On March 5, 2020, the Turkish parliament approved the bill on product safety and technical regulations and with its publication in the Official Gazette on March 13, 2020, the Act No. 7223 on Product Safety and Technical Regulations ("Product Safety Act") has passed into law. Although the Product Safety Act will come into force on March 13, 2021, and the provisions of Act No. 4703 on the Preparation and Application of Technical Legislation of Products ("Abolished Act") will prevail in the meantime, we believe it is important to explain what this new act brings and how it will affect relevant parties.

When a high-level comparison is conducted, it is safe to say that the Product Safety Act provides clarifications on previously disputed matters by defining each player in the supply chain and their obligations in detail. Additionally, unlike the Abolished Act, the Product Safety Act dwells on the powers of authorized institutions and their monitoring activities, explicitly governs the obligations of intermediary service providers and the indemnification of consumers for damages rooting from product safety weaknesses.

Each player of the supply chain counts!

Previously, the Abolished Act defined only the manufacturer and the distributor as players in the supply chain and stated that if the manufacturer of the products resides outside Turkey, the obligations of the manufacturer may also be applicable for its authorized representative in Turkey and/or the importer. Moreover, the Abolished Act fell short of defining what the nature and scope of the supply chain was and therefore whether intermediary actors (such as intermediary service providers) were considered a part of the supply chain. In an effort to eliminate this uncertainty, the Product Safety Act introduced the term "economic operators"1 and provided separate definitions for authorized representatives, distributors, importers and manufacturers separately as follows:

  • Authorized representative: Natural or legal persons residing in Turkey who are authorized by the manufacturer in writing to fulfil the obligations of the manufacturer arising from the Product Safety Act and other legislation.
  • Distributor: Natural or legal persons other than the manufacturer or importer who are in the supply chain and make products available on the market.
  • Importer: Natural or legal persons placing the products on the market through import.
  • Manufacturer: Natural or legal persons placing products on the market with their own name or trademark, either by producing or providing means for the design or production of the product.

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In addition to the new definitions for supply chain players, the Product Safety Act also distinguishes the operations of such players and introduces market placement of goods and making goods available in the market as separate activities for the first time.

As stated, the Products Safety Act introduces the obligations of each economic operator separately; there are commonalities in the said obligations. Several examples of common obligations include:

  • Placing only the products that comply with the relevant product safety rules and technical regulations on the market;
  • Ensuring that the product carries required marks of conformity and documentation (for the manufacturer this obligation is providing the technical documentation and conformity marks with and/or on the product);
  • Keeping the conformity documents for the period stipulated in the relevant legislation (in the absence of such a period, for 10 years) and providing such documents when requested;
  • If the legislation requires, providing details such as trade name, trademark and address on the product, or on the package or a document accompanying the product;
  • Taking necessary precautions in relation to non-compliant products that are placed on the market, including correction, suspension of the market placement, withdrawal or recalling of such products and notifying the previous and next economic operators in the supply chain of such a situation;
  • Cooperation with economic operators in relation to the actions taken for eliminating the risks carried by the products in the market and submitting requested information and documents to the authorized institutions;
  • Keeping the records of the previous and next economic operators in their supply chain for at least 10 years;
  • Publicly announcing risks associated with any product type, either ex officio or upon request of the authorized institutions.

Additional obligations of manufacturers2

Apart from the obligations stipulated above, the manufacturers are also obliged to practice sample tests and examinations in order to understand the risks that may be associated with the products, track the mass production phase and any modifications to the design or attributes of the products in terms of product safety and compliance. Manufacturers are also responsible for taking necessary precautions in relation to the risks that may be associated with the product and inform the final consumer about such in Turkish by either displaying the relevant information on the product or with documents accompanying the product.

Please note that manufacturers' obligations may be applicable for the authorized representatives to the extent of the delegation of power agreed between the manufacturer and the authorized representative.

Additional obligations of importers

In addition to the common obligations, the importer is responsible for checking the products in order to ensure that the manufacturer has placed required information such as the conformity mark and provided the relevant documentation. Moreover, it is the duty of the importer to prevent products from any damage or harm in relation to safety for the time during which the products are under its custody.

Additional obligations of distributors

Distributors are responsible for checking whether the importers and/or the manufacturers have abided by their obligations while supplying the product to the distributors. Like the importers, the distributors also have the obligation to prevent products from suffering any damage or harm in relation to safety for the time in which the products are under their custody.

What should we understand as product safety?

In line with the Abolished Act, Product Safety Act states that it is mandatory for the products to be safe and in compliance with relevant technical regulations. The Product Safety Act considers a product safe as long as it is compliant with the human health and safety provisions of its technical regulations. Accordingly, non-compliant products cannot be placed on or made available in the market or provided for services. The power to regulate, restrict or set exemptions in this regard is vested in the president.

Marks of conformity

In order to ensure product safety, technical regulations may require the issuance of a mark (or marks) of conformity for products. In such a case, it is mandatory for the products to undergo a conformity examination and receive an approval. Conformity assessment bodies, which will be in charge of the said examinations and tests, shall be appointed by the authorized institutions which prepare or execute the technical regulations or those which supervise the products. Regardless of whether they have been appointed to a specific case, the conformity assessment bodies are accountable for the said authorized institutions. In this regard, the conformity assessment bodies are obliged to operate in a transparent and impartial manner and to keep records of any documents in relation to their activities for the period stipulated in the relevant technical regulation (in the absence of such a period, for 10 years). During its routine inspections, if the relevant authorized institution decides that the conformity assessment body is not complying with its obligations, it may suspend or restrict the activities of the body, provide a reasonable time for the elimination of such an inconvenience or shut down the relevant body.

