A regularly updated article featuring recent and forthcoming legislation affecting the EU, compiled by Vivienne Kendall.

December 2014

Agriculture, fisheries and food

Russian sanctions: €28 million for Baltic milk producers

Continuing its series of support measures for agricultural producers hit by the Russian sanctions against import of EU food products, the European Commission has provided a €28 million support package for milk producers in Estonia, Latvia and Lithuania. The Russian ban has had a significant impact on dairy producers in these three countries. The EU support is to be divided on the basis of their milk production in 2013-14: €6.9 million for Estonia, €7.7 million for Latvia and €14.1 million for Lithuania. The measure is expected to be formally adopted in late November.

€39 million for promotion of agricultural products

At the end of October, 27 co-financing programmes to promote agricultural products in the EU and third countries were adopted to provide a 3-year budget of €77.4 million, of which the EU will contribute €39 million. Twenty-one of the programmes target the internal market, and the remaining six target North America, Latin America, the Middle East, South-East Asia, Japan, North Africa and Turkey. The programmes cover fresh and processed fruit and vegetables, dairy products, flowers, quality meat, sheep meat for the first time, and also all quality products with a specific EU designation (ie Protected Designation of Origin, Protected Geographical Indication, Traditional Speciality Guaranteed, organic products). Two of the programmes are to involve organisations from more than one Member State; a trend which the Commission is predicted to encourage for the future.

Competition

Trucks cartel

Manufacturers of heavy and medium duty truck have been informed by the European Commission that they are suspected of participating in a cartel in breach of EU competition rules. In January 2011, Commission officials, accompanied by others from the relevant national competition authorities, carried out unannounced inspections of a number of company premises in the sector. The statement of objections made in late November is the next formal step in proceedings and the companies can now request an oral hearing to make their response to the Commission and the national competition authorities. After this, if it feels there is sufficient evidence of a cartel, the Commission can prohibit the practices concerned and impose a fine of up to 10% of the companies’ annual worldwide turnover.

Easier access to compensation for antitrust injury

In mid-November, the Council of Ministers formally adopted a proposed directive that should make it easier for individuals and companies within the EU to received effective compensation for injury caused by violation of the EU competition rules, eg cartels or abuse of dominant market position. The directive is expected to be formally signed by the European Parliament at its end-November session, and Member States will have two years to implement it in national legislation.

Although the European Court of Justice has acknowledged the right to compensation for those damaged by antitrust infringements, only a few individuals or organisations affected have successfully obtained compensation due to national diversity of procedures and the resulting legal uncertainty. The directive now adopted will force companies to disclose evidence where victims of infringement claim compensation (providing that the disclosure orders are proportionate and that confidential information is protected). A final decision of a national competition authority that an infringement has taken place will automatically be recognised as proof of that infringement. Victims will have at least one year to claim damages after a final decision that infringement has taken place, and have the right to full compensation for actual loss, loss of profit, and interest from the time the harm occurred until compensation is paid. If price increases as a result of the infringement have been passed down the distribution chain, others who have suffered damage lower down the chain will also be entitled to compensation.

For further information, see the EC press release.

Customs

Russia: import duties

At the end of October, the EU requested formal consultations with the Russian Government concerning its import duties for paper products, refrigerators and palm oil. This is the first step in the dispute settlement procedure in response to the violation by Russia of its obligations under the World Trade Organization (WTO). When Russia joined the WTO in 2012, Russia committed to keeping its import duties below the limits recognised in the accession documents, but these have since risen. The higher duties are having a negative impact on EU exports of these three product categories.

Further information is available on the EC website.

Visa waivers for Colombia and Peru

At the end of October, the European Commission recognised that Colombia and Peru fulfil the relevant criteria for negotiation of visa waiver agreements between the Schengen area and themselves. The European Parliament and Council Regulation adopted in May 2014 included annexes listing countries whose nationals must hold visas when crossing the external EU borders, and those whose nationals are exempt. Nineteen countries were transferred from visa obligation to visa exemption: Colombia, Dominica, Grenada, Kiribati, Marshall Islands, Micronesia, Nauru, Palau, Peru, Saint Lucia, Saint Vincent and the Grenadines, Samoa, Solomon Islands, Timor-Leste, Tonga, Trinidad and Tobago, Tuvalu, the United Arab Emirates and Vanuatu. For each country, visa exemption will apply from the date of entry into force of an individual agreement to be made by each country with the EU.

Peru and Colombia have now been added to that list on the basis of further assessment by the Commission of a number of aspects including foreign trade. The reports have concluded that trade flows are expanding alongside the significant growth of the Colombian and Peruvian economies. The risks of possible increase in drug and human trafficking and immigration are considered to be manageable through reinforced border checks. The reports will be discussed in the European Parliament and Council, after which the Commission will seek authorisation from the Council to negotiate short-stay visa waiver agreements with each of the two countries. Agreement is not expected before the second half of 2015.

Further information is available in the EC Report on Colombia and the EC Report on Peru.

Trade Facilitation Support Programme

In mid-November, a breakthrough was announced on the Bali Trade Facilitation Support Programme, with the resolution of differences between the US and India that should enable adoption of the programme by 31 July 2015. Making an initial contribution of €10 million out of €400 million over five years, the EU is the largest contributor to the programme. It will support the modernisation of border procedures of developing countries, and enable them to benefit from the Bali customs agreement of 2013. The agreement supports the introduction of electronic systems and improved coordination between customs authorities; enabling companies to complete the necessary paperwork before the shipment arrives. Thirty developing countries have requested support so far. The OECD estimates that a 1% reduction of trade costs might add $40 billion to world income, of which 65% would benefit developing countries.

See the EC news archive for more details.

EU

New Commission’s work programme

On 1 November, the new European Commission headed by President Jean-Claude Juncker started its term of office, which will run until 31 October 2019. Within two weeks, First Vice-President Frans Timmermans had launched the process of consultation with the European Parliament and the General Affairs ministers of the Member States on the Commission’s work programme for 2015. He stressed that the Commission was well aware that businesses want Europe to enhance their competitiveness, and not to burden them with red tape.

The work programme will relate the political guidelines, which are the Juncker Commission's political contract with the European Parliament, and the European Council's Strategic Agenda for the Union in Times of Change, into concrete actions. The political guidelines indicate the intention to complete negotiations on international trade agreements, including the Transatlantic Trade and Investment Partnership, by 2015. However the new President emphasised that he would will not sacrifice Europe’s safety, health, social and data protection standards, or its cultural diversity, on the altar of free trade. The work programme is expected to be adopted by mid-December.

See A New Start for Europe and Strategic Agenda for the Union in Times of Change.

Trade issues

Trade protectionism: global trade increasingly obstructed

The Commission’s 11th annual report on potentially trade-restrictive measures illustrates the disappointing finding that the G20 members and other key EU trade partners adopted 170 new trade-limiting measures in the year to the end of June 2014. However, somewhat ironically, the G20 summit held in November 2014 in Brisbane restated its core 2008 commitment to fight against protectionism.

