A regularly updated article featuring recent and forthcoming legislation affecting the EU, compiled by Paul Clarke.
EU disputes Airbus findings
The argument between the EU and the USA over illegal subsidies allegedly given to Airbus and Boeing rumbles on. In the latest twist, the European Commission has appealed the findings of a World Trade Organization (WTO) panel which is assessing the EU’s compliance with an earlier ruling in the dispute. In September, the WTO panel confirmed that there have been no prohibited subsidies granted to the Airbus A350 XWB or A380 models. It also stated that most of the other subsidies challenged by the USA had ended.
Despite those findings going in the EU’s favour, the Commission believes that other aspects of the panel’s report are unsatisfactory. In particular, the Commission disagrees with the legal conclusion that, even though most of the subsidies challenged by the USA have ended, the EU has not yet fully complied with a previous ruling. It also considers that the panel made several errors when assessing the alleged harm that the subsidies caused to Boeing. The Commission has also pointed out that the figure of US$22 billion cited in the press reflects the face value of all repayable loans granted to Airbus. The subsidy will not amount to anywhere close to that amount, the Commission claimed.
Commission clears food industry takeover
After an investigation under the EU Merger Regulation, the European Commission has unconditionally cleared the proposed acquisition of joint control of Slaney Foods JV and Slaney Proteins (Ireland) by meat processor ABP Group (Ireland) and farmer-owned agri-food company Fane Valley (UK). ABP, Fane Valley and Slaney are all active in the purchase and slaughter of live animals as well as deboning and processing of meat. Their activities also cover the marketing of fresh beef, lamb and mutton to meat retailers (including supermarkets), and industrial meat processors. The Commission’s investigation focused in particular on the impact of the proposed transaction on competition in the markets where the activities of the parties overlap and which constitute affected markets in terms of EU merger rules. See the European Commission website for more details.
Have your say on EU merger control rules
A public consultation has been launched on the functioning of certain procedural and jurisdictional aspects of EU merger control. This is part of the European Commission’s work to promote a consistent review of existing EU laws. Under the Merger Regulation, mergers are subject to control by the Commission if they have an EU dimension — defined as when the turnover of at least two of the merging parties meets the relevant notification thresholds. Recently, questions have been raised regarding the effectiveness of the purely turnover-based notification thresholds of the regulation. In particular, there have been suggestions that the existing thresholds should be complemented by alternative criteria in order to capture some types of transactions in certain sectors, for example, digital services and pharmaceuticals.
Under current regulation thresholds, acquisitions of target companies that do not yet generate significant turnover but that have a high market potential, which may be reflected in a high purchase price, do not have to be notified to the Commission. This can happen, in particular, in the digital services sector. Similar issues may arise in the pharmaceutical industry if established players purchase highly valued biotech companies that own products under development that have not yet been marketed, and therefore do not generate significant turnover. Views on these and other topics are sought by 13 January 2017. See the European Commission website for full details.
Review of EU consumer and marketing rules
The Unfair Commercial Practices Directive (Directive 2005/29/EC) is among a number of pieces of EU legislation currently being reviewed by the European Commission. Carried out in the context of the Regulatory Fitness and Performance Programme (REFIT), the review aims to assess whether the regulatory framework for consumer and marketing policy is fit for purpose. Among other acts included in the review are the Unfair Contract Terms Directive (Directive 93/13/EEC), the Price Indication Directive (98/6/EC) and the Misleading and Comparative Advertising Directive (2006/114/EC). The objective is to create a kind of EU consumer code that ensures that the legal provisions are consistent, modern and future-proof, Commissioner Vĕra Jourová explained. There is no intention to remove or reduce existing consumer rights, but rather to help ensure that consumers know the rules, businesses comply with them and the authorities enforce them. The Commission expects to publish its report on the results of the review in the second quarter of next year.
Online shops neglecting consumer rights
The European Commission’s latest check of websites for possible breaches of consumer legislation has found that the vast majority (88%) of sites comply with the law. The latest “sweep” focused on the quality of information available online to consumers before they purchase something. This pre-contractual information is regulated by the Consumer Rights Directive (Directive 2011/83/EU). Although most websites were found to be compliant, the sweep did identify a number of areas of concern, including 63% of the sites having unclear, incomprehensible or simply no information on the right to withdraw from a transaction. A third of sites (34%) had incomplete or unclear details about the trader while 21% failed to provide consumers with a clear and prominent display of price or contract conditions before the order confirmation. Sites selling clothes, shoes and fashion accessories were the worst offenders. See the EC Consumers website for full details.
Storing personal data relating to website visitors
Patrick Breyer brought an action before the German Courts seeking an injunction to prevent websites, run by the Federal German institutions that he consults, from registering and storing his internet protocol addresses (IP addresses). Those institutions register and store the IP addresses of visitors to their sites, together with the date and time when a site was accessed, with the aim of preventing cybernetic attacks and to make it possible to bring criminal proceedings. The German Court hearing the case decided to seek a ruling from the EU’s Court of Justice (CJEU) on the applicability of Directive 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data.
Ruling in Case C-582/14, the EU Court has said that the operator of a website may have a legitimate interest in storing certain personal data relating to visitors to that website in order to protect itself against cyberattacks. The dynamic IP address of a visitor constitutes personal data, with respect to the operator of the website, if that operator has the legal means allowing it to identify the visitor concerned with additional information about him or her which is held by the internet access provider.
EU ratifies Paris Agreement
An extraordinary meeting of the EU’s Environment Council has approved the ratification of the Paris Agreement by the EU. So far, 61 countries accounting for almost 48% of global emissions have ratified the deal. The Agreement will enter into force 30 days after at least 55 countries, representing at least 55% of global emissions have ratified it. Noting that the world is reaching a critical period for decisive climate action, Commissioner for Climate Action and Energy Miguel Arias Cañete said: “They said Europe is too complicated to agree quickly. They said we had too many hoops to jump through. They said we were all talk. Today’s decision shows what Europe is all about: unity and solidarity as Member States take a European approach, just as we did in Paris.” Details of the Paris Agreement on Climate Change can be found here.
Interpreting the rule of exhaustion
Criminal charges have been brought in Latvia against two individuals who are alleged to have illegally sold copyright-protected computer programs including Microsoft Windows and Microsoft Office. In this context, the Latvian Court asked the EU’s Court of Justice (CJEU) to interpret Directive 91/250/EC on the legal protection of computer programs. The Latvian Court was specifically interested in the rule of exhaustion of a copyright holder’s distribution right. Under the directive, that rule establishes the principle that the first sale of a copy of a computer program in the EU, by the rightholder or with his consent, exhausts the right to distribute that copy in the Union.
Giving its Judgment in Case C-166/15, the CJEU ruled that the initial acquirer of a copy of a computer program, accompanied by an unlimited user licence, may resell that copy and his licence to a new acquirer. However, where the original material medium of the copy that was initially delivered has been damaged, destroyed or lost, that acquirer may not provide his back-up copy of that program to the new acquirer without the authorisation of the rightholder. The national court must now decide the original case in accordance with this ruling.
Securing Europe’s external borders
Less than a year after it was first proposed by the European Commission, the European Border and Coast Guard Agency has been officially launched. A rapid reserve pool of at least 1500 border guards and a technical equipment pool will be put at the disposal of the Agency — meaning there will no longer be shortages of staff or equipment for its operations. The European Border and Coast Guard will now ensure the implementation of EU standards of border management through periodic risk analysis and mandatory vulnerability assessments. The aim is to provide a missing link in strengthening Europe’s external borders so that people can continue to live and move freely within the Union. The Commission believes that this will help to meet Europe’s commitment to get back to the normal functioning of the Schengen area and the lifting of temporary internal border controls by the end of the year. A Commission question and answer (Q&A) on the new Agency can be found at the European Commission.
African countries offered asymmetric trade deal
A trade deal between the EU and five countries in southern Africa has provisionally entered into force. The agreement gives exports from Botswana, Lesotho, Namibia, South Africa and Swaziland immediate duty-free and quota-free access to the EU. Formally known as the Economic Partnership Agreement (EPA) between the EU and the Southern African Development Community (SADC) EPA Group, the deal aims to support sustainable economic growth and regional integration in southern Africa.
The EPA gives Botswana, Lesotho, Mozambique, Namibia and Swaziland full free access to the EU market, while South Africa will benefit from the total or partial removal of customs duties on almost all (98.7%) of its exports to the EU. The deal also allows southern African producers to build products using components from other countries, without losing their free access to the EU market. The “asymmetric liberalisation” approach means that the African signatories to the EPA do not have to open their markets as much to EU imports as the EU does to African exports. Under the EPA they can, for example, keep tariffs on products that are sensitive to international competition. See the EC Trade website for further details.
Tougher controls on exports of dual-use items
The EU is proposing stronger controls on exports of certain goods and technologies that — in addition to legitimate civilian applications — may also be misused for human rights violations, terrorist acts or the development of weapons of mass destruction (WMD). Trade Commissioner Cecilia Malmström explained: “We are living in turbulent times. Preserving peace and protecting human rights are core objectives of the EU and our trade policy is essential to that aim. That’s why we are proposing a set of modern rules to make sure that exports are not misused to threaten international security or undermine human rights.”
A main element of the Commission’s proposal is a new “human security” dimension in export controls, to prevent human rights violations associated with certain cyber-surveillance technologies. With the emergence of, for example, specifically designed surveillance technology such as monitoring centres and data retention systems, it is considered essential to ensure that regulations allow EU authorities to stop exports in cases where they could be misused for human rights violations, for repression or in armed conflict. The proposal also aims to simplify and harmonise the existing export control rules in order to save time and money for EU exporters and national authorities. A common EU list of controlled dual-use items is included in the annex to EC Regulation 428/2009. The new proposal can be found here.
Further trade concessions offered to Ukraine
A proposal to give Ukrainian producers improved access to the EU market have been tabled by the European Commission. A draft regulation sets out provisions to increase duty-free exports of a number of agricultural and industrial products from Ukraine to the EU. The products concerned include cereals, processed tomatoes, honey, fertilisers, footwear and electronic equipment. The proposal was adopted to coincide with a visit to Ukraine by Trade Commissioner Cecilia Malmström to discuss progress with the existing Association Agreement between the EU and Ukraine. The Association Agreement has been provisionally applied in part since November 2014. In the context of that Agreement, a Deep and Comprehensive Free Trade Area (DCFTA) has been provisionally applied since the start of this year.
Speaking in Kyiv, Commissioner Malmström emphasised that much work still remains to be done in order to unleash the full potential of the DCFTA. She also stressed the need for Ukraine to take the necessary steps to attract EU investment by modernising its economy further. Corruption must be tackled, legislation made transparent and predictable, and existing barriers to trade removed, she stressed. More information can be found at the EC Trade website.
Understanding EU export statistics
If statistics on pig meat exports leave you dazed and confused, then help could be at hand in the form of a new publication from the EU’s statistical office, Eurostat. The latest edition of the User Guide on European Statistics on International Trade in Goods runs to 86 pages and aims to explain to a wide range of users how the statistics relating to trade in goods, both between EU Member States and with non-EU countries are collected, compiled, processed and published at European level. Presented in a Q&A format, the guide offers an introduction to the International Trade in Goods Statistics (ITGS) published by Eurostat. Available at www.ec.europa.eu, the guide also outlines the main concepts and definitions set out in EU legislation while also providing information on trade statistics produced at national level by the Member States.
EU to get tough on trade cheats
Despite the fact that the European Commission has been using all its available trade defence instruments (TDIs), these have proven insufficient to deal with the huge overcapacities that result in dumped exports on the EU market. It has accordingly called on the Member States to support its efforts to provide the EU with updated, strengthened and more robust TDIs. President Jean-Claude Juncker explained: “Trade is essential for our economic growth and jobs creation, but we should not be naïve. Our current rules are proving insufficient to combat the harm from unfair foreign competition. Some EU industries have lost thousands of jobs. We cannot stay idle. The EU’s trade defence rules require an urgent update.”
In a paper entitled Towards a Robust Trade Policy for the EU in the Interest of Jobs and Growth, the Commission has outlined how its proposed new anti-dumping measures would be used to address situations where market conditions do not prevail. This also takes account of forthcoming changes to the legal framework of the World Trade Organization (WTO). The implementation of this new methodology would include a transition period during which all existing anti-dumping and anti-subsidy measures would remain subject to the existing legislation, and ongoing investigations would not be affected. The proposal should be tabled before the end of the year.
Commission checks out e-commerce sector
An investigation by the European Commission into the e-commerce sector has identified a number of potentially anti-competitive business practices. Launched in May 2015, the inquiry was intended to identify behaviour that might restrict competition and limit consumer choice. According to the Commission, over 50% of EU adults bought consumer goods or services online in 2015; in some Member States, the figure was more than 80%. However, the investigation found that manufacturers of consumer goods are adopting selective distribution systems and increasingly using contractual sales restrictions in their distribution agreements.
For digital content, copyright licensing agreements are complex and often exclusive, with more than 60% of licence agreements submitted by rights holders being limited to the territory of a single Member State. Some 60% of digital content providers have agreed to “geo-block” content. The Commission points out that, if this is the result of agreements between suppliers and distributors, EU competition rules may have been broken. Its preliminary findings are open for public consultation with the final report expected in the first quarter of 2017. See the EC Competition website for more details.
Firm fined for buying off competitors
A fine of €93.8 million imposed on Danish pharmaceutical company Lundbeck has been upheld by the EU’s General Court. The European Commission levied the fine in 2013, after finding Lundbeck guilty of breaching the Union’s antitrust rules. In four “pay-for-delay” agreements, Lundbeck was found to have recompensed other pharmaceutical companies for staying out of the market for the antidepressant medicine citalopram of which it was the original manufacturer. With its basic patent for the drug due to expire, four manufacturers of generic medicines — Alpharma, Arrow, Generics UK and Ranbaxy — were preparing to launch much cheaper versions of the antidepressant.
The agreements enabled Lundbeck to keep the price of its “blockbuster drug” artificially high, in contravention of EU competition law. In addition to the fine on Lundbeck, the other four companies were fined a total of €52.2 million. All five firms appealed the Commission’s decision to the General Court. However, that appeal has confirmed the fines imposed. The companies have two months to appeal this latest decision to the Court of Justice (CJEU) although they may only do so on points of law.
Pre-loading software is not an unfair commercial practice
Eight years after a French citizen started legal proceedings against Sony for selling him a laptop with pre-loaded software, the EU’s Court of Justice (CJEU) has found in favour of the Japanese multinational. Delivering its judgment in Case C-310/15 (Vincent Deroo-Blanquart v Sony Europe Ltd), the court found that the sale of a computer equipped with pre-installed software does not, in itself, constitute an unfair commercial practice. The CJEU also found that the failure to indicate the price of each item of pre-installed software does not constitute a misleading commercial practice under Directive 2005/29/EC.
In 2008, Mr Deroo-Blanquart bought a Sony laptop which had the Windows Vista Home Premium operating system and other software already loaded. He refused to agree to the operating system’s end-user licence agreement and instead asked Sony to reimburse him part of the laptop purchase price equivalent to the cost of the pre-installed software. Sony’s refusal caused Mr Deroo-Blanquart to start legal proceedings against the company. The case was referred by the French Court of Cassation, which must now decide the case in accordance with the decision of the CJEU.
A standard ringtone cannot be registered as an EU trademark because of its banality, the EU’s General Court has decided. Ruling in Case T-408/15, the court upheld a decision by the European Union Intellectual Property Office (EUIPO) to refuse an application made by Globo Comunicação e Participações SA to register a specific sound intended to be used as the ringing of an alarm or a telephone. In 2014, the Brazilian company asked EUIPO to register the sound sign. The EU agency refused on the ground that it had no distinctive character, being only a banal and commonplace ringtone which would generally go unnoticed by the consumer. The company asked the General Court to annul that decision. However, the court dismissed its application and confirmed EUIPO’s refusal to register the trademark. Globo Comunicação has two months to appeal the decision of the General Court to the Court of Justice (CJEU) although it may only do so on points of law.
