Legal andarketplace Incentives for Suppliers Declaration of Conformity

George T. Willingmyre, P.E.

April, 2000

 What are the legal aspects in USA that support marketplace confidence in SDoC?

 What are the legal aspects in Europe that support marketplace confidence in SDoC?

 CONFORMITY ASSESSMENT PROCEDURES: SUPPLIER’S DECLARATION OF CONFORMITY  Contribution from the United States  to the TBT Committee

 Background:

At a meeting of the WTO Technical Barriers to Trade (TBT) Committee in 1998, in Geneva, the U.S. Government put forward a paper for discussion on the use of supplier’s declaration of conformity as a cost-effective tool for regulators to meet legitimate policy objectives, such as ensuring safety and health. The paper   intended to provide additional background on the use of suppliers’ declaration of conformity for possible use in reducing technical barriers to trade as well as information on the US experience.   The US submission stated in part:  


 6. An effective market surveillance system is an essential underpinning to reliance on supplier’s declaration. Another factor which may be relevant to the willingness of regulators to rely on supplier’s declaration is the extent to which national laws regarding manufacturers’ liability supplement (or do not supplement) efforts by a regulatory agency to assure compliance with regulatory requirements. In addition, a regulator may believe that a different approach to conformity assessment is necessary for confidence that the product/process/service fulfils the technical regulation.

7. In the United States, laws on mandatory information disclosure between seller and buyer and consumer education/information programmes are also important mechanisms supporting reliance on supplier’s declaration of conformity. For example, the Fair Packaging and Labeling Act and similar Federal/state legislation provide manufacturers with flexibility in labeling and advertising conformity of their products to standards and requirements established by the manufacturers themselves. Such legislation can help promote product innovation and improvements and can be an alternative to imposing mandatory product requirements. It also allows consumers the freedom to select products which have the characteristics that they (not the regulator) deem important, while at the same time protects the consumer from false or misleading labeling or advertising. This approach can reduce the need for more intrusive regulatory interference in the marketplace. It should be noted that this approach alone may not be appropriate for characteristics which may impose serious health or safety risks.   

The Figure incorporated by reference   Incentives for SDoC under conditions of Post   Market Surveillance and Sanctions for False Statements   portrays key marketplace factors in  Europe and in the United States which support the use of  SDoC.

The Figure and the descriptions of product labeling,  market surveillance and product liability considerations in bringing  a product to market in the United States and Europe are intended as  basic introduction to the legal and marketplace incentives encouraging manufacturers to build  products complying with relevant mandatory and voluntary marketplace requirements and labeling them so when appropriate.  This paper does not provide legal advice or counsel.  Readers are strongly  advised to consult their attorneys for specific legal interpretations.

George T. Willingmyre, P.E.  March 28, 2000

 

What are the legal and marketplace aspects in USA  that support marketplace confidence in SDoC?

 A variety of laws and regulations in the United States call for products to be accurately labeled. Such laws and regulations carry severe penalties for those businesses that would falsely claim conformity to a standard.  Accompanying government and private sector marketplace surveillance programs help the marketplace self police itself against both products that should be meeting appropriate standards, but are not so labeled and products that are falsely claiming conformity to standards. Product labeling regulations and marketplace surveillance activities are covered in many specific pieces of legislation within the jurisdiction of many different agencies.  One would have to determine which agency has jurisdiction of the specific product or even the specific product characteristic in some cases and then would have to research those regulations for the applicable requirements in any given product field. 

Additionally direct product liability considerations and both regulatory and product liability considerations related to product recalls act together to encourage manufacturers to build products to the relevant safety standards in order to minimize these risks of defending against claims of defective products or calls for mandatory or voluntary product recalls. 

One recent US example of a manufacturer running afoul of a specific regulatory requirement for producing accurate testing results is that of  the Clean Air Act and Saybolt. Saybolt Inc. agreed to plead guilty in Federal Court to charges of falsely certifying results of qualitative test of reformulated gasoline as required under the Clean Air Act.  As part of the penalty, Saybolt agreed to publicly announce in the news media; “… As a result of a pattern of data falsification, our company has agreed to pay a fine of $3,400,000 and to be placed on probation for five years.  We also agree to publish this announcement. Accurate reporting of test results … is essential.  Failure to do so will expose you to severe penalties.  It is also smart business.” [ASTM Standardization News, November 1998 page 62] 

In addition to specific regulatory oversight, In the U.S., the performance of products in the market place is typically monitored by competitors, who do so to protect the market share for their products.  Industry reports on false claims are given to the Federal Trade Commission (FTC) and the Food and drug Administration (FDA) which have the capability, through the Fair Package and Labeling Act, to take action against those who present false and misleading information. 

