kom (2017) 0796 (forslag) - COMMISSION STAFF WORKING DOCUMENT REFIT EVALUATION Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on the mutual recognition on goods lawfully marketed in another Member State

Europaudvalget 2017
KOM (2017) 0796
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EUROPEAN

COMMISSION

Brussels, 19.12.2017

SWD(2017) 475 final

COMMISSION STAFF WORKING DOCUMENT

REFIT EVALUATION

Accompanying the document

Proposal for a Regulation of the European Parliament and of the Council

on the mutual recognition on goods lawfully marketed in another Member State

{COM(2017) 796 final} - {SWD(2017) 471 final} - {SWD(2017) 472 final} -

{SWD(2017) 476 final} - {SWD(2017) 477 final}

kom (2017) 0796 (forslag) - COMMISSION STAFF WORKING DOCUMENT REFIT EVALUATION Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on the mutual recognition on goods lawfully marketed in another Member State

2.1

2.2

2.3

2.3.1

2.3.2

4.1

4.2

4.3

6.1

6.2

6.3

7.1

7.1.1

7.1.2

7.1.3

7.1.4

7.1.5

7.2

7.2.1

7.2.2

7.2.3

Contents

CONTEXT ................................................................................................................... 7

BACKGROUND TO THE MUTUAL RECOGNITION PRINCIPLE AND

REGULATION ............................................................................................................ 8

Baseline

Objectives of the mutual recognition principle and Regulation

Description of the mutual recognition principle and Regulation

The mutual recognition principle and its tools

The Mutual Recognition Regulation

EVALUATION QUESTIONS .................................................................................. 14

METHOD................................................................................................................... 14

External studies

Desk research

Stakeholders consultation

LIMITATIONS AND ASSESSMENT OF ROBUSTNESS OF FINDINGS ........... 16

IMPLEMENTATION STATE OF PLAY ................................................................. 19

Implementation of the mutual recognition principle

Application of Regulation (EC) No 764/2008

Compliance with the Regulation (EC) No 764/2008

ANSWERS TO THE EVALUATION QUESTIONS ............................................... 24

Effectiveness: Evaluating to what extent mutual recognition achieved its objectives24

Facilitating free movement of goods in the non–harmonised area through mutual

recognition

Increasing awareness of the mutual recognition principle

Ensuring legal certainty when using the mutual recognition principle

Improving administrative cooperation between national authorities (Mutual

Recognition Regulation)

Conclusion on effectiveness

Efficiency: Measuring the cost effectiveness of the mutual recognition principle and

Regulation

Costs for public authorities

Costs for businesses

Some practical illustrations at sectorial level

7.2.4

7.2.5

7.2.6

7.2.7

7.2.8

7.2.9

7.3

7.4

7.5

Costs for the Commission

Benefits for national authorities

Benefits for businesses

Benefits for consumers

Comparing costs and benefits

Conclusion on efficiency

Coherence: how mutual recognition fits in the other EU policies

Relevance: assessing the continuous need for mutual recognition

EU added value: Evaluating what mutual recognition brings to the EU

CONCLUSION .......................................................................................................... 71

ANNEX 1: PROCEDURAL INFORMATION ....................................................................... 73

ANNEX 2: STAKEHOLDER'S CONSULTATION ............................................................... 77

1.1

2.1

2.2

2.2.1

2.2.2

2.3

2.3.1

2.3.2

2.3.3

2.3.4

2.3.5

2.4

2.5

OBJECTIVES OF THE CONSULTATION ............................................................. 77

Consultation methods and tools

RESULTS OF THE CONSULTATION ACTIVITIES............................................. 77

Meetings of the Mutual Recognition Consultative Committee

Stakeholder conference of 17 June 2016

Main meeting

Workshops

Public Consultation

How stakeholders see mutual recognition and its potential shortcomings

Functioning of the Mutual Recognition Regulation

Assessment of communication when using Mutual Recognition

Priorities to improve Mutual Recognition

Options

Surveys carried out by the external contractors

Other contributions received (position papers or e-mail)

FEEDBACK TO STAKEHOLDERS ........................................................................ 84

ANNEX 3: METHODS AND ANALYTICAL TOOLS USED IN PREPARING THE

EVALUATION ........................................................................................................................ 86

LITERATURE REVIEW AND ANALYSIS OF PUBLICLY AVAILABLE

STATISTICS ............................................................................................................. 86

1.1

3.1

3.2

3.3

The macro context

EXPLORATORY INTERVIEWS WITH COMMISSION OFFICIALS AND

REPRESENTATIVES OF EUROPEAN BUSINESS ASSOCIATIONS ................. 87

SURVEYS TARGETING DIFFERENT STAKEHOLDERS AFFECTED BY THE

MUTUAL RECOGNITION PRINCIPLE ................................................................. 87

National business and sector organisations (umbrella organisations targeting a broad

range of sectors)

Companies

National product contact points

QUALITATIVE INTERVIEWS ............................................................................... 89

ANNEX 4: OVERVIEW OF THE ASSESSED LITERATURE AND CASE LAW ............. 91

LITERATURE ........................................................................................................... 91

RECENT CASE LAW OF THE CJEU ON MUTUAL RECOGNITION ................ 95

ANNEX 5: RESULTS OF THE PUBLIC CONSULTATION ............................................... 99

TYPE OF RESPONDENTS ...................................................................................... 99

HOW STAKEHOLDERS SEE MUTUAL RECOGNITION AND ITS POTENTIAL

SHORTCOMINGS .................................................................................................. 101

FUNCTIONING OF THE MUTUAL RECOGNITION REGULATION .............. 103

ASSESSMENT OF COMMUNICATION WHEN USING MUTUAL

RECOGNITION ...................................................................................................... 108

PRIORITIES TO IMPROVE MUTUAL RECOGNITION .................................... 109

ANNEX 6: CASE STUDIES 2016 ........................................................................................ 111

1.1

1.2

1.3

1.4

1.5

2.1

MANUFACTURE OF OTHER FOOD PRODUCTS: FOOD SUPPLEMENTS ... 111

Introduction

Background

Stakeholders involved

111

113

Practices and trends identified and main issues related to the application of Mutual

Recognition

113

Conclusions

118

PRODUCTS IN CONTACTS WITH DRINKING WATER .................................. 118

Introduction

118

2.2

2.3

2.4

2.5

3.1

3.2

3.3

3.4

Background

Stakeholders involved

119

122

Practices and trends identified and main issues related to the application of Mutual

Recognition

122

Conclusions

125

FOOD CONTACT MATERIALS ........................................................................... 125

Introduction

Background

Stakeholders involved

125

126

128

Practices and trends identified and main issues related to the application of Mutual

Recognition

128

ANNEX 7: OVERVIEW OF NOTIFICATIONS .................................................................. 130

OVERVIEW NOTIFICATIONS REGULATION (EC) NO 764/2008 .................. 130

OVERVIEW OF MEMBER STATES ANNUAL REPORTS ................................ 132

OVERVIEW INQUIRIES RECEIVED BY PCPS .................................................. 136

ANNEX 8: RESULTS OF THE EXTERNAL EVALUATION PERFORMED BY DTI,

TECHNOPOLIS, E&Y AND VVA CONSULTING (2015)................................................. 139

STAKEHOLDER’S VIEWS ON WHETHER THE MUTUAL RECOGNITION

PRINCIPLE HAS ACHIEVED ITS OBJECTIVES................................................ 139

AWARENESS OF THE PRINCIPLE AMONG ENTERPRISES, STRATEGIES

CONCERNING MUTUAL RECOGNITION, AND COST OF INSUFFICIENT

APPLICATION OF THE PRINCIPLE ................................................................... 142

AWARENESS AND APPLICATION OF THE PRINCIPLE BY THE MEMBER

STATES ................................................................................................................... 155

MARKETS AND SECTORS WITH THE MOST PROBLEMS ............................ 177

TYPOLOGY OF OBSTACLES .............................................................................. 187

CONCLUSIONS: EFFECTIVENESS AND EFFICIENCY ................................... 190

RECOMMENDATIONS ......................................................................................... 196

ANNEX 9: SHORT COMPANY CASES ............................................................................. 201

ANNEX 10: OVERVIEW OF DIRECTIVE EU 2015/1535 (TRIS) .................................... 216

EXECUTIVE SUMMARY .................................................................................................... 219

PART I: STANDARDISATION ........................................................................................... 220

2.1

2.2

3.1

3.2

3.3

4.1

4.2

INTRODUCTION ................................................................................................... 220

INFORMATION PROCEDURE ............................................................................. 220

Operation of the procedure from 2011 to 2012

Conclusion

220

221

MANDATES ........................................................................................................... 221

Operation of the mandating process 2011-2012

Trends in mandates

Conclusion

221

222

FORMAL OBJECTIONS ........................................................................................ 223

Operation of the procedure from 2011 to 2012

Conclusion

223

NEW LEGISLATIVE FRAMEWORK ................................................................... 223

PART II: TECHNICAL REGULATIONS ............................................................................ 224

1.1

1.2

1.3

2.1

2.3

2.4

2.5

2.6

2.7

2.8

2.9

DEVELOPMENTS 2011-2013................................................................................ 224

Use of the procedure within the context of “Better regulation”

Use of the procedure to improve competitiveness

Improvements in managing the 98/34 procedure

225

226

APPLICATION OF THE 98/34 PROCEDURE ...................................................... 227

Effectiveness: general overview

Use of the urgency procedure

Notification of ‘fiscal or financial incentive measures’

Follow-up to Commission reactions

Follow-up to the notification procedure

Dialogue with the Member States

Requests for access to documents issued under Directive 98/34

Conclusion

227

230

231

232

ANNEX 11: SUMMARIES OF THE MEETINGS OF THE CONSULTATIVE “MUTUAL

RECOGNITION COMMITTEE” .......................................................................................... 234

MINUTES OF THE FIRST MEETING OF THE CONSULTATIVE ‘MUTUAL

RECOGNITION COMMITTEE’ HELD IN BRUSSELS ON 4 MARCH 2009 .... 234

MINUTES OF THE SECOND MEETING OF THE CONSULTATIVE ‘MUTUAL

RECOGNITION COMMITTEE’ HELD IN BRUSSELS ON 19 NOVEMBER 2010

.................................................................................................................................. 235

MINUTES OF THE THIRD MEETING OF THE CONSULTATIVE ‘MUTUAL

RECOGNITION COMMITTEE’ HELD IN BRUSSELS ON 30 NOVEMBER 2011

.................................................................................................................................. 238

MINUTES OF THE 4TH MEETING OF THE CONSULTATIVE ‘MUTUAL

RECOGNITION COMMITTEE’ HELD IN BRUSSELS ON 7 DECEMBER 2012

.................................................................................................................................. 239

MINUTES OF THE 5TH MEETING OF THE CONSULTATIVE ‘MUTUAL

RECOGNITION COMMITTEE’ HELD IN BRUSSELS ON 6 DECEMBER 2013

.................................................................................................................................. 241

MINUTES OF THE 6TH MEETING OF THE CONSULTATIVE ‘MUTUAL

RECOGNITION COMMITTEE’ HELD IN BRUSSELS ON 5 DECEMBER 2014

.................................................................................................................................. 243

MINUTES OF THE 7TH MEETING OF THE CONSULTATIVE ‘MUTUAL

RECOGNITION COMMITTEE’ HELD IN BRUSSELS ON 2 DECEMBER 2015

.................................................................................................................................. 245

MINUTES OF THE 8TH MEETING OF THE CONSULTATIVE ‘MUTUAL

RECOGNITION COMMITTEE’ HELD IN BRUSSELS ON 25 OCTOBER 2016

.................................................................................................................................. 248

ANNEX 12: STUDY OF THE DANISH BUSINESS ASSOCIATION ............................... 251

EXECUTIVE SUMMARY...................................................................................... 251

INTRODUCTION ................................................................................................... 252

METHODOLOGY................................................................................................... 253

MAIN FINDINGS ................................................................................................... 254

CASE EXAMPLES ................................................................................................. 255

POLICY RECOMMENDATIONS – THE WAY FORWARD… .......................... 257

ONTEXT

Obstacles to the free movement of goods within the single market can be eliminated by

harmonising national legislation or through the principle of mutual recognition.

Mutual recognition is seminal for the proper functioning of the single market for goods. It

consists of a principle, embedded in Articles 34 and 36 of the Treaty on the Functioning of the

European Union (TFEU), and further elaborated on in the case law, and in a legal act,

Regulation (EC) No 764/2008 (the Mutual Recognition Regulation), defining the practical

modalities of its implementation.

If a business is lawfully selling a product in one Member State, it should be able to sell it in

other Member States without adapting it to the national rules of that Member State, even

when there are no common European rules on how the product has to be manufactured (rules

on i.e. characteristics of the product, size, composition, etc.). The right to sell a product

lawfully marketed in another Member State

can be refused only when the Member State of

destination has diverging product requirements whose mandatory imposition is justified by

the need to protect a certain public interest, and those requirements are necessary and

proportionate for achieving that objective.

This is the principle of mutual recognition in the

field of goods.

Annex 4 contains an overview of the relevant case law on the basis of which

the principle was elaborated.

The practicalities of how mutual recognition works in practice are defined by the

Mutual

Recognition Regulation.

The Regulation introduces procedural guarantees to ensure on one

hand that businesses can easily invoke their right to mutual recognition, and on the other hand

that Member States use their right to deny mutual recognition in the light of the

proportionality principle.

In December 2013, the Conclusions on Single Market Policy, adopted by the Competitiveness

Council, recalled that to improve framework conditions for businesses and consumers in the

Single Market, all relevant instruments should be appropriately employed, including

harmonisation and mutual recognition

. The Commission was therefore requested to report to

the Council on the sectors and markets where the application of the principle of mutual

recognition is economically most advantageous, but where its functioning remains insufficient

or problematic.

In response to the indications that the functioning of the principle might not be optimal, and

taking into account the request of the Council, the application of the principle of mutual

recognition was subject to an external evaluation

, part of the REFIT agenda in 2014

Its

objective was to assess the functioning of the principle, in terms of efficiency and

effectiveness. Among the shortcomings identified the external evaluation pointed out the

limitations of the Mutual Recognition Regulation and recommended several ways forward to

improve its application. These conclusions triggered the need to evaluate the Mutual

Applies also to EEA products

Conclusions on Single Market Policy, Competitiveness Council meeting; Brussels 2 and 3 December 2013:

http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/intm/139846.pdf

European Commission, Study commissioned to Technopolis Group (2015): ‘Evaluation of the application of the principle of mutual

recognition in the field of goods,’ ENTR/172/PP/2012/FC – LOT 4 carried out between April 2014 and May 2015:

http://ec.europa.eu/growth/single-market/goods/free-movement-sectors/mutual-recognition/index_en.htm.

Scoreboard Regulatory Fitness and Performance Programme (REFIT): State of Play and Outlook, SWD(2014)192;

http://ec.europa.eu/smart-regulation/docs/com2014_368_en.pdf

Recognition Regulation, and to complement the evaluation of the mutual recognition

principle.

This evaluation will assess the functioning of mutual recognition in the field of goods, i.e. the

mutual recognition principle and the Mutual Recognition Regulation. According to the 'Better

Regulation Guidelines

, evaluations are an essential step to managing and revising the

existing body of EU legislation and policies and should precede the impact assessment, in line

with the "evaluate first" principle. This evaluation will assess to what extent mutual

recognition has achieved its original objectives in term of effectiveness, efficiency, relevance,

coherence, and EU value-added. Its findings should feed into the impact assessment of the

planned initiative on achieving higher and better mutual recognition, called upon in the Single

Market Strategy, Upgrading the Single Market: more opportunities for people and business,

adopted on 28 October 2015

, and one of the main objectives of the 2017 Commission Work

Programme

This initiative, called "the Goods package", aims to give citizens and businesses

the assurance that the Single Market protects and empowers them. People need to be

confident that products available on the market can be trusted, their rights as consumers are

not undercut, and businesses need to be confident that they can sell their products throughout

the EU and that competition is fair. Therefore, the Commission is proposing, on the one hand,

to strengthen the implementation of EU harmonisation legislation by supporting compliance

and enforcement and on the other, to give a major boost to mutual recognition in the area of

goods. The initiative has been linked to the REFIT programme

due to the impacts the

malfunctioning of mutual recognition has on the functioning of the internal market. The

evaluation will therefore examine the extent to which the legal framework for mutual

recognition is fit for purpose and delivers its intended benefits while avoiding undue costs.

1.1

ACKGROUND TO THE MUTUAL RECOGNITION PRINCIPLE AND

EGULATION

Baseline

The principle of mutual recognition, stemming from Articles 34-36 TFEU and elaborated on

the basis of case law, requires that, notwithstanding technical differences between the national

rules that apply throughout the EU, the Member State of destination may not prohibit the sale

on its territory of products that are lawfully marketed in other Member States, even if those

were manufactured in accordance with different technical rules. The only possibility for

Member States to deny market access for products lawfully marketed in another Member

States is on the basis of overriding interests linked to the protection of public interest such as

protection of health, consumers, environment, etc. Therefore, the application of mutual

recognition is not automatic. It can be lawfully denied if Member States demonstrate that, by

not complying with its own national rules, a product lawfully marketed in another Member

State would endanger the protection of a given the public interest. Mutual recognition aims to

facilitate the free movement of goods, where there are no EU harmonised rules governing the

marketing of products or parts thereof, while maintaining a high level of protection of public

interests. It is particularly relevant for innovative products, where businesses need to rely on

http://ec.europa.eu/smart-regulation/guidelines/index_en.htm

Communication from Commission to the European Parliament, the Council, the European Economic and Social Committee and the

Committee of the Regions, Upgrading the Single Market: more opportunities for people and business, COM 2015 550/2

http://ec.europa.eu/atwork/key-documents/index_en.htm

The aim of the REFIT programme is to ensure that EU laws are fit for purpose and deliver their intended benefits for citizens,

businesses and society while removing red tape and lowering costs. It also aims to make EU laws simpler and easier to understand.

REFIT pays particular attention to small businesses, which can be disproportionately affected by the burden of implementing EU

rules.

existing national rules or deal with the absence of such rules in order to launch new products

on the market.

Applying the mutual recognition principle also consists of scrutinising national technical

rules, in order to identify those undermining free movement of goods. This was done mainly

by:



Requiring the insertion of a so called "mutual recognition clause" in the new national

technical regulations, when those are notified to the Commission via Directive (EU)

2015/1535

Dealing with complaints and infringements of free movement of goods as guaranteed by

Articles 34-36 TFEU



Yet, the application of the mutual recognition principle in practice was challenging since its

introduction by the Court of Justice in 1979

. Already in 1996, the Commission highlighted

in a communication to the Parliament and the Council

the difficulties of applying the mutual

recognition principle in practice. These concerns were reiterated again in a Commission

Working Document in 1998

, and in a communication from 1999

. Furthermore, the

surveys carried out in 2002 for the second biennial report on the functioning of mutual

recognition

indicated that about 35% of businesses reported problems with mutual

recognition, and about 50% of them decided to adapt their products to the rules of the

Member State of destination. Furthermore, about 25% of the complaints received in the area

of free movement of (non -harmonised) goods related to mutual recognition, and market

access for products constituted one of the most important problems registered by SOLVIT.

The Commission analysed the reasons for this in 2007

and reached the following

conclusion: The lack of awareness about the mutual recognition principle, the legal

uncertainty about the scope of the principle and the burden of proof, the risk for enterprises

that their products will not get access to the foreign market or that they will have to be

withdrawn from the market of the destination Member State, and the absence of a dialogue

between competent authorities in different Member States prevents the achievement of free

movement of goods in the non-harmonised area

. Following this analysis, it was estimated

that, depending on the product, the differences between technical rules in different national

markets, combined with the need for multiple testing and certification, may constitute

between 2% and 10% of overall production costs

. However, the 2007 analysis was based on

a very theoretical methodology to estimate macroeconomic impacts, such as estimates as a

percentage of increase in GDP. As these estimates could not be verified ex post, the findings

of the 2007 analysis were not considered reliable enough to be used as a basis for the

evaluation.

Directive (EU) 2015/1535 laying down a procedure for the provision of information in the field of technical regulations and of rules

on Information Society services, OJ L 241, 17.9.2015, p.1

C-120/78 "Cassis de Dijon"

The impact and effectiveness of the Single market, Communication from the Commission to the European Parliament and the

Council, 30 October 1996 http://ec.europa.eu/internal_market/economic-reports/docs/single_en.pdf

SWD on the application of the mutual recognition principle, SEC(1998) 242

Communication from the Commission to the Council and the European parliament, Mutual recognition in the context of the follow-

up to the Action Plan for the Single Market, COM(1999)299 final

COM(2002)419final of 23.7.2002

Commission staff working document COM(2007) 36 Final of 2007

Communication on mutual recognition COM(1999)2999 Final, first and second biennial report on the application of the principle of

mutual recognition, SEC(1999)1106 of 13 July 1999 and COM(2002)419 Final of 23 July 2002, Commission staff working

document COM(2007) 36 Final of 2007

See footnote 15

The adoption of Regulation (EC) No 764/2008 (‘the Mutual Recognition Regulation’) was a

response to the suboptimal application of the principle of mutual recognition in the field of

goods, mainly aimed at addressing the issues identified and establishing a procedural

framework to minimise the possibility that national technical rules create unlawful obstacles

to the free movement of goods between Member States.

1.2

Objectives of the mutual recognition principle and Regulation

The objective of the mutual recognition principle is to guarantee free movement of goods in

the internal market, in the absence of harmonised rules. The principle allows goods to move

freely, despite the existence of different and potentially divergent national technical rules. As

for the Mutual Recognition Regulation, it aimed to increase awareness of the mutual

recognition principle, ensuring legal certainty for national authorities and businesses and

improving administrative cooperation between national authorities.

1.3

Description of the mutual recognition principle and Regulation

This section describes the different components of mutual recognition.

1.3.1

The mutual recognition principle and its tools

The mutual recognition principle applies in the area of products that are not subject to EU

common rules (non - harmonised products) or to aspects of products falling outside the scope

of such legislation (partially harmonised products). It allows a product lawfully marketed in a

Member State to be sold in other Member State, despite the fact that this product complies

with different technical rules. Exceptions to this principle are justified on grounds of the

protection of public morality or public security, the protection of health and life of humans,

animals or plants, provided for under Article 36 TFEU or on the basis of overriding

requirements of general public importance recognised by the case law of the Court of Justice,

and also that they are proportionate to the aim pursued. The mutual recognition principle

would apply in the area of childcare articles, textiles, decorative articles, furniture, lighters,

cooking accessories, etc. The principle applies to the marketing of the whole product, or to

aspects of it, if it is a partially harmonised product. For example, textiles: the content of

chemicals that may be present in textiles is harmonised, but the lengths of the cords for

children's textiles (to avoid strangulation risks) is left to national discretion (and thus subject

to mutual recognition). Mutual recognition also applies to a number of non-consumer

products. For example, while certain measuring instruments such as taximeters or water

meters are subject to EU harmonisation legislation, others such as radars for speed

measurement or breathalysers for estimating blood alcohol content are not.



The mutual recognition clause

The clause is one of the tools allowing for the correct application of the mutual

recognition principle. In its 2002 Communication on the application of the mutual

recognition principle

, the Commission recommends

the insertion of a mutual

recognition clause in national technical rules notified under Directive (EU) 2015/1535,

to give the concerned economic operators a precise and clear understanding of their

Commission interpretative communication on facilitating the access of products to the markets of other Member States: the practical

application of mutual recognition, 2003/C 265/02

The insertion of the clause is not considered as mandatory for Member States

rights and obligations with regards to the application of that rule to their products

lawfully marketed in other Member States. In practice, the clause refers to the mutual

recognition principle and procedural guaranties of the regulation; it expressly mentions

that products lawfully marketed in other Member States are allowed to enter the market

despite not fully complying with this national technical regulation.



Complaints and infringements related to Articles 34-36 TFEU

The Commission monitors whether Member States comply with the EU law and

whether their national rules undermine the free movement of goods. To ensure that

internal market rules are respected and applied correctly in the area of non-harmonised

goods, the Commission follows up complaints based on alleged breaches of Article 34

which cannot be justified.

1.3.2

The Mutual Recognition Regulation

The Regulation lays down the rules and procedures to be followed by the national authorities

of a Member State when taking or intending to take a decision, in accordance with the

national technical rules, which would hinder the free movement of a product lawfully

marketed in another Member State and subject to Article 34 TFEU. Therefore, the Regulation

only applies when national authorities intent to restrict market access, and not before. It

applies when:

national authorities intend to take an administrative decision,

concerning a product lawfully marketed in another Member State,

concerning a product or aspects of a product which are not subject to harmonised EU

legislation,

addressed to economic operators,

based on a national technical rule, and

has a restrictive effect on the product, namely that it will be:

ii.

iii.

prohibited from being placed on the market,

modified or subject to additional testing before it can be placed or kept on the

market, or

withdrawn from the market

This means that the Regulation does not apply to prior authorisation procedures, as the

requirement that the placing of a product on the market is subject to prior authorisation is not

a technical rule within the scope of the Regulation. However, the decision to deny prior

authorisation merely because the product does not comply with the national rules in the

Member States having the prior authorisation procedure is a decision within the scope of the

Regulation



Assessment by Member States of the need to apply a technical rule and information to

the economic operator

The mutual recognition principle is not automatically applied. It is not an obligation on

Member States, but a right which can be invoked by economic operators wishing to

trade their products in the internal market. Member States may decide that the

application of a national technical rule, to the detriment of mutual recognition, is

necessary, based on the need to protect a given public interest. However, the Regulation

places the burden of proof on the national authorities intending to deny market access.

A written notice has to be sent to the economic operator, informing him about their

intention to deny market access, and specifying the technical rule on which the decision

is based, and the supporting technical or scientific evidence which makes the decision

justified and proportionate. The economic operator has the right to submit comments.

Any decision denying market access taken after receiving comments from the economic

operator shall be notified to him, and shall state the grounds on which it is based, the

technical or scientific evidence supporting the decision and, when applicable, the

reasons for rejecting the economic operator's arguments. The decision shall also indicate

the remedies available under national law in order to challenge the decision.



Product Contact Points

Economic operators may wish to know about the applicable national rules before

entering a market. The Regulation contains the obligation on Member States to

establish Product Contact Points in their territories. The Product Contact Points provide,

upon request, information on the technical rules applicable to a specific product, the

contact details of the competent authorities in charge of supervising the implementation

of the technical rule in question and the remedies available in case of dispute between

the economic operator and the competent authority.



The list of products which might be subject to mutual recognition

Mutual recognition does not apply to products fully or to those aspects partially covered

by EU harmonisation legislation. To facilitate the identification of products to which the

mutual recognition principle may apply, the Regulation introduced an obligation for the

Commission to put in place a non-exhaustive list of products which are not subject to

EU harmonisation legislation.



Reporting obligations

Under the Regulation, every decision denying market access, as well as the grounds on

which it is based, has to be individually notified by the Member States to the

See recital 12 of the Mutual Recognition Regulation

Commission, in addition to notifying the economic operator. Additionally, Member

States have to send the Commission on a yearly basis a report on the application of the

Regulation.

Table 2-1: Intervention logic mutual recognition

OBJECTIVES

NEEDS

ACTIONS

GENERAL

AND

SPECIIFC

Free

movement of

goods in the

non-

harmonised

area

Products

lawfully

marketed in

one Member

States can be

more easily

sold in another

Better

functioning of

the internal

market

OUTCOMES

IMPACTS

EXTERNAL

FACTORS

Mutual recognition

principle

Mutual recognition

clause

Complaints and

infringements

Regulation 764/2008

Awareness

about mutual

recognition

Decentralized

national

administrations

impeding the

functioning of the

product contact

points network

Remove

barriers to

trade of

products

lawfully

marketed

in one

Member

State

Procedures for

assessing and

denying / restricting

market access

Legal

certainty

Reduction of

information

costs

More choices

for consumers

at lower prices

Perception of some

national authorities

that their own

national rules are

generally better than

those of other

Member States

Product Contact

Points

Administrative

cooperation

List of products to

which mutual

recognition may

apply

Avoid

duplication of

tests/

additional

testing

opportunities

for businesses

Perception of

businesses that

national rules must

apply regardless of

mutual recognition

Reporting

Complementary

actions

Guidance documents

on the application of

Tendency of

businesses to avoid

any problems by

complying with

national rules

without questioning

them

the mutual

recognition principle

to specific sectors

Conferences,

seminars and round

tables on the

application of the

principle

VALUATION QUESTIONS

In order to assess the functioning of mutual recognition in the field of goods and to evaluate

whether the mutual recognition principle and the Regulation are, in effect, on course to

achieve their objectives, the following questions were used to guide the analysis:



Effectiveness:

To what extent have the mutual recognition principle and the Regulation

been effective in meeting, or moving towards, the defined objectives (i.e. to what extent

have they contributed to facilitating free movement of goods? To what extent has the

Regulation contributed to achieving its objectives such as increasing awareness on the

mutual recognition principle? To what extent has legal certainty been increased for

businesses and authorities as a result of the Regulation? To what extent has the

administrative cooperation been improved as a result of the Regulation? What are the

factors that influenced the achievements and to what extent?)

Efficiency:

What are the costs of the mutual recognition principle and of the

Regulation? What are the benefits of the mutual recognition principle and of the

Regulation? To what extent are the regulatory costs (including administrative burden)

proportionate to the benefits achieved?

Coherence with other policies:

To what extent is mutual recognition consistent with

other policy actions at EU and national level?

Relevance:

To what extent is the mutual recognition principle and of the Regulation

still relevant to its stakeholders? How well do the objectives (still) correspond to the

current needs within the EU?

EU added value:

What is the additional value resulting from the Regulation, compared

to what could be achieved by Member States at national and/or regional levels? To what

extent do the issues addressed by the Regulation continue to require action at EU level?

What would be the most likely consequences of repealing the Regulation?

ETHOD



The approach was designed in several steps, in order to ensure collection of both qualitative

and quantitative data from the relevant audience. First, a study on the functioning of the

mutual recognition principle was carried out by an external consultant. On the basis of its

results, an evaluation of the functioning of the mutual recognition principle and Regulation

was conducted by the Commission's services, using the evidence from the above mentioned

external evaluation and complemented by desk research, stakeholders consultation and a

study on the impacts of revising the Mutual Recognition Regulation. The evaluation covers

the time period between the entry of the Regulation into force on 13 May 2009 and 31

December 2016. In terms of geographical coverage, the evaluation covers the EU Member

States and the EFTA states that are contracting parties to the Agreement on the European

Economic Area (EEA)

1.4

External studies

The application of the principle of mutual recognition was subject to an external evaluation

Its aim was to evaluate the application of the mutual recognition principle by Member States,

in order to identify shortcomings and to present possible ways of enhancing the application of

the principle. Thus, the study did not evaluate the Regulation specifically, but looked from a

broader perspective at the impacts of an insufficient application of mutual recognition on

economic operators and the internal market. Furthermore, the study focused on the

effectiveness and efficiency aspects only, as these are the most relevant with regard to the

mutual recognition principle, which stems directly from the Treaty and the jurisprudence. The

evaluation was based on a combination of data sources and data collection tools, which

included a literature review, statistical data, web-based surveys among different target groups

and in-depth interviews with Member States and relevant stakeholders.

Additionally, a study was launched in 2016 in order to estimate the market value of current

intra-EU trade in non-harmonised products falling under the mutual recognition principle.