Russia, China, India and Indonesia were the countries adopting the greatest number of measures, and only 12 pre-existing measures were removed. Border restrictions continued to rise, as did the number of new export restrictions. China introduced the most internal measures such as discriminatory taxation, technical regulations and localisation requirements; while the US maintained strong restriction on the participation of foreign companies in tenders for public procurement.

See The 11th Report on Potentially Trade-restrictive Measures and EC information on Accessing Markets.

TTIP becomes more transparent

As part of its declared “fresh start” announced by Trade Commissioner Cecilia Malmström, one of the first tasks of the new European Commission has been to make information available to EU citizens about the continuing talks toward a Transatlantic Trade and Investment Partnership (TTIP). TTIP documents are to be made available to all Members of the European Parliament, and not just members of its International Trade Committee as at present. Secondly, the EU’s specific negotiating proposals on TTIP are to be published.

Commissioner Malmström is to present these proposals to the International Trade Committee of the European Parliament on 3 December, and the Commission aims to implement its new measures before the end of the year.

Further information on the TTIP process is available on the EC website.

US/China breakthrough on IT

On 11 November, the announcement by the US and China of a breakthrough in negotiation of the expanded Information Technology Agreement (ITA) was recognised as progress of significant important to the EU. The trade negotiation on expansion of the ITA involves 54 of the 78 countries which were party to the original 1997 agreement. While the original agreement provided for removal of duties on IT goods between participating countries, the proposed expansion includes newer, more advanced equipment in which the EU is very competitive, such as:

  • next generation semi-conductors (multi component semiconductors (MCOs)); used in numerous electronic and informatics products

  • medical equipment (eg magnetic resonance imaging or tomography apparatus)

  • advanced measuring and controlling instruments

  • other electrical and electronic machinery and components, including components for smart phones and computers, and accessories for internet equipment.

World exports in these products accounted in 2013 for €1.1 billion, or almost 10% of world trade, and the EU has a positive balance of €14 billion in trade in these products with the rest of the world. The agreement is expected to increase the value of products covered by ITA by 70%.

Further information is available from the World Trade Organization.

November 2014

Agriculture, fisheries and food

Functioning of the food supply chain

The EC’s Final Report of the High Level Forum for a Better Functioning Food Supply Chain documents improvement in business-to-business trading relationships and the establishment of the Supply Chain Initiative. Launched by seven EU-level associations, this had the objective of improving fair practices in commercial relations in the food supply chain. The forum has also steered a study on the impact of Member State taxes on food and drink on industry competitiveness, and improved food price monitoring in national observatories of food prices.

The Forum members represent 21 EU countries, European companies active in food production, processing or distribution, professional associations and non-governmental organisations representing citizens’ interests.

€165 million more for perishable fruit and vegetable market

As reported in September 2014, the Russian Federation announced in August a one-year ban on imports of a wide range of fruit, vegetables, meat, fish, milk and dairy products from the EU and other countries. In support of EU growers and producers, the European Commission has since adopted a number of emergency measures, which were extended further at the end of September. A new support scheme worth up to €165 million will support the withdrawal of surplus volumes of perishable fruit and vegetables from the market. It adds to the €125 million programme that was introduced in mid-August and then suspended as its budget allocation had already been claimed. The new arrangement includes for the first time oranges, mandarins and clementines; but cabbage, cauliflowers, headed broccoli, mushrooms, and soft fruit are no longer included. As before, the support is also available for non-members of producer organisations, although at a lower rate than that for members. The measure providing private storage aid for cheese has been halted. The scheme will run until the end of 2014.

Further information is available on the European Commission’s website.

Illegal fisheries

From mid-January 2015, the European Commission has proposed to ban imports into the EU of fisheries products from Sri Lanka. The ban follows four years of dialogue, which resulted in the conclusion that Sri Lanka was not addressing the problem of illegal, unreported and unregulated fishing and was failing to comply with international and regional fisheries rules.

Fiji, Panama, Togo and Vanuatu, which had received EU warnings at the same time as Sri Lanka, have tackled illegal fishing successfully. The trade measures imposed by the EU in March against Belize are to be lifted, as it has adopted new rules on the inspection, control and monitoring of vessels. Measures taken against all five countries in November 2012 are to be ended. Korea, Curacao and Ghana have been given until January 2015 to make changes to their fisheries controls.

See the press release for more information.

Competition

Banking cartel on Swiss franc risks

RBS, UBS, JP Morgan and Crédit Suisse have been fined a total of €32.355 million for operating a cartel on the “bid-ask spreads” of Swiss franc interest rate derivatives in the EEA. These indicate the difference between the market maker’s selling and buying prices for a given product. RBS was not fined as it had revealed the cartel to the European Commission; fines on UBS and JP Morgan were reduced for co-operating with the investigation.

The four banks were found to have agreed, in 2007, to quote to all third parties bid-ask spreads on some categories of short-term over-the-counter Swiss franc interest rate derivatives that were fixed and wider than the spreads they were maintaining for trade amongst themselves. This had the effect of preventing other banks from competing in the Swiss franc derivatives market on the same terms. All four banks have agreed to settle the case with the Commission, leading to a further reduction in their fines of 10%.

Creation of British Business Bank

The European Commission has approved the alignment with EU state aid rules of UK plans for the British Business Bank. This will be an integrated body with the role of managing access to finance programmes in the UK for SMEs. The Commission was satisfied that the Bank will rectify market failures which currently limit SME access to finance, without distorting competition.

The Business Bank will co-ordinate existing support programmes and develop new initiatives. Its Mandated Arm is authorised to receive up to £6 billion from the UK Government, which can be used within an approved remit to offer SME finance where a market failure has been demonstrated. The other two arms of the Bank (Services and Commercial) do not require state funding.

Further information will shortly become available on the European Commission website.

Mergers

A clutch of mergers has been examined by the European Commission in recent weeks as follows.

Employment

Labour rights in Bangladeshi textile industry

A joint review conducted by the European Commission, Bangladesh, the US and the International Labour Organisation has confirmed significant improvement in labour rights and factory safety in the Bangladeshi textile industry. The Bangladesh Sustainability Compact between the three partners was set up in July 2013 in response to the Rana Plaza disaster that killed more than 1100 workers and injured many more.

Since then, amendments to Bangladeshi labour law have strengthened freedom of association, collective bargaining and occupational safety and health. More than 300 trade unions have been established, 1800 factory inspections have been carried out through increased resources, and Bangladesh now has a national occupational safety and health policy. However, further progress is needed; particularly in relation to enforcement of the Labour Act through implementing regulations, new measures on the structural integrity of buildings, and further initiatives on occupational safety and health. A further review will be conducted in 2015.

EU

Juncker Commission is elected

On 22 October, the European Parliament voted strongly in support of the new European Commission, with 423 votes in favour, 209 against and 67 abstentions. The European Council will formally appoint the new Commission, which will start its term of office on 1 November 2014.

See the European Commission website for further information on the Juncker Commission as well as President Juncker’s guidelines for the new Commission.

