Belgian federal government restricts the sale of personal protective equipment and medical devices that can be used in the fight against Covid-19 – Updated

On 23 March 2020, a Ministerial Decree on special measures in the context of the SARS-CoV-2 pandemic on the basis of Book XVIII of the Code of Economic Law (“the MD”) was adopted by the Belgian Minister of Economic Affairs, which restricts both the retail and wholesale distribution of certain types of personal protective equipment (“PPE”), as well as of medical devices used for treating Covid-19 patients. Further amendments have been implemented by Ministerial Decrees of 27 March and of 7 April 2020.

According to the MD’s preamble, it concerns types of PPE and devices that are very important in the fight against the coronavirus and whose availability is threatened by market disruption and measures taken by other countries.

In this blog, we provide a short description of the concerned trade restrictions followed by a legal analysis in the light of fundamental principles of European law.

Overview of the measures

The MD has been taken under Article XVIII.1 of the Code of Economic Law, which empowers the Minister to take certain measures that are strictly necessary for resolving or avoiding economic difficulties caused by exceptional circumstances or events that (can) endanger the Belgian economy’s effective functioning.

Firstly, the MD provides in Article 2 that only licensed pharmacies may sell certain medical devices (such as screening materials, disinfection wipes for medical use, respirators, etc.) if prescribed by a healthcare professional.

Sales of these products by registered distributors should be restricted to other registered distributors of the products concerned, licensed pharmacies, hospitals and licensed healthcare professionals.

Surgical masks were initially also included but removed from the list by MD of 2 May 2020. Given the important role they play in the exit strategy of the Belgian government, they can now also be sold in supermarkets.

Subsequently, Article 3 restricts the retail and wholesale distribution of the following types of PPE that can be used in the fight against the coronavirus: FFP2 and FFP3 masks, protective goggles and masks, gloves (nitrile) with a long sleeve of at least 300 mm and 12% hydrogen peroxide and nebulisers (nocospray).

Initially this list also included two biocidal products (hydroalcoholic gels and hand alcohol), but these products were deleted with the amendment of 7 April 2020, given the lack of acute shortage.

At the retail level, these types of PPE may only be sold in licensed pharmacies if they have been prescribed by a healthcare professional. Wholesalers may only offer them to the following categories of customers:

• to other wholesalers in the sector, licensed pharmacies, hospitals, and licensed health professionals;
• to undertakings that have to offer these products to their employees in implementation of the Belgian Welfare Codex.
• to undertakings that, by virtue of legal or regulatory provisions, need these types of PPE in the manufacture, processing, conservation or storage of their goods, or in the exercise of their activities.

The latter category was not initially foreseen and was added by the MD of 7 April 2020.

Finally, the MD also provides that the Federal Minister of Public Health is entitled to impose restrictions on the number of transactions, the sales and the sales volume, both for wholesale and retail sales in Belgium, and that government officials may require/order (i) stocks of certain medical devices and PPE to be redistributed, and/or (ii) the confiscation of certain medical devices and PPE at cost price.

The Royal Decree confirming the MD has already been presented to the Council of Ministers, but has not yet been adopted as it is apparently awaiting the Council of State’s advice.

Material scope of the Decree

The MD applies to a very broad range of medical devices and PPE listed in Articles 2 and 3; some of which are not always clearly defined, such as ‘screening materials’ listed in Article 2 or ‘protective glasses and masks’ listed in Article 3, and that may not all be suitable for the medical treatment of patients, but are used in other sectors.

This occasional lack of clarity is in contrast to the European Commission Implementing Regulation (EU) 2020/402 making the exportation of certain products subject to the production of an export authorisation (as last amended by Commission Implementing Regulation (EU) 2020/426)) in which the type of PPE concerned is listed in Annex 1 based on the respective CN Code and a clear description.

Compliance with EU law – free movement and solidarity

Even more importantly, the territorial scope of the sales restrictions is also not entirely clear and could give rise to confusion.

If the MD is understood as to only refer to wholesalers, authorised distributors and undertakings established in Belgium, as one could think in view of its exclusively Belgian referencing framework, then it would constitute a complete export ban on a broad range of essential products for companies in different sectors. This would undoubtedly violate the fundamental principle of the free movement of goods that applies both within the EU and for trade with EFTA countries, as well as the principle of solidarity.

