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2351st Council meeting - INTERNAL MARKET / CONSUMER AFFAIRS / TOURISM - Brussels, 30-31 May 2001

European Council - PRES/01/205   31/05/2001

Other available languages: FR DE DA ES NL IT SV PT FI EL

C/01/205

9120/01 (Presse 205)

2351st Council meeting

- INTERNAL MARKET / CONSUMER AFFAIRS / TOURISM -

Brussels, 30-31 May 2001

Presidents :

Mr Leif PAGROTSKY

Minister at the Ministry of Foreign Affairs, with responsibility for Trade

Ms Britta LEJON

Minister at the Ministry of Justice, with responsibility for Democracy Issues and Consumer Affairs

of the Kingdom of Sweden

CONTENTS

PARTICIPANTS 4

ITEMS DEBATED

CONSUMER AFFAIRS

DISTANCE MARKETING OF CONSUMER FINANCIAL SERVICES 6

INFORMAL MEETING ON CONSUMER INTERESTS IN LUND 7

NEW FORMS OF MARKET REGULATION AND ADMINISTRATIVE COOPERATION 7

CONSUMER CREDITS 7

PREPARING CONSUMERS FOR THE EURO 8

INTERNAL MARKET

DIRECTIVE ON FOOD SUPPLEMENTS 9

EUROPEAN FOOD AUTHORITY / FOOD LAW 9

COMMUNITY PATENT 10

PARALLEL IMPORTS/EXHAUSTION OF TRADE MARK RIGHTS 12

INTERNAL MARKET SCOREBOARD 13

2001 REVIEW OF THE SINGLE MARKET STRATEGY - Council conclusions 14

JOINT WORK PROGRAMME OF THE THREE PRESIDENCIES 16

STRATEGY FOR THE INTEGRATION OF ENVIRONMENTAL PROTECTION AND SUSTAINABLE DEVELOPMENT INTO INTERNAL MARKET POLICY 16

STRATEGY FOR THE CUSTOMS UNION - Council Resolution 17

PUBLIC PROCUREMENT 22

DIRECTIVE ON VALUATION RULES FOR THE ANNUAL AND CONSOLIDATED ACCOUNTS * 24

DIRECTIVE ON LIFE ASSURANCES 25

SOLVENCY MARGIN REQUIREMENTS FOR INSURANCE COMPANIES 26

e-EUROPE 2002 ACTION PLAN: INFORMATION AND NETWORK SECURITY

- Council resolution 27

DIRECTIVE ON MARKETING OF SHORT CHAIN CHLORINATED PARAFFINS 29

DIRECTIVE ON TESTING AND MARKETING OF COSMETIC PRODUCTS 30

ANNEX 31

ITEMS APPROVED WITHOUT DEBATE

INTERNAL MARKET

  • Vehicles used for the carriage of passengers - Convening of a conciliation committee I

CONSUMER AFFAIRS

  • General product safety - Convening of a conciliation committee I

TRADE ISSUES

  • Customs Union - Canary Islands I

EXTERNAL RELATIONS

  • Relations with Switzerland II

    [Graphic in PDF & Word format]

_________________

For further information call 02-285.60.83 or 02-285.68.08

PARTICIPANTS

The Governments of the Member States and the European Commission were represented as follows:

Belgium :

Mr Charles PICQUÉ

Minister for Economic Affairs and Scientific Research, with responsibility for the Policy on Large Towns and Cities

Mr Eric TOMAS

Minister of the Brussels Capital Regional Government, with responsibility for Employment, Economic Affairs, Energy and Housing

Denmark :
Mr Ole STAVAD

Minister for Trade and Industry

Germany :
Mr Hansjörg GEIGERState Secretary, Federal Ministry of Justice
Mr Alexander MÜLLER

State Secretary, Federal Ministry of Consumer Protection, Food and Agriculture

Greece :
Mr Christos PACHTAS

Ms Milena APOSTOLAKI

State Secretary for Economic Affairs

State Secretary for Development

Spain :
Ms Celia VILLALOBOS TALEROMinister for Health and Consumer Affairs

France :

Mr François PATRIAT

State Secretary to the Minister for Economic Affairs, Finance and Industry, with responsibility for Small and Medium-Sized Enterprises, Trade and Craft Industries, and Consumer Affairs

Ireland :
Mr James BRENNAN

Deputy Permanent Representative

Italy :
Mr Gianni MATTIOLI

Mr Stefano PASSIGLI

Minister for Community Policies

State Secretary for Industry, Trade, Craft Trades and Consumer Affairs

Luxembourg :
Mr Henri GRETHEN

Minister for Economic Affairs

Netherlands :
Mr Dick BENSCHOP

State Secretary for Foreign Affairs

Austria :
Mr Dieter BÖHMDORFERMinister for Justice
Ms Mares ROSSMANN

State Secretary, Federal Ministry of Economic Affairs and Labour

Portugal :
Mr Acácio BARREIROSState Secretary for Consumer Protection
Ms Teresa MOURA

State Secretary for European Affairs

Finland :

Mr Kimmo SASI

Minister for Foreign Trade and European Affairs

Sweden :
Ms Britta LEJONMinister at the Ministry of Justice, with responsibility for Democracy Issues and Consumer Affairs
Mr Leif PAGROTSKYMinister at the Ministry of Foreign Affairs, with responsibility for Trade
Mr Hans-Eric HOLMQVISTState Secretary at the Ministry of Justice
Mr Sven-Eric SÖDER

State Secretary at the Ministry for Economic Affairs, with responsibility for Nordic Cooperation

United Kingdom :

Mr Bill STOWDeputy Permanent Representative

* * *

Commission :

Mr Frits BOLKESTEIN

Mr David BYRNE

Mr Erkki LIIKANEN

Member

Member

Member

CONSUMER AFFAIRS

DISTANCE MARKETING OF CONSUMER FINANCIAL SERVICES

The Council examined the proposal for a directive concerning the distance marketing of consumer financial services and amending Directives 97/7/EC and 98/27/EC and, in particular, the question concerning whether or not Member States could, until the expiration of transposition period of the directive, continue to apply their national rules on incoming financial service providers.

