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PRODUCT LAW NEWS IN A NUTSHELL
The new EU General Product Safety Regulation

One of the most significant recent reforms in product safety law is the adoption of the so-called General Product Safety Regulation (EU) 2023/988 (GPSRthe new “General Part,” if you will, of European product safety law. It entered into force on June 12, 2023, and will replace the current 2001 Product Safety Directive when it takes effect on December 13, 2024.

Why does the GPSR exist and what is new? 8 facts for take away:

 

  1. Purpose and scope
    The purpose of the GPSR is to “improve the functioning of the internal market while providing a high level of consumer protection.” The aim is thus to guarantee the greatest possible product safety with the least possible interference with the free market. A revision of the existing legal framework was necessary, among other things, because of the development of new technologies and online sales.
    The GPSR applies in principle to consumer products on the Union market, with some exceptions such as pharmaceuticals, food or feed. If a product is subject to sector-specific Union harmonization legislation, such as the Medical Devices Regulation, these take precedence if they already regulate a particular subject. In addition, such products are generally excluded from some parts of the GPSR.
  2. Harmonization of the legal framework
    The GPSR is based on the endeavor to create the greatest possible coherence with the sector-specific harmonization and standardization legislation and with the EU Market Surveillance Regulation, and to close gaps between the legal frameworks wherever possible. This is implemented, for example, by including the fulfillment service provider, setting the time of “making available on the market” in online sales to the time of offer, and extensive referencing as in Articles 16 and 23.
    Recital 3 hereby also justifies the choice of the legal instrument of a regulation: the objective of coherence with the legal framework for market surveillance of products falling within the scope of Union harmonization legislation could be better achieved if both areas were governed by regulations.
  3. Extension and redefinition of the criteria for the assessment of safety
    For the assessment of the safety of consumer products, Art. 6 GPSR contains a new and comprehensive catalog of aspects to be considered. When a product is considered “safe” and when it is not is thus described in more concrete terms than was previously the case – although on a case-by-case-basis, of course, it will remain a matter of interpretation.
    The well-known criteria such as the characteristics of the product, including its composition and packaging, the effect of the product on other products where a joint use is foreseeable, the presentation of the product and the consumer groups exposed to a risk when using the product remain relevant. The GPSR adds to these the appearance of a product where it is likely to lead consumers to use the product in a way different to what it was designed for as well as the product’s cybersecurity features that may be required and any evolving, learning, and predictive functions of the product.
  4. New obligations for non-harmonized products
    Due to the broad scope and an expansion of obligations for various economic actors, new obligations will also arise in the non-harmonized area, especially for manufacturers: for example, in the future, before placing a product on the market, they will have to conduct a more precisely described internal risk analysis, prepare technical documentation, establish publicly accessible communication channels for complaints, and maintain an internal complaints register.
  5. New obligations in online commerce
    European product safety law is to finally arrive in the digitalized age with the GPSR. Providers of online marketplaces must therefore, among other things, establish a central contact point for market surveillance authorities and consumers, have an internal system for ensuring product safety and use the rapid alert system Safety-Gate (formerly: RAPEX). They also face extensive notification, information and cooperation obligations towards market surveillance authorities.
  6. Need for an economic operator established in the EU
    Already since the entry into force of the Market Surveillance Regulation in 2021, a prerequisite for the lawful placing on the market of certain products has been the existence of an economic operator established in the Union and responsible for the product. The GPSR adopts this requirement and thus extends its scope to non-harmonized products.
  7. New requirements for dealing with product recalls, including for online marketplaces
    The GPSR provides for a complex product recall system, which in essence, however, continues to be based on the essential steps of immediate corrective action and informing consumers and authorities. However, the Regulation provides for more precise requirements, for example with regard to the recall notice, which must meet specified formal and content-related requirements (including being headed with the term “product safety recall”) and be written in a language that is easy for consumers to understand. The Commission is to establish a template by means of an implementing act.
    As a result of a recall, the responsible economic operator must also offer “effective, cost-free and timely” remedies to affected consumers, such as the repair, replacement, and an adequate refund. This provision can be read as a kind of incorporation of warranty law into product safety law.
  8. New obligations to report accidents
    In the future, manufacturers will be required to immediately report “accidents that occur in connection with the safety of products” via the online communication portal Safety Business Gateway. The notification is directed to the authorities of the Member State in which the accident occurred. The scope of this rule is not entirely clear, but its wording presumably limits it to cases of particularly serious accidents. The reporting obligation also serves in particular to create a comprehensive collection of data so that dangerous product groups and trends can be identified more quickly in the future.

