The Hungarian Act LXXXVIII of 2012 on the Market Surveillance of Products was recently amended. The background to the amendment is EU Regulation 2019/1020 on market surveillance, which took effect on 16 July 2021, and the principle of EU-level harmonisation, which calls on member states to enact requirements providing a high level of protection of public interests, such as health and safety and the protection of consumers.
The main changes to the Market Surveillance Act are summarised below:
User and operating instructions in Hungarian
As per the new rules, all non-food products sold must be accompanied by instructions for use and handling in Hungarian, with the possibility of online publication of the instructions for products not specified in another specific law or standard.
This responsibility runs down the supply chain. The manufacturer holds the primary obligation, but if the manufacturer did not fulfil this requirement, the importer should do so. If neither the manufacturer nor the importer fulfils their obligations in this respect, the duty falls on the fulfilment service provider (which is a new role enacted by the amendment explained in more detail below).
Responsibility of fulfilment service providers
The amendment establishes a new role in the supply chain, namely the role of fulfilment service providers, which are natural or legal persons offering, during commercial activity, at least two of the following services: warehousing, packaging, addressing and dispatching, without owning the products involved. If other actors in the supply chain do not fulfil their above-mentioned product information obligations for use and handling, the logistics service providers are liable and can be prosecuted by market surveillance authorities if this obligation is not carried out.
With this amendment, the entire supply chain becomes responsible for product safety. Supply chain actors are, of course, free to agree on a right of recourse in their commercial contract to remedy potential consequences of non-compliance or missing product information for use and handling.
Voluntary measures by economic operators
Economic operators include the manufacturer, the authorised representative, the importer, the distributor, the fulfilment service provider or any other natural or legal person who is subject to obligations in relation to the manufacture of products, making them available on the market or putting them into service. This open-ended definition includes virtually all actors throughout the entire supply chain.
Under the new rules, the identification of a risk by the market surveillance authority (in Hungary, consumer protection authorities are the competent authorities) does not immediately trigger the opening of the administrative procedure, but economic operators can take corrective actions on a voluntary basis as well. The economic operator may take voluntary measures within a time limit set by the public authority, which may include making the product conform with applicable rules, prohibiting the marketing of the product, recalling or withdrawing the product from the market or even destroying the product.
By taking voluntary measures, businesses can avoid the administrative and financial burden of the official procedure, but if they fail to take the necessary steps within the deadline, the authority may order the withdrawal of the problematic product from the market, and in the case of a more serious risk, it may order a recall of the product from customers, resulting in a fine to the defaulting business. The amount of the fine can range from HUF 15,000 (EUR 40) up to HUF 500 million (EUR 1.4 million). If the infringement harms or endangers the life, physical integrity or health of consumers or users, a fine of up to HUF 2 billion (EUR 5.5 million) can be levied.
Extension of the authority's powers for dangerous products
Where there are no other effective means of eliminating a serious risk of irreparable harm to end users in relation to dangerous products, the market surveillance authority can:
- Require the removal of the associated product from the website or require the display of an explicit warning to end-users when accessing the website; or
- Order that access to the related website or application be restricted.
All providers of electronic communications services are bound by decisions of the market surveillance authority on these matters without this being specified in the decision. The practical implementation of "website blocking" is not carried out by the market surveillance authorities, but by the National Media and Infocommunications Authority (Nemzeti Média- és Hírközlési Hatóság, or NMHH), which will organise and monitor this implementation on the basis of Act C of 2003 on Electronic Communications.
Article is co-authored by Anna Zsófia Horváth.
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