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European Commission

MEMO

Brussels, 2 October 2013

"REFIT - Fit for growth": Examples how EU law is becoming lighter, simpler and cheaper

In today's Communication on regulatory fitness and performance (IP/13/891) the Commission outlines where it has taken action to simplify EU rules and make them less burdensome. It also sets out where it will take further action, for example by considering withdrawing pending proposals or evaluating or repealing existing pieces of legislation. Below a number of concrete examples from various policy areas:

Examples of administrative burden reduction measures adopted

  1. "Return of the curvy cucumber"/fruit and vegetable marketing standards: The completion of the Single market led to the adoption of marketing standards for fruits and vegetables, partly based on standards already existing at national level. The aim was to facilitate trade on the base of fair competition, help producers to meet consumer expectations and keep unsatisfactory products off the market. Specific rules were adopted over the years and by 1996 a total of 36 fruit and vegetables were regulated by specific marketing standards. These however were criticized for being unnecessarily complex and leading to food waste, with "ugly" fruits and vegetables with non-conventional shapes and sizes being excluded from the market. This led the Commission to review and simplify the rules and rationalize checking operations. Labels will indicate origin, but no longer class, size or variety. As a result of the simplification efforts undertaken in 2008, specific marketing standards have been brought down to a set of 10 specific rules in force today (and as from 1 July 2009). The specific standard for cucumbers, for example, was withdrawn. As a result the famous "curvy cucumbers", formerly banned, can now be legally put on the market.This measure can save up to €970 million annually.

  2. Electronic VAT Invoicing: With billions of VAT invoices submitted annually in Europe, the switch to a fully electronic VAT invoicing system will save much time and money for more than 22 million taxable enterprises. New rules which entered into force on 1 January 2013 will remove obstacles to companies' electronic billing, including additional requirements in the Member States, to make invoices VAT-compliant. The maximum mid-term reduction potential of the new rules is estimated at €18 billion a year, if all businesses send all their invoices electronically.

  1. Simplification of Financial Reporting: In the past two years, the European Parliament and the Council have agreed on two major initiatives to simplify the drawing up of annual accounts. The measures, agreed in March 2012, will allow more than 5 million micro-companies (with max. 10 employees) in Europe to benefit from a simple system of financial reporting. Although the final compromise falls short of achieving the estimated annual savings of about €6.3 billion in the Commission's original proposal, substantial savings worth several billion euro remain. New measures agreed in June 2013 will further simplify accounting rules for small companies (with max. 50 employees), with estimated savings of about €1.5 billion.

  2. VAT Refund Procedure: The rules for VAT refunds for taxable persons established in one Member State and incurring VAT in another Member State were cumbersome, requiring the completion of paper forms in the language of the Member State where the refund was due. In the new system, applicants file their applications electronically in their own Member State, which pass the information on to the other Member States. This speeds up and simplifies the refund procedure for enterprises applying for refunds in other Member States, saving them up to €447 million annually.

  3. Biocidal Products: Measures simplifying the authorisation procedures for the placing of biocidal products on the market, applicable from 1 September 2013, can save businesses up to €140 million annually and up to €2.7 billion over a period of 10 years.

  4. Trade Statistics: In order to produce trade statistics ('Intrastat'), enterprises have to report on their imports and exports of goods within the EU. The EU allowed Member States to increase their reporting thresholds, as long as the national statistics transmitted to the Commission cover the value of at least 97% of dispatches and at least 95% of arrivals. This reduces the number of reporting enterprises by a third (from 540,000 in 2005), saving up to €134 million annually, particularly for SMEs.

Examples of simplification and burden-reduction initiatives pending decision by Parliament and Council:

  1. Proposal for a Regulation on Consumer Product Safety and a Regulation on Market Surveillance introducing a clearer set of rules, eliminating overlaps, and codifying also certain exemptions from reporting requirements;

  2. Proposals for a new animal health law, replacing 37 legal acts for a new plant health Regulation replacing 7 legal acts, for a new plant reproductive material law, replacing 12 legal acts and for a new Regulation on official controls along the agri-food chain replacing 10 legal acts;

  3. Commission proposal on the review of the Professional Qualifications Directive (2005/36/EC): The legislative proposal includes several provisions aimed at reducing the complexity of recognition procedures (e.g. introduction of a European Professional Card), modernising the system of automatic recognition (e.g. update of the minimum training requirements for certain professions), simplifying the access to information (e.g. central online access points) and strengthening safeguards for consumers and patients (e.g. alert mechanism). In addition, the proposal includes specific measures aimed at simplifying and modernising the annexes to the Directive.

