutual recognition of certification.
 ---pagebreak---                                               117
        9.2. Reasons for the operation
              - Needfor intervention from the Community budget
      Under Article 113 of the Treaty of Rome the Community has exclusive competence
      for commercial policy and these agreements have been negotiated in accordance with
      a mandate of the Council of Ministers and in consultation with the 113 Committee.
      The Commission will be responsible for implementation and management of the
      agreements.
              - Choice of methods of intervention
                 * advantages over alternative measures (comparative advantages)
                 * analysis of similar operations at Community or national level
                 * results and expected multipliers
The choice of management method (Joint Committee and Joint Sectoral Groups) have
been set out in the Agreements and constitute a minimum necessary for the proper
functioning of the Agreement. The Agreements also contain provisions for the use of
seminars in the initial phases to ensure familiarity with other systems.
These seminars and verifications are also designed to build mutual confidence;
verifications will also be required to ensure this confidence is maintained throughout the
life of the agreements. Confidence and its maintenance are keys to the successful
operation of the agreements.
The importance of this budget is justified when put in perspective with the trade involved
in these agreements and the yearly savings for EU exporters which are expected
(estimated on a yearly basis at 190 millions ECUs for EU exporters to the US, 20 mio in
the case of exports to Canada and 40 mio in the case of exports to Australia and New
Zealand).
             - Main factors of uncertainty which could affect the specific results of the
                operation.
                * None
       9.3   Monitoring and evaluation of the operation
             - Performance indicators selected
                * Output indicators
                * indicators of impact, following the objectives chosen
   In the case of these Agreements, success can be quantified by trade facilitation through
   avoidance of duplication of testing and certification and costs. Yearly estimated
   savings for the European Community are indicated above (9.2).
   Success can also be measured by increased EU exports and this factor will be taken
   into consideration although export performance is subject to such a wide range of
   variables (e.g. changes in exchange rates) that this can never be the sole factor for
   evaluation.
 ---pagebreak---                                                118
             - Evaluation of results
    Progress in the attainment of the Agreements objectives wiU be monitored by
    Commission officials, Committees established under the Agreements and by the
    economic operators concerned.
Details and frequency of the planned evaluation
The evaluation of the effectiveness and usefulness of the agreements wil be regularly
monitored by the Commission and by the Committees established under the agreements at
their annual meetings. Thefirstmajor evaluation will be at the end of the confidence-
building period.
10.     ADMINISTRATIVE EXPENSES
Actual mobilisation of the necessary administrative resources will depend on the
Commission's annual decision on the allocation of resources, taking into account the
number of staff and additional amounts authorised by the budgetary authority. There is no
request for additional staff.
10.1    Effect on the number of posts
         Type of post         Staff to be assigned to                  Source               Duration
                              managing the operation
                          Permanent          Temporary    Existing            Additional
                          posts              posts        resources in the resources
                                                          DGsor
                               DGI                        departments
                                 +                        concerned
                           sectoral DGs
      Officials        A               3.5 None                          3.5 None          permanent
                       B
                       C               1                                1
      Other resources     None
      Total                            4.5                              4.5
10.2    Overallfinancialimpact of human resources: 4.5 staff (107 500 Ecus per staff
        member per year = 483 750 Ecus).
10.3    Increase in other adrninistrative expenditure as a result of the operation (A-7010:
        travel expenses)
The expenses set out below relate to travel expenses for officials of the Commission
attending meetings of the Joint Committee, joint sectoral groups, seminars and
verifications, when these are outside Brussels. These will be taken care of by the relevant
budget allocations of various Directorates Generals involved.
 ---pagebreak---                                              119
For 1998 this involves the following calculation:
 Budget heading         Amounts (ECU)                   Method of calculation
                                          No. of missions        Standard Unit cost
Joint Committee                           Aus/NZ            4   US: Travel: 2 000 ECUs;
                                          Israel            4   per diem: 185 Ecus
A-7010                  22 120
Sectoral Groups                           US               4    CAN: Travel: 1 750
                                          CAN              4    Ecus; per diem: 170 Ecus
A-7010                  20 680
Seminars                                  US               4    Aus / NZ: Travel: 3 200
                                          CAN              4    Ecus; per diem: 190 Ecus
A-7010                  20 680            Aus/NZ
Verifications                             US              18
                                          CAN             18
A-7010                142 150             Aus/NZ          12
                                          Israel           1
A-7010       Total    205 630                            73
                                                                   In ECU
                            Year     Year                                       Total
                            1998     1999        2000     2001     2002      1998-2002
       A. Joint
       Committee            22120   20 680       22120   20 680     22 120     107 720
       B Joint Sectoral
       Groups               20 680  20 680       20 680  20 680    20 680      103 400
       C. Seminars          20 680  18 260                                      38 940
       D. Verifications    142 150 142 150       48 430  48 430    48 430     429 590
       TOTAL               205 630 201 770       91230   89 790    91230       679 650
 ---pagebreak---                                                  l2o
                             IMPACT ASSESSMENT FORM
                    THE IMPACT OF THE PROPOSAL ON BUSINESS
                with special reference to small and medium-sized enterprises
Title of proposal
Proposal for a Council Decision on the conclusion of an Agreement between the
European Community and Canada on Mutual Recognition in relation to Conformity
Assessment
Reference number
The proposal
The legislation is necessary to conclude an Agreement between the European Community
and Canada on Mutual Recognition in relation to Conformity Assessment, Certificates
and Markings. This is an agreement negotiated and initialled by the Commission in
accordance with the mandate and negotiating directives provided by the Council on
21/9/92.
The impact on business
The business sectors affected are telecommunications terminal equipment, electrical
equipment, recreational craft, medicinal products, and medical devices.
The Agreement permits certification of conformity with technical regulations on product
safety, etc, to be conducted in Europe for exports destined for Canada. This avoids the
necessity for further certification by Canadian conformity assessment bodies before
putting them on the Canadian market.
The Agreement therefore presents important advantages from the point of view of
transparency, market access, avoidance of duplication especially of cost and general
facilitation of trade. This is of particular importance for small and medium-sized
enterprises.
The Agreement covers a wide range of sectors spread throughout the Community and an
extensive range of firms in these sectors both large and small, the advantages are not
limited to specific geographical areas in the Community.
Businesses will have to comply with Canadian regulations and procedures, but the
certification, as stated above, will be conducted by conformity assessment bodies located
in the Community and designated by the Member States, and not in Canada.
The Agreement will substantially reduce certification costs and improve prospects for
exports, employment, investment and competitiveness by European firms.
 ---pagebreak---                                                 li\
The Agreement does not contain measures to take account of the specific situation of
small and medium-sized firms, but by its nature and by reducing certification costs which
are the same for all firms, the agreement will benefit small and medium sized enterprises
to a greater extent proportionately than larger firms.
Consultation
The main trade organisations in each sector eg Eurobit, Orgalime, EFPIA, have been
consulted and have universally declared their support for the Agreement.
 ---pagebreak---                                               12-2-
                                                                  ISSN 0254-1475
                                                           COM(98) 271 final
                                              DOCUMENTS
EN                                                             11 08 06 10
                                    Catalogue number : CB-CO-98-289-EN-C
                                                             ISBN 92-78-35528-3
Office for Official Publications of the European Communities
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