• Myth and Reality of CE Marking When Importing from China

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    The CE mark is a well known compliance marked, found on a wide range of different products, for example electronics, toys and machinery. The CE mark signals compliance with all, to the specific product, applicable regulations: For example the Low Voltage Directive or the EN 71 Toy Safety Directive. The CE Mark is not applicable to all products. However, it is mandatory for all products within its scope of regulations.

    As I will further explain in this article, there is a lot more to CE marking than what meets the eye, namely the printed little logo. While many importers are aware that there are requirements for testing and documentation, plenty of businesses fail to understand how such documentation is produced, and what it must include.

    Then there is China. CE marking procedures are not developed with importers in mind. While ensuring CE marking compliance is relatively simple for an EU or US based manufacturer, which is only concerned with its own products – it’s far more complex for importers buying from contract manufacturers in China, and other developing countries in Asia. We debunk 6 common myths concerning CE marking when importing from China, and explain the background to each one.

    Important note: As we publish this Amazon.com recently removed almost every balance scooter model from its marketplace. Meanwhile, the UK Customs Authorities recalled a staggering 15,000 units of the very same product – that after finding that 88% of the produce on the market was non-compliant. For the ‘unlucky’ importers, this may spell financial ruin. However, all of this could have been avoided, if they had a at least a basic grasp of product safety standards in their home markets, and how compliance procedures work when importing from China.

    Why CE Marking becomes more complex when involving Asian contract manufacturers

    CE marking, being fairly complex in itself, mixed with the pitfalls and smokescreens of dealing with suppliers in Asia, results in a toxic mix of confusion and severe risk. Failing to ensure compliance can result in a forced recall, something that is taking place on a massive scale as this article is being written. In case you’ve missed it, more than 15,000 so called Hoverboards were recently recalled by British authorities. The total number of inspected units was reported as 17,000. Hence, more than 88% (!) of all inspected Hoverboards were recalled. Why? Because the importers failed to prove compliance with applicable EU regulations.

    But this is only happening in over-regulated Europe, isn’t it? Think again. Earlier this week, Amazon.com announced the withdrawal of almost all Hoverboard models sold on the site. According to this article, Amazon.com has sent out requests to all Hoverboard sellers to provide compliance documents with immediate effect:

    “Amazon sent sellers a notice asking for proof that their gadgets “are compliant with applicable safety standards, including UN 38.3 (battery), UL 1642 (battery), and UL 60950-1 (charger),” according to Swagway.”

    In 90% of these cases, the buyers will receive no support from their suppliers. As a matter of fact, most suppliers don’t have a clue what, for example, UL 1642 is. And why should they? It’s not their responsibility after all. Now, CE marking is only required in the European Union, but the same challenges are, as underlined by recent events, also facing American companies importing from China, and elsewhere in Asia.

    So, what do Chinese suppliers know about CE marking? Not much, many assume that it’s a paperwork exercise and formality. As demonstrated by the recent recalls in the UK, a product does not ‘become’ compliant with safety standards by accident. A product must be designed according to the directives to be compliant. That leads us to the next issue. Only a minority of the manufacturers in China possess the technical expertise to produce ‘compliant products’. It’s complex.

    But the iPhone is Made in China? Yes, it is. China is home to some of the most sophisticated and large scale production facilities in the world. But as Foxconn (the World’s leading contract manufacturer) will not accept your order for 2000 pcs of Bluetooth headsets, it’s rather irrelevant.

    Misunderstanding 1: It’s the supplier’s responsibility to ensure compliance with all relevant CE marking directives. Not ours.

    No, it’s yours. While the legal texts often refer to ‘responsibility of the manufacturer’, this doesn’t apply to importers. European authorities never go after foreign manufacturers. Instead, they target the EU based importer, which is then facing persecution and fines.

    The biggest mistake one can make, when buying from China, is to assume anything about the supplier. And the biggest mistake of all big mistakes is to assume that the supplier even knows which regulations apply, in the EU, to your product. 80% don’t know. 15% does, but can’t do it. The remaining 5% does have the technical expertise, equipment, subcontractors and experience – and some of the required compliance documentation, but not a complete set.

    Misunderstanding 2: The supplier sent us a CE Declaration of Conformity. Does that mean my products are compliant?

    When a supplier is asked whether ‘they are compliant with regulation / directive X”, they respond by sending a CE Declaration of Conformity (DoC). Before we dig deeper in this, we start with the basics: A factory cannot be ‘CE marked’. It only applies to specific products. Hence, a CE DoC is only valid for the listed SKU/s. It does not magically ensure compliance with every single unit that comes off its assembly line.

