News from the EU - July 2009

Note:
The euro area consists of Belgium, Germany, Ireland, Greece, Spain, France, Italy, Cyprus, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland.

The EU27 includes Belgium, Bulgaria, the Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden and the United Kingdom.
-----------------------------------------------------------------------------------------------------------------------------------------EC Merger Regulation contributes to more efficient merger control in EU
On 18 June 2009, the European Commission published a report setting out the results of its review of the functioning of the EC Merger Regulation. The main aim of the Commission's review was to evaluate how the rules on jurisdictional thresholds are working and to consider how the referral mechanisms (in Articles 4(4) and 4(5), 9 and 22 of the Merger Regulation) have worked in practice since their introduction and amendment in May
2004.

The EU Merger Regulation (Regulation 139/2004) has contributed to more efficient merger control within the EU since it came into force on 1 May 2004, according to the Commission's report adopted by the Commission on 18 June 2009. Turnover thresholds have in most cases been effective in distinguishing cases of EU relevance from those with a primarily national focus. Also, the improved system of case re-allocation between the Commission and the National Competition Authorities introduced in 2004 has allowed business to benefit from the Commission's "one-stop-shop" assessment and to have their cases reviewed by the more appropriate authority. The report nevertheless identifies certain areas where further reflection may be useful.

Source: http://ec.europa.eu/competition/mergers/studies_reports/studies_reports.html
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------EU accounting regulation: amending Directive published in the Official Journal
On 26 June 2009 Directive 2009/49/EC of the European Parliament and of the Council was published in the Official Journal.

This stems from the Commission's communication of 10 July 2007 on a simplified business environment for companies in the areas of company law, accounting and auditing identifies amendments that need to be made to Fourth Council Directive 78/660/EEC of 25 July 1978 on the annual accounts of certain types of companies and Seventh Council Directive 83/349/EEC of 13 June 1983 on consolidated accounts . Special attention has been given to further relieving the reporting burden imposed on small and medium-sized companies.

The Directive amends Council Directives 78/660/EEC and 83/349/EEC as regards certain disclosure requirements for medium-sized companies and the obligation to draw up consolidated accounts. The Council identified accounting and auditing as key areas for reducing the administrative burden for European companies.

Source: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:164:0042:0044:EN:PDF 
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------The European Services Directive guidance for local authorities
On 30 June 2009, guidance was published to help local authorities implement the European Services Directive in the UK.

The Department for Business, Innovation and Skills (BIS) has issued this guidance to help Local Authorities implement the Services Directive in the UK. In order to implement the Directive effectively, BIS has been working with a cross section of Authorities to gain a better understanding of how practices vary across the UK.

Advice in the guidance is not definitive on how best to implement the Directive; it is intended to highlight suggested directions that Local Authorities may wish to take. As this is a living document, it will be revised and updated later in the year.

Source: www.berr.gov.uk/files/file50026.pdf   
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------EC turns to European Court of Justice to enforce audit directive
The European Commission has opened nine case files as it attempts to force European Union (EU) member states to comply with EU accounting and auditing directives. Brussels is taking four briefs to the European Court of Justice (ECJ) regarding Austria, Ireland, Italy and Spain, which it accuses of failing to comply with the 2006 statutory audit directive (2006/43/EC).

The directive was supposed to have been implemented across the EU by June 2008 and was designed to boost the quality of audits in Europe. Notably, it requires member state to establish external quality assurance and public oversight systems of the audit profession and encourages co-operation between financial regulators.

Criticising these countries' alleged 'non-implementation' of the law, Brussels said the reform was important considering European 'corporate scandals in the past', such as the notorious Parmalat affair.

Meanwhile, the Commission has also formally threatened legal action at the ECJ against Belgium, Ireland, Greece, Luxembourg, Poland and Portugal for failing to properly implement the EU's 2006 accounting directive (2006/46/EC). This extended disclosure requirements for companies regarding transactions with related parties, such as management and spouses of board members, plus off-balance sheet arrangements. These countries have been given two months to say how they will comply with the law or maybe an ECJ case.

