insight brussels june 2013

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June 2013 n°13

A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS


N°13 – 4th June 2013 SECTORAL POLICIES

1. Agriculture and Fisheries ........................................................................................................................................... 2

2. Defence .............................................................................................................................................................................. 3

3. Energy and Environmentx ......................................................................................................................................... 4

4. Financial Services .......................................................................................................................................................... 5

5. Food and Beverage ....................................................................................................................................................... 6

6. Healthcare and Pharmaceuticals ............................................................................................................................ 7

7. Information and Communication Technology .................................................................................................. 8

8. Media .................................................................................................................................................................................. 8

9. Sports and Gambling .................................................................................................................................................... 8

10. Transport ....................................................................................................................................................................... 9

CROSS-SECTORAL POLICIES 11. Competition ............................................................................................................................................................... 11

12. Consumer .................................................................................................................................................................... 12

13. Intellectual Property and Copyright ................................................................................................................ 13

14. Research and Development ................................................................................................................................. 13

15. Taxation ....................................................................................................................................................................... 14

16. Trade ............................................................................................................................................................................. 15



1. Agriculture and Fisheries European Commission adopts restrictions on pesticides From the next 1 December restrictions on the use of three pesticides (clothianidin, imidacloprid and thiametoxam) on crops attractive to honeybees will apply throughout the EU. Member States have to withdraw or amend existing authorisations to comply with the EU restrictions by 30 September. The ban has been decided by the European Commission following a report of the European Food Safety Authority (EFSA), which found that these pesticides posed a high acute risk for bees. This has been disputed by the industry, with agro-chemical companies arguing that EFSA made fundamental mistakes in its assessment, including a serious over-estimation of the amount of pesticide bees are exposed to in the fields. Environmental groups, on the other hand, dismiss the industry’s protests, instead claiming that the EU should even go further by banning all pesticides for a period of ten years. Outcry forces European Commission to make U-turn on refillable olive oil bottles Following a wave of criticism, the European Commission has withdrawn its earlier proposal banning refillable bottles of olive oil in restaurants. Under the draft Regulation, due to enter into force on 1 January 2014, restaurants were required to use sealed, non-refillable bottles with a view to protect consumers against fraud related to European olive oil. Hard-won agreement on CFP reform After a long night of negotiations, the European Parliament and the Council of the EU reached political agreement on the Common Fisheries Policy. It took two days of talks before the co-legislators found a mutually acceptable compromise on the most contentious issues, namely discards and maximum sustainable yield (MSY is the level of fishing that allows species to continue reproducing). On discards, a 5% rate for acceptable discards of total annual catches of all species will apply after a phase-in period of four years. The starting date for the new discard rules is set at 1 January 2015 for pelagic fish (fish living near the surface rather than in deep waters), and at 1 January 2016 for other species and fishing zones. On MSY, Member States will have to set sustainable fishing quotas by 2015 “where possible” and at the latest by 2020 for all species. In addition, the agreement obliges Member States to adapt their fishing fleet capacities to avoid overfishing, and provides for decentralisation by placing fishermen, professional organisations, as well as local and regional authorities at the centre of the decision-making process.

S E C T O R A L P O L I C I E S



On 8 May, the European Parliament and the Council of the EU had also reached agreement on a draft Regulation on reform of the common market organisation (CMO) in fishery and aquaculture products, thereby consolidating an important instrument that supports CFP objectives. The draft Regulation aims to make the industry more competitive by simplifying procedures for producer organisations, and improves the labelling of fishery and aquaculture products, thus providing better information to consumers.

