Financial Services – 23 May 2023
The Commission has adopted a retail investment package.
The package provides ambitious and far-reaching measures to:
- improve the information provided to retail investors on investment products and services, by further standardizing them and making them more relevant by adapting the information rules to the digital age and the growing investor preference for sustainability ;
- to make costs more transparent and comparable by imposing the use of standardized presentation and terminology in this respect;
- ensure that all retail clients receive at least once a year a clear statement of the performance of their investment portfolio;
- address potential conflicts of interest in the distribution of investment products, by prohibiting inducements for sales made on the basis of “pure execution” (i.e. without the provision of any advice) and ensuring that the financial advice provided is in line with the interests of retail investors;
- protect retail investors from misleading marketing practices by ensuring that financial intermediaries (i.e. advisers) are fully responsible for the use (including misuse) that is made of their marketing communication, including when it is done through social media, or provided by celebrities or other third parties they pay or offer inducements to;
- maintain high standards in the professional qualification of financial advisers;
empowering consumers to make better financial decisions, by encouraging Member States to implement national measures to develop the financial literacy of citizens, regardless of their age, social background and level of education;
- reducing administrative burdens and improving the accessibility of products and services for sophisticated retail investors, by making the eligibility criteria for professional investor status more proportionate;
- strengthen supervisory cooperation to enable national competent authorities and European supervisory authorities to ensure that the rules are effectively and correctly applied in a consistent way across the EU and to jointly fight against fraud and abusive practices.
The package consists of an amending directive, which revises the existing rules set out in the Markets in Financial Instruments Directive (MiFID II), the Insurance Distribution Directive (IDD), the Investment Undertakings Directive group in transferable securities (UCITS directive), the directive on alternative investment fund managers (AIFM directive) and the directive on access to and exercise of insurance and reinsurance activities (Solvency II directive), as well as an amending regulation, which revises the regulation on packaged retail and insurance-based investment products (PRIIPs).
Financial Services – 16 May 2023
The Council of the Union has reached an agreement in principle on new tax transparency rules applicable to all service providers facilitating transactions involving crypto-assets for customers residing in the European Union.
Based on a Commission proposal, the new rules complement the Crypto-Asset Markets Regulation (MiCA) and the Transfer of Funds Regulation (TFR), and fully comply with the OECD initiative on crypto-asset reporting framework.
The Directive will improve Member States’ ability to detect and combat tax fraud, avoidance and evasion, by requiring all EU-based crypto-asset service providers, regardless of their size, that they report the transactions of customers residing in the EU.
In addition, the scope of the updated directive has been extended to include reporting obligations for financial institutions with regard to electronic money and central bank digital currencies, as well as the automatic exchange of information on cross-border tax rulings used by natural persons.
The new reporting requirements for crypto-assets, e-money and central bank digital currencies will enter into force on 1 January 2026. These new rules can be definitively adopted once the European Parliament has issued its advisory opinion.
Intellectual Property – 27 April 2023
The Commission has proposed new regulations on patents, compulsory licenses and supplementary protection certificates.
Standard-essential patents (SEPs), which protect technology declared essential to the application of a technical standard adopted by a standard-setting organization, benefit from a monopoly conferred by these specific patents, counterbalanced by the commitment of SEP holders to license these patents on fair, reasonable and non-discriminatory (FRAND) terms. The proposal introduces measures on the following aspects: a register, a database and essentiality checks for SEPs, expert opinions on the aggregate fee for SEPs, the determination of FRAND terms by way of conciliation instead of costly litigation, support measures for SMEs and the creation of a ‘competence centre’ within the European Union Intellectual Property Office (EUIPO).
The Commission will determine which standards, their applications or their use cases would be excluded from the process of setting aggregate royalties and FRAND conciliation when the licensing of the SEPs in question does not present any major difficulty or inefficiency having a impact on the functioning of the internal market. Standards published before the entry into force of the regulation will not fall under it, unless specific market distortions due to inefficiencies in the licensing of SEPs lead the Commission to include them in its scope. of application
Regarding compulsory licensing (which allows governments to authorize the use of a patented invention without the consent of the patent owner), there is a patchwork of 27 national compulsory licensing regimes. The new rules provide for a new EU-wide compulsory licensing instrument.
Concerning the supplementary protection certificate (intellectual property right which extends the term of a patent by a maximum of five years for a pharmaceutical product for human or veterinary use or a phytopharmaceutical product), a unit SPC is created at the scale of the ‘Union for intended to supplement the unitary patent. It is accompanied by a centralized examination procedure, implemented by the EUIPO, in close cooperation with the national offices. Under this scheme, a single application will be subject to a single examination procedure which, if successful, will lead to the granting of national SPCs for each of the Member States named in the application. The same procedure can also lead to the granting of a unit SPC.
The 2023 SME Fund will now make available new voucher services relating, for the first time, to European patents and new plant varieties. These new services will allow SMEs to save, per application, up to €1,500 on their patent registration costs and up to €225 on the registration of new plant varieties.
Digital Economy – 25 April 2023
The Commission adopted the first designation decisions under the Digital Services Regulation, designating 17 very large online platforms and 2 very large online search engines, with at least 45 million monthly active users.
This is in line with the Digital Services Regulation proposed on the 15 December 2020. Following the political agreement reached a year ago between EU co-legislators in April 2022, the Digital Services Regulation entered into force on 16 November 2022.
Are concerned by these decisions:
- Very large online platforms: Alibaba AliExpress, Amazon Store, Apple AppStore, Booking.com, Facebook, Google Play, Google Maps, Google Shopping, Instagram, LinkedIn, Pinterest, Snapchat, TikTok, Twitter, Wikipedia, YouTube, Zalando.
- Very large online search engines: Bing, Google Search.
The platforms were designated on the basis of user data that they had to publish by February 17, 2023.
Following their designation, companies will have to comply, within four months, with all the new obligations arising from the regulation on digital services. These seek to empower and protect online users, including minors, by requiring designated services to assess and mitigate their systemic risks and provide tools for effective content moderation.
- Users will be clearly informed of the reasons why certain information is recommended to them and they will have the right to opt out of recommendation systems based on profiling;
- Users will be able to easily report illegal content and platforms will have to deal with these reports diligently;
- Users’ sensitive data (such as ethnic origin, political opinions or sexual orientation) will not be able to be used to select the advertisements presented;
- Platforms should:
- label all advertisements and identify their promoters to users;
provide an easily understandable summary of their terms and conditions, written in plain language, in the languages of the Member States where they operate.
- redesign their systems to ensure a high level of privacy, safety and security for minors;
- label all advertisements and identify their promoters to users;
- Advertising based on profiling aimed at children is no longer permitted;
- Special risk assessments, including adverse effects on mental health, must be provided to the Commission 4 months after designation and made public no later than one year later;
- Platforms should:
- have clear terms and conditions and enforce them diligently and in a non-arbitrary manner;
put in place a mechanism allowing users to report illegal content, and must react promptly to such reports;
- analyze their specific risks and put in place mitigating measures, for example to prevent the spread of misinformation and inauthentic use of their services.
- submit to an external and independent audit their risk assessment and the measures they take to ensure compliance with all obligations arising from the Digital Services Regulation;
- allow researchers to access publicly available data. Subsequently, a special mechanism will be put in place for accredited researchers;
make public the register of all advertisements presented on their interface;
- publish transparency reports on content moderation decisions and risk management.
- have clear terms and conditions and enforce them diligently and in a non-arbitrary manner;
No later than 4 months after the notification of the designation decisions, the designated platforms and search engines must have adapted their systems, resources and compliance processes, set up an independent compliance monitoring system, carried out their first assessment annual risk assessment and have communicated it to the Commission.
Platforms will need to identify, analyze and mitigate a range of systemic risks, ranging from how illegal content and disinformation can be amplified through their services to the impact on freedom of expression and media freedom. Similarly, particular risks related to online gender-based violence or the protection of minors online and their mental health need to be assessed and mitigated. The risk mitigation plans of designated platforms and search engines will be subject to independent audit and monitoring by the Commission.
The Digital Services Regulation will be implemented through a pan-European oversight architecture. The Commission is the competent authority to monitor the designated platforms and search engines, but it will work closely with the coordinators for digital services within the monitoring framework established by the Digital Services Regulation. Member States have until 17 February 2024 to establish these national authorities, which are also responsible for monitoring smaller platforms and search engines. This date is also the deadline by which all other platforms must comply with their obligations under the Digital Services Regulation and provide their users with the protection and guarantees it provides.
To enforce the Digital Services Regulation, the Commission is also strengthening its expertise through multidisciplinary, internal and external knowledge. She also recently launched the European Center for Algorithm Transparency. The latter will help to determine whether the operation of algorithmic systems complies with risk management obligations. The Commission is also setting up a digital enforcement ecosystem, which brings together expertise from all relevant sectors.
Financial services – 18 April 2023
The European Commission has adopted a proposal to strengthen the banking crisis management framework and deposit insurance, with particular attention to medium and small-sized banks.
The proposal pursues the following objectives:
- Use of deposit guarantee schemes in crisis situations to protect depositors (individuals, companies, public entities, etc.) from losses, when necessary to avoid contagion to other banks and negative effects on the community and the economy. By relying on industry-funded safety nets (such as deposit guarantee schemes and resolution funds), the proposal also better protects the taxpayer, who will not be called upon to preserve financial stability. Deposit guarantee schemes can only be used for this purpose once banks have exhausted their internal loss-absorbing capacity, and only in the case of banks which were already initially intended to be subject to A resolution.
- Guarantee level of EUR 100,000 per depositor per bank, provided for by the Directive on deposit guarantee schemes, maintained for all eligible depositors in the EU. The new framework extends depositor protection to public entities (hospitals, schools, municipalities), as well as to customer money deposited in certain types of “customer funds” (e.g. with investment companies, payment institutions or electronic money institutions). The proposal includes additional measures to harmonize the protection of temporarily high bank account balances when they exceed EUR 100,000 due to specific life events (such as inheritance or insurance compensation).
Trade – 17 February 2023
The European Commission has forwarded the trade agreement between the European Union and New Zealand to the Council for signature. Once the Council has given its green light, the Union and New Zealand can sign the agreement and it can be sent to the European Parliament for approval. Once approved, the agreement can enter into force.
According to the Commission, bilateral trade is expected to increase by up to 30% and, in terms of annual EU exports, the increase is likely to reach €4.5 billion. EU investments in New Zealand have a growth potential of up to 80%. The agreement can reduce customs duties for EU businesses by around €140 million a year from the first year of application.
The agreement will provide new opportunities for companies by:
- the elimination of all customs duties on EU exports to New Zealand;
- the opening of the New Zealand services market in key sectors such as financial services, telecommunications, shipping and delivery services;
- the non-discriminatory treatment guaranteed to EU investors in New Zealand and vice versa;
- improving access for EU companies to New Zealand procurement contracts for goods, services, works and works concessions;
- facilitation of data flows, predictable and transparent rules for digital trade and a secure online environment for consumers;
- preventing unjustified data localization requirements and maintaining high standards of personal data protection;
- help to enable small businesses to export more, thanks to a chapter dedicated specifically to small and medium-sized enterprises;
- a significant reduction in compliance requirements and procedures to allow faster movement of goods;
- significant commitments by New Zealand to the protection and enforcement of intellectual property rights, aligned with EU standards.
Customs duties will be abolished from day one on the Union’s main agri-food exports. In addition, 163 of the Union’s most renowned traditional products will be protected in New Zealand.
The agreement takes into account the interests of EU producers of sensitive agricultural products: several dairy products, beef and sheepmeat, ethanol and sweet corn. For these sectors, there will be no trade liberalisation. Instead, the agreement will allow zero- or reduced-rate imports from New Zealand only for limited quantities (through tariff rate quotas).
European Union – 1st January 2023
The European Commission has soberly welcomed the 30th anniversary of the Single Market, which entered into force on 1 January 1993. Decided by the Single Act of 1986, it complements the free movement of goods, services, capital and workers decided in 1958, by also allowing the harmonization of an increasing part of the legislation applicable in the 27 Member States.
The Single Market has several interesting corollaries for the affirmation of the European project. Internally, it enabled the establishment in 1992 of true co-decision between the member governments meeting in the Council of the Union and the European Parliament elected by universal suffrage.
Externally, access to a powerful single market of several hundred million consumers who are among the wealthiest in the world and who are similar in their consumption habits has become a major negotiating tool for the European Union with its trading partners in the world.
Finally, the Single Market makes it possible to quite largely overcome the reluctance of certain European countries to join the Union as such. This is how several non-member countries are part of the Single Market, applying all its rules without participating in their development and adoption : Norway, Iceland and Switzerland in particular.
On the other hand, the United Kingdom did not wish to remain in the Single Market by leaving the European Union in 2021. For the European Union, it has become a foreign state with a trade agreement in the same way as Mexico or Vietnam. If its legislation still resembles that of the European Union at first, it is likely that it will move away from it in several areas over the years.
European Union – 1st January 2023
On January 1, 2023, Croatia joined the euro as a currency and fully joined the Schengen area. Together with Croatia, 20 EU Member States and 347 million EU citizens will share the common EU currency. As for Schengen, it is the eighth enlargement and the first after 11 years. The euro will bring concrete benefits to Croatian citizens and businesses. It will make traveling and living abroad easier, enhance market transparency and competitiveness, and facilitate trade. The Schengen area allows 420 million people to travel freely between member countries without going through border controls. It makes it possible to develop a common and shared responsibility for the control of the Union’s external borders and the responsibility for issuing common Schengen visas.
From January 1, 2023, the euro will gradually replace the kuna as the currency of Croatia. In line with a consistent history of exchange rate stability, the kuna will be exchanged at a conversion rate of 1 euro to 7.53450 Croatian kuna. The two currencies will be used side by side for a period of two weeks. When receiving a payment in kuna, change will be given in euros. This will allow a gradual withdrawal of the kuna from circulation.
Only Denmark (benefiting from an exemption since 1992), Sweden, Poland, Hungary, the Czech Republic, Romania and Bulgaria still remain outside the euro zone while being part of the European Union.
Four micro-states (Andorra, Monaco, San Marino and the Vatican) and two British bases located in Cyprus (Akrotiri and Dhekelia) are also authorized to use the euro and two non-member European countries, Montenegro and Kosovo l de facto use. Other countries have their national currencies linked to the euro due to a previous peg to the French franc, the Portuguese escudo or the German mark: Benin, Bosnia and Herzegovina, Burkina Faso, Cameroon, Cape Verde, Comoros , Congo Brazzaville, Ivory Coast, Gabon, Equatorial Guinea, Guinea-Bissau, Mali, Niger, New Caledonia, French Polynesia, Wallis and Futuna, Central African Republic, Sao Tome and Principe, Senegal, Chad, Togo .
Since joining the EU in 2013, Croatia has applied parts of the Schengen acquis, including those related to external border controls, police cooperation and use of the Schengen Information System.
The other parts of the Schengen acquis, which include the lifting of internal border controls and related measures, will become applicable from 1 January 2023: internal land and sea border controls between Croatia and other Schengen area will be lifted. Internal air border controls will be lifted from March 26, 2023, taking into account the need to coincide with the dates of the International Air Transport Association (IATA) summer/winter timetable.
The rules of the Schengen area were absorbed into European Union law through the Treaty of Amsterdam in 1999, although the area also includes three non-EU states — Iceland, Norway and Switzerland – and de facto four European microstates – Liechtenstein, Monaco, San Marino and the Vatican, as well as since Brexit, the British overseas territory of Gibraltar. All the states of the Union, except one — Ireland — must eventually implement the Schengen acquis.
With the exception of Bulgaria, Cyprus and Romania, all other EU Member States are already participating.
Trade – 29 December 2022
New guidance issued by the US reaffirms that EU companies can benefit from the Commercial Clean Vehicle Credit scheme under the US Inflation Reduction Act. Under the US guidance, Commercial Clean Vehicle Credits will be available to EU companies without requiring changes to established or foreseen business models of EU producers.
The EU continues to seek similar, non-discriminatory treatment of EU clean vehicle producers under the Clean Vehicle Credits of the Inflation Reduction Act. This scheme remains of concern to the EU, as it contains discriminatory provisions which de facto exclude EU companies from benefiting.
Further work is ongoing in the EU-US Inflation Reduction Act Task Force to find solutions to European concerns, for example by treating the EU the same way as all US FTA partners.
The US Inflation Reduction Act (signed into law on 16 August 2022) offers generous financial incentives to support the green transition. In the case of clean vehicles, the two main incentives are tax credit programmes: one for commercial operators and one for private consumers. The consumer tax credit contains several provisions, including local content, production or assembly requirements, which discriminate against EU automotive producers, thus risking weakening competition and raising prices. The EU strongly objected to this, following which the EU and the US launched the EU-US Task Force on the Inflation Reduction Act on 25 October 2022.
Agricultural Policy – 14 December 2022
The approval of all 28 strategic plans (one for each EU country and two for Belgium) by the European Commission marks the launch of the new common agricultural policy, scheduled for 1 January 2023. The European Commission presented its proposal for the reform of the Common Agricultural Policy (CAP) in 2018, introducing a new way of working to modernize and simplify EU agricultural policy. The new CAP legislation was formally adopted on December 2, 2021.
EU funding of €264 billion will help European farmers adapt to the transition to a sustainable and resilient agricultural sector, and help preserve the vitality and diversity of rural areas. Co-financing and complementary national funding will bring the total public budget allocated to farmers and rural communities to €307 billion for the period 2023-2027.
CAP direct payments remain a safety net for farmers. Almost €20 billion of basic income support will be allocated each year to eligible farmers. However, this aid is conditional on the application by farmers of reinforced basic standards in terms of good agricultural and environmental conditions (GAEC). GAECs are expected to cover nearly 90% of agricultural land in the EU. Small and medium-sized farms in 25 EU countries will benefit from higher income support through a redistributive payment amounting to 10.6% of all direct payments. This amount will amount to €4 billion per year, 2.5 times more than the redistributive payments under the current CAP (2014-20), applied only by ten Member States.
To help farmers cope with crises, 15% of EU farms will receive support to take out insurance premiums, participate in mutual funds or other risk management tools. Support for protein crops/legumes, provided through coupled income support, will increase by 25% compared to 2022, helping to reduce the dependence of EU farmers on imports and the use of certain fertilizers. Seventeen other sectors in difficulty will also benefit from coupled support, representing 21% of farms in the EU.
Three of the ten specific objectives of the CAP relate directly to the environment and the climate. Thanks to the ‘no backsliding’ clause, Member States are required to show higher ambitions in their strategic plans compared to the current situation. In the CAP Strategic Plans, almost €98 billion, or 32% of the total CAP funding (EU and co-funding), will be dedicated to achieving benefits for climate, water, soil, air, biodiversity and animal welfare, and encouraging practices that go beyond mandatory conditionality; 24% of direct payments are allocated to eco-schemes and 48% of rural development spending across all plans will fully support environmental and climate objectives.
The plans will encourage land managers to store carbon in soil and biomass, reduce greenhouse gas (GHG) emissions and contribute to the adaptation of 35% of the EU’s agricultural area through appropriate management practices, such as extensive grassland management, cultivation of legumes and catch crops, organic fertilization or agroforestry.
Based on the new obligations imposed on farmers, crop rotation should cover around 85% of the arable land benefiting from CAP support. This will help disrupt pest and disease cycles and therefore reduce pesticide use and associated risks. Going further, more than 26% of EU farmland will receive support to, among other things, adopt integrated crop protection practices and use non-chemical methods of pest control or precision farming.
CAP support for organic production in 2027 will be almost doubled compared to the area supported in 2018. 30% in 2030. Planned investments in the production of renewable energy on farms will increase the EU’s energy production capacity by 1.556 MW.
Specific support for young farmers features prominently in every approved plan, and EU countries have gone beyond the minimum requirement of devoting 3% of their direct payments to generational renewal. In total, €8.5 billion of public spending will help young farmers to set up, invest and maintain their business during their first years of activity. For the period 2023-2027, the installation of 377,000 additional full-time young farmers is planned. Some Member States plan further efforts to encourage farm succession, improve gender equality in rural areas and strengthen the position of women in agriculture.
Local development is also boosted by the 7.7% of the European Agricultural Fund for Rural Development (EAFRD), dedicated to community-led local development strategies (LEADER approach), representing €5 billion. Once in place, these strategies should cover 65% of Europe’s rural population. For the first time, CAP payments will be linked to compliance with certain EU social and labor standards and beneficiaries will be incentivized to improve working conditions on farms.
The plans will support investments to make living and working in rural areas more attractive, with the aim of creating at least 400,000 jobs. Similarly, support will be provided for investment in digital technologies and services to optimize the efficient use of resources. More than 6 million people will directly benefit from advice, training and knowledge exchange funded by the CAP, or participate in innovation projects under the European Innovation Partnership, focusing on environmental and climate performance or on social and rural aspects.
Taxation – 13 December 2022
Unanimous agreement has been reached in the Council of the EU on the Commission’s proposal for a directive guaranteeing an effective minimum tax rate for large multinational groups.
The Council Directive, to be formally adopted by the Council by written procedure, includes a common set of rules on the method of calculating the minimum effective tax rate of 15%, so that it is applied appropriately and consistent across the EU. The minimum tax rate of 15% has been approved globally by 137 countries.
The rules will apply to multinational corporate groups and large national groups in the EU with combined financial revenues of more than €750 million per year. They will apply to all large groups, whether national or international, which have a parent company or a subsidiary located in an EU Member State. If the minimum effective rate is not applied by the country in which the subsidiary is established, provisions are made to allow the Member State of the parent company to apply an “additional” tax. The directive also ensures effective taxation in cases where the parent company is located outside the EU in a low-tax country that does not apply equivalent rules.
Member states will have to comply with the new rules by December 31, 2023.
Digital Economy – 13 December 2022
The European Commission has initiated the process of adopting an adequacy decision regarding the EU-US data protection framework.
The project follows President Biden’s October 7, 2022 signing of a U.S. Executive Order, as well as regulations passed by U.S. Attorney General Merrick Garland. These two instruments transposed into American law the agreement in principle announced by President von der Leyen and President Biden in March 2022.
US businesses will be able to join the EU-US Data Protection Framework by committing to a detailed set of privacy obligations, such as the obligation to delete personal data when they are no longer necessary for the purpose for which they were collected, and to ensure continuity of protection when personal data is shared with third parties. EU citizens will benefit from several avenues of redress if their personal data is processed in breach of the framework, including free access to independent dispute resolution mechanisms and an arbitration panel.
In addition, the US legal framework provides a number of limitations and safeguards with respect to US government access to data, particularly for criminal law enforcement and national security purposes. These include the new rules introduced by the US Presidential Executive Order, which addressed concerns raised by the Court of Justice of the European Union in the Schrems II ruling:
- US intelligence access to European data will be limited to what is necessary and proportionate to protect national security;
- EU citizens will have the opportunity to seek redress in relation to the collection and use of their data by US intelligence services before an independent and impartial redress mechanism, which includes a Court of newly created data protection. The Court will independently investigate and decide complaints from Europeans, including by adopting binding remedies.
European companies will be able to rely on these safeguards for transatlantic data transfers, including when using other transfer mechanisms, such as standard contractual clauses and binding corporate rules.
Environmental policy – 13 December 2022
The European Parliament and the Council have reached an agreement on the Carbon Border Adjustment Mechanism (CBAM), which sets a fair price for the carbon emitted during the production of carbon-intensive goods that enter the EU, and encourage cleaner industrial production in third countries. The agreement will be complemented by the revision of the emissions trading system (ETS), which will be subject to negotiations and will align the phasing out of the free allocation of allowances with the introduction of the CBAM to support the decarbonisation of EU industry.
By ensuring that a price is paid for the embodied carbon emissions generated during the production of certain goods imported into the EU, the CBAM will provide certainty that the carbon price for imports is equivalent to the applicable carbon price. domestic production, thus ensuring that EU climate objectives are not compromised. The CBAM is designed to be compatible with WTO rules.
Taxation – 8 December 2022
The European Commission has proposed amendments to three pieces of EU legislation:
- the VAT Directive (2006/112/EC),
- Council Implementing Regulation (EU) 282/2011 and
- the Council Regulation on administrative cooperation ( EU 904/2010).in matters of value added tax (VAT).
The objective is to be able to ensure in the Union:
- The shift to real-time digital reporting based on e-invoicing for businesses doing cross-border business in the EU;
- The update of the VAT rules applicable to passenger transport and short-term accommodation platforms;
- The introduction of a single VAT registration across the Union.
Financial Services – 7 December 2022
The European Commission has presented measures on compensation, corporate insolvency and listing.
The compensation package includes:
- a communication;
- a regulation amending the European Market Infrastructure Regulation (EMIR), the Capital Requirements Regulation (CRR) and the Money Market Funds Regulation;
- a directive amending the capital requirements directive (CRD), the investment firms directive and the directive on undertakings for collective investment in transferable securities (UCITS).
The proposed measures will make it faster and easier for EU central counterparties (CCPs) to develop their products, and by strengthening the incentives for EU market participants to clear their contracts with these CCPs and increase their level of liquidity. They will strengthen the EU supervisory framework for central counterparties. For example, they will increase the transparency of margin calls, so that market participants (notably companies in the energy sector) can better predict them. They will reduce excessive exposures of EU market participants to third-country CCPs, in particular on derivatives listed by the European Securities and Markets Authority as being of considerable systemic importance. The proposed measures thus require all market participants concerned to hold active accounts with central counterparties in the EU for the clearing of at least part of certain systemic derivative contracts.
The Business Insolvency Initiative includes a directive on business insolvency. The proposed provisions will harmonise certain aspects of EU-wide insolvency proceedings. They provide for example:
- measures to preserve the estate from insolvency (ie avoid actions by debtors that would reduce the value recoverable by creditors);
- creditors’ committees, to ensure an equitable distribution of the recovered value among creditors;
- so-called pre-package procedures (in which the sale of the business is concluded before the start of insolvency proceedings);
- the obligation for managers to request the opening of insolvency proceedings quickly in order to prevent the company from losing value.
They introduce a simplified regime for micro-enterprises which will reduce the cost of liquidation and free the owner of his debts, thus enabling him to make a fresh start as an entrepreneur. They will require Member States to produce an information sheet summarizing the main elements of their national insolvency law, in order to facilitate decisions for cross-border investors.
The rating package includes:
- an amending regulation amending the Prospectus Regulation, the Market Abuse Regulation and the Markets in Financial Instruments Regulation;
- an amending directive amending the Markets in Financial Instruments Directive and repealing the Listing Directive;
- a guideline on multiple voting shares.
The changes will simplify the documentation that companies need to gather to access stock markets and streamline the control procedures of national supervisory authorities, which will make going public faster and cheaper, whenever possible. They will simplify and clarify certain rules relating to market abuse, without compromising the integrity of the market. They will help companies to make themselves more visible to investors, by encouraging investment research, in particular for small and medium-sized companies.
They will allow business owners to access SME growth markets through the use of multi-voting share structures, allowing them to maintain sufficient control over their company post-IPO, without this affects the rights of other shareholders.
Digital Economy – 10 November 2022
The European Parliament adopted by 577 votes for, 6 against and 31 abstentions new legislation, which was already the subject of an agreement between Parliament and the Council in May, and which defines stricter obligations in the cybersecurity in terms of risk management, reporting and information sharing. These obligations include incident response, supply chain security, encryption, and vulnerability disclosure, among other provisions.
More entities and sectors will need to take protective measures. “Essential sectors” such as energy, transport, banking, digital infrastructure, public administration and the space sector will be covered by the new security provisions.
The new rules will also protect so-called “important” sectors like postal services, waste management, chemicals, food, medical device manufacturing, electronics, machinery, vehicle engines and digital suppliers. . All medium and large-sized companies will be subject to this legislation.
The text also establishes a framework for better cooperation and information sharing between different authorities and Member States and creates a European database on vulnerabilities.
Competition Policy – 10 November 2022
The European Parliament has adopted new legislation, by 598 votes for, 5 against and 9 abstentions, which allows the European Commission to investigate subsidies granted by non-European public authorities to companies operating in the EU. If these subsidies are found to be distorting, the Commission may apply measures to remedy this and prevent companies benefiting, for example, from interest-free loans, reduced-cost financing, preferential tax treatment or direct state aid, outbid European competitors in mergers, acquisitions and public procurement procedures.
The legislation addresses a long-standing legal vacuum, as no regulatory regime applies to support from non-EU member states, while EU member states are strictly subject to EU rules on state aid.
Under the new rules, companies will have to notify the Commission of planned mergers and acquisitions, if one of the parties involved has a turnover of at least €500 million in the EU and if there is a contribution foreign financial institution of at least 50 million euros. The Commission will also investigate tenders in public procurement if the value of a contract is at least €250 million.
Following Parliament’s approval, the Council is expected to formally adopt a deal on November 28. The legislation is expected to enter into force 20 days after its publication in the EU Official Journal.
Environmental Policy – 10 November 2022
The Corporate Sustainability Reporting Directive (CSRD) was passed by the European Parliament with 525 votes in favour, 60 against and 28 abstentions. It aims to make companies more responsible by requiring them to regularly publish data on their societal and environmental impact, and thus to fill the gaps in the existing legislation on the publication of non-financial information (NFRD), considered today grossly inadequate and unreliable.
In order to ensure the reliability of the information provided by the companies, they will be subject to certifications and independent audits. Financial and sustainability information will be put on an equal footing, providing investors with reliable and comparable data. Sustainability information should also be searchable and accessible online.
The new EU sustainability reporting obligations will apply to all large companies, whether listed or not. Non-European companies that carry out a substantial activity in the EU (a turnover of more than 150 million euros) will also have to comply with it. Listed SMEs will also be subject to these obligations, although they will be given additional time to comply.
For almost 50,000 companies in the EU, collecting and publishing information on their own sustainability will become the norm, whereas today only 11,700 companies are covered by the scope of EU law.
The Council is expected to adopt the proposal on November 28, which will then be signed and published in the Official Journal of the EU. The directive will enter into force 20 days after its publication. The application of the rules will start between 2024 and 2028:
– From 1 January 2024, for public-interest companies with more than 500 employees, already subject to the directive on the publication of non-financial information, the publication of reports is expected in 2025;
– From 1 January 2025, for large companies that are not currently subject to the directive on the publication of non-financial information (with more than 250 employees and/or 40 million euros in turnover, and /or 20 million euros of assets in total), the publication of the reports is expected in 2026;
– From 1 January 2026 for SMEs and other listed companies, with reports due in 2027.
SMEs can choose not to participate until 2028.
Financial Services – 8 November 2022
As part of strengthening the resilience of banks operating in the Union, their supervision and their risk management, the Council of the Union adopted its position on the new capital requirements and the regulation on own funds proposed by the European Commission.
As regards the limitation of the variability of banks’ capital levels, the calculation of which is carried out using internal models via what is known as the “capital capital floor”, the Council specifies that the limit applies both at the level of the banking group and at the level of each bank taken in isolation. Member States will nevertheless have the possibility, if they wish, to apply the capital floor at the highest level of consolidation for entities in their country.
In its position, the Council added technical improvements in the areas of credit risk, market risk and operational risk. It also added reinforced proportionality rules for small banks, in particular with regard to the information obligations incumbent on small and non-complex institutions.
The Council also revised the Commission’s proposals relating to the “fit and proper assessment framework” intended to assess the suitability of members of management bodies and holders of key positions in institutions, taking greater account of national specificities and practices. Similarly, a more proportionate and targeted framework has been imposed with regard to the waiting periods that staff and members of the governance bodies of competent authorities must respect before they can take up a position within a supervised institution.
Last, but not least, the proposal aims to harmonize the minimum requirements for branches of third-country banks and the supervision of their activities in the EU, as well as to harmonize supervisory tools and powers in order to make the framework best suited to the specific market conditions of the Member States.
The EU will thus be able to complete the transposition of the Basel III international agreements concluded by the EU and its G20 partners within the Basel Committee.
Competition Policy – 8 November 2022
The European Commission has launched a public consultation on its draft revised notice on market definition. The Communication on market definition is being revised for the first time since its adoption in 1997, in order to take into account the important developments of recent years, in particular digitization and new modes of supply of goods and services, and take into account the interconnected and globalized nature of trade.
The proposed changes provide new or additional guidance.
- explanations of the principles of market definition and how it is used for competition enforcement purposes;
- increased emphasis on non-price elements, such as innovation and quality of products and services;
- clarification regarding the prospective application of market definition, particularly in markets that are expected to undergo structural transitions, such as technological or regulatory changes;
- new guidance on market definition for digital markets, eg multi-sided markets and ‘digital ecosystems’ (eg for products built around a mobile operating system);
- new principles on innovation-intensive markets, specifying how markets should be examined when companies compete for innovation, including through products under development;
- further guidance on geographic market definition, including on the conditions for defining global markets, the approach taken to assess imports as well as the Commission’s approach to local markets defined by catchment areas (eg for the retail sale of consumer goods);
- details of quantitative techniques, such as the SSNIP (‘slight but significant and non-transitory increase in price’) test, which the Commission may use when defining a market;
- expanded guidance on possible sources of evidence and their probative value, based on practical experience and the Commission’s factual approach to market definition.
Financial Services – 26 October 2022
The European Commission presented a legislative proposal to make instant payments in euros accessible to all individuals and businesses with a bank account in the EU or in an EEA country.
The proposal, which amends and modernizes the 2012 Single Euro Payments Area Regulation, known as the SEPA Regulation, includes four requirements for instant euro payments:
- obligation for EU payment service providers who already offer credit transfers in euros, to also offer, within a fixed period, their instant version;
- obligation for payment service providers not to charge instant payments in euros at a higher price than traditional and non-instant transfers in euros;
- obligation for service providers to verify the concordance between the bank account number (IBAN) and the name of the beneficiary provided by the payer in order to alert the latter of a possible error or fraud before the payment is made;
- procedure by which payment service providers will carry out at least daily checks on their customers against the EU sanctions lists, instead of checking all transactions one by one.
Financial Services – 19 October 2022
The Council and the European Parliament reached a provisional agreement on a revision of the regulation on European long-term investment funds (ELTIF) intended to make these investment funds more attractive. In particular, they clarified the definition of eligible assets and investments, portfolio composition and diversification requirements, conditions for borrowing and lending cash and other rules applicable to funds, including durability.
The regulatory framework sets out detailed fund rules regarding eligible assets and investments, portfolio diversification and composition, leverage limits and marketing. ELTIFs are the only type of funds dedicated to long-term investments that can be distributed to both professional and retail investors on a cross-border basis. However, since the adoption of the Regulation in 2015, only a few ELTIFs have been launched due to significant constraints on the distribution process (“demand side”) and strict rules regarding the composition of portfolios (“demand side”). of the offer”).
After the technical and legal finalization, the finalized text will be submitted to the Council and the European Parliament for adoption.
Financial Services – 4 October 2022
The Council adopted a regulation which strengthens the prudential regulatory framework for credit institutions operating in the Union. The ‘Daisy Chain’ regulation introduces targeted adjustments that improve the resolvability of banks. It helps to ensure that banks remain resilient and capable of withstanding shocks.
Regulation (EU) No 575/2013 of the European Parliament and of the Council (the Capital Requirements Regulation or CRR) establishes together with Directive 2013/36/EU of the European Parliament and of the Council (the Capital Requirements Directive or CRD) the prudential regulatory framework for credit institutions operating in the Union.
This banking prudential framework is complemented by rules on the resolution of banks, i. e. the orderly exit of all or parts of a banking business to avoid the destructive impact of bankruptcies where relevant and possible. The last update to the banking resolution framework (‘BRRD2’) entered into force in 2019, but issues had later been identified, calling for additional fixes. The Daisy Chain proposal aims to address those issues.
Such formal adoption of the regulation is the final step in the process.
European Union – 23 June
The European Council decided to grant candidate country status to Ukraine and Moldova. In the coming years, these two countries will have to demonstrate chapter by chapter their application of all European legislation and rules. Their efforts will be validated chapter by chapter unanimously by the 27 Member States.
