European Parliament

Understanding GPSR and its implications for SMEs

The European Union’s General Product Safety Regulation (GPSR), which came into force today,13th December 2024, and represents a significant overhaul of product safety requirements within the EU market. Designed to strengthen consumer protections, the GPSR replaces the General Product Safety Directive (2001/95/EC) and introduces more rigorous rules to ensure that all products sold in the EU are safe, especially in light of modern technologies and global supply chains.

For British companies, particularly small and medium-sized enterprises (SMEs), exporting to the EU, understanding and complying with the GPSR is essential to maintain market access.

What Does the GPSR Aim to Achieve?

The GPSR is designed to address several gaps and challenges in product safety that have emerged since the earlier directive was implemented. Key objectives include:

  1. Enhanced Consumer Protection: The regulation strengthens safety standards for non-food products, with a particular focus on those incorporating emerging technologies such as AI and IoT (Internet of Things).
  2. Market Surveillance: It enhances the powers of national authorities to identify, prevent, and address unsafe products entering the EU market.
  3. Digitalisation of Compliance: New requirements include the introduction of a product safety portal, facilitating swift reporting of safety issues and improved communication between businesses and regulators.
  4. Clarity for Online Marketplaces: Online platforms that facilitate sales will now bear greater responsibility for ensuring the safety of products sold through their services, even if they do not directly handle the goods.
  5. Uniform Safety Standards: The GPSR harmonises safety requirements across the EU, simplifying compliance for businesses trading in multiple member states.

Key Requirements Under the GPSR

Some of the critical provisions businesses must adhere to include:

  • Traceability: Businesses must ensure complete traceability of their products throughout the supply chain. This includes providing clear identification of products, manufacturers, and importers.
  • Safety Assessments: Comprehensive risk assessments must be conducted to ensure product safety, especially for items involving digital and AI components.
  • Product Recalls: The GPSR introduces stricter rules for product recalls, requiring businesses to act swiftly and transparently in case of safety concerns.
  • Representative in the EU: Non-EU companies exporting to the EU must appoint a responsible person within the EU to manage compliance and safety-related issues.

Implications for British SMEs

For British companies exporting to the EU, the GPSR introduces both challenges and opportunities. Key implications include:

  1. Increased Compliance Costs: SMEs may need to invest in additional resources to meet the stricter safety and traceability requirements. This could involve hiring compliance experts, upgrading testing procedures, or appointing an EU-based representative.
  2. Adaptation to New Technologies: Businesses incorporating digital or AI features into their products must ensure these elements comply with the GPSR’s enhanced safety standards. SMEs may face difficulties due to limited resources for advanced testing and certification.
  3. Market Access Opportunities: By adhering to the GPSR, SMEs can assure EU consumers and partners of their products’ safety and reliability, potentially improving their competitiveness in the market.
  4. Complexities for Online Sales: SMEs using online marketplaces must work closely with platform operators to ensure their products meet safety requirements. Non-compliance risks product removal or bans.

Practical Steps for SMEs

To ensure compliance with the GPSR and maintain access to the EU market, British SMEs should:

  1. Conduct Comprehensive Audits: Review existing product lines to ensure compliance with the GPSR’s safety requirements.
  2. Invest in Documentation and Traceability Systems: Implement robust systems to document the supply chain and product life cycle, enabling full traceability.
  3. Collaborate with EU Representatives: Appoint an authorised representative within the EU to handle compliance matters effectively.
  4. Engage with Testing and Certification Bodies: Work with accredited organisations to verify product safety and secure necessary certifications.
  5. Stay Updated: Keep abreast of changes in EU regulations and market expectations to ensure ongoing compliance.

The General Product Safety Regulation reflects the EU’s commitment to prioritising consumer safety in an increasingly complex market landscape.

For British SMEs, the regulation presents both a hurdle and an opportunity. While the compliance burden may be significant, meeting these enhanced standards can strengthen market positioning and consumer trust. By taking proactive measures, British exporters can navigate the GPSR’s requirements effectively and continue thriving in the EU market.

George Holmes, Managing Director of business finance specialist Aurora Capital, commented, “The new GPSR changes represent yet another regulatory hurdle for UK small businesses already grappling with rising costs and economic uncertainty.

While ensuring product safety is important, the extra paperwork and costs of compliance could overwhelm many SMEs, particularly those operating on tight margins or reliant on EU trade.

For small firms, adapting to these new requirements could mean investing in new systems and potentially even hiring new staff to handle compliance – expenses that many just cannot afford in the current climate. Worse still, the lack of clear guidance and support only adds to the uncertainty, leaving business owners scrambling to interpret the rules and avoid penalties.

The government must act quickly to provide clearer, more accessible information on these changes. Beyond that, meaningful financial support, such as grants or subsidies for compliance, could really help SMEs through this transition.

Without these measures, there’s a real risk that smaller businesses will be pushed out of the market, undermining the UK’s entrepreneurial spirit and economic recovery.”


Author: Mark Salisbury, Editor, Fleetpoint

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