PURPOSE: to reform the type-approval and market surveillance system for motor vehicles in the EU.

LEGISLATIVE ACT: Regulation (EU) 2018/858 of the European Parliament and of the Council 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.

CONTENT: this Regulation lays down harmonised rules and principles for the type-approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles, and for individual vehicle approval, with a view to ensuring the proper functioning of the internal market for the benefit of businesses and consumers and in order to offer a high level of safety and of health and environmental protection .

It also lays down provisions for the placing on the market and putting into service of parts and appliances which may present a serious risk to the proper functioning of essential vehicle systems.

The Regulation introduces changes to the type-approval system by means of measures strengthening (i) the quality of testing that allows a vehicle to be placed on the market through improved technical services; (ii) market surveillance to control the conformity of vehicles already available on the market; (iii) the oversight of the type-approval process.

Vehicle testing : under the new market surveillance rules, the market surveillance authorities of each Member State shall carry out at least a minimum number of tests on vehicles per year. That minimum number of tests per Member State shall be one for every 40 000 new motor vehicles registered in that Member State in the preceding year , but shall not be less than five tests.

At least 20 % of the minimum number of tests shall cover all applicable emissions-related requirements to the tested type.

The market surveillance authority of one Member State may agree with the market surveillance authority of another Member State that the market surveillance authority of that other Member State carries out the tests

Compliance verification by the Commission : the Commission shall organise and carry out, at its own expense, tests and inspections to verify that vehicles, systems, components and separate technical units comply with the relevant requirements.

The Commission may entrust the performance of tests or inspections to technical services, in which case, the technical service shall be acting on behalf of the Commission. In this case, the Commission shall ensure that the technical service that is used is not the same as the technical service that performed the original type-approval test.

The Commission shall inform the relevant approval authorities and market surveillance authorities in order for them to take appropriate measures to alert users within the Union , within an adequate timeframe, of any non-compliance that it has identified in relation to any vehicle, system, component or separate technical unit so as to prevent or reduce the risk of injury or other damage.

In addition, the Commission shall be empowered to carry out assessments concerning the procedures put in place by the approval authorities that have granted EU type-approvals during the five years preceding the assessment. The Commission shall produce a summary of its findings and make them available to the public.

General obligations of manufacturers : manufacturers shall be responsible to the approval authority for all aspects of the approval procedure and for ensuring conformity of production. They 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;

establish procedures to ensure that series production of vehicles, systems, components and separate technical units remains in conformity with the approved type. 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.

Corrective and restrictive measures : where the market surveillance authority of a Member State finds that a vehicle poses a serious risk to the health or safety of persons or to other aspects related to the protection of public interests, it shall request the relevant economic operator to take all appropriate corrective measures without delay to ensure that the vehicle no longer poses such a risk.

The Member State taking corrective or restrictive measures shall inform the Commission and the other Member States. Where corrective measures are applied, the owners of the vehicles concerned shall not have to bear the costs of repairing their vehicles .

Penalties : the Regulation allows for penalties to be imposed on economic operators and technical services who falsify test results or who submit false declarations or incorrect data for type-approval. The Commission shall have the possibility to impose administrative fines on manufacturers and importers of up to EUR 30 000 per non-compliant vehicle .

Type-approval authority : the Regulation provides for the establishment of a procedure for the evaluation of type-approval authorities. The Commission shall have the opportunity to participate in the peer evaluation team and shall make public a summary of the conclusions of these evaluations. However, type-approval authorities shall not be subject to peer review if they designate all their technical services on the basis of accreditation based on internationally recognised standards.

Technical services : the technical services shall carry out the type-approval tests under the responsibility of the type-approval authorities.

National accreditation bodies shall participate in the evaluation of technical services and the establishment of joint assessment teams. If the technical service is not accredited, the assessment shall be carried out by joint assessment teams composed of representatives of the type-approval authorities of at least two other Member States and a representative of the Commission.

The position of technical services vis-à-vis manufacturers should be strengthened, including their right and duty to carry out unannounced factory inspections and to conduct physical or laboratory tests.

