AVASK want £1k to set it up and 2% of every commercial invoice thereafter. This feels too high.
That is quite cheap, so I assume that it is just for deliveries to Amazon. (Remember that sales from Amazon are always B2C.)
I am always keen on new business opportunities and we already have a company in Germany, so I commissioned some legal advice on the subject of and the situation for Germany is far from clear, as the law has yet to be tested in court. No doubt, someone will commission a series of exploratory court cases (Aufklärungprossesse) about the various aspects of the enabling legislation.
The main takeaways are -
- The Authorized Representative is legally liable for defective or non-compliant devices at the same level as the manufacturer.
- Anyone using your product should know who your Authorized Representative is. There is a special logo for that and this together with the contact details for the AR must appear on the product, labeling, packaging, and instructions for use.
- All mandatory documentation should be available at the offices of the AR. These documents may be audited and must be presented to the competent authorities upon request.
Special to Germany -
- Three-year guarantee.
- All documentation must be in German.
- Liability for import duties travels with the product.
- The AR is liable for any and all laws and regulatory requirements that must be followed.
So, to put it simply, an AR in Germany must carry all the responsibilities and obligations of the manufacturer. The German authorities will only contact and deal with that one person or company. They are extremely unlikely to want to talk to a UK company.
Much of what one hears or is told is bogus. Yes, they may say or write that, but somewhere deep in the contract will be an open-ended penalty clause making you fully liable for any and all damages that they may suffer within the EU. At a guess, even if it is their fault! It would hardly surprise me if a commercial AR asks for a security deposit. Sooner or later, someone at one of these agencies is going to get burnt! German consumer law is especially draconian!
It is an interesting situation and explains why thousands of UK companies have opened EU offices.
So what could happen to the AR?
In 1999, the Aachen computer sales company SEH discovered that the import duty on CPUs and other chips that came to them via a Swiss import agency may not have been paid for the past ten years. They had done nothing wrong, but the Swiss agency had been dissolved and no proof of payment could be provided to the Finanzamt (HMRC equivalent). Maybe they had paid and maybe that had not paid and did a runner! But the Finanzamt, obviously unable to proceed within Switzerland, wanted proof and therefore sent SEH a bill for 60m Deutschmark. SEH was instantly kaput!
Similar issues exist with safety rules. If some bogus Chinese manufacturer's CE procedures are not in accordance with the rules as laid down by the Commission, it is the EURP (EU Responsible Person) that is liable for the €100,000 (max) fine and for a total product recall. The consequences under liability law extend to criminal prosecution, so it is the EURP that gets a criminal record!
As of July last year, fines for simple procedural mistakes were increased from €3k to €10k and fines for actual endangerment went from €30k to €100k.
Here are some of the misdemeanors that the EURP will be held responsible for -
- Errors in the CE marking, e.g. the CE mark is attached, although it is not needed.
- The CE mark is misused in other ways.
- There is an incorrect CE marking on a product.
- The EC declaration of conformity is not provided.
- Instructions for use in German are not supplied.
- Installation instructions in German required for using the product are not provided.
- Required information and labeling in German are missing for consumer products.
- Technical documents in German are not provided.
- The EURP does not cooperate sufficiently with the labour inspectorate.
- Despite clear indications of the dangers to safety and health emanating from its product, the company has not informed the responsible market supervisory authority and has thus violated the obligation to disclose.
So you see that the role of the EURP extends far beyond that of a nominal person on the ground. He/she is far more than just an import representative and the full weight of the law rests on that person or company.
One way around these new rules is to form your own GmbH. Another is to use the Amazon fulfillment service - they are more than big enough to carry such responsibilities!
