Free Movement of Goods in the Context of EU Membership Negotiations:
Practical Issues, Opportunities and Challenges Regarding Serbia’s Efficient Integration into Single Market Free Movement of Goods in the Context EU Membership Negotiations
This study has been produced with the financial assistance of Think Tank Fund (Open Society Foundations) within the Think Tank Young Professional Development Program. The views and opinions of expressed in this study do not represent the official views of the Open Society Foundation.
Free Movement of Goods in the Context of EU Membership Negotiations: Practical Issues, Opportunities and Challenges Regarding Serbia’s Efficient Integration into Single Market
Ksenija Simović EUROPEAN POLICY CENTRE | BELGRADE Table of Contents
CHAPTER I. Introduction ...... 2 1. Introduction into topic 2
1.2. Aims, methodology and structure of the study 3
CHAPTER II. Overview of Serbia’s EU accession process ...... 5 2.1. Timeline of the accession process including main events and documents 5
2.2. Harmonization efforts 6
CHAPTER III. Comparative analysis of EU and Serbia’s legislation pertaining to free movement of goods ...... 6 3.1. EU Single Market and free movement of goods legislation 6
3.2. Free movement of goods- Case law and legislation 7
3.3. Serbia’s state of affairs: Free movement of goods legislation application 37
3.4. EC’s Opinion – 2013 Serbia Progress Report, Chapter 1- Free Movement of Goods 48
CHAPTER IV. Detailed sector analysis of Serbia’s state of affairs in selected policy areas related to Free Movement of Goods ...... 49 4.1. Market surveillance 50
4.2. Quality infrastructure 53
4.3. Intellectual property issues 59
CHAPTER V. Final Remarks ...... 65 VI. Bibliography ...... 71
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The study aims to assess Serbia’ progress in developing institutional and legislative framework in line with the EU acquis and requirements in the area of free movement of goods, specifically focusing on harmonisation of the horizontal legal framework. To achieve this objective, both Serbian and EU documents in the area have been examined and outlined in this study, also interviews with the most relevant EU and Serbia’s expert have been conducted and their contributions have been processed and included in the final analysis and recommendations.
CHAPTER I. Introduction
1. Introduction into topic
The current point in time, which is of great significance for Serbia given the recent beginning of EU accession negotiations, provides also an excellent timing for a study tackling one of the most important issues of the accession process – the harmonization of Serbia’s legislation in policy areas referring directly to those covered by the EU legislation of the European Internal or Single1 Market.
Since it was first conceived during the creation of EEC2 in 1951, the then Common Market (and its four essential freedoms3) have had an important if not essential role in keeping the European project alive and in creating and guaranteeing competitiveness and development of the European industry and economy. Although the project of the Single Market did not always have the full attention of the policy makers, since its re-launch in the 1985 with the Delors Commission’s White Book it never again ceased to be the hot topic of the EU integration process. The White Book which introduced more than 300 measures and directives, together with the ESA from 1986 and the Treaty of Maastricht from 1992 brought to the adoption of the European Single Act in 1993, which assured a further integration of the Single Market. The Delors Commission adopted a New Approach characterized by both negative and positive integration and it allowed for different levels of harmonization. The original main objective of the Common market was to ensure free movement of goods, service, people and capital among the Member States, and it was initially guaranteed by the customs union, while today the Single Market includes a solid and wide legislative structure and concrete decision making mechanisms. It is since the reform of Delors Commission that the Single Market became the heart of EU politics and economic development. It has permitted the development of trade both within Member States and with third countries and it has certainly brought to an improvement of European industry competitiveness.
It is for all these reasons that potential future Members of the European Union, the pre-candidate and candidate countries, must dedicate a significant amount of attention to the harmonization of their legislation in this area, in order to insure the development of their economies. Serbia’s legislation in this area still needs to go through a series of changes and its development strategies need to envision a substantial investment in the development of its economic and industrial infrastructures and
1Although the correct term in European Internal or Single Market, the denomination Common Market is also sometimes used, as it was the first name given during the creation of the EEC. 2 European Economic Community 3 Free movement of goods, Free movement of persons, Free movement of capital and Free movement of services
2 mechanisms in order to be able to cope with the competition and fast pace of Single Market economy, once it becomes a full-fledged member of the EU.
Free movement of goods and the protection of intellectual property are just some of the most important policy areas concerning the Single Markets legislation. The conformity to the laws of these and other policy areas and their implementation guarantees to the new acceding countries an easier functioning in the Single Market, weather they end up becoming a Member State or in case they remain a third country operating on the EU market. Conformity with the regulations governing the Single Market in certain manner also guarantees to the country a better recognition and protects its economy. It is in any case one of the conditions for successful membership negotiations and therefore the adoption of all EU legislation in this area is in the eminent future for Serbia.
1.2. Aims, methodology and structure of the study
Although Serbia has made significant reforms in order to meet EU standards in technical regulations and legislation, especially in the sector specific legislation and development of quality infrastructure and in strengthening of the institutional framework required for the correct implementation of the aligned legislation, we have still identified certain gaps in the application of the horizontal legislation in the area of free movement of goods4.
This research study therefore aims at assessing Serbia’s achievements in developing the legislative structure in line with the existing EU one, as well as assessing the requirements in the area of free movement of goods (Chapter 1 of the Negotiations framework5), focusing mainly on harmonisation of technical legislation in this policy area and studying the horizontal effects of that legislation.
The study will provide an overview of both EU’s and Serbia’s legislation in the area of free movement of goods, more specifically the horizontal legislation and it will especially concentrate on positive and negative types of harmonization, quality infrastructure and market surveillance, as well as on the topic of intellectual property. The study is intended to give valuable insights into the functioning of the European Single Market and the legislation that governs it. These insights will also be the main starting point in assessing the current state of affairs in the Serbian legislation and providing some recommendations for a better harmonization and transposition of EU’s acquis in this policy area.
4 Free movement of goods and the policies which relate to it, will be the focal point of this study. 5 Chapter 1 – Free movement of goods
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In order to meet the objectives of the study both EU and Serbia’s area relevant documents have been studied, analysed and outlined, Closing a Chapter -When the and interviews have with relevant experts have been conducted. Commission notes that closing The study has been structured in this way in order to provide a wide benchmarks have been fulfilled, approach to the examination of legislative harmonization in the the chapter can be formally area of free movement of goods, but also to provide a concrete closed at an Inter-Governmental input for future reforms needed for the successful closing of the Conference, provided the Chapter 1 in the negotiation process. Governments of all Member States are satisfied with the The study is based on a qualitative approach to the analysis of progress made by the candidate the collected data, which includes primary and secondary sources country in the sector covered by of EU law, as well as the relevant national regulations. It also the respective chapter. includes academic literature, especially when it comes to EU law, Furthermore, the chapters are considered temporarily closed since the local academic professional literature contains a limited pending conclusion of the number of publications tackling the matter. accession negotiations, meaning The research is conceived as a case study of the Republic of that “nothing is agreed until everything is agreed”. Serbia in the context of EU integration, however it should be noted (Document - Information that numerous lessons and recommendations stemming from the Concerning the EU accession findings also have relevance in the context of other Western negotiating process, Balkans countries due to the similarity of problems faced in this http://www.mfa.gov.rs/en/imag area. The presentation and analysis, both of the regulations in force es/stories/pdf/Information- in the EU, and of the Serbian regulations in the field of free concerning-the-process-of- movement of goods, are based primarily on normative and negotiations-process.doc) dogmatic (legal) method from the point of view of de lege lata. The research results are obtained through the application of a comparative legal method from the point of view of de lege ferenda. Therefore, the applicable regulations in Serbia are compared with the relevant regulations of the European Union, in order to identify fails in the process of legal harmonization and propose measures to address existing problems. Apart from the desk research, data collection also included 12 semi-structured interviews with experts from Serbia’s relevant institutions and from European Commission’s Directorate General Enterprise and Industry which is in charge for the free movement of goods part of the Single Market legislation.
The study is divided into five chapters. After the introduction, Chapter II represents a timeline of Serbia’s accession process and it introduces the reader to the Stabilisation and Association Process and Agreement and their most important elements, as well as to the legislative harmonization process and the problems that relate to it. Chapter III provides an overview of the legal areas of the acquis communautaire, whose knowledge is necessary for the proper contextualization of problems. In order to understand the policy area of free movement of goods in the EU, but also the situation in Serbia as a future member of the EU, it is necessary to study the basics of the EU Single Market, free movement of goods legislation and important case law in this area. The chapter will also help the reader to better understand the context within which the process is carried out and how the harmonization of Serbian
4 law with European is being done, since it is necessary to understand the significance of the research findings related to methodological problems in the process of harmonization. In the Chapter IV a more detailed overview of certain free movement areas will be provided. Finally, Part VII summarizes all the work which has been presented in the previous chapters and includes a brief review of the conclusions drawn from the research, reflect on the future of Serbia’s further legislative alignment and also raises new questions that may constitute the subject of future research in this area.
CHAPTER II. Overview of Serbia’s EU accession process
Together with an overview of the harmonization efforts, a short outline of Serbia’s accession process is needed, in order for the relevant analysis of Serbia’s current state of affairs in the area free movement of goods to be correctly understood.
2.1. Timeline of the accession process including main events and documents
After the Thessaloniki summit in 2003, Stabilisation and Association Process (SAP) mechanism was developed in order to contribute to long-term stability of South-east Europe, bringing the region closer to European Union. One of the instruments that SAP introduced is the Stabilisation and Association Agreement (SAA). The SAA is a legal framework that follows the SAP and delaines the relations with the Union. The introduction of the SAA has been interpreted in all of the Western Balkans as a sign of approval from the EU.
The SAA has been signed between Serbia and the EU with its Member States on 29th April 2008 and entered into force on 22 July 2013. The SAA was official ratified by the EU on the 1st of September 2013. Even if the Stabilization and Association Agreement was signed between the EU and Serbia, the EU decided not to start with the implementation of the Interim Trade Agreement (TPA) signed along with the SAA. Serbia decided in any case to adopt the decision on unilateral implementation of the Interim Trade Agreement between Serbia and the EU, starting from 1 January 2009. Even through the EU decided to start implementing the Interim Trade Agreement on the 7 December 2009, it entered in force only on the 1 February 2010.
The agreement provides a “…framework for political dialogue and enhanced regional cooperation, promotes the expansion of trade and economic relations between the parties and establishes a basis for Community technical and financial assistance”6 and it also lays down the regulations and methods for monitoring the progress of countries that are applying for membership. Serbia got its candidate status on the 1st March 2012 and on the 1st September 2013 the EU completed the SAA ratification process. In the Council meeting on the 18th December 2013 it was decided that the opening of the negotiations with Serbia should start with the Intergovernmental Conference on the 21st January 2014. However, even before the first Intergovernmental Conference was held in January, explanatory and bilateral screenings for the negotiating chapters already started before that day and are now continuing on a regular pace. These screenings are a very important instrument, as they provide significant input for Serbian Government and guidance for further law harmonization in all negotiating areas.
6 Tamara Obradovic - National Report Free movement of goods: Aspect Of Articles 2830 Treaty Establishing The European Community And Old, New And Global Approach (page 6)
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2.2. Harmonization efforts
The harmonization of legal system with EU’s acquis communautaire became a formal obligation of Serbia once it signed the Stabilization and Association Agreement and was granted EU candidate status. This process is neither simple nor short-period activity.
Serbia, as any other candidate country needs to put in an enormous effort in a substantial legislation reform, as well as in creating sustainable mechanisms for the implementation of new regulations. This requires strong institutional structure and capacity, but also a high understanding of the responsibilities and efforts needed for the reforms by all relevant political factors in the country. In the process of Serbia’s negotiation with EU harmonization process is performed in 35 different areas or chapters, which are thoroughly negotiated between EU and candidate country before granting membership status. After a relatively slow progress in the period from 2003 to 2008, the process of harmonisation of Serbian legislation with acquis communautaire accelerated after 2008. According to the 2011 NPI report the harmonization of Serbian legislation went from an average of 20% in the previous period (2003- 2008), to almost 80% of legislation harmonised in the period between 2008 and 2011. The decision on the opening of the negotiations in the January 2014, was a clear proof of the progress made in the last years.
Nonetheless, Serbia still has a long way to go before the membership moment approaches. Lack of financial resources and awareness on the advantages the process of harmonization provides in long term, can be identified as some of the main obstacles to the advancement of the process. Political limitations, as well as corruption and troubles in establishing a right kind of competition on the market can also limit the process, and make it more costly and long. However, as many experts confirm harmonisation process in Serbia remains realistic and the harmonization of its legislation with the EU acquis communautaire will probably be reached in a reasonable medium term.
CHAPTER III. Comparative analysis of EU and Serbia’s legislation pertaining to free movement of goods
Before proceeding to the analysis of Serbia’s current situation in regards to the harmonization in the area of free movement of goods, a short outline of the most important legislation and case law of the Single Market and free movement of goods will be presented.
3.1. EU Single Market and free movement of goods legislation
Single Market is certainly one of the most important policy pillars in the EU. It is defined by four categories of freedoms, guaranteed to all the citizens of the Union. These four freedoms are:
a) Free movement of people; b) Free movement of goods; c) Free movement of services;
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d) Free movement of capital
These four freedoms find their legal base7 in the EC Treaty and they outline the framework of the Single Market.
As stated by the Commission itself, this guarantees:
Individuals: the right to live, work, study or retire in another EU country Consumers: increased competition leading to lower prices, a wider choice of things to buy and higher levels of protection Businesses: much easier and cheaper way to do business across borders8
The Single Market however doesn’t find his only legal justification in the Treaty, but is also since 1992 enabled with additional laws (mainly Regulation and Directives), that were conceived in the period after 1985 in order to bring down barriers in specific areas and further harmonize the implementation of these laws in single Member States. These additional laws contribute to an easier integration in the Market.
European Commission is in charge of monitoring the functioning of the Single Market, it assures and controls that there is a full respect of the EU law in the Member States.
It is also very important to denote that the Single Market legislation doesn’t only influence the Member States, but it also has an important international component. This external dimension is certainly very present in the enlargement processes, since the adoption of the acquis in this area represents one of the conditions for becoming a full Member of the EU.
The Single Market legislation today comprises a quite extensive list of Regulations and Directives, but it is still in the process of developing, and many argue that it will need further and stricter legislation in order to come to a real completion.
The Single Market direction is under the DG Internal Market and Services, except for the part regarding the free movement of goods which is under the direction of the DG Enterprise and Industry.
3.2. Free movement of goods- Case law and legislation
Free movement of goods has contributed to the development of the Single Market, from which both citizens and businesses benefit daily. Today's unique EU market, with a total population of over 500 million, facilitates buying and selling of products, and provides consumers with a wide choice of best quality products. At the same time, the free movement of goods is important also for the companies, because about 75 % of internal trade in goods takes place in the Single Market. The market is a strong platform guaranteeing an open and competitive environment, but which requires that the free movement of goods legislation is well applied. All the regulations governing the internal or Single
7 The Treaty on European Union (article 3, paragraph 3) and the Treaty on the Functioning of the European Union (articles 21, title I, 26, 28, 29, title IV, title V, articles 114, 115) 8 Source: http://ec.europa.eu/internal_market/top_layer/index_en.htm
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Market are conceived in order to ensure the prosperity of the EU economy in the future. In fact the legislation ensuring the free movement of goods“…is one of the instruments of economic integration of the European economy and of creation of the internal market as an area without internal frontiers in which the right to freedom of movement of goods, services and factors of production (labour, capital, and business / enterprise) is guaranteed.”9 The territory of the European Economic Area, which includes the EU countries and Norway, Switzerland, Iceland and Lichtenstein, constitutes the territory of the internal market. Free movement of goods is a subjective right of the citizens of the EU, a right which they can defend in front of competent courts in Member States and EU. Therefore it is also important to state that “…when the merchandise is legally accepted to the internal market of the EU, this right belongs also to those who do not poses the status of EU citizen”10.
The free movement of goods policy is based on a mechanism that comprehends:
”a) prohibition and prevention of the creation of new barriers to trade between Member States,
b) the assumption of compliance of industrial and agricultural products of a Member State with the regulations governing the placing on the market of a product in another country (mutual recognition / mutual recognition),
c) mutual harmonization of national regulations.”11
In order to correctly approach the legislation and the functioning Measures having equivalent of the system of free movement of good we must address the effect- It was with the Dassonville Treaty articles governing the Single Market, as they are essential to case (Case 8-74) that the concept correctly comprehend the further legislation in the area. of measures having equivalent effect was defined by the ECJ Article 34 TFEU The Court stated: "(…)all trading Prohibits ‘quantitative restrictions on imports and all measures rules enacted by Member having equivalent effect shall be prohibited between Member States which are capable of States’. Quantitative restrictions are understood as “measures hindering, directly or indirectly, which amount to a total or partial restraint of, according to the actually or potentially, intra circumstances, imports, exports or goods in transit”. Article 34 community trade are to be considered as measures having an represent a negative obligation for the Member States as it effect equivalent to quantitative requires abstention from active formal and informal documents restrictions" (Par. 5). that may violate the freedom of movement of goods.
9 Zoran Sretic, Sloboda kretanja robe: Uskladjivanje Republike Srbije sa trgovinskom politikom EU, Evropski pokret u Srbiji, Loznica, Mladost grupa, 2011. (Page.17.) [Harmonization of the Republic of Serbia to the EU's trade policy, the European Movement in Serbia] 10 Ibid. (Page.18) 11 Zoran Sretic, Sloboda kretanja robe: Uskladjivanje Republike Srbije sa trgovinskom politikom EU, Evropski pokret u Srbiji, Loznica, Mladost grupa, 2011. (Page.17)
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Article 35 TFEU
Relates to exports and prohibits ‘quantitative restrictions and all measures having equivalent effect’.
Article 36 TFEU
Provides for ‘derogations to the internal market freedoms of Articles 34 and 35 TFEU that are justified on certain specific grounds’. These restrictions however are not allowed to constitute means of arbitrary discrimination and cannot be a form of disguised restrictions on trade between Member States. These restrictions can be applied when there is a risk resulting from issues such as public health, environment, or consumer protection.12
As stated by the European Commission (EC): “These Treaty articles do not apply when the free movement of a given product is fully harmonised by more specific EU legislation, i.e. especially where the technical specifications of a given product or its conditions of sale are subject to harmonisation by means of directives or regulations adopted by the EU. In some other cases, more specific Treaty rules, such as Article 110 TFEU on tax-related provisions that may hamper the internal market, prevail over the general provisions of Articles 34–36 TFEU.”13
Apart from these main Treaty provisions, the European Court of Justices (ECJ) practice brought to the most significant developments of legislation in the policy area of Single Market and Free movement of goods as well.
Within the process of the harmonization and the regulation of the market we can distinguish two aspects, one which is negative and another one which is characterized by a positive harmonization.
The negative aspect refers to the prohibition of unilateral measures and activities which would directly or indirectly negatively influence the functioning of the internal market, and the positive aspect, which refers to the definition of common standards and harmonized conditions for placing products on the EU market. Under the negative aspect of the regulation of the internal market these would be the most serious measures: a) The abolition of the ban on the introduction of customs duties and charges having equivalent effect between Member States, b) the abolition of the ban on the introduction of quantitative restrictions and measures having equivalent effect to quantitative restrictions and the prohibition of direct or indirect discrimination on the grounds of fiscal origin.
The system of prohibition is primarily focused on the duties and conduct of the Member States, which thus defends the idea that consumers have the right to enjoy the freedom of movement of goods without prejudice. The positive aspect on the other hand involves the harmonization of national technical regulations governing the characteristics of the product (safety, health, environment, energy
12 Consolidated Versions Of The Treaty On European Union And The Treaty On The Functioning Of The European Union (2010/C 83/01) 13 European Commission- Free movement of goods; Guide to the application of Treaty provisions governing the free movement of goods – Publication office of the EU, Luxemburg, 2010 (page 9)
9 etc.). With the help of this aspect the disparity between national technical regulations that create obstacles to the free movement of goods are to be eliminated. The form and content of the regulations are retrieved via the so-called secondary sources of EU law. These regulations are adopted by the EU authorities under the Secondary sources of EU authority granted to them by the Treaty. law or the Secondary Community Legislation – It is at this point crucial to underline again the existence of two categories is provided by Art. 288 of products on the market: harmonized and non-harmonized. TFEU. The binding acts are: “Where secondary legislation is relevant, any national measure relating Regulations, Directives and Decisions and the non- thereto must be assessed in the light of the harmonising provisions and not of binding acts are: those of the Treaty.”14 recommendations and Secondary legislation includes the regulations governing the common rules opinions. of standardization, accreditation and market surveillance, mutual coordination of procedures for conformity assessment and metrology of products. These regulations are also called horizontal measures. It should be noted that harmonization instruments do not cover all kinds of products placed on the EU market, when they don’t it is usually the case of Directive 2001/95/EC on general non- harmonized products. Product safety defines general product safety The regime of placing products on the EU internal market is in the absence of specific governed by the general rules contained in the provisions of the TFEU, harmonization instruments, which case law, Directive 2001/95/EC on general product safety and regulated aspects of security of the products in question. Regulation 764/2008/EC regulating the application of the principle of Regulation 764/2008/EZ on mutual recognition of national technical regulations. procedures referring to the application of certain national Articles 34 to 36 TFEU, the Directive 2001/95/EC and Regulation technical regulations of the 764/2008/EC together with the Directive 98/34/ЕC which establishes product which is lawfully placed procedures for providing notification in the field of technical on the market of another Member States regulates the use standards and the Regulation EC 2679/98 which refers to the of principle of mutual recognition functioning of the internal market in relation to free movement of of national technical regulations goods between Member States constitute the legislation referring to in the absence of non-harmonized products, and therefore are applied where there instruments of harmonization. aren’t any specific product regulations.
