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Market supervision of the State Food and Consumer Services

Earlier we wrote about appeal against fines of the State Food and Consumer Service and about how controllers check the safety of industrial goods, and today we will consider how the supplier to execute the decision on elimination of formal discrepancies?

If you sell non-food products, you can wait for the arrival of inspectors from the State Food and Consumer Service with an inspection in the field of market surveillance.

Let's imagine the situation: the State Food and Consumer Service comes to the enterprise to check the quality of certain products, such as toys.

Recall that market surveillance inspects non-food products for compliance with technical regulations. In fact, the functions of the market surveillance authority depending on the type of product are performed by different authorities. 

Thus, the State Food and Consumer Service, in particular, supervises electrical and electronic equipment: household appliances, power tools, toys, leisure equipment, etc.

If during the inspection of the controlling body violations are revealed that do not pose a danger to users, the State Food and Consumer Service will make a decision to restrict products on the market and eliminate non-compliance.

Such violations may be due to the lack of products with the necessary labeling: mark of conformity to technical regulations, information on the name of the manufacturer, trademark and his contact postal address, serial number of the goods, etc. However, only the manufacturer can eliminate such violations, ie apply the appropriate markings.

Therefore, often the only option in this case is return of goods to the supplier or manufacturer to bring the product to normal, because the company, as a distributor of products, can not eliminate such discrepancies.

However, there may be circumstances that prevent the product from being returned to the supplier or manufacturer. For example, the supplier of the specified goods refuses to make a return, or the company that supplied the products no longer carries out economic activities.

Therefore, the question arises: can the company in such a situation dispose of products at its discretion, so as not to pay a fine for non-compliance with the decision of the State Food and Consumer Services, which can range from 34,000 to 68,000 hryvnia.

Thus, the issue of destruction of products is regulated by law only in relation to dangerous products that must be destroyed by the manufacturer after recall. As a result, the manufacturer must reimburse the user for the full cost of the product or replace it with quality similar products. 

However, the destruction of products in the case of less serious violations is not regulated by law, so it is appropriate to pay attention to case law in this regard.

The position of the courts on disposal

Thus, the courts take the position that the disposal of products, which is carried out in connection with the impossibility of eliminating violations together with suppliers, is "an appropriate measure by which the purpose of the control measure is achieved."

Thus, the position of the State Food and Consumer Service in court often comes down to the fact that “the decision to destroy products is made by the market surveillance authority. Accordingly, the company has no authority to destroy (dispose of) products.

The courts note that there is no prohibition on the disposal of property by the distributor, because he is the owner of this property, and therefore can not be limited to his disposal.

Thus, the Second Administrative Court of Appeal in case №520 / 922/21 noted: "The prohibition to destroy property belonging to the enterprise is an interference in the internal economic activity of the business entity."

The courts conclude that the application of the fine must comply with the principle of effectiveness and proportionality of liability of economic entities for violations of the law. And if the violation of the law on the market is eliminated and improper products are removed from circulation, even through disposal, the purpose of the control measure was achieved, because improper products now do not threaten anyone.

The courts take into account the following:

  • whether at the time of imposition of the fine the State Food and Consumer Service was duly notified of the disposal of the goods;
  • whether there was really no possibility of interaction with the product supplier, after all  in accordance with the law, economic entities in the supply chain of the relevant products are obliged to cooperate with each other in order to bring products in line with the established requirements.


Practical advice

If the only option after the inspection was to dispose of the goods, you should reinsure and take the following actions:

  • Notify the body of the State Food and Consumer Service about the utilization by appropriate letter. 

Provide evidence of disposal, such as a contract with the relevant disposal company, acceptance certificate, disposal certificate, etc.

It is important to provide evidence that the products with defects were provided for disposal. Provide evidence that the subject to whom the product was transferred has the right to dispose of it.

In a letter to the market surveillance authority, you can justify the legality of the decision with reference to case law for persuasiveness.

  • Justify the impossibility to eliminate the non-conformity of the product in another way.

If a supplier refuses to issue a return, it is necessary to provide evidence of communication with such supplier, for example, his written response-refusal or evidence of sending a letter to the supplier and the lack of response to such a letter.

However, if the supplier is not currently operating and does not have the technical capacity to remedy the formal non-conformity of the product, evidence of the supplier's closure or bankruptcy, or the existence of numerous debts and arrests, may be provided. To do this, you need to provide references and extracts from the relevant registers.

  • Show the supply chain to provide the necessary information to market surveillance authorities in which direction to move next.

Provide the necessary documents that allow you to track the origin of the goods and indicate who is the supplier of products. Such documents may be a supply contract, relevant invoices, etc. Through these actions, the company will help the State Food and Consumer Service find other products with violations.

Therefore, it is important to provide as much information as possible that the company has taken all necessary actions and eliminated the identified violations.

It is important to convince the market surveillance authority or the court that the only possible option to implement the decision of the State Food and Consumer Service was to dispose of the goods. After all, this will limit the products on the market, and such goods will no longer pose a threat to consumers. 

If the inspectors of the State Food and Consumer Service have visited you - you can always ask for help from our specialists. Leave the number and we will call.


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