Court rules on hyperlinks and copyright
Linking from a website to material protected by copyright and published without the author’s consent on another website does not constitute a “communication to the public” when the person who posts the link does not seek financial gain and acts without knowledge that the material has been published illegally. That is the ruling of the EU’s Court of Justice (CJEU) in Case C-160/15, involving Playboy magazine and the Dutch internet site GeenStijl. The CJEU also ruled that if those hyperlinks are provided for profit, then knowledge of the illegal publication on the other website must be presumed.
Copyright reform on EU agenda
The European Commission has published proposals for modernising EU rules on copyright. Adopted in the context of the Digital Single Market Strategy, the proposals address three priorities: to ensure better choice and access to content online and across borders; to improve copyright rules on education, research, cultural heritage and inclusion of disabled people; and to promote a fairer and sustainable marketplace for creators, the creative industries and the press. Content has been identified as one of the main drivers of growth in the digital economy. The proposals are set out in the Commission’s Communication Promoting a Fair, Efficient and Competitive European Copyright-based Economy in the Digital Single Market which can be found at the European Commission.
Liability of shops offering free wi-fi
Sony Music claimed that a German shop owner, Tobias Mc Fadden, had infringed its copyright after a musical work was “unlawfully offered for downloading” through the free access to a wi-fi network which he provided at his sound system shop. The German Court hearing the proceedings had said that it was minded to reach a finding of indirect liability on the ground that the wi-fi network had not been made secure. However, before doing so, it decided to refer to the EU’s Court of Justice (CJEU) to ask whether the terms of the E-Commerce Directive (2000/31/EC) would prevent it making such a ruling.
The CJEU has now answered that question, in Case C-484/14, by first agreeing that making a wi-fi network available to the general public free of charge in order to draw the attention of potential customers to the goods and services of a shop constitutes an “information society service” under the directive. The court decided that Directive 2000/31/EC exempts intermediate providers of “conduit services” from liability for unlawful acts committed by a third party with respect to the information transmitted, provided the following conditions are met. The provider of the conduit service must not have initiated the transmission; it must not have selected the recipient of the transmission; and it must neither have selected nor modified the information contained in the transmission. As those exemptions apply in the present case, Sony cannot claim compensation from Mr Mc Fadden. However, it can ask a national court to order him to prevent any infringement of copyright committed by his customers and it would not be unreasonable if such an injunction ordered the internet connection to be secured by means of a password. This interpretation of the E-Commerce Directive will now apply in all 28 EU Member States.
UK nomination gets Security Union job
Following the immediate resignation of the UK’s Commissioner (Lord Hill) following the referendum vote, it was pointed out that, until it leaves the EU, the UK is entitled to nominate someone to serve on the Commission. Accordingly, it put forward Sir Julian King and his position as Commissioner for the Security Union has now been endorsed by the European Parliament.
A genuine and effective Security Union
Following the Brussels attacks earlier this year, Commission President Juncker announced that Europe needed a Security Union to effectively combat the threat of terrorism. His 2016 State of the Union address, delivered on 14 September, set out how the EU can enhance security in Europe by improving the exchange of information and strengthening external borders. In a Commission memo available at the European Commission website, the President sets out moves towards a genuine and effective Security Union in areas including: terrorist financing, the prevention of radicalisation, co-operation with non-EU countries, firearms and explosives, and cybercrime.
Ireland must recover illegal tax benefits given to Apple
Ireland granted undue tax benefits of up to €13 billion to Apple, the European Commission has ruled, and this was illegal under EU state aid rules as it allowed the US company to pay substantially less tax than other businesses. “In fact,” Competition Commissioner Margrethe Vestager said, “this selective treatment allowed Apple to pay an effective corporate tax rate of 1% on its European profits in 2003 down to 0.005% in 2014.” Two tax rulings issued by Ireland to Apple were found to have substantially and artificially lowered the tax paid by the multinational in Ireland since 1991.
The rulings endorsed a way to establish the taxable profits for two Irish incorporated companies of the Apple group (Apple Sales International and Apple Operations Europe), which did not correspond to economic reality; almost all sales profits recorded by the two companies were internally attributed to a “head office”. The Commission’s assessment showed that these “head offices” existed only on paper and could not have generated such profits. These profits allocated to the “head offices” were not subject to tax in any country under specific provisions of the Irish tax law, which are no longer in force. An Infographic showing how the illegal rulings worked in Apple’s favour can be found at www.ec.europa.eu.
What is State aid?
The Commission has laid down guidance on local public support measures that do not constitute State aid. This is based on its investigation of five public measures for purely local operations in Spain, Germany and Portugal which it found to involve no State aid because they are unlikely to affect trade between Member States. Competition Commissioner Margrethe Vestager explained: “In many cases Member States can stimulate investment without asking the Commission … (this) complements the modernisation of State aid as a result of which 90% of all State aid measures can be decided by Member States themselves — they no longer have to go to the Commission for approval.” See the Official Journal of the EU for more details.
Mind the VAT Gap
The VAT Gap is defined as the difference between the estimated VAT revenues that Member States expect to receive and the amount of VAT actually collected. It measures the effectiveness of VAT enforcement and compliance measures in each Member State and estimates revenue loss due to fraud and evasion, tax avoidance, bankruptcies, financial insolvencies as well as miscalculations. In its 2016 report on the VAT Gap, the European Commission notes that the VAT revenue collection across the Member States showed only “timid signs of improvement” in 2014 and stresses that the headline VAT Gap of €159.5 billion for the EU as a whole is still unacceptably high. Member States’ estimated VAT Gaps ranged from 1.2% in Sweden and 3.8% in Luxembourg to 37.9% in Romania and 36.8% in Lithuania.
EU starts process of identifying unfair tax jurisdictions
The European Commission has begun to draw up a first common EU list of “non-co-operative tax jurisdictions” by presenting a pre-assessment of all non-EU countries according to key indicators. “It is now for EU Member States to choose which countries should be screened more fully over the next months so as to accurately pinpoint the countries which do not play by the rules when it comes to taxation,” the Commission said. All non-EU countries and tax jurisdictions were analysed to determine their risk of facilitating tax avoidance. This pre-assessment was based on a wide range of neutral and objective indicators, including economic data, financial activity, institutional and legal structures, and basic tax good governance standards.
Once the screening process is complete, the countries that refused to co-operate or engage with the EU regarding tax good governance concerns should be put on the EU list. This common EU list is intended as a last resort option. It will be a tool to deal with those countries that refuse to respect tax good governance principles, when all other attempts to engage with them have failed. The “scoreboard of indicators” can be found here.
End of roaming charges in the EU in 2017
When you travel to a foreign country and phone, text or browse with your mobile phone using your home country’s SIM card, you are roaming. Since 2007, the European Commission has successfully worked to reduce the consumer price of roaming, which has fallen by 92%. In 2013, the European Commission proposed legislation to end roaming charges for people periodically travelling in the EU. In October 2015, after long negotiations, the European Parliament and the Council agreed that this should be in place as of 15 June 2017. A Commission Fact Sheet giving questions and answers on fair use policy in this sector can be found here.
Russian pork ban declared illegal
A World Trade Organization (WTO) panel has, in the light of international trade rules, declared illegal the Russian import ban on live pigs, fresh pork and other pig products from the EU. The ruling sends a strong signal to Russia, and all WTO members, as regards their obligation to respect international standards, in particular, in this case, the principle of regionalisation (allowing trade from individual areas of a country which are recognised as disease-free, even if the health status of the rest of the country is not favourable) and the requirement to conduct a risk assessment based on scientific evidence. The panel underlined that WTO members can exercise their right to determine their appropriate levels of protection and to restrict imports accordingly on the basis of sanitary concerns only when this is done in line with WTO rules.
MPs launch inquiry into future UK-EU trade
The UK Parliament’s EU External Affairs and EU Internal Market Sub-Committees are to investigate what will happen to trade between the UK and the EU in goods and services after Brexit. The Sub-Committees will consider: the UK’s position in the World Trade Organization (WTO); the issues relating to participation in the Customs Union, the European Free Trade Area (EFTA) and the European Economic Area (EEA); and the potential for the negotiation of a Free Trade Agreement (FTA).
MPs will ask about the consequences if the two-year time limit for negotiating the UK’s withdrawal from the EU under Article 50 lapses before the UK has renegotiated its WTO membership terms. They will also be interested in learning about the costs and benefits of relying on WTO terms for trade with non-EU countries and with the Union. A later evidence session will look at what sectors can and cannot be accommodated within an FTA, how long FTA negotiations might take and how such an agreement would compare to access to the Single Market through EEA membership.
Proposed merger under EU spotlight
The European Commission has opened an in-depth probe to assess whether the proposed merger of the two USA companies Dow and DuPont is in line with the EU Merger Regulation. Combining two competitors with leading herbicides and insecticides portfolios, and with a strong track record of bringing innovative crop protection and seeds products to the market, the proposed merger would create the world’s largest integrated crop protection and seeds company. It would also create a leading integrated producer of certain petrochemical products that are widely used in packaging and adhesive applications.
The Commission has preliminary concerns that the merger may lead to a reduction of innovation in crop protection as a whole. Dow and DuPont are important innovators in the crop protection industry, which is characterised by a limited number of global companies with significant research and development (R&D) capabilities. The transaction would possibly lead to the elimination of one of the few companies able to develop and launch new active ingredients. The Commission now has 90 working days, until 20 December 2016, to take a decision on the merger.
Computers get new Ecolabel rules
Ecological criteria have been published for the award of the EU Ecolabel for personal, notebook and tablet computers. Decision 2016/1371, which can be found at the EUR-Lex website, defines the products concerned as: desktop computers, integrated desktop computers, portable all-in-one computers, notebook computers, two-in-one notebook computers, tablet computers, thin clients, workstations and small-scale servers. The new rules reflect a move to promote products with a lower environmental impact and which contribute to sustainable development along their life cycle. Included in the annex to the Decision are: provisions on energy consumption, use of hazardous substances and mixtures, end-of-life management and Corporate Social Responsibility (CSR). The Decision — which does not cover gaming consoles or digital picture frames — will apply from 10 October 2016. It repeals existing legislation on notebook computers (Decision 2011/330/EU) and personal computers (Decision 2011/337/EU).
Setting the standard
Standardisation across the EU is a key part of the Single Market and the European Commission has recognised the need to stay ahead of the game in this area by putting forward a new vision on how European standard setting should evolve in the light of technological developments, political priorities and global trends. “From the A4 paper size to GSM technology,” the Commission points out, “standards reduce costs, promote innovation, ensure interoperability between different devices and services, and help companies to access markets.”
A detailed fact sheet, available at the European Commission website, sets out the steps proposed to modernise the EU’s standardisation policy. Although they are often seen as merely technical issues, the document stresses that standards are in fact important economic drivers and that a single and coherent EU standardisation policy is needed.
The UK will be particularly interested to note that services — one of this country’s success stories — will feature strongly in the new proposals given that, while services account for 70% of the EU economy, only around 2% of all European standards currently concern services.
UK has a new Commissioner
Immediately after the result of the UK’s referendum on EU membership was declared, Lord Hill, who had been the EU Commissioner responsible for Financial Stability, Financial Services and the Capital Markets, announced his intention to resign from that post. As the UK will remain an EU Member until its Article 50 negotiations are completed, and is therefore still entitled to have a national on the Commission, President Juncker accepted the nomination of Sir Julian King by the then Prime Minister David Cameron. Sir Julian had been Head of the office of two previous British Commissioners in Brussels (Peter Mandelson and Baroness Ashton). He has been put in charge of the EU’s Security Union, a new portfolio based on the “European Agenda on Security”. This was set out in April this year in a Commission paper available at the European Commission website. It covers areas including terrorism, border management, firearms and radicalisation.
EU funding post-Brexit
UK businesses and organisations involved with projects receiving EU funds have been told that funding will continue even after the UK leaves the Union. Chancellor Philip Hammond issued the assurance in an effort to end uncertainty over the future of EU-funded projects in the light of the recent referendum result. He confirmed that structural and investment funds projects signed before this year’s Autumn Statement, and Horizon research funding granted before the UK leaves the EU, will be guaranteed by the Treasury after the UK ends its EU membership. He also committed the Government to match the current level of agricultural funding until 2020. The assurances will apply to: the European Social Fund (ESF), the European Maritime and Fisheries Fund (EMFF), the European Agricultural Fund for Rural Development (EAFRD) and the European Regional Development Fund (ERDF).
Making card payments more transparent
New rules have come into force to make the costs of payments with debit or credit cards more transparent to retailers and consumers, and to allow them to make efficient choices. All elements of the EU’s Interchange Fee Regulation are now fully applicable. When a customer pays for a purchase with a credit or debit card, the retailer’s bank (the “acquiring bank”) pays a fee to the bank that issued the payment card to the consumer (the “issuing bank”). A so-called “interchange fee” is then deducted from the final amount that the retailer receives from the acquiring bank for the transaction.
In order to address the problem of widely varying and excessive interchange fees, the EU adopted the Interchange Fees Regulation in 2015. The first set of rules, applicable since 9 December 2015, introduced caps on interchange fees for consumer debit and credit cards. With the rest of the regulation now brought into force, the European Commission believes that the payment card market will work more efficiently. All retailers will now have to display the cards they accept in a clear and unequivocal manner at the entrance of the shop and at the till. For online sales, this information must be displayed on the website or other applicable electronic or mobile medium. Further details can be found in a Commission Memo at the European Commission website.
New EU statutory audit rules now applicable
Aiming to boost confidence in the financial sector, the EU has introduced a directive setting out the framework for all statutory audits and a regulation setting out specific requirements for statutory audits of public-interest entities (PIEs), such as listed companies, banks and insurance undertakings. The new rules will enhance the transparency of companies’ financial information by providing investors with a more informative audit report, as well as providing an additional report to the audit committees of PIEs.
Auditors will now also have a strong mandate to be independent and to exert “professional scepticism” regarding the management of the audited company. For example, in the case of PIEs, auditors will rotate on a regular basis and will no longer be allowed to provide certain non-audit services to their audit clients. In addition, the new rules will help foster diversity and drive innovation in audit and non-audit markets through the new rotation system combined with the restriction to provide certain non-audit services to PIEs. Finally, the new rules will strengthen the co-ordination of audit supervision throughout the Union, with the establishment of the Committee of European Auditing Oversight Bodies (CEAOB). The CEAOB, whose members include national supervisors and the European Securities and Markets Authority (ESMA), will, the European Commission argues, help drive supervisory convergence and promote high-quality audits in the Union. Full details of the new rules can be found in a Commission Memo at the European Commission website.
Clamping down on money laundering
The European Commission has adopted a proposal to reinforce EU rules on anti-money laundering in order to counter terrorist financing and increase transparency about who really owns companies and trusts. This proposal is the first initiative to implement the Action Plan for strengthening the fight against terrorist financing which is published in February 2016. “The recent terrorist attacks and the Panama Papers revelations highlighted the need for the EU to take further measures and step up its fight against money laundering and terrorism financing,” the Commission said.
Available at the European Commission, the proposal is for a directive updating Directive 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (the Fourth Anti-Money Laundering Directive). It will: introduce enhanced checks with regard to high-risk non-EU countries, bring virtual currency exchange platforms under the scope of the legislation; and strengthen transparency measures applicable to prepaid instruments, such as prepaid cards, by lowering thresholds for identification from €250 to €150 and widening customer verification requirements.
Free movement of services
EFTA states back services proposal
Members of the European Free Trade Association (EFTA) who are also part of the European Economic Area (EEA) have formally commented on EU proposals to introduce a Services Passport. Although the three countries concerned — Iceland, Liechtenstein and Norway — are not involved in the formulation of the EU legislation with which they have to comply, they do have the right to submit comments on important policy issues. This latest comment addresses a forthcoming European Commission proposal to introduce a Services Passport aimed primarily at helping SMEs in key service sectors expand across borders. Cross-border activity is still very low in some services sectors, including architecture, construction, engineering and accounting. The barriers to trade appear, the Commission suggested, to concern administrative and regulatory requirements.
In their submission (available at EEA), Iceland, Liechtenstein and Norway support the idea of introducing a Services Passport as a useful tool for service providers in demonstrating their compliance with administrative and regulatory requirements when providing their services in other EEA States. The Passport should, they argue, be fully electronic, voluntary, and based on existing tools such as the Internal Market Information System. The three countries call for the initiative to be implemented initially only in construction and in key business services sectors.