These requirements, implementing the Fair Packaging and Labeling Act, are found in Title 15 – Commerce and Trade; Chapter 39 –Fair Packaging and Labeling Program.  Section 1451 states the Congressional declaration of policy as follows: 

Informed consumers are essential to the fair and efficient functioning of a free market economy.  Packages and their labels should enable consumers to obtain accurate information as to the quantity of the contents and should facilitate value comparisons.  Therefore, it is hereby declared to be the policy of the Congress to assist consumers and manufacturers in reaching these goals in the marketing of consumer goods.  (Pub. Las 89-755, Sec.2, Nov3, 1966, 80 Stat 1296)

Section 13 of Pub. Law 89-755 distributes the responsibilities between the Food and Drug Administration  and the Federal Trade Commission 

As implemented, these requirements are that all advertising claims must be substantiated.  Labels are construed as claims; therefore everything on the label must be able to be substantiated.  The requirements include methods of substantiation.  Claiming conformity to or compliance with a standard, code or regulation must be substantiated.  

In a typical month, a half dozen FTC actions are listed in the Federal Register.  FTC does not have the staff to do much inquiry but depends upon competitors and consumers to identify false claims.  If a product does not meet the requirement claimed on the label of if the label is just  miss worded, FTC may be  notified. 

There are tough consequences for false certification of test results.  Increasing regulatory agency use of “suppliers declaration of conformity” to relevant requirements in standards and the associated transfer of responsibilities for conducting tests from the public to the private sector is often accompanied with a fear that businesses will not actually perform the cited tests or will otherwise falsely claim to comply.    Penalties for such illegal actions can be severe.  

In another case involving misleading advertising and product claims, Telxon Corporation announced that the U.S. District Court, Northern District of Ohio  granted its request for a preliminary injunction against Symbol Technologies, Inc. (NYSE: SBL) of Holtsville, New York, enjoining Symbol from continuing to make false and misleading statements about its frequency hopping wireless network; namely, Spectrum 24. [Akron, Ohio. December 19, 1996 PR Newswire] In addition, the court ordered a public retraction of the false and misleading statements which have appeared in various forms of advertising and public communications made by Symbol. The court's ruling stems from a lawsuit filed by Telxon on September 4, 1996, charging that Symbol engaged in violations of the federal Lanham Act and the Ohio Deceptive Trade Practices Act by making false and misleading statements concerning, among other things, issues of standards compliance, interoperability, and open systems in connection with Spectrum 24. Frank Brick, Telxon's President and Chief Operating Officer, stated, "We are pleased by the court's decision and hope that this will clarify for customers and the marketplace any confusion

Specifically, the judgment entry issued by the court, enjoins Symbol as follows:  

A.     from making statements (expressly or in substance) that Spectrum 24 is compliant, meets, conforms or is compatible with the IEEE 802.11 standard or draft standard.  

B.     from making statements (expressly or in substance) that Spectrum 24 is an open system.   

C.    from making statements (expressly or in substance) that:  IEEE 802.11 is a    standard for interoperability;  compliance with the IEEE 802.11 will result in interoperability;  Spectrum 24 is interoperable; and  IEEE 802.11 will provide interoperability between access points.

As an additional component of injunctive relief, Symbol was ordered by the court to issue a public retraction stating as follows:

Symbol has made false and misleading statements that Spectrum 24 (Symbol's frequency hopping network) is compliant with the IEEE 802.11 standard. The truth is that the IEEE 802.11 standard has not been finalized. Spectrum 24 is not compliant with the IEEE 802.11 draft standard. And in the first available edition, Symbol shall publish the retraction in a full one page advertisement in each magazine where it published its advertisement [that contained its false and misleading statements],

Product Liability considerations in the United States lead  manufacturers to reduce their exposure to liability suits by building products complying  to  applicable regulatory requirements and to the  most relevant applicable voluntary safety and warning labeling standards.  Meeting such standards and declaring conformity of their products to such standards can be used as a defense although not a guaranteed shield against  a plaintiff’s claim of damages and injuries due to a defective product.  Not meeting a relevant regulatory requirement or applicable voluntary standard is certain to be used as evidence that a manufacturer did not meet reasonable expectations to produce a safe product.