2. Defence NATO Secretary General urges Europe to step up defence efforts At a joint meeting of the European Parliament’s Committee on Foreign Affairs (AFET) on 6 May, NATO Secretary-General, Anders Fogh, called on the EU to strengthen its defence policy and budget. He argued that soft power alone is not enough and that Europeans should also have the political will to use the right capabilities. According to Fogh, all talk about a strengthened European defence and security policy would just be hot air if European countries did not firmly commit to invest in defence. He added that he hoped that the European Council in December, which is dedicated to security and defence, would showcase an EU both willing and able to act. For their part, MEPs called for closer cooperation between the EU and NATO, and asked Fogh to ensure that there would be no duplication of effort and spending. As a positive example, the Secretary-General cited the promise by European NATO members to engage in developing European air-to-air refuelling capabilities to avoid dependency on the US. Other issues raised by MEPs included NATO’s enlargement and the situation in Syria. Member States encouraged signing UN Arms Trade Treaty The European Commission has initiated a proposal for the Council Decision authorising Member States to sign the United Nations’ Arms Trade Treaty (ATT). This Treaty, which was adopted on 2 April by the UN General Assembly, aims at making legal arms trading more responsible by establishing strict common international standards for importing, exporting and transferring weapons. It covers also the evaluation of arms transfers, and measures to prevent the misappropriation of conventional weapons imported or exported by Member States. Furthermore, it enhances transparency in arms trading by obliging all signatory states to keep registers, and to report to the Secretariat and other Member States. France opposed to include defence in EU-US trade agreement The French Minister of Defence, Jean-Yves Le Drian, told the European Parliament’s Defence Sub-Committee meeting in Strasbourg on 21 May that the French government wants to have defence industries excluded from the upcoming negotiations on a Trade and Investment Partnership (TTIP) between the EU and the US. Drian declared that the French government is not in favour of the defence sector being part of the TTIP because, first, the defence sector has so far never been included in trade negotiations with third countries; second, the Trade Council deals with trade affairs, which are therefore not under the jurisdiction of Defence Ministers; and, finally, the inclusion of defence would prejudice



the 2009 defence package, which contains several Directives aimed at eliminating obstacles to the free circulation of defence equipment in the EU.

3. Energy and Environment European leaders discuss competitiveness during a special energy summit For the first time, a European Summit has been focusing on energy policy. At last May summit, EU Heads of State and Government agreed on four priority issues:

- Completion of the internal energy market: the conclusions of the European energy summit put the emphasis on the need to achieve the two political objectives of creating common rules and standards for energy networks by 2014, and of integrating all isolated Member States into the European energy networks by 2015.

- Deployment of major infrastructure: priority was given to the adoption of a list of projects of common interest, with implementation to start in 2014. Member States should also adopt a Directive on deployment of infrastructure for alternative fuels, revision of state aid aimed at facilitating investment in energy and the environment, and elimination of subsidies granted to fossil fuels by the end of 2014.

- Security of supply: the topic of shale gas entered the debate on EU competitiveness, with the adoption of a text endorsing the European Commission’s initiative to assess more systematic recourse to indigenous sources of energy. Both the President of the European Commission, José Manuel Barroso, and the Energy Commissioner, Günther Oettinger, are in favour of a carefully monitored use of shale gas resources, pointing out that the status quo is not an option. While the Belgian Prime Minister, Elio Di Rupo, stated that shale gas is a geostrategic upheaval, his French counterpart, François Hollande, stressed that the hydraulic fracturing technique is unacceptable.

- Energy efficiency: the Heads of State and Government agreed on the need to improve energy efficiency across the EU by implementing the recently adopted Directive. The European Commission will also present a proposal on “eco-design” and energy labelling by the end of 2014.

European Commission makes €31.5 million available for Eco-innovative projects The European Commission has published a call for proposals to fund the best 45 eco-innovation projects. Businesses throughout Europe applying for-co-financing from the EU can receive up to 50% of the cost of their project. Applicants have until 5 September to submit their proposals for bringing novel environmental solutions to the market in the following areas: material recycling, water, sustainable building products, green business, and the food and drink sector. 185 projects have been selected until 2012 and are currently under implementation.



4. Financial Services European Commission proposes new rules for bank accounts The European Commission has proposed a new Directive on bank accounts. The measures contained in the draft Directive target three areas:

- Access to payment accounts: the Directive grants everyone legally residing in the EU the right to have access to a payment account with basic features, including withdrawals, bank transfers and a debit card, in all Member States.

- Payment account switching: in order to allow consumers to change banks more swiftly, banks will have to apply a clear and simplified procedure. When a consumer requests to transfer all or part of the recurring payment orders established on his account to another account, the receiving payment service provider will be in charge of initiating and managing the procedure for the customer. This procedure will have to be completed within 15 days (30 days if the bank change is made between providers located in different Member States).