At the end of the debate, the President noted that the Council was not in a position to reach agreement by qualified majority on this issue.

This draft directive , presented by the Commission in October 1998 and amended in July 1999, is intended to complete framework Directive 97/7/EEC of 20 May 1997 on the protection of consumers in respect of distance contracts. Its objectives are

    - the prohibition of abusive marketing practices such as "inertia selling", which involves sending unsolicited financial products or services to a person and charging him/her for these ;

    - to set out rules to restrict other sharp practices such as "cold faxing", "cold calling" and "spamming" ; "cold calling" meaning unsolicited communication about such products and services by telephone, "cold faxing" the same practice by fax and "spamming" unsolicited communication by e-mail ;

    - an obligation to provide consumers with comprehensive information before a contract is concluded ; and

    - a consumer right to withdraw from the contract during a cool-off period.

INFORMAL MEETING ON CONSUMER INTERESTS IN LUND

The Council took note of the oral report by the Presidency on the informal meeting the Ministers for Internal Market and Consumer Affairs had in Lund 27-28 April last. This meeting, which was the first time that both sets of Ministers (for Internal Market and Consumer Affairs) met together, was organised by the Presidency in order to enhance the integration of the internal market and consumer policies.

NEW FORMS OF MARKET REGULATION AND ADMINISTRATIVE COOPERATION

The Commission informed the Council on the state of play regarding its future Green Paper on this issue. The Council took note of this information, as well as of the interventions by delegations, and invited the Commission to present its Green Paper soon, with a view to enabling the Council to have a substantial debate on it at its forthcoming session under the future Belgian Presidency.

CONSUMER CREDITS

The Council took note of the Commission's intention to present a discussion paper shortly in order to prepare a proposal for a directive on consumer credits. The proposal is expected to provide for a substantial amendment of the existing Directive by introducing far-reaching harmonisation and increased consumer protection.

PREPARING CONSUMERS FOR THE EURO

The Council had an exchange of information on the state of play concerning preparation of the consumers for the euro. For this purpose, the Presidency had invited the Ministers to address questions pertaining to

    - the assessment of the Member States of the preparation of consumers for the transition to euro notes and coins in January 2002 ;

    - particular aspects or measures which may require common or coordinated action;

    - specific efforts that are being made in order to take care of the needs of citizens who have difficulties understanding or benefiting from the information provided to the public in general (socially or economically vulnerable people, the elderly, blind people, deaf people, the mentally disabled) ; and

    - measures being taken in order to ensure that the introduction of the euro does not lead to an intentional or unintentional rise in prices .

The delegations supported the Commission's intention to reach an agreement with the banking sector on low cost money transfer within the Community.

The Council took note with great interest of the state of these preparations and expressed the hope that in the months to come the necessary progress will be made to prepare consumers.

INTERNAL MARKET

DIRECTIVE ON FOOD SUPPLEMENTS

The Presidency concluded that its compromise proposals for a common position on the Directive relating to food supplements did not meet with a sufficient degree of agreement.

The Council will therefore revert to this issue at one of its next sessions.

EUROPEAN FOOD AUTHORITY / FOOD LAW

Following an orientation debate, the Council agreed on a common approach on the main elements of the proposed Regulation. Nevertheless, certain aspects have still to be finalised, in particular those relating to the composition of the Management Board of the future European Food Authority. The Council called on the Permanent Representatives Committee to examine without delay the opinion of the European Parliament, when available, and to look into the issues which have yet to be finalised, with a view to reaching a political agreement before the end of June.

COMMUNITY PATENT

The Council agreed on the following common approach as guidelines for the continued work on the Community patent :

    "1. The Council instructs the Permanent Representatives Committee to continue to give priority to work on a Community patent based on the principles of full respect of the Community legal order, legal security, affordability, user responsiveness, procedural efficiency, simplicity and non-discrimination between Community citizens and gives the following guidelines for the overall structure:

    • A central role is to be played by the European Patent Office in the grant and administration of Community patents. This would require amendment of the European Patent Convention, without prejudice to the legal form of the relationship between the Community and the European Patent Organisation.

    • National patent offices should have an important role as regards Community patents and the public, in particular small and medium-sized enterprises, with which contacts in the local language are important. This role would include in particular advising potential applicants for Community patents, receiving applications for Community patents and transmitting them to the European Patent Office and disseminating information relating to Community patents. In addition, those national patent offices which so wish could carry out, in their respective working languages, activities, such as searches, concerning the processing of a number of applications for Community patents, provided they are found to meet agreed requirements in relation to the quality and the uniformity of the Community patent, which should be granted by the European Patent Office. The questions of the nature of such activities and of how and whether there should be a quantitative limit on the activities of national patent offices should be further considered, taking account of the need to guarantee the quality and uniformity of the Community patent, of the needs of applicants and of the situation of applications processed in the language of the national patent office.

      Applicants should remain free to have their patent applications fully processed by the European Patent Office.

    • Costs to applicants for and proprietors of Community patents have to be kept at a competitive level. The annual renewal fee for a Community patent should not exceed the total annual renewal fees at present payable for an average European patent. Other means of limiting costs should be explored.

    • As regards languages, the Community patent system should be based on the general principles which have been outlined, including the principle of non-discrimination. With a view to limiting translation costs, further consideration should be given to the various solutions suggested, including technological support for translation, while not excluding other possibilities.

    • A certain percentage of income from annual renewal fees for the Community patent, to be negotiated between the Community and the European Patent Organisation, should be distributed among the Community Member States/national patent offices in accordance with a fair and justified distribution key to be agreed as soon as possible by the Community Member States. The percentage to be distributed among Member States/national patent offices would be paid directly by the European Patent Office to the Member States/national patent offices.