Source: Accountancy Age/Financial Director 1/7/2009
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------EU cuts the cost of texting and mobile data services abroad - FAQs
Effective from 1 July 2009, the new EU roaming rules will:

  • introduce a 'Euro-SMS tariff' limiting the price that consumers can be charged for sending a text message while abroad to €0.11 excluding VAT (compared to an average of €0.28 today),
  • reduce the cost of surfing the web or downloading movies with a mobile phone while abroad by introducing a wholesale cap of €1 per MB downloaded,
  • protect consumers from 'bill shocks' by ensuring they receive an SMS about how much it will cost to surf the net via their mobiles when they roam. In addition, from March 2010, operators must introduce a cut-off limit mechanism once the bill reaches €50 unless the consumer chooses a different limit offered by the operator),
  • further reduce price caps for mobile roaming calls to €0.43 for calls made abroad and €0.19 for calls received abroad (per minute and excluding VAT),
  • introduce the principle of per-second billing after the first 30 seconds for outgoing calls and after the first second for incoming calls, which is expected to cut bills by as much as 24%.

The FAQs published on 1/7/2009 can be accessed at: http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/09/309&format=HTML&aged=0&language=EN&guiLanguage=en 
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------UK faces legal action over transparency
Accountancy Age (1/7/09) reports that the UK government is being threatened with legal action by the European Commission for failing to comply with legislation forcing companies receiving public subsidies to account separately for that part of their work.  The law is the transparency directive (2005/81/EC) - supposed to have been written into the Statute Book by December 2006. Brussels says Britain has not fully implemented the law, and has given the government two months to say how it will comply or maybe face a European Court of Justice case.

Apparently the UK and Belgium are the only member states that have not complied with their financial transparency obligations.

Read story at: www.accountancyage.com/accountancyage/news/2245128/uk-faces-legal-action
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------Consumers: New 'Business Application' to notify dangerous consumer products
In an address on 3 July 2009, to the European Business Leaders Convention in Helsinki, the European Commissioner for Consumers, presented to business leaders the new 'GPSD Business Application': an on-line system for producers and distributors to notify authorities in Member States about dangerous consumer products on the EU market.

Producers and distributors, have an obligation to alert all Member States where dangerous goods were found on the market under the General Product Safety Directive (GPSD, 2001/95/EC), up to now, such notifications had to be sent to each Member State separately. The new online system will make it possible for businesses to alert all Member States concerned at the same time in one step, simplifying and speeding up the process. This in turn is in the critical interest of any consumers who might be at risk from such products.

Read the press release at: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/1087&format=HTML&aged=0&language=EN&guiLanguage=en
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------EC launches public consultation on the UCITS depositary function
The European Commission has launched a wide-ranging public consultation on the UCITS depositary Function. This consultation will play an important role in identifying and shaping the European response to vulnerabilities emanating from the UCITS depositary sector, with a view to improving the level of protection for UCITS investors.

This public consultation is part of a comprehensive review of the existing European regulatory principles which are applicable to depositary functions. It will make an important contribution to clarifying and strengthening the regulation and supervision of UCITS depositaries, in particular in the light of recent Madoff fraud.
In particular, views and evidence are sought in the following areas, to serve as guidelines for appropriate initiatives that might be taken:

  • Depositary's duties: The consultation invites views on how depositary safe-keeping and supervisory duties should be better harmonised. It seeks clarification on the depositary safe-keeping duties for each class of assets that are eligible within a UCITS portfolio and invites views on whether supervisory duties should also be further clarified and harmonised, and if so how to do so.
  • Responsibility regime: The consultation invites views on how to improve UCITS investors' protection if a depositary performs its duties improperly or if it becomes insolvent. To that end, it attempts to identify the relevant risks that might materialise. The Commission considers that the burden of proof should be borne by the depositor. The Commission also proposes that there should be additional requirements where assets are entrusted for safe-keeping through a network of sub-custodians. It also seeks views on the form of a liability regime which would allow investors to adequately mitigate losses.
  • Organisational requirements: The consultation invites views on the introduction of rules on organisation and conflict of interests based on existing rules (the Markets in Financial Instruments Directive).
  • Eligibility criteria and supervision: According to the AIFM proposal depositories should be credit institutions based, authorised and supervised in the EU. The consultation asks whether a similar approach should be adopted for UCITS depositaries and how supervisory rules might be strengthened.