 

Author:
Eva Ritte, M.A.

Regulatory
Agri-PV now privileged

The expansion of renewable energies in Germany is on the rise and forms a central pillar of the energy transition. The aim is to make Germany’s energy supply climate-neutral and independent of imports of fossil fuels from abroad. The focus is on the expansion of solar energy, and photovoltaic systems are an important building block for a secure energy supply in Germany. The government has therefore set itself ambitious targets: From 2024, Germany is to install photovoltaic systems with an annual capacity of 22 GW of solar energy. Agricultural land is increasingly being considered for this purpose. In order not to endanger agriculture and to avoid further soil sealing, the focus is increasingly shifting to so-called agri-PV systems. The Bundestag has made it easier to grant privileges for these systems in open spaces by introducing Sec. 35 (1) No. 9 BauGB from 03.07.2023.

 

  1. What are Agri-PV systems?

Agri-photovoltaics is a method of using land for both agricultural crop production and PV electricity production. The systems are usually placed on high stilts, above and partially covering the agricultural land. Agri-PV systems increase land efficiency and enable the expansion of PV power while preserving fertile arable land for agriculture or the creation of biodiverse biotopes. In this way, competition for land is avoided and land is used efficiently.

 

  1. New privileges for Agri-PV systems

In order to promote the expansion of renewable energies, the construction of Agri-PV systems is now to be facilitated. Therefore, on 3 July 2023, the Bundestag introduced a new privilege for the installation of agri-PV systems in outdoor areas in Sec. 35 (1) No. 9 BauGB. The privilege functions in the same way as the privilege introduced on 1 January 2023 for PV systems within 200 metres of motorways or railways. In future, agricultural PV systems will be possible in open spaces without a development plan if

  • sie in einem räumlich-funktionalen Zusammenhang zu einem land- und forstwirtschaftlichen Betrieb oder zu seinem Betrieb der gartenbaulichen Erzeugung nach § 35 Abs. 1 Nr. 1 oder 2 BauGB stehen,
  • their floor area does not exceed 2.5 hectares, and
  • only one installation is operated per farm or farm location.

 

III. Was bringt die Privilegierung?

Die Privilegierung in § 35 Abs. 1 BauGB erleichtert das Bauen im Außenbereich ohne Bebauungsplan. Grundsätzlich gilt der städtebauliche Grundsatz, dass der Außenbereich von Vorhaben freigehalten werden soll, soweit die Vorhaben ihrem Wesen nach nicht in den Außenbereich gehören. § 35 Abs. 1 BauGB beinhaltet daher eine abschließende Aufzählung von privilegierten Vorhaben, die im Außenbereich zulässig sind, wenn öffentliche Belange nicht entgegenstehen. Das umfasst landwirtschaftliche Betriebe und Elektrizitätswerke genauso wie Windparks und PV-Anlagen.

Privileges under Sec. 35 (1) BauGB have a stronger influence on the balancing process than the permissibility of other projects under Sec. 35 (2) BauGB, which are not explicitly listed. This is because privileged projects are permissible if they do not conflict with public interests. Other projects, on the other hand, must not interfere with public interests. As a result, the change in the law now means that agri-PV installations in open spaces do not require a development plan and are given more weight in the balancing process than other public interests. However, the following still applies A balancing procedure must always be carried out for Agri-PV installations. Nevertheless, the new privilege can shorten planning procedures and facilitate the expansion of renewable energy.