Furthermore, the study looked into the magnitude of the problem triggered by the potentially

suboptimal functioning of mutual recognition and its significance. This was done by analysing

the intra-EU trade for harmonised goods compared to non-harmonised goods and their

evolution over the last 10 years. The study was conducted between September 2016 and

March 2017.

1.5

Desk research

Desk research was conducted for the purpose of the evaluation of the mutual recognition

principle and Regulation, by the contractors in the framework of the external studies

mentioned under 4.1 and by the Commission's services. Available literature on the topic,

annual reports from the Member States as well as all notifications

received between 2009

and 2016 were scrutinised. Also, the Commission services examined the complaints received

from economic operators concerning a malfunctioning of mutual recognition and the draft

national regulations notified on the basis of Directive (EU) 2015/1535. The desk research

involved case studies in sectors where the application of mutual recognition is problematic.

The literature review comprised a review of existing business and academic literature on the

non-harmonised areas in the EU internal market. Annex 4 contains a full overview of the

assessed literature, and a summary of the notifications and annual reports received.

1.6

Stakeholders consultation

Stakeholders consultation performed by the consultants

Iceland, Liechtenstein and Norway

European Commission, Study commissioned to Technopolis Group (2015): ‘Evaluation of the application of the principle of mutual

recognition in the field of goods,’ ENTR/172/PP/2012/FC – LOT 4 carried out between April 2014 and May 2015:

http://ec.europa.eu/growth/single-market/goods/free-movement-sectors/mutual-recognition/index_en.htm.

Notifications of national administrative decisions denying or restricting market access, on the basis of article 6 of the Regulation

In the framework of the external study mentioned under 4.1, four different surveys were

launched on 9 October 2014 and completed on 5 January 2015. These were a company survey

(199 participants), a survey of national business associations and of national sector

associations (20 participants), and a product contact point survey (26 participants). Following

the survey, qualitative interviews with national business associations and Product Contact

Points in each Member State were also carried out. The objective of the qualitative interviews

was to shed more light on the implementation of the mutual recognition principle in the

Member States, in particular with respect to ‘sensitive’ areas such as notification practices (or

lack thereof). The interviews were conducted with the same person who responded to the

survey, to the extent possible.

For the purposes of the second study mentioned under 4.1, an online survey was launched

between December 2016 and January 2017. 100

respondents accessed the survey (40

businesses, 38 national authorities, and 22 business associations). In parallel with the launch

of the survey, the research team started contacting selected stakeholders for in-depth

interviews on the application of the mutual recognition principle across Europe. The team

carried out 25 interviews in order to gather more fine-grained and detailed information about

the implementation of mutual recognition.

Annex 2 provides a full overview of the stakeholders' consultation performed by the

consultants.

Stakeholders consultation performed by the Commission

During the 8

meeting of the Consultative Committee on mutual recognition which took place

on 25 October 2016, the preliminary findings on the functioning of mutual recognition were

presented and discussed with Member States representatives.

An online public consultation was carried out from the 1

of June until the 30

of September

2016. 153 replies were received, representing 91 companies, 45 national authorities and 17

citizens. The consultation was made available to the general public, and aimed to gather data

on how stakeholders perceive mutual recognition and its potential shortcomings, on the

functioning of the Mutual Recognition Regulation (effectiveness, efficiency, coherence,

relevance and EU added value), on the communication between mutual recognition users and

on the possible options of achieving an increased and better mutual recognition. The results of

the public consultation can be found in Annex 5.

A stakeholders' event was organised on 17 June 2016, to identify the main issues relating to

the functioning of mutual recognition and to identify possible ways forward. 144 participants

attended the event, representing businesses (62), national authorities (60) and others (22). The

minutes of the event can be found in Annex 2.

IMITATIONS AND ASSESSMENT OF ROBUSTNESS OF FINDINGS

Assessing the magnitude of the difficulties linked to the functioning of mutual recognition and

its actual and potential impacts on stakeholders is not straightforward. Indeed, several factors

are making the evaluation of the application of mutual recognition a difficult exercise.

24 However, only half of them answered the questionnaire to an extent that may be considered satisfactory

First, mutual recognition, when it is working properly, is invisible; this is because it is

impossible to monitor when and how many times goods are allowed to enter a market on the

basis of the mutual recognition principle. Only the number of products for which market

access has been denied can be estimated, on the basis of the monitoring tools in place by the

Regulation (notification of administrative decisions denying market access and annual

reports). However, this doesn't represent the full picture of the situation, as only 6 Member

States are notifying decisions to deny market access

. The complaints received and the

divergences noticed between the annual reports and notifications show that not all decisions

taken are being notified to the Commission.

It is possible to estimate, based on intra EU trade statistics, the number of non-harmonised

products lawfully marketed in one Member State and placed on the market of other Member

States. However, this doesn't show how many products were marketed on the basis of the

mutual recognition principle.

This is because businesses may decide, on commercial

grounds, not to use mutual recognition, and to align their products with the existing national

rules in the Member States where they want to market their products. Some large companies

choose to design and produce products fitting the highest requirements, and thus complying

with all national technical rules.

Second, the results of the stakeholders' consultation might need to be treated with caution, as

the consultations, targeted or opened, were not representative of different sectors, Member

States and company types.

The surveys carried out in 2014-2015 by the external consultant registered a low rate of

responses. 199 businesses and 20 national or sectoral associations participated in the survey.

The businesses survey did not result in a representative sample. There was a significant

geographical bias with respect to the geographical coverage. Companies from Portugal (36),

the UK (22) and Lithuania (21) were significantly overrepresented, while there were no

responses from 9 EU Member States or from any of the EEA countries. Also, large companies

were overrepresented in the survey, while small companies were underrepresented. 29% of

the participating companies were large companies with more than 250 employees, while they

represent around 1% of the EU's company population

. 26% were medium-sized companies

with 50 to 250 employees and 27% are small companies with 10 to 49 employees. Micro

companies with less than 10 employees accounted for 18%. Also, the business associations

had generally not put a high priority on responding to the survey, which can be either because

they don't monitor issues related to mutual recognition, or because their members don't

approach them in relation to these issues. Only a minority of sectors and Member States were

represented in the survey. As regards the survey targeting PCPs, its main limitation came

from the fact that PCPs are only the interface between business and national authorities in

charge of applying the mutual recognition principle. Thus, they are not always familiar with

the practicalities of the application of the mutual recognition principle, and they don't always

have insight as regards the denial of market access for certain products. Furthermore, not all

PCPs across the EU participated in the survey. PCPs from Austria, Bulgaria, France,

Germany, Italy and Spain did not submit any responses to the survey, but, with the exception

of Italy, they were subsequently interviewed. PCPS from Portugal and Romania were

represented twice (as they have several PCPs), and out of the EEA/EFTA countries,

Liechtenstein and Norway participated. More details are provided in the synopsis report.

See for more details section 7.1

http://ec.europa.eu/growth/smes_en

As regards the public consultation carried out by the Commission, it gathered 153 replies

only. Businesses actively participated (91) but without reaching a representative sample;

large companies were overrepresented (19%), while, as mentioned previously, they only

represent 1% of the EU's company population. Also, when asked to quantify the costs and

benefits of the Regulation, most businesses indicated that such estimation is impossible. Only

a few replied (between 11% and 26% depending on the questions), and the replies contain

considerable variations. This is why case studies were used in order to complement the lack of

accurate information on costs and benefits. Member States were represented in the

consultation by both PCPs (13) and other authorities (32), but without reaching a good

geographical balance: no replies were received from Cyprus, Denmark, Finland, France,

Greece, Ireland, Luxembourg, Malta and UK

The overview of the notifications of draft national technical rules for the assessment of their

compatibility with EU law by the Commission under Directive 2015/1535 provides some

insight on the sectors where a high regulatory activity at national level can be observed, and

where the use of mutual recognition is more relevant

. From 2011 to 2013,

2114

notifications

were received (675 in 2011, 734 in 2012 and 705 in 2013). The

construction sector

saw the

highest number of notifications, with many measures related to energy efficiency of buildings

and concrete structures, road pavements and constituent materials, fire safety of buildings.

Construction was followed by

agricultural products, foodstuffs and beverages

(food

hygiene, the composition and labelling of foodstuffs and beverages, food packaging,

minimum price for alcoholic beverages, composition and marketing of alcoholic and non-

alcoholic beverages). Notifications were also received in the

telecommunications sector

(radio equipment and telecommunications terminal equipment, radio interfaces, hardware and

software for the collection, management and use of data gathered by electronic mechanisms

installed on board vehicles (black box)) and in the

environment sector

(packaging and

packaging waste, recyclable products, processing of biodegradable waste). This information

was used in order to identify sectors where numerous national technical rules exists or were

introduced, in order to see if market access problems can be linked with important regulatory

activity. However, the use of this information is limited and should be treated with caution, as

many issues related to compatibility with EU law are solved before the adoption of the

national rule, during the stand still period. Furthermore, the assessment performed under this

Directive links to the compatibility of the national rule with EU law, while the Mutual

Recognition Regulation covers the application of a national rule to a specific individual case.

Thus, while the national rule is compatible with EU law, its application in a specific

individual case may be incompatible. Therefore, the notifications alone cannot be used as a

good proxy for estimating the number of market access denials in specific sectors.

All these factors make the precise measuring of the mutual recognition principle and

Regulation's effect quite challenging. The contributions received following the various

surveys and consultations carried out did not allow a statistically representative result to be

reached. However, the stakeholders' consultation was very wide, and, together with the

multitude of information sources used, it allows a strong indicative picture of the functioning

of mutual recognition to be gathered, reliable enough to be used as a basis for further decision

making.

Some of these Member States choose sending a position paper instead of participating in the public consultation, e.g. Denmark and

France

Latest report available: http://ec.europa.eu/growth/tools-databases/tris/en/the-20151535-and-you/being-informed/reports/report-to-

the-european-parliament-2011-2013/

Furthermore, it is necessary to draw lessons from the lack of reliable data on mutual

recognition in order to be able, in the future, to better assess the impacts of the functioning of

the principle on free movement of goods. In order to do so, is it appropriate to reflect on more

reliable monitoring tools, such as a better information collection tool, preferably an IT tool, to

facilitate the collection of data, as well as relying on existing surveys at EU level such on

which the Commission could rely to collect data on how well the mutual recognition principle

performs.

1.7

MPLEMENTATION STATE OF PLAY

Implementation of the mutual recognition principle

In addition to the Regulation, two main tools were used for facilitating the implementation of

the mutual recognition principle: the mutual recognition clause and the management of

complaints.

The mutual recognition clause

It has been a longstanding Commission policy

to insist on the insertion of a mutual

recognition clause in the technical rules of Member States

. During 2012 and 2014 for

example, 2168 draft national rules were notified, and only 205 contained a mutual recognition

clause. When inserted, the clause is often unclear or not very detailed. This shows that

national authorities are reluctant towards mutual recognition, or that they lack awareness in

particular regarding the benefits it could achieve. Therefore, they tend not to follow the

Commission's recommendations in this area.

Complaints

Between 2009 and 2016, economic operators complained 195 times about a misapplication of

the mutual recognition principle.

Member State

Austria

Belgium

Bulgaria

Czech Republic

Denmark

Estonia

Finland

France

2010

2011

2012

2013

2014

2015

2016

Total

Communications COM (1999) 299, COM (2002)419, COM (2003)200 and C (2003)3944

See section 2.3.1

Where the misapplication of the mutual recognition principle is reported

Germany

Greece

Hungary

Italy

Latvia

Lithuania

Malta

The Netherlands

Poland

Portugal

Romania

Slovenia

Slovakia

Spain

Sweden

The sectors where most of the complaints were registered are food, construction products,

labelling and precious metals.

Most concerned sectors

Food (e.g. food supplements, vitamins)

Construction products

Labelling (including food labelling)

Precious metals

1.8

Application of Regulation (EC) No 764/2008

This section describes the implementation of the different components of the Regulation,

since its entry into force on 13 May 2009. The effects of the implementation are further

assessed in section 7.

Establishing Product Contact Points (PCPs)

PCPs have been established in all EU Member States. Their list was initially published in the

and is regularly updated and available online on the Commission's website

The Regulation left the set-up of PCPs to the discretion of Member States, thus, their

organisation and function vary significantly. Most Member States have a single PCP,

responsible for all inquiries related to non-harmonised products. In a few Member States

the PCP is split between a general one and a construction products specific one. Other

Member States

have PCPs in 6-7 different ministries. In almost all Member States, the PCP

(or the co-ordinator, where there are several PCPs) is located within the ministry responsible

for industry/business and the internal market, often as part of a group or team dealing with

internal market policy. Only in Slovenia the PCP is located in an independent institute (the

Slovenian Institute for Standardisation). A few PCPs handle queries (or part of queries)

themselves. In Malta, the PCP is responsible for all communication with companies.

However, this setup is unique to Malta (and difficult, if not impossible, to handle in a larger

Member State), and in most cases queries from economic operators are passed on to the

responsible ministry, department or directorate or, occasionally, the relevant local authority.

In Italy, there is an appointed PCP, however, economic operators must contact the relevant

ministry in charge of their product and receive their answer from this authority – without the

PCP being involved. The way replies are being provided to economic operators also varies

from one Member State to another. Very often, the responsible authority replies directly to the

company making the query. Thus, the PCP has little insight on the outcome of the queries.

Sometimes, national authorities provide answers to companies via the PCP.

Establishing the list of products to which mutual recognition may apply

Article 12 (4) required the publication of a non-exhaustive list of products which are not

subject to EU harmonisation legislation by the Commission. This task proved to be very

challenging, as there is no correspondence between the nomenclature under which products

are classified in the different existing databases and the scope of the different pieces of

harmonised legislation. On the basis of the existing Commission's Export Helpdesk

database

it was possible to extract an indicative, non-exhaustive list of products not covered

by any piece of EU legislation. This list is available online on the Commission's website on

mutual recognition

. However, the list was not regularly updated, thus does not take into

account repealed or newly adopted legislation since 2009. Furthermore, it does not provide

any information on those products which are only partially covered by harmonisation

legislation, and where mutual recognition may apply with respect to those aspects not covered

by the harmonisation legislation.

Notifications from Member States

According to the Regulation, Member States shall notify the Commission every time they

take an administrative decision denying or restricting market access. In the period between the

entry of the Regulation into force on 13 May 2009 and 31 December of 2016, the

Commission has received

3918

notifications, originating from

6 notifying Member States.

OJ C 185 of 7.08.2009, p. 6-12

https://ec.europa.eu/growth/single-market/goods/free-movement-sectors/mutual-recognition/contacts-list_en

Estonia, Latvia and Poland

Romania, Portugal and the Netherlands

http://exporthelp.europa.eu/thdapp/index.htm

https://ec.europa.eu/growth/single-market/goods/free-movement-sectors/mutual-recognition/products-list_en

The number of notifications received in 2015 amounts to 447, in line with the activity

registered the year before (466 notifications in 2014). For 2016, the number of notifications

increased: 646 notifications were registered. The measures notified relate mainly to precious

metals. Some notifications concern food supplements, fertilisers, energy drinks and vitamins.

Annex 7 contains an overview of all notifications received.

The yearly reports from Member States

The Regulation requires Member States to submit a report every year on the application of the

Regulation. However, despite the Commission's efforts to insist on the fulfilment of this

obligation, not all Member States are communicating the reports as requested by the

Regulation. For example, in 2016, only 23

Member States submitted annual reports, while

20 reports were received in 2015 and 21 in 2014.

Identifying recurrent problems and monitoring the application of the Mutual Recognition

Regulation on the basis of the annual reports is not straightforward. This is because the data

received is not homogeneous or comprehensive enough to be considered as usable input. The

Regulation sets out minimum information to be provided in the annual reports, i.e. the number

of decisions denying or restricting market access and the grounds on which they are based,

and leaves to the discretion of Member States the additional information they might consider

useful to report. This leads to considerable variations as regards the content of the reports

received. The Commission suggested a template to be followed by Member States but this

template is not widely used.

The reports highlight the main issues encountered by Member States when applying mutual

recognition, in particular with regards to the lack of awareness, the poor administrative

cooperation and the difficulties related to the concept of "lawfully marketed".

As regards awareness, almost all Member States highlighted in their annual reports the need

for additional awareness raising campaigns and trainings, as many economic operators are not

aware of mutual recognition and how it functions. Training and information campaigns are

also considered useful and suggested for officials within Member States dealing directly with

national technical rules, as this could have a positive impact on the way they apply mutual

recognition with regard to products lawfully marketed in other Member States.

The lack of administrative cooperation is also a recurrent issue most Member States reported

on. It is difficult to identify, within a Member State, the responsible authority responsible for

a specific product. Difficulties are underlined also with regards to communication with

authorities in other Member States. Some Member States report that they receive late and

unclear answers

. Even when not reporting on specific problems encountered, Member States

are calling for more administrative cooperation

. The reports also underline the limitations

encountered by PCPs when exercising their activities. Often, they receive questions which are

not within their remit, such as questions related to affixing the CE marking, which relates to

the application of harmonisation legislation. They are also affected by the complexity of the

questions they receive, the variety of products covered by mutual recognition and language

limitations.

Slovenia, the Netherlands, Malta, Italy and Luxembourg did not submit annual reports in 2016

e.g. Romania, Slovenia, annual report 2015

e.g. France, Sweden, annual reports 2015

The sectors where the application of mutual recognition is reported as being more problematic

for both Member States and businesses are fertilisers, food labelling, food supplements

(interpretation of various national authorisation procedures), construction products (role of

autonomous certifying bodies, gold-plating, national quality marks and standards) and

hallmarks (recognition of certificates).

Annex 7 contains an overview of all the annual reports received.

The telematic network

Article 11 of the Regulation foresees that the Commission may establish a telematics network

concerning the exchange of information between PCPs and/or the competent authorities of the

Member States. The possibility of establishing this telematic network was discussed for the

first time during the meeting of the Mutual Recognition Consultative Committee in 2014. The

Commission suggested, for facilitating notifications and communication among PCPs, the use

of the Internal Market Information tool (IMI)

. During the 2015 meeting of the Consultative

Committee, they agreed on launching a pilot project for testing the use of IMI. However, this

decision was postponed in the light of the adoption of the Single Market Strategy calling for

higher and better mutual recognition by revisiting the Mutual Recognition Regulation.

Member States considered that the choice of the IT tool for supporting notifications and

communication should be made after the revision of the Regulation, and in line with the

changes to be made, in order to be able to choose the most appropriate IT tool.

Meetings of the Consultative Committee on Mutual Recognition

A Consultative Committee, established under the Regulation, assists the Commission. There

is no obligation as regards how many times the Committee should meet. Usually, one meeting

per year is organised. During the 8th meetings held, the Commission and the representative of

the Member States and from EEA/EFTA (since 2011) have discussed matters relating to the

application of this Regulation. The main topics discussed have been the guidance documents,

the role of Product Contact Points, and ways forward in improving the application of the

mutual recognition principle. Member States also raised the difficulties encountered during

the application of the Regulation, such as the problematic concept of "lawfully marketed", the

lack of awareness about mutual recognition and the lack of appropriate communication

among PCPs.

Annex 12 provides an overview on the functioning of the Committee and issues discussed.

Guidelines, awareness raising campaigns and information

A series of guidance documents offering practical information on the application of the

Regulation to particular issues (e.g. the concept of "lawfully marketed", hallmarks, food

supplements, etc.) have been prepared by the Commission with the input of the members of

the consultative committee. These guidance documents are indicative, not legally binding, and

have been made public on the Commission's website on mutual recognition

. Annex 4

contains an overview of all guidance documents published.

http://ec.europa.eu/internal_market/imi-net/index_en.htm

http://ec.europa.eu/growth/single-market/goods/free-movement-sectors/mutual-recognition/

Since 2009, the Commission has organised or taken part in numerous seminars on mutual

recognition in the internal market and the application of the mutual recognition principle. The

main participants were businesses from areas most often impacted by mutual recognition and

academia.

1.9

Compliance with the Regulation (EC) No 764/2008

During the period covered by this evaluation, no formal infringement procedures specifically

related to the application of the Mutual Recognition Regulation were yet launched. Issues

related to the lack of notifications or submission of annual reports where addressed with

Member States during the meetings of the Consultative Committee

NSWERS TO THE EVALUATION QUESTIONS

1.10 Effectiveness: Evaluating to what extent mutual recognition achieved its objectives

The general objective of the mutual recognition principle and Regulation was

to facilitate

free movement of goods in the non-harmonised area.

Over the period from 2008 and 2014,

around 0.89 million enterprises were operating within non-harmonised sectors, representing

more than 50% of the total number of active enterprises in the manufacturing economy

Around 87% of the enterprises operating within the non-harmonised sectors are micro

enterprises (i.e. with less than 9 employees) and around 11% are small and medium

enterprises (i.e. with a number of employees between 50 and 250)

. In terms of turnover,

non-harmonised sectors represent a significant contribution to the economy, i.e. enterprises

operating within non-harmonised sectors contribute to around 20% of the total value of

market sales of manufacturing sectors. Furthermore, the value on intra EU exports of non-

harmonised products represented the 18% of the value of intra EU exports.

Additionally, the Regulation had the following specific objectives:



To increase awareness about the mutual recognition principle ,

To ensure legal certainty when using the mutual recognition principle,

To improve administrative cooperation among national authorities when applying the

mutual recognition principle

1.10.1

Facilitating free movement of goods in the non–harmonised area through mutual

recognition

The results of the public consultation carried out between June and September 2016

show

that the mutual recognition principle and the Regulation had limited effects in facilitating free

movement of goods in the non-harmonised area.

See annex 12

Around 2 million active enterprises are operating under Section C of NACE classification named Manufacturing. The

correspondence between the list of NACE DIGIT-3 codes and the way they have been considered in the analysis (i.e. harmonised or

non/partially harmonised) can be found in annex 5

These figures have been computed for the period 2011 – 2013 since the enterprise statistics by size class for aggregates of activities

(NACE rev.2) are only available for this period.

See annex 5

In general, the majority of companies wishing to sell products in another Member State check

the applicable rules in that Member State. If these rules prevent them from selling their

product as such, most of them adapt it.

Figure 7-1: Public consultation 2016

yes

5,40%

13,00%

Do you check rules before entering a market?

Do you adapt your product if the rules prevent you from selling it

as such?

94,50%

86,00%

Several situations make businesses adapt their products. First, they can decide to do so

immediately after the examination of the applicable national rules in the Member State where

they want to sell their product, either because the business is not aware about the possibility of

invoking mutual recognition to enter the market without adapting the product, or because the

business don't trust mutual recognition, and prefer not to use it at all

. Secondly, they can

decide to adapt the product after receiving an administrative decision denying market access,

mainly because it's too long and costly to challenge such decision. Lastly, the choice of not

using mutual recognition can also be solely based on strategic reasons, thus unrelated to

awareness or trust in mutual recognition. For example, certain businesses prefer designing a

product which fits all existing requirements in all Member States, and have the guarantee that

they can penetrate any market without further modifications.

Furthermore, the 2016 public consultation shows that 68% of the respondents tried to use

mutual recognition to enter a new market, but half of them faced market access denial. More

specifically, 75% of micro enterprises, 80% of small enterprises and 71% of medium

enterprises tried to use mutual recognition, and, respectively, 62%, 53% and 71% of them

had their market access denied. In principle, national authorities can deny market access only

when they have diverging product requirements whose mandatory imposition is justified by

the need to protect a certain public interest, and those requirements are necessary and

proportionate for achieving that objective. In practice, the stakeholders' feedback shows that

market access denial is automatic, because national authorities are not aware of mutual

recognition or they find that applying it to the detriment of their own rules results in legal

uncertainty. Thus, they feel more confident in applying their national rules and ignore mutual

recognition. Only 15% indicated that market access was not denied.

Figure 7-2: Public consultation 2016

31% had not used mutual recognition, mainly because they don't know about it (15%) or because they don't trust it (4%)

Have you used mutual recognition for entering a market?

When using mutual recognition, was market access

denied?

68%

53%

15%

32%

yes

No answer

A recent study carried out by the Danish Business Association

also confirms the findings of

the 2016 public consultations. This study shows that businesses are still experiencing barriers

to free movement of products in the Single Market. 24 out of the 35 businesses interviewed by

the association experienced problems with the application of the mutual recognition principle

and Regulation, especially in certain sectors, such as construction products, food contact

materials, products in contact with water and innovative products. According to this study,

this is due to the fact that Member States apply national requirements

on products

characteristics, including requirements relating to product testing and documentation, to the

detriment of mutual recognition. This results in businesses having to retest or modify the

products or giving up on marketing the products in certain cases.

Example: Upholstered furniture– a well-known obstacle for exports to the UK

Special requirements in the UK for upholstered furniture – even for garden furniture –

require that a special range of products have to be developed for the UK. Due to fire

protection public interests, foam and textiles must be treated with flame resistant chemicals.

These flame resistant chemicals, for environmental public protection reasons, are restricted

in entering other markets.

The consequence for one specific company is that they need to have a double stock of

furniture (binding capital of abt. 150,000 euro). There are extra initial costs for each

product (abt. 50,000 euro per type), for which reason they have been forced to reduce the

product range in the UK by abt. 25 p.c.

Example: Export of environmentally friendly, innovative product hindered by national

regulation

Some years ago, a small Danish manufacturer developed an intelligent solution for efficient

pest control, completely without the use of poison. Since then, the products are in demand

by an increasing number of countries around the world. The system monitors rodent activity

and protects against rats entering the building or gaining a foothold in the area.

The product nevertheless meets many national obstacles in the form of national legislation

See annex 13 - based on qualitative telephone interviews with company executives and relevant technical managers from 35

member companies, covering many different sectors

Even if these national requirements are justified by the need to protect a given public interest, they may not always be necessary and

proportionate.

aimed at animal protection (e.g. in Sweden and Germany). These national rules banning the

use of electricity on animals de facto block the marketing of the products, even if they are

proved to be both efficient and better than poison which remains in nature.

The findings of the surveys carried out during 2014-2015

are similar and point in the same

direction. One third of the respondents among businesses believe that mutual recognition

doesn’t work well in practice. The reasons identified during the interviews are related to

additional tests that national authorities require, to the detriment of mutual recognition. One of

the examples provided relates to water taps

, where in 2014 several companies stated that

additional different national tests are required, to the detriment of mutual recognition, in

Member States; the differences related not only to the testing required, but also to what

needed precisely to be tested: in certain Member States components needed to be tested, while

in others the testing referred to the whole product.

Figure 7-3: Company survey: In your view, how well does the mutual recognition

principle work in practice?

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

The survey among national business and sector associations showed that 25-35% of the

respondents perceive the objectives to be partly reached (see Figure 7-4), because mutual

recognition functions better in certain areas than in others. For example, a Belgian company

with less than 10 employees in the precious metals sectors

explained that mutual recognition

functions in an average way, and that it contributed to lowering trade barriers for certain

categories of goods which can be sold without any further adaptations. A small company

active in the construction area

(with 40% of its exports falling into the scope of mutual

recognition) considered that mutual recognition works "badly" and that it did not lower trade

barriers at all. This company gave up entering a market 3 times, due to the additional costs

triggered by the request to modify or retest its products.

Figure 7-4: Business and sector association survey: To what extent has the mutual

recognition principle achieved its objectives?

External evaluation of the mutual recognition principle 2014-2015

External evaluation of the mutual recognition principle 2014-2015, case studies, case study 2, 4, 8

External evaluation of the mutual recognition principle 2014-2015, case studies, case study 16

External evaluation of the mutual recognition principle 2014-2015, case studies, case study 12

Source: Questionnaire survey among national business and sector associations, running from 9 October 2014 to 5 January

2015, carried out by DTI

The perception of businesses that mutual recognition doesn't function properly is confirmed

by the replies provided by national authorities during the 2016 public consultation. When

national authorities check if products available on their market and coming from another

Member State comply with the national rules they are enforcing, only

46%

verify if they are

already lawfully marketed in the Member State of origin, meaning that they take into account

the potential application of mutual recognition of these products

. The others directly

conform to the applicable national rules, without looking into the potential application of the

mutual recognition principle and Regulation. This can be because they are not well aware of

the practicalities of applying mutual recognition, or because they simply prefer applying their

own national rules, with whose cultural and historical backgrounds they are well acquainted.

The input submitted in the annual reports on the application of the mutual recognition

Regulation goes in a similar direction: while Member States recognise the potential of the

principle and Regulation in terms of achieving their objective, they also believe that in

practice many difficulties stop these objectives being fulfilled. These difficulties, which

mainly refer to the lack of awareness and understanding about how the principle should be

applied and legal uncertainty, will be further assessed in the following sections.

The perception of PCPs

in the surveys carried out during 2014-2015 was more positive.

Around half of them indicated in the survey that the objectives have been either completely

reached or close to completely reached. The other half perceived the objectives as being partly

reached, and a few PCPs said that there is quite a long way to go in terms of lowering trade

barriers in the internal market. However, these results have to be treated with caution, as the

PCPs, depending on how they are organised at national level, are mostly the interface between

businesses invoking their right to mutual recognition and national authorities exercising their

right to apply their own national rules. Most of them are only providing information to a

specific request, and/or establish a contact between the business and the competent authority;

they don't monitor the application of the mutual recognition principle, and don't have a lot of

knowledge about the outcome of a case once it has left the remit of their competence

This doesn't mean that they allow market access automatically

During this survey, only PCPs were interviewed. the survey did not reach national authorities granting or denying mutual

recognition

See section 6.2 and 7 for a more detailed assessment of PCPs

This is also supported by the number of complaints received relating to the application of the

mutual recognition principle. Since 2010, 195 complaints relating to a misapplication of the

mutual recognition principle were registered.

With regards to the Regulation specifically, the results of the public consultation carried out in

2016

show that very few economic operators consider that it is easier to sell products in

other Member States since the Regulation entered into force. The majority consider that the

Regulation has not improved the situation in terms of facilitating free movement of goods, or

don't know, either because they don't use mutual recognition or they don't sell products

abroad

Figure 7-5: Public consultation 2016

Is it easier to sell products in another national market since the Mutual Recognition Regulation is in

force?

yes

26%

30%

24%

15%

I don't know because I don't use mutual

recognition

The 2016 public consultation, the stakeholders' consultation performed in 2014 and the

evidence submitted by the Danish business association all point to the same direction. Overall,

stakeholders consider that despite the existence of the principle and the adoption of the

Regulation, free movement of goods in the non-harmonised area still remains problematic.

Businesses are still facing difficulties with regards to market access, despite the fact that their

products are already lawfully marketed in other Member States. Thus, they often adapt their

products or give up entering on a new market.

1.10.2

Increasing awareness of the mutual recognition principle

One of the specific objectives of the Regulation was to increase awareness about the mutual

recognition principle. The stakeholders' consultation and the desk research performed by the

Commission services show that there are businesses and national authorities still unaware

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

triggers lack of awareness about how this principle should be applied or the conditions under

which mutual recognition could be denied. It also triggers lack of awareness about the

Regulation as well; as the Regulation enters into play once mutual recognition is denied, by

issuing an administrative decision and notifying it to the economic operator and to the

Commission.

Figure 7-6: Public consultation 2016

See annex 5

15% replied other, but did not specify what they meant by it

How much do you know about the Mutual Recogntion Regulation?