In order to better explain how these rules govern the Single Market and how the ECJ practice shaped them, a study of most important cases is needed. These are mostly cases that brought to most substantial changes in the legislation of the free movement of goods and are therefore essential for its study. The following case law is essential for comprehending the Single Market legislation, as well as the creation of the “New” approach.
14 Case C-309/02 Radlberger Getränkegesellschaft and S. Spitz [2004] ECR I-11763, paragraph 53
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MOST IMPORTANT FREE MOVEMENT OF GOODS CASE LAW
a) “Dassonville“15 case- quantitative restrictions and measures having equivalent effects
Even if quantitative restrictions were defined in the Geddo case16, the Dassonville case contributed significantly to definition of the term “measures having equivalent effect” (MEEs). After this case a measure (even if not directed strictly to trade) that could in some way become a measure which poses a restriction on quantity became banded. However, the notion of “measure having equal effect” is significantly wider than quantitative limitations per se.
It is in the interpretation of the “measure having equal effect” (MEEs) where the importance of the case lays. The Court stated:
“All trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade are to be considered as measures having an effect equivalent to quantitative restrictions”17
Terms “indirectly” and “potentially” are precisely what brought to the extension of the scope of the Article. Although, in the beginning the interpretation was directed only to “trade issues” it later became applicable also to the technical regulations.
This definition was helpful to the Court, but its application was a bit complicated, as it tended not to distinguish between indirectly and directly applicable measures. The decision was also very broad, in fact, the Court had to “curtail the broad sweep of the Dassonville formula, when in its judgment Keck18, it recognized that non-discriminatory measures restricting certain selling arrangements (CSAs) did not constitute MEEs and so fell outside the scope of Article 34 TFEU”19.
In fact by interpreting the Article 34 in such a broad sense, the Court is “…granting itself equally broad powers to supervise national measures via preliminary reference procedure, even if in some cases it will find those measures compatible with the Treaty”20 .
Nonetheless, the Court does refer to the principle of proportionality in the Paragraph 6 of its statement:
“In the absence of a Community system guaranteeing for consumers the authenticity of a product‘s designation of origin, if a Member State takes measures to prevent unfair practices in this connection, it
15 Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837 16 Case2/73 Geddo v Ente Nazionale risi [1973] ECR 865 17 Case 8/74, Procurer du Roi v Dassonville [1974] ECR 837, point 5. 18 Criminal proceedings against Bernard Keck and Daniel Mithouard- Joined cases C-267/91 and C-268/91. 19 Catherine Barnard- The Substantive Law of the EU: The Four Freedoms , Oxford press, (fourth edition) 2013 (page 75) 20 Chalmers D., Davies G., Monti G.: European Law Cases and Materials, Cambridge,2010 (Page 478)
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is however subject to the condition that these measures should be Proportionality- “Similarly to reasonable and that the means of proof required should not act as a the principle of subsidiarity, hindrance to trade between Member States and should, in consequence, be the principle of accessible to all Community nationals.”21 proportionality regulates the exercise of powers by the Some examples of national laws which had MEEs, were the laws European Union. It seeks to designed in such manner to enforce certain standards which then brought set actions taken by the institutions of the Union to the exclusion of certain products, but usually protected national within specified bounds. producers. Standards such as: size, weight, labelling, price, content of Under this rule, the goods or tests to ensure standards. involvement of the institutions must be limited This was the case in the cases: to what is necessary to - Commission v Italy22: Where there was a ban on imports of pork, achieve the objectives of the which protected the interests of Italian pig farmers and which was Treaties. In other words, the content and form of the distinctly applicable and quite discriminatory. action must be in keeping - Commission v Ireland23: In this case the issue were the measures with the aim pursued” which had potential to influence conduct of consumers and traders if they Source: http://europa.eu/ Laid down in Article 5 TEU represented a Government action.
b) “Cassis de Dijon” jurisprudence
The importance of the "Cassis de Dijon" case24 and the posterior jurisprudence (so-called Cassis de Dijon jurisprudence): "German Beer25", "Bouchara26", "Foie grass27" cases, etc. is immense as it influenced many of the following regulations and had large effects on the functioning of the Single Market.
Cassis de Dijon Principle: relates to the free movement of goods and it’s based on a preposition that there is no valid reason why goods which have been lawfully produced and marketed in a Member State, should not be introduced into any other Member State.
The case introduces one of the most important principles in EU, the principle of mutual recognition, at that time, mostly to balance the conflict between public interest and free movement of goods.
The importance of the judgment is marked in the Paragraph 8 of the ECJ’s statement:
21 Case 8/74, Procurer du Roi v Dassonville [1974] ECR 837, paragraphe 6 22 Commission v Italy (Case 7/61) (Ban on pork imports) [1961] ECR 317 23 Commission v Ireland (Buy Irish) [1982] ECR 4005 24 Case 120/78, Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein [1978] ECR 649 25 Commission of the European Communities v Federal Republic of Germany. - Failure of a State to fulfill its obligations - Purity requirement for beer. - Case 178/84. 26 Case 25/88 Bouchara [1989] ECR 1105. In the case the court mentioned the obligation of mutual trust, without referring to it as a general principle. 27 Case C-184/96- Commission v France ('Foie Gras') [1998] ECR I-6197
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“…obstacles to movement within the community resulting from disparities between the national laws relating to the marketing of the products in question must be accepted in so far as those provisions may In regards to the free movement be recognized as being necessary in order to satisfy mandatory of goods, the principle of mutual requirements relating in particular to the effectiveness of fiscal recognition “…is directly supervision, the protection of public health, the fairness of commercial applicable in all Member States. It transactions and the defence of the consumer.” obliges Member States to accept products lawfully marketed in Another important outcome of this case was the system of another Member State and which mandatory requirements: are not subject to Union harmonisation unless very specific “These mandatory requirements (justifications) are indistinctly conditions are met. This means applicable measures. List of mandatory requirements is not exhaustive that certain national technical and the CJEU comes up with other new grounds for such justifications, barriers may be justified, while for instance: protection of environment, road safety, maintenance of others may not.” Source: press diversity, protection of younger persons etc.”28 http://ec.europa.eu/enterprise
The Commission also took a stand in regards to the outcomes of the case and stated:
“The principles introduced by the Court imply that a Member State may not in principle prohibit the sale in its territory of a product lawfully produced and marketed in another Member State even if the product is produced according to technical or quality requirements which differ from those imposed on its domestic products. Where a product "suitably and satisfactorily" fulfils the legitimate objective of a Member State's own rules (public safety, protection of the consumer or the environment, etc.), the importing country cannot justify prohibiting its sale in its territory by claiming that the way it fulfils the objective is different from that imposed on domestic products”.29
The cases in a certain manner opened the door to the Intra-Community trading, so the Court introduced also four mandatory requirements that can be accepted in order to restrict trade, these are measures that refer to “…the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions, and the defence of the consumer.”30
Finally, according to the case-law of the ECJ directly discriminating measures may only be justified in the overriding reasons of public interest that are explicitly mentioned in Article 30 of the Treaty and in environmental protection regulations. The ECJ’s judgment in case C-379/98, PreussenElectra31, confirms
28Case law of EU: http://www.caselawofeu.com/cassis-de-dijon-case-and-mandatory-requirements/ (taken on 13/01/2014) 29 European Commission: Interpretative Communication "Cassis de Dijon" of October 3, 1980 30 Steiner, Josephine; Woods, Lorna; Twigg-Flesner, Christian- EU Law (9th ed.). Oxford: Oxford University Press,2006 (Page 378) 31 PreussenElektra case (Case C-379/98) the CJEU decided that statutory provisions of a Member State which, require private electricity supply undertakings to purchase electricity produced in their area of supply from renewable energy sources at minimum prices higher than the real economic value of that type of electricity is compatible with the Treaty.(source: http://www.caselawofeu.com/statutory-provisions-of-a-member-state-which-
13 that national rules that do not directly discriminate foreign goods (so-called restrictions) may also be justified in other overriding reasons of public interest, for example consumer protection.
c) Groeneveld32 formula
The Groeneveld formula concerns the application of the Article 35 and more precisely the fact that the quantitative restrictions on exports and all measures having equivalent effect (art.35 of TFEU) should be prohibited. Art. 35 TFEU “Quantitative restrictions In this case Dutch legislation prohibited all the meet manufacturers to on exports, and all retain a stock or process the horse meet. This measure was taken in order measures having to protect the export of meat products in those countries that prohibited equivalent effect, shall the marketing of horse meet. be prohibited between Member States”. It has been noted that in the Groeneveld case the Court took a different stand then when interpreting the prohibitions in art.34 of TFEU, which apply to discriminatory and indistinctly applicable measures.
In its judgment the Court stated that:
“…national measures which have as their specific object or effect the restriction of patterns of exports and thereby the establishment of a difference in treatment between the domestic trade of a Member State and its export trade in such a way as to provide a particular advantage for national production or for the domestic market of the State in question at the expense of the production or of the trade of other Member States.”33
In certain cases the Dassonville formula, or the measures which are applicable to all products, are however inapplicable when “Member States retain the right to regulate products on their territory in the absence of EU legislation and that such regulations in the context of export don’t not have the effect of double burden on manufacturers”34.
Therefore the Groeneveld formula will be compatible with the Treaty “…if, in the absence of EU rules governing trade of the products in question, it aims to protect the interests defined in Article 36 or the mandatory requirements (protection of non-economic interest), if it is proportionate to the purpose for which it was introduced (goal achieved with the least possible restriction of the market), and if it does not constitute a disguised protection of domestic production.”35
require-private-electricity-supply-undertakings-to-purchase-electricity-produced-in-their-area-of-supply-from- renewable-energy-sources-at-minimum-prices-h/) taken on 13/01/2014 32 Case 15/79, P.B. Groenveld BV/Produktschap voor Vee en Vlees, [1979] ECR 3409 33 Case 15/79 P.B. Groenveld BV v. Produktschap voor Vee en Vlees [1979] ECR 3409, para. 7. 34 Zoran Sretic, Sloboda kretanja robe: Uskladjivanje Republike Srbije sa trgovinskom politikom EU, Evropski pokret u Srbiji, Loznica, Mladost grupa, 2011. (page.31) [Harmonization of the Republic of Serbia to the EU's trade policy, the European Movement in Serbia] 35 Ibid. (Page 31)
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Therefore in this particular case the Court found that the measures taken by the Netherlands Government did not infringe the Article 35 TFEU.
d) Keck case
In the Keck judgment, the Court tried to clarify the scope of Article 34 TFEU. It mostly wanted to underline the fact that certain national regulations can avoid the application of the “Dassonvile measures”, mainly regulations regarding the control of price, methods, place or time of the sale etc. The bases of the Keck case were in fact the selling arrangement and the reselling at loss.
The problem in this case was the fact that the French law prohibited merchants from selling goods at a loss. The law however does not draw a distinction between domestic and imported products. It’s more an economic regulation, which could be classified as a regulation dealing with unfair competition and therefore indistinctly applicable to any person, engaged in retail activities on French territory.
The case provoked a large academic discussion, probably because as prof. Weatherill explained “Keck was doubtless intended to empower national courts to dismiss far-fetched attempts to deploy internal market law which was clogging up the EU judicial system with the minutiae of purely local affairs”36.
The distinctions that Keck case introduced were the following:
“(i) ‘rules that lay down requirements to be met by goods’, related to inherent characteristics of products, and per se are considered to fall under Article 34 TFEU;
(ii) ‘selling arrangements’, regulating questions extrinsic to goods. They are covered by Article 34 TFEU only if they discriminate against imports;
(iii) ‘residual rules’, as a separate group named in subsequent case-law and doctrine. They fall under Dassonville as affecting intra-EU trade.”37
The points 16 and 17 of the judgment constitute the epicentre of the "theory Keck":
“16- By contrast, contrary to what has previously been decided, the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements is not such as to hinder directly or indirectly, actually or potentially, trade between Member States within the meaning of the Dassonville judgment (Case 8/74 [1974] ECR 837), so long as those provisions apply to all relevant traders operating within the national territory and so long as they affect in the same manner, in law and in fact, the marketing of domestic products and of those from other Member States.
17- Provided that those conditions are fulfilled, the application of such rules to the sale of products from another Member State meeting the requirements laid down by that State is not by nature such as
36 S.R. Weatherill.: After Keck: Some thoughts on how to clarify the clarification,33 CMLRev,1996, (Page 885-906) 37 Source: http://kslr.org.uk/blogs/europeanlaw/2012/10/17/rethinking-keck-and-market-access-test-once-again- a-vichy-circle/#_edn3 (taken on 14/01/2014)
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to prevent their access to the market or to impede access any more than it impedes the access of domestic products. Such rules therefore fall outside the scope of Article 30 of the Treaty.”38
MAIN EU HORIZONTAL LEGISLATION IN THE AREA OF FREE MOVEMENT OF GOODS
The previously presented four cases represent somewhat of a base of interpreting the Treaty articles concerning the free movement of goods, and the way Court’s decisions influence the policy and legislation making in the EU. However in order to truly grasp the quintessence of the free movement of goods legislation and case law, we must study in detail some of the main Regulations and Directives of horizontal legislation, which facilitate and regulate the daily functioning of the Single Market.
Regulation (EC) No 764/2008
As explained earlier in the interpretation of the Cassis de Dijon case, mutual recognition is essential for the correct functioning of the EU Single Market. Though the principle is based on articles 28 - 30 of the EC Treaty and the case law of the European Court of Justice, it is also outline in the Regulation (EC) No 764/2008.
The Regulation actually makes the principle fully operational by defining rights and obligations of national authorities and enterprises wishing to sell in a Member State products lawfully marketed in another Member State. The Regulation was necessary because a number of obstacles to the free movement of goods within the internal market were identified. These obstacles are due to, inter alia, the fact that the principle of mutual recognition was insufficiently effective in practice.
The Regulation therefore stipulated concrete procedures that concentrate on the burden of proof, consultation rights and justification that need to be applied by the national authorities when they wish to in any way restrict the marketing of a product which is not subject to harmonised legislation but nonetheless lawfully marketed in another Member State
For the purpose of preventing the cases of denial of access of product to the market of the Member State of destination, Regulation establishes product contact points in each of the Member State.
In accordance with articles 9-10 of regulation 764/2008 on mutual recognition in all Member States Product Contact Points have been setup. These contact points provide free information to businesses on the national technical rules that apply in their own territory. They are essential for the development of the industry as they provide all the details of products, or aspects of products, to which the mutual recognition principle applies, and the national technical rules relating to those products.
Following the logic of the case-law of the ECJ, the Regulation also takes into account that directly discriminating measures may only be justified in the overriding reasons of public interest that are explicitly mentioned in Article 30 of the Treaty and in reference to the environmental protection, like it
38 Source: http://eurlex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEXnumdoc&lg=en&numdoc=61991J02 67 (taken on 14/01/2014)
16 was proven in ECJ’s judgment PreussenElectra in case C-379/9839, whereas national rules that do not directly discriminate foreign goods (so-called restrictions) may also be justified in other overriding reasons of public interest, for example in cases of necessary consumer protection.
It is important to underline that in many cases, however, the harmonised EU rules do allow the Member States to establish supplementary national technical rules which must be met before a product can be marketed on the national market. Those cases of minimum harmonisation, the supplementary national rules are still subject to both Articles 28 and 30 of the EC Treaty and to the Regulation on Mutual Recognition. What this entails is that those national rules need to be justified on one of the grounds of public interest set out in Article 30 or one of the overriding reasons of public interest. Also, they still must be non-discriminatory and comply with the principle of proportionality.
The New Legislative Framework (NLF) and Regulation (EC) 765/2008
Regulation (EC) No 765/2008 and Decision No 768/2008/EC brought together, in the New Legislative Framework (NLF), all the elements required for a comprehensive regulatory framework to operate effectively for the safety and compliance of industrial products with the requirements adopted to protect the various public interests and for the proper functioning of the Single Market. A Regulation and a Decision constituting part of the “Ayral goods package” were adopted by the European Parliament and the Council on 9 July 2008.40
The Regulation lays down the rules for the application of national technical rules, it closely relates to the Cassis de Dijon case, because this case brought to the acceptance of national technical regulations in EU, facilitating the circulation of products lawfully produced and marketed in Member State.
As the Commission states: “The objective of this Regulation is to improve the free movement of goods in the Community. It establishes rules and procedures which should be followed by the authorities of Member States when they take or intend to take a decision which could hinder the free movement of a product lawfully marketed in another Member State and not covered by harmonised rules at Community level.”41
However, also in this case the Art.36 TFEU provides for exceptions to the rules set out in the Regulation, mostly in the cases where there is a need for measures regarding the protection of public interest. In any case, these reasoning’s are very strictly evaluated and the exceptions to the respect of these rules are rarely consented.
The Regulation defines the procedural framework for the conformity assessment of products with national regulations. It also puts the burden of proving the validity of the application of the principle of mutual recognition to the State Agency. Any decision restricting or prohibiting access to the market for a
39 Case C-379/98 PreussenElektra AG v Schleswag AG 40 European Commission- The ‘Blue Guide ‘on the implementation of EU product rules 2014, page 9 41 Source: http://europa.eu/legislation_summaries/internal_market/single_market_for_goods/technical_harmonisation/mi0 006_en.htm (taken on 14/01/2014)
17 certain product, must provide sufficient technical or scientific evidence to support its decision, by the reasoning of Article 36 TFEU or the prevailing reasons of public interest (mandatory requirements).
Returning to the principle of proportionality, what this mean is that the proportionality of any measure that restricts trade, must be based on technical and scientific arguments.
A very important topic that the Regulation addresses is the mutual recognition of the Accreditation bodies and agencies. In fact, the Chapter 5 of the Regulation clearly states that the “recognition of certificates or test reports issued by an accredited conformity-assessment body in accordance with Regulation No 765/2008: Member States cannot reject certificates or test reports on grounds related to the competency of that body.”42
The NLF brought significant changes to the legislative environment of the EU by introducing a comprehensive policy on market surveillance. This has considerably changed the balance of EU legislative provisions from being fundamentally oriented at setting product related requirements to be met when products are placed on the market to an equal emphasis on enforcement aspects during the whole life-cycle of products.43Also, the NLF created a system which brought together all the different elements making the product safety legislation more coherent, comprehensive legislative instrument that can be used across the board in all industrial sectors, and even beyond (environmental and health policies also have recourse to a number of these elements), whenever EU legislation is required.44
Finally, The Regulation introduces the establishment of "product contact points" (PCP) in each of the Member States with the objective to provide information on technical rules applicable to the products and the implementation of the principle of mutual recognition in relation to the economic operators in that State. As described in the Article 10 of the Regulation, the PCP’s are tasked with following duties:
1. PCP shall supply, upon request, in particular to economic operators or authorities of other Member States, the following information: a) The technical rules applied to a particular type of product in the territory where these contact points are established, together with information related with the principle of mutual recognition. b) Information on competent authorities in the Member State, including data related with the competent authority responsible for the supervision of the Regulation. c) The means of appeal, available in the national territory, in case of dispute between the competent authorities and economic operators. 2. PCP shall respond within 15 working days after receiving a request as described in paragraph 1. 3. PCP of a Member State in which the economic operator has lawfully marketed the product may also provide information to economic operators or competent authority referred in article 6. 4. PCP may not charge for providing the information referred in paragraph 1.45
42 Source: http://europa.eu/legislation_summaries/internal_market/single_market_for_goods/technical_harmonisation/mi0 006_en.htm (taken on 15/01/2014) 43 European Commission- The ‘Blue Guide ‘on the implementation of EU product rules 2014, page 10 44 Ibid. 45 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, Article 10
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Regulation (EC) 2679/98- eliminating obstacles to trade
This Council Regulation from 1998, obliges Member States to take all necessary and proportionate measures so that free movement of goods is assured in their territories in accordance with the Treaty. It prescribe specific procedures for the elimination of any serious obstacles to the free movement of goods that may produce damage to economic operators and that require a rapid response. The Regulation refers to any physical barrier which prevents the circulation of goods.