More action needed by Bangladeshi garment sector
The European Commission has called for further action by the Bangladeshi authorities to improve labour conditions in the country’s garment sector. In its third annual report on progress achieved through the Sustainability Compact for Bangladesh, the Commission acknowledges that safety has improved, but says that significant efforts are required to ensure sustainable change. The Compact was established in response to the 2013 collapse of the Rana Plaza factory complex, in which more than 1100 people died. It brings together the EU, the USA, Canada, Bangladesh, and the International Labour Organization (ILO) to address three key areas: respect for labour rights, structural integrity of buildings and occupational safety and health, and responsible business conduct.
The latest report highlights the need for a new strategy for safety inspections and remediation which will ensure effective co-ordination between the relevant Bangladeshi regulators. The EU also wants Bangladeshi’s administrative capacities to be strengthened through recruitment and training of inspectors, and full transparency of factory inspections. Foreign companies with garment sector operations in Bangladesh should also become more engaged in moves to improve the situation according to the report (which is available at the European Commission).
Russian import duties violate WTO rules
The World Trade Organization (WTO) has confirmed that Russian import duties on paper, refrigerators and palm oil do not comply with its rules. Import duties applied to the products have exceeded those agreed by Russia when it joined the WTO in August 2012. The WTO found that duty on some paper products is applied at 10% or 15% rather than the 5% that Russia should be charging. For other products, Russia essentially fixes a minimum amount of import duty that needs to be paid even, the European Commission told a WTO Panel, if it is not justified by the agreed duty rate.
The ruling was made in response to concerns raised by the EU in October 2014. European exports of paper products to Russia are worth some €240 million annually. Exports of palm oil are worth €50 million per year, with about €150 million worth of refrigerators also exported from the EU to Russia. The WTO report can be appealed within 60 days. If no appeal is filed, the report will be adopted and Russia will be bound to comply with the recommendation to bring the measures concerned into line with WTO rules.
What is happening to TTIP?
It would be fair to say that the proposed Transatlantic Trade and Investment Partnership (TTIP) has not had a smooth ride through the negotiation process with entrenched opposition on both sides of the Atlantic. However, the 14th Negotiation Round recently concluded and the EU’s Chief Negotiator, Ignacio García Bercero, has summarised what he describes as “36 intense months” as having brought TTIP to an advanced stage, although much work remains to be done. It is now apparent that TTIP will have up to 30 chapters divided into 3 main blocks: market access for the EU and USA companies, co-operation on regulatory issues, and global rules of trade such as sustainable development or competition policy.
“On tariffs” the Commissioner said, “we have exchanged offers twice which led to a very advanced stage of negotiations. We have now on the table good offers from both sides which include 97% of all tariff lines, leaving the remaining 3% for the so-called end game”. With regard to regulatory issues, the EU wants to simplify technical rules of approving and selling different products building on co-operation with the USA in the past on standards for electric cars and in the aviation sector. Proposals are on the table for co-operation in seven industry sectors: chemicals, cosmetics, engineering, medical devices, pharmaceuticals, textiles and cars. Access to procurement markets seems to be one of the least successful areas of negotiation, thus far with EU pressure for substantial improvements in market access at all levels of Government being resisted by the USA. The Commissioner ends his report on an optimistic note but commentators have noted that the forthcoming US Presidential elections will delay any further progress and, depending on the result, may even see negotiations brought to a halt.
Invoice language rule infringes EU law
The EU’s Court of Justice (CJEU) has ruled that legislation requiring cross-border invoices to be drawn up only in a particular language — failing which they are null and void — infringes the EU law. Ruling in Case C-15/15, the Court found that Flemish legislation which requires companies established in the region to use Dutch in legal acts and documents constitutes a restriction on the free movement of goods within the EU. Parties must, the CJEU argued, have the option of drawing up such invoices in another language that they know and which is no less authentic than the required language. See the CJEU press release for more details.
Largest UK food distributor can be taken over
The European Commission has cleared, under the EU Merger Regulation, the proposed acquisition of Brakes, the largest UK food distributor, by Sysco, the largest such distributor in the USA. Both companies deliver a broad variety of chilled, frozen and ambient food across all product categories and across all sectors of the food service industry. The Commission found that the takeover would not adversely affect competition in Europe. Brakes’ business is mainly centred in the UK, France, Sweden and Ireland. See the EC Competition website for more details.
New e-commerce rules to help consumers and companies
A package of measures to allow consumers and companies to buy and sell products and services online more easily and confidently across the EU has been put forward by the European Commission. The package includes three legislative proposals: to address unjustified geo-blocking and other forms of discrimination on the grounds of nationality, residence or establishment; on cross-border parcel delivery services to increase the transparency of prices and improve regulatory oversight; and to strengthen enforcement of consumers’ rights and guidance to clarify, among others, what qualifies as an unfair commercial practice in the digital world.
The Commission has also published updated guidance on unfair commercial practices to respond to the challenges presented by the digital world (available at the European Commission). It clarifies the application of the Unfair Commercial Practices Directive (2005/29/EC). For instance, any online platform that qualifies as a “trader” and promotes or sells goods, services or digital content to consumers must make sure that its own commercial practices fully comply with EU consumer law. Platforms must state clearly that rules on unfair commercial practices do not apply to private persons selling goods, and search engines would be required to clearly distinguish paid placements from natural search results. A detailed Fact Sheet on these proposals can be found at the European Commission website.
Participating in the law-making process
In line with the European Commission’s commitments under the Better Regulation Agenda, and its effort to increase transparency in the EU Institutions, draft delegated and implementing acts are now available online and open for public feedback for a period of four weeks. Delegated and implementing acts are used by the EU institutions to update elements of adopted legislation or specify the conditions by which EU laws should be implemented. The online feedback tool allows interested parties to express their views during the entire policy and law-making process. Anyone wishing to take part should check the Commission and its priorities website for further details.
Court rules on royalty payments
The EU’s Court of Justice (CJEU) has ruled that the beneficiary of a patent licence must pay the agreed royalty even if it does not infringe the patented technology. Giving its judgment in Case C-567/14, the Court found that the royalty constitutes the price to be paid in order to protect the licensee against any infringement proceedings. The case concerned the pharmaceutical firm Genentech, which was granted a worldwide non-exclusive licence to use a patented technology.
Genentech, which used the technology to produce the medicinal product Rituxan, did not infringe the licensed patents and therefore refused to pay part of the agreed royalty. The Court of Appeal in Paris asked the CJEU whether payment of the royalty imposed costs on Genentech that were not justified under EU competition law. In the view of the CJEU, EU competition law does not prohibit the obligation to pay a royalty for the use of technology, even where such use does not give rise to an infringement. See the CJEU press release for more details.
The EU has granted protected status to a number of food names including Allgäuer Sennalpkäse, a hard cheese made in Germany, Fogaça da Feira, a Portuguese sweet bun and Zagorski puran, a type of Croatian turkey. This brings to 1349 the number of products ranging from champagne to Melton Mowbray pork pies, which have been protected from attempts to use their names by producers from other areas wanting to take advantage of a product’s reputation.
EU law supporting this scheme dates back to 1993 and lays down that if there is a link between the characteristics of certain products and their geographical origin, they may qualify for either a protected geographical indication (PGI) or a protected designation of origin (PDO). A third option is the Traditional Speciality Guaranteed (TSG) which is open to products which are traditional or have customary names and have a set of features which distinguish them from other similar products. Some concern has been expressed that the UK will lose protection for a range of products when it leaves the EU. Those already granted protection include Cornish clotted cream, Whitstable oysters, Welsh lamb and Hereford cider.
Fancy a McTrademark?
The reputation of McDonald’s trademarks makes it possible for the company to prevent the registration of trademarks combining the prefix “Mac” or “Mc” with the name of a foodstuff or beverage. That is the decision of the EU’s General Court in Case T-518/13, Future Enterprises v EUIPO. In 2008, the company Future Enterprises of Singapore, applied to register the EU trademark MacCoffee for foodstuffs and beverages. The application was granted in 2010 by the European Union Intellectual Property Office (EUIPO — then known as OHIM). The American company McDonald’s sought to have the trademark declared invalid on the basis of its earlier EU trademark McDonald’s and 12 other trademarks, including McMuffin, McFlurry, Chicken McNuggets and Egg McMuffin.
Given the reputation of the McDonald’s trademark for restaurant services and the link that the public could establish between the contested marks, EUIPO granted McDonald’s application. Future Enterprises then asked the General Court to set aside that decision. However, in this judgment, the General Court dismisses the action brought by Future Enterprises and confirms the EUIPO decision. See the General Court of the EU for more details. An appeal, limited to points of law, may be brought before the CJEU against the General Court’s judgment.
New anti-counterfeiting tool
The European Commission has created an anti-counterfeiting tool which collates data relating to cases of intellectual property (IP) infringement affecting EU companies in countries outside the EU. The Anti-counterfeiting Rapid Intelligence System (ACRIS) is intended to serve as a single secure information point for both EU businesses and enforcement authorities. The free web-based application (which can be found at the ACRIS website) is intended to help EU businesses make informed decisions about their business strategies in third (non-EU) countries and mitigate the risk of future IP infringements.
Record company seeks jurisdiction ruling
A mistake made in drawing up a share purchase option agreement led to a fivefold increase in the sale price compared with the price originally intended, and that sale price then had to be multiplied by the number of shareholders. The resulting dispute between Universal Music, a record company established in the Netherlands, and the shareholders of the Czech record company B&M eventually reached the EU’s Court of Justice (CJEU). It was asked by the Supreme Court of the Netherlands to give guidance on the meaning of EC Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.
The CJEU has ruled that the loss of some assets happened in the Czech Republic since the damage occurred there. The mere fact that Universal Music paid the financial settlement by a transfer from a bank account it held in the Netherlands is not such as to invalidate that finding. Purely financial damage which materialises directly in the applicant’s bank account cannot, in itself, be qualified as a relevant connecting factor for the purpose of Regulation 44/2001, the Court concluded.
IT equipment to go duty-free
The EU has expanded duty-free treatment to a range of information technology (IT) products covered by the revised Information Technology Agreement (ITA). From 1 July, the EU action eliminates custom duties on over 200 IT products as required under the ITA revision agreed in December 2015. When it is fully implemented by all parties, the ITA will cover 54 countries which between them account for some 90% of global trade in IT products. Negotiated by 54 members of the World Trade Organization (WTO), the ITA extension is the first major tariff-cutting deal at the WTO in nearly 20 years. All 161 WTO members will benefit from the agreement, as they will all enjoy duty-free market access in the markets of those members who are eliminating tariffs on the products concerned.
Estimated to be worth €1 trillion, the deal will, it is claimed, benefit both businesses and consumers by removing customs duties on a wide range of goods, including new-generation semiconductors, GPS navigation systems, medical products, machine tools for manufacturing printed circuits, telecommunications satellites and touch screens. See the WTO website for more details of the ITA.
EU ready to confirm Canada trade deal
The most ambitious trade deal ever concluded by the EU has moved a step closer after the European Commission formally proposed that an agreement with Canada should be signed. The Comprehensive Economic and Trade Agreement (CETA) will remove the majority of customs duties so that EU firms will potentially save hundreds of millions of euros each year in duty payments. The agreement will also introduce mutual recognition of conformity assessment certificates for a wide range of products from electrical goods to toys. To obtain a certificate valid for Canada, EU firms will therefore have to get products tested only once — in Europe.
There will be a boost to trade in services, with new opportunities available for EU companies working in a range of sectors including maritime services, telecommunications, engineering, environmental services and accountancy. EU companies will also be able to bid for public contracts in Canada at all levels of government. Canadian authorities will publish all relevant calls for tender on a single website, making it easier for EU firms to identify opportunities. More information is available on the Commission trade website.
EU-Korea FTA hailed a success
A European Commission report published to mark the five-year anniversary of the EU-Korea Free Trade Agreement (FTA) shows that exports from the EU to Southeast Asian country have increased by 55% since 2011. The bilateral trade in goods was worth over €90 billion in 2015. Although the agreement between the EU and South Korea only came formally into force in December 2015, it had been provisionally applied since July 2011. It is the EU’s first trade deal with an Asian country.
Despite the fact that they can benefit from preferential treatment, the Commission report shows that about a third of EU companies exporting to South Korea do not ask for the lower customs duties and other benefits to which they are entitled. The Commission therefore wants national authorities to play a greater role in informing companies about the benefits of this and other EU trade deals.
EFTA trade developments
Given the UK interest in Switzerland’s position as a member of the European Free Trade Association (EFTA) trading with the EU, it is worth noting that EFTA has just signed a trade deal with Georgia. The Free Trade Agreement (FTA) is intended to further strengthen the economic ties and promote trade and investment between the two sides. Trade in goods between the EFTA States and Georgia increased at an average annual rate of 19% between 2005 and 2015. Last year, it was valued at US$53.3 million, of which US$49.4 million were EFTA exports to Georgia.
EFTA (which comprises Iceland, Liechtenstein, Norway and Switzerland) now has 27 FTAs with a total of 38 partners outside the EU. It has another trade deal in the offing, with the launch of negotiations between the Association and Ecuador. Over the last 10 years, trade in goods between the EFTA States and Ecuador has increased at an average annual rate of 10%. In 2015, EFTA States’ exports to Ecuador totalled US$125 million while it brought in US$163 million worth of imports.
Upgrade for EU-Mexico trade
Mexico was one of the first countries with which the European Communities established diplomatic relations over 50 years ago. Talks have now started to establish a new trade and investment regime between the EU and Mexico, aiming not only to modernise the existing deal but also to broaden its scope, to reflect similar agreements that both sides have since negotiated with other partners. Trade relations between the EU and Mexico are currently subject to the provisions of a Free Trade Agreement (FTA) adopted under a wide-ranging Economic Partnership, Political Co-ordination and Co-operation Agreement signed in 1997.
It is anticipated that a new deal will further reduce customs tariffs and provide EU businesses with more opportunities to provide services, participate in public procurement and invest in Mexico. Speaking at the launch of the negotiations, Trade Commissioner Cecilia Malmström described them as a new page in the history of EU-Mexico relations. For more information about EU-Mexico trade, see the EC Trade website.
More countries taking action against EU exports
Companies trying to export from the EU’s Member States are facing difficulties as trade defence actions taken by non-EU countries are increasing, and the resulting cases are becoming more complex. This is the main conclusion of the European Commission’s 13th annual report on trade defence actions which highlights that some persistent problems remain, despite the EU achieving positive results in a number of areas. The report can be accessed at the EC Trade website together with fact sheets on a number of the countries taking action against EU exports, including Canada, Israel, Turkey, India and South Africa.
EU agrees to curb trade in conflict minerals
Companies should be sourcing tin, tantalum, tungsten and gold responsibly, the EU has insisted, pointing out that armed groups are still being financed through trade in these “conflict minerals” which are typically used in everyday products such as mobile phones, cars and jewellery. Lilianne Ploumen, the Minister for Foreign Trade and Development Co-operation of the Netherlands, speaking for the Union’s Council of Ministers, said: “The EU is committed to preventing international trade in minerals from financing warlords, criminals and human rights abusers.”
She confirmed that a political understanding had been reached with the European Parliament on a framework for an EU regulation to stop profits from trading minerals being used to fund armed conflicts. The vast majority of metals and minerals imported to the EU will be covered, although small volume importers will be exempted from these obligations.
Protectionism gaining ground
Since the economic crisis started, just 31 countries have between them adopted more than 1000 trade-restrictive measures. That is the worrying finding of the European Commission’s Report on Trade and Investment Barriers and Protectionist Trends. The analysis finds that there is still a strong tendency to restrict trade, with the 31 countries covered by the report adopting 200 new protectionist measures between 1 July 2014 and 31 December 2015. The most common trade restrictions are product bans, import or export duties and licences. Other measures include specific provisions on trade in services, investment and access to foreign public contracts. Among the goods most affected by restrictive measures are raw materials, energy products and information and communication technologies (ICT) products.
Examples of trade barriers cited in the report include: measures introduced by China to limit access to public procurement and foreign direct investment, on the grounds of national security; and an increase of duties on several products in India, including on ICT — which is formally bound to be duty-free under the existing Information Technology Agreement.
