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Insight Brussels June 2013

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A look at some of the key issues shaping EU Policy, by MSLGROUP Brussels. Don't miss the EU summit decision on energy policy priorities and on the fight against tax fraud, the new proposed rules for …

A look at some of the key issues shaping EU Policy, by MSLGROUP Brussels. Don't miss the EU summit decision on energy policy priorities and on the fight against tax fraud, the new proposed rules for bank accounts, or those related to health and safety standards in the agri-food chain.

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  • 1. | Insight Brussels | 0June 2013n°13
  • 2. A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS| Insight Brussels | 1N°13 – 4th June 2013SECTORAL POLICIES1. Agriculture and Fisheries...........................................................................................................................................22. Defence..............................................................................................................................................................................33. Energy and Environmentx.........................................................................................................................................44. Financial Services..........................................................................................................................................................55. Food and Beverage.......................................................................................................................................................66. Healthcare and Pharmaceuticals ............................................................................................................................77. Information and Communication Technology ..................................................................................................88. Media..................................................................................................................................................................................89. Sports and Gambling....................................................................................................................................................810. Transport.......................................................................................................................................................................9CROSS-SECTORAL POLICIES11. Competition ...............................................................................................................................................................1112. Consumer....................................................................................................................................................................1213. Intellectual Property and Copyright................................................................................................................1314. Research and Development.................................................................................................................................1315. Taxation.......................................................................................................................................................................1416. Trade.............................................................................................................................................................................15
  • 3. A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS| Insight Brussels | 21. Agriculture and FisheriesEuropean Commission adopts restrictions on pesticidesFrom the next 1 December restrictions on the use of three pesticides (clothianidin, imidaclopridand thiametoxam) on crops attractive to honeybees will apply throughout the EU. MemberStates have to withdraw or amend existing authorisations to comply with the EU restrictions by30 September.The ban has been decided by the European Commission following a report of the European FoodSafety Authority (EFSA), which found that these pesticides posed a high acute risk for bees. Thishas been disputed by the industry, with agro-chemical companies arguing that EFSA madefundamental mistakes in its assessment, including a serious over-estimation of the amount ofpesticide bees are exposed to in the fields. Environmental groups, on the other hand, dismiss theindustry’s protests, instead claiming that the EU should even go further by banning all pesticidesfor a period of ten years.Outcry forces European Commission to make U-turn on refillable olive oil bottlesFollowing a wave of criticism, the European Commission has withdrawn its earlier proposalbanning refillable bottles of olive oil in restaurants.Under the draft Regulation, due to enter into force on 1 January 2014, restaurants were requiredto use sealed, non-refillable bottles with a view to protect consumers against fraud related toEuropean olive oil.Hard-won agreement on CFP reformAfter a long night of negotiations, the European Parliament and the Council of the EU reachedpolitical agreement on the Common Fisheries Policy.It took two days of talks before the co-legislators found a mutually acceptable compromise onthe most contentious issues, namely discards and maximum sustainable yield (MSY is the levelof fishing that allows species to continue reproducing).On discards, a 5% rate for acceptable discards of total annual catches of all species will applyafter a phase-in period of four years. The starting date for the new discard rules is set at 1January 2015 for pelagic fish (fish living near the surface rather than in deep waters), and at 1January 2016 for other species and fishing zones. On MSY, Member States will have to setsustainable 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 avoidoverfishing, and provides for decentralisation by placing fishermen, professional organisations,as well as local and regional authorities at the centre of the decision-making process.SECTORAL POLICIES