The consultation is available at: http://ec.europa.eu/internal_market/investment/depositary_en.htm 
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------EESC lukewarm about European Commission's review of consumer rights
Full harmonisation of consumer protection rules should be limited to areas most affected by cross-border trade, namely distance and off-premises sales, and not extended to the issue of unfair terms and sales guarantees, says the European Economic and Social Committee (EESC) in its opinion on consumer rights adopted at the plenary session on 16 July 2009.

Four months after the European Consumers Day discussed the Commission's proposal on consumer rights, the EESC has adopted its opinion on the issue. The Commission's proposal aims to review existing European legislation on consumer protection and seeks to improve the functioning of the business-to-consumer Internal Market by increasing consumer confidence and reducing business reluctance to engage in cross-border trade.

The reaction to the Commission's proposal varied considerably among the different segments of civil society represented by the EESC. The opinion is thus a true compromise that overcomes differences between stakeholders, namely the business community and consumer associations.

Source: http://europa.eu/rapid/pressReleasesAction.doreference=CES/09/100&format=HTML&aged=0&
language=EN&guiLanguage=en
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------Adjusting EU ICT standardisation policy to the realities of 21 century
The landscape for ICT (Information and Communication Technology) standardisation has dramatically changed over the last decade. Alongside the traditional standard stetting organisations, specialised and mostly global fora and consortia have become more active and several have emerged as world-leading ICT standards development bodies, such as those responsible for the standards covering the internet and the World Wide Web. This development is not reflected in the EU standardisation policy. Fora and consortia standards cannot currently be referenced, even if they could be of benefit in helping to achieve public policy goals. Without decisive action the EU will fail to master the information society, will not realise a number of important European policy goals which require interoperability such as e-health, accessibility, security, e-business, e-government, transport, etc, and will face obstacles to being a driving force in the development and promotion of international standards for personal data protection as set out in the Communication on the Stockholm programme.

The reforms proposed in the White Paper should improve the possibilities to use and reference EU recognised standards in legislation and public procurement. The proposed reforms will also give the EU a bigger influence on international standard setting in the field of ICT. The following policy options are suggested in the White Paper:

  • Defining the attributes which make ICT standards eligible for association with EU legislation and policies. Ten such attributes are proposed based on the World Trade Organisation (WTO) criteria for international standardisation organisations (such as openness, treatment of intellectual property rights, consensus etc.)
  • Creating a permanent stakeholders' platform to advise the Commission on the objectives and priorities of ICT standardisation policy and its implementation.
  • Allowing the Commission, after consulting the stakeholders' platform, to reference in policies and legislation, specific ICT fora and consortia standards meeting the attributes, in areas where there are no European Standardisation Organisation standards.
  • Updating public procurement rules for ICT systems by enabling referencing not only products, but also services and applications. The suggested reforms will provide a better level of interoperability of publically procured ICT services and applications.

See EC press release 3/7/2009 at: http://europa.eu/rapid/pressReleasesAction.doreference=IP/09/1085&format=HTML&aged=
0&language=EN&guiLanguage=en
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------Antitrust: EC action against cartels - Questions and answers
On 8 July 2009, the EC published the most recent version of Questions and Answers in relation to cartels in the marketplace.

A cartel is an illegal secret agreement concluded between competitors to fix prices, restrict supply and/or divide up markets. The agreement may take a wide variety of forms but often relates to sales prices or increases in such prices, restrictions on sales or production capacities, sharing out of product or geographic markets or customers, and collusion on the other commercial conditions for the sale of products or services.

Details available at: http://ec.europa.eu/competition/cartels/overview/faqs_en.html
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------Frequently asked questions: Green Paper on "Promoting the learning mobility of young people"
On 8 July 2009, the European Commission published a Green Paper on "Promoting the learning mobility of young people". The purpose of the Green Paper is to open up a debate on how best to boost the opportunities for young people to develop their knowledge and skills by going abroad. With this Green Paper the Commission launches a public consultation which will be open until 15 December 2009.