The  Restatement of Torts (Third) is a comprehensive general statement of the tort law in the United States governing liability for defective products.  Even  as a general statement, however, it is subject to interpretation and variations in individual states and courts. The third edition states in section 2 with respect to product defects:

A product is defective when, at the time of sale or distribution, it contains a manufacturing defect, is defective in design, or is defective because of inadequate instructions or warnings. A product:

(a) contains a manufacturing defect when the product departs from its intended design even though all possible care was exercised in the preparation and marketing of the product;

(b) is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the omission of the alternative design renders the product not reasonably safe;

(c) is defective because of inadequate instructions or warnings when the foreseeable risks of harm posed by the product could have been reduced or avoided by the provision of reasonable instructions or warnings by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the omission of the instructions or warnings renders the product not reasonably safe.

An allegation that a product is defective in design is the most common allegation asserted in a products liability action. Section 2(b)  adopts what is essentially a  negligence analysis for design defect claims. The Restatement  requires the plaintiff to establish that the foreseeable risks of harm could have been prevented by a "reasonable alternative design," and the absence of that alternative design renders the product "not reasonably safe." Furthermore, the plaintiff must prove that such a reasonable alternative design was, or reasonably could have been, available at the time of sale or distribution of the product.

However, many products liability actions involve allegations of inadequate warnings. Section 2(c)   addresses warning defects and adopts a reasonableness test for judging the adequacy of product instructions and warnings. The reasonableness standard is more difficult to apply in the context of warnings and instructions than it is in the area of design defects. Too many warnings or warnings that are too detailed may not be read by consumers; determining the optimum number and type of warnings and instructions for a given product is complicated.

In connection with liability for defective design or inadequate instructions or warnings:

(a)  A product’s noncompliance with an applicable product safety statute or administrative regulation renders the product defective with respect to the risks sought to be reduced by the statute or regulation; and

(b) A product’s compliance with an applicable product safety statute or administrative regulation is properly considered in determining whether the product is defective with respect to the risks sought to be reduced by the statute or regulation, but such compliance does not preclude as a matter of law a finding of product defect.

The American National Standards institute (ANSI) estimates that its standards were cited in 400 product liability cases over a recent 15 year period.   Several court cases illustrate the variety of outcomes possible with regard to defendant’s and plaintiff’s reference to relevant regulations and voluntary standards.

In the case  Wagner v. Clark Equipment Co, Inc., 243 Conn. 168, 700 A.2d 38 (1997). the Connecticut Supreme Court  decided that evidence of compliance with OSHA regulations may be considered in design defect cases and the court went so far as to state that where a product complies with and exceeds OSHA standards, the jury may permissibly draw the inference that the product is not defective and that the manufacturer acted with due care in its design.

Illustrating a contrary  conclusion, the Georgia Supreme Court  ruled in a 6-1 decision that Georgia law permits a personal injury product liability claim when an auto maker sells a car to a Georgia citizen and the vehicle is in compliance with the National Automobile Safety Act. Doyle et al. v. Volkswagenwerk Aktiengesellschaft et al, No. S96Q1529 (March 3, 1997).

In the case of I. Potter v. Chicago Pneumatic Tool Co. 241 Conn. 199, 694 A.2d 1319 (1997),, it was affirmed that it is up to a plaintiff to prove that, at the time the defendants manufactured their products, a feasible alternative design existed which was safer than the defendants’ design.  The existence of a regulation or a voluntary standard would be compelling evidence in such a situation

Illustrating the principal that compliance with a voluntary standard is not a completely sufficient defense against a product liability claim is the case of King v. National Spa & Pool Institute (NSPI), Inc., 570 So. 2d 612 (Ala. 1990) (hereafter "King").    Taken from Products Liability Claims against voluntary standards developers—an update on recent developments   at  http://web.ansi.org/public/library/guides/prod_liability.html In this case the Supreme Court in Alabama held that even the group that prepares a relevant  voluntary safety standard  owes  a duty to consumers and may be found liable.

