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Brussels, 18 June 2014
REFIT: State of play and outlook - Questions and Answers
What is REFIT?
The Regulatory Fitness and Performance Programme (REFIT) launched in December 2012 is a programme aimed to make EU law lighter, simpler and less costly so that it benefits citizens and businesses and helps to create the conditions for growth and jobs. It does not put into question the EU's policy objectives, but seeks for more effective ways to achieve them.
Where do we stand with its implementation?
Under REFIT, the Commission regularly screens the entire stock of EU legislation for burdens, inconsistencies and ineffective measures and identifies corrective action. The aim is to make sure that the policy objectives are achieved and the benefits of EU legislation are enjoyed at lowest cost and with a minimum of administrative burden
On 2 October 2013, the Commission defined an ambitious agenda with over 100 individual actions including 46 legislative actions to simplify and reduce regulatory burden, 7 initiatives to repeal existing regulation and 9 initiatives to withdraw proposals for new regulation. In addition, the Commission committed to carry-out 47 Fitness Checks and evaluations under REFIT to assess the efficiency and effectiveness of EU regulation and prepare future initiatives for simplification and regulatory burden reduction. The Commission also identified areas where initiatives foreseen would not be taken forward. Stakeholders from a broad range of interests provided valuable input.
Today, the Commission presented the state of play of REFIT implementation, proposes new initiatives and publishes a scoreboard showing the progress of each REFIT initiative. (See press release).
Which action has the Commission taken since October 2013?
Most of the legislative proposals for simplification and burden reduction identified in October 2013 have been adopted already or are planned for adoption this year. Important simplification proposals for business, such as the introduction of a standard EU VAT declaration and the improvement of the European small claims procedure have already been tabled by the Commission and are awaiting decision of the co-legislator.
The Commission formally approved and published 53 withdrawals of pending proposals after consultation of Parliament and Council, including all nine REFIT initiatives, notably those on simplification of VAT obligations, the statute of a European private company and on the protection of soil.
The Commission also decided not to present a number of proposals on which it had already been working, for example in the areas of occupational safety and health for hairdressers, musculoskeletal disorders, environmental tobacco smoke and carcinogens and mutagens.
The Commission is preparing repeals of existing EU legislation as foreseen, including legislation on the classification, packaging and labelling of dangerous preparations, scientific cooperation on questions relating to food, steel statistics and retrofitting of mirrors to heavy goods vehicles.
Work has started on the Fitness Checks in the legislative areas of waste, the protection of birds and habitats (Natura 2000), passenger ship safety and the General Food Law. These will provide the basis for further initiatives for simplification and regulatory burden reduction, including the reduction and streamlining of reporting obligations.
Which action have the Council and Parliament been taken since October 2013?
Since October 2013, the legislator (Parliament and Council) has adopted a number of important proposals for simplification and burden reduction: The amended Directive on recognition of professional qualifications will simplify recognition procedures and facilitate the access to information; the new legal framework for public procurement contains measures to make procurement easier and administratively less burdensome and promotes electronic procurement. For example, contracting authorities and entities that have already made the transition to e-procurement commonly report savings between 5-20%. Given the size of the total procurement market in the EU, each 5% saved could return around €100 billion to the public purse. (E-procurement strategy – COM(2012)179final)
The new regulation on tachographs reduces administrative burden and improves enforcement through the introduction of "digital tachographs" linked to satellite navigation systems and control authorities. To accommodate the specific situation of craftsmen, vehicles of less than 7.5 tons driving within a limited range of 100 km from the craftsmen's base of activity were taken out of the scope of the social and tachograph rules. These proposals should bring substantial cost savings to SMEs: the legislation on the digital tachograph would entail a cost reduction of 20% or 415 million EUR each year in total.
The Regulation on the simplification of prospectus and disclosure requirements of securities in relation to the Internal Market, for example would save 20% or between 20.000 and 60.000 EUR per prospectus.
Which are the biggest obstacles in implementing the smart regulation agenda?
There are cases where cost savings projected at the stage of impact assessment could not be delivered due to amendments in the legislative process, such as regarding producer registration in the context of waste of electrical and electronic equipment. Simplifications in environment proposals on waste shipment and environmental impact assessment were not supported by the legislator. Combating late payments in commercial transactions, company accounting requirements, collection of statistics, co-ordination on VAT and simplification of VAT obligations are also areas where Member States have been reluctant to reduce burdens, citing subsidiarity or additional national policy justifications.