    • Jurisdictional arrangements for the Community patent should be set up in accordance with the framework of Articles 225a and 229a of the EC Treaty as adopted at Nice. The first instance judicial panel should be arranged with account taken of the need for uniform application of Community law and factors such as cost effectiveness, demand and local languages, closeness to users and use of any existing infrastructure and expertise. Appeals should be heard by the Court of First Instance.

    • Examination of the Commission's suggestions for amendments to the European Patent Convention should be continued with a view to developing a Community position.

    2. The Council welcomes the intention of the Commission to organise rapid consultations in order to create a basis for further consideration as regards the possible impact of a Community utility model in legal, practical and economic respects."

Furthermore, the Council mandated the Presidency to take the necessary procedural steps to request the Administrative Council of the European Patent Organisation to put on the agenda of its next meeting (25 to 29 June 2001) the convening of a Diplomatic Conference for the revision of the 1973 European Patent Convention (EPC), in order to accommodate the Community patent, on the understanding that no negotiations on this matter would begin before a negotiation mandate was decided by the Council.

It is recalled that the aim of the proposed Regulation is to establish a CP-system valid throughout the European Union at an affordable price and providing every guarantee of legal certainty. CPs, which would be issued by the Munich-based non-communitarian EPO, would exist alongside national and European patents so that inventors could choose the type of patent protection best suited to their needs.

Given that the 1973 Convention on the Grant of European Patents (EPC), known as the "Munich Convention", to which actually 20 States adhere (15 EU States + Switzerland, Liechtenstein, Monaco, Cyprus, Turkey), is currently under revision, the Commission pointed out the need for this revision of the intergovernmental convention to make the amendments necessary for the introduction of the Community patent.

PARALLEL IMPORTS/EXHAUSTION OF TRADE MARK RIGHTS

Over lunch, the Council heard the Presidency's information on the exhaustion of trade mark rights and parallel imports. There was a broad support among the delegations for continued detailed studies on this issue. The Council took note of the intention of the incoming Belgian Presidency to pursue the work on this file.

It is recalled that, at its meeting (Internal market) on 25 May last year, the Council took note of a Presidency report concerning parallel imports/exhaustion of trademark rights as well as of a statement by Commissioner BOLKESTEIN. The Commission, having analysed the current situation on the international market, did not at that stage intend to present a proposal to change the present regime from Community exhaustion to international exhaustion of trademark rights.

There is a divergence of views among Member States between those who favour a shift from the principle of Community exhaustion of trade market rights to international exhaustion and those who are in favour of maintaining the present system.

The Council then noted the positions expressed by different delegations on this issue as well as the Commission's evaluation of the dossier. The Council agreed to revert to the subject at a forthcoming session.

The question of exhaustion of trademark rights and the possible effects of a change from the present Community-wide exhaustion regime to a system of international exhaustion, notably as regards allowing "parallel imports", had been brought to the forefront by a ruling of the European Court of Justice (case C-355/96 (Silhouette)) given on 16 July 1998 in which the Court had clarified the legal position by interpreting Directive 89/104/EEC on trademarks. In summary, the Court had ruled that the holder of a trademark can ban its use on products sold within the Community without his consent in the case of parallel imports (i.e. imports outside a manufacturer's official distribution network; usually such imports are sold more cheaply) from countries outside the EEA even where the products imported were put on the market with the consent of the rightholder outside the EEA. In legal terms: marketing with the holder's consent outside the EEA does not exhaust the trademark holder's rights within the Community. Unless, that is, the Community decided to change this situation by amending the Directive or by negotiating reciprocity arrangements with countries from outside the EEA.

INTERNAL MARKET SCOREBOARD

The Council welcomed the presentation by Commissioner BOLKESTEIN of the latest version of the bi-annual Internal Market Scoreboard, including the results from its Europe-wide price study, and reaffirmed its commitment to full transposition of internal market legislation through a progressive and targeted reduction of transposition deficits.

The Council took note of interventions by a large number of delegations including a UK proposal to extend future price studies to cover comparison with third countries, a Danish study on the economic consequences of legal expense insurance for patents, and an Italian reminder of the need for further work on renewable energy sources.

The Commission presents an update of its Internal Market Scoreboard every six months. The latest version shows a moderate improvement in the overall transposition deficit, but a worrying deterioration in some Member States and a lack of sufficient progress in others. The Commission fears that a number of Member States might fail to reach the target of transposition of 98.5% of internal market directives by Spring 2002.

2001 REVIEW OF THE SINGLE MARKET STRATEGY - Council conclusions

The Council welcomed the Commission's presentation of its Communication on the review of its Internal Market strategy and adopted the following conclusions :

"The Council (Internal Market, Consumer Affairs and Tourism),

RECALLING the Conclusions of the Lisbon and Stockholm European Councils as well as its Conclusions of 12 March 2001 on internal market aspects of the Cardiff economic reform process,

    1. WELCOMES the Commission's Communication on the 2001 Review of the Internal Market Strategy as a valuable basis for the continued work to improve the functioning of the internal market in order to ensure tangible benefits for Europe's citizens, consumers and businesses, taking into account economic, social and environmental aspects of sustainable development and respecting the remit of services of general economic interest;

    2. ENDORSES the overall approach and general orientation of the Strategy Review, including the fact that it focuses on a limited number of priority actions, thereby recognising its role as an important framework for work ahead;

    3. AGREES with the overall priorities as covered by the four strategic objectives, stressing the importance of aligning individual target actions on the strategic priorities set by the European Council;

    4. RECOGNISES the need to safeguard and strengthen the key elements of the internal market, such as mutual recognition, standardisation (particularly in the construction products and machinery sectors), market surveillance, full, timely and correct transposition of all internal market legislation, effective application and enforcement of competition rules, consumer confidence, legal certainty and improved administrative cooperation;

    5. WELCOMES the increased focus on the external dimension of the Review and the need to prepare the internal market for an enlarged Union;

    6. CALLS ON the Commission to present its intention how to incorporate its Internal Market Strategy for Services into the general Internal Market Strategy in order to reach a harmonious development of all elements of the internal market;

