Regulation 2018/858: The new European Type-Approval-Legislation Challenges for the Automotive Industries
- 09. Juli 2018 - Blog
On 4th of July 2018 the Regulation (EU) 2018/858 of the European Parliament and of the Council of 30 May 2018 on the approval and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles, amending Regulations (EC) No 715/2007 and (EC) No 595/2009 and repealing Directive 2007/46/EC has entered into force.1 Regulation 2018/858 (hereinafter referred to as “the Regulation”) shall apply from 1 September 2020.2 However, it is inevitable and absolutely advisable to immediately get a clear understanding of the scope and of the relevance of the Regulation for the legal conduct until 1 September 2020. The Regulation is the consequent answer of the European lawmakers to the turbulences in the automotive industry of the last three years. There is in my opinion nothing to complain against the strict rules affecting the whole automotive community: manufacturers, suppliers, technical services and different authorities. The model of harmony and trust as e.g. designed under the concept of the High Level Group CARS 213 has failed. Recitals 4, 5 and 6 of the Regulation underscore the strict and consequent reaction of the European lawmakers to what has gone wrong in the past:
(4) That assessment also concluded, however, that there is a need to introduce market surveillance provisions to complement the type-approval requirements; a need to clarify the recall and safeguard procedures, as well as the conditions for granting extensions to approvals for existing types of vehicle; a need to improve the enforcement of the framework for type-approval by harmonising and enhancing the type-approval procedures and conformity of production procedures applied by Member States' authorities and technical services; a need to clearly delineate the roles and responsibilities of economic operators in the supply chain, and of the authorities and parties involved in the enforcement of the framework, guaranteeing the independence of those authorities and parties, and preventing conflicts of interest; and a need to improve the suitability of alternative approval schemes (national small series and individual vehicle approvals) and the suitability of the multi-stage type-approval process to provide appropriate flexibility for niche markets and small and medium-sized enterprises without, however, distorting the level playing field.
(5) In addition, recent problems with the implementation of the framework for EU type-approval have revealed particular weaknesses and have demonstrated the need for its fundamental revision in order to ensure that it is robust, transparent, predictable and sustainable and that it provides a high level of safety and of health and environmental protection.
(6) This Regulation introduces a number of safeguards to prevent requirements imposed in the process of granting approval to vehicles, systems, components or separate technical units from being misapplied. In order to prevent abuse of the approval process in the future, it is important that those safeguards are effective.
Some highlights which in my opinion should be acknowledged and considered now: 1. The Regulation incorporates most of the provisions of the actual type-approval Directive 2007/46/EC (hereinafter referred to as “the Directive”) which will be replaced by the Regulation effective as of 1 September 2020. Article 3 no. 2 defines:
(2) „EU type-approval" means the procedure whereby an approval authority certifies that a type of vehicle, system, component or separate technical unit satisfies the relevant administrative provisions and technical requirements of this Regulation;
It is important to differentiate in this legal definition:
(i) EU type-approval means the administrative procedures between the member states of the European Union and the conduct between the authorities involved including the special function and the role of the technical services;
(ii) The second part of the legal definition (“… provisions and technical requirements…”) emphasizes the technical requirements for vehicles, systems, components and separate technical units addressed to and to be observed by the manufacturer and suppliers under the scrutiny and surveillance of the authorities.
Recital 20 underscores in this context very clearly:
(20) A robust compliance enforcement mechanism is necessary in order to ensure that the requirements under this Regulation are met. Ensuring compliance with the type-approval and conformity of production requirements of the legislation governing the automotive sector should remain the key responsibility of the approval authorities, as it is an obligation closely linked to the issuing of the type-approval and requires detailed knowledge of its content. It is therefore important that the performance of approval authorities is regularly verified.
