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INSIGHTS
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A regular alert
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Issue 25 | May 2015
Its time to deliver
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Contents
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1. Cross-border e-commerce
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Digital Agenda:
Speeding up EU digital transformation
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3. Data economy
Energy:
Towards a bolder EU energy policy
1. Energy security
2. Competitiveness
3. Sustainability
Financial Services:
Towards a Capital Markets Union fostering market-based
instruments
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2. Investment plan
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Taxation:
Advancing efforts to combat tax avoidance
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Editorial
Europe will not be made all at once, or according to a single
plan. It will be built through concrete achievements which
first create a de facto solidarity.
Robert Schuman
The declaration of French foreign minister Robert Schuman,
outlining on 9 May 1950 in Paris a new form of political
cooperation that launched the beginning of the European
Union project, is today more relevant than ever and should
remain a source of inspiration for European policy makers.
The first six months of the Juncker Commission have been
used to mark the shift in focus, governance and approach that
will be deployed throughout the European Commissions fiveyear mandate.
For the next six months, we should expect the delivery of
operational initiatives that are likely to keep policy makers as
well as stakeholders busy, as described in our brief. Although
we have seen an unusual legislative pause during the past
few months (mainly in terms of new regulatory proposals
put forward), this should not overshadow the Commissions
ongoing activism and preparatory work to reshuffle policy
direction and the regulatory environment for energy, financial
services and industries affected by the digital revolution.
The Commissions determination to act more boldly is evident
in the context of high profile antitrust investigations, which
have already provoked animated reactions outside of Europe
from Russia and the US. Other examples are the sectorwide inquiries (also launched by Competition Commissioner
Margrethe Vestager) into e-commerce, and on subsidies
and aid provided by national governments to national power
companies; or the establishment of the European Fund for
Strategic Investments (promoted by EC Vice-President Jyrki
Katainen) which is expected to become operational during the
second half of the year.
Factors contributing to a more favourable economic
environment include lower oil prices, the depreciation of
the euro currency, the European Central Banks strong
Leonardo Sforza
Managing Director
MSLGROUP Brussels
commitment to lowering interest rates and improving credit
conditions, and rising private consumption. According to the
recent European Commission economic forecast, the outlook
for economic growth has improved, with real GDP in the EU
expected to increase 1.8% in 2015 and 2.1% in 2016. However,
internal economic growth remains uneven within the EU
and the pace of reform conducive to sustainable growth and
employment is still slow and patchy across countries. It will be
interesting to see the tone and scope of the country-specific
policy recommendations that the European Commission will
release later in May, and the way in which national authorities
decide to follow these up.
Meanwhile, nobody in Brussels is ignoring the uncertainty
surrounding a number of impending compelling issues
such as the economic and policy effects of the Greece case,
the UKs EU agenda following the impending election,
geopolitical tension in Ukraine, the Middle East and Northern
Africa, or the effect of monetary policy normalisation in the
US.
In this edition of our policy brief, we provide an update
of some key regulatory and policy changes under way
or anticipated in coming months in relation to the newly
released digital agenda, to the on-going implementation of
the energy strategy, to financial services, and to taxation.
Digital Agenda
1. Cross-border
e-commerce
Digital Agenda
Revision of regulation
on Consumer Protection
Cooperation (2015-2016)
Apart from the new proposal on crossborder rules, the European Commission
also announced that it will review the
regulation on Consumer Protection
Cooperation with a view to develop
more efficient cooperation mechanisms.
The current Consumer Protection
Cooperation (CPC) Network brings
together public authorities in all EU
Member States that are responsible
for enforcing EU consumer protection
laws. The European Commission
wants to clarify and enhance these
enforcement powers and support more
efficient market surveillance and alert
mechanisms. The Commission also
plans to establish in 2016 an EU-wide
online dispute resolution platform.
Initiative on cross-border
parcel delivery (2016)
The European Commission aims to
ensure that the cost and efficiency of
parcel delivery is not an obstacle to
cross-border e-commerce. Although it
has not yet identified the legal nature of
its proposal, the European Commission
will prepare an initiative in the area of
parcel delivery with a focus on price
transparency and regulatory oversight.
Two years after this initiative is adopted,
the Commission will reassess the
need for additional and more stringent
measures.
Digital Agenda
2. Digital networks
and platforms
The second general aim of the Strategy
is to support the development of
reliable, high-speed, affordable
networks and services. The European
Commission aims to ensure that the
EU regulatory framework ensures a
level playing field between traditional
telecom companies and new internet
players competing on the same markets.
Comprehensive assessment
of the role of online platforms
(2016)
Being aware of the fact that the market
power of some online platforms in the
digital economy raises a number of
issues (search engines, social media,
app stores, sharing economy platforms,
intermediaries), the Commission
has announced that it will carry out
a comprehensive assessment on the
role of these platforms in terms of
transparency (including in search
results), use of data collected, relations
between platfomrs and suppliers, and
platform compatibility.