    7. UNDERLINES the need to speed up work in order to complete target actions in accordance with agreed timetables, recognising that responsibility for improving performance has to be shared by the Council, the European Parliament, the Commission and the Member States themselves;

    8. UNDERTAKES to continue to pursue work actively with a view to seeking agreement, allowing for timely adoption in accordance with the European Council's Conclusions, on priority actions such as the Public procurement legislative package, the European Food Authority, the Directive on Distance marketing of consumer financial services and the Postal services Directive. Work on the Community patent and the Utility model should also be pursued so as to meet the goals established by the European Councils of Lisbon, Feira and Stockholm;

    9. RECOGNISES the need for rapid progress also on other priority target actions in the Commission's Review of its Internal Market Strategy in the areas of financial services, transport and energy;

    10. RECALLS the political agreement reached in December 2000 on the European Company Statute and UNDERLINES the importance of rapid adoption of this and associated legislative acts;

    11. CALLS ON the Commission to present initiatives which are due before December 2001, including the co-ordinated Strategy to simplify the regulatory environment and the results of the first phase of the Services strategy, as well as the Strategy for life sciences and biotechnology, including ethical issues;

    12. INVITES the Commission to take the fullest possible account of demands and concerns of stakeholders when drawing up new initiatives and evaluating existing practices ("interactive policy making"). In addition, concrete steps are required to strengthen the role of citizens/consumers and businesses, in particular SMEs, in shaping the regulatory framework for the internal market, e.g. by assessing the impact on consumers and SMEs, as well as more effective means of problem solving;

    13. STRESSES the need to strengthen consumer confidence in the internal market, including in the field of e-commerce, and WELCOMES the Commission's intention to present its Green Paper on consumer protection legislation regarding commercial practices and enforcement and to further develop its monitoring of prices of goods and services;

    14. UNDERLINES the need for continuous monitoring of progress in implementing the Strategy, in particular through the Internal Market Scoreboard and a comprehensive set of indicators to be developed by the Commission, in close cooperation with the Member States;

    15. REAFFIRMS its support of the Internal Market cycle and its intention to provide input and guidance for the 2002 annual review;

    16. NOTES with satisfaction in this regard that the Joint Work Programme of the three Presidencies (Sweden, Belgium and Spain) of May 2001 includes a continued follow-up of the Strategy during the months ahead. The Council (IMCT) will assess the state of play at its meeting in November 2001."

JOINT WORK PROGRAMME OF THE THREE PRESIDENCIES

The Council welcomed the presentation by the Presidency and by the Belgian and Spanish delegations of their joint work programme as an important basis for continued work to develop the internal market. There was broad consensus on the main orientation of work and the priorities established, particularly in the areas of e-commerce, services and the simplification of legislation. The new version of the programme continues to maintain an emphasis on delivering real benefits to citizens and consumers, reflecting the amalgamation on the Internal Market and Consumer Affairs Council formations.

(The Programme is joined in the Annex of this Press release.)

STRATEGY FOR THE INTEGRATION OF ENVIRONMENTAL PROTECTION AND SUSTAINABLE DEVELOPMENT INTO INTERNAL MARKET POLICY

The Council adopted the report on this strategy, to be forwarded to the Göteborg European Council 15-16 June (see http://consilium.europa.eu/newsroom/miscellaneous - doc. No 8970/01).

STRATEGY FOR THE CUSTOMS UNION - Council Resolution

The Council adopted the following resolution:

"THE COUNCIL OF THE EUROPEAN UNION,

RECALLING:

    1. that the Lisbon European Council on 23 and 24 March 2000 set a central strategic goal for the Union to become, within a decade, the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion,

    2. that the Tampere European Council of October 1999 stated that serious economic crime increasingly has tax and duty aspects,

    3. the Interinstitutional Agreement of the European Parliament, the Council and the Commission of 22 December 1998 on common guidelines for the quality of drafting of Community legislation,

    4. that the customs authorities carry out controls to ensure compliance with regulations in many central policy areas, i.e. consumer security and protection of the financial interests of the Community and the Member States; that they play a fundamental role in combating smuggling, counterfeit, fraud and other illicit activities which comprise crossborder movements of goods; that an important contribution in the customs field to this combat is made within the scope of Article 30 of the Treaty on the European Union; that the Conventions on Mutual Assistance and Cooperation between Customs Administrations (Naples II) and on the use of information technology for customs purposes (Customs Information System) are important new tools for this purpose, and

    5. that, while collecting duties and indirect taxes remain an important task, customs work is progressively shifting emphasis to enforcing international trade regulations and developing and applying procedures to promote trade and to enhance the competitiveness of Europe;

CONFIRMING the goals and measures recommended in the Council Resolution of 25 October 1996 on the simplification and rationalisation of the Community's customs regulations and procedures and Decision No 105/2000/EC of the European Parliament and of the Council of 17 December 1999 amending Decision No 210/97/EC adopting an action programme for customs in the Community (Customs 2000) and repealing Council Decision 91/341/EEC;

RECOGNISING:

    1. that a well-functioning system for customs clearance can contribute effectively to strengthening the competitiveness of the Union and is a precondition for a good business climate; the increasing volume of international trade and the need to ensure expeditious clearance mean that new methods for customs clearance and customs controls have to be developed, in which computerisation, risk analysis and cooperation with economic operators are essential tools,

    2. that the forthcoming enlargement of the European Union will entail new challenges for customs authorities as well as new opportunities for economic operators,

    3. the importance of close cooperation with customs authorities in third countries and, in particular, that an extended cooperation with customs authorities in countries bordering on the Union can contribute actively to smooth border crossing and a successful fight against infringements in the customs field, and

    4. that it is important for the functioning of the Internal Market that both customs officials and economic operators have access to adequate and relevant training in Community legislation, information technology and modern working methods, and noting, in this context, that a feasibility study has concluded positively on the establishment of a European Customs Academy;