Social Affairs – 7 June 2022
The European Parliament and the Council of the Union adopted a directive on minimum wages proposed by the Commission in October 2020. It will enter into force 20 days after its publication in the Official Journal, and Member States will have to transpose it into national law within two years.
The Directive establishes a framework by encouraging collective bargaining on wage setting and improving workers’ effective access to the protection offered by minimum wages. It does not oblige Member States to introduce statutory minimum wages, nor does it set a common level of minimum wages across the Union. Member States that apply statutory minimum wages will need to put in place a strong governance framework for setting and updating minimum wages. This includes in particular:
- clear criteria for setting the minimum wage (including: purchasing power, taking into account the cost of living, level, distribution and growth rate of wages, and national productivity);
- the use of indicative benchmarks to guide the assessment of the adequacy of minimum wages, with the directive giving guidance on which values can be used;
- regular and timely updates of minimum wages;
- the creation of consultative bodies in which the social partners could participate;
ensuring that variations and deductions from statutory minimum wages respect the principles of non-discrimination and proportionality, including the pursuit of a legitimate aim; and
- the effective participation of the social partners in setting and updating legal minimum wages.
In all Member States, the directive supports collective bargaining. It asks Member States whose collective bargaining coverage is below 80% to draw up an action plan to promote collective bargaining. Member States will have to collect data on the coverage and adequacy of minimum wages and ensure that workers have access to dispute resolution and a right of redress.
Financial Services – 11 May 2022
The European Commission has proposed a reform of the rules on the distance marketing of financial services to consumers.
The proposal introduces measures in several areas:
- Easier access to the 14-day right of withdrawal for distance financial services contracts: traders will have to provide a withdrawal button when selling electronically. In addition, the professional will have to send a notification of the right of withdrawal if the pre-contractual information is received less than one day before the conclusion of the contract;
- Clear rules concerning the nature of the pre-contractual information, the way in which it must be provided and when: the proposal imposes on the seller the obligation to provide certain information from the outset, including, in particular, the e-mail address of the trader, the possible hidden costs or financial service risk. Information must also be displayed prominently on the screen and rules are introduced regarding the use of pop-ups or tiered links to provide information. The new rules will also ensure that the consumer has sufficient time to understand the information received, at least one day before the actual signature;
- Special rules to protect consumers when concluding contracts for financial services online: the proposal obliges traders to set up fair and transparent online systems and to provide adequate explanations when using online tools ( such as robo-tips or chat boxes). The rules also empower the consumer by introducing the possibility to request human intervention if the interaction with these online tools is not fully satisfactory;
- More severe penalties will apply to financial services contracts concluded at a distance in the event of large-scale cross-border infringements, with a maximum penalty of at least 4% of annual turnover;
- Full legal harmonisation, establishing similar rules for all providers in all Member States.
Competition Policy – 10 May 2022
The European Commission has adopted the new block exemption regulation applicable to vertical agreements, together with the new guidelines on vertical restraints. The package will come into effect on 1st June 2022.
The new rules will help assess the compatibility of their supply and distribution agreements with EU competition rules in a business environment reshaped by the growth of e-commerce and online sales.
The exemption regulation exempts from the prohibition laid down in Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) agreements concluded between undertakings operating at different levels of the production or distribution, subject to conditions. The rules therefore provide a safety zone when certain agreements benefit from a block exemption.
Digital Economy – 23 April 2022
The European Parliament and the Council of the union adopted the Digital Services Act (DSA), proposed by the Commission in December 2020. The DSA sets out an unprecedented new standard for the accountability of online platforms regarding illegal and harmful content. It will provide better protection for internet users and their fundamental rights, as well as define a single set of rules in the internal market, helping smaller platforms to scale up.
In scope of the DSA are various online intermediary services. Their obligations under the DSA depend on their role, size, and impact on the online ecosystem. These online intermediary services include:
- Intermediary services offering network infrastructure: Internet access providers, domain name registrars;
- Hosting services such as cloud computing and webhosting services;
- Very large online search engines with more than 10% of the 450 million consumers in the EU, and therefore, more responsibility in curbing illegal content online;
- Online platforms bringing together sellers and consumers such as online marketplaces, app stores, collaborative economy platforms and social media platforms;
- Very large online platforms, with a reach of more than 10% of the 450 million consumers in the EU, which could pose particular risks in the dissemination of illegal content and societal harms.
Single Market – 13 April 2022
The Commission has proposed a very first framework aimed at protecting the intellectual property of artisanal and industrial products which are based on the originality and authenticity of the traditional practices of their regions.
Inspired by the success of the system of geographical indications relating to agricultural products, wines and spirits, the Commission intends to give producers the possibility of protecting artisanal and industrial products linked to their region and their traditional know-how in Europe and beyond its borders.
Financial Services – 4 April 2022
The European Commission has adopted a decision declaring that a number of US stock exchanges under the supervision of the US Securities Exchange Commission (SEC) are equivalent to regulated markets in the EU. As a result, derivatives traded on these US exchanges will now be treated as listed derivatives under EU law.
The Commission also amended its equivalence decision concerning US central counterparties. This decision now covers certain products (for example, mortgage-backed securities issued or guaranteed by certain federally backed agencies and traded on a “To-Be-Announced” basis).
These decisions complement the equivalence decision adopted by the Commission in 2021 for US central counterparties registered with the US Securities and Exchange Commission.
Digital Economy – 25 March 2022
The European Parliament and the Council of the Union have adopted a common version of the legislation on digital markets (Digital Markets Act, DMA).
The digital markets legislation will apply to gatekeepers, companies that create bottlenecks between businesses and consumers, and sometimes even control entire ecosystems, formed by different platform services like online marketplaces. online, operating systems, cloud services or online search engines. These access controllers will be subject to a certain number of clearly defined obligations and prohibitions established with regard to the most unfair market practices, or practices which create barriers for other companies or reinforce them.
Once formally confirmed by the European Parliament and the Council of the Union, the DMA Regulation will be directly applicable throughout the EU and implemented six months after entry into force.
Financial Services – 16 March 2022
The European Commission proposed changes to the regulation on central securities depositories. Central securities depositories administer the infrastructures that enable the settlement of securities (such as stocks or bonds) in the financial markets. Settlement refers to the delivery of securities to a buyer in exchange for the delivery of cash to a seller. It can take up to two business days for a transaction to settle, which can create credit risk as well as legal risk in the meantime. The proposal includes:
- Improved passporting regime: It simplifies the passporting regime for central securities depositories, allowing them to obtain only one license to operate across the EU. In particular, it eliminates costly and redundant procedures, thus facilitating the cross-border provision of services and promoting competition.
- Improved cooperation between supervisors: It improves cooperation between supervisors by requiring the establishment of colleges for certain central securities depositories in order to strengthen the consistency and convergence of supervision.
- Improvement of banking-type ancillary services: It modifies the conditions under which central securities depositories can access banking services, enabling them to offer settlement services for a wider range of currencies and offering companies the possibility of obtaining financing from a wider pool of investors, including beyond national borders.
- Improved settlement discipline: It modifies certain elements of the settlement discipline regime, changing the process by which buy-ins could become applicable and adapting certain technical aspects of the regime in order to make it more efficient and proportionate.
- Improved supervision of third-country central securities depositories: It ensures that supervisory authorities are better informed about the activities in the EU of third-country central securities depositories.
Financial Services – 15 March 2022
The Economic and Monetary Affairs Committee of the European Parliament adopted by 31 votes for, 4 against and 23 abstentions its negotiating mandate on new rules relating to crypto-assets. Parliament is expected to confirm this vote in plenary in the coming weeks.
The rules aim to increase consumer confidence and support the development of digital services and alternative payment instruments. The main provisions concerning issuers and acquirers of crypto-assets (including bitcoins, asset-related tokens and electronic money tokens) cover transparency, communication, authorization and supervision of transactions. Consumers will be better informed of the risks, costs and charges. Furthermore, the legal framework will support market integrity and financial stability through the regulation of public offerings of crypto-assets. Finally, the text includes measures against market manipulation and the prevention of money laundering, terrorist financing and other criminal activities.
In order to reduce the high carbon footprint of cryptocurrencies, in particular the mechanisms used to validate transactions, the deputies call on the Commission to present to them, by 1 January 2025, a legislative proposal including in the so-called taxonomy classification system of the EU for sustainable activities any activity of mining of crypto-assets contributing in a substantial way to climate change.
The deputies point out that other industries (video games, leisure, data storage, etc.) also consume energy resources that are not climate-friendly. They call on the Commission to work on horizontal legislation dealing with these issues.
They also want the European Securities and Markets Authority to oversee the issuance of asset-related tokens, while the European Banking Authority would be in charge of overseeing e-money tokens.
Trade – 14 March 2022
The European Commission, the European Parliament and the Council have reached a political agreement aimed at giving the European Union increased means of pressure to obtain that European companies can access public markets outside the EU.
The Public Procurement Instrument empowers the EU to open investigations in the event of alleged restrictions on European companies in third country public procurement markets, to enter into consultations with the country concerned on the opening of its markets and ultimately restrict foreign companies’ access to EU public procurement if they come from a country that continues to impose restrictions on EU companies.
The Commission could apply restrictions on access to EU public procurement markets in the form of adjustments made in the context of the evaluation of offers from the country concerned, or in the form of an exclusion of offers from the country concerned. concerning. In practice, the application of these adjustments means that offers from this country would be considered, in relation to other offers, as displaying a higher price than the price actually indicated. This would give bidders from the EU and non-target countries a competitive advantage in European public procurement.
Before taking this step, the Commission would open investigations in the event of alleged restrictions on third-country public procurement for European companies. Alongside the investigation into the existence of discriminatory restrictions against EU products, services and/or suppliers, the Commission would invite the country concerned to consultations on the opening of its public procurement markets. These consultations could also take the form of negotiations for an international agreement.
In any case, to avoid the application of such measures, it would suffice for third countries to put an end to their restrictive practices. Existing commitments made by the Union, including under the WTO Agreement on Government Procurement and bilateral trade agreements, are not called into question by this instrument.
Competition Policy – 11 March 2022
The European Commission has opened a formal competition investigation to determine whether an agreement between Google and Meta (formerly Facebook) regarding online display advertising services may have breached EU competition rules.
The Commission’s investigation relates to a September 2018 agreement between Google and Meta, codenamed “Jedi Blue” by Google, regarding Meta’s Audience Network participation in Google’s Open Bidding program. The Commission is concerned that the deal is part of an effort to exclude competing ad tech services from Google’s Open Bidding program and thereby restrict or distort competition in display markets online advertising, to the detriment of publishers and ultimately consumers.
The British competition authority (Competition & Markets Authority) has opened its own investigation into the agreement between Google and Meta. The Commission has been in contact with the CMA and intends to cooperate closely with this investigation in accordance with the applicable rules and procedures.
Financial Services – 8 February 2022
The European Commission has adopted a decision extending until June 30, 2025 the equivalence granted to British central counterparties.
The Commission has also launched a targeted public consultation and a call for input on ways to expand central clearing activities in the EU and increase the attractiveness of EU central counterparties, in order to reduce overreliance of the EU with regard to central counterparties of third countries which are of systemic importance.
In the second half of 2022 the Commission intends to propose measures to develop European capabilities, make the EU a more competitive and efficient clearing hub and increase the liquidity of EU CCPs, while ensuring proper management risks through enhanced surveillance, including at EU level.
Single Market – 2 February 2022
The Commission has presented a new standardization strategy outlining its approach to standards in the single market and globally. This strategy is accompanied by a proposal to amend the standardization regulation, a report on the implementation of this regulation and the annual Union work program for European standardization for 2022.
A harmonized standard is a European standard drawn up at the request of the European Commission by a recognized European standardization organization (CEN, Cenelec or ETSI). Once accepted, these standards become part of EU law and provide manufacturers who use them across the Single Market with a presumption that their products comply with the requirements of EU law, helping to reduce costs for small businesses. This process is based on a public-private partnership between the Commission and all standardization players, in which the distribution of roles and responsibilities is inspired by the 2012 standardization regulation.
From 2022, priorities for standardization will be clearly set out in the Union’s annual work program for European standardization. A high-level forum will be set up to feed the reflection on future priorities in terms of standardization. The Commission will create the function of European Standardization Officer, who will be responsible for providing high-level guidance on standardization activities to the whole of the Commission and who will be supported by an EU Center of Excellence in on standards composed of Commission services.
The Commission also proposes that requests addressed to the European standardization organizations by the Commission should be dealt with by the national delegates — the national standardization bodies — of the Member States of the EU and the EEA to avoid any undue influence from actors in the non-EU and EEA countries in decision-making processes when developing standards for key areas, such as cybersecurity or hydrogen standards. The Commission will launch a peer review process between Member States and national standardization bodies to achieve greater inclusiveness for civil society and users, as well as more favorable standardization conditions for SMEs. At the same time, the Commission will launch the evaluation of the standardization regulation.
The Commission will also work on setting up a new mechanism with EU Member States and national standardization bodies to share information and coordinate and strengthen the European approach to international standardization. The Commission will also seek to strengthen coordination between EU Member States and like-minded partners. The EU will fund standardization projects in African countries and neighboring countries.
The Commission proposes to better exploit the potential of EU-funded research to add value to innovation projects through standardization activities and to anticipate standardization needs at an early stage. It will launch a ‘Standardisation Booster’ to help researchers working under the ‘Horizon 2020’ and ‘Horizon Europe’ programs to test the relevance of their results for standardisation. The Commission will also start, by mid-2022, the drafting of a code of good practice for researchers in the field of standardization in order to strengthen the link between standardization and research/innovation within the framework of the European Research Area (ERA).
Climate Policy – 2 February 2022
The European Commission has presented an additional delegated act on the climate objectives of the taxonomy which covers certain activities of the gas and nuclear sectors with regard to climate change mitigation and adaptation to climate change.
The EU taxonomy aims to direct private investment towards the activities needed to achieve climate neutrality. The college of Commissioners believes that private investments in gas and nuclear activities have a role to play in the transition. The gas and nuclear activities selected are in line with the EU’s climate and environmental objectives and will allow a faster transition from more polluting activities, such as coal-fired power plants, to a climate-neutral future, where renewable energy sources.
The complementary delegated act sets conditions: for both gas and nuclear activities, that they contribute to the transition towards climate neutrality; for nuclear activities, that they meet nuclear and environmental safety requirements; and for gas activities, that they contribute to the abandonment of coal in favor of renewable energy sources. Other conditions impose on companies carrying out activities in the gas and nuclear sectors specific information obligations for these activities.
The supplementary delegated act will be officially sent to the European Parliament and the Council of the Union for consideration; they will have four months to examine the document and to express objections to it if they deem it necessary. The Council will be able to object by a reinforced qualified majority vote, which means that at least 72% of the Member States (i.e. at least 20 Member States), representing at least 65% of the EU population, should be to object to the delegated act. For its part, the European Parliament may object by a negative vote of the majority of its members (i.e. at least 353 deputies) meeting in plenary session.
Once the examination period is over and if none of the co-legislators has expressed an objection, the supplementary delegated act will enter into force and apply from 1 January 2023.
Digital Economy – 20 January 2022
The European Parliament has adopted a proposal for measures against illegal content.
The text approved by 530 votes for, 78 against and 80 abstentions will constitute its negotiating mandate with the French Presidency of the Council, which represents the Member States.
The draft Digital Services Act defines the responsibilities and obligations of intermediary service providers, in particular online platforms, such as social media and marketplaces.
These measures establish a notice-and-action procedure, as well as safeguards for the removal of infringing products, services or content. Hosting service providers should act on notifications “without undue delay, taking into account the type of illegal content notified and the urgency of action”.
MEPs also strengthened the obligation to verify the identity of merchants (principle of verification of business customers).
Very large online platforms will be subject to specific obligations due to the particular risks they present with regard to the dissemination of harmful and illegal content. The proposal also intends to tackle harmful (not necessarily illegal) content and the spread of disinformation by introducing provisions on mandatory risk assessment, risk mitigation measures, independent audits and transparency of ” recommendation systems” (algorithms that determine what users see).
Parliament made several changes to the Commission’s proposal, including:
- Exemption for micro and small enterprises from certain obligations related to digital services legislation;
- In terms of targeted advertising, the text provides for a more transparent and informed choice for recipients of online services, including information on how their data will be monetized. Denying consent should not be more difficult or time consuming for the recipient than granting consent. In the event of refusal or withdrawal of consent, recipients will be offered other options for accessing the online platform, including “options based on non-tracking advertising”;
- Targeting or amplification techniques involving the data of minors for the purpose of displaying advertisements will be prohibited, as will the targeting of persons on the basis of special categories of data allowing the targeting of vulnerable groups;
- Beneficiaries of digital services and the organizations that represent them must be able to have access to remedies against online platforms for any damages suffered as a result of failure to comply with their obligations;
- A possible prohibition for online platforms to use deception or “nudge” techniques to influence user behavior through “rigged interfaces”;
- More choice on algorithm-based ranking: very large online platforms should provide at least one recommendation system that is not based on profiling.
Climate Policy – 1st January 2022
The European Commission has started consultations with the Member States’ expert group on sustainable finance and with the platform on sustainable finance on a draft complementary delegated act on taxonomy covering certain activities in the gas and nuclear sectors. The Taxonomy Regulation provides that the Sustainable Finance Platform and the Member States’ Expert Group on Sustainable Finance are to be consulted, in their capacity as experts, on all delegated acts under that Regulation. They will have until 12 January to make their contributions. The Commission will analyze their contributions and formally adopt the complementary delegated act in January 2022. This will then be sent to the co-legislators for consideration.
The EU taxonomy helps guide and mobilize private investment in the activities needed to achieve climate neutrality over the next 30 years. The Commission considers that natural gas and nuclear power have a role to play in facilitating the transition to a future based mainly on renewable energies. As part of the taxonomy, it would therefore be a matter of classifying these energy sources according to clear and rigorous criteria (for example, the gas must come from renewable sources or produce few emissions by 2035), in particular with regard to their contribution to the transition to climate neutrality.
The European Parliament and the Council (which have delegated the power to adopt the act in question to the Commission) will have four months to examine the amended taxonomy regulation and, if they deem it necessary, to express objections to it. respect. In accordance with the taxonomy regulation, both institutions can request that the review period be extended by two months. The Council will have the right to object to the delegated act by an enhanced reverse qualified majority vote (which means that at least 72% of the Member States will be needed, i.e. at least 20 Member States, representing at least 65% of the EU population to oppose the delegated act) and the European Parliament, by a simple majority vote (i.e. at least 353 MEPs in plenary).
Once the review period has ended and assuming that none of the co-legislators have expressed any objection, the delegated (complementary) act will enter into force and apply.
Taxation – 22 December 2021
The European Commission has proposed a directive on the establishment of a minimum effective tax rate for the global activities of large multinational groups. It is in line with the international agreement and sets out the modalities of the practical application of the principles of the effective tax rate of 15%, agreed by 137 countries, within the EU.
The proposed rules will apply to all large groups, national and international in scope, which have a parent company or a subsidiary located in an EU Member State. If the minimum effective rate is not applied by the country in which a low-taxed company is established, provisions are made to allow the Member State of the parent company to apply an “additional” tax. The proposal also ensures effective taxation in cases where the parent company is located outside the EU in a low-tax country that does not have equivalent rules.
In accordance with the global agreement, the proposal also provides for certain exceptions. In order to reduce the impact on groups carrying out real economic activities, companies will be able to exclude an amount of income equivalent to 5% of the value of tangible assets and 5% of wages. The rules also provide for the exclusion of minimum profit amounts in order to reduce the compliance burden in low risk situations. In other words, when the average revenues and profits of an MNE group in a jurisdiction are below certain minimum thresholds, those revenues are not taken into account in calculating the rate.
The Commission’s tax program is complementary to the OECD agreement, but is not limited to the elements covered by this agreement. By the end of 2023, it is also planned to publish a new framework on business taxation in the EU, which will reduce the administrative burden on companies operating in multiple Member States, remove tax obstacles and create a more business-friendly environment within the single market.
Taxation – 22 December 2021
The European Commission today presented a key initiative to tackle the misuse of front entities for inappropriate tax purposes. The proposal aims to ensure that entities of the European Union which do not exercise any economic activity or which exercise only a minimum economic activity cannot benefit from tax advantages and do not impose any financial burden on taxpayers. It also aims to maintain a level playing field for the vast majority of European businesses and to ensure that ordinary taxpayers do not have to bear an additional financial burden.
Once adopted by member states, the proposal is expected to enter into force on January 1, 2024.
In 2022, the Commission will present another transparency proposal, which will require certain multinationals to publish their effective tax rates, as well as the 8th Directive on administrative cooperation, which will provide tax administrations with the information they need to hedge crypto-assets.
Digital Economy – 15 December 2022
The European Parliament has adopted the proposal for legislation on the digital markets (Digital Markets Act or DMA) draws up a blacklist of certain practices adopted by large platforms which act as “gatekeepers” and allows the Commission conduct market investigations and apply penalties.
The text approved by Parliament by 642 votes for, 8 against and 46 abstentions sets new obligations and prohibitions directly applicable to these platforms, with a view to ensuring that the markets are fair and open. Negotiations must now be conducted in trilogue to arrive at a common text with the Council of the Union.
The proposed rule will apply to large companies that offer “essential platform services”, the most prone to engaging in these unfair practices. These services cover in particular online intermediation services, social networks, search engines, operating systems, online advertising services, cloud computing and video sharing services, when meet the criteria required to be qualified as “access controllers”.
MEPs have included web browsers, virtual assistants and smart TVs within the scope of the legislation. They also made other changes concerning the definition of access controllers based on certain thresholds, the list of obligations and prohibitions, including new provisions relating to targeted advertising and the interoperability of services, restrictions on “predatory acquisitions”, EU enforcement, the role of national competition authorities, as well as fines.
Financial Services – 15 December 2021
The European Commission presented its new strategy to improve and modernize the reporting of information for financial supervision in the EU.
Supervisors, such as the European Banking Authority (EBA), require financial firms, banks and investment firms to report certain information. This is the surveillance report.
The supervision of the EU financial system is based on recent, relevant and high-quality data. EU surveillance reporting rules, as well as the way authorities collect and use data, need to be kept up to date with the latest developments, namely the rapidly evolving digital technologies of surveillance. collection and analysis of this data.
The main objective of the strategy is to put in place a system that will provide recent, accurate and consistent data to financial sector supervisors, both at EU and national level, while reducing as much as possible the overall charge related to the declaration for financial institutions.
The strategy will directly contribute to the objectives of the European Data Strategy and the Digital Finance Package to foster digital innovation in Europe. In addition, this strategy contributes to the achievement of the objectives of a Capital Markets Union and the establishment of a single market in financial services.
The strategy is made up of four main elements:
- Ensure consistency and standardization of data on the basis of clear and common terminology as well as common standards, formats and rules.
- Facilitate the sharing and reuse of reported data among supervisory authorities by removing undue legal and technological barriers, in order to avoid redundant requests for data.
- Improve the design of reporting requirements by developing guidance based on good practice in enforcement, supervisory reporting, Better Regulation principles.
- Establish joint governance arrangements to improve coordination and encourage greater cooperation between different supervisory authorities and other stakeholders, allowing them to share expertise and exchange information.
Environment – 15 December 2021
The Commission has adopted a Communication on Sustainable Carbon Cycles, which outlines how to increase carbon removals from the atmosphere. To counter the effects of our CO2 emissions, the EU will have to drastically reduce its dependence on fossil carbon, make greater use of carbon storage in agricultural soils in order to store more carbon in nature and put forward industrial solutions for absorb and recycle carbon in a sustainable and verifiable manner.
By 2030, carbon storage initiatives in agricultural soils are expected to help store 42 Mt of CO2 in European natural carbon sinks. Measures to achieve this include:
- the promotion of carbon storage practices in agricultural soils within the framework of the common agricultural policy (CAP) and other programs such as LIFE or the research mission “A pact for healthy soils in Europe” of Horizon Europe , and through national and private public funding;
- the standardization of the monitoring, reporting and verification methods necessary to have a clear and reliable carbon certification framework and allowing the development of voluntary carbon markets;
- providing better knowledge, data management and targeted advisory services to land managers, both on land and within the blue carbon ecosystem.
The Commission will engage in a dialogue with stakeholders with a view to ensuring that at least 20% of the carbon used in chemicals and plastics comes from sustainable non-fossil sources by 2030. This will be done taking full account of the EU biodiversity and circular economy objectives as well as the forthcoming strategic framework for bio-based, biodegradable and compostable plastics. In order to better manage these new carbon flows, to support innovative technologies and to achieve large-scale carbon removals, the Commission will contribute to the establishment of an internal market for the capture, use and storage carbon as well as the infrastructure necessary for the cross-border transport of CO2. By 2030, 5 Mt of CO2 are expected to be absorbed from the atmosphere each year and stored permanently using technological solutions. The key financing instrument for these technologies in the short term is the Innovation Fund, which is funded by the EU Emissions Trading System.
By the end of 2022, the Commission will propose an EU regulatory framework for the certification of carbon removals based on strong and transparent carbon accounting requirements and rules to monitor and verify authenticity and ‘environmental integrity of high quality sustainable carbon removals. A call for contributions will also be launched in January 2022.
Taxation – 7 December 2021
The Council adopted the updated rules governing the rates of value added tax (VAT) applicable to goods and services. Public administrations will have more flexibility as regards the rates they can apply and equal treatment between Member States will be guaranteed. At the same time, the updated legislation will align VAT rules with common EU priorities such as tackling climate change, supporting digitization and protecting public health.
The European Parliament must now be consulted on the final text by March 2022. Once formally adopted by the Member States, the legislation will enter into force 20 days after its publication in the Official Journal of the European Union. will allow Member States to apply the new system from that date.
The current EU rules on VAT rates date back almost thirty years and their modernization had become urgent given the evolution of general VAT rules over the years. This is why the Commission proposed in 2018 to reform the VAT rates.
The concluded agreement includes:
- An update of the list of goods and services (Annex III of the VAT Directive) to which all Member States can apply reduced VAT rates. Among the new products and services on the list are those that protect public health, those that are beneficial for the environment and those that promote the digital transition. Once the rules come into force, Member States will also for the first time be able to exempt certain goods and services considered to cover basic needs from VAT.
- The removal, by 2030, of the possibility for Member States to apply reduced rates and exemptions to goods and services deemed to be harmful to the environment and to the EU’s climate change targets.
- Making available to all countries derogations and exemptions applicable to specific goods and services, which are currently in place for historical reasons in some Member States in order to ensure equal treatment and avoid distortions of competition . However, existing derogations that are not justified by public policy objectives other than those in favor of EU climate action will have to be removed by 2032 at the latest.
The new rules presented today are the consequence of a previous agreement which provides for a switch from the EU VAT system to a system in which VAT is paid in the Member State of the consumer rather than in the Member State of provider. The multiplicity of rates will be less likely to disrupt the functioning of the single market or create distortions of competition. At the same time, it also helps prevent a proliferation of reduced rates that would jeopardize the ability of member states to collect revenue after the COVID-19 pandemic.
Over the next few years, Member States will need to continue their efforts to ensure a sustainable recovery from the COVID-19 pandemic and invest heavily in ecological and digital transitions. The protection of public revenues is particularly important in this context. This is why the updated legislation also specifies the minimum level of reduced rates as well as the maximum number of goods and services listed in Annex III to which Member States can apply these rates (see Questions and answers for more information). However, for the first time, Member States will also be able to apply a reduced rate below 5% or exempt from VAT a small number of items on the list.
Digital Economy – 7 December 2021
The European Commission and the United States have launched the Joint Technology Competition Policy Dialogue.
In June 2021, alongside the launch of the EU-U.S. Trade and Technology Council (CCT), the EU and the United States established a Joint Technology Competition Policy Dialogue (DPCT ) which will focus on developing common approaches and strengthening cooperation on competition policy and its implementation in the technology sector.
The European Commission and US authorities face common challenges in enforcing competition in digital investigations, such as network effects, the role of massive data volumes, interoperability and others. characteristics generally present in new technology and digital markets. The DPCT aims to share knowledge and experience in order to coordinate policy and its implementation as much as possible.
Trade – 2 December 2021
A group of 67 members of the World Trade Organization (WTO), including the European Union (EU), concluded negotiations on a landmark agreement to cut red tape in trade in services.
WTO members participating in this initiative will make specific commitments by the end of 2022 to facilitate trade in services in their markets, for example by simplifying authorization procedures or ensuring transparency. The new commitments made under this initiative will apply to service providers from any other WTO member, on the basis of the most-favored-nation principle.
Financial Services – 25 November 2021
The European Commission has adopted a package of measures to make it easier for businesses to raise capital across the EU.
The legislative proposals are as follows:
- Creation of a single European access point (PAUE) putting financial and sustainability information data at the fingertips of investors.
- Revision of the regulation on European long-term investment funds (ELTIF), in particular by removing the minimum investment threshold of 10,000 euros.
- Revision of the Directive on Alternative Investment Fund Managers (AIFM), clarifying in particular the rules relating to delegation, which allow fund managers to call on experts from third countries.
- Revision of the Markets in Financial Instruments Regulation (MiFIR), by introducing a “consolidated European publication system” to facilitate access for all investors to trading data.
These changes will establish a ‘Consolidated European Publishing System’, which will allow investors to access near real-time trading data on stocks, bonds and derivatives across all EU trading platforms. . Until now, this access has been limited to a small number of professional investors. The revision presented today will also strengthen the level playing field between stock exchanges and investment banks. It will also promote the international competitiveness of EU trading platforms by removing the open access rule.
Digital Economy – 23/25 November 2021
The European Parliament’s Internal Market Committee adopted by 42 votes in favor, 2 against and 1 abstention the proposed Digital Markets Act (DMA), which will set clear rules on what companies that opt for behave as ‘access controllers’ will and will not be able to do in the EU. The draft legislation blacklisting the unfair practices of major platforms and allows the Commission to conduct market investigations and apply sanctions. The text is expected to be put to a vote in plenary in December. It will then become the mandate for negotiations with EU governments, for negotiations which should start under the French Presidency of the Council in the first half of 2022.
The proposed regulation will apply to large companies offering ‘essential platform services’ most prone to engage in such unfair practices, such as online intermediation services, social media, search engines, operating systems, online advertising services, cloud computing and video sharing services, which meet certain criteria to qualify as ‘gatekeepers’. MEPs have included web browsers, virtual assistants and connected televisions within the scope of the legislation.
MEPs also amended the Commission proposal to raise the quantitative thresholds for a company to fall under the scope of the DMA to eight billion euros in annual turnover in the European Economic Area (EEA) and 80 billion euros in terms of market capitalization.
To qualify as a gatekeeper, businesses will also need to provide essential platform service in at least three EU countries and have at least 45 million end users per month as well as more than 10,000 business users (MEPs have created an annex with details on how to measure these indicators). These thresholds will not prevent the Commission from labeling other companies as “access controllers” if they meet certain conditions.
Gatekeepers should refrain from imposing unfair conditions on businesses and consumers. MEPs included additional requirements on the use of data for targeted or micro-targeted advertising and on the interoperability of services, for example for non-dial-based interpersonal communications services and social media services.
The text states that a gatekeeper must, “for its own commercial purposes and the placement of third-party advertisements in its own services, refrain from combining personal data for the purpose of delivering targeted advertisements or micro-targeted ”, except in the case of explicit and renewed informed consent, in accordance with the General Data Protection Regulation. The personal data of minors should not be processed for commercial purposes such as direct marketing, profiling and targeted behavioral advertising, stress MEPs.
If a gatekeeper does not follow the rules, the Commission can impose fines of as much as 4% and not exceeding 20% of global turnover in the previous financial year, “MEPs say.
On November 25, the Council of the EU in turn adopted its position on the text. The Council text shortens the deadlines and improves the criteria for the designation of access controllers; it includes an annex which defines “active end users” and “active user companies”. Improvements have been made to make the structure and scope of the obligations clearer and more sustainable, and a new obligation strengthens the right of end users to unsubscribe from essential platform services.
The arrangements for dialogue on regulatory measures have been improved to ensure that the discretion available to the European Commission to initiate such dialogue is used wisely. In order to avoid fragmentation of the internal market, the text confirms that the European Commission is the only body empowered to enforce the regulation. Member States can empower national competition authorities to initiate investigations into possible infringements and report their findings to the European Commission.
Financial Services – 23 November 2021
The Council agreed its position on two proposals forming part of the digital finance package: the “Regulation on crypto-asset markets” (MiCA) and the “Regulation on digital operational resilience of the financial sector “(DORA). This agreement constitutes the Council’s mandate for the trilogue negotiations with the European Parliament.
The aim of the MiCA Regulation is to create a regulatory framework for the crypto-asset market that supports innovation and leverages the potential of crypto-assets in a way that preserves financial stability and protects investors.
The DORA regulation aims to create a regulatory framework on digital operational resilience in which all businesses ensure that they can withstand all types of IT-related disruptions and threats, in order to prevent and mitigate cyber threats.
This bundle contains a Digital Finance Strategy, Crypto-Asset Markets (MiCA) and Financial Sector Digital Operational Resilience (DORA) Proposals and Distributed Ledger Technology (DLT) Proposal. This package of measures fills a gap in existing EU legislation by ensuring that the current legal framework does not hinder the use of new digital financial instruments. At the same time, it is about ensuring that these new technologies and products fall within the scope of financial regulation and operational risk management systems of companies active in the EU.
The Council and the European Parliament will now start trilogue negotiations on these proposals. Once the two institutions reach a provisional political agreement, they will formally adopt the regulations.
Competition Policy – 18 November 2021
The European Commission has adopted a communication on a competition policy adapted to new challenges, which defines the important role of competition policy in setting Europe on the path of recovery, ecological and digital transitions and in guaranteeing a single market resilient. The Communication underlines the intrinsic capacity of competition policy to adapt to new market conditions, strategic priorities and consumer needs: for example, the Commission adopted a sixth amendment to the temporary framework for State aid, which enables Member States to provide targeted support to businesses during the coronavirus crisis.
The Commission is currently reviewing competition policy instruments to ensure that all competition policy instruments (merger control, anti-competitive practices and state aid) remain fit for purpose and complement its existing toolbox.
The Commission has also strengthened the control of potentially problematic acquisitions in the digital sector through its new guidance on the application of Article 22 of the Merger Regulation. Member States are thus encouraged to submit potentially problematic transactions to the Commission, even if they do not meet national notification thresholds, and the Commission can examine acquisitions of innovative companies with competitive potential going beyond what their turnover might indicate, especially in the digital sector.
On the other hand, the Commission will continue to support the current efforts of the Member States to design important projects of common European interest (CEIP) at pan-European level which jointly overcome market failures by enabling decisive investments in innovation. and infrastructure in the major green and digital priorities, namely hydrogen, cloud infrastructure, health and microelectronics. The forthcoming communication on PIIEC state aid will further strengthen the openness of the PIIECs, facilitate the participation of SMEs and specify the criteria for pooling the resources of the Member States and the EU.
In view of the exceptional situation in the semiconductor sector, the importance of these and the dependence on a limited number of suppliers in a difficult geopolitical context, the Commission could consider authorize aid aimed at bridging any funding gaps for the establishment, in particular, of new European installations in the semiconductor ecosystem.
Taxation – 11 November 2021
In order to fight tax evasion, Parliament approved rules requiring large multinationals to publicly declare the taxes they pay in each EU country. This vote closed a legislative process after five years of hesitation on the part of various governments.
Multinationals and their subsidiaries with annual revenues exceeding 750 million euros – and which are active in more than one EU country – will have to publish the amount of taxes they pay in each member state. This information should also be made public on the internet, according to a common template in a machine-readable format.
According to the agreement approved by MEPs, in order to facilitate the use of the information provided and to increase transparency, the data provided by companies will have to be broken down into various specific elements. This includes the nature of the business’s activities, the number of full-time employees, the amount of profit before income tax, the amount of income taxes accrued and paid as well as accrued profits.