 

III. Schlecht für Gemeinden, gut für Solarparkentwickler: Keine Möglichkeit von „Konzentrationsplanung“ nach § 35 Abs. 3 S. 3 BauGB

Gleichzeitig hat der Gesetzgeber bei der neuen Privilegierung von Agri-PV-Anlagen den Gemeinden nicht die Möglichkeit gegeben, durch die Ausweisung bestimmter „Konzentrationszonen“ Agri-PV-Anlagen auf bestimmte Bereiche im Gemeindegebiet zu begrenzen.

Denn ein privilegiertes Bauvorhaben steht gemäß § 35 Abs. 3 Satz 3 BauGB in der Regel dann öffentlichen Belangen entgegen und ist unzulässig, soweit durch die Darstellungen im Flächennutzungsplan oder als Ziel der Raumordnung eine Ausweisung solcher Vorhaben erfolgt ist (sog. Konzentrationsplanung). Die Gemeinde darf also die privilegierten Vorhaben im Plangebiet konzentrieren und im Flächennutzungsplan festlegen, soweit die Standorte hierfür geeignet sind. Das dient der Planungshoheit von Gemeinden, die dann den übrigen Planungsraum für andere Vorhaben freihalten kann.

However, this concentration plan only applies to privileged construction projects according to Sec. 35 (1) nos. 2-6 BauGB. The new privileged status for agricultural PV installations is explicitly not included. Thus, the municipality cannot prohibit agricultural PV installations simply because it has designated other areas in the outer area for this purpose. This restriction on concentration planning was criticized during the legislative process; for municipalities, it certainly means a reduction in the planning control options for the permissibility of PV installations. On the other hand, this is good news for solar farm developers and farmers, as it will make it much easier to plan agricultural PV installations in the future. It will be interesting to see whether we really will see more Agri-PV systems over agricultural fields in the near future.

PRODUCT LAW NEWS IN A NUTSHELL
Product eco-design in focus

Europe is to be climate-neutral by 2050. This is not possible without consistent resource conservation. As a central component of the EU Green Deal, the EU Commission has focused on a sustainable product cycle at an early stage. Ecologically sustainable products are to become the norm. The new Ecodesign Regulation is becoming the new guiding star of product law – and the industry is facing major changes.

 

  1. Purpose of the Ecodesign Regulation

The planned EU Ecodesign Regulation will create a legally binding and harmonised framework to ensure that products on the European market are, in the future, not only safe but have also been designed to be ecologically sustainable. To be improved are, in particular, the durability, reusability, retrofittability, reparability, energy and resource efficiency, recycling possibilities and the use of recycled materials.

These sustainability requirements are to apply to almost all physical goods, with the exception of food and feed, pharmaceuticals and (presumably also) vehicles. Against this broad scope, the Ecodesign Regulation will have an enormous significance for the industry – also in comparison to the current Ecodesign Directive, which only applies to certain energy consumption-relevant products.

The specific sustainability requirements for the different individual product groups and their design are, however, not laid down in the Ecodesign Regulation as such but are to be defined by the EU Commission in supplementary delegated regulations.

  1. A real novelty: the digital product passport

A real novelty in product law is also the digital product passport provided for in the draft Ecodesign Regulation. Calls for a digitalisation of product law have been around for years, especially in product safety law. Now, for the first time, a digital product passport will be introduced with the Ecodesign Regulation: Information such as on the ecological sustainability of the respective product is to be provided on a data carrier. This should help consumers in their purchasing decisions, facilitate repairs and recycling, and improve traceability. The digital product passport is intended to support authorities in market surveillance. The exact specifications – on the type of data carrier, the scope of the information and persons with access, etc. – have not yet been determined. They will also be laid down later in the delegated regulations for the individual product groups.

However, it is already clear today that the digital product passport is explicitly not intended to replace analogue information but only to supplement it, at least for the time being. The opportunities of digitalisation are therefore (unfortunately) not consistently used by the legislator. Instead, the industry will be confronted with many unclear practical questions regarding the digital product passport.