The Regulation is based on Article 268 of the Treaty on the Functioning of the European Union (TFEU) and applies to clear, unmistakable and unjustified obstacles originating in action or inaction on the part of a Member State and which:
-lead to serious disruption of the free movement of goods;
-cause serious loss to the individuals affected;
-require immediate action in order to prevent any continuation, increase or intensification of the disruption or loss in question.46
It is, therefore, applicable to all obstacles to the free movement of goods contrary to Articles 34 and 36 TFEU. Member States have a duty to take proportionate measures to eliminate any real obstacles that threaten the freedom of movement of goods and which are caused by the action of individuals. Not taking action against such barriers is considered a breach of obligations under the Treaty.
The Regulation establishes the Rapid intervention mechanism – this is an early warning mechanism which requires Member States to notify to the Commission in advance major events such as demonstrations or road works concerning important routes, which could potentially impede trade. The mechanism also allows for the economic actors to report risks or actual cases to the Commission. This information is then shared with all Member States.47
Directive (EC) 98/34-Technical Standards and Regulations
This particular Directive is essential for the correct function of free movement of goods. It is the most relevant piece of horizontal legislation regulating this policy area, and extremely important for all the manufacturers in Europe and further.
This Directive defines EU standards as technical specifications adopted by European standards organisations for repeated or continuous application, with which compliance is not compulsory.
46 Source : http://europa.eu/legislation_summaries/internal_market/single_market_for_goods/free_movement_goods_gene ral_framework/l11042_en.htm 47 Source: http://ec.europa.eu/enterprise/policies/single-market-goods/free-movement-non-harmonised- sectors/rapid-intervention-mechanism/index_en.htm
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However it is clearly stated in the rules of the standards organizations that these European standards must be transposed at national level, meaning that standards in question must be made available as national standards in an identical way, and most importantly that any conflicting national standards must be eliminated in a certain prescribed period of time.
The Directive aims to prevent technical barriers to trade being created. It sets up a legal mechanism that requires member states to notify the Commission, and other Member States as well, if they are planning to introduce any new technical regulations. The notifications must occur at the draft stage, as at this stage amendments can still be introduced. Usually, after the notification is submitted, the standstill period of 3 months is observed before the adoption of the draft technical regulation. This period is extremely important as it allows any interested party to examine the draft and give comments.
The exchange of information is carried out in accordance with a two-pronged procedure which divides the Directive into two distinct but complementary parts.
In the accordance with the case law, every technical rule not notified in draft stage or adopted in the course of the binding standstill period may not produce the effect and be applied by the national administrative and judicial authorities against legal and natural persons.48 A noticeable development in the Single Market management is the advancing of the notification procedures “…designed inter alia to to identify problems in the operation of the Single Market rules”.49
This mechanisms and procedures on notifications provide an important tool for the Commission’s objectives in providing greater transparency and control.
The EC admits that the system under the Regulation 98/34, got off to a slow start, but that with time gained momentum and has provided the EC, the Member States and enterprises “…with a window on the activities of national authorities and standardisation bodies in the technical field (rules relating to product composition, labelling, name, testing, etc., as well as rules relating to product life cycle through to disposal)”.50
The scope of the Directive51 has also been progressively extended, and it now also covers all agricultural and industrially manufactured products in order to identify in due time and prevent any measures which indirectly require compliance with technical specification.
48 European Commission- Free movement of goods; Guide to the application of Treaty provisions governing the free movement of goods – Publication office of the EU, Luxemburg, 2010 (page 36) 49 Nick Bernard (edited by Catherine Barnard)-The Law of the Single European Market: Unpacking the Premises (page 110) 50 European Commission- Directive 98/34/EC: An instrument of co-operation between institutions and enterprises to ensure the smooth functioning of the Internal Market, A guide to the procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services, 2005, page 11 51 Directive 98/34/EC is implemented in part in the EFTA countries since 1990 and it’s partly extended to Turkey under the Association Agreement.
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An important contribution of the Directive as confirmed by many EC officials is also that it brought along an entire philosophy of “…information exchange, dialogue and cooperation has evolved between the Member States.”52
The Directive 98/34/EC is seen by the Commission as a turning point on the advancement of the EU legislation on free movement of Good. Together with the adoption of Directive 98/48/EC on Information Society services and the 2004 enlargement it radically changed the application of the legislation and also its geographical scope, which still continues to expand.
Directive 2001/95/EC- On general product safety (GPSD Directive)
The directive applies to the supply of all products to consumers for their personal use, whether they were intended for use by consumers or not. The General Products Safety Directive applies, at least partially, to all products used by consumers and it can entirely apply to a product, in case there is no CE marking directive which already applies, or it can apply partially, if no CE marking directives apply to the specific product. The directive refers to all actors in the supply chain (manufacturers, importers, retailers, distributors) but also those who rework, repair or modify the products. The Directive introduced identical requirements for consumer product safety in all Member States.
The Directive objectives refers to the two Treaty articles:
1) Article 100 (a) which refers to the Single Market with the objective of providing producers and consumers with the benefits of economies of scale that this offers
2) Article 129 (a) which refers to the consumer protection.
It is very important to determine the scope of the Directive, as it applies to the supply of both new and second hand products and also to products that have migrated from professional to consumer user.
The Directive in fact determines general standards and requirements in terms of products, and it does not apply to products that are covered by other directives (such as CE marking). The requirements of these Directives have precedence over the corresponding GPSD requirements. However GPSD in certain aspects complements the provisions of certain sector legislations. One of the key provision of the GPSD refers to the producers, which are obliged under the Directive to place on the market only products which are safe for consumers.53
The Directive applies in a complementary way to sector-specific product safety legislation and it does not at all cover sectors of pharmaceuticals, medical devices or cosmetics, as well as for some sectors which have specific rules, like: toys, chemicals, electrical equipment and automotive vehicles.
52 European Commission- Directive 98/34/EC: An instrument of co-operation between institutions and enterprises to ensure the smooth functioning of the Internal Market, A guide to the procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services, 2005, page 11 53 Specific guidance on the practical application of the GPSD is available at: http://ec.europa.eu/consumers/safety/prod_legis/index_en.htm
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The GPSD, requires the Member States to enforce the requirements on producers and distributors, through the practices of market surveillance and enforcement. Also the Directive gives the surveillance authorities a wide range of monitoring and intervention powers, in order for them to be able to impose penalties on those not respecting the general requirements.
Under the GPSD the rapid alert system, RAPEX, between RAPEX- is EU rapid alert system that Member States and the Commission has been set up. RAPEX facilitates the rapid exchange of system “ensures that the relevant authorities are rapidly information between Member States informed of dangerous products.”54 and the Commission on measures taken to prevent or restrict the Proposal for a Consumer Product Safety Regulation marketing or use of products posing ("CPSR") a serious risk to the health and safety of consumers with the exception of Currently the EU is planning to change the product safety and food, pharmaceutical and medical market surveillance regime by adopting the Consumer Product devices, which are covered by other Safety Regulation and Market Surveillance Regulation (MSR). mechanisms. The two proposed Regulations expected to be adopted in 2014. and it is said that it may enter into force as early as 2015. More on: http://ec.europa.eu/consumers/safet While maintaining most of the existing product safety y/rapex/alerts/main/index.cfm?event requirements, the new legislation would impose new =main.listNotifications&CFID=210877 requirements on the marking of origin and impose stricter 3&CFTOKEN=17681803&jsessionid=0 documentation and notification obligations. As stated by Baker 89caed783a4773705874955257a592 & McKenzie’s experts Kate A. Corby and John Leadley “…CPSR 42132 aims to ensure their identification and traceability by requiring them to be marked with a batch and lot number, the identity of the manufacturer and importer and, for the first time, the product's place of origin. There are also requirements for distributors to check that these key elements are present on the products, and for all economic operators to keep details of the entity "one up" and "one down" from them in the supply chain.”55
They Regulation on Consumer Product Safety with the new novelties augments also market surveillance. However, it is the new Market Surveillance Regulation that will reinforce cooperation, enforcement and the information flow between Member States.
An important introduction to these matters will be the new guiding body, made of Member States' market surveillance authorities, the so called European Market Surveillance Forum that should establish a clear institutional collaboration on market surveillance issues.
54 European Commission- The ‘Blue Guide’on the implementationof EU product rules 2014, Ref.Ares(2014)1025242 - 02/04/2014 55 Source: http://www.lexology.com/library/detail.aspx?g=5936a665-0c45-409b-90e8-99f3e80652a7 taken on 18.05.2014
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Finally, while the RAPEX system will continue to work on the same bases, its jurisdiction, so to say will be moved from GPSD to the MSR.
The above segment explained the negative aspects of the integration to the European Single Market, through the limitation of national actions. Therefore, having outlined the most important case law and legislation, we must also explain better the difference between harmonized and non-harmonized products and at the methods of harmonization used in this policy area.
Non-harmonized and Harmonized products
Non-harmonized products are all those products which are not subject to Community legislation harmonization. The Commission provides the list of all non-harmonized sectors and products.56
However, certain goods which are present on that indicative list can still present some aspects which are not subject to Community harmonisation legislation and, therefore, are usually covered in part by national specifications.
Harmonized products on the other hand, in order to be fully harmonised must be covered by a specific legal provision, mainly Directive, which defines precisely its technical characteristics. The Harmonised European Standards provide for a solid technical basis for manufacturers to test their products, and confirm their compatibility. (List of harmonized standards Annex 1.)
Directives remove all disparities in national legislations and define common rules which are equally applicable to all participants on the Single Market. When a Directive harmonizing certain aspects of market product placement is adopted, Member States cannot invoke in the name of public interest any limitations or introduce new barriers by relying on exceptions to the principle of mutual recognition (Cassis de Dijon formula) except within the limits of the Directive and Article 114 TFEU (ex. Article 95 TEC). The Member States can however, ask after the Directive has been adopted to keep their national measures on the base of the Article 36 TFEU in order to protect the environment and work conditions, it needs to do so by providing significant evidence to support their claims. Also the Member State can on the base of new scientific revelations, ask for the introduction of new protective environmental measures. The Commission is obliged to deliberate on these measures within 6 months after it received the notification from the Member State.
56 More information on non-harmonized sectors can be found at: http://ec.europa.eu/enterprise/policies/single- market-goods/free-movement-non-harmonised-sectors/index_en.htm
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Harmonization methods
Harmonization in the EU Internal Market has two main objectives, one which aims to promote the integration of the Single market, and prevention of isolation of national markets, and the second which aims to harmonize the protection in the interest of EU citizens in terms of health, safety, the environment and fair competition. De facto technical regulations include: EU regulations that regulate the functioning of the internal market in – laws, regulations or administrative terms of free movement of goods, are characterized by two provisions of a MS which refer either approaches, the old and the New Approach. The classification under to technical specifications or to other one or the other approach is determined according to “…a method of requirements or to rules on services, the technical requirements and standards for industrial products, where or to professional codes or codes of practice which in turn refer to the first approach is more rigid and less transparent, or other flexible technical specifications or other and clear and applies whenever it is technically feasible”.57 requirements or to rules on services, compliance with which confers a Technical regulations we refer to here, are legally binding technical presumption of conformity with the requirements for a particular product, its manufacturing process or obligations imposed by the system management, established by the national legislature regarding aforementioned laws, regulations or the protection of a public interest. administrative provisions (Source: EC)
Standards on the other hand, are legally binding technical requirements for a product, process or production management system, codified by private or international standards bodies.
It is however important to underline that standards can be incorporated through certain technics into technical provisions and in that way become legally binding technical requirements for a specific product.
a) Old Approach
The Old Approach of harmonization, reflects the traditional manner in which national authorities drew up technical legislation. Before 1985, the legislation on technical harmonisation was adopted and based on a case•by•case approach, which entailed very detailed specifications with type approval procedures. These legislations were usually motivated by a lack of confidence in economic operators on issues regarding public health and safety. This issues lead the authorities in certain sectors (e.g. legal metrology) “…to deliver certificates of conformity themselves.”58 Old Approach regulations start from the harmonization of national regimes through detailed technical specifications in relation to the individual requirements for each product category. These regulations are characterized by a certain
57 Zoran Sretic, Sloboda kretanja robe: Uskladjivanje Republike Srbije sa trgovinskom politikom EU, Evropski pokret u Srbiji, Loznica, Mladost grupa, 2011. (page.40) [Harmonization of the Republic of Serbia to the EU's trade policy, the European Movement in Serbia] 58 European Commission, Commission staff working document - The 'Blue Guide' on the implementation of EU product rules: Version of ‘Month’ 2013, Internal Market for the Free movement of goods, Draft – Version 30 September 2013, (Page 8)
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“rigidity”, which is reflected in the complicated procedure of changing the above named technical specifications. Hence, this brings to a serious lagging behind of technological advances and standardization in the relevant industrial sector, and thus contributes also to the lagging behind of a certain industry as well. Detailed specifications and the absence of a single regulatory techniques, in re- turn is reflected in the vagueness of such regulations in relation to the "users".
Two reasons have been identified as a cause of these slow adjustments of the Old Approach regulations: “First, the legislation became highly technical, as it had the objective of meeting the individual requirements of each product category. Second, the adoption of technical harmonisation directives was based on unanimity in the Council.”59
The legislation of Old Approach covers the areas of motor vehicles, chemicals, pharmaceuticals, cosmetics, pre-packaging and legal metrology, textiles, crystal glass, footwear labelling and wood classification.
b) New and Global Approach
The deficiencies of the previous approach required a new set of regulations for the free movement of goods in order to achieve the goal of establishing Single Market.
In fact, as previously stated in this study it was under the guidance of The New Approach implies that the Delors Commission that the New Approach was conceived and finally the European directives define approved with the Council Resolution60 on May 7 1985. Also the ECJ only important (essential) practice and the Cassis de Dijon case, well known for its important role in requirements for product promoting the mutual recognition principle played an important role in safety, and that the detailed the establishment of the New Approach. technical content is contained The aim of the New Approach is to accelerate the harmonization of in the so called harmonized national regulations for efficient removal of any national technical European standards (which the barriers in the Single Market. It introduces more flexible criteria for European Commission conformity of industrial products, clarifies the role of standards in the "ordered" from the European regulatory process and regulates conformity assessment of products, Organization for while still achieving high level of predictability and clarity for "users." Standardization).
Also, it is important to denote that the New Approach was followed by For more information on the the Council Resolution on a Global Approach to conformity assessment new approach please consult: adopted, which was then followed by two other Council http://www.newapproach.org/ Decisions61setting out more detailed specifications on testing and
59 European Commission, Guide to Implementation of the Directives Based on the New Approach and the Global Approach , Office for Official Publications of the European Communities, Luxemburg, 2000, (Page 7) 60 Council Resolution of 7 May 1985 on a new approach to technical harmonization and standards [Council Resolution (85/C 136/01) - Official Journal C 136 of 4 June 1985] 61 Council Decision 90/683/EEC of 13 December 1990 (Official Journal L 380/13, 31.12.1990) replaced by Council Decision 93/465/EEC of 22 July 1993(Official Journal L 220/23, 30.08.1993.)
25 certification procedures and providing guidelines for the use of the CE marking, intended to be used in the harmonisation directives. The Global Approach also calls for a generalized use of the EU standards relating to quality assurance, the setting up of well-functioning accreditation systems, as well for a promotion of mutual recognition on certification and testing between the bodies that are operating in the no regulatory sphere.
The Directives characterizing the New Approach are based on a high protection levels of: health, environment and consumers, with the inclusion of new developments based on scientific facts. These Directives also ensure the free movement of goods through technical harmonization of the entire production sectors while guaranteeing a high level of public interest, as defined in Article 114, paragraph 3, of the TFEU. The Directives of the New Approach are one of the most important legal instruments in the Single Market. The New Approach includes a set legal instruments (directives) that prescribe the essential requirements to be met by each product. Essential requirements are most easily meet through the application of harmonized standards, which are nothing but European standards published in the "Official Journal of the European Union." These standards are published by the European standards organizations: CEN (European Committee for Standardization) and CENELEC (European Committee for Electrotechnical Standardization).
Unlike the regulations of the Old Approach, where detailed technical specifications established individual requirements for each category products, the New Approach regulations introduce one instrument covering the entire sector products. These individual directives refer to one particular sector of products (toys, construction products, medical devices, etc.) and establish general, essential requirements to protect certain interests (health, safety, environmental and consumer). Each producer of the given sector must respond to these requirements. (Annex 1.)
The main principle of harmonization is that special rules governing certain product should, whenever possible, avoid to enter into technical details and to limit their expression to "essential requirements". The technical specification is left to the harmonized standards which are adopted in accordance with the provisions of Directive 98/34 /EC62.
The advantage of these “new” regulatory technic is that Directives include a wide range of products that are sufficiently homogeneous among each other. However, implementation of harmonised standards still remains optional. This means that the manufacturer may apply different technical solutions, as long as they meet the essential requirements. Hence, the difference in this case is that that he cannot rely on the legal presumption of compliance with essential requirements.
In other words, only the essential requirements are binding, while finding an adequate technical solution to meet the essential requirements is free field. Also, all the directives of the New Approach are based on ex post control, which means that the verification of product compliance with the essential requirements of the relevant directives is carried out only after the product has already been introduced
62 Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services.
26 on the market. In other words, the New Approach introduces a ban on the prior authorisation procedure.
Product compliance with the New Approach is regulated on following levels:
A) Manufacturers (before marketing products) B) Customs officials (at the entrance of products whose origin is outside the EU), C) Body for market surveillance (after placement of products on the EU market) D) Justice (the occurrence of incidents).
As stated by the Commission the New Approach regulations should be based on the following principles:
Legislative harmonisation should be limited to the essential requirements (preferably performance or functional requirements) that products placed on the EU market must meet if they are to benefit from free movement within the EU; The technical specifications for products meeting the essential requirements set out in legislation should be laid down in harmonised standards which can be applied alongside the legislation; Products manufactured in compliance with harmonised standards benefit from a presumption of conformity with the corresponding essential requirements of the applicable legislation, and, in some cases, the manufacturer may benefit from a simplified conformity assessment procedure (in many instances the manufacturer's Declaration of Conformity, made more easily acceptable to public authorities by the existence of the product liability legislation ). The application of harmonised or other standards remains voluntary, and the manufacturer can always apply other technical specifications to meet the requirements (but will carry the burden of demonstrating that these technical specifications answer the needs of the essential requirements, more often than not, through a third party conformity assessment process)63
Most important legislation on technical standards, the so called „NEW goods package” contains the following legislative acts:
- Decision European of the Parliament and of the Council on a common framework for the marketing of products and repealing decision 93/465/EEC, 902/2008/EC;
- Regulation of the European Parliament and of the Council setting out the requirements for accreditation and Market Surveillance relating to the marketing of products and repealing regulation 93/339EEC, 901/2008EC ;
- Regulation 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,764/2008/EC.
63 European Commission, Guide to Implementation of the Directives Based on the New Approach and the Global Approach , Office for Official Publications of the European Communities, Luxemburg, 2000, (Page 11)
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In regards to the essential requirements and harmonised standards it is important to mention the Decision 768/2008/EC. This Decision defines the form and content of the reference provisions, definitions and general obligations of economic operators and a range of conformity assessment procedures, among which the European legislator can make an appropriate choice.
Also, in the Annex I. of the Decision contains a unique definition of concepts and models of provision that should be taken into account when drafting the regulations governing the free movement of goods. Annex II contains the description of the models of conformity assessment procedures between which the legislator selects the best suited product category in question and the essential requirements that need to be met with the least possible burden on manufacturers. Finally, the Decision also contains the rules governing the labelling of the products with "CE" mark, which is of extreme importance for the protection of legally manufactured EU products.
As most of the New Approach Directives introduce the obligation for producers to mark their products with “CE” marking, we will briefly describe the importance of such sign, both for produces and consumers.
Also, new conformity assessment procedures have been introduced as the key segment of the so called Global Approach. Conformity assessment is defined as: “any activity used to determine either directly or indirectly whether the relevant requirements are fulfilled”.64
c) “CE” marking
The largest number of consumer and industrial products in EU carries the CE mark. In this way, the manufacturer certifies that the product meets all the essential requirements set out in European Directives relating to the product and the conformity assessment procedures conducted.
