18 Proposals
to Simplify
EU Law
Copyright
© Association of German Chambers of Industry and Commerce e. V. (DIHK)
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Department for Economic Policy
Dr. Alexander Schumann, Dr. Ulrike Beland, Christopher Gosau
June 2014
Foreword
Companies benefit from a correctly functioning European single market - Germany in particular.
Without uniform rules, this advantage does not exist. Manageable VAT, legal certainty in online
commerce or the European Private Company are just a few keywords that show the need for this
regulatory framework that applies equally from Lisbon to Helsinki.
Frequently, however, EU law becomes overburdened with too many details. Light bulbs, cucumbers or shower heads are striking examples of this type of regulation. In the opinion of German
business the internal market could function equally well in several places with fewer rules - or
even better sometimes.
With this list, the DIHK is submitting suggestions for fewer and simpler regulations in EU legislation which places the greatest strain on the German economy.
The causes for the overregulation are to be found on different levels:
-
Too often, impact assessments of the Commission do not recognise the effects on companies. The SME test in particular is not applied regularly and effectively. According to a EUROCHAMBRES analysis (SME test 2013), just half of the newly adopted regulations have undergone the SME test since 2012.
-
Information, documentation and reporting requirements could be avoided. At least SMEs
should be exempted from these. The expertise of German business and the public Chambers
should be taken into account to a greater extent in the legislative process.
-
In the implementation of EU regulations, the cutting of red tape does not go far enough. The
German legislator often tightens European specifications even further. This hinders the single European market and places German companies at a disadvantage compared to European competitors.
From the perspective of the 3.6 million companies in Germany which are represented by the
DIHK and the 80 Chambers of Commerce and Industry, the following EU regulations place a
particular burden on them:
-
Information requirements,
-
non-standard reverse charge procedure for value-added tax,
-
reporting obligations in derivatives trading (EMIR).
The appropriate and practical structuring of these regulations alone would reduce the burden on
companies in Germany by more than €1 billion annually. The reductions are estimated and calculated on the basis of company examples.
For many regulations it was not possible to quantify the burden on German companies because
there was no data available. The German National Regulatory Control Council therefore also
should systematically estimate the level of bureaucracy which is directly attributable to EU law.
DIHK – 18 Proposals to Simplify EU Law
2
DIHK – 18 Proposals to Simplify EU Law
Overview of the Proposals
Information and Documentation Requirements, Company and Competition Law
1st
2nd
3rd
4th
Proposal: Information requirements should be company and consumer-friendly ................. 4 Proposal: Avoiding irrelevant reporting obligations in the Annual Financial Statements ... 5 Proposal: Improving framework conditions instead of introducing the women's quota...... 6 Proposal: Avoiding additional bureaucracy in the reform of state aid law............................. 7
Tax law
5th
6th
7th
8th
9th
10th
Proposal: Making the VAT treatment of chain transactions manageable ............................... 8 Proposal: Extending simplification rules for warehouses in other EU countries to all
member states ........................................................................................................................................... 9 Proposal: Expanding tax exemption on intra-Community deliveries to cases of upstream
processing .................................................................................................................................................10 Proposal: Standardising the reverse charge throughout the EU ..............................................11 Proposal: Avoiding the duplication of value-added tax...............................................................12 Proposal: Enabling EU-wide VAT registration through national registration offices ..........13
Environment and traffic law
11th
12th
13th
14th
Proposal: Designing REACH to be SME-friendly ...........................................................................14 Proposal: Not allowing "Eco-design" to get out of hand ...........................................................15 Proposal: Simplifying initial status reports for soil and groundwater .....................................16 Proposal: Making the tachograph obligation more friendly to SMEs ......................................17
Financial market regulation, EU funding programmes, product safety
law
15th
16th
17th
18th
Proposal: Simplifying reports for the control of OTC derivative trading .................................18 Proposal: Preventing an increase in bureaucracy for the "Made in …" origin marking .....19 Proposal: Reducing the bureaucracy for ERDF/ESF and EAFRD funding .................................20 Proposal: Avoiding additional bureaucracy in EU funding instruments .................................21
Sources ................................................................................................... 22
3
DIHK – 18 Proposals to Simplify EU Law
1st Proposal:
Information requirements should be company and consumer-friendly
Legal field:
Information and documentation requirements in various legal fields, e.g. sales law,
consumer law, environmental law.
