Mike Josypenko, Director of Special Projects for the Institute of Export and expert, shares his guidance on assessing what local regulations will apply in the markets you are targeting.
Doing business in any market – even your own country involves understanding local regulations; these range from local laws, standards or regulations relating to products (such as consumer protection or technical standards), as well as tax and other administrative requirements.
Research the regulations in your selected country
Selling into another country also involves working within regulations – some of these may be similar to the ones that you face at home; others will be different, and must be researched and understood. Some regulations will have an impact on how you sell your goods.
- Products may need to be modified to comply with local regulations,
- Labelling or packing requirements may be different; requiring local language, or detailed information on composition, ingredients or materials used.
- Products may need to be inspected or approved before they can be sold.
These requirements need to be researched before you enter a market, as the cost of compliance may affect the sales price of your product, or the cost and profitability of your goods in that market.
What products are likely to be regulated
Product regulations can apply across a wide range of different goods and industries. Consumer products are often subject to rigorous scrutiny, usually for consumer protection reasons, and a number of goods tend to have strict import regulations in many countries;
- Food, drink & alcohol products,
- Goods coming into contact with foodstuffs (tableware, containers, packaging),
- Pharmaceutical and drug products,
- Cosmetic products
- Clothing (especially children’s clothing)
- Textile products and furnishings
- Electrical devices,
- Medical devices and equipment
All of these may be subject to regulations, which can either restrict their sale in that country, or prevent importation. The extent, reach and complexity of regulations can vary from country to country – it is estimated that the U.S. Food & Drug Administration (FDA) has an interest in between 20 – 25% of all goods imported into the USA. Many countries insist that producers or importers of foodstuffs must be registered with agencies in the country, if they wish to sell their products in that market.
Product standards are not confined to consumer goods – many other industrial and capital products may be subject to technical standards, either for reasons of safety, effectiveness, or for reasons of standardization – such as in the construction products. Even where there is no formal enforced regulatory requirement, there may be “industry standards” in place, based on the preference within the trade, or market prevalence; these can have an impact on the sales potential or otherwise of your product. Selling a product based on EU standards into a market which prefers an alternative, technically different standard of product may become an uphill task, and an exporter may be advised to turn their efforts to other, more favourable markets.
Aside from product-specific regulations, some countries also impose pre-shipment inspection procedures for goods being exported to that country. Although these are partly intended ensure that goods meet specifications or standards, they also act as a check for the destination government that the actual goods to be imported correspond to the documentation, preventing fraud or under-payment of import customs duty. In some cases these may have a cost implication for the seller, in others, the cost may be borne by the destination government or the buyer; however, even if there is no cost, it is important to understand the requirements, and to take into account the timescale for the process, when planning shipping or delivery schedules.
When exporting a physical product there are many things you should consider before shipping and I’d recommend checking out this Open to Export article about preparing a physical product for export. And if you are selling a non-physical product, this article on the preparation for selling a software or a service may be useful.
How can I find out about local regulations?
Help in uncovering details of product regulations is available from a number of sources.
The EU Market Access Database (MADb – available at: http://madb.europa.eu/madb/datasetPreviewFormIFpubli.htm?datacat_id=IF&from=publi ) offers information on regulatory and documentary requirements for specific products and countries.
DIT staff based in the network of Embassies and Consulates around the world can often advise you – ask to speak to a representative covering your product sector. Contact details are available from: https://www.gov.uk/government/publications/uk-trade-investment-ukti-worldwide-offices
Trade associations covering specific industries often have information on overseas markets, including product and technical regulations: they may also have contacts with their counterpart organization in overseas markets.
Inspection Agencies (such as Cotecna, Bureau Veritas, Intertek, SGS etc) can offer information on technical standards and inspection or approval requirements for countries.
Further help is available from the IOE Helpline – +44 (0) 1733 404400