Under legal aspects to be on the safe side I recommend – besides in particular the sanctions, stipulated in the Regulation – to apply and to interpret the Directive from now in the light of the Regulation. Recital 63 of the Regulation seems to suggest that the application of the “new rules” introduced by the Regulation shall be effective from 1 September 2020, “falling after the date of entry into force” (4 July 2018). Under coherence considerations in the pursue of the identical goals of the Directive and the Regulation 4 the regime of the European type-approval legislation effective from 4 July 2018 is that of the Regulation which includes e.g. consolidated Regulations such as Regulation 715/2007 5 , Regulation 661/2009 6 and Regulation 765/2008 7
In addition: According to Article 89 (1) type-approvals granted by 31 August 2020 remain valid. But according to Article 89 (2) extension and revisions of those type-approvals shall be granted according to Article 33 and 34 of the Regulation instead of Article 13 and Article 14 of the Directive.
The same basically applies for the duties of the market surveillance authorities to act under the new regime of the Regulation. 8 Recital 30 of the Regulation clarifies: “… it is essential that market surveillance authorities verify compliance of the automotive products irrespective of whether their type-approval was granted before or after the date of application (highlighted by the author) of this Regulation”.
2.1 For manufacturers and suppliers Article 5 and Article 13 of the Regulation must be considered very carefully. Article 5 reads:
1. Vehicles, systems, components and separate technical units shall comply with the equirements of the regulatory acts listed in Annex II.
2. Vehicles, systems, components and separate technical units shall be considered not to comply with this Regulation in the following cases in particular:
(a) if they deviate from the particulars in the EU type-approval certificates and their attachments or from the descriptive particulars in the test reports more than is permitted in the relevant regulatory act;
(b) if the performance criteria or limit values for series production laid down in the relevant regulatory act have not been fulfilled under all the conditions set out in the relevant regulatory act;
(c) if any information given by the manufacturer in the information document is not reproducible under all the conditions set out in the relevant regulatory act by approval authorities, market surveillance authorities or the Commission.
Only checks, tests, inspections and assessments conducted by or carried out on behalf of the approval authorities, market surveillance authorities or the Commission shall be taken into account when assessing compliance for the purposes of this paragraph.
3. The Commission is empowered to adopt delegated acts in accordance with Article 82, amending Annex II in order to take into account technological and regulatory developments by introducing and updating references to the regulatory acts that contain the requirements with which vehicles, systems, components and separate technical units have to comply.
The most crucial and most sophisticated aspect is stipulated in Article 5 (2) lit. c): If any information provided by the manufacturer or supplier in the type-approval documentation is not reproducible alternatively (i) by the type-approval authorities, (ii) by the market surveillance authorities or (iii) by the Commission the vehicle, its systems, components or separate technical units shall be considered not to comply with the Regulation. In any such case the type-approval either applied for or granted is at jeopardy.
The strategy of shift of burden of proof behind these provisions is obvious: Different from the situation of today the manufacturer and/or the suppler must proof to the satisfaction of the authorities not to have pursued circumvention strategies as discussed e.g. in connection with defeat devises under Article 5 of Regulation 715/2007 or other strategies of emission reduction systems.
Article 13 reads:
General obligations of manufacturers
1. Manufacturers shall ensure that the vehicles, systems, components and separate technical units that they have manufactured and that are placed on the market have been manufactured and approved in accordance with the requirements laid down in this Regulation, and in particular, those in Article 5.
2. Manufacturers shall be responsible to the approval authority for all aspects of the approval procedure and for ensuring conformity of production. In the case of multi-stage type-approval, manufacturers shall also be responsible for the approval and conformity of production of the systems, components or separate technical units that they have added at the stage of vehicle completion. Manufacturers who modify components, systems or separate technical units already approved at earlier stages shall be responsible for the type-approval and conformity of production of the modified components, systems or separate technical units. Manufacturers of the previous stage shall provide information to manufacturers of the subsequent stage regarding any change that may affect component type-approval, system type-approval or separate technical unit type-approval or the whole-vehicle type-approval. Such information shall be provided as soon as the new extension to the whole-vehicle type-approval has been granted and at the latest on the starting date of manufacture of the incomplete vehicle.
