Product compliance – Overview
In today’s highly dynamic world of global trade, product compliance (sometimes also called product conformity standards) plays an important role in a company’s success, in particular for companies that want to gain a foothold in international markets. Product compliance is not only a legal requirement, but it is also considered to be key to gaining the customers’ trust and avoiding legal disputes and financial losses that may arise in the case of non-compliance.
This blog post takes a close look at what product compliance is all about.
What is product compliance?
In short, product compliance means that a product meets the legal, technical and safety standards applicable both on the national and the international level. These standards are not static; they are subject to continuous development, in particular due to technological innovations and changing market conditions. Compliance with these standards by every business is crucial to ensure that the products are safe, reliable, and of high quality.
Legal basis and responsibilities
The manufacturers are primarily responsible for product compliance. They ensure that their products comply with the regulations applicable in the markets where such products are planned to be sold. Their responsibility includes not only compliance with safety standards, but also environmental regulations. For example, there are explicit regulations regarding the chemical composition, and privacy regulations that are particularly important for networked products.
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Global and regional differences
The different requirements applicable in the various countries and regions constitute another complex aspect of product compliance. The EU, for example, has very strict regulations for the approval of products, whereas other regions may well have different or additional requirements. Because of this, businesses need to be flexible and able to adapt, and prepared to develop specific versions of a product to comply with local laws.
Dynamic development of regulations
The rapid development of technologies, in particular in the field of digital products and services, results in ever new provisions that companies are required to observe. Examples of areas that the regulatory authorities have increasingly been focusing on in the past years in particular include cybersecurity requirements, data protection regulations, and provisions relating to Artificial Intelligence.
Thus, product compliance is not only an issue of lawfulness, but also a decisive factor in winning the customers’ trust and preserving the integrity of the brand. Companies that act proactively in this respect protect themselves against legal consequences, but more importantly, they gain a competitive edge because they are perceived as responsible, trustworthy suppliers.
The history of product compliance
Over the past decades, product compliance has become ever more important, in particular due to the globalization of the markets, the technological progress, and the growing awareness of issues of environmental and consumer protection. While product standards used to be mostly local and rather simple at the beginning, they evolved as the economy became more international and trade routes expanded. As mentioned above, this means that products had to comply with the statutory provisions of various countries, which led to the development of national and international standards.
Because of the rapid developments in the fields of chemistry and electronics, new, specific regulations have been adopted, including the RoHS (Restriction of Hazardous Substances) Directive and the REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) Regulation in the EU.
They are meant to ensure that the products are safe as well as environmentally compatible. The RoHS Directive aims at restricting the use of hazardous substances in electrical equipment, whereas the more comprehensive REACH Regulation focuses on improving the protection of human health and the environment against chemical risks and hazards. This also aims at boosting the competitiveness of the chemical industry in the EU. Due to the globalization, the harmonization of standards by organizations such as the ISO (International Organization for Standardization) and the IEC (International Electrotechnical Commission) has become ever more important. On the one hand, this facilitates international trade, and on the other hand, it creates fair competitive conditions.
Nowadays, companies are required to manage a wide variety of dynamic compliance requirements that continue to develop, and quickly. This way, they meet the challenges posed by new risks and technological innovations.
Key areas of product compliance
Safety requirements
Product compliance focuses on product safety, which means that every product – chemical, electrical, or mechanical – has to be subjected to comprehensive safety tests. This is necessary to ensure that the products comply with the applicable standards and regulations. Consequently, this includes tests intended to verify the electrical safety, the verification of compliance with chemicals restrictions pursuant to the REACH Regulation, and testing of the mechanical load-bearing capacity. Simply being functional is not sufficient for a product to be allowed on the market. In fact, products have to be classified as safe for the end user in order to minimize the risk of damage to their health and injury.
Labeling and documentation
One of the fundamental requirements of product compliance is the correct labeling of the product. Each product has to be equipped with the requisite information, providing safety advice, ingredients, and other relevant information to the consumer. One of the standards used for this purpose in the EU is the so-called CE marking, which confirms that a product complies with the EU-specific requirements. In addition to the CE marking, other labels such as an energy efficiency label or symbols warning about hazardous substances may be required, depending of the type of product. However, it is in fact not enough to provide such information on the product itself. It must mandatorily also be provided in accompanying documents such as the instructions and safety data sheets.
Data protection
As more and more digital products and IoT devices come onto the market, data protection has become an integral part of product compliance. Whenever products collect or process data, compliance with the General Data Protection Regulation, or GDPR in short, is imperative. It defines strict rules for the collection, storage and processing of data within the EU. This also includes ensuring data integrity and safety, and transparency vis-à-vis the users regarding the use of their data. For example, manufacturers are responsible for ensuring that their products provide appropriate encryption and safety measures, and that they provide clear information to the users about the way their data are used.
The role of economic operators
For a company to be successful on international markets, compliance with product conformity standards is essential. Several economic operators play an important role in this respect:
- The EU Authorized Representatives act as local representatives for non-EU manufacturers and contact for the EU authorities.
- The sellers are responsible for ensuring that the products they are offering for sale have the requisite documentation and labels.
- The manufacturers are responsible for designing and manufacturing compliant products.
- Importers have to ensure that the products they are importing comply with the EU regulations.
If you want to gain a better understanding of the roles and responsibilities of these operators, you can find more detailed information in our blog post.
Cooperation and compliance
In order to ensure product compliance, it is essential for the operators to work closely together. This is the only way to make sure that the products to be offered for sale are compliant. This includes every step, from the product development to the launch and the continuous compliance monitoring. If all the operators take care to properly implement the product compliance directives, they not only protect the customers, but also help improve the company’s reputation and give them a competitive edge.
Conclusion, and how Tradavo can help you
The truth is: Product compliance is a crucial aspect in modern business operations. If you risk errors, you risk not only financial losses, but also jeopardize your customers’ trust in you. Do you need assistance with the complex product compliance requirements? We at Tradavo are here to help you. Feel free to make an appointment for a non-committal initial consultation with our compliance experts at Tradavo, and we will work with you to find out where you need to take action and how we can best help you with that.
You need assistance?
It is best to book an appointment directly for a free initial consultation.
Who wrote this article?
As an author, Christina fills the blog section of our website with exciting and informative articles, so that our readers can always take care of product compliance in their company in the most well-informed way.
