CE Marking and Legal Liability: Who's Responsible When a Product Is Manufactured by a Third Party? – Sicom Testing

In the contemporary commercial landscape, it is increasingly common to resort to production models that separate those who physically manufacture a product from those who market it under their own brand. This practice – commonly known as white label or private label – raises legal issues, particularly regarding the CE marking. In this article, we address one of the most frequently asked questions on the topic: Who is legally responsible for the conformity of a product when production is outsourced?

The definition of manufacturer according to European directives

To understand where legal responsibility actually lies, it's necessary to start with the definition of the term "manufacturer" provided by European directives. Among the various sources on the subject, Article 2 of the Low Voltage Directive defines the manufacturer as any natural or legal person who manufactures an electrical product or has one designed or manufactured, and markets that product under his own name or trademark.

This definition clearly outlines that the legal responsibility for a product lies with those who introduce it to the European market by placing their own commercial identity on it.

For example, an Italian company purchasing power banks from a Chinese manufacturer to resell under its own brand would automatically become, under EC regulations, the manufacturer of those products, with all the resulting responsibilities.

This broad interpretation of the concept of manufacturer applies equally to various situations. It concerns both companies that outsource the production of their original designs and those that purchase products pre-designed by the supplier and simply apply their own brand. In both cases, the application of the brand automatically confers manufacturer status, regardless of the degree of actual participation in the production process.

The manufacturer's substantial obligations

Article 6 of the Low Voltage Directive, similarly expressed in other applicable directives, outlines a liability framework based on certain substantive obligations.

The first obligation concerns the technical conformity of the product. The manufacturer must ensure that the product is designed and manufactured in compliance with all European Community provisions regarding health, safety, and environmental protection.'environment.

The manufacturer is also required to compile and maintain a complete technical file that includes design drawings, component specifications, risk assessments, a list of applicable directives and standards, and test reports demonstrating compliance. This file must be retained for ten years from the date of placing the product on the market and must be made available to regulatory authorities upon request.

In parallel with the technical file, the manufacturer must draw up and sign the EU Declaration of Conformity, a document through which responsibility for the product's compliance with all applicable directives is formally assumed.

Finally, as is known, the manufacturer must affix (and ensure that the product bears) the CE marking correctly, together with his name or registered trademark, contact address and all other information required by the specific directives.

In the Sicom Testing blog, we also explored the obligations of importers, distributors, and authorized representatives of the manufacturer. Here are some: the full article.

The concrete consequences of non-compliance

The European control system is structured on several levels, each of which can intervene at different moments in the commercial life of the product.

The first checkpoint is the customs authorities upon import. National customs authorities, especially for product categories considered high-risk, such as electronic devices, medical devices, and toys, perform documentary checks and may require immediate inspection of the technical file and Declaration of Conformity. Failure to provide this documentation may result in the shipment being blocked and, in the most serious cases, the goods being destroyed without compensation.

Market surveillance authorities, however, operate at a later stage, even after the product has been placed on the market. If non-compliance is found, they can order the withdrawal from the market of all products already sold, impose a ban on further marketing and arrange administrative sanctions that can reach considerable amounts.

Regarding direct-to-consumer sales through e-commerce platforms, another layer of complexity is added. Amazon, in particular, has intensified its random checks for sellers in recent years.

In fact, Amazon operators in charge of checks can request the European Declaration of Conformity and related technical documentation for the product, to verify its authenticity.

In case of irregularities the product in question is identified as non-compliant with EU requirements and Amazon proceeds with sanctions of varying degrees, including the suspension of the seller account, resulting in the blocking of trading.

We at Sicom Testing have dedicated an in-depth look at the CE marking of products sold on Amazon. Here the full article.

The Value of Laboratory Testing on Liability

In this context, verification of conformity through laboratory tests is of essential importance.

The intervention of a specialized laboratory such as Sicom Testing - That carries out all technical tests and prepares the documentation to support the CE certification – becomes necessary not only to obtain an objective verification of compliance, but also to have strong documentary evidence in case of disputes by the authorities.

Furthermore, from a risk management perspective, a good strategy is to invest in preliminary tests designed to identify anomalies and potential product defects already in the early stages of the production cycle.

Thanks to customized laboratory tests, it is possible to simulate stress scenarios and verify the product's reaction to complex operating conditions. This is very useful. carry out the pretesting activities of the prodeight in an initial phase, since if a non-conformity is discovered it will be less expensive to remedy.

Testing for Compliance: A Winning Economic Strategy

A comprehensive business evaluation should certainly consider the costs of laboratory testing, technical consulting, and documentation preparation, which, especially for small businesses or startups, can represent significant investments.

However, it is also necessary to analyze the potential costs of non-compliance, estimating that – for example – a product recall from the market entails not only the direct costs of withdrawal and destruction, but also reputational damage that is difficult to quantify. Furthermore, the seizure or blocking of an entire shipment or the administrative sanctions imposed by surveillance authorities constitute very high amounts to be addressed in the company.

From a business risk management perspective, therefore, investing in compliance is both beneficial and essential. The cost-benefit ratio becomes even more favorable when considering that many compliance investments are non-recurring.

To facilitate startups and small and medium-sized businesses, we at Sicom Testing have developed testing packages for emerging businesses, ranging from functional testing to security and reliability analyses. Read more here. the full article.