New Electronic Interface to Be Developed, Reinforcing Surveillance of Imports Entering the EU

The European Commission has published a draft Regulation intending to develop an electronic interface for the exchange of data between Member States’ national customs systems and the EU’s information and Communication System for Market Surveillance (ICSMS). It is noted that this electronic interface is a requirement under the EU Market Surveillance Regulation (2019/1020), in order to facilitate communication between national customs and market surveillance authorities for the purpose of monitoring products entering the EU. This is equally so for products imported into the EU from non-European companies which are sold online. The aim behind the development of such an electronic interface is to have a faster, more effective and efficient system to ensure that only safe products are sold to EU customers.

Regulation (EU) 2019/1020 on market surveillance and compliance of products (the “Market Surveillance Regulation”) was adopted in June 2019 and entered into effect earlier this year, on 16 July 2021. The Market Surveillance Regulation applies to all products that fall under EU harmonised legislation, such as toys, clothing, footwear, PPE, electronics, batteries, cosmetics and medical devices; and to all products imported into the EU that are not subject to sectoral legislation.

The Market Surveillance Regulation also considers the challenges posed by e-commerce and the digital environment. Products sold online will be considered to have been made available on the market if the offer for sale is targeted at end-users in the EU. Determining whether the offer is targeted to EU users will be a case-by-case analysis. Manufacturers based in Hong Kong or mainland China who export products to the EU or who sell products online that are potentially targeted to end-users in the EU should endeavour to identify an appropriate economic operator located in the EU to fulfil the appropriate tasks outlined in the Market Surveillance Regulation.

The exchange of information between the EU market surveillance authorities takes place through the Information and Communication System on Market Surveillance (ICSMS). It is an IT platform that facilitates communication between market surveillance authorities, sharing information on non-compliant products quickly and efficiently, effectively coordinating inspections and speeding up the withdrawal of unsafe products from the market. Its main objective is to ensure that market surveillance is effective and uniform in all EU countries to avoid distortions of competition.

Hong Kong traders may like to know that the Commission, in accordance with the Market Surveillance Regulation, is developing an electronic interface to encourage the swift exchange of data between national customs systems and the ICSMS. The interface aims to facilitate communication between customs and market surveillance authorities in order to strengthen the market surveillance system with the objective of preventing unsafe products from being placed on the EU market, especially from non-European countries.

For the interface to work effectively, it is necessary for the European legislator to set out clearly the form and type of data to be transmitted. These specifications must be sufficiently flexible to allow Member States to use the most appropriate data for each individual case. In any event, the requirements laid down in the Market Surveillance Regulation as regards the surveillance of products placed on the Union market have to be respected.

If market surveillance authorities find that a product may compromise users’ health or safety, or does not comply with the relevant EU harmonisation legislation, the authorities may require the importer to take appropriate and proportionate corrective action. Corrective actions may include bringing the product into compliance, preventing the product from being made available on the market, recalling the product and alerting the public to the risk, and destroying the product. Manufacturers outside the EU should be aware that importers may be required to take such corrective actions in response to an order from a Member State’s market surveillance authorities.

Hong Kong traders should note that the development of the electronic interface is currently only an initiative. For its development, the Commission has published the draft Implementing Regulation which sets out how this new system should work. Pursuant to this draft Regulation, for the purposes of customs authorities notifying the market surveillance authorities of the suspension of release for free circulation of a product, the data to be transmitted will have to include: (a) relevant data available in national customs systems, including data from the customs declaration naming the economic operators involved and describing the product; and (b) additional data to be entered in national customs systems, such as the reasons for suspension; information on the product, for example name, trade name or registered trademark, model, EAN number, serial number (where available); and the EU legislative act(s) to which the alleged non-compliance relates.

The Regulation is expected to be adopted within a matter of months, so that the interface may start to be developed and eventually implemented. Apparently, the development of the interface is a very complex task that requires a great deal of effort on the part of the Member States and the Commission. Therefore, the interface is expected to be fully operational within four years from its adoption.