Technical legislation

Preservatives in cosmetics

On the basis of a risk assessment from the independent Scientific Committee on Consumer Safety, the European Commission has adopted measures to restrict the use of three preservatives in cosmetics. The maximum concentration of propylparaben and butylparaben, used in leave-on skin products, has been reduced from 0.4% (individually) or 0.8% (used with other esters) to 0.14% when used either together or separately. They are banned completely from leave-on skin products for the nappy area of children under three. The new rules will apply for products put on shelves after 16 April 2015.

Mixtures of methylchloroisothiazolinone and methylisothiazolinone have been banned from use in leave-on products such as body creams, but can still be used in rinse-off products such as shampoos and shower gels at a maximum concentration of 0.0015 % of a mixture in the ratio 3:1 of MCI/MI. The measure will apply for products placed on the market after 16 July 2015.

Further information is available on the European Commission website.

Cutting emissions from off-road engines

Emission of major air pollutants from engines in non-road mobile machinery are to be made subject to more stringent emission limits, and harmonised rules are to be introduced for placing these machines on the EU market. The new proposed regulation will replace 28 national laws and also repeal an extremely complex 1997 EU directive. The new regulation will relate to construction machinery (eg excavators, bulldozers), agricultural machinery (eg harvesters), gardening equipment eg chainsaws) and railway engines and inland waterway vessels. Together these engines currently represent 15% of EU nitrogen oxide emissions.

Trade issues

International trade disputes: The Choice of Court Convention

EU Justice Ministers have approved a decision ratifying the 2005 Convention on Choice of Court Agreements, which clarifies the rules governing international trade disputes. The Convention provides clarity on jurisdiction rules, on which court is competent and on the recognition and enforcement of judgments given by courts in the countries which apply the Convention. This will strengthen the legal certainty of EU companies doing business with companies outside the EU, because their choice of court to deal with any dispute will be respected by the courts of countries that have ratified the Convention. They can also be sure that the judgment given by the court will be recognised and enforced in the countries which apply it.

Now the decision has been approved by the Justice Ministers of the Member States, the European Parliament will be consulted and providing it is in agreement, the decision will be formally adopted by the Council of Ministers and will enter into force in the EU.

East African Community

On 16 October, a new economic partnership agreement was finalised between the EU and the East African Community. The agreement will offer free and unlimited access to the EU market for products from Burundi, Kenya, Rwanda, Tanzania and Uganda. It eliminates customs duties and also covers free movement of goods, co-operation on customs and taxation, and trade defence instruments.

In 2013, trade between the EU and the East African Community amounted to €5.8 billion. The EU imported €2.2 billion worth of coffee, cut flowers, tea, tobacco, fish and vegetables. Exports from the EU into the EAC are mainly machinery and mechanical appliances, equipment and parts, vehicles and pharmaceutical products, amounting to €3.5 billion in the same year.

TTIP negotiating mandate made public

In the interests of transparency, the Council of Ministers has published the negotiating directives for talks on an EU–US trade agreement, the Transatlantic Trade and Investment Partnerships (TTIP). These represent the mandate on which the European Commission is negotiating the agreement. Governments, Members of the European Parliament (MEPs) and civil society are being consulted throughout the process.

October 2014

Agriculture, fisheries and food

Russian import ban on agricultural products

On 7 August 2014, the Russian Federation announced a one-year ban on imports of a wide range of fruit, vegetables, meat, fish, milk and dairy products from the EU, the USA, Australia, Canada and Norway. The ban was implemented with immediate effect, in response to sanctions from these countries in protest against Russia’s recent actions in Ukraine.

Since then, the EU has taken a number of steps to support agricultural producers, particularly producers of perishable fruits and vegetables. Support measures worth €33 million for peach and nectarine producers were the first (11 August 2014), and in mid-August, Agriculture and Rural Development Commissioner Dacian Cioloș called on Member States to share the latest market data to complement its own analysis of traditional trade patterns, potential alternative sales outlets, and the potential overall impact of the Russian measures in broad terms.

Support measures worth €125 million, including market withdrawals especially for free distribution, compensation for non-harvesting and green harvesting were introduced for perishable fruit and vegetables that were in season, with no available storage and no alternative market. These measures were intended to apply until the end of November 2014 with a budget of €125 million, but the scheme was foreclosed on 10 September because of a disproportionate volume of claims.

At the end of August 2014, the Commission’s attention turned to measures to provide private storage aid for butter, skimmed milk powder and certain cheeses, which will cover storage costs for three to seven months. Early September brought the promise of an additional €30 million from the Commission for promotion of EU agricultural products, on top of the €60 million already budgeted. Finally, the fisheries sector is to benefit from storage aid for live, fresh, chilled, frozen, salted, in brine and smoked fish, molluscs and crustaceans, while meat and meat products are currently under consideration.

Details of the products banned for export to Russia are available on www.gov.uk.

Further information:

Herring ban lifted from Faroe Islands

On 20 August 2014, the European Commission lifted its year-old measures against the Faroe Islands, which were imposed because of their unsustainable fishing of Atlanto-Scandian herring. This follows the agreement that the Faroe Islands would limit their herring catch for 2014 to 40,000 tonnes, which according to scientific advice should not put the fish stock at risk.

Competition

H4 State aid: freight services and white goods in France

Major investigations have been started into the provision of state aid from the French Government to two companies, FagorBrandt and Mory-Ducros. FagorBrandt produces and repairs domestic electrical appliances, and Mory-Ducros is the second largest provider of national and international freight services in France. These were the first two companies to benefit from a new exceptional package under the French Economic and Social Development Fund to support firms in financial difficulties. FagorBrandt received a total of €57.5 million since November 2013 and could also benefit from social security and tax debts being written off. Mory-Ducros received a loan of €17.5 million in February 2014 and also some social measures for employees. State aid for firms in difficulty is permissible within EU state aid rules under certain conditions, eg if it is linked to a credible restructuring plan or if the distortions of competition are offset by compensatory measures. The Commission therefore intends to investigate whether these conditions have been met.

Mergers: container shipping, aeroengines and hazelnuts

During August/September 2014, the European Commission has authorised, under the EU merger regulation, three significant mergers in very different sectors. The merger between Hapag Lloyd of Germany and the Chilean Compañia Sud Americana de Vapores SA will establish the world’s fourth largest container shipping company. Like most other carriers, the two companies offer shipping services through agreements with other shipping company consortia, which decide on capacity, scheduling and ports of call. The merger, as originally notified, would have created links between consortia not previously connected, which would have restricted the competition on two trade routes between Northern Europe and the Mediterranean, and between Northern Europe and the west coast of South America. The two companies have therefore agreed to terminate the two consortia involved in these two trade routes — the Euroandes consortium and the Ecuador Express consortium.