Legal basis:
Countless existing regulations such as the trade in digital products in Directives
97/7/EC, 2011/83/EU, 2005/29/EC, 2006/123/EC, 2000/31/EC, 2010/13/EU, 95/46/EC,
2002/58/EC or 2002/22/EC as well as new proposals such as the Common European
Sales Law (KOM (2019) 635), the proportion of women (COM (2012) 614), data protection (KOM (2012) 11) or tobacco products (KOM (2012) 788).
Initial situation/ Information requirements are expensive. The German National Regulatory Control
Council has identified approximately 10,900 different information requirements for
problem:
business alone. Both EU and German legislators have become increasingly aware of
the problem that information requirements impose significant burdens on companies.
Nevertheless, these potential burdens are still not sufficiently taken into account in
the planning phase for new regulations. For companies this means that more and
more new waves of cumbersome information requirements are introduced. One recent
example is the proposal for a regulation on a Common European Sales Law (CESL). In
articles 13 to 20 of the proposal alone there are 97 individual information requirements that have to be taken into account by the company when a purchase agreement is concluded, some of which overlap, compliment or exclude each other.
The large number of information requirements and the level of detail place an excessive strain on smaller companies in particular. Furthermore, they do not result in the
consumer being provided with appropriate information. Consumers are often confronted with the problem of "information overload".
Proposed solution:
A fundamental review needs to be carried out as to whether declarations on the topics
of the environment, social matters, human rights, anticorruption, diversity policy and
other non-financial information are required. With respect to the aspects of cost minimisation and complexity, it needs to be clarified when the regulations are drawn up
which information requirements are needed by companies and consumers. In this process, regulations must not be considered in isolation. What is required is an overall
picture - from the patient information leaflet to the information requirements for
complex transactions. The information requirements in existing regulations must be
reduced to the level that is actually of importance for consumers and market participants. Duplication must be avoided.
Costs
Companies report that the cost burden is €10,000 a year. All companies are potentially affected. If the only companies that were affected were those with 50 employees and more (84,000, Detatis 2013) this would mean total costs of €840 million.
Contact person:
Dr. Christian Groß
+49 (0) 30-20308 2723, [email protected]
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DIHK – 18 Proposals to Simplify EU Law
2nd Proposal:
Avoiding irrelevant reporting obligations in the Annual Financial
Statements
Legal field:
Company law
Legal basis:
Proposal for a Directive of the European Parliament and of the Council amending
Council Directives 78/660/EEC and 83/349/EEC as regards disclosure of non-financial
and diversity information by certain large companies and corporate groups, COM
(2013) 207 final by means of a plenary vote in the European Parliament.
Initial situation/ problem:
Large companies of public interest with more than 500 employees have to disclosea
statement on non-financial information (environmental, social and employee matters,
respect for human rights and the fight against corruption and bribery) in their management report, provided that this is necessary for an understanding of the company's
development, performance or position. For this purpose there should be a brief description of the business model and the policy in relation to the non-financial aspects,
including
- due diligence processes implemented,
- the result of those policies,
- the principal risks linked with business activities (where relevant and proportionate, business relationships should be included, inter alia, which have adverse effects) and the means of handling these risks,
- as well as non-financial key performance indicators, relevant to the particular
business.
In addition, capital market-oriented companies with more than 250 employees should
include a description of the diversity policy in administrative, management and supervisory bodies in terms of age, gender, educational and professional background in their
management report. If the company has no such policy, it should explain why this is
the case.
The draft directive proposes that two irrelevant reporting requirements should be included in the annual financial statements. This creates additional bureaucratic burdens and makes the efforts to increase the degree of social commitments difficult.
Proposed solu- Almost all companies with more than 20 employees assume social responsibility in
Germany. Their commitment goes beyond the legal regulations on a voluntary basis;
tion:
accordingly, such information on these matters should also be voluntary. Every fifth
company can well imagine that if the reporting requirements become mandatory, they
will cut back on their levels of commitment (IHK-Unternehmensbarometer 2012). The
proposed directive should therefore be withdrawn or at least implemented with as few
burdens as possible.