A product can be "unreasonably dangerous" for purposes of strict products liability if it lacks adequate directions or warnings. It is a fundamental principle of the law of product liability  that a manufacturer has a responsibility to instruct consumers as to the safe use of its product and to warn consumers of dangers associated with its product of which the seller either knows or should know at the time the product is sold. In assessing what hazards are foreseeable, a manufacturer is held to the status of an expert. The lack of adequate warnings renders a product defective and unreasonably dangerous even if there is no manufacturing or design defect in the product.

Many courts have recognized the failure to warn as a type of "defect" upon which recovery in both strict liability and negligence may be grounded. Failure to warn has led to recovery when there was a complete absence of warning where one was needed to prevent the product from being unreasonably dangerous.

In Torres-Rios v. LPS Laboratories Inc., 1998 WL 429337 (1st Cir. 1998), The United States Court of Appeals for the First Circuit recently affirmed summary judgment in favor of the manufacturer of a product used to clean electrical equipment, holding that the product's English-language warning label met federal standards and, therefore, a jury could not find the product to be unreasonably dangerous.

The case of Product Liability in Japan: The Exploding T.V. Case Taishi Kensetsu Kogyo Ltd. v. Matsushita Electric Industrial Co., Ltd   available at http://www.law.kyushu-u.ac.jp/~luke/tvcase.html  illustrates what appears to be the  counterpart situation in Japan where  the negligence of the manufacturer is presumed when a defect is found in the product, the user doesn't have any duty further to elucidate the specifics of cause of the defect or of breach of the duty of care, and the manufacturer has to rebut the presumption by clarifying the cause of defects, in order to be released from the liability.  In this case the defendant argued that the product in question met the relevant type testing standards of MITI:

The Restatement of Torts (Third) also provided that entities  engaged in the business of selling or otherwise distributing products are subject to liability for harm to persons or property caused by the seller’s failure to recall a product after the time of sale or distribution :

(a) (1) a statute or other governmental regulation specifically requires the seller or distributor to recall the product; or

(2) The seller or distributor, in the absence of a recall requirement under Subsection (1) undertakes to recall the product; and

(b) The seller or distributor fails to act as a reasonable person in recalling the product.

In a regulatory or products liability context the term "recall" is a term of art. It refers to a very specific device by which a manufacturer, seller, licensee, importer, distributor, retailer, or other entity in the chain of commerce of a product, advises purchasers that certain actions/activities should be undertaken with respect to that product. Of course, a recall can be effected in any number of ways. Recall may consist merely of the addition of a warning to a given product; it could entail repair, replacement or retrofit of that product; or it could require repurchase by the manufacturer and a refund of the purchase price to the buyer/consumer.

In recent years, recalls have become fairly pervasive and have received considerable attention from the media and various business and consumer groups. Several federal administrative agencies, such as the National Highway Traffic Safety Administration, Consumer Products Safety Commission, Food and Drug Administration, Department of Housing and Urban Development, Federal Trade Commission, Federal Aviation Administration ("FAA"), and other entities, have statutory authority to recall products or take action so that a recall or what amounts to a recall. Where the government has ordered a recall, there is no question about the manufacturer's duty to comply -- it must.

In the case of the Consumer Product Safety Commission Section 15(b) of the Consumer Product Safety Act establishes reporting requirements for manufacturers, importers, distributors and retailers of consumer products. Each must notify the Commission immediately if it obtains information which reasonably supports the conclusion that a product distributed in commerce (1) fails to meet a consumer product safety standard or banning regulation, (2) contains a defect which could create a substantial product hazard to consumers, (3) creates an unreasonable risk of serious injury or death, or (4) fails to comply with a voluntary standard upon which the Commission has relied under the CPSA. Companies that distribute products that violate regulations issued under the other laws that the Commission administers -- the Flammable Fabrics Act, 15 U.S.C. § 1193-1204; the Federal Hazardous Substances Act, 15 U.S.C. § 1261-1278; the Poison Prevention Packaging Act, 15 U.S.C. § 1471-1476; and the Refrigerator Safety Act; 15 U.S.C. §1211-1214 -- must also report, if the violations may also constitute product defects that could create a substantial risk of injury to the public or may create an unreasonable risk of serious injury or death. The  CPSC has released a helpful and comprehensive RECALL HANDBOOK A Guide for Manufacturers, Importers, Distributors and Retailers on Reporting Under Sections 15 and 37 of the Consumer Product Safety Act and Section 102 of the Child Safety Protection Act and Preparing for, Initiating and Implementing Product Safety Recalls that clarifies the Commission review of whether a product recall may be necessary.  Available at http://www.cpsc.gov/businfo/8002.html