Brakes deal cruises on after green light
The UK’s largest food distributor, Brakes, is a step nearer to being taken over by USA firm Sysco following approval of the deal by the European Commission. The Commission has cleared the move under the EU Merger Regulation after finding that the takeover would not adversely affect competition in Europe. Sysco is the biggest food distributor in the USA. The company’s activities in the European Economic Area (EEA) are mainly carried out through its Pallas subsidiary, which is active in the Ireland and Northern Ireland. Brakes mainly operate in the UK, France and Sweden, but also sells in Ireland.
Heavy fine for participation in steel abrasives cartel
The European Commission has found that Italian abrasives producer Pometon SpA breached EU antitrust rules by participating in a cartel to co-ordinate steel abrasives prices in Europe for almost four years. The Commission has imposed a fine of €6.197 million. The cartel concerned steel abrasives, which are loose steel particles used for cleaning or enhancing metal surfaces in the steel, automotive, metallurgy and petrochemical industries. They are also used for cutting hard stones such as granite and marble.
Changes to card payment rules
The Interchange Fee Regulation is now fully in force across the EU, with both retailers and consumers set to be better informed about the costs of debit and credit card payments. The new rules have introduced caps on interchange fees for consumer debit and credit cards. Banks must specify to a retailer the fee for each transaction, unless the retailer explicitly requests a single “blended” fee for card transactions using different brands. Retailers must display details of all the cards they accept in a clear format online, at the entrance to a physical shop and at the shop’s till.
EU Court rules on cross-border invoices
The EU’s Court of Justice (CJEU) has been asked to rule in a case which centred on the language that could be used to produce an invoice where the supplier was based in one Member State and the purchaser in another. In the case at issue, Global Pharmacies Partner Health (GPPH), a company established in Italy, had sent invoices (with all the standard details and general conditions worded in Italian) to New Valmar, a company established in the Dutch-speaking region of Belgium. The latter rejected the documents, citing Flemish legislation which requires undertakings established in the region in question to use Dutch to draw up acts and documents required by law. It still did so when GPPH offered a copy translated into Dutch.
Having heard the arguments, the CJEU has stated that the Flemish language legislation constitutes a restriction on the free movement of goods within the EU and cannot be imposed on a cross-border basis. “In depriving the traders concerned of the possibility of choosing freely a language they are both able to understand for the drawing up of their invoices and in imposing on them a language which does not necessarily correspond to the one they agreed to use in their contractual relations,” the Court has ruled, “that legislation is likely to increase the risk of disputes and non-payment of invoices.” The CJEU argued that the recipients of those invoices could be encouraged to rely on their actual or alleged inability to understand the invoices’ content in order to refuse to pay them. The full text of the judgment can be found at the InfoCuria website.
EU moves to boost e-commerce
New proposals from the European Commission aim to boost e-commerce in Europe by tackling three key barriers to trade: geo-blocking, cross-border parcel delivery and consumer protection. The package of legislative proposals comprises three draft regulations: a proposal addressing geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment within the internal market; a proposal on cross-border parcel delivery services; and a proposal on co-operation between national consumer protection authorities (a revision of Regulation 2006/2004 on consumer protection co-operation (the CPC Regulation) which it will repeal). According to the Commissioner for the Digital Single Market, Andrus Ansip, the package aims to solve the problems that are preventing consumers and businesses from fully enjoying the opportunities of buying and selling products and services online.
New EU rules to promote high-quality audits
New EU statutory audit rules have recently become applicable, aiming to boost confidence in the financial sector. These rules consist of an amended directive setting out the framework for all statutory audits and a regulation setting out specific requirements for statutory audits of Public Interest Entities (PIEs), such as listed companies, banks and insurance undertakings. Auditors will now have a strong mandate to be independent and to exert professional scepticism regarding the management of the audited company, the European Commission said. For example, in the case of PIEs, auditors will rotate on a regular basis and will no longer be allowed to provide certain non-audit services to their audit clients. In addition, the new rules will help foster diversity and drive innovation in audit and non-audit markets via the new rotation system combined with the restriction to provide certain non-audit services to PIEs. See the European Commission website for full details.
Headscarf ban could be lawful
The CJEU has been advised that a ban on wearing headscarves in the workplace could be lawful. Giving her opinion in Case C-157/15, Advocate General Kokott advised that such a ban may be justified if it enables the employer to pursue the legitimate policy of ensuring religious and ideological neutrality. The case concerns Samira Achbita, who is of Muslim faith. Ms Achbita worked as a receptionist for the Belgian company G4S Secure Solutions, which prohibits the wearing of any visible religious, political or philosophical symbols. When Ms Achbita insisted on wearing an Islamic headscarf at work, G4S dismissed her. Her case for damages went to the Belgian Court of Cassation, which asked the CJEU to clarify the position under EU law on discrimination on the grounds of religion or belief.
In her opinion, Advocate General Kokott argues that there is no direct discrimination on the ground of religion where an employee of Muslim faith is banned from wearing an Islamic headscarf in the workplace, provided that the ban is founded on general company policy and not on stereotypes or prejudices against one or more particular religions or against religious beliefs in general. The CJEU — which is not bound by the Advocate General’s Opinion — will give its judgment at a later date.
Can Rubik’s Cube shape be trademarked?
Seven Towns, a UK company which manages intellectual property rights relating to the Rubik’s Cube, registered with the EU Intellectual Property Office (EUIPO), in 1999, the shape of that cube as a three-dimensional Community trademark. German company Simba Toys challenged that registration on the ground that it involves a technical solution consisting of a rotating capability, whereas such a solution may be protected only by patent and not as a trademark. Its arguments failed in the EU’s General Court and the company then appealed to the CJEU. Giving an advance opinion on the merits of the case, before the Court delivers its final ruling later this year, Advocate General Maciej Szpunar has proposed that the CJEU should set aside the judgment of the General Court and annul the decision of EUIPO.
Jurisdiction in civil and commercial matters
A judgment from the Court of Justice has clarified the law on legal jurisdiction. In a case involving the record companies Universal Music (established in the Netherlands) and B&M (of the Czech Republic), the Court has ruled that the occurrence of purely financial damage in a Member State does not in itself justify the jurisdiction of the courts of that State. Universal Music had brought proceedings against B&M’s Czech lawyers before the Dutch courts, claiming that it suffered financial loss in a dispute between the two parties. The action was based on EC Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. The Supreme Court of the Netherlands asked the CJEU to interpret the regulation, specifically with regard to whether the Netherlands can be treated as the “place where the harmful event occurred” within its meaning — which would mean that the courts of the Netherlands have jurisdiction.
Setting the standard
Standardisation across the EU is a key part of the Single Market and the European Commission has recognised the need to stay ahead of the game in this area by putting forward a new vision on how European standard setting should evolve in the light of technological developments, political priorities and global trends. “From the A4 paper size to GSM technology,” the Commission points out, “standards reduce costs, promote innovation, ensure interoperability between different devices and services, and help companies to access markets.” A detailed fact sheet, available at the European Commission website, sets out the steps proposed to modernise the EU’s standardisation policy. Although they are often seen as merely technical issue, the document stresses that standards are in fact important economic drivers and that a single and coherent EU standardisation policy is needed. Despite its decision to leave the Union, the UK will be interested to note that services — one of this country’s success stories — will feature strongly in the new proposals given that, while services account for 70% of the EU economy, only around 2% of all European standards currently concern services.
Approval for UK broadband plans
The European Commission has decided that the UK National Broadband Scheme for 2016–2020 complies with EU State aid rules. The Scheme aims to increase coverage of high-speed broadband to homes and businesses in the UK through Next Generation Access (NGA) networks operating at speeds above 30 megabit per second (Mbps). The Scheme will run until the end of 2020.
Anti-tax Avoidance Package
The European Commission has welcomed agreement by the EU’s Member States on their general approach for new rules to eliminate the most common corporate tax avoidance practices. First proposed by the Commission in January, these legally-binding rules have been agreed to spur global efforts to clamp down on aggressive tax planning. They are, the Commission said, particularly timely given the recent Panama Papers revelations. Once implemented, this legislation will put an end to the most common loopholes and aggressive tax planning schemes currently used by some large companies to avoid paying their fair share of tax. For example, all Member States will now have the power to tax profits being moved to low-tax countries where the company does not have any genuine economic activity (CFC rules). Previously untaxed gains on assets such as intellectual property which have been moved from the EU’s territory can also be taxed (exit taxation rules), while countries have also been empowered to tackle tax avoidance schemes that are not covered by specific anti-avoidance rules (general anti-abuse rule). A detailed Commission memo on the package can be found at the European Commission website.
EU prepares to cut roaming charges
The European Commission has adopted a proposal to set maximum wholesale roaming charges at €0.04/min, €0.01/SMS (texts) and €0.0085/MB (data) in the EU. It sees this as a vital step to prepare the end of roaming charges for consumers set for 15 June 2017. Commissioner for the Digital Single Market Andrus Ansip said: “In a year from now, we’ll say goodbye to roaming charges. Our ambition is to abolish unjustified geo-blocking on the same occasion. We also want the cross-border portability of content to be a reality in 2017 so that Europeans can travel with their films, music, sports broadcasts, e-books across the EU.” Further details, including the text of the Commission proposal, can be found at the Digital Single Market website.
EU trade talks with Mexico
A new trade and investment regime is being negotiated by the EU and Mexico. Trade relations between the two are subject to the provisions of a Free Trade Agreement adopted under an Economic Partnership, Political Co-ordination and Co-operation Agreement dating back to 1997. The negotiations are expected to result in further reductions of customs tariffs and to provide EU businesses with more opportunities to provide services, participate in public procurement and invest in Mexico. Speaking at the launch of the negotiations, Trade Commissioner Cecilia Malmström described them as “a new page in the history of EU-Mexico relations”. See the EC Trade website for more details).
EU trade deal with southern Africa
The EU has signed an Economic Partnership Agreement (EPA) with six countries in southern Africa: Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland. All 6 are members of the 15-strong Southern African Development Community (SADC). The EPA guarantees the six states duty-free, quota-free access to the European market and will enable southern African producers to assemble products from components from various countries, without the risk of losing free access to the EU market. Southern African markets will gradually and partially open up to EU exports, which currently consist mostly of engineering, automotive and chemical products. Import duties on many “intermediary goods” (such as industrial parts, seeds and machinery) will be significantly reduced for southern African businesses. Before it can enter into force, the EPA must be approved by the European Parliament and ratified by all 28 EU Member States and the 6 African signatories.
Philippines next in line for an EU trade deal
Hoping to expand on the Partnership and Co-operation Agreement signed in 2012, the European Commission has entered into negotiations for an EU-Philippines Free Trade Agreement (FTA). The aim is to conclude an agreement that covers a broad range of issues, including tariffs, non-tariff barriers to trade, trade in services and investment, as well as trade aspects of public procurement, intellectual property, competition and sustainable development. The fifth largest economy in the region, the Philippines is 1 of the 10 members of the Association of Southeast Asian Nations (ASEAN). When completed, the ASEAN Economic Community will constitute the third largest market in the world, with over 600 million potential consumers.
Ensuring better access for EU exporters to the dynamic ASEAN market is accordingly a priority for the Commission. It first attempted to set up a direct agreement between the EU and ASEAN but, in 2009, after two years of talks, it decided instead to pursue agreements with the individual members. Talks with Singapore and Vietnam were successfully concluded in 2014 and 2015 respectively, and the Commission has now added the Philippines to Malaysia and Thailand, the other ASEAN members with which it is currently carrying out trade discussions.
More countries taking action against EU exports
Companies trying to export from the EU’s Member States are facing increasing difficulties as trade defence actions taken by non-EU countries are increasing, and the resulting cases are becoming more complex. This is the main conclusion of the European Commission’s 13th annual report on trade defence actions which highlights that some persistent problems remain, despite the EU achieving positive results in a number of areas. The report can be accessed at the EC Trade website together with fact sheets on a number of the countries taking action against EU exports, including Canada, Israel, Turkey, India and South Africa.
Most of the trade defence measures against the EU in 2015 concerned anti-dumping, although there were also some safeguard measures. The number of measures in force at the end of the year was 151, compared to 140 at the end of 2014. In 2015, 37 new measures were imposed against the Union, mainly by India, China, the USA and Brazil. Steel was the sector most affected, with 19 new investigations in 2015, followed by the chemical sector with seven. The EU applies high standards in its own investigations and expects its trading partners to do the same. World Trade Organization (WTO) members have the right to make use of trade defence instruments (TDIs) but the Commission stresses that they must be properly used and not as protectionist measures.
Banks must be able to bail themselves out
The European Commission has put forward a draft regulation specifying the criteria that authorities responsible for resolving banks will need to consider when setting the minimum requirements for the purpose of loss absorption and recapitalisation of banks in the event of another financial crisis. Jonathan Hill, EU Commissioner for Financial Stability, Financial Services and Capital Markets Union, said: “It is important that banks hold enough regulatory capital and high-quality liabilities to absorb potential losses in case they have to be resolved. Today’s implementing rules help ensure that. It matters because we need a well-functioning system where it’s the banks’ creditors, rather than tax payers, who pay for problems in banks.”
Acquisition of O2 blocked
The European Commission decided to block the proposed acquisition of O2 by Hutchison UK, a move that would have created a new market leader with 40% market share. The Commission’s main concern is that the merger would lead to higher prices for consumers across all mobile providers and would significantly reduce competition. The Commission assesses mergers and acquisitions involving companies with turnover above certain thresholds to prevent concentrations that will significantly impede effective competition and ultimately lead to higher prices, less innovation and reduced consumer choice.
In the case of O2/Hutchison, the merger would have left only two alternative mobile networks — Vodafone and EE — and significantly reduced the incentive for all three of them to compete for customers. More importantly, the merger would have disrupted existing arrangements for network sharing, thus affecting the entire UK mobile infrastructure and the roll-out of 5G technology. Currently, EE and Three share the cost of rolling out their networks while competing for customers. Similar agreements exist between Vodafone and O2. The merged entity would have been present in both partnerships, giving it a full overview of the plans of the other two competitors. See the European Commission website for more details of the decision.
Danger in the playroom
Toys and clothing have again topped the list of unsafe consumer goods found on the European market, according to the European Commission’s Rapid Alert System for dangerous non-food products (RAPEX — see the EC Consumers website). There were 2072 alerts and 2745 follow-up actions registered in the system last year, with toys (27%) and clothing, textiles and fashion items (17%) being the main product categories requiring action by consumer protection authorities. These were also the two most notified categories in 2014. The most frequently notified risk in 2015 was for chemicals (25%), with concerns relating particularly to products such as fashion jewellery (containing heavy metals such as nickel and lead) and toys (phthalates).
The European Commissioner for Justice, Consumers and Gender Equality, Věra Jourová, highlighted two main challenges for consumer protection authorities: the role of online shopping in allowing unsafe products directly into consumer’s homes, and the high proportion (62%) of notified dangerous products originating in China. Commissioner Jourovà will visit China in June to discuss product safety with her Chinese counterparts.
Call for mandatory country of origin labelling
Mandatory country of origin labelling would help improve consumer confidence in food products by making the food supply chain more transparent, Members of the European Parliament (MEPs) have told the European Commission. Labels stating the country of origin or place of provenance should be made mandatory for all kinds of drinking milk, dairy products and meat products, MEPs said, adding that the Commission and Member States should also consider extending it to other single-ingredient foods, or those with one main ingredient. “To better inform EU consumers, in the wake of the horse meat scandal and other food fraud cases, and improve transparency throughout the food chain, country of origin labelling should also be made mandatory for meat in processed foods,” the MEPs said.
They point to huge backing for their arguments with official EU polls showing 84% support for showing the origin of milk and more than 90% agreeing that such labelling is important for processed foods. However, the European Parliament has voted on this matter on several previous occasions and so far the Commission has yet to make any such proposals, citing the costs to industry and predicting that consumers would not be willing to put up with resultant higher prices.