Subsidiaries or branches with turnover below the set threshold will also be required to report if they are deemed to exist only to help the company avoid new reporting obligations. Certain provisions allow multinationals to be temporarily exempted from certain reporting obligations, but these are nevertheless strictly regulated. According to the legislative text, the tax transparency reports also apply to the European Union’s list of non-cooperative jurisdictions for tax purposes outside the EU (countries on the “black” and “gray” lists”).
Even if MEPs wanted stronger provisions to fight against the transfer of profits to tax havens outside the EU, the new rules will still shed light on the taxes lost to tax havens. In January 2021, Parliament took note of reports which show that six of the 20 largest tax havens in the world were EU countries; and that there were two Member States in the top 6 global tax havens. A study by the director of the European Taxation Observatory concluded that almost 80% of the profits transferred to the EU go to European tax havens.
The directive will enter into force 20 days after its publication in the Official Journal of the EU. Member States will then have 18 months to transpose it into their national law. This means that companies will have to comply with the first provisions of the directive by mid-2024. The legislation includes a review clause; the rules will be reviewed in four years and expanded after an assessment.
Social Affairs – 11 November 2021
The European Parliament is preparing to adopt a new European legislative project which will guarantee a minimum level of wage protection in all Member States. The draft negotiating mandate was adopted by 37 votes in favor, 10 against and 7 abstentions in the Committee on Employment and Social Affairs. It is expected to be approved by Parliament as a whole in the November 22-25 plenary session before talks with the Council on the final form of the legislation can begin.
The project plans either to establish a legal minimum wage (the lowest wage allowed by law), or to allow workers to negotiate their wages with their employers. The new legislation should apply to all workers in the EU who have an employment contract or employment relationship.
According to the legislative project, member states will have to assess and communicate whether the legal minimum wage is sufficient using criteria to create decent living and working conditions as well as including elements such as purchasing power and the wage rate. poverty. Member States in which the minimum wage is protected exclusively by collective agreements will not be forced to introduce a statutory minimum wage or to make these agreements generally applicable.
The draft directive explicitly aims to strengthen and extend the coverage of collective bargaining and to protect workers by giving them a minimum wage through these negotiations. Member States in which collective bargaining coverage is less than 80% of workers should take active steps to promote this tool. In order to devise the best strategy for this, they should consult the social partners and inform the European Commission of the measures adopted. In addition, it will be explicitly prohibited to undermine collective bargaining or collective agreements on wage setting. Workers must be able to join a union and cannot be prevented from doing so.
National authorities should ensure that workers have a right to redress in the event of violation of their rights. Workers must be adequately compensated and be able to recover any compensation due. In addition, national authorities must take the necessary measures to protect workers and union representatives against any unfair treatment by their employer as a result of a complaint they have lodged or any other procedure initiated to assert their rights. rights.
Financial Services – 10 November 2021
Financial Services, Financial Stability and Capital Markets Union Commissioner Mairead McGuinness announced the Commission’s plans for central clearing. The European Commission remains of the view that too much dependence on UK-based central counterparties (CCPs) for certain clearing activities is a source of risk for medium-term financial stability and will continue its work. to develop the capacity of EU-based CCPs as a means to reduce this overdependence.
In order to deal with a possible risk of short-term financial stability, linked to a sudden interruption of access to clearing services, the Commission will propose an extension of equivalence (adopted in September 2020 until 30 June 2022) for central counterparties based in the United Kingdom.
But this extension of equivalence is a short-term solution. The Commission wants to present in 2022 measures to make EU-based CCPs more attractive to market players, taking into account the results of the assessment currently being undertaken by ESMA on the systemic importance of EU-based CCPs. UK. These measures should be based on two pillars:
- First, strengthening national capacities. Measures to make the EU more attractive as a competitive and profitable clearing hub, and thus to induce an expansion of central clearing activities in the EU, will be needed. In this context, the Commission will explore ways to improve the liquidity of EU CCPs and to broaden the range of clearing solutions offered by EU infrastructures.
- Second, surveillance. If the EU is to increase its central clearing capacity, it is essential that the associated risks are managed appropriately. the Commission will strengthen the EU supervisory framework for CCPs, including a stronger role for supervision at EU level.
Financial Services – 27 October 2021
The European Commission has proposed reform of EU banking regulations on capital requirements. It completes the implementation of the Basel III accord in the EU.
The reform consists of the following legislative instruments:
- a legislative proposal to amend the Capital Requirements Directive (Directive 2013/36 / EU);
- a legislative proposal to amend the Capital Requirements Regulation [Regulation (EU) No 575/2013];
- a separate legislative proposal to amend the capital requirements regulation in the area of resolution (proposal on daisy chain structures)
The proposal aims to ensure that the “internal models” used by banks to calculate their capital requirements do not underestimate the risks, and therefore that the capital required to cover these risks is sufficient. This in turn will make it easier to compare risk-based capital ratios between banks, thereby restoring confidence in these ratios and, more generally, in the soundness of the banking sector.
The proposed proposal will also require banks to systematically detect, disclose and manage environmental, social and governance (ESG) risks as part of their risk management. Both supervisors and banks will have to carry out regular weather stress tests.
Finally, the proposal offers enhanced tools for the supervisory authorities responsible for supervising EU banks. It establishes a set of clear, solid and balanced rules of good repute, which allow supervisors to assess whether senior management has the skills and knowledge required to run a bank.
In addition, in reaction to the “Wirecard” scandal, supervisory authorities will now be equipped with better tools to monitor fintech groups, including banking subsidiaries.
The reform also addresses, in a proportionate manner, the issue of establishing branches of banks from third countries in the EU. At present, these branches are mainly subject to national legislation; harmonization remains very limited.
Trade – 18 October 2021
The Commission has launched an online consultation platform ‘Futurium‘ on the EU-US Trade and Technology Council (CTC), which allows stakeholders to share their views and present joint proposals for the future work.
Businesses, think tanks, trade unions, nonprofits and environmental organizations, academics and other parties that form civil society at large are invited, as key players in the success of the project. cooperation between the EU and the United States, to make their contribution.
The platform is open to everyone after a simple registration. It allows interested parties to make their voices heard in the work of the ten specific working groups of the CCT. Through this website, they can not only make their views known, but also receive important information and updates on the progress of the various working groups.
Trade – 29 September 2021
The EU-US Trade and Technology Council (TTC) met for the first time in Pittsburgh. It was co-chaired by European Commission Executive Vice President Margrethe Vestager, European Commission Executive Vice President Valdis Dombrovskis, US Secretary of State Antony Blinken, US Secretary of Commerce Gina Raimondo and US Trade Representative Katherine Tai. The European Union and the United States reaffirm the TTC’s objectives to coordinate approaches to key global technology, economic, and trade issues; and to deepen transatlantic trade and economic relations, basing policies on shared democratic values.
In their joint statement, the parties support the continued growth of the EU-US technology, economic and trade relationship and cooperation in addressing global challenges. They intend to collaborate to promote shared economic growth that benefits workers on both sides of the Atlantic, grow the transatlantic trade and investment relationship, fight the climate crisis, protect the environment, promote workers’ rights, combat child and forced labour, expand resilient and sustainable supply chains, and expand cooperation on critical and emerging technologies.
The EU and they US also intend to maintain investment screening in order to address risks to national security and, within the European Union, public order. They recognise that our investment screening regimes should be accompanied by the appropriate enforcement mechanisms. Furthermore, investment screening regimes should be guided by the principles of non-discrimination, transparency, predictability, proportionality, and accountability, as set forth in relevant OECD guidelines. They also intend to engage with partner countries and stakeholders on investment screening. They recognise the importance of effective controls on trade in dual-use items. Such export controls are necessary to ensure compliance with their international obligations and commitments. They affirm that a multilateral approach to export controls is most effective for protecting international security and supporting a global level-playing field. They note that the potential applications of emerging technologies in the defence and security field raise important concerns, and recognise the need to address these risks. They have determined shared principles and areas for export control cooperation, including in export control capacity-building assistance to third countries, and recognise the importance, where appropriate and feasible, of prior consultations to ensure that the application of export controls is transparent and equitable for EU and US exporters.
Financial Services – 21 September 2021
The European Commission has proposed a comprehensive review of EU insurance rules (Solvency II Directive entered into force on January 1, 2016); the review includes:
- a legislative proposal to amend the Solvency II Directive (Directive 2009/138 / EC);
- a communication on the revision of the Solvency II Directive;
- a legislative proposal for a new directive on the reorganization and resolution of insurance and reinsurance companies.
Beyond the minimum review provided for in the directive itself, and after consulting stakeholders, the Commission identified other elements of the Solvency II framework that needed to be reviewed, such as the sector’s contribution to the political priorities of the European Union (in particular the Green Deal for Europe and the Capital Markets Union), the control of cross-border insurance activities and the strengthening of the proportionality of prudential rules, including with regard to the communication of information.
With this review, the European Commission considers that:
- the planned changes will allow consumers to be better protected, and insurance companies to remain strong, even in times of economic turmoil;
consumers (“policyholders”) will be better informed about the financial situation of their insurer;
- cooperation between supervisory authorities will be improved, whereby consumers will be better protected when they buy an insurance product in another Member State;
- insurers will be encouraged to make more long-term capital investments for the benefit of the economy;
the financial strength of insurers will take better account of certain risks, in particular climatic risks, and will be less sensitive to short-term market fluctuations;
- stronger control will be exercised over the entire sector, in order to prevent any threat to its stability.
For its part, the Directive on the recovery and resolution of insurance and reinsurance undertakings aims to ensure that (re) insurers and competent authorities in the EU are better prepared to face serious financial difficulties. By setting up colleges of resolution authorities, the supervisory and resolution authorities concerned will be able to take coordinated, swift and decisive action to resolve issues arising within cross-border (re) insurance groups and thereby ensure the best possible outcome for policyholders and the economy as a whole.
Financial Services – 20 July 2021
The European Commission has presented a set of legislative proposals aimed at strengthening EU rules on combating money laundering and the financing of terrorism (AML / CFT). This legislative package contains a proposal for the creation of a new EU authority. The package presented today consists of four legislative proposals:
- a regulation establishing a new EU AML / CFT authority;
- a regulation on AML / CFT, containing directly applicable rules, in particular with regard to due diligence with regard to customers and beneficial owners;
- a Sixth AML / CFT Directive (“AMLD6”), replacing Directive 2015/849 / EU currently in force (the Fourth AML Directive as amended by the Fifth AML Directive), and containing provisions that will be transposed into national law, such as rules on national supervisory authorities and financial intelligence units in Member States;
- a revision of the 2015 regulation on fund transfers to ensure the traceability of crypto-asset transfers (regulation 2015/847 / EU).
The core of the proposed legislative package is the creation of a new EU authority, which will transform AML / CFT supervision in the EU and strengthen cooperation between financial intelligence units (FIUs). It will be responsible for:
- establish a single integrated AML / CFT supervisory system across the EU, based on common supervisory methods and the convergence of high supervisory standards;
directly monitor some of the riskiest financial institutions which operate in a large number of Member States or require immediate action to address imminent risks;
- monitor and ensure coordination between national supervisory authorities responsible for other financial entities, as well as coordination between supervisory authorities of non-financial entities;
- support cooperation between national financial intelligence units and facilitate coordination between them as well as their joint analyzes, to enable better detection of illicit financial flows of a cross-border nature.
A single EU regulatory body will harmonize AML / CFT rules across the EU, including, for example, more detailed rules on customer due diligence obligations, beneficial owners and the powers and tasks of supervisory authorities and financial intelligence units (FIUs). The current national bank account registers will be connected, allowing FIUs to access key information on bank accounts and safes more quickly. The Commission will also allow law enforcement authorities to access this system, which will speed up financial investigations and the recovery of criminal assets in cross-border cases. Access to financial information will be subject to the strong guarantees provided for by Directive (EU) 2019/1153 on access to financial information.
EU AML / CFT rules will be fully applied to the crypto-asset sector. The proposed changes will ensure full traceability of transfers of crypto-assets, such as bitcoins, and will prevent and detect their possible use for money laundering or terrorist financing purposes. In addition, anonymous crypto-asset wallets will be banned, in order to fully apply EU AML / CFT rules to the crypto-asset industry.
The Commission proposes to introduce an EU-wide maximum ceiling of EUR 10,000 for cash payments. National ceilings below 10,000 EUR may be maintained.The countries appearing on the FATF lists will also be on those of the EU. There will be two EU lists, a “black list” and a “gray list”, corresponding to the FATF lists. When a country is placed on a list, the EU will apply measures proportionate to the risks it poses. The EU will also be able to include on its lists countries which are not on those of the FATF, but which, according to an autonomous assessment, pose a threat to the EU financial system.
The legislative package will now be examined by the European Parliament and the Council. The Commission is counting on a rapid legislative process. The future Anti-Money Laundering Authority should be operational in 2024.
Environment – 14 July 2021
The European Commission has adopted a set of proposals to adapt the Union’s policies on climate, energy, land use, transport and taxation so as to enable the Union to reduce its emissions net greenhouse gas emissions of at least 55% by 2030, compared to 1990 levels.
These proposals combine: the application of emissions trading to new sectors and a strengthening of the current Union emissions trading system; increased use of renewable energies; improved energy efficiency; faster deployment of low-emission transport modes and related infrastructure and fuel policies; alignment of fiscal policies with the objectives of the Green Pact for Europe; measures to prevent carbon leakage; and tools to preserve and expand the capacity of our natural carbon sinks.
With regard to the Union’s Emissions Trading System (ETS), the Commission proposes to further lower the overall emission ceiling and increase its annual reduction rate. The Commission also proposes to phase out free emission allowances for aviation, to align with the global carbon offsetting and reduction regime for international aviation (CORSIA) and to integrate for the first time times maritime transport emissions in the EU ETS. A new, separate emission trading system is being put in place for the distribution of fuel for road transport and buildings.
For their part, Member States will have to devote all of the revenues they derive from emissions trading to climate and energy-related projects. A specific part of the revenues generated by the new system applicable to road transport and buildings should be devoted to measures to tackle the social repercussions on vulnerable households, micro-enterprises and transport users.
The effort-sharing regulation assigns each Member State enhanced emission reduction targets for buildings, road and inland maritime transport, agriculture, waste and small industries. These targets, which take into account the baseline situation and capacities of each Member State, are based on GDP per capita and adjusted for cost-effectiveness.
By 2035, the Union will have to strive to achieve climate neutrality in the sectors of land use, forestry and agriculture, including with regard to emissions other than those of CO2 from the agricultural sector, such as those from fertilizer use and animal husbandry.
The Renewable Energy Directive will raise the production target so that the share of energy produced from renewable sources reaches 40% by 2030. All Member States will contribute to this target, and specific targets are proposed for the use of renewable energies in transport, heating and cooling systems, buildings and industry. To achieve both our climate and environmental objectives, sustainability criteria for the use of bioenergy are strengthened and bioenergy support schemes developed by Member States must respect the principle of cascade use. woody biomass.
The Energy Efficiency Directive will set a more ambitious annual binding target at EU level for reducing energy consumption. It will guide the way in which national contributions are established and will almost double the annual energy savings obligation for Member States. The public sector will be required to renovate 3% of its buildings each year in order to start the wave of renovations, create jobs and reduce energy consumption and costs for the taxpayer.
In addition to emissions trading, a combination of measures is needed to tackle rising emissions in road transport. Stricter CO2 emission standards for cars and vans will accelerate the transition to zero-emission mobility by imposing an average reduction in new car emissions of 55% from 2030 and 100% from 2035 compared to 2021 levels. As a result, all new cars registered from 2035 will be zero emission vehicles. To allow motorists to have access to a reliable network across Europe for recharging or refueling their vehicles, the revised regulation on the deployment of an infrastructure
Financial Services – 6 July 2021
The European Commission has adopted a set of measures to raise its level of ambition in terms of sustainable finance. A proposed EU green bond standard aims to create a high-quality voluntary standard for bonds used to finance sustainable investments.
The new EU standard will be open to all issuers of green bonds, including issuers from third countries. The main objective is to create a new “gold standard” for green bonds against which other market standards could be compared and to seek possible alignment. The proposed framework sets out four essential requirements:
- All funds raised through the bond issue must go to projects aligned with the EU taxonomy;
the allocation of the proceeds of the issue must be perfectly transparent, detailed reporting obligations being provided for this;
- Any issuance of EU Green Bonds must be audited by an external reviewer, who ensures compliance with the regulations and alignment of funded projects with the taxonomy. Limited specific flexibility is provided in this regard for sovereign issuers;
- External examiners who offer their services to EU green bond issuers must be registered with the European Securities and Markets Authority and are subject to its supervision. This obligation will guarantee the quality of their services and the reviews they carry out and, in so doing, the protection of investors and the integrity of the market. Limited specific flexibility is provided in this regard for sovereign issuers.
The Commission has also adopted, on the basis of Article 8 of the EU Taxonomy Regulation, a delegated act on the information to be published by financial and non-financial companies to indicate the degree of sustainability of their activities. Non-financial companies will have to publish the share of their turnover, investment and operating expenses associated with environmentally sustainable economic activities within the meaning of the Taxonomy Regulation, the Act delegate relating to the climate component of the taxonomy, officially adopted on June 4, 2021, and any future delegated act relating to other environmental objectives.
For their part, financial institutions, mainly banks, asset managers, investment firms and large insurance and reinsurance companies, will have to make public the proportion of environmentally sustainable economic activities. in the total assets they finance or invest in. The delegated act will be forwarded to the European Parliament and to the Council for examination over a period of 4 months, which may be extended once by 2 months.
Digital Economy – 22 June 2021
The European Commission has opened a formal anti-competitive practice investigation to determine whether Google violated EU competition rules by promoting its own online display advertising technology services within the supply chain “Ad tech” to the detriment of competing ad technology service providers, advertisers and online publishers. The formal investigation will notably examine whether Google distorts competition by restricting third-party access to user data for advertising purposes on websites and applications, while reserving this data for its own use.
As part of its in-depth investigation, the Commission will in particular examine:
- the requirement to use Google’s Display & Video 360 (“DV360”) and / or Google Ads services to purchase online YouTube advertising displays;
- the obligation to use Google Ad Manager to provide online display advertising on YouTube, as well as the potential restrictions imposed by Google on how services competing with Google Ad Manager are able to provide online display advertising on Youtube;
- the apparent advantage conferred on Google’s Ad Exchange (AdX) by DV360 and / or Google Ads, as well as the potential advantage conferred on DV360 and / or Google Ads by AdX;
- restrictions imposed by Google on the ability of third parties, such as advertisers, publishers or competing intermediaries in the field of online display advertising, to access data relating to the identity or behavior of users, data that is available for Google’s own advertising intermediation services, including Doubleclick ID;
- Google’s plan to ban the placement of third-party “cookies” on Chrome and replace them with the “Privacy Sandbox” toolkit, including its impact on the online display advertising and intermediation markets in the field of on-line advertising display;
- Google’s plan to no longer make the Advertising ID available to third parties on Android-type smart mobile devices when a user forgoes personalized advertising, as well as its impact on online display advertising markets and on-line advertising display intermediation.
Transport – 16 June 2021
The Council and the European Parliament reached a political agreement on revised rules on road pricing (“Eurovignette” directive), to combat greenhouse gas emissions and other environmental impacts and bring a positive impact on the environment. response to questions related to road congestion and financing of road infrastructure. A new EU-wide tool will be introduced to vary infrastructure charges and user charges for heavy-duty vehicles according to CO2 emissions, as foreseen in the Council’s initial position. The variation will be based on current CO2 standards. The variation in tolls or user charges based on environmental performance will apply to vans and minibuses from 2026, where technically feasible.
Digital Economy – 15 June 2021
Ursula von der Leyen, President of the European Commission, and Joe Biden, President of the United States, launched the EU-U.S. Trade and Technology Council (CTC) at the EU-U.S. Summit held held in Brussels on June 15, 2021.
The CTC will serve as a forum for the United States and the European Union to coordinate their approaches to major global trade, economic and technology issues and to deepen transatlantic trade and economic relations based on shared democratic values.
This new council will meet periodically at political level to steer cooperation. It will be co-chaired by Margrethe Vestager, Executive Vice-President of the European Commission and Commissioner for Competition; Valdis Dombrovskis, Executive Vice-President of the European Commission and Commissioner for Trade; Antony Blinken, US Secretary of State; Gina Raimondo, US Secretary of Commerce; and Katherine Tai, US Trade Representative. Other members of the College and representatives of US ministries will be invited as needed, allowing focused discussions on specific issues as part of a comprehensive government approach.
The objectives of the CCT are:
- Develop and strengthen bilateral trade and investment;
- Avoiding new technical barriers to trade;
- Cooperate on key policies in technology, digital issues and supply chains;
- Support collaborative research;
- Cooperate in the development of compatible and international standards;
- Facilitate cooperation on regulatory policy and implementation of legislation;
- Promote innovation and leadership of European and American companies.
Initially, the CCT will include the following working groups:
- Cooperation on technology standards (including artificial intelligence and internet of things, among other emerging technologies);
- Climate and green technologies;
- Secure supply chains, including semiconductors;
- ICT security and competitiveness;
- Data governance and technology platforms;
- Misuse of technologies threatening security and human rights;
- Export controls;
- Investment filtering;
- Promotion of SME access to and use of digital technologies;
- Global business challenges.
At the same time, the EU and the United States have established a joint technology competition policy dialogue which will focus on developing common approaches and strengthening cooperation on competition policy. competition and rule compliance in technology sectors.
Digital Economy – 4 June 2021
The European Commission has opened a formal investigation to establish whether Facebook has violated EU competition rules. This is advertising data collected from advertisers in order to compete with them in markets where Facebook operates, such as online ads. When advertising their services on Facebook, companies that are also in direct competition with Facebook can provide data to Facebook from a business perspective. Facebook could then use that data to compete with the companies that provided it.
This procedure will also determine whether Facebook links its online ad service “Facebook Marketplace” to its social network, in violation of EU competition rules. Facebook could use data obtained from competing providers who advertise their services on Facebook’s social network to help Facebook Marketplace supplant it. Facebook could, for example, obtain precise information about user preferences based on the advertising activities of its competitors and use this data to tailor Facebook Marketplace.
Digital Economy – 4 June 2021
The European Commission adopted two sets of standard contractual clauses, one for use between controllers and processors and one for the transfer of personal data to third countries. They reflect new requirements under the General Data Protection Regulation (GDPR) and take into account the Schrems II judgement of the Court of Justice, ensuring a high level of data protection for citizens.
Main innovations of the new standard contractual clauses:
- Update in line with the General Data Protection Regulation (GDPR);
- One single entry-point covering a broad range of transfer scenarios, instead of separate sets of clauses;
- More flexibility for complex processing chains, through a ‘modular approach’ and by offering the possibility for more than two parties to join and use the clauses;
- Practical toolbox to comply with the Schrems II judgment; i.e. an overview of the different steps companies have to take to comply with the Schrems II judgment as well as examples of possible ‘supplementary measures’, such as encryption, that companies may take if necessary
For controllers and processors that are currently using previous sets of standard contractual clauses, a transition period of 18 months is provided.
Digital Economy – 4 June 2021
The new EU copyright rules are applicable from June 7, member states are supposed to have transposed them by that date. The new Copyright Directive protects creativity in the digital age and brings concrete benefits to citizens, the creative sectors, the press, researchers, teachers and cultural heritage management institutions in the world. whole EU.
At the same time, the new directive on television and radio programs will allow European broadcasters to make certain programs on their online services more easily accessible across borders. In addition, the Commission today published its guidance on Article 17 of the new Copyright Directive, which provides for new rules on content sharing platforms.
Transport – 3 June 2021
The Council of the Union has adopted its position on the reform of the Single European Sky. This package includes an amended proposal to recast the Single European Sky Regulation (SES 2+) as well as a proposal for a regulation amending the basic regulation of the European Aviation Safety Agency (EASA).
The Council agrees on the essential objectives: to strengthen safety, to meet the needs in terms of capacities and to promote the reduction of emissions, while offering a satisfactory cost / efficiency ratio. the reform should also help to integrate drones into the airspace in a secure and gradual manner.
For the Council, the national supervisory authority, responsible for monitoring performance, must be independent of the air navigation service providers. Member States will have the option of merging the functions of economic oversight and safety oversight within the same administrative entity, instead of being required to create a separate entity for economic oversight as proposed by the Commission.
Air navigation service providers will also only need a single certificate, instead of two as initially proposed by the Commission. This single certificate will cover both the security aspects and the economic aspects necessary for providers to operate in the EU, meaning that providers will only have to complete one procedure.
Member States may decide to authorise the opening of certain air navigation services under market conditions. This will enable them to ensure that any deregulation of air traffic management is based on a thorough cost-benefit analysis and does not undermine the safety or security of air traffic management.
The national supervisory authorities and the Commission will jointly assess the performance of air navigation services, in accordance with the principles of subsidiarity and proportionality. The Commission may appoint a performance assessment body, which has an advisory role, to assist in this process and to ensure that local targets are compatible with targets set at EU level. It is not intended to create any new structure under EASA in this regard, as this would likely increase administrative costs for users without offering any proven benefits.
No changes will be made with regard to route charges for air navigation services: Member States will continue to set their national unit rates according to common criteria and the multilateral Eurocontrol agreement, which allows local conditions to be taken into account.
The general orientation strengthens environmental protection as a key performance area, in line with the Green Deal for Europe.
Member States will be able to implement variable charges. The Council instructs the Commission to study the possibility of varying charges at EU level, taking into account not only fuel consumption and trajectories, but also altitude and speed, effects excluding CO2 and NOx emissions.
Eurocontrol will be assigned additional tasks, including coordinating air traffic flows in order to optimize them from a network perspective, as well as coordinating and supporting network crisis management.
Finally, the Council’s position re-establishes functional airspace blocks as the basis for strengthening cooperation and coordination across national borders.
Digital Economy – 3 June 2021
The Commission has proposed a European framework for a digital identity that will be accessible to all EU citizens, residents and businesses. Citizens will be able to prove their identity and share electronic documents from their European digital identity wallet at the click of a button on their smartphone. They will be able to access online services using their national digital identification, which will be recognized across Europe. Very large platforms will be required to accept the use of European digital identity wallets at the request of the user, for example to allow him to prove his age. The use of the European digital identity portfolio will always be at the discretion of the user.
Economic and Financial Affairs – 27 May 2021
The parliaments of Austria and Poland have ratified the European recovery plan of 672 billion euros to overcome the economic consequences of the Covid-19 pandemic. They were the last national parliaments not to have done so yet. The ratification process for this project is now complete. With this plan, each EU member state has the opportunity to submit to Brussels an investment plan associated with structural reforms. Nineteen of the 27 states have already submitted their drafts to the Commission, which is due to review and approve them within two months. The European Council then has one month to give its agreement.
Single Market – 26 May 2021
The Swiss Federal Council has taken the decision to put an end to negotiations on the institutional framework agreement between the Union and Switzerland. Part of the 120 agreements currently in force between the two parties will gradually become obsolete. About half of Switzerland’s exports go to the EU and two-thirds of its imports come from the EU. Some 450,000 Swiss nationals live in the European Union and around 1.4 million European nationals live in Switzerland.
A first free trade zone was created in 1972 for industrial products by the agreement between Switzerland and the European Economic Community (EEC). It was supplemented in 1990 by an agreement which simplified customs controls and formalities in trade in goods.
In May 1992, Switzerland submitted a request to open negotiations for membership of the EEC. But a referendum in Switzerland rejected the country’s membership of the European Economic Area (EEA), considered at the time as a gateway to the EU. A package of agreements was nevertheless signed in 1999 (Bilateral Agreement I), then a second (Bilateral Agreement II), in 2014 to open up reciprocal access to markets and allow intense collaboration in other areas.
Single Market – 21 May 2021
In a resolution passed with 344 votes in favour, 311 against and 28 abstaining, the European Parliament asked the European Commission to modify its draft decisions on whether or not UK data protection is adequate and data can safely be transferred there, bringing them in line with the latest EU court rulings and responding to concerns raised by the European Data Protection Board (EDPB) in its recent opinions. The EDPB considers that UK bulk access practices, onward transfers and its international agreements need to be clarified further. The resolution states that, if the implementing decisions are adopted without changes, national data protection authorities should suspend transfers of personal data to the UK when indiscriminate access to personal data is possible.
Notably, the UK regime contains exemptions in the fields of national security and immigration, which now also apply to EU citizens wishing to stay or settle in the UK. Current UK legislation also allows for bulk data to be accessed and retained without a person being under suspicion for perpetrating a crime, and the EU court has found indiscriminate access to be inconsistent with the General Data Protection Regulation (GDPR), warns the text.
The deputies underline that provisions on metadata (or “secondary data”) do not reflect the sensitive nature of such data and are therefore misleading. They also worry about onward data transfers. The UK’s data-sharing agreements with the US mean EU citizens’ data could be shared across the Atlantic, despite recent rulings of the European Court of Justice that found US practices of bulk data access and retention incompatible with GDPR. Also, the UK’s application to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) could have implications for data flow to countries that do not have an adequacy decision from the EU.
Environment – 12 May 2021
The European Commission adopted the EU action plan ‘Towards zero pollution in air, water and soil’, a key part of the Green Deal for Europe. In order to help the EU achieve its 2050 goal of building a healthy planet for healthy people, the action plan sets key targets for 2030 to reduce pollution at source relative to the situation current. These objectives are:
- Improve air quality to reduce the number of premature deaths caused by air pollution by 55%;
- Improve water quality by reducing waste, plastic waste at sea (by 50%) and microplastics released into the environment (by 30%);
- Improve soil quality by reducing nutrient losses and the use of chemical pesticides by 50%;
- Reduce by 25% EU ecosystems where air pollution threatens biodiversity;
- Reduce by 30% the proportion of people suffering from chronic disorders due to transport noise; and
- Significantly reduce waste production and reduce residual municipal waste by 50%.
The plan describes a number of flagship initiatives and actions, including:
- Better alignment of air quality standards with the latest recommendations from the World Health Organization;
- Revision of water quality standards, including in EU rivers and seas;
- Reducing soil pollution and improving restoration;
the revision of most of the EU waste legislation in order to adapt it to the principles of the clean and circular economy;
- The promotion of “zero pollution” production and consumption;
- The presentation of a scoreboard of ecological performance of EU regions in order to promote zero pollution in all regions;
- The reduction of health inequalities due to the disproportionate share of harmful effects on health which is today borne by the most vulnerable people;
- Reducing the EU’s external pollution footprint, by limiting exports of products and waste that have harmful and toxic effects in third countries;
- The launch of living laboratories for green digital solutions and intelligent zero pollution;
- Consolidation of EU knowledge centers on zero pollution and bringing together stakeholders within the platform of stakeholders concerned by the “zero pollution” ambition;
- Stricter application of zero pollution rules, in collaboration with the competent environmental authorities and other authorities.
Competition Policy – 12 May 2021
The Court of First Instance of the Court of Justice of the Union has delivered two judgments. It has confirmed the Commission’s June 2018 decision that Luxembourg granted illegal State aid to Engie through selective tax breaks, but it annulled the Commission’s October 2017 decision that Luxembourg granted illegal State aid to Amazon.
Both judgments confirm once more a key principle: while Member States have exclusive competence to determine their taxation laws, they must do so in respect of EU law, including State aid rules.
As regards Engie in Luxembourg, the General Court has confirmed the Commission’s decision that a set of tax rulings issued by Luxembourg artificially reduced Engie’s tax bill by around €120 million. The tax rulings endorsed two financing structures put in place by Engie that treated the same transaction both as debt and as equity, with the result that its profits remained untaxed. The General Court has also confirmed that State aid enforcement can be a tool to tackle abusive tax planning structures that deviate from the objectives of the general tax system.
As regards Amazon in Luxembourg, the Commission’s decision concerned a tax ruling issued by Luxembourg to Amazon, by virtue of which three quarters of the profits made from all Amazon sales in the EU went untaxed until 2014.
Competition Policy – 5 May 2021
The European Commission has proposed a new instrument to address the potential distorting effects of foreign subsidies in the single market.
EU rules on competition, public procurement and trade defense instruments play an important role in ensuring a level playing field for companies operating in the single market. But none of these tools apply to foreign grants that give their beneficiaries an unfair advantage when acquiring EU companies, participating in public procurement in the EU or exercising ‘other business activities in the EU. These foreign subsidies can take different forms, such as zero-interest loans and other loss-making finance, unlimited state guarantees, zero tax rate agreements, or direct financial subsidies.
Under the proposed regulation, the Commission will be empowered to investigate financial contributions granted by the public authorities of a third country to companies carrying out an economic activity in the EU and, where appropriate, to remedy their distortion effects.
In this context, the regulation proposes the introduction of three tools, namely two notification-based tools and a general market investigation tool. It is more specifically:
- A notification-based tool for examining mergers involving a financial contribution from a public authority in a third country, when the turnover in the EU of the company targeted by the acquisition ( or at least one of the parties to the concentration) is equal to or greater than EUR 500 million and the foreign financial contribution is at least EUR 50 million;
- A tool based on notifications which allows the examination of tenders submitted in the context of public contracts involving a financial contribution from a public authority of a third country, when the estimated value of the public contract is equal to or greater than 250 millions of euros;
- A tool to examine all other market situations and lower value concentrations and public contracts. The Commission can launch such reviews on its own initiative (ex officio review) and request ad hoc notifications.
With regard to the two notification-based tools, the purchaser or the tenderer will have to notify in advance any financial contribution received from a public authority of a third country in the context of mergers or public contracts which reach the fixed thresholds. . Until the Commission’s examination has taken place, the concentration in question cannot be completed and the tenderer who is the subject of the investigation cannot be awarded the contract. Binding deadlines are set for the Commission’s decision.
The proposed regulation provides that if a company fails to comply with the obligation to notify a subsidized concentration or a financial contribution in the context of public contracts reaching the established thresholds, the Commission can impose fines and examine the transaction as if it had been notified.
As for the general market investigation tool, it will allow the Commission to examine other types of market situations, such as entirely new investments or mergers and public contracts below the thresholds, when suspects the existence of a foreign subsidy. In these cases, the Commission may open inquiries on its own initiative (ex officio examination) or request ad hoc notifications.
On the basis of the comments received on the White Paper, monitoring the application of the Regulation will be the sole responsibility of the Commission, in order to ensure its uniform application throughout the EU.
If the Commission establishes that there is a foreign subsidy and that this has distorting effects, it will take into account, where justified, any positive effects on the single market and weigh them against the negative effects generated. by distortion.
If the negative effects outweigh the positive effects, the Commission will have the power to impose remedial measures or to accept commitments from the companies concerned that will remedy the distortions.
Relations with the United Kingdom – 28 April 2021
The European Parliament adopted by 660 votes in favor, 5 against and 32 abstentions the agreement which sets the rules for the future relationship between the EU and the UK.
On December 24, 2020, EU and UK negotiators concluded the trade and cooperation agreement setting out the terms of future EU-UK cooperation. In order to minimize disruption, the agreement will apply provisionally since January 1, 2021.
Climate Change Policy – 21 April 2021
The European Parliament and the Council of the Union have agreed on the Regulation which confirms the EU’s commitment to achieve climate neutrality by 2050 as well as the intermediate objective of reducing net greenhouse gas emissions at least 55% by 2030 compared to 1990 levels:
- an ambitious climate target for 2030 of reducing net emissions by at least 55% compared to 1990, which clearly indicates the contribution that emissions reductions and removals will make;
- recognition of the need to strengthen the EU’s carbon sink through a more ambitious regulation, on which the Commission will present proposals in June;
- a process aimed at setting a climate objective for 2040, taking into account an indicative greenhouse gas emissions budget for the period 2030-2050 which will be published by the Commission;
- a commitment to negative emissions after 2050;
- the establishment of a European Scientific Advisory Board on Climate Change which will provide independent scientific advice;
- stricter provisions for adaptation to climate change;
- strong consistency between Union policies and the objective of climate neutrality;
- a commitment to cooperate with the different sectors in order to establish sectoral roadmaps charting the way towards climate neutrality in different areas of the economy.