Forum for the exchange of information on enforcement : the Regulation provides for the establishment of an advisory Forum for the exchange of information on enforcement, composed of representatives of the national authorities responsible for type-approval and market surveillance. This Forum will be set up in order to harmonise the different interpretations and practices between the Member States. It shall also examine the findings of the peer reviews and the Commission's evaluations.

The national authorities shall have to submit, annually, to the Forum a comprehensive overview of its planned market surveillance checks.

ENTRY INTO FORCE: 4.7.2018.

APPLICATION: from 1.9.2020.

The European Parliament adopted by 547 votes to 83, with 16 abstentions, a legislative resolution on the approval and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles.

The issue had been referred back to the committee responsible for interinstitutional negotiations at the sitting of 4.4.2017.

The European Parliament’s position adopted at first reading under the ordinary legislative procedure amended the Commission proposal as follows:

Subject : the proposed Regulation shall lay down harmonised rules and principles for the type-approval of motor vehicles and their trailers , and of systems, components and separate technical units intended for such vehicles, and for individual vehicle approval.

It shall also establish:

provisions for the placing on the market and the entry into service of parts and equipment that may pose a serious risk to the correct functioning of the essential systems of the vehicles; requirements for the market surveillance of vehicles, systems, components and separate technical units that are subject to approval and the requirements for the market surveillance of parts and equipment for such vehicles.

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.

Reception and market surveillance : Member States shall establish or appoint their own approval authorities and market surveillance authorities. In order to avoid potential conflicts of interest, the approval authorities and the market surveillance authorities should not be linked when carrying out their tasks.

Member States should periodically review and assess the functioning of their market surveillance activities and make publicly available a summary of the results of the periodic assessments.

The technical services responsible for carrying out the tests provided for in the Regulation shall also be subject to regular and independent audits.

Vehicle testing : the market surveillance authorities of each Member State shall carry out at least a minimum number of tests on vehicles per year. That minimum number of tests per Member State shall be one for every 40 000 new motor vehicles registered in that Member State in the preceding year, but shall not be less than five tests. At least 20 % of the minimum number of tests shall cover all applicable emissions-related requirements to the tested type.

Verification of compliance by the Commission : the Commission may carry out, at its own expense, tests and inspections (including laboratory and road tests) to verify the conformity of vehicles. Member States shall cooperate with the Commission when it carries out tests and inspections.

The Commission shall inform the relevant approval authorities and market surveillance authorities in order for them to take appropriate measures to alert users within the Union, within an adequate timeframe, of any non-compliance that it has identified in relation to any vehicle, system, component or separate technical unit so as to prevent or reduce the risk of injury or other damage.

Obligations of manufacturers : the amended text stipulates that 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.

Corrective and restrictive measures at Union level : where the market surveillance authority of a Member State finds that a vehicle presents a serious risk to the health or safety of persons or to other aspects related to the protection of the public interest, it shall request the relevant economic operator to take all appropriate corrective measures without delay to ensure that the vehicle no longer presents such a risk.

The Member State taking corrective or restrictive measures shall inform the Commission and the other Member States. Where the Commission considers that a notified national measure is contrary to Union law, it should consult the Member States and the economic operator or operators concerned. On the basis of this consultation, it should adopt implementing acts in order to decide on harmonised corrective or restrictive measures at Union level.

Any test carried out on any vehicle in one Member State shall be able to be used to take corrective and restrictive measures in another Member State.

If corrective measures are applied, the owners of the vehicles concerned shall not bear the costs of repairing their vehicles.

Penalties : the Regulation shall allow fines to be imposed on economic operators and technical services who falsify test results or who submit false declarations or incorrect data for type-approval.

In support of corrective and restrictive measures at Union level, the Commission may impose administrative fines of up to EUR 30 000 per vehicle on the economic operator concerned for non-compliance of the vehicle.

Forum for the exchange of information on enforcement : the Commission shall chair and manage a forum for the exchange of information on enforcement. This forum shall be composed of representatives appointed by each of the Member States, representing the approval authorities and the market surveillance authorities.

In order to ensure a level playing field and to avoid divergent standards being applied across the Union, national authorities shall cooperate fully with the Forum and the Commission in their audit and oversight activities.

