Montreal, December 11 - On December 13th, the European Union will introduce the General Product Safety Regulation (GPSR), a set of rules designed to improve consumer safety and transparency for products sent to the EU. The requirements make it difficult for small businesses to comply with the new regulation with many of them ceasing selling in the EU market. This journalist aims to explore the GPSR's effects on small businesses worldwide and examine its impact on their dealings. 

What is the GPSR?

The General Product Safety Regulation is a new set of rules to ensure product safety and transparency for physical and digital items sold or sent to the EU. Non-compliance with the GPSR may result in fines of up to €20,000, recalls, product removal from the market and sanctions. Those rules will be effective starting December 13^th.

Requirements for businesses include:

• Hiring an authorized EU-based representative for their products.
• Updating packaging and product labels with detailed safety information, such as fire hazard warnings, age restrictions, choking hazard notices, which cannot be determined arbitrarily, and manufacturer information.
• Having products tested in a lab in their manufacturing country to confirm their compliance with EU safety standards.
• Acquiring relevant certificates regarding product conformity and risk assessments.

These regulations aim to protect consumers, however, some experts described them as protectionist measures for deglobalization.

There has been a lack of promotion of these new regulations to business owners. Helen Rose from Lauren Aston Designs explains in her article that she has only recently become aware of this new regulation. The entrepreneur states "It’s all very blurry and... there is an absolute lack of information out there for us," (Rose).

Despite the significant impact on consumers and businesses, major players in the industry like shipping carriers, forwarders and governments have not commented on the issue despite discussions regarding the implementation started with Brexit 4 years ago. Organizations such as Canada Post, UPS, FedEx, ChitChats and the Canadian Government, have no information about GPSR despite it being just a few days before the implementation. This raises concerns as many of these associations' primary customers will be heavily impacted by the new embargos.

Why is GPSR Problematic for Small Businesses & Consumers?

High Costs

The new regulation implies that all businesses must go through extensive processes to ensure the safety of their products, even when the products are self-explanatory (eg. clothing, books, etc.). Hiring an authorized representative starts at around €1000, depending on the number of products sold by the vendor. Moreover, additional requirements for lab testing are needed for certain products, which may prove the biggest obstacle to the implementation of the GPSR within small businesses. Lab testing alone can cost thousands of dollars per product type, such as sweaters or cardigans, which would be considered two different types of products despite their similarities. For small businesses offering a variety of products, these costs quickly add up, often exceeding what’s financially sustainable.

Experts on the subject have commented that lab tests cannot be transferred from manufacturing facilities to resellers. This means that if a manufacturer has conducted product testing for themselves, the same type of products would need to be tested again as they are considered different products or entities on paper. Therefore, small businesses cannot use their manufacturer’s compliance documents for their records.

Administrative Burden

Complying with GPSR involves extensive paperwork, including detailed product documentation, updated labels with relevant information in the language of the customer, and coordination with authorized representatives. For small business owners who already juggle multiple roles, this adds a new layer of work that comes with additional costs.

Limited Flexibility

Many small businesses work with quick product launches that follow trends. Lab testing and approval processes can take weeks or months, making it difficult to release relevant designs on short notice.

Reduced Global Access

Businesses that cannot comply with the GPSR lose access to the EU market, which for many represents a significant portion of their customer base. This restriction may limit consumer access to unique, handmade, or niche products that often aren’t available from larger companies.

Economic Impact

Additionally, since large corporations must also bear the costs associated with compliance with these new regulations, these expenses will be reflected in the sale price of their products, disadvantaging EU consumers. Small businesses contribute significantly to the global economy. Thus, restricting their ability to trade with the EU will harm local economies.

Broader Implications for Families & Friends

Although responses from certified representatives varied, it is implied that the GPSR needs to be applied to individuals sending a package to the EU. This means friends and family need to ensure that the products they send are compliant with the new rules.

What Needs to Change

While safety and transparency are certainly important, the current GPSR framework heavily impacts small businesses and vendors selling simple products. These regulations may need to be revised in the future to accommodate small businesses.

One significant improvement would be to adjust the requirements to reflect the size or nature of a business to create a more equitable framework. Responsible authorities should provide a well-defined guide to help businesses navigate and adapt to the new regulations effectively.

Resources for Small Businesses

The GPSR is a wake-up call about how regulations can create barriers for small businesses. If you’re a small business owner navigating these challenges, know that you’re not alone. Many face tough decisions about whether to stop selling in the EU or not. Stay informed, connect with others in your industry, and advocate for solutions that balance safety with fairness.

I’ve compiled a list of resources for small businesses. You can find the authorized representatives I spoke with and recommended laboratories for product testing if you ever decide to go forward with complying with the new GPSR.

Authorized GPSR Representatives:

• LOVAT: https://vatcompliance.co/authorized-representative-services-in-eu-and-uk/
• International Associates: https://www.ia-uk.com/
• TerrainQ: https://www.terrainq-solutions.com/en
• advena.mt : https://www.advena.mt/
• EU Compliance Partner: https://eucompliancepartner.com/

Lab Testing for GPSR :

• QIMA : https://www.qima.com/
• SGS : https://www.sgs.com/en-ca