WELCOMES the Commission's Communication on a Strategy for the Customs Union;

ENDORSES its general thrust and LOOKS FORWARD TO receiving concrete proposals;

AGREES:

    1. that there is a need for such a strategy, based on mutual values of openness, flexibility, efficiency and cooperation between customs authorities, to further the vision of them functioning as if they were one,

    2. that the full use of information technology in the Customs Union is essential and that it therefore is necessary:

      (a) to develop a credible, comprehensive strategy for the use of information technology in customs activities and to establish an interface between information networks,

      (b) to provide mutual access to data bases, with due regard for the relevant provisions concerning data protection in the Community and in the Member States,

      (c) to develop and implement a broad-based programme for computerisation of customs procedures, and

      (d) to develop and implement programmes aimed at exchanging information between customs authorities, such as the New Computerised Transit System (NCTS) and the Customs Information System (CIS), as soon as possible, and

    3. that, in view of the role that customs authorities play in collecting indirect taxes, coherent customs and tax actions are of great importance, not least in combating tax fraud;

AGREES FURTHERMORE:

that a main objective must be to improve cooperation between the customs authorities themselves, between customs authorities and economic operators, and between customs authorities and other agencies, in order to guarantee equivalent results from the application of customs legislation, and to increase their ability to combat fraud and other acts threatening the security of persons and goods efficiently;

NOTES WITH SATISFACTION:

    1. that the Commission intends to pursue its work to simplify customs regulations and procedures, and that a decisive part of this work is continued computerisation and use of electronic means,

    2. the Commission's objective to improve the quality and efficiency of customs controls and to develop control methods by increased use of risk analysis and audit techniques, while recalling that the execution of customs controls remains the responsibility of the Member States, and

    3. the Commission's intention to continue work to improve the quality and accessibility of information to economic operators and the training of both customs officials and economic operators;

EMPHASISES:

    1. that the forthcoming enlargement of the European Union increases the demand upon the Commission and the customs authorities of the current Member States to cooperate closely with the customs authorities of the acceding states i.e. with a view to fostering equivalent results of controls in all Member States, current and future,

    2. that an essential condition for the customs authorities to be able to fulfil their tasks in an efficient way is that there is a well-developed cooperation with customs authorities in third countries, in particular with those in neighbouring areas,

    3. that the customs authorities, by virtue of the variety of tasks assigned to them, are required to work both in a Community context and in the context of customs cooperation in the framework of Title VI of the Treaty on European Union,

    4. that customs plays a significant role in the fight against cross-border crime through the prevention, detection and, within the national competences of the customs services, through investigation and prosecution of criminal activities in the areas of fiscal fraud, money laundering, and trafficking in drugs and other illegal goods; that the customs authorities should further develop their operational cooperation and coordination, such as joint customs operations based on a strategic approach; and that customs, police and judicial authorities should cooperate effectively in order to maintain and develop the European Union as an area of freedom, security and justice,

    5. that a clear and unambiguous legislation that is known to the users and applied by adequately trained officials is of fundamental importance, not only for legitimate trade to flow smoothly but also for the combat against fraud to be efficient,

    6. that no steps towards outsourcing of the infrastructure of the Customs Union should be taken by the Commission without a thorough analysis of their consequences, including the distribution of responsibilities, and that work on any such externalisation must be done in close cooperation between the Commission and the Member States, with due regard for the sovereignty of the Member States as regards the organisation of their customs authorities, and

    7. that the Community customs legislation must provide a framework for allowing economic operators in all the customs territory of the Community to benefit from equal conditions of competition;

POINTS OUT:

    1. that it is very important that the strategy for the customs union remains in harmony with development and that the strategy therefore should be evaluated in due course in the light of experience gained, and

    2. that experience shows that Community action programmes in the customs field, in particular the Customs 2002 and the OISIN programmes, are a good foundation for long-term work aiming to systematically improve and simplify customs regulations and procedures, while at the same time securing an effective protection of the customs territory, the citizens and businesses of the Union, the Community's own resources and the resources of the Member States;

INVITES THE COMMISSION:

    1. to propose further simplification, modernisation and rationalisation of customs regulations and customs procedures, bearing in mind the need both to promote economic development and to ascertain effective controls, and taking into consideration that it is necessary to involve both customs authorities and economic operators at an early stage,

    2 to develop a broad-based programme for computerisation of customs procedures and exchange of customs information, as well as a credible strategy for the development and use of information networks in customs activities, and

    3. to make, within five years, an evaluation of the strategy for the customs union;

WELCOMES in this context that the Commission has recently made known its intention to make a proposal to the European Parliament and the Council for a prolongation of the Customs 2002 programme, with a view to further improving the functioning of the internal market;

INVITES THE MEMBER STATES to do their utmost for the strategy for the customs union to be successfully accomplished;

INVITES THE COMMISSION AND THE MEMBER STATES:

    1. to participate in actions against criminal activities and, as appropriate, to coordinate their actions with those of other authorities, in particular police and judicial authorities, and to continue their efforts to reinforce the coherence between customs and fiscal regulations, and

    2. to take steps to strengthen cooperation both between the customs authorities in the European Union and with customs authorities in third countries, in particular with those in neighbouring areas, with a view to facilitating smooth border crossing procedures and successfully combating fraud; and

ENCOURAGES the economic operators to make the best use of the information and training and the possibilities to cooperate that the customs authorities offer."

PUBLIC PROCUREMENT

The Council took note of a progress report on this dossier. It welcomed the progress which had been achieved so far and confirmed its intention to continue to give high priority to this file with a view to reaching an agreement within the timeframe set by the European Council.

The new legislative package, presented by the Commission at the meeting of the Internal Market Council in May 2000, has two objectives. The first is to simplify and clarify the existing Community Directives, and the second is to adapt them to modern administrative needs in an economic environment that is changing as a result of factors such a liberalisation of telecommunications or the transition to the new economy. With the object of enhancing transparency in the award process and of combating corruption and organised crime, the legislative package also includes measures designed to make for greater clarity in the criteria determining the award of the contract and the selection of tenderers.