  • 4. A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS| Insight Brussels | 3On 8 May, the European Parliament and the Council of the EU had also reached agreement on adraft Regulation on reform of the common market organisation (CMO) in fishery andaquaculture products, thereby consolidating an important instrument that supports CFPobjectives. The draft Regulation aims to make the industry more competitive by simplifyingprocedures for producer organisations, and improves the labelling of fishery and aquacultureproducts, thus providing better information to consumers.2. DefenceNATO Secretary General urges Europe to step up defence effortsAt 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 andbudget. He argued that soft power alone is not enough and that Europeans should also have thepolitical will to use the right capabilities. According to Fogh, all talk about a strengthenedEuropean defence and security policy would just be hot air if European countries did not firmlycommit 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 toensure that there would be no duplication of effort and spending. As a positive example, theSecretary-General cited the promise by European NATO members to engage in developingEuropean air-to-air refuelling capabilities to avoid dependency on the US. Other issues raised byMEPs included NATO’s enlargement and the situation in Syria.Member States encouraged signing UN Arms Trade TreatyThe European Commission has initiated a proposal for the Council Decision authorising MemberStates to sign the United Nations’ Arms Trade Treaty (ATT). This Treaty, which was adopted on2 April by the UN General Assembly, aims at making legal arms trading more responsible byestablishing strict common international standards for importing, exporting and transferringweapons. It covers also the evaluation of arms transfers, and measures to prevent themisappropriation of conventional weapons imported or exported by Member States.Furthermore, it enhances transparency in arms trading by obliging all signatory states to keepregisters, and to report to the Secretariat and other Member States.France opposed to include defence in EU-US trade agreementThe French Minister of Defence, Jean-Yves Le Drian, told the European Parliament’s DefenceSub-Committee meeting in Strasbourg on 21 May that the French government wants to havedefence industries excluded from the upcoming negotiations on a Trade and InvestmentPartnership (TTIP) between the EU and the US.Drian declared that the French government is not in favour of the defence sector being part ofthe TTIP because, first, the defence sector has so far never been included in trade negotiationswith third countries; second, the Trade Council deals with trade affairs, which are therefore notunder the jurisdiction of Defence Ministers; and, finally, the inclusion of defence would prejudice
  • 5. A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS| Insight Brussels | 4the 2009 defence package, which contains several Directives aimed at eliminating obstacles tothe free circulation of defence equipment in the EU.3. Energy and EnvironmentEuropean leaders discuss competitiveness during a special energy summitFor 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 energysummit put the emphasis on the need to achieve the two political objectives of creatingcommon rules and standards for energy networks by 2014, and of integrating all isolatedMember States into the European energy networks by 2015.- Deployment of major infrastructure: priority was given to the adoption of a list ofprojects of common interest, with implementation to start in 2014. Member Statesshould also adopt a Directive on deployment of infrastructure for alternative fuels,revision of state aid aimed at facilitating investment in energy and the environment, andelimination 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, withthe adoption of a text endorsing the European Commission’s initiative to assess moresystematic recourse to indigenous sources of energy. Both the President of the EuropeanCommission, José Manuel Barroso, and the Energy Commissioner, Günther Oettinger, arein favour of a carefully monitored use of shale gas resources, pointing out that the statusquo is not an option. While the Belgian Prime Minister, Elio Di Rupo, stated that shale gasis a geostrategic upheaval, his French counterpart, François Hollande, stressed that thehydraulic fracturing technique is unacceptable.- Energy efficiency: the Heads of State and Government agreed on the need to improveenergy efficiency across the EU by implementing the recently adopted Directive. TheEuropean Commission will also present a proposal on “eco-design” and energy labellingby the end of 2014.European Commission makes €31.5 million available for Eco-innovative projectsThe European Commission has published a call for proposals to fund the best 45 eco-innovationprojects. Businesses throughout Europe applying for-co-financing from the EU can receive up to50% of the cost of their project. Applicants have until 5 September to submit their proposals forbringing 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.
  • 6. A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS| Insight Brussels | 54. Financial ServicesEuropean Commission proposes new rules for bank accountsThe European Commission has proposed a new Directive on bank accounts. The measurescontained in the draft Directive target three areas:- Access to payment accounts: the Directive grants everyone legally residing in the EU theright 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 totransfer all or part of the recurring payment orders established on his account to anotheraccount, the receiving payment service provider will be in charge of initiating andmanaging the procedure for the customer. This procedure will have to be completedwithin 15 days (30 days if the bank change is made between providers located indifferent Member States).- Transparency and comparability of payment account fees: in order to improvetransparency and bank comparison, the Directive obliges banks to provide consumerswith a number of documents drafted using standardised terminology and standardformats.The proposal will now go to the Council of the EU and the European Parliament for theirapproval before it can be enter into force.European Commission consults on a review of the European supervision systemOn 26 April, the European Commission launched a public consultation on the review of theEuropean System of Financial Supervision (ESF).The ESF was established in 2010 in response to the financial crisis and is composed of theEuropean Systemic Risk Board (ESRB), as well as three European Supervisory Authorities(ESAs): the European Banking Authority (EBA), the European Insurance and OccupationalPensions 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 ESRBby 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 theESFS and its constituent agencies, as well as for suggestions to improve the existing structure.