3. Manufacturers who modify an incomplete vehicle in such a manner that it qualifies as a different category of vehicle, with the consequence that the requirements already assessed in a previous stage of type-approval have changed, shall also be responsible for compliance with the requirements applicable to the category of vehicles for which the modified vehicle qualifies.
4. For the purposes of EU type-approval of vehicles, systems, components and separate technical units, a manufacturer established outside the Union shall appoint a single representative established within the Union to represent the manufacturer before the approval authority. That manufacturer shall also appoint a single representative established within the Union for the purposes of market surveillance, who may be the same as the representative appointed for the purposes of EU type-approval.
5. Manufacturers shall ensure that their vehicles, systems, components and separate technical units are not designed to incorporate strategies or other means that alter the performance exhibited during test procedures in such a way that they do not comply with this Regulation when operating under conditions that can reasonably be expected in normal operation.
6. Manufacturers shall establish procedures to ensure that series production of vehicles, systems, components and separate technical units remains in conformity with the approved type.
7. Manufacturers shall examine any complaints they receive relating to risks, suspected incidents or non-compliance issues with the vehicles, systems, components, separate technical units, parts and equipment that they have placed on the market. Manufacturers shall keep a record of such complaints, including for each complaint a description of the issue and the details needed to precisely identify the affected type of vehicle, system, component, separate technical unit, part or equipment, and, in the case of substantiated complaints, manufacturers shall keep their distributors and importers informed thereof.
8. In addition to the statutory plate fixed to their vehicles and type-approval marks fixed to their components or separate technical units in accordance with Article 38, manufacturers shall indicate their name, registered trade name or registered trade mark and their contact address in the Union on their vehicles, components or separate technical units made available on the market or, where that is not possible, on the packaging or in a document accompanying the component or separate technical unit.
9. Manufacturers shall ensure that, while a vehicle, system, component or separate technical unit is under their responsibility, storage or transport conditions do not jeopardise its compliance with the requirements laid down in this Regulation.
10. Without prejudice to Article 9(5) and subject to the protection of commercial secrets and the preservation of personal data pursuant to Union and national law, manufacturers of vehicles shall make available data which is needed for testing by third parties for possible non-compliance, including all parameters and settings that are necessary to accurately replicate the test conditions that were applied at the time of the type-approval testing. For the purposes of the first subparagraph of this paragraph, the Commission shall adopt implementing acts specifying the data to be made available free of charge, as well as the requirements to be met by third parties to demonstrate their legitimate interest in the fields of public safety or environmental protection and their recourse to adequate testing facilities. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 83(2).
Paragraph 5 of Article 13 is complementary to the allover non-circumvention strategy of Article 5 (2) lit. c).
As indicated not only in Article 13 (6) the key element of the Regulation – extended to the provisions of the Directive – the absolute congruence between (i) the correctness of information provided for the purposes of the application of a typeapproval, (ii) the conformity of production arrangements (Article 31) and (iii) the Certificate of Conformity (hereinafter referred to as “CoC”).