The “CE” mark indicates that the given product is in compliance with EU legislation and therefore is free to move within the European market. A manufacture, by affixing the CE mark declares, on his sole responsibility, that the product meets all the legal requirements for the CE marking.). This also applies to products made in other countries which are sold in the EEA.
As referred previously only product categories mentioned in specific EU directives can have the “CE” marking. However, CE marking does not indicate that a product More information on the process of was made in the EEA, but only states that the product has been approval for CE marking can be found assessed before being placed on the market. on the DG Enterprise and Industry This implies that the manufacturer has: website:
verified that the product complies with all relevant http://ec.europa.eu/enterprise/polici essential requirements (e.g. health and safety or environmental es/single-market-goods/cemarking/ requirements) laid down in the applicable directive(s) and
64 Dragan Božanić, Jelena Popović - Serbian Horizontal Legal Framework In The Field Of Quality Infrastructure, Ministry of finance and economy of the republic of Serbia, Belgrade, September 2012 (page 19)
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if stipulated in the directive(s), had it examined by an independent conformity assessment body.65
Member States have a duty to properly supervise the labelling of the product. They also have to take measures and prescribe sanctions for improper application of the label. However, the Member States mustn’t prohibit or restrict the placing on the market of the “CE” marked products on its territory, except if there is a case of incorrect application of regulations on the use of these marks.
The "CE" is used for marking of only those products for which relevant EU regulations envisage it. As previously stated, it is the Decision 768/2008/EC that establishes practical rules and terms of putting "CE" marking on the product in terms of emphasis, visibility, readability etc.
Several pieces of Union harmonisation legislation foresee additional markings that are complementary and non-overlapping to the CE marking.
Pictograms or other markings indicating, for instance, the category of use are, according to some Union harmonisation legislation, complementary to the CE marking but do not form part of it or replace it. Some examples:
• the EU energy label for energy-related products;
• the specific marking of explosion protection required for equipment and protective systems intended for use in potentially explosive atmospheres;
• the specific conformity mark (in the form of a ship’s wheel) of the marine equipment directive (instead of the CE marking)
• the equipment class identifier required for radio equipment (Class 2);
• the “Pi” marking required for transportable pressure equipment (instead of the CE marking);
• the supplementary metrology marking required for measuring instruments and non-automatic weighing instruments66
Also, in regards to the CE marking, it is very important to know another concept - global approach. This approach establishes the technical environment for the verification of the compliance with the essential requirements of the directives and the implementation of conformity assessment procedures. Conformity assessment procedures are grouped into eight modules, designated letters from A to H.
Finally, it is important to underline that the manufacturer (natural or legal person) that is responsible for the design and manufacture of products, does not need to be located in the European Union. Also
65 Source: http://ec.europa.eu/enterprise/policies/single-market-goods/cemarking/about-ce- marking/index_en.htm (taken on 13/02/2014) 66 European Commission- The ‘Blue Guide ‘on the implementation of EU product rules 2014, page 53
29 manufacturers outside the EU can affix the CE marking to their product if they have indeed conducted all the necessary procedures.
d) Conformity assessment procedures
Before placing a product on the Community market, the manufacturer must subject the product to a conformity assessment procedure provided for in the applicable Directive, with the view of affixing the “CE” marking.
Previously named Decision 768/2008/EC in the Annex II provides for so-called modules. They provide the European legislator models of conformity assessment procedures that it may take from the directive. European legislator can opt for a model that corresponds to the type of product and the risk in question, in regards to, the availability of competent notification body in that particular area of production and interest as defined by Article 114, paragraph 3 TFEU.
Conformity assessment according to module is based on the procedures carried out by the producer, conducted by third parties or parties authorized to do so by the notified body. Modules can refer to the stage of development (design) of the product, to the production phase or to both phases. There are eight basic modules that can be combined in different ways.
Every Directive of the New Approach (Annex 1.) defines the type and content of possible modules of conformity assessment, which are supposed to provide the necessary level of protection, and reliability assessment in relation to the essential requirements of product according to Directive in question. In addition, the Directives establish the criteria under which a manufacturer can exercise choice between more appropriate procedures. Depending on the applicable directives manufacturer may be required to submit the product to the process of testing and certification to a third party and / or to provide a control system of its certification quality (ISO 9000 series of standards67).
e) Accreditation, standardization, market surveillance and metrology
One of the main introductions of the New Approach was the decentralization, or the transfer of responsibility for conformity assessment from the State to the producers. However, this type of decentralization includes the establishment of an appropriate system of market surveillance by the national authorities after the product has been introduced on the market.
The introduction of this transfer of responsibility “…follows market logic by which an economic operator is primarily interested to place on a market safe, proper and environmentally friendly
67 ISO 9000 series- is a family of standards that addresses various aspects of quality management and contains some of ISO’s best known standards. The standards provide guidance and tools for companies and organizations who want to ensure that their products and services consistently meet customer’s requirements, and that quality is consistently improved. For more information head to: http://www.iso.org/iso/iso_9000
30 products”68. A producer is certainly motivated to do so, in order to preserve good reputation and fight fierce competition.
However, in order to guarantee the good functioning of the system of internal market and its regulations, the EU must guarantee the reliability of the notification bodies assessing the product compliance with the requirements provided in various Directives.
The Regulation (EC) 765/200869 establishes the requirements for accreditation and market monitoring of product sales. It provides unique and immediately applicable rules for the assessment of compliance done by a business accreditation body, as well as the legal framework for market surveillance in the Single Market.
1. Accreditation
The Commission defines accreditation “…as the last level of public control in the European conformity assessment system” and continues by explaining that the accreditation system in EU is “…designed to ensure and attest that conformity assessment bodies (e.g. laboratories, inspection or certification bodies) have the technical capacity to perform their duties adequately”70.
The accreditation system in the EU is based on a peer evaluation, which ensures the proper functioning of accreditation facilities and their practices, across the EU. A functioning system of accreditation is essential, as it aims to increase trust and reinforces the mutual recognition of products on the EU Single Market.
It is very important to underline the importance of accreditation in all regulated sectors, but also in the voluntary areas where there is no specific legislation. It works through conformity assessment bodies and is based on harmonised standards. These standards “…define competence criteria for the national accreditation body and for each category of conformity assessment body (such as laboratories or certification bodies), sector specific requirements and guidance documents drawn up by regional and international organisations of accreditation bodies.” 71
As previously mentioned, it is the Regulation 765/2008, which sets out requirements for accreditation. Its main principles are:
• One accreditation body per Member State (but it is possible to have recourse to another Member State's national accreditation body, should a Member State decide not to set up its own)
68 Zoran Sretic, Sloboda kretanja robe: Uskladjivanje Republike Srbije sa trgovinskom politikom EU, Evropski pokret u Srbiji, Loznica, Mladost grupa, 2011. (page.49) [Harmonization of the Republic of Serbia to the EU's trade policy, the European Movement in Serbia] 69 Regulation (EC) No 765/2008 of the European Parliament and of the Council of 9 July 2008 setting out the requirements for accreditation and market surveillance relating to the marketing of products 70 Source: http://ec.europa.eu/enterprise/policies/single-market-goods/internal-market-for- products/accreditation/index_en.htm#h2-1 (taken on 14/02/2014) 71 Ibid.
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• Accreditation is a public sector activity
• There is no competition between national accreditation bodies
• Accreditation is a not-for-profit activity
• Stakeholder representation is ensured
• Accreditation is the preferred means of demonstrating technical capacity in the regulated area - in the appointment of notified bodies. 72
Also, accreditation must be a non-commercial activity, as the commercialization of the accreditation would decrease the value and credibility its functions. The way the procedure goes, is that National accreditation bodies at the request of conformity assessment body implement procedures for evaluating whether a certification body is competent to carry out specific conformity assessment activities. Where they determine that a body is competent, an accreditation certificate is issued by a national accreditation body. National accreditation bodies later continue to supervise bodies for conformity assessment to which they issued the certificate of accreditation. National authorities of the Member States cannot refuse certificates issued by a conformity assessment body from another Member States, which has in that country been accredited in accordance with Regulation (EC) 765/2008. In this way, the European accreditation infrastructure insures the respect of the principle of mutual recognition of the level of competence of certification bodies from different Member States.
Finally, Member States may choose to perform all or some of the accreditation work, or they can delegate to the national accreditation body of another Member State if it is economically rational for them (for example if setting up their own accreditation body is too costly).
2. Standardization
Regulation (EU) No 1025/2012 provides definitions for the terms “standard”, “national standard”, “European standard”, “harmonised standard”, and “international standard”.
• “Standards” are defined as technical specifications, adopted by a recognised standardisation body, for repeated or continuous application, with which compliance is not compulsory.
• “European standards” are standards adopted by the European standardisation organisations listed in Annex I of Regulation (EU) No 1025/2012
• Taking into account the first two definitions mentioned above, “harmonised standards” are “European standards” adopted, upon a request made by the Commission for the application of Union harmonisation legislation. Harmonised standards maintain their status of voluntary application.73
72 Source: http://ec.europa.eu/enterprise/policies/single-market-goods/internal-market-for- products/accreditation/index_en.htm#h2-1 (taken on 14/02/2014) 73 European Commission- The ‘Blue Guide ‘on the implementation of EU product rules 2014, page 33
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Harmonised European standards help ensure the free movement of goods within the Single Market and ensure the competitiveness of EU industry, therefore standardisation policy plays a central role in the proper functioning of the internal market. These standards also have an important role in protecting the health and safety of consumers and significantly contribute to environmental protection.
EU standardization policy has its legal basis in the Regulation (EU) CENELEC - European Committee No 1025/2012, which sets out rules for “the Union to use European for Electrotechnical standards for products and for services in support of Union legislation Standardization and policies, to identify ICT technical specifications and to finance http://www.cencenelec.eu European standardisation.”74 But, most importantly the Regulation sets obligations for the European standardisation organisations (CEN, CEN- European Committee for CENELEC and ETSI) and national standardisation bodies. It regulates Standardization the way standardisation processes should organized and sets rules on http://www.cencenelec.eu/ stakeholder participation in standardisation activities. ETSI- the European Transparency and regulated stakeholder participation are very Telecommunications Standards important, as they guarantee a smooth functioning of the internal Institute market for products and for services. This means that the work of the European standardisation organisations and the national http://www.etsi.eu/WebSite/cont standardisation bodies must be transparent and publicly available. actus.aspx
Main aims of the standardisation policy are:
to eliminate technical barriers to trade by providing a source of common reference for trade; to provide a common and transparent reference for public procurement; to offer recognised references for quality, certification, and regulatory compliance; to promote European technical integration via the harmonisation of national and European legislation; to encourage technical co-operation and the exchange of expertise; to advance European competitiveness by providing a common, yet flexible, technical environment across the Single Market; to provide a flexible mechanism for consensus-building on identified issues in Europe (the level of consensus necessary to meet the needs of the parties concerned will vary according to the industrial sector, the relationship to the regulatory environment and factors such as product safety and the potential for harm to the environment); to promote European interests in the global economy and create conditions for access to world markets; and, to provide a means of reference for assistance and technical co-operation with third countries.75
74 Source: http://ec.europa.eu/enterprise/policies/european-standards/standardisation-policy/general- framework/index_en.htm (taken on 25/02/2014) 75 Source: http://www.efta.int/eea/policy-areas/goods/standardisation-mra-technical- cooperation/standardisation (taken on 25/02/2014)
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Standardisation is a voluntary activity carried out by all interested parties and that is why EU institutions advise and encourage the European standards bodies to develop new policies in order to adapt to ever-changing market needs.
The two governing principles of standardisation are:
diversifying the products and services offered to interested parties; developing a graduated system of products other than formal standards, for example elaboration procedures and consultation processes.76
In 2011 the Commission presented a renewed standardisation strategy, which has been structured in a way to support the Europe 2020 Strategy for smart, sustainable and inclusive growth.
Funding has always been a bit of a problematic issues in the standardization, as the position of the Council was that interested parties should bear the price of the standardization process. However the new reform envisions more funding to support standardisation activities, as they remain a major driver for the development of standards whose primary function is to support EU policy making and industrial growth.
3. Metrology (and pre-packaging)
Metrology is the science of measurement which includes all theoretical and practical aspects of measurement. It is usually divided in two categories:
a) Legal metrology b) Scientific metrology
In this case, we will be exploring only the aspects of legal metrology, as they are more relevant to the study.
In the EU legal metrology and pre-packaging is a part of the free movement of goods policy area, and therefore under the responsibility of DG Enterprise and Industry.
One of the most important legislative acts in this sector is the Directive 2004/22/EC on Measuring Instruments (MID), which was adopted by the European Parliament and Council on 31 March 2004. The Directive started being implemented in the Member States from 30 October 2006, and it gained precedence over national regulations. It covers “ten categories of measuring instruments and is
76Source: http://europa.eu/legislation_summaries/internal_market/single_market_for_goods/technical_harmonisation/l210 01c_en.htm (taken on 25/02/2014)
34 designed to harmonize the requirements for new measuring instruments placed on the market or put into use in Europe by eliminating the regulatory differences at national level which hinder trade.”77
The main purpose of Directive 2004/22/EC concerning harmonisation of Measuring instruments measuring instruments is to remove technical barriers in trade, while regulating covered by the Directive: trade and use of such measuring instruments as water meters, gas meters, electrical energy meters and measuring transformers, heat meters, measuring 1. Exhaust gas systems for liquids except water, automatic weighing scales, taximeters, analysers measurement systems for material measures and dimensions, odour analyser 2. Water meters and combustion gas analyser.78 3. Active electrical energy meters This Directive belongs to the “new-approach” and it allows manufacturers 4. Heat meters more freedom to choose from a variety of conformity assessment procedures 5. Gas meters and for their instruments. Also, it introduces the notion of presumption of volume conversion conformity to essential requirements. The MID Directive guarantees the validity devices of certificates of conformity throughout Europe. 6. Dimensional measuring Another legislative act of great importance in this sector is the Directive instruments 2009/3/EC of the European Parliament and of the Council of 11 March 2009, 7. Automatic weighing which amended Council Directive 80/181/EEC concerning the approximation instruments indications of the laws of the Member States relating to units of measurement. 8. Material measures The Directive was conceived in order to avoid creating obstacles for Community 9. Systems for the undertakings exporting to certain third countries that require products to be continuous and marked, it is appropriate to maintain the authorisation to use supplementary dynamic indications.”79 measurement of In regards to the pre-packaging measurement the Directive 2007/45/EC of quantities of liquids the European Parliament and of the Council on nominal quantities for pre- other than water packed products80is the legal basis. However, it is the Technical Regulation on 10. Taximeters Quantity of Pre-packed Products and Supervision of Measurement Vessels81 that implements the Directives provisions.
77 Source: http://www.lne.eu/en/metrology/legal_metrology/mid-directive.asp (taken on 28/02/2014) 78 Directive 2004/22/EC of the European Parliament and of the Council of 31 March 2004 on measuring instruments 79 Directive 2009/3/EC of the European Parliament and of the Council of 11 March 2009 amending Council Directive 80/181/EEC on the approximation of the laws of the Member States relating to units of measurement 80 Directive 2007/45/EC Of the European Parliament and of the Council of 5 September 2007 laying down rules on nominal quantities for pre-packed products. 81 Order No. V-73 11/9/2008 of Director of the State Metrology Service concerning technical regulation on quantity of pre-packed products and supervision of measurement vessels. Official Gazette. 2008, No. 106- 4076).
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4. Market surveillance
A highly functioning market surveillance is essential for enforcing the “New Approach.” This means that surveillance technics need to envision constant controls, which would check that products meet requirements of the applicable directives, actions which bring non-compliant products into compliance and finally sanctions which need to be imposed when necessary.
Organisation of market surveillance in the Single Market is based on specific requirements, with legal basis. However, in accordance with the subsidiarity principle, market surveillance is organised and carried out at national level.
It is the obligation of Member States to take all necessary measures to ensure that products are put on the market only if they do not endanger the safety and health of persons, or other interests covered by the applicable Directives, as well as to assure that they have been correctly manufactured. Therefore, Member States must put in practice an organized, effective and sufficiently extensive market surveillance. In base of these responsibilities they also have the power to challenge, under the safeguard clause, the free movement of substantially non-compliant products. Finally, they also must periodically update their national market surveillance programmes and review and assess the functioning of their surveillance activities at least every four years.
The legal basis that regulates market surveillance is the Regulation (EC) 765/2008, which “sets out clear obligations for market surveillance authorities, requires procedures to be put in place for following up complaints, monitoring accidents, verifying that corrective action has been taken and gathering scientific and technical knowledge concerning safety issues.”
Market surveillance is essential in protecting European consumers and workers against risks presented by non-compliant products. Also, an effective Information exchange and cross-border co- operation between market surveillance authorities is essential to ensure consistent market surveillance in the Single Market.
Rapid Information System (RAPEX) is the tool which allows the pooling of information and cooperation at EU level. It is an alert system which allows easy flow of information, insuring that the information about products presenting a risk is transmitted to all Member States in a rapid manner.
RAPEX was initially established under Directive 2001/95/EC on General product safety (GPSD), but its scope was subsequently extended by Regulation (EC) 765/2008 in order for the system to include all harmonised goods.
Another important tool for assuring the cooperation among Member States on market surveillance is ICSMS. This IT tool provides for a comprehensive communication platform between all the market surveillance authorities. It consists of an internal (accessible only to market surveillance authorities) and a public area.82
82 European Commission- The ‘Blue Guide ‘on the implementation of EU product rules 2014, page 96
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3.3. Serbia’s state of affairs: Free movement of goods legislation application
Article 77 (standardization, metrology, accreditation and conformity assessment) in the Stabilization and Association Agreement provides for the obligation of Serbia, to gradually achieve conformity with EU regulations, European standards, accreditation procedures and compliance reviews. This means that Serbia needs to transpose the regulations of the Old and directives of New Approach in its legal system and build a horizontal infrastructure to ensure their uniform application.
The audit of the horizontal legal framework began in 2009, and Serbia is since then actively working on transposing EU legislation in this area. So far, five laws broad in scope have been adopted:
1. Law on Technical Requirements for Products and Conformity Assessment ("Official Gazette of RS", no. 36/09); 2. Law on Standardization ("Official Gazette of RS", no. 36/09); 3. Metrology Law ("Official Gazette of RS", no. 30/10); 4. Law on Accreditation ("Official Gazette of RS", no. 73/10) 5. Law on General Product Safety ("Official Gazette of RS", no. 41/09) and 6. The Law on Market Surveillance (Official Gazette of RS, no 92/11).
1. Law on Technical Requirements for Products and Conformity Assessment
On 13th May 2009 the Serbian parliament adopted the new law on Technical Requirements for Products and Conformity Assessment, which represents the key legal framework regulating conformity of products to technical requirements. The Law “prescribes technical requirements for products, adoption of technical regulations, assessment of conformity of products to prescribed requirements, obligations of all actors in the chain (producers, importers, and distributors), recognition of foreign certificates of conformity, information and dissemination of technical regulations and conformity assessment procedures and enforcement of the law and all related sub-laws.”83
The new law introduced for the first time the term “notified“ and “notification“ into the Serbian legal system, which also comprises that the state designates a number of conformity assessment bodies that operate on the market in order to grantee to the producers the option to select one of them. The Conformity Assessment Bodies (COB’s) performs conformity assessment procedure and issues an adequate certificate of conformity for the product in question. This novelty is very important as it enhances the competitiveness among the conformity bodies.
Also, the new law The new recognised for the first time both terms -“ authorisation” and “designation”, which means, “the new Law accepted both approaches, the Old Approach for the most sensitive products where State maintains certification and control and New Approach for the less sensitive products the conformity to the technical requirements of which is assessed and certified by a
83 Dragan Božanić, Jelena Popović - Serbian Horizontal Legal Framework In The Field Of Quality Infrastructure, Ministry of finance and economy of the republic of Serbia, Belgrade, September 2012 (page 28)
37 notified body; less sensitive products are, in this way, more exposed to the market rules, without any kind of control by the State, except market surveillance.”84
Finally, another important novelty that the law brings into the Serbian legal system is the possibility for the competent Minister to recognise, following a special procedure, the validity of foreign documents and marks of conformity of the certain foreign product if it meets the requirements of foreign technical regulation with guarantee that the product in question is produced respects the same levels of protection (safety, human life and health, environment, consumers and property) and that the requirements to be met by a foreign conformity assessment body fulfil the same level of requirements as defined in the Serbian technical regulation for notified bodies based in Serbia.”85
The new law on Technical Requirements For Products And Conformity Assessment aims to transpose relevant EU Directives of both Old and New Approach into Serbian legal system, for which, the law provides legal ground. The law also enables the Republic of Serbia to take over solutions from EU Directives by prescribing the EU requirements for the products in Serbian technical regulation.