In the engineering sector, the Commission has authorised the acquisition of Rolls-Royce's aero-derivative gas turbine business, compressor activities and aftermarket services, and also its 50% stake in Rolls Wood Group, by Siemens of Germany. Both companies are concerned with the supply of small- and medium-sized gas turbines used in the oil and gas sector, and with compressor sets that combine gas turbines with a compressor. They are not viewed as close competitors because of technical differences between the types of gas turbines they produce: Siemens makes industrial gas turbines while Rolls-Royce manufactures aero-derivative turbines.

Also cleared under the merger regulation is the acquisition of the Turkey-based Oltan Group by Ferrero International SA of Luxembourg. The merger will create the world’s leading supplier of hazelnuts, which Ferrero uses extensively in its chocolate confectionery (eg Rocher) and its Nutella spread. The Commission concluded that the merger would not restrict competition, as a significant number of other hazelnut suppliers are in operation.

€138 million fine for smart card chips cartel

Fines totalling more than €138 million have been imposed by the European Commission on three companies (Infineon, Philips and Samsung) for operating a cartel to exchange commercial information in relation to the market for smart card chips. A fourth partner in the cartel, the Hitachi/Mitsubishi joint venture known as Renesas, was granted immunity from the fine as it had informed the Commission about the cartel. Samsung’s fine was reduced by 30% in return for full co-operation with the investigation. Philips has since divested its smart card chips business.

The companies involved were found to have shared information between 2003 and 2005 on pricing, customers, contracts, production capacity or utilisation, and future market contact. Smart card chips are extensively used in mobile telephone SIM cards, bank cards, identity cards and passports, and cards operating pay-TV.

EU

New Juncker Commission

Commission President-elect, Jean-Claude Juncker, revealed his nominated team of Commissioners on 10 September 2014. In doing so, he stressed his commitment to openness and reform in order to tackle the major political challenges facing the EU: people in work, stimulating investment, banking supervision, digital connectivity, a credible foreign policy, and energy security.

The new College of Commissioners, nine of whom are women, will have seven Vice Presidents including the High Representative for Foreign Policy and Security Policy, who will each co-ordinate the work of other Commissioners in project teams of varying composition according to need. The project teams are expected to include jobs, growth, investment and competitiveness, and energy union.

The designated Commissioner for Trade, Cecilia Malmström, will contribute to the work of both the High Representative (Federica Mogherini) and the Vice President for Jobs, Growth, Investment and Competitiveness (Jyrki Katainen). The UK Commissioner, Lord Hill, will take responsibility for Financial Stability, Financial Services and the Capital Markets Union.

The European Parliament will now conduct hearings during September 2014 with all Commissioners-designate and will be required to give its consent to the entire College of Commissioners.

Full details of the new Commission are available on the Commission website and press release.

Trade issues

Cameroon

Cameroon ratified the EU-Central Africa Economic Partnership Agreement (EPA) for trade and development in late July 2014, and the agreement came into force on 4 August. This is an interim agreement that will provide the progressive removal of duties and quotas relating to exports from Cameroon to the EU between now and 2023. The agreement also covers aid for trade, mechanisms for settlement of disputes, and other trade-related issues such as protection of intellectual property.

In 2000, the African, Caribbean and Pacific countries agreed to work towards more extensive trade co-operation, and negotiations began in 2002. However, they could not be completed before the Cotonou Agreement ended on 31 December 2007, so a series of interim agreements was developed in order to retain access to the EU market for the African countries concerned.

Cameroon is the leading trade partner of the EU in central Africa; exporting petroleum products, aluminium, wood, cocoa, coffee, bananas and rubber. Cameroon imports industrial products, vehicles, chemicals and medicines from the EU.

Further information is available from the European Commission website.

Ukraine

In view of the continued unrest in Ukraine, the then European Trade Commissioner, Karel De Gucht, Foreign Affairs Minister Klimkin of Ukraine, and Russian Minister Ulyukayev (Economic Development) issued a joint statement on 16 September 2014. They agreed that the European Commission would grant flexibility to Ukraine in the case that it ratifies its Association Agreement with the EU. The provisional application of the deep and comprehensive free trade area between the EU and Ukraine would be delayed until 31 December 2015, but other autonomous EU trade measures to the benefit of Ukraine would be continued.

Ecuador

Negotiations for a trade agreement between Bolivia, Colombia, Ecuador and Peru and the EU began in June 2007, but later collapsed. After further attempts, an agreement was reached with Colombia and Peru, signed in June 2012, and provisionally applied since March 2013 (Peru) and 1 August 2013 (Colombia). Ecuador resumed negotiations in early 2014 and has now reached agreement that will give improved access to the EU market for its fishery products, bananas, cut flowers, coffee, cocoa, fruit and nuts. The EU will benefit from improved access for exports of cars and alcoholic drinks to Ecuador.

Further information is available from the European Commission website.

TTIP

The sixth round of trade negotiations between the EU and the USA was held in late July 2014, covering a wide range of aspects relating to market access, regulatory issues including those relating to the specific sectors of textiles, chemicals, pharmaceuticals, cars and others, plus broader principles of cooperation.

See the latest state of play.

Transport

€11.9 billion to improve European connections

In early September 2014, the European Commission invited proposals of projects to improve European transport connections, offering EU funding up to €11.9 billion, which is the largest amount it has ever ring-fenced for transport infrastructure. The Member States must submit their proposals by 26 February 2015. The aim is that they focus on improving nine major transport corridors throughout Europe, streamlining border crossings and removing bottlenecks. The funding is the first tranche of the €26 billion allocated for 2014–2020 under the new Connecting Europe Facility — tripling the €8 billion for 2007 — 2013. The projects must be cofinanced by the Member States, and the results and allocations will be announced in summer 2015.

See:

August 2014

Agriculture, fisheries and food

Unfair practices in the food supply chain

A number of EU Member States have recognised the potential for unfair practices arising in the food supply chain and have taken (or are developing) regulatory steps to prevent them, leading to variation in controls across the single market. Because the supply chain involves many different types of operators, eg producers, processors and retailers, their varying size and market strength can lead to imbalance prejudicial to smaller companies. The resultant unfair practices can include refusal to put essential commercial terms in writing, retrospective unilateral changes in prices, transfer of unjustified risk, disruption of delivery schedules and unilateral termination of contracts.

The European Commission is encouraging Member States to have appropriate measures in place and to enforce them. It suggests that they support the principles of the voluntary Supply Chain Initiative and encourage the participation of SMEs. The Initiative was developed by seven European-level associations representing the food and drink industry (FoodDrinkEurope), the branded goods manufacturers (AIM), the retail sector (the European Retail Round Table (ERRT), EuroCommerce, EuroCoop and Independent Retail Europe), and agricultural traders (CELCAA).

The food supply chain employs more than 47 million people in the EU and represents about 7% of EU gross value added. The total EU retail market in food-related products is estimated at €1.05 trillion and at least 70% of total annual exports of agricultural products of EU countries go to other EU Member States.

Further information is available on the Supply Chain Initiative and Europa websites.