  1. Prohibiting the destruction of unsold consumer products

In order to reduce the amount of waste, the EU Member States in Competition Council included a further initiative in the draft Ecodesign Regulation at the end of May. A rather obvious potential for resource conservation lies in a reduced destruction of new goods, which is particularly relevant in online trade with return rates of up to over 50 percent. The EU Commission had already provided for transparency obligations and a general power to adopt acts prohibiting the destruction of unsold consumer products in the draft Ecodesign Regulation.

Given that the textile industry, as the fourth largest producer of negative environmental impacts and an enormous amount of waste – 5.8 million tonnes of textiles are incinerated in the EU every year -, is currently the focus of particular attention, the Competition Council recently added a prohibition to destruct unsold clothing for large and medium-sized companies into the draft Regulation. The prohibition will apply 36 or 48 months after the Regulation comes into force. By then, stakeholders will not only have to think about possible adjustments to their returns policies but may also have to reconsider their purchasing and production planning accordingly.

  1. Start of trilogue negotiations

After the Competition Council has published its “General Approach”, the draft of the Ecodesign Regulation will now enter the so-called trilogue procedure, in which the Member States, the EU Commission and the European Parliament will negotiate the final draft. Subsequently, the draft must be adopted by the EU Parliament and the Council of Ministers. Since the new requirements for ecodesign are laid down in regulations, they will be applicable in all Member States as directly applicable EU law – in contrast to directives which must be transposed into national laws. Particularly with regard to the delegated regulations for the different product groups, in which the European legislator is expected to make very far-reaching specifications for the concrete design of products, industry stakeholders are recommended to closely following and accompanying the legislative process. Not only in order to incorporate practical and strategic interests but also to anticipate the concrete impacts of the planned new requirements on their own product lines at an early stage and to prepare any necessary adjustments to the product design with sufficient lead time. In any case, compliance with the ecodesign requirements will not be a mere “nice to have”, but a prerequisite for legally placing products on the market. Products that do not meet the sustainability requirements (in time) may, in the future, no longer be sold.

 

Author:

Dr. Astrid Seehafer M.Sc.

PRODUCT LAW NEWS IN A NUTSHELL
The new EU deforestation regulation

In our series “Product Law News in a Nutshell” we regularly present new developments and judgments in the field of product safety, product liability and sustainable products. Most of these diverse innovations originate from the pen of European institutions.