Technical regulations play a crucial role in the mutual recognition of products, and the new Law defines the technical regulation in base of EU practice, as a regulation that for individual or group of products, prescribes, at least one of the following components:
a) technical requirements to be met by a product in order to be placed on the Serbian market
b) conformity assessment procedures,
c) regular and extraordinary inspection of the product,
d) documents that accompany product when placed on the market,
e) marking and manner of marking the product,
f) requirements to be met by conformity assessment bodies,
g) requirements with regard to packaging and labelling,
h) safety requirements for the product during the period of use.86
84 Ibid. (page 30) 85 Ibid. (page 30) 86 Dragan Božanić, Jelena Popović - Serbian Horizontal Legal Framework In The Field Of Quality Infrastructure, Ministry of finance and economy of the republic of Serbia, Belgrade, September 2012 (page 31)
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Apart for the several definitions (box) the new law has introduced significant number of novelties to align Serbia’s Law with EU technical legislation. These novelties mainly refer to the Decision 768/2008/EC87 of the European Parliament and which repeals Council Decision 93/465/EEC88:
a) The “presumption of conformity” principle - the Law introduces a presumption of conformity of the product with the prescribed requirements, which means that if the product is in compliance with the standard requirements referred to in the technical regulation, it is automatically in compliance with the technical regulation. b) The new Law also introduces the option for different operators to perform conformity assessment procedures, such as: 1) producer, 2) notified conformity assessment body, 3) public administration bodies in case of products posing higher risks.
This introduction guarantees a “free space” between the producer and conformity assessment body, which goes beyond the public authority competence. However, the competence of the COB’s should be in the compliance with international standards, which make distinction between three types of COB’s: 1) Testing and calibration laboratories- ISO/IEC 17025 2) Inspection body – ISO/IEC 17020 3) Certifying body – European Standard EN 45011
The competence of the body in Serbia is valid only after the Serbian Assessment Body issues an accreditation act upon carrying out procedure of strictly evaluating the competence of such body.
c) Following the ‘Old Approach’ the law confirms State competence for conformity assessment for the most ‘sensitive’ groups of products, like: medicines, cosmetics, motor vehicles, chemicals. etc. d) The new law also transposes all EC Decisions regarding to the conditions for correct functioning of CABs, such as: requirements concerning professional competences, necessary equipment, business confidentiality protection etc. e) Another novelty is also the introduction of technical regulations which set out the way conformity assessment procedure needs to be conducted. f) The law also transposed the safeguard procedures, as they are regulated in the Decision 789/2008. Mainly, this means that if during the market surveillance procedures and inspector assesses that the product is not in line with regulations, or that it poses any sort of danger, it may undertake measures for the removal of such product from the market. g) Obligations and liability of economic operators, some of the most important regulations of the quality infrastructure in the EU, has been transposed into Serbian legislation, through this new law.
87 Decision No 768/2008/EC of the European Parliament and of the Council of 9 July 2008 on a common framework for the marketing of products, and repealing Council Decision 93/465/EEC. 88 COUNCIL DECISION 93/465/EEC of 22 July 1993 concerning the modules for the various phases of the conformity assessment procedures and the rules for the affixing and use of the CE conformity marking, which are intended to be used in the technical harmonization directives.
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These obligations interest all the economic operators, from the manufacturer/producer, representative, importer to the distributor. h) The law has also tackled the very important issues of the mark of conformity89, prescribing that the manufacturer affixes on the product which is compliant with the technical regulations. Serbian mark of conformity is the only mark guaranteeing that the product placed on the market is the line with the technical requirements foreseen in the Serbian technical regulation. The mark will be valid till the entrance in force of the Agreement on Conformity Assessment and Acceptance of Industrial Products with EU (ACAA Agreement), when it will cease existing and the CE mark will become valid. i) In line with Decision EC 768/2008 and the Directive EC 98/34 the Ministry of Economic and Regional Development has become obliged to notify all technical regulations that belong to non-harmonized area (national In order to create a unified technical regulations), and as well all those that are harmonized information centre on the technical with EU Directives but which still contain some additional regulations, Serbia realized a project national technical requirements. for portal development, application j) Finally, there is a set of novelties referring to the software and databases - TEHNIS. WTO/TBT requirements, like the establishment of the Enquiry More on TEHNIS: points responsible for provision of information on technical http://www.tehnis.privreda.gov.rs/e regulations and related conformity procedures, which is in the n/About_TEHNIS_portal.html like with TBT/WTO Agreements and Notification Directive 98/34/EC. A great importance in applying the provisions from the Agreement and the Directive is the setting up of the application software TEHNIS, an electronic database and Internet portal that upgrades the Enquiry point operations, facilitating the dissemination and notification of technical regulations.
2. Law on Standardization
This new Law on Standardization entered in force on in 2009, it regulates principles and objectives of standardization, its organisation and activities of the national standardization body, as well as the adoption, publication and application of Serbian.
In precedence to the law in 2007 Serbian Government passed the Decision on the establishment of the Institute for Standardization, as an independent body, outside state administration. However, only with the new law regulated its legal status and position.
The new law introduced a series of novelties into Serbian legal system, mainly:
a) novelties based on the harmonisation of the new law with the legal system of the Republic of Serbia;
89 Serbian mark of conformity-“Sl. Glasnik RS”, br.98/2009)
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b) novelties based on the alignment of the new law with WTO /TBT and EU requirements.90
Main novelties that further align Serbian Law with TBT/WTO and EU requirements are:
a) Voluntary application of standards, abolishing in that way the mandatory application of more than 8000 standards. b) International standards are used as the basis for the adoption of Serbian standards, European and national standards of other countries can now be used as basis for Serbian. c) Adoption and announcement procedures have been changed with new provisions in the Law on Standardization. A standard or a relating document must be adopted now in the form of decision by the responsible body of the ISS and published in the Official Gazette of the Republic of Serbia, becoming publicly available to everyone. d) Another novelty concerns the procedures for conformity assessment of products with Serbian standard, given that the application of the standards has become voluntary with the new law, therefore so does the procedure. This means that now, conformity of products, processes and services with the Serbian standard can be confirmed by the declaration of conformity, which can be issued by the producer itself or service provider. e) In line with TBT/WTO principles and EU Directive 98/34 Institute for Standardization is the enquiry point for standards, providing information and notifications about standards. f) The Standardization is now based on the following TBT/WTO principles:
1) the right of all interested parties to voluntarily take part in the adoption of Serbian standards; 2) consensus of interested parties; 3) prevention of the precedence of individual interests over the common interest of the interested parties; 4) transparency of the standardization procedure and public availability of Serbian standards and related documents; 5) mutual consistency of Serbian standards and related documents; 6) taking into account development of technology and rules of international and European organizations for standardization and relevant international agreements; 7) non-discriminatory treatment of foreign products or services and same or similar domestic products or services in accordance with ratified international agreements to which the republic of Serbia is a signatory.91
Until the end of 2013, the Serbian Institute for Standardization (ISS) adopted 94% European Standards, meeting in that way its obligation under the international agreements – to transpose 80%92
90 Dragan Božanić, Jelena Popović - Serbian Horizontal Legal Framework In The Field Of Quality Infrastructure, Ministry of finance and economy of the republic of Serbia, Belgrade, September 2012 (page 62) 91 Dragan Božanić, Jelena Popović - Serbian Horizontal Legal Framework In The Field Of Quality Infrastructure, Ministry of finance and economy of the republic of Serbia, Belgrade, September 2012 (page 66) 92 Currently there are is around 96% of transposed standards
41 of EU standards. The standardization law mainly affects the work of the institute, which currently has 215 active committees.
3. Law on Accreditation
Ministry of Economy is the responsible ministry, in charge of the development and implementation of accreditation policy and strategy. The accreditation system in Serbia includes also the Accreditation Board of Serbia (ABS) and conformity assessment bodies (CABs), previously discussed. The ABS, has been established as an independent body, outside the state administration with the previous Law on Accreditation ("Official Gazette of RS", no. 44/2005) which started its implementation in 2006.
The new Law, which entered in force in 2010 defines the establishment of the accreditation system in Serbia, its activities, financing and it also identifies requirements for accreditation of CABs to perform their activities. Namely, the law defines the responsibilities of the ABS in assessment of CABs competence and in accreditation of the same and precisely defines its legal status and position. The law also diminished the number of governing bodies of the ABS, which now amount to three: Managing Board, Director and Supervisory Board. Also, a number of technical committees has been granted and advisory role, in order to better manage certain types of accreditation, like the ones for laboratories and inspection and certification bodies.
However, the law also introduced a series of novelties in order to harmonize the Law with European Parliament and Council’s Regulation (EC) 765/2008, which sets out requirements for accreditation and market surveillance and also to adapt to the requirements set out in ISO IEC 17011 for accreditation bodies accrediting conformity assessment.
Some of the main novelties in this alignment include:
a) ATS operates on a non-profit bases following Regulation principle “The national accreditation body shall operate on a not-for-profit bases” b) Also in line with the Regulation the ABS is a public institution granted with operation of public authority activity. c) ATS under the new Law in line with the Regulation cannot provide services that CABs provide, nor can it provide any consultancy services or have financial or managerial interest in a CAB. d) A very important aspect is that State is in charge of supervision of the ABS, while ABS is in charge of supervising the CABs. e) In compliance to the ISO IEC 17011 “national accreditation body shall set up and maintain adequate organizational structures which shall provide effective and balanced involvement of all interested parties”. f) Also in line with the ISO IEC 17011 the ABS cannot be in competition with a conformity assessment body and it must maintain its independency at all times. g) In line with Regulation (EC) 765/2008 and the principle of cross-frontier accreditation, ABS refer a conformity assessment body to submit an application for accreditation to an accreditation body from another country. However, ABS can conduct the accreditation procedure on the basis of the application of a conformity assessment body from another country under the two conditions:
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1. if another country did not establish a national accreditation body; 2. if an accreditation body from another country does not perform accreditation of certain conformity assessment activities for which the accreditation is sought.93 h) As the Regulation also prescribes obligatory peer evaluation, the new Law includes also provisions on this, and the ABS has already underwent a peer evaluation with European Cooperation for Accreditation in order to be able to sign bilateral and multilateral agreements (BLA and MLA).
MLA with EA:
i) Finally a set of general requirements from the ISO IEC 17011 have been transposed: 1. A national accreditation body must be organised and run in a way to provide and protect objectivity and impartiality; 2. A national accreditation body shall put in place the procedure as regards the resolution of appeals lodged by conformity assessment bodies against ATS decisions.
By June 2013, the ABS granted accreditation to 535 bodies, including 313 testing, 53 calibration, and 9 medical laboratories, and 125 inspection bodies, plus 21 certification bodies for products, 9 for management systems and 2 for persons.94
4. Law on Metrology
In 2010 a new Law on metrology was adopted. The Directorate for measures and precious metals, which is a part of the Ministry of Economy drafted a new Law in order to harmonize this field with EU and international standards. In fact, the new law is based on acts issues by the International Organization of Legal Metrology (OIML D1 and OIML D9) and relevant EU regulations in the field.
Main reasons for the adoption of the new Law are:
1. enabling uniform measuring in the Republic of Serbia through: • provision of accurate measuring instruments harmonised with international requirements determined for specific measuring instruments; • use of measurement units harmonized with international system of units (SI) • provision of traceability of measurement standards in the republic of Serbia to international measurement standards or measurement standards of other countries. 2. establishment of an impartial and transparent performance of metrological tasks in the Republic of Serbia.95
93 Dragan Božanić, Jelena Popović - Serbian Horizontal Legal Framework In The Field Of Quality Infrastructure, Ministry of finance and economy of the republic of Serbia, Belgrade, September 2012 (page 80) 94 Commission Staff Working Document Serbia 2013 Progress Report Accompanying The Document Communication From The Commission To The European Parliament And The Council Enlargement Strategy And Main Challenges 2013-2014, Brussels, 16.10.2013, SWD(2013) 412 final (page 22) 95 Dragan Božanić, Jelena Popović - Serbian Horizontal Legal Framework In The Field Of Quality Infrastructure, Ministry of finance and economy of the republic of Serbia, Belgrade, September 2012 (page 89)
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The covers both fields of metrology under the responsibility of Directorate for measures and precious metals: legal and scientific.
As mentioned, the Law aims to harmonize Serbian legislation in the field with EU and international regulations. Some of the main novelties include:
a) With the new Law a clear distinction of competence among the institutions is made. The institutions involved in field of metrology are: the Ministry of Economy responsible for policy making in the area of metrology; Directorate of Measures and Precious Metals (DMPM); Metrology Council; conformity assessment bodies, bodies authorised for measuring instruments verification, and accredited calibration laboratories. b) Also a clear distinction between activities of DMPM and other bodies has been made. Mainly, the law identifies DMPM as subject in charge of measuring instruments verification, BUT only in case when there are no authorised/designated bodies for the verification of the instruments concerned. However, DMPM supervises the work of the authorised/designated bodies. This novelty under the Law is also DMPMs new organizational structure, which facilitates the functioning of the Directorate and also guarantees a better surveillance in legal metrology. The new law and organizational structure facilitated the authorization of 30 inspection bodies for the verification of legal instruments, which assure the competitiveness in this area and also prevent the creation of the monopoly position of the DMPM. In relation to this it is very important to make the following distinction between authorised bodies for the verification of measuring instruments as defined in the Law on Metrology and designated bodies as defined in the Law on Technical requirements and conformity assessment: • designated bodies are mostly private bodies on the market, freely selected by the producers; • authorised bodies, mainly privately owned, although “engaged” by the state and as such they are representatives of the state given that they are granted public authorities. 96
As an illustration, the following elements of the public authority could be recognised with the authorised bodies:
1) the state supplies authorised bodies with the marks used for the verification of measuring instruments – the verification inspection body affixes the “state” mark to an instrument instead of issuing a certificate; 2) price list of an authorised inspection body needs to be approved by the Serbian Government; however, this is not the case with the bodies (testing laboratories, inspection bodies, certification bodies) designated in accordance with the law on Technical requirements and conformity assessment and its sub-laws used for the implementation thereof).97 3) for measuring instruments verification, the body conducting the examination must be authorized and accredited for the proper scope of the type of measuring instruments.
96 Dragan Božanić, Jelena Popović - Serbian Horizontal Legal Framework In The Field Of Quality Infrastructure, Ministry of finance and economy of the republic of Serbia, Belgrade, September 2012 (page 91) 97 Ibid. (page 92)
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4) The legal control over measuring instruments is mandatory in order to insure a higher security and accuracy in transaction of goods, protection of health and general safety, protection of environment, control and security of traffic and testing of pre-packaged goods. 5) With the new law, three types of control of measuring instruments are identified: verification of measuring instrument - procedure which includes testing and marking and/or issuing of a verification certificate confirming that the specific measuring instrument complies with the type approval and or with all the prescribed metrological requirements. type approval certificate - certificate or document issued on basis of previous testing of a measuring type confirming that the type of measuring instrument complies with the relevant metrological and technical requirements conformity assessment of a measuring instrument - procedure of testing and evaluating measuring instruments to ascertain whether a single instrument, an instrument lot or a production series of instruments are in compliance with all the prescribed requirements applicable to this type of instrument, and to any other product
6) The new Law also provides strict provisions for pre-packaged goods, defining this type of goods clearly and precisely. This also includes a clear definition of the elements specific for this kind of product:
conformity mark (conditions for marking); volume standard as a measuring instrument for pre-packaged products; measuring bottle as a product – marketing conditions; extraordinary testing of conformity of pre–packaged products with metrological requirements; exception - free samples which are used for marketing and service provision services (airplanes, ships and trains).98
7) In accordance with International agreements, the new Law also enhanced the procedures for the recognition of foreign documents and marks of conformity. This means that “The Minister has the right to recognise foreign type approval certificates, verification certificates and/or marks and other signs of conformity of foreign origin provided that these documents and marks have been issued in accordance with conditions prescribed by the Republic of Serbia.”99
8) Probably the most important novelty in the new Law is the metrological surveillance, which is to be performed by the Directorate for measures and precious metals. The importance of this task is separately defined, as it should not interfere with other tasks covered by the Directorate. The surveillance covers: measuring instruments on the market; measuring instruments in use; pre-packaged products;
98 Dragan Božanić, Jelena Popović - Serbian Horizontal Legal Framework In The Field Of Quality Infrastructure, Ministry of finance and economy of the republic of Serbia, Belgrade, September 2012 (page 95) 99 Ibid. (page 96)
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use of legal measurement units; professional work of authorised/designated bodies.
9) The new Law has also introduced more severe transparency of traceability in regards to international measurement standards.
The image underneath shows how the traceability chain is implemented in Serbia in regards to the national and international standards:
Source: Dragan Božanić, Jelena Popović - Serbian Horizontal Legal Framework in the Field of Quality Infrastructure, Ministry of finance and economy of the republic of Serbia, Belgrade, September 2012
5. The Law on General Product Safety - Horizontal Implementation of the QI laws
The new Law, adopted in 2009 is in full accordance with the principles of Directive on General Product Safety (2001/95/EC) and it also includes all the dispositions of the new framework for marketing of products, adopted in the EU in 2008.
The setting up of the previously named RAPEX system is probably the most important novelty, which means that Serbia is now part of this integrated system which aims to coordinate all relevant market surveillance authorities in order to assure a fast and efficient information exchange about dangerous products. By establishing a system of fast exchange of information on dangerous products represents a further successful integration into EU RAPEX system and general product safety Directive (Reg. EC 765/2008).
Other novelties and procedures introduced in the establishment of the fast information exchange system are:
1) Contact point – Ministry of Agriculture, Water Management and Trade Market inspectorate are in charge of keeping a register on dangerous products. 2) Market surveillance authorities and Customs Authorities – obliged to inform the Contact point if they detect any dangerous products on the market
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3) Contact point forwards the information to all relevant authorities of market surveillance in order to intensify checks for presence of dangerous products 4) Authorities are then obliged to inform the Contact point of any findings 5) Contact point also has the obligation to follow the available international database on dangerous products, and check whether such products could be found on Serbian market and advise the authorities to intensify checks
6. The Law on Market Surveillance
The new Law adopted in 2011 for the first time defined the concept of market surveillance “as a set of activities implemented and measures taken by the market surveillance market, intended to product compliance with safety, technical and other requirements set out in suitable regulations, primarily technical regulation and to ensure that the products placed on the market of the Republic of Serbia do not compromise human, health and safety or other aspects of the protection of human rights”100created a system of codified provisions for market surveillance, regulating:
- General rules of market surveillance - Market surveillance authorities and their activities - Exchange of information and communication between MSAs101 - Cooperation between the MSAs and customs authorities - Coordination between the MSAs and monitoring of the market surveillance activities
The new Law is lex generali relating to market surveillance, applying only when there is no other specific laws, lex specialis, which apply to specific market surveillance activities.
As a novelty the law introduces a specific form of coordination between market surveillance that takes place through the Product Safety Council102 and its task is to: monitor and analyse the implementation of market surveillance law.
The law sets out strict principles which define the obligations and responsibilities of market surveillance authorities and customs authorities in the control of the products entering the market of the Republic of Serbia. The cooperation between the two authorities is essential for assuring that all products entering the market are in order, and that they will not pose any risk to the consumers.
Customs authorities are under the new Law obliged to suspend the release of a product on the market of Republic of Serbia, if the product does not comply with prescribed requirements, or if there is a reasonable suspicion that the product may pose risk for health, safety or environment. They are also
100 Dragan Božanić, Jelena Popović - Serbian Horizontal Legal Framework In The Field Of Quality Infrastructure, Ministry of finance and economy of the republic of Serbia, Belgrade, September 2012 (page 122) 101 Market surveillance authorities 102 The Council includes: representatives of all markets surveillance authorities, Serbian Chamber of Commerce, Serbian Standardization Office, Serbian Accreditation Authority and consumer protection organizations.
47 oblige to stop the product at the customs in case such product is not accompanied by required documentation (or if documentation is not in order) and if they notice that CE mark is used in
The provisions which relate to the obligations of the market surveillance authority are probably the most important novelty in the Law. This refers specifically to the risk evaluation of a product that the customs have deemed ‘risky’ or ‘dangerous’, as if the market surveillance authorities find that the product does not pose any serious risk to the health and safety of consumers, the custom authority needs to realise the product for free circulation. However, if the market surveillance authority agrees that the product poses a danger for consumers, the law requires that a notice “DANGEROUS PRODUCT- RELEASE FOR FREE CIRCULATION IS NOT AUTHORISED” is issued.