Several recent examples of CPSC-required product recalls are the following:

CPSC, Michael's Stores Inc. Announce Recall of Lighters WASHINGTON D.C March 9, 23000 - In cooperation with the U.S. Consumer Product Safety Commission (CPSC), Michael's Stores Inc., of Irving, Texas, is recalling about 213,000 all-purpose lighters. These lighters can leak butane when they are ignited, causing an excessive burst of flame from the tip or other areas of the lighter. This presents a risk of fire and burn injuries to consumers. Details at http://www.cpsc.gov/cpscpub/prerel/prhtml00/00076.html

CPSC, New Cole Sewell Corp. Announce Recall of Storm Doors WASHINGTON, D.C. - In cooperation with the U.S. Consumer Product Safety Commission (CPSC), New Cole Sewell Corp., of St. Paul, Minn., is recalling about 23,000 storm doors manufactured without retaining pins in the upper windows. The upper window can fall out and could injure nearby consumers. New Cole Sewell Corp. has received 15 reports of upper windows falling out of the storm doors. No injuries have been reported. The recall involves storm doors manufactured from June 1, 1999, through August 16, 1999 Details  at http://www.cpsc.gov/cpscpub/prerel/prhtml00/00066.html

While in most cases a product recall is carried out as the result of a regulatory scheme, it is not always so. There exist many situations where there is  no requirement  that a product must be recalled pursuant to a statute, rule or regulation. At times, a manufacturer, in the interest of safety, might institute a recall in the absence of a regulatory scheme requiring a recall.

Review of the case law in the area of "recall" law reveals that there are no hard and fast rules. Some jurisdictions require that, upon learning of a defect, a manufacturer recall/retrofit that product; other jurisdictions leave recall to regulatory authority.  A company that has designed and manufactured a product to a relevant safety standard and subsequently truthfully declared the product’s conformity to the relevant standard will necessarily be less likely to find himself in the situation of having to perform either a regulatory-required or voluntarily imposed product recall at the very minimum with respect to the safety considerations addressed in the relevant standard compared to a similar company which has not done so.  

 

 

What are the legal aspects in Europe that support marketplace confidence in SDoC?

 This Section Extracted in entirety from GUIDE TO THE IMPLEMENTATION OF DIRECTIVES  BASED ON NEW APPROACH AND GLOBAL APPROACH New Approach Guide - 1999 Edition (Draft)  This Guide is intended to contribute to better understanding of directives based on the New Approach and the Global Approach, and to their more uniform and coherent application across different sectors and throughout the Single Market. The "New Approach Guide - 1999 Edition (Draft)"  is available on line and for download: http://www.eotc.be/News/EC/EC_Guide/NA_Guide99.htm

Marketplace Surveillance as part of Member State Responsibility for implementation of New Approach directives

Market surveillance involves two main stages: (1) National surveillance authorities shall monitor that products placed on the market comply with the provisions of the applicable national legislation transposing the New Approach directives, and (2) subsequently, when necessary, they shall take action to establish conformity.

Although market surveillance operations cannot take place during the design and product stages, efficient enforcement usually requires that surveillance authorities act in collaboration with manufacturers and suppliers in order to prevent the placing on the market of non-compliant products

Enforcement of Community legislation is an obligation on Member States: Art. 10 of the EC Treaty requires Member States to take all appropriate measures to ensure fulfillment of their obligation arising out of the Treaty. Market surveillance is an essential tool for enforcing New Approach directives, in particular by taking measures to check that products meet requirements of the applicable directives, that action is taken to bring non-compliant products into compliance, and that sanctions are applied when necessary.

A high level of protection is envisaged in the New Approach directives. This requires Member States to take all necessary measures to ensure that products may be placed on the market and put into service only if they do not endanger the safety and health of persons, or other interests covered by the applicable New Approach directives, when correctly constructed, installed and maintained, and used in accordance with their purpose. This implies an obligation for Member States to organize and carry out market surveillance, in a way that is effective and sufficiently extensive to discover non-compliant products. This is to protect not only the interests of consumers, workers and other users, but also the interests of economic operators from unfair competition.

