VI.      TRADE REGULATIONS AND STANDARDS

Germany's regulations and bureaucratic procedures can be a
difficult hurdle for companies wishing to enter the market,
requiring close attention by U.S. exporters.  Complex safety
standards, not normally discriminatory but sometimes zealously
applied, complicate access to the market for many U.S.
products.  U.S. suppliers are well advised to do their homework
thoroughly and make sure they know precisely which standards
apply to their product, and that they obtain timely testing and
certification.

The European Union's (EU) attempts to harmonize the various
product safety requirements of its member states have
complicated the issue.  The EU harmonization of safety
requirements and related standards is being implemented for
industrial products through EU directives.  During a transition
period national requirements must be met.  (After the
transition period, the European-wide "CE" mark supersedes all
other compliance certificates, provided the products in
question are covered by an EU-directive.)

This is doubly important because, to the extent EU-wide
standards are developed, there is a high probability that the
existing German standard will form the basis for the eventual
European standard.  In many cases, Germany will also be the
first European country to implement EU-wide standards.  The
implementation of electromagnetic compatibility standards
(EMC), despite a five-year phase-in period, surprised many
affected companies - not only foreign but also German - with
the result that accredited test laboratories are booked out for
months and market introduction for some products is delayed
considerably.

German buyers may require additional performance or quality
marks, which are not necessarily legally required, but greatly
enhance a product's chances to be marketed.  Both EU
requirements and the standards for a German quality or
performance mark will, in many cases, require a product to be
modified.  Even if the product does not require modification,
it will require testing and certification before it can be
marketed.  Important marks are the "gepruefte Sicherheit" (GS)
mark for mechanical products, and the "Verband Deutscher
Elektrotechniker" (VDE) mark for electrical components.  It
should be emphasized that neither the "GS" license nor the
"VDE" license are mandatory for products sold in Germany.  The
only exception is for products for use in certain work place
applications, where either of these marks are required to meet
insurance eligibility requirements.

The German organization that compiles the standards laying down
the requirements for a "GS" mark is the "Deutscher Industrie
Normenausschuss - DIN" (German Standards Institute).  The
organization responsible for testing is the "Technischer
Ueberwachungsverein e.V. - TUV," (Technical Inspection
Association).

Although the "VDE" license deals with electrical products,
instead of mechanical products, the same process of
certification can be followed.  A company can obtain the "VDE"
literature from the VDE publisher, VDE Verlag, GmbH, or from
the VDE association directly (for contact information please
see below).

The TUV tests for both the "VDE" license and the "GS" license.
The process for "VDE" certification is the same as that of the
"GS" mark.

TUV and Certification Process for the "GS" and the "VDE"
Licenses:

TUVs are private companies set up by various German states to
inspect and test products for compliance with German safety
standards.  Individual TUVs have also been authorized by the
German Government to test products for compliance with EU
legislation, and many have established representative offices
in the United States.

Firms interested in certification should contact a U.S. TUV
office (Contact information is provided below).

Effect of EU Harmonization of Standards on the "GS" and "VDE"
mark:

The effect of EU harmonization on the "GS" and "VDE" mark is
difficult to analyze.  It is estimated that about 75 percent of
all American products sold in the EU must have the "CE" mark
once all directives have been passed and all transition periods
have expired.  Where EU directives are in place the "CE" mark
is mandatory by law for products that are covered by the
appropriate directive; the mark allows the product to be
marketed in all the EU member states.  National certificates
such as the "GS" and the "VDE" marks, may not be legally
required, but enhance marketing chances.  German consumers look
for these marks in much the same way as Americans look for the
"UL" mark.

Currently, only 11 of the 22 proposed and planned EU directives
are in place: low voltage electrical safety, toys, simple
pressure vessels, construction projects, electro-magnetic
capability, gas appliances, personal protective equipment,
machinery, active implantable medical devices, non-automatic
weighing machines, and type approval of telecommunications
terminal equipment. For products where there is as yet no EU
directive, national standards must be adhered to.

Who has the authority to actually affix the "CE" mark?  For
many products, the mark may be affixed by the manufacturer,
based on his or her own testing to verify that the product
meets EU requirements.  However, EU legislation may require
that an independent third party be involved in product
assessment.

Who is qualified to be this third party?  The EU establishes
so-called "notified bodies," i.e. testing or certification
agencies.  The majority of the TUVs have already been approved
- they will play an important role as notified bodies.