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Logistics service providers become liable for the safety of imported goods

12 November 2020
Customs, Trade & Logistics - Customs - Netherlands Food and Consumer Product Safety Authority (NVWA)

Under the new European Import Control Regulation (Regulation (EU) 2019/1020), logistics service providers are given a new role, that of the fulfilment service provider. Once this new regulation enters into force in the course of 2021, every logistics service provider that meets the definition of the fulfilment service provider may become responsible for the safety of products imported into the European Union from third countries.

What is the background to this new regulation?

In Europe, there is an extensive framework of regulations on how products must be safely designed, manufactured and labeled before they can be placed on the market. There are rules for personal protective equipment (such as mouth masks), for cosmetics, for building materials, medical devices, et cetera. For most product categories this is laid down in European regulations, directives and standards (whether or not harmonized).

Products often have to be provided with a CE marking, which serve to notify the user and the supervising authorities (in the Netherlands, usually the Netherlands Food and Consumer Product Safety Authority (NVWA) or the Human Environment & Transport Inspectorate (IL&T)) that the product complies with the regulations. It is prohibited to place products on the market that do not comply with these requirements and violation of such a prohibition may result in administrative and/ or criminal enforcement.

Who is responsible for product safety and compliance?

The manufacturer is primarily responsible for placing a product on the market that is safe and which complies with the regulatory requirements. However, if a product is manufactured outside the European Union, the importer is the primarily responsible for product safety and compliance. In some cases, products manufactured outside the EU may not be placed on the European market if the manufacturer not established in the EU appoints at least one representative in the EU (this is the case, for example, in the new Medical Devices Regulation that will enter into force in May 2021), but this is not a requirement for most products.

Controls upon import of products

The new European Import Control Regulation was introduced because the European Commission observed a number of circumstances and developments:

  1. In recent years, the number of purchases via international online platforms (AliExpress, Wish, Amazon, Light in the Box and eBay) has skyrocketed. Many of these platforms are located outside the EU. Because consumers or companies buy the products directly via the online platform, no importer can be designated who has to warrant the safety and compliance of the product. For national regulators (such as the NVWA in the Netherlands), this makes it very difficult to enforce EU product regulations if products are found on the market that appear to be unsafe. After all, there is no one who can provide the necessary technical product information (swiftly) to the regulator, and no one who can initiate a recall.
  2. Statistics have shown for years that the vast majority of unsafe products found on the European market originate from outside the EU (and especially from Southeast Asia). In February of this year, international Consumers’ Associations also warned about this via the media after extensive research (see our blog: ‘Onveilige producten afkomstig van buiten de EU gevestigde webwinkels’).
  3. The European legislation in which regulations and directives provide a framework for the various product categories, does not contain legislation on official controls of goods at the moment they are brought into the EU by sea and via airports and declared at customs for importation. When importing goods, customs already has numerous tasks, for example intercepting illegal products, levying customs duties and stopping counterfeit products. However, as far as product safety is concerned, there were no more than non-binding guidelines that encouraged the European member states to cooperate in the control of imported goods. In practice, this only happened sporadically.

This information, coupled with the ever-increasing volumes of non-EU goods purchased directly from online platforms, has led to the adoption of this new regulation. The Import Control Regulation therefore tries to solve the problems identified above by:

    1. obliging EU Member States to introduce controls on imports of products of 68 different categories. The customs of each Member State has been designated as primarily responsible, but each Member State may also designate other supervisors in this regard;
    2. the introduction of an economic operator (named the fulfilment service provider), in addition to the manufacturer, his authorized representative, the importer and the distributor, who becomes responsible and accountable for compliance with product safety requirements.

The fulfilment service provider

The Import Control Regulation therefore introduces a new party that must guarantee the safety of imported products if no manufacturer or importer can be designated within the EU.

Who is the fulfilment service provider?

A fulfilment service provider is a logistics service provider that performs two of the following four activities with regard to the imported products (postal, parcel and other “freight forwarding services” are excluded):

  • Warehousing;
  • Packaging;
  • Addressing;
  • Dispatching.

These are activities that numerous logistics service providers (forwarders, storage companies, fulfillment centers) perform on a daily basis and with this new role – defined by Brussels – the logistics service provider is given a whole new range of tasks. These tasks include keeping technical information about a product available and, on request, making available to the authorities and, if necessary, carrying out recalls. The fulfilment service provider must also put its name on the product.

But these tasks are not without obligation. The fulfilment service provider will have to perform these tasks accurately. If he fails to do so, administrative and criminal sanctions may be imposed. The logistics service provider is completely dependent on the information provided by its client (who is often also a logistics service provider). The costs of all these new tasks are for the account of the fulfilment service provider unless he can pass them on to his client.

An additional problem is that the logistics service provider will not always know whether the manufacturer has an establishment in the EU and / or whether the products are bought by someone directly from a supplier not established in the EU (i.e. without an importer). That makes this new role extra risky.

Incidentally, the new range of duties of the fulfillment service provider does not apply to all categories of products, but to a specific group of products that is listed in the regulation.