Both proposals have the objectives of

     the introduction of electronic purchasing mechanisms and the consequences of these in terms of reducing the length of an award procedure;

     clarification of provisions relating to technical specifications; this will encourage effective competition through the participation of the greatest possible number of tenderers and, in particular, innovative businesses;

     a strengthening of the provisions relating to award criteria;

     a simplification of thresholds, the number of which has been reduced; and

 the introduction of a common procurement vocabulary.

  • PROPOSAL ON THE COORDINATION OF PROCEDURES FOR THE AWARD OF PUBLIC SUPPLY CONTRACTS, PUBLIC SERVICE CONTRACTS AND PUBLIC WORKS CONTRACTS

    This proposal is presented in the form of a single text for supply, works and service contracts. It replaces the three "conventional" or "classic" directives, namely Directive 92/50/EEC coordinating procedures for the award of public service contracts, Directive 93/36/EEC coordinating procedures for the award of public supply contracts and Directive 93/37/EEC coordinating procedures for the award of public works contracts. By removing certain inconsistencies between those three Directives, the new proposal also has the effect of rendering applicable to all contracts provisions which are currently applicable to some contracts only.

  • PROPOSAL COORDINATING PROCEDURES FOR THE AWARD OF CONTRACTS IN THE WATER, ENERGY AND TRANSPORT SECTORS

(often referred to as the "Utilities Directive")

    This proposal aims to amend Directive 93/38/EEC on contracts concluded in the water, energy, transport and telecommunications sectors by reviewing the scope in the light of gradual liberalisation in those sectors.

During its discussions so far, the Council has focused more on the first proposal, but the results of those discussions have helped to achieve progress with the proposal for a Utilities Directive. The discussions during the Swedish Presidency have touched upon most questions, but particular attention has been paid to the rules on electronic procurement and the so called competitive dialogue that would be used in connection with particularly complex contracts.

DIRECTIVE ON VALUATION RULES FOR THE ANNUAL AND CONSOLIDATED ACCOUNTS *

The Council unanimously adopted the directive amending Directives 78/660/EEC, 83/349/EEC and 86/635/EEC as regards the valuation rules for the annual and consolidated accounts of certain types of companies as well as of banks and other financial institutions.

This directive was presented by the Commission in February 2000 with a view to making it possible for companies to apply International Accounting Standard 39 (Financial Instruments: Recognition and Measurement), facilitating the valuation of certain financial instruments at fair value instead of historic cost. The application of the standard will ensure that the financial impacts of the use of financial instruments are reflected in company financial statements appropriately and with full transparency. This standard has been prepared by a private accounting standard setter (IASB) and will become operative in 2001. The Community endeavours by this directive to facilitate the use of the standard by companies right from the beginning, since otherwise serious problems would be created. The directive now also contains amendments to the Banks Accounts Directive, in addition to the 4th and 7th Company Law Directives.

As regards the general legislative environment, the Commission has also presented, last February, a proposal for a regulation for a mandatory application of International Accounting Standards for listed companies by 2005.

DIRECTIVE ON LIFE ASSURANCES

The Council reached political agreement on its common position on the directive concerning life assurance (recast version), subject to the possible modifications in its codification part that may follow if the directive on the solvency margin for life assurance undertakings is adopted at first reading.

There are three generations of insurance Directives which have been adopted at different stages of integration from the 1970s until 1992 when the third insurance Directives were adopted. There are three Directives for life assurance and three Directives for non-life insurance. This recast simplifies the Community legislation on life assurance.

SOLVENCY MARGIN REQUIREMENTS FOR INSURANCE COMPANIES

The Council took note of a progress report concerning two proposals for directives:

    - proposal for a directive amending Directive 73/239/EEC as regards the solvency margin requirements for non-life insurance undertakings; and

    - proposal for a directive amending Directive 79/267/EEC as regards the solvency margin requirements for life assurance undertakings.

The Council confirmed its agreement on the texts of the proposals and instructed the Permanent Representatives Committee to finalise the examination of the proposals in the light of the opinion of the European Parliament, as soon as it is available, with a view to reaching an agreement on the directives at first reading, if possible.

These two proposals, which were presented by the Commission last October, are often referred to as Solvency I-package. Their aim is generally to modernise the solvency margin requirements that have been applied for more than 20 years particularly in respect of the methodology of calculation.

The Commission is already preparing a new proposal referred to as Solvency II, which is aimed to be a more wide-ranging revision of solvency margin provisions that would touch upon the overall financial position of an insurance undertaking.

e-EUROPE 2002 ACTION PLAN: INFORMATION AND NETWORK SECURITY

- Council resolution

The Council took note of the information provided by the Commission on a forthcoming Communication on Information and Network Security and adopted the following resolution to be presented to the Göteborg European Council :

"The Council of the European Union,

Recalling the conclusion of the Stockholm European Council that the Council together with the Commission will develop a comprehensive strategy on security of electronic networks including practical implementing action.

Considering that information and network security is an area of increasing importance for the European Union. Recognising that information security issues affect several policy areas of the Union.

Considering that information and network security is about securing the senders' and receivers' identities, protection of the information from unauthorised changes, protection of unauthorised access to information, and to provide a reliable supply of equipment, services and information,

Recognising the role of trust and confidence of individuals and businesses in information security as an important prerequisite for the widespread use of information and communication technologies to achieve increased efficiency and competitiveness in the Internal Market,

Realising that malicious activities or hazardous events directed at information systems pose a significant risk to important functions in society,

Considering that the eEurope Action Plan 2002 calls for action to improve security of on line transactions in the European Union; Recalling that the Action Plan noted the important role of the market in defining the adequate security solutions.

Considering that from an institutional point of view, information security is a topic involving all three pillars of the EU.