- Transparency and comparability of payment account fees: in order to improve

transparency and bank comparison, the Directive obliges banks to provide consumers with a number of documents drafted using standardised terminology and standard formats.

The proposal will now go to the Council of the EU and the European Parliament for their approval before it can be enter into force. European Commission consults on a review of the European supervision system On 26 April, the European Commission launched a public consultation on the review of the European System of Financial Supervision (ESF). The ESF was established in 2010 in response to the financial crisis and is composed of the European Systemic Risk Board (ESRB), as well as three European Supervisory Authorities (ESAs): the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA). The original ESFS Regulations provided for a review of the structure and functioning of the ESRB by 17 December 2013, and of the three ESAs by 2 January 2014. In preparation for this review, the European Commission now asks stakeholders for their opinion on the effectiveness of the ESFS and its constituent agencies, as well as for suggestions to improve the existing structure.



5. Food and Beverage Council approves new rules for food for vulnerable persons On 22 April, the Council of the EU approved the compromise on the draft Regulation concerning foods considered essential for certain vulnerable persons, such as babies and young children. The new regulation will replace Directive 2009/39/EC on foodstuffs intended for particular nutritional uses and a number of European Commission acts implementing this Directive. The aim is to clarify the existing regulatory framework by remedying the overlap between legislation applicable to food for particular nutritional uses and legislation applicable to food for normal consumption. The Regulation defines general compositional and information requirements for infant formula and follow-on formula, processed cereal-based foods and baby foods for infants and young children, foods for special medical purposes, and total daily diet foods for weight control. By contrast, the new rules do not cover foods for sportsmen, milk-based drinks and similar products marketed as “growing up milks”, as well as low-lactose or low-gluten food products. The proposal will now be transmitted to the European Parliament for its second reading. Food safety: European Commission proposes package on seed, plant and animal health The European Commission proposes a package of measures to strengthen the enforcement of health and safety standards throughout the agri-food chain. The package provides for a modernised, simplified and more risk-based approach to the protection of health, as well as more efficient control tools to ensure that the rules guiding the operation of the food chain are applied effectively. Currently, EU legislation on the food production chain consists of almost 70 pieces of legislation. The reform package will cut this down to five legislative texts, and reduce red tape on processes and procedures for farmers, breeders and food business operators. The main elements of the proposal are the following:

- Official controls: the current system of fees applying to milk and meat, which are used to finance the effective implementation of controls, will be extended to other parts of the industry. In addition, Member States will be asked to fully integrate anti-fraud controls in their national control plans and to ensure that financial penalties in this area represent genuinely deterrent amounts.

- Animal health: standards regulating animal health will be improved, and a common system for detecting and controlling diseases will be provided. Moreover, diseases requiring EU-level action will be categorised.

- Plant health: greater attention will be paid to high-risk trade coming from third countries and increased traceability of planting material on the internal market.



Furthermore, better surveillance and early eradication of outbreaks of new pest species, as well as financial compensation for growers hit by such pests will be introduced.

- Plant reproductive material: more flexible rules for the marketing of seeds and other plant reproductive material will be introduced.

The proposal will now be discussed by the European Parliament and the Council of the EU. At this stage, the European Commission estimates that it can enter into force in 2016. Aspartame: EFSA reschedules opinion Less than a week before the projected date, the European Food Safety Authority (EFSA) has decided to postpone to November the publication of its final opinion on the sweetener aspartame. This opinion was expected to merely confirm the acceptable daily intake (ADI) for aspartame, which is currently set at 40 milligrams per kilo of body weight. In a statement released on 8 May, the EU agency explained that the extension of the timeframe would give experts sufficient time to consider and address the more than 200 contributions to the public consultation on its preliminary opinion, which took place from 8 January to 15 February, and three new studies that have recently been published.

6. Healthcare and Pharmaceuticals Council confirms agreement with European Parliament on cross-border health threats Member State representatives approved on 15 May a compromise agreed with the European Parliament on a draft Decision on serious cross-border health threats. This Decision aims to strengthen EU capacities and structures for responding to serious cross-border health threats by establishing common procedures and standards, shared resources and a better exchange of information. In particular, the draft includes the following elements:

- Establishment of a legal basis for a joint and voluntary procurement mechanism for medical countermeasures, especially pandemic vaccines.

