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, which is why we have summarized the innovations of the VerpackG that are relevant for every store operator of physical goods.
What is new about the Packaging Act?
The Packaging Ordinance (VerpackV) currently in force 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. All sales, service, shipping and outer packaging, as well as filling material, which is generated as waste by private consumers, must then be returned via the so-called dual system. The manufacturer or retailer therefore does not organize the licensing and recycling of its packaging itself, but commissions a provider such as Grüner Punkt to do so.
Why is the Packaging Act important for online store operators?
The new packaging law applies to all online retailers - even if they only circulate small quantities of packaging. Without exception, they must register with the central office and report their packaging generated. To ensure transparency, the businesses are then published on the Internet. In addition, online retailers must note that they cannot have the shipping packaging used participate in the dual system through a pre-distributor (e.g.: supplier of the packaging material). The system participation obligation therefore lies with each retailer who puts the packaging into circulation for final consumption. The digital register is scheduled to be opened for registration in summer 2018. Traders must register independently and in person with the central office of the packaging register in a timely manner, i.e. before the packaging materials 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:
- Registration obligation: Manufacturers and distributors must register with the central body before placing packaging on the market, otherwise products subject to the system participation obligation may not be sold.
- System participation obligation: (Online) retailers are not allowed to organize the take-back 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 recycling of packaging as a dual system.
- Data reporting to the central body: Manufacturers or distributors are obliged to report all relevant data regarding system participation (registration number, type of material, mass of packaging involved, name of the system, period of system participation) to the central body.
- Letters of representation: In addition to the corresponding inspection reports, declarations of completeness must be filed electronically with the central office by May 15 each year. Companies that have placed less than 80,000 kilograms of glass, less than 50,000 kilograms of paper, cardboard and board, less than 30,000 kilograms of packaging made of ferrous metals, aluminum, beverage cartons or other composite packaging on the market 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, existing packaging volumes will be monitored by the Central Office. In addition, random checks will be carried out to determine which manufacturers are not complying with their reporting obligations. Since packaging licensing and participation in the dual system often means a lot of extra work for online retailers with lower packaging volumes, 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 the Packaging 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.