    - Refers to the Commission Communication COM(2000)890 of 26 January 2001,

    - Underlines the need for actions both at Member State and European level in the areas of information and network security, and recognises that information and network security calls for a comprehensive cross-pillar approach when developing policies in this area and working on appropriate coordination.

    - Takes note of the Commission intention to present a communication on a comprehensive strategy on security of electronic networks.

    - Undertakes to examine rapidly the proposals for practical implementing action with a view to strengthening and increasing the coherence of policies for information security in the Union, and in addition consider whether institutional structures and procedures for information and network security issues should be strengthened (inter alia by setting up an independent European entity for information security, independent observatory, council working party, another appropriate forum, or by strengthening the existing cooperation between the existing Computer Emergency Response Teams (CERTs)."

DIRECTIVE ON MARKETING OF SHORT CHAIN CHLORINATED PARAFFINS

The Council reached political agreement by qualified majority, the Belgian, the Danish and the Netherlands' delegations voting against, on the text of the directive amending for the 20th time the Directive relating to restrictions on the marketing and use of certain dangerous substances and preparations. After the finalisation of the text in all the Community languages, the common position will be adopted and forwarded to the European Parliament for its second reading, in accordance with the co-decision procedure of the Treaty.

The aim of the draft directive is to harmonise differing national laws on the use of short-chain chlorinated paraffins (SCCPs) for two purposes: metalworking and leather finishing. Restriction of the use of these substances appears advisable in the light of the outcome of a risk assessment of SCCPs, which found there to be potential risks to the environment.

It is recalled, that a study by the Scientific Committee on Toxicity, Ecotoxicity and the Environment (CSTEE) concluded in November 1998 that there are potential unacceptable environmental risks associated with the life cycle of Short Chain Clorinated Paraffins (SCCP) and that there is a need for specific protective measures for the aquatic ecosystem.

The draft directive proposes to restrict the marketing and use of SCCP in the two areas of application cited by the study, namely in metalworking and leather finishing. Furthermore, with regard to the other applications of SCCP, namely as plasticiser in paints, coatings and sealants, and as flame retardant in rubber, plastics and textiles, the directive stipulates that the risk reduction measures should be reconsidered within three years of its adoption, in the light of the review of scientific knowledge and technical progress.

DIRECTIVE ON TESTING AND MARKETING OF COSMETIC PRODUCTS

The Council examined the proposal for the directive amending for the seventh time Directive 76/768/EEC on the approximation of the laws of the Member States relating to cosmetic products. Having noted that there was no qualified majority in favour of this draft directive at this stage, the Council requested the Permanent Representatives Committee to pursue the examination of this file with a view to enabling the Council to reach agreement on it at a forthcoming session.

The purpose of this draft directive is to prohibit the performance of experiments on animals for finished cosmetic products, for ingredients and combinations of ingredients of cosmetic products, and to allow products to be marked with labels indicating that animal testing has not been performed.

It is recalled that Directive 76/768/EEC (amended) contains a marketing ban on cosmetic products which have been tested on animals. The entry into force of the ban has been postponed twice because of insufficient progress in developing satisfactory methods to replace animal testing. It will now come into force 1 July 2002 unless it is amended. Against the background of concerns with respect to the WTO compatibility of the marketing ban the Commission presented a proposal for an amendment of Directive 76/768/EEC. In the draft Directive the marketing ban has been replaced by a testing ban on Member States' territories.

ANNEX

JOINT WORK PROGRAMME OF THE THREE PRESIDENCIES (SWEDEN, BELGIUM AND SPAIN) FOR THE INTERNAL MARKET

I. Introduction

     The Joint Work Programme sets out the priorities of the present and the two following Presidencies in the area of the internal market. It highlights the most important issues which the Internal Market, Consumer Affairs and Tourism Council (IMCT) is expected to deal with in this area during the period concerned. The programme is indicative. A revised, updated version is presented every six months, normally towards the end of each Presidency. An important objective of the programme is to improve planning and coordination of work in the Council and to ensure continuity between Presidencies.

     The present version of the Joint Work Programme is submitted by the Swedish Presidency on behalf also of the following Belgian and Spanish Presidencies.

II. Overall priorities and orientation of work

    The clear targets and priorities for the completion of the internal market defined by the Lisbon and Stockholm European Councils will guide work during the months ahead. The Barcelona European Council in March 2002 will ensure continuity of this process.

    The need to improve the functioning of markets for goods and services in order for citizens and enterprises to be able to enjoy the full benefits of the internal market is a first priority for the Presidencies. This includes an acceleration of economic reform under the Cardiff process, through the commitment to liberalisation, modernisation and interconnection of public utilities, while ensuring the provision of services of general economic interest, the development of a strategy for integration of environmental protection and sustainable development into internal market policy, securing the free movement of goods, improvement of the administrative and regulatory framework, i.a. through simplification of legislation , as well as other measures to create favourable conditions for innovation, entrepreneurship, economic growth and employment. In this framework priority will also be given to the reduction of state aids and the enhancement of transparency of the system. At the centre of the work programme are legislative actions as well as other policy initiatives to restore and strengthen the confidence of consumers in products and markets. Rapid agreement on the establishment of the European Food Authority and the general principles and requirements of food law is essential in this regard. Measures to improve the situation of SMEs, inter alia by reducing the administrative burden caused by excessive regulation and facilitating their access to risk capital, are also of high priority.

    The merger of the Internal Market and Consumer Affairs Councils into one integrated Council formation is an expression of the close links which exist between the development of the internal market and the interests of the consumers. The Presidencies will endeavour to strengthen this integration. The informal meeting of Internal Market and Consumer Affairs Ministers in Lund, Sweden, on 26-28 April 2001 provided an important opportunity to develop synergies between the two areas.

    The main priorities are presented below.

      III. New legislation

    Priority attention will be given to legislative proposals in key sectors where there is a clear need for new or modified Community legislation in order for the internal market to perform more effectively.