- Extension of the existing coordination mechanisms for communicable diseases to all health threats of biological, chemical, environmental and unknown origin.

- Establishment of a legal base for the Health Security Committee (HSC), which is composed of Member States and European Commission representatives, and has since its creation in 2011 merely been a place for cooperation and informal coordination.

In order to enter into force, the Decision still has to be formally approved by the European Parliament, which is expected to do so in its June plenary, and the Council of the EU, probably after the summer break.



7. Information and Communication Technology European Commission presents strategy to boost the EU’s electronics industry The European Commission unveiled on 23 May a strategy for coordinated public investments in micro- and nano-electronics, such as semiconductors and computer chips, hoping to generate private investment amounting to a total of €100 billion between 2013 and 2020. This ambition is backed by researchers and the electronics industry, who at the end of 2012 outlined how a total investment of €100 billion could boost Europe's wider industrial competitiveness and benefit other sectors, from energy over automotive and health sector. The seven-year partnership is designed to cover the whole value and innovation chain in the electronics sector, including the funding of large-scale innovation projects. Half of the amount will come from the public sector, with 30% from EU's research program and 70% from Member States. The remaining €5 billion will be financed by the private sector.

8. Media European Commission consults on converging audiovisual world In view of the rapid convergence of technologies and content in the audiovisual sector, the European Commission launched an open consultation on media freedom and pluralism, on the independence of audiovisual regulatory bodies, on the changing media landscape and borderless internet. The EC invites stakeholders, including business representatives, viewers and internet users, to share their views on the changing media landscape and borderless internet in particular on market conditions, interoperability and infrastructure, and implications for EU rules. On the basis of the results of the consultation process –closing next 31 August- the Commission might explore regulatory and policy responses, including self-regulation.

9. Sports and Gambling Parliamentary Committee on Internal Market and Consumer Protection adopts Report on Online Gambling On 30 May, the European Parliament’s Internal Market and Consumer Protection Committee (IMCO) adopted a draft Report on online gambling in the internal market prepared by rapporteur Ashley Fox (ECR, UK). No less than 425 amendments had been proposed since the presentation of the draft report at the end of February. In its current form, the report more systematically stresses the principle of compliance with EU law. Following pressure from some socialist MEPs, it additionally puts greater emphasis on the principle of subsidiarity, leaving Member States free to determine how online gambling services



are organised at the national level. Finally, the report highlights the need for a high level of consumer protection and the fight against illegal gambling activities. The own-initiative report, which represents the European Parliament’s response to the European Commission’s Communication on online gambling of October 2012, now has to be adopted in plenary, with the vote being scheduled for 1 July.

10. Transport European Commission presents new legislative package for liberalising port services The European Commission has presented a new proposal for the liberalisation of port services, after two previous packages in 2004 and 2011 failed due to disagreements on social issues. 319 seaports belonging to the Trans-European Transport Network (TEN-T) are concerned and will have to adapt their performance to the expected increase of 50% in cargo handling by 2030. The European executive is proposing to ensure the free provision of services in these ports for a wide range of activities, such as pilotage, towing, refuelling and waste management. The measures are expected to put an end to the abusive use of exclusive rights by certain operators. Space constraints may nevertheless justify limiting the number of service providers in certain ports, but operators will in such cases have to be chosen through a tendering procedure. The legislative package also establishes the principle of leaving it up to ports themselves to set out and collect fees for using infrastructure and allocating it. Port authorities will be requested to take environmental performance into account and competition distortions will be monitored. EU funding under the “Connecting Europe Facility” will have a new focus on port projects identified in the so-called TEN-T corridor plans for priority funding, and on connections of ports with rail, inland waterways and roads. Ports will be encouraged to play an active role in this, for instance by providing information on traffic flows. The seaport package will now be transmitted to the European Parliament and the Council of the EU. Legislative measures are expected to come into force in 2016, but a transition period for contracts that are already in place will last until 2025. Road transport: institutional agreement on new tachographs The European Parliament and the Council of the EU reached an agreement on 14 May on the smart version of digital tachographs, which are the devices used to record the driving and rest time of professional drivers. The current manual recording of the location of vehicles will be replaced by automated recording through satellite positioning, which will reduce opportunities for fraud. The European Commission will now have to adopt technical specifications by the end of 2014, after which the sector will have a period of three years to adapt. The new devices will therefore be in place in 2018 for vehicles weighing over 35 tonnes and within 15 years for all heavy goods vehicles. However, exemptions will be granted for vehicles weighing less than 7.5 tonnes and transporting goods within 100 km of the company’s head office.