  4. Commission proposal to amend the Public Procurement Directives Directive 2004/18/EC and Directive 2004/17/EC: Under the new PP directives, bidders may rely on self-declarations at the beginning of the procedure. Only the winning bidder will have to provide original certificates as evidence for his suitability. The winning bidder may also indicate national databases where contracting authorities could retrieve up to date documentary evidence electronically. This will considerably reduce the paperwork for economic operators and contracting authorities. The mandatory introduction of e-procurement will also simplify PP procedures as of 2016 (2018 at the latest). The new PP directives also extend the possibility of using simplified procedures such as negotiated procedures. It also allows for simplified means of publication for sub-central contracting authorities and authorities awarding service contracts specifically for social and health services;

  5. Proposal Common Consolidated Corporate Tax base (CCCTB): The Common Consolidated Corporate Tax Base is a single set of rules that companies operating within the EU could use to calculate their taxable profits. In other words, a company or qualifying group of companies would have to comply with just one EU system for computing its taxable income, rather than different rules in each Member State in which they operate. In addition, groups using the CCCTB would be able to file a single consolidated tax return for the whole of their activity in the EU. It is estimated that the current compliance costs could be reduced by 7% and the CCCTB would save businesses EUR 750 million in reduced compliance costs and EUR 1 billion in reduced costs to expand cross-border.

Examples of forthcoming legislative initiatives to simplify and reduce burden:

  1. Consolidation of three Directives in the area of information and consultation of workers subject to the results of a consultation of social partners;

  2. Revision of the Food Hygiene legislation to consolidate the hygiene provisions, simplify procedures and reinforce a flexible approach for SMEs;

  3. Framework Regulation Integrating Business Statistics (FRIBS): FRIBS should lead to streamlining and rationalising the reference framework for European business statistics, reducing unnecessary statistical burden on businesses and allowing potential cost savings for national statistical authorities. This will be achieved through a combination of simplification actions, re-balancing (e.g. in the case of the requirements for trade in goods and services), the use of alternative sources and the use of information already available;

  4. Reform of State Aid in the Agricultural Sector: Aspects of simplification are being considered in terms of both procedure and substance. Considerations include a "one window approach"), with the aim to deal with State aid aspects as far as possible in parallel with the procedures for approval of rural development programmes or to provide for block exemptions as far as this is legally possible;

  5. Simplification and streamlining of the Visa Code: This proposal intends to streamline procedures, simplify the whole process, making the system quicker and more efficient, as well as more user-friendly for both visa applicants and the visa issuing authorities;

  1. Introduction of a standard EU VAT declaration in all Member States: The main difficulty businesses face in completing VAT returns in different Member States is the complexity. This comes from providing different information, the information not having consistent definitions, the lack of good guidance in how to complete the VAT return, different rules and procedures for the submission, and the need to complete it in the national language. The new initiative intends to address these difficulties.

  2. Simplification of cabotage rules in road transport: The purpose of this proposal will be to address difficulties in application and interpretation met by business of the existing rules. The proposal intends to simplify rules, make them easier to understand and applicable in a uniform way across the EU.

Examples of laws that the Commission considers for repeal:

  1. Repeal of the Regulation on Steel Statistics: Based on the need for clear priority-setting in the field of statistics, an analysis of the cost of data collection, the use of the steel statistics and the availability of data relating to sectors of similar interest in the European Union, a Regulation for the continuation of the collection of the steel statistics is no longer necessary. Steel statistics are now collected though different direct arrangements with steel companies. The legislation is therefore no longer necessary.

  2. Repeal of Directive 2009/33/EC on the promotion of clean and energy-efficient road transport vehicles: no longer necessary in the context of the recent developments in the horizontal public procurements rules;

  3. Repeal of the Council decision on the setting of a Community target for a reduction in the consumption of primary sources of energy in the event of difficulties in the supply of crude oil and petroleum products and implementing legislation: no longer necessary given recent developments in this area.