  • 7. A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS| Insight Brussels | 65. Food and BeverageCouncil approves new rules for food for vulnerable personsOn 22 April, the Council of the EU approved the compromise on the draft Regulation concerningfoods 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 particularnutritional uses and a number of European Commission acts implementing this Directive. Theaim is to clarify the existing regulatory framework by remedying the overlap between legislationapplicable to food for particular nutritional uses and legislation applicable to food for normalconsumption.The Regulation defines general compositional and information requirements for infant formulaand follow-on formula, processed cereal-based foods and baby foods for infants and youngchildren, foods for special medical purposes, and total daily diet foods for weight control. Bycontrast, the new rules do not cover foods for sportsmen, milk-based drinks and similarproducts 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 healthThe European Commission proposes a package of measures to strengthen the enforcement ofhealth and safety standards throughout the agri-food chain. The package provides for amodernised, simplified and more risk-based approach to the protection of health, as well asmore efficient control tools to ensure that the rules guiding the operation of the food chain areapplied 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 processesand 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 tofinance the effective implementation of controls, will be extended to other parts of theindustry. In addition, Member States will be asked to fully integrate anti-fraud controls intheir national control plans and to ensure that financial penalties in this area representgenuinely deterrent amounts.- Animal health: standards regulating animal health will be improved, and a commonsystem for detecting and controlling diseases will be provided. Moreover, diseasesrequiring EU-level action will be categorised.- Plant health: greater attention will be paid to high-risk trade coming from thirdcountries and increased traceability of planting material on the internal market.
  • 8. A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS| Insight Brussels | 7Furthermore, 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 otherplant reproductive material will be introduced.The proposal will now be discussed by the European Parliament and the Council of the EU. Atthis stage, the European Commission estimates that it can enter into force in 2016.Aspartame: EFSA reschedules opinionLess than a week before the projected date, the European Food Safety Authority (EFSA) hasdecided to postpone to November the publication of its final opinion on the sweeteneraspartame. This opinion was expected to merely confirm the acceptable daily intake (ADI) foraspartame, 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 timeframewould give experts sufficient time to consider and address the more than 200 contributions tothe public consultation on its preliminary opinion, which took place from 8 January to 15February, and three new studies that have recently been published.6. Healthcare and PharmaceuticalsCouncil confirms agreement with European Parliament on cross-border health threatsMember State representatives approved on 15 May a compromise agreed with the EuropeanParliament 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 anda better exchange of information. In particular, the draft includes the following elements:- Establishment of a legal basis for a joint and voluntary procurement mechanism formedical countermeasures, especially pandemic vaccines.- Extension of the existing coordination mechanisms for communicable diseases to allhealth threats of biological, chemical, environmental and unknown origin.- Establishment of a legal base for the Health Security Committee (HSC), which iscomposed of Member States and European Commission representatives, and has sinceits 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 EuropeanParliament, which is expected to do so in its June plenary, and the Council of the EU, probablyafter the summer break.
