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European Commission - Announcement

EU-Canada trade deal to be signed by governments; next steps on tax transparency and security

Brussels, 5 July 2016

The Commission transmits the EU-Canada trade deal (CETA) to governments for signature. It took further steps to increase tax transparency in the wake of the "Panama papers" revelations and launched a Public-Private Partnership on cybersecurity.

Comprehensive Economic and Trade Agreement EU-Canada (CETA):

"The trade agreement between the EU and Canada is our best and most progressive trade agreement and I want it to enter into force as soon as possible," said President Jean-Claude Juncker.

In the words of EU trade Commissioner Cecila Malmström "CETA is a milestone in European trade policy. It will help to generate much-needed growth and jobs while fully upholding Europe's high standards in areas like food safety, environmental protection and people's rights at work. "

Commissioner Malmström confirmed that the Commission's legal assessment is that all the areas covered by CETA fall under EU competence. Although from a strict legal standpoint, the Commission considers this agreement to fall under exclusive EU competence, Commissioner Malmström explained that the Commission has decided to propose CETA for signature as a mixed agreement which requires the consent of the European Parliament, and of all Member States through the relevant national ratification procedures. She called upon Member States who have all asked for this agreement and welcomed it, to show leadership by defending it in their parliaments and with citizens. 

The deal is set to benefit people and businesses – big and small – across Europe. CETA will:

  • scrap almost all customs duties from day one, saving EU firms hundreds of millions of euros a year in duty payments,
  • facilitate trade in services,
  • create new market access,
  • provide better access for European suppliers of services ranging from maritime services, telecoms, and engineering to environmental services and accountancy,
  • make it easier for service suppliers to travel between the EU and Canada to connect with their customers,
  • facilitate the recognition of professional qualifications for regulated professions, opening up new opportunities for professionals in these sectors, 
  • allow EU companies to bid for Canadian public contracts at all levels of government – federal provincial and local – and in areas from IT systems to roads to trains.

CETA contains strong rules on the protection of labour rights and the environment. Both sides pledged to promote the EU's high standards working together to also encourage others around the world - particularly developing countries - to raise their own standards.

In addition, CETA introduces a new investment court system and enhanced rules on investment protection. This ensures that the need to encourage foreign investors by protecting their investments fully respects governments' freedom to act in the interests of their citizens. The system guarantees EU governments' right to regulate. And it makes the resolution of investment disputes fairer and more transparent. As such it serves as an important step towards the EU's ultimate goal of a global investment court.

Fair and transparent taxation

The Commission has today set out the next steps in its campaign to boost tax transparency in order to fight tax evasion and avoidance in the EU, taking into account the problems highlighted in the recent media leaks known as the Panama Papers. 

The Commission has today adopted a proposal to further reinforce EU rules on anti-money laundering to counter terrorist financing and increase transparency about who really owns companies and trusts.

In addition, the Commission presented a Communication setting out priorities for our work towards fairer, more transparent and more effective taxation.

Key actions include:

  • Providing tax authorities with the information they need: In order to spot tax evaders, tax authorities must know the ultimate beneficiary behind every company, trust and fund. The Commission today proposed to amend the Directive on Administrative Cooperation for Taxation in this sense.
  • Extending the information available to authorities: Existing, as well as new, accounts should be subject to due diligence controls. Passive companies and trusts, such as those highlighted in the Panama Papers, will also be subject to greater scrutiny and tighter rules. The amendments to the anti-money laundering Directive proposed today will ensure this.
  • Increasing cross-border transparency on beneficial ownership: Given the international nature of tax evasion and avoidance, tax transparency must also extend across borders. The Commission will examine how Member States could automatically exchange their national information on beneficial owners of companies and trusts with a potential tax impact. 
  • Improving oversight of tax advisors' activities: The Commission will examine how to shed more light on tax advisors' activities and create effective disincentives for those that promote and enable aggressive tax planning. 
  • Promoting tax good governance worldwide and tackling uncooperative tax jurisdictions: The EU has a number of tools at its disposal to promote tax good governance worldwide, such as agreements with third countries and development assistance. Member States have already endorsed the idea of establishing an EU list of third countries that do not respect tax good governance standards. The Commission is now working with the Council to identify the most relevant countries to screen under this process, in order to have a first EU list ready in 2017.
  • Protecting whistle-blowers: Many cases of tax evasion and avoidance have recently come to light thanks to the actions of whistle-blowers.The Commission will assess the need for horizontal or additional sectorial measures in order to increase the protection of whistle-blowers.

Security

According to a recent survey, at least 80% of European companies have experienced at least one cybersecurity incident over the last year and the number of security incidents across all industries worldwide rose by 38% in 2015. For this reason, the Commission signed an agreement with the industry on cybersecurity and stepped up efforts to tackle cyber-threats. In concrete terms, the Commission launched a new public-private partnership on cybersecurity that is expected to trigger €1.8 billion of investment by 2020. This is part of a series of new initiatives to better equip Europe against cyber-attacks and to strengthen the competitiveness of its cybersecurity sector.

The European Commission and High Representative put forward today a Joint Communication on security sector reform and a legislative proposal to foster security and sustainable development in partner countries by providing more effective assistance to all security sector actors.

Related Links

AC/16/3697


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