On the other hand, for products that are not dangerous, but still do not comply with prescribed requirements, the process is similar, but the Law requires that a commercial invoice stating “PRODUCT NOT IN CONFORMITY – RELEASE FOR FREE CIRCULATION NOT AUTHORISED” is issued.
3.4. EC’s Opinion – 2013 Serbia Progress Report, Chapter 1- Free Movement of Goods
In Serbia’s 2013 Progress Report the European Commission stated that in regards to the horizontal measures “… Serbia has further aligned legislation with the EU acquis by adopting the remaining implementing legislation on metrology in January. Staffing levels in the ministry in charge of horizontal coordination remain to be strengthened.”103
In regards to the standardization the report had a positive outlook on the fact that the ISS adopted almost 94% of European Standards. Also, it found the administrative capacities of the Institute and its working structure of technical committees adequate. However, it underlined that Serbia has not yet applied for a membership at CEN or CENELEC.
Also, the area of conformity assessment was positively evaluated, as Serbian Government designed a set of conformity assessment bodies in accordance with the relevant EU Directives: 7 for the Machinery Directive, 4 for the Low Voltage Directive, 4 for the Electromagnetic Compatibility Directive, 7 for the Lift Directive, 8 for the Pressure Equipment Directive, and one for the Radio and Telecommunications Terminal Equipment Directive.
The field of accreditation, is a prime example of Serbia’s success, especially since the Accreditation Body of Serbia (ABS) signed the International Laboratory Accreditation Co-operation (ILAC) Mutual Recognition Agreement for the field of calibration, testing, and inspection, and the International Accreditation Forum (IAF) Multilateral Agreement for product certification fields. Also, the ABS was for the first time recognised by the European Commission (EC), as a national body approved for performing the certification of organic products in line with the acquis, allowing Serbia to freely export and place its organic products on the EU market. By June 2013. the ABS had granted accreditation rights to 535 bodies, including 313 testing, 53 calibration, and 9 medical laboratories, and 125 inspection bodies, plus
103 Commission Staff Working Document Serbia 2013 Progress Report Accompanying The Document Communication From The Commission To The European Parliament And The Council Enlargement Strategy And Main Challenges 2013-2014, Brussels, 16.10.2013, SWD(2013) 412 final
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21 certification bodies for products, 9 for management systems and 2 for persons. However, the EC stated clearly in the document that staffing levels of the ABS remain insufficient to handle these new tasks.
Regarding the area of metrology, the EC evaluated positively the fact that the Directorate for Measurements and Precious Metals became a contact member of EURACHEM and the fact that Serbia was for the first time included in EURAMET’s Metrology Programme for Innovation and Research (EMPIR). Moreover 23 rulebooks for the implementation of the framework law have been adopted. Overall, the administrative capacity of the Directorate is considered sufficient.
In the area of market surveillance, which has been an area with very low activity for years, the EC positively viewed the fact that Product Safety Council restarted its regular operations in January 2013., including representatives of all relevant groups. Interinstitutional co-operation and co-operation with the civil society sector, businesses and academia has improved. The administrative capacity of the joint body for surveillance of chemicals and biocidal products needs to be reinforced.
In regards to the Old Approach product legislation, the EC stated that Serbia still needs to align its legislation acquis from a number of Old Approach areas, such as pollutant emissions from non-road engines with the crystal glass, textiles and footwear.
In regards to the New Approach Serbia needs further alignment in the areas of construction products, cableway installations, recreational craft, cosmetics, and toy safety. On the other hand, Serbia has transposed the relevant directives in the field of personal protective equipment, equipment in the potential explosive atmosphere (ATEX Directive), noise emissions from outdoor equipment, and non- automatic weighing instruments (NAWI Directive). It has also updated the list of standards in the field of electromagnetic compatibility, machinery safety, low voltage electrical equipment and general product safety, non-automatic weighing instruments, and radio and telecommunications terminal equipment.
The EC underlined that Serbia still needs to adopt the law on dual use of goods, as well as to align its laws with the acquis on civil firearms and return of cultural objects unlawfully removed from the territory of an EU Member State.
In its conclusions the EC stated that Serbia is moderately advanced in its preparations in the area of free movement of goods, but that a stronger emphasis needs to be put on administrative capacity and coordination between institutions.
CHAPTER IV. Detailed sector analysis of Serbia’s state of affairs in selected policy areas related to Free Movement of Goods
Certain areas of free movement of goods legislation require special attention because they represent the most cross cutting issues, involve a large number of stakeholders and have great influence on the
49 industrial production and trade. These areas are Market Surveillance, Quality Infrastructure and Industrial Property Rights, which will be closely examined from a Serbian perspective, in the following chapter.
4.1. Market surveillance
The main goal of the New Approach is for the products to be able to circulate freely in the EEA market and have an appropriate level of security. In order for these two (above mentioned) principles to be correctly implemented, a functioning market surveillance system is required. Considering that free competition cannot exist unless it is fair, market surveillance is in the interest of serious producers because it prevents competition that lowers prices bypassing the fulfilment of the essential requirements. Therefore, in the EU market surveillance is the responsibility of all Member States and their local authorities.
In Serbia there are numerous authorities involved in some aspects of market surveillance, however the dominant role is played by three of the four main institutions. These are namely the Ministry of Foreign and Internal Trade and Telecommunications, the Ministry of Economy, Ministry of Health and for food stuffs the Ministry of Agriculture.
1. The Market Inspection of the Ministry of Foreign and Internal Trade and Telecommunications (MTT), is the largest of the market surveillance authorities for non-food products. The Ministry employs around 477 people for this sector and has a representation in all 24 districts of Serbia, with main coordination being handled in Belgrade.
For the purpose of coordination and the introduction of the New Approach Directives the MTT’s market inspection sector plays the biggest role. It is also responsible for the coordination and information exchange between the institutions and towards the consumers. In the last decade, the ministry has significantly updated it systems as the data storage among market surveillance authorities was quite unsystematic and only partially electronic. The changes introduced by the new IT management information system will improve record keeping and the information flow among inspectorates. This is absolutely essential in order to for the Ministry to assure and improve the strategic and operational management of the work carried out by the four main market surveillance inspection authorities. Furthermore, the Ministry is has the lead in the newly established Committee for the safety of products, which aims to tackle the issues of weak coordination and collaboration between state and non-state actors.
Since the portfolio of consumer protection also falls under the MTT’s jurisdiction, its market inspection plays a crucial role for consumer protection and helps the implementation of the Law on General Product Safety.104
The Department of Market Inspection within the Ministry of Foreign and Domestic Trade and Telecommunications, which is in charge of carrying out market surveillance finalised also the
104 For more information on MTTs Inspectorate please visit: http://mtt.gov.rs/en/sectors-of-the-ministry/sector- for-market-inspection/
50 preparations for the implementation of the new Law on General Safety of Goods .This Law also incorporates rules set out in the European Directive on General Product Safety 2001/95/EC, and transposes the Directive on products appearing to be other than what they are (87/357/EEC). This Law entered into force in December 2009, but two by-laws necessary for the implementation of the Law were also prepared:
1. the Rulebook on the Notification of the Competent Authority about Dangerous Products or Suspected Serious Risks Imposed by Industrial Products Placed on the Market; 2. the Regulation of the Establishment and Functioning of the National Rapid Alert System for Dangerous Products on the Serbian Market.
The Government of Serbia adopted the Strategy for Market surveillance from2010th to 2014th in early September 2010. The strategy refers only to the safety of non-food products. The strategy aimed at improving the effectiveness of market surveillance, creating a minimum burden on the economy and assuring a high level of consumer protection and other public interests (protection of health and safety in the workplace, environment protection etc.). The strategy is based on obligations for harmonization and implementation of regulations in the field of free movement of goods established by the Stabilisation and Association Agreement. Commitments include the appropriate application harmonized legislation in order to further improve the market economy, provide greater opportunities to businesses and insure a greater choice of products which comply with the technical requirements for the safety of non-food products to the consumers.
The Strategy includes:
• EMARS - improving market surveillance through best practices
• Regulation (EC) no. 764/2008 of the European Parliament and of the Council of 9 July 2008th year, which prescribe procedures relating to the application of certain national technical rules to products that are legally traded in the market of another Member State and repealing Decision No.3052/95/EZ
• Decision (EC) No 768/2008 of the European Parliament and of the Council of 9 July 2008, Ø. Joint framework for the marketing of products and repealing Decision (EEC) 93/465/EEC
• Regulation (EC) no. 765/2008 of the European Parliament and of the Council of 9 July 2008th which requirements for accreditation and market surveillance relating to the marketing of products and which repealing Regulation (EEC) no. 339/93
• Council Directive (EC) 95/2001 of the European Parliament and of the Council on general product safety
• New Approach Directives concerning the CE marking
• Old Approach Directives (motor vehicles, chemical, pharmaceutical and cosmetic products, textiles, footwear, wood, glass
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2. The Ministry of Economy (ME) is in charge for transposing the EU legislation and imposing technical regulations on certain groups of products, such as electrical equipment, machinery, furniture, lifts, measuring instruments. However, the Ministry has just one market surveillance department, which is the Directorate of Measures and Precious Metals (DMDM), mainly in charge of both legal and technical metrology. The Customs Administration,105 which operates 13 regional offices, however answers to this Ministry of Finance and carries out essential inspections on imported goods and works with market inspection authorities to stop unsafe goods from entering Serbia.
Customs Administration in the relation to the market surveillance:
The Customs Administration of the Republic of Serbia (CAS) plays a unique and important role in performing its tasks within the territory of the Republic of Serbia, as well as in meeting the obligations towards the international community and its future membership within the European Union. In this context, the role of the CAS is to maintain a permanent equilibrium between its major tasks: protection of the society, revenue collection and trade facilitation. The Customs Administration, as the administrative authority belonging to Ministry of Finance, performs state administration affairs and professional works relating to: customs clearance of goods, customs surveillance and other controlling activities for passengers’ traffic and foreign trade of goods and services, as well as other affairs stipulated by the law.
The 2010 Customs Law106, regulates the general rules and procedures applicable to goods brought into or out of the territory of the Republic of Serbia.
In its report the EC state that “As regards customs legislation, the Customs Law was amended in November and was further aligned with the acquis and with national legislation, particularly with some provisions of the Budget System Law. The Serbian Government amended the decree on customs tariff nomenclature in November with the aim of aligning it with the 2013 EU Combined Nomenclature and with the liberalisation schedule under the Interim Agreement.”107
However the EC stated that further harmonisation is needed in the field of customs legislation. Mainly referring to the new Law on the Customs Service, which remains to be adopted. Also, the EC stated that the legislation on customs-related security initiatives and authorised economic operators has yet to be implemented.
As for the market surveillance, also customs administration improved its administrative capacity in order to effectively enforce the customs legislation. In terms of improving its administrative capacity the CAS is aiming to establish a functioning IT system based on interconnectivity between various departments.
105 For more information on Serbian Customs Authority please consult: http://www.upravacarina.rs/en/Pages/default.aspx 106 (“Official Gazette Republic of Serbia” No 18/2010) 107 COMMISSION STAFF WORKING DOCUMENT SERBIA 2013 PROGRESS REPORT- Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Enlargement Strategy and Main Challenges 2013-2014 {COM(2013) 700 final}
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The EC seems quite satisfied with the fact that over 95% of customs declarations are submitted electronically and that the concept of electronic signature has been introduced.
However, the numbers are a bit less promising for physical inspections, about 17% of declarations are subject to documentary or physical inspections. In terms of intellectual property rights, around 45% of the rights holders uses the electronic application for the protection of Intellectual property rights.
The EC underlined that the upgrading of the customs declaration processing system (CDPS) and the customs laboratories needs to be addressed.
Finally, apart from the still not adopted Customs Law and legislation on the tariff nomenclature and the needed upgrade of the CDPS system it concluded that the preparations in the area of the customs union are well on track.
3. The Ministry of Health (MoH), has under its jurisdiction the Sanitary Inspection108, which is responsible for controlling certain types of products, such as toys, cosmetics, food contact material, as well as novel foods, baby food, dietary foods, supplements for mother milk, and all additives of non- animal origin, bottled water, and drinking water.
4. Even if the study just tackles the issue of industrial non-food products, it is important to denote that the Ministry of Agriculture, Forestry and Water Management also has its part in the market surveillance, even if it is not a part of the product safety market surveillance system. The Ministry is mainly responsible for control over the food chain, tracking the whole production chain from primary production and imports of food, to the preparation, retail and sales to the consumers. The Veterinary Inspection and Phyto-Sanitary Inspection (including also specific border inspection units) and the General Agricultural Inspection are the main inspection bodies operating under the Ministry of Agriculture. For consumer protection purposes the General Agricultural Inspection is the most important as it inspects processed and packaged food in retail shops.
4.2. Quality infrastructure
Quality infrastructure essentially affects the economic and social development degree of each country. It is an important and integral part of economy and one of foundations of national, regional, and international trade. Neither environmental protection, nor health, and consumer’s rights can function without quality infrastructure.
National Quality Infrastructure (NQI) comprises all aspects related to metrology, accreditation, conformity assessment (production compliance with standards), standardization, testing, quality management and aims at protecting the consumers by placing safe products on the market and ensuring fair competition. Quality Infrastructure is very significant for the international recognition of national products and services and in assuring their competitiveness. Therefore, it also has a significant influence on the export.
108 For more information on the Sanitary Inspection visit: http://www.zdravlje.gov.rs/index.php
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Since Serbia, as an EU accession candidate has begun to implement the acquis communautaire of the EU, the area of quality infrastructure (QI) is also a part of it. The conception and implementation of the Law on Technical Requirements for Products and Conformity Assessment, the Law on Standardisation, the Law on General Safety of Products in 2009 and the Law on Metrology and the Law on Accreditation from 2010 (all previously described), are seen as great progress in the process of harmonisation with the infrastructure of quality (metrology, standardisation, accreditation and conformity assessment) and market surveillance as defined in the EU and by the international rules.
The Law on Technical Requirements for Products and Conformity Assessment and the Law on Standardisation apart from being fully harmonised with WTO and European Union EU rules, are the two laws which transpose the main part of EU directives in this area (technical regulations) and EU standards into domestic legislation.
The QI institutions have also been re-organized appropriately and corresponding acts have been elaborated. The Quality Infrastructure Department within the Ministry of Economy is in charged for the cooperation and the coordination between all the actors concerned in the system of QI. The Department operates in line with the Action Plan for the Enactment of Technical Regulations.
Also, there is a list of the by-laws that were introduced by the Law on Technical Requirements for Products and Conformity Assessment and the Law on Metrology. These are the following:
1. The Regulation on the Manner of Performance of the Conformity Assessment, Content of the Conformity Certificate, and on the Form, Appearance, and Content of the Conformity Mark;
2. The Regulation on the Manner of Appointment and Authorisation of Conformity Assessment Bodies;
3. The Regulation on the Manner of Recognition of Foreign Conformity Certificates and Conformity Marks;
4. The Rulebook on the Manner of Marking of Products with the Conformity Mark and the Usage of Marks;
5. The Rulebook on the Content and Manner of Keeping the Register on Technical Regulations;
6. The Rulebook on the Defining of a List of Serbian Standards in the Area of General Safety of Goods;
7. The Rulebook on the Manner of Recognition of Foreign Conformity Certificates, Trademarks, and Conformity Marks;
8. The Regulation on Legal Measurements
9. The Regulation on the Manner of Performance of Surveillance in the Metrology Area;
10. The Regulation on Certain Legal Measurements
11. The Rulebook on the Manner of Appointment of Legal Entities for the Verification of Measurements and on the Register of Appointed Bodies;
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12. The Rulebook on Conditions for the Verification of Measurements;
13. The Regulation on the Manner of Reporting and Providing Information of Technical Regulations, Conformity Assessment, and Standards;
14. The Regulation on the Amount and Manner of Paying Fees for the Verification of Measurements, Metrology Expertise, the Examining of Measurement Types, the Examination of Pre-Packaged Products and the Measuring and Other Operations in the Field of Metrology;
15. The Rulebook on the Types of Measurements Requiring Verification and Time Intervals for their Periodic Verification;
16. The Rulebook on Amendments to the Rulebook on the Manner and Conditions for the Verification of Measurements;
17. The Rulebook on the Termination of Certain Rulebooks;
18. The Rulebook on Hydrometers and Rulebook on Pressure Gauges for Measuring Tire Pressure;
19. Rulebooks on moisture meters for cereal grains and oilseeds, alcoholometers, and sound level meters
20. The Rulebook on break testers in motor vehicles;
21. The Rulebook on manometers for measuring of the blood pressure
22. The Rulebook on modifications and amendments
23. The Rulebook on reactive electrical energy meters of accuracy classes 2 and 3
23. The Rulebook on modifications and amendment the Rulebook on clinical thermometers
As well as Guides for implementation of:
24. The Rulebook on marking of footwear
25. The Rulebook on marking and labeling of textile products
As standards are extremely important for the proper product categorization and placement, in line with the Law on Standardisation, standards are no longer mandatory except in the situations the appropriate technical regulation incorporates a particular standard.
This is very important to underline, since the Law changed around 8,000 standards from mandatory to voluntary. However, not all previous mandatory standards were incorporated into the appropriate technical regulations. Nonetheless, The Law on Standardisation assured a good definition of the role of the Institute for Standardisation of Serbia (ISS) which now complies with EU practices, enabling in this way its full membership into European standardisation organizations.
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A big issue in regards to the advancement of QI reforms in Serbia, is the lacking Strategy on quality infrastructure. However, it has been confirmed that the Sector for QI in the Ministry of Economy has been working hard alongside experts form GIZ on such strategy, which should be completed and published soon. The Strategy is intended for assuring gradual compliance with European requirements for full integration of Serbian quality infrastructure into global system.
However, the Strategy must address first of all some very obvious problems that remain. In relation to the reforms in this sector, the response of industry and industry specialists remains pretty low. Also, it is very problematic to assure their presence and full understanding of the new standards when the translation of the standards is insufficient. Only some 6% of standards (more or less) have been translated into Serbian from English. While this is not a big problem for bigger companies, which employ experts with generally good knowledge of English language, this is a barrier for a large scale participation of industry actors. This situation is mainly due to the lack of finances for the translation of EU standards by professional translators, the ISS has till now mainly translated into Serbian the cover pages and forewords of the published standards.
In the consultation with some of the main actors in Serbia’s policy making and development in the area of QI, another problematic issues has surfaced. The lack of public awareness about the need for accreditation and standardization is still identified as a problem, although the enactment of the new Laws on Accreditation and Standardization, which does not prescribe mandatory accreditation and standardization may be now much more approachable to the producers, and other interested parties.
Also, due to the fact that technical regulations are enacted by line ministries, their insufficient involvement and reluctance to speed up the process of enactment of necessary technical regulations remains a problem.
The Old Approach is still and issue in Serbia. While the directives of the New Approach have largely been transposed, the harmonisation of technical regulation (Old Approach directives) with adopted EN standards however still remains insufficient.
This is because the Old Approach has very detailed technical rules, all requirements are mandatory and because products must be controlled by a public authority before being placed on the market. Old Approach Directives regulate above all technical requirements for products such as pharmaceuticals, plant protection products and certain biocidal products (example: Regulation 528/2012109), require authorisation to place a specific product on the market. Motor vehicles need to be type-approved in one EEA State and may then be marketed in all EEA countries. For most sectors, e.g. cosmetics and textiles, the products may be placed on the market without prior authorisation. The directives are around 700 and it has been witness also in previous enlargements that the method of legal harmonization of Old Approach Directives is a rather complex one.
109 Regulation (EU) No 528/2012 of the European Parliament and of the Council of 22 May 2012 concerning the making available on the market and use of biocidal products, published on 27 June 2012 (Official Journal of the European Union)
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It is very important to underline that Serbia’s Accreditation body is seen as somewhat of a shiny example of harmonization with principle of EU in the area. Especially now when the Accreditation Body of Serbia has become a full member of the European Co-operation for Accreditation (EA) and has also signed the Multilateral Agreement (MLA), a mutual trust and acceptance of certificates issued by accredited CABs must be enhanced and the Serbian accreditation system must become equivalent to those of other signatory countries.
Assessments shows there is still room for improvement in this area, especially in regards to the awareness about the functioning of the New Approach, recently transposed Serbian and European directives and harmonized standards.
The need improvements on the other hand need to be supported by a functioning institutional framework. In the area of free movement of goods minimum state structures need to include a central body which would cover the general implementation of the legislation, including the implementation of Articles 28 to 30 EC Treaty, effective market surveillance, the existence of test facilities and available expertise to underpin such activities and a national standardisation infrastructure.
