The European Union has taken a step towards the adoption of a law which will make the origin labelling of several types of consumer product compulsory for manufacturers that wish to trade their products in the European Union's 27 member states. On October 21 2010 a European Commission proposal which will require certain products that are imported from third countries to carry indications of their country of origin won overwhelming support from the European Parliament.
At present, no legislation is in place in the European Union regarding the use of origin marking (ie, 'made in' labelling) for industrial products. Although the EU Unfair Commercial Practices Directive (2005/29/EC), which addresses instances of the misleading use of origin indications, has been in place since 2005, it omits to define the meaning of 'made in' and does not empower customs authorities to carry out inspections.
Furthermore, the rules on the use of origin marking differ in certain member states.
Due to growing industry concerns regarding origin marking, in December 2005 the commission tabled a proposal on the regulation of country of origin markings in relation to certain products imported from third countries. The progress of this legislation through the EU lawmaking system has been extremely slow, although the European Parliament's overwhelming support may help to lubricate the process from now on.
Key provisions and amendments
Products which are destined for the end consumer - and therefore not, for example, components for purely industrial use - are to be covered by the future regulation. Thus, the European Parliament has broadly accepted the commission's 2005 proposal, the annex of which laid out the goods to be covered.
The product categories to be covered include leather, footwear, clothing, ceramics, glassware, jewellery, furniture, lamps and lighting fittings, and brushes and brooms.
The European Parliament wants screws, nuts, bolts and similar articles added to the list, as well as tools and implements which fall within the scope of Chapter 82 of the Combined Nomenclature. All such goods imported from outside the European Union will be required to carry origin marking, although goods originating in Norway, Liechtenstein, Iceland and Turkey are exempt from this requirement, as are goods whose marking is seen to be impossible for technical reasons. For products which are sold in packaging, both the packaging and the product itself will be required to carry country of origin markings. The 'made in' labels may be in the official language of the country of origin or else in English.
The European Parliament also wants to see a harmonised penalty system in place, in order to prevent errant exporters from targeting national markets which have the lowest penalties.
Member states' customs authorities will be able to perform border checks and controls on the correct implementation of the regulation. The European Parliament hopes that this will help in the battle against counterfeit products entering the European Union and lead to the interception of more products that breach the EU environmental and product safety laws. Furthermore, according to the Parliament, origin marking will enable consumers to identify products which adhere to the social, environmental and safety standards that are generally associated with the country of origin, and to make their purchasing decisions accordingly.
The proposed regulation opts for a definition of 'country of origin' which is based on the EU non-preferential rules of origin, which are applied for other customs purposes. The application of these rules to origin marking is consistent with the European Union's commitments in relation to the World Trade Organisation agreement on rules of origin.
However, inter-institutional debate on this topic may drag on, since any legislation that is adopted will have to provide guidance on what constitutes an item that is 'made in' a particular territory (eg, the European Union, in which case it will not require the origin marking).
Comment
The EU Council will soon vote on the commission's proposal; the vote may take place as early as December 2010. Significant differences remain between the respective positions of the commission and some of the member states. Italy, Spain and Portugal are expected to lobby the other member states intensively for a swift adoption of the proposed regulation. Other member states, including the United Kingdom and Sweden, depend heavily on imports from countries such as China, India and Vietnam, and as such are less likely to vote in favour of the proposed regulation, possibly fearing that to add further technical and administrative burdens on imports could detrimentally affect these crucial trade relations.