Fisheries

The Commission’s annual report on the state of fish stocks and preparation for 2015 fishing quotas shows a good recovery in the North East Atlantic, from 86% overfishing in 2009 to 41% in 2014. The Mediterranean situation, however, is described as dismal: 96% or more of bottom-living species are overfished, as are 71% of middle-depth fish like sardine and anchovy. A public consultation on fishing opportunities for 2015 invites comments by 30 September 2014.

Further information is on the Europa and European Commission websites.

Business

New funding for SMEs

Up to 330,000 European SMEs stand to benefit over the next seven years from loans up to a total of €21 billion, backed by the European Investment Fund through the EU Competitiveness of Enterprises and SMEs (COSME) programme.

The COSME programme will fund guarantees for banks, enabling them to provide loans and to finance leases to SMEs. The programme is predicted to provide leverage of up to €30 of financing for every €1 invested in a loan guarantee. In the experience of the Competitiveness and Innovation Programme (CIP), which preceded COSME, 90% of the beneficiaries will have 10 employees or fewer. Part of the COSME finance will be invested in funds to provide venture capital for SME expansions, especially across borders. This will be available to about 500 companies, with a total investment volume of up to €4 billion.

Further information, including full details of this and other routes of access to finance, is on the European Commission and Europa websites.

Helping businesses to use the Cloud

Guidelines for business users of cloud computing services have been developed by the EU’s Cloud Select Industry Group, whose members are cloud service providers and users including representatives from Arthur's Legal, ATOS, Cloud Security Alliance, IBM, Microsoft, Telecom Italia and the European Union Agency for Network and Information Security (ENISA). The group was set up to encourage trust and to promote business use of remote data storage and processing, which is estimated to save up to 20% of average data costs.

The guidelines are the first stage towards development of standardised service level agreements that define the technical and legal aspects of the service offered — standards greatly needed by cloud users. The guidelines will help users to establish the availability and reliability of the cloud service, the quality of support services, security levels and available advice on managing cloud-stored data. The European Commission is to test the guidelines with users, particularly SMEs. The Cloud Select Industry Group is also working on a data protection code of conduct for cloud computing providers.

Further information is on the European Commission websites Digital Agenda for Europe and Cloud Computing.

Competition

Towards more efficient merger controls

A public consultation has been opened on proposals to improve merger control at EU level. While the 2004 merger control regulation has made a substantial contribution to preserving effective competition, the Commission now proposes measures relating to non-controlling minority shareholdings that could damage competition, and also to make referral procedures simpler and faster. Comments are invited by 3 October 2014, following which the Commission is expected to publish a legislative proposal.

The current EU merger rules do not permit the Commission to examine cases where companies obtain minority stakes in competitors, and are therefore enabled to influence their activities and to reduce competition. National rules of some Member States (and also the US and Japan) do allow their authorities to investigate such cases, so the Commission seeks to include them in the remit of the EU regulation.

Streamlining case referrals would contribute to avoiding parallel national/EU investigations, while other simplifications will include the removal of some transactions from the scope of the regulation, eg creation of joint ventures that will operate outside the EEA and have no impact on European markets.

Further information is on the Europa and European Commission websites.

Strengthening national implementation of EU competition rules

The European Commission has set out its recommendations for strengthening the status and enforcement resources of Member States’ competition authorities. These national bodies and the Commission itself have the power to enforce the 2004 EU competition rules on restrictive business practices and abuse of dominant market positions. Now, on the basis of 10 years’ experience of the rules in practice, the Commission is proposing measures to guarantee the independence of national authorities, and to provide them with effective investigative and decision-making tools. It also wants to ensure that all Member States are able to impose deterrent and proportionate fines, and that they offer well-designed leniency programmes.

Further details are available on the European Commission website.

Finance

EU-wide interconnection of insolvency registers

In early July 2014, the insolvency registers from seven Member States were linked together in the first stage of the creation of an EU-wide database, available on the EU’s website, on access to justice: the e-Justice Portal. The registers from the Czech Republic, Germany, Estonia, the Netherlands, Austria, Romania and Slovenia will soon be joined by those of other Member States. The aim is to establish a single, free and multilingual resource for businesses, creditors and investors considering investing in Europe. It will also provide clear explanations on the insolvency terminology and systems of participating Member States.

The initiative anticipates adoption, expected this year, of the updated insolvency regulation. From 48 months after adoption, this will make it mandatory for Member States to publish key information on insolvency proceedings in electronic insolvency registers, and this must be publicly accessible via the internet and interconnected via the e-Justice Portal.

Further information is available on the e-Justice Portal and European Commission Justice/Insolvency proceedings and Justice/Newsroom websites.

Technical Legislation

Protection of geographical origin for non-agricultural products

A Green Paper launched in mid-July invites comments on the possibility of extending the protection offered by the protection of geographical origin beyond key agricultural products, eg cheeses, wines, meats, fruit and vegetables, and those made by traditional local processes. The extension could grant special protection to a wide range of non-agricultural products linked with particular locations, eg Italian marble or Scottish tartan. The consultation closes on 28 October 2014.

Both agricultural and non-agricultural products are currently covered by rules on geographical origin within the World Trade Organization (WTO). However, 14 EU Member States have their own (varying) measures on non-agricultural products, and producers requiring protection in the EU have to file in each individual Member State where it is available.

Further information, and access to the consultation, is available on the Europa and European Commission websites.

Bisphenol A in toys

The limit of 0.1 mg/l bisphenol A (BPA) in toys (European Standard EN 71-9:2005+A1:2007), currently applied voluntarily by the European toy industry, has been imposed as a strict limit in toys for children up to the age of three years and in any toys intended to be placed in the mouth. BPA is used in the manufacture of polycarbonate (PC) plastics, which can be used in the production of toys and polycarbonate shields for pacifiers. The risks to public health from bisphenol are currently under review by the European Food Safety Authority (EFSA).

The draft EFSA scientific opinion is available on the EFSA website.

Trade issues

US–TTIP

The sixth round of the Transatlantic Trade and Investment Partnership (TTIP) negotiations concluded on 18 July 2014. The EU’s chief negotiator, Ignacio Garcia Bercero, commented on the high proportion of effort devoted to establishing co-operation in different areas of regulations, including standards and conformity assessment, especially sanitary and phytosanitary aspects. Nine industrial sectors have merited special attention, including pharmaceuticals, cars, chemicals and engineering.

The session also allowed the negotiators to hear from over 400 representatives of civil society, including consumers, NGOs, trade unions, public health representatives and businesses. These presentations highlighted the key importance to small and medium-sized enterprises (SMEs) within TTIP of trade-facilitating rules of origin, unnecessary duplication of procedures that prevent business (eg inspection of manufacturing facilities, certification requirements) and easy access to information on regulatory and other conditions for export.

A full update is available on the European Commission and EC Trade websites.

Ecuador

Ecuador is to join Peru and Colombia in their trade agreement with the EU. Ecuador will gain better access for its exports to the EU; mainly fish, bananas, cut flowers, coffee, cocoa, fruits and nuts. EU exports of cars and alcoholic drinks will have wider access to the Ecuadorian market, and access for services, establishment and government procurement will also improve.