Examples of areas where the Commission will not take action or consider to withdraw legislative proposals:

  1. No action: During the present mandate, the Commission will not propose legislation in the area of occupational safety and health for hairdressers: On the basis of Art 155 TFEU, the social partners have asked the Commission to propose a directive implementing their agreement on health and safety rules for hairdressers. The Commission has decided that it will not propose such an agreement under the current mandate. The appropriateness and EU value-added of this agreement must first be fully assessed. In 2012, SMEs have highlighted legislation in this area as particularly burdensome and costly. A general evaluation of EU legislation in the Occupational Health and Safety Area (Directive 89/391/EEC and its 23 related directives) is ongoing and will include specific consultations of social partners. Its conclusions will be available in 2015. This will orient further developments in this legislative area.

  1. Withdrawal of a proposal for a Soil Framework Directive: The proposal was made in 2006 and is pending decision by the co-legislators since. Despite the efforts of several Presidencies, the Council has so far been unable to reach a qualified majority on this legislative proposal due to the opposition of a number of Member States constituting a blocking minority on the grounds of subsidiarity and proportionality. When considering the withdrawal, the Commission will examine how the objectives of the proposed directive can be best achieved.

  2. Withdrawal of a proposal on access to justice in the area of environment: The proposal was made in 2003 and is pending decision by the co-legislators since. The Commission is working on an alternative proposal;

  3. Withdrawal of two proposals regarding information to the general public on medicinal products subject to medical prescription: Aspects regarding pharmaco-vigilance were incorporated in new proposals COM(2012)51 and COM(2012) 52 which were adopted respectively as Regulation (EU) No 1027/2012 and Directive 2012/26/EU. The aspects regarding "information to patients" were incorporated in the amended proposals COM (2012) 48 and COM (2012) 49. Discussions in Council have shown that an agreement on these proposals cannot be reached.

  4. Withdrawal of a proposal for a Regulation on European statistics on safety from crime (COM(2011)335). Considering the vote at the EP, considering the objections made on the ground of policy needs that have not been totally addressed by the users, considering the need for prioritisation in the European Statistical System and in the absence of position at the Council after the EP vote, the Commission proposes withdrawing its proposal.

  5. Withdrawal of the proposal for a Council Regulation on the statute of a European private company: The proposal was made in 2008 and is pending decision by the co-legislators since. The Commission is working on an alternative proposal;

  6. Withdrawal of the proposal for a Directive simplifying VAT obligations: This proposal intends to give Member States the right to exempt from VAT companies below a threshold of up to 100.000 EUR. The proposal has been made in 2004 and no agreement in Council could be achieved so far – unanimity is required in this area. The proposal remains a key priority for the Commission in its Communication on the future of VAT. Following withdrawal, the Commission will re-consider the objectives of the proposal and the ways to deliver on them;

Examples of Fitness Checks1 and Evaluations with a focus on regulatory fitness:

  1. Evaluation and Fitness Check on Natura 2000;

  2. Fitness Checks on Waste Policy;

  3. Evaluation of legislation in the area of health and safety at work;

  4. Fitness Check of the Regulation (EU) N° 178/2002 (the General Food Law Regulation);

  5. Fitness Checks on chemicals legislation not covered by REACH as well as related aspects of legislation applied to downstream industries;

  6. Evaluation of the Directive on Renewable Energy;

  7. Fitness Check of legislation on legal migration;

  8. Evaluation of legislation regarding equal treatment in social security;

  9. Evaluation of Financial Services legislation.

Further information

More information: IP/13/891

Read the text of the Communication, its annex, infographics and further information: http://ec.europa.eu/refit

About smart regulation in general: http://ec.europa.eu/smart-regulation

Twitter: #EUfit4growth, #EU4citizens, #EU4business

1 :

    "Fitness checks" are comprehensive policy evaluations assessing whether the regulatory framework for a policy sector is fit for purpose. Their focus is in particular on identifying excessive regulatory, burdens, overlaps, gaps, inconsistencies and/or obsolete measures which may have appeared over time. Their findings serve as a basis for drawing policy conclusions on the future of the relevant regulatory framework.


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