A new EU regulation on the mutual recognition of goods will apply as of April 2020. It aims to improve the free movement of goods across the EU Single Market by guaranteeing that any product lawfully sold in one Member State can be sold in another even if the product does not fully comply with the national requirements of the other country.
The principle of mutual recognition is based on the free movement of goods within the Single Market, unless a decision has been made to restrict or deny market access.
Existing regulation ineffective
The current regulation on the mutual recognition of goods has not generated the expected benefits and therefore needs to be updated. The regulation is not widely known, and cooperation between authorities has been insufficient. In addition, the scope of the regulation and the practices of applying the principle of mutual recognition have involved legal uncertainties from the viewpoint of both companies and authorities.
There is less internal EU trade in products that are not subject to harmonisation at EU level. This is partly due to the ineffective implementation of the principle of mutual recognition, according to estimates. Better implementation of mutual recognition is therefore expected to have positive effects on the development of cross-border trade in the Single Market. Consumers will have access to a wider and more competitive range of products as goods move more freely within the Single Market.
Consumers will have access to a wider and more competitive range of products as goods move more freely within the Single Market.
What will change?
The biggest change is that the regulation will have more detailed provisions on how the authorities should apply the principle of mutual recognition. Member States’ authorities must observe the obligations laid down in the regulation when they perform their duties, such as assessment of goods and taking of administrative decisions. The new regulation also contains more detailed provisions on the content of the administrative decisions. It is essential that the authorities in all Member States follow the same rules and procedures in a uniform manner. This will boost the application of the principle of mutual recognition and thereby increase legal certainty and transparency.
The new regulation will allow companies to submit a voluntary mutual recognition declaration (self-declaration) to demonstrate that their product is lawfully sold in another EU Member State. Self-declaration will increase transparency and give companies the opportunity to demonstrate that their product is already lawfully marketed within the EU. In addition, companies can use the single market problem-solving network (SOLVIT) to assess whether an authority has applied the principle of mutual recognition appropriately. SOLVIT offers companies a fast, low-threshold way to get help if they suspect that the authorities have imposed unjustified barriers to the free movement of goods.
Implementation in a key role
It is essential that all Member States and all the relevant sectors implement the new regulation efficiently. That is the only way to ensure the best possible utilisation of the benefits and opportunities of the regulation. It is also important that national authorities cooperate both with their counterparts in other Member States and with the Commission. Better implementation and cooperation will take us further towards a better functioning single market.
Niina Etelävuori, Senior Specialist