Learning mobility, i.e. transnational mobility for the purpose of acquiring new skills is one of the fundamental ways in which individuals, particularly young people, can strengthen their future employability as well as their personal development. Studies confirm that learning mobility adds to human capital, as students access new knowledge and develop new linguistic skills and intercultural competences. Furthermore, employers recognise and value these benefits. Europeans who are mobile as young learners are more likely to be mobile as workers later in life. Learning mobility has played an important role in making education and training systems and institutions more open, more European and international, and more accessible and efficient. It can also strengthen Europe's competitiveness by helping to build a knowledge-intensive society, thereby contributing to the achievement of the objectives set out in the Lisbon strategy for growth and jobs.

The green paper can be downloaded from: http://ec.europa.eu/education/lifelong-learning-policy/doc/mobility/com329_en.pdf
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------EC proposes further revision of banking regulation to strengthen rules on bank capital and on remuneration in the banking sector
Announced on 13 July 2009, the European Commission has put forward a further revision of EU rules on capital requirements for banks that is designed to tighten up the way in which banks assess the risks connected with their trading book; impose higher capital requirements for re-securitisations; increase market confidence through stronger disclosure requirements for securitisation exposures; and require banks to have sound remuneration practices that do not encourage or reward excessive risk-taking.

Under the new rules, banks will be restricted in their investments in highly complex re-securitisations if they cannot demonstrate that they have fully understood the risks involved, while national supervisory authorities will review banks' remuneration policies and have the power to impose sanctions if the policies do not meet the new requirements. The proposal, which amends the existing Capital Requirements Directives, represents part of the EU's response to the financial crisis, and reflects consultation with Member States, banking supervisors and industry. It now passes to the European Parliament and the Council of Ministers for consideration.

Source: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/1120&format=HTML&aged=0&language=EN&guiLanguage=en
The proposal is available at: http://ec.europa.eu/internal_market/bank/regcapital/index_en.htm  
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------EC and industry to invest € 3.2 billion in economic recovery for a stronger, greener and more competitive economy tomorrow
Announced on 13 July 2009, the European Commission and industry announced the first round of research calls for proposals injecting €268 million in three key market areas in order to trigger economic recovery and make it more sustainable and knowledge-based.

A total of €3.2 billion has been earmarked for European public-private partnerships (PPPs) dedicated to develop new technologies in manufacturing, construction and the automotive sectors. These collaborations between the Commission and the industry will foster global competitiveness for European businesses, bring down the excessive energy consumption of Europe's buildings that make up one-third of EU CO 2 emissions, and develop new and sustainable forms of road transport. The three planned partnerships are part of the Commission's European Economy Recovery Plan endorsed by the European Council on December 2008 aiming to promote the convergence of public interest and industry commitment for research.

Source: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/1116&format=HTML&aged=0&language=EN&guiLanguage=en
For the full text of the European Economic Recovery Plan: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0800:FIN:EN:PDF
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------Engaging for Success: enhancing performance through employee engagement
The MacLeod Review of employee engagement has recommended government support and more cooperation by UK businesses, both large and small, to make sure the relationship between employees and employers is at the centre of successful business plans.  Led by David MacLeod and Nita Clarke, the review was commissioned in September 2008 to make recommendations on promoting employee engagement.

On 16 July 2009, a paper entitled as above, was published by the BIS. In autumn 2008, the authors of this paper were asked by the then Secretary of State for Business to take an in-depth look at employee engagement and to report on its potential benefits for companies, organisations and individual employees. The new Secretary of State, Lord Mandelson, encouraged the authors to examine in particular whether a wider take up of engagement approaches could impact positively on UK competitiveness and performance, as part of the country's efforts to come through the current economic difficulties, take maximum advantage of the upturn when it comes, and meet the challenges of increased global competition.