The comprehensive trade agreement signed with Peru and Colombia in 2012 has been provisionally applied with Peru since 1 March 2013 and with Colombia since 1 August 2013. In 2013, EU trade with Ecuador reached €4.9 billion (€2.3 billion exports; €2.5 billion imports).

Further information is on the Europa and European Commission websites.

Southern Africa and Western Africa regions

Negotiations for an economic partnership agreement were concluded in late July 2014 between the EU and the Southern African Development Community EPA Group (Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland).

Under the agreement, South Africa (which has a level of development more comparable to the EU) will trade on the basis of improved conditions based on the existing EU-South Africa Trade, Development and Cooperation Agreement (TDCA). The other Southern African countries will eventually benefit from duty-free and quota-free access to the EU market,

At the same time, agreement was reached on an economic partnership agreement with the EU by leaders of 16 West African countries (Benin, Burkina Faso, Cape Verde, Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone and Togo), together with the Economic Community of West African states (ECOWAS) and the West African Economic and Monetary Union (WAEMU). The agreement, linked with EU support of at least €6.5 billion for West Africa during 2015–2020, will now go for signature and ratification.

Further information is on the European Commission Southern African Development Community and West Africa websites.

Fiji

Fiji has notified the EU of its intention to implement the interim Pacific Economic Partnership Agreement, which provides duty-free and quota-free market access into the EU for all exports from Fiji and Papua New Guinea. Fiji will gradually open its market to European exports by 2023, with the exception of some agricultural and sensitive industrial products.

Further details are on the Europa website.

July 2014

Agriculture, fisheries and food

Rules tighten on South African citrus fruits

In late May 2014, the EU tightened its import requirements on citrus fruit from South Africa. The emergency measures were adopted to protect citrus production in the EU from citrus black spot, and followed the interception of a large number of infected fruit at EU border controls. South Africa currently produces about a third of EU citrus fruit imports — 600,000 tonnes between April and November 2013.

Citrus black spot is a fungal disease caused by Phyllosticta citricarpa, which results in a high proportion of fruit loss and is not a native disease in Europe. The new measures apply for the 2013–2014 growing season and replace the 2012–2013 measures, which have since lapsed. Imports of citrus fruits from South Africa will now be required to show records of chemical treatment before and after harvest, while packing stations must be registered and orchards will become subject to inspection. Samples of at least 600 of each type of citrus fruit per 30 tonnes will be taken by South African authorities, and all fruit with symptoms of black spot will be tested for Phyllosticta infection.

Further information is available on the EFSA website

Illegal fishing — Philippines and Papua New Guinea

The Philippines and Papua New Guinea have been warned by the European Commission that they are not doing enough to fight illegal (unsustainable) fishing. The Commission has identified a lack of systems to prevent illegal fishing and proposed a plan of action for each country, but has not imposed any trade restrictions at this time. Trade sanctions like those imposed on Guinea, Belize and Cambodia could follow if the situation does not improve within six months. Formal warnings have also been sent to eight other countries: Fiji, Panama, Sri Lanka, Togo and Vanuatu, in 2012, and Ghana, Curaçao and South Korea in 2013.

The EU is the world’s largest importer of fish and is working to close its market to the products of illegal, unreported and unregulated (IUU) fishing. Between 11–26 million tonnes of fish are caught illegally each year; worth €10 billion per year and corresponding to at least 15% of world catches.

Further information is available on the Europa and European Commission websites.

Business

Late payments implementation in Italy, Slovakia

Authorities in Italy and Slovakia have been taken to task by the European Commission over two separate issues relating to implementation of the 2011 late payments directive. This measure requires public authorities to pay for goods and services received within 30 days (or 60 days in exceptional circumstances), and companies to pay within 60 days; it also entitles suppliers to claim interest on late payment and compensation for recovery costs.

The Commission believes that the directive is not being applied correctly in Italy, having received complaints that Italian public authorities take an average of 170 days to pay for goods or services, and 210 days for public works. In addition, some public bodies apply interest rates for late payments that are lower than that required by the directive (ie at least 8% above the ECB reference rate), and some postpone work progress reports that are linked to payments due.

In Slovakia, the issue relates to a dual legislative system for late payment interest rates (one fixed and one variable), and the Commission doubts its compatibility with the directive. If the two countries do not resolve the issues satisfactorily, they will receive a reasoned opinion, and failure at that stage will result in referral to the European Court of Justice and possible fines.

Further information is on the European Commission website and in the Official Journal of the European Union.

Competition

Approved acquisition: Honeywell–Federal-Mogul

Federal-Mogul, the US manufacturer of engine and transmission components and friction materials used in brake pads for trucks and cars, is to take over the European section of Honeywell's friction materials business in an acquisition just cleared by the European Commission. Both companies are prominent providers of original equipment and spare parts in this sector in the EEA, and the Commission was concerned that the acquisition as originally notified would have significantly reduced competition.

The approval was granted on the condition that Federal-Mogul agreed to divest the production of commercial vehicle pads in Marienheide, Germany and also the Noyon, France factory that produces brake pads for light vehicles.

Employment

Health and safety at work — Strategy for 2014–2020

A new strategic framework on health and safety at work for 2014–2020 was launched in early June, renewing the EU commitment to continuous improvement in working conditions. One of its major challenges is the need to improve implementation of existing health and safety rules, which have proved burdensome for small and micro-enterprises, and the EU will aim to address this through technical assistance and tools for online sectorial risk assessment. It will also need to take account of the ageing of the workforce, and to tackle risks of new work-related diseases, including exposure to nanomaterials and biotechnologies.

Member States will be encouraged to improve enforcement by evaluating the performance of their national labour inspectorates, and EU co-ordination with international partners (ILO, WHO and OECD) will be reinforced. The new framework will be reviewed in 2016 to assess how well it has been implemented, and this review will also appraise the current evaluation of the EU occupational health and safety legislation, which is due to report by the end of 2015.

Further information is on the Europa and European Commission websites.

Eurozone

Lithuania may join in 2015

According to the latest report from the European Commission on the readiness of eight Member States to adopt the euro, Lithuania is the leading country. Lithuania now meets the criteria and the Council of Ministers will decide in July (following input from the heads of state and government at the June European Council) whether Lithuania can join the eurozone on 1 January 2015. The reforms adopted there have raised Lithuania’s GDP per capita, from 35% of the EU-28 average in 1995 to a projected 78% in 2015. It has strong trade and labour market linkages with the rest of the EU economy and attracts significant foreign direct investment. The domestic financial sector is well integrated with the EU financial system, through a high level of foreign ownership of the banking system, and its financial legislation is fully compatible with EU legislation.

All EU Member States except the UK and Denmark are committed by the EC Treaty to adopt the euro once they fulfil the necessary conditions, and 18 countries have already done so. Of the remaining seven (Bulgaria, the Czech Republic, Croatia, Hungary, Poland, Romania and Sweden), none currently meet the criteria and will be reassessed in 2016.

Further information is on the Europa and European Commission websites.