Climate Change Policy – 21 April 2021
The European Commission has adopted a set of measures to steer capital flows towards sustainable activities across the European Union:
- A delegated act relating to the climate strand of the EU taxonomy, which aims to promote sustainable investments by giving a clearer view of the economic activities that most contribute to the achievement of the EU’s environmental objectives. A communication, also adopted today by the college, presents the Commission’s approach in more detail. This delegated act would cover the economic activities of some 40% of listed companies in sectors which are responsible for nearly 80% of direct greenhouse gas emissions in Europe. These sectors include energy, forestry, manufacturing, transport and construction.
- A proposal for a directive on the harmonisation of the publication of sustainability information by companies EU requirements for the publication of sustainability information will be extended to all large companies and companies listed. As a result, almost 50,000 EU companies will now have to comply with detailed European standards for publishing sustainability information, up from 11,000 under the current regime. Companies will need to publish information on the impact on them of sustainability issues, such as climate change, and on the impact of their activities on people and the environment. The Commission proposes the development of standards for large companies and separate and proportionate standards for SMEs, which unlisted SMEs could apply on a voluntary basis.
- Six amending delegated acts relating to fiduciary duties and investment and insurance advice, which will ensure that financial firms, such as advisers, asset managers or insurers, take sustainability into account in their procedures and advice in investment that they provide to their customers.
Competition Policy – 19 April 2021
The European Commission adopted revised EU regional aid guidelines (the ‘Regional State Aid Guidelines’), which set out the rules according to which Member States can grant aid for regional purposes. State to companies to support the economic development of disadvantaged areas in the EU, while ensuring a level playing field between Member States. The revised guidelines will come into effect on January 1, 2022.
The regional state aid guidelines are the first set of state aid rules to be revised following the announcement of the Green Deal for Europe and European industrial and digital strategies .
Competition Policy – 8 April 2021
The European Commission has launched a public consultation inviting all interested parties to comment on a proposal for a targeted review of the framework for state aid for research, development and innovation (the “RDI framework” ). Interested parties have eight weeks, i.e. until June 3, 2021, to respond to the consultation.
The Commission has carried out an assessment of the current RDI framework as part of the fitness check of state aid rules. The evaluation found that the current RDI framework arrangements work well overall and are an effective tool to facilitate research, development and innovation activities at both national and European level.
At the same time, the assessment has shown that some targeted adjustments to existing rules may be necessary to take into account the latest regulatory, economic and technological developments. In addition, the RDI framework may need to be aligned with the Commission’s new strategic priorities, such as the Green Deal for Europe and the EU’s digital strategies.
In this context, the Commission is proposing a number of targeted changes. More specifically, the proposed revisions are as follows:
- improve and update existing definitions of research and innovation activities eligible for support under the RDI framework, in particular to clarify their applicability with regard to digital technologies and transformation-related activities digital, in order to provide legal certainty to Member States and stakeholders, while facilitating investments in RDI that will enable the digital transformation of businesses in the EU;
- introduce new arrangements enabling public support for technological infrastructure (e.g. facilities, equipment, capacities and support services needed to develop, test and modernize technology, such as testing laboratories) in order to ” encourage RDI investments in this type of infrastructure. This aims to further promote the rapid development of innovative technologies, in particular by small and medium-sized enterprises (SMEs), and to facilitate the ecological and digital transition of the EU economy;
- simplify certain rules, for example by introducing a simplified method of calculating indirect costs in order to determine the eligible costs, with the aim of facilitating the practical application of the RDI framework, when the evaluation has found a possible excessive administrative burden for companies and managing authorities.
The RDI framework project and all the information relating to the public consultation are available online.
Digital Economy – 22 March 2021
The Council adopted new rules aimed at improving administrative cooperation in the field of taxation. They require digital platform operators to report the income received by sellers on their platforms and Member States to automatically exchange this information.
The new rules affect digital platforms established inside and outside the EU and will apply from 1 January 2023. They will allow national tax authorities to detect income received through digital platforms and determine the resulting tax obligations. Compliance will also be made easier for digital platform operators, as reporting will be done in a single Member State in accordance with a common EU framework.
Improvements will also be made to the rules relating to the performance of simultaneous checks, the possibility for officials to be present in another Member State during an investigation, and the competent authorities of two or more Member States to conduct investigations. joint audits.
This framework will be operational in all Member States from 2024 at the latest.
Digital Economy – 16 March 2021
The Council adopted the new EU program for a digital Europe; it will stimulate digital transformation by providing funding for the deployment of cutting-edge technologies in crucial areas such as artificial intelligence, high performance computing and cybersecurity. With a budget of 7,588 million euros, the program will cover the period 2021-2027, with retroactive effect from 1 January. Adoption by the European Parliament should take place soon.
The Digital Europe Program will fund projects in five areas, each with its own indicative budget:
- high performance computing: 2,226 million euros;
- artificial intelligence: 2,061 million euros;
- cybersecurity and trust: 1,649 million euros;
- advanced digital skills: 577 million euros;
- deployment, better use of digital capacities and interoperability: 1,072 million euros.
The Digital Europe program will complement a number of other digital transformation support programs, such as Horizon Europe, which focuses on research and technological development, and the digital side of the Connecting Europe Facility. .
In addition, according to the new regulation establishing the recovery and resilience facility, national recovery and resilience plans must devote at least 20% of their envelope to the digital transition.
Environment – 15 March 2021
The Council approved a new chemicals strategy, which sets out a long-term vision for EU chemicals policy; it is based on the communication of the European Commission: “Strategy for sustainability in the field of chemicals – Towards an environment free of toxic substances” presented in October 2020.
The strategy specifically aims to ban the most harmful chemicals found in consumer products such as cosmetics, toys, detergents, childcare articles, furniture, textiles or materials that come into contact with foodstuffs, to unless they are deemed essential to the health, safety or operations of the company, or there is no alternative. The Council also stresses the importance of limiting exposure to endocrine disruptors (dangerous for the hormonal system) and of reducing the harmful effects of chemical mixtures.
The major novelty of the strategy is the shift to an approach focused on safety and sustainability from the design stage. This approach also aims to stimulate innovation and sustainability in the chemicals sector.
Company Law – 3 March 2021
The Council of the Union adopted the proposal for a directive on the communication by certain companies and branches of information relating to income tax, commonly known as the “directive on the publication of country-by-country information”. It must now negotiate a common position with the European Parliament, which adopted the directive in March 2019.
The directive, proposed by the European Commission in April 2016, requires multinational companies or autonomous companies, whether established in the EU or not, whose total consolidated turnover exceeded 750 million euros for each of the last two financial years consecutively, to publish, among other relevant tax information, a specific information statement relating to the income tax they pay in each Member State.
Banks do not fall within the scope of this directive, as they are required to disclose similar information under another directive.
In order to save the companies concerned from disproportionate red tape and to limit the disclosure of information to what is strictly necessary to allow effective public control, the Directive includes a complete and definitive list of the information which must be disclosed.
The declaration must be made within twelve months of the balance sheet date for the financial year in question. The directive sets the conditions under which a company can obtain the postponement of this disclosure for a maximum period of six years.
It also determines who is actually responsible for ensuring compliance with the reporting obligation.
Member States will have two years to transpose the directive into their legislation.
Digital Economy – 19 February 2021
The Commission launched the process towards the adoption of two adequacy decisions for transfers of personal data to the United Kingdom, one under the General Data Protection Regulation and the other for the Law Enforcement Directive. The publication of the draft decisions is the beginning of a process towards their adoption.
Over the past months, the Commission has carefully assessed the UK’s law and practice on personal data protection, including the rules on access to data by public authorities. It concludes that the UK ensures an essentially equivalent level of protection to the one guaranteed under the General Data Protection Regulation (GDPR) and, for the first time, under the Law Enforcement Directive (LED).
This involves obtaining an opinion from the European Data Protection Board (EDPB) and the green light from a committee composed of representatives of the EU Member States.
Trade – 18 February 2021
The European Commission has set out the EU trade strategy for the five coming years. In particular, the Commission will :
- Seek the adoption of a first set of reforms of the WTO focusing on enhancing the WTO’s contribution to sustainable development, and launch negotiations on reinforced rules to avoid distortions of competition due to state intervention;
- Work to restore a fully-functioning WTO dispute settlement;
- Support the green transition and promote responsible and sustainable value chains, in particular with G20 partners;
- Seek the rapid conclusion of an ambitious and comprehensive WTO agreement on digital trade, including rules on data flows;
- Deepen trade and economic relations with other countries in Europe, including the Western Balkans and countries that have concluded DCFTAs with the EU, focusing in particular on closer regulatory cooperation in support of the green and digital transitions;
- Modernise its trade and investment relations with those countries in the Southern Neighbourhood interested in fostering closer integration with the European Union.
- Reinforce its engagement with African countries by enhancing political dialogue and cooperation with the African Union and its Members and the smooth implementation of AfCFTA, including engagement with the private sector and promoting common standards in Africa to enhance regional and continental integration, and deepening and widening its existing trade agreements with African regional economic communities and strengthen their sustainability dimension;
- Strengthen the EU’s focus on implementation and enforcement of trade agreements, and ensure a level playing field;
- Seek to consolidate the EU’s partnerships with key growth regions–in the Asia Pacific and Latin America -by creating the conditions to conclude negotiations and ratify outstanding bilateral agreements.
Financial Services – 12 February 2021
The European Commission has launched two related consultations on the Settlement Finality Directive in Payment Systems and Securities Settlement (SFD) 2008, on the one hand, and the Financial Collateral Directive (FCD) of 2009, on the other hand.
The SFD guarantees that the transfer orders entered in these systems are also definitively settled, whether the sending participant has become insolvent or not. The FCD has created a European legal framework for the reception and execution of financial guarantees. Financial security minimizes the risk of financial loss for the lender if the borrower does not meet his obligations.
The consultations will remain open until mid-May.
Environment – 10 February 2021
The European Parliament has adopted policy recommendations to achieve a fully circular, carbon neutral, sustainable and non-toxic economy by 2050 at the latest. It calls on the Commission to present new legislation in 2021 extending the scope of the Ecodesign Directive to include non-energy products. Other key proposals include:
- The introduction of measures against greenwashing and false environmental claims, as well as legislative measures to end practices leading to planned obsolescence;
- Strengthening the EU eco-label as a benchmark for environmental sustainability;
- Strengthening the role of green public procurement through the establishment of mandatory minimum criteria and targets; and
- The integration of the principles of the circular economy in the national recovery plans of the Member States.
During the plenary debate, MEPs also stressed that it would not be possible to achieve the targets set in the Green Deal if the EU did not switch to a circular economic model, and that these changes would create jobs and new opportunities for businesses. Better implementation of current waste legislation is needed, as well as additional measures for key sectors and products, such as textiles, plastics, packaging and electronics.
The Council should now take position.
Financial Services – 2 February 2021
The Council adopted amendments to the so-called Benchmark Regulation addressing the termination of financial benchmarks.
The amendments have been made against the background of an expected phasing-out of the London Inter-Bank Offered Rate (LIBOR) by the end of 2021. The aim of the new rules is to reduce legal uncertainty and avoid risks to financial stability by making sure that a statutory replacement rate can be put in place by the time a systemically important benchmark is no longer in use.
Under the new framework, the Commission will have the power to replace so-called ‘critical benchmarks’, which could affect the stability of financial markets in the EU, and other relevant benchmarks, if their termination would result in a significant disruption in the functioning of financial markets in the EU. The Commission will also be able to replace third-country benchmarks if their cessation would result in a significant disruption in the functioning of financial markets or pose a systemic risk for the financial system in the EU.
The new rules also cover the replacement of a benchmark designated as critical in one member state, through national legislation.
In addition, the amendments to the Benchmark Regulation extend the transition period for the use of third-country benchmarks until the new rules governing the use of such benchmarks are applied.
EU supervised entities will be able to use third-country benchmarks until the end of 2023. The Commission may further extend this period until the end of 2025 in a delegated act to be adopted by 15 June 2023, if it provides evidence that this is necessary in a report to be presented by that time.
The text of the regulation adopted will be signed on 10 February and is expected to be published in the Official Journal on 12 February. It will enter into force and apply from the following day.
Financial Services – 27 January 2021
The European Commission has adopted an equivalency decision establishing that the regime applied to US central counterparties by the US Securities and Exchange Commission (SEC) is equivalent to EU rules. This decision establishes that the legal framework and supervisory framework applicable to US CCPs registered with the SEC can be considered equivalent to the requirements of EMIR. It only applies to “covered clearing agencies” regulated by the SEC. The equivalence decision is conditional. In order to be allowed to offer their services in the EU, the relevant US CCPs will have to put in place rules to comply with certain risk management requirements (liquidation periods and anti-cyclical measures).
The oversight of central counterparties in the United States is a shared responsibility between the SEC and the CFTC. The equivalence decision concerns American central counterparties registered with the SEC, that is to say those which clear securities and securities derivatives (“security-based swaps” in American terminology). ESMA has already recognized a number of US CCPs registered with and supervised by the CFTC.
This decision marks an important first step towards the recognition, in the European Union, of American CCPs registered with the SEC. It will allow these American central counterparties to apply for their recognition by the European Securities and Markets Authority (ESMA). Once recognized by ESMA, these US CCPs will be able to offer central clearing services in the EU.
Central counterparties are entities that intervene between the two parties to a derivative contract, acting as buyer vis-à-vis the seller and seller vis-à-vis the buyer. In the aftermath of the financial crisis, the G20 pleaded for the use of these entities, in order to reduce the risk inherent in trading in derivatives. Derivatives markets are global in nature.
In order for the Commission to adopt an equivalence decision, the third country regime must meet three conditions set out in the European Market Infrastructure Regulation (hereinafter “EMIR”):
- first, CCPs authorized in the third country must comply with legally binding requirements equivalent to the requirements of EMIR;
- second, they must be subject to effective and continuous monitoring; and
- third, the legal framework of the third country must provide for an effective equivalent system for the recognition of foreign central counterparties.
Trade – 20 January 2021
The European Parliament has adopted a regulation allowing the EU to resort to countermeasures in trade disputes when arbitration is blocked. It approved the political agreement with the Council of the Union by 653 votes in favor, 10 against and 30 abstentions. The Council will adopt this agreement in the coming days and the regulation will enter into force within 20 days.
The strengthening of the regulation on the respect of the rules of international trade allows the EU to protect its commercial interests against partners who act illegally. The EU can now introduce countermeasures when it obtains a favorable ruling from a World Trade Organization (WTO) dispute settlement panel, or in bilateral and regional agreements when the other party does not cooperate in resolving the dispute.
Parliament widened the scope of the settlement of disputes over goods to those including services and certain intellectual property rights, in particular European trademarks, designs and geographical indications.
Parliament has also ensured that the Commission examines violations with adverse consequences for workers or the environment in a business context with the same attention as violations of market access.
Economic and Financial Affairs – 19 January 2021
The European Commission has presented a new strategy aimed at fostering the openness, soundness and resilience of the EU’s economic and financial system for years to come. This strategy aims to strengthen Europe’s capacity to play a leading role in global economic governance, while protecting the EU against unfair and abusive practices. It is part of the Geopolitical Commission project set out by President von der Leyen and follows on from the Commission communication of May 2020 entitled “Time for Europe: repairing the damage and preparing the future for the next generation ”.
The proposed approach is based on three mutually reinforcing objectives:
- Strengthen the international role of the euro by engaging in dialogue with third country partners to promote the use of the euro, by supporting the development of instruments and indices denominated in euros and by promoting the status of international reference currency of the euro in the energy and commodity sectors, and in particular the sector of new energy vectors such as hydrogen.
The issuance of high-quality euro-denominated bonds under NextGenerationEU will significantly increase the depth and liquidity of EU capital markets in the coming years and increase their attractiveness, and that of the euro, for investors. The promotion of sustainable finance also provides the opportunity to transform the EU financial markets into a global platform for ‘green finance’ and thereby strengthen the status of the euro as the default currency for sustainable financial products. .
In this context, the Commission will work to promote the use of green bonds as instruments to finance the energy investments needed to achieve the energy and climate targets by 2030. The Commission will issue 30% of the total volume of bonds under NextGenerationEU in the form of green bonds. It will also examine the possibilities of expanding the role of the EU Emissions Trading System (ETS) to maximize environmental outcomes and to support emissions trading activity in the EU. the EU. In addition, the Commission will also continue to support the work of the European Central Bank (ECB) concerning the possible issue of a digital euro, in addition to cash.
- Continue to develop the EU’s financial market infrastructures and improve their resilience, in particular in the case of the extraterritorial application of sanctions by third countries.
The Commission, in cooperation with the ECB and the European Supervisory Authorities (ESA), will engage in dialogue with the companies that constitute the financial market infrastructures in order to carry out an in-depth analysis of their vulnerabilities linked to the illegal extraterritorial application of unilateral measures by third countries and take measures to remedy them. The Commission will also set up a working group to analyze the technical issues that may arise in transferring financial contracts denominated in euros (or other EU currencies) to central counterparties located in the EU and cleared outside the EU. In addition, the Commission will explore ways to ensure an uninterrupted flow of essential financial services, including payments, with EU entities or individuals affected by the extraterritorial application of unilateral sanctions from third countries.
- Continue to promote the uniform implementation and enforcement of EU sanctions.
In 2021, the Commission will develop a database – the repository for the exchange of information on sanctions – to ensure effective reporting and information exchange between Member States and the Commission on the implementation and the enforcement of sanctions. The Commission will work with Member States to set up a single point of contact for implementation and enforcement issues with a cross-border dimension. The Commission will also ensure that EU funds intended for third countries and international organizations are not used in violation of EU sanctions. In view of the need to monitor the harmonized execution of EU sanctions, the Commission will set up a special system allowing anonymous reporting of cases of circumvention of sanctions, including the launching of whistleblowers.
Trade – 24 December 2020
The European Commission has concluded a trade agreement with the United Kingdom following its departure from the European Union. It must be ratified by the Council of the Union and the European Parliament in 2021, but will apply provisionally from 1 January 2021.
The Withdrawal Agreement remains in force and protects, among other things, the rights of citizens of the Union and nationals of the United Kingdom, the financial interests of the Union and peace and stability on the island of Ireland.
The agreement on trade is complemented by a horizontal agreement on governance, in order to offer maximum legal certainty to businesses, consumers and citizens, It will include binding enforcement and dispute settlement mechanisms, placing competition between businesses in the Union and the United Kingdom on an equal footing without either party being able to use its regulatory autonomy to grant unfair subsidies or distort competition. In the event of a violation of the agreement, both parties can take cross-sectoral retaliatory measures applicable to all areas of the economic partnership.
The trade agreement is defined as a new economic and social partnership with the United Kingdom.
- The agreement covers trade in goods and services and a wide range of other areas of interest to the Union, such as investment, competition, state aid, tax transparency, air transport and road, energy and sustainability, fisheries, data protection and social security coordination.
- It provides for zero tariffs and quotas on all goods conforming to the appropriate rules of origin.
- The two parties are committed to ensuring a level playing field by maintaining high levels of protection in areas such as environmental protection, the fight against climate change and carbon pricing, social rights and rights. labor, tax transparency and state aid, which implies effective implementation at national level, a binding dispute settlement mechanism and the possibility for both parties to take corrective measures.
- The Union and the United Kingdom have agreed on a new framework for the joint management of fish stocks in their respective waters. The UK will be able to increase the development of UK fishing activities, while preserving not only the activities and livelihoods of European fishing communities but also natural resources.
- As regards transport, the agreement provides for air, road, rail and maritime connectivity which will operate in continuity and sustainability, although it is true that market access will not be as favorable as in single market conditions. It includes provisions to ensure equal competition between operators in the Union and the United Kingdom, so that passenger rights, workers’ rights and transport safety are not compromised.
- As far as energy is concerned, the agreement provides for a new model for trade and interconnectivity, with guarantees for open and fair competition, including with regard to applicable safety standards offshore and the production of electricity. renewable energy.
- With regard to the coordination of social security, the agreement aims to guarantee a number of rights to Union citizens and United Kingdom nationals. This concerns EU citizens who will work, travel or settle in the UK and UK nationals who will work, travel or settle in the EU after 1 January 2021.
- Finally, the agreement allows the UK to continue participating in a number of EU flagship programs, such as Horizon Europe, over the period 2021 to 2027 (subject to a financial contribution from the UK). United to the Union budget). The United Kingdom, however, will not participate in the Erasmus programme.
Lastly, a partnership for internal security completes the mechanism to guarantee police and judicial cooperation in criminal and civil matters.
By contrast, foreign policy, external security and defense cooperation are not covered by the agreement, as the UK did not want to include them in the negotiation. As of January 1, 2021, there will therefore be no framework for the UK and the EU to develop and coordinate common responses to foreign policy issues, such as the imposition of sanctions aimed at criminalising nationals or economies of third countries.
Representation of interests – 15 December 2020
The Council of the Union has reached an agreement with the European Commission and the Parliament to join the management of the Transparency Register, which lists and regulates around 12,000 lobbying entities. This register, which was created in 2008, includes compliance with a code of conduct and the publication by these entities of a series of precise information.
This register also includes obligations for the Council, and in particular for the Member States which constitute it. However, unlike the Commission and Parliament, the publication of the names of the entities met will only remain an option for the Member States.
Digital Economy – 15 December 2020
The Commission has proposed a reform of the European digital space.
On services, digital services legislation will introduce across the EU a series of new harmonized obligations for digital services, which will be carefully tailored to the size and impact of these services. For example:
- rules for removing illegal goods, services or content online;
- guarantees for users whose content has been deleted by mistake by a platform;
new obligations for very large platforms to take risk-based measures to prevent misuse of their systems;
- wide-ranging transparency measures, in particular with regard to online advertising and the algorithms used to recommend content to users;
- new skills to examine the functioning of platforms, in particular by facilitating researchers’ access to data from key platforms;
- new rules on the traceability of professional users on online marketplaces, to more easily find sellers of illegal goods or services;
- an innovative process of cooperation between public authorities in order to ensure effective enforcement of the law throughout the single market.
Platforms that reach more than 10% of the EU population (45 million users) are considered to be systemic in nature and will be subject not only to specific obligations to control their own risks, but also to a new monitoring structure. This new accountability framework will include a committee of national coordinators for digital services and will give special powers to the Commission with regard to the oversight of very large platforms, including the possibility of directly sanctioning them.
In terms of markets, the legislation on digital markets:
- will only apply to essential platform services most exposed to unfair practices, such as search engines, social networks or online intermediation services, meeting the objective criteria provided for in the legislation to be appointed as access controllers ;
- define quantitative thresholds which will serve as a basis for identifying suspected access controllers. The Commission will also be empowered to designate companies as having the position of gatekeeper, following a market investigation;
- prohibit certain clearly unfair practices, such as preventing users from uninstalling preinstalled software or applications;
- require gatekeepers to proactively implement certain measures, such as targeted measures that allow third-party software to function and interact properly with their own services;
- will impose sanctions in the event of non-compliance with the provisions, in particular fines of up to 10% of the access controller’s worldwide turnover, in order to ensure the useful effect of the new rules. In the event of a repeat offense, these penalties may include the obligation to take structural measures, which may go as far as the sale of certain activities if no equally effective measure is available to ensure compliance;
- will allow the Commission to carry out targeted market surveys to determine whether, if any, there is a need to integrate new practices of access controllers and new services into the rules, in order to keep up with the rapid development digital markets.
Climate Policy – 10 December 2020
The European Commission has proposed to modernize EU legislation on batteries. The Commission is proposing mandatory requirements for all batteries (i.e. industrial, automotive, electric and portable vehicles) placed on the EU market. Requirements such as the use of responsibly sourced materials with limited use of hazardous substances, minimum recycled content, carbon footprint, performance, duration and marking, as well as meeting collection targets and recycling are essential for the development of a more sustainable and competitive battery industry across Europe and the world.
With this proposal, the Commission aims to stimulate the circular economy of battery value chains and promote a more efficient use of resources with the aim of minimizing the environmental impact of batteries. From July 1, 2024, only rechargeable industrial batteries and electric vehicle batteries for which a carbon footprint statement has been established can be placed on the market.
In order to close the loop and keep the recoverable materials used in batteries for as long as possible in the European economy, the Commission proposes to establish new requirements and targets for the content of recycled materials and the collection , treatment and recycling of batteries at the end of their life cycle. To significantly improve the collection and recycling of portable batteries, the collection rate, which currently stands at 45%, should be increased to 65% in 2025 and to 70% in 2030. All other batteries (industrial, automotive or electric vehicles) must be collected. All batteries collected must be recycled and high levels of recovery must be achieved, especially with regard to recoverable materials such as cobalt, lithium, nickel and lead.
The proposed regulation sets out a framework that will facilitate the reallocation of electric vehicle batteries to give them a second life, for example as stationary battery energy storage systems, or through their integration into power grids as resources. energetic.
The use of new IT technologies, including the battery passport and interconnected data space, will be essential to ensure secure data sharing, increase transparency in the battery market and traceability of large batteries throughout their lifecycle. of life. It will allow manufacturers to develop innovative products and services as part of the dual ecological and digital transition.
Climate Policy – 9 December 2020
The European Commission presented its “Sustainable and Smart Mobility Strategy”, accompanied by an action plan of 82 initiatives.
By 2030, at least 30 million zero-emission vehicles will circulate on European roads; 100 European cities will be climate neutral; high-speed rail traffic will double across Europe; collective trips scheduled for journeys of less than 500 km should be carbon neutral; automated mobility will be deployed on a large scalezero emission seagoing vessels will be ready to market.
By 2035, large capacity zero-emission aircraft will be ready to market.
By 2050, almost all new cars, vans, buses and heavy-duty vehicles will be zero-emission; rail freight traffic will double; a multimodal and fully operational trans-European transport network (TEN-T) for sustainable and intelligent transport guaranteeing very fast connectivity.
The advent of sustainable transport presupposes in practice:
- foster the adoption of zero-emission vehicles, ships and aircraft, renewable and low-carbon fuels and related infrastructure – for example, by installing 3 million public charging points by 2030;
- to create zero-emission airports and ports – for example through new initiatives to promote sustainable fuels for the aviation and shipping sectors;
- make interurban and urban mobility healthy and sustainable – for example, by doubling high-speed rail traffic and developing additional cycling infrastructure over the next 10 years;
- greening freight transport – for example, by doubling freight rail traffic by 2050;
- set a price for carbon and improve incentives for users – for example, by adopting a comprehensive set of measures to ensure fair and efficient pricing in all modes of transport.
Innovation and digitalization will shape the way people and goods move in the future if the right conditions are right. In this regard, the strategy provides for the following flagship initiatives:
- making connected and automated multimodal mobility a reality – for example, by giving passengers the option to purchase tickets for multimodal journeys and by ensuring that goods can move seamlessly from one mode of transport to another. other;
- encourage innovation and the use of data and artificial intelligence (AI) for smarter mobility – for example, by fully supporting the deployment of drones and unmanned aerial vehicles and others measures to create a common European space for mobility data.
Competition – 10 November 2020
The European Commission has informed Amazon of its preliminary view that it has breached EU antitrust rules by distorting competition in online retail markets. The Commission takes issue with Amazon systematically relying on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon’s own retail business, which directly competes with those third party sellers.
The Commission also opened a second formal antitrust investigation into the possible preferential treatment of Amazon’s own retail offers and those of marketplace sellers that use Amazon’s logistics and delivery services.
Single Market – 4 November 2020
Following the agreement reached with the European Parliament in June 2020, the Council adopted its position at first reading on a draft directive on representative actions for the protection of the collective interests of consumers within the EU. The directive was proposed by the Commission in April 2018 as part of the Commission’s ‘New deal for consumers’ package, which aimed to ensure fair and transparent rules for EU consumers.
The directive requires member states to put in place a system of representative actions for the protection of consumers’ collective interests against infringements of Union law. It covers actions for both injunctions and redress measures. It empowers qualified entities designated as such by member states to seek injunctions and/or redress, including compensation or replacement, on behalf of a group of consumers that has been harmed by a trader who has allegedly infringed one of the EU legal acts set out in the annex to the directive. These legal acts cover areas such as financial services, travel and tourism, energy, health, telecommunications and data protection.
The directive distinguishes between qualified entities entitled to bring actions in the member state where they have been designated (domestic representative actions) and those entitled to bring actions in any other member state (cross-border representative actions). For domestic actions a qualified entity will have to fulfil the criteria set out in the law of its member state of designation, whereas for cross-border actions it will have to fulfil the harmonised criteria set out in the directive.
As a safeguard against abusive litigation, the directive provides clear rules on the allocation of judicial costs in a representative action for redress based on the ‘loser pays’ principle. Furthermore, with a view to avoiding conflicts of interest, it imposes on qualified entities a number of transparency requirements, in particular as regards their funding by third parties. The directive will apply to representative actions brought on or after the date of its application.
In line with the early second reading agreement reached last June, the European Parliament should approve the Council’s position at first reading before the end of the year. The directive will then be deemed to have been formally adopted. It shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. Member states will have 24 months from the entry into force of the directive to transpose it into national law, as well as an additional 6 months to start applying these provisions.
Trade – 28 October 2020
The European Commission, the European Parliament and the Council have reached a political agreement on the strengthening of the European Union (EU) regulation on compliance with the rules of international trade. As part of the agreement, the Commission pledged to rapidly develop the EU’s anti-coercion mechanism.
The revised regulation will allow the EU to react even if the WTO has not ruled definitively because the other WTO member party to the dispute is blocking the settlement process with an appeal to an Appellate Body that does not is not operational and by the denial of alternative arbitration under the WTO Dispute Settlement Understanding.
This new mechanism will also apply to dispute settlement provisions in regional or bilateral trade agreements to which the EU is a party if a comparable blockage occurs. The EU must be able to react decisively when trading partners obstruct effective dispute settlement, for example by blocking the establishment of panels.
The agreement also extends the scope of the regulation and possible trade policy measures to services and certain aspects of trade-related intellectual property rights (IPRs).
Environment – 14 October 2020
The European Commission presented its EU Chemicals Strategy for Sustainability. The Strategy is the first step towards a zero pollution ambition for a toxic-free environment announced in the European Green Deal. In 2018, Europe was the second biggest producer of chemicals (accounting for 16.9% of sales). Chemical manufacturing is the fourth largest industry in the EU, directly employing approximately 1.2 million people. 59% of chemicals produced are directly supplied to other sectors, incl. health, construction, automotive, electronics, and textiles. Global chemicals production is expected to double by 2030, and the already widespread use of chemicals is likely to also increase, including in consumer products.
Flagship initiatives include in particular:
- Phasing out from consumer products, such as toys, childcare articles, cosmetics, detergents, food contact materials and textiles, the most harmful substances, which include among others endocrine disruptors, chemicals that affect the immune and respiratory systems, and persistent substances such as per- and polyfluoroalkyl substances (PFAS), unless their use is proven essential for society;
- Minimising and substituting as far possible the presence of substances of concern in all products. Priority will be given to those product categories that affect vulnerable populations and those with the highest potential for circular economy;
- Addressing the combination effect of chemicals (cocktail effect) by taking better account of the risk that is posed to human health and the environment by daily exposure to a wide mix of chemicals from different sources;
- Ensuring that producers and consumers have access to information on chemical content and safe use, by introducing information requirements in the context of the Sustainable Product Policy Initiative.
Climate Policy – 14 October 2020
The European Commission has published its Renovation Wave Strategy to improve the energy performance of buildings. The Commission aims to at least double renovation rates in the next ten years and make sure renovations lead to higher energy and resource efficiency.
Buildings are responsible for about 40% of the EU’s energy consumption, and 36% of greenhouse gas emissions from energy. By 2030, 35 million buildings could be renovated and up to 160,000 additional green jobs created in the construction sector.
Digital Economy – 24 September 2020
The European Commission has adopted a new set of measures on digital finance, comprising digital finance and retail payments strategies as well as legislative proposals relating to crypto-assets and digital resilience.
The Commission distinguishes between crypto-assets already governed by EU law and other crypto-assets. The former will remain subject to existing legislation, but the Commission is proposing a pilot scheme for market infrastructures that wish to attempt to trade and settle transactions in financial instruments in the form of crypto-assets. This should allow market participants and regulators to gain experience with using DLT exchanges that would trade or register stocks or bonds on the digital ledger.
For previously unregulated crypto-assets, including “stablecoins”, the Commission is offering a tailor-made regime. The proposed regulation sets strict requirements for issuers of cryptoassets in Europe and providers of cryptoassets wishing to apply for authorization to provide their services in the single market. Guarantees include capital requirements, custody of assets, a mandatory claims procedure for investors and the rights of the investor against the issuer. Large, asset-backed crypto-asset issuers would be subject to more stringent capital, liquidity management and interoperability requirements.
The Commission also proposes that all companies ensure that they can withstand all types of disruption and threats related to ICT. Banks, exchanges, clearing houses, as well as fintechs, will need to adhere to strict standards to prevent and limit the impact of ICT incidents. The Commission is also establishing a supervisory framework for service providers (such as big tech) that provide cloud computing to financial institutions.
The strategy for instant payments and EU-wide payment solutions is about protecting consumers and ensuring that payment solutions are secure and reducing Europe’s dependence on major global players in this field.
Financial Services – 24 September 2020
The European Commission has published a new Action Plan to boost the European Union’s Capital Markets Union (CMU) over the coming years. It has three key objectives:
- Ensuring that the EU’s economic recovery is green, digital, inclusive and resilient by making financing more accessible for European companies, in particular SMEs;
- Making the EU an even safer place for individuals to save and invest long-term;
- Integrating national capital markets into a genuine EU-wide single market for capital.
To do this, the Commission has put forward 16 targeted measures :
- Create a single access point to company data for investors;
- Support insurers and banks to invest more in EU businesses;
- Strengthen investment protection to support more cross-border investment in the EU.
- Facilitate monitoring of pension adequacy across Europe;
- Make insolvency rules more harmonised or convergent;
- Push for progress in supervisory convergence and consistent application of the single rulebook for financial markets in the EU.
Financial Services – 21 September 2020
The European Commission adopted a temporary decision to give financial market participants 18 months to reduce their exposure to UK central counterparties (CCPs).
The heavy reliance of the EU financial system on services provided by UK-based CCPs raises important issues related to financial stability and requires the scaling down of EU exposures to these infrastructures. Accordingly, industry is strongly encouraged to work together in developing strategies that will reduce their reliance on UK CCPs that are systemically important for the Union. On 1 January 2021, the UK will leave the Single Market. This decision aims to protect financial stability in the EU and give market participants the time needed to reduce their exposure to UK CCPs.
Climate Policy – 17 September 2020
The European Commission presented its plan to reduce EU greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. This level of ambition for the next decade will put the EU on a balanced pathway to reaching climate neutrality by 2050. The new target is based on a comprehensive Impact Assessment of the social, economic and environmental impacts. The Assessment demonstrates that this course of action is realistic and feasible. This raised ambition also underlines the EU’s continued global leadership, ahead of the next UN climate conference (COP26).
The Commission has tabled an amendment to the proposed European Climate Law, to include the 2030 emissions reduction target of at least 55% as a stepping stone to the 2050 climate neutrality goal. It invited the Parliament and Council to confirm this 55% target as the EU’s new Nationally Determined Contribution (NDC) under the Paris Agreement, and to submit this to the UNFCCC by the end of this year. The Commission also set out the legislative proposals to be presented by June 2021 to implement the new target, including: revising and expanding the EU Emissions Trading System; adapting the Effort Sharing Regulation and the framework for land use emissions; reinforcing energy efficiency and renewable energy policies; and strengthening CO2 standards for road vehicles.
Trade – 8 September 2020
Further to Trade Commisioner Phil Hogan’s resignation on 26 August – because of allegations of health security rules breach in Ireland – Mairead McGuinness was appointed to replace him. However, she will be responsible for the Financial Services Policy while Vice-President Valdis Dombrovski will take in charge the Trade portfolio.
European Union – 21 July 2020
The European Council adopted a “Next Generation EU” recovery plan, following the health crisis of spring 2020.