Furthermore, a number of important simplification proposals with significant savings are still pending adoption by the legislator: for instance the Commission proposal for a common set of rules to calculate the corporate tax base which would considerably reduce tax compliance costs of businesses operating in the Single Market. There are also other cases where current discussion in the legislative process could result in a reduction of estimated savings. For example, savings to business estimated at 15 billion EUR per year, included in the Commission's proposal for an EU standard VAT declaration risk being substantially diminished if certain changes discussed in Council are adopted.
At the implementation stage, there are significant examples where Member States do not use simplification options offered by EU legislation or burden is added through national regulation in areas not directly covered by EU rules. This is the case, for instance, in the area of food safety, where optional lighter regimes for small establishments are not always used, in the area of road freight transport, where some national requirements for recording of driving time for light commercial vehicles in areas not covered by EU law add regulatory burden for small companies, and in company accounting requirements. Significant benefits can also be brought for SMEs through full use by Member States of the flexibility allowed under the regulation on how food information is provided to consumers.
Which simplification measures could Member States implement?
Several Simplification proposals in the areas of customs enforcement of intellectual property rights (IPR) and take-back of electronic waste (WEEE) have entered into force in early 2014. The IPR Regulation will reduce administrative burdens and costs, enable better risk management and improve the enforcement of intellectual property rights. The WEEE Directive provides an exemption of small retailers from the take-back obligation for electric and electronic waste. It is important that all Member States fully implement and take advantage of the simplification and burden reduction provisions in these and other measures, such as the regulation on food information to consumers, which enters into force at the end of this year (Regulation 1169/2011 on the provision of food information to consumers).
What do you expect from other institutions, Member States and stakeholders?
The Commission will continue to work closely with Parliament and Council to ensure that benefits in simplification and burden reduction are confirmed in the legislative process and calls upon the legislator and upon all Member States to develop sufficient capacity to contribute to these efforts in their respective areas and to carry-out ex-ante impact assessments of significant amendments to Commission proposals in the legislative process.
The new mandates for Parliament and Commission starting this year offer an opportunity for all EU institutions to strengthen their commitment to smart regulation and regulatory fitness.
The Commission invites input, data and evidence from stakeholders on the state of play and outlook on REFIT presented in this Communication and in the accompanying staff working document.
What is the purpose and contents of the REFIT Scoreboard published for the first time today?
With the publication of an annual scoreboard, the Commission committed itself to monitor REFIT initiatives through the legislative process and at a later stage at the level of Member States implementation. The purpose of the Scoreboard, published as part of a Staff Working Document (SWD) today, is to track progress in the implementation of REFIT, providing information on the results and impact on-the-ground, allowing results to be measured against initial objectives and expectations, contributing to transparency on the whole regulatory cycle.
This Staff Working Document includes the first edition of this scoreboard covering 133 initiatives identified by the Commission in the context of REFIT, its SME policy and the ABR+ programme. The scoreboard identifies the main REFIT objectives of each initiative, indicates the main changes that are made in the legislative procedure and includes an assessment of those measures that have already been finally adopted. In each policy area, the SWD also includes an overview of smart regulation activities and simplification efforts in 2013-2014 and a list of possible future REFIT actions.
Which legislative proposals have you withdrawn since you announced this intention in October 2013?
The Commission has withdrawn 53 legislative proposals. The corresponding decision was taken in the context of the 2014 Work Programme of the Commission. The withdrawals took effect with the publication in the Official Journal C 153 of 21 May 2014. They include proposals identified under REFIT. Examples are: the proposals for a simplification of VAT tax obligations and for a Framework Directive on Soil which did not receive sufficient support in the Council, a proposal for a Community Patent converted into enhanced cooperation and a proposal for a Statute on a European Private Company which was replaced. The Commission considers it a practice of good legislative management to withdraw proposals that are obsolete or do not advance in the legislative process in order to allow for a fresh start or for alternative ways to achieve the intended legislative purpose. This practice will be continued in the context of the Commission's REFIT programme. The detailed justification for each of the 2014 withdrawals can be found in Annex IV of the Commission's annual work programme.
How does the number of 53 withdrawals compare to past years?
The identification of withdrawals is an annual exercise of good legislative management. In this context, the Commission carries out a periodical screening of the proposals pending before the legislators to check whether they are still in line with political priorities and better regulation requirements. In 2005-2006, as a result of a first screening exercise carried out on proposals dating from before 2004, a list of 68 obsolete proposals was withdrawn. In each of the following years a similar exercise was carried out, which has led to the withdrawal of in total 293 proposals since the first exercise.
* Legal effect takes place upon publication in the Official Journal.
Will the Commission withdraw other legislative proposals?
Today, five further proposals which are either outdated or without support by the legislator have been identified for withdrawal. These include proposals on pregnant workers, investor compensation schemes, aviation security charges and on a compensation fund for oil pollution damage. A proposal on exempting micro companies from certain food hygiene provisions, pending in legislative procedure since 2007, will also be suggested for withdrawal.