Damages arising from non-compliant products

An interesting provision in the Product Safety Act governs the liability of the manufacturer (or the importer) to indemnify the damages incurred by a person, provided that the causal link between the damage and the non-compliance of the product is proven. In case there are more than one manufacturer (or importer) involved in the process, such actors shall be jointly liable. The Product Safety Act goes one step forward and declares any agreement releasing the liability of the manufacturer (or the importer) partially or as a whole null and void. The period of limitation for such indemnification claims is set as three years following the occurrence of the damage and learning the liable party for indemnification, however in any case the liability of the manufacturer (or importer) ends 10 years following the market placement of the non-compliant product.

Who is in charge of monitoring product safety?

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Previously in the Abolished Act, the supervision and monitoring of product safety was solely the responsibility of the authorized institution, which drafts and enacts the relevant technical regulation. However, the Product Safety Act has a more inclusive and global approach in terms of monitoring product safety. As briefly explained above, all economic operators are obliged to monitor the safety of the products already introduced or that will be introduced to the market throughout the lifetime of the product. This monitoring obligation is also extended to the timeframe after the product meets the consumer, through the recall mechanism. In case economic operators evaluate a product risky, they now have the authority and the obligation to take the necessary corrective measures.

Additionally, the authorized institutions, which are still in charge of the monitoring process, may delegate or transfer their powers to another supervisory institution, including the power of dictating precautions. Authorized institutions are responsible for setting the administrative and technical framework for the efficient and fast monitoring of products and they may work in coordination with other institutions in this regard. Please note that, monitoring shall be made throughout the whole life cycle of the product beginning from its market placement to the point where it meets the final consumer (and even through the installation or usage of the product if explicitly stated in the technical regulation).

Risk assessment

Supervision activities by the authorized institutions may be conducted where deemed necessary, including in the storage facilities, transportation vehicles, workplaces and production facilities. Upon inspection, if the authorized institution finds it necessary, it may conduct a risk assessment to determine whether a product carries significant risk. Please note that a product that does not carry technical files, label and instructions may be regarded risky. In such a case the authorized institution provides the economic operator at least 10 days for the submission of its defence. The economic operator is obliged to take the necessary precautions and the authorized institution shall announce these precautions along with any precautions it may take on its website or in another medium it deems appropriate. Additionally, it is the responsibility of the economic operators to announce the risks associated with their products and the necessary precautions. In their announcement, the economic operators shall include the following information:

  • Trademark, model, type or other information that may distinguish the product,
  • If applicable, the image of the product,
  • Precautions taken,
  • Clear and explicit explanation of the problem,
  • Name, address and other contact information of the relevant economic operator,
  • Methods advised for avoidance of risk

Product recalls

Another mechanism that was applied in Europe, yet not included in the Abolished Act ̶ product recalls ̶ is introduced by the Products Safety Act. In case the precautions taken by the economic operator is regarded as insufficient, the economic operator may decide ex officio to recall the risky products or it may recall the risky products upon request of the relevant authorized institution. Expenses that may be incurred during the recall process shall be borne by the relevant economic operator. In such a scenario, in addition to the information listed above, the economic operator shall include in its announcement the following:

  • Addresses and points of contact where the product will be retrieved or repaired,
  • Options and offers provided to the final consumers which must include at least one of the following:
    • Fixing the cause of the recall,
    • Payment of the retail sale price of the product on the date of delivery,
    • Replacement of the product with a compliant, safe and equivalent one.

Intermediary service providers' responsibilities

Considering the developments and the importance of e-commerce, the Product Safety Act also recognizes the authorized institutions' power to supervise service providers that make the products available on the market. In cases where the product offered and/or promoted online is not compliant with the stipulated product safety rules and technical regulations, authorized institutions may request intermediary service providers to block access to any non-compliant products within 24 hours. If an intermediary service provider fails to comply with this obligation, the Product Safety Act foresees an administrative fine between approximately US$3,052 - 30,5233 (TRY 20,000 - 200,000). Please note that this obligation is also applicable to the economic operators, if the products are offered online by economic operators.

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As a last remark, it is important to note that the intermediary service providers are also responsible for keeping the record of the name, trade name or trademark, contact information and other tracking information of the previous and next economic operators in the supply chain. These records musts be kept for at least 10 years starting from the date on which the products are placed or made available on the market by the intermediary service providers and must be presented to the authorized institutions if requested. By putting the same obligation for economic operators and intermediary service providers under different paragraphs of the same article, the legislator indicated that intermediary service providers are not included under the umbrella term "economic operator".

Conclusion

Providing a more detailed and comprehensive list of rules and obligations, the Product Safety Act is aimed at tackling the practical problems in the product safety market through the introduction of new mechanisms and structural changes. By way of defining economic operators and differentiating intermediary service providers from this umbrella term, the new legislation provides a more certain approach on the liabilities of each party involved in the product life cycle from its production to its offering to consumers. Economic operators are furnished with new powers (and thus obligations) in terms of monitoring, which will make them play an even more important role in the compliance of products with relevant safety requirements. When all the new contributions of the Product Safety Act is taken into account, it is safe to say that Turkish product safety legislation is one step closer to its European counterpart. All in all, the new legislation seems to offer positive changes in the market but the legal circles have until March 12, 2021, to observe the real effect of the legislation. Until then, the Abolished Act and its secondary legislation will prevail.

Footnotes

1. Please note that the manufacturers, importers, distributors and authorized representatives and other natural and legal persons who are responsible for the production, market placement or providing services as per the relevant technical regulations are collectively referred to as "economic operators" as per the Product Safety Act.

2. As per Article 11 of the Product Safety Act, the obligations of the manufacturer may also be applicable to the distributor or the importer in case they modify the product in a way that affects its compliance to the relevant technical regulations and product safety legislation.

3. As of March 22, 2020, 1 USD = 6.55 TRY

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.