71%

40%

32%

22%

Member States

Businesses

8,70%

I am fully aware

I am partially aware

I only found out about it now

Surveys carried out in 2004

and 2014

show a low level of awareness about mutual

recognition among businesses. In 2004, 46% of the respondents declared awareness about

mutual recognition; 54 % of the companies interviewed in 2014 declared not knowing about it

or having heard of it but not being familiar with the details. The public consultation carried

out in 2016

shows however a significantly higher level of awareness; 7% of the respondents

declared being aware of mutual recognition. The differences in the declared level of

awareness can be explained by the fact that the consultation process was different (targeted

surveys versus open consultation).

The level of awareness about mutual recognition among national authorities is mixed. The

results of the public consultation carried out in 2016 shows that when national authorities

check if products available on their market coming from another Member State comply with

the national rules they are enforcing, 53% verify if they are already lawfully marketed in the

Member State of origin while 46% don’t. Thus, those not checking if products are already

lawfully marketed elsewhere take for granted the fact that their national rules are applicable,

and take measures against economic operators, asking them to align their products. Some

Member States organised at national level such campaigns, mostly for authorities, and

considered them very useful.

In order to increase awareness of the mutual recognition principle, the Regulation put in place

Product Contact Points (PCPs)

. Most of the businesses (73%) replying to the 2016 public

consultation declared that they have never contacted a PCP in order to obtain information

about the applicable national rules and the mutual recognition principle, mostly (46%)

because they are not aware of them.

In the period between the entry into force of the Regulation on 13 May 2009 and today

, the

Product Contact Points received

8024

questions from economic operators.

Survey carried out in the framework of the impact assessment supporting the proposal for the Mutual Recognition Regulation

European Commission, Study commissioned to Technopolis Group (2015): ‘Evaluation of the application of the principle of mutual

recognition in the field of goods,’ ENTR/172/PP/2012/FC – LOT 4 carried out between April 2014 and May 2015:

http://ec.europa.eu/growth/single-market/goods/free-movement-sectors/mutual-recognition/index_en.htm.

See annex 5

See section 6.2

Requests received in 2016 are not taken into account, as these will be reported by Member States in the 2017 reports

2010-2011

1402

2012

1439

2013

1826

2014

1793

2015

1564

The PCPs that were most contacted are France and the Czech Republic, followed by Slovakia.

Figure 7-7: Most contacted PCPs

Slovakia

Czech Republic

France

115

272

416

135 134

434

325

498

325

581

375

2015

2014

2013

2012

2010-2011

However, the number of questions indicated above is only indicative and does not constitute

an accurate picture of all questions received or treated by the PCPs. This is because not all

Member States are indicating in their annual reports the number of questions received and

treated by the PCPs. In 2010-2011, 2012 and 2014, 17 Member States indicated the number of

questions received by the PCPs. 19 Member States supplied this information in 2013 and 16

Member States supplied this information in 2015. Also, with regard to the number of

questions received, it is not certain that the number indicated covers questions related to

mutual recognition only. Some Member States are reporting those questions related to mutual

recognition only, while others are reporting all questions received, even when outside the

remit of the PCPs. A few Member States

conducted national surveys on the usefulness of

the PCPs, and the results show that economic operators are globally satisfied with the services

provided by the network, which are considered useful.

In general, the main issues underlined by economic operators in relation to PCPs are the long

delays for receiving an answer, the quality of the answer or even the absence of it. These

issues are also highlighted by the Member States in their annual reports. Some Member States

indicated that the 15 day deadline set out by the Regulation is difficult to meet, although most

of the time respected. According to the information submitted in the annual reports, these

delays are caused by the wide range of products (or aspects of) falling under the scope of

mutual recognition as well as the increasing number of applicable national rules, which makes

it difficult to easily identify the responsible persons having the necessary expertise. The

decentralisation of certain Member States administration and the fact that most often the

necessary competences are distributed between different ministries add to these difficulties.

Very often, the PCPs have to send the inquiry to the local responsible officer. Last but not

least, language issues, especially when technical language is involved, add further delays and

contributes to the sometimes low quality of the answers provided. Some good practices were

also highlighted by Member States in their annual reports as regards the functioning of PCPs.

Slovakia for example indicated that an expert network was put in place to support the work of

the PCP. Furthermore, the PCP is located in the same department dealing with Directive (EU)

The reporting in annual since 2012

See annual reports from SE 2015, DE and FR 2013

2015/1535, thus aware of all national regulations notified to the Commission and subject to

the application of the mutual recognition principle.

Overall, the PCPs network is considered by Member States in their annual reports as a useful

tool, having the potential to help economic operators in obtaining information about the

applicable national rules and the mutual recognition principle. Member States consider

however that it needs to be further strengthened. In their annual reports, they call on

enhancing administrative cooperation, and integrating the PCPs into a wider network, in order

for them to gain the expertise and to reply more efficiently to the inquiries they received. This

view is also shared by businesses, as 58% of the respondents indicated in the 2016 public

consultation that PCPs are a useful tool, despite the fact that only 7% of them considered their

experience with PCPs as satisfactory.

The Regulation had a limited effect in increasing awareness about the mutual recognition

principle, mainly due to the suboptimal functioning of the PCPs. This makes it difficult for

businesses to know when mutual recognition can be used for entering a market and what their

rights are. Most stakeholders agreed however that PCPs are a very useful tool, with a lot of

potential. They need however to be strengthened in terms of administrative cooperation and

network, in order to be efficient as regards their objectives.

Additionally, one of the objectives of the mutual recognition clause referred to in section 2.3.1

was to make authorities and economic operators aware of the mutual recognition principle.

During the PCPs survey carried out in 2014, only 28% of the respondents indicated that a

mutual recognition clause is included systematically in all relevant national rules

66.

The

overview

of the draft national technical regulations notified between 2012 and 2014 shows a

poor use of the mutual recognition clause:

2012

Total

755

MRC

inserted

Total

728

2013

MRC inserted

Total

685

2014

MRC inserted

When inserted, the clause sometimes lacks clarity or is not properly implemented. Many of

the comments and detailed opinions the Commission issued, when assessing draft national

regulations in the framework of Directive (EU) 2015/1535, relate to a wrong wording of the

mutual recognition clause:

Table 7-1: Overview of comments and detailed opinions in the framework of Directive

(EU) 2015/1535- 2015 and 2016

2015

Total

Absence of MRC

MRC wrongly

Non

8% replied that MRCs are not used at all, 20% replied that MRCs are included in few rules, and 44% replied that MRCs are

included in more than half of the adopted national rules.

Carried out internally by the Commission services

Mutual recognition clause

worded

related to

the MRC

Non

related to

the MRC

Comments

Detailed opinions

MRC wrongly

worded

2016

Total

Absence of MRC

Comments

Detailed opinions

Therefore, the mutual recognition clause has not shed sufficient light on when mutual

recognition is applicable. Despite the regular recommendations by the Commission to insert

the clause in draft national legislation notified following Directive (EU) 2015/1535

, or to

redraft it in order to ensure clarity, its use is still poor.

1.10.3

Ensuring legal certainty when using the mutual recognition principle

Another specific objective of the Regulation is to ensure legal certainty when using the

mutual recognition principle. The Regulation tried to address the lack of legal certainty by:

(1)

(2)

(3)

Introducing the principle according to which the burden to demonstrate that the

product does not meet the necessary requirements relies with the national authorities

Establishing a non-exhaustive list of products to which mutual recognition might apply

Introducing an obligation to notify administrative decisions denying market access

Clarity of the concept "lawfully marketed"

The main value of the Regulation was to place

the burden of proof

on the national

authorities that intend to deny market access. This was justified by the uncertainties regarding

who has to demonstrate that a product lawfully marketed in a Member State can be marketed

in another Member State. The objective was to reduce the risk of seeing market access denied,

by allowing communication between the businesses and the national authorities in order to

prevent problems of free movement of goods. In practice, however, the outcome is not very

positive. Placing the burden of proof on Member States did not have any added value as

regards the lack of clarity in the concept of "lawfully marketed", which triggers the possibility

for economic operators to invoke the mutual recognition principle to sell their products in

other Member States. This is because the Regulation only indicates who has the burden of

proof, without defining the concept of "lawfully marketed", nor the kind of evidence needed

to demonstrate that a product was lawfully marketed. Furthermore, there is no jurisprudence

from the Court of Justice on this concept. Thus, businesses report that Member States have

776 notifications were received in 2015; 44 concerned Information services

Other issues related to incompatibility with EU law were raised, such as e.g. proportionality issues

756 notifications were received in 2016, the number of notifications on information services in unknown today

OJ L 241, 17.9.2015, p. 1–15

different requirements as regards the evidence to be submitted in order to demonstrate that a

product is "lawfully marketed". The Commission has provided guidance

on this topic,

explaining the meaning of the "lawfully marketed" concept and what type of evidence can be

requested or accepted in order to demonstrate it. According to this guidance, any piece of

evidence such as a product invoice, product label, catalogue with evidence of a date, sale or

tax records, registrations, licences, notifications to/from the authorities, certifications, extracts

from public records, etc. should be deemed suitable to demonstrate the actual marketing of the

product in another Member State. Despite this guidance, Member States in their annual

reports and businesses in their contributions report that the concept remains problematic.

Economic operators declared for example that if a product invoice is sufficient in one

Member State, very often it will not be considered as sufficient evidence in another Member

State, who will require additional evidence. The first report on the application of the

Regulation

underlines that the difficulty of demonstrating that a product has been lawfully

marketed in another Member State is one of the issues where close and regular monitoring is

necessary. National authorities need a stronger and clearer framework for being able to

determine whether or not a product is lawfully marketed and to allow market access to

products coming from other Member States despite the fact that they do not fully comply with

their national technical rules.

The difficulties raised by the concept of "lawfully marketed" were also discussed during the

stakeholders' event held in June 2016 "Single market for products: fresh ideas to unleash full

potential"

. A specific workshop was dedicated to a more practical approach for proving and

assessing lawful marketing of products in other Member States. During this workshop,

business representatives described the problems they often encounter when trying to

demonstrate that a product is lawfully marketed in a Member State, especially in terms of

what is understood and accepted as evidence. In order to bring more clarity and facilitate

market access, the participants focused on what is really needed as evidence to demonstrate

the lawfulness of the marketing of a product and listed those elements considered necessary

(e.g. name of the manufacturer and contact details, the market(s) where the product is

marketed, and the regulations and standards it complies with. Participants concluded that

standardising the type of information to be provided to national authorities in support of the

demonstration of the lawfulness of the marketing of the product would have positive impacts

on legal certainty when using mutual recognition.

Businesses replying to the 2016 public consultation identified the difficulty of demonstrating

the lawfulness of a product as an obstacle to mutual recognition.

Table 7-2: Public consultation 2016 – Ranking of obstacles –Businesses

Ranking of obstacles by order of importance

Difficult for businesses to challenge a national decision denying market access

Insufficient communication between national authorities of different Member States

62%

46%

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52013DC0592

Communication from the Commission to the European Parliament and the Council, First report on the application of Regulation

(EC) No 764/2008, OJEU C (2012) 292 final

See annex 2

Lack of awareness about mutual recognition

Difficult to obtain information about whether mutual recognition applies to a specific product and

thus to assess if mutual recognition can be used or not for a specific product

Other

Slow/inefficient communication between businesses and national authorities

Difficult to demonstrate to authorities in other Member States that a product is lawfully sold in a

Member State

Insufficient communication between national authorities within the same Member State

35%

32%

29%

27%

26%

21%

Stakeholders predominantly agreed

that standardising the type of information to be provided

would facilitate demonstrating that a product is lawfully marketed in a Member State.

Clarity concerning the products to which mutual recognition apply

Before the adoption of the Regulation, it was difficult for both economic operators and

national authorities to know with certainty when a product falls into the scope of mutual

recognition

. The Regulation required the Commission to publish a

non-exhaustive list of

products which are not subject to EU harmonisation legislation and to which mutual

recognition might apply,

as a mean to improve legal certainty when trying to use the mutual

recognition principle. More information on the list is available in section 6.2. In 2015, for

example, the web-page hosting the product list received 2655 visits, and 59% of them left the

page immediately, without trying to use the list. However, during the public consultation

carried out in 2016, 68% of Member States and 51% of businesses declared that the list is

useful and necessary, but needs to be updated and made more user-friendly. These findings

point to the fact that stakeholders agree with the usefulness of having such a list, but that the

list in its current state is not reliable.

Transparency of administrative decisions

The obligation to notify every administrative decision denying market access

was also

intended to bring more legal certainty for economic operators when invoking their right to

mutual recognition. In the period between the entry into force of the Regulation on 13 May

2009 and today, the Commission has received

3918 notifications.

All notifications received

come from

6 Member States,

and one Member State, namely Portugal, accounts for around

80%

of the notifications received. Most of notifications refer to precious metals, and some

relate to foodstuff, fertilisers, food additives and electrical equipment. This doesn't mean that

the precious metals area is the only area where the obligation to notify is respected by

Member States. The fact that most of notifications relate to one category of products, i.e.

precious metals, could be explained by the reluctance of Member States to apply the mutual

recognition principle in an area where many of them have permanent and long-time

established control bodies specifically devoted to assessing hallmarking and control of

precious metals. This generated several infringement procedures, and the Court of Justice

75% of Member States and 80% of businesses

See Impact assessment 2007

underlined in several rulings

that Member States have to respect the free movement of

precious metals on the basis of the mutual recognition principle. Because of the abundant

jurisprudence of the Court on these issues, national authorities became over time well

acquainted with the application of the principle in this area, and with the obligation to notify

contained in the Regulation.

Additionally, there are discrepancies between the number of notifications received by the

Commission and the number of administrative decisions indicated by Member States in the

annual reports. For example, some Member States are indicating in their annual reports that a

certain number of administrative decisions have been taken, while these have never been

notified to the Commission. Other Member States are reporting that no administrative

decisions have been taken, while complaints received show the contrary

. This points to the

fact that Member States are not always notifying the Commission administrative decisions

denying or restricting market access. This issue has been often addressed in the Mutual

Recognition Consultative Committee

; representatives from Member States considered that

the lack of notifications could be justified by the fact that inspectors performing controls on

the market and taking these decisions lack awareness about the Regulation and its obligations

and thus don't know that the decisions they are taking should be notified to the Commission.

Some Member States reported

that information campaigns and trainings have been

organised in order for their staff to get familiar with the Regulation; however these are more

isolated cases, and don't allow drawing a conclusion of the effectiveness of these initiatives in

terms of complying with the obligations of the Regulation.

Difficulty to challenge administrative decisions denying market access

The Regulation foresees that when an administrative decision denying or restricting market

access is notified to the economic operator, it shall mention the legal remedies available at

national level allowing challenging this decision. Economic operators reported that national

remedies usually consist in long and costly court proceedings. During the 2016 public

consultation, they ranked this as the main obstacle to relying on mutual recognition:

Table 7-3: Public consultation 2016

Ranking of obstacles by order of importance

Difficult for businesses to challenge a national decision denying market access

62%

As court proceedings are very time consuming and expensive for businesses, they prefer

adapting their products or renouncing to enter the market. This is supported by the 2016

public consultation, which shows that when market access (and mutual recognition) is denied,

businesses rely rarely on the national remedies available to them:

The main cases being C-220/81 Criminal proceedings against Timothy Frederick Robertson and others, C-293/93 Criminal

proceedings against Ludomira Neeltje Barbara Houtwipper, C-30/99 Commission v. Ireland

See annex 7

See annex 12

See annex 7

62% of respondents ranked this obstacle as being the most important one

Figure 7-8: 2016 Public consultation: Did you challenge the decision denying market

access?

No answer

47%

4,40%

10%

6,50%

4,40%

14%

11%

No, I prefer giving up the market

No, I prefer to aling on national rules

yes, still waiting for the results

Yes, but unsuccesfully and then gave up the

market

Yes, but unsuccesfully and then I aligned

with national rules

Yes, unsuccesfully

Yes, succesfully

To further underline this issue, during the 2016 public consultation, one business association

indicated that in the area of drinking water installations they are aware of more than 100

cases where national authorities denied market access and required the products to be adapted

to the different national requirements; one company tried to challenge the administrative

decisions denying market access, which resulted in a two years lawsuit (still ongoing);

another indicated that because the only way to challenge these decisions is having a long and

costly lawsuit in their national law, they prefer to adapt the product or give up entering the

market.

Beyond the Regulation, the insertion of mutual recognition clauses

in the draft notified

national regulations

also aimed to increase the level of legal certainty. However, the

impacts of this policy in terms of legal certainty are limited.

The tools put in place by the Regulation had a limited effect on increasing legal certainty

when using the mutual recognition principle. The lack of legal certainty appears to remain a

major obstacle to unleashing the full potential of the principle, and the main reason why

Member States and businesses are reluctant towards mutual recognition.

1.10.4

Improving administrative cooperation between national authorities (Mutual

Recognition Regulation)

Before the adoption of the Regulation, dialogue between the national authorities of different

Member States was very difficult, mostly due to the lack of a common address book /network.

The Regulation tried to remedy to this problem by introducing the Product Contact Points and

See section 6.1

See section 6.2.1

the telematic network

. Despite this, administrative cooperation remains suboptimal, for

various reasons. Many Member States highlighted, in their annual report, the difficulties PCPs

have to identify and contact the responsible authorities in their own administration in order to

reply to requests received from economic operators. Some Member States managed over the

years to put in place a network of experts, but the variety of products covered by mutual

recognition and national legislation involved, as well as the different internal organisation in

certain Member States make this task very difficult. Also, there is a lack of administrative

cooperation between PCPs. The absence of a network, allowing rapid communication and

exchange of information delays the work of the PCP when replying to a request from

economic operators. Many are complaining about the absence of reply from their colleagues

from other Member States, or about long delays to receiving an answer. Often, the answers

received are of low quality as regards the information transmitted

During the survey carried out in 2014, the interviewed PCPs indicated the main problems with

regard to administrative cooperation:

Figure 7-9: 2016 public consultation

Main issues related to administrative cooperation

Lack of information on whom to contact on

another Member State

Unduly long response time

No response at all

One PCP indicated that sometimes the delay for receiving a reply is

40-50

working days.

Another indicated that the intervention of the Commission was necessary in order to obtain a

reply.

Additionally, the administrative cooperation between PCPs is also undermined by the

difficulty of communicating in a common language, especially when technical terms are

involved. This issue is almost unanimous among PCPs, and was raised in the surveys,

interviews, in the annual reports as well as during the meetings of the Consultative Committee

on mutual recognition.

The majority of those economic operators who contacted a PCP preferred not to assess if their

experience was satisfactory or not.

Figure 7-10: Public consultation 2016

Was your experience satisfactory?

21%

72,50%

Yes

Article 11 of the Regulation

See annex 7

If not, what was the reason?

79,10%

4,40%

13,10%

Long delays

Language problems

Member States consider communication with authorities within their own country as good,

while communication with authorities from other Member States is rather average or poor. As

regards communication between national administrations and businesses, the assessment by

authorities is quite mixed between good, average and poor. The main reasons for poor

communication are related to the lack of knowledge about mutual recognition, language

issues and the absence of an appropriate IT tool to facilitate communication.

Figure 7-11: Public consultation 2016

How do you asses communication when applying mutual recognition?

57%

33%

20%

35%

28%

35%

28%

15%

Good

Average

Communication with authoritiesin the Communication with authorities from

same MS

other MS

Communication between authorities

and businesses

Poor

What are the main causes of poor communication?

51%

20%

22%

Lack of awareness

Language problems

As regards the telematic network foreseen by the Regulation, its creation was discussed

several times with representatives from Member States during the meetings of the Mutual

Recognition Consultative Committee without being finalised

1.10.5

Conclusion on effectiveness

Overall, the findings of the evaluation show that the principle and the Regulation did not meet

their objectives. Businesses are still encountering numerous obstacles to the free movement of

products lawfully marketed in another Member States. During the 2016 public consultation,

they ranked as the main obstacle in difficulty to challenge administrative decisions denying

market access, followed by insufficient administrative cooperation and lack of awareness

about mutual recognition.

The tools put in place by the Regulation in order to ensure awareness, i.e. the PCPs, had a

limited effect, mainly due to their suboptimal functioning. Businesses still don't know when

mutual recognition can be used for entering a market and what their rights are. Furthermore,

the mutual recognition clause has not shed sufficient light on when mutual recognition is

applicable. Despite the regular recommendations by the Commission to insert the clause in

draft national legislation notified following Directive (EU) 2015/1535

, or to redraft it in

order to ensure clarity, its use is still poor.

See section 6.2.2

OJ L 241, 17.9.2015, p. 1–15

The tools put in place by the Regulation had also a limited effect on increasing legal certainty

when using the mutual recognition principle. The lack of legal certainty appears to remain a

major obstacle to unleashing the full potential of the principle, and the main reason why

Member States and businesses are reluctant towards mutual recognition.

As regards administrative cooperation, it still needs to be enhanced in order to facilitate the

application of the mutual recognition principle.

The weak use of the principle of mutual recognition and the limited impacts the Regulation

had in achieving the foreseen objectives of ensuring free movement of goods in the Single

Market points to the fact that there is a lot of potential to be unleashed. Estimating accurately

the magnitude of this unleashed potential is not straightforward, due to the complex nature of

mutual recognition and the wide variety of products to which it applies. However, several

elements indicate that the suboptimal use of mutual recognition triggers significant costs and

that improving its functioning would bring significant benefits. The comparison of the value

of the intra EU exports with domestic consumption

shows that for harmonised products the

value of intra EU exports is

55%

of domestic consumption, while for the non-harmonised and

partially harmonised goods it represents only

35%.

A study done for the European

Parliament

tried to estimate the magnitude of the impact that non-tariff barriers to trade have

on the internal market. It concluded that a reduction of such barriers could lead to an increase

in intra-EU trade of more than

100 billion EUR

per year.

Therefore, in terms of priorities for the Commission to remedy to the ineffectiveness of the

regulation, national authorities and citizens ranked first the need to increase awareness of the

mutual recognition principle, while businesses stressed their need for effective remedies to

take action against decisions denying market access. If the consultation did not result in a

representative sample of sectors, company type and Member States, it provides however a

good indication of areas where the scope of mutual recognition can be improved.

Furthermore, the difficulties in terms of gathering useful data on the functioning of mutual

recognition needs to be addressed, in order to get a clearer picture of how the principle

functions and its impacts on the free movement of goods.

Table 7-4: 2016 public consultation

Ranking of priorities by businesses

Ensure that businesses have effective remedies at their disposal to take action against decisions

denying mutual recognition when needed

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

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

national authorities

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

72%

67%

65%

64%

Value of production-value of extra EU exports +value of intra EU imports

The Cost of Non- Europe in the Single Market, 'Cecchini Revisited', An overview of the potential economic gains from further

completion of the European Single Market, CoNE 1/2014

http://www.europarl.europa.eu/RegData/etudes/STUD/2014/510981/EPRS_STU(2014)510981_REV1_EN.pdf

Facilitate communication between all actors involved in mutual recognition (business, national

authorities, European Commission)

Increase general awareness of the mutual recognition principle

54%

52%

Table 7-5: 2016 Public consultation

Ranking of priorities by Member States

Increase general awareness of the mutual recognition principle

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

national authorities

Ensure that businesses have effective remedies at their disposal to take action against decisions

denying mutual recognition when needed

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

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

Facilitate communication between all actors involved in mutual recognition (business, national

authorities, European Commission)

51%

42%

40%

35%

33%

31%

Table 7-6: 2016 public consultation

Ranking of priorities by citizens

Increase general awareness on the mutual recognition principle

Increase legal certainty for businesses when using mutual recognition to sell

products abroad

Ensure that businesses have effective remedies at their disposal to take action

against decisions denying mutual recognition when needed

Increase effectiveness of mutual recognition to facilitate access to the internal

market

Ensure that the procedures are duly followed when decisions denying market access

are taken by national authorities

Facilitate communication between all actors involved in mutual recognition

(business, national authorities, European Commission)

64%

52%

47%

41%

35%

23%

1.11 Efficiency: Measuring the cost effectiveness of the mutual recognition principle

and Regulation

One of the Commission's priorities is to make EU law simpler and to reduce administrative

burdens. These objectives refer specifically to costs associated with reporting and

administrative burdens, and costs related to the implementation of the mutual recognition

principle and Regulation. Measuring the efficiency of the principle and Regulation means

evaluating to what extent the costs generated by using the principle and the Regulation are

proportionate to the benefits it achieved. Relevant stakeholders were consulted on this topic.

1.11.1

Costs for public authorities

The Regulation, by nature, is directly applicable; thus, no particular costs were incurred for

transposing or integrating the requirements in national law. The PCPs generated specific costs

for Member States. With regards to the principle, the main costs are generated by its incorrect

application. The analysis below therefore looks into specific costs generated particularly by

the PCPs, and at costs linked to the activity of national authorities other than PCPs, involved

in the implementation of the principle and Regulation.

Costs related to the implementation and functioning of the PCPs

National authorities incurred costs related to implementing their obligation to establish PCP

(putting them in place and having them functioning on an annual basis). Most of the time, the

PCP has been integrated in an already existing department dealing with internal market issues.

Based on the annual reports

, one person on average is fulfilling the task of PCP. This is the

case for example in France, Sweden, Ireland, Greece, the Netherlands, Bulgaria and Poland.

In cases where the function of PCP is available in several ministries, such as in Romania or

Portugal, several persons (5-8) have PCP related tasks among their portfolio. Estimates of

labour costs for PCPs can be made by taking into account the costs of Full Time Equivalents

(FTEs) necessary to perform the required tasks every year. As detailed information on the

salary costs of administrative staff employed PCP is not available, an estimate has been made

based on the Eurostat data (period 2010-2011) on the gross annual salaries for employees in

national public administrations, as shown in the table below:

Table 7-7: Gross annual salaries for employees in the public administration Eurostat

GEO/TIME

Belgium

Czech Republic

Denmark

Germany

Estonia

N of staff

2010

40124 Euro

12786 Euro

Information not available

11541 Euro

11944 Euro

2011

40921 Euro

12850 Euro

See annex 7

For all issues related to internal market information, so we can assume that one person fulfils the tasks of PCP

Ireland

Greece

Spain

France

Netherlands

Portugal

Romania

Slovakia

Sweden

0.5

Information not available

29541 Euro

Information not available

46988

Information not available

7675

11648

38954

7417

11060

41963

47450

29069 Euro

PCPs reply to inquiries from economic operators within the limits set out by the Regulation,

and it is necessary, very often, to communicate in English. Most Member States (25)

have

online portals providing information on the role of PCPs and mutual recognition. 18 Member

States provide this information (sometimes partially) in English. The availability of online

information generates costs related to creating the website and keeping it up-to-date; however,

these are easily counterbalanced by the potential reduction of the number of "basic" inquiries

PCPs would have to deal with in the absence of such online information. The number of

inquiries received by PCPs varies from one Member State to another. Some Member States

(France, Czech Republic, Belgium, Hungary and Sweden) registered a high number of

requests, while others had very little. For example, in 2015, out of the 22 annual reports

received,

16 only indicate the number of inquiries received.

The number of questions

received amounted to

1645.

The most active Member States are France, Czech Republic and

Belgium, followed closely by Hungary and Sweden.

Figure 7-12: PCPs activity 2015

See "Screening Report on Member States Product Contact Points and Product Contact Points for Construction", Ecorys, 2016

France

Romania

Portugal

Spain

Belgium

656

Lithuania

Latvia

Ireland

Bulgaria

Czech Republic

Greece

100

217

110

Hungary

Poland

Slovakia

Slovenia

The fact that some PCPs receive a higher number of inquiries can be explained by the fact that

these are big attractive and / or more difficult markets, or that promotion of PCPs has been

more efficient. The low numbers registered in certain Member States can be also explained by

the fact that requests are not properly registered and monitored, or reported to the

Commission. For example, some Member States are indicating in their annual reports an

increase of the number of inquiries received by the PCPs, while the actual number of these

inquiries was never communicated.

Costs related to assessing products lawfully marketed in another Member State and

notifying decisions restricting or denying market access

Other costs supported by national authorities

are those related to assessing if a product

lawfully marketed in a Member State can be placed on their market on the basis of the mutual

recognition principle. This assessment is followed, depending on its outcome, by the

obligation to notify economic operators and the Commission of their decisions restricting or

denying market access. The assessment of the notifications and annual reports received by the

Commission between 2009 and 2016 show that only a few Member States are notifying

administrative decisions to the Commission. This makes it impossible to calculate the costs

related to this obligation, as the Commission does not have any accurate knowledge about the

actual number of administrative decisions taken over the last 6 years, as these were not

notified. More precise information exists at sectorial level. For example, in the area of

For a full overview of the number of inquiries received by the PCPs see annex 7

These costs are related to national authorities other than PCPs

fertilisers,

the costs on national authorities to assess if fertilisers lawfully marketed in a single

Member State can be placed on their market has been estimated at EUR 420 000

Lastly, there are costs related to the obligation to send an annual report to the Commission on

the application of the Regulation. This obligation did not incur any of the ordinary costs.

Some Member States promoted the Regulation via awareness raising campaigns and training

activities. However, these costs appear marginal, and are not considered burdensome for the

Member States.

Generally, during the public consultation, national authorities ranked the costs linked to the

implementation of the regulation as average costs. Additionally to the choices provided by the

consultation, authorities also indicated additional costs linked to the absence of an updated list

of products to which mutual recognition may apply. This implies that they have to spend more

time checking if a product is subject to harmonised rules or not. Some consider that additional

costs are triggered by the administrative procedures, seen as long and time consuming.

Figure 7-13: Public consultation 2016

Costs for national authorities related to the implementation of the Mutual Recognition, ranked by their

importance on a scale from 1 to 5, 1 being the lowest and 5 the highest.

44%

31%

35%

22%

11% 13%

13%

17%

22% 22%

15%

31%

Establishing and ensuring the functioning Recurrent costs related to the functioning The obligation of the Member State of

of Product Contact Points (infrastructure of the Product Contact Points, including destination to notify a decision denying

and IT)

translation costs (staff only)

market access and the accompanying

procedural safeguards

1.11.2

Costs for businesses

Generally, there are no major costs involved for businesses when applying the Regulation.

Insignificant costs may relate to economic operators getting to know the Regulation and

becoming familiar with the procedures it puts in place.

The main costs incurred (transaction and adaptation costs) are due to the

suboptimal

application of the mutual recognition principle.

According to information provided during

the 2016 public consultation, the following costs have been identified:

High costs are triggered by the need

to adapt the products

to the applicable national rules,

when mutual recognition is either denied or not used for penetrating the market. These

adaptation costs are estimated to be

between 1000 and 150 000 Euro per product and per

According to the survey on administrative costs carried out in the "Fertilisers Study", the costs for competent authorities to analyse

requests for mutual recognition of national fertilising products have been estimated to be 0.2 FTEs x 28 x EUR 75 000 = EUR 420

000 (B.40) for the whole EU.

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

impossible

market. High costs are also related to

delays in entering a market,

estimated

between 3000

and 500 000 Euro per product and per market, and to

lost opportunities,

when businesses

renounce entering the market because of different national rules requiring the adaptation of

the products. On average, the latest are estimated

at between 10 000 and 500 000 Euro per

product and per market. The estimation of the adaptation costs appears to the lower than the

estimation of costs linked to lost opportunities and delayed entry to the market. This may be

due to the specific profile of the respondents to the public consultations that were able to

provide estimates, as testing costs can vary significantly from one product to another. The

variety of products and how this translates in terms of costs is also highlighted later on (see

table 7-8). Finally, the costs related to

challenging administrative decisions

denying

market access are considered less important, mainly because few economic operators choose

to do so. The estimate

100

is between 10 000 and 100 000 Euro per product and per market.