The Commission is empowered in the Own Resources Decision to borrow funds on the capital markets on behalf of the Union up to a maximum amount of EUR 750 billion at 2018 prices; new net borrowing activity will cease no later than the end of 2026.
The amounts under Next Generation EU intended for the various programs are as follows:
- Recovery and Resilience Facility: EUR 672.5 billion, of which loans: EUR 360 billion, of which grants: EUR 312.5 billion;
- REACT-EU: EUR 47.5 billion (Regional policy);
- Horizon Europe: EUR 5 billion (Research and Innovation);
- InvestEU: EUR 5.6 billion (European Strategic Development Fund);
- Rural development: EUR 7.5 billion (Agricultural Policy);
- Just Transition Fund (FTJ): EUR 10 billion (Climate policy);
- RescEU: EUR 1.9 billion (Humanitarian aid).
Borrowed funds can be used for loans up to a maximum of EUR 360 billion at 2018 prices and for expenditure up to a maximum of EUR 390 billion at 2018 prices.
Repayment is scheduled, in accordance with the principle of sound financial management, so as to guarantee a constant and predictable reduction in commitments until December 31, 2058. The amounts not used to pay interest as planned will be used for early repayments before the end of the MFF 2021-2027, with a minimum amount, and may be increased beyond this level, provided that new own resources have been introduced. The amounts due by the Union in any given year for repayment of principal shall not exceed 7.5% of the maximum amount of EUR 390billion foreseen for expenditure.
Financial Services – 20 July 2020
The Council adopted new rules to improve the way crowdfunding platforms operate across the EU. They will cover crowdfunding campaigns of up to EUR 5 million over a 12 month period. Larger operations will be regulated by MiFID and the prospectus regulation. Reward- and donation-based crowdfunding fall outside the rules’ scope since they cannot be regarded as financial services.
The adopted rules provide a high level of investor protection, whilst taking into account compliance cost for providers: they set out common prudential, information and transparency requirements and include specific requirements for non-sophisticated investors. The rules for EU crowdfunding businesses will be tailored depending on whether they provide their funding in the form of a loan or an investment (through shares and bonds issued by the company that raises funds).
The framework defines common authorisation and supervision rules for national competent authorities. The European Securities and Markets Authority (ESMA) will have an enhanced role to facilitate coordination and cooperation, through a binding dispute mediation mechanism and the development of technical standards.
Digital Economy – 16 July 2020
The Court of Justice of the Union has invalidated the decision 2016/1250 of the European Commission on the adequacy of the protection provided by the EU-US Privacy Shield. However, it held that its decision 2010/87 on standard contractual clauses for the transfer of personal data to subcontractors established in third countries is valid.
The General Data Protection Regulation (GDPR) provides that the transfer of such data to a third country can, in principle, only take place if the third country in question ensures an adequate level of protection for this data. According to this regulation, the Commission may find that a third country ensures, by virtue of its internal legislation or its international commitments, an adequate level of protection.
As regards the level of protection required in the context of such a transfer, the Court considers that the requirements provided for this purpose by the provisions of the GDPR, which relate to appropriate guarantees, enforceable rights and legal remedies must be interpreted as meaning that persons whose personal data are transferred to a third country on the basis of standard data protection clauses must benefit from a level of protection substantially equivalent to that guaranteed within the Union by this regulation, read in the light of the Charter. In this context, it specifies that the evaluation of this level of protection must take into account both the contractual stipulations agreed between the data exporter established in the Union and the recipient of the transfer established in the third country concerned that, with regard to possible access by the public authorities of that third country to the data thus transferred, the elements relevant to its legal system.
Taxation Policy – 16 July 2020
The European Commission adopted an ambitious new tax package to ensure that EU tax policy supports Europe’s economic recovery and long-term growth. It has three components:
- The tax action plan presents 25 separate actions to make taxation simpler, fairer and better suited to the modern economy in the coming years. These actions will remove obstacles at every step of the process, from registration to dispute resolution, including declaration, payment and verification.
- The Administrative Cooperation Proposal (DAC 7) extends EU rules on tax transparency to digital platforms.
- The communication on good tax governance focuses on the promotion of fair taxation and the fight against unfair tax competition in the EU and internationally. To this end, the Commission is proposing a reform of the code of conduct, which focuses on tax competition and combating harmful tax practices in the EU. It also proposes improvements to the EU list of non-cooperative countries and territories, which includes third countries that refuse to follow internationally agreed standards.
Competition Law – 15 July 2020
The General Court overturned the European Commission’s request to have the Irish government demand the return of 13 billion euros in illegal tax benefits from Apple. This request, made in 2016, concerned tax measures from 1991 and 2007. For the Commission, this Irish tax policy represented illegal state aid, in favor of Apple Sales International (ASI) and Apple Operations. Europe (AOE), which were companies incorporated in Ireland but not tax resident in the country.
Trade – 22 June 2020
The European Union and China held their 22nd bilateral Summit via videoconference on 22 June 2020 The EU strongly emphasised the need to advance negotiations for an ambitious EU-China Comprehensive Investment Agreement that addresses the current asymmetries in market access and ensures a level playing field. Urgent progress is needed in particular on behaviour of State-Owned Enterprises, transparency on subsidies and rules tackling forced transfers of technology.
On economic and trade issues, the EU recalled the joint commitment to work constructively and expeditiously towards the resolution of a number of market access and regulatory issues. The EU welcomed confirmation by China that the recent China-US “phase 1” deal will be implemented in full compatibility with World Trade Organisation (WTO) obligations and without discrimination against EU operators. The EU recalled its expectation that European exporters immediately benefit from trade facilitating measures in the agri-food sector.
The EU reiterated the urgent need for China to engage in future negotiations on industrial subsidies in the WTO, and address overcapacity in traditional sectors such as steel as well as high-tech areas.
The EU is looking forward to the signature of the EU-China Agreement on Geographical Indications in coming weeks and entry into force in nearest future.
The Summit was also an opportunity to discuss the importance of the digital sector to economies and societies worldwide. The EU stressed that the development of new digital technologies must go hand in hand with the respect of fundamental rights and data protection. The EU also raised outstanding issues on cybersecurity, disinformation.
Single Market – 22 June 2020
The European Parliament and the Council of the Union agreed on the new directive on collective action for consumers. The scope of collective action would include trader violations in areas such as data protection, financial services, travel and tourism, energy, telecommunications, environment and health, as well as air and train passenger rights, in addition to general consumer law. Negotiators agreed that the Commission should assess whether to establish a European Ombudsman for collective redress to deal with cross-border representative actions at Union level.
Once the directive is endorsed by both institutions, Member states will have 24 months to transpose the directive into their national laws, and an additional six months to apply it. The new text includes:
- At least one representative action procedure for injunction and redress measures should be available to consumers in every member state, allowing representative action at national and EU level;
- Qualified entities (organisations or a public bodies) will be empowered and financially supported to launch actions for injunction and redress on behalf of groups of consumers and will guarantee consumers’ access to justice;
- On designation criteria for qualified entities, the rules distinguish between cross-border cases and domestic ones. For the former, entities must comply with a set of harmonised criteria. They have to demonstrate 12 months of activity in protecting consumers’ interest prior to their request to be appointed as a qualified entity, have a non-profit character and ensure they are independent from third parties whose economic interests oppose the consumer interest;
- For domestic actions, member states will set out proper criteria consistent with the objectives of the directive, which could be the same as those set out for cross-border actions;
- The rules strike a balance between access to justice and protecting businesses from abusive lawsuits through the Parliament’s introduction of the “loser pays principle”, which ensures that the defeated party pays the costs of the proceedings of the successful party;
- To further avoid abusive lawsuits, Parliament negotiators also insisted that courts or administrative authorities may decide to dismiss manifestly unfounded cases at the earliest possible stage of the proceedings in accordance with national law.
Single Market – 17 June 2020
The European Commission has adopted a White Paper dealing with the distortive effects caused by foreign subsidies in the Single Market. The Commission now seeks views and input from all stakeholders on the options set out in the White Paper.
The public consultation, which will be open until 23 September 2020, will help the Commission to prepare for appropriate legislative proposals in this area.
Subsidies granted by non-EU governments to companies in the EU appear to have an increasing negative impact on competition in the Single Market, but fall outside EU State aid control. There is a growing number of instances in which foreign subsidies seem to have facilitated the acquisition of EU companies or distorted the investment decisions, market operations or pricing policies of their beneficiaries, or distorted bidding in public procurement, to the detriment of non-subsidised companies.
Moreover, the existing trade defence rules relate only to exports of goods from third countries and thus do not address all distortions caused by foreign subsidies granted by non-EU countries. Where foreign subsidies take the form of financial flows facilitating acquisitions of EU companies or where they directly support the operation of a company in the EU, or facilitate bidding in a public procurement procedure, there appears to be a regulatory gap.
The White Paper therefore proposes solutions and calls for new tools to address this regulatory gap. In this context, it puts forward several approaches. The first three options (so-called “Modules”) aim at addressing the distortive effects caused by foreign subsidies
- in the Single market generally (Module 1),
- in acquisitions of EU companies (Module 2) and
- during EU public procurement procedures (Module 3).
These Modules may be complementary to each other, rather than alternatives. The White Paper also sets out a general approach to foreign subsidies in the context of EU funding.
Module 1 proposes the establishment of a general market scrutiny instrument to capture all possible market situations in which foreign subsidies may cause distortions in the Single Market.
Under this Module, the supervisory authority, which would be a national authority or the Commission, could act upon any indication or information that a company in the EU benefits from a foreign subsidy. If the existence of a foreign subsidy is established, the authority would then impose measures to remedy the likely distortive impact, such as redressive payments and structural or behavioural remedies. However, it could also consider that the subsidised activity or investment has a positive impact, which outweighs the distortion and not pursue the investigation further (the “EU Interest Test”).
The first module could be complemented by Module 2, which is intended to specifically address distortions caused by foreign subsidies facilitating the acquisition of EU companies. This module aims at ensuring that foreign subsidies do not confer an unfair benefit on their recipients when acquiring (stakes in) EU companies, either directly by linking a subsidy to a given acquisition or indirectly by de facto increasing the financial strength of the acquirer.
Under Module 2, companies benefitting from financial support of a non-EU government would need to notify their acquisitions of EU companies, above a given threshold, to the competent supervisory authority. The White Paper proposes that the Commission is the competent supervisory authority. Transactions could not be closed whilst the Commission’s review is pending. Should the supervisory authority find that the acquisition is facilitated by the foreign subsidy and distorts the Single Market, it could either accept commitments by the notifying party that effectively remedy the distortion or, as a last resort, it could prohibit the acquisition. Under this Module, the Commission could also apply the EU Interest Test.
Foreign subsidies could also have a harmful effect on the conduct of EU public procurement procedures. This issue is addressed under Module 3. Foreign subsidies may enable bidders to gain an unfair advantage, for example by submitting bids below market price or even below cost, allowing them to obtain public procurement contracts that they would otherwise not have obtained. Under this Module, the White Paper proposes a mechanism where bidders would have to notify the contracting authority of financial contributions received from non-EU countries. The competent contracting and supervisory authorities would then assess whether there is a foreign subsidy and whether it made the procurement procedure unfair. In this case, the bidder would be excluded from the procurement procedure.
Finally, the White Paper sets out ways to address the issue of foreign subsidies in the case of applications for EU financial support. All economic operators should compete for EU funding on an equal footing. Foreign subsidies may however distort this process by putting the beneficiaries of such subsidies in a better position to apply. The White Paper proposes options to prevent such unfair advantage. Among others, in case of funding distributed through public tenders or grants, a similar procedure would apply as the one foreseen for EU public procurement procedures. Moreover, the White Paper emphasises the importance of ensuring that international financial institutions that implement projects supported by the EU budget, like EIB or EBRD, mirror the approach to foreign subsidies.
Trade – 16 June 2020
The European Commission launched a major review of the European Union’s trade policy, including a public consultation seeking input from the European Parliament, Member States, stakeholders and civil society.
The consultation covers all relevant topics to the EU trade policy, with a special focus on the following:
- Building a resilient and sustainable EU economy after the coronavirus;
- Reforming the World Trade Organization;
- Creating global trade opportunities for businesses and in particular small and medium sized enterprises;
- Maximising the contribution of trade policy to addressing key global challenges such as climate change, sustainable development or the digital transition;
- Strengthening of trade and investment relationships with key trading partners;
- Improving the level playing field and protecting EU business and citizens.
Competition Policy – 2 June 2020
The European Commission has published an inception impact assessment as well as an open public consultation inviting comments on exploring the need for a possible new competition tool that would allow addressing structural competition problems in a timely and effective manner. Stakeholders can submit their views on the inception impact assessment until 30 June 2020 and respond to the open public consultation until 8 September 2020.
The Commission believes that ensuring the contestability and fair functioning of markets across the economy is likely to require a holistic and comprehensive approach, with an emphasis on the following three pillars:
(1) the continued vigorous enforcement of the existing competition rules making full use of Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU), including the use of interim measures and restorative remedies, where appropriate;
(2) possible ex-ante regulation of digital platforms, including additional requirements for those that play a gatekeeper role; and
(3) a possible new competition tool to deal with structural competition problems across markets which cannot be tackled or addressed in the most effective manner on the basis of the current competition rules (e.g. preventing markets from tipping).
Digital Economy – 2 June 2020
The European Commission has launched a public consultation on the Digital Services Act. The consultation, open until 8 September, covers issues such as safety online, freedom of expression, fairness and a level-playing field in the digital economy.
The consultation covers two work strands:
The first set of rules would relate to the fundamentals of the e-commerce directive, in particular the freedom to provide digital services across the EU single market in accordance with the rules of the place of establishment and a broad limitation of liability for content created by users.
The second set would address the issue of the level playing field in European digital markets, where currently a few large online platforms act as gatekeepers. This could be through additional general rules for all platforms of a certain scale, such as rules on self-preferencing, and/or through tailored regulatory obligations for specific gatekeepers, such as non-personal data access obligations, specific requirements regarding personal data portability, or interoperability requirements.
European Union – 27 May 2020
The European Commission put forward a proposal for a major recovery plan. It is proposed to create a new recovery instrument, Next Generation EU, embedded within a revamped long-term EU budget. The Commission has also unveiled its adjusted Work Programme for 2020 which will prioritise the actions needed to propel Europe’s recovery and resilience.
Next Generation EU will raise money by temporarily lifting the own resources ceiling to 2.00% of EU Gross National Income, allowing the Commission to use its strong credit rating to borrow €750 billion on the financial markets. This additional funding will be channelled through EU programmes and repaid over a long period of time throughout future EU budgets – not before 2028 and not after 2058.
To help do this in a fair and shared way, the Commission proposes a number of new own resources. In addition, in order to make funds available as soon as possible to respond to the most pressing needs, the Commission proposes to amend the current multiannual financial framework 2014-2020 to make an additional €11.5 billion in funding available already in 2020.
All of the money raised through Next Generation EU will be channelled through EU programmes in the revamped long-term EU budget:
The European Green Deal will act as the EU’s recovery strategy:
- A massive renovation wave of our buildings and infrastructure and a more circular economy, bringing local jobs;
- Rolling out renewable energy projects, especially wind, solar and kick-starting a clean hydrogen economy in Europe;
- Cleaner transport and logistics, including the installation of one million charging points for electric vehicles and a boost for rail travel and clean mobility in our cities and regions;
- Strengthening the Just Transition Fund to support re-skilling, helping businesses create new economic opportunities.
Strengthening the Single Market and adapting it to the digital age:
- Investing in more and better connectivity, especially in the rapid deployment of 5G networks;
- A stronger industrial and technological presence in strategic sectors, including artificial intelligence, cybersecurity, supercomputing and cloud;
- Building a real data economy as a motor for innovation and job creation;
- Increased cyber resilience.
A fair and inclusive recovery for all:
- The short-term European Unemployment Reinsurance Scheme(SURE) will provide €100 billion to support workers and businesses;
- A Skills Agenda for Europe and a Digital Education Action Plan will ensure digital skills for all EU citizens;
- Fair minimum wages and binding pay transparency measureswill help vulnerable workers, particularly women;
- The European Commission is stepping up the fight against tax evasion and this will help Member States generate revenue.
Financial Services – 28 April 2020
The European Commission proposed a few targeted “quick fix” amendments to the EU’s banking prudential rules (the Capital Requirements Regulation) in order to maximise the ability of banks to lend and absorb losses related to Coronavirus. The Commission proposes exceptional temporary measures to alleviate the immediate impact of Coronavirus-related developments,
- by adapting the timeline of the application of international accounting standards on banks’ capital,
- by treating more favourably public guarantees granted during this crisis,
- by postponing the date of application of the leverage ratio buffer and
- by modifying the way of excluding certain exposures from the calculation of the leverage ratio.
The Commission also proposes to advance the date of application of several agreed measures that incentivise banks to finance employees, SMEs and infrastructure projects.
In its Interpretative Communication, the Commission confirms the recent statements on using flexibility within accounting and prudential rules, such as those made by the Basel Committee of Banking Supervision, the European Banking Authority (EBA) and the European Central Bank, amongst others. The Commission encourages banks and supervisory authorities to make use of the flexibility in the EU’s accounting and prudential frameworks. For example, the Communication confirms – and welcomes – the flexibility available in EU rules when it comes to public and private moratoria on loan repayments (EBA guidelines of 2 April). The Communication also highlights areas where banks are invited to act responsibly, for example by refraining from making dividend distributions to shareholders or adopting a conservative approach to the payment of variable remuneration.
Trade – 28 April 2020
The European Union and Mexico a new trade agreement. The broader Global Agreement, of which the trade agreement is an integral part, also covers the protection of human rights, as well as chapters on political and development cooperation. It will also be the very first EU trade agreement to include provisions to fight corruption, with measures to act against bribery and money laundering.
Under the new EU-Mexico agreement, practically all trade in goods between the EU and Mexico will be duty-free. The agreement also now includes progressive rules on sustainable development, such as a commitment to effectively implementing the Paris Climate Agreement. It is also the first time that the EU agrees with a Latin American country on issues concerning investment protection. Simpler customs procedures will further help boost exports.
Mexico is the EU’s number one trade partner in Latin America with bilateral trade in goods worth €66 billion and trade in services worth another €19 billion (respectively 2019 and 2018 data).
Climate Policy – 15 April 2020
Council today adopted a regulation setting out an EU-wide classification system, or “taxonomy”, which will provide businesses and investors with a common language to identify those economic activities which are considered environmentally sustainable.
The taxonomy will enable investors to refocus their investments on more sustainable technologies and businesses. It will be key to enabling the EU to become climate neutral by 2050 and achieve the Paris agreement’s 2030 targets. These include a 40% cut in greenhouse gas emissions, for which the Commission estimates that the EU has to fill an investment gap of about 180 billion EUR per year.
The future framework will be based on six EU environmental objectives:
1) climate change mitigation;
2) climate change adaptation;
3) sustainable use and protection of water and marine resources;
4) transition to a circular economy;
5) pollution prevention and control;
6) protection and restauration of biodiversity and ecosystems.
The taxonomy for climate change mitigation and climate change adaptation should be established by the end of 2020 in order to ensure its full application by end of 2021. For the four other objectives, the taxonomy should be established by the end of 2021 for application by the end of 2022.
The regulation now needs to be adopted by the European Parliament at second reading before it can be published in the Official Journal and enter into force.
Trade – 15 April 2020
The Council gave the go-ahead to the multi-party interim appeal arbitration arrangement (MPIA) with Australia, Brazil, Canada, China, Chile, Chinese Taipei, Colombia, Costa Rica, Guatemala, Hong Kong, Mexico, New Zealand, Norway, Singapore, Switzerland, and Uruguay, a new system that will allow the EU, together with other participating WTO members, to overcome the current paralysis of the WTO’s Appellate Body and solve trade disputes amongst themselves.
The new arrangement will be temporary, and based on Article 25 of the WTO Dispute Settlement Understanding (DSU). It mirrors the main features of the WTO appeal system.
The MPIA will enable the participating members to benefit from a binding resolution of trade disputes and have the right to an independent and impartial appeal review of panel reports, as it is the case in the WTO system.
The MPIA is open for any WTO member to join, and will become operational upon its notification to the WTO’s Dispute Settlement Body which is expected in the coming weeks. The MPIA is meant as a temporary arrangement, as the EU remains committed to working with all WTO members to find a permanent and urgent solution to the paralysis of the WTO Appellate Body.
Trade – 8 April 2020
The Council approved the amendment of a regulation on the application of and compliance with the EU by international trade rules. The Council position on the EU regulation on compliance with international trade rules will serve as the basis on which the Presidency will rely to conduct negotiations with the European Parliament.
Thanks to these rules, the Commission was able, after receiving authorization from the WTO, to impose countermeasures following a dispute settlement procedure.
The main purpose of the proposed amendment is to deal with cases where, after the EU obtains a favorable ruling from a WTO dispute settlement panel, the process is blocked because the other party appeals to the report of the WTO panel “in a vacuum” and that it did not agree to have recourse to provisional appeal arbitration under Article 25 of the WTO Understanding dispute settlement. In such cases, the new rules introduce the possibility of imposing sanctions such as customs duties, quantitative restrictions on the import and export of goods and measures in the area of public procurement.
The Commission will also have the right to take countermeasures when a trading partner, under a bilateral or regional trade agreement, imposes illegal trade measures and then blocks the dispute settlement process under that agreement.
The Council position remains close to the spirit of the Commission proposal, but provides for a review clause which invites the Commission to assess the operation of the new rules and the advisability of extending their scope to services and intellectual property rights, at the latest within three years of the adoption of the regulation.
Transport – 7 April 2020
The Council adopted a major reform of the European road transport sector, known as the “mobility package”. The new regulations will improve working conditions for drivers, introduce special rules for the posting of drivers in international transport and update the provisions on access to the road haulage market. It will also make application control more efficient.
The new rules aim to strike a balance between better social and working conditions for drivers and the freedom given to carriers to provide cross-border services, and they will also contribute to road safety. In addition, they will bring clarity to the sector with regard to ambiguous previous provisions and will end their uneven application from one Member State to another.
The package consists of a regulation governing access to the road haulage market and to the profession of haulier or passenger by road; regulations on maximum working hours and minimum rest times for drivers and location by means of tachographs; and a directive revising the control requirements and laying down rules on the posting of drivers.
The vote, taken by written procedure, means that the Council adopted its position at first reading. Legal acts must now be adopted by the European Parliament at second reading before being published in the Official Journal. The two regulations will enter into force 20 days after their publication and the directive, the day following that of its publication.
The rules contained in the Market Access Regulation and in the Posting Directive will apply 18 months after the entry into force of legal acts. The rules contained in the regulations concerning driving times will apply 20 days after its publication, with the exception of the special deadlines provided for tachographs.
Climate Policy – 4 March 2020
The Commission presented a proposal to enshrine in legislation the EU’s political commitment to be climate neutral by 2050.
The Climate Law also addresses the pathway to get to the 2050 target:
- Based on a comprehensive impact assessment, the Commission will propose a new 2030 EU target for greenhouse gas emission reductions. The Climate Law will be amended once the impact assessment is completed.
- By June 2021, the Commission will review, and where necessary propose to revise, all relevant policy instruments to achieve the additional emission reductions for 2030.
- The Commission proposes the setting of a 2030-2050 EU-wide trajectory for greenhouse gas emission reductions, to measure progress and give predictability to public authorities, businesses and citizens.
- By September 2023, and every five years thereafter, the Commission will assess the consistency of EU and national measures with the climate-neutrality objective and the 2030-2050 trajectory.
- The Commission will be empowered to issue recommendations to Member States whose actions are inconsistent with the climate-neutrality objective, and Member States will be obliged to take due account of these recommendations or to explain their reasoning if they fail to do so. The Commission can also review the adequacy of the trajectory and the Union wide measures.
- Member States will also be required to develop and implement adaptation strategies to strengthen resilience and reduce vulnerability to the effects of climate change.
At the same time, the Commission is launching a public consultation on the future European Climate Pact.
Relations with the United Kingdom – 25 February 2020
The European Council authorised the opening of the future partnership negotiations with the UK.
The negotiating directives adopted are based on the draft recommendation put forward by the Commission on 3 February 2020. They fully respect existing European Council guidelines and conclusions, as well as the Political Declaration agreed between the EU and the United Kingdom in October 2019.
The comprehensive negotiating directives define the scope and terms of the future partnership that the European Union envisages with the United Kingdom. These directives cover all areas of interest for the negotiations, including trade and economic cooperation, law enforcement and judicial cooperation in criminal matters, foreign policy, security and defence, participation in Union programmes and other thematic areas of cooperation. A dedicated chapter on governance provides an outline for an overall governance framework covering all areas of economic and security cooperation.
Digital Economy – 18 February 2020
The Council adopted a set of rules to facilitate the detection of tax fraud in the context of cross-border e-commerce transactions.
The new measures will allow Member States to collect, in a harmonized manner, the recorded data made available electronically by payment service providers, such as banks. In addition, a new central electronic system will be set up for the storage of payment information and for further processing by national officials responsible for combating fraud.
This set of new rules includes two pieces of legislation:
- Amendments to the VAT Directive providing for the obligation for payment service providers to keep records of cross-border payments relating to electronic commerce. These data will then be made available to the national tax authorities under strict conditions, including with regard to data protection;
- Amendments to the regulation on administrative cooperation in the field of VAT. These changes set out the details of how national tax authorities will cooperate in this area to detect VAT fraud and monitor compliance with VAT obligations.
These texts complement the regulatory framework for VAT for electronic commerce which came into force in January 2021, which introduced new VAT obligations for online marketplaces and simplified rules on compliance with of VAT for online businesses.
The new measures will apply from January 1, 2024.
Trade – 12 February 2020
The European Parliament approved the EU-Vietnam trade and investment agreements. The EU-Vietnam trade agreement is now set to enter into force in 2020, upon conclusion of the ratification procedure by Vietnam. The trade agreement will eliminate virtually all tariffs on goods traded between the two sides and will guarantee – through its strong, legally binding and enforceable commitments on sustainable development – the respect of labour rights, environmental protection and the Paris Agreement on climate.
This is the most comprehensive trade agreement between the EU and a developing country, a reality that was fully taken into account: Vietnam will eliminate its duties gradually over a longer, 10-year period, to take into account its development needs. However, many important EU export items such as pharmaceuticals, chemicals or machinery will already enjoy duty free import conditions as of entry into force. The trade agreement also contains specific provisions to address non-tariff barriers in the automotive sector, and will provide protection for 169 traditional European food and drink products, known as Geographical Indications, like Rioja wine or Roquefort cheese.
Through the trade agreement, EU companies will also be able to participate on an equal footing with domestic Vietnamese companies in bids for procurement tenders by authorities and state-owned enterprises in Vietnam.
The agreement commits the two parties to:
- ratifying the eight fundamental Conventions of International Labour Organization (ILO), and respect, promote and effectively implement the principles of the ILO concerning fundamental rights at work;
- implement the Paris Agreement, as well as other international environmental agreements, and act in favour of the conservation and sustainable management of wildlife, biodiversity, forestry and fisheries; and
- involve independent civil society in monitoring the implementation of these commitments by both sides.
Vietnam has already made progress on some of these commitments:
- It ratified in June 2019 the ILO Convention 98 on collective bargaining
- It adopted a revised Labour Code in November 2019
- It confirmed a timeline for the ratification of the remaining two fundamental ILO Conventions on freedom of association and on forced labour.
The Council can now conclude the trade agreement. The investment protection agreement with Vietnam will still need to be ratified by all Member States according to their respective internal procedures.
Enlargement – 5 February 2020
The European Commission presented a proposal for the accession of European states to join the EU to make the process more credible, more dynamic, more predictable, with more determined political leadership.
The Commission believes that credibility needs to be strengthened by placing even more emphasis on fundamental reforms, starting with the rule of law, the functioning of democratic institutions, public administration and the economy of Candidate countries. The Commission also proposes to increase the prospects for high-level political and strategic dialogue, through the regular holding of summit meetings between the EU and the Western Balkans and the intensification of ministerial contacts. Member States should also participate more systematically in monitoring and reviewing the process. The Commission also proposes to group the negotiation chapters into six thematic groups: “fundamental”; indoor market; competitiveness and inclusive growth; environmental program and sustainable connectivity; resources, agriculture and cohesion; foreign Relations.
To encourage the implementation of demanding reforms, the Commission will better define the conditions that candidates must fulfill to progress and will take clear and tangible incentives of direct interest to citizens, such as accelerated and gradual integration into policies, market and EU programs (while ensuring equal conditions), as well as increased funding and investment for the country concerned. The Commission is also proposing more decisive measures proportionately penalizing any serious or prolonged situation stagnation, even retreat in the implementation of reforms and compliance with the requirements inherent in the accession process. Negotiations could be put on hold in certain areas or, in the most serious cases, be suspended altogether, while chapters already closed could be reopened; the benefits of closer integration, such as access to EU programs, could be temporarily interrupted or removed, and the scope and intensity of EU funding could be downgraded.
Commission hopes Member States will approve proposal, alongside opening of accession negotiations with North Macedonia and Albania, before European Union-Western Balkans summit to be held in Zagreb on 6 and 7 May next and during which the Commission will examine how to advance investment, socio-economic integration and the rule of law in the Western Balkans region.
Transport – 22 January 2020
The reform of the road transport sector is almost adopted.
The revised rules concerning the posting of drivers, their rest time and better application of cabotage rules (which consist of leaving a country with a vehicle and loading and unloading in a border country, on a temporary basis) aim to put an end distorting competition in the road transport sector and providing better working conditions for drivers.
The agreement maintains the current cabotage limits (three operations in seven days) but introduces the recording of border crossings by tachograph to fight fraud. In order to prevent ‘systematic cabotage’, a four-day waiting period will be introduced before other cabotage operations can be carried out in the same country with the same vehicle.
In order to combat the use of “letterbox companies”, road transport companies will have to have substantial activities in the Member State where they are registered. The new rules will also require trucks to return to the company’s operations center every eight weeks.
Since operators are increasingly using vans for their international transport services, these operators (using light commercial vehicles weighing more than 2.5 tonnes) will also be subject to European standards applicable to carriers and will have to equip their vans with tachographs.
The rules on the posting of workers apply to cabotage and international transport operations, with the exception of transit, bilateral operations and bilateral operations with additional loading or unloading in each direction (or zero to the go and two on the way back).
The text also includes changes to ensure better rest conditions for drivers and allow them to spend more time at home. Companies will need to organize their schedules so that drivers in the international transportation sector can return home at regular intervals (every three or four weeks, depending on work schedules). The mandatory rest period at the end of the week, known as regular weekly rest, cannot be taken in the cab of the truck, the text says. If this rest period is taken outside the driver’s home, the company must pay the accommodation costs. In exceptional cases and within strict limits, the new rules will allow drivers to exceed the driving time to go home to take their weekly rest, provided that they are very close to their home.
To enter into force, the agreement must now be approved by EU ministers and then by Parliament as a whole.
The rules on posting will apply 18 months after the entry into force of the legislative act. The rules on rest times will apply 20 days after the publication of the act. The rules on truck returns and other changes relating to market access will apply 18 months after the entry into force of the Market Access Act.
Trade – 14 January 2020
In a Joint Statement, representatives of the European Union, the United States and Japan announced their agreement to strengthen existing rules on industrial subsidies and condemned forced technology transfers practices.
They agreed that the current list of subsidies prohibited under the World Trade Organization’s rules is insufficient to tackle market and trade distorting subsidisation existing in certain jurisdictions. They concluded therefore that new types of unconditionally prohibited subsidies have to be added to the WTO Agreement on Subsidies and Countervailing Measures.
The EU, U.S. and Japan also agreed that for particularly harmful types of subsidies, such as excessively large subsidies, the burden of proof should be reversed: the subsidising WTO member must demonstrate that there are no serious negative trade or capacity effects and that there is effective transparency about the subsidy in question. The signatories of the statement also reaffirmed the importance of technology transfers for global trade and investment and discussed possible core rules to be introduced to prevent forced technology transfer practices of third countries.
The Joint Statement also confirmed continued cooperation on a number of key items such as:
- The importance of market oriented conditions
- Reform of the WTO, to include increasing compliance with existing WTO notification obligations
- Pressing advanced WTO members claiming developing country status to undertake full commitments in ongoing and future WTO negotiations
- International rule making and trade related aspects of electronic commerce at the WTO; and
- International forums such as the Global Forum of Steel Excess Capacity and the Governments/Authorities’ Meeting on Semiconductors.
The Joint Statement is seen as an important step toward resolving some key issues in the lead up to the 12th WTO Ministerial Conference in June 2020 in Nur-Sultan.
Financial Services – 18 December 2019
The European Parliament and the Council agreed on the creation of the world’s first-ever “green list” – a classification system for sustainable economic activities, or taxonomy.
This is a general framework for what can be classified as an “environmentally sustainable economic activity”. Notably, it sets out the following six environmental objectives
- Climate Change Mitigation
- Climate Change Adaptation
- Sustainable Use and Protection of Water and Marine Resources
- Transition to a Circular Economy
- Pollution Prevention and Control
- Protection and Restoration of Biodiversity and Ecosystems
Four requirements that economic activities need to comply with in order to qualify:
- They provide a substantial contribution to at least one of the six environmental objectives;
- “No significant harm” to any of the other environmental objectives;
- Compliancewith robust and science-based technical screening criteria; and,
- Compliance with minimum social and governance safeguards.
A list of sustainable economic activities will be assessed based on the report from Technical Expert Group on Sustainable Finance and will be developed through delegated acts.
Trade – 12 December 2019
The European Commission unveiled a proposal that will allow the European Union to protect its trade interests despite the paralysis of the multilateral dispute settlement system in the World Trade Organisation.
The proposal to amend the existing Enforcement Regulation comes as a direct reaction to the blockage on 11 December of the operations of the WTO Appellate Body. The current regulation – a basis under EU law for adopting trade countermeasures – requires that a dispute go all the way through the WTO procedures, including the appeal stage, before the Union can react. The lack of a functioning WTO Appellate Body allows WTO Members to avoid their obligations andescape a binding ruling by simply appealing a panel report.
The Commission’s proposal will enable the EU to react even if the WTO is not delivering a final ruling at the appellate level because the other WTO member blocks the dispute procedure by appealing into the void.
This new mechanism will also apply to the dispute settlement provisions included in regional or bilateral trade agreements to which the EU is party. The EU must be able to respond resolutely in case trade partners hinder effective dispute settlement resolution, for instance, by blocking the composition of panels.
Environment – 11 December 2019
The European Commission presented The European Green Deal– a roadmap for making the EU’s economy sustainable by turning climate and environmental challenges into opportunities across all policy areas to boost the efficient use of resources by moving to a clean, circular economy and stop climate change, revert biodiversity loss and cut pollution.
To set into legislation the political ambition of being the world’s first climate neutral continent by 2050, the Commission will present within 100 days the first ‘European Climate Law’. To reach our climate and environmental ambition, the Commission will also present the Biodiversity Strategy for 2030, the new Industrial Strategy and Circular Economy Action Plan, the Farm to Fork Strategy for sustainable food and proposals for pollution-free Europe. Work will immediately start for upping Europe’s 2030 emissions targets, setting a path to the 2050 goal.
The Commission will present in early 2020 a Sustainable Europe Investment Plan to help meet investment needs. At least 25% of the EU’s long-term budget should be dedicated to climate action, and the European Investment Bank, Europe’s climate bank, will provide further support. For the private sector to contribute to financing the green transition, the Commission will present a Green Financing Strategy in 2020.
European Commission – 1st December 2019
The new College of 27 Commissioners for the 2019-2024 period was put in place after it was approved by both the Council and the Parliament. The main business-oriented portfolios are those of:
- Thierry Breton (France), in charge of the Single Market, the Digital Market and Defence Policy,
- Valdis Dombrovskis, Executive Vice-President in charge of the Economy and Financial services,
- Paolo Gentiloni (Italy), in charge of the Economy and Taxation,
- Margrethe Vestager (Denmark), Executive Vice-President in charge of Competition Policy and the Digital Market,
- Phil Hogan (Ireland) in charge of Trade,
- Adina Valean (Romania) in charge of Transport Policy,
- Kadri Simson (Estonia) in charge of Energy Policy and
- Nicolas Schmit (Luxembourg) in charge of Employment Policy.