CO2 emissions from new vans
The fuel efficiency of new vans registered in the EU increased slightly in 2015 compared to the previous year. Average emissions of carbon dioxide (CO2) fell by less than 1g of CO2 per kilometre, according to preliminary data published by the European Environment Agency. This is the smallest annual reduction since monitoring of emissions from new light commercial vehicles started in 2012. The average van registered in 2015 emitted 168.2g CO2/km which is 0.9g less than in 2014. While the reported annual reduction is small, emissions are nevertheless well below the EU’s 2017 target of 175g CO2/km. This target had already been met in 2013. Further efficiency improvements still need to be achieved to reach the EU’s more stringent target of 147g CO2/km set for 2020. Three out of five new vans registered in the EU were sold in just three Member States: the UK (24%), France (21%) and Germany (15%).
Challenges to the legality of the 2014 Tobacco Products Directive have been rejected by the EU’s Court of Justice (CJEU). Directive 2014/40/EU concerning the manufacture, presentation and sale of tobacco and related products includes provisions on packaging, menthol cigarettes and electronic cigarettes. An action to annul the prohibition of tobacco products with a characterising flavour (specifically menthol) was brought by Poland. That action was rejected by the CJEU, which argues that menthol makes tobacco products more attractive to consumers.
Two requests for clarification of other provisions in the directive were made by the High Court of England and Wales. One case concerned special rules for electronic cigarettes — including a duty on manufacturers and importers to submit a notification to the national authorities for any product which they wish to place on the market. The CJEU found that those requirements are less strict than the rules on tobacco products, and that the legislation does not infringe the principle of equal treatment or go beyond the limits of what is appropriate and necessary. In the other case, the CJEU found that requirements on the standardisation of the labelling and packaging of tobacco products are proportionate and do not go beyond the limits of what is appropriate and necessary to achieve the Directive’s aim of protecting human health (see CJEU press release for more details).
Key changes for tobacco products sold in the EU
With the above cases decided in the European Commission’s favour, new restrictions on the sale of cigarettes and other tobacco products came into force through the revised EU Tobacco Products Directive (2014/40/EU) on 20 May 2016. These include:
larger and mandatory pictorial health warnings
a ban on cigarettes with flavours such as menthol, vanilla or candy that mask the taste and smell of tobacco
the tar, nicotine and carbon monoxide (TNCO) labelling on cigarettes and roll-your-own (RYO) tobacco must be replaced with an information message informing consumers that “Tobacco smoke contains over 70 substances known to cause cancer”
slim packs, other irregular shaped packs and packs containing fewer than 20 cigarettes are banned
health warnings for e-cigarettes become mandatory advising consumers that e-cigarettes contain nicotine.
Health and safety
The European Commission has proposed changes to the Carcinogens and Mutagens Directive (Directive 2004/37/EC). Available at the European Commission website, the proposals aim to improve protection for workers by limiting exposure to 13 cancer-causing chemicals in the workplace. New or amended limit values will be incorporated into the Directive, setting maximum concentrations for the presence of the carcinogens in the air at places of work. Among the 13 carcinogens concerned are respirable crystalline silica (RCS), chromium (VI) compounds, hardwood dust, and hydrazine. For some others, there are indications that use patterns may be lower, but those chemicals are considered a priority as the ratio between the number of exposed workers and cancer cases is high.
Global value chains
EU Ministers have adopted a statement on responsible global value chains (GVCs). The Council’s Conclusions set out how the EU can have a positive impact on sustainable development by promoting the responsible management of GVCs, making them sustainable and inclusive. That is in line with the EU objective of ensuring that inclusive economic growth is developed alongside social justice and respect for human rights, including core labour standards and sustainable environmental practices. The Council highlighted the importance of engaging with the private sector on these issues.
It wants the European Commission and the Member States to make sure that policies not only contribute to supporting sustainability in GVCs, but also promote corporate social responsibility (CSR) principles. The Conclusions also welcomed the systematic inclusion of trade and sustainable development provisions in all EU trade agreements, committing parties to respecting core labour standards and key multilateral environmental agreements.
The business of human rights
The issue of human rights and business was the focus of a recent conference organised by The Netherlands EU Presidency. Delegates were told that, five years after the UN Human Rights Council endorsed the UN Guiding Principles on Business and Human Rights, business-related human rights abuse remains a serious problem. Because of the large numbers of European companies involved in global value chains (GVCs), the EU has a specific responsibility in this area. The conference called for an ambitious follow-up to the European Commission’s 2011–2014 Communication on Corporate Social Responsibility.
Task force on illegal immigrant smuggling
Judicial and law enforcement professionals from France, the UK, Belgium and the Netherlands, together with specialists from Europol, recently met at the judicial co-operation body Eurojust to discuss illegal immigrant smuggling in the North Sea region. Having examined emerging trends and new threats in the field, and explored the possibilities of more efficient co-operation and information sharing in related cases, the parties agreed to improve information-sharing between the competent national law enforcement and judicial authorities, as well as with Europol, Frontex and the relevant administrative and port authorities.
In 2015, over 1 million migrants entered the EU; 90% of those entries were facilitated by smugglers. The profits generated by illegal immigrant smuggling activities is estimated by Europol to be between €3 and €6 billion in 2015. In this context, a new task force will meet regularly at the Court of Lille with the aim of enhancing practical co-operation in cross-border investigations and prosecutions to ensure an effective collective response to the growing problem of illegal immigrant smuggling.
Commission clarifies scope of the rules
To help public authorities and companies to identify when public support measures can be granted without needing approval under EU State aid rules, the Commission has published guidance on when public spending falls within, and outside, the scope of EU State aid controls. Available at the European Commission, the “Notion of Aid” Notice is the last part of the Commission’s State Aid Modernisation initiative, launched in 2012. It is hoped that the Notice will facilitate public investment in the EU by helping Member States and companies to design public funding in ways which do not distort competition. It gives clear guidance on when public investments do not involve State aid, notably because they do not risk distorting the level playing field in the Single Market or risk crowding out private investment.
Example: A Member State builds an airport with public money. The investment complies with the Commission’s Guidelines on State aid to airports and airlines (see the Official Journal of the European Union website). The airport manager is chosen through a competitive selection procedure to select the most economically advantageous offer. In this situation, the operator of the airport does not receive any State aid.
Example: As part of its cultural policy, a Member State wants all citizens to have affordable access to art, theatre and classical music. Some museums, theatres and opera houses therefore sell entry tickets at low prices and do not earn enough money to cover their costs. The State provides funding to those cultural institutions to balance their finances. In this situation, the public support is not subject to State aid control.
Staying safe in cyber space
The security of network and information systems is set to improve across the EU following a decision by the Council of Ministers. Under the Network and Information Security (NIS) Directive, national authorities will increase co-operation on cybersecurity. Security obligations will be introduced for operators of essential services (such as energy, transport, health and finance) and for digital service providers (online marketplaces, search engines and cloud services). The adoption of a draft text by Ministers in the Council paves the way for final approval by the European Parliament.
The internet and tourism
The internet has had a significant impact on the tourism sector, according to new data published by the European Commission’s statistical body Eurostat. Statistics on the use of information and communication technologies (ICT) in tourism show that tourists from the EU booked more than two-thirds of air trips and more than half of train trips and accommodation online in 2014. Tourism businesses in the accommodation sector appear to be more advanced in using ICT than those in other sectors, with 74% of them offering online ordering last year compared to just 17% of all enterprises. In 2015, 95% of all EU enterprises in the accommodation sector had a website, compared to 75% of businesses with 10 or more staff in the wider economy.
The impact of TTIP
A draft Trade Sustainability Impact Assessment of the proposed Transatlantic Trade and Investment Partnership (TTIP) has been published by the consultants Ecorys. The report examines how trade and trade-related provisions under negotiation could affect economic, social and environmental issues in the EU and the USA. The report (found at the Ecorys website), highlights the opportunities that TTIP could create for people and businesses across Europe. It suggests that the economies of all EU Member States would grow as a result of the new trade agreement and predicts that EU exports to the USA would rise by 27%. Although warning that the report “should be taken with a pinch of salt”, EU Trade Commissioner Cecilia Malmström said that it did highlight the many opportunities that TTIP presents for the EU.
Making trade defence procedures more transparent
The European Commission has taken steps to increase transparency in its trade defence procedures and to facilitate communication with interested parties. Following the initiation last month of trade defence cases on hot-rolled steel and paper from China, it published an “executive summary” containing substantial additional information on the request to carry out an investigation. The Commission will in future publish such summaries with regard to any requests for new investigation or for a review of existing anti-dumping or anti-subsidy measures in order to improve access to information on trade defence cases.
Trade Commissioner Cecilia Malmström said: “I’m committed to making trade policy more transparent across-the-board, including for trade defence. With the ongoing steel crisis, we need more engagement between the Commission’s trade defence services and everyone concerned, including small businesses who struggle with unfair imports. With these new tools to improve two-way communication, we hope for more contributions to help us better address the industry’s legitimate concerns.”
MEPs say no to China
Members of the European Parliament (MEPs) have voted against a measure which would have allowed China “market economy status” (MES) in its trade dealings with the EU. China believes that its membership of the World Trade Organization (WTO) means that it should automatically be granted MES but, if its request was granted, it would make it much harder for the EU to protect itself against cheap Chinese exports. MEPs were agreed that China must meet the EU’s criteria if it is to be judged as a market economy (in potential anti-dumping cases) and not one where the government supports exports at artificially low prices. China’s excess production capacity and the resulting cut-price exports are already having “strong social, economic and environmental consequences in the EU”, MEPs said, pointing in particular to the EU steel sector.
There have been two recent developments in EU trade in organic products. In the first, the scope of the EU-Canada Organic Equivalence Arrangement (EUCOEA) has been extended. Organic wine is now included within the agreement, allowing wine certified to EU or Canada organic standards to be sold and labelled as such in both markets. Although EUCOEA has been successfully implemented for five years, the import of organic products from Canada into the EU was limited to products grown or processed entirely in Canada. The new agreement will allow imports into the EU of Canadian organic processed products certified to Canadian organic standards to contain organic ingredients from third countries. The decision follows a thorough assessment of the equivalence of EU and Canada organic wine production standards and import control systems.
In the second development, negotiations between the EU and Chile on trade in organic products have reached a successful conclusion. Under the deal, the EU and Chile will mutually recognise the equivalence of their organic production rules and control systems and ensure a high level of respect for the principle of organic production. Although the EU currently has a food trade deficit with Chile, it is anticipated that the new deal will see an increase in EU organic exports to Chile.
European Cloud Initiative
A blueprint for cloud-based services and world-class data infrastructure has been published by the Commission with the aim of ensuring that science, business and public services reap the benefits of the big data revolution. According to the Commission, Europe is the largest producer of scientific data in the world, but insufficient and fragmented infrastructure means this “big data” is not being exploited to its full potential. By bolstering and interconnecting existing research infrastructure, the Commission plans to create a new European Open Science Cloud that will offer Europe’s 1.7 million researchers and 70 million science and technology professionals a virtual environment to store, share and reuse their data across disciplines and borders.
This will be underpinned by the European Data Infrastructure, deploying the high-bandwidth networks, large-scale storage facilities and supercomputer capacity necessary to effectively access and process large datasets stored in the cloud. This world-class infrastructure will ensure Europe participates in the global race for high-performance computing in line with its economic and knowledge potential. Focusing initially on the scientific community — in Europe and among its global partners — the user base will over time be enlarged to the public sector and to industry. This initiative is part of a package of measures to strengthen Europe’s position in data-driven innovation, to improve competitiveness and cohesion, and to help create a Digital Single Market in Europe. A Commission Fact Sheet gives more details of the initiatives and links to the original documents found at the European Commission website.
Steel industry summit
In the context of the current crisis facing the steel industry, the Organisation for Economic Co-operation and Development (OECD) held a high level symposium on excess capacity in the steel sector. Among the speakers was EU Trade Commissioner Cecilia Malmström, who set out her thoughts on how to tackle the crisis. Commissioner Malmström said that governments should not grant subsidies to keep economically unviable plants or companies running. Where governments do make subsidies available, they must meet their World Trade Organization (WTO) obligations and notify them to other WTO members. The Commissioner also called for governments to promote a market-driven restructuring of their steel industries (see the EC Trade website ).
Huge fine for canned mushrooms cartel
Having found that Spanish canned and fresh vegetable company Riberebro participated in a cartel to co-ordinate prices and allocate customers of canned mushrooms in Europe for more than a year, the Commission has imposed a fine of over €5 million on the company. Commissioner Margrethe Vestager, in charge of competition policy, said: “Access to food at competitive prices is essential for European consumers. The cartel for canned mushrooms affected sales to retailers throughout Europe. Today’s decision once again shows the Commission’s determination to sanction cartels and impose fines on all cartel participants.” The punishment would have been even harsher had Riberebro not received a reduction of 50% in its fine for co-operating with the investigation.
Commission fires a shot across Google’s bows
The Commission has informed Google of its preliminary view that the company has, in breach of EU antitrust rules, abused its dominant position by imposing restrictions on Android device manufacturers and mobile network operators. These practices mean that Google Search is pre-installed and set as the default, or exclusive, search service on most Android devices sold in Europe. This appears to close off ways for rival search engines to access the market, through competing mobile browsers and operating systems. In addition, Google’s actions seem to harm consumers by stifling competition and restricting innovation in “the wider mobile space”. A detailed Commission Memo on the case can be found at Europa.eu. This makes clear that nothing at this stage prejudges the outcome of the investigation, as the Commission takes a final decision only after the parties have exercised their rights of defence.
Commitments offered in pay-TV investigation
Comments are invited from interested parties on commitments offered by Paramount Pictures to address EU competition concerns relating to contractual clauses preventing the cross-border provision of pay-TV services. The Commission has concerns relating to contractual clauses in certain bilateral agreements between six major film studios, including Paramount Pictures, and Sky UK under which the studios license their output of films over a certain period of time for pay-TV to Sky UK. These clauses appear to prevent Sky UK from allowing EU consumers located elsewhere to access, through satellite or online, pay-TV services available in the UK and Ireland. Details of the case can be found at Europa.eu, and the Commission is now examining commitments offered by Paramount Pictures to address the competition concerns. If a company breaks such commitments, the Commission can impose a fine of up to 10% of the company’s worldwide turnover.
EU continues slow recovery
The latest quarterly review of the employment and social situation in the EU shows that the economy is continuing the slow recovery it started nearly three years ago. Although economic activity has increased in most Member States, the recovery remains uneven, with some countries seeing declines in the last quarter of 2015. During those 3 months, real gross domestic product (GDP) increased by 0.4% in the EU itself and 0.3% in the eurozone. Poland saw GDP grow by 1.1%, with Spain seeing 0.8% and the UK 0.6%.
Compiled by the European Commission, the review (available here) also shows the employment rate gradually rising, with permanent and full-time jobs continuing to grow, albeit more slowly than in 2014. Although unemployment has continued to fall, there were nearly five million more people unemployed in February 2016 than in March 2008. Looking ahead, the Commission anticipates a moderate outlook for growth during the rest of this year.
The European Parliament, the Council of the European Union and the European Commission have adopted a new interinstitutional agreement on better law-making. Although it sounds somewhat esoteric, the agreement (available at Europa.eu) is an important component of the EU legislative process. It recognises the joint responsibility of the three institutions for ensuring that legislation is as simple and as clear as possible, does not impose unnecessary administrative burdens on businesses (especially small and medium-sized enterprises (SMEs) and strengthens the competitiveness and sustainability of the EU economy.
The agreement commits the three institutions to legislate only where, and to the extent, necessary. In that context, they call on national governments to ensure that, when EU directives are transposed into national law, any additional elements added by Member States (so-called gold plating) should be easy to identify. The agreement also states that the time limit for transposition of directives will be as short as possible (usually no longer than two years).
Playboy, hyperlinks and copyright
The Court of Justice of the European Union (CJEU) has been advised that linking to a website which published photos without authorisation is not in itself an infringement of copyright. Under Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society, each act of communication of a work to the public has to be authorised by the copyright holder. However, giving his Opinion in a case involving Playboy magazine and the Dutch internet site GeenStijl, Advocate General Wathelet has argued that neither the motivation of someone placing a hyperlink nor the fact that they knew that photos placed on a website were not authorised, are relevant.
The Advocate General considers that, if internet users risk liability for copyright infringement every time they place a hyperlink to works which are freely accessible on another internet site, they would be much more hesitant to post those links. That would, in his view, have a negative impact on both the proper functioning of the internet and the development of the information society. The Advocate General’s Opinion is not binding on the CJEU, which will announce its judgment at a later date. See the CJEU press release for more details.
