Duty before free: The new packaging law for online retailers

With the new German Packaging Act (VerpackG) coming into force on January 1, 2019, it is once again clear that digital commerce involves much more than simply setting up and operating an online store. Legal changes have a direct impact on day-to-day digital business, so we've summarized the new features of the VerpackG that are relevant to any store operator of physical goods.

What is new about the VerpackG?

The currently applicable Packaging Ordinance (VerpackV) will be replaced by the new Packaging Act. From now on, the responsibility for taking back and recycling packaging material that a retailer puts into circulation lies with the retailer itself. Anysales, service, shipping and outer packaging, as well as filling material, that accumulates as waste at private consumers must then be returned via the so-called dual system. Themanufacturer or retailer therefore does not organize the licensing and recycling of its packaging itself, but commissions a provider such as Green Dot to do so.

Why is the Packaging Act important for operators of online stores?

The new Packaging Act applies to all online retailers - even if they only circulate small quantities of packaging. They do not have tomust, without exception, register with theCentral Office and report their packaging generated. To ensure transparency, the businesses are then published on the Internet. In addition, online traders must note that they have to identify the usednot be able to have shipping packaging participate in the dual system through a pre-distributor (e.g.: supplier of the packaging material). The system participation obligation therefore lies with each distributor who puts the packaging intocirculation for final consumption. The digital register is scheduled to be opened for registration in summer 2018. Traders mustregister independently and in person with thecentral office ofthe packaging register in a timely manner, i.e. before thepackagingmaterials are distributed- otherwise there is a risk of fines!

What specific obligations apply to online retailers?

The new packaging law results in the following obligations for operators of online stores (and other manufacturers) with regard to shipping and packaging materials:

1. Registration obligation: manufacturers and retailers must register with thecentral officebefore placing packaging on the market, otherwise products subject to the system participation obligation may not be sold.
2. System participation obligation: (Online) retailers may not organize the return and recovery of their packaging themselves, but must turn to a dual system provider to license and dispose of their packaging. Municipalities and private providers jointly organize the take-back, sorting and recovery of packaging as a dual system.
3. Data reporting to the central office: Manufacturers or distributors are required to report all relevant information regarding system participation (registration number, material type, mass of packaging involved, name of system, period of system participation) to the Central Body.
4. Declarations of Completeness: In addition to the corresponding inspection reports, declarations of completeness must be filed electronically with the Central Body by May 15 each year. Companies that have put less than 80,000 kilograms of glass, less than 50,000 kilograms of paper, cardboard and carton, less than 30,000 kilograms of packaging made of ferrous metals, aluminum, beverage cartons or other composite packaging into circulation for the first time in the previous calendar year are exempt from the obligation to submit declarations.

The aim of the new packaging law is to ensure transparent, sustainable and competition-neutral packaging disposal. As early as 2018, the existing packaging quantities will be monitored by the Central Office. In addition, random checks will be carried out to determine which manufacturers are not fulfilling their reporting obligations. Since packaging licensing and participation in the dual system often means a great deal of additional work for online retailers with smaller packaging quantities, this process can be handed over to third-party companies. Nevertheless, store operators must register independently with the Central Office and report the relevant data in accordance with thePackaging Act.To ensure that online store operators do not suffer any financial losses, they should take care of proper licensing and registration of their packaging materials at an early stage.