Figure 7-14: Public consultation 2016

Costs in case mutual recognition has been denied

54%

53%

52%

38%

29%

18%

21%

19%

21%

20%

15%

Costs caused by the

delayed entry on the

market

Highly important

Relatively important

Of little importance

I don't know

Costs related to the

challenge before courts

Costs related to lost

opportunities

Costs related to aligning

products on national rules

Costs are also related in assessing if mutual recognition can be used to sell products in another

Member State. Very few economic operators (2%) are outsourcing this assessment, while

26% are doing it internally. 46% are doing both, depending on the product. The lack of

additional information does not allow an estimate of the actual costs incurred to be made

when the assessment of whether or not mutual recognition can be used is outsourced. When

done internally, economic operators spend on average 54 hours doing the assessment;

however, the number of hours indicated varies from one company to another. Most indicated

only a few hours (less than 10) while two indicated spending more than 500 hours on this.

The average cost per hour is 78 Euro. When trying to demonstrate that a product is already

lawfully marketed in a Member State, businesses indicate that the average number of hours

spent is 16, and the average cost per hour is 76 Euro.

100

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

impossible

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

impossible

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

impossible

These results confirm the findings of the external study carried out in 2015

101,

where

businesses underlined transaction and adaptation costs as being very significant. They

perceived testing as being costly – more than 40% of them have rated testing as being a very

significant cost. The testing costs vary considerably, depending on the sector and the product,

but some examples from different sectors are provided in Figures 7-18. Internal company staff

time and administrative costs are perceived to be very significant by 32% and 30% of the

companies, respectively. In the interviews carried out by the contractor, many companies

mentioned that these types of costs naturally follow the testing costs and are therefore closely

related to the issue of Member States demanding additional tests. Lastly, around 26% of

businesses perceive the adaptation of products to local technical requirements to be a very

significant cost. Furthermore, it is interesting that for all four categories, over half of the

companies perceive the costs as either very significant or significant.

Figure 7-15: Company survey: What are the typical cost items involved and how

significant are they?

102

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

With regards to the costs, the survey and the subsequent interviews carried out by the

contractor revealed the same wide range of costs as during the 2016 public consultation,

depending on the different sectors. Similarly, few economic operators were able to put a

figure on the costs faced due to the incorrect application of the mutual recognition principle.

Of those that provided estimates, the costs ranged from 0.5% of the annual turnover, to 20%

of the turnover. This is mainly due to the variety of products covered by mutual recognition.

Table 7-8 summarises some of the characteristics of the companies that provided cost

estimates.

Table 7-8: Overview of the businesses that provided estimates for the costs of adapting

or retesting products

101

102

See annex 6

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

Sector

Articles of precious

metals

Childcare products

Childcare Products

Size of

company

Small

Large

Micro

Small

Percentage of export

Knowledge of MR goods falling under MR

principle

yes, but not in

detail

100

yes, but not in

detail

yes, but not in

detail

yes

yes, but not in

detail

yes

yes, but not in

detail

yes

yes, but not in

detail

yes, but not in

detail

yes, but not in

detail

Costs of adaptation or

retest (percentage of

yearly turnover or euros)

50,000 EUR

0,3

Company originates from MS

where national rules are

stricter

0,5

Testing costs, see case

2,000-9,000 EUR/test

Tailor-made products, agree

on terms with client

50,000-100,000 EUR/test

0,1

0,2

Childcare products

Construction

products

Construction

products

Construction

products

Construction

products

Construction

products

Construction

products

Construction, retail

Electrical products

Fertilisers

Fertilisers and

potting soil

Food

Food additives and

food supplements

Garments for

children

Medical devices and

technical aids

Paper industry,

packaging for

foodstuff etc.

Production of metal

devices

Sports equipment

Medium

Large

Medium

Small

Large

Medium

Small

Large

Medium

Large

Small

Large

Medium

Large

1-5

Large

Medium

Large

yes

yes, but not in

detail

yes

100

0,0025

Document and testing costs,

see also case

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

by DTI

The variety of costs is mainly due to the fact that mutual recognition covers a wide range of

products, with different characteristics and degrees of complexity. The two examples below

show the diversity of costs that businesses may incur depending on the products they are

selling:

Example: water taps

In the area of

water taps,

migration of chemical substances, odour flavour and noise are

regulated at national level, and thus subject to mutual recognition. National rules in this area

vary significantly, and one company indicated that for each product in the category of taps

the certification and testing costs are up to €50,000. In addition, the cost of getting a new

composition approved (to be used for the production of water taps) is between €50,000 and

€100,000. Another company cited testing costs for a single component of approx. €2,000 and

for the final product approx. €8000-9000. In addition, tests can be rather time-consuming.

For instance, a test to determine whether the component or final product contains nickel takes

up to 18 weeks.

103

Example: Food contact materials

In the area of food contact materials, a company producing paper that comes into contact

with food had to re test the paper already lawfully marketed upon the request of the Italian

authorities. The cost of the testing was 700 Euro (per test), considered by the company as not

a major cost, but rather as an unnecessary cost.

104

1.11.3

Some practical illustrations at sectorial level

Fertilisers

The EU fertiliser product market is an economic sector that has between EUR 20 billion and

EUR 25 billion in annual turnover and approximately 100 000 jobs

105

. It is partly covered by

harmonising legislation

106

regulating inorganic fertilisers, leaving the other fertilising

materials regulated at national level. Thus, intra-EU movement of national fertilisers should

be covered by the principle of mutual recognition, but most Member States expressed strong

reluctance in accepting mutual recognition due to environmental and human health concerns,

socio-economic aspects, and alleged administrative burden and introduced prior authorisation

procedures

107

The ex-post evaluation of the Fertilisers Regulation and the implications of the entry into

force of the Mutual Recognition Regulation for the fertilising products sector

108

found that in

2009, the year of entry into force of MRR, an annual average of no more than 5 to 10

fertilising products had been placed on the market under the application of the procedures for

mutual recognition in most Member States. Since then, the yearly reports of the Member

States on the implementation of the Regulation show that 20 Member States out of 27

specifically mentioned issues relating to fertilising products. They are reported as one of the

product categories for which economic operators submit many information requests to PCPs,

which means that there is a significant interest in intra-EU trade, but that economic operators

are uncertain about the requirements applicable in different Member States.

National producers often lack knowledge about the legal situation in other Member States and

are unsure whether they should adapt their products to the requirements of the Member State

103

104

105

106

107

108

See external evaluation of the mutual recognition principle - case studies 2 and 4

See external evaluation of the mutual recognition principle - case study 1

See http://ec.europa.eu/enterprise/sectors/chemicals/files/fertilizers/final_report__23jan2012_en.pdf

Regulation (EC) No 2003/2003 of the European Parliament and of the Council of 13 October 2003 relating to fertilisers, OJ L 304,

21.11.2003, p. 1

See also the guidance document on the application of the Mutual Recognition Regulation to prior authorisation procedures, 2010:

http://ec.europa.eu/growth/single-market/goods/free-movement-sectors/mutual-recognition/index_en.htm

Available at: http://ec.europa.eu/growth/sectors/chemicals/specific-chemicals/index_en.htmas

of destination by modifying the product (which means additional costs) or if they can rely on

Mutual Recognition procedures (which may cause delay in accessing the market and create

costs in the prior authorisation procedure in some Member States).

109110

In order to solve the recurrent issues faced by economic operators in the area of fertilisers, an

optional harmonisation solution was preferred for fertilising products that have not been

harmonised.

Food supplements

111

are concentrated sources of nutrients (or other substances) with

nutritional and physiological effect, marketed by business operators in the food sector. Such

goods can be sold in “dose” form, such as pills, tablets and capsules, and could contain:



Nutrients (vitamins and minerals);

Botanicals;

112

Other substances (e.g. amino acids).

The three main issues linked to mutual recognition

113

are:



Maximum levels of vitamins and minerals

114

Substances other than Vitamins and Minerals

115

Botanicals and botanical preparation

116

Information collected from stakeholders shows a very heterogeneous picture of the

application of mutual recognition in the sector, with many issues faced by companies, relating

to both differences in national procedures/requirements and to the specific nature of the

various products included in the sector. On the former, different Member States follow

different procedures and rules, in addition to a very dissimilar recognition and application of

the principle, creating issues and obstacles companies may have to deal with when trying to

enter a new market and often culminating in having different products for different countries.

On the latter, stakeholders highlight the complexity of a sector with many different products,

ingredients and their combinations, under different levels of controls and requirements among

109

See the Commission Staff Working Document - Impact Assessment accompanying the Proposal for a Regulation of the European

Parliament and of the Council laying down rules on the making available on the market of CE marked fertilising products and

amending Regulations (EC) No 1069/2009 and (EC) No 1107/2009 (COM(2016) 157 final)

See the Commission Proposal for a Regulation of the European Parliament and of the Council laying down rules on the making

available on the market of CE marked fertilising products and amending Regulations (EC) No 1069/2009 and (EC) No 1107/2009,

(COM(2016) 157 final).

See annex 13 for the full case study on food supplements

Plant parts, concentrated sources of plants or their extracts or derivatives with a physiological effect.

Food Supplement Europe (2016),

Input into the REFIT of the Mutual Recognition Regulation 764/2008.

Many Member States established national maximum levels for the amounts of vitamins and minerals in food supplements, while

others preferred not to have specific maximum levels. The existence of particularly low levels applied in certain Member States,

together with the large differences between the levels applied for the same substances across the EU, make it extremely difficult for

companies to manufacture one single product for whole of the EU

Some Member States apply positive lists115 with specific conditions to their use. In addition, some Member States may consider

certain ingredients as for medicinal use only

Botanicals are used in a wide variety of food supplements. Many Member States have positive lists, including conditions of use. The

content of these lists differ widely, and certain botanicals are banned in different Member States because of medicinal status, while

they are widely marketed as food supplements in others.

110

111

112

113

114

115

116

Member States, making it difficult to have a uniform and clear picture of the whole sector and

the possible strategies to overcome barriers.

117

Different countries, different rules

Since the sector is not fully harmonised and limitedly regulated at EU level,

118

companies and

their products are subject to national legislation and mutual recognition. The main issues for

companies arise from:



Different classification

of ingredients or substances: as already mentioned, some

products may be classified as food supplements by a Member State, while another

country – sometimes the very neighbour – can consider them medicines, therefore

creating completely different requirements, rules and procedures to be followed for their

marketing;

Different levels

of ingredients or substances allowed. One of the most (and most

differently) regulated elements is the level of ingredients (e.g. vitamins, minerals and

other substances) allowed in a specific products at national level. Member States tend to

have their own levels that apply to the same products, creating problems for companies

which need to adapt their products and formulas to comply;

Terminology and labels:

It may happen that terms and labels are not uniformly

accepted across Europe (e.g. probiotic). This requires companies to change and adapt

labels and packaging if it is the case.



In addition, it appears that there is not full uniformity in the national systems in place, with

few Member States

119

that, unlike the others, do not rely on a

notification-based system,

which, according to stakeholders, may tend to constitute a sort of pre-market authorisation

instead of a procedure to simply notify national authorities about the products to be marketed

and register information on labels.

In the end, what emerges is that there is not a real issue of complexity of procedures, but

rather the co-existence of many different rules, requirements and practices at national level

that help companies investing time and resources to learn and cope with them, especially in

countries with high levels of restrictions.

120

However, since most of the companies present in

this sector are SMEs, resources and time become crucial elements for their survival.

The application of mutual recognition

Stakeholders find the application of mutual recognition to be difficult in the complex

environment described above. They underline how national authorities tend to focus on

117

This is particularly true for botanical products: while the use of botanicals and other derived preparations need to be compliant with

requirements of Regulation (EC) No 178/2002, stakeholders underlined how no real steps forward seem to have been made to

clarify the framework, without a centralised authorisation procedure – which would be extremely helpful – for the use of botanicals

or to determine the classification of botanicals as either medicines or food supplements. This, as well as the large differences among

Member States in the definition of botanicals and lists of products/ingredients which are allowed or not, create an uncertain and

difficult environment for companies to operate.

Some exceptions include the Regulation (EC) No 1924/2006 on nutrition and health claims, or Directive 2002/46/EC, with a list of

substances that can be used for food supplement production, but whose implementation and monitoring is entrusted to the individual

Member States.

AT, NL, SE, SI and UK.

Such as AT, DE, FI, HR, SE.

118

119

120

national legislation when deciding, without taking into account other EU Member States

certifications or proof of the fact that the product is already lawfully marketed in another

Member State.

In addition, existing instruments meant to favour the application of mutual recognition – such

as Product Contact Points – are not really instrumental in helping companies, given their role

of as information hubs, with no real consultative or assessing capabilities and tasks.

Companies emphasise how the main reason used by national authorities to delay or even

block a product from being marketed in a Member State concerns the existence of potential

safety issues and the need for the authorities to protect the consumers, which cannot be easily

challenged by companies. Sometimes, however, companies report a lack of transparency in

the reason for denial.

In this regard, stakeholders suggest how the fact the burden of proof is on companies – and

not on national authorities – when demonstrating that a product is not dangerous, may limit

their action and ability to challenge a decision, considering the time and resources needed.

Companies may see also a potential effort of national authorities not to allow (or delay)

foreign companies in entering the local market in order to reduce competition for national

companies.

Considering the potential expenses and (considerable) use of time and resources to challenge

a decision taken by national authorities through judicial procedures, sometimes such option is

not considered by companies. According to stakeholders, this can be due to:



Resources

needed, as mentioned. For a company – especially an SME – such resources

needed can be high to discourage it from pursuing such a way. For instance, an Italian

SME active in the area of food supplement suggested how, on average, costs for lawyers

and appealing procedures can amount to around EUR 20,000 per product, but other

stakeholders provided more extreme examples;

Uncertainty

of the final outcome of the procedure, which can result in another and

definite loss for the company;

Preference not to

antagonise

national authorities, which will be crucial for the approval

of the many other products that a company in this sector usually has and tries to market.



In light of these difficulties, stakeholders tend to:



Adapt the product

to the national requirements. Clearly this decision also entails some

costs.

An Italian SME indicated how adapting the product to sell it as a medicine could

be virtually unbearable for an SME in terms of time and costs (with the need to

develop a complete dossier, with testing, clinical tests and documentation), easily

amounting to thousands of EUR.

Adapting a product to different limits of ingredients or substances can also require

some effort from the company, since it requires a new technological development,

with lab costs and feasibility studies. Such costs can be important for an SME (at

least EUR30-50,000 in each case), not considering the potential impact on the

production lines, which need to be differentiated even for a single ingredient. This

strategy is not likely to repay when the targeted market is too small not to justify

such investments.



Not entering the market

at all, when companies realise that costs and efforts will not

lead to a positive solution or, even if it is the case, they will be too high to be sustained.

In this case it can be very difficult to estimate the costs and potential losses for

companies, but there is no doubt that this can result in losing money as well as possible

damages to the company’s image and reputation, especially after a judicial procedure;

Trying to look for a “least

common denominator”

among a group of Member States,

which can have similar rules and requirements and targeting this group with a single

product that would easily comply with all different national regulations.



Products in contacts with drinking water

121

Considering the available information, it is possible to estimate the total turnover of the sector

as between

and

43 billion per annum,

122

while the number of companies operating can be

estimated at around

7,000 units,

with a heterogeneous distribution among small medium and

large enterprises.

123

Tests and certifications concerning the products in contact with drinking water come under

several categories: mechanical, hygienic and audits. The cost-spread for these certifications as

well as statutory audits are different among EU Member States. In Germany, for example,

audit costs amount to a figure around 14% of the total costs for tests and certifications, while

in other countries like U.K., Netherlands and France such a cost is around 1% of the total.

124

Water taps are among the products whose commercialization is more problematic, according

to stakeholders. Water taps segment covers about

35%

of the entire turnover of companies

active in the area of products in contacts with drinking water.

Stakeholders revealed how the application of mutual recognition with regard to these products

is seriously deficient currently, thus creating limitations to both competition among

businesses and availability of products for consumers in the EU single market. The main issue

stems from the absence of comprehensive EU harmonised requirements on such products.

Article 10 of Directive 98/83/EC (Drinking Water Directive)

125

requires Member States to

verify that the materials and substances used in the treatment and distribution systems are not

present in drinking water “in concentrations higher than is necessary for the purpose of their

use and do not, either directly or indirectly, reduce the protection of human health”.

121

122

123

124

125

See annex 13 for the full case study on products in contact with drinking water

Eurostat data for product categories is not specific to drinking water contact products, some estimation based on expert evaluation

are available thanks to data and document collection

Panteia,

Economic Effects of Article 10 of the Drinking Water Directive,

2016

Figawa,

Member Survey,

2016

Concerning the quality assurance of treatment, equipment and materials in contact with drinking water.

The implementation and monitoring measures are left to the Member States, which have

established their own national test and certification bodies

126

to assure the quality of materials

and to issue licences for the sale of products in contact with drinking water. Each body

assesses the conformity of materials and products in contact with water for human

consumption against specific requirements and criteria that vary at national level (for example

as regards the compliance of products with a specific composition or the effects of the

materials on the microbiological growth in the water).

This framework creates the conditions for double or multiple testing of products in contact

with drinking water in the EU market. Companies willing to obtain a licence for marketing

their product in a single Member State have to comply with all the national test criteria and

requirements as defined in the law and by the relevant test and certifications bodies in that

Member State. However, when they want to market that same product in other Member State,

they are typically required to repeat those same tests by the relevant bodies in each individual

Member State they want to enter, as Member States not only have different test criteria, but

also do not recognise each other’s tests. This practice does result in an expensive and time

consuming reiteration of activities for businesses, which are forced to repeat tests and acquire

certifications several times in the EU market, into higher final prices for consumers and –

more importantly for our analysis – into the infraction of mutual recognition principle. As

pointed out by a representative of one of the largest European manufacturer of hydraulic

accessories and components, it is currently not possible for a business to market its products

in more than a few countries

127

at the same time in Europe, mainly due to additional testing

and certifications that have to be done in each Member State requiring it. In some instances,

the cost of additional testing may even exceed the cost of initial testing and certification.

As an example, the interviewee reported that, in the context of EUR 2 million project aiming

to sell a single hydraulic product in 15 EU Member States, the total cost for the initial

certification of such product amounted to EUR 35,000, while cost the double testing in a

single country (FR) was EUR 38,000. Similarly, for a large project worth EUR 60 million

concerning the renewal of product present on the market for a long time, interviewed

stakeholder expects the costs for initial certifications (estimated at around EUR 1 million) to

double when trying to market the product in all the 28 Member State due to additional

certification.

Moreover, companies have to deal with the auditors of the different national certification

bodies who periodically conduct audit visits concerning the quality certifications already

acquired. The current cost reported by the interviewed stakeholder for managing all these

certifications (which are, for drinking water only, around 1,350) is around EUR 2.3 million

per year. Remarkably, all of these costs faced by businesses are passed on to consumers via

final prices.

126

127

FIGAWA reports the following list of national test and certification bodies: Österreichische Vereinigung für das Gas- und

Wasserfach (AT), BELGAQUA (BE), Sekretariatet for byggevarer godkendt til drikkevand (DK), VTT Expert Services (FI), Centre

Scientifique et Technique du Bâtiment (FR), Deutscher Verein des Gas- und Wasserfaches (DE), National Institute of

Environmental Health (HU), Ministerio della Salute (IT), Kiwa NL (NL), Państwowy Zakład Higieny (PL), Instituto Nacional de

Saude (PT), Institut Za Varovanje Zdravja Republike Slovenije (SI), Asociación Española de Normalización y Certificación (ES),

Kiwa Swedcert (SE), Schweizerischer Verein des Gas- und Wasserfaches (CH), Water Regulations Advisory Scheme (UK).

The countries mentioned by the interviewee in these respect are AT, DE, and NL. Indeed, the interviewee stated that initial product

certifications are sought and obtained in these MS, as the laboratories having the necessary technical instrumentation and know-how

for complex (mechanical and hygiene) testing are mainly settled there. Moreover, the interviewee company has a preference for

German speaking countries due to the absence of language barrier in interacting with test and certification bodies.

The problem of double and additional testing is particularly acute in some countries.

Stakeholders mentioned how Member States such as Spain, France, UK, and in general the

Scandinavian countries, can be seen as the most problematic in this respect. Businesses may

find double testing not only expensive in terms of fees to be paid to repeat the same test in

different Member States, but also extremely time consuming. The time that elapses between

the registration for tests and the certification of approval typically can span from six up to 12

months, and may even reach 24 months in more complex circumstances. For companies, this

obviously results in foregone profits due to the delayed market access.

Crucially, when businesses make the point of mutual recognition in dealing with national

authorities in other MS, the latter typically refer to the application of the relevant national

norms and legislation, rather than EU Legislation.

From the point of view of businesses, there is a generalized lack of awareness (if not

deliberate disregard) of the mutual recognition principle by national test and certification

bodies.

Moreover, interviewees reported “cherry picking” by national authorities, as some tests and

certifications presented by businesses can be accepted by some MS, while other tests shall be

repeated. Businesses are simply asked to comply with national requirements and test criteria,

even though their products underwent to the same testing in other countries.

However, businesses are reluctant to bring national authorities to court to see the principle of

mutual recognition applied. There are two main reasons behind this. First, businesses do not

want to see their long-lasting relationship with national authorities jeopardised just to seek the

application of mutual recognition to a single product. In other words, they prefer avoiding

confrontation with national authorities and complying with national requirements by repeating

tests, mainly because they are concerned about being treated unfavourably in the future.

Second, businesses are concerned that, in absence of harmonised rules at EU level on

hygienic testing, the enforcement of mutual recognition with respect to materials and products

in contact with drinking water may start a “race to the bottom” among producers with regards

to the quality of products, a fact which is expected to negatively impact the safety of

consumers. Finally, interviewed business associations also reported how among its members

there is a problem of awareness about mutual recognition. While companies dealing with

products in contact with drinking water are aware of and well-versed in relevant legislation

such as Regulation (EU) No 305/2011 (Construction Products Regulation) or Directive

98/83/EC (Drinking Water Directive), are less aware about the possibility of benefiting from

mutual recognition.

Food contact material

128

Food contact materials (FCM), including food packaging, are only partially harmonized at the

EU level and subject both to extensive national regulation and to extended practical scrutiny

by the competent authorities, which may be partially justified by the potential impact of these

products on public safety and more precisely public health.

The food and drink industry in general is the EU's biggest manufacturing sector in terms of

jobs and value added. The EU boasts an important trade surplus in trade in food and EU food

128

See annex 13 for the full case study

specialities are well appreciated overseas. In the last 10 years, EU food and drink exports have

doubled, reaching over €90 billion and contributing to a positive balance of almost 30 billion.

The FCM sector in particular has an approximate annual turnover of €100 billion.

The range of non-harmonised aspects of the FCM industry was recently examined through a

2016 JRC Study on the European regulatory and market situation of non-harmonised food

contact materials.

129

The Study found that due to the lack of harmonisation of materials listed

under the framework regulation the sector was subject to mutual recognition. Specifically, the

study highlighted a lack of detail in relation to requirements and quality assurance towards

declaration of compliance and supporting documents, certification where applicable, basis for

enforcement and sanctions. Tellingly, the Study argued that this was a hurdle for competent

authorities as well, rather than only for economic operators. Indeed, FCM is an industry in

which the Member States have a complementary authority, allowing them to exercise a

certain margin of discretion, but only within the limitations permitted by the FCM Regulation,

the procedural norms established in relation to EFSA

130

, and the logic of the Mutual

Recognition Regulation. From a Member State perspective, the mirror image of this

competence is the need to be relatively specific in relation to the criteria and processes that

they apply to make their decisions. This can be problematic in practice.

At the national level, requirements on declarations of conformity to be provided by economic

operators and supporting documents lack guidance and associated quality criteria. Self-

regulation can address this to some extent by providing additional sectorial guidelines, but it

is unclear whether these are known and applied in particular by SMEs.

National measures on specific materials are mainly based on lists of authorised substances and

corresponding restrictions. Close to 8,000 substances were found. Some materials are

regulated by more than 10 Member States (metal, glass) and some only by a few (wood).

National rules for ceramics, glass and metals/alloys cover about 15 heavy metals and ban

substances such as barium and mercury. There are between 100 and over 5,000 substances

authorised for each category of the other materials. Only 15-35 % of substances considered

nationally are in the lists that EFSA reported as being adequately risk assessed.

There is a lack of concerted strategies for the monitoring of various FCMs among Member

States. This can be perceived as a grey area for the systematic assurance of food safety. The

level of non-compliance is not greater overall for non-harmonised materials, but it is prevalent

for their imports. Enforcement also suffers from lack of standards or test methods.

To economic operators, the lack of transparency and accessibility on applicable requirements,

rules and procedures is the key challenge: when moving from one Member State to the next, it

is challenging to identify (a) whether national rules exist; (b) who the competent authority is;

Regulation is a satisfactory solution.

The interrelationship between the FCM Regulation and the Mutual Recognition Regulation is

not clear to economic operators. In practice, there is significant familiarity with the FCM

Regulation as such and with applicable rulesets in major markets, but economic operators are

129

Non-harmonised food contact materials in the EU: regulatory and market situation, 2016, JRC; see

https://ec.europa.eu/jrc/en/publication/eur-scientific-and-technical-research-reports/non-harmonised-food-contact-materials-eu-

regulatory-and-market-situation-baseline-study

European food and safety authority

130

insufficiently aware of the principles and scope of application of the Mutual Recognition

Regulation and its ability to facilitate compliance with specific national rules. As noted in the

2016 study, this lack of clarity “leads industries to seek external legal advice, which adds to

costs and may result in lengthier authorisation processes and delayed market access. It can

also result in a greater focus on certification and accreditation systems at industrial level”.

Road circulation of mobile machinery

The mobile machinery industry

131

consists of a series of products across sectors (such as

agricultural machinery (excl. tractors), construction machinery, garden equipment, municipal

equipment). The total production value in the EU amounted to €10.3bn in 2013

132

. Despite the

existence of a number of EU harmonisation measures applying to mobile machinery

133

, the

road approval aspect of mobile machinery is not subject to EU harmonisation and thus mutual

recognition should apply. However, mobile machines are still facing a series of different

requirements across EU Member States when requesting road approval causing costs for

manufacturers, authorities, users and citizens.

The absence of harmonised requirements for the road circulation of mobile machinery in the

EU has led to these specific problems:

Different requirements for road circulation of mobile machinery are applicable in

different Member States. Road approval is necessary as required by the relevant

Member States. This procedure causes direct costs (administrative burdens for

manufacturers and regulatory charges – such as third party testing and other inspection

activities) and indirect costs to industry (time delays in the introduction of new

products, reduced product innovation etc.) as well as indirect costs to others

(administrative costs for MS governments, administrative burdens for dealers, time

delay in delivery etc.).

Compliance costs related to non-harmonised requirements are causing direct industry

costs (additional logistics, administrative translation, additional manufacturing & design

costs) which cause indirect industry costs (higher product prices, barriers to market

entry etc.). Based on the market power of the industry such costs may be further passed-

on to downstream clients (in the form of increased prices or different prices across

Member States, differentiated access to machines);

Costs caused by the application of the different national requirements consist of both direct

and indirect costs. Direct costs for the industry to comply with existing legislation add up to

€90 m in the EU. This corresponds to 1.3% of their turnover. Indirect industry costs were also

identified, such as time delays on the introduction of products, reduced innovation, higher

product prices or barriers to entry as well as reduced choice for consumers and administrative

burdens for national administrations. Barriers to market entry are impacting above all SMEs

who consider it too challenging to enter new Member States markets and to comply with their

specific rules, more than other firms.

131

132

133

Mobile machinery refers to any self-propelled mobile machine or vehicle, with a maximum design speed higher than 6 km/h,

running on tyres and that is not intended for carrying passengers or goods on public roads

Study on the EU harmonisation of the requirements for the road circulation of mobile machinery – FWC

ENTR/172/PP/2012/FC/Lot1. http://ec.europa.eu/DocsRoom/documents/17786/attachments/1/translations/en/renditions/native

Amongst others: NRMM Directive 97/68/EC, Outdoor Noise Equipment Directive 2000/14/EC, Machinery Directive 2006/42/EC,

Regulation (EU) No 167/2013

1.11.4

Costs for the Commission

The main costs incurred by the Commission are related to managing the implementation of

the Mutual Recognition Regulation and to the handling of notifications, complaints and

infringements in the area of Articles 34-36 TFEU. These costs can be estimated on the basis

of Full Time Equivalents (FTEs), for which a yearly gross salary of kEUR 60 has been

assumed, to which also 25% of overhead was added (75 000). It was assumed that one FTE

corresponds to approximately 220 effective working days. Additionally, there are the costs of

organising the Mutual Recognition consultative committee, estimated on the basis of the

number of experts participating and the amounts of travelling fees reimbursed.

Mutual Recognition Regulation

(per year)

1 FTE – EURO 75 000

Notifications, complaints and

infringements (per year)

3 FTEs – EURO 225 000

Mutual Recognition consultative

committee (per year)

EURO 9700

1.11.5

Benefits for national authorities

There are several benefits of mutual recognition for the national authorities.

First, mutual recognition brings

regulatory benefits

134

. These regulatory benefits are

perceived in the sense of ‘better regulation’. The mutual recognition principle respects

Member States' regulatory autonomy and diversity, as different coexisting national rules

should be considered as equivalent while at the same time ensuring that in cases where

consumer safety or health is at stake, derogations apply. Also, it avoids unnecessary

harmonisation at EU level, by allowing free movement of goods for products which are not

always designed and manufactured according to identical rules.

Second,

strategic benefits

135

can be achieved, as the functioning of the internal market is

enhanced without adding any new EU legislation. Economic operators are supposed to have

access to new markets while this access was hindered /blocked before the existence of mutual

recognition.

Finally,

economic welfare

136

is another benefit, as mutual recognition aims to facilitate free

movement of goods, thus enhancing competition, providing more and better choices to

consumers and offering new opportunities to businesses.

Further to the benefits of mutual recognition mentioned above, the Regulation was expected

to bring certain benefits, in terms of increased awareness of the mutual recognition principle,

and better information on the applicable rules in the Member States where the products are

lawfully marketed, allowing for a smoother application of the mutual recognition principle.

The expected benefits deriving from the obligation to notify administrative decisions denying

market access was supposed to discipline national authorities when applying the principle, as

134

135

136

Pelkmans (2012): Mutual recognition: economic and regulatory logic in goods and services

they have to justify why market access is refused. National authorities agreed, fully or

partially, with the benefits the Regulation brings.

Figure 7-16: Public consultation 2016- Member States views

Below are listed the main benefits the Mutual Recognition Regulation was expected to

have. Based on your experience, to what extent do you consider them to be realised?