Access to information : the text provides that independent garages shall have access to relevant vehicle information in order to be able to compete with dealers and help reduce prices. They shall have access to remote diagnostic services used by manufacturers and dealers.

The European Parliament adopted by 585 votes to 77, with 19 abstentions, amendments on the proposal for a regulation of the European Parliament and of the Council on the approval and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles.

The matter was referred back to the committee responsible for interinstitutional negotiations.

The main amendments adopted in plenary concern the following issues:

An end to manipulation : Members stated that consumer protection is a priority of the Union and that everything should be done to prevent cheating by car manufacturers designed to manipulate pollution emission and fuel consumption tests in order to produce false results or circumvent any other rules. Particular attention should be paid to the risk of illegal defeat devices .

This Regulation should ensure reliable, harmonised and transparent type-approval and market surveillance procedures in the Member States.

As consumer protection is a priority of the Union, manufacturers of vehicles circulating in the Union should be required to submit those vehicles for testing before being placed on the market and during their lifetime. Member States and the Commission should be guarantors of this double surveillance, the one being able to act where the other fails to do so.

Responsibility of type-approval authorities and competent authorities : the proposed amendments aim to clarify the roles and responsibilities of national type approval authorities, testing centres and market surveillance bodies, in order to reinforce their independence and prevent conflicts of interest.

Members proposed the following:

Member States shall assess at least every three years the functioning of their type-approval activities and the quality of the type-approvals issued. They shall perform random market surveillance tests on at least 20 % of the new models placed on the Union market each year to verify whether the vehicles on the road comply with Union safety and environmental legislation; the approval authorities shall interpret and enforce the requirements of this Regulation in a uniform and consistent manner to avoid divergent standards being applied across the Union; Market surveillance authorities shall (i) perform regular checks to verify compliance with the requirements set out in this Regulation as well as with the correctness of the type approvals; (ii) prepare and submit a national market surveillance programme for approval by the Commission on an annual or multi-annual basis; (iii) to alert users within their territories within an adequate timeframe of non-compliance they have identified; (iv) inform, without delay, the Commission and the Member States where it considered that a vehicle is in breach of the Regulation.

Members proposed making publicly available the results of the national periodic reviews on the functioning of their surveillance activities.

The Commission shall be empowered to supervise the work of the national authorities by means of regular audits, checks and tests of samples of the type-approvals issued and verifying the uniform, consistent and effective application of this Regulation.

Compliance verification testing by the Commission : the European Commission may:

oblige a Member State to carry out a compliance test which it considers necessary, or do the tests itself under certain conditions; oblige economic operators to take all necessary restrictive measures, including the recall of vehicles , so that non-compliant vehicles in question are brought into conformity.

Those tests and inspections shall be performed by means of, inter alia, laboratory tests and real-driving emissions tests, on the basis of statistically relevant samples, and shall be supplemented by documentary checks.

Where technical services are designated for the purposes of this Article, the Commission shall ensure that a different technical service is used from the technical service that performed the original type approval test.

Manufacturer’s responsibility : the manufacturer shall be responsible to the approval authority for all aspects of the approval procedure and for ensuring conformity of production regardless of testing method used.

The manufacturer shall: (i) ensure that the design of the vehicles does not incorporate strategies that unnecessarily alter the performance exhibited during applicable test procedures when those vehicles are operated under conditions that might reasonably be expected to be encountered in normal operation and use; (ii) disclose any engine management strategies which might be deployed, either through hardware or software means; (iii) investigate and keep a register of complaints and non-conformities of vehicles, systems, components, separate technical units, parts or equipment that he placed on the market and keep his importers and distributors informed of such monitoring. If the number of complaints and non- conformities concerning safety or emission related equipment exceed 30 cases or 1 per cent of the total of vehicles, detailed information shall be sent to the relevant approval authority responsible.

Forum for enforcement : Members proposed strengthening the Forum’s powers. Its tasks shall be extended to: (i) the consideration of substantiated complaints, evidence or other relevant information presented by recognised third parties of possible non-compliance; (ii) the joint discussion and assessment of the national market surveillance programmes following their submission to the Commission; (iii) the review of the results of assessments of the functioning of market surveillance.