Market surveillance is the responsibility of public authorities. This is, in particular, to guarantee the impartiality of market surveillance operations. Each Member State can decide upon the market surveillance infrastructure, for example there is no limitation to allocate responsibilities between authorities on a functional or geographical basis as long as surveillance is efficient and covers the whole territory. As a result, the legal and administrative market surveillance infrastructures differ from one Member State to another. This requires, in particular, that efficient administrative co-operation between competent national authorities is in place so that an equivalent level of protection can be ensured throughout the Community, in spite of the competence for market surveillance being limited to each Member State’s territory.

Market surveillance authorities should have the necessary resources and powers to conduct their surveillance activities. This is to monitor products placed on the market and, in case of non-compliance, to take appropriate action to enforce conformity. As regards personnel resources, the authority needs to have, or have access to, a sufficient number of suitably qualified and experienced staff, which has the necessary professional integrity. To guarantee the quality of the test data, the testing facility used by the authority should comply with the relevant criteria of the EN 45001 standard. The authority should also be independent, and carry out its operations in an impartial and non-discriminatory way. Further, the authority should carry out market surveillance respecting the principle of proportionality, for example action must be in accordance with the degree of risk or non-compliance and the impact on the free circulation of products may not be more than is necessary for achieving the objectives of market surveillance.

The surveillance authority may subcontract technical tasks (such as testing or inspection) to another body, provided that it retains the responsibility for its decisions, and provided there is no conflict of interest between the other body’s conformity assessment activities and its surveillance tasks. In doing so the authority should exercise great care to ensure that the impartiality of the advice it receives is beyond reproach. The responsibility for any decision to be taken on the basis of such advice shall reside in the surveillance authority.

As a general rule, it is inappropriate for notified bodies to be responsible for market surveillance. In order to avoid a conflict of interest it is necessary to make a clear distinction between conformity assessment (which takes place before the product is placed on the market) and market surveillance (which takes place after the product has been placed on the market). As an exception, where a notified body and a market surveillance authority come under the same superior authority in a Member State, the lines of responsibility should be so organized that there is no conflict of interest between these activities.

 New Approach directives and the Directive on general product safety

 

The Directive on general product safety applies to consumer products supplied in the course of commercial activity, provided that:

the product is not covered by New Approach directives or other Community legislation; or

all aspects of safety or categories of risk are not covered by New Approach directives or other Community legislation.

 

The Directive on general product safety requires manufacturers to place only safe products on the market. They are obliged, within the limits of their respective activities, to provide consumers with the relevant information to enable them to assess the risks inherent in a product, where such risks are not immediately obvious without adequate warnings, and to take precautions against those risks. They are also obliged to adopt measures commensurate with the characteristics of the product in order to be informed of possible risks, and to take appropriate action including, if necessary, withdrawing the product from the market.

The Directive on general product safety (92/59/EEC) aims to ensure that consumer products placed on the market do not present a risk under conditions of use that are normal or can be reasonably foreseen. It requires producers to place only safe products on the market, and to inform about risks. It also obliges Member States to survey products on the market, and to inform the Commission about actions taken through either a safeguard clause procedure or the information system for serious and immediate risks. The Directive on general product safety covers new, used and reconditioned products intended for consumers or likely to be used by consumers, supplied in the course of commercial activity. According to this definition, products within the scope of several New Approach directives are to be considered as consumer products (such as toys, recreational craft, refrigeration appliances, and to certain extent electrical equipment, gas appliances, machinery, personal protective equipment and pressure equipment).

The Directive on general product safety is applicable insofar as there are no specific provisions in rules of Community law governing all the safety aspects of the products concerned. Further, where specific rules of Community law contain provisions governing only certain aspects of product safety or categories of risk for the product concerned, these provisions are applicable to the products in question with regard to the relevant safety aspects or risks. This rule gives priority to the application of New Approach directives for all aspects of product safety and categories of risk they cover. Further, for products covered by New Approach directives the objective has been to cover all foreseeable risks, if necessary by means of simultaneous application of these directives and other relevant provisions of Community legislation

  New Approach directives and the Directive on product liability

 

The Directive on product liability is applicable to all products covered by New Approach directives.