48%

28%

17%

Better information on

national rules

Justification of

administrative decisions

denying market access

Reduced risk to see market

access denied

31%

26%

15%

26%

20%

48%

20%

Increased awareness

22%

I fully agree

I partially agree

I desagree

I dont know

44%

15%

1.11.6

Benefits for businesses

The main benefit that the mutual recognition principle and Regulation were expected to bring

were

an easier access to the market of other Member States;

economic operators may

exploit economies of scale by expanding into new geographical markets. Such changes should

be reflected in gains in competitiveness and productive efficiency, and should thus contribute

to the restoration of profit margins. In addition, it should foster innovation; the economies of

scale are crucially important for innovative firms that spend a large fixed cost in research and

development (R&D) and need a large internal market to cover these costs

137

. Furthermore, in

order to launch innovative new products on the market, businesses need to rely on existing

national rules or deal with the absence of such rules; a correct application of the mutual

recognition principle would not only facilitate free movement of innovative/new products but

could also increase a number or innovative products to be placed on the market

138

Following a proper application of the mutual recognition principle, the risk for enterprises that

their products will not gain access to - or will have to be withdrawn from - the market of the

Member State of destination would in many cases be reduced. A proper application of the

mutual recognition principle would also imply less need for multiple testing and certification,

and Member States would recognise products lawfully marketed in another member State and

therefore not require additional testing. Additionally, the Regulation has additional potential

benefits, as it is supposed to increase awareness of the principle and to facilitate access to

information about the applicable national rules.

In terms of benefits that the Regulation brings, the perceptions of businesses are quite mixed:

Figure 7-17: Public consultation 2016

137

138

See OECD Economic Surveys: European Union 2014, Thematic Chapter Reinvigorating the EU single market: http://www.oecd-

ilibrary.org/economics/reinvigorating-the-eu-single-market_5jxx3d3hk437-en.

The Innobarometer 2016 shows that the main barriers to commercialisation identified by business (including regulatory barriers)

confirm in particular the relevance of the Single Market Strategy to give a boost to innovation performance

Below are listed the main benefits the Mutual Recognition Regulation was expected to have. Based on

your experience, to what extent do you consider them to be realised?

38%

30%

14%

26%

28%

Better information on

national rules

32%

26%

15%

36%

21%

13%

41%

12%

Reduced risk to see market

access denied

I fully agree

16%

31%

13%

Increased awareness

I partially agree

I desagree

I dont know

Justification of

administrative decisions

denying market access

1.11.7

Benefits for consumers

In the case of an optimal functioning of mutual recognition, consumers would have access to

a wider variety of products, and would enjoy lower prices, due to the economies of scale

made by the manufacturers. Furthermore it can be assumed that consumers would also benefit

in terms of public interest protection, as a product lawfully marketed in another Member State

would be allowed in their own Member State only if it satisfactorily fulfils the same public

interest protection requirements

139

This is also supported by a recent study carried out by the European Parliament

140

, where the

benefits of removing remaining barriers to intra EU trade are evaluated. Although the study

does not directly estimate the effects on consumers, the study points out that it is expected that

EU consumers will benefit from a wider variety of supplies available for their consumption in

line with increased bilateral trade flows. Furthermore, rising trade flows increases competitive

pressure on domestic producers of goods and leads to lower prices for given products. The

study estimates that a reduction in barriers to intra-EU trade could lead to increases in trade

between Member States of a magnitude of more than 100 billion EUR annually.

1.11.8

Comparing costs and benefits

There are certain administrative costs resulting directly from the Regulation. For national

authorities, the main costs relate to implementing the PCPs network and deciding if mutual

recognition can be applied or not. For businesses, these relate to getting familiar with the

Regulation.

The main costs involved are rather due to the suboptimal application of mutual recognition

than to the application of the Regulation as such.

Member States

BENEFITS

COSTS

Implementing

Regulatory

139

Businesses

BENEFITS

COSTS

Easier access to

Information

Consumers

BENEFITS

Wider variety

Commission

COSTS

Mutual Recognition

140

BIS publication (2014) Measuring the benefits to UK consumers from the creation of the European Single Market, How theory

suggests the Single Market should create consumer benefits, mentions that "One main goal of the Single Market is the delivery of

benefits to consumers, including access to goods and services at lower prices and higher quality and larger product variety." These

are expected to be delivered via: "trade liberation (…), stronger competition (…), faster product innovation (…) and costs

reductions from legal and regulatory harmonisation."

See "The costs of non- Europe", study of the European parliamentary research service:

http://www.europarl.europa.eu/EPRS/EPRS_STUDY_536353_CoNE_Single_Market_I.pdf

(better

regulation,

regulatory

autonomy and

diversity, no

unnecessary

harmonisa-tion)

and functioning

of Product

Contact Points

EURO 7417-

47450

141

new markets

(opportunities)

(on the

applicable rules

in the Member

State of

destination)

10-500 hours

of supply

available

Regulation (per year)

1 FTE – EURO 75 000

Strategic

(enhanced

functioning of

the Single

Market)

Assessment of

products and

notification of

decisions

denying market

access

EURO 420 000

e.g. fertilisers

sector)

Reporting on

the

implementation

if the

Regulation

Lower

production costs

( no need to

retest/adapt)

Adaptation

EURO 1000-

150 000

142

Delayed

entry

on the market

EURO 3000-

500 000

143

Lost

opportunities

EURO

40 000-500

000

144

Notifications,

complaints and

infringements (per year)

3 FTEs – EURO 225

000

Economic

welfare

(enhanced

competition and

opportunities)

Better access to

information on

applicable rules

Lower prices

Mutual Recognition

consultative committee

(per year)

EURO 9700

It is not possible to compare costs and benefits in a reliable way. The costs observed cannot

be estimated globally, because of the variety of products and sectors involved, and because of

the lack of precise data related to the occurrence of market denial. The 2016 public

consultation provides the perception of stakeholders as to whether or not costs are

proportionate to the benefits. The results show that while Member States tend to consider that

the costs of the Regulation (which include the costs of the suboptimal functioning of mutual

recognition) are proportionate with the benefits it generates, businesses mostly disagree.

Figure 7-18: Public consultation 2016

Would you agree or disagree with the following statement: "these costs are acceptable and

proportionate to the benefits the Mutual Recognition Regulation brings in terms of facilitating market

access?

Businesses

Member States

35%

54%

62%

I don't know

I desagree

I agree

This perception can be justified by the fact that businesses reported important/ significant

costs while they did not really observe the expected benefits, due to the suboptimal

functioning of mutual recognition. As the 2016 public consultation shows, 87% of businesses

adapt their products instead of relying on mutual recognition. The costs incurred by national

authorities were considered normal costs that are usually incurred in enforcing legislation, and

thus proportionate with the benefits expected.

141

142

143

144

Based on Gross annual salaries for employees in public administration Eurostat

Per product and per market

1.11.9

Conclusion on efficiency

Overall, it can be concluded that the suboptimal use of mutual recognition creates additional

costs on businesses and prevents them from taking advantage of the benefits that mutual

recognition might bring. Due to the difficulty of gathering accurate data on mutual

recognition, it was not possible to establish the global costs incurred by businesses. But

sectorial evidence and the results of the different surveys and consultations carried out,

although not representative show that the costs are significant.

A better functioning mutual recognition would reduce the costs incurred by businesses when

they are obliged to adapt their products or to give up entering a market, while allowing all of

the benefits listed above. A study done for the European Parliament

145

shows that a reduction

of barriers to trade could lead to an increase in intra-EU trade of more than 100 billion EUR

per year. The fact that mutual recognition does not function well is, de facto, a regulatory

burden triggering barriers to trade. Therefore, any efforts to improve the functioning of

mutual recognition would result in simplifications for businesses, e.g. easier access to

markets. The remaining costs (information costs and costs related to implementing the

Regulation) would become negligible in the light of the full benefits achieved.

1.12 Coherence: how mutual recognition fits in the other EU policies

Several initiatives relevant for mutual recognition have been identified:

Directive (EU) 2015/1535 laying down a procedure for the provision of information in

the field of technical regulations and of rules on Information Society services

146

. The

Directive contributes to ensuring higher and better mutual recognition by requiring Member

States to notify the Commission and each other of any draft ‘technical regulations’ for

products before they are adopted in national law, with a view to boosting transparency and

control with regard to those regulations. Since national technical regulations might create

unjustified barriers to trade between Member States, notification in draft form and subsequent

evaluation of their content in the light of the mutual recognition principle help to diminish this

risk. As for the relationship between the Directive and the Regulation, they have differing

objectives. The Directive seeks to prevent trade barriers in the form of ‘technical regulations’

before they are adopted, by enabling the Commission and Member States to verify that the

technical rule is compatible with EU law. The Regulation applies after a ‘technical rule’ has

been adopted; it seeks to ensure that any authorities taking decisions based on such rules

apply the principle of mutual recognition correctly in individual cases. The two acts are

applied at different stages in the life cycle of a technical rule. While the Directive is a

preventive mechanism which precedes the adoption of a technical rule, the Regulation is a

corrective measure once the rule is in force, ensuring on a case by case basis that the rule is

being applied correctly. On the basis of the above, it appears that there is no incoherence or

duplication between the mutual recognition principle / Regulation and the Directive. Rather,

the analysis carried out shows several synergies. The main synergy which can be highlighted

relates to the inclusion of a mutual recognition clause in the draft technical regulations

notified to the Commission. Other synergies relate to flagging sectors and areas where

145

The Cost of Non- Europe in the Single Market, 'Cecchini Revisited', An overview of the potential economic gains from further

completion of the European Single Market, CoNE 1/2014

http://www.europarl.europa.eu/RegData/etudes/STUD/2014/510981/EPRS_STU(2014)510981_REV1_EN.pdf

OJ L 241, 17.9.2015, p. 1–15

146

Member States tend to regulate intensively, and where challenges may arise in terms of

applying the mutual recognition principle.

Directive 2001/95/EC on General Product Safety

147

(including the RAPEX

148

mechanism)

ensures that products placed on the EU market are safe. The directive applies to non-

harmonised consumer products. The Regulation also operates in the non-harmonised area, but

do not apply to measures taken under Directive 2001/95 and concerning products posing a

risk to the health and safety of consumers. The Regulation applies where the competent

authorities of a Member State intend to prohibit the marketing or use of a non-harmonised

consumer product, lawfully marketed in another Member State, on the basis of a technical

rule and for reasons other than a risk to the health and safety of consumers. This is the case,

for example, when a product is not allowed to be marketed for reasons based on the

denomination, size, composition or packaging, or for environmental reasons. The analysis

carried out on the coherence between these two legal instruments suggests that certain specific

administrative decisions are excluded from the scope of the Regulation, while others are

covered. Furthermore the analysis did not result in finding any clear explanation of the

rationale for the differentiation and that this differentiation could generate a risk of confusion

among national authorities and economic operators.

The relationship between the Directive and the Regulation is addressed in article 3.2 a) of the

Regulation, on the basis of which it appears that the Regulation does not apply to the

following administrative decisions:



temporary ban on the supply, the offer to supply or the display for however long is

needed for the various safety evaluations, checks and controls for any product that

could be dangerous (article 8(1)(d) of the GPSD);

ban on the marketing and introduction of the accompanying measures required to

ensure the ban is complied with for dangerous product: (article 8(1)(e) of the GPSD);

order for or organisation of the actual and immediate withdrawal, and alert to

consumers of the risks presented; order for or coordination – or, if appropriate,

organisation together with producers and distributors – of the recall from consumers

and the destruction of any dangerous product already on the market (article 8(1)(f) of

the GPSD);

any of the measures mentioned above as well as the requirement to mark with clearly

worded and easily comprehensible warnings on the risks, to make the marketing subject

to prior conditions to make the product safe and to order that persons to whom the

product could pose risks are given warning in good time and in an appropriate form

including the publication of special warnings, for products posing a serious risk (article

8(3) of the GPSD).



Furthermore, the Regulation does not apply to certain measures, such as the organisation of

appropriate safety checks on the safety properties of any product, the request of all necessary

information from the parties concerned and the decision to take samples of products and

147

148

OJ L 11, 15.1.2002, pp. 4-17

Rapid Alert System established under Directive 2001/95 on General Product Safety

subject them to safety checks (Article 8(1)(a) of the GPSD), as these are not administrative

decisions taken on the basis of a technical rule in the sense of article 2 of the Regulation.

A contrario, the Regulation would apply to the following administrative decisions:



the requirement to mark with clearly worded and easily comprehensible warnings on

the risks, to make the marketing subject to prior conditions to make the product safe

and to order that persons to whom the product could pose risks are given warning in

good time and in an appropriate form including the publication of special warnings, for

products that could pose a risk in certain conditions and for products that could pose

risks for certain persons (article 8(1) (b) and (c) of the GPSD).

Regulation (EU) No 305/2011 on construction products

149

sets up Products Contact Points

for Construction (PCPCs). Article 10 of The Regulation requires each Member State to

nominate a Product Contact Point for Construction in order to "provide

information, using

transparent and easily understandable terms, on the provisions within its territory aimed at

fulfilling basic requirements for construction works applicable for the intended use of each

construction product”.

The Mutual Recognition Regulation, and in particular the

requirements related to Product Contact Points (PCPs) complements coherently the PCPCs.

The objective of the PCPCs is very similar with the objective of the PCPs under mutual

recognition; furthermore, many construction products belong to the non-harmonised area. The

importance of the construction sector both in terms of variety and complexity of products

covered and number of active economic operators justify the existence of a specific PCP for

construction products. Nevertheless, in numerous Member States, the PCPC and the PCP

have been merged, in order to offer a "one single entry point" for businesses. Thus, it appears

that that there is no incoherence or duplication between the mutual recognition principle /

Regulation and the Construction Products Regulation. Rather, the analysis carried out shows

synergies between the two and guidelines

150

have been published for maintaining consistency

between PCPs and CPCPs.

The SOLVIT network

151

is a service provided by the national administration in each EU

Member State, and in Iceland, Liechtenstein and Norway. It helps business when their rights

are breached by public authorities in another EU Member State, by aiming to find a solution

within 10 weeks. Thus, SOLVIT may be used, as an alternative, by businesses when facing a

national decision denying or restricting market access on the basis of the mutual recognition

principle.

The proposal for an

EU Single Digital Gateway

152

is expected to introduce a new obligation

to provide information on national product rules online on a website, instead of upon request

like currently. Member States will need to provide a summary of the applicable rules for

product categories, but may also refer to the assistance services for more detailed information

tailored to specific products. This follows good practices already adopted by many Member

States.

153

It is expected that having access to the information online will facilitate the

accessibility and awareness of the role of PCPs and of national product rules by businesses. In

149

150

151

152

153

OJ L 88, 4.4.2011, p. 5–43

Study performed by Ecorys (final version and link not available)

http://ec.europa.eu/solvit/what-is-solvit/index_en.htm

http://ec.europa.eu/DocsRoom/documents/22761

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

Annex 12 of the Evaluation.

addition, this initiative is expected to improve the functioning of PCPs by setting out quality

criteria and the obligation to provide information online.

EU harmonisation legislation

and mutual recognition are fully complementary. Free

movement of goods in the internal market is ensured through EU common rules on products

(EU harmonisation legislation) and the principle of mutual recognition. EU harmonisation

legislation sets out common requirements on how a product has to be manufactured, which

includes rules on i.e. characteristics of the product, size, composition, etc. Its aim is not only

to eliminate barriers to the free movement of goods in the single market, but also to ensure

that only safe and otherwise compliant products find their way onto the EU market, in such a

way that honest economic operators can benefit from a level playing field, thus promoting at

the same time an effective protection of EU consumers and professional users and a

competitive single market. The adoption of EU common rules prevents Member State from

regulating those technical aspects of products and products complying with such rules are

guaranteed free movement across the single market. However, EU harmonisation legislation

covering every product and aspect of product is neither a feasible nor a desirable objective.

Adopting EU common rules is a costly and time consuming process, where a balance needs to

be struck between different approaches and should be reserved for those products and aspects

of products where there are significant barriers to the free movement across the Single Market

which cannot be addressed otherwise. Where there are no EU common rules, or when

products are only partially covered by EU common rules, Member States remain free to adopt

national technical rules laying down requirements to be met by those products, such as rules

relating to designation, form, size, weight, composition, presentation, labelling or packaging.

The results of the 2016 public consultation confirm the analysis carried out above. There is a

consensus among stakeholders as regards the coherence of the Regulation with regard to other

EU pieces of legislation. Most of the respondents are not aware about any overlaps between

the Regulation and other initiatives/legislation/policies. A minor part of respondents indicated

that there are some overlaps linked to SOLVIT

154,

RAPEX

155

, ICSMS

156

and Regulation

765/2008 on market surveillance

157.

However, the analysis of their individual replies shows

that their perception is due to a misunderstanding of the EU legislation identified rather than

to real overlaps.

Figure 7-19: Public consultation 2016

154

155

156

157

http://ec.europa.eu/solvit/index_en.ht

See above 139

Internet-supported information and communication system for the pan-European market surveillance

OJ L 218/30, 13.08.2008

Are you aware of any overlaps between the regulation and other EU initiatives

84%

71%

70%

Member States

Businnesses

28%

15%

29%

Citizens

Yes

7.3.1 Conclusion on coherence

Overall, the internal analysis carried out, confirmed by the results of the 2016 public

consultation show that there does not seem to be any contradiction between mutual

recognition and other EU policies for achieving the internal market and facilitating the free

movement of goods in the EU. Rather, the mutual recognition principle and the Regulation

complement and are coherent with a number of initiatives in this area, as described above.

1.13

Relevance: assessing the continuous need for mutual recognition

Mutual recognition is "one of the most appreciated innovations of the EU"

158

, as it aims to

achieve a deep market integration while respecting diversity and regulatory autonomy among

Member States. It is seen as an alternative to harmonisation, when the latest is not necessary,

justified and proportionate. However, the application of the mutual recognition principle in

practice proved to be very challenging. The adoption of the Mutual Recognition Regulation

aimed to enhance and improve the application of the mutual recognition principle and thus

reduced some of the costs incurred by businesses.

To what extent is mutual recognition still relevant to its stakeholders?

Businesses still encounter problems when trying to sell in Member State products lawfully

marketed in another Member State. Member States need to retain their regulatory autonomy

and diversity while supporting the competitiveness of their economic operators and allowing

them easy access to markets. Whenever there are national technical rules, there will be a need

to ensure the mutual recognition of those in order to guarantee the free movement of goods. A

recent study

159

shows that around 0.99 million enterprises

160

were operating within the non-

harmonised area, representing more than 50% of the total number of active enterprises in the

manufacturing economy. At EU28 level, more than 8 million persons are employed in the

non-harmonised area, representing around 31% of all persons employed in the manufacturing

sector). Furthermore, the (average) annual value of intra EU exports

161

of non-harmonised (or

158

159

160

161

"Mutual recognition: economic and regulatory logic in goods and services", Bruges European Economic Research Papers, 2012,

Jacques Pelkmans

Study on the cost and benefits of the revision of the Mutual recognition Regulation (EC) No 764/2008, February 2017

Over the period 2012-2014

Over the period 2008-2015

partially harmonised) goods has been equal to €335 billion, while the contribution of

enterprises in the non-harmonised (or partially harmonised) area is around 20% of the total

value of market sales of manufacturing sectors (€1, 158 billion out of €5, 690 billion).

Furthermore, mutual recognition is particularly relevant for supporting innovation. In the area

of new innovative products, there are no European harmonised rules, and businesses need to

rely on existing rules/standards at national level, or even to deal with the absence of such

rules. Mutual recognition is the only alternative for businesses wishing to market their

new/innovative products in other Member States. Recent data

162

shows that more than two

thirds of EU companies have introduced at least on innovation since 2013, and four in ten EU

companies have introduced new or significantly improved products. For the majority of

companies, innovative goods accounts for between 1% and 25% of their turnover (67%) while

a further 17% say that they account for more than 26% of their turnover. The relevance of

mutual recognition in this area is also supported by the fact that 57% of EU companies

consider that the cost and complexity of meeting regulations or standards is a problem for the

marketing of innovative goods, and for 48% this is one of the reason why they have not

introduced innovative goods on the market since 2013. Furthermore, 18% of those that have

not introduced innovative products on the market believe that further support in relation to

how to meet regulations and standards is needed.

Lastly, mutual recognition is an alternative to harmonisation. In order to be cost effective,

harmonisation can be used only in sectors where the divergence of technical rules poses too

many problems to permit a proper application of the mutual recognition principle.

Furthermore, mutual recognition can achieve similar results to harmonisation with the

advantage of not triggering transition costs (as harmonisation does, which forces companies to

comply with new harmonised requirements that are likely to be different from the prior

national requirements).

Thus, mutual recognition remains a very relevant issue for stakeholders across the EU, as the

solutions it brings have the potential to address the needs of businesses and Member States.

This is also supported by the fact that during the consultation process

163

, stakeholders showed

a high interest in mutual recognition.

How well do the objectives set out in the Regulation (still) correspond to the current needs

within the EU?

Mutual recognition remains a much appreciated tool for achieving free movement of goods

while respecting Member States regulatory autonomy and diversity. The Regulation captured

well the practical difficulties of the application of the mutual recognition principle; these

difficulties remain valid and improving the application of the principle is still an objective

which corresponds to the current need of stakeholders to rely on a smooth functioning of the

internal market. This is confirmed by the results of the 2016 public consultation which shows

that most of the tools put in place by the Regulation are still useful and necessary.

Figure 7-20: Public consultation 2016: are the tools put in place by the Regulation still

useful and necessary?

162

163

Innobarometer 2016 – EU business innovation trends

See annex 2

Are these tools still useful and necessary?

84%

75%

64%

58%

80%

68%

58%

51%

58%

82%

76%

82%

Member States

Businnesses

Citizens

PCPs

Obligation to notify

Product list

Guidelines

Since the introduction of the principle and the entry into force of the Regulation, the

traditional way goods are being sold changed. Data

164

shows that more and more products are

being sold online; in the future, more and more products will be sold online, and the number

of online cross border transactions will increase. However, the way products are being made

available to consumers (in shops or online) has no impact on the fact that these products

should comply with the applicable rules and benefit from the free movement principle.

Economic operators are entitled to invoke their right to mutual recognition regardless of how

they intend to sell their products, provided that they are lawfully marketing them in one

Member State. What might be impacted is the Member States capacity to conduct market

controls and check those products which are sold online. Currently, market control procedures

are more adapted to the classic selling methods (shops), but it is expected that, due to the

increase of online sales, market control procedures will evolve in order to better capture those

products sold online.

7.4.1 Conclusion on relevance

The evaluation shows, that, overall, mutual recognition remains particularly relevant for

businesses, which still encounter obstacles to free movement of goods, and for Member

States, who still need to retain their regulatory autonomy. Mutual recognition remains also

relevant for innovative products, where there is a need to rely on existing national rules or to

deal with their absence. Furthermore, mutual recognition remains an alternative to

harmonisation, which can be used only where it is cost efficient, due to a very important

divergence of technical rules. This conclusion justifies the need for a continued effort to refine

and improve the functioning of mutual recognition and achieve full potential of the internal

market.

1.14

EU added value: Evaluating what mutual recognition brings to the EU

What is the EU added value of mutual recognition for stakeholders? To what extent do the

issues addressed by the mutual recognition provisions continue to require action at EU level?

164

http://ec.europa.eu/eurostat/statistics-explained/index.php/E-commerce_statistics

Following the stakeholders' consultation

165

, there is a general consensus among stakeholders

that mutual recognition brings added value to the EU. It gives the possibility to market in

other Member States products already lawfully marketed elsewhere, while maintaining

Member States' regulatory autonomy and diversity. It is widely acknowledged that the

objectives it sets out can be met only by acting at EU level. Throughout the consultation

process, stakeholders were almost unanimous as regards the necessity of having an EU legal

instrument for achieving more and better mutual recognition. This is because mutual

recognition only applies in cross border situations where an economic operator would like to

trade in other Member States a product already lawfully marketed in a Member State. Action

by Member States alone cannot solve problems associated with the application of the

principle of mutual recognition across the single market. To be effective, the application of

the principle needs to be based on harmonised procedures to be applied equally by all national

authorities. Only such harmonised procedures can guarantee that national authorities will

apply the principle in the same manner, thus allowing companies to benefit from an equal

treatment regardless of the country where they try to market their product. Leaving the

procedural aspects of the application of the mutual recognition principle to each Member

State would weaken the principle by dismantling the modus operandi into 28 different and

possibly contradictory procedures.

Figure 7-21: Public consultation 2016 – EU added value of mutual recognition

European common procedures on mutual recognition guarantee equal treatment of businesses,

regardless of where they want to sell their products

17%

I don't agree

26%

Citizens

Businnesses

Member States

76%

I agree

67%

84%

165

See annex 2

European common procedures on mutual recognition guarantee that national authorities apply the

principle in the same manner European common procedures on mutual recognition guarantee that

national authorities apply the principle in the same manner

29%

I don't agree

35%

15%

Citizens

Businnesses

Member States

64%

I agree

52%

68%

What would be the most likely consequences of repealing the mutual recognition provisions?

The mutual recognition principle arises from articles 34-36 TFEU and has been further

developed on the basis of the Court's jurisprudence. It cannot be repealed as such. In case of

repealing the Regulation, the mutual recognition principle would continue to apply. This

means that economic operators would no longer have any procedural guarantees in case

market access is denied. They would no longer have access to PCPs, when information on the

applicable national rules is needed. Generally, businesses and national authorities would be

reluctant to apply the mutual recognition principle alone, as they were before the adoption of

the Regulation, in the absence of harmonised procedural guarantees. They would follow, de

facto, the applicable national rules. In principle, this would mean going back to the baseline as

it existed before the adoption of the Regulation.

Figure 7-22: Public consultation 2016

The absence of European common procedures on mutual recognition would weaken the principle by

dismantling its application into 28 different and possibly contradictory procedures and undermine the

internal market

I don't agree

11%

76%

85%

82%

Citizens

Businnesses

Member States

I agree

7.5.1

Conclusion on EU added value

The evaluation shows that there is a high consensus among stakeholders that mutual

recognition brings added value to the EU, as it allows free movement of goods already

lawfully marketed in one Member State while respecting Member States regulatory

autonomy. Repealing the Regulation would mean depriving businesses of any procedural

guarantees when invoking the mutual recognition principle.

ONCLUSION

There is a general consensus among stakeholders that mutual recognition in the fields of

goods has the potential to bring added value to the EU. It gives the possibility to market in

other Member States products already lawfully marketed elsewhere. However, the evaluation

of the mutual recognition principle shows that it is not functioning as it should. The majority

of businesses wishing to sell products in another Member State declare that they check the

applicable rules in that Member State, and, if these rules prevent them from selling the

product, they don’t rely on the principle of mutual recognition but most of them adapt the

product to those rules. Where businesses try to rely on the principle of mutual recognition,

national authorities often deny market access to those products.

Whilst the Regulation was adopted to facilitate the application of the principle of mutual

recognition, generally, the evaluation shows that only few economic operators consider that it

is easier to sell products in other Member States since the Regulation entered into force.

The Regulation had a very moderate effect with regards to the objectives settled, mainly

because the procedural requirements it put in place proved to be insufficient to ensure an easy,

reliable and user-friendly application of the mutual recognition principle. It had limited effects

in raising awareness of the mutual recognition principle; still many economic operators and

national authorities are not fully aware of the principle and its practical implications, and

stakeholders, throughout the consultation process, were unanimous with regards to the

necessity to continue efforts in raising awareness. Member States and citizens consider that

this should be the Commission's first priority, while businesses ranked fourth.

Legal certainty remains an issue and makes users reluctant towards mutual recognition.

Businesses ranked the need to increase legal certainty when using mutual recognition as the

second priority for the Commission. The evaluation shows that the lack of knowledge as

regards the scope of mutual recognition makes economic operators reluctant to use the

principle for entering new markets. Determining if a product might benefit from the mutual

recognition principle is not straightforward, as mutual recognition applies to a very wide

range of products, i.e. products or aspects of products which are not covered, fully or

partially, by EU harmonisation legislation. Also, there are many uncertainties when it comes

to demonstrating that products have been lawfully marketed in a given Member States.

Furthermore, the difficulty to challenge administrative decisions that deny or restrict market

access has been pointed out as a reason for not relying on mutual recognition. Businesses

ranked this as being the main obstacle to using mutual recognition, and the first priority for

the Commission; they were supported by Member States, who ranked this as the third priority.

Although the actual number of administrative decisions denying or restricting market access

is unknown, the evaluation of the functioning of mutual recognition shows that economic

operators are often faced with such administrative decisions. Administrative cooperation

remains limited, despite the fact that the PCPs network, even if not used at its full capacity, is

judged useful my most stakeholders. Member States called on improving the current system,

by integrating PCPs in a wider network in order to gain expertise and by enhancing

administrative cooperation.

Stakeholders consulted throughout the evaluation were unable to quantify the cost-saving

brought by the principle and Regulation. A study done for the European Parliament

166

tried to

estimate the magnitude of the impact that non-tariff barriers to trade have on the internal

market. It concluded that a reduction of such barriers could lead to an increase in intra-EU

trade of more than 100 billion EUR per year. While the concept of non-tariff barriers in the

paper is broader (including not only lack of mutual recognition or harmonisation but also

discriminatory procedures and less favourable tax or subsidy treatment), it provides an

indication that the problem of mutual recognition not working well in practice is economically

significant. Due to the ineffective application of the principle of mutual recognition, goods

lawfully marketed in one Member State are generally not being sold in another Member State

without adaptations to national rules. This leads to barriers to free movement of goods; in the

absence of harmonisation legislation, a single market for goods is thus far from being

achieved. Economic operators are not benefitting fully from the internal market and their

existing rights. National authorities rely on their own national rules which may undermine the

free movement of goods. The qualitative input received during the consultation process also

points into the direction that mutual recognition, when working optimally, has the potential to

reduce costs and generate benefits.

Throughout the consultation process, stakeholders were almost unanimous with regards to the

necessity of enhancing the existing tools for achieving higher and better mutual recognition.

166

The Cost of Non- Europe in the Single Market, 'Cecchini Revisited', An overview of the potential economic gains from further

completion of the European Single Market, CoNE 1/2014

http://www.europarl.europa.eu/RegData/etudes/STUD/2014/510981/EPRS_STU(2014)510981_REV1_EN.pdf

NNEX

1: P

ROCEDURAL

NFORMATION

In December 2013, the Conclusions on Single Market Policy, adopted by the Competitiveness

Council, recalled that to improve the framework conditions for businesses and consumers in

the Single Market, all relevant instruments should be appropriately employed, including

harmonisation and mutual recognition. The Commission was therefore requested to report to

the Council on the sectors and markets where the application of the principle of mutual

recognition is economically most advantageous, but where its functioning remains insufficient

or problematic.

In response to the Council request and the indications that the functioning of the principle

might not be optimal, the application of the principle of mutual recognition was subject to an

external evaluation

167

. Its objective was to assess the functioning of the application of the

principle and identify the shortcomings and on this basis, to identify possible ways to improve

its application. The evaluation of the principle of mutual recognition was part of the REFIT

agenda in 2014. This exercise did not include a full ex-post evaluation of the Mutual

Recognition Regulation but provided some indications on its current performance.