Single Market – 28 November 2019
The Council of the Union and the European Parliament agreed on a Directive on representative actions for the protection of the collective interests of consumers.
Once in force, the new rules will enable consumers to claim their rights not only individually but also through collective actions. It will empower reputable organisations (so-called ‘qualified entities’) to launch actions on behalf of consumers. The main improvements will be more transparency for consumers when buying online, effective penalties and clear rules to tackle the issue of dual quality of products in the EU.
Environment – 15 October 2019
The Council is planning to reinstate nuclear power as a clean source of energy under a proposed green finance classification scheme currently under discussion at EU level. Such detailed EU classification system – or taxonomy – aims at listing sustainable activities to which the financial industry should dedicate its core activity.
The vote caused consternation in Austria, Germany, and Luxembourg, which had earlier issued a joint statement to oppose the inclusion of nuclear in the EU’s sustainable finance taxonomy.
The gas industry hopes to be added to the list, asking whether a clean break from fossil fuels is at all possible and whether “bridge fuels” like gas should be promoted in the transition to a 100% renewable energy system.
Financial Services – 11 October 2019
The European Commission launched a public consultation on the reform of the capital adequacy system for European banks (Basel 3). The purpose of the consultation is to gather the views of interested parties on specific topics such as credit risk, operational risk, market risk, risk of adjustment of credit valuation, securities financing transactions as well as only on the production floor. The consultation aims to gather views from interested parties on specific topics such as credit risk, operational risk, market risk, credit valuation adjustment risk, securities financing transactions as well as in relation to the so-called output floor. The Commission will hold a public conference on 12 November 2019 to discuss the impact and challenges of implementing the final Basel 3 reforms in the EU. The consultation will remain open until 3 January 2020.
Financial Services – 11 October 2019
The European Commission launched a public consultation on the functioning of the regulation on the financial reference indices, including the powers of the competent authorities with regard to the critical reference indices, but also their powers to withdraw or suspend the authorization. or the registration of an administrator. The consultation also aims to gather the views of stakeholders on whether the current supervisory framework for critical benchmarks (eg EURIBOR) is appropriate and whether the regulatory framework for non-core benchmarks is appropriate. and indices with regulated data is correctly calibrated. In addition, the Commission also welcomes the opinions on the operation of the ESMA Register of Administrators and requests a call for contributions on the measures applicable to climate indices, commodity indices and indices of third countries. The consultation will remain open until 6 December 2019.
Financial Services – 29 July 2019
The European Commission took stock of its overall approach to equivalence in the area of financial services. The EU assesses the overall policy context and to what extent the regulatory regimes of a given third country achieves the same outcomes as its own rules. A positive equivalence decision, which is a unilateral measure by the Commission, allows EU authorities to rely on third-country rules and supervision, allowing market participants from third countries who are active in the EU to comply with only one set of rules. The Commission has to date taken over 280 equivalence decisions with regard to over 30 countries.
The Communication sets out the EU’s comprehensive approach and recent legislative improvements in terms of how the Commission grants equivalence to non-EU countries. It also describes how the Commission and the European Supervisory Authorities (ESAs) monitor the situation in those countries after equivalence decisions have been taken, to ensure that these continue to fulfil EU objectives and preserve financial stability, investor protection, market integrity and a level playing field in the EU.
This Commission document also provides an overview of how recent EU legislative changes have strengthened the equivalence framework, both in terms of initial assessments and ex-post monitoring, in particular with an increased role for the European Supervisory Authorities. These recent legislative changes, for instance in the amended ESAs regulations, strengthen the roles of those authorities in monitoring equivalent third countries.
The Commission adopted equivalence decisions for financial benchmarks administered in Australia and Singapore. These decisions recognise that the administrators of certain interest rates and foreign exchange benchmarks in Australia and Singapore are subject to legally binding requirements which are equivalent to the EU requirements set out under Regulation (EU) 2016/1011 (The Benchmark Regulation).
Separately, the Commission has extended existing equivalence decisions in the field of Credit Rating Agencies for Hong-Kong, Japan, Mexico and the United States. At the same time, the Commission has for the first time repealed existing decisions for Argentina, Australia, Brazil, Canada, and Singapore, as these jurisdictions could no longer meet the standards set by the EU Credit Rating Agencies after its amendment in 2013. The countries decided, after discussions with the Commission, not to implement the necessary legislative adjustments given the limited scale of activity to be covered.
Digital Economy – 17 July 2019
The European Commission has opened a formal antitrust investigation to assess whether Amazon’s use of sensitive data from independent retailers who sell on its marketplace is in breach of EU competition rules.
Amazon has a dual role as a platform: (i) it sells products on its website as a retailer; and (ii) it provides a marketplace where independent sellers can sell products directly to consumers.
When providing a marketplace for independent sellers, Amazon continuously collects data about the activity on its platform. Based on the Commission’s preliminary fact-finding, Amazon appears to use competitively sensitive information – about marketplace sellers, their products and transactions on the marketplace.
As part of its in-depth investigation the Commission will look into:
- the standard agreements between Amazon and marketplace sellers, which allow Amazon’s retail business to analyse and use third party seller data. In particular, the Commission will focus on whether and how the use of accumulated marketplace seller data by Amazon as a retailer affects competition.
- the role of data in the selection of the winners of the “Buy Box” andthe impact of Amazon’s potential use of competitively sensitive marketplace seller information on that selection. The “Buy Box” is displayed prominently on Amazon and allows customers to add items from a specific retailer directly into their shopping carts. Winning the “Buy Box” seems key for marketplace sellers as a vast majority of transactions are done through it.
If proven, the practices under investigation may breach EU competition rules on anticompetitive agreements between companies (Article 101 of the Treaty on the Functioning of the European Union (TFEU)) and/or on the abuse of a dominant position (Articles 102 TFEU).
Trade – 28 June 2019
The European Union and Mercosur reached a political agreement for an ambitious, balanced and comprehensive trade agreement.
The EU is the first major partner to strike a trade pact with Mercosur, a bloc comprising Argentina, Brazil Paraguay and Uruguay. The agreement concluded will cover a population of 780 million and cement the close political and economic relations between the EU and Mercosur countries. It represents a clear commitment from both regions to rules based international trade and will give European companies an important head start into a market with an enormous economic potential. It will anchor important economic reforms and modernisation undergoing in Mercosur countries. The agreement upholds the highest standards of food safety and consumer protection, as well as the precautionary principle for food safety and environmental rules and contains specific commitments on labour rights and environmental protection, including the implementation of the Paris climate agreement and related enforcement rules.
The EU-Mercosur region-to-region agreement will remove the majority of tariffs on EU exports to Mercosur, making EU companies more competitive by saving them €4 billion worth of duties per year.
- As regards EU industrial sectors, this will help boost exports of EU products that have so far been facing high and sometimes prohibitive tariffs. Those include cars (tariff of 35%), car parts (14-18%), machinery (14-20%), chemicals (up to 18%), pharmaceuticals (up to 14%), clothing and footwear (35%) or knitted fabrics (26%).
- The EU agri-food sector will benefit from slashing existing Mercosur high tariffs on EU export products, chocolates and confectionery (20%), wines (27%), spirits (20 to 35%), and soft drinks (20 to 35%). The agreement will also provide duty-free access subject to quotas for EU dairy products (currently 28% tariff), notably for cheeses.
The agreement will open up new business opportunities in Mercosur for EU companies selling under government contracts, and to service suppliers in the information technology, telecommunications and transport sectors, among others. It will simplify border checks, cut red tape and limit the use of export taxes by Mercosur countries. Smaller companies on both sides will also benefit thanks to a new online platform providing easy access to all relevant information.
The EU and Mercosur commit to effectively implement the Paris Climate Agreement. A dedicated sustainable development chapter will cover issues such as sustainable management and conservation of forests, respect for labour rights and promotion of responsible business conduct. It also offers civil society organisations an active role to overview the implementation of the agreement, including any human rights, social or environmental concerns. The agreement will also provide for a new forum to work closely together on a more sustainable approach to agriculture and, as part of the political dialogue under the Association Agreement, address the rights of indigenous communities. The agreement also safeguards the EU and Mercosur’s right to regulate in the public interest and preserves the right to organise public services in the way they consider appropriate.
EU food safety standards will remain unchanged and all imports will have to comply with the EU’s rigorous standards, as is the case today. The agreed food safety, and animal and plant health provisions will reinforce cooperation with the authorities of the partner countries and speed up the flow of information about any potential risks through a more direct and efficient information and notification system. In this way, the agreement will increase our efficiency in ensuring the safety of the products traded between the EU and Mercosur countries.
Financial Services – 18 June 2019
Implementing rules under Solvency II have been published in the Official Journal of the European Union. Insurers providing finance via such instruments will now be able to benefit from lower capital requirements.
The Delegated Regulation introduces simplifications for the calculation of capital requirements by insurance companies, as well as alignments between rules for the banking and the insurance sector. A more fundamental review of Solvency II is due by the end of 2020. Preparatory work for that review is already ongoing. In line with the objectives of the CMU, further analysis on remaining obstacles to investments in the real economy will be undertaken.
Financial Services – 18 June 2019
The European Commission published new guidelines on corporate climate-related information reporting, as part of its Sustainable Finance Action Plan. These guidelines will provide companies with practical recommendations on how to better report the impact that their activities are having on the climate as well as the impact of climate change on their business.
These guidelines will provide guidance to around 6,000 EU-listed companies, banks and insurance companies that have to disclose non-financial information under the Non-Financial Reporting Directive. They are inspired by recent proposals by the Technical Expert Group on sustainable finance (TEG), and integrate the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) established by the G20’s Financial Stability Board.
The TEG itself published three reports on sustainable finance:
- The first is a classification system – or taxonomy – for environmentally-sustainable economic activities. This aims to provide practical guidance for policy makers, industry and investors on how best to support and invest in economic activities that contribute to achieving a climate neutral economy. The group has extensively screened activities across a wide range of sectors, including energy, transport, agriculture, manufacturing, ICT and real-estate. It has identified low-carbon activities like zero-emissions transport but also transition activities like manufacturing of iron and steel in order to compile the most comprehensive classification system for sustainable activities to date. This expert report is published as the Commission’s proposal on taxonomy awaits agreement by the co-legislators.
- The second expert report on an EU Green Bond Standard recommends clear and comparable criteria for issuing green bonds. In particular, by linking it to taxonomy, it will determine which climate and environmentally-friendly activities should be eligible for funding via an EU green bond. The Commission expects this to boost the green bond market allowing investors to scale up sustainable and green investment
- Finally, a third expert report on EU climate benchmarks and benchmarks’ ESG disclosures sets out the methodology and minimum technical requirements for indices that will enable investors to orient the choice of investors who wish to adopt a climate-conscious investment strategy, and address the risk of greenwashing. The report also sets out disclosure requirements by benchmark providers in relation to environmental, social and governance (ESG) factors and their alignment with the Paris agreement. This expert report relates to the Commission’s proposal on low-carbon benchmarks, which has recently been agreed by the co-legislators.
Social Affairs – 13 June 2019
The Employment, Social Policy, Health and Consumer Affairs Council formally adopted the Regulation establishing the European Labour Authority and decided to establish its headquarters in Bratislava. It is responsible for:
- Facilitating cooperation and exchange of information between Member States and support them through joint and joint inspections to combat abuse, fraud and undeclared work;
- Assisting Member States in providing information and services to citizens and businesses;
- Exercising a mediating role between Member States in the event of disputes.
Company Law – 10 June 2019
The revised Shareholder Rights Directive is in application. Institutional investors and asset managers are required to be transparent about their investment and engagement policy, and to disclose how they take social and environmental impact into account. There are also new transparency requirements for proxy advisors who advise institutional investors on how to vote in companies’ general meetings.
To ensure that the remuneration policy contributes to the long-term interests and sustainability of the company, the performance of directors must be assessed continuously, including with social and environmental considerations. In addition, the Directive introduces a shareholder “say on pay”: shareholders will have the right to know how much the company’s directors are paid and they will be able to influence this. The new rules also bring approval and disclosure requirements for material related party transactions (typically between the company and its director or controlling shareholder.)
The new rules will ultimately make it easier for shareholders resident in another EU country than where the investee companies is based to participate in the general meetings and vote.
Digital Economy – 13 May 2019
As of 15 May, a new maximum price will apply for all international calls and SMS within the EU. As a result, consumers calling from their country to another EU country will pay a maximum amount of 19 cents per minute (+VAT) and 6 cents per SMS message (+VAT).
Following the end of roaming charges in June 2017, these new price caps for international calls and SMS in the EU are part of the EU-wide overhaul of telecoms rules to strengthen coordination of electronic communications and enhance the role of the Body of European Regulators for Electronic Communications (BEREC).
The maximum price is capped only for personal usage, i.e. for private customers. Business customers are excluded from this price regulation, given that several providers have special offers for business customers.
Digital Economy – 3 May 2019
The European Commission proposed a series of WTO disciplines and commitments relating to electronic commerce and telecommunications services, while maintaining the possibility to define and implement cultural and audio-visual policies for the purposes of preserving their cultural diversity, including by not taking commitments on audio-visual services.
By January 2019, 76 WTO members had pledged to negotiate on the subject. This proposal on behalf of the EU (forwarded to the WTO as early as 26 April) also anticipates a future revision of the 2000 eCommerce Directive (2000/31 /EC).
As regards electronic contracts, it is proposed that WTO members should ensure that contracts may be concluded by electronic means and that their legal systems neither create obstacles for the use of electronic contracts nor results in contracts being deprived of legal effect and validity solely on the ground that they have been made by electronic means.
However, this should not apply to broadcasting services, gambling services, legal representation services, to services of notaries or equivalent professions involving a direct and specific connection with the exercise of public authority, and to contracts that establish or transfer rights in real estate, contracts requiring by law the involvement of courts, public authorities or professions exercising public authority, contracts of suretyship granted and or collateral securities furnished by persons acting for purposes outside their trade, business or profession and contracts governed by family law or by the law of succession.
As regards electronic authentication and electronic signature, WTO members should not deny legal effect and admissibility as evidence in legal proceedings of electronic signature solely on the basis that it is in electronic form, nor impose customs duties on electronic transmissions, which include the transmitted content.However, certification requirements by an authority accredited may be mandatory in accordance with domestic law or certain performance standards.
Recognising the importance of enhancing consumer trust in electronic commerce, WTO members should adopt and maintain measures that protect consumers from fraudulent and deceptive commercial practices when they engage in electronic commerce transactions. Additionally, members should consider adopting or maintaining measures that require traders to act in good faith; require traders to provide accurate information on the goods or services and the terms of the contract; and grant consumers access to redress.
WTO members should adopt and maintain measures that protect consumers against unsolicited commercial electronic messages. To this end the recipient’s consent shall be required, as specified according to the laws and regulations, to receive commercial electronic messages; or suppliers of commercial electronic messages should be required to facilitate the ability of recipients to prevent ongoing reception of such messages. Members should provide access to redress against suppliers of unsolicited commercial electronic messages who do not comply with these measures. WTO members shall ensure that commercial electronic messages are clearly identifiable as such and clearly disclose on whose behalf they are sent.
In the European Commission’s proposal, WTO members should not require the transfer of, or access to, the source code of software owned by a natural or juridical person of other Members; without prejudice nevertheless to requirements by a court, administrative tribunal, or by a competition authority to remedy a violation of competition law; the protection and enforcement of intellectual property rights; and the right to take any action or not disclose any information that is considered necessary for the protection of essential security interests relating to the procurement of arms, ammunition or war materials, or to procurement indispensable for national security or for national defence purposes.
As regards cross-border data flows, they should not be restricted by requiring the use of computing facilities or network elements in the Member’s territory for processing, including by imposing the use of computing facilities or network elements that are certified or approved in the territory of the Member; requiring the localisation of data in the Member’s territory for storage or processing; prohibiting storage or processing in the territory of other Members; making the cross-border transfer of data contingent upon use of computing facilities or network elements in the Member’s territory or upon localization requirements in the Member’s territory.
As regards personal data and privacy, WTO members may adopt and maintain the safeguards they deem appropriate to ensure the protection of personal data and privacy, including through the adoption and application of rules for the cross-border transfer of personal data. Nothing in the agreed disciplines and commitments should affect the protection of personal data and privacy afforded by the WTO member States’ respective safeguards.
As regards open internet access, WTO members should maintain or adopt appropriate measures to ensure that end- users in their territory are able to access, distribute and use services and applications of their choice available on the Internet, subject to reasonable and non-discriminatory network management; connect devices of their choice to the Internet, provided that such devices do not harm the network; and have access to information on the network management practices of their Internet access service supplier.
Anti-competitive practices will be banned, in particular cross-subsidization; using information obtained from competitors with anti-competitive results; and not making available to other services suppliers on a timely basis technical informatio about essential facilities and commercially relevant information which are necessary for them to provide services.
Interconnection with a major supplier shall be ensured at any technically feasible point in the network. Such interconnection shall be provided under non-discriminatory terms, conditions (including technical standards and specifications) and rates and of a quality no less favourable than that provided for its own like services or for like services of its subsidiaries or other affiliates; in a timely fashion, on terms and conditions (including rates, technical standards and specifications) that are transparent, reasonable, having regard to economic feasibility, and sufficiently unbundled so that the supplier need not pay for network components or facilities that it does not require for the service to be provided; and upon request, at points in addition to the network termination points offered to the majority of users, subject to charges that reflect the cost of construction of necessary additional facilities. The procedures applicable for interconnection to a major supplier shall be made publicly available. Major suppliers shall make publicly available either their interconnection agreements or a reference interconnection offer.
Authorisation to provide public telecommunications transport networks or services should in principle be granted without a formal licencing procedure, so that the supplier may start providing its networks or services without having to wait for a decision by the telecommunications regulatory authority. The telecommunications regulatory authority shall be separate from, and not accountable to, any supplier of public telecommunications transport networks or services. To this end, the telecommunications regulatory authority should not hold a financial interest or maintain an operating or management role in any such supplier. Any procedures for the allocation and use of scarce resources, including frequencies, numbers and rights of way, shall be carried out in an objective, timely, transparent and non- discriminatory manner.
A major supplier should make its essential facilities available to suppliers of public telecommunications transport networks or services on reasonable, transparent and non- discriminatory terms and conditions for the purpose of providing public telecommunications transport services, except when, on the basis of the facts collected and the assessment of the market conducted by the telecommunications regulatory authority, this is not necessary to achieve effective competition.
Social Affairs – 16 April 2019
The European Commission launched a debate on ways to make decision-making more effective in the social field at EU level. In 2018, in his State of the Union address, the President of the European Commission, Jean-Claude Juncker, announced a thorough review of all treaty “passerelle clauses”. As a follow-up to this declaration, three communications have already been adopted: on the Common Foreign and Security Policy (September 2018), taxation (January 2019) and energy and climate (April 2019). The communication on social policy bridging clauses is the fourth.
The fact that there is voting by qualified majority and unanimity in certain related policy domains has led to an uneven development of the social policy acquis. Moreover, special legislative procedures do not give an equal, prominent role as co-decision maker to the European Parliament, which is often only consulted in those cases. To activate apasserelle clause, according, the European Council would have to decide by unanimity, with no objection from national parliaments, and with the European Parliament’s consent.
The potential scope of such change covers:
- non-discrimination based on different grounds (gender, racial or ethnic origin, religion or belief, disability, age, and sexual orientation);
- social security and social protection of workers (outside cross-border situations);
- protection of workers against dismissals;
- representation and collective defence of the interests of workers and employers; and
- conditions of employment for third-country nationals legally residing in the EU.
Trade – 15 April 2019
The Council adopted negotiating directives for trade talks with the United States, thus continuing to deliver on the implementation of the Joint Statement agreed by Presidents Juncker and Trump in July 2018.
The directives for the negotiations cover two potential agreements with the U.S.:
- A trade agreement strictly focused on industrial goods, excluding agricultural products;
- A second agreement, on conformity assessment, to make it easier for companies to prove their products meet technical requirements on both sides of the Atlantic.
Digital Economy – 26 March 2019
The European Parliament adopted the new directive on copyrights by 348 votes in favour and 274 against.
The new rules will provide:
- New opportunities for broadcasters, through the country of origin principle that will facilitate the licensing of rights, to make certain programmes on their online services available across borders (services covered are simulcasting, catch-up services and other services that complement the main broadcast, such as previews).
- A wider choice of radio and TV programmes offered by retransmission services provided through Internet Protocol television (IPTV), satellite, digital terrestrial, mobile networks or over the internet. The Directive applies a facilitated rights clearance mechanism – the system of compulsory collective management – to retransmission services provided through means other than cable (e.g. over internet), making it easier to obtain authorisations required to retransmit radio and TV channels from other Member States.
- Legal certainty for transmissions of radio and TV programmes through direct injection, ensuring that rights holders are adequately remunerated when their works are used in programmes transmitted through direct injection.
- An obligation for Google News and other aggregators to pay publishers for certain types of links to their articles. Services that offer users the chance to upload their own content, such as YouTube and Facebook, will be liable for videos that violate copyrights.
The text will have to be formally endorsed by the Council of the Union. Once published in the Official Journal of the EU, Member States will have 24 months to transpose the new rules into their national legislation.
Financial Services – 21 March 2019
The European Parliament and the Council of the Union reached a compromise agreement about the European supervision in the areas of EU financial markets including when it comes to anti-money laundering. Powers related to the prevention and mitigation of risks of money laundering in the financial sector will be centralised at the European Banking Authority (EBA).
The new legislation will:
- Ensure that breaches of anti-money laundering rules are consistently investigated: the EBA will be able to request national anti-money laundering supervisors to investigate potential material breaches and to request them to consider targeted actions – such as sanctions;
- Provide that the national anti-money laundering supervisors comply with EU rules and cooperate properly with prudential supervisors. The EBA’s existing powers will be reinforced so that, as a last resort if national authorities do not act, the EBA will be able to address decisions directly to individual financial sector operators;
- Enhance the quality of supervision through common standards, periodic reviews of national supervisory authorities and risk-assessments;
- Enable the collection of information on anti-money laundering risks and trends and fostering exchange of such information between national supervisory authorities (so-called data hubs);
- Facilitate cooperation with non-EU countries on cross-border cases;
- Establish a new permanent committee that brings together national anti-money laundering supervisory authorities.
Digital Economy – 20 March 2019
The European Commission fined Google €1.49 billion for breaching EU antitrust rules. Google has abused its market dominance by imposing a number of restrictive clauses in contracts with third-party websites which prevented Google’s rivals from placing their search adverts on these websites. Google’s provision of online search advertising intermediation services to the most commercially important publishers took place via agreements that were individually negotiated.
The Commission has reviewed hundreds of such agreements in the course of its investigation and found that:
- Google included exclusivity clauses in its contracts. This meant that publishers were prohibited from placing any search adverts from competitors on their search results pages.
- Google gradually replaced these exclusivity clauses with so-called “Premium Placement” clauses, which meant that third-party websites had to take a minimum number of search ads from Google, and put them on the most visible part of the page.
- Google also included clauses requiring publishers to seek written approval from Google before making changes to the way in which any rival adverts were displayed.
The Commission’s decision concludes that Google is dominant in the market for online search advertising intermediation in the EEA since at least 2006.
Digital Economy – 12 March 2019
The European Parliament and the Council of the Union reached a compromise agreement on new VAT rules for sales of goods online. The new rules agreed today will ensure a smooth introduction of the new e-commerce VAT measures that were adopted in December 2017 and are due to enter into force in January 2021.
Online marketplaces will be considered to act as vendors when they facilitate the sale to customers in the Union of goods worth up to € 150 by third country companies using their platform.
The same rules will apply when third country companies use online platforms to sell goods in the EU from “order processing centers”, regardless of their value, which will allow the tax authorities to request the payment of VAT due on these sales. Online platforms will also need to keep a record of sales of goods or services made by companies using the platform.
The modernized VAT portal for e-business or ‘one-stop shop’, introduced by these measures, will enable companies that sell goods online to their customers to fulfill their VAT obligations in the EU via an easy-to-use online portal in their own language.
The new VAT rules will apply from 1 January 2021, with Member States having to transpose the new rules of the VAT Directive into national law by the end of 2020. Companies wishing to use the system Extended VAT Single Window will be able to start registering in the Member States from 1 October 2020.
Financial Services – 8 March 2019
A delegated act drafted by the European Insurance and Occupational Pensions Authority and implementing the Insurance Solvency II directive has been adopted by the European Commission. A first version was rejected by the European Parliament.
The availability of more recent data requires revised calibrations in a number of areas such as natural catastrophe risks, assistance and medical expenses, as well as legal expenses risks.
The delegated act includes:
- new simplifications in the calculation of capital requirements,
- improved alignment between the insurance and banking prudential legislations,
- updated principles and standard parameters to better reflect developments in risk management and the most recent data (including a better treatment of financial hedging strategies).
This text will now be subject to a scrutiny period of 3 months by the European Parliament and the Council of the Union.
Financial Services – 7 March 2019
The European Parliament and the Council of the Union reached a compromise agreement about new rules in favor ofsmall and medium-sized enterprises (SMEs) to finance their growth, innovate, and create jobs. The proposal provides for targeted amendments to two key pieces of financial services legislation, namely the Market Abuse Regulation and the Prospectus Regulation.
The amendments to the rules on market abuse aim to strike a balance between cutting red tape for small businesses while safeguarding market integrity and investor protection. The revised framework also creates a common set of rules on liquidity contracts for SME Growth Markets in all Member States while giving national competent authorities sufficient flexibility to tailor market practices to local conditions. This will ensure minimum liquidity and reduce volatility of SME shares.
The proposed changes to the Prospectus Regulation will allow issuers in SME Growth Markets to produce a lighter prospectus when transferring to a regulated market (i.e. a main stock exchange), which can lead to significant cost-saving for growing SMEs.
Financial Services – 7 March 2019
The European Parliament and the Council of the Union reached a compromise agreement about new rules on disclosure requirements related to sustainable investments and sustainability risks. The agreed rules will strengthen and improve the disclosure of information by manufacturers of financial products and financial advisors towards end-investors.
First proposed by the Commission in May 2018 as part of the Sustainable Finance Action Plan and the Capital Markets Union, these rules are an integral part of the EU efforts, under the EU’s sustainable development agenda and the carbon neutrality agenda, to connect finance with needs of the real economy. They also support the 2012 United Nations’ Sustainable Development Goals and the 2016 Paris Climate Agreement targets.
The new regulation is built around three main pillars:
- Elimination of greenwashing (unsubstantiated or misleading claims about sustainability characteristics and benefits of an investment product) and an increase of market awareness on sustainability matters;
- Regulatory neutrality: the rules introduce a disclosure toolbox to be applied in the same manner by different financial market operators. The three European Supervisory Authorities (ESAs), and in particular the Joint Committee of the Authorities, will ensure further convergence and harmonisation of disclosures in all the sectors concerned.
- Level playing field: the regulation covers the following financial services sectors: (i) investment funds; (ii) insurance based investment products (life insurance products with investment components available as individual retail life policies as well as group life policies); (iii) private and occupational pensions, (iv) individual portfolio management; and (v) both insurance and investment advice.
Digital Economy – 7 March 2019
The European Commission accepted commitments by Disney, NBCUniversal, Sony Pictures, Warner Bros. and Sky on cross-border pay-TV services It has made commitments offered by these companies legally binding under EU antitrust rules.
These address the Commission’s concerns regarding certain clauses in these studios’ film licensing contracts for pay-TV with Sky UK. These clauses prevented Sky UK from allowing EU consumers outside the UK and Ireland to subscribe to Sky UK’s pay TV services to access films via satellite or online. They also required NBCUniversal, Sony Pictures and Warner Bros. to ensure that broadcasters other than Sky UK are prevented from making their pay-TV services available in the UK and Ireland.
Disney, NBCUniversal, Sony Pictures and Warner Bros. have now committed not to apply these clauses in existing film licensing contracts for pay-TV with any broadcaster in the European Economic Area (EEA). They have also committed to refrain from (re)introducing such clauses in film licensing contracts for pay-TV with any broadcaster in the EEA. Similarly, Sky will neither apply existing clauses nor (re)introduce new ones in its film licensing contracts for pay-TV with Disney, Fox, NBCUniversal, Paramount Pictures, Sony Pictures and Warner Bros.
Social Affairs – 14 February 2019
The creation of the European Labour Authority has been adopted. It will provide information to citizens and business on opportunities for jobs, apprenticeships, mobility schemes, recruitments and training, as well as guidance on rights and obligations to live, work and/or operate in another Member State of the EU.
It will also support cooperation between national authorities in cross-border situations, by helping them ensure that the EU rules that protect and regulate mobility are easily and effectively followed. The Authority will help improve information exchange, support capacity building among national authorities and assist them in running concerted and joint inspections. This will strengthen mutual trust between actors, improve day-to-day cooperation routines and prevent possible fraud and abuse of rules. The European Labour Authority will be able to provide mediation and facilitate solutions in case of cross-border disputes, such as in the event of company restructuring involving several Member States.
Taxation – 13 February 2019
The Commission has adopted its new list of 23 third countries with strategic deficiencies in their anti-money laundering and counter-terrorist financing frameworks. As a result of the listing, banks and other entities covered by EU anti-money laundering rules will be required to apply increased checks (due diligence) on financial operations involving customers and financial institutions from these high-risk third countries to better identify any suspicious money flows.
On the basis of a new methodology, which reflects the stricter criteria of the 5th anti-money laundering directive in force since July 2018, the list has been established following an in-depth analysis.
The 23 jurisdictions are: Afghanistan, American Samoa, The Bahamas, Botswana, Democratic People’s Republic of Korea, Ethiopia, Ghana, Guam, Iran, Iraq, Libya, Nigeria, Pakistan, Panama, Puerto Rico, Samoa, Saudi Arabia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, US Virgin Islands, Yemen.
Social Affairs – 7 February 2019
The European Commission, the European Parliament and the Council have reached a provisional agreement on the European Commission’s proposal for a new Directive to create more transparent and predictable working conditions, in particular for workers in non-standard forms of employment. The original Directive dates from 1991, but since then, the world of work has evolved significantly. Demographic change has resulted in a greater diversity of the working population, digitalisation has facilitated the creation of new forms of employment and new and more flexible employment relationships have emerged.
New rights include:
- Limit the length of probationary periods to 6 months, unless longer is objectively justified;
- Right to work for other employers,with a ban on exclusivity clauses and restrictions on incompatibility clauses;
- Right to predictability of work: workers with variable working schedules determined by the employer (i.e. on-demand work) should know in advance when they can be requested to work. Outside the agreed working time, they retain full right to refuse calls, and protection against unfair treatment;
- Right to compensation when the employer cancelsthe work assignment after a specific deadline;
- Prevention of abusive practices regarding the use of on-demand or similar contracts;
- Possibility to request a more stable form of employment and to receive a justified written reply (within 1 month; for small and medium-sized enterprises within 3 months and orally for repeated requests);
- Right to cost-free mandatory training.
Digital Economy – 11 December 2018
The Council and the European Parliament reached an agreement on the new copyright legislation on TV and radio programmes. It includes three mains changes:
- The Directive introduces the country of origin (COO) principle to facilitate the licensing of rights for certain programmes that broadcasters may wish to offer on their online services (simulcasting, catch-up services and other services that complement the main broadcast, such as previewing). Thanks to this mechanism, broadcasters will be able to make radio programmes, TV news and current affairs programmes as well as their fully financed own productions, available online in all EU countries.
- The Directive provides a mechanism to facilitate the licensing of rights in the case of retransmission of radio and TV programmes, which includes retransmission services provided over the internet under certain conditions. This measure is expected to contribute to a wider distribution of radio and TV channels.
- The new rules on direct injection will make sure that right holders are adequately remunerated when their works are used in programmes transmitted through direct injection. They will provide legal certainty to broadcasters and distributors involved in the process.
Today broadcasters are increasingly offering their broadcasts online. However, their online programming often remains unavailable in other Member States than their Member State of origin even if there could be a potential high interest (for instance because of the language). The current complexity in the clearing of rights (i.e. obtaining right holders’ authorisations) makes it difficult for these services to develop across borders.
Energy – 13 November 2018
The European Parliament completed the parliamentary approval of half of the eight legislative proposals in the 2016 Clean Energy for All Europeans package, following the Energy Performance in Buildings Directive, which came into force on 9 July. The package is a key element of the Juncker Commission’s political priority of “a resilient Energy Union with a forward-looking climate change policy“, aimed at giving Europeans access to secure, affordable and climate-friendly energy and making the European Union world leader in renewable energy. The Council of Ministers will now finalise its formal approval of the three laws. This endorsement will be followed by the publication of the texts in the Official Journal of the Union, and the new legislation will enter into force 3 days after publication.
When these policies will be fully implemented, they will lead to steeper emission reductions for the whole EU than anticipated– some 45% by 2030 compared to 1990, instead of 40%. To strive towards a long-term greenhouse gas reduction objective, the framework sets up a robust governance system of the Energy Union.
- Sets a new, binding, renewable energy target for the EU for 2030 of at least 32%, including a review clause by 2023 for an upward revision of the EU level target.
- Improves the design and stability of support schemes for renewables.
- Delivers real streamlining and reduction of administrative procedures.
- Establishes a clear and stable regulatory framework on self-consumption.
- Increases the level of ambition for the transport and heating/cooling sectors.
- Improves the sustainability of the use of bioenergy.
- Sets a new energy efficiency target for the EU for 2030 of at least 32.5%, with an upwards revision clause by 2023;
- Will extend the annual energy saving obligation beyond 2020, which will attract private investments and support the emergence of new market actors;
- Will strengthen rules on individual metering and billing of thermal energy by giving consumers – especially those in multi-apartment building with collective heating systems – clearer rights to receive more frequent and more useful information on their energy consumption, enabling them to better understand and control their heating bills.
- Will require Member States to have in place transparent, publicly available national rules on the allocation of the cost of heating, cooling and hot water consumption in multi-apartment and multi-purpose buildings with collective systems for such services.
Governance of the Energy Union and Climate Action
- Puts in place a simplified, robust and transparent governance for the Energy Union which promotes long-term certainty and predictability for investors and ensures that EU and Member States can work together towards achieving the 2030 targets and the EU’s international commitments under the Paris Agreement.
- Calls for each Member State to prepare a national energy and climate plan for the period 2021 to 2030, covering all the five dimension of the Energy Union and taking into account the longer-term perspective.
- Aligns the frequency and timing of reporting obligations across the five dimensions of the Energy Union and with the Paris Climate Agreement, significantly enhancing transparency and reducing the administrative burden for the Member States, the Commission and other EU Institutions.
Digital Economy – 2 October 2018
The European Parliament adopted the revised Audiovisual Services directive, which will have to be aligned with the Council of the Union’s version.
The existing rules already cover traditional TV broadcasters and video on-demand services. In the updated rules the scope of application has been extended to also cover video-sharing platforms.
- Member States should ensure that video-sharing platforms put in place measures to protect minors from harmful content (which may impair the physical, mental or moral development); access to which would have to be restricted; and protect the general public from incitement to violence or hatred and content constituting criminal offences (public provocation to commit terrorist offences, child pornography and racism or xenophobia).
- Tobacco advertising remains forbidden in all types of media. For alcohol advertising, the co-legislators agreed also to encourage further development of self- or co-regulation, if necessary also at EU level, to effectively reduce the exposure of minors to such advertisments. This does not prevent Member States from applying stricter rules such as, for example, banning alcohol advertisements or adopting other measures.The advertising limit of 20% of broadcasting time will apply from 6:00 to 18:00 (i.e. broadcasters can place advertising up to 20% of the viewing time in that period) and the same share is allowed during prime time (from 18:00 to midnight).