Consultation on Single European Sky performance targets The European Commission is inviting stakeholders to give their views on the EU-wide targets for the Single European Sky for the second reference period from 2015 to 2019. The consultation is part of the process leading to the adoption of binding targets for Member States on air navigation services, delays, costs for airlines and passengers, as well as environment and capacity. The consultation will last until 3 July. Following the analysis of the submitted contributions, the European Commission will present its proposal in September.



11. Competition Consultation on review of Block Exemption Regulation In the context of its state aid modernisation (SAM) initiative, the European Commission on 8 May invited stakeholders to give their opinion on a first proposal for the review of the General Block Exemption Regulation (GBER). In force since July 2008, the GBER sets out the conditions under which state aid can be exempted from the requirement of prior notification to the European Commission. Through a simplified review, it aims to lighten the administrative burden on public authorities, beneficiaries and the European Commission by permitting the automatic authorisation of aid schemes implemented under the Europe 2020 targets that do not distort competition in the Single Market. The proposal contains a number of changes to the current GBER, the most important of which include:

- greater possibilities to promote investments in R&D, in “greening” process, risk capital and finance for SMEs;

- simplified provisions for innovation and start-up aid to SMEs;

- new provisions for renewable energy, district heating, remediation of polluted sites;

- new provisions for regional development to promote cross-border co-operation projects and to address handicaps of outermost regions;

- wider possibilities to support youth employment and simplified rules on training aid;

- strengthened transparency provisions and evaluation of large schemes to promote efficient and effective public spending and minimise distortions in the internal market.

The consultation is open until 28 June. Google’s concessions considered insufficient After complaints about its search practices and the subsequent opening of an investigation by the European Commission, Google proposed in January to label its own specialised search services and to display links to at least three rival specialised search services in order to avoid being fined for abuse of dominant position in the European online search market. These proposals were submitted to a market test on 25 April. Several stakeholders have already indicated that they find the internet giant’s concessions insufficient. FairSearch, a coalition that brings together 17 of Google’s competitors and filed a complaint about the company’s Android

C R O S S - S E C T O R A L P O L I C I E S



operating system for mobile device in April, argues for example that the labelling of Google’s products does not solve the problem of the preferential treatment of its own results. The European Commission has already reacted to stakeholders’ criticism. On 28 May, Competition Commissioner, Joaquin Almunia, told MEPs in the Committee on Economic and Monetary Affairs (ECON) that Google will have to improve its proposals and to make more concessions. Previously, he had already extended the market test, which was set to end on 27 May, by one month. Almunia would prefer an amicable settlement with the US firm, because this would avoid drawn-out procedures. Nonetheless, the European Commission might still find the Google’s proposals unsuited to remedy the situation and continue its investigation under the normal procedure for abuse of dominant position, with a possible fine of up to 10% of the company’s annual global turnover. European Commission warns Motorola over patent misuse The European Commission sent on 6 May a statement of objections to Motorola Mobility, noting that its practice of seeking and enforcing an injunction against Apple in Germany on the basis of its mobile phone standard-essential patents (SEPs) amounts to an abuse of dominant position. Motorola Mobility holds patents on technologies defined as essential to the smart phone and tabloid sector, and is therefore obliged to issue licences to competitors for these patents on fair, reasonable and non-discriminatory terms (FRAND). After Apple had lodged a complaint, the European Commission opened an investigation in April 2012. On its conclusions, the European executive found that the injunction against Apple runs counter to FRAN terms. While recourse to injunctions is possible for patent infringements, such conduct may be abusive for SEPs where the potential licensee is willing to enter into a licence on FRAND terms. In such a situation, the European Commission considers that dominant SEP holders should not use injunctions, which generally involve a prohibition to sell the product infringing the patent to distort licensing negotiations and impose unjustified licensing terms on patent licensees. The sending of a statement of objections is a formal step in the European Commission’s investigations, in which it informs the parties concerned of the objections raised against them. The parties can reply to this statement and request an oral hearing to present comments. A final decision is taken only after they have exercised their rights of defence. If the European Commission subsequently finds that there is sufficient evidence of an infringement, it can impose a fine of up to 10 % of a company’s annual worldwide turnover.