In regards to the Regulation (EEC) 339/93110, it is on Member States to define the best methods and means to use in carrying out the necessary checks at borders. Therefore, as in other Member States, in Serbia as well there is a need to enhance the communication and co•ordination between customs and market surveillance authorities. Also, the Decision 3052/95111 and Regulation (EC) 2679/98112 require that contact points be designated in each Member State, this has been identified as a problematic issue in Serbia by the experts in Ministry of Economy. As previously stated, there is an obligation for Member States to notify the Commission and other Member States of any draft technical regulation relating to products, exactly for this matter the establishment of a central unit is an indispensable core administrative structure, to receive and send the relevant notifications and information. Even if in Serbia TEHNIS is a bright example, much needs still to be achieved especially in regards to the creation of contact point, which need to serve Serbian industry and foreign investors as well. These contact point are essential in assuring a constant information flow on technical standards, legislation and other relevant information in the sector, as well as for enhancing cooperation and communication between all relevant stakeholders. They are essential because through these points businesses can obtain information on which products are subject to national technical requirements, and what those requirements specify, as well as information on standardization processes etc.
Although in Serbia the legislation regarding the CE marking the legislation is transferred in the Law on technical requirements for products and conformity assessment, certain deficiencies are still visible.
110 Council Regulation (EEC) No 339/93 of 8 February 1993 on checks for conformity with the rules on product safety in the case of products imported from third countries 111 Decision 3052/95 of the European Parliament and of the Council of 13 December 1995 establishes a procedure for the exchange of information on individual cases of refusal to apply the principle of free movement of goods within the Community. So called “Strawberry” Regulation 112 COUNCIL REGULATION (EC) No 2679/98of 7 December 1998on the functioning of the internal market in relation to the free movement of goods among the Member States.
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These deficiencies as identified through the interviews with the relevant stakeholders are presents both at the regulatory and industry level.
There is high responsibility placed on the relevant ministries, as the placing of the CE mark is placed in the jurisdiction of the ministries themselves, which are then assumed to respect the obligations arising from EU law, i.e. of the Regulation 765/2008 and EU Harmonization of regulations governing the affixing of the CE. The authorities must ensure that the CE mark is placed only on those products for which it is putting its planned Community legislation for harmonization, as prescribed by Regulation.
In the advancement of Serbian quality infrastructure system foreign support project have played an important role. They have contributed to the process both financially and in the transfer of know how.
The area of quality infrastructure has benefited from three very important project, which are certainly in good measure responsible for the advancement of the system in Serbia in the last 5 years.
These are:
A) EU FUNDED PROJECT "TECHNICAL ASSISTANCE TO QUALITY INFRASTRUCTURE INSTITUTIONS IN THE REPUBLIC OF SERBIA
The main beneficiaries of the project, funded by the EU and implemented by an international consortium led by AFNOR were The Ministry of Economy and Regional Development, the Institute for Standardisation of Serbia, the Accreditation Board of Serbia and the Directorate of Measures and Precious Metal.
B) IPA 2011 REGIONAL: QUALITY INFRASTRUCTURE IN THE WESTERN BALKANS AND TURKEY
The project, contributed to the facilitation of the harmonisation of legislative framework and the advancement of the implementing mechanisms in Western Balkan countries. The beneficiaries of this project in Serbia were the then Ministry of Economy and Regional Development (MERR), Institute for Standardization of Serbia (ISS), Directorate of Measures and Precious Metals (DMDM) and the Accreditation Board of Serbia (ATS).
C) GIZ PROGRAM “ASSISTANCE TO THE COMPETITIVENESS AND COMPATIBILITY FOR THE EU OF SERBIAN SME (ACCESS)”
The program has as its main objective to assure that „Conditions for enhanced competitiveness of Serbian SMEs on regional and EU internal markets have improved.” identified as one of its main activities the “Promotion of quality infrastructure (NQI)”.The ACCESS Program brought important benefits for the advancement of Serbian industry and business environment in general, especially in terms of adjustment to the EU standards. The project has an important part dealing specifically with the promotion of quality infrastructure in Serbia. The project has and is still implemented in collaboration with the Ministry of Economy’s Sector for quality infrastructure. It had also produced some of the most relevant studies on the advancement of Serbia’s quality infrastructure, which have been largely used also for the purpose of this study. Finally, an extremely important action of the
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project that must be underlined is that in collaboration with the sector for quality infrastructure, GIZ is bringing forward the conclusion of the Nation Strategy for Quality Infrastructure. The strategy will be of outmost importance for the advancement of the sector in the context of EU integration.
4.3. Intellectual property issues
What is intellectual property (IP) and how does it refer to the horizontal legislation in the area of free movement of goods?
The Intellectual Property or better the protection of the Intellectual Property rights are essential for the correct and fair placement of the products, functioning of the market and industry development. It is a crosscutting issue of extreme importance for the development of industry and the enhancement of innovations.
In the study “Intellectual Property Rights intensive industries: contribution to economic performance and employment in Europe”113, which aimed to measure the importance of Intellectual Property (IP) rights in the EU economy, key finding have shown that about 39% of total EU economic activity is generated by IPR-intensive industries, while around 26% of all employment in the EU is provided directly by the IP industries.
By the definition of the WIPO (World Intellectual Property Organization) the IP refers to the “creations of the mind, inventions, literary and artistic works, as well as to symbols, names and images used in commerce.”114 By WIPO’s definitions IP is divided into two categories:
a) Industrial Property, which includes: - Patents for inventions: A patent is an exclusive right granted for an invention, a product or process that provides a new way of doing something, or that offers a new technical solution to a problem. A patent provides patent owners with protection for their inventions. Protection is granted for a limited period, generally 20 years. - Trademarks: A trademark is a distinctive sign that identifies certain goods or services produced or provided by an individual or a company. - Industrial designs: An industrial design refers to the ornamental or aesthetic aspects of an article. A design may consist of three-dimensional features, such as the shape or surface of an article, or two-dimensional features, such as patterns, lines or colour. - Geographical indications: A geographical indication is a sign used on goods that have a specific geographical origin and possess qualities or a reputation due to that place of origin. Most commonly, a geographical indication consists of the name of the place of origin of the goods. Agricultural products typically have qualities that derive from their place of production and are influenced by specific local geographical factors, such as climate and soil.
113 “Intellectual Property Rights intensive industries: contribution to economic performance and employment in Europe” (September 2013) 114 WIPO- What is Intellectual Property?- WIPO Publication No. 450(E)
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b) Copyright, which covers: - literary works (such as novels, poems and plays): - films - music - artistic works (e.g., drawings, paintings, photographs and sculptures) - architectural –design
Copyright laws grant authors, artists and other creators protection for their literary and artist creations, generally referred to as “works”. Also Copyright refers to the performing arts/artists and broadcasters in radio and TV programmes.115
An effective protection of Intellectual property rights (IPR) can become a significant catalyst for economic development, as well as an important tool for advancing social and cultural well-being. It is exactly in the terms of the economic and industrial development that a good functioning of IPR protection system is essential in the area of free movement of goods.
On the EU level the respect of all principles governing the internal market (the free movement of goods and services and free competition) are indeed based on standardisation of intellectual property. EU is a great promoter of IPR, as it considers them to be an essential ingredient for assuring a high level of EU economy competitiveness. Through the years, the EU has develop a successful set of policies to help make European businesses aware of these rights and to assess the impact and effectiveness of the use of these rights.116
In the EU, apart from DG Enterprise and Industry, the Office for Harmonisation in the Internal Market (OHIM), responsible for the registration of Community trademarks and designs, and the European Patent Office (EPO), responsible for patent protection are the two main bodies carrying practices related to the IP policies. Also, the EU has in the recent years proceeded with even further integration of the legislation by advancing the idea of a common patent at the EU level. In fact, in 2012 Member States and the European Parliament agreed on the “patent package”. As stated by the European Commission this is a “legislative initiative consisting of two Regulations and an international Agreement, laying grounds for the creation of unitary patent protection in the EU”117. After the adoption of the two Regulations the contracting Member States (25 MS, with the exception of Italy and Spain) will now proceed with the signature and ratification of the Agreement on a Unified Patent Court, which is the final component for setting up a single and specialised patent jurisdiction. The Agreement will create a patent with unitary effect, which will be “a legal title ensuring uniform protection for an invention across 25 Member States on a one-stop shop basis, providing huge cost advantages and reducing administrative burdens”.118
115 Ibid. 116 For more information consult the DG Enterprise page at: http://ec.europa.eu/enterprise/policies/industrial- competitiveness/industrial-policy/intellectual-property-rights/index_en.htm 117 Source: http://ec.europa.eu/internal_market/indprop/patent/index_en.htm (taken on 14/05/2014) 118 Ibid.
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For the purpose of the study more attention will be given to the IPR under the Industrial Property category, as it is seen as more relevant for the placement of Serbian industrial products on the EU Single Market.
Intellectual property in Serbia in the prospect of EU integration:
Serbia is a country with a long history of protecting the intellectual property, going back to the 19th century, when in 1883 the Kingdom of Serbia was one of the eleven countries taking part in the Paris Convention for the Protection of Industrial property. Also, in 1884. , The Kingdom of Serbia adopted the first national regulations in areas of distinctive signs. This makes Serbia one of the countries with the longest history of internationally respected rights of industrial property.
Today Serbia still has and set of quality laws in this area and is a signatory to most international treaties in domain of industrial property and copyrights, it has a constant good cooperation with the most important international institutions of this kind, especially with the previously named WIPO (World Intellectual Property Organization: WIPO) and the EPO (European Patent Office: EPO).
Also, the Intellectual property protection is important condition for a successful accession to the European Union and the World Trade organization.
In the Article 75 of the Stabilisation and Association Agreement it is stated that the Republic of Serbia “take all necessary measures in order not later than 5 years from the entry into force of this Agreement a level of protection intellectual, industrial and commercial property rights similar to that existing in the Community, including effective means of enforcing such rights.”119
There is no doubt that the Republic of Serbia has under the guidance of it Intellectual Property Office 120(IPO) in the last two decades done much to improve the system of intellectual property protection, by constructing the laws and assuring their compliance in respect to the international standards, and building up institutions and capacities for a successful enforcement of intellectual property rights.
Intellectual property rights are under the responsibility of several institutions apart from the IPO, the Ministry of Agriculture and Environment has the responsibility under the area of GI for wine and spirits, protection of plant sorts and Ministry of Economy in regards to the protection of undisclosed information.
In 2004. the Customs Act introduced measures applicable at the border aiming to protect intellectual property and the Customs Administration established a special department for the protection of intellectual property, which for has now for many years exercised significant results. In the following year 2005. also the Law on Organization and Jurisdiction of Government Authorities in Suppression cybercrime was passed, on the basis of which the prosecution hi-tech crime was established.
119 Article 75 of the Stabilisation and Association Agreement 120 For more information on the Republic of Serbia Intellectual Property Office, please consult: http://www.zis.gov.rs/home.59.html
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In the area of Industrial property rights in Serbia, the protection of patents is regulated by the Law on Patents.121However, with the objective of full harmonisation with the relevant provisions of the EU acquis, in 2013 amendments to the Patent Law have been prepared. In the provisions of the draft Law amending the Patent Law further harmonisation with the Directive 98/44/EC, as well as the Directive 2004/48/EC, has been carried out in order to achieve full compliance. At this stage, the deficiency in harmonisation of the draft law relates to the exhaustion of rights in EU regarding Directive 98/44/EC, and the Article 4 of the Directive 2004/48/EC regarding persons entitled to seek application for the measures, procedures and remedies, the IPO explains that this is due to the fact that „professional defence bodies, which are regularly recognized as having right to represent right holders “are not established in Serbia. Also, there is still a lack in the harmonization with the Directive No. 469/2009 of the European Parliament and of the Council on the supplementary protection certificate for medicinal products for paediatric use. This is because as stated in the previous section, the Republic of Serbia does not still have an appropriate regulation governing the issue of medical products for paediatric use. The Intellectual Property Office (IPO) of Serbia underlined also that the Regulation No. 1901/2006 relating to medicines for paediatric use has not been implemented into national law nor the Law on Medicines and Medical Products, so the establishment of the Paediatric Committee, which is a prerequisite for the implementation of the provisions of Regulation No. 469/2009 is not foreseen.
In the inquiries for the purpose of this study, the representatives of the IPO also draw attention to the fact that provisions applying only to the Member States of the European Union are not transferred. However, they pointed out that the amendments to the Patent Law ensure that there is a full harmonization with provisions of the Regulation No. 1610/96 of the European Parliament and of the Council on the creation of a supplementary protection certificate for plant protection products, excepting the provisions relating only to European Union member states.
The protection of trademarks is regulated by the Law on Trademarks122. In regards to this Law, it is important to point out that the Law has been significantly amended in the begging of 2013 in order to be harmonized with the Directive 2008/95/EC on the approximation of the laws of the Member States relating to trademarks and the Directive 2004/48/EC on enforcement.
The IPO representatives point out that the most important amendment is certainly the one relating to the content of the rights in the domain of transit of the goods, which also has significant relevance for the free movement of goods acquis as well. The amendment followed the EC comment that the inclusion of ”transit“ is not in line with EU acquis and that this would have an impact when it comes to customs enforcement. The EC therefore recommended the exclusion of trademark protection for goods in transit. The Law on Trademarks was for this matter amended to be in line with the provision of the Directive 2008/95 and the transit of the goods has been deleted from this provision.
Also, especially in the light of recent cases in the EU relating to the international exhaustion of trademark rights in the light of EU competition law and the GATT and Trips agreements, which required
121 (Official Gazette RS No. 99/2011). 122 (Official Gazette of RS No. 104/2009 and 10/2013).
62 lot of clarification by the ECJ, the concept of exhaustion of rights was also addressed in Serbia. The Law on Trademarks has been for this purpose amended and the principle of the national, instead of international exhaustion of rights, has been introduced. Finally, in line with the provisions of the Directive 2008/95, all definitions regarding absolute and relative grounds for refusal and invalidity of trademark have been amended to be in line with relevant provision of the Directive 2008/95.
The protection of industrial design is regulated by the Law on Legal Protection of Industrial Design123. The Law is according to the comments received from the EC in the latest report only partially harmonized with the Directive 98/71/EC. However, the amendments to the Law are already underway and the comments were taken into consideration. One of the first amendments relates to the issue of novelty. With the new amendments, one they area adopted, a design shall be considered new when there is a previously submitted application for an industrial design, but that was not available to the public, industrial design for which protection is sought shall be considered new. Other set of amendments include the determination of individual character of industrial design, as well as the provisions regulating the content of rights.
The National Strategy for the Development of Intellectual Property for the period since 2011-2015 has determined the direction, the extent and short-term goals, as well as the medium-and long-term development of the intellectual property rights in the Republic of Serbia in the past years.
The previously named reforms in the IP sector, as well as all the activities directed towards the institutional building and enforcement of the IP legislation, were stated in the Strategy and made compatible with the development interests of the country, as designed in the Sustainable Development Strategy. In the short and medium term, the reforms and the achievement of strategic objectives were mainly concerned with the fulfilment of all obligations which Republic of Serbia took over in the Stabilization and Association Agreement with the European Union.
With this Strategy, Serbia also recognized itself as a country that understands the development role and importance of intellectual property, as it is recognized also in the European strategy for smart, sustainable and inclusive growth - EUROPE 2020.124 The Strategy underlines the importance of the respect and enforcement of the IPR, especially for the development of the SME and for the protection of Serbian products. Still, the Strategy underlines that the production of intellectual property in the company is not dependent only on the effectiveness of intellectual property rights as incentives addressed to the private sector, and assures that the state applies also other incentive methods for creating intellectual property, especially in regards to the development and enhancement of scientific and technical knowledge.
Finally, the Strategy states that “In transition countries, like the Republic of Serbia, intellectual property law has an additional characteristic function that from the perspective of the current economic policies, is sometimes in the forefront. It is the function of attracting foreign direct investment. That in terms of the global economy capital seeks favourable conditions for business, such as proximity to sources of raw
123 Official Gazette of RS No. 104/2009 124 (Adopted by the European Council on 17 June 2010.) .
63 materials, high quality and cheap labour force, good communication infrastructure and stimulating tax system. An effective legal Intellectual property protection is undoubtedly encouraging foreign companies to bring to the country manufacturing and services based on new technologies, well-known trade and service marks and the so called creative industries”.125
The IP issues have been addressed with a few projects over the last few years, mainly implemented through the IPO. Like the project on the Technical Assistance in the Field of Intellectual Property Rights (geographical indications and TRIPS compliance) by the Swiss Federal Institute of Intellectual Property and the two EU projects “Support to the Education and Information Centre of the Serbian Intellectual Property Office” and “Enforcement of Intellectual Property Rights - with emphasis on destruction and pirated counterfeited products”.
However, since the most recent EC evaluations have still identified certain gaps between the IPR practices at the EU level and in Serbia, a new Twinning Project has been initiated recently. The project “Enforcement of Intellectual Property Rights” has been initiated with the aim of strengthening administrative capacities for the IPR enforcement. The beneficiaries of this projects will be the Ministry of Foreign and Internal Trade and Telecommunications – Sector of Market Inspection and the Intellectual Property Office and the Customs Administration, as well as the Ministry of Interior-Sector for IP Crime Suppression and Special Prosecutors Office for High-Tech Crime. As stated in the presentation of the project, it will also perform analysis of cooperation between institutions dealing with IPR enforcement in Serbia in order to develop an improved model for cooperation, which is of great importance for the preparation for the Single Market. In fact, the project also contains an important component referring to the elaboration of procedures of the market inspection regarding identification and withdrawal from the market of goods violating IPR which directly relates to the objectives of the Market Surveillance strategy. Finally, all the components will aim to contribute to the enforcement bodies training and activities regarding raising public awareness.
In conclusion, even if significant efforts and reforms have directed towards the improvement of the IPR in Serbia, in the prospect of development and implementation of modern industrial policy the IP policies need to enhanced and better communicated. However, for the remaining issues to be tackled with success the European Commission warned that cut in human resources in institutions in charged for promoting and implementing the IPR, especially in the view of SME development, could pose a serious threat further advancements in this area.
125 Republic of Serbia- The National Strategy for the Development of Intellectual Property for the period since 2011-2015, page 7
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CHAPTER V. Final Remarks
European Internal or Single Market has been constantly evolving since its conception in the ‘50s.The changes adopted under the Delors Commission and the New and Global Approach have created very successful instruments for further development and integration of the Internal Market. The New and Global Approach created functional regulatory frameworks that enable the competitiveness of the EU industry, allowing the advancement of technology and innovations mostly by promoting the concept of mutual recognition, or better the spirit of trust among Member States. The obvious benefits of the adoption of new technical regulations have motivated industries in Europe but also worldwide to adopt standards compatible with EU’s regulatory framework.
However, improving conformity assessment procedures, administrative co• operation and market surveillance still needs to be further developed and strengthened also on the EU level. Further development is mainly needed in order for the EU to ensure that effective action is taken when products do not meet the essential requirements and also in order to improve the understanding of CE•marking and the importance of promotion of the EU regulatory framework.
This brief overview of the legislation and measures introduced so far in the process of approximation of technical legislation in Serbia clearly shows that in some areas important progress has been made towards the goal of meeting EU requirements. However, in certain areas further reforms are needed. In these areas Serbian Government first of all needs to take a stronger lead in assuring the introduction of different practices in order to achieve full level of compliance with and implementation of EU principles. This mainly refers to certain sectors which are regulated by New Approach directives. One of the identified problems with the New Approach is that its regulatory sphere is limited only to essential requirements that in the case of Serbia subsequently lead to the weakening of pre•market authorisation, which was once the most relevant factor in assuring quality assessment. For this reason, this New Approach requirements necessitate a development of adequate quality infrastructure and market surveillance through the enforcement by relevant authorities. These are however precisely the kind of reforms that take the most time and require substantial financial investments, which on the other hand limits the bright outlook on the possible future benefits of the harmonization process in the area.
Nonetheless, one thing that cannot be put in doubt is that one of the main preconditions for the success of the process of harmonisation of technical legislation is that all stakeholders are included. This especially refers to an active inclusion of the private sector and industry. The inclusion of SMEs, consumers, expert organisations, laboratories, conformity assessment and testing bodies is necessary, as they are all directly involved in the process and need to be very well informed about all changes.
Since Serbia signed Stabilization and Association Agreement and was granted EU candidate status, harmonization of legal system with the acquis communautaire became its formal obligation. This process is neither simple nor a short-period activity.