In a number of recent communications, the European Commission has strongly opposed such national export bans, which have spread to an increasing range of products, starting with PPE and extending more recently to medicines. For example, in its Coordinated Economic response to the COVID-19 Outbreak of 13 March 2020 the Commission has emphasized that “it is crucial that national measures pursue the primary objective of health protection in a spirit of European solidarity and cooperation”. It has gone on to state that “restrictions on exports ignore integrated supply chains. They create bottlenecks to production of essential supplies by locking inputs in specific Member States. They disrupt logistics and distribution chains, which rely on central warehouses. They encourage stockpiling responses in the supply chain. Ultimately, they reintroduce internal borders at a time where solidarity between Member States is the most needed” (emphasis added).

The Commission response has recalled that the TFEU “allows Member States under certain strict conditions to deviate from Single Market rules. Any national restrictive measure taken under Article 36 TFEU to protect health and life of humans must be justified, i.e. suitable, necessary and proportionate to such objectives by ensuring an adequate supply to the relevant persons while preventing any occurrence or aggravation of shortages of goods, considered as essential, such as personal protective equipment, medical devices or medicinal products. Any planned national measure restricting access to medical and protective equipment must be notified to the Commission, which is to inform the other Member States thereof” (emphasis added).

Annex 2 to this communication provides guidance for Member States on how to put in place adequate control mechanisms to ensure security of supply across the EU. The Commission has clarified that “a simple export ban alone cannot meet the legal requirement of proportionality. Such a measure does not, in itself, ensure that the products will reach the persons who need them most. They would therefore prove unsuitable to reach the objective of protecting the health of people living in Europe”. According to the Commission, “measures without a clearly identified scope restricted to actual needs, a solid rationale and/or a limited duration may increase the risk of scarcity and therefore are very likely to be disproportionate”.

The same principles apply for the EFTA countries (Iceland, Liechtenstein, Norway and Switzerland) in light of the rules on free movement of goods provided for by the EEA Agreement and the Free Trade Agreement with Switzerland.

In short, exceptions to the free movement of goods during the current coronavirus crisis, where many countries are facing shortages of essential medical equipment, will be very difficult to justify and should be introduced in close cooperation with the European Commission.

Accordingly, the sale restrictions in the MD should therefore be interpreted restrictively and in a way that is compatible with EU law. This is actually also the position taken by the cabinet of the Minister of Economic Affairs as we found out when we contacted the cabinet to seek clarification. Exports to other legally registered wholesalers and authorised distributors in the EU and EFTA countries, as well as to other undertakings situated in these countries that need the PPE to manufacture, process, or store their goods, or to carry out their activities, should thus still be possible.

Exports outside the EEA and Switzerland

As regards exports outside the EEA and Switzerland, the MD is not any clearer. Less strict principles apply than to trade within the internal market, but even so, an absolute ban on exports to third countries will not be easily justified.

On the EU level, the European Commission introduced, on 15 March 2020, export authorisation requirements for certain PPE, which are listed in annex 1 of Implementing Regulation (EU) n°2020/402 and defined by CN code. These include protective spectacles and visors, face shields, mouth-nose-protection equipment, protective garments and gloves.

Applications for export authorisations must be addressed to the competent authorities of the Member State where the exporter is established. The competent authority for granting an authorisation in Belgium is the Federal Public Service Economy. More information (and the notification form) can be found on its website (in Dutch and French).

A European Commission Guidance Note provides practical guidelines for the application of the new authorisation system. The Commission has clearly indicated that the system is not an export ban. The competent authorities enjoy a margin of discretion and exports of certain quantities of specific PPE products may be authorised under specific circumstances depending on the needs of Member States.

Restrictions on the export of other types of PPE outside the EEA are possible, but should also respect the principles of proportionality and international solidarity so that export restrictions outside the EEA should only be introduced when strictly necessary in light of immediate shortages for that product. Regulation 2015/479 on common rules for exports states in its Article 1 that exports to non-EU countries “shall not be subject to any quantitative restriction, with the exception of those restrictions which are applied in conformity with this Regulation.” In principle, a Member State should send a request to the European Commission, and the latter should decide, within 5 working days, on whether to impose an export ban at the EU level in order to prevent a shortage of essential products.

Article 10 of Regulation 2015/479 permits Member States to adopt quantitative restrictions on exports if these are justified on the grounds of protection of life and human health. Against the background of Article 1, this presumably requires that urgency makes it impossible for a Member State to consult with the European Commission.

Written by

• Christophe Ronse

  Partner