The European Union (EU) is a huge market that is growing stronger as it accepts new members. The Union takes great pride in unifying the region so products and services can flow into the market seamlessly. In an effort to achieve greater integration, the EU has adopted what it terms CE Marking Directives. Such directives insist that CE Marking is mandatory if your product falls in one of the defined categories stated in its directives.

In this article I will highlight the power of the EU in the world market and the importance of CE Marking to enter and sustain your international marketing operations. As always, in this article I will not provide any legal counsel or advice.

EU Market Power

The European Union has the world's largest economy, larger than that of the United States with a 2005 Gross Domestic Product (GDP) of $12,865,602 million version $11,734,300 million (using nominal U.S. Dollar GDP) according to the International Monetary Fund. Using the purchasing power parity method of computing GDP, the preferred comparative measure of economic output, the EU and the U.S. economies are virtually the same size ($12.36 trillion for the U.S. versus $12.18 trillion for the EU). As the EU has 50% more people than the U.S. but produces about the same economically, the average EU citizen enjoys a per capita share of domestic product of about $28,100, while in the U.S. the per person GDP is over USD $40,000.

The European Union consists of 25 sovereign states, which have built the world's largest multinational customs union. Its membership has grown to 27 member states with the addition of Bulgaria and Romania to the Union in 2007. In the future, the size of the European Union will likely expand because numerous other countries, primarily in Central and Eastern Europe, have expressed an interest in joining the union.

The EU's 25 member states number among the most politically stable and successful in the world. The EU has a population of 456 million, a substantial portion of which is well educated and relatively wealthy. In population ranking, the EU numbers third behind China and India.

According to World Bank data, the EU is the world’s biggest economy with a combined Gross Domestic Product (GDP) of more than $12 trillion in 2005. It accounts for a substantial share of global trade. If the European Union continues to add new members, it may be only a matter of time before the European marketplace begins to challenge the United States as the premier business market in the world. Looking at these statistics it is logical to assume that your international marketing agenda include the European Union.

Doing Business with EU Member States: The European Union’s Agenda

The EU has been consistently striving to realize a seamless and integrated (single) market in which goods can be traded without any internal trade restrictions. To accomplish this goal the EU has adopted the harmonized European product legislation and CE Marking. In other words, to successfully tap these markets exporters need to understand the procedure for application as well as the implications of the CE Marking. The resolution effectively seeks to harmonize national systems of European standards and promote varied New Approach Directives. The directives specify essential requirements to which a product must conform in order to be put on the market. The “essential requirements” are contained in the relevant directive, and products may need to comply with the requirements of more than one directive.

This article is focused on CE Marking since it is frequently being viewed as the “Passport to Europe.”

Introducing CE Marking

The CE Mark was conceived in 1985 by a New Approach Resolution in Europe and was made part of the European Community legislation two years later. It should be noted that CE does not have any meaning as an abbreviation, according to some experts, but may have originally stood for Communauté Européenne or Conformité Européenne, French for European Conformity.

On January 1, 1995, new EU directives came into effect requiring the "CE" mark on a wide range of products entering EU member states. While these directives aim at eliminating non-tariff barriers to trade within the EU system, products flowing through the EU must comply with general safety and environmental norms.

A CE Marking is certification that a product meets the standards established by the 25-nation European Union and four-nation European Free Trade Association (EFTA) and qualifies the product for sale in those countries. CE marking on a product or system assumes conformity by the manufacturer or importer by complying with one or more directives relating to the product.

The CE Mark does not reflect a quality level, a particular form of testing, or certification. It should not be confused with third-party certification marks. The CE Mark simply allows a product to be placed on the market within the European Community. And it gives the national administration members confidence that essential requirements of relevant directives have been met.

In a nutshell, only products with a CE Mark can be legally sold in European Union. The CE Mark is required for manufacturers wishing to sell their products in the 28 EU countries. Many non-EU exporters are finding that no matter how interested a prospective EU importer may be in the product, the importer will not risk importing non-conforming products (i.e. the products without CE Marking) which, in case of accident, may generate legal action against them. The CE Marking is required if you export to the 25 European Union (EU) and three European Free Trade Association Members (EFTA) member states.

CE Marking is Not Optional

Products that meet the essential requirements of safety, health, environment and consumer protection are allowed to bear the CE Mark, while companies that do not conform not only risk losing sales but also facing criminal prosecution. If a product does not bear a CE Mark, it may not lawfully be put on the market within the EU. This effectively gives the CE Mark the status of a passport to the EU and explains why some producers from outside the EU may use the mark to mislead customs officers and gain access to EU markets. Additionally, the distributors of such goods could be held responsible for ensuring that they conform with the relevant EU safety directive.

The "New Approach Directives" documents contain the legislation issued by the European Commission on the requirements that must be met and procedures that must be followed in order for a particular product to be CE Marked for sales in the EU. Upon review of these directives if you find your product to be listed in the 22 products groups stated in the document, you must understand CE Marking. Products that need certification via CE Marking range from low voltage electrical equipment, toys, explosives, elevators, as well as in-vitro medial devices. Detailed information is provided at the CE Marking official website.

The Member States are responsible for surveillance of their domestic markets. If at any time a product does not meet the essential requirements, the authorities of a Member State can order that the product be withdrawn from the market in that State. If a product that requires CE Marking finds its way via “gray marketing” or some other means into EU member country markets without CE conformity, it will be withdrawn from the market through official action. In such even, the manufacturer is obliged to modify the product so that it complies with all applicable directives before it can again be sold.

CE Marking Process

In simple words, CE marking means that the manufacturer verifies that the product meets the requirements of all new approach directives that apply to the product it is marketing in EU member states. It also means that the manufacturer confirms that the product has been assessed according to one of the prescribed procedures to determine that it fulfils the mandatory requirements.

In general, the steps to obtain CE Marking on these goods consist of:

• Identifying applicable directives and standards,
• Determining if the product meets all requirements of the applicable directives,
• Preparing a technical file,
• Preparing an EU Declaration of Conformity, and
• Affixing the CE Marking.

The CE Marking process includes a rigorous examination of quality manufacturing procedures and indicates to the public that the marked device meets standards set by the Union for products and medical devices. For a product made in the EU, the manufacturer may either carry out the necessary safety tests itself or use an independent testing house which has been certified by a competent authority.

Soon after the test is completed, a declaration of conformity to the essential requirements must be prepared. The Declaration of Conformity must contain information adequate for tracing the product back to the manufacturer or the authorized representative in the European Union. It may include a list the directives and standards that your product conforms to, product identification, the manufacturer's name, address and signature.

After this, the manufacturer affixes a 'CE' mark to his product. A technical file must be maintained, containing approved documentation showing the manufacturer's reasoning as to how this product satisfies EU requirements. This must be kept for at least 10 years after the manufacture of the last unit of the product. Then the product may be placed on the European Community market without challenge by national administrations. The CE Marking consists of the letters CE in the form shown below:

It is important to remember that there are specific rules that must be adhered to for the CE Marking. These rules address the size and location of the Marking; affixing the CE Marking to products, packaging and material or documents shipped with the product; and specific limitations on when and who is permitted to affix the CE Marking. Detailed information is provided at the CE Marking official website.

Final Words

The CE mark proves to buyers that the product fulfils all the essential safety and environmental requirements as defined in the European Directives. As long as your products are affixed with CE Marking, importers, distributors and sales representatives will find it easier to do business with you since they will not have to deal with complex conformity issues and product certification that require professional in-depth expertise.