The authors' answer is an unequivocal yes and they rely on many examples of companies and organisations where performance and profitability have been transformed by employee engagement; they have met many employees who are only too keen to explain how their working lives have been transformed; and have read many studies which show a clear correlation between engagement and performance - and most importantly between improving engagement and improving performance.

The authors say that if employee engagement and the principles that lie behind it were more widely understood, if good practice was more widely shared, if the potential that resides in the country's workforce was more fully unleashed, we could see a step change in workplace performance and in employee well-being, for the considerable benefit of UK plc. Engagement, going to the heart of the workplace relationship between employee and employer, can be a key to unlocking productivity and to transforming the working lives of many people for whom Monday morning is an especially low point of the week.

The publication is available for download from: www.berr.gov.uk/files/file52215.pdf
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------The eighth annual Value Added Scoreboard
The eighth annual Value Added Scoreboard was published by BIS on 16 July 2009. It contains details of the Value Added by the top 800 UK companies (UK800) and the top 750 European companies (E750).

Value Added, which is the difference between a company's sales and the cost of its bought-in goods and services, measures the amount of wealth created by a company. It provides a broader perspective on a company's contribution to the economy than operating profit.

The eighth annual Value Added Scoreboard analyses the overall scale and growth of Value Added and examines the efficiency with which Value Added is created by UK and other European companies. It contains details of the Value Added by the top 800 UK companies (UK800) and the top 750 European companies (E750) based on an analysis of the latest audited company annual reports and consolidated accounts (as at 5th January 2009). For most companies the data reflect activities in the financial year 2007/08 and as such predate the current economic downturn.

The publication is available for download from: www.innovation.gov.uk/value_added/downloads/2009_ValueAdded_Analysis.pdf
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------State aid: Commission presents guidelines on restructuring aid to banks
The European Commission (EC) has agreed a Communication explaining its approach to assessing restructuring aid given by Member States to banks. The approach is based on three fundamental principles:

  • aided banks must be made viable in the long term without further state support:
  • aided banks and their owners must carry a fair burden of the restructuring costs; and
  • measures must be taken to limit distortions of competition in the Single Market.

The guidelines, which are in force until 31 December 2010, explain in particular how the EC intends to apply these principles in the context of the current systemic financial crisis, with a view to contributing to the return to viability of the European banking sector.

The Commission has to deal with a large number of individual cases of bank restructuring, which follow from bank rescue aid measures approved on the condition that a restructuring plan would be submitted within six months. In order to foster transparency, predictability and equality of treatment between Member States, the Commission has issued guidelines to clarify its approach, the criteria it will base its assessment upon and the type of information required to guide this assessment. These guidelines are temporary and apply until the end of 2010. After that date, the normal rules on rescue and restructuring should resume.

The full text of the Communication is available at:
http://ec.europa.eu/competition/state_aid/legislation/specific_rules.html
http://europa.eu/rapid/pressReleasesAction.doreference=IP/09/1180&format=HTML&aged=0&
language=EN&guiLanguage=en
State aid: Commission presents guidelines on restructuring aid to banks - frequently asked questions, is available at: http://europa.eu/rapid/pressReleasesAction.doreference=MEMO/09/350&format=HTML&aged=
0&language=EN&guiLanguage=en
© Copyright Bizezia Limited, publisher of LEARNEZIA
-----------------------------------------------------------------------------------------------------------------------------------------
Antitrust: EC launches public consultation on review of competition rules for distribution sector
Announced on 28 July 2009, the European Commission is calling for comments on its proposal for a revised Block Exemption Regulation and Guidelines on supply and distribution agreements (vertical restraints). The current Regulation is due to expire in May 2010. Based on its experience in their application and on stakeholders' comments, the Commission considers that the rules are working well overall and should not be fundamentally modified. The main suggestions for amendments intend to take account of recent market developments, in particular the increased buyer power of big retailers and the evolution of on-line sales on the Internet. Interested parties are invited to submit comments until 28 September 2009.

Source: http://europa.eu/rapid/pressReleasesAction.doreference=IP/09/1197&format=HTML&aged=0&
language=EN&guiLanguage=en
© Copyright Bizezia Limited, publisher of LEARNEZIA