The key term – as a summery at this point – is mentioned in Article 13 (1): “The manufacturer shall ensure …”. 9
Manufacturer is defined in Article 3 no. 40 of the Regulations:
(40) „manufacturer“ means a natural or legal person who is responsible for all aspects of the type-approval of a vehicle, system, component or separate technical unit, or the individual vehicle approval, or the authorisation process for parts and equipment, for ensuring conformity of production and for market surveillance matters regarding that vehicle, system, component, separate technical unit, part and equipment produced, irrespective of whether or not that person is directly involved in all stages of the design and construction of that vehicle, system, component or separate technical unit concerned;
The term “to ensure” means verification and validation of all identified processes providing evidence, transparency and absolute integrity of the entire documentation in the context of Article 5 (2) lit. c) and the truth of the CoC. The processes required are to be derived from the system of ISO 9001:2015 (Annex IV). 10
It is important to realize that the requirements of ISO 9001:2015 comprise all statutory requirements and that the addresses of the protection instruments of ISO 9001:2015 are the same as those under the Regulation: the consumers and bystanders, the safety, health and environment. 11
Therefore “to ensure” means in legal terms:
(i) The obligation of the manufacturers to be organized in accordance with all legal requirements including the Quality Management System as a “cornerstone of the European type-approval system”. Recital 42 of the Regulation reads:
(42) Conformity of production is one of the cornerstones of the EU type-approval system, and therefore the arrangements set up by the manufacturer to ensure such conformity should be approved by the competent authority or by an appropriately qualified technical service designated for that purpose, and should be subject to regular verification by means of independent periodic audits. In addition, approval authorities should ensure the verification of the continued conformity of the automotive products concerned.
(ii) The burden of proof to be borne by the manufacturer according to the highly sophisticated system in the Regulation of the allocation of burden of proof,
(iii) The liability of the manufacturer and its representatives
The Regulation is based on strict surveillance, controls and in particular on a high level of public transparency of the entire type-approval process and sensible measures in the event of lack of transparency, always including the absolute correctness of all data and information provided in those processes. For example: Article 14 (4) stipulates:
4. Manufacturers shall, following a reasoned request from a national authority or the Commission, provide that authority or the Commission, with a copy of the EU type-approval certificate, or the authorisation referred to in Article 55(1) demonstrating conformity of the vehicle, system, component, separate technical unit, part or equipment, in a language that can be easily understood by the national authority or the Commission.
Manufacturers shall, following a reasoned request from a national authority, cooperate with that authority on any action taken in accordance with Article 20 of Regulation (EC) No 765/2008 to eliminate the risks posed by the vehicle, system, component, separate technical unit, part or equipment that they have made available on the market.
A “national authority” in this context may also be a national Court requesting data and information from the type-approval documents in order to investigate infringements for the benefit of a plaintiff. Compared to the numerous Court cases pending in many countries Article 14 (4) of the Regulation bears a high risk. 12 Article 12 of the Regulation deals with the online data exchange between the authorities including to publicity in RAPEX (Article 7 (3) and Article 12 (3).
Regulation 2018/858 is complex and very sophisticated legal frame work for the European automotive industry imposing total responsibility on all “economic operators” 13 , technical services and authorities. It might be advisable to invest more efforts to undertake complying with the Regulation rather that to seek ways of circumvention.
1 OJ L 151 of 14 June 2018
2 Article 91
3 Recital 12 of Regulation 661/2009, OJ L 202/2 of 31 July 2009
4 As already addressed in Article 169 of the Lisbon treaty: High level of consumer protection, health, safety and economical interests of the consumers. Further explanation in Recital 24 of the Regulation.
5 OJ L 171 of 29 June 2007
6 OJ L 200/1 of31 July 2009
7 OJ L 218 ob 13 August 2008
8 OJ L 218 ob 13 August 2008
9 Recital 11
10 ISO 9001:2015 has been adopted es European harmonized norm EN ISO 9001:2015 effective from 15 September 2018. The International Automotive Task Force of the international automotive industry has amended its specific requirements in IATF 16949, replacing the former ISO/TS 16949 which is not any longer linked to the ISO organization.
11 Chapter 4.2 of ISO 9001:2015 reads: „Due to their effect or potential effect on the organization’s ability to consistently provide products and services that meet customer and applicable statutory and regulatory requirements, the organization shall determine: a) the interested parties that are relevant to the quality management system; b) the requirement of these interested parties that are relevant to the quality management system. The organization shall monitor and review information about these interested parties and their relevant requirements.
12 In this context it is worth to also consider Recital 29 of the Regulation, Article 9 (6) and 13 (5) in conjunction with the sanctions mentioned in Articles 53 und 54.
13 Artikel 3 no. 44