  • 9. A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS| Insight Brussels | 87. Information and Communication TechnologyEuropean Commission presents strategy to boost the EU’s electronics industryThe European Commission unveiled on 23 May a strategy for coordinated public investments inmicro- and nano-electronics, such as semiconductors and computer chips, hoping to generateprivate investment amounting to a total of €100 billion between 2013 and 2020. This ambitionis backed by researchers and the electronics industry, who at the end of 2012 outlined how atotal investment of €100 billion could boost Europes wider industrial competitiveness andbenefit other sectors, from energy over automotive and health sector.The seven-year partnership is designed to cover the whole value and innovation chain in theelectronics sector, including the funding of large-scale innovation projects. Half of the amountwill come from the public sector, with 30% from EUs research program and 70% from MemberStates. The remaining €5 billion will be financed by the private sector.8. MediaEuropean Commission consults on converging audiovisual worldIn view of the rapid convergence of technologies and content in the audiovisual sector, theEuropean Commission launched an open consultation on media freedom and pluralism, on theindependence of audiovisual regulatory bodies, on the changing media landscape andborderless internet.The EC invites stakeholders, including business representatives, viewers and internet users, toshare their views on the changing media landscape and borderless internet in particular onmarket conditions, interoperability and infrastructure, and implications for EU rules. On thebasis of the results of the consultation process –closing next 31 August- the Commission mightexplore regulatory and policy responses, including self-regulation.9. Sports and GamblingParliamentary Committee on Internal Market and Consumer Protection adopts Report onOnline GamblingOn 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 byrapporteur Ashley Fox (ECR, UK). No less than 425 amendments had been proposed since thepresentation of the draft report at the end of February.In its current form, the report more systematically stresses the principle of compliance with EUlaw. Following pressure from some socialist MEPs, it additionally puts greater emphasis on theprinciple of subsidiarity, leaving Member States free to determine how online gambling services
  • 10. A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS| Insight Brussels | 9are organised at the national level. Finally, the report highlights the need for a high level ofconsumer protection and the fight against illegal gambling activities.The own-initiative report, which represents the European Parliament’s response to theEuropean Commission’s Communication on online gambling of October 2012, now has to beadopted in plenary, with the vote being scheduled for 1 July.10. TransportEuropean Commission presents new legislative package for liberalising port servicesThe 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. 319seaports belonging to the Trans-European Transport Network (TEN-T) are concerned and willhave 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 awide range of activities, such as pilotage, towing, refuelling and waste management. Themeasures 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 certainports, 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 setout and collect fees for using infrastructure and allocating it. Port authorities will be requestedto 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 projectsidentified in the so-called TEN-T corridor plans for priority funding, and on connections of portswith rail, inland waterways and roads. Ports will be encouraged to play an active role in this, forinstance by providing information on traffic flows.The seaport package will now be transmitted to the European Parliament and the Council of theEU. Legislative measures are expected to come into force in 2016, but a transition period forcontracts that are already in place will last until 2025.Road transport: institutional agreement on new tachographsThe European Parliament and the Council of the EU reached an agreement on 14 May on thesmart version of digital tachographs, which are the devices used to record the driving and resttime of professional drivers. The current manual recording of the location of vehicles will bereplaced by automated recording through satellite positioning, which will reduce opportunitiesfor fraud. The European Commission will now have to adopt technical specifications by the endof 2014, after which the sector will have a period of three years to adapt. The new devices willtherefore be in place in 2018 for vehicles weighing over 35 tonnes and within 15 years for allheavy goods vehicles. However, exemptions will be granted for vehicles weighing less than 7.5tonnes and transporting goods within 100 km of the company’s head office.
  • 11. A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS| Insight Brussels | 10Consultation on Single European Sky performance targetsThe European Commission is inviting stakeholders to give their views on the EU-wide targets forthe Single European Sky for the second reference period from 2015 to 2019. The consultation ispart of the process leading to the adoption of binding targets for Member States on airnavigation services, delays, costs for airlines and passengers, as well as environment andcapacity. The consultation will last until 3 July. Following the analysis of the submittedcontributions, the European Commission will present its proposal in September.
