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The end of "Made in Germany"?

  • United Kingdom
  • Germany
  • Europe
  • Industrials - Industrial engineering
  • Retail


The new product safety and market surveillance package of the European Commission

The German Product Safety Act not only contains regulations on the safety of consumer products, product monitoring as well as on product warnings and recalls. It also regulates the labelling of products, such as the CE and GS marks, as well as the indication of the name and address of the manufacturer. The label "Made in Germany", generally associated with high quality, has so far been an optional statement. This is now set to change.

The term "Product Safety and Market Surveillance Package" 2013/0049 (COD) encompasses a bundle of measures which the European Commission already proposed in February 2013. The question of conformity of products with the applicable legal and technical requirements no longer stopped at national borders anyway. There are multiple European legal provisions and – often harmonised – technical standards (such as EN). Manufacturers and distributors in the EU have learned to deal with these requirements.

Nevertheless, the EU again intends to considerably intervene in national regulations and interests with the Product Safety and Market Surveillance Package. Whilst it appears that the EU only intends to replace a former European regulation with a new version, this is what happens in reality:

The General Product Safety Directive 2001/95/EC, enforceable since 2004, will be replaced by the new European Product Safety Regulation. Contrary to the directive, the regulation directly applies in all EU member states (as well as in the European Economic Area). Thereby, the basis of the German Product Safety Act is impaired; it has to be adapted.

As soon as the Product Safety Regulation enters into force, which is planned for 2015, this could result in significant changes to the "declaration of origin". Art. 7 of the Product Safety Regulation merely states that manufacturers and EU importers shall ensure that products bear an indication of the country of origin of the product; where the country of origin is a member state of the EU, manufacturers and importers may refer to the EU or to a particular member state.

However, the devil is in the details: Art. 7 refers to certain provisions of the customs legislation, according to which the country of origin is the country where products underwent their "last, substantial, economically justified processing or working" (Art. 60 of Regulation 952/2013/EU). For a lot of products, this will not be Germany, so that "Made in Germany" might be used only rarely in the future. If, however, the indication "Made in ..." become mandatory, manufacturers and importers would be forced to state a respective other country of origin.

Several industrial and trade associations in Germany strongly campaign against this. They reject the indication of the country of origin. According to the associations, the mandatory indication of the country of origin for the purpose of improving traceability is excessive and inappropriate. The associations consider the reason specified by the EU that the declaration of origin gives consumers a "safety guarantee" in case of global value chains to be incorrect. According to the associations, it furthermore does not protect consumers from trade mark and product piracy, only creates unnecessary bureaucracy and does not provide any reliable statements regarding, for example, social and environmental standards. Moreover, the associations claim that there is the risk that products imported from outside the EU will be discriminated. In particular, the German associations continue to opt for a voluntary indication of the country of origin.

It is rumoured that no consensus has so far been reached among the EU member states with respect to the implementation of this change. However, it should not be underestimated that the proposed regulation remained unchanged also during the elections to the European Parliament in summer 2014 and is still discussed in the various EU committees. It should also be noted that already today legal conditions have to be met when using the label "Made in Germany". Only recently, by decision of 27 November 2014 (file no. I ZR 16/14), the Federal Supreme Court established as to when the use may be misleading and thus inadmissible.

We will keep an eye on whether the proposed regulation passes through the legislation process – or whether there will be another postponement or additional last minute changes.