- Under the new rules, TV broadcasters will continue to be obliged to broadcast at least 50% share of European works (including national content) in viewing time. Video-on-demand services – which already have to promote European works under current rules – are subject under the revised Directive to more specific obligations: they need to ensure at least 30% share of European content in their catalogues and should give a good visibility (prominence) to European content in their offers.The new rules also include a mandatory exemption for companies with a low turnover and low audiences.
Implementation of the new regime via co-regulation would be encouraged; the proposed rules provide basic requirements and partners who share responsibility and contribute to fulfilling the objectives.
The measures listed in the Directive that video-sharing platforms will need to put in place complement the E-Commerce Directive: this includes flagging and reporting mechanisms, age verification systems, systems to rate the content by the uploaders or users, or parental control systems, as well as clarification in the terms and conditions of the platform of a prohibition for users to share the content citizens should be protected from.
In addition, under the revised Directive, video-sharing platforms would also have to respect certain obligations for the commercial communications they are responsible for and to be transparent about commercial communications that are declared by the users when uploading content that contains such commercial communications.
Member States are able to adopt stricter rules for video-sharing platforms under their jurisdiction. Any measures under the new rules will need to remain compatible with the liability exemption for digital intermediaries provided in the E-Commerce Directive.
A video-sharing platform is defined as a commercial service addressed to the public:
- where the principal purpose of the service (or an essential functionality of such service ) is devoted to providing programmes and user-generated videos to the general public, in order to inform, entertain or educate;
- which is made available by electronic communications networks; and
- where the content is organised in a way determined by the provider of the service, in particular by displaying, tagging and sequencing;
This means that services such as YouTube will fall under the scope of the revised Directive. Audiovisual content shared on social media services, such as Facebook, will also be covered by the revised Directive.
While newspaper websites remain outside the scope of the Directive, standalone parts of newspapers’ websites which feature audiovisual programme or user-generated videos will be considered as video-sharing platforms for the purpose of the Directive. However, any occasional use of videos on websites, blogs, news portals will be outside the scope of the Directive.
Trade – 19 September 2018
The European Commission put forward a first set of ideas to modernise the World Trade Organisation and to make international trade rules fit for the challenges of the global economy. These ideas relate to three key areas:
- updating the rule book on international trade to capture today’s global economy;
- strengthening the monitoring role of the WTO;
- overcoming the imminent deadlock on the WTO dispute settlement system.
The EU already started to engage with other WTO partners: with the US and Japan, in the framework of the trilateral discussions; with China, in the dedicated working group set up during the latest EU-China Summit; with other partners, most recently at the G20 Trade Ministerial.
The WTO is now increasingly burdened by inflexible procedures and conflicting interest amongst countries. The arm of the WTO that resolves trade disputes is on the verge of being paralysed because of the blocking of nominations of new WTO Appellate Body Members. And the WTO’s role as a monitoring body is under threat by a lack of transparency from many countries.
Digital Economy – 6 June 2018
The European Parliament and the Council reached late last night a political agreement to update the EU’s telecoms rules.
The new Electronic Communications Code will enhance the deployment of 5G networks by ensuring the availability of 5G radio spectrum by end of 2020 in the EU and providing operators with predictability for at least 20 years in terms of spectrum licensing; including on the basis of better coordination of planned radio spectrum assignments.
The code will facilitate the roll-out of new, very high capacity fixed networks by making rules for co-investment more predictable and promoting risk sharing in the deployment of very high capacity networks; promoting sustainable competition for the benefit of consumers, with a regulatory emphasis on the real bottlenecks, such as wiring, ducts and cables inside buildings; and a specific regulatory regime for wholesale only operators. Moreover, the new rules will also ensure closer cooperation between the Commission and the Body of European Regulators for Electronic Communications (BEREC) in supervising measures related to the new key access provisions of co-investment and symmetric regulation.
The code will also benefit and protect consumers, irrespective of whether end-users communicate through traditional (calls, sms) or web-based services (Skype, WhatsApp, etc.) by:
- ensuring that all citizens have access to affordable communications services, including universally available internet access, for services such as egovernment, online banking or video calls;
- ensuring that international calls within the EU will not cost more than 19 cents per minute, while making sure that the new rules would not distort competition, innovation and investment;
- giving equivalent access to communications for end-users with disabilities;
- promoting better tariff transparency and comparison of contractual offers;
- guaranteeing better security against hacking, malware, etc.;
- better protecting consumers subscribing to bundled service packages;
- making it easier to change service provider and keep the same phone number, including rules for compensations if the process goes wrong or takes too long;
- increasing protection of citizens in emergency situations, including retrieving more accurate caller location in emergency situations, broadening emergency communications to text messaging and video calls, and establishing a system to transmit public warnings on mobile phones.
Digital Economy – 6 June 2018
The European Parliament and the Council confirmed a political agreement on revised rules to apply to European audiovisual legislation. This includes:
- European audiovisual rules extended to video-sharing platforms. The revised Directive will also apply to user-generated videos shared on platforms, e.g. Facebook, when providing audiovisual content is an essential functionality of the service.
- Better protection of minors against harmful content whether on TV or video-on-demand services. The new rules envisage that video-sharing platforms put appropriate measures in place to protect minors.
- Stronger rules against hate speech and public provocation to commit terrorist offences that prohibit incitement to violence or hatred and provocation to commit terrorist offences in audiovisual media services. The rules will also apply to video-sharing platforms to protect people from incitement to violence or hatred and content constituting criminal offences.
- Strengthened Country of Origin Principle with more clarity on which Member State’s rules apply in each case, and the same procedures for both TV broadcasters and on-demand service providers as well as possibilities for derogations in the event of public security concerns and serious risks to public health.
- Promoting European works in on-demand catalogues with at least 30% share of European content.
- More flexibility in television advertising. The revised rules give broadcasters more flexibility as to when ads can be shown – the overall limit of 20% of broadcasting time is maintained between 6:00 to 18:00. Instead of the current 12 minutes per hour, broadcasters can choose more freely when to show ads throughout the day.
- Independence of audiovisual regulators will be reinforced in EU law by ensuring that they are legally distinct and functionally independent from the government and any other public or private body.
Financial Services – 24 May 2018
The Commission proposed new rules to give small and medium enterprises (SMEs) better access to financing through public markets.
Main proposed changes to SME listings rules:
- Adapt current obligations to keep registers of persons that have access to price-sensitive information so as to avoid excessive administrative burden for SMEs, while ensuring that competent authorities can still investigate cases of insider dealing.
- Allow issuers with at least three years of listing on SME Growth Markets to produce a lighter prospectus when transferring to a regulated market. A prospectus is a legal document with information an investor needs to have before making a decision whether to invest in the company.
- Make it easier for trading venues specialised in bond issuance to register as SME Growth Markets. This will be done by setting a new definition of debt-only issuers. Those would be companies that issue less than EUR 50 million of bonds over a 12-months period.
- Create a common set of rules on liquidity contracts for SME Growth Markets in all Member States, in parallel to national rules. This refers to agreements between issuers and financial intermediaries (a bank or an investment firm) for buying and selling shares of and on behalf of the issuer. By so doing, the financial intermediary enhances the liquidity of the shares.
This initiative encompasses a legislative proposal which brings technical amendments to the Market Abuse Regulation and the Prospectus Regulation, and further technical amendments to delegated acts under the Markets in Financial Instruments Directive (MiFID II).
European Union – 2 May 2018
The European Commission has proposed a Union budget framework of 27 for the period 2011-2017 in the amount of € 1.135 billion in commitments – ie 1.1% of the gross national income of the EU-27, and of € 1.105 billion (1.08% of GNI) in payments. Given inflation, this level is comparable to the size of the current budget for the period 2014-2020 (including the European Development Fund).
The Commission is proposing a new mechanism to protect the EU budget from the financial risks associated with widespread rule of law failures in the Member States. It would allow the Union to suspend, reduce or restrict access to EU funds in a manner commensurate with the nature, severity and extent of widespread failures of the rule of law. Decision should be proposed by the Commission and adopted by the Council by reverse qualified majority voting.
In the new multiannual financial framework, two new instruments are proposed:
- A new reform support program with an overall budget of € 25 billion will provide financial and technical support to all Member States for the implementation of priority reforms, in particular within the framework of the European Semester. In addition, a convergence mechanism will provide specific support to non-euro area Member States on their path to joining the common currency.
- A European investment stabilisation mechanism that will maintain investment levels in the event of large asymmetric shocks. It will initially take the form of backed loans guaranteed by the EU budget, up to € 30 billion, combined with financial assistance to the Member States to cover the cost of interest.
Company Law – 25 April 2018
The European Commission proposed new company law rules to make it easier for companies to merge, divide or move within the Single Market. There are currently only 17 Member States that provide a fully online procedure for registering companies. Under the new rules, in all Member States, companies will be able to register, set up new branches or file documents to the business register online.
In line with the landmark 2017 Polbud ruling from the European Court of Justice, companies will be able to move their seat from one Member State to another following a simplified procedure. The new rules will include effective safeguards against abusive arrangements to circumvent tax rules, undermine workers’ rights or jeopardising creditors’ or minority shareholders’ interests. Should ever this happen, the operation will be stopped by the Member State of departure even before the move can take place. The “once-only principle” included in the proposal replaces the need to submit the same information several times to different authorities in a company life-cycle; ore information about companies will be available to all interested parties free of charge in the business registers.
To prevent fraud and abusive practices, national authorities will be able to rely on information held by their counterparts about the fallen rulers. If they suspect fraud, they will still be able to demand the physical presence of the owners of the business. They may also require that certain bodies (eg notaries) be involved in the process.
Trade – 23 April 2018
The European Union and Mexico reached a new agreement on trade, part of a broader, modernised EU-Mexico Global Agreement.
- Agricultural exports from the EU are set to benefit the most,such as poultry, cheese, chocolate, pasta, and pork.
- The agreement includes a comprehensive trade and sustainable development chapter, which sets the highest standards of labour, safety, environmental and consumer protection; introduces a new dialogue with civil society in all areas of the agreement, strengthens the EU and Mexico’s actions on sustainable development and climate change, notably the obligations both sides undertook under the Paris Agreement on climate change; and maintains and fully safeguards Member States’ right to organise public services the way they choose.
- The agreement also includes an explicit reference to the precautionary principle that, already enshrined in the EU treaties, allows the EU to keep products out of its market as long as there is no scientific certainty that they are safe.
- It will also be the very first EU trade agreement to include provisions to fight corruption, with measures to act against bribery and money laundering. The broader Global Agreement, of which the trade agreement is an integral part, also covers the protection of human rights, as well as chapters on political and development cooperation.
- As regards public procurement markets, EU and Mexican companies will be placed on an equal footing, irrespective of whether they present a bid in Mexico or in the EU. Mexico has also committed itself to enter into negotiations with the Mexican States to allow EU firms to tender for contracts at State level by the time the agreement is signed.
- There will be a high level of protection of intellectual property rights. as regards EU research and development and guarantees fair pay for EU artists, as well as the 340 traditional EU distinctive European foods and drink products.
- The new agreement opens up trade in services, such as financial services, transport, e-commerce, and telecommunications. The agreement will also help develop an favourable environment for a knowledge-based economy, with a new chapter on digital trade. This will remove unnecessary barriers to online trade, like charging customs duties when downloading an app, and will put in place clear rules to protect consumers online.
- On investment protection, the agreement improves investment conditions and includes the EU’s new Investment Court System, ensuring transparency and the right of governments to regulate in the public interest, and will also ensure that Mexico and the EU work towards the setting up of a Multilateral Investment Court.
Single Market – 11 April 2018
The European Commission proposed a ‘New Deal for the Consumers” to strengthen their rights. Under the proposal, if adopted by the European Parliament and the Council of the Union:
- When buying from an online market place, consumers will have to be clearly informed about whether they are buying products or services from a trader or from a private person, so they know whether they are protected by consumer rights if something goes wrong.
- When searching online, consumers will be clearly informed when a search result is being paid for by a trader. Moreover, online marketplaces will have to inform the consumers about the main parameters determining the ranking of the results.
- When paying for a digital service, consumers benefit from certain information rights and have 14 days to cancel their contract (withdrawal right). The New Deal for Consumers will now extend this right to ‘free’ digital services for which consumers provide their personal data, but do not pay with money. This typically would apply to cloud storage services, social media or email accounts.
- In some Member States, it is already possible for consumers to launch collective actions in courts, but now this possibility will be available in all EU countries. Representative actions will not be open to law firms, but only to entities such as consumer organisations that are non-profit and fulfil strict eligibility criteria, monitored by a public authority.
- Consumers in all Member States have the right to claim individual remedies (e.g. financial compensation or termination of contract) when they are affected by unfair commercial practices, such as aggressive or misleading marketing.
- National consumer authorities will have the power to impose effective, proportionate and dissuasive penalties in a coordinated manner. For widespread infringements that affect consumers in several EU Member States, the available maximum fine will be 4 % of the trader’s annual turnover in each respective Member State. Member States are free to introduce higher maximum fines.
- Consumers will no longer be allowed to return products that they have already used instead of merely trying them out, and traders will no longer have to reimburse the consumers before actually receiving the returned goods.
Digital Economy – 23 March 2018
The European Parliament and the Council of the Union adopted a common version of the anti-geoblocking legislation. It will be enforced on 3 December 2018.
The new rules define three specific situations where no justification and no objective criteria for a different treatment between customers from different EU Member States are conceivable from the outset.
- The sale of goods without physical delivery;
- The sale of electronically supplied services;
- The sale of services provided in a specific physical location. Example: An Italian family can buy a trip directly to an amusement park in France without being redirected to an Italian website.
In such cases:
- A trader shall not, through the use of technological measures or otherwise, block or limit a customer’s access to the trader’s online interface for reasons related to the customer’s nationality, place of residence or place of establishment.
- A trader shall not, for reasons related to a customer’s nationality, place of residence or place of establishment, redirect that customer to a version of the trader’s online interface that is different from the online interface to which the customer initially sought access, by virtue of its layout, use of language or other characteristics that make it specific to customers with a particular nationality, place of residence or place of establishment, unless the customer has explicitly consented to such redirection.
- A trader shall not apply different general conditions of access to goods or services, for reasons related to a customer’s nationality, place of residence or place of establishment.
- A trader shall not, within the range of means of payment accepted by the trader, apply, for reasons related to a customer’s nationality, place of residence or place of establishment, the location of the payment account, the place of establishment of the payment service provider or the place of issue of the payment instrument within the Union, different conditions for a payment transaction.
The Regulation does not impose an obligation to sell and does not harmonise prices. It does however address discrimination in access to goods and services in cases where it cannot be objectively justified (e.g. by VAT obligations or different legal requirements).
Digital Economy – 21st March 2018
The European Commission has proposed new rules to ensure that digital business activities are taxed, through two legislative proposals.
The main one would enable Member States to tax profits that are generated in their territory, even if a company does not have a physicalpresence there. A digital platform will be deemed to have a taxable ‘digital presence’ or a virtual permanent establishment in a Member State if it fulfils one of the following criteria:
- It exceeds a threshold of €7 million in annual revenues in a Member State;
- It has more than 100,000 users in a Member State in a taxable year; or
- Over 3000 business contracts for digital services are created between the company and business users in a taxable year.
The new rules will also change how profits are allocated to Member States in a way which better reflects how companies can create value online: for example, depending on where the user is based at the time of consumption.
Ultimately, the new system secures a real link between where digital profits are made and where they are taxed.
Furthermore, an interim tax is proposed to ensure that those activities which are currently not effectively taxed would begin to generate immediate revenues for Member States. It would help to avoid unilateral measures to tax digital activities in certain Member States which would be damaging for the Single Market.
The tax will apply to revenues created from activities where users play a major role in value creation and which are the hardest to capture with current tax rules, such as those revenues:
- Created from selling online advertising space;
- Created from digital intermediary activities which allow users to interact with other users and which can facilitate the sale of goods and services between them;
- Created from the sale of data generated from user-provided information.
Tax revenues would be collected by the Member States where the users are located, and will only apply to companies with total annual worldwide revenues of €750 million and EU revenues of €50 million. This will help to ensure that smaller start-ups and scale-up businesses remain unburdened. An estimated €5 billion in revenues a year could be generated for Member States if the tax is applied at a rate of 3%.
Financial Services – 14 March 2018
The Commission proposed a package of measures to tackle non-performing loans (NPLs) in Europe:
1. Ensuring sufficient loss coverage by banks for future NPLs
- A Regulation amending the Capital Requirements Regulation (CRR) introduces common minimum coverage levels for newly originated loans that become non-performing. In case a bank does not meet the applicable minimum level, deductions from banks’ own funds would apply.
- The measure addresses the risk of not having enough funds to cover losses on future NPLs and prevents their accumulation.
2. Enabling accelerated out-of-court enforcement of loans secured by collateral
- Under the proposals, banks and borrowers can agree in advance on an accelerated mechanism to recover the value from loans guaranteed with collateral.
- If a borrower defaults, the bank or other secured creditor is able to recover the collateral that underpins a loan in an expedited way, without going to court.
- Out-of-court collateral enforcement is strictly limited to loans granted to businesses and subject to safeguards. Consumer loans are excluded.
3. Further developing secondary markets for NPLs
- The proposal will foster the development of secondary markets for NPLs by harmonising requirements and creating a single market for credit servicing and the transfer of bank loans to third parties across the EU.
- The proposed Directive defines the activities of credit servicers, sets common standards for authorisation and supervision and imposes conduct rules across the EU. It means that operators respecting those rules can be active throughout the EU without separate national authorisation requirements.
- Purchasers of bank loans are required to notify authorities when acquiring a loan. Third-country purchasers of consumer loans are required to use authorised EU credit servicers. Consumer protection is ensured by legal safeguards and transparency rules so that the transfer of a loan does not affect the legitimate rights and interest of the borrower.
4. A technical blueprint for how to set up a national Asset Management Companies (AMCs)
- The non-binding blueprint guides Member States on how they can set up national AMCs, should they find it useful, in full compliance with EU banking and State aid rules.
- While considering AMCs with a State aid element as an exceptional solution, the blueprint clarifies the permissible design of AMCs receiving public support. The blueprint also sets out alternative impaired asset measures.
- The blueprint suggests a number of common principles on the set-up, governance and operations of AMCs. The blueprint draws on experience and best practices from AMCs already set up in Member States.
Taxation – 13 March 2018
The Council of the Union adopted new transparency rules for intermediaries – such as tax advisers, accountants, banks and lawyers – who design and promote tax planning schemes for their clients. They will have to report these schemes to the tax authorities before they are used.
Member States will automatically exchange the information that they receive on the tax planning schemes through a centralised database, giving them early warning on new risks of avoidance and enabling them to take measures to block harmful arrangements and carry out audits more effectively.
The new reporting requirements will enter into force on 1 July 2020, with EU Member States obliged to exchange information every 3 months after that. The first exchange willl take place by 31st October 2020.
Social Affairs – 13 March 2018
Commission proposed creating a European Labour Authority. It will provide information to citizens and business on opportunities for jobs, apprenticeships, mobility schemes, recruitments and training, as well as guidance on rights and obligations to live, work and/or operate in another Member State of the EU.
The Authority will also support cooperation between national authorities in cross-border situations, by helping them ensure that the EU rules that protect and regulate mobility are easily and effectively followed. The priority is not just to make these rules fairer and fit-for-purpose but also to make sure that they can be correctly applied and enforced in a fair, simple and effective way in all economic sectors.
The European Labour Authority will be able to provide mediation and facilitate solutions in case of cross-border disputes, such as in the event of company restructuring involving several Member States.
The European Labour Authority will be established as a new decentralised EU agency and should be up and running in 2019.
The European Commission has proposed measures to promote alternative sources of financing and remove barriers to cross-border investment.
Common rules for secured obligations, based on quality standards and good practice.
Removal of regulatory obstacles to cross-border distribution of investment funds
New rules as to the law applicable to the assignment of receivables; the law of the country in which the assignor has his habitual residence would apply irrespective of the Member State of the courts or competent authorities which examine the case.
Taxation – 13 March 2018
The Council of the Union has adopted new transparency rules for intermediaries – tax advisers, accountants, banks and lawyers – who design and promote tax planning schemes for their clients. These intermediaries will have to declare them to the tax authorities before they are used.
Member States will automatically exchange the information they receive on tax planning schemes through a centralized database, which will enable them to detect new risks of evasion early and take measures to neutralize and carry out audits more effectively.
The obligation to declare a device will not necessarily mean that it is harmful, but only that it deserves to be examined by the tax authorities. However, Member States have also decided to apply effective and dissuasive sanctions to companies that do not comply with transparency measures.
The new reporting requirements will come into effect on 1 July 2020 and will oblige EU Member States to exchange information every 3 months thereafter. The first exchange will take place on October 31, 2020.
Financial Services – 12 March 2018
The European Commission proposed measures to promote alternative sources of financing and remove barriers to cross-border investment.
- Common rules for covered bonds based on quality standards and good practice;
- Removal of regulatory obstacles to cross-border distribution of investment funds
- New rules as to the law applicable to the assignment of claims and securities; the law of the country in which the assignor has his habitual residence would apply irrespective of the Member State of the courts or competent authorities which examine the case.
Financial Services – 8 March 2018
The European Commission presented its strategy for sustainable investment. It proposes :
- Establishing a single classification system (taxonomy) of the EU to define what is sustainable and to identify areas in which sustainable investments can have the greatest impact;
- The creation of EU labels for green financial products, based on this EU classification system;
- Clarifying requirements for asset managers and institutional investors to consider sustainability aspects in the investment process and to strengthen their reporting obligations;
- The obligation for insurance companies and investment firms to inform their clients on the basis of their preferences for sustainability;
- Integrating sustainability into prudential requirements the Commission will check whether it is possible to recalibrate the capital requirements for banks (the so-called “green support factor”) for sustainable investments, where this is justified from the point of view of risk, while ensuring stability financial;
- Enhancing transparency of corporate disclosure: by changing the EU’s guidelines for publishing non-financial information.
Social Affairs – 1st March 2018
The European Parliament, the Council and the Commission reached a trilogue political agreement on the Directive on Posted Workers.
On 8 March 2016, following extensive consultation, the Commission proposed a reform of the current rules on posting of workers, which establishes the principle of equal pay for equal work at the same place. This principle goes significantly beyond the requirement of minimum pay under the existing Directive.
Other important elements of the agreement include:
- Rules set by sectoral social partner agreements become mandatory for posted workers in all economic sectors. Currently, this is only the case for the construction sector.
- Better protection for several categories of workers: the new rules will apply to temporary agency workers and workers in chain posting to ensure also for them the principle of equal pay for equal work at the same place. Workers in non-genuine posting will be protected too.
- Member States will have to comply with reinforced transparency obligations, such as the publication of all information on websites.
- Long-term posting: today, posted workers have the same rights irrespective of the duration of posting. Under the new rules, workers who are posted for more than 12 months will be subject to all aspects of the labour law of the host Member State. This could be extended to 18 months via a motivated notification.
- Link with road transport: the new EU rules on posting will apply to the road transport sector according to the Commission’s Road Transport Strategy for Europe, once it enters into force (the Strategy is currently under discussion in the Council and the Parliament). Depending on the development of this ‘lex specialis’, there will be an assessment to see whether further measures are required.
- Transitional period: Member States will have 2 years to transpose the new rules into their national legislation. They will then have to apply and start enforcing the rules.
In addition to amending the rules, the Commission has facilitated the implementation of the so-called “Enforcement Directive”, which entered into force in June 2016. This Directive gives more powers to national authorities to combat cases of abuse, such as “letter box companies”, and to coordinate their activities.
Other recent Commission initiatives in favor of fairer labour mobility include:
- Modernisation of EU rules for the coordination of social security systems, to facilitate labour mobility, ensure fairness for those who move and provide better tools for cooperation between Member State authorities.
- The launch of the Electronic System of Social Security Information, which allows for a quicker and easier exchange of mobile workers’ social security information between Member States.
- The upcoming proposal to set up a European Labour Authority, to ensure that EU rules on labour mobility are enforced in a fair, simple and effective way.
Digital Economy – 1st March 2018
The European Parliament, the Council and the Commission reached a trilogue political agreement on several crucial parts regarding the new telecom rules and radio spectrum policy. The agreement was reached on a number of key measures envisioned in the European Electronic Communications Code, including the availability of radio spectrum for 5G by 2020 in the EU, 20 years investment predictability for spectrum licences, and enhanced coordination and peer review of planned radio spectrum assignment procedures.
The agreement will prepare the ground for 5G network deployment across the EU, taking into account the previous agreements on the setting of radio spectrum fees, on eliminating cross-border interference and on deploying the small cells more easily. The negotiations on other parts of the European Electronic Communications Code are ongoing. The goal of the co-legislators is to find an agreement as soon as possible under the Bulgarian Presidency.
Trade – 23 January 2018
The international trade committee of the European Parliament endorsed the political agreement reached between the Commission, the Council and the European Parliament on 5 December 2017 on the modernisation of the EU’s trade defence instruments.
Amongst the most important changes to the EU’s anti-dumping and anti-subsidy legislation are:
- Faster and more efficient investigations: provisional measures will be imposed within 7 to 8 months, in comparison to the current 9 months.
- Possibility to impose higher duties: this will apply to anti-subsidy cases, as well as anti-dumping cases concerning imports produced using raw materials and energy provided at an artificially low price. This means the rule known as “lesser duty rule” will be adapted. In such cases, the EU will be able to apply the duty rates at the full dumping margin level, provided this is in the interest of the EU as a whole, taking into account the interest of consumers, as much as upstream and downstream industries.
- Improved injury calculation: the new rules concerning calculation of the ‘non-injurious price’, i.e. the price that the industry is expected to have charged under normal circumstances, now better reflect economic reality. They may now take into account the cost of necessary investments, such as in infrastructure or research and development, but also future expenses related to social and environmental standards, for example under the Emission Trading System. Also, the ‘non-injurious price’ will now assume a minimum profit of 6% that will be included in the calculation, with a higher profit margin possible on a case-to-case basis.
- Inclusion of social and environmental considerations: Trade has to be open but also fair. The new rules ensure that our high standards in the EU do not disadvantage European industry in application of trade defence measures. The EU will now for instance take into account the cost of compliance by EU industry with higher social and environmental standards. Furthermore, the EU will normally not accept price undertakings from third countries that have a bad record on core International Labour Organisation conventions and multilateral environmental agreements.
- Increased transparency and predictability: An advance warning of 3 weeks will now be given to companies before duties start being collected. This will allow all companies to adapt to the new situation.
- Support for EU smaller companies: EU small and medium-sized companies will now be able to benefit fromstreamlined procedures and support of an SME Helpdesk to make it easier for them to participate in trade defence investigations.
- Closing the loophole related to dumped products shipped offshore: Trade defencemeasures will now also apply to dumped or subsidised products shipped offshore in the Continental Shelf / Exclusive Economic Zone of the Member States when the consumption of the product is significant.
Financial Services – 14 January 2018
The Payment Services Directive (PSD2), applies since 13 January 2018. It incorporates and repeals Directive 2007/64/EC (PSD1), which provided the legal basis for the creation of an EU-wide single market for payment services.
The new rules will:
- Prohibit surcharging, which are additional charges for payments with consumer credit or debit cards, both in shops or online;
- Open the EU payment market to companies offering payment services, based on them gaining access to information about the payment account;
- Introduce strict security requirements for electronic payments and for the protection of consumers’ financial data;
- Enhance consumers’ rights in numerous areas. These include reducing the liability for non-authorised payments and introducing an unconditional (“no questions asked”) refund right for direct debits in euro.
Digital Economy – 19 December 2017
- VAT on cross-border sales under €10,000 a year will be handled according to the rules of the home country of the smallest businesses, giving a boost to 430 000 businesses across the EU. SMEs will benefit from simpler procedures for cross-border sales of up to €100,000 annually. These measures will enter into force by 1 January 2019.
- All companies that sell goods to their customers online will deal with their VAT obligations in the EU through one easy-to-use online portal in their own language. Without the portal, VAT registration would be required in each EU Member State into which they want to sell – a situation cited by companies as one of the biggest barriers for small businesses trading cross-border.
- Large online marketplaces will be responsible for ensuring VAT is collected on sales on their platforms that are made by companies in non-EU countries to EU consumers. This includes sales of goods that are already being stored by non-EU companies in warehouses (so-called ‘fulfilment centres’) within the EU which can often be used to sell goods VAT free to consumers in the EU.
The One Stop Shop for sales of online goods is due to come into effect in 2021 to give Member States time to update the IT systems underpinning the system.
Trade – 19 December 2017
A EU-Japan Economic Partnership Agreement was signed by the European Commission and the government of Japan.
Some clarification was made on tariffs and services; protection of EU and Japanese Geographical Indications; good regulatory practices and regulatory cooperation, namely.
With regards to agricultural exports from the EU, the agreement will, in particular:
- scrap duties on many cheeses such as Gouda and Cheddar (which currently are at 29.8%) as well as on wine exports (currently at 15% on average);
- allow the EU to increase its beef exports to Japan substantially, while on pork there will be duty-free trade in processed meat and almost duty-free trade for fresh meat;
- ensure the protection in Japan of more than 200 high-quality European agricultural products, so called Geographical Indications (GIs), and will also ensure the protection of a selection of Japanese GIs in the EU.
The agreement also opens up services markets, in particular financial services, e-commerce, telecommunications and transport. In addition:
- it guarantees EU companies access to the large procurement markets of Japan in 48 large cities, and removes obstacles to procurement in the economically important railway sector at national level;
- it addresses specific sensitivities in the EU, for instance in the automotive sector, with transition periods before markets are opened.
The deal also includes a comprehensive chapter on trade and sustainable development; sets the highest standards of labour, safety, environmental and consumer protection; strengthens EU and Japan’s actions on sustainable development and climate change and fully safeguards public services.
Concerning data protection, the EU and Japan continue working towards adopting adequacy decisions under the respective data protection rules as soon as possible in 2018.
The Commission will submit the agreement for the approval of the European Parliament and EU Member States, aiming for its entry into force before the end of the current mandate of the European Commission in 2019.
At the same time, negotiations continue on investment protection standards and investment protection dispute resolution.
Defence – 19 December 2017
- European Medical Command;
- European Secure Software defined Radio (ESSOR);
- Network of logistic Hubs in Europe and support to Operations
- Military Mobility;
- European Union Training Mission Competence Centre (EU TMCC);
- European Training Certification Centre for European Armies;
- Energy Operational Function (EOF);
- Deployable Military Disaster Relief Capability Package;
- Maritime (semi-) Autonomous Systems for Mine Countermeasures (MAS MCM);
- Harbour & Maritime Surveillance and Protection (HARMSPRO);
- Upgrade of Maritime Surveillance;
- Cyber Threats and Incident Response Information Sharing Platform;
- Cyber Rapid Response Teams and Mutual Assistance in Cyber Security;
- Strategic Command and Control (C2) System for CSDP Missions and Operations;
- Armoured Infantry Fighting Vehicle / Amphibious Assault Vehicle / Light Armoured Vehicle;
- Indirect Fire Support (EuroArtillery);
- EUFOR Crisis Response Operation Core (EUFOR CROC).
In addition to PESCO which is purely intergovernmental, the European Defence Fund proposed by the European Commission in June will create incentives for Member States to cooperate on joint development and the acquisition of defence equipment and technology through co-financing from the EU budget and practical support from the Commission.
Digital Economy – 19 December 2017
The European Parliament and the Council aadopted a common version of a regulation on the pricing of cross-border parcel delivery services.
The new Regulation is a key pillar of the Commission’s efforts to boost e-commerce to allow consumers and companies, in particular SMEs, to buy and sell products and services online more easily and confidently across the EU.
The main elements of the new Regulation on cross-border parcel delivery are:
- Price transparency: While the Regulation does not impose a cap on prices, it will foster competitive pressure by allowing users to easily compare domestic and cross-border tariffs. Parcel delivery providers will have to disclose prices for the services individual consumers and small businesses often use, which the Commission will publish on a website.
- Regulatory oversight: Where parcel delivery is subject to the universal service obligation, National Regulatory Authorities will assess whether tariffs for cross-border services are unreasonably high compared to the underlying cost – as they already do for postal services. National regulators will be given new powers to identify better parcel service providers and the services they offer.
A 2013 survey found that consumers and small businesses struggle with parcel delivery, in particular with the high prices, which prevent them from buying or selling more from other Member States. Research shows that the public cross-border prices charged by universal service providers are up to five times higher than the domestic equivalent and that these differences cannot be explained by labour or other costs in the destination country. Prices from broadly similar originating Member States over comparable distances sometimes vary significantly without obvious explanatory cost factors.
The text is part of a three-pronged plan to boost e-commerce by tackling geoblocking (for which a political agreement was reached on 21 November), making cross-border parcel delivery more affordable and by improving consumer protection through better consumer law enforcement (fully adopted on 12 December).
Financial Services – 21 November 2017
The Council of the Union took the decision to transfer the European Banking Authority from London to Paris – where the European Securities and Markets Authority is already based – in the context of the UK’s withdrawal from the EU. The European Insurance and Occupational Pensions Authority remains in Frankfurt .
Health – 21 November 2017
The Council of the Union took the decision to transfer the European Medicine Agency from London to Amsterdam in the context of the UK’s withdrawal from the EU.
Social Affairs – 14 November 2017
End October, the Employment, Social Policy, Health and Consumer Affairs Council expressed its unanimous endorsement of the European Pillar of Social Rights, which the Commission presented in April 2107.
In 2018 the Commission will launch a European Labour Authority, in line with President Juncker’s 2017 State of the Union and Letter of Intent. The aim is to strengthen cooperation between labour market authorities at all levels and better manage cross-border situations.
The Commission will also propose other initiatives in support of fair mobility, including a European Social Security Number, to make social security rights more visible and digitally accessible.
Social Affairs – 24 October 2017
The Council reached an agreement on its position on the posting of workers directive. The new proposal revises certain elements of the original 1996 directive. Poland, Hungary, Lithuania, and Latvia voted against, United Kingdom, Ireland and Croatia abstained. The majority represents 20 member States (16 required) representing 73% of the EU population (65% required). Transport will be adressed separately.
The Estonian Presidency of the Council needs to negotiate in trilogue with the European Parliament rapporteurs (Elizabeth Morin-Chartier and Agnes Jongerius) and the shadow rapporteurs to align their respective positions. In the Employment and social affairs committee, the majority is broad: 32 votes in favour, 8 against and 13 abstentions.
The Council ‘s version of the new directive provides for:
- remuneration of posted workers in accordance with host member state law and practices
- long-term posting of 12 months that can be extended to 6 months (18 months in total) on the basis of a motivated notification by the service provider
- application of universally applicable collective agreements to posted workers across all sectors
- equal treatment of temporary agency workers and local workers
- as regards the transport sector, the provisions of the amending directive will apply from the date of entry into force of the forthcoming sector-specific legislation
- 3 years transposition period plus 1 more year before the application of the directive.
All rules on remuneration which apply to local workers will also have to apply to posted workers. Remuneration will not only include the minimum rates of pay, but also other elements such as bonuses or allowances.
The Platform against undeclared work will be used to fight fraud and abuses and to improve the exchange of information and administrative cooperation between member states.
Taxation – 11 October 2017
The ECOFIN Council reached an agreement which will ensure that businesses and citizens can resolve disputes related to the interpretation of tax treaties more swiftly and effectively. It will also cover issues related to double taxation – a major obstacle for businesses, creating uncertainty, unnecessary costs and cash-flow problems.
This agreement will ensure that taxpayers faced with tax treaty disputes can initiate a procedure whereby the Member States in question must try to resolve the dispute amicably within two years. If at the end of this period, no solution has been found, the Member States must set up an Advisory Commission to arbitrate. If Member States fail to do this, the taxpayer can bring an action before the national court to do so. This Advisory Commission will be comprised of 3 independent members and representatives of the competent authorities in question. It will have 6 months to deliver a final, binding decision. This decision will be immediately enforceable and must resolve the dispute.
Estimates show that there are currently around 900 double taxation disputes in the EU today, estimated to be worth €10.5 billion. The new rules formally adopted today will better meet the needs of businesses and citizens and any double taxation will be removed.