The Commission will also assess how
best to tackle illegal content on the
internet, in particular when information
is contrary to public interest (such as
terrorism or child pornography) .
3. Data economy
New business registers (2017)
Timeline 2015-2017
2016
Data Economy
Data Networks
Cross-Border E-commerce
2015
Proposal to end
Geo-blocking
Inquiry into
geo-blocking
Proposal on
cross-border rules
Publication of
Industry report
Implementation
Implementation
Public
consultation
Launch of Initiative on
Data flow
Initiatives on
Free Data Flow
Launch of new standardization
system for Industrial Internet
Inter-institutional
negotiations
Self-regulation
by industry
Public
consultation
Data Protection
Package adopted
Inter-institutional
negotiations
Transposition &
Implementation
Inter-institutional
negotiations
Internal
negotiations
Commission
Proposal
Connected Continent
Package adopted
Internal
negotiations
Commission
Initiative
Public
consultation
Internal
negotiations
Commission
Proposal
Public
consultation
Commission
Proposal
Initiative on
Parcel Delivery
2017
Public
consultation
New Commission
Proposal
Inter-institutional
negotiations
Internal
negotiations
Internal
negotiations
Commission
Proposal
New Commission
Proposal
Internal
negotiations
Energy
1. Energy security
The European Commissions main goal
is to put forward initiatives to prevent
supply shortages or disruptions and
reduce dependency on particular fuels,
energy suppliers and routes. The belowmentioned proposals are likely to have
significant short- to long-term impact on
European energy companies business
models.
Revision of Security of
Electricity Supply Directive
(2015-2016)
The Commission has announced its
intention to re-open discussions on the
revision of the Security of Electricity
Supply Directive. The revision will
establish a range of acceptable risk
levels for supply interruptions and take
into account progress in cross-border
flows, variable renewable production,
demand response and storage
possibilities. The Commission is also
Revitalisation of European
energy diplomacy
With the aim of carrying more weight
on the global scene, the Commission
has proposed the establishment or
renewal of energy partnerships with
major producers and transit countries.
Particular objectives: to make significant
progress on a Mediterranean Gas hub;
to adopt a Strategic Energy Partnership
with Algeria, a Strategic Alliance
with Turkey, and a Strategic Energy
Relationship with Ukraine; to renew
the Strategic Alliance with the Energy
Community (Non-EU, Central and
Eastern European Countries); and renew
partnerships with Norway, United States
and Canada.
In addition to these energy partnerships,
the European Commission is pursuing
its trilateral rounds of negotiations
with Russia and Ukraine with a view to
2. Competitiveness
The European Commission acknowledges the
underperformance of the EU energy system in terms of
investment, competition and regulatory fragmentation. The
following initiatives, of utmost importance to the energy
business community, are proposed to address such a gap.
3. Sustainability
The Commission considers that more should be done on the
energy efficiency front to moderate energy consumption, on
decarbonisation (due to be the main objective of EU climate
policy), and to ensure that research and innovation play a more
central role.
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Timeline 2015-2017
2016
Sustainibility
Competitiveness
Security of Supply
2015
Security of Electricity
Supply Directive
European electricity
market design
Liquiefied Natural
Gas (LNG) Strategy
Study on LNG as
a shipping fuel
Implementation of
3rd Energy Package
National
Implementation
Implementation of
Infrastruture Package
Call for
Projects
Strategic Energy
Technology Plan
2030 Climate
& Energy Package
Renewable Energy
Package
Energy Efficiency
Directives
Commission
Proposal
Electricity
Stress Tests
EU study on joint
gas purchases
Security of Gas
2017
Public
consultation
Internal
negotiations
Commission
Proposal
Publication
of Strategy
Inter-institutional
negotiations
Internal
negotiations
Potential opening
of Infringement Proceedings
EU Selection
Process
Public
consultation
Pre-Agreement on
objectives
EU
Funding
Call for
Projects
Potential
Case rullings
EU Selection
Process
Publication
of Strategy
Commission
Proposals
Inter-institutional
negotiations
EU
Funding
Call for
Projects
EU Selection
Process
EU
Funding
Commission
Formal Proposal
Public
consultation
Internal
negotiations
Inter-institutional
negotiations
Commission
Proposal
Implementation
Internal
negotiations
Inter-institutional
negotiations
Financial services
1. Capital Markets
Union
2. Investment plan
On 10 March 2015, the European
Parliament agreed to support the
Commissions proposal to create a new
investment fund framework aimed at
facilitating long-term investment. The
proposal was endorsed by the Council
in April and will soon enter into force
following its publication in the EC official
journal.
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Member State, which leads to fragmentation of the single
capital market and limits the funds growth.