Thus, the purpose of this exercise is to have a full ex-post evaluation of the Mutual

Recognition Regulation, in order to assess the main difficulties encountered and follow-up on

the implementation of the Single Market Strategy with respect to mutual recognition, and in

particular on the proposal to revisit the application of the principle of mutual recognition and

the implementation of the Mutual Recognition Regulation with a the view to ensuring higher

and better mutual recognition. This initiative is part of the Commission's 2017 Working

Programme

168

An Inter-Service Steering Group (ISSG) chaired by DG GROW was set up in October 2015

and with the participation of the following Directorates General: Legal Service of the

Commission (LS), Secretariat General (SG), DG Agriculture and Rural Development (AGRI),

DG Economic and Financial Affairs (ECFIN), DG Energy (ENER), DG Environment

(ENV), DG Justice and Consumers (JUST), DG For Mobility and Transport (MOVE), DG

Health and Food Safety (SANTE), DG Taxation and Customs Union (TAXUD), DG Trade

(TRADE), DG Maritime Affairs and Fisheries (MARE). The ISSG met in total nine times

(29/01/2016, 07/03/2016, 21/04/2016, 29/09/2016, 28/11/2016, 27/01/2017, 13/02/2017,

27/02/2017 and 06/03/2017).

The Regulatory Scrutiny Board (RSB) of the European Commission assessed a draft version

of the present evaluation and issued its positive opinion on 07/04/2017. The Board made

several recommendations to further improve the report. Those were addressed in the revised

report as follows:

RSB recommendations

(B) Main considerations

The Board gives a positive opinion, but

considers that the report should be improved

with respect to the following key aspects:

Modification of the report

167

168

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

COM(2017)710 Final

(1) There is scope to improve the description

and the relative importance of the main

problems encountered in the application of

the mutual recognition principle and the

corresponding Regulation. Why do the key

instruments put in place by the Regulation

not deliver?

(2) While being a REFIT evaluation, it does

not clearly estimate existing regulatory

burdens on companies or public

administrations, or the potential for cost

savings.

This recommendation has been addressed

thorough the text, by adding relevant data

collected during the study supporting the

impact assessment on the revision of the

Mutual Recognition Regulation.

Clarifications on the REFIT aspects have

been added in sections 7.1.5 and 7.2.9 of the

SWD.

(3) The report does not provide clear

conclusions on whether the Mutual

Recognition Regulation remains relevant or

not, or on the extent to which there is scope

to remedy its ineffectiveness.

The conclusions have been amended

accordingly; see more specifically sections

7.1.4, 7.1.5, 7.2.9, 7.3.1, 7.4.1, 7.5.1 and 8 of

the SWD.

recommendations for improvement

(1) Effectiveness and magnitude of the

problem

The report gives indications that the

application of the mutual recognition

principle and the related Regulation do not

work properly. However, it does not provide

robust evidence to show the extent of the

problem. It should use information from the

parallel draft impact assessment to estimate

the magnitude of the problem (with the

necessary caveats). In particular, it should

further assess bottlenecks of the main

delivery mechanisms: Contact

Points in the national administrations,

Commission database, mutual recognition

clause in technical specifications. The report

should differentiate between technical

difficulties, lack of resources for

The problems have been completed with

useful data collected during the study

supporting the impact assessment on the

revision of the Mutual Recognition

Regulation (more specifically, see section

7.1 of the SDW). Explanations on the

robustness of the data collected during the

public consultations have been added in

section 5 and 7.1.4 of the SWD.

enforcement, lack of awareness and political

reluctance.

The presentation of the results of the open

public consultation should mention that they

are not statistically representative. The report

should better explain why it considers that

the replies provide a reliable basis to

substantiate the assessment.

(2) Baseline

The baseline should analyse how the

situation would have evolved without the

Regulation.

It should show to what extent the observed

evolution correspond to the estimates

foreseen in the 2007 impact assessment

accompanying the Regulation. It should also

show to what extent the objectives of the

Regulation were attained or not.

Information on the 2007 impact assessment

was added in section 2.1 of the SWD.

(3) Efficiency

The report should quantify costs and benefits

as much as possible and identify the

unnecessary regulatory burden. This is

particularly important given the REFIT

dimension.

The report should clearly indicate the efforts

made to obtain quantified data. The

evaluation should compare figures against

other estimates available (from statistics,

studies, etc.) to show their robustness.

(4) Relevance

The report should discuss in this section how

the lack of effectiveness of mutual

recognition (both the principle and the

Regulation) has no apparent major negative

effects on the goods markets. In particular,

the report should assess the relevance of the

main measures of the Regulation, given their

lack of effectiveness. The report should

This recommendation has been addressed by

amending sections 7.1.5 and 7.2.9 of the

SWD.

This recommendation has been addressed by

amending sections 7.4 and 7.4.1 of the SWD.

better analyse how new developments in e-

commerce affect mutual recognition and its

application.

(5) Conclusions

The evaluation should present clear

conclusions and underpin the statements with

evidence. It should elaborate on the

applicability of the mutual recognition

principle, on whether the related Regulation

remains relevant and to what extent there is

scope to improve its effectiveness. It should

also assess the usefulness and functioning of

the main elements of the Regulation, for

instance of the Product Contact Points or of

the mutual recognition clause.

The overall conclusions (e.g. on

effectiveness and efficiency) should be

consistent with the findings of previous

sections. The report should present the

limitations of the available evidence more

transparently.

The report should draw lessons from the

suboptimal functioning of the monitoring

and reporting framework. It should further

explain how the DG would collect more

reliable data for monitoring purposes.

The conclusions have been amended

accordingly; see more specifically sections

7.14, 7.1.5, 7.2.9 and 8 of the SWD. The

collection of data for improving monitoring

has been addressed in section 5 of the SWD.

NNEX

2: S

TAKEHOLDER

ONSULTATION

OBJECTIVES OF THE CONSULTATION

The 'Single Market Strategy' (COM(2015)550 of 28.10.2015) highlights the need to

strengthen the single market for goods in the field of mutual recognition. This principle

allows products lawfully marketed in a Member State and not subject to European

harmonisation legislation to enjoy the right of free movement, despite a lack of compliance

with the national technical rules of the Member State of destination. However, the principle is

not yet used at its full potential as shown in a recent evaluation of the mutual recognition

principle.

To improve the application of the mutual recognition principle, the Commission will present

an EU-wide Action Plan to raise awareness of the principle of mutual recognition. The plan

will also include specific actions to be taken for sectors in which mutual recognition could

achieve the greatest increase in EU competitiveness (e.g. construction). The Commission will

also investigate the need for a revision of Regulation (EC) No 764/2008 to ensure a better

application among businesses and national authorities. The objective of the consultation was

therefore to seek stakeholders' views on the current and future application of Mutual

Recognition.

1.1

Consultation methods and tools

The

members of the Mutual Recognition Consultative Committee

169

were asked to

provide their feedback during their latest meetings on

2 December 2015

and

25 October

2016.

public consultation in all EU official languages

has been published on a consultation

website hosted on

Europa.

The consultation has run from June to September 2016.

The public consultation has been supplemented by a

stakeholder conference

organised by

the Commission on

17 June 2016.

2.1

RESULTS OF THE CONSULTATION ACTIVITIES

Meetings of the Mutual Recognition Consultative Committee

The consultative “Mutual Recognition Committee” held its seventh and eighth meetings on 2

December 2015 and 25 October 2016 respectively. The Committee's members are

representatives of Member States dealing with mutual recognition issues. The Commission

presented the envisaged actions for raising awareness of mutual recognition and asked for

feedback and input on these actions. Member States welcomed the activities presented and

stressed the importance of awareness raising in relation to a correct application of the mutual

recognition principle. The Commission presented also a preliminary analysis of the main

problems generated by the suboptimal functioning of mutual recognition, as identified in the

framework of the ongoing evaluation. The delegates agreed that mutual recognition should

not be only a right that economic operators may invoke, but also a principle that national

authorities should apply. Furthermore, the Commission presented the preliminary options for

improving mutual recognition and asked for feedback from the delegations. Some

169

The members of this Committee are the national authorities responsible for mutual recognition in the 28 Member States and in

Iceland, Liechtenstein, Norway, Switzerland and Turkey. Representatives of other third parties or other experts may be invited to

participate on a specifc topic, on a case by case basis.

representatives were not convinced that there are benefits in fully revising the Regulation,

whilst all of them agreed that some adjustments are necessary and that many of the problems

can be solved with the actions foreseen in the Action Plan.

The participants also supported the option to clarify the scope of the Regulation, and mainly

the mutual recognition principle, thus articles 34-36 TFEU, where guidelines are more

appropriate to achieve this objective. The Commission also proposed having a clearer mutual

recognition clause, such as a standard model, which could be adapted to particular cases,

would be proposed, for systematic integration in new national technical rules. Another point

discussed was the need for an updated and user friendly product database.

The Commission presented then the possible introduction of a declaration of compliance with

the technical rules of the Member State where the product is being lawfully marketed, to

facilitate the access of this product to the market of the other Member States. The declaration

would offer a presumption of compliance for the economic operator; this presumption could

be rebutted by national authorities, who would be tasked with proving non-compliance. Some

Member States considered that this option would introduce a significant administrative

burden on economic operators but market surveillance authorities would welcome such

declaration, as it would facilitate their tasks.

Another point discussed was the introduction of incentives for national authorities to ensure

that they comply with the obligation to notify administrative decisions denying or restricting

mutual recognition. More transparency for these decisions would be an incentive for Member

States to apply the mutual recognition principle, as it would render less acceptable the

absence of notifications or the lack of a proper justification in supporting the administrative

decisions to be notified. Using an IT tool for allowing Member States to notify would also

give all notifications more visibility. Furthermore, the Commission examines the possibility

of creating a new fast track mechanism which would be an alternative to the costly and

lengthy court procedures currently available. It would be inspired by the "safeguard

procedure" operating in the area of products covered by Union harmonisation legislation,

which allows a Member State or the Commission to intervene in order to challenge a national

decision which is considered to potentially breaching EU law. The fast track appeal procedure

would be very quick (no longer than 3 months), and free of charge for businesses, as any

other complaint they may address to the Commission. The option of a system of prior

authorisation to placing products on the market was presented afterwards. Products lawfully

marketed in the market of one Member State would be placed on the market of another

Member State only after a prior examination of the product by the receiving Member State.

Many Member States expressed their opposition to this option, as it would hinder the free

movement of goods.

Another point of discussion was the option of ensuring free movement of goods guaranteed

by compliance with European standards. This implies the recognition, by the Commission,

and after consultation of Member States, of certain European standards in the area of non-

harmonised goods via implementing acts. This option refers only to already existing European

standards and not to mandating the developments of new ones. Member States considered

that focusing on essential requirements is more beneficial than using standards.

Additionally, the Commission sought the Member States' opinions on the option of

strengthening of the role of the Product Contact Points in order to provide information on all

applicable rules for all products. Member States supported this option as the Product Contact

Points lack resources and staff. The Commission proposed also the integration of the Product

Contact Points in a wider network, e.g. the Single Digital Gateway. Delegations consider that

the Single Digital Gateway initiative is not advanced enough in order to able to provide input

on this option.

Another option presented was the harmonisation of certain basis requirements. Member States

were strongly against this option, since partial harmonisation only for the sake of free

movement does not bring benefits proportionate to the level red tape it adds.

2.2

Stakeholder conference of 17 June 2016

A stakeholders' event was organised on 17 June 2016, to identify the main issues relating to

the functioning of mutual recognition and to identify possible ways forward. 144 participants

attended the event, representing businesses (62), national authorities (60) and others (22),

such as consumer organisations, representatives of trade unions. The detailed minutes of this

conference can be found at:

http://ec.europa.eu/DocsRoom/documents/17963.

2.2.1 Main meeting

Knut Sauerbier,

responsible for product compliance and IP at BRITA, explained how

mutual recognition functions for businesses by providing the example of drinking water

treatment.

Camilla Hjermind,

Head of Division of International Relations of the Danish Business

Authority of the Ministry of Business and Growth presented the practical difficulties

encountered while applying the principle of mutual recognition.

Jacques Pelkmans,

Senior Fellow at CEPS in Brussels and visiting Professor at the College

of Europe, outlined the main problems faced with mutual recognition, one of the EU's greatest

innovation.

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

discuss the topics.

2.2.2 Workshops

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

more practical approach

The first workshop was held on the topic of proving and assessing the lawful marketing of

products in another Member State. The participants were to discuss a more practical approach

on this issue. The workshop gathered around 30 participants and had a balanced

representation of national authorities, businesses and associations.

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

The second workshop discussed how to make mutual recognition a practical tool for

businesses. The workshop involved 46 stakeholders. Participation was well balanced among

national authorities, businesses, associations and Commission services. The workshop was

moderated by Annette Dragsdahl, Senior Adviser at the Confederation of Danish Industry.

2.3

Public Consultation

153

replies were received during the public consultation. Businesses were strongly

represented (91), followed by Member States authorities (45), and citizens (17). This includes

respondents that did not want their replies published: 16 businesses, 9 authorities and one

citizen. The remainder of the respondents agreed to have their response published either fully

or anonymously. All replies are included in the statistics.

45 authorities

from Member States replied to the public consultation. 31% are Product

Contact Points, the rest are other authorities involved in this area. Among the group of

citizens there are two consumer organisations. Individual companies (44) and business

organisations (44) were equally represented, while only 3 chambers of commerce replied to

the consultation. In terms of company size, the responses are roughly balanced between small

and large

170

companies.

In terms of activity sectors,

manufacturing is the most represented sector (46%), followed

by wholesale and retail trade (13%), agriculture, forestry and fishing (8%) and water

supply (6%).

The geographical representation is quite well balanced for businesses. As for national

authorities, 18 Member States and Norway participated in the public consultation. No replies

were received from Cyprus, Denmark, Finland, France, Greece, Ireland, Luxembourg, Malta

and UK. The majority of consumers chose not to indicate their country of establishment.

The numbers and percentages used to describe the distribution of the responses to the public

consultation derive from the answers provided under the EU-Survey tool.

2.3.1 How stakeholders see mutual recognition and its potential shortcomings

The majority of responding companies wishing to sell products in another Member State

check the applicable rules in that Member State, and, if these rules prevent them from selling

the product, most of them adapt it. This happens despite the fact that 70% of them are fully

aware of the mutual recognition principle. More than half of the businesses responding tried

to use mutual recognition to enter a new market. Among them, half had their market access

denied, and only 2% challenged this decision successfully.

35% replied that they do not rely on mutual recognition to enter a new market, mainly

because they do not know about it (15%) or because they do not trust it (4%).

When national authorities check if products available on their market and coming from

another Member State comply with the national rules they are enforcing,

53% verify if they

are already lawfully marketed in the Member State of origin while 46% do not.

Despite the indicated high level of awareness about mutual recognition, the majority of

respondents consider that awareness-raising remains necessary.

170

Enterprises can be classified in different categories according to their size; for this purpose different criteria may be used (e.g.

number of persons employed, employees, balance sheet total, investments, ...), but the one most common in a statistical context is

number of persons employed : small and medium-sized enterprises, abbreviated as SMEs: fewer than 250 persons employed (

SMEs are further subdivided into: micro enterprises: fewer than 10 persons employed; small enterprises: 10 to 49 persons

employed; medium-sized enterprises: 50 to 249 persons employed); large enterprises: 250 or more persons employed.

With regards to the obstacles to the functioning of mutual recognition, businesses identified

the lack of quick remedies for challenging national decisions denying market access as the

highest one, followed by insufficient communication among authorities.

52%

of the

respondents faced such obstacles themselves.

2.3.2 Functioning of the Mutual Recognition Regulation

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

The majority of respondents are aware of the Regulation, and consider that most of the tools

put in place are useful and still necessary. As regards whether or not the Regulation has met

its objective, the feeling is mixed among businesses and national authorities. Generally, very

few economic operators consider that it is easier to sell products in other Member States since

the Regulation entered into force. The majority consider that the Regulation has not improved

the situation, or do not know, either because they do not use mutual recognition or they do not

sell products abroad.

Efficiency: costs and benefits of the Regulation

As regards the costs of implementing the Regulation, national authorities ranked them as

average. On top of the choices provided by the consultation, authorities also indicated

additional costs linked to the absence of an updated list of products to which mutual

recognition may apply. Some consider that additional costs are triggered by the administrative

procedures, seen as long and time-consuming. Despite the costs, national authorities agree,

fully or partially, that the Regulation brings benefits in terms of facilitating market access.

With regards to businesses, the main costs incurred are triggered by the need to adapt the

products to the applicable national rules, when mutual recognition is either denied or not used

for penetrating the market. These costs are estimated

171

on average at 23 000 Euro per product

and per market. High costs are also related to delays in entering a market, estimated

172

at 115

000 Euro per product and per market, and to lost opportunities, when businesses relinquish

entering a market because of different national rules that require adapting the products. On

average, the latest are estimated

173

at 136 000 Euro per product and per market. The costs

related to challenging administrative decisions denying market access are considered as less

important, mainly because few economic operators choose to do so. The estimates

174

are

around 32 000 Euro per product and per market. There are however considerable variations in

the answers.

Costs were also related to assessing if mutual recognition can be used to sell products in

another Member State. Very few economic operators (2%) are outsourcing this assessment,

while 26% are doing it internally. 46% are doing both, depending on the product.

In terms of benefits that the regulation brings, the perception of responding businesses is quite

mixed. While Member States tend to consider that the costs of the Regulation are

proportionate to the benefits it generates, businesses mostly disagree with only 9% agreeing.

171

172

173

174

26% of respondents

impossible

20% of respondents

impossible

13% of respondents

impossible

11% of respondents

impossible

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

Coherence

There is a consensus among respondents as regards the coherence of the Regulation. Most of

the respondents are not aware of any overlaps between the Regulation and other

initiatives/legislation/policies. The overlaps indicated by those replying positively are linked

to Solvit, RAPEX, ICSMS and Regulation 765/2008 on market surveillance.

EU added value

The European added value of the mutual recognition rules is also strongly underlined by the

respondents. Most of them agree that having a common set of rules guarantees equal

treatment, and that relying on national rules only would undermine the internal market.

2.3.3 Assessment of communication when using Mutual Recognition

Most of the responding businesses have never contacted a Product Contact Point to obtain

information on the applicable product rules, mainly because they are not aware of their

existence. Among those having contacted Product Contact Points, it is quite difficult to

identify their level of satisfaction or the reasons behind it.

Responding Member States consider the communication with authorities within their own

country as good, while communication with authorities from other Member States is rather

average or poor. As regards communication between national administrations and businesses,

the assessment by authorities is quite mixed between good, average and poor. The main

reasons for poor communication relate to the lack of knowledge about mutual recognition,

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

2.3.4 Priorities to improve Mutual Recognition

Stakeholders have different views with regards to the Commission's priorities as regards to

mutual recognition. If businesses rank the need for effective remedies as being the highest

priority, Member States and citizens opt in favour of increasing awareness of mutual

recognition.

2.3.5 Options

All options put forward for making mutual recognition easier to apply and more reliable

received a high level of support among respondents.

As to what would be the most appropriate alternative to mutual recognition, the majority of

respondents agree that harmonisation is the most appropriate tool to use when mutual

recognition does not work properly.

2.4

Surveys carried out by the external contractors

In the framework of the external study evaluating the functioning of the mutual recognition

principle

175

, four different surveys were launched on 9 October 2014 and completed on 5

January 2015. These were a company survey (199 participants), a survey of national business

associations and of national sector associations (20 participants), and a product contact point

175

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

survey (26 participants). Following the survey, qualitative interviews with national business

associations and Product Contact Points in each Member State were also carried out.

The findings of the surveys and interviews show that the application of the mutual recognition

principle is challenging. Stakeholders outlined that there are still barriers to free movement of

lawfully marketed goods due to additional requirements and tests existing in certain Member

States. The lack of knowledge and awareness about mutual recognition was also pointed out

as being problematic, as companies and national authorities do not know when and how the

principle should be applied, in particular with regard to the type of products falling under the

scope of mutual recognition and to the type of documentation to be required for

demonstrating that a product has been already lawfully marketed. Poor communication and

cooperation among national authorities has also been pointed out as a weakness, contributing

to the poor functioning of mutual recognition. In terms of efficiency, many businesses

declared having to carry out additional tests at the request of the Member States on the

territory of which they are trying to sell their products.

In the framework of the study assessing the costs and benefits of the different options

envisaged for improving mutual recognition, a survey and interviews were carried out by the

external contactor. The stakeholder consultation focused not only on the current functioning

of mutual recognition – and its main issues – but also on how to revise the Regulation,

through the policy options proposed by the Commission. Targeted surveys and interviews

allowed an understanding of the stakeholders’ point of view about the Policy Options. With

respect to the obstacles to the implementation of MR National authorities highlight that: the

wide scope, size and fragmentation of the market falling under mutual recognition and the

presence of many different national legislations may create difficulties in having clear,

structured and smooth procedures to apply mutual recognition; products falling in areas where

partial harmonisation and/or some EU standards exist create difficulties for authorities, since

a mix of national and EU rules may apply, requiring more effort from their side to check and

decide; a certain lack of communication exists also across Member States. This may result in

difficulties for a national body to understand why a product was lawfully marketed in another

Member State and what relevant rules apply, without investigating and asking for further

information or clarification. Businesses highlighted several obstacles as well, in particular

relating to the interaction with national authorities, especially in terms of obtaining easy

access to information, concerning mainly relevant legislation and procedures in place

especially because of language barriers, proving that the product is already lawfully marketed

in another Member State since National Authorities require different information and

evidence. The time required to receive a response from the national authorities has a

significant impact in delaying the entry into the market or even discouraging them to enter.

Considering the issues highlighted by stakeholders both economic operators and national

authorities agree that measures to improve the MR Regulation have to be taken. Within each

category of stakeholder, preferences and opinions about the feasibility and priority of policy

options (and sub-options) seem to be heterogeneous. While among National Authorities there

is quite a spread consensus about the need for intervention, either through soft-law or hard-

law instruments, economic operators appear to be more cautious on the effectiveness of the

proposed options in avoiding delayed market access and reducing costs for them. However,

economic operators and national authorities appear to be in favour of mixing different sub-

options, rather than the adoption of a single, full policy option.

2.5

Other contributions received (position papers or e-mail)

Several interested parties submitted separate position papers, many of which revealed that

indeed national technical rules are being used as a basis to deny mutual recognition and that

no effective mechanisms exist for businesses to question national decisions denying mutual

recognition. For this reason, they consider that more ambition is needed to improve trust

among Member States and the improvement of transparency of national decisions will

alleviate this lack of trust.

Concerning the principle of mutual recognition, some stakeholders mentioned that it could

further be strengthened by the introduction of a presumption of conformity to independently

tested products. They argue that the Commission should provide a conformity assessment by

independent third parties as a precondition for a corresponding presumption of conformity

with regard to the product marketed in another member state because they are not involved in

the design, manufacture, supply, repair or maintenance of the item to be assessed.

The scope of the Mutual Recognition Regulation should be clarified, better structures for

proportionality assessments should be put in place, and an informal set-up could ensure better

sharing of best practices among Member States. Also, dissuasive means should be introduced

to ensure that Member States notify according to their obligations in the Regulation.

Moreover, effective remedies must be available to businesses in order for them to get quicker

clarity on decisions taken against their products on the Single Market, including enhanced

transparency to see the decisions. In addition, the Product Contact Points should be optimised

and give businesses easy access to information about national decisions and technical rules.

Also, there is an overall need to redeem trust and strengthen cooperation among Member

State authorities across the Single Market.

One proposal, made by some stakeholders, is that the notification of article 2.1 administrative

decisions (Regulation (EC) No 764/2008) is brought together with the procedure used in the

harmonised sectors. The Commission should also consider other measures in order to

integrate the non-harmonised and harmonised goods sector not only in the practical level but

also in the policy level still fully respecting the principle of mutual recognition.

The lack of trust between competent authorities should be overcome and national decisions

should become more transparent. A Quick Assessment Procedure, allowing for an evaluation

of decisions denying market access without a binding decision, is a potential tool that can lead

to better understanding of the Mutual Recognition principle and improve the functioning of

the current Regulation.

FEEDBACK TO STAKEHOLDERS

Mutual recognition is essential to the Single Market for goods. Nevertheless, its use is

suboptimal, generating lost business opportunities, less competition and higher prices for

consumers. It needs to be further improved to reduce barriers to the free movement of

products lawfully marketed in one or several Member States.

The consultation processes provided a wide range of views regarding the implementation of

the Regulation in terms of what has worked well and what has not worked so well, seen

through the eyes of these stakeholders. The meetings with the stakeholders provided an early

opportunity to promote the engagement of the national authorities, thus enhancing the chances

of a good response rate. These findings will underpin the forthcoming Action Plan to raise

awareness on the mutual recognition principle and to create a "mutual recognition culture",

and the revision of the Regulation.

Soft law instruments to improve the functioning of mutual recognition: This option refers to

the adoption of an action plan containing non-legislative measures to further boost the

application of the mutual recognition principle. This option would not include a revision of

the Regulation, and therefore the PCP network and the procedure to be followed by national

authorities for denying market access would remain as they are today. The action plan would

contain, in particular, the following measures: Awareness raising and training; A clearer

mutual recognition clause and Exchange of officials in the area of mutual recognition.

Minimum legislative changes to Regulation (EC) No 764/2008 to improve the functioning of

mutual recognition: Under this option, containing several complementary sub-options, the

Regulation would be revised; the changes to be introduced would address all the drivers

identified while allowing for more flexibility on the use of the mutual recognition principle.

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

goods guaranteed by compliance with European standards; Transparency for administrative

decisions denying market access and Enlarging the Product Contact Points.

Comprehensive legislative changes to Regulation (EC) No 764/2008 to improve the

functioning of mutual recognition: Under this option, comprehensive regulatory changes

would be made to the current legislation. In particular, the following changes would be

introduced in the Regulation: Clarifying the scope of mutual recognition; Declaration of

compliance; Fast track appeal procedure and Strengthening the Product Contact Points and

the cooperation between relevant authorities.

Voluntary prior authorisation to placing on the market: Under this option, the suboptimal

functioning of the mutual recognition principle would be addressed by intervening in a pre-

marketing phase to prevent obstacles to free movement of goods rather than in a post-

marketing phase as it is the case today. By introducing a system of prior authorisation to

placing products on the market, economic operators would have confirmation that their

products can have market access in the Member State of destination on the basis of the mutual

recognition principle before actually entering that market.

The soft law option could be combined with any of the other legislative options (options 3, 4

or 5). Options 3, 4 and 5 would be mutually exclusive.

The option relating to repealing the Mutual Recognition Regulation has been discarded at an

early stage. The Evaluation has concluded that, despite its current shortcomings, the

Regulation remains relevant and that common procedures for the application of mutual

recognition are still necessary. Also, the option of proposing further harmonisation measures

on specific basic requirements of products has been discarded. Adopting EU harmonisation

legislation on specific products or aspects of products which appear particularly problematic,

where this is justified, necessary and proportionate is always possible. However, adopting

harmonisation measures which would cover certain aspects of all products (such as

traceability requirements) is not likely to address the current problem drivers and the current

situation is expected to be maintained, i.e. obstacles for companies in getting access to new

markets, implying costs related to re-testing, lost markets and opportunities, etc.

NNEX

3: M

ETHODS

NALYTICAL

OOLS

SED

REPARING

VALUATION

This section sets out the methodological approach that has been applied to the evaluation

objectives and the corresponding task requirements.

The methodology has combined desk research, focusing on existing textual and statistical

sources, with a survey and qualitative interviews. This mix has allowed the team to

triangulate the results of the different analytical steps. The figure below presents an overview

of the work carried out in the project.

Overview of work

Source: DTI, Technopolis, EY and VVA Consulting

ITERATURE REVIEW AND ANALYSIS OF PUBLICLY AVAILABLE STATISTICS

The literature review comprised a review of existing business and academic literature on the

non-harmonised areas in the EU internal market. Annex A contains a full overview of the

assessed literature. In addition, the evaluation team has assessed and analysed publicly

available statistics from e.g. Eurostat and the OECD. This review aimed at gaining an initial

overview of possible barriers and issues involved in the application of the mutual recognition

principle as well as providing a good understanding of the available types of data, which were

discussed in further detail during the surveys and qualitative interviews.

1.1

The macro context

The Eurostat database provided data on the macroeconomic context, including:



increases or decreases in intra-EU trade in terms of sectors and markets;

unemployment rate;

inflation;

EU exports by sector; and

EU imports by sector.

By using the above-mentioned quantitative context measures as a point of departure, it was

investigated if Member States with a high share of cases/issues relating to the application of

the mutual recognition principle shared a similar macroeconomic context. Clearly, the crisis

dynamics were unleashed by factors that had nothing to do with mutual recognition (or the

application thereof), but the macroeconomic factors will be used to investigate if authorities in

countries hit particularly hard by the crisis behave in a different way with regards to the

application of the mutual recognition principle for certain product categories. Among the

questions posed were, ‘Do some of the Member States that were hit particularly hard by the

financial crisis tend to find it harder to apply the principle?’ ‘Do high levels of e.g.

unemployment affect the application of the principle among Member States?’ By integrating

the quantitative Eurostat indicators into the evaluation, the team seeks to shed light on these

kinds of questions.

XPLORATORY INTERVIEWS WITH

OMMISSION

UROPEAN BUSINESS ASSOCIATIONS

OFFICIALS AND REPRESENTATIVES

The evaluation team has conducted ten exploratory interviews with or received written

feedback from Commission officials and representatives of European business associations.

The aim of these exploratory interviews was to gather information on the application of the

mutual recognition principle and cross-European information on the challenges regarding the

application of the mutual recognition principle and the areas where the problems are most

pronounced. The interviews took place between August 2014 and December 2014.

URVEYS

TARGETING DIFFERENT STAKEHOLDERS AFFECTED BY THE MUTUAL

RECOGNITION PRINCIPLE

The objective of the questionnaire surveys was to collect quantitative information on the

application of the mutual recognition principle in the Member States. Four different surveys

were launched on 9 October 2014 and completed on 5 January 2015. These were a company

survey, a survey of national business associations

176

, a survey of national sector associations,

and a product contact point survey. The surveys for the business and sector associations

contained almost identical questions. In the subsequent analysis, these are grouped together.

The company survey and the survey of national business organisations and national sector

organisations were conducted in English, French, German and Spanish.

3.1

National business and sector organisations (umbrella organisations targeting a

broad range of sectors)

This survey aimed to gain a broad picture of the burdens and costs that enterprises may

experience and identifying areas where problems may exist. The team contacted one business

association per Member State. The business associations have generally not put a high

priority on responding to the survey, which is interpreted as a) the associations are not

monitoring the subject, or b) that enterprises rarely approach their business associations with

these kinds of issues. However, the business associations that have answered the survey and

many of those that have participated in an interview have provided us with valuable input and

company examples. The same impression applies to the national sector organisations. In

addition, Business Europe has approached numerous business associations for their input to

the evaluation, and some associations may have felt that this input was sufficient.

The national sector organisations represent the sectors in which the majority of decisions,

requests for information and complaints arise (as indicated in the Terms of Reference). Some

176

”National business associations” are cross-sector associations, typically functioning as national umbrella organisations for sector-

specific associations etc.

of these sectors were covered by the national business organisations. The sector associations

that received the survey represented food, construction, fertilisers, automobiles, and electrical

products in the Member States. The questionnaire used here closely resembles the one used

for the above-mentioned business organisations.

For both national business and sector organisations, only a minority of sectors and Member

States are represented in the surveys. All received weekly reminders to participate in the

survey and the business associations were also contacted by telephone. The participating

organisations are represented by 10 national business associations, five sector associations in

the food industry and three sector organisations representing the railway sector (the latter are

all at the EU Level).

3.2

Companies

The company survey was requested by the client during the inception phase of the evaluation.