Wir starten mit der EU-Verordnung 2023/1115 für entwaldungsfreie Lieferketten (EUDR), die am 29. Juni 2023 in Kraft tritt. Knappe 18 Monate haben größere Unternehmen Zeit, um sich auf die neuen Pflichten einzustellen; kleineren Unternehmen werden teilweise 6 Monate mehr eingeräumt.
Purpose
The purpose of the new EUDR is to reduce global deforestation which contributes to the climate crisis in multiple ways. One reason for this is the high consumption and production of commodities in the EU, for the cultivation of which forests are converted into agricultural land. As part of its EU Green Deal, the Commission has therefore once again focused on supply chains: through bans and due diligence, the EUDR aims to ensure that only products whose commodities were produced on land that has not been deforested since 1 January 2021 are made available on the Union market or exported.
Commodities and products covered
The largest share of deforestation caused by the Union is due to the cultivation or rearing of the following commodities: Oil palm (34%), soya (32.8%), wood (8.6%), cocoa (7.5%), coffee (7%), cattle (5%) and rubber (3.4%). These are precisely the commodities covered by the EUDR.
However, the linchpin of the EUDR is not the commodities themselves, but so-called “relevant products”, i.e. products which contain, have been fed with or have been made using relevant commodities, and which are listed in Annex I of the EUDR. Decisive is therefore this list of products, which are specified by customs tariff numbers and the goods covered by them. The scope of the EUDR therefore does not only include meat of cattle, chocolate, roasted coffee or palm oil, but also, for example, leather, books, tyres, or wooden furniture.
Assessment of countries
The rate of deforestation and of expansion of agricultural land for relevant commodities, as well as production trends themselves vary around the world. For this reason, the Commission will classify all countries into one of three risk categories by the end of 2024 at the latest. Countries with a “high risk” are those for which there is a high risk that relevant commodities will not be deforestation-free; in countries with a “low risk” deforestation is assumed to be the exception. The country list itself is then published by means of implementing acts.
Central prohibition
In future, relevant commodities and relevant products may only be placed or made available on the market or exported if they fulfil three conditions:
They are deforestation-free, meaning that no forests have been converted into agricultural use since 1 January 2021;
They have been produced in accordance with the relevant legislation of the producing country in terms of land use rights, environmental protection, forest-related rules – but also in terms of non-deforestation-related aspects such as labour and human rights, as well as tax, anti-corruption, trade and customs regulations;
They are covered by a due diligence statement.
If these conditions are not met, the products listed in Annex I will no longer be marketable in a few months.
Obliged persons
The obligations of the EUDR primarily affect operators, i.e. persons who place the relevant products on the market for the first time or export them in the course of a commercial activity.
Non-SME traders are, however, also covered by the full range of obligations under the EUDR. This is justified by the fact that they have a significant influence on supply chains and play an important role in ensuring that supply chains are deforestation-free.
SME traders, in contrast, are only subject to rather limited obligations.
Three due diligence obligations
As in general supply chain legislation, the EUDR due diligence obligations are to be understood as obligations of effort, not of success. This means that operators have ensured that products are deforestation-free and in compliance with local regulations if they had followed, documented, and annually verified the following three due diligence obligations before marketing the products:
Collection of information, data, and documents. These range from a description of the products and contact details of all suppliers, to data on the geolocation of all land on which the commodities were produced, to agreements on the land use.
Risk assessment of the information and documents collected based on various criteria laid down in the EUDR. Product may only be marketed if this risk assessment shows that there is no or only a negligible risk of non-compliance.
Risk mitigation measures when a risk is identified, such as requesting further information or conducting independent surveys or audits.
Easing of these due diligence obligations applies to SME market participants: If a due diligence statement has already been submitted for the relevant product, they no longer have to fulfil the due diligence obligations themselves, but only have to provide the reference number of the due diligence statement to the competent authority upon request.
In addition, simplified due diligence obligations apply to all operators if they have ascertained that all relevant commodities and products were produced in low-risk countries. In this case, the due diligence obligations to be complied with are limited to the collection of information, data, and documents. A risk assessment and risk mitigation measures are then only to be carried out if the operator has to assume a risk that the products do not comply with the EUDR or that the rules are circumvented.
Due diligence statement
As evidence of the fulfilment of all due diligence obligations to ensure that relevant products are deforestation-free and comply with local legislation, operators, including non-SME traders, must submit a due diligence statement. The specific information that must be included in such a statement can be found in Annex II EUDR. The due diligence statement must made available to the authorities before the products are placed on the market or exported via an information system that is to be set up by the end of 2024, and must be kept for 5 years thereafter.
If a due diligence statement has already been submitted for a relevant product, other non-SME operators may refer to it if they have previously established that the due diligence obligations have been fulfilled. However, they remain responsible for the compliance of the relevant products.
Legal consequences of non-compliances
If the requirements of the EUDR are not met, the relevant products are not marketable. If the non-compliance is not formal and can be rectified, products must be recalled or withdrawn, donated or disposed of.
In addition to possible competition law and civil law claims, there will also be several regulatory penalties for EUDR infringements. These range from the exclusion from public procurement processes and confiscation of revenues to severe fines with a maximum amount of at least 4% of the total annual Union-wide turnover.
On the Commission’s website, final judgments for infringements and imposed penalties will also be published in a non-anonymised manner – which increases the reputational risk.
The EU is serious.

Dr. Astrid Seehafer, M.Sc.
Eva Ritte, M.A.