Fees : Members proposed that the costs for their type-approval and market surveillance activities shall be covered by the Member States either through their national budgets, a fee-based structure (where national fees are levied on the manufacturers who have applied for type-approval in the Member State concerned), or apply a combination of both methods.

Penalties : the proposal provides that the Commission may impose administrative fines (of up to EUR 30 000 per vehicle) on the manufacturer concerned in breach of the Regulation. Administrative fines levied by the Commissions may be used for the purposes of market surveillance measures and for measures to support persons negatively affected by infringements of this Regulation or other such activities to the benefit of affected consumers and, where appropriate, environmental protection.

In cases of non-conformity the consumer may face personal damage or damage to their own property. In such cases the consumer should be entitled to pursue compensation under relevant legislation addressing defective products or non-conforming goods.

Database : Members proposed that the Commission should establish an online type-approval database for the secure electronic exchange of information related to type-approval procedures, authorisations issued and market surveillance.

The Committee on the Internal Market and Consumer Protection adopted the report by Daniel DALTON (ECR, UK) on the proposal for a regulation of the European Parliament and of the Council on the approval and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles.

The committee recommended that the European Parliament’s position adopted at first reading following the ordinary legislative procedure should amend the Commission proposal as follows:

An end to manipulation : Members stated that consumer protection is a priority of the Union and that everything should be done to prevent cheating by car manufacturers designed to manipulate pollution emission and fuel consumption tests in order to produce false results or circumvent any other rules.

Responsibility of type-approval authorities and competent authorities : the proposed amendments aim to clarify the roles and responsibilities of national type approval authorities, testing centres and market surveillance bodies, in order to reinforce their independence and prevent conflicts of interest.

Members proposed the following:

Member States shall assess at least every three years the functioning of their type-approval activities and the quality of the type-approvals issued. They shall perform random market surveillance tests on at least 20 % of the new models placed on the Union market each year to verify whether the vehicles on the road comply with Union safety and environmental legislation; the approval authorities shall interpret and enforce the requirements of this Regulation in a uniform and consistent manner to avoid divergent standards being applied across the Union; Market surveillance authorities shall (i) perform regular checks to verify compliance with the requirements set out in this Regulation as well as with the correctness of the type approvals; (ii) prepare and submit a national market surveillance programme for approval by the Commission on an annual or multi-annual basis; (iii) to alert users within their territories within an adequate timeframe of non-compliance they have identified.

Members proposed making publicly available the results of the national periodic reviews on the functioning of their surveillance activities. The Commission shall be empowered to supervise the work of the national authorities by means of regular audits, checks and tests of samples of the type-approvals issued and verifying the uniform, consistent and effective application of this Regulation.

Compliance verification testing by the Commission : the European Commission may oblige a Member State to carry out a compliance test which it considers necessary, or do the tests itself under certain conditions.

The European Commission may also oblige economic operators to take all necessary restrictive measures , including the recall of vehicles , so that non-compliant vehicles in question are brought into conformity.

Manufacturer’s responsibility : the manufacturer shall be responsible to the approval authority for all aspects of the approval procedure and for ensuring conformity of production regardless of testing method used.

The manufacturer shall: (i) ensure that the design of the vehicles does not incorporate strategies that unnecessarily alter the performance exhibited during applicable test procedures when those vehicles are operated under conditions that might reasonably be expected to be encountered in normal operation and use; (ii) disclose any engine management strategies which might be deployed, either through hardware or software means.

Forum for enforcement : Members proposed strengthening the Forum’s powers. Its tasks shall be extended to: (i) the consideration of substantiated complaints, evidence or other relevant information presented by recognised third parties of possible non-compliance; (ii) the joint discussion and assessment of the national market surveillance programmes following their submission to the Commission; (iii) the review of the results of assessments of the functioning of market surveillance.

Fees : Members proposed that the costs for their type-approval and market surveillance activities shall be covered by the Member States either through their national budgets, a fee-based structure (where national fees are levied on the manufacturers who have applied for type-approval in the Member State concerned), or apply a combination of both methods.