Technical legislation

Medical devices — the PIP scandal

Work has continued under the Council of Ministers EPSCO configuration (responsible for Employment, Social Policy, Health and Consumer Affairs) to restore confidence in breast implants following the revelation of defective implants produced by the French company, PIP. An EU action plan under the existing medical devices legislation was agreed in 2012 to tighten the working of responsible authorities (notified bodies) and improve market surveillance. The Council acknowledged substantial progress, including voluntary assessment of the activities of notified bodies of 23 Member States by May 2014. Immediate corrective actions were taken where needed, including restriction or suspension of the notified body, and re-assessment of all certificates it had issued. For one notified body, 45 certificates were suspended and 18 withdrawn, out of 689 checked.

However, the system is now to be tightened further by the introduction of unannounced audits of manufacturers by the notified bodies, and monthly vigilance teleconferences between national authorities to improve their co-ordination. The action plan is seen as a short-term measure, pending the introduction of a new regulation that will make the unannounced audits mandatory, define more clearly the obligations of manufacturers and notified bodies, and improve the traceability of devices.

Further information is available on the European Commission website.

Trade issues

Trade defence actions

Many countries began trade defence investigations during the economic crisis, and the number of trade defence instruments (TDIs) in force has risen steadily from 2010. During 2013, the number of measures adopted by third countries against exports from the EU rose significantly during 2013, reaching 152 measures in force: an increase of 14 measures on 2012. India and China were the two countries making most use of TDIs, two-thirds of which were anti-dumping measures. Other countries imposing new measures were Brazil, Colombia, the Eurasian Customs Union (Russia, Belarus, and Kazakhstan), South Africa and Turkey. The measures imposed by China and the Eurasian Customs Union are expected to have the most negative impact on EU exports, due to the high volume of trade.

The European Commission’s 11th report on TDIs notes concern at the retaliatory nature of some of the investigations conducted by Chinese authorities, and also the number of new safeguard investigations, which can have an impact on normal trade flow even if no formal measures are introduced. It also notes that some countries continue to impose parallel anti-dumping and safeguard investigations of maximum duration on the same product.

Details are available on the European Commission website, at SWD(2014) 169 final and COM(2014) 294 final. A new guide, TDI: guide for exporters is also available.

Environmental goods

The EU is conducting a public consultation on the feasibility of developing a system to facilitate international trade in “green goods” (environmental goods), ie those which use natural resources efficiently and reduce dependency on fossil fuels. An example of how this could work would be by reducing customs duties on these goods. The EU move will contribute to its contribution to a legally binding initiative within the WTO.

The Commission is inviting suggestions on the type of products that European stakeholders, companies and trade associations feel should be included as environmental goods, and also about any non-tariff barriers which already or potentially limit trade in these products, and aspects of environmental services that could also be enhanced.

Details of the consultation, which closes on 31 July 2014, are on the European Commission website.

The EU, Ukraine and Russia

Preparations for the association agreement/deep and comprehensive free trade area (AA/DCFTA) between the EU and Ukraine are still on track despite recent tensions, and are to be signed on 27 June. The routine third bilateral meeting between the EU and Russia in mid-June considered the potential effects of the EU–Ukraine agreement on the Russian economy.

The EU holds that the AA/DCFTA is compatible with Ukraine's participation in the CIS Free Trade Agreements, and that it would not be justified to suspend the preferential trade relations between Ukraine and the Russian Federation. Russia underlined the importance of the Ukrainian market for Russian exporters of agricultural and manufactured products and proposed that a new mechanism should be developed to ensure transparency on the coming changes in Ukrainian technical regulations.

The EU–Russia talks will continue, alongside early political-level discussions on the implementation of the AA/DCFTA, led by EU Trade Commissioner Karel De Gucht.

Further information is on the European Commission website under Ukraine and Russia.

June 2014

Agriculture, fisheries and food

Driftnet fishing may be banned

The European Commission has proposed a total ban on the use of all kinds of driftnets for fishing in all EU waters, and a ban on keeping them on board fishing vessels, with effect from 1 January 2015. Using driftnets to catch specified migratory fish including tuna and swordfish was banned in 2002, but their continued use involved accidental catching of sea mammals, turtles and seabirds. Concerns have been raised over EU compliance with related UN obligations, due to continued illegal fishing with driftnets.

The proposal responds to a public consultation held in summer 2013 to assess the impact of driftnets on prohibited and protected species and the implementation of the rules by the small-scale fisheries.

Further information is available at:

http://europa.eu/rapid/press-release_MEMO-14-351_en.htm.

Competition

Mergers

In the last month, the European Commission has cleared the formation of two significant joint ventures under the EU merger regulation and approved the acquisition by Japanese company Kuraray of the glass laminating and vinyls business of DuPont. One joint venture (INEOS and Solvay of Belgium) relates to the chemical industry and the other (Wood Group and Siemens) concerns replacement parts for gas turbines.

The INEOS-Solvay joint venture was approved, provided that INEOS AG (based in Switzerland) divests some of its suspension-PVC (s-PVC) plants and related assets, which will compete with the new joint venture. Without such divestment, the Commission was concerned that the joint venture would be enabled to raise prices for s-PVC (used for pipes and window-frames) and sodium hypochlorite (bleach) in the Benelux countries, as it combined the two largest suppliers.

DuPont's Glass Laminating Solutions/Vinyls (GLSV) business (USA) is to merge with Kuraray of Japan. GLSV is required to divest its PVB film production facility in Uentrop, Germany, in order to preserve sufficient competition. Both companies manufacture vinyl acetate monomer (VAM), polyvinyl alcohol (PVA), polyvinyl butyral (PVB) resin and PVB film, which is used as an interlayer in the manufacture of laminated safety glass for buildings and cars.

The Wood Group (USA) and Siemens (Germany) are to form a joint venture for rotating equipment services, including the supply of replacement parts and component repair for gas turbines aged over 15 years for which the warranty has expired. The Commission decided that the transaction would not raise any competition concerns.

Samsung and Motorola Mobility on patents

Two decisions reached on the same day at the end of April together clarify the circumstances in which injunctions to enforce standard essential patents can be anti-competitive. Samsung made commitments to the European Commission that it will not seek injunctions in Europe on the basis of its standard essential patents (SEPs) for smartphones and tablets, against licensees which subscribe to a licensing framework. The framework provides for determination by a court or arbitrator of which terms for the SEPs are “fair, reasonable and non-discriminatory” (FRAND). Patent holders have commonly sought injunctions in cases of patent infringement, but such an injunction based on a SEP may represent abuse of a dominant position, as the patent holder has licensed the patient on FRAND terms. Samsung had started to seek injunctions against Apple on the basis of its SEPs, but on investigation by the European Commission, Samsung has committed not to seek any SEP-based injunctions.

The European Commission also found that Motorola’s seeking and enforcement of an injunction against Apple before a German court on the basis of a smartphone standard essential patent (SEP) constituted an abuse of a dominant position, which is prohibited by EU anti-trust rules. The SEP relates to the European Telecommunications Standardisation Institute's GPRS standard, which is a key industry standard for mobile and wireless communications. However, Motorola was not fined as there is no relevant EU case law and national laws have reached divergent opinions.