  • 12. A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS| Insight Brussels | 1111. CompetitionConsultation on review of Block Exemption RegulationIn the context of its state aid modernisation (SAM) initiative, the European Commission on 8May invited stakeholders to give their opinion on a first proposal for the review of the GeneralBlock Exemption Regulation (GBER).In force since July 2008, the GBER sets out the conditions under which state aid can be exemptedfrom the requirement of prior notification to the European Commission. Through a simplifiedreview, it aims to lighten the administrative burden on public authorities, beneficiaries and theEuropean Commission by permitting the automatic authorisation of aid schemes implementedunder 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 whichinclude:- greater possibilities to promote investments in R&D, in “greening” process, risk capitaland 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 projectsand 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 promoteefficient and effective public spending and minimise distortions in the internal market.The consultation is open until 28 June.Google’s concessions considered insufficientAfter complaints about its search practices and the subsequent opening of an investigation bythe European Commission, Google proposed in January to label its own specialised searchservices and to display links to at least three rival specialised search services in order to avoidbeing 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 alreadyindicated that they find the internet giant’s concessions insufficient. FairSearch, a coalition thatbrings together 17 of Google’s competitors and filed a complaint about the company’s AndroidCROSS-SECTORAL POLICIES
  • 13. A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS| Insight Brussels | 12operating system for mobile device in April, argues for example that the labelling of Google’sproducts 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 andMonetary Affairs (ECON) that Google will have to improve its proposals and to make moreconcessions. Previously, he had already extended the market test, which was set to end on 27May, 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 proposalsunsuited to remedy the situation and continue its investigation under the normal procedure forabuse of dominant position, with a possible fine of up to 10% of the company’s annual globalturnover.European Commission warns Motorola over patent misuseThe European Commission sent on 6 May a statement of objections to Motorola Mobility, notingthat its practice of seeking and enforcing an injunction against Apple in Germany on the basis ofits 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 andtabloid 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, theEuropean Commission opened an investigation in April 2012. On its conclusions, the Europeanexecutive found that the injunction against Apple runs counter to FRAN terms.While recourse to injunctions is possible for patent infringements, such conduct may be abusivefor SEPs where the potential licensee is willing to enter into a licence on FRAND terms. In such asituation, the European Commission considers that dominant SEP holders should not useinjunctions, which generally involve a prohibition to sell the product infringing the patent todistort 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’sinvestigations, 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 finaldecision is taken only after they have exercised their rights of defence. If the EuropeanCommission subsequently finds that there is sufficient evidence of an infringement, it canimpose a fine of up to 10 % of a company’s annual worldwide turnover.12. ConsumerNeven Mimica designated as the next Commissioner for consumer protectionOn 25 April, Croatia named Neven Minica, Deputy Prime Minister for Foreign Affairs andEuropean 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
  • 14. A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS| Insight Brussels | 13the portfolio of consumer protection. This means that the Health and Consumer Protectionportfolio of Maltese Commissioner, Tonio Borg, will be split in two. After a hearing at theEuropean Parliament on 4 June, the Council of the EU will appoint, by common accord withBarroso, the new Commissioner, who will take up his function on 1 July this year, when Croatiawill become the 28th EU Member State.13. Intellectual Property and CopyrightEU Ministers reject proposals to have retailers pay copyright leviesThe 27 Ministers with responsibility for Competitiveness met on 29-30 April in Brussels todiscuss the modernisation of copyright law.One of the most contentious issues in this respect was private copyright levies, taxes levied onrecording equipment, such as blank CDs, smartphones and cameras, to compensate right holdersfor private copies made by users. Private copyright levies were harmonised across Europe in2001, 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 tountangle the jungle of national regimes, Internal Market Commissioner, Michel Barnier, askedformer Justice and Home Affairs Commissioner, António Vitorino, to make recommendations tobring the national systems into alignment.Vitorino’s recommendations formed the basis of the debate among EU Ministers. His reportdescribes the current levies system in Europe as deeply flawed and as a major source of frictionwithin the single market. In order to remedy the situation, Vitorino suggested notably shiftingthe liability to pay private copyright levies from manufacturers or importers to retailers, whileat the same time simplifying the levies system.EU Ministers, however, rejected this proposal, arguing that the shift would complicate thecollection of levies with the risk that these would not be collected at all. Moreover, theyconsidered to freeze discussion until the Court of Justice has ruled in the next year or two onseveral cases linked to private copyright levies regimes.14. Research and DevelopmentNegotiations on Horizon 2020 enter final straightNegotiations between the Council of the EU and the European Parliament on the EU FrameworkProgramme 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 isexpected to propose a comprehensive proposal after the meeting of Research Ministers on 30May.However, a number of issues remain controversial, including notably the rules for being eligiblefor funding, the budgetary lines and the budget distribution between the three specific
  • 15. A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS| Insight Brussels | 14objectives of Horizon 2020 (excellent science, competitive industries and better society), as wellas 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 asplanned on 1 January 2014.EU supports research facility in the Middle EastAfter having already contributed more than €3 million to SESAME, one of the most ambitiousresearch facilities in the Middle East, the European Commission announced on 28 May that itwill contribute a further €5 million to the project.SESAME is a third-generation synchrotron light source that operates using a ring of magnets inwhich electrons are stored after being accelerated to high energy. SESAME will allowresearchers from the region to examine the properties of advanced materials, biologicalprocesses and cultural artefacts. Based in Jordan, the joint venture brings together scientistsfrom 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 throughscientific cooperationThe budget allocated by the EU will allow CERN, the European Organisation for NuclearResearch, to provide the electron storage ring used by SESAME.15. TaxationEU leaders want to step up fight against tax fraud and tax evasionAt the European Council summit on 22 May in Brussels, European Heads of State andGovernment succeeded in making slight progress on tax fraud and tax evasion. In theirconclusions, EU leaders called notably for action to be taken on the following issues:- Automatic exchange of information: Heads of State and Government gave priority toextending 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 onadministrative cooperation in the field of taxation, thus enabling the automatic exchangeof information to cover a full range of income. At global level, the EU intends to promotethe automatic exchange of information as a new international standard, and willtherefore 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 atthe ECOFIN Council to begin negotiations with Andorra, Liechtenstein, Monaco, SanMarino and Switzerland on the taxation of savings income. The goal is to ensure thatthese five countries continue to apply rules equivalent to those in the EU’s Directive onthe taxation of savings income, which is currently being updated. The European Councilexpects the revised Directive to be adopted before the end of the year.
