Until now it’s largely been a free for all when it comes to selling products cross-border to consumers in the European Union. As of July 2021, this changes drastically. Non-EU companies selling B2C to consumers in the European Union will be required to have an EU address on the packaging.
Packages without an EU address may be seized and destroyed – without any form of compensation to either the seller or the buyer. The solution may at first sound as simple as using a virtual address and expect business as usual.
This is not the case, as you can only use the address of a European Authorised Representative – who in turn will only allow you to use their address if you can provide evidence that your product is safe and fully compliant.
In this guide, we explain what Amazon sellers, cross-border e-commerce businesses, export manufacturers, and logistics companies must know about European Authorised Representatives in 2021 and beyond.
What is a European Authorised Representative?
The role of the Authorised Representative is to act as sort of a contact point for companies selling products to EU consumers – without having an actual presence in any EU member state. Not having a presence, in this case, refers to non-EU companies without an address and company entity anywhere in the European Union.
The European Authorised Representative is an EU-based company that provides the following services on behalf of the non-EU company:
EU AR Address: The authorised representative authorizes the non-EU company to use their address on the packaging (which is mandatory). Note that products shipped in packaging without an EU Authorised Representative address can be seized and destroyed – without approval – upon arrival. That said, this is not as simple as paying for a virtual office address.
Compliance Documents: The authorised representative holds the technical file, test report, and other relevant compliance documents. This means that it will be more difficult to sell non-compliant and unsafe products to the EU – even if your company is registered elsewhere.
This is simply because no European Authorised Representative accepts clients that cannot provide mandatory compliance documents. The signal the EU is sending here is that products shipped to the EU must be compliant with EU regulations. It’s likely only a matter of time before this approach becomes adopted elsewhere.
Prior to this requirement, there was no effective mechanism for stopping non-compliant and unsafe products from entering the EU. Now, the representatives become gatekeepers.
Communication: The authorised representative communicates with the national authorities (e.g. market surveillance authorities) on behalf of the non-EU company.
Which products require a European Authorised Representative?
This is stated on the EU website:
The provisions on market surveillance of this Regulation should cover products that are subject to the Union harmonisation legislation listed in Annex I concerning manufactured products other than food, feed, medicinal products for human and veterinary use, living plants and animals, products of human origin and products of plants and animals relating directly to their future reproduction.
There is also a more specific list of products in Annex I.
Here are some interesting takeaways:
1. Products covered by REACH are listed. Note that REACH applies broadly to all consumer products. This seems to imply that a European Authorised Representative will become mandatory for all consumer products shipped to the EU.
2. CE marking directives, such as the Low Voltage Directive and the Toy Safety Directive are listed. It seems rather clear that all products that must be CE marked also require a European Authorised Representative.
That being said, it’s likely that the authorities will initially focus on stopping high-risk products from entering the market, such as electronics and toys. In the medium, to long term, it’s not impossible that they will implement a more automated system to verify compliance.
What kind of companies need to use a European Authorised Representative?
Here’s an overview of different businesses and how the EU AR requirements may impact them.
Cross-Border B2C E-Commerce Sellers
Cross-border sellers are probably the main target. This makes sense, as cross-border sellers from China, and elsewhere, shipping products that fail to meet EU safety standards, labeling, and documentation requirements. Henceforth, cross-border sellers will need to get a European Authorised Representative.
Non-EU Manufacturers and Exporters
Manufacturers selling directly to consumers in the EU must also have an authorised representative, for the same reasons as explained above. This is not the case for manufacturers selling B2B to EU-based importers.
This is stated on the EU website:
In order to ensure that market surveillance authorities can carry out their responsibilities effectively and to avoid a gap in the enforcement system, it is appropriate to include fulfilment service providers within the list of economic operators against whom it is possible for market surveillance authorities to take enforcement measures.
This is further clarified by SGS:
The fulfillment service provider becomes responsible when there is no representative in the EU (a fulfillment service provider is a person or company offering at least two of the following services: warehousing, packaging, addressing and dispatching, without having ownership of the products involved; courier and postal companies are specifically excluded).
In short, it seems fulfilment centers like Easyship will also need to implement measures to verify product compliance for sellers shipping products to the EU.
This is stated in the Amazon Seller Central:
If you sell CE-marked products that are manufactured outside of the EU, you will need to ensure that such products have a Responsible Person in the EU prior to July 16, 2021. After July 16, 2021, it will be illegal to sell CE-marked products in the EU without an EU Responsible Person. All CE marked products are covered by this rule except for medical devices, explosives for civil uses, and certain lifts and cableway installations.
Amazon is also offering its own authorised representative service for FBA sellers. That being said, they only accept you as a customer as long as you can prove that your products are fully compliant, tested, correctly labeled, and documented.
Do importers need a European Authorised Representative?
EU-based importers cannot use an Authorised Representative as they are already responsible for the products they import. This responsibility cannot be transferred to another company.
What can happen to non-EU companies shipping products without having an Authorised Representative?
The authorities have the right to seize and destroy incoming shipments without an EU Authorised Representative address. As said, it’s likely that the authorities will focus on certain ‘high-risk’ products – at least initially.
As such, it might be naive to expect a complete halt to non-compliant products entering the EU from July 2021. Still, this will hurt sellers that continue to sell non-compliant products in the following ways:
1. They will no longer be able to sell through Amazon FBA
(We’ll also need to wait and see how Aliexpress, Wish, and other major cross-border marketplaces respond to this new requirement)
2. They will not be able to sell using fulfillment centers (and could possibly face issues with freight forwarders at some point)
3. They will need to deal with a higher number of failed shipments (that the customers never receive as the package is seized and destroyed without compensation)
Where can I find an Authorized Representative?
There are several companies offering authorised representative services in the EU. For example, ProductIP offers a yearly service package from 2000 EUR. In addition, they also charge 225 EUR per hour if they need to act on behalf of the non-EU company – for example when communicating with market surveillance authorities. ProductIP is likely to set a standard for pricing models going forward.
Here are some other companies offering EU AR services:
- AR Experts
- Authorised Representative Service
- Obelis Group
How much does an Authorised Representative cost?
The price differs between service providers. For example, here is the current pricing offered by ProductIP:
- Annual fee: 1800 EUR
- Hourly rate: 225 EUR
- Deposit: 2000 EUR
Note that these rates are subject to change and may already be outdated.
What kind of documentation is needed from the seller?
It’s not as simple as paying a yearly fee. First, you must meet their requirements:
This will be a problem for many smaller cross-border sellers whose margins are largely based on the fact that their non-compliant and unsafe products undercut legit EU-based sellers. The specific compliance documents depend on the product. Here are some examples:
- Test reports
- Declaration of Conformity
- Declaration of Compliance
- Technical file
- User manual
- Product images
- Packaging layout
- GMP documentation
Business license/company registration document
This should not come as a surprise. Individuals will not be able to sell B2C without registered companies.
Product liability insurance
This is often easier said than done, especially for foreign companies. Further, product liability insurance providers also require the submission of compliance documents in many cases.
EU AR Agreement
Here is an example of an EU AR Agreement.
Note that this list is based on ProductIP’s document requirements. The documentation requirements may vary depending on the service provider.
Can non-EU companies act as Authorised Representatives?
No, that would defeat the entire purpose of having a European Authorised Representative in the first place.
Do I need an Authorised Representative if my company is based in the UK?
Yes, as the United Kingdom is no longer part of the EU, the requirement also applies to UK sellers. This will certainly make it more costly for UK-based businesses to sell B2C to consumers in the European Union.