Further information is available at:

http://europa.eu/rapid/press-release_MEMO-14-322_en.htm.

Customs

China

Among agreements signed in mid-May between the EU and China, a mutual recognition customs agreement provides for recognition of “trusted traders”, enabling acknowledged companies to enjoy reduced administration in customs procedures. The EU has already signed similar agreements with the USA and Japan, and about 15,000 companies are currently certified as authorised economic operators which can benefit from simplified customs procedures.

A strategic framework for customs co-operation was also signed, setting priorities for EU-China collaboration and including trade facilitation, supply chain security and fighting counterfeit and illicit trade. The strategy provides for tackling illegal waste shipments. Finally, a new EU-China Action Plan on Intellectual Property Rights should intensify efforts to restrict counterfeit goods.

Further information is available at:

http://europa.eu/rapid/press-release_MEMO-14-353_en.htm.

Employment

Protection of rights of workers posted to other member states

The Council of Ministers has formally adopted new measures to enforce the employment rights of “posted workers” — employees required by their employer to work for a period in another Member State. The new directive must be implemented in the Member States within two years. Its objective is to prevent companies from avoiding national rules on social security and working conditions. This situation arises particularly with subcontracting chains and in the construction and transport industries.

The new enforcement directive defines Member States’ responsibilities in this area and improves co-operation between their relevant national authorities. Companies posting workers are required to designate a contact person to liaise with the enforcement authorities, to provide details of posted workers to the authorities and to keep records of their contracts and working arrangements.

The original 1996 directive on the posting of workers made requirements on Member States including maximum work periods and minimum rest periods, holidays, rates of pay and working conditions.

Further information is available at:

http://europa.eu/rapid/press-release_MEMO-14-344_en.htm.

State aid

Towards greater transparency

Member States granting state aid in excess of €500,000 to companies will soon be obliged to publish the name of the beneficiary and the amount; also the sector, whether SME or large company and its location. Member States will set up dedicated national or regional websites to carry this information within six months of the aid being granted, and the new requirement will take effect in two years’ time. The requirement includes fiscal aid, with rules to ensure tax confidentiality.

This transparency requirement is part of a continuing process to modernise the EU rules on state aid. A further initiative published in late May is a revision of the General Block Exemption Regulation (GBER) for state aid, including increased scope for exemptions through higher thresholds and inclusion of new categories.

The general block exemption regulation sets out the categories of state aid considered to be valuable to society to an extent that outweighs possible distortions of competition caused by state funding. State aid within these categories can be provided by Member States without prior notification to the European Commission. The current revision expands the existing categories and adds:

  • aid to innovation clusters and aid to process and organisational innovation

  • aid schemes to make good the damage caused by natural disasters

  • social aid for transport residents of remote regions

  • aid for broadband infrastructure

  • aid for culture and heritage conservation, including aid schemes for audio-visual works

  • aid for sport and multifunctional recreational infrastructures

  • investment aid for local infrastructure.

Further information is available at:

http://ec.europa.eu/competition/state_aid/modernisation/index_en.html#

http://europa.eu/rapid/press-release_MEMO-14-369_en.htm

http://europa.eu/rapid/press-release_IP-14-587_en.htm.

Technical legislation

Gas appliances rules

The safety of gas-fired appliances and related devices is currently regulated by the 2009 Gas Appliances Directive, implemented in the Member States by their individual legislation. The European Commission has now proposed to replace all these sometimes overlapping or conflicting rules with one directly applicable regulation. The regulation will apply to cookers, stoves, radiant heaters, instantaneous hot water heaters, gas lights and central heating boilers, but not to gas appliances used in industrial processes.

The new regulation will set out clearer responsibilities for manufacturers, importers and distributors, and provide for improved product traceability which will allow defective or unsafe products to be traced. The import of dangerous products from third world countries will be better prevented through improved national market surveillance.

Similar proposals to align technical legislation have already been made earlier this year in relation to electrical equipment, explosives for civil uses, lifts, simple pressure vessels, measuring instruments, non-automatic weighing instruments, equipment and protective systems for use in potentially explosive atmospheres, products that could cause electromagnetic disturbances, personal protective equipment and cableway installations.

More information is available at:

http://ec.europa.eu/enterprise/sectors/pressure-and-gas/documents/gad/index_en.htm

http://europa.eu/rapid/press-release_IP-14-111_en.htm

http://europa.eu/rapid/press-release_IP-14-319_en.htm.

Trade issues

Strengthening EU rights under international trade agreements

A new legal framework approved by the EU Council of Ministers will make it possible for the EU to respond more strongly to illegal measures taken by its trading partners. Providing an international panel from WTO or one created under a free trade agreement considers that an EU trade partner country is not conforming with international trade rules, the European Commission will be able to implement a streamlined procedure for adopting trade sanctions. These may include increased customs duties, import quotas or limits on access to EU public contracts. These measures will be effected by an executive decision to urge the country in question to remove the illegal measures.

The Commission will now be enabled to compensate for import restrictions imposed on EU products in exceptional situations or where a WTO member raises import tariffs without adequate compensation for the EU.

Later in May, EU Trade Commissioner De Gucht announced that he will bring forward four draft guidelines in this area before the summer break, which will clarify existing EU practice. They will concern the selection of an analogue country in anti-dumping and anti-subsidy cases, the injury margin, duration and expiry of measures and the determination of EU interest.

Further information is available at:

http://europa.eu/rapid/press-release_MEMO-12-1006_en.htm

http://ec.europa.eu/trade/policy/accessing-markets/trade-defence.

Georgia and Moldova

Discussions in April and May have continued progress toward the signature of separate EU association agreements with Georgia and Moldova. Georgia is due to sign its agreement, which includes provision for a deep and comprehensive free trade area, in June. This should stimulate competition in Georgia and ensure better access to imported EU goods and the EU market. Enlargement Commissioner Štefan Füle has stressed that the Georgian government must continue to deliver on political reforms and legislation on anti-discrimination.

Moldova has already implemented a visa-free regime with the EU, operating from the end of April, and is working towards a formal EU-Moldova association agreement including a deep and comprehensive free trade area.

Japan

Parallel negotiations for a strategic partnership agreement and a free trade agreement between the EU and Japan were at the heart of a summit between the two in Brussels in early May. The summit came at the end of a nine-day visit of Japan’s Prime Minister Shinzo Abe to six EU Member States. The free trade agreement aims to encourage bilateral trade and investment. The summit also took the opportunity to consider global issues with opportunities for Japan and the EU to work together, including strengthening the global economy and trade. Trade between the two has been growing by 4% annually over the past five years, reaching €110 billion in 2013. EU President Barroso commented that the negotiation of a Free Trade Agreement between these two major players in the world economy is likely to be one of the most important trade negotiations in years to come.

Further information is available at:

http://eeas.europa.eu/japan/index_en.htm.

Last reviewed 3 December 2014