12. Consumer Neven Mimica designated as the next Commissioner for consumer protection On 25 April, Croatia named Neven Minica, Deputy Prime Minister for Foreign Affairs and European Integration, as Commissioner-designate. The President of the European Commission, José Manuel Barroso, has endorsed his candidacy and indicated his intention to assign to Mimica



the portfolio of consumer protection. This means that the Health and Consumer Protection portfolio of Maltese Commissioner, Tonio Borg, will be split in two. After a hearing at the European Parliament on 4 June, the Council of the EU will appoint, by common accord with Barroso, the new Commissioner, who will take up his function on 1 July this year, when Croatia will become the 28th EU Member State.

13. Intellectual Property and Copyright EU Ministers reject proposals to have retailers pay copyright levies The 27 Ministers with responsibility for Competitiveness met on 29-30 April in Brussels to discuss the modernisation of copyright law. One of the most contentious issues in this respect was private copyright levies, taxes levied on recording equipment, such as blank CDs, smartphones and cameras, to compensate right holders for private copies made by users. Private copyright levies were harmonised across Europe in 2001, but the rules have been interpreted differently from Member State to Member State, resulting in copyright levies being applied at different rates to different products. In a bid to untangle the jungle of national regimes, Internal Market Commissioner, Michel Barnier, asked former Justice and Home Affairs Commissioner, António Vitorino, to make recommendations to bring the national systems into alignment. Vitorino’s recommendations formed the basis of the debate among EU Ministers. His report describes the current levies system in Europe as deeply flawed and as a major source of friction within the single market. In order to remedy the situation, Vitorino suggested notably shifting the liability to pay private copyright levies from manufacturers or importers to retailers, while at the same time simplifying the levies system. EU Ministers, however, rejected this proposal, arguing that the shift would complicate the collection of levies with the risk that these would not be collected at all. Moreover, they considered to freeze discussion until the Court of Justice has ruled in the next year or two on several cases linked to private copyright levies regimes.

14. Research and Development Negotiations on Horizon 2020 enter final straight Negotiations between the Council of the EU and the European Parliament on the EU Framework Programme for Research and Innovation for 2014-2020, Horizon 2020, are close to be resumed. Since the beginning of May, the Irish Presidency has been consolidating a compromise text and is expected to propose a comprehensive proposal after the meeting of Research Ministers on 30 May. However, a number of issues remain controversial, including notably the rules for being eligible for funding, the budgetary lines and the budget distribution between the three specific



objectives of Horizon 2020 (excellent science, competitive industries and better society), as well as the architecture and lines of activity of Horizon 2020. EU institutions have to reach an agreement by the end of June for Horizon 2020 to begin as planned on 1 January 2014. EU supports research facility in the Middle East After having already contributed more than €3 million to SESAME, one of the most ambitious research facilities in the Middle East, the European Commission announced on 28 May that it will contribute a further €5 million to the project. SESAME is a third-generation synchrotron light source that operates using a ring of magnets in which electrons are stored after being accelerated to high energy. SESAME will allow researchers from the region to examine the properties of advanced materials, biological processes and cultural artefacts. Based in Jordan, the joint venture brings together scientists from Bahrain, Cyprus, Egypt, Iran, Israel, Jordan, Pakistan, the Palestinian Authority and Turkey. Alongside its scientific aims, the project also aims to promote piece in the region through scientific cooperation The budget allocated by the EU will allow CERN, the European Organisation for Nuclear Research, to provide the electron storage ring used by SESAME.