Key sectors are:

    Intellectual property rights, Product safety and Foodstuffs, Technical and administrative barriers to trade in goods and services (including environmental standards and technical regulations), Public procurement, Financial services, Company law (including Accounting standards), E-commerce.

    Since the latest version of the Joint Work Programme was presented in November 2000, the Council has reached agreement on several important legislative proposals: European Company Statute, General Product Safety, Data protection in the Community institutions, Restrictions on the marketing and use of certain dangerous substances and preparations (21st amendment of Dir. 76/769/EEC) as well as in the area of Motor vehicles. Worth noting is also that the directive on Copyright in the information society has been finally adopted.

    In addition, considerable progress has been achieved in a number of areas such as Insurance, Accounting Principles, Foodstuffs (including the European Food Authority), Cosmetic products and Distance marketing of financial services . Work will be actively pursued on Community patent, Utility model and Public procurement. Safety of toys, Machinery, Type approval of vehicles designed for transport of animals, Combating counterfeiting and piracy, Customs legislation and policy, Consumer credit and overindebtedness, the e-Europe Action Plan, including security of networks, are other important files/sectors on which the three Presidencies will endeavour to take work forward as rapidly as possible. Efforts will be made to prepare the proposal for a Community design regulation for final adoption. The issue of Parallel imports and exhaustion of trade mark rights will continue to be explored during the months ahead.

IV. General policy issues and non-legislative initiatives

    As has been emphasised, ways and means of improving the functioning of the internal market so that it can deliver tangible benefits to consumers through a wider choice of safe and high quality products at affordable prices are at the centre of the Joint Work Programme. The interests of citizens/consumers were the subject of an in-depth analysis by the IMCT for the preparation of the Broad Economic Policy Guidelines for 2001.

    In this context the Presidencies underline their interest in a continued discussion on new forms of regulation and administrative cooperation.

    Both the Lisbon and Stockholm European Councils have underlined the need to speed up work on economic reform as a means to establish well-functioning markets for goods and services and as an important element of the strategy to modernise Europe. To this end, the Cardiff economic reform process will continue to be a matter of high priority for the IMCT and the three Presidencies will make efforts to further improve the quality of the IMCT contributions to the Broad Economic Policy Guidelines, focusing on key internal market issues.

    The Strategy for integration of environmental protection and sustainable development into internal market policy, to be forwarded to the Göteborg European Council, will be reviewed at regular intervals and adjusted, when necessary.

    The Presidencies will pay particular attention to the need for improved transposition of internal market directives into national legislation in order to achieve the interim target of a 1.5 per cent transposition deficit in 2002, in line with the Conclusions of the Stockholm European Council. In connection with the Commission's presentation of its Scoreboard a review debate will be held in the IMCT twice a year to assess progress.

    The Commission's latest Review of the Internal Market Strategy is an important policy document which assesses progress achieved so far in implementing the strategy and at the same time identifies problems and sets out priorities for the continued work. Still under the Swedish Presidency the Council will give its opinion on the review and the revised target actions under the Strategy. A continued follow-up will take place under both the Belgian and Spanish Presidencies with a view to identifying and reaching agreement on priority actions at Council level and assessing progress. Together with the Joint Work Programme of the Presidencies, the Review of the Internal Market Strategy will form the basis for planning of work in the IMCT.

    In this context the Presidencies underline the importance which they attach to the creation of an effective internal market in services, both in the financial sector and in general. They look forward to the Commission's inventory of existing barriers to trade in services scheduled for December 2001 as part of its Services Strategy. Concrete proposals for the removal of barriers to cross-border trade in services within the Community will be given priority attention.

      Relations with the European Parliament

    A constructive dialogue and effective cooperation with the European Parliament in the framework of the co-decision procedure is a pre-requisite for progress on internal market legislation. Encouraged by the positive experiences in the past, the Presidencies will continue to develop the dialogue with the European Parliament with a view to reaching agreement as early as possible in the process, avoiding, to the extent possible, lengthy conciliation procedures.

VI. Calendar of meetings of the Internal Market, Consumer Affairs and Tourism Council

 30-31 May 2001

 27 September 2001

 26 November 2001

  1 March  2002

 21 May  2002.

ITEMS APPROVED WITHOUT DEBATE

INTERNAL MARKET

Vehicles used for the carriage of passengers - Convening of a conciliation committee

The Council having not been able to accept all the amendments adopted by the European Parliament to the common position on the proposed Directive relating to special provisions for vehicles used for the carriage of passengers comprising more than eight seats in addition to the driver's seat and amending Directive 70/156/EC, a conciliation committee is convened, in accordance with the provisions of the co-decision procedure of the Treaty (Art. 251).

CONSUMER AFFAIRS

General product safety - Convening of a conciliation committee

The Council having not been able to accept all the amendments adopted by the European Parliament to the common position on the proposed Directive on general product safety, a conciliation committee is convened, in accordance with the provisions of the co-decision procedure of the Treaty (Art. 251).

TRADE ISSUES

Customs Union - Canary Islands

The Council adopted an amendment to Regulation (EEC) No 1911/91 on the application of the provisions of Community law to the Canary Islands, extending temporarily the rates and exemptions relating to the APIM (tax on production and imports), the application of autonomous Customs Tariff duty suspensions and the transitional period for the introduction of the Common Customs Tariff duties on imports of certain goods into the Canary Islands until 31 December 2001.

The Council also adopted a Regulation extending the date of application

    = of Regulation (EEC) No 3621/92 which temporarily suspends the autonomous Common Customs Tariff duties on imports of certain fishery products into the Canary Islands, and

    = of Regulation (EC) No 527/96 which temporarily suspends the autonomous Common Customs Tariff duties and progressively introducing the Common Customs Tariff duties on imports of certain industrial products into the Canary Islands ;

    until 31 December 2001.

EXTERNAL RELATIONS

Relations with Switzerland

The Council adopted a Recommendation for a Council Decision authorising the Commission to open negotiations on the adaptation of Protocol 2 to the 1972 Agreement between the European Economic Community and the Swiss Confederation.


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