The objective of New Approach directives is to protect the public interest (for example health and safety of persons, consumer protection, protection of business transactions, environmental protection). Thus, they intend to prevent, as far as possible, the placing on the market and putting into service of unsafe or otherwise non-compliant products. The Directive on product liability (85/374/EEC), which is applicable to all products covered by New Approach directives, provides a powerful incentive to guarantee the safety of products. It is in the interest of the manufacturer, the importer and the distributor to supply safe products in order to avoid the costs that liability places on them for defective products causing damages to individual or property. Consequently, New Approach directives and the Directive on product liability are complementary elements in ensuring an adequate level of protection.

World Trade G/TBT/W/63
7 April 1998
Organization
(98-1401)


Original: English
Committee on Technical Barriers to Trade


CONFORMITY ASSESSMENT PROCEDURES: SUPPLIER’S DECLARATION OF CONFORMITY  Contribution from the United States


I. INTRODUCTION

1. In the first Triennial Review of the Operation and Implementation of the Agreement on Technical Barriers to Trade (G/TBT/5), the Committee noted the growing concern with respect to the restrictive effect on trade of multiple testing and conformity assessment procedures, and that the principle of “one standard, one test” and if required “one certification, one time” should be pursued to facilitate trade and reduce costs (Para. 26). The Committee recognized the supplier’s declaration of conformity as saving costs associated with assuring conformance. At the same time the Committee acknowledged this procedure was not appropriate in all cases, particularly where technical infrastructure was lacking or it would compromise health, safety or environmental protections. The Committee agreed that it would be useful for Members to exchange information on their experience in the various types of conformity assessment procedures and their conditions of application. The following submission by the United States is intended to provide additional background on the use of suppliers’ declaration of conformity as well as information on the US experience.

II. USE OF SUPPLIER’S DECLARATION OF CONFORMITY AS A TOOL FOR DEMONSTRATING PRODUCT CONFORMITY

2. A supplier’s declaration of conformity is but one tool for indicating the conformity of a product, process or service to a standard or technical regulation. It is a procedure by which a supplier (as defined in ISO/IEC Guide 22:1996, a supplier is the party that supplies the product, process or service and may be a manufacturer, distributor, importer, assembler, service organization, etc.) provides written assurance of conformity to the specified requirements. The declaration identifies the party responsible for making the declaration of conformity and for the conformity of the product/process/service itself.

III. HOW DOES IT WORK?

3. A purchaser or government authority may rely upon a declaration of conformity as an assurance that a product, process or service complies with a particular standards or technical regulation. As stated in ISO/IEC Guide 22:1996 (General Criteria for Supplier’s Declaration of Conformity), “the declaration normally has the form of a separate document. It may alternatively be given in, for example, a statement, catalogue, invoice, or user’s instructions relevant to the product, process or service.” The supplier makes such a declaration based on: (1) the manufacturer’s confidence in the quality control system, or (2) the results of testing or inspection the manufacturer undertakes or authorizes others to undertake on his/her behalf. ISO/IEC Guide 22:1996 lays out criteria for supplier’s declaration of conformity. According to Guide 22, the manufacturer has the option of using an accredited laboratory or inspection body and indicating this on the declaration; this is not a requirement. The choice of where to test is left to the manufacturer. This approach allows manufacturers to use laboratories in whom they have confidence and which are most conveniently located in relation to where the product is produced, reducing the cost and time associated with testing. For regulatory purposes, authorities can ensure that the integrity of a supplier’s declaration of conformity is maintained by establishing requirements for who signs the declaration of conformity, requiring access to the declaration and/or compliance records, etc.

IV. US EXPERIENCE

4. In the United States, reliance on a declaration of conformity is most prevalent with respect to assuring conformity to voluntary standards (e.g., telecommunications interoperability). A number of US regulatory agencies also rely upon a declaration of conformity to technical regulations. The US Department of Transportation, for example, recognizes a declaration of conformity by manufacturers (or importers) of motor vehicles and motor vehicle equipment. Under US law, manufacturers are required to certify that their products comply with all applicable Federal Motor Vehicle Safety Standards (FMVSS). This certification is in the form of a permanent label affixed to the product. This label is required for all vehicles and equipment covered by the FMVSS, and must be present if a vehicle or equipment covered by the FMVSS is to enter the United States. For purposes of enforcement, the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) may test the vehicle or equipment for compliance with one or more of the FMVSS after the product is on the market. If the product fails the test, and either the manufacturer or NHTSA determines that the product, in fact, does not comply, the manufacturer must notify the product’s owner and remedy the noncompliance at no cost to the owner. Additional penalties may apply. A manufacturer outside the United States who offers its product for importation into the US must submit itself to the jurisdiction of Federal courts in the US by designating an agent in the United States who will receive legal papers on behalf of the manufacturer.