Due to budget and time constraints, the outreach of the survey was limited. In order to carry

out the company survey with only a limited budget, the national business and sector

organisations were asked to disseminate the survey questionnaire to their individual member

companies to the extent possible. Thus, it has not been possible to control any bias in the

sample with respect to:



country representation;

sector representation; and

company size.

Because business associations sent out the questionnaires, it was not possible for the

contractor to follow up with companies to ensure a greater response rate. It should be noted,

however, that many business associations have been very cooperative in sending out the

survey to their individual members.

As expected, the survey did not result in a representative sample, and all results should be

interpreted with this in mind. Nevertheless, the responses do provide some indication of how

companies perceive the application of the mutual recognition principle and of the potential

costs for companies in Member State that do not comply with the mutual recognition

principle.

In total, 447 companies have accessed the online survey. Of these, 199 companies completed

the survey, either fully or partially. The majority of participating companies only completed

the survey partially.

With respect to geographical coverage, there is significant geographical bias, which was

unavoidable due to the constraints described above. Companies from Portugal (36), the UK

(22) and Lithuania (21) are significantly overrepresented in the survey, while there were no

responses from nine EU Member States or from any of the four EFTA countries (cf. above for

details).

Large companies are overrepresented in the survey, while small companies are

underrepresented. Large companies only make up around 1% of the EU’s company

population.

177

. However, in this survey, 29% of the participating companies were large

companies with more than 250 employees, 26% were medium-sized companies with 50 to

250 employees and 27% were small companies with 10 to 49 employees. Micro companies

with less than 10 employees accounted for 18%.

3.3

National product contact points

The aim of the survey among product contact points was to help identify issues in the legal

framework, to gain an understanding of whether there are some sectors that are particularly

‘problematic’ in the country in question, and areas where further dialogue with other product

contact points and the Commission, etc., might be necessary.

The product contact points (or the co-ordinator, where there are several product contact

points) are typically located within the ministry responsible for industry/business and the

internal market. The product contact points have a coordinating function (at least with respect

to notifications) and are thus in the best position to have an overview of the application of the

mutual recognition principle in their country. Other Member State authorities responsible for

applying the mutual recognition principle in their field have a narrower domain (e.g. sectoral,

or regional). This means that none of these authorities will have a good overview of the

general (cross-sectoral, national) situation pertaining to the application of the mutual

recognition principle in the Member State.

Not all product contact points across Member States participated in the product contact point

survey (cf. the footnote to). In general, the team put much effort into ensuring a high level of

response from all survey target groups. The team followed up with phone calls to the product

contact points and national business associations to gain a higher response rate and set up

qualitative interviews. For the vast majority of product contact points, this approach was

successful. However, for the business associations, the response rate in the survey remained

rather low.

Explanations for the relatively low response may be:



that business and sector organisations do not monitor mutual recognition closely;

that companies do not approach the business and sector associations when they

experience problems;

that business associations have already given input to Business Europe;

that companies are not concerned with the mutual recognition principle; or

that companies experience problems with the free movement of goods in the internal

market, but do not link these problems to the principle of mutual recognition and

therefore do not know that their problem falls within this area.

UALITATIVE INTERVIEWS

Following the survey, the evaluation team carried out qualitative interviews with national

business associations and product contact points in each Member State. The objective of the

qualitative interviews was to shed more light on the implementation of the mutual recognition

177

E.g. http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/index_en.htm

principle in the Member States, in particular with respect to ‘sensitive’ areas such as

notification practices (or lack thereof). The interviews were conducted with the same person

who responded to the survey, to the extent possible (in a few cases the interview was referred

to a colleague).

The evaluator has been in contact with product contact points in all Member States except

Italy. As for the Italian product contact point, the team was informed by the contacts at the

Italian Ministry (provided by the Commission) that they do not deal with the mutual

recognition topic, and that they were not aware of other authorities in Italy that we could

contact.

The evaluator has repeatedly contacted business associations in all Member States and

approached them for an interview. Some business associations monitor the application of the

mutual recognition principle closely, and they have provided us with valuable insights into

the problems and the benefits of the mutual recognition principle. Others do not monitor the

application of the principle closely and/or have not heard about problems from their members,

but agreed to an interview. The last (small) group of business associations did not monitor the

application of the mutual recognition principle, had not heard about problems in the field

from their members, and consequently did not feel that they were in a position to contribute.

In these cases, we have attempted to contact sector associations that may provide insight into

the field, but in some cases, it was not possible to identify a sector association either that

could provide information, as the mutual recognition principle was not monitored.

The companies have been asked to put a figure on the cost of the incorrect application of the

mutual recognition principle for their company. Very few companies have been able to do so.

The main reason seems to be that companies adapt their products to the requirements from the

Member State in question and test their products/withdraw from the particular market/do not

enter the market. They do not spend time on calculating what the costs of the situation might

be. Similarly, none of the business associations that we have interviewed have these cost

figures, either because they have not asked the companies specifically about this, or because

the companies cannot put a figure on it.

NNEX

4: O

VERVIEW OF THE ASSESSED LITERATURE AND CASE LAW



ITERATURE

BIS publication (2011): The economic consequences for the UK and the EU of

completing the Single Market

BIS publication (2013) : Optimal Integration in the Single market: A Synoptic Review

Moïsé, E. 2013. The impact of trade facilitation on developing countries. GREAT

Insights, Volume 2, Issue 8. November 2013. Maastricht: ECDPM

M. Vancauteren and D. Weiserbs, ULC :Intra-European Trade of Manufacturing

Goods: An extension of the gravity model

Natalie Chen and Dennis Novy, International Trade Integration: A Disaggregated

Approach, 2009, CEP Discussion Paper No 908

Business Europe (2014): Position paper: Evaluation of the application of the principle

of mutual recognition mutual recognition principle of goods

CSES (2014): Evaluation of the Internal Market Legislation for Industrial Products

Copenhagen Economics (2012): Delivering a stronger single market

Laurens Ankersmit, What if Cassis de Dijon were Cassis de Quebec? The assimilation

of goods of third countries origin in the internal market, Common Market Law Review

50: 1387-1410,2013

Markus Mostl, Preconditions and limits of mutual recognition, Common Market Law

Review 47:405-436, 2010

Christine Janssens (2013): The principle of mutual recognition mutual recognition

principle in EU law

Kerber and Van den Bergh, Mutual Recognition Revisited: Misunderstandings,

Inconsistencies, and Suggested reinterpretation, Kyklos, Vol.61, 2008, No. 3, 447-465

HM Government UK (2013): Review of the Balance of Competences between the

United Kingdom and the European Union - The Single Market

Mattera, The principle of mutual recognition and respect for national, regional and local

identities and traditions, Kostoris and Schiopa (Eds.)

Weiler, Mutual recognition, functional equivalence and harmonisation in the evolution

of the European commun market and the WTO, Kostoris and Schiopa (Eds.)

Mattera, The principle of mutual recognition in the European integration process,

Palgrave Macmillan, 2005, pp. 1-24

Amstrong, Mutual recognition, Barnard and Scott(Eds.)



Amstrong, The law of the single European market: unpacking the premises, Hart

Publishing, 2002, pp. 225-267

Patrick A. Messerlin (2011) The European Union single market in goods: between

mutual recognition and harmonisation, Australian journal of International Affairs, 65:4,

410-435

Davies, Is mutual recognition an alternative to harmonisation: lessons on trade and

tolerance of diversity from the EU, Bartels and Ortino (Eds.),

Davies, regional trade agreements and the WTO legal system, OUP, 2006, pp. 265-280

Bartels, The legality of the EC mutual recognition clause under WTO law, Journal of

International Economic law, 2005, 691-720

Toulemonde, A welfare analysis of the principle of mutual recognition, European

Economic review 60, 2013,1-16

OECD (2013): International Regulatory Co-operation: Addressing Global Challenges,

OECD Publishing.

OECD (2013): Trends in international regulatory co-operation, in International

Regulatory Co-operation: Addressing Global Challenges, OECD Publishing.

Orgalime (2014): Position paper: Suggestions for improving the application of the

mutual recognition principle

Pelkmans, Jacques (2012): Mutual Recognition: economic and regulatory logic in goods

and services

Pelkmans, Jacques (2011): the case for “more Single Market”

Pelkmans, Jacques (2010): Mutual Recognition: rationale, logic and application in the

EU internal goods market

Pelkmans, Jacques (2003): Mutual Recognition in Goods and Services: An economic

perspective

Pelkmans, J., (2011), the case for “more Single Market”

Pelkmans, J., Correia de Brito, A. (2015), Transatlantic MRAs: Lessons for TTIP?,

CEPS Special Report, no. 101, March, Brussels

Pelkmans, J., Labory S., Majone, G. (2000), Better EU regulatory quality: assessing

current initiatives and new proposals

Pelkmans J., Correia de Brito, A., Enforcement in the single market, Brussels

Schmidt, Susanne (2008): Mutual Recognition – a new mode of governance





Commission report COM(2001)736 of 7 December 2001, “Economic Reform : Report

on the functioning of Community product and capital markets”

Commission Staff Working Paper SEC(2001)1993 of 7 December 2001, “Statistical and

technical annex to the “Report on the functioning of Community product and capital

markets;

“Technical barriers to trade”, Volume 1 of Sub-series III (“Dismantling of Barriers:

Technical Barriers to Trade”), Single Market Review, Luxembourg, 1998;

Hagemejer J. and Michalek Jan J., “The Significance of Technical Barriers to Trade for

Poland and other CEECs Acceding to the EU: Reconsidering the Evidence”, Emergo –

Journal of Transforming Economies and Societies, 2004, v. 11, No 1, p. 36;

Brenton P. Sheehy J. and Vancauteren M., “Technical Barriers to Trade in the European

Union: Data, Trends and Implications for Accession Countries”, Journal of Common

Market Studies, 2001, No 39, p. 241;

Fabienne Ilzkovitz, Adriaan Dierx, Viktoria Kovacs and Nuno Sousa, « Steps towards a

deeper economic integration: the internal market in the 21st century “, European

Economy, Economic Papers, No. 271. January 2007

Rodrigue, J.P. et al. (2016), The Geography of Transport Systems, Routledge



European Council conclusions



Cardiff European Council, 15/16 June 1998: Presidency Conclusions

Council resolution of 28 October 1999 on mutual recognition (2000/C 141/02)

Competitiveness Council meeting; Brussels, 2 and 3 December 2013: Conclusions on

Single Market Policy

The Mutual Recognition Regulation



Regulation (EC) No 764/2008 of the European Parliament and of the Council, of 9 July

2008, laying down procedures relating to the application of certain national technical

rules to products lawfully marketed in another Member State and repealing Decision No

3052/95/EC

Communications and other Commission documents



European Commission (2007): Accompanying document to the Proposal for a directive

of the European Parliament and of the Council laying down procedures relating to the

application of certain national technical rules to products lawfully marketed in another

Member State and repealing Decision 3052/95/EC Impact assessment

European Commission (2012): First report on the application of Regulation (EC) No

764/2008 2008 - COM(2012) 292 final





European Commission interpretative communication of 3 October 1980, concerning the

consequences of the judgment given by the court of Justice on 20 February 1979 in

Case 120/78 (‘Cassis de Dijon’)

European Commission COM(1999)299 final: Mutual recognition in the context of the

follow up to the Action Plan for the Single Market - on the application of the mutual

recognition principle, based on a detailed analysis of the cases of incorrect application

of mutual recognition handled by the Commission

European Commission (2002): Second biennial Report on the Application of the

Principle of Mutual Recognition in the Single Market

European Commission (1999): Commission Staff Working Paper: First Report on the

application of the principle of mutual recognition in product and services markets

European Commission (1998): Document du travail des services de la Commission:

L’application du principe de reconnaissance mutuelle

European Commission (2014): Restarting the EU’s Growth Engine – A new start for the

Internal Market

Evaluation of the Application of the Principle of Mutual Recognition in the Field of

Goods, Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs

2015



Commission guidance documents



European Commission (2010): Guidance document: the relationship between Directive

98/34/EC and the Mutual Recognition Regulation

http://ec.europa.eu/DocsRoom/documents/5801/attachments/1/translations



European Commission (2013): Commission Working Document: Guidance document.

The concept of ‘lawfully marketed’ in the Mutual Recognition Regulation (EC) No

764/2008

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52013DC0592



European Commission (2010): Guidance document: The relationship between Directive

2001/95/EC and the Mutual Recognition Regulation

http://ec.europa.eu/DocsRoom/documents/5807/attachments/1/translations



European Commission (2010): Guidance Document: The application of Mutual

Recognition Regulation to prior authorisation procedures

http://ec.europa.eu/DocsRoom/documents/5822/attachments/1/translations



European Commission (2010): Guidance Document: The application of Mutual

Recognition Regulation to narcotic drugs and psychotropic substances

http://ec.europa.eu/DocsRoom/documents/5821/attachments/1/translations



European Commission (2010): Guidance Document: The application of Mutual

Recognition Regulation to food supplements

http://ec.europa.eu/DocsRoom/documents/13481/attachments/1/translations



European Commission (2010): Guidance Document: The application of Mutual

Recognition Regulation to non-CE marked construction products

http://ec.europa.eu/DocsRoom/documents/5881/attachments/1/translations



European Commission (2010): Guidance Document: The application of Mutual

Recognition Regulation to fertilisers and growing media

http://ec.europa.eu/DocsRoom/documents/5825/attachments/1/translations



European Commission (2010): Guidance Document: The application of Mutual

Recognition Regulation to articles of precious metals

http://ec.europa.eu/DocsRoom/documents/5806/attachments/1/translations



European Commission (2010): Guidance Document: The application of Mutual

Recognition Regulation to weapons and firearms

http://ec.europa.eu/DocsRoom/documents/5824/attachments/1/translations

ECENT CASE LAW OF THE

CJEU

ON MUTUAL RECOGNITION

CJEU, Case C-227/06

Commission v Belgium,

ECLI:EU:C:2008:160

By requiring economic operators wishing to market construction products, which have been

lawfully manufactured and / or marketed in another Member State, in Belgium to obtain

national conformity marks, Belgium has failed to fulfil its obligations under Articles 34 and

36 TFEU (ex 28 EC and 30 EC).

CJEU, Case 88/07

Commission v Spain,

ECLIEU:C:2009:123

By withdrawing from the market products based on medicinal herbs lawfully produced and/or

marketed in another Member State, under an administrative practice consisting in

withdrawing from the market any product based on medicinal herbs not included either in the

annex of the an Order on the creation of a special register of medicinal herb-based

preparations or the annex of an Order establishing the list of plants sale of which to the public

is prohibited or restricted because of their toxicity, other than a preparation the constituents of

which are exclusively one or more medicinal herbs or whole parts of such herbs, or crushed or

powdered parts of such herbs, on the ground that that product is deemed to be a medicinal

product marketed without the requisite marketing authorisation, Spain has failed to fulfil its

obligations under Articles 34 and 36 TFEU (ex 28 EC and 30 EC) and Articles 1 and 4 of

Decision No 3052/95/EC of 13 December 1995 establishing a procedure for the exchange of

information on national measures derogating from the principle of the free movement of

goods within the Community.

CJEU, Case C- 132/08

Lidl,

ECLI:EU:C:2009:281

Member States cannot, under Directive 1999/5/EC of 9 March 1999 on radio equipment and

telecommunications terminal equipment and the mutual recognition of their conformity,

require a person who places radio equipment on the market to provide a declaration of

conformity even though the producer of that equipment, whose head office is situated in

another Member State, has affixed the ‘CE’ marking to that product and issued a declaration

of conformity in its regard.

Where a matter is regulated in a harmonised manner at Community level, any national

measure relating thereto must be assessed in the light of the provisions of that harmonising

measure and not in that of Articles 34 and 36 TFEU (ex 28 EC and 30 EC).

CJEU, Case C-100/08

Commission v Belgium.

ECLI:EU:C:2009:537

By making the import, possession and sale of birds born and bred in captivity that were

legally marketed in another Member States subject to restrictive conditions requiring

economic operators to alter the specimen marking to respond to the specific requirements of

Belgian law and by not allowing the marking accepted in other Member States or certificates

issued (in accordance with Regulation (EC) No 338/97 on the protection of species of wild

fauna and flora by regulating trade) and by denying traders the ability to obtain exemptions

from the prohibition to hold European native birds legally marketed in other Member States,

Belgium has failed to fulfil its obligations under Article 34 TFEU (ex 28 EC).

CJEU, Case C-333/08

Commission v France,

ECLI:EU:C:2010:44

By laying down, for processing aids and foodstuffs whose preparation involved the use of

processing aids from other Member States where they are lawfully manufactured and/or

marketed, a prior authorisation scheme not complying with the principle of proportionality,

France has failed to fulfil its obligations under Article 34 TFEU (ex 28 EC).

CJEU, Case C-142/09

Vincent Willy Lahousse,

ECLI:EU:C:2010:694

Council Directive 92/61/EEC of 30 June 1992 relating to the type-approval of two or three-

wheel motor vehicles, and Directive 2002/24/EC of 18 March 2002 relating to the type-

approval of two or three-wheel motor vehicles and repealing Directive 92/61 are to be

construed as meaning that, where a vehicle or a component or separate technical unit thereof

does not qualify for the type-approval procedure established by those directives, on the

ground that it does not come within their scope, the provisions of those directives do not

prevent a Member State from introducing, in its domestic law and in relation to such vehicle,

component or separate technical unit, a similar mechanism for recognising the checks carried

out by other Member States. In any event, such legislation must comply with EU law, in

particular Articles 34 TFEU and 36 TFEU.

CJEU, Case C-484/10

Ascafor and Asidac,

ECLI:EU:C:2012:113

Articles 34 TFEU and 36 TFEU must be interpreted as meaning that the requirements laid

down in Spanish legislation for official recognition of certificates demonstrating the quality

level of reinforcing steel for concrete granted in a Member State other than Spain constitute a

restriction on the free movement of goods. Such a restriction may be justified by the objective

of the protection of human life and health, provided the requirements laid down are not higher

than the minimum standards required for the use of reinforcing steel for concrete in Spain. In

such a case, it is for the referring court to ascertain — where the entity granting the certificate

of quality which must be officially recognised in Spain is an approved body within the

meaning of Council Directive 89/106/EEC of 21 December 1988 on the approximation of

laws, regulations and administrative provisions of the Member States relating to construction

products, as amended by Council Directive 93/68/EEC of 22 July 1993 — which of those

requirement go beyond what is necessary for the purposes of attaining the objective of the

protection of human life and health.

CJEU, Case, C-171/11

Fra.bo,

ECLI:EU:C:2012:453

Article 34 TFEU (ex 28 EC) must be interpreted as meaning that it applies to standardisation

and certification activities of a private-law body, where the national legislation considers the

products certified by that body to be compliant with national law and that has the effect of

restricting the marketing of products which are not certified by that body.

CJEU, Case C-150/11

Commission v Belgium,

ECLI:EU:C:2012:539

By requiring systematically the production of a vehicle’s certificate of conformity for the

purpose of a roadworthiness test prior to the registration of a vehicle previously registered in

another Member State (in addition to production of a certificate of registration) and by

making such vehicles subject to a roadworthiness test prior to their registration due to a

change in ownership, without taking into account the results of the roadworthiness test carried

out in another Member State, Belgium has failed to fulfil its obligations under Article 4 of

Council Directive 1999/37/EC of 29 April 1999 on the registration documents for vehicles, as

amended by Council Directive 2006/103/EC of 20 November 2006, and under Article 34

TFEU.

CJEU, Case C-385/10

Elenca,

ECLI:EU:C:2012:634

Articles 34 TFEU to 37 TFEU must be interpreted as precluding national provisions which

automatically make the marketing of construction products, originating from another Member

State, subject to the affixing of CE marking.

CJEU, Case C-481/12

UAB Juvelta,

ECLI:EU:C:2014:11

Article 34 TFEU must be interpreted as precluding national legislation under which, for it to

be permissible for them to be sold on the market of a Member State, articles of precious metal

imported from another Member State, in which they are authorised to be put on the market

and which have been stamped with a hallmark in accordance with the legislation of that

second Member State, must, where the information concerning the standard of fineness of

those articles provided in that hallmark does not comply with the requirements of the

legislation of that first Member State, be stamped again, by an independent assay office

authorised by that first Member State, with a hallmark confirming that those articles have

been inspected and showing their standard of fineness in accordance with those requirements.

CJEU, Case C-423/13

Vilniaus Energija,

ECLI:EU:C:2014:2186

Article 34 TFEU and Directive 2004/22/EC of 31 March 2004 on measuring instruments must

be interpreted as precluding national legislation and practice according to which a hot-water

meter which satisfies all the requirements of that Directive and is connected to a remote

(telemetric) data-transmission device is to be regarded as a measuring system and, as a result,

cannot be used for its intended purpose so long as it has not been subject, together with that

device, to a metrological verification as a measuring system.

Competent national authorities may not, in any event, unnecessarily require technical analyses

where those analyses have already been carried out in another Member State and their results

are available to those authorities or may, at their request, be placed at their disposal (see, to

that effect, Commission v Portugal, ECLI:EU:C:2005:669, paragraph 46 and the case-law

cited).

CJEU, Case C-354/14

Capods Import-Export,

ECLI:EU:C:2015:658

Article 34 TFEU and Article 31(1) and (12) of Directive 2007/46/EC of 5 September 2007

establishing a framework for the approval of motor vehicles and their trailers, and of systems,

components and separate technical units intended for such vehicles (Framework Directive)

must be interpreted as not precluding national legislation, which makes the marketing in a

Member State of new spare parts for road vehicles subject to the application of an approval or

homologation procedure in that Member State, provided that that legislation also lays down

exceptions such as to ensure that parts lawfully produced and marketed in other Member

States are exempted or, failing this, that the parts in question are capable of posing a

significant risk to the correct functioning of systems that are essential for the safety of the

vehicle or its environmental performance and that that approval or homologation procedure is

strictly necessary and proportionate in relation to the objectives of protection of road safety or

of protection of the environment.

The conditions for proving that such parts have already been approved or homologated or

constitute original parts or parts of matching quality are governed, in the absence of European

Union rules on the matter, by the law of the Member States, subject to the principles of

equivalence and of effectiveness.

NNEX

5: R

ESULTS OF THE PUBLIC CONSULTATION

TYPE OF RESPONDENTS

153

replies were received during the public consultation. Businesses were strongly

represented (91), followed by Member States authorities (45), and citizens (17). This includes

respondents that did not want their replies published: 16 businesses, 9 authorities and one

citizen. The remainder of the respondents agreed to have their response published either fully

or anonymously. All replies are included in the statistics.

Type of respondents

11%

Bussinesses

29%

Member States authorities

59%

Citizens

45 authorities

from Member States replied to the public consultation. 31% are Product

Contact Points, the rest are other authorities.

Among the group of citizens there are two consumer organisations.

Individual companies (44) and business organisations (44) were equally represented, while

only 3 chambers of commerce replied to the consultation. In terms of company size, the

responses are roughly balanced between small and large companies.

Businesses representation

Individual companies

48%

Business organisations

Chambers of commerce

Company size

15%

16%

micro

small

medium

large

In terms of activity sectors,

manufacturing is the most represented sector (46%), followed

by wholesale and retail trade (13%), agriculture, forestry and fishing (8%) and water

supply (6%).

The geographical representation is quite well balanced for businesses. As for national

authorities, 18 Member States and Norway participated in the public consultation. No replies

were received from Cyprus, Denmark, Finland, France, Greece, Ireland, Luxembourg, Malta

and UK. The majority of consumers chose not to indicate their country of establishment.

Authorities

20,00%

18,00%

16,00%

14,00%

12,00%

10,00%

8,00%

6,00%

4,00%

2,00%

0,00%

Business

40,00%

35,00%

30,00%

25,00%

20,00%

15,00%

10,00%

5,00%

0,00%

100

Consumers

100,00%

90,00%

80,00%

70,00%

60,00%

50,00%

40,00%

30,00%

20,00%

10,00%

0,00%

The numbers and percentages used to describe the distribution of the responses to the public

consultation derive from the answers provided under the EU-Survey tool. Other submissions

of stakeholders to the public consultation, such as position papers and contributions by email,

have been taken into account when describing and analysing the views of stakeholders, but

without being considered for the statistical representation.

HOW STAKEHOLDERS SEE

POTENTIAL SHORTCOMINGS

MUTUAL

RECOGNITION

AND

ITS

The majority of companies wishing to sell products in another Member State check the

applicable rules in that Member State, and, if these rules prevent them from selling the

product, most of them adapt it. This happens despite the fact that 70% of them are fully aware

of the mutual recognition principle. More than half of the businesses responding tried to use

mutual recognition to enter a new market. Among them, half had their market access denied,

and only 2% challenged this decision successfully.

35% replied that they don't rely on mutual recognition to enter a new market, mainly because

they don't know about it (15%) or because they don't trust it (4%).

Do you check rules before entering a market?

94,50%

5,40%

Do you adapt your product if the rules prevent you from

selling it as such?

86%

13%

yes

Have you used mutual recognition for entering a market?

68%

31%

When using mutual recognition, was market access denied?

52%

15%

Did you challenge the denial of market access?

36,50%

14%

101

When national authorities check if products available on their market and coming from

another Member State comply with the national rules they are enforcing,

53% verify if they

are already lawfully marketed in the Member State of origin while 46% don’t.

Despite the indicated high level of awareness about mutual recognition, the majority of

respondents consider that awareness-raising remains necessary:

Do you know that a product lawfully marketed in one Member State must, in principle,

be admitted in another Member State?

93%

84%

95%

88%

70%

Member States

Businesses

Citizens

23%

17%

I am fully aware

I am partially aware

Awareness raising is necessary

With regards to the obstacles to the functioning of mutual recognition, businesses identified

the lack of quick remedies for challenging national decisions denying market access as the

highest one, followed by insufficient communication among authorities. By order of

importance, obstacles have been ranked as follows:

Ranking of obstacles by order of importance

Difficult for businesses to challenge a national decision denying market access

Insufficient communication between national authorities of different Member States

Lack of awareness about mutual recognition

Difficult to obtain information about whether mutual recognition applies to a specific product and

thus to assess if mutual recognition can be used or not for a specific product

Other

Slow/inefficient communication between businesses and national authorities

Difficult to demonstrate to authorities in other Member States that a product is lawfully sold in a

Member State

Insufficient communication between national authorities within the same Member State

62%

46%

35%

32%

29%

27%

26%

21%

102

52%

of the respondents faced such obstacles themselves. Most of the examples provided

relate to national authorities insisting on applying the national rules at the cost of mutual

recognition, very often in relation to food legislation or fertilisers.

FUNCTIONING OF THE MUTUAL RECOGNITION REGULATION

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

The majority of respondents are aware of the Regulation, and consider that most of the tools

put in place are useful and still necessary. As regards whether or not the Regulation has met

its objective, the feeling is mixed among businesses and national authorities.

How much do you know about the Mutual Recogntion Regulation?

71%

64%

40%

32%

22%

23%

8,70%

I am fully aware

I am partially aware

Member States

Businesses

Citizens

I only found out about it now

Are these tools still useful and necessary?

84%

75%

58%

64%

80%

68%

58%

51%

58%

Member States

Businnesses

Citizens

82%

76%

82%

PCPs

Obligation to notify

Product list

Guidelines

No, the objectives of the Regulation have not been achieved

60%

52%

47%

Member States

29%

15%

17%

15%

17%

Businnesses

Citizens

Legal certainty

Administrative cooperation

Reduced risk of denied market access

103

I don't know if the objectives of the Regulation have been achieved

29%

20%

17%

10%

17%

13%

18%

Member States

Businnesses

Citizens

Legal certainty

Administrative cooperation

Reduced risk of denied market access

Yes, the objectives of the Regulation have been partially achieved

64%

57%

53%

Member States

26%

29%

31%

23%

17%

Businnesses

Citizens

Legal certainty

Administrative cooperation

Reduced risk of denied market access

Yes, the objectives of the Regulation have been fully achieved

29%

20%

17%

11%

Legal certainty

Administrative cooperation

Reduced risk of denied market access

11%

17%

Member States

Businnesses

Citizens

Generally, very few economic operators consider that it is easier to sell products in other

Member States since the Regulation entered into force. The majority consider that the

Regulation has not improved the situation, or don't know, either because they don't use mutual

recognition or they don't sell products abroad.

Is it easier to sell products in another national market since the Mutual Recognition

Regulation is in force?

yes

28%

24%

25%

I don't know

104

Efficiency: costs and benefits of the Regulation

As regards the costs of implementing the Regulation, national authorities ranked them as

average. On top of the choices provided by the consultation, authorities also indicated

additional costs linked to the absence of an updated list of products to which mutual

recognition may apply. Some consider that additional costs are triggered by the administrative

procedures, seen as long and time-consuming. Despite the costs, national authorities agree,

fully or partially, that the Regulation brings benefits in terms of facilitating market access.

Costs for national authorities related to the implementation of the Mutual Recognition,

ranked by their importance on a scale from 1 to 5, 1 being the lowest and 5 the highest.

44%

35%

31%

22%

17%

11%

13%

Establishing and ensuring the functioning Recurrent costs related to the functioning The obligation of the Member State of

of Product Contact Points (infrastructure of the Product Contact Points, including destination to notify a decision denying

and IT)

translation costs (staff only)

market access and the accompanying

procedural safeguards

22% 22%

15%

31%

Below are listed the main benefits the Mutual Recognition Regulation was expected to

have. Based on your experience, to what extent do you consider them to be realised?

48%

44%

31%

26%

17%

Better information on

national rules

Justification of

administrative decisions

denying market access

Reduced risk to see market

access denied

15%

26%

20%

15%

20%

48%

28%

I fully agree

22%

I partially agree

I desagree

I dont know

Increased awareness

With regards to businesses, the main costs incurred are triggered by the need to adapt the

products to the applicable national rules, when mutual recognition is either denied or not used

for penetrating the market. These costs are estimated

178

on average to be 23 000 Euro per

product and per market. High costs are also related to delays in entering a market,

estimated

179

at 115 000 Euro per product and per market, and to lost opportunities, when

178

179

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

impossible

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

impossible

105

businesses relinquish entering a market because of different national rules that require the

products to be adapted. On average, the latest costs are estimated

180

at 136 000 Euro per

product and per market. The costs related to challenging administrative decisions denying

market access are considered to be less important, mainly because few economic operators

choose to do so. The estimates

181

are around 32 000 Euro per product and per market. There

are however considerable variations in the answers.

Costs where mutual recognition has been denied

54%

53%

38%

29%

18%

21%

19%

Costs caused by the

delayed entry on the

market

21% 20%

15%

Costs related to the

challenge before courts

Costs related to lost

opportunities

Highly important

Relatively important

Of little importance

I don't know

52%

Costs related to aligning

products on national rules

Costs were also related to assessing if mutual recognition can be used to sell products in

another Member State. Very few economic operators (2%) are outsourcing this assessment,

while 26% are doing it internally. 46% are doing both, depending on the product. The lack of

additional information does not allow an estimate of the actual costs incurred when the

assessment of whether or not mutual recognition can be used is outsourced to be made. When

done internally, economic operators spend on average 54 hours doing the assessment;

however, the number of hours indicated varies from one company to another. Most indicated

only a few hours (less than 10) while two indicated spending more than 500 hours on this.

The average cost per hour is 78 Euro. When trying to demonstrate that a product is already

lawfully marketed in a Member State, businesses indicate that the average amount of hours

spent is 16, and the average cost per hour is 76 Euro.

