New EU Regulation To Impact All Indian Small Businesses

Indian businesses, especially those dealing in business-to-consumer category in the European Union,   will have to comply new stricter regulations.  It will have immediate impact on courier exports through e-commerce route.

On 19 December 2017, the European Commission had published a proposal for a Regulation on Compliance & Enforcement is to become effective soon.

As per the new law, Indian traders will be required to appoint a ‘responsible person’ or ‘authorized economic operator’, inside the EU before being able to place certain goods on the European market.

This ‘responsible person’ or ‘authorized economic operators’ details has to be on every single product, package, parcel, or on an accompanying document and non-compliance of the directive could lead goods being held by the relevant customs authorities.

The aim of the proposal is to combat non-compliance and prevent unsafe products from being placed on the European market, as well as strengthen the system of market surveillance across the European Union.

This will come as a significant cost to all third country small businesses, estimated by the EU itself to be at least a few thousand euros, particularly having to appoint someone in the EU responsible for compliance information and the product!

According to Anil Bharadwaj, Secretary General of MSME national body Federation of Indian Micro and Small & Medium Enterprises (FISME) ‘the introduction of requirement of a ‘responsible person’ would act as new barrier for MSMEs in direct business-to-consumer trade and is potentially a counterproductive method of handling the volume of physical goods entering the EU’.

FISME is teaming up with counterpart SME associations in other countries such as UK and Canada in opposing the move.

FISME’s counterpart  Federation of Small Business (UK) has called for the deletion of Article 4 and for the EU and its Member States to commit to implement the new ‘Cross-Border E-Commerce Framework’ developed by the E-Commerce Working Group of the World Customs Organization, alongside other third countries.― KNN India

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