  • 16. A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS| Insight Brussels | 15- VAT fraud: Heads of State and Government called on the Council of the EU to adopt thenew Directives designed to tackle VAT fraud by the end of June. The new rules willintroduce a quick reaction mechanism enabling Member States to react rapid in cases ofmassive fraud, and a reverse charge mechanism targeting carousel fraud.16. TradeUS Senate and MEPs back Trade and Investment PartnershipAt 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 callon 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 EuropeanCommission’s decision to launch negotiations. After an animated debate, a large majority ofMEPs 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 byurging the Council of the EU to exclude the audiovisual sector from the negotiating mandate. Inthis respect, its Resolution called for the exclusion of cultural and audiovisual services, includingthose provided online, to be clearly stated in the negotiating mandate. This exemption was notforeseen in the European Commission’s negotiating mandate.Although the European Parliament’s Resolution is not legally binding, MEPs will have to approvethe deal once the negotiations have been concluded and have made clear that they will only givetheir approval if their views are respected.The Council of the EU is expected to authorise the opening of negotiations and to approve thenegotiating mandate on 14 June. The first round of talks would then probably take place on 8July in Brussels, followed by a second round in Washington in October.EU and China wage trade warHitting back at recent anti-dumping and anti-subsidy investigations by the EU against its solarpanels and telecoms network equipment, China is prepared to open an anti-dumping probe intothe EU chemical industry’s practices. This would be China’s second anti-dumping action againstthe EU in one month; having on 10 May launched an anti-dumping investigation against steeltube imports from the EU, Japan and the US.The EU had at the beginning of May threatened to impose provisional anti-dumping dutiesaveraging 47% on Chinese solar panel producers and also warned China that the opening of anex officio case (without any prior complaint by the EU industry) against Chinese telecomcompanies 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 inBrussels, but have so far remained inconclusive. While China is calling on the EU to refrain from
  • 17. A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS| Insight Brussels | 16imposing anti-dumping duties, De Gucht complains that China is exerting pressure on individualMember 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 EuropeanCommission nonetheless has the right to impose duties, but this will be difficult without thesupport of the Member States.The decision on the imposition of provisional anti-dumping duties will be taken in June. The fullinvestigation will continue and be concluded in December. Depending on the results of theinvestigation, the European Commission can propose that the provisional duties becomepermanent or that they are rolled back. In this case, however, the ultimate decision lies in thehands of the Member States in the Council of the EU.
  • 18. A MONTHLY ALERT ON KEY EU POLICY DEVELOPMENTS AFFECTING OUR CLIENTS| Insight Brussels | 17For further information please contact:Leonardo Sforza (leonardo.sforza@mslgroup.com)Romain Seignovert (romain.seignovert@mslgroup.com)Klas Landelius (klas.landelius@jklgroup.com)Andrea Oechsler (andrea.oechsler@mslgroup.com)MSLGROUP Brussels, Avenue des Gaulois, 18 – B 1040 BruxellesOur website: www.mslgroup.comFollow us on twitter for the breaking news updates: @MSL_Brussels