15. Taxation EU leaders want to step up fight against tax fraud and tax evasion At the European Council summit on 22 May in Brussels, European Heads of State and Government succeeded in making slight progress on tax fraud and tax evasion. In their conclusions, EU leaders called notably for action to be taken on the following issues:

- Automatic exchange of information: Heads of State and Government gave priority to extending the automatic exchange of information at both EU and global level. At EU level, the European Commission will propose in June amendments to the Directive on administrative cooperation in the field of taxation, thus enabling the automatic exchange of information to cover a full range of income. At global level, the EU intends to promote the automatic exchange of information as a new international standard, and will therefore work closely with partners in international fora such as the G8, G20 and OECD.

- Taxation of savings income: EU leaders welcomed the agreement reached on 14 May at the ECOFIN Council to begin negotiations with Andorra, Liechtenstein, Monaco, San Marino and Switzerland on the taxation of savings income. The goal is to ensure that these five countries continue to apply rules equivalent to those in the EU’s Directive on the taxation of savings income, which is currently being updated. The European Council expects the revised Directive to be adopted before the end of the year.



- VAT fraud: Heads of State and Government called on the Council of the EU to adopt the new Directives designed to tackle VAT fraud by the end of June. The new rules will introduce a quick reaction mechanism enabling Member States to react rapid in cases of massive fraud, and a reverse charge mechanism targeting carousel fraud.

16. Trade US Senate and MEPs back Trade and Investment Partnership At a US Senate hearing on 23 May, there was overwhelming support for starting talks on an EU-US Transatlantic Trade and Investment Partnership (TTIP). Senators took the opportunity to call on the US administration to adopt an as-broad-as-possible negotiating mandate. The Senate’s demands came the same day that the European Parliament backed the European Commission’s decision to launch negotiations. After an animated debate, a large majority of MEPs adopted the motion for a Resolution prepared by the Committee on International Trade (INTA). However, the European Parliament took a more cautious stance than the US Senate by urging the Council of the EU to exclude the audiovisual sector from the negotiating mandate. In this respect, its Resolution called for the exclusion of cultural and audiovisual services, including those provided online, to be clearly stated in the negotiating mandate. This exemption was not foreseen in the European Commission’s negotiating mandate. Although the European Parliament’s Resolution is not legally binding, MEPs will have to approve the deal once the negotiations have been concluded and have made clear that they will only give their approval if their views are respected. The Council of the EU is expected to authorise the opening of negotiations and to approve the negotiating mandate on 14 June. The first round of talks would then probably take place on 8 July in Brussels, followed by a second round in Washington in October. EU and China wage trade war Hitting back at recent anti-dumping and anti-subsidy investigations by the EU against its solar panels and telecoms network equipment, China is prepared to open an anti-dumping probe into the EU chemical industry’s practices. This would be China’s second anti-dumping action against the EU in one month; having on 10 May launched an anti-dumping investigation against steel tube imports from the EU, Japan and the US. The EU had at the beginning of May threatened to impose provisional anti-dumping duties averaging 47% on Chinese solar panel producers and also warned China that the opening of an ex officio case (without any prior complaint by the EU industry) against Chinese telecom companies was imminent if the two parties were unable to find an amicable solution soon. Talks to settle the trade disputes have already begun, with Trade Commissioner, Karel De Gucht, and Chinese Vice-Minister of Commerce, Zhong Shan, meeting on 27 May for informal talks in Brussels, but have so far remained inconclusive. While China is calling on the EU to refrain from



imposing anti-dumping duties, De Gucht complains that China is exerting pressure on individual Member States to oppose the European Commission’s plans. Indeed, a survey published on the day of the meeting showed that a majority of Member States, among them Germany, the Netherlands and the UK, is opposed to sanctions. The European Commission nonetheless has the right to impose duties, but this will be difficult without the support of the Member States. The decision on the imposition of provisional anti-dumping duties will be taken in June. The full investigation will continue and be concluded in December. Depending on the results of the investigation, the European Commission can propose that the provisional duties become permanent or that they are rolled back. In this case, however, the ultimate decision lies in the hands of the Member States in the Council of the EU.



For further information please contact: Leonardo Sforza ([email protected]) Romain Seignovert ([email protected]) Klas Landelius ([email protected]) Andrea Oechsler ([email protected]) MSLGROUP Brussels, Avenue des Gaulois, 18 – B 1040 Bruxelles Our website: www.mslgroup.com Follow us on twitter for the breaking news updates: @MSL_Brussels

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insight brussels june 2013

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