Timeline 2015-2017
2016
Financial services
2015
2017
Proposal on Credit
information of SMEs
Public
consultation
Results and
Action Plan
Commissions
proposal
Internal
negotiations
Inter-institutional
negotiations
Proposal on high-quality
securisatiom
Public
consultation
Results and
Action Plan
Commissions
proposal
Internal
negotiations
Inter-institutional
negotiations
Public
consultation
Results and
Action Plan
Commissions
proposal
Internal
negotiations
Inter-institutional
negotiations
Commissions
proposal
Internal
negotiations
Inter-institutional
negotiations
Proposal on EU long-term
investment funds (ELTIFS)
Inter-institutional
negociations
Proposal on European
private placement markets
Public
consultation
Proposal on
financial benchmarks
Investment plan
for Europe
Proposal to review
IORPs
Implementation
Results and
Action Plan
Inter-institutional
negotiations
Internal
negotiations
Commission
Proposal
Inter-institutional
negotiations
Internal negotiations
Consultation for 29 Regime
Entry into
operation
First
Funding
Implementation
Progress
review
Inter-institutional
negotiations
Transposition and
implementation
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Taxation
1. Corporate taxation
policy
Adoption of Directive on
automatic exchange of tax
rulings (2015-2016)
In its 2015 work program, the
Commission highlighted its
determination to combat tax avoidance
by putting in place an automatic
exchange of information on tax rulings.
In line with this ambition, the
Commission unveiled on 18 March 2015
its Tax Transparency Package aimed
at efficiently combatting corporate
tax avoidance. The key feature of this
package is a proposal of directive
introducing an automatic exchange of
information between Member States
on their tax rulings.2 Until now, it was at
the Member States discretion to decide
whether a tax ruling was relevant to
another Member State. This proposal is
designed to ensure that Member States
are given the information they need to
protect their tax bases and efficiently
target companies that try to avoid paying
their fair share of taxes.
The terms of this proposal will subject
Member States to a strict timeline: every
three months, national tax authorities
will be required to issue a brief report
to all other Member States covering all
cross-border tax rulings issued during
that time period. The information
provided will include the names of the
taxpayer and group, a description of the
issues addressed in the tax ruling, and
details on the criteria used to determine
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2. Review of tax
agreements under EC
competition rules
In June 2014, the Commission opened
three in-depth investigations into
whether tax agreements concluded
by Ireland, the Netherlands and
Luxembourg, respectively, with
Apple, Amazon, Fiat and Starbucks
constituted illegal state aid that
distorted competition. The Commission
is expected to issue its decision on
the findings of these investigations
after this summer. In February 2015,
the Commission also opened another
in-depth investigation into Belgiums
excess profit rulings.
In the event the subsidies awarded to
the above-referenced corporations
are deemed illegal state aid, the
Commission is authorised to order
that the subsidies be returned to the
country from which they were paid. The
initiation of an in-depth inquiry provides
interested third parties and concerned
Member States with an opportunity
to submit their comments, but does
prejudice the inquirys outcome.
The Commissions preliminary enquiries
have shown that the quality and
consistency of tax authority scrutiny
differ substantially across the Member
States.
Timeline 2015-2017
2016
Competition
investigations
Corporate
taxation
2015
Proposal on automatic
exchange of tax rulings
Commission
Proposal
Proposal on further
transparency requirements
Transparency
Package
Proposal
of CCCTB
Council negotiations
Parliament opinion
Action
Plan
Action
Plan
Commission
proposal
Potential Commission
revised proposal
2017
Potential
Council Approval
Transposition &
Implementation
Potential
Council Approval
Transposition &
Implementation
Potential
Council Approval
Transposition &
Implementation
Ireland
Ongoing
investigations
Investigations
outcome
Potential
ECJs ruling
Luxembourg
Ongoing
investigations
Investigations
outcome
Potential
ECJs ruling
Netherlands
Ongoing
investigations
Investigations
outcome
Potential
ECJs ruling
Belgium
Ongoing
investigations
Investigations
outcome
Potential legal
proceedings
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Notes
1.
UCITS: Undertakings for Collective Investment in Transferable Securities, an investment vehicle subject to a single European regulatory regime and thus eligible to be marketed across the EU without
regard to country of domicile.
2.
Tax rulings are confirmations or assurances provided by tax authorities to taxpayers regarding how tax will be calculated. Tax rulings are typically issued to provide taxpayers with legal certainty
regarding the tax treatment of large or complex commercial transactions they intend to conduct. Accordingly, tax rulings per se do not pose problems when issued by Member States. They become
problematic when they in effect give preferential treatment to certain companies or facilitate aggressive tax planning. One example of this is when tax rulings offering low tax rates in one Member
State encourage companies to artificially shift profits there, leading to serious revenue losses for other Member States.
3.
Currently, such transparency requirements only exist for banks and large extractive and logging industries.
leonardo sforza
WEB
romain seignovert
astrid burhi
Office
LEONARDO.SFORZA@MSLGROUP.COM
ROMAIN.SEIGNOVERT@MSLGROUP.COM
ASTRID.BURHOI@MSLGROUP.COM
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