The 2016 EU Justice Scoreboard
The 2016 EU Justice Scoreboard gives a comparative overview of the efficiency, quality and independence of justice systems in the EU Member States. The aim of the Scoreboard is to assist national authorities in their efforts to improve their justice systems, by providing this comparative data. For the first time, the Justice Scoreboard also includes the results of Eurobarometer surveys conducted to examine the perception of judicial independence in the EU among citizens and businesses in more detail. This edition of the Scoreboard uses new indicators, in particular on the judicial training, the use of surveys, the availability of legal aid and the existence of quality standards.
The Scoreboard reveals better accessibility to justice systems, in particular, in matters such as electronic submission of small claims or promotion of Alternative Dispute Resolution (ADR) methods. However, the Commission believes that there is still room for improvement in online availability of judgments or electronic communication between courts and parties. It also points out that further efforts are needed to improve the training in judicial skills and the use of information and communication technologies (ICT) for case management systems. The full text of the Scoreboard can be found here.
Stronger and smarter borders in the EU
The Commission has put forward a revised proposal for a regulation on the establishment of an Entry-Exit System to speed-up, facilitate and reinforce border check procedures for non-EU nationals travelling to the Union. The System will modernise external border management by improving the quality and efficiency of controls, and support Member States with the increasing numbers of travellers entering and exiting the EU. The system will register the name, type of travel document and biometrics and the date and place of entry and exit. This will facilitate the border crossing of bona fide travellers, detect over-stayers and identify undocumented persons in the Schengen area. The system will also record refusals of entry. The legislative proposal is part of the broader “Smart Borders Package”, addressing the role of information systems in enhancing external border management, internal security and the fight against terrorism and organised crime. A factsheet giving details of the system is available at Europa.eu.
Fighting tax avoidance
A draft directive published by the European Commission aims to introduce additional tax transparency requirements for multinational enterprises (MNEs). The proposal (available at the EUR-Lex website) targets corporate groups with a worldwide consolidated net turnover of over €750 million. MNEs with that turnover will have to provide tax authorities with a country-by-country report on income tax paid — whether the company has its headquarters in the EU or elsewhere. The proposal, which the Commission describes as proportionate in terms of both its scope and the information to be disclosed, does not impose any obligations on SMEs.
Modernising VAT in the EU
Describing it as the first step towards a single EU VAT area equipped to tackle fraud, to support business and to help the digital economy and e-commerce, the Commission has published a VAT Action Plan. It argues that 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. As the current VAT rules for cross-border trade between businesses in the Member States date back to 1993, the Commission has decided that it is time for an upgrade to the system taking account of technological developments, changes in business models and the globalisation of the economy.
It argues that the current VAT system is too burdensome and complex for smaller businesses that wish to expand beyond the Member State in which they are established. The “VAT gap”, which is the difference between the expected revenue and the VAT actually collected in Member States, was almost €170 billion in 2013. Furthermore, cross-border VAT fraud is estimated to be responsible for revenue losses of around €50 billion annually in the EU. “Towards a single EU VAT area — Time to decide” can be found at Europa.eu. By the end of 2016, the action plan will be followed by a legislative proposal aimed at modernising and simplifying VAT for cross-border e-commerce, extending the current One Stop Shop concept to all cross-border e-commerce, including distance sales.
EU — Mercosur deal edges closer
Progress is being made in long-running trade negotiations between the EU and the Mercosur group of countries in Latin America. Mercosur, which was created in 1991, comprises Argentina, Brazil, Paraguay and Uruguay as well as Venezuela, which is not participating in the current talks. The negotiations aim to reach a comprehensive trade agreement which would see: customs duties cut; barriers to trade in services removed; and rules on public tenders, customs procedures, and intellectual property protection improved.
Talks between the EU and Mercosur opened in 1999, but broke down in 2004. Negotiations restarted in 2010 and are said to be making progress, with the two parties set to exchange market access offers early in May 2016, setting out how to increase mutual openness to each other’s goods and services. In 2015, trade in goods between the 2 regions totalled more than €88 billion. The EU is also a major provider of commercial services and the biggest foreign investor in the Mercosur region. See the EC Trade website for more details.
The Fourth Railway Package
The European Parliament and the Council of Ministers have reached an agreement on what is known as the Fourth Railway Package, a series of measures that aim to make railways in the EU more attractive, innovative and competitive. The Package consists of a set of six legislative proposals designed to revitalise the rail sector and deliver better quality of service and more choice to passengers. These include: a regulation which deals with the award of public service contracts for domestic passenger transport services by rail; a directive regarding the opening of the market of domestic passenger transport services by rail and the governance of the railway infrastructure; and a proposal to repeal an old regulation on the grant of State aid to railway undertakings.
The Package also includes three technical measures: a directive on railway safety; a directive on the interoperability of the rail system within the EU; and a regulation on the European Union Agency for Railways. The European Commission said it welcomed the agreement which paved the way for a swift adoption of the package. However, a new regulatory framework based on the principle of competitive award of rail public service contracts is unlikely to be in place until 2023. A Fact Sheet setting out the details of the Package, including the benefits to consumers, manufacturers, rail workers and rail infrastructure managers can be found at Europa.eu.
Beef back on the menu
In January 1998, the USA introduced import restrictions on beef, sheep, goats and associated products from the EU. Justified on the basis of concern over Bovine spongiform encephalopathy (BSE), the USA measures went further than the recommendations of the World Organisation for Animal Health (OIE). In a gradual reopening of the market, the USA has announced that it will lift its ban on beef from the Netherlands. Dutch beef will therefore join products from Ireland and Lithuania in being allowed into the USA. Welcoming the move, the EU Commissioner for Health and Food Safety, Vytenis Andriukaitis, described it as a sign of recognition for the comprehensive and effective measures taken to eradicate BSE in Europe.
Commission tackles suspected industrial paper sacks cartel
Officials from the European Commission have carried out unannounced inspections at the premises of several companies active in the sector of kraft paper and industrial paper sacks. Although the Commission does not prejudge the outcome of its investigations, unannounced inspections are a preliminary step in investigations into suspected cartels. The Commission said that it had concerns that the companies concerned may have violated EU rules which prohibit anticompetitive practices such as price fixing and customer allocation. It stressed that there is no legal deadline to complete cartel inquiries. Their duration depends on a number of factors, including the complexity of each case, the extent to which the undertakings concerned co-operate and the exercise of the rights of defence.
Cement companies win case against Commission
In November 2008 and September 2009, the Commission carried out inspections at the premises of several cement companies as part of an investigation into suspected anticompetitive practices. When it asked the undertakings concerned to answer a questionnaire, however, a number of them complained that the Commission had not adequately explained the alleged infringements and had imposed on them a disproportionate burden having regard to the volume of information requested. The EU’s lower court (the General Court) found for the Commission but, on appeal, the Court of Justice (CJEU) has disagreed and annulled the Commission’s requests. As set out at the CJEU press release, it concluded that the statement of reasons for the Commission decisions did not meet the requisite legal standard.
Insurance Block Exemption Regulation
The Commission has published a report focusing on the functioning of the Insurance Block Exemption Regulation (IBER), which exempts certain types of co-operation in the insurance sector from EU antitrust rules under stated conditions. The IBER came into force on 1 April 2010 and will expire on 31 March 2017. Before that date, the Commission will need to decide on whether to renew it in its current form, modify it or let it lapse. The papers available at Europa.eu present the preliminary findings of this review.
Your purchase cannot be completed
A survey of more than 10,000 e-commerce websites has highlighted problems with cross-border shopping in the Member States. Published by the European Commission, the survey found that only 37% of the websites allowed shoppers to reach the final stage of a cross-border purchase. Other sites effectively “geo-blocked” attempts to purchase products or services at some point in the buying process. Over a quarter of sites (27%) prevented shoppers from registering on the site; a similar proportion (26%) in some way prevented consumers from paying for their purchases; and a third (32%) of online sellers refused to deliver the product to the shoppers’ country or to provide them with the service purchased.
The survey on geo-blocking in the Digital Single Market (DSM) found that the practice seems to be much more prevalent with tangible goods than with services. Electrical household appliances proved the most problematic, with 86% of purchases blocked in some way. For consumers trying to buy books, 60% failed in their attempts to buy online from another Member State. For services, geo-blocking was found to be the least used by online retailers for purchases of travel services (33%) and for online reservations made for offline leisure activities (40%). Key findings from the Mystery Shopping Survey on Territorial Restrictions and Geo-blocking in the European Digital Single Market are available here.
Air passengers’ rights
When a flight is cancelled, the air carrier is required under EC Regulation 261/2004 to provide care for the passengers concerned as well as compensation (between €250 and €600, depending on the distance). Following a request from the Dutch courts, the EU’s Court of Justice (CJEU) has clarified that national authorities must carry out general monitoring activities in this area, in order to guarantee air passengers’ rights, but they are not required to act on individual complaints. However, that power may be given to them by national legislation if a Member State so wishes.
Privacy Shield to replace Safe Harbour
We have reported previously on the decision of the CJEU to annul the Safe Harbour arrangement agreed between the EU and the USA. In the wake of the annulment, the European Commission negotiated a new set of principles: Privacy Shield. Before Privacy Shield can enter into force, the Commission must declare that it offers a sufficient level of data protection. The European Parliament’s Civil Liberties Committee has been assured that the new system lays down clear limits on USA Government access to data and will therefore improve EU citizens’ privacy. The ability of Privacy Shield to provide sufficient safeguards against mass surveillance has, however, been criticised by privacy activists. Further information can be found in the Commission Communication Transatlantic Data Flows: Restoring Trust through Strong Safeguards and on the Commission’s website.
New Posted Workers Directive
Posted workers are people who are employed in one Member State and sent to work temporarily in another. Figures show that, in 2014, some 1.9 million workers in the EU fell into this category. Provisions concerning them are currently set out in Directive 96/71/EC on the posting of workers in the framework of the provision of services (the Posted Workers Directive). A proposal to amend that directive was recently presented by the European Commission, with the aim of addressing three specific issues: the remuneration of posted workers, rules on temporary work agencies and long-term posting. Announcing the proposal (available at the EUR-Lex website), the Commissioner for Employment, Social Affairs, Skills and Labour Mobility, Marianne Thyssen, said that it will create a legal framework for posting that is clear, fair and easy to enforce.
Boosting the use of organic and waste-based fertilisers
The reuse of raw materials that are now disposed of as waste is one of the key principles of the Circular Economy Package adopted in December 2015 (for details, see Closing the Loop — An EU Action Plan for the Circular Economy). In this context, the Commission is proposing a regulation which will significantly ease the access of organic and waste-based fertilisers to the EU single market, putting them on a level playing field with traditional, non-organic fertilisers. This will, the Commission said, create new market opportunities for innovative companies while at the same time reducing waste, energy consumption and environmental damage.
The regulation sets out common rules on converting biowaste into raw materials that can be used to manufacture fertilising products. It defines safety, quality and labelling requirements that all fertilising products need to comply with to be traded freely across the EU. Producers will have to demonstrate that their products meet those requirements, as well as limits for organic contaminants, microbial contaminants and physical impurities before affixing the CE mark. See Europa.eu for full details.
Freedom of movement
The Commission has published a roadmap listing the concrete steps needed to return order to the management of the EU’s external and internal borders and to restore a fully functioning Schengen system. “The creation of the Schengen area without internal borders has brought important benefits to European citizens and business alike,” it argued, “yet in recent months the system has been severely tested by the refugee crisis.” If the EU fails to restore Schengen, the Commission said, Member States such as Poland, the Netherlands or Germany would face more than €500 million of additional costs for the road transport of traded goods. Between €0.6 and €5.8 billion of administrative costs would have to be paid by governments due to the need for increased staff for border controls and at least 13 million tourist nights could be lost, with a total cost of €1.2 billion. “Back to Schengen — A Roadmap” can be found at http://bit.ly/1TXVGNZ.
The Body Shop loses trademark appeal
The Body Shop International has lost an attempt to register the trademark Spa Wisdom. The company first applied to register the mark in 2010, but the move was opposed by Spa Monopole, a business established in Spa, Belgium. When the Office for Harmonisation in the Internal Market (OHIM) refused The Body Shop’s application, the company appealed to the General Court. In its judgment in case T-201/14, the General Court dismissed the action brought by The Body Shop and upheld the decision of OHIM to refuse registration. The court agreed with OHIM that there was a risk that the use of the mark Spa Monopole would take unfair advantage of the distinctive character or the repute of the trademark Spa, and that association with the earlier mark would make it easier for The Body Shop to market its own range of products. An appeal, limited to points of law only, may be brought before the CJEU against the decision of the General Court within two months of notification of the decision.
With the entry into force on 23 March 2016 of EU Regulation 2015/2424 amending the Community Trade Mark Regulation (CTMR), the Office for Harmonisation in the Internal Market (OHIM) became the European Union Intellectual Property Office (EUIPO), and the Community trademark became the EU trademark. OHIM has processed more than 1.5 million trademark applications from nearly every country and region in the world since its foundation in 1994. The EUIPO, the EU’s largest decentralised agency, remains at Alicante in Spain. See euipo.europa.eu for full details of its work.
Zika research backed with €10 million
The European Commission has released €10 million for research on the Zika virus (ZIKV), currently affecting large parts of Latin America. The most affected country is Brazil, where the World Health Organization (WHO) has declared that the recent cluster of severe brain malformations in newborns may be linked to the virus. While the risk of transmission of the ZIKV in the EU is low, there is currently no treatment or vaccine against the virus, and diagnostic tests for infections are not widely available. The new funding, which comes from the Horizon 2020 EU research and innovation funding programme, will go into projects that will first have to prove the link between the virus and severe brain malformations reported in newborn children. If proven, researchers could then move on to combating the ZIKV, including developing diagnostics and testing potential treatments or vaccines. See Europa.eu for more information.
General Court clamps down on glucose health claims
For several years, a German company has been seeking permission from the European Commission to use claims about its glucose sugar products which refer to their beneficial use during exercise. The Commission took the view that the health claims in question conveyed a contradictory and ambiguous message to consumers, as they encouraged the consumption of sugar, of which national and international authorities recommend a reduction on the basis of generally accepted scientific advice. Eventually, the company, Dextro Energy, took legal action in support of its claims but has been told by the EU’s General Court that “the Commission did not err in finding that those claims encouraged the consumption of sugar, such encouragement being incompatible with generally accepted principles of nutrition and health”. An appeal, limited to points of law only, may be brought before CJEU against the decision of the General Court within two months of notification of its ruling.
Political agreement has been reached by the Member States on the automatic exchange of tax-related financial information of multinational companies, known as country-by-country reporting (CbCR). This agreement is however subject to UK parliamentary scrutiny. The new rules are a key part of the Anti-Tax Avoidance Package adopted by the European Commission on 28 January 2016. Member States will have 12 months to transpose them into national law after their entry into force, expected for spring 2016.
Dumping defences and China
Trade Commissioner Cecilia Malmström has set out her thoughts on the future of EU trade defence procedures vis-a-vis China. China’s Protocol of Accession to the World Trade Organization (WTO) includes rules concerning trade defence investigations. With those provisions expiring at the end of this year, the EU has to decide how to respond. The Commission is therefore consulting interested parties to determine the best way forward. In that context, Commissioner Malmström has outlined three broad options: do nothing, change the method used to calculate dumping for China, change the method of calculation and also make other changes to the relevant legislation. Warning that none of the options is cost free, the Commissioner emphasised that the issue is complex and that no decision has yet been made on how to proceed (see here for more details).
Is the Services Directive failing?
A new report has criticised the European Commission for not properly enforcing Directive 2006/123/EC on services in the internal market (the Services Directive). Published by the European Court of Auditors (ECA), the report calls on the Commission to be bolder in its support for EU businesses and consumers wanting to buy or sell services across borders. Despite a 2009 implementation deadline for the Services Directive, the ECA says that barriers still remain and that the Commission is reluctant to pursue legal proceedings, partly due to the length of the judicial procedure, but also due to lack of confidence in the legislation. The UK was one of seven Member States visited by the ECA during the preparation of the report (which can be found at www.eca.europa.eu). The court found that most Member States had not transposed the legislation on time, and the Commission had referred only one case to the CJEU.