Taxation – 4 October 2017
The European Commission launched plans for the biggest reform of EU VAT rules “in a quarter of a century”. The Commission proposes to tax sales of goods from one EU country to another in the same way as goods are sold within individual Member States.
- VAT would be charged on cross-border trade between businesses. Currently, this type of trade is exempt from VAT, providing an easy loophole for unscrupulous companies to collect VAT and then vanish without remitting the money to the government;
- It would be simpler for companies that sell cross-border to deal with their VAT obligations thanks to a ‘One Stop Shop’; Member States would then pay the VAT to each other directly, as is already the case for all sales of e-services;
- There would be a move to the principle of ‘destination’ whereby the final amount of VAT is always paid to the Member State of the final consumer and charged at the rate of that Member State;
- There would be some simplification of invoicing rules, allowing sellers to prepare invoices according to the rules of their own country even when trading across borders. Companies would no longer have to prepare a list of cross-border transactions for their tax authority (the so-called ‘recapitulative statement’).
Digital Economy – 23 September 2017
The Commission proposed a new set of rules to govern the free flow of non-personal data in the EU.
- The principle of free flow of non-personal data across borders: Member States can no longer oblige organisations to locate the storage or processing of data within their borders. Restrictions will only be justified for reasons of public security. Member States will have to notify the Commission of new or existing data localisation requirements. The free flow of non-personal data will make it easier and cheaper for businesses to operate across borders without having to duplicate IT systems or to save the same data in different places.
- The principle of data availability for regulatory control: Competent authorities will be able to exercise their rights of access to data wherever it is stored or processed in the EU. The free flow of non-personal data will not affect the obligations for businesses and other organisations to provide certain data for regulatory control purposes.
- The development of EU codes of conduct to remove obstacles to switching between service providers of cloud storage and to porting data back to users’ own IT systems.
Financial Services – 23 September 2017
The Commission proposed to make ESMA the direct supervisor over certain sectors of capital markets across the EU:
- Capital market data: ESMA will authorise and supervise the EU’s critical benchmarks and endorse non-EU benchmarks for use in the EU. This will improve the reliability and harmonisation of supervision of benchmarks, which are the indices or indicators used to price financial instruments and financial contracts or to measure the performance of an investment fund.
- Capital market entry: In a bid to streamline procedures for companies to tap into EU capital markets and attract investment from across the EU, ESMA will now be in charge of approving certain EU prospectuses and all non-EU prospectuses drawn up under EU rules. Prospectuses are documents that contain the information an investor needs before making a decision whether to invest in a company.
- Capital market actors: ESMA will authorise and supervise certain investment funds with an EU label with the aim of creating a genuine single market for these funds (European Venture Capital Funds, European Social Entrepreneurship Funds and European Long-Term Investment Funds).
- Market abuse cases: ESMA will have a greater role in coordinating market abuse investigations. It will have the right to act where certain orders, transactions or behaviours give rise to well-founded suspicion and have cross-border implications or effects for the integrity of financial markets or financial stability in the EU.
The ESAs (markets, banks, insurance) will take decisions more independently from national interests. Under the new governance system, newly-created Executive Boards with permanent members will lead to quicker, more streamlined and EU-oriented decisions. Moreover, interested parties will be able to ask the Commission to intervene if the majority consider that the ESAs have exceeded their competences when issuing guidelines or recommendations. The reform will also make the funding of the ESAs independent from national supervisors. This will guarantee that the ESAs have improved autonomy and independence. While the EU budget will continue to contribute a share of the ESAs’ funding, the rest will be funded by contributions from the financial sector.
As the EU steps up efforts to complete the Capital Markets Union, supervision has to keep pace with new market developments, notably:
- The ESAs will promote sustainable finance, while ensuring financial stability. They will take account of environmental, social and governance-related factors and risks in all the tasks they perform.
- The ESAs will prioritise FinTech and will coordinate national initiatives to promote innovation and strengthen cybersecurity. They will take account of technological innovation in all the tasks they perform.
European Union – 16 September 2017
In his speech on the state of the Union on 15 September, Commission President Juncker gave details on important initiatives from the Commission, including:
- proposals to reduce the carbon emissions of our transport sector;
- a European Cybersecurity Agency;
- a European Social Standards Union,
- a common Labour Authority;
- encouraging the Council to move to qualified majority voting for decisions on the common consolidated corporate tax base, on VAT, on fair taxes for the digital industry and on the financial transaction tax;encouraging Member States to join the Banking Union;
- incentives for Member States to join the Economic and Monetary Union.
Taxation – 22 June 2017
The European Commission proposed new transparency rules for intermediaries – such as tax advisors, accountants, banks and lawyers – who design and promote tax planning schemes for their clients.
Cross-border tax planning schemes bearing certain characteristics or ‘hallmarks’ which can result in losses for governments will now have to be automatically reported to the tax authorities before they are used. The Commission has identified key hallmarks, including the use of losses to reduce tax liability, the use of special beneficial tax regimes, or arrangements through countries that do not meet international good governance standards.
Digital Economy – 9 June 2017
The Council of the Union has adopted one important part of the e-commerce package proposed by the European Commission in May 2016, that is to say a legislative proposal on cross-border parcel delivery services to increase the transparency of prices and improve regulatory oversight.
The Regulation will foster competition by introducing greater price transparency. The Commission did not propose a cap on delivery prices. The Regulation will give national postal regulators the data they need to monitor cross-border markets and check the affordability and cost-orientation of prices. It will also encourage competition by requiring transparent and non-discriminatory third-party access to cross-border parcel delivery services and infrastructure. The Commission will publish public listed prices of universal service providers to increase peer competition and tariff transparency.
The other elements of the package are:
- A legislative proposal to address unjustified geoblocking and other forms of discrimination on the grounds of nationality, residence or establishment;
- A legislative proposal to strengthen enforcement of consumers’ rights and guidance to clarify, among others, what qualifies as an unfair commercial practice in the digital world.
Social Affairs – 26 April 2017
The European Commission presented the European Pillar of Social Rights setting out 20 key principles and rights to support fair and well-functioning labour markets and welfare systems.
The Pillar is presented both as a Commission Recommendation and as a proposal for a joint proclamation by the Parliament, the Council and the Commission.
The Commission will now enter into discussions with the European Parliament and all the Member States in the Council to work towards broad political support and high-level endorsement of the Pillar.
Already today, the European Commission flanks the European Pillar of Social Rights with a number of further concrete legislative and non-legislative initiatives such as on the work-life balance of parents and carers, on the information of workers, and on access to social protection and on working time. These initiatives illustrate both the nature of the issues covered by the Pillar as well as the way in which its principles and rights can be implemented.
A social scoreboard is also established to track trends and performances across EU countries in 12 areas and to assess progress towards a social “triple A” for the EU as a whole. This analysis will feed into the European Semester of economic policy coordination.
Company Law – 20 March 2017
The European Parliament adopted the revised Shareholders’ rights directive. The final adoption step will take place in the Council shortly. The directive will enter into force two years after its publication in the official journal.
The main changes include:
- Stronger shareholders ‘rights and facilitation of cross-border voting.
- Long-term engagement of institutional investors and asset managers: the Directive encourages these investors to adopt more-long-term focus in the investment strategies and to consider social and environmental issues. These new rules will be based on a ‘comply or explain’ approach. There is no requirement to reveal any confidential information.
- More transparency of proxy advisors’ preparation of recommendation, advice and application of the code of conduct they apply.
- Shareholders’ vote on the remuneration policy will in principle be binding. Member States will however have the possibility to opt for an advisory vote.
- Related party transactions that are most likely to create risks for minority shareholders will also have to be submited for approval of the general meeting of shareholders or of the board.
European Union – 6 March 2017
The European Commission presented a White Paper on the Future of Europe, which forms the Commission’s contribution to the Rome Summit of 25 March 2017. It sets out five scenarios.
- Scenario 1: Carrying On – The EU27 focuses on delivering its positive reform agenda in the spirit of the Commission’s New Start for Europe from 2014 and of the Bratislava Declaration agreed by all 27 Member States in 2016. By 2025 this could mean:
- Europeans can drive automated and connected cars but can encounter problems when crossing borders as some legal and technical obstacles persist.
- Europeans mostly travel across borders without having to stop for checks. Reinforced security controls mean having to arrive at airports and train stations well in advance of departure.
- Scenario 2: Nothing but the Single Market – The EU27 is gradually re-centred on the single market as the 27 Member States are not able to find common ground on an increasing number of policy areas. By 2025 this could mean:
- Crossing borders for business or tourism becomes difficult due to regular checks. Finding a job abroad is harder and the transfer of pension rights to another country not guaranteed. Those falling ill abroad face expensive medical bills.
- Europeans are reluctant to use connected cars due to the absence of EU-wide rules and technical standards.
- Scenario 3: Those Who Want More Do More – The EU27 proceeds as today but allows willing Member States to do more together in specific areas such as defence, internal security or social matters. One or several “coalitions of the willing” emerge. By 2025 this could mean that:
- 15 Member States set up a police and magistrates corps to tackle cross-border criminal activities. Security information is immediately exchanged as national databases are fully interconnected.
- Connected cars are used widely in 12 Member States which have agreed to harmonise their liability rules and technical standards.
- Scenario 4: Doing Less More Efficiently – The EU27 focuses on delivering more and faster in selected policy areas, while doing less where it is perceived not to have an added value. Attention and limited resources are focused on selected policy areas. By 2025 this could mean
- A European Telecoms Authority will have the power to free up frequencies for cross-border communication services, such as the ones used by connected cars. It will also protect the rights of mobile and Internet users wherever they are in the EU.
- A new European Counter-terrorism Agency helps to deter and prevent serious attacks through a systematic tracking and flagging of suspects.
- Scenario 5: Doing Much More Together – Member States decide to share more power, resources and decision-making across the board. Decisions are agreed faster at European level and rapidly enforced. By 2025 this could mean:
- Europeans who want to complain about a proposed EU-funded wind turbine project in their local area cannot reach the responsible authority as they are told to contact the competent European authorities.
- Connected cars drive seamlessly across Europe as clear EU-wide rules exist. Drivers can rely on an EU agency to enforce the rules.
Digital Economy – 22 February 2017
The European Parliament adopted a Resolution for the Commission on robotics and artificial intelligence by 396 votes to 123, with 85 abstentions. It rejected, against the opinon of the Socialist Rapporteur Mady Delvaux by 368 against 286, the idea of a universal basic income to compensate for the impact of robots on the labour market.
The Parliament stresses that draft legislation is urgently needed to clarify liability issues, especially for self-driving cars. They call for a mandatory insurance scheme and a supplementary fund to ensure that victims of accidents involving driverless cars are fully compensated.
The Parliament also asks the Commission to consider creating a specific legal status for robots in the long run, in order to establish who is liable if they cause damage.
The rapid development of robots might result in changes in the labour market through the creation, displacement and loss of certain jobs. The Parliament urges the Commission to follow these trends closely.
The growing use of robotics also raises ethical issues, for example to do with privacy and safety. The Parliament proposes a voluntary ethical code of conduct on robotics for researchers and designers to ensure that they operate in accordance with legal and ethical standards and that robot design and use respect human dignity.
It also asks the Commission to consider creating a European agency for robotics and artificial intelligence, to supply public authorities with technical, ethical and regulatory expertise.
Taxation – 3 January 2017
As of 1 January 2017, Member States are obliged to automatically exchange information on all new cross-border tax rulings that they issue. This will be done through a central depository, accessible to all EU countries.
Every six months national tax authorities will send a report to the depository, listing all the cross-border tax rulings that they have issued. Other Member States will then be able to check those lists and to ask the issuing Member State for more detailed information on a particular ruling. This first exchange should take place by 1 September 2017 at the latest.
By 1 January 2018, Member States will also have to provide the same information for all cross-border rulings issued since the beginning of 2012.
Taxation – 1st December 2016
The European Commission unveiled a series of measures to improve the Value Added Tax (VAT) environment for e-commerce businesses in the EU. These include:
- New rules allowing companies that sell goods online to deal easily with all their EU VAT obligations in one place;
- To simplify VAT rules for startups and micro-businesses selling online, VAT on cross-border sales under €10,000 will be handled domestically. SMEs will benefit from simpler procedures for cross-border sales of up to €100,000 to make life easier;
- Action against VAT fraud from outside the EU, which can distort the market and create unfair competition;
- To enable Member States to reduce VAT rates for e-publications such as e-books and online newspapers.
Defence – 30 November 2016
The European Commission proposes a European Defence Fund and other actions to support Member States’ more efficient spending in joint defence capabilities, strengthen European citizens’ security and foster a competitive and innovative industrial base.
Under the European Defence Action Plan, the Commission proposes to:
1 – Set up a European Defence Fund to support investment in joint research and the joint development of defence equipment and technologies: the proposed Fund would include two “windows” which are complementary but different in their legal structure and budget sourcing.
- A “research window” to fund collaborative research in innovative defence technologies such as electronics, metamaterials, encrypted software or robotics. The Commission has already proposed EUR 25 million for defence research as part of the 2017 EU budget, and expects that this budget allocation could grow to a total of EUR 90 million until 2020. Under the post-2020 EU multiannual financial framework, the Commission intends to propose a dedicated defence research programme with an estimated amount of EUR 500 million per year.
- A “capability window” which would act as a financial tool allowing participating Member States to purchase certain assets together to reduce their costs. The capabilities would be agreed by the Member States, who would own the technology and equipment. For example, Member States may jointly invest in drone technology or bulk buy helicopters to reduce costs. As an order of magnitude, this window should be able to mobilise about EUR 5 billion per year. The Commission will launch a scoping study to refine this estimate.
2 – Foster investments in SMEs, start-ups, mid-caps and other suppliers to the defence industry: The European Structural and Investment Funds and European Investment Bank (EIB) group already provide financial support for the development of a number of dual-use activities. The Commission will support EIB efforts to improve access to funding by the defence supply chains. It will promote EU co-financing of productive investment projects and the modernisation of the defence supply chains. Under the ‘Blueprint for Sectoral Co-operation on Skills‘ the Commission will support cooperation in the defence sector to ensure people have the right skills and technological ability to generate innovation.
3 – Strengthen the Single Market for defence: The Commissionwill strengthen the conditions for an open and competitive defence market in Europe to help companies operate across borders and help Member States get best value for money in their defence procurement. To do so, the Commission will push ahead with the effective application of the two Directives on defence and security procurement and on EU transfers, facilitate the cross-border participation in defence procurement, support the development of industry standards, and promote the contribution of sectoral policies, such as EU space programmes, to common security and defence priorities.
Financial Services – 28 November 2016
The European Commission proposed new rules for systemic derivatives market infrastructures, known as Central Counterparties (CCPs).
The proposed rules for CCPs set out provisions comparable to those in the recovery and resolution rules for banks (Bank Recovery and Resolution Directive– BRRD) and are based on international standards. However, as CCPs are very different businesses to banks, this proposal contains CCP-specific tools that better align with CCPs’ default management procedures and operating rules, especially to determine how losses would be shared.
- The proposed rules require CCPs to draw up recovery plans. This should include scenarios involving defaults by clearing members of the CCP as well as the materialisation of other risks and losses for the CCP itself, such as fraud or cyberattacks. Recovery plans are to be reviewed by the CCP’s supervisor.
- Authorities responsible for resolving CCPs (i.e. resolution authorities) are required to prepare resolution plans for how CCPs would be restructured and their critical functions maintained in the unlikely event of their failure.
- Early intervention will ensure that financial difficulties are addressed as soon as they arise and problems can be averted. CCP supervisors are granted specific powers to intervene. Supervisors could also require the CCP to undertake specific actions in its recovery plan or to make changes to its business strategy or legal or operational structure.
- In line with the guidance of the Financial Stability Board, a CCP will be placed in resolution when it is failing or likely to fail, when no private sector alternative can avert failure, and when its failure would jeopardise the public interest and financial stability. In addition, it could be placed into resolution where the use of further recovery measures could compromise financial stability even when the conditions above are not met.
- The proposal establishes so-called resolution colleges for each CCP containing all the relevant authorities including the European Securities and Markets Authority (ESMA) and the European banking Authority (EBA).
- The existing colleges under EMIR and the newly set-up resolution colleges should jointly undertake the specific tasks allocated to them under this Regulation. ESMA will facilitate joint actions and act as a binding mediator if necessary.
Company Law – 22 November 2016
The European Commission for the first time presented a set of European rules on business insolvency.
- Common principles on the use of early restructuring frameworks.
- Rules to allow entrepreneurs to benefit from a second chance, as they will be fully discharged of their debt aftera maximum period of 3 years.
- Targeted measures for Member States to increase the efficiency of insolvency, restructuring and discharge procedures.
Companies in financial difficulties, especially SMEs, will have access to early warning tools. Flexible preventive restructuring frameworks will simplify lengthy, complex and costly court proceedings. The debtor will benefit from a time-limited ”breathing space” of a maximum of four months from enforcement action in order to facilitate negotiations and successful restructuring. Dissenting minority creditors and shareholders will not be able to block restructuring plans but their legitimate interests will be safeguarded. New financing will be specifically protected increasing the chances of a successful restructuring
Taxation – 27 October 2016
In the pipeline since almost 15 years, the proposal on a Common Consolidated Corporate Tax Base (CCCTB) has been tabled by the Commission; it was re‑calibrated as part of a broader package of corporate tax reforms. To encourage swift progress, the CCCTB has been broken down into a more manageable, two-step process.
1. With the CCCTB, companies will for the first time have a single rulebook for calculating their taxable profits throughout the EU. Compared to the previous proposal in 2011, the new corporate taxation system will:
– Be mandatory for large multinational groups which have the greatest capacity for aggressive tax planning, making certain that companies with global revenues exceeding EUR 750 million a year will be taxed where they really make their profits.
– Tackle loopholes currently associated with profit-shifting for tax purposes.
– Encourage companies to finance their activities through equity and by tapping into markets rather than turning to debt.
– Support innovation through tax incentives for Research and Development (R&D) activities which are linked to real economic activity.
Corporate tax rates are not covered by the CCCTB, as these remain an area of national sovereignty.
2. The Commission has also proposed an improved system to resolve double taxation disputes in the EU. There are currently around 900 double taxation disputes in the EU today, estimated to be worth €10.5 billion. The Commission has proposed that current dispute resolution mechanisms should be adjusted to better meet the needs of businesses.
A third proposal contains new measures to stop companies from exploiting loopholes, known as hybrid mismatches, between Member States’ and non-EU countries’ tax systems to escape taxation. The Anti-Tax Avoidance Directive, agreed in July, already addresses mismatches within the EU. The October proposal completes the picture by tackling mismatches with non-EU countries and is being made at the request of the Member States themselves.
Digital Economy – 21 September 2016
The European Commission revised its proposal regarding the end of roaming in the mobile phone sector. All travellers using a SIM card of a Member State in which they reside or with which they have stable links to use their mobile device in any other EU country, just as they would at home. Europeans will pay domestic prices when they call, text or go online from their mobile devices and will have full access to other parts of their mobile subscription (e.g. monthly data package).
The new draft allows operators to check usage patterns to avoid the “Roam like at Home” mechanism is abused. A non-exhaustive list of criteria includes:
- insignificant domestic traffic compared to roaming traffic;
- long inactivity of a given SIM card associated with use mostly, if not exclusively, while roaming;
- subscription and sequential use of multiple SIM cards by the same customer while roaming.
In such cases, operators will have to alert their users. Only if these conditions are met, operators will be able to apply small surcharges (the Commission proposed a maximum of €0.04/min per call, €0.01/SMS and €0.0085/MB). In case of disagreement, complaints procedures must be put in place by the operator. If the dispute persists the customer may complain to the national regulatory authority which will settle the case.
Abuses could also be related to the mass purchase and resale of SIM cards for permanent use outside the country of the operator issuing them. In such cases, the operator will be allowed to take immediate and proportionate measures while informing the national regulator.
The Commission will adopt the final proposal by 15 December 2016, following feedback from the Body of European Regulators in Electronic Communications, Member States and all interested parties.
Financial Services – 10 June 2016
La Commission opened the European Investment Project Portal (EIPP), an online platform bringing together European project promoters and investors from the EU and beyond. The Portal will increase the visibility of projects to invest in across Europe.
The European Fund for Strategic Investments (EFSI) is at the heart of the Commission’s Investment Plan. Managed by the EIB Group, it should deliver on mobilising at least EUR 315 billion in additional investments in the real economy by mid-2018. The EFSI provides a first loss guarantee, so that the EIB has been able to invest in more projects, sometimes riskier projects, and to invest sooner than without the EFSI. Overall, the EFSI is already active in 26 Member States and is expected to trigger EUR 100 billion in investment with the approvals given so far. Small and medium-sized enterprises (SMEs) have benefited particularly from the EFSI so far. To encourage more EFSI activity in the Member States lagging behind so far, the EIB and the Commission will increase their local outreach.
The European Investment Advisory Hub (EIAH) provides technical assistance and tailored advice to private and public project promoters.
In February, the Commission issued guidance on how European Structural and Investment Funds (ESI Funds) can be combined with the EFSI to enable as much investment as possible.
Finally, the Commission has already taken a number of steps to improve the business environment and financing conditions as part of the Investment Plan’s third pillar. Initiatives include lowering capital charges for insurance and reinsurance companies.
Digital Economy – 27 May 2016
The European Commission has proposed a package to boost and stabilise the European Digital Single Market.
- A legislative proposal to address unjustified geoblocking and other forms of discrimination on the grounds of nationality, residence or establishment. It would ensure that consumers seeking to buy products and services in another EU country, be it online or in person, are not discriminated against in terms of access to prices, sales or payment conditions, unless this is objectively justified for reasons such as VAT or certain public interest legal provisions. It would exempt small businesses that fall under a national VAT threshold from certain provisions.
- A legislative proposal on cross-border parcel delivery services to increase the transparency of prices and improve regulatory oversight. It is not proposing a cap on delivery prices, but will take stock of progress made in 2019 and assess if further measures are necessary.
- A legislative proposal to strengthen enforcement of consumers’ rights and guidance to clarify, among others, what qualifies as an unfair commercial practice in the digital world. National authorities would be able to check if websites geo-block consumers or offer after-sales conditions not respecting EU rules; order the immediate take-down of websites hosting scams; request information from domain registrars and banks to detect the identity of the responsible trader.
A proposal on VAT simplification is planned for autumn 2016.
Taxation – 14 April 2016
The Commission has proposed a directive to require multinationals operating in the EU with global revenues exceeding EUR 750 million a year to publish key information on where they make their profits and where they pay their tax in the EU on a country-by-country basis.
The same rules would apply to non-European multinationals doing business in Europe. In addition, companies would have to publish an aggregate figure for total taxes paid outside the EU.
The proposal builds on the Commission’s work to tackle corporate tax avoidance in Europe. It will amend Directive 2013/34/EU.
Taxation – 7 April 2016
The European Commission has presented an Action Plan setting out ways to reboot the current EU VAT system to make it simpler, more fraud-proof and business-friendly.
The current VAT rules urgently need to be updated so they can better support the Single Market, facilitate cross-border trade and keep pace with today’s digital and mobile economy.
The ‘VAT gap’, which is the difference between the expected VAT revenue and VAT actually collected in Member States, was almost €170 billion in 2013. Cross-border fraud itself is estimated to be responsible for a VAT revenue loss of around €50 billion a year in the European Union. At the same time, the current VAT system remains fragmented and creates significant administrative burdens, especially for SMEs and online companies.
The Action Plan sets out a pathway to modernise the current EU VAT rules, including:
- key principles for a future single European VAT system;
- short term measures to tackle VAT fraud;
- update the framework for VAT rates and set out options to grant Member States greater flexibility in setting them;
- plans to simplify VAT rules for e-commerce in the context of the Digital Single Market (DSM) Strategy and for a comprehensive VAT package to make life easier for SMEs.
Social Affairs – 16 March 2016
The European Commission presented a preliminary outline of the European Pillar of Social Rights announced by President Juncker in September 2015 and launches along and broad public consultation to gather views and feedback from other European institutions, national authorities and parliaments, social partners, stakeholders, civil society, experts from academia and citizens. This initiative is targeted at the euro area, while allowing other EU Member States to join if they want to do so. The online consultation will run until the end of 2016.
This consultation covers policies regarding skills and life-long learning, social doialogue, integrated social benefits, healthcare, pensions, unemployment benefits, minimum income, disability, lang-term care, childcare, housing, labour contracts, access to essential services, profesional transitions, support to employment, gender equality, equal opportunities, employment conditions, wages, health and safety at work.
Energy Policy – 3 March 2016
The Commission presented its Energy Security Package. It includes :
- Security of Gas Supply Regulation: the Commission proposes a shift from national approach to a regional approach when designing security of supply measures and a solidarity principle among Member States to ensure the supply of households and essential social services, such as healthcare, in case their supply was affected due to a severe crisis.
- Intergovernmental Agreements in energy: the EU needs to ensure that intergovernmental agreements signed by its Member States with third countries and relevant to EU gas security are more transparent and fully comply with EU law. To that end it introduces an ex-ante compatibility check by the Commission. This ex-ante assessment makes it possible to check compliance with competition rules and internal energy market legislation before the agreements are negotiated, signed and sealed. The Member States will have to take full account of the Commission’s opinion ahead of signing the agreements.
- Liquefied natural gas (LNG) and gas storage strategy: significant regional disparities as regards access to LNG remain. The central elements of the EU strategy are building the strategic infrastructure to complete the internal energy market and identifying the necessary projects to end single-source dependency of some of the Member States.
- Heating and Cooling strategy: the proposed Heating and Cooling strategy focuses on removing barriers to decarbonisation in buildings and industry. It also stresses that increased energy efficiency and use of renewables will have an impact on energy security.
Digital Economy – 3 February 2016
The European Union and America have reached a deal on data protection. The “EU- US Privacy Shield” allows companies to store Europeans’ personal data on American computers. This ends a three-month hiatus since the European Court of Justice struck down the previous agreement, “Safe Harbour”, on the grounds that it gave insufficient protection against snooping by American spy agencies.
Failure to reach a deal could have sparked a damaging legal spat, in which some European national data protection agencies could have ruled illegal all transfers of data across the Atlantic.
Taxation – 3 February 2016
The European Commission made new proposals to tackle corporate tax avoidance. The Anti Tax Avoidance Package calls on Member States to take a stronger and more coordinated stance against companies that seek to avoid paying their fair share of tax and to implement the international standards against base erosion and profit shifting.
Key features of the new proposals include:
- Legally-binding measures to block the most common methods used by companies to avoid paying tax;
- A recommendation to Member States on how to prevent tax treaty abuse;
- A proposal for Member States to share tax-related information on multinationals operating in the EU;
- Actions to promote tax good governance internationally;
- A new EU process for listing third countries that refuse to play fair.
The two legislative proposals of the Package will be submitted to the European Parliament for consultation and to the Council for adoption. The Council and Parliament should also endorse the Tax Treaties Recommendation and Member States should follow it when revising their tax treaties. Member States should also formally agree on the new External Strategy and decide on how to take it forward as quickly as possible once it has been endorsed by the European Parliament.
Collectively, these measures are design to hamper aggressive tax planning, boost transparency between Member States and ensure fairer competition for all businesses in the Single Market.
Last October, OECD countries agreed on measures to limit tax base erosion and profit shifting (BEPS). The European Parliament has also developed recommendations on corporate tax avoidance.
Major initiatives put forward by the Commission in 2015 to boost tax transparency and reform corporate taxation are already reaping results: the proposal for transparency on tax rulings was agreed by Member States in only seven months and a number of other substantial corporate tax reforms have been launched. The Commission will continue its campaign for corporate tax reform throughout 2016, with important proposals such as the re-launch of the Common Consolidated Corporate Tax Base (CCCTB).
Circular Economy – 2 December 2015
The European Commission has adopted an ambitious new Circular Economy. The proposed actions will contribute to “closing the loop” of product lifecycles through greater recycling and re-use, and bring benefits for both the environment and the economy. The plans will extract the maximum value and use from all raw materials, products and waste, fostering energy savings and reducing Green House Gas emissions. The proposals cover the full lifecycle: from production and consumption to waste management and the market for secondary raw materials.
Key actions adopted or to be carried out under the current Commission’s mandate include:
- Funding of over €650 million under Horizon 2020 and €5.5 billion under the structural funds;
- Actions to reduce food waste including a common measurement methodology, improved date marking, and tools to meet the global Sustainable Development Goal to halve food waste by 2030;
- Development of quality standards for secondary raw materials to increase the confidence of operators in the single market;
- Measures in the Ecodesign working plan for 2015-2017 to promote reparability, durability and recyclability of products, in addition to energy efficiency;
- A revised Regulation on fertilisers, to facilitate the recognition of organic and waste-based fertilisers in the single market and support the role of bio-nutrients;
- A strategy on plastics in the circular economy, addressing issues of recyclability, biodegradability, the presence of hazardous substances in plastics, and the Sustainable Development Goals target for significantly reducing marine litter;
- A series of actions on water reuse including a legislative proposal on minimum requirements for the reuse of wastewater.
A revised legislative proposal on waste sets clear targets for reduction of waste and establishes an ambitious and credible long-term path for waste management and recycling. Key elements of the revised waste proposal include:
- A common EU target for recycling 65% of municipal waste by 2030;
- A common EU target for recycling 75% of packaging waste by 2030;
- A binding landfill target to reduce landfill to maximum of 10% of all waste by 2030;
- A ban on landfilling of separately collected waste;
- Promotion of economic instruments to discourage landfilling ;
- Simplified and improved definitions and harmonised calculation methods for recycling rates throughout the EU;
- Concrete measures to promote re-use and stimulate industrial symbiosis –turning one industry’s by-product into another industry’s raw material;
- Economic incentives for producers to put greener products on the market and support recovery and recycling schemes (e.g. for packaging, batteries, electric and electronic equipment, vehicles).
Financial Services – 1st October 2015
Commissioner Jonathan Hill (Financial Stability, Financial Markets and Capital Markets Union) presented a package of proposals and initiatives ss part of the Juncker Commission priority to boost jobs, growth and investment across the EU, the Capital Markets Union (CMU). It aims to tackle investment shortages head-on by increasing and diversifying the funding sources for Europe’s businesses and long-term projects.
Alternative sources of finance, complementary to bank-financing – including capital markets, venture capital, crowdfunding and the asset management industry – are more widely used in other parts of the world, and should play a bigger role in providing financing to companies that struggle to get funding, especially SMEs and start-ups. According to the European Commission, having more diversified sources of financing is good for investment and business but is also essential to financial stability, mitigating the impact of potential problems in the banking sector on companies and their access to finance. For this reason, CMU is also an important part of the work on the completion of the European Economic and Monetary Union.
The Commission also wants to break down barriers that are blocking cross-border investments in the EU to make it easier for companies and infrastructure projects to get the finance they need, regardless of where they are located.
The CMU is a medium-term project but with some important early initiatives. The Commission unveiled a first set of measures to relaunch high-quality securitisation, and to promote long-term investment in infrastructure. In addition, the Commission will announce proposed changes to the Prospectus Directive before the end of the year, with a view to making it easier and less expensive for small and medium-sized companies to raise capital.
In addition, the Commission has started two consultations on Venture Capital Funds and on Covered Bonds.
And in line with the principles of Better Regulation, the Commission is also launching a call for evidence on the cumulative impact of financial legislation — to make sure that it is working as intended without (for example) overlapping reporting requirements or inconsistencies between the various laws.
Trade – 18 September 2015
On 16 September, the European Commission has approved its proposal for a new and transparent system for resolving disputes between investors and states – the Investment Court System (ICS).
This is further to the adoption by the European Parliament, 436 in favour to 241 against, of a resolution supporting the transatlantic trade deal (TTIP), as Parliament’s support came on the condition that the investor-state dispute settlement (ISDS) mechanism be replaced by another system.
The Investment Court System would replace the existing investor-to-state dispute settlement (ISDS) mechanism in all ongoing and future EU investment negotiations, including the EU-US talks on a Transatlantic Trade and Investment Partnership (TTIP).
The proposal for an Investment Court System builds on the substantial input received from the European Parliament, Member States, national parliaments and stakeholders through the public consultation held on ISDS. It is intended to ensure that all actors can have full trust in the system. Built around the same key elements as domestic and international courts, it enshrines governments’ right to regulate and ensures transparency and accountability.
The proposal for the new court system includes major improvements such as:
- a public Investment Court System composed of a first instance Tribunal and an Appeal Tribunal would be set up;
- judgements would be made by publicly appointed judges with high qualifications, comparable to those required for the members of permanent international courts such as the International Court of Justice and the WTO Appellate Body;
- the new Appeal Tribunal would be operating on similar principles to the WTO Appellate Body;
- the ability of investors to take a case before the Tribunal would be precisely defined and limited to cases such as targeted discrimination on the base of gender, race or religion, or nationality, expropriation without compensation, or denial of justice;
- governments’ right to regulate would be enshrined and guaranteed in the provisions of the trade and investment agreements.
This builds on the EU’s existing approach which ensures:
- proceedings will be transparent, hearings open and comments available on-line, and a right to intervene for parties with an interest in the dispute will be provided;
- Forum–shopping is not possible;
- Frivolous claims will be dismissed quickly;
- A clear distinction between international law and domestic law will be maintained;
- Multiple and parallel proceedings will be avoided.
The Commission will now have discussions with the Council and the European Parliament. Once the text of the proposal has been discussed, it will be presented as an EU text proposal in the EU-US trade talks and will be used in other ongoing and future negotiations.
Finally, in parallel to the TTIP negotiations, the Commission will start work, together with other countries, on setting up a permanent International Investment Court. The objective is that over time the International Investment Court would replace all investment dispute resolution mechanisms provided in EU agreements, EU Member States’ agreements with third countries and in trade and investment treaties concluded between non-EU countries.
The European Parliament and the Council of the Union have reached a compromise in trilogue on the strengthening of the fight against tax evasion and terrorist financing.
The fourth anti-money laundering directive (AMLD) will for the first time oblige EU member states to keep central registers of information on the ultimate “beneficial” owners of corporate and other legal entities, as well as trusts. These central registers were not envisaged in the European Commission’s initial proposal, but were included by MEPs in negotiations. The text also sets out specific reporting obligations for banks, auditors, lawyers, real estate agents and casinos, among others, on suspicious transactions made by their clients.
The central registers will be accessible to the authorities and their financial intelligence units (without any restriction), to “obliged entities” (such as banks doing their “customer due diligence” duties), and also to the public. To access a register, a person or organisation will in any event have to demonstrate a “legitimate interest” in suspected money laundering, terrorist financing and in “predicate” offences that may help to finance them, such as corruption, tax crimes and fraud. These persons could access information such as the beneficial owner’s name, month and year of birth, nationality, country of residence and details of ownership. Any exemption to the access provided by member states will be possible only “on a case-by-case basis, in exceptional circumstances”.
The text clarifies the rules on “politically-exposed” persons”, such as heads of state, members of government, supreme court judges, and members of parliament, as well as their family members.
Member states will have two years to transpose the anti-money laundering directive into their national laws.
After two years of inter-institutional discussions, the Commission, the European Parliament and the Council have reached a political agreement on the EU Trade Mark reform package, which concerns two legal instruments:
- The 1989 Directive (now codified as 2008/95/EC) approximating the laws of the Member States relating to trade marks;
- The 1994 Regulation (now codified as 207/2009/EC) on the Community trade mark
The cornerstones of the trade mark reform are:
- Significant reductions of the fees for European Union trade marks covering all 28 Member States, up to 37%, in particular beyond an initial period of 10 years;
- Streamlined, more efficient and harmonised registration procedures across all trade mark offices in the E;
- Strengthened means to fight against counterfeits in particular of goods in transit through the EU’s territory;
- Modernised rules and increased legal certainty by adapting trade mark rules to the modern business environment and clarifying trade mark rights and their limitations.
The political agreement requires to be formally confirmed by the European Parliament and the Council in the coming weeks.