Penalties : the proposal provides that the Commission may impose administrative fines (of up to EUR 30 000 per vehicle) on the manufacturer concerned in breach of the Regulation. Administrative fines levied by the Commissions may be used for the purposes of market surveillance measures and for measures to support persons negatively affected by infringements of this Regulation or other such activities to the benefit of affected consumers and, where appropriate, environmental protection.

Database : Members proposed that the Commission should establish an online type-approval database for the secure electronic exchange of information related to type-approval procedures, authorisations issued and market surveillance.

PURPOSE: to revise the legal framework for the type-approval of motor vehicles and their trailers in order to ensure the proper functioning of the internal market while at the same time providing for a high level of public safety and environmental protection.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

BACKGROUND: a comprehensive EU type-approval framework for motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles, was established by Directive 2007/46/EC of the European Parliament and of the Council .

This framework aims at facilitating the free movement of motor vehicles and trailers in the internal market by laying down harmonised requirements designed to achieve common environmental and safety objectives. Directive 2007/46/EC covers motor vehicles for the carriage of passengers (category M) and of goods (category N), and their trailers (category O), as well as their systems and components.

As part of the commitments the Commission made in its CARS2020 Action Plan for a strong, competitive and sustainable European car industry, the EU type-approval framework for motor vehicles has been the subject of a comprehensive fitness check in 2013.

Although the fitness check confirmed that the existing regulatory framework has its merits in meeting policy objectives, it has come under harsh criticism after the discovery that a German manufacturer (VW) had for several years used software to manipulate the emission performance of its cars .

Within a week of the outbreak of the scandal, the Commission announced that it would reinforce the type-approval system, in particular by ensuring adequate supervisory mechanisms to ensure a correct and harmonised application of the type-approval procedures.

Triggered by the outburst of the VW emissions scandal, the European Parliament adopted on 27 October 2015 a Resolution on emission measurements in the automotive sector , calling on the Commission for significantly strengthening the current EU type approval regime including more EU oversight, in particular with regard to market surveillance, coordination and follow up regime for vehicles sold in the Union.

IMPACT ASSESSMENT: the proposal is accompanied by an impact assessment of the VW emissions crisis on the review of the type-approval framework for motor vehicle.

Already before the outburst of the VW crisis, the Commission was working on proposals to improve the type-approval legislation for motor vehicles, and identified main areas with a significant potential for improvement to better address the problems of unsafe and non-compliant automotive products. The assessment of the possible policy options resulted in the conclusion that regulatory action in these areas would be the most effective.

The re-assessment of these policy options in the light of the VW crisis has highlighted the need to further increase their effectiveness in terms of detecting and preventing non-compliance problems .

There is a warranted need for EU wide supervision to achieve a harmonised and co-ordinated enforcement based on commonly applicable criteria and uniformly applied by Member States.

CONTENT: the proposed Regulation seeks to replace Directive 2007/46/EC . It sets out the harmonised rules and principles for the type-approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles, and the individual vehicle approval.

The proposal aims to strengthen the existing type-approval framework, by introducing market surveillance provisions . It also contains a wide range of measures relating to:

the traceability of products and role and responsibilities of economic operators in the supply chain; responsibilities of and co-operation between the different national authorities involved in the enforcement of the technical harmonisation legislation for motor vehicles; the quality of the type-approval and conformity assessment tasks carried out by technical services; the post-market safeguard procedures and the provisions for the recall of vehicles, procedures for ensuring conformity of production.

BUDGETARY IMPLICATION: the budgetary implication of this proposal is estimated at EUR 40.104 million (including administrative expenditure) for the period 2017-2020.

In view of the constraints of the Multiannual Financial Framework 2014-2020, the implementation of the legislative proposal will have to be built on existing resources and to be designed in such a manner that additional financial resources under the EU budget are not needed. For the period following 31 December 2020, the amount shall be subject to the multiannual financial framework in force for the period commencing in 2021.

DELEGATED ACTS: the proposal contains provisions empowering the Commission to adopt delegated acts in accordance with Article 290 of the Treaty on the Functioning of the European Union.