5. The US Federal Communications Commission has adopted a rule which permits recognition of supplier’s declaration for personal computers (PC’s) and PC peripherals, provided supporting test results are obtained from an accredited laboratory (both accreditation programmes cited in the rule conform to ISO/IEC Guides 58 and 25). This programme benefits manufacturers in two ways -- by reducing costs and time to market -- while maintaining a high level of protection of health and safety. We are aware that other Members also rely on supplier’s declaration as a demonstration of conformity to regulatory requirements.

6. An effective market surveillance system is an essential underpinning to reliance on supplier’s declaration. Another factor which may be relevant to the willingness of regulators to rely on supplier’s declaration is the extent to which national laws regarding manufacturers’ liability supplement (or do not supplement) efforts by a regulatory agency to assure compliance with regulatory requirements. In addition, a regulator may believe that a different approach to conformity assessment is necessary for confidence that the product/process/service fulfils the technical regulation.

7. In the United States, laws on mandatory information disclosure between seller and buyer and consumer education/information programmes are also important mechanisms supporting reliance on supplier’s declaration of conformity. For example, the Fair Packaging and Labeling Act and similar Federal/state legislation provide manufacturers with flexibility in labeling and advertising conformity of their products to standards and requirements established by the manufacturers themselves. Such legislation can help promote product innovation and improvements and can be an alternative to imposing mandatory product requirements. It also allows consumers the freedom to select products which have the characteristics that they (not the regulator) deem important, while at the same time protects the consumer from false or misleading labeling or advertising. This approach can reduce the need for more intrusive regulatory interference in the marketplace. It should be noted that this approach alone may not be appropriate for characteristics which may impose serious health or safety risks.

V. IMPACT ON TRADE

8. Reliance upon a declaration of conformity by suppliers is normally considered to be a trade friendly approach to conformity assurance. As noted above, from a manufacturer’s perspective, the supplier’s declaration of conformity allows flexibility in the choice of location to have a product tested, reduces the uncertainty associated with mandatory testing by designated laboratories based in foreign countries as well as associated costs. Reliance on a supplier’s declaration of conformity can also be a cost-saving and efficient tool for regulators to meet their legitimate policy objectives, such as ensuring protection of the environment and the health and safety of consumers. It can provide an assurance that a product conforms to regulatory requirements by identifying an accountable party in the event that non-compliance is detected. Regulatory reliance on a declaration of conformity can be enhanced when “spot checks” are conducted and penalties are imposed for non-compliance. Additional safeguards can be provided by customs inspections to verify the presence of the supplier’s declaration of conformity documents and by affording an opportunity for market participants to inform regulatory authorities of perceived non-conformance. A supplier’s declaration of conformity is also beneficial in that there is no discrimination on the basis of the geographic location of a testing or other conformity assessment body -- conformity is, in short, the responsibility of the supplier. Under such a system, the question of “portability” of conformity assessment, or of the need to negotiate political agreements on mutual recognition, become moot.

VI. FUTURE WORK

9. The Committee on Technical Barriers to Trade has acknowledged the importance of avoiding unnecessary obstacles to international trade in cases where a positive assurance of conformity with a technical regulation or standard is required. While the Committee has noted that the supplier’s declaration of conformity can save costs, it also acknowledged that such an approach to conformity assurance may not always be appropriate. The United States continues to support the voluntary exchange of information foreseen in the Triennial Review on the use of supplier’s declaration and alternative approaches to conformity assessment and would welcome information from other Members on their experience. Such experience could include a further definition of the conditions supporting effective use of a declaration of conformity; considerations that may deem such an approach inappropriate from a regulatory perspective; an identification of technical infrastructure components which would be necessary to support reliance on this approach.



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