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In the area of free movement of goods, Serbia has since 2008 shown serious advancement in the harmonization with the EU acquis. It adopted new rules on accreditation, standardization and metrology, on general product safety and on technical requirements for products and conformity assessment. Some of the bright examples in Serbia include the advancement of the accreditation system, which with the Law on Accreditation brought to the creation in 2010 of The Accreditation Body of Serbia (ABS). ABS is a not for-profit public body in charge of accreditation of conformity assessment bodies, constructed on the model of best European examples. With the creation of ABS and its development the whole system of accreditation gained significant relevance in Serbia. With the signing various international agreements of great importance, such as the ones with the European co-operation for Accreditation (EA MLA), International Laboratory Accreditation Cooperation (ILAC MRA) and International Accreditation Forum (IAF MLA), ABS drew even more attention to need of well-functioning, efficient, impartial and independent accreditation system that guarantees trust of citizens and consumers, and economy in services provided by accredited laboratories, inspection and certification bodies in the Republic of Serbia.
In terms of institutional and capacity building other two relevant example of positive implementation of European practices are also the Institute for Standardization of Serbia (ISS) and the Directorate for Measures and Precious Metals (DMDM).
In 2009, the Institute for Standardization of Serbia (ISS) which has been recognized as the only national standardization body in the Republic of Serbia, by the Law on Standardization and the Decision on Amending of the Founding Act of the Institute for Standardization of Serbia . Even if the practice of standardization was implemented through various forms of organization, with the new conception of the Institute, which follows European practices it quickly became and associate member of the European Committee for Standardization (CEN) and advanced its position as a member in other international organizations for standardization.
In terms of improvement of the metrology practice the Law on Metrology from 2010 established the Directorate for Measures and Precious Metals (DMDM) within the Ministry of Economy, which is in charge of implementation of the law. The Directorate has been since its conception dealing with a serious lack of the regulation of this sector. In fact, following the adoption of the Law on Metrology, in 2011 four Regulations and two Decrees were passed, the trend continued also in the following two years with the adoption of the Law on the control of precious metals articles and several other Regulations, establishing in that way a more regulated system in the area of metrology. DMDM is in charge of the correct functioning of the metrology in Serbia, it is therefore also in charge with carrying out metrology supervision since 2010. Since the supervision started, DMDM units have encountered many irregularities, primary in the sector of measuring instruments (retail weighting instruments, taximeters, fuel dispensers, tanks, electrical energy meters etc.). As stated by the interviewed experts from the DMDM, the supervision still remain the one of the most problematic issues, mainly due to the lack of human resources, which need to be distributed across Serbia.
However, the establishment of the DMDM can together with the ABS be considered a shiny example of the reforms in the harmonization with EU legislation and praxis in this area. DMDM achieved remarkable
66 results in a very short period, which is also reflected by the stronger collaboration it initiated with the Intergovernmental Organization of Metre Convention- the International Bureau of Weights and Measures (BIPM), The International Organization of Legal Metrology (OIML), the European Association of National Metrology Institutes (EURAMET), European Cooperation in Legal Metrology (WELMEC) and others. Also, DMDM is very good example of the cooperation in the region, which has been advanced with the signing of Memorandum of Understanding on cooperation between DMDM and the Bureau of Metrology of the Republic of Macedonia (BOM) in 2012, together with Memorandum of Understanding on cooperation between DMDM and the Institute of Metrology of Bosnia and Hercegovina signed in 2011.
These positive examples serve the purpose of showing how the institutional and capacity building of institutions and independent conformity assessment bodies is essential for the development of the European practices in Serbia and the meeting of EU requirements. They also illustrate how in a relatively short term a lot has been achieved in this area.
However, it would be wrong to consider the area of free movement of goods as a shiny example in whole. Certain issues, that by the words of EU experts still remain open, are the ones that have also been problematic in the previous rounds of enlargement, which are mainly the establishment of a functioning system of market surveillance and a trustworthy, clear and transparent quality infrastructure.
In regards to the market surveillance, Serbia has adopted a strategy for the period 2010-2014 and it started certain activities in 2011. The strategy brought to the advancement of the market surveillance practice in Serbia, under the responsibility of the Ministry of Trade, Tourism and Telecommunications. The strategy clearly underlined the need of adopting EU standards and strengthening of Serbian capacities for assuring an effective market surveillance throughout the country and on its borders (collaboration with Customs).The development of market surveillance in Serbia also brought to the creation of a Coordination body for product safety. As explained by the responsible officials in the Ministry of Trade this kind of body is essential since market surveillance is a cross-cutting issue, involving many different state and non-state actors, such as consumer protection organizations. The body has the task to improve the coordination between all inspections and monitoring bodies that exist in the relevant ministries, in order to improve the quality and safety of products on the Serbian market and protect the consumers. The creation of this Coordination body is also essential for the division of responsibilities among the relevant actors and for their preparation for the EU RAPEX system.
This kind of strategy however is lacking in the sector of quality infrastructure. This strategy by the words of experts from the Ministry of Economy is currently being prepared with the technical and financial assistance from GIZ and is expected in the following period. It is believed that the newly conceived strategy will clearly outline the gaps in the current Serbian legislation and praxis in regards to the quality infrastructure, and that it will set timely reasonable goals for the achievement of full harmonization with the EU acquis in the area. However, the lack of the strategy must not undermine the efforts the Sector for Quality Infrastructure in the Ministry of Economy achieved during the last several years. As confirmed by the experts of the DG Enterprise and Industry, Serbia is certainly the most advanced
67 country among the current pre candidate and candidate countries form the Western Balkans in terms of the harmonization with EU acquis. The large number of technical standards that have been transposed (even if many remain still not translated in Serbian), the Law on Standardization, Metrology and Accreditation alongside with all other relevant actions in the establishment of the New Approach in Serbia have greatly contributed to the advancement of EU practices in Serbia. It is very important to underline that Serbia has in this process also approximated its Law with the Directive on provision of information in the field of technical regulations and standards, which is very important for the enhancement of the transparency in the adoption of technical standards, that can in some case bring to the creation of the barriers to the free movement of goods. However, state experts dealing with quality infrastructure underline that bearing in mind the extent of the EU legislation in the area, the sector in Serbia is still understaffed, which slows down the pace of the harmonization process. Also, they underline that the foreign (EU and bilateral) projects for the advancement of the sector were essential for the transfer of the know-how and the advancement of the process.
While it is clear that in many aspects the alignment with EU acquis in the area of free movement of goods has been rather successful, it is still lacking in some of the most important product categories. The alignment has not been achieved in a number of other areas, including emissions of pollutants from non-road engines and crystal glass. As regards ‘New and Global Approach’ product legislation, further alignment is needed in the areas of construction products, cableway installations, recreational craft, cosmetics and toy safety.
From the research and the interviews conducted for the purpose of the study some general conclusions can be drawn on the remaining issues that need to be tackled in order for Serbia to establish a well- functioning system that will support the free movement of goods.
First of all, what comes out both from the opinion of foreign experts, Government officials and the Commission is that a better policy coordination between Serbian bodies and authorities is needed. Some underline the fact that in some cases relevant authorities have the tendency to think that their contribution is irrelevant and that the legislation in this sector only interests the Ministry of Economy or Trade. This happens because there is a misconception on the very nature of free movement of goods legislation, which is a very horizontal one, and therefore pertains to many different sectors.
Another thing they all agree on is that there is a general lack of awareness. While the negotiations with the EU are a hot topic in Serbia, and some of the most particular negotiation chapters seem to be on everybody’s agenda, the Chapter of free movement of goods seems to be a very limited area of interest. Lack of awareness on the importance of the free movement of goods harmonized legislation for the export of goods to the EU market and assuring their safety for consumers seems to be undermined. This is also because there is a lack of awareness on what technical standards are, why they exist in such form and what their importance for the production process and trade is. This is a big issue, since those who these specifications are directed to, are usually the ones that get to know them last. A more active inclusion and awareness raising campaigns on the process of harmonization, and more particularly on the New Approach needs to be directed towards the producers, preferably through a more active involvement of Chambers of Commerce (national, regional and local).
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Transparency also must remain a strong focus in the whole process. While the TEHNIS website is a deemed a good platform, it needs to be constantly improved in order for the information on goods and technical standards to become more accessible and understandable to citizens.
Some of the experts interviewed also underline the importance of the links with CEFTA. They say that having in view the common goal of the CEFTA states to join the EU, there is an untapped potential for collaboration on the issues regarding the free movement of goods legislation harmonization process, as well as in advancing some common practices. Therefore, it is certainly one of the recommendations that the regional cooperation in this area should to be straightened, and full potential of CEFTA system used in the preparation for the EU Single Market.
Some of the other recommendations include also the importance of functional cooperation committees both in the area of market surveillance and quality infrastructure, which need to facilitate the decision making process and the implementation of the newly adopted legislation in Serbian economy.
Finally, it must be underlined that the problems Serbia is facing at this stage however, are not particularly unique. By the words of DG Enterprise and Industry experts these are the kind of problems that also previous candidate states faced, especially those that needed to transition from state to market economy. Also the case of the most recent Member State, Croatia confirms the stated. The experts explain that the biggest issue is to efficiently explain the functioning of the Single Market in terms of Free movement of goods, the New Approach and the mutual recognition principle to those that need to implement it daily, which brings us back to the issue of active inclusion of SME’s inclusion of SMEs, consumers, expert organisations, laboratories, conformity assessment and testing bodies into the process.
In order for this active approach to be achieved the experts say in their experience with previous enlargements a top down approach is needed. The Government and the relevant state actors need to bring forward and explain the importance of the harmonization in this area, its horizontal nature and significance for Serbian economy both now and in the future.
Reforms of this calibre are never easy and the harmonization in the area of free movement of goods as much as it can sometimes seem a copy paste job, due to its technical nature, is in reality a very troublesome and timely process. However, if Serbia manages to raise awareness on the importance of harmonization in this area and establish a functioning mechanism of communication and collaboration between all state and non-state actors, the eventual entrance into the Single Market should be a relatively easy step.
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Annex 1.- New approach directives,regulations and standards:
Source: European Commission- The ‘Blue Guide’on the implementationof EU product rules 2014, Ref. Ares(2014)1025242 - 02/04/2014
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VI. Bibliography:
Books and articles:
1. Barnard Catherine - The Substantive Law of the EU: The Four Freedoms , Oxford press, (fourth edition) 2013 2. Bernard Nick (edited by Barnard Catherine)-The Law of the Single European Market: Unpacking the Premises 3. Božanić Dragan, Popović Jelena - Serbian Horizontal Legal Framework In The Field Of Quality Infrastructure, Ministry of finance and economy of the republic of Serbia, Belgrade, September 2012 4. Chalmers D., Davies G., Monti G.: European Law Cases and Materials, Cambridge,2010 5. European Commission- Free movement of goods; Guide to the application of Treaty provisions governing the free movement of goods – Publication office of the EU, Luxemburg, 2010 6. European Commission: Interpretative Communication "Cassis de Dijon" of October 3, 1980 7. European Commission- The ‘Blue Guide ‘on the implementation of EU product rules, 2014 8. European Commission, Commission staff working document -The 'Blue Guide' on the implementation of EU product rules: Version of ‘Month’ 2013, Internal Market for the Free movement of goods, Draft – Version 30 September 2013 9. European Commission, Guide to Implementation of the Directives Based on the New Approach and the Global Approach , Office for Official Publications of the European Communities, Luxemburg, 2000 10. European Commission Staff Working Document Serbia 2013 Progress Report Accompanying The Document Communication From The Commission To The European Parliament And The Council Enlargement Strategy And Main Challenges 2013-2014, Brussels, 16.10.2013, SWD(2013) 412 final 11. Joint project between the European Patent Office and the Office for Harmonization in the Internal Market. Intellectual property rights intensive industries: Contribution to economic performance and employment in the European Union, Industry-Level Analysis Report, Septembar 2013, Available at: http://ec.europa.eu/internal_market/intellectual- property/docs/joint-report-epo-ohim-final-version_en.pdf 12. Obradović Tamara - National Report Free movement of goods: Aspect Of Articles 28¬30 Treaty Establishing The European Community And Old, New And Global Approach. Available at : http://www.cepor.hr/projekti/internal_market_obradovic.pdf 13. Sretić Zoran - Sloboda kretanja robe: Usklađivanje Republike Srbije sa trgovinskom politikom EU, Evropski pokret u Srbiji, Loznica, Mladost grupa, 2011. 14. Steiner, Josephine; Woods, Lorna; Twigg-Flesner, Christian- EU Law (9th ed.). Oxford: Oxford University Press,2006 15. Weatherill S.R.: After Keck : Some thoughts on how to clarify the clarification,33 CMLRev,1996 16. World Intellectual Property Organisation - What is Intellectual Property?- WIPO Publication No. 450(E) Available at:
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http://www.wipo.int/export/sites/www/freepublications/en/intproperty/450/wipo_pub_450.p df
Provisions and case law:
1. Case C-309/02 Radlberger Getränkegesellschaft and S. Spitz [2004] ECR I-11763, paragraph 53 2. Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837 3. Case2/73 Geddo v Ente Nazionale risi [1973] ECR 865 4. Case 8/74, Procurer du Roi v Dassonville [1974] ECR 837, point 5. 5. Criminal proceedings against Bernard Keck and Daniel Mithouard- Joined cases C-267/91 and C- 268/91. 6. Case 8/74, Procurer du Roi v Dassonville [1974] ECR 837, paragraphe 6 7. Commission v Italy (Case 7/61) (Ban on pork imports) [1961] ECR 317 8. Commission v Ireland (Buy Irish) [1982] ECR 4005 9. Case 120/78, Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein [1978] ECR 649 10. Commission of the European Communities v Federal Republic of Germany. - Failure of a State to fulfill its obligations - Purity requirement for beer. - Case 178/84. 11. Case 25/88 Bouchara [1989] ECR 1105. 12. Case C-184/96- Commission v France ('Foie Gras') [1998] ECR I-6197 13. Case 15/79, P.B. Groenveld BV/ProduktschapvoorVee en Vlees, [1979] ECR 3409 14. Case 15/79 P.B. Groenveld BV v. ProduktschapvoorVee en Vlees [1979] ECR 3409, para. 7. 15. Case C-379/98 PreussenElektra AG v Schleswag AG 16. Council Decision 93/465/EEC of 22 July 1993 (Official Journal L 220/23, 30.08.1993.) 17. Council Directive 80/181/EEC Available at : http://eur-lex.europa.eu/legal content/EN/TXT/PDF/?uri=CELEX:31980L0181&from=EN 18. Council Resolution (85/C 136/01) - Official Journal C 136 of 4 June 1985 Available at : http://eur- lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31985Y0604%2801%29&from=EN 19. Council Regulation (EEC) No 339/93 of 8 February 1993 Available at : http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31993R0339:EN:HTML 20. Council Regulation (EC) No 2679/98of 7 December 1998 Available at : http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:1998:337:0008:0009:en:PDF 21. Commission- Directive 98/34/EC Available at : http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1998L0034:20070101:EN:PDF 22. Customs Law (“Official Gazette Republic of Serbia” No 18/2010) 23. Directive 2004/22/EC of the European Parliament and of the Council of 31 March 2004 Available at : http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2004:135:0001:0080:EN:PDF 24. Directive 2007/45/EC Of the European Parliament and of the Council of 5 September 2007, Available at : http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:247:0017:0020:en:PDF 25. Decision No 768/2008/EC of the European Parliament and of the Council of 9 July 2008 Available at : http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:218:0082:0128:en:PDF
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26. Decision 3052/95 of the European Parliament and of the Council of 13 December 1995 Available at : http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31995D3052&from=EN 27. Law on Trademarks (Official Gazette of RS No. 104/2009 and 10/2013) 28. Law on Patents (Official Gazette RS No. 99/2011) 29. Law on Legal Protection of Industrial Design (Official Gazette of RS No. 104/2009) 30. Order No. V-73 11/9/2008 of Director of the State Metrology Service (Official Gazette. 2008, No. 106-4076) 31. Regulation (EC) No 764/2008 of the European Parliament and of the Council of 9 July 2008. Available at : http://europa.eu/legislation_summaries/internal_market/single_market_for_goods/technical_h armonisation/mi0006_en.htm 32. Regulation (EC) No 765/2008 of the European Parliament and of the Council of 9 July 2008. Available at: http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:218:0030:0047:en:PDF 33. Republic of Serbia- The National Strategy for the Development of Intellectual Property for the period since 2011-2015. Available at: http://www.zis.gov.rs/upload/documents/pdf_sr/pdf/Strategija%20razvoja%20intelektualne%2 0svojine.pdf 34. Serbian mark of conformity (“Sl. Glasnik RS”, br.98/2009) 35. Stabilisation and association agreement- Available at: http://www.seio.gov.rs/upload/documents/sporazumi_sa_eu/ssp_prevod_sa_anexima.pdf 36. Treaty on European Union - Available at: http://europa.eu/about-eu/basic- information/decision-making/treaties/index_en.htm 37. Treaty on Functioning of the European Union - Available at: http://eur-lex.europa.eu/legal- content/EN/TXT/?uri=CELEX:12012E/TXT
Links:
1. Accreditation: http://ec.europa.eu/enterprise/policies/single-market-goods/internal-market-for- products/accreditation/index_en.htm#h2-1 2. CE marking: http://ec.europa.eu/enterprise/policies/single-market-goods/cemarking/about-ce- marking/index_en.htm 3. Directorate General enterprise and industry : http://ec.europa.eu/enterprise/policies/industrial-competitiveness/industrial- policy/intellectual-property-rights/index_en.htm 4. Expert’s opinion of Baker & Mckenzie group concerning products safety and market monitoring: http://www.lexology.com/library/detail.aspx?g=5936a665-0c45-409b-90e8-99f3e80652a7 5. EFTA and standardization: http://www.efta.int/eea/policy-areas/goods/standardisation-mra-technical- cooperation/standardisation 6. European Commission, Internal Market: http://ec.europa.eu/internal_market/top_layer/index_en.htm
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7. EU Case law: http://www.caselawofeu.com/cassis-de-dijon-case-and-mandatory-requirements/ 8. ISO standards 9000: http://www.iso.org/iso/iso_9000. 9. Keck case: http://kslr.org.uk/blogs/europeanlaw/2012/10/17/rethinking-keck-and-market- access-test-once-again-a-vichy-circle/#_edn3, 10. http://eurlex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEXnumdoc&lg=en& numdoc=61991J0267 11. Non-harmonised sectors: http://ec.europa.eu/enterprise/policies/single-market-goods/free-movement-non-harmonised- sectors/index_en.htm 12. Republic of Serbia Department of Market Inspection: http://mtt.gov.rs/sektori/sektor-trzisne-inspekcije/odeljenje-trzisne-inspekcije-beograd/ 13. Republic of Serbia Sanitary Inspection: http://www.zdravlje.gov.rs/index.php 14. Republic of Serbia Custom service: http://www.upravacarina.rs/cyr/Stranice/Default.aspx 15. Republic of Serbia Intellectual Property Office: http://www.zis.gov.rs/home.59.html 16. Patents in EU: http://ec.europa.eu/internal_market/indprop/patent/index_en.htm 17. Special guide on practical implementation of GPSD: http://ec.europa.eu/consumers/safety/prod_legis/index_en.htm 18. Standardisation in EU: http://europa.eu/legislation_summaries/internal_market/single_market_for_goods/technical_h armonisation/l21001c_en.htm
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Publisher: European Policy Centre, Belgrade- CEP Executive publisher: Nebojša Lazarević Author: Ksenija Simović Editorial consultant: Nebojša Lazarević Print run: 80 pcs Print and prepress: HARTIJA PRODUCTION&DESIGN STUDIO Design: Sara Simović Belgrade, 2014 ISBN 978-86-89217-03-2
CIP - Каталогизација у публикацији
Народна библиотека Србије, Београд
341.217.02(4-672EU:497.11)
339.13(4-672EU)
СИМОВИЋ, Ксенија, 1988-
Slobodno kretanje robe u kontekstu
pregovora o pristupanju Evropkoj uniji :
praktična pitanja, prilike i izazovi,
efikasne integracije Republike Srbije u
Jedinstveno tržište / Ksenija Simović. -
Beograd : Centar za evropske politike, 2014
(Beograd : Hartija a Productin on & Design
Studio). - 79 str. ; 24 cm
Tiraž 80. - Napomene i bibliografske
reference uz tekst. - Bibliografija: str.
74-79.
ISBN 978-86-89217-03-2
a) Европска унија - Придруживање - Србија
b) Тржиште - Европска унија
COBISS.SR-ID 209183244 Since the establishment, in the 1950s the Common Market (and its four essential freedoms) has had an important if not essential role in keeping the European project alive and in creating and guaranteeing competitiveness and development of the European industry and economy. This study aims to assess Serbia's progress in the development of the institutional and legal framework in the area of free movement of goods, in accordance with the objectives set out by the EU, focusing in particular on the harmonization of the horizontal legal framework in this policy area.
Belgrade, 2014