The mutual recognition principle in the single market
This Communication highlights the importance of the mutual recognition principle for the single market. It examines the actual situation on the ground and makes proposals for improving the operation of mutual recognition.
Communication from the Commission "Mutual recognition in the context of the follow-up of the action plan for the single market" [COM(1999) 299 final - Not published in the Official Journal].
At the invitation of the Internal Market Council of March 1998, the Commission has undertaken an analysis of the difficulties encountered in the application of mutual recognition.
IMPORTANCE OF MUTUAL RECOGNITION FOR THE SINGLE MARKET
The mutual recognition principle guarantees free movement of goods and services without the need to harmonise Member States' national legislation. Goods which are lawfully produced in one Member State cannot be banned from sale on the territory of another Member State, even if they are produced to technical or quality specifications different from those applied to its own products. The only exception allowed - overriding general interest such as health, consumer or environment protection - is subject to strict conditions. The same principle applies to services.
In general, the rules of the Member State of origin prevail. This guarantees compliance with the principle of subsidiarity by avoiding the creation of detailed rules at EU level and by ensuring greater observance of local, regional and national traditions and makes it possible to maintain the diversity of products and services. It is thus a pragmatic and powerful tool for economic integration.
PROBLEMS WITH APPLICATION AND ANALYSIS OF THE CAUSES
Available information. One of the problems concerns availability of reliable information necessary for evaluation. Available figures do not allow a precise estimation of the economic impact of mutual recognition, but it is clear that the principle is a very important mechanism for a large number of industry and services sectors. The only figures available concern the number of complaints lodged with the Commission. The number of cases where producers have complied with countries' requirements or withdrawn their products is unknown.
Obstacles. According to the results of surveys conducted in industry, there are still some obstacles at the level of technical standards and regulations. The service sector estimates that in general the obstacles to free movement of goods remained practically the same between 1996 and 1998. Other problematic issues have been identified:
- on consumer protection grounds, controls that are not always necessary are imposed in the countries of destination;
- in the internal administrative organisation, better management is hampered by administrative delays, costs of procedures and inability to deal with complex issues (for example innovative products and services);
- a lack of mutual confidence in the acts of other Member States continues.
These problems have prompted some operators to adapt their products to local requirements or even, in extreme cases, to forgo marketing their products or services in another Member State.
Products. Most problems relate to guaranteed protection, since the country of destination is often convinced that its safety arrangements are the only good ones. The fields most affected are food, electrical engineering, vehicles, precious metals, construction and chemicals.
Services. The service sectors about which the Commission receives most complaints are as follows: business communications, construction, patent agents and security services. Available figures do not give an accurate picture of the situation because of the small number of complaints lodged with the Commission. In the regulated professions, difficulties in the implementation of the mutual recognition principle continue to affect individuals. In the field of financial services, the Commission finds evidence of inappropriate use of the notion of "general interest" and of consumer protection designed to inhibit the marketing of financial products. In the field of business communications, national differences, in particular in advertising, frustrate the creation of a genuine single market. Finally, as regards electronic commerce, legal barriers still restrict the opportunities in the single market.
Ensure credible monitoring. In order to assess progress, the Commission will prepare, every two years, evaluation reports, whose conclusions will be included in the single market scoreboard in order to make Member States more aware of the existing problems and to find solutions. The Commission undertakes to give greater attention to the compliance with obligations by the Member States, including the opening of infringement proceedings. Moreover, the possibilities offered by the notification procedure should be fully used to promote mutual recognition and prevent the emergence of new obstacles.
Actions targeted at citizens and economic operators. The Commission proposes two action plans, one for the Commission itself, the other for the Member States.
Action by the Commission. The Commission undertakes to facilitate dialogue between the citizens and companies. To improve information and economic analysis, the Commission proposes:
- producing a Guide on application of the mutual recognition principle in the field of industrial products and a brochure explaining the implementation of Decision 3052/95 concerning the measures derogating from the principle of free movement of goods;
- an economic analysis of the application of mutual recognition in various different sectors in order to obtain a better evaluation (economic benefits and costs of non-implementation);
- an analysis of the national consumer protection rules for financial products.
The Commission proposes the following training measures:
- organise sectoral roundtables of representatives of Member States' competent authorities and professional organisations;
- draw up specific projects at national level in order to disseminate information about the mutual recognition principle to the target public.
In order to make mechanisms for dealing with problems more effective, it is planned to:
- use biennial reports to assess more accurately whether or not new harmonisation initiatives are needed;
- draw up a model application form to be used between bodies responsible for application of mutual recognition and the European and national federations;
- make it possible for economic operators to ask for reasons why an application has been rejected and improve the handling of complaints by the Commission, in particular in problem sectors;
- extend the "package meetings" on goods between the Commission and Member States to the services sector and follow more systematically solutions proposed by Member States;
- develop a Community network for handling complaints in the field of financial services;
- take specific sectorial initiatives for better application of the principle in services, in particular in the sectors of air transport and telecommunications.
In order to take into account the international dimension of mutual recognition and to reduce, or even eliminate, barriers to trade, the Commission intends to conclude mutual recognition agreements under the General Agreement on Trade in Services (GATS) and in the area of trade in goods under the World Trade Organisation (WTO).
Action by Member States. As Member States are the main actors in the implementation of the mutual recognition principle, the Commission proposes that they give the following undertakings:
- to apply the judgments of the Court of Justice on including mutual recognition clauses in national legislation;
- to reply within a reasonable time to requests for the application of mutual recognition, except in particularly sensitive cases;
- to strengthen cooperation between the national administrations of Member States with the new telematics contact network, meetings of heads of coordination centres, and more systematic use of contact points as well as greater involvement of national coordinators (particularly in the area of regulated professions);
- to prepare regular reports on problems with application and potential solutions.
In 1997, the Commission adopted the Single Market Action Plan, which set out in detail the priority measures to be taken to improve the functioning of the single market by 1 January 1999. These included the application of the principle of mutual recognition.
Two years later in 1999, the Commission published this Communication, which serves as a basis for the Council Resolution on mutual recognition (see "Related Acts").
- For further information, please consult the mutual recognition website of the Directorate-General for Enterprise and Industry