EU and Canada agree on new approach
The European Commission and the Canadian Government have agreed to include a new approach on investment protection and investment dispute settlement in the EU-Canada Comprehensive Economic and Trade Agreement (CETA). This represents a clear break from the old Investor to State Dispute Settlement (ISDS) approach and demonstrates the shared determination of the EU and Canada to replace the current ISDS system with a new dispute settlement mechanism and move towards establishing a permanent multilateral investment court. This revised CETA text is also, the Commission said, a clear signal of the EU’s intent to include this new proposal on investment in its negotiations with all partners.
Staples cleared for Office Depot takeover
The acquisition of office supplies distributor Office Depot by Staples has been approved by the European Commission. Both US companies supply office products such as stationery, paper and printer supplies in several European countries. The Commission’s approval, under the EU Merger Regulation, is subject to the divestment of Office Depot’s contract distribution business in Europe and its entire business in Sweden. The impact of the merger on the international contract sales market and on markets in the Netherlands and Sweden were considered by the Commission. Competition Commissioner Margrethe Vestager said that the deal as agreed will ensure that effective competition is maintained, in particular on the EU’s international office supplies market. European companies will continue to benefit from the Single Market by procuring their office supplies internationally, she added. Details can be found on the DG Competition website.
Acquisition of Procter and Gamble’s beauty products businesses by Coty approved
The European Commission has approved under the EU Merger Regulation the acquisition of Procter & Gamble’s beauty products businesses by Coty. The Commission concluded that strong independent players would remain active in all the concerned markets. P&G is selling to Coty the following fragrance brands: Alexander McQueen, Bruno Banani, Escada, Gabriela Sabatini, Gucci, Hugo Boss, James Bond 007, Lacoste, Mexx and Stella McCartney. The Commission found that the combined market shares would remain low to moderate in all affected markets. The main colour cosmetics brand P&G is selling to Coty is Max Factor and again the Commission found that the combined market shares would remain moderate in all affected markets.
Massive fine for car parts cartel
Fines of €137,789,000 have been imposed by the Commission on Melco (Mitsubishi Electric) and Hitachi for participating in a cartel for alternators and starters with another firm, Denso, in breach of EU antitrust rules. For more than five years, the three Japanese car parts manufacturers coordinated prices and allocated customers or projects with regards to alternators and starters, two important components of car engines. Under the Commission’s 2006 Leniency Notice, Denso received full immunity for revealing the existence of the cartel, thereby avoiding a fine of more than €157 million.
ODR facility now available
The online dispute resolution (ODR) platform mentioned in last month’s newsletter is now up and running here. The facility offers EU consumers and traders the opportunity to settle disputes about both domestic and cross-border online purchases. The disputes are channelled to national Alternative Dispute Resolution (ADR) bodies connected to the ODR initiative.
Safety features on medicine packaging
Regulation 2016/161, which supplements Directive 2001/83/EC by laying down detailed rules for the safety features appearing on the packaging of medicinal products for human use, has been published. Available in the Official Journal of the European Union, this sets out a system where the identification and the authentication of medicinal products is guaranteed by an end-to-end verification of all such products bearing the safety features, supplemented by the verification by wholesalers of certain medicinal products at higher risk of falsification. A character sequence resulting from the combination of a product code and a serial number sequence will be unique to a given pack of a medicinal product until at least one year after the expiry date of that pack or five years after the product has been released for sale or distribution, whichever is the longer period.
EU-US Privacy Shield to replace Safe Harbour
Last year, the EU’s Court of Justice (CJEU) told the Commission that the agreement covering personal data transfer between the EU and the United States was invalid. The “Safe Harbour” scheme was inadequate, the Court ruled, because it is applicable solely to the US undertakings which adhere to it, and public authorities are not subject to its provisions. Given that this ruling could affect every company sending data to the US, the Commission has acted quickly and agreed on a new framework for transatlantic data flows: the EU-US Privacy Shield. This will provide stronger obligations on companies in the US to protect the personal data of Europeans and stronger monitoring and enforcement by the US Department of Commerce and Federal Trade Commission (FTC), including through increased cooperation with European Data Protection Authorities. US companies wishing to import personal data from Europe will need to commit to robust obligations on how personal data is processed and individual rights are guaranteed, the Commission said.
Ministers have approved a second package of measures aimed at improving the accuracy of vehicle emissions testing under real driving conditions. Analysis has shown that vehicles meeting existing EU standards generate substantially higher emissions on the road than under laboratory conditions. The Real Driving Emission (RDE) tests are intended to accurately measure pollutants from cars and other light vehicles in real world situations. Following the Council’s decision (see www.consilium.europa.eu), the Commission can now adopt the legislation.
A new settlement for the UK in the EU
The European Commission has printed in the EU’s Official Journal the full text of the agreement between the UK and the other 27 Member States which Prime Minister David Cameron will use as the basis of his recommendation to the British people that they vote to stay in the EU when the Referendum is held on 23 June. A new settlement for the United Kingdom within the European Union: Extract of the conclusions of the European Council of 18–19 February 2016 can be found here.
Parallel stripes win for Adidas in EU Court
Sports company Adidas has successfully fought off an attempt by Shoe Branding Europe, a Belgian company, to register two parallel lines on certain sports shoes as a trade mark. The case had been decided by the EU’s General Court but the loser in that instance, Shoe Branding Europe, decided to appeal to the Court of Justice (CJEU). The higher Court has upheld the General Court’s judgment having decided that it did not err in law in coming to its decision. See the CJEU press release for more details.
Coke cannot register a contour bottle without fluting
Coke’s iconic bottle (the contour bottle with fluting) is a trade mark but the company’s attempt to go a step further and register the shape, but without the fluting, has been rejected by the EU’s General Court. When the EU’s Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) turned down the application, Coke decided to take the case to court. The General Court has however agreed with OHIM that the bottle does not possess any characteristics that distinguish it from others available on the market. The mark sought is thus a mere variant of the shape of a bottle which does not enable the consumer to distinguish Coca-Cola’s goods from those of other undertakings. See the CJEU press release for further details.
Right to a fair trial
Ministers from the EU Member States have adopted new rules that will guarantee the presumption of innocence of anyone accused or suspected of a crime by the police or justice authorities. The new directive, which has not yet been published, also ensures that everyone benefits from the right to be present at their trial. Furthermore, the new rules clarify that the burden of proof for establishing guilt is on the prosecution, rather than on the accused person to prove that they are not guilty. Any doubt is to the benefit of the suspected or accused person. Finally, the rights to remain silent and not to self-incriminate are also protected and cannot be used against suspects and accused persons to secure conviction.
The Commission has presented a revised proposal aimed at opening up global public procurement markets. The proposed International Procurement Instrument (IPI) is intended to make opportunities for European firms available by encouraging non-EU countries to negotiate access to their markets. Under the IPI the Commission would be able to investigate cases where discrimination against EU firms in procurement markets is alleged (see the DG Trade website). If the allegations are proved to be true, the Commission will invite the country concerned to negotiate the opening of its procurement market. If no agreement can be reached, the Commission will be able to initiate action under the IPI, by introducing price adjustment measures to disadvantage bids from companies in the country concerned for public contracts in the EU.
State aid initiative cuts red tape
The latest State Aid Scoreboard produced by the Commission suggests that measures to modernise the rules are paying off. Figures show a significant increase in aid measures that could be granted without prior scrutiny by the Commission. With more than 90% of State aid measures registered under the new General Block Exemption Regulation (GBER), the Scoreboard highlights a significant reduction in administrative red tape. Member States have been taking on more responsibility for ensuring compliance with State aid rules, it said, leaving Commissioners to focus their attention on more distortive aid. According to the Scoreboard, Member States spent €101.2 billion on aid to manufacturing services, agriculture and fisheries in 2014. That represents an increase of some €33 billion over 2013. The rise is largely attributed to greater awareness that renewable energy support involves State aid.
New measures to fight corporate tax avoidance
Proposals put forward by the European Commission aim for a coordinated EU-wide response to corporate tax avoidance, following global standards developed by the Organisation for Economic Cooperation and Development (OECD) last autumn. The aim is to be able to fight aggressive tax practices by large companies efficiently and effectively. The proposals include legally-binding measures to block the most common methods used by companies to avoid paying tax and a new EU process for listing third countries that refuse “to play fair”. The proposals have now been submitted to the European Parliament for consultation and to the Council of Ministers for adoption. See this Commission Memo for full details.
EU and Andorra sign new tax transparency agreement
It will be more difficult for EU citizens to hide undeclared income in financial institutions in Andorra following the signing of a new tax transparency agreement between the EU and the Pyrenean state. As of 2018, Andorra and EU Member States will automatically exchange information on the financial accounts of one another’s residents. This will ensure that both sides are better equipped to detect and pursue tax evaders, who will no longer be able to exploit bank secrecy to hide income and assets abroad.
Anti-dumping legislation “partially invalid”
The Court of Justice of the European Union (CJEU) has found that EU Regulation 1472/2006 imposing an anti-dumping duty on imports of certain footwear originating in China and Vietnam is partially invalid. The Court ruled that the Council and the Commission did not comply with certain procedural rules when the Regulation was adopted. It set the rate of anti-dumping duty at 16.5% for footwear manufactured by companies established in China (except for the company Golden Step, for which duty was set at 9.7%) and at 10% for footwear manufactured by companies established in Vietnam. The British company C & J Clark International Ltd and the German sports goods company Puma both argued that the act was invalid. The national courts concerned had requested a preliminary ruling and it is now for them to decide on the cases in accordance with the Court’s decision. For more details, see this CJEU press release.
Call for TiSA to protect public services
Negotiations for a Trade in Services Agreement (TiSA) started in 2013 with the aim of establishing global minimum requirements for trade in areas such as financial, digital and transport services. Now the European Parliament has called for negotiators to ensure that any deal would make it easier for EU companies to access international markets, while simultaneously protecting national and local authorities in the Member States from competition (see the European Parliament News website.
Anti-dumping investigations target steel products
New anti-dumping investigations have been opened by the European Commission, which wants to determine whether imports of three steel products have been dumped on the EU market. The products concerned are seamless pipes, heavy plates and hot-rolled flat steel; all originate in China. In a separate case, the Commission has decided to impose provisional anti-dumping duties on cold-rolled flat steel from China and Russia. The EU currently has 37 trade defence measures in place on imports of steel products, with nine investigations ongoing (see the DG Trade website).
Consultation on Chinese dumping
The Commission is seeking views on measures aimed at stopping China from dumping products on the European market. In December this year, provisions of the Protocol concerning China’s accession to the World Trade Organisation (WTO) will expire. Before they do, the Commission is looking at the potential impact on the EU’s anti-dumping legislation under Regulation 1225/2009. Three options have been identified by the Commission: not changing EU legislation; changing the anti-dumping methodology for trade defence instruments (TDIs) with no additional measures; and changing the anti-dumping methodology for TDI as part of a package with additional measures. The consultation can be accessed here. The deadline for responses is 20 April.
Agri-food exports set new record
A record €129 billion of agri-food products were exported from the EU last year. The figure for December 2015 was €11.2 billion, which was nearly €1 billion higher than the previous year. The biggest increases were in exports to the United States (up by 18.5%) and China (up 39%). The three sectors seeing the greatest improvement were cereals (up by €1.2 billion), wines (up €835 million) and spirits (€641 million). The report Monitoring EU Agri-Food Trade: Development until December 2015 also shows EU imports of agri-food products on the rise — increasing by 8.7% over the 2014 figure, to hit €113 billion. The trade balance for all EU agri-food products therefore showed a surplus of €16 billion — a fall from the €18 billion recorded in 2014. The report can be downloaded here.
Court rules on competition leniency programmes
The Court of Justice (CJEU) has ruled, in Case C-428/14, that the leniency programmes of the EU and of the Member States co-exist, reflecting the system of parallel competences of the European Commission and of the national competition authorities within the European Competition Network (ECN). The programmes are intended to help to uncover unlawful conduct by encouraging participants in cartels to report them. The leniency system is based on the principle that the competition authorities will grant immunity from fines to the undertaking that reports its participation in a cartel if it is the first to submit evidence enabling the finding of an infringement of the competition rules. In a ruling set out in this official press release, the CJEU has said that neither the EU nor the national leniency programmes take precedence.
EU approves delivery services merger
The proposed acquisition of TNT Express by FedEx Corporation has been approved under the terms of the EU Merger Regulation. Both companies offer worldwide small package delivery services. Following an in-depth investigation opened in July 2015, the European Commission has concluded that the acquisition will not give rise to competition concerns, because the two companies are not particularly close competitors. In addition, the merged entity will continue to face sufficient competition from its rivals in all markets concerned including from Europe-based DHL, owned by Deutsche Post, and US-based UPS.
Court confirms cartel fines
Fines imposed on members of a cartel in the gas insulted switchgear (GIS) market have been upheld by the EU’s General Court. Giving its judgments in Cases T-404/12 and T-409/12, the Court upheld fines of €131 million imposed by the European Commission on Toshiba and Mitsubishi Electric for their participation in the cartel. The Court’s judgment was made in response to the companies seeking to have the fines annulled (see here). An appeal, limited to points of law only, may be brought before the CJEU within two months of the decision being notified.
Is EU consumer law fit for purpose?
The European Commission has set out plans for a review of EU consumer law. Over the next two years, a “Fitness Check” will evaluate the following six directives: the Unfair Contract Terms Directive; the Price Indication Directive; the Sales and Guarantee Directive; the Unfair Commercial Practices Directive; the Misleading and Comparative Advertising Directive; and the Injunctions Directive. The Fitness Check will assess if the directives are fit for purpose, on the basis of their effectiveness, efficiency, coherence, relevance and EU added value. The review also aims to identify any excessive regulatory burdens, overlaps, gaps, inconsistencies and/or obsolete measures, as well as the cumulative impact of the various pieces of legislation.
New online dispute resolution facility
On 15 February, a new online dispute resolution (ODR) platform will be launched by the European Commission. The facility will enable consumers and traders to settle online disputes concerning both domestic and cross-border purchases, without having to go to court. When a complaint is lodged, the dispute resolution bodies will act as a referee between the consumer and the business concerned. According to EU Commissioner Věra Jourová, about 33% of consumers experienced a problem when buying online last year, but 25% of them did not complain. Online traders will be obliged to provide a link to the ODR platform on their websites (see the EC Consumer website).
EU data protection reforms near completion
After nearly four years of negotiations, European Commission proposals on EU Data Protection Reform were agreed by the European Parliament and the Council just before the end of 2015. The changes will, according to the Commission, put an end to the patchwork of data protection rules that currently exists in the EU. There are two elements to the reform package: a Data Protection Directive (concerning police and judicial cooperation), and a General Data Protection Regulation. Intended to help businesses make the most of the opportunities presented by the Digital Single Market, the regulation will establish a single set of EU-wide rules, making it simpler and cheaper for companies to do business across the Member States. It will guarantee that data protection safeguards are built into products and services from the earliest stage of development. Further details of the forthcoming reforms can be found at Europa.eu. The new legislation will be published in the EU’s Official Journal after which there will be a two year implementation period during which the Commission will work with Member State and EU data protection authorities to ensure its key aim of uniform application of the new rules.
Legislation in Scotland which introduces a minimum price per unit (MPU) of alcohol is contrary to EU law if less restrictive tax measures can be introduced. That is the view of the CJEU in a case brought by the Scotch Whisky Association. The Alcohol (Minimum Pricing) (Scotland) Act 2012 was passed into law but has not yet been implemented because of the Association’s legal challenge. The Act seeks to protect public health by reducing alcohol consumption through increasing the price. In Case C-333/14, the EU Court found that the legislation significantly restricts the market and that such a restriction might be avoided by the introduction of a tax measure designed to increase the price of alcohol instead of a measure imposing a minimum price per unit of alcohol (see the CJEU website). It is now for the national court to decide the original case in the light of the CJEU ruling.