How many pieces of EU legislation in force have been repealed since 2005?
Since 2005, 6145 legal acts have been repealed in total. This number includes all Regulations, Directives, Decisions and Recommendations by any of the three institutions Commission, Parliament and Council. It includes new 'basic acts' as well as amendments.
Which additional existing EU legislation do you plan to repeal?
The Commission will prepare repeals of legislation in four additional areas: energy labelling, transport rates and conditions, the Common Agricultural Policy and in relation to standardized reporting in the area of environment. In addition, the Commission is also screening the acquis in respect of police cooperation and judicial cooperation in criminal matters to identify acts which could be repealed in the context of the expiry of the transitional period set out in the Treaties.
What do you announce today in terms of simplification and burden reduction?
The Commission considers that new initiatives for simplification and burden reduction are warranted in eight areas. These initiatives include the simplification of EU legislation on identity and travel documents, the development of a new comprehensive architecture for business statistics (see below), the extension of the one-stop-shop in the area of VAT to all business to consumer supplies, the codification of legislation on third country listings for visa requirements, the review of legislation on nuclear issues, a proposal in the area of emergency travel documents and the review of Regulations on the import of textile products and of dual-use items.
What are the plans in terms of evaluations and fitness checks?
The Commission envisages launching over the medium term several new evaluations and Fitness Checks of the performance of existing EU, including on consumer protection on timeshares, late payments, the legal framework for pre-packaging, the design system in the EU, the Directives on Prospectus, the application of the mutual recognition principle in view of improving its functioning in the internal market, carbon capture and storage and CO2 emissions of light commercial vehicles and passenger cars, telecoms, and legislation on unauthorized entry, transit and residence. In other key areas where wider policy reviews are in preparation such as the Digital Single Market, it will be important to identify the remaining barriers and assess the regulatory framework for costs and simplification potential. (for details see chapter 21 of the Staff Working Document of 18 June 2014, available on the REFIT website).
Will you further reinforce impact assessments?
The Commission's impact assessment (IA) system operates at an early stage of the policy cycle, when new proposals are being developed to establish an evidence-base for informed policy making. The system has undergone continuous strengthening and improvement since it was set up in 2002 such as the publication of revised guidelines in 2009 and complementary guidance in various areas (competitiveness and micro-enterprises, fundamental rights, social and territorial impacts). To facilitate the quick identification of IA results, including benefits and costs, the Commission introduced a standard two-page summary sheet in its impact assessment reports in 2013. Building on experience gained (over 350 impact assessments since 2010), the Commission has committed to update its IA guidelines and will seek stakeholders' views through a public consultation which will be launched in June 2014.
How will you strengthen ex-post evaluation ?
Systematic ex-post evaluation of EU regulation verifies whether the expected results and impacts of EU regulation have been achieved. Evaluation planning has been improved with the planning of evaluations being published on Europa. In order to further strengthen evaluation policy and practice, the Commission carried out a public consultation of its new evaluation guidelines between November 2013 and February 2014. The results will feed into the upcoming revision of the evaluation guidelines. These will include reference to Fitness Checks which were introduced in 2010 as comprehensive policy evaluations assessing coherence and consistency between and within regulatory areas and whether a larger regulatory framework for an entire policy sector is fit for purpose. Fitness Checks have since been completed in several policy areas, such as environment (EU Freshwater Policy), employment and social policy (Information and Consultation of Workers), industrial policy (Type-approval of Motor Vehicles) and transport (Internal Aviation Market) and can lead to the preparation of several legislative proposals for simplification and burden reduction.
Will anything change in terms of stakeholder consultation?
Dialogue with citizens and stakeholders in business and civil society helps to make sure that EU law making is transparent, well targeted and coherent. Stakeholder consultation is enshrined in the Treaties and is particularly important in relation to detecting issues of proportionality and subsidiarity. The Commission carries out consultations at each stage of the policy cycle. In order to further strengthen the quality, scope and targeting of consultations, the Commission will continue to improve its planning of consultations through the preparation of consultation strategies at the policy preparation stage and continued publication of its evaluation planning. It will issue internal guidelines to advise and support Commission staff carrying out consultations with stakeholders outside the EU institutions with a view to enhance the quality of consultations. These guidelines will be put out for public consultation before adoption by the Commission. The Commission will strengthen the use of consultations in evaluations and Fitness Checks by applying minimum standards of consultation as it is currently done for impact assessments. The Commission will recommend that agencies apply the minimum standards when running consultations. The Commission is also considering how to improve public consultations on implementing and delegated acts.