    Now, to the real issue. What many Chinese manufacturers, and importers, fail to understand is that the Declaration of Conformity is just one of the ‘CE Documents’ that are required by law. At a minimum, the full set of documentation includes the following:

    a. Declaration of Conformity
    b. Test Report/s
    c. Design File / Circuit Diagram
    d. Bill of Materials / Component List
    e. Risk Analysis
    f. Summary of all applied EU directives / technical standards
    g. User Guide / Instructions Manual
    h. Applied Marks and Labels

    That’s the Technical file. Guess how many Chinese manufacturers even know what a Technical file is? Not many. Finding a supplier, and a suitable product, with a complete set of documentation is close to impossible. Contract manufacturing just don’t work that way. Then again, manufacturers are not, and are not even supposed to be, experts on European Union CE marking requirements. That’s your job!

    The Technical File is, without exceptions, created and held by the importer. No specific format is required, and many suppliers will assist with its creation – but never expect them to take initiative and lead the project. Also keep in mind that each product must have its own Technical File, even though variations of the same product can be covered by one single file.

    Misunderstanding 3: The supplier knows which EN directives apply to our products

    No, most suppliers don’t have a clue. Even among the manufacturers with the European Union as a main market, the understanding for which “CE Marking Directives” apply is limited. As a result, many suppliers can only provide documents proving partial compliance, i.e. compliance with some, but not all, applicable regulations.

    Misunderstanding 4: My products are CE marked, why should I worry?

    The CE Mark is only a conformity label. However, the European importer is required to maintain the required documentation for a minimum of 10 years. There are plenty of low quality, and sometimes dangerous, products with CE marks – but the label itself is of no value without the proper documentation. What you need to consider is the following:

    a. Which EU directives apply to our products?
    b. Do we have the complete set of documentation?
    c. Apart from the CE mark, are there other EU labelling requirements, applicable to the product?

    Misunderstanding 5. Third party testing and certification is not mandatory for our products. Hence, we can trust the supplier to issue all relevant documentation.

    In our interview with Han Zuyderwijk, he mentioned that 90% of all products can be ‘self certified’. That means that a supplier is allowed to issue a Declaration of Conformity, without submitting the product to a third party company for compliance testing. That should make life a lot easier for importers. Just tell the supplier to issue a DoC and do the testing in house. Yes, in theory, that could work – if it wasn’t for the fact that very few suppliers has the expertise and equipment to carry out the required tests. After all, these test reports are mandatory attachments to the Technical File.

    As a result, you must rely on a third party testing company when developing the CE Technical File. In the end, you shouldn’t let your supplier make judgements on their own products, even if they have the expertise and equipment.

    Misunderstanding 6: My supplier cannot ensure compliance with a certain directive. However, they have exported to companies in the EU for years, without problems. Why should we listen to you instead of our supplier?

    We get to hear this a lot. Hopefully, we will hear this slightly less often, after the ongoing crackdown on unsafe electronics. But, back to the topic. Many importers assume that there are no regulations in place, simply because their competitors don’t bother to ensure compliance. Many Chinese suppliers use the same argument: None of our buyer’s required this sort of procedure before, why should we care now?

    What you must understand first of all, is that there is no such thing as total enforcement of regulations. Regulations that were developed, in the first place, from a European context, rather than for international trade based on contacts made through Alibaba and GlobalSources. In practice, this means that the customs don’t check every single shipment.

    While we don’t have data on how many shipments they actually check, we are receiving an ever increasing number of reports from importers having their cargo seized by the customs in various EU member states – simply due to a lack of CE marking compliance documents. However, the fact that most shipments still ‘gets through’ is taken, by both suppliers and importers, as a sign that CE marking compliance is not something that should be taken that seriously.

    I agree that enforcement is spotty. I agree that the framework is overly complex, and that legislation must be adapted to modern conditions (worth mentioning is that the CE mark was implemented in the 90s, which doesn’t make it that old, but things are moving fast). However, mine and your opinion will carry little weight the day your product is facing a forced recall due to non-compliance. In fact, the big risk is not having products seized by the customs. What is a far greater risk is products causing fires or personal injury. If that happens, and it’s revealed that your company has been selling illegal and non-compliant goods, you will not only face a recall, but a lawsuit for millions of Euros.

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