Changes to the Community Trade Mark
From 23 March 2016, the Community Trade Mark (CTM) will become the European Union Trade Mark. Amendments to the existing Community Trade Mark Regulation made by Regulation 2015/2424 will see the Office for Harmonisation in the Internal Market (OHIM) renamed the EU Intellectual Property Office (EUIPO). The new legislation will also alter the fees payable to the EUIPO, including reducing the level of trade mark renewal fees. When the new regulation comes into force, existing CTMs and CTM applications will automatically become EU Trade Marks and EU Trade Mark applications, respectively. Further information about the changes is available from the OHIM website.
Call for action on Digital Single Market
Members of the European Parliament (MEPs) have called on the Commission to propose measures aimed at maximising the benefits of the digital revolution for businesses and consumers. One of the recommendations made by MEPs for boosting the Digital Single Market (DSM) is to end the practice of blocking online access to goods and services on the basis of someone’s IP address, postal address, or the country where their credit card was issued. MEPs argue that the practice — which is known as “geo-blocking” — is unjustified and must be stopped. Parliament called on the Commission to ensure equivalent protection for consumers, regardless of whether digital content is purchased online or offline. Also added to the Commission’s to-do list were finding innovative solutions to cross-border parcel delivery and seizing the opportunities presented by technologies such as cloud computing and 3D-printing. The European Parliament’s resolution (summarised on the European Parliament Newswebsite) will help shape the Commission’s strategy for a Digital Single Market, which is scheduled to be presented by the end of the year.
EU puts UK support for Drax power plant under the spotlight
An in-depth investigation to assess whether the UK’s plans to support the conversion of part of the Drax coal power plant to operate on biomass are in line with EU state aid rules has been opened by the European Commission. While it fully supports Member State efforts to increase the use of renewable energy, the Commission has stressed that EU state aid rules are intended to ensure that the cost of such support for consumers is limited and does not give certain operators an unfair advantage over competitors. In April 2015 the UK notified plans to subsidise the conversion of one unit of the coal-fired Drax power plant to operate entirely on biomass. The unit concerned by this measure would have the capacity to generate 645 MW of renewable electricity running exclusively on wood pellets. “The opening of an in-depth investigation gives the UK and interested third parties an opportunity to submit comments,” the Commission said. “It does not prejudge the outcome of the investigation.”
Antwerp terminal operators to be checked for State aid
The Commission has opened an in-depth inquiry into whether reductions in compensation payments granted by the Port of Antwerp to two container terminal operators gave them an undue advantage over competitors, in breach of EU state aid rules. The concession agreements for PSA Antwerp NV and Antwerp Gateway NV, two container terminal operators in the Port of Antwerp, contained a requirement that a minimum amount of containers must be handled in the port every year (minimum tonnage requirements). Between 2009 and 2012 PSA Antwerp NV and Antwerp Gateway NV failed to reach these minimum tonnage requirements and should have paid compensation to the Authority. However, instead of collecting the compensation due from the two companies, the Antwerp Port Authority retroactively revised the minimum tonnage requirements downwards. Following a complaint from a competitor, the Commission has opened an in-depth investigation to examine whether a private investor would have accepted to reduce its compensation in a similar manner. If the operation was not carried out on market terms it could constitute state aid as defined by EU rules.
EIB funds UK rural broadband
Ultrafast broadband is on its way for more than 40,000 rural properties in the UK thanks to funding from the European Investment Bank (EIB). A loan of €25 million to Gigaclear plc will enable the company to implement plans to expand its infrastructure during 2016. At the end of last year, Gigaclear owned and operated 56 rural fibre networks, with 35 under construction, in the following counties: Kent, Oxfordshire, Northamptonshire, Cambridgeshire, Leicestershire, Buckinghamshire, Hertfordshire, Rutland, Gloucestershire, Berkshire and Essex. Describing the EIB loan as a landmark moment for the company, Gigaclear’s Chief Executive, Matthew Hare, said the company estimates that 1.5 million properties in the UK could benefit from its broadband services. The loan is the largest of its kind awarded to a UK company. Gigaclear was the first operator other than BT to secure contracts under the Broadband Delivery UK initiative (BDUK), which aims to install broadband of at least 24Mbps to 95% of the UK (see the EIB website).
UK exports could take big hit from Brexit
If the UK leaves the EU without putting a new Free Trade Agreement (FTA) in place, British exporters could suffer significant losses according to a report from trade credit insurance provider Euler Hermes. The warning came as David Cameron is entering what many see as the final phase of his EU reform negotiations. There is currently no indication of whether any deal achieved by the Prime Minister would be sufficient to satisfy those in his own party and elsewhere who want Britain to exit the EU – the so-called Brexit option. In that context, the report “Brexit me if you can” (available at www.eulerhermes.com/) considers the impacts of three scenarios on UK firms.
In the first, the UK stays in the EU, disruption to trade is minimised and exports continue to grow by as much as £26 billion by 2019. Turnover of UK firms would, it is suggested, grow by 4% on average after 2017. The second option considered is for the UK to leave the EU and to conclude an FTA with the Union as well as bilateral agreements with non-EU countries. This option would see turnover grow at 2%. In the third scenario, Brexit happens without a UK-EU FTA being agreed. This could result in losses of up to £30 billion or 8% of UK total goods exports, Euler Hermes warns. Even when offset by trade with Commonwealth countries, the gap would take at least a decade to fill, its report argues. Under this worst case scenario, the trade balance deficit would quickly widen by £35 billion and turnover for British firms would contract by an average -1% per year.
EU’s trade deal with Ukraine now in force
On 1 January 2016, the EU and Ukraine began applying the Deep and Comprehensive Free Trade Area (DCFTA) which forms part of the Association Agreement, signed in June 2014 and provisionally applied in parts since November 2014. With ambitious goals of bringing Ukraine into line with EU legislation in areas such as competition, government procurement and protection of intellectual property rights, the agreement should contribute to the modernisation and diversification of the Ukrainian economy and will create additional incentives for reform, notably in the fight against corruption. EU exports to Ukraine amount to €17 billion and Ukrainian exports to the EU equalled €14 billion (data for 2014). A memo detailing the EU’s reactions to Russian concerns with regard to the DCFTA can be found on the EC Trade website.
EU-China investment deal
The prospect of an EU-China Investment Agreement has moved a step closer after negotiators reached agreement on the scope of the proposed deal. The two sides have agreed that the initiative should improve market access opportunities for investors, both by establishing a genuine right to invest and by guaranteeing that there will be no discrimination against companies. The launch of negotiations on an Investment Agreement was announced at the end of 2013. The aim is to provide for progressive liberalisation of investment and the elimination of restrictions for investors in both countries. China is the European Union’s second largest trading partner after the United States, while the EU is China’s biggest trading partner (for more details see the EC Trade website).
UK merger to be decided at EU level
The European Commission has decided not to refer the planned acquisition of Telefónica UK by Hutchison to the UK competition authority. The Commission concluded that it was better placed to ensure consistency in the application of merger control rules in the mobile telecommunications sector across the European Economic Area. The EEA comprises the 28 EU Member States plus the three countries — Iceland, Liechtenstein and Norway — that apply Internal Market legislation in exchange for being allowed to take part in the free movement of goods, labour and people. The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it. It may, if it wishes, delegate the duty to authorities in the Member States.
EU acts on firearms
Recognising that their use by criminal and terrorist organisations poses a great security threat, a package of measures to make it more difficult to acquire firearms in the EU has been put forward by the European Commission. The intention is to amend the Firearms Directive (91/477/EEC) to ban certain semi-automatic firearms, to impose stricter conditions for the online acquisition of firearms and to include blank-firing weapons (alarm and signalling weapons for example) in the scope of the directive, because of their potential to be transformed into lethal weapons. Under no circumstances will civilians be authorised to own any of the most dangerous firearms falling under Category A (such as a Kalashnikov), which is currently possible if they have been deactivated. See Commission Proposals to strengthen control of firearms: Questions & Answers for more details.
Telecoms contract withdrawals
According to Directive 2002/22/EC on universal service and users’ rights relating to electronic communications networks and services (the Universal Service Directive), subscribers to electronic communication services have the right to withdraw from their contract without penalty if the conditions of the contract are changed. In response to a request from the Supreme Court of Austria, the Court of Justice of the European Union (CJEU) has ruled that an increase in telecommunications charges in accordance with a consumer price index does not allow subscribers to withdraw from their contract. In its judgment (summarised here), the CJEU found that the EU legislature recognised that undertakings providing electronic communication services may have a legitimate interest in being able to adjust the prices and charges for their services. A price adjustment clause such as the one at issue does not, the CJEU decided, place end-users in a contractual situation any different from that which arises from a contract formed by standard terms and conditions that contain such a price adjustment. It is now for the national court to decide the case, based on the EU Court’s ruling.
Commission adopts ambitious recycling package
A package of measures intended to boost global competitiveness, foster sustainable economic growth and generate new jobs has been adopted by the European Commission and includes proposals to amend some of the EU’s most important waste legislation. “Closing the loop — An EU action plan for the Circular Economy”, which can be found at, sets out the details of the Commission’s plans which focus on resources being used in a more sustainable way. The Commission is supporting the move to a Circular Economy with over €650 million from the EU’s research and development (R&D) fund, Horizon 2020, and €5.5 billion from the Structural Funds which support projects in the Member States.
The measures to be introduced include:
actions to reduce food waste including improved date marking;
the development of quality standards for secondary raw materials;
improvements in the Ecodesign working plan for 2015-17 to promote reparability, durability and recyclability of products, in addition to energy efficiency;
a strategy on plastics, addressing issues of recyclability, biodegradability and the presence of hazardous substances in plastics;
a series of actions on water reuse; and
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.
In addition the Commission has issued proposals to amend:
three other directives namely 2000/53/EC on end-of-life vehicles (ELVs), 2006/66/EC on batteries and accumulators and waste batteries and accumulators; and 2012/19/EU on waste electrical and electronic equipment (WEEE) (all in the same proposal, available on the EUR-Lex website.
EIB funds UK smart meters
The European Investment Bank (EIB) will help to fund the installation of more than seven million smart meters in British homes. Smart meters are intended to raise awareness among consumers of how much their energy is costing them. By identifying the impact of different appliances on energy use, householders should be able to use less energy and save money. The EIB contribution is part of a £1 billion mass roll-out programme which aims to ensure that over 53 million smart electricity and gas meters are installed in domestic properties by 2020. The roll-out, which will start in 2016, is one of the largest smart meter schemes in Europe. It is being managed by Calvin Capital, a leading funder, owner and manager of gas and electricity meters.
Green paper on retail finance
With a deadline of 18 March 2016 for comments, a Green Paper on retail financial services has been published by the Commission as part of a public consultation on how the European market for retail financial services – namely insurance, loans, payments, current and savings accounts and other retail investments — can be further opened up. Available on the EUR-Lex website, the Green Paper recognises that retail financial services markets are not yet as integrated as they could be in the EU. These services and structures still operate largely on a national basis and it remains impossible for consumers to access or transfer certain financial products cross-border. Depending on the contributions received, an Action Plan might be proposed around summer 2016.
Deepening reconciliation in Northern Ireland
Worth almost €270 million, the new EU Programme for Peace and Reconciliation (PEACE IV) aims to consolidate peace and deepen reconciliation in Northern Ireland and the border region with Ireland. Shared education projects intended to increase contacts between pupils and teachers from all backgrounds will benefit from €30 million of funding while €57 million will be invested in peer mentoring actions and local community youth initiatives to increase the interaction between children and young people from all backgrounds and promote respect for diversity.
On copyright and digital contracts
The European Commission has adopted two proposals concerning the Digital Single Market: one on the supply of digital content (copyright) and one on the online sale of goods (for more information, see “Bringing down barriers to unlock online opportunities”). A draft regulation on the cross-border portability of online content services seeks to allow EU residents to travel with the digital content they have purchased or subscribed to at home. Cross-border portability, a new EU right for consumers, is expected to become a reality in 2017. The Commission has also outlined its vision of a modern EU copyright framework, within which people are able to legally access a wide range of content, while the rights of authors and other rights holders are better protected and fairly remunerated.
If the Commission’s proposals for a directive on digital contracts become law, more than 122,000 EU businesses are expected to start selling to consumers in other Member States, while as many as 70 million consumers could start buying online from other EU countries. At the moment, only 15% of consumers buy online across borders. By harmonising contractual rights throughout the EU, the Commission aims to tackle the main obstacles to cross-border e-commerce in the Union: legal fragmentation in the area of consumer contract law and the associated high costs for businesses, and low consumer trust when buying online from another country.
Threshold values published for procurement directives
Every year the Commission is required to publish the values in the EU national currencies other than the euro of the various thresholds which apply in the Public Procurement Directives (2014/23/EU, 2014/24/EU and 2014/25/EU). Where a threshold of €80,000 applies, for example, before a contract falls under the remit of one of the directives, in 2016 the equivalent value will be £62,842. the values for all the thresholds for all the currencies, which include the Czech Koruna, Swedish Krona and New Bulgarian Lev, can be found in a Commission Communication, published in the Official Journal.
Making products and services more accessible to the disabled persons
A European Accessibility Act has been proposed with the aim of setting common accessibility requirements for certain key products and services that will help people with disabilities at EU level to participate fully in society. The products and services concerned include ATMs and banking services, PCs, telephones and TV equipment, telephony and audiovisual services, transport, e-books and e-commerce. To be introduced through a directive (see Europa.eu), the European Accessibility Act will make it easier for producers and service providers to export products and services that comply with EU requirements, since they will not need to adjust to divergent national rules.
Converting Lynemouth power station to biomass
As the project will further EU environmental and energy goals without unduly distorting competition, the Commission has concluded that UK support for the conversion of Lynemouth power station from coal to biomass complies with EU state aid rules. The UK Government intends to support the project in the form of a premium paid on top of the market price of the electricity generated (a so-called Contract for Difference). The project will receive aid until 2027 and, according to UK estimates, will generate about 2.3 TWh of low-carbon electricity per year by using approximately 1.5 million tonnes of wood pellets per year.
Environmental taxes still need to grow
According to the EU’s Statistical Office, Eurostat, environmental taxes amounted to €330.1 billion in 2013, compared with €272.1 billion in 2003. However, the share of environment taxes in total revenues from taxes and social contributions decreased over this 10-year period, from 6.9% in 2003 to 6.3% in 2013. Under the Europe 2020 strategy, the objective to be reached is at least a 10% share by 2020.
Shining a light on tax rulings
The EU has adopted a directive aimed at improving transparency on tax rulings given by Member States to companies in specific cases. One of a number of initiatives aimed at preventing corporate tax avoidance, the new legislation will require Member States to exchange information automatically on advance cross-border tax rulings and advance pricing arrangements. Following the meeting of the Economic and Financial Affairs Council (see www.consilium.europa.eu), Luxembourg’s Finance Minister, Pierre Gramegna, said that the agreement means that Europe is now sending a strong signal for greater equity in taxation of businesses worldwide.
EU ties up Vietnam free trade deal
The EU and Vietnam have finalised talks for a Free Trade Agreement (FTA). The deal was announced after a number of outstanding issues were resolved in the wake of an earlier agreement in principle reached in August. According to EU Trade Commissioner Cecilia Malmström, Vietnam is a vibrant economy of more than 90 million consumers with a growing middle class and a young and dynamic workforce. The FTA is expected to trigger a new wave of high quality investment in both directions, supported by an updated investment dispute resolution system. EU exporters in the agricultural, industrial and services sectors are particularly expected to benefit from the opportunities presented by the Vietnamese market. On the EU side, the Agreement must be formally approved by the Council and ratified by the European Parliament. The FTA builds on the EU-Vietnam Partnership and Cooperation Agreement (PCA), which is already going through the ratification process.
Commission promises big push on trade in services
The Trade in Services Agreement (TiSA) is currently being negotiated by 23 members of the World Trade Organization (WTO), including the EU, which together account for over 70% of world trade in services. TiSA aims at opening up markets and improving rules in areas such as licensing, financial services, telecoms, e-commerce, maritime transport and professionals moving abroad temporarily to provide services. The EU has said it will use its chairmanship of the latest round of TiSA negotiations to push for significant progress on key chapters, including domestic regulation, transparency in legislative processes and financial services. Services account for 75% of EU gross domestic product (GDP) and jobs, while cross-border trade in services accounts for nearly a third of intra-EU trade. For more information on TiSA, click here.
Last reviewed 27 October 2016