In terms of benefits that the regulation brings, the perception of businesses is quite mixed:

Below are listed the main benefits the Mutual Recognition Regulation was expected to

have. Based on your experience, to what extent do you consider them to be realised?

38%

I fully agree

41%

12%

Reduced risk to see market

access denied

16%

31%

13%

I partially agree

I desagree

Better information on

national rules

Justification of

administrative decisions

denying market access

Increased awareness

I dont know

30%

14%

26% 28%

15%

26%

36%

13%

21%

32%

180

181

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

impossible

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

impossible

106

While Member States tend to consider that the costs of the Regulation are proportionate to the

benefits it generates, businesses mostly disagree with only 9% agreeing.

Would you agree or disagree with the following statement: "these costs are acceptable

and proportionate to the benefits the Mutual Recognition Regulation brings in terms of

facilitating market access?

35%

Businesses

35%

Member States

62%

54%

I don't know

I desagree

I agree

Coherence

There is a consensus among stakeholders as regards the coherence of the Regulation. Most of

the respondents are not aware of any overlaps between the Regulation and other

initiatives/legislation/policies. The overlaps indicated by those replying yes are linked to

Solvit, RAPEX, ICSMS and Regulation 765/2008 on market surveillance.

Are you aware of any overlaps between the regulation and other EU initiatives?

84%

71%

28%

15%

29%

70%

Member States

Businnesses

Citizens

Yes

EU added value

The European added value of the mutual recognition rules is also strongly underlined by the

respondents. Most of them agree that having a common set of rules guarantees equal

treatment, and that relying on national rules only would undermine the internal market.

European common procedures on mutual recognition guarantee equal treatment of

businesses, regardless of where they want to sell their products

17%

I don't agree

26%

Citizens

Businnesses

76%

I agree

67%

84%

Member States

107

European common procedures on mutual recognition guarantee that national

authorities apply the principle in the same manner European common procedures on

mutual recognition guarantee that national authorities apply the principle in the same

manner

29%

35%

15%

64%

I agree

52%

68%

I don't agree

Citizens

Businnesses

Member States

The absence of European common procedures on mutual recognition would weaken

the principle by dismantling its application into 28 different and possibly contradictory

procedures and undermine the internal market

11%

I don't agree

Citizens

Businnesses

76%

Member States

I agree

85%

82%

ASSESSMENT OF

RECOGNITION

COMMUNICATION

WHEN

USING

MUTUAL

Most of the businesses have never contacted a Product Contact Point (PCP) to obtain

information on the applicable product rules, mainly because they are not aware of their

existence. Among those having contacted Product Contact Points, it is quite difficult to

identify their level of satisfaction or the reasons behind it.

Have you ever contacted a PCP?

Yes

27%

72%

What was the reason for not contacting a PCP?

I am not aware about them

46%

25%

Language problems

Other

108

Member States consider communication with authorities within their own country as good,

while communication with authorities from other Member States is rather average or poor. As

regards communication between national administrations and businesses, the assessment by

authorities is quite mixed between good, average and poor. The main reasons for poor

communication are related to the lack of knowledge about mutual recognition, language

issues and the absence of an appropriate IT tool to facilitate communication.

How do you asses communication when applying mutual recognition?

57%

35%

28%

20%

Communication with authoritiesin the Communication with authorities from

same MS

other MS

Communication between authorities

and businesses

35%

28%

15%

Good

Average

Poor

33%

What are the main causes of poor communication?

Lack of awareness

51%

20%

22%

Language problems

Lack of IT tools

Other

PRIORITIES TO IMPROVE MUTUAL RECOGNITION

Stakeholders have different views with regards to the possible priorities with regard to mutual

recognition. If businesses rank the need for effective remedies as being the highest priority,

Member States and citizens opt in favour of increasing awareness of mutual recognition.

Ranking of priorities by businesses

Ensure that businesses have effective remedies at their disposal to take action against decisions

denying mutual recognition when needed

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

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

national authorities

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

Facilitate communication between all actors involved in mutual recognition (business, national

authorities, European Commission)

Increase general awareness of the mutual recognition principle

72%

67%

65%

64%

54%

52%

109

Ranking of priorities by Member States

Increase general awareness of the mutual recognition principle

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

national authorities

Ensure that businesses have effective remedies at their disposal to take action against decisions

denying mutual recognition when needed

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

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

Facilitate communication between all actors involved in mutual recognition (business, national

authorities, European Commission)

51%

42%

40%

35%

33%

31%

Ranking of priorities by citizens

Increase general awareness on the mutual recognition principle

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

Ensure that businesses have effective remedies at their disposal to take action against decisions

denying mutual recognition when needed

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

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

national authorities

Facilitate communication between all actors involved in mutual recognition (business, national

authorities, European Commission)

64%

52%

47%

41%

35%

23%

110

NNEX

6: C

ASE STUDIES

2016

The case studies below were carried out in the framework of the Study on the costs and

benefits of the revision of the Mutual Recognition Regulation (September 2016-February

2017).

1.1

ANUFACTURE OF OTHER FOOD PRODUCTS

FOOD SUPPLEMENTS

Introduction

Food supplements are concentrated sources of nutrients (or other substances) with nutritional

and physiological effect, marketed by business operators in the food sector.

Such goods can be sold in “dose” form, such as pills, tablets and capsules, and could contain:

Nutrients (vitamins and minerals);

Botanicals;

182

Other substances (e.g. amino acids).

The main rules for the marketing of these products by manufacturers are laid down in

Directive 2002/46/EC, in which implementation and monitoring is entrusted to the individual

Member States.

The Directive includes a list of substances that may be used for the production of food

supplements, and was amended several times over recent years.

183

During the first round of interviews, stakeholders – both from business associations and

national authorities – highlighted how this sector still constitutes one of the main “grey

areas”, where EU and national rules collide and combine, and where national authorities have

the largest autonomy and room for manoeuvre in decision making and acceptance/denial on

market entry.

Stakeholders underlined how this type of product suffers from a poor implementation of the

principle of Mutual Recognition across the EU. Different MS authorities provide diverse and

heterogeneous procedures and requirements to access the market, which are often difficult for

companies to deal with.

1.2

Background

The reference legislation on food supplements is harmonized to a limited extend, and provides

a relatively loose regulatory framework based, as mentioned, on

Directive 2002/46/EC.

The Directive provides a list of vitamins and minerals which may be used in the manufacture

of food supplements, but it does not give information on the levels that these substances could

have within the products, nor on any mix with botanicals or other substances. This creates a

legal vacuum around which the "puzzle" of the food supplements industry rotates.

182

183

Plant parts, concentrated sources of plants or their extracts or derivatives with a physiological effect.

Commission Regulation (EU) 2015/414, Commission Regulation (EU) No 119/2014, Commission Regulation (EU) No 1161/2011,

Commission Regulation (EC) 1170/2009, Commission Directive 2006/37/EC

111

The coverage of this gap is

de facto

left to the Member States, which identify heterogeneous

solutions that lead to various safety standards of products, levels of ingredients as well as

their classification.

The three main issues that have to do with the mutual recognition

184

are:

Maximum levels of vitamins and minerals.

Many Member States established national

maximum levels for the amounts of vitamins and minerals in food supplements, while others

preferred not to have specific maximum levels. The existence of particularly low levels

applied in certain Member States, together with the large differences between the levels

applied for the same substances across the EU, make it extremely difficult for companies to

manufacture one single product for whole of the EU;

Substances other than Vitamins and Minerals.

Some Member States apply positive lists

185

with specific conditions to their use. In addition, some Member States may consider certain

ingredients for medicinal use only;

Botanicals and botanical preparation.

Botanicals are used in a wide variety of food

supplements. Many Member States have positive lists, including conditions of use. The

content of these lists differ widely, and certain botanicals are banned in different Member

States because of medicinal status, while they are widely marketed as food supplements in

others.

Stakeholders involved (i.e. businesses and consumers) call for greater transparency of the

rules:

186

consumers push on the rise of the levels of consumer protection in Europe while

companies are more interested in an increased harmonization of the rules, dictated especially

by the costs to obtain certifications to export to other European countries.

Businesses, in order to facilitate their export, also try to create selling strategies of the

products that, by modifying the labelling of these from "food supplement" to "medical

device", may guarantee them an easier, faster and less expensive access to the market. This

could be possible because, in the current legal environment, the same product can be – for

example – considered to be a botanical food supplement in one EU country and as an herbal

medicine in another one.

187

This option, however, can entail some other costs for companies

when labelling a product as “medicine”.

Considering the

market,

it is estimated that approximately

20% of consumers

in several

European countries use at least one type of food supplement, with big variations between

North and South, (northern populations making more extensive usage).

188

It is difficult, however, to have a clear picture of the market size. The entire

market

in recent

years has been estimated to be worth

EUR 11 billion

in Europe,

189

and apparently has a

growing trend, with a good share (around 20%) represented by botanicals.

184

185

186

187

188

189

Food Supplement Europe (2016),

Input into the REFIT of the Mutual Recognition Regulation 764/2008.

A “positive list” is an official register where all elements (or substances or products) allowed in the county are listed. It is opposite

to a “negative list”, which contains all elements (or substances or products) not allowed in the country.

Food Supplements Europe, (2016)

Input into the REFIT of the Mutual Recognition Regulation 764/2008;

BEUC (2016),

Food

Supplements.

BEUC (2016),

Food Supplements – Challenges & risks for consumers.

Ibidem.

Euromonitor data 2014.

112

With respect to the individual Member States, the biggest market is

Italy,

with a turnover of

EUR 3bn,

with around

25%

– EUR 300/400 million – coming from products that use

botanicals.

190

1.3

Stakeholders involved

Organisation

191

FoodSupplementsEurope

Description

International association working to promote

issues related to the industry of the food

supplement in Europe. Members include other

associations active at national level

SME founded in 2003 with over 130 employees

– all based in France – and turnover of over EUR

30 m in 2016

SME founded in the 1980s to produce and

commercialise food supplements. Around 30

employees and turnover of more than EUR 15 m

in 2016

Holland-based subsidiary of a multinational

company founded in 1947. Established over 25

years ago and with annual turnover of around

EUR 15 m in the BeNeLux area

Stakeholder category

Business Association

Business

French SME

Business

Italian SME

Business

Dutch subsidiary of a

multinational company

1.4

Practices and trends identified and main issues related to the application of

Mutual Recognition

192

Information collected from stakeholders show a very heterogeneous picture of the application

of mutual recognition in the sector, with many issues faced by companies, relating to both

differences in national procedures/requirements and to the specific nature of the various

products included in the sector.

On the former, as already mentioned, different Member States follow different procedures and

rules, in addition to a very dissimilar recognition and application of the principle, creating

issues and obstacles companies may have to deal with when trying to enter a new market and

often culminating in having different products for different countries.

On the latter, stakeholders highlight the complexity of a sector with many different products,

ingredients and their combinations, under different levels of controls and requirements among

Member States, making it difficult to have a uniform and clear picture of the whole sector and

the possible strategies to overcome barriers.

193

Different countries, different rules

190

191

192

193

Stakeholders input.

In some cases, stakeholders have asked for not disclosing their contact details.

Please consider that the following sections are based on inputs collected from businesses and business associations.

This is particularly true for botanical products: while the use of botanicals and other derived preparations need to be compliant with

requirements of Regulation (EC) No 178/2002, stakeholders underlined how no real steps forward seem to have been made to

clarify the framework, without a centralised authorisation procedure – which would be extremely helpful – for the use of botanicals

or to determine the classification of botanicals as either medicines or food supplements. This, as well as the large differences among

Member States in the definition of botanicals and lists of products/ingredients which are allowed or not, create an uncertain and

difficult environment for companies to operate.

113

Since the sector is not fully harmonised and regulated to a limited extent at EU level,

194

companies and their products are subject to and need to comply with extensive national

legislation. In this regard, three main areas have been highlighted by stakeholders, where

main issues for companies arise:

Different classification

of ingredients or substances: as already mentioned, some products

may be classified as food supplements by a Member State, while another country – sometimes

its' very neighbour – can consider them medicines, therefore with completely different

requirements, rules and procedures to be followed for their marketing;

Different levels

of ingredients or substances allowed. One of the most (and most differently)

regulated elements is the level of ingredients (e.g. vitamins, minerals and other substances)

allowed in a specific product at national level. Member States tend to have their own levels

that apply to the same products, creating problems for companies which need to adapt their

products and formulas to comply;

Terminology and labels:

It my happen that terms and labels are not uniformly accepted

across Europe (e.g. probiotic). This requires companies to change and adapt labels and

packaging if it is the case.

In addition, it appears there is not complete uniformity in the national systems in place, with

few Member States

195

that, unlike the others, do not rely on a

notification-based system,

which, according to stakeholders, may tend to constitute a sort of pre-market authorisation

instead of a procedure to simply notify national authorities of the products to be marketed and

In the end, what emerges is that there is not a real issue of complexity of procedures, but

rather the co-existence of many different rules, requirements and practices at national level

that make companies investing time and resources to learn and handle them, especially in

those countries with high level of restrictions.

196

However, since most of the companies

present in this sector are SMEs, resources and time become crucial elements for their survival.

The application of mutual recognition

Stakeholders find the application of mutual recognition to be difficult in the complex

environment described above.

Stakeholders underline how national authorities tend to focus on national legislation when

deciding, without taking into account other EU MS-certifications or proof of the fact that the

product is already lawfully marketed in another MS.

In addition, existing instruments meant to favour the application of mutual recognition – such

as Product Contact Points – are not really instrumental in helping companies, given their role

as information hubs, with no real consultative or assessing capabilities and tasks.

Companies emphasise how the main reason used by national authorities to delay or even

block a product from being marketed in another Member State concerns the existence of

194

Some exceptions include the Regulation (EC) No 1924/2006 on nutrition and health claims, or Directive 2002/46/EC, with a list of

substances that can be used for food supplement production, but whose implementation and monitoring is entrusted to the individual

Member States.

AT, NL, SE, SI and UK.

Such as AT, DE, FI, HR, SE.

195

196

114

potential safety issues and the need for the authorities to protect the consumers, which cannot

be easily challenged by companies. Sometimes, however, companies report a lack of

transparency in the reason for denial.

In this regard, stakeholders suggest how the fact the burden of proof is on companies – and

not on national authorities – when demonstrating that a product is not dangerous, may limit

their action and ability to challenge a decision, considering time and resources needed.

Companies may see also a potential effort of national authorities not to allow (or delay)

foreign companies in entering the local market in order to reduce competition for national

companies.

Considering the potential expenses and (considerable) use of time and resources to challenge

a decision taken by national authorities through judicial procedures, sometimes such option is

not considered by companies. According to stakeholders, this can be due to:

Resources

needed, as mentioned. For a company – especially an SME – such resources

needed can be so high to discourage it from pursuing such way. For instance, an Italian SME

active in the area of food supplement suggested how, on average, costs for lawyers and

appealing procedures can amount to around EUR 20,000 per product, but other stakeholders

provided more extreme examples (see Box below);

Uncertainty

of the final outcome of the procedure, which can result in another and definite

loss for the company;

Preference not to

antagonise

national authorities, which will be crucial for the approval of the

many other products that a company in this sector usually has and tries to market.

In the light of these difficulties, according to stakeholders, other possible options include:

Adapting the product

to the national requirements. Clearly also this decision entails some

costs.

An Italian SME indicated how adapting the product to sell it as a medicine could be

virtually unbearable for an SME in terms of time and costs (with the need to develop a

complete dossier, with testing, clinical tests and documentation), easily amounting to

thousands of EUR.

Adapting a product to different limits of ingredients or substances can also require some

effort from the company, since it requires a new technological development, with lab

costs and feasibility studies. Such costs can be important for an SME (at least EUR30-

50,000 in each case), not considering the potential impact on the production lines,

which need to be differentiated even for a single ingredient. This strategy is not likely to

repay when the targeted market is too small not to justify such investments.

Not entering the market

at all, when companies realise that costs and efforts will not lead to

a positive solution or, even if it is the case, they will be too high to be sustained. In this case it

can be very difficult to estimate the costs and potential losses for companies, but there is no

doubt that this can result in losing money as well as possible damages to the company’s

image and reputation, especially after a judicial procedure;

115

Trying to look for a “least

common denominator”

among a group of MS which can have

similar rules and requirements and therefore targeting them with a single product that would

easily comply with all different national regulations.

The box below presents more in details some of the experiences highlighted by stakeholders

in different EU Member States.

Box 6-1: Examples of positive and negative experiences with mutual recognition in EU

Belgium

Stakeholders underline how the Belgian case is one of the hardest for them to deal with, with

so many difficulties in entering this market that – sometimes – leave them to no choice other

than not marketing the product.

A French SME finds that in recent years the marketing of products have become increasingly

difficult. While for some basic products (e.g. ginseng) there is no specific interpretation

needed by Belgian authorities and the scrutiny can be quite fast and straightforward, for other,

more complex products, after dealing with many questions and requests for clarification, the

company saw its requests for notification and marketing to be refused by the Belgian

authorities. Authorities did not accept the brand under which the product was marketed,

which was, however, already lawfully marketed in at least another MS. Without any specific

explanation given about the interpretation that led to this decision, the company is still

expecting a definitive response after more than 2 years. Over EUR 10,000 and months have

been spent by the company, waiting to be in front of a court to challenge the decision.

Considering the turnover for the same product in similar markets, the company can assume to

have a potential loss of turnover between EUR 200,000 and 500,000 for not entering the

Belgian market.

A Holland-based subsidiary of an international company decided not to further pursue the

entrance on the Belgian market with a product already lawfully marketed in another MS. The

issue related to a product which, despite being accepted in other MS and proved not

dangerous, had higher levels of ingredients than those allowed by the Belgian law. The

decision not to enter the market was taken after that for months the company tried to get

access to the market also through the support of SOLVIT and product contact points, without

any success. The company estimates around EUR 100,000 spent in law suits.

Netherlands

The same Holland-based company faced a similar case in Netherlands, when trying to

introduce a product onto the market through mutual recognition.

While no issues were apparently faced in the first few years, in 2013, after a change in the

Dutch law, the company started seeing its requests delayed and eventually denied, under the

motivation that the products was considered unsafe for local consumers, since the level of

some ingredients was higher than the maximum level allowed in the country. Despite proving

that the product was already lawfully marketed in another MS and that was not to be

considered unsafe,

197

the company decided to challenge the decision in front of a Dutch court

197

The company specified how they submitted a proof of safety (considering the lists of products by EFSA, indicating that they could

not find any suggestion that the product was unsafe in its components up to the level that was present in the product), evidence that

116

since no further explanation was given by national authorities. After two years, with no final

decision, the company decided to market the product anyway, on the basis of the evidence

they already provided. A late reaction of the national authorities, which seized the products,

brought the company back to a national court, which decided that the fault was to be ascribed

to national authorities, for not reacting sooner in stopping a product, and providing a

motivation. However, such decisions was not decisive for the company, since it put the

company in the position of starting the whole process to put the product into the market once

again.

The company reported legal expenditures for around EUR 90,000, plus the time and effort

needed to reach a final verdict. In addition, around EUR 500,000 of potential loss (in

consumer price) were considered for 2016 only, due to the impossibility to market the

product.

Spain

While mutual recognition is difficult to implement in many countries, Spain is considered as

one of the most positive examples. Companies encounter very few obstacles in entering the

market – for both types of products and levels of ingredients, as long as they can prove that

the product is already lawfully marketed in another MS. A French SME reported how the

process, including a declaration by the Spanish distributor and the presentation of another MS

notification of the validity of the product, took around 2-3 months and no more than EUR

1,000 for a single product, quite the opposite of many other Member States.

198

Other MS

Baltic Countries

represent an interesting example of how the same product can be considered

very differently across – in this case neighbouring – countries. An Italian SME saw its

product being approved and lawfully marketed in Lithuania, while blocked in Estonia, under

the motivation that it was considered as a medicine by the local authorities. The same product

is still under review in Latvia, with a consultation among authorities whether it should be

considered as a food supplement or not.

Germany

is considered a highly regulated market, with one of the most stringent control and

regulation systems. Issues are particularly related to plants and botanical products, which can

be often considered medicines, with the need for companies to change the formula or some

ingredients of their product. Such changes may cost around EUR 5,000 per product to a SME

– and become very expensive if the company has to make changes to several products at once

– plus additional time and costs to obtain a new certification, carry out new checks on quality

and the need to require a new notification from the MS where the company is based.

199

Notwithstanding such general difficulties, stakeholders highlighted also as the situation seems

to be – slightly and slowly – improving with some positive signals from Member States in

terms of application of mutual recognition. Member States appear to start drawing common

rules and similar requirements (e.g. FR and IT in the field of botanical products), easing the

the product was lawfully marketed and largely sold in another EU MS, a formal letter of approval from a scientists – also part of

EFSA – and requesting a Dutch Research Institute to draft a report on the possible unsafety of the components, leading to no

indications in this sense.

Stakeholders specified, nonetheless, how it is likely that time and costs vary heavily for different products.

Stakeholders underlined how German authorities may require a new notification for the modified product, to be produced by the

original Member State, even if the product is not going to be marketed in such country.

198

199

117

work of companies, while other countries, originally very difficult to enter (e.g. SI), start

accepting mutual recognition, even if at a very slow pace.

1.5

Conclusions

Despite the heterogeneity of cases and requirements across the EU that could create some

very different situations for companies, stakeholders seem to generally agree on the fact the

mutual recognition is not working properly in the sector.

Complexity of products, intricacy and differences in national requirements, scarce knowledge

or disposition of national authorities in considering mutual recognition do not facilitate the

situation of companies, which, as a paradox, may find easier to export food supplements

outside the EU than across our internal borders, often spending more resources in fighting

decisions from authorities than their actual competitors.

And while a full harmonisation of the sector would probably solve many issues but it would

probably be the hardest path to follow, changes seem to be definitely needed to improve the

actual situation.

The main issue that companies highlight is an unbalanced situation between them – which

have the burden of proof– and national authorities, which can too easily delay or deny market

access without a full and clear explanation and little burden afterwards. In addition, open-

ended procedures gives no real room for manoeuvre to companies when a decision is taken by

national authorities, together with a general scarce attitude of national authorities in

considering the principle.

The complexity of the sector, however, may require specific attention to measures and options

to be implemented.

These are all elements that need to be addressed in order to improve the situation and

facilitate a better application of mutual recognition.

2.1

RODUCTS IN CONTACTS WITH DRINKING WATER

Introduction

The legislation of the European Union (EU) provides to Member States (MS) a set of rules

concerning the production and commercialization of products which are in contact with

drinking water.

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Such measures are due to be transposed by each MS: Directive 98/83/EC (Drinking Water

Directive) established that it is up to individual MS to take all the necessary measures to

ensure that materials and products in contact with drinking water do not generate any negative

effect on human health.

However, the transposition and implementation of this provision by national legislators

resulted in the emergence of a multitude of country-specific requirements, with MS pursuing

the same objective (ensuring an adequate level of safety for consumers) through diverse

provisions and test criteria, and different levels of stringency of rules.

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Directive 98/83/EC,

Drinking Water Directive

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This multitude of different national requirements creates a particularly challenging

environment for manufacturers in the sector, also in the application of mutual recognition.

Companies are subject to a series of time-consuming and complex activities necessary to

obtain the certifications, and it conveys an overall increase in costs that inhibits their

propensity in trying to have access to new markets.

During the previous phase of the study, all categories of stakeholders highlighted the

importance of this sector, and the need for intervention to a generally poor implementation of

mutual recognition.

Particular emphasis will be placed on Water Taps, which represent one of the core products in

the sector, with several stakeholders involved highlighting that the commercialization of this

type of product in Europe remains quite challenging.

2.2

Background

The manufacturing sector of products in contact with drinking water spreads in a wide and

articulated range.

A list can be summarized into the following categories:

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Safety and Protection valves,

Water treatment machineries,

Water Taps,

Pipes and fittings, and

Tanks and pumps

Overall, the market demand for this kind of products can be seen as driven by a multiplicity

of factors such as:

The need to replace installed systems at the end of their lifecycle;

Provide for expansions to public networks for new buildings;

The trend towards a sophistication in terms of design (shape and external characteristics) and

performances (water efficiency, control of leakage and reduction of costs).

Considering available information, it is possible to estimate the total turnover of the sector

between

and

43 billion per annum,

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while the number of companies operating can be

estimated at around

7,000 units,

with a heterogeneous distribution among small medium and

large enterprises.

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201

202

203

Figawa,

Effects of Article 10 of the EU Drinking Water Directive on test and certification costs for products in contact with drinking

water,

2016

Eurostat data for product categories is not specific to drinking water contact products, some estimation based on expert evaluation

are available thanks to data and document collection

Panteia,

Economic Effects of Article 10 of the Drinking Water Directive,

2016

119

In terms of Net Sales on the European Market the central and northern European countries are

leaders, with

Germany, Switzerland

and

Nordic countries

on top, while companies from

third countries (e.g. Far East, Middle East and Africa) together with the Iberian Peninsula (ES

and PT) are instead at the bottom,

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as shown in the figure below.

Figure 6-1: Net Sales of Products in contact with Drinking Water (2015)

Author’s elaboration based on stakeholder input

All these products may be hazardous to human health, and therefore must comply with certain

safety requirements.

Tests and certifications

concerning the products that come into contact with drinking water

fall mainly under two categories:

mechanical

and

hygienic,

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as presented in the following

figure.

Figure 6-2: Test and Certifications

Author’s elaboration based on stakeholder input

The cost-spread for these certifications as well as statutory audits is different among EU

Member States.

204

205

Data and information provided by Stakeholders

Mechanical tests are related to issues like pressure fluctuation, closure, deformation, while hygienic tests are related to the

possibility that there is a release of substances in the water.

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In Germany, for example, audit costs amount to a figure around 14% of the total costs for

tests and certifications, while in other countries like U.K., Netherlands and France such a cost

is around 1% of the total.

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Figure 6-3: Total Costs for Certifications

Author’s elaboration based on stakeholder input

Water Taps

Water taps are among the products whose commercialization is more problematic, according

to stakeholders. Water taps are basically valves used to control the release of water.

Unfortunately there is a limited availability in terms of industry sector data, and databases

cannot reach the level of granularity needed.

For this reason, to estimate the key variables useful to give a clear representation of the target

market, a triangulation of the information provided by different stakeholders involved in the

analysis, together with interviews with stakeholders and Eurostat data has been implemented.

Therefore, following figures can be estimated about the segment of the sector that is linked to

the production of taps and valves in contact with drinking water, presented in the following

table.

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Table 6-1: Estimated data on water taps in the EU

Variable

Turnover (EUR mln)

N. of Enterprises

2012

14,768

1403

2013

14,864

1378

2014

15,074

1393

Therefore, it could be estimated that the water taps segment covers about

35%

of the entire

turnover. Plastic plates, sheets, tubes and profiles follow immediately with an average figure

206

207

Figawa,

Member Survey,

2016

Eurostat,

Annual detailed enterprise statistics for industry (NACE Rev. 2, B-E)

–

C2814 Manufacture of other taps and valves

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of EUR 11.398 million. At the end of the list, we can find tanks, reservoirs and containers of

metal (less than EUR 500,000).

Four member states are of particular interest in the current analysis: France, Germany,

Netherlands and Great Britain. These countries are the promoters of an initiative, started in

2011, which aims to harmonize the tests for the hygienic suitability of products in contact

with drinking water. This agreement was launched after the failure of the European

Acceptance Scheme in 2006.

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These countries all together generate on average

50% of the sector turnover

in Europe, and

they host around

one third of the total number of enterprises.

Table 6-2: Estimated data for the 4MS

Variable

4MS Turnover

(EUR mln)

4MS N. of Enterprises

2012

7,4935

423

2013

8,073

406

2014

7,628

419

2.3

Stakeholders involved

Organisation

FIGAWA

Description

German association based in Cologne, whose

members are businesses related to gas and water

sector. The association promotes technological

development in the industry and try to improve

cooperation between the German organizations

and international bodies for the development of

rules and regulations.

Multinational company based in Switzerland

with over 10,000 employees and 125 years of

activity. 80% of the turnover (over EUR2bn per

year) is generated in the EU.

Stakeholder category

Business Association

Business

Geberit

2.4

Practices and trends identified and main issues related to the application of

Mutual Recognition

Interviews with stakeholders representing manufacturers of products and materials in contact

with drinking water

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revealed how currently the application of mutual recognition with

regard to these products is seriously deficient, thus creating limitations to both competition

among businesses and availability of products for consumers in the EU single market.

The main issue stems from the absence of comprehensive EU harmonised requirements on

such products. Article 10 of Directive 98/83/EC (Drinking Water Directive)

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requires MS to

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209

210

This project intended to create a unique European system to assess hygienic aspects of products in contact with drinking water,

source:

http://www.ceir.eu

E.g. pipes, pumps, taps, valves, fittings, water heaters, catering equipment, seals, etc.; and materials such as elastomers, metals,

plastics, etc.

Concerning the quality assurance of treatment, equipment and materials in contact with drinking water.

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verify that the materials and substances used in the treatment and distribution systems are not

present in drinking water “in concentrations higher than is necessary for the purpose of their

use and do not, either directly or indirectly, reduce the protection of human health”. This was

related to, for instance, in terms of the concentration of substances leaking from such

materials, or the breeding of pathogenic microorganisms upon them.

However, as already mentioned, the implementation and monitoring measures are left to the

MS, which have established their own national test and certification bodies

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to assure the

quality of materials and to issue licences for the sale of products in contact with drinking

water. Each body assess the conformity of materials and products in contact with water for

human consumption against specific requirements and criteria that vary at national level (for

example as regards the compliance of products with a specific composition or the effects of

the materials on the microbiological growth in the water).

This framework creates the conditions for double or multiple testing of products in contact

with drinking water in the EU market. Companies willing to obtain a licence for marketing

their product in a single MS have to comply with all the national test criteria and requirements

as defined by in the law and by the relevant test and certifications bodies in that MS.

However, when they want to market that same product in other MS, they are typically

required to repeat those same tests by the relevant bodies in each individual MS they want to

enter, as MS not only have different test criteria, but also do not recognise each other’s tests.

This practice does result into an expensive and time consuming reiteration of activities for

businesses, which are forced to repeat tests and acquire certifications several times in the EU

market, into higher final prices for consumers and – more importantly for our analysis – into

the infraction of mutual recognition principle enshrined in Regulation (EC) 764/2008. In fact,

on the basis such a principle, a MS may not prohibit the sale on its territory of products which

are lawfully marketed in another MS, even where those products were manufactured in

accordance with technical rules different from those to which domestic products are subject.

The current situation is especially difficult for SMEs which may not be able, due to limited

resources, to fulfil the different test and certification requirements imposed in each MS.

As pointed out by a representative of one of the largest European manufacturer of hydraulic

accessories and components, it is currently not possible for a business to market its products

in more than few countries

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at the same time in Europe, mainly due to additional testing and

certifications that shall be taken in each MS requiring so. In some instances, the cost of

additional testing may even exceed the cost of initial testing and certification. As an example,

the interviewee reported that, in the context of EUR 2 million project aimed at selling a single

hydraulic product in 15 EU MS, the total cost for the initial certification of such product

amounted to EUR 35,000, while cost the double testing in a single country (FR) was EUR

38,000. Similarly, for a large project worth EUR 60 million concerning the renewal of

product present on the market for a long time, interviewed stakeholder expects the costs for

initial certifications (estimated at around EUR 1 million) to double when trying to market the

product in all the 28 MS due to additional certification.