Costs:
The original proposal of the Commission alone, which assumed 18,000 affected companies (EU Comm Memo 2013) throughout Europe, would have meant costs for the
companies between €2.8 and €10.8 billion according to the estimate of EUROCHAMBRES (EUROCHAMBRES 2013). For a large company, the costs incurred as a result of
the obligation to provide information on non-financial performance indicators can be
a six-figure sum - between 150,000 and €600,000 per year - for a smaller company a
four or five figure sum - between €8,000 and €25,000 (CSES 2011).
Contact partners:
Annika Böhm, +49 (0) 30-20308 2727, [email protected]
Cornelia Upmeier, +49 (0) 30-20308 1621, [email protected]
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DIHK – 18 Proposals to Simplify EU Law
3rd Proposal:
Improving framework conditions instead of introducing the women's
quota
Legal field:
Company law
Legal basis:
Proposed directive of the EU Commission on improving the gender balance among nonexecutive directors of companies listed on stock exchanges and related measures (KOM
(2012) 614 final), approved by plenary vote in the European Parliament.
Initial situation
/ problem:
Large listed companies with 250 employees or more are to fill forty per cent of the
seats on the non-executive director positions with the underrepresented sex by means
of a stipulated recruitment process by January 1, 2020. In the case of non-compliance,
the member states are obliged to impose sanctions such as fines, declare that the appointment of the board member is null and void or be excluded from public calls for
tenders.
Furthermore, the draft directive provides for individual commitments regarding a gender-balanced representation on the management board. This is to be implemented in
national law. In addition, the proposed directive provides for an annual reporting requirement on
- the gender representation on the management board/supervisory board,
- the measures taken and
- the commitment to a target quota
on the company website and in the annual report.
European Union law does not provide any legal basis for a quota system. Only measures
which are intended to bring about equal opportunities are permitted. However the draft
Directive goes far beyond this. The draft infringes the principle of subsidiarity as well as
the principle of proportionality.
European Union law does not provide any legal basis for a quota system. Only measures
which are intended to bring about equal opportunities are permitted, although the draft
Directive goes far beyond this. The draft infringes the subsidiarity principle as well as
the principle of proportionality.
Proposed solution:
In Germany, as well as many other EU member states, the proportion of women in executive positions, and therefore also on the Supervisory Boards, is increasing. Recommendations in corporate governance codes for commitments of companies to increase
the share of women on Supervisory Boards also exist. Companies are therefore already
setting themselves ambitious individual targets.
Instead of a binding target quota, the causes of the existing under-representation of
women in executive positions should be addressed, for example the number of care
facilities available. In Germany in particular, the expansion of the public infrastructure
for the care of children and adults who are in need of care should be promoted.
Costs:
There are no cost estimates available.
Contact partners:
Annika Böhm, +49 (0) 30-20308 2727, [email protected]
Patricia Sarah Stöbener, +49 (0) 30-20308 2715, [email protected]
Stefanie Koenig, +49 (0) 30-20308 1624, [email protected]
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DIHK – 18 Proposals to Simplify EU Law
4th Proposal:
Avoiding additional bureaucracy in the reform of State aid law
Legal field:
Competition law/State aid law
Legal basis:
De minimis Regulation; General Block Exemption Regulation (GBER); proposals of the
EU Commission for new guidelines on rescue and restructuring aid and a communication on the notion of State aid.
Initial situation/ problem:
The EU Commission would like to concentrate the enforcement of State aid law on the
most serious distortions of competition. However, many provisions do not result in a
limitation on, but rather an expansion of the requirement to notify aid with the EU
Commission and, therefore, in increased administration costs. The Commission is expanding its own review powers in its communication on the notion of State aid beyond the existing jurisdiction. In some cases the regulations impose serious restrictions on existing funding opportunities, such as the de minimis Regulation, which
has already been passed, and the new GBER. This contradicts the aim of improving the
funding opportunities for companies and might turn out to inhibit innovation and
growth.
In the GBER and the guidelines on rescue and restructuring aid, strict criteria are set
for the definition of "undertakings in difficulty", with the result that the field of application of the GBER is further restricted. Through the publication of State aid on the
Internet in order to increase transparency, business secrets might become public.
Proposed solu- Communication on the notion of State aid: Above all, the rules on business-related
infrastructure and state resources have to be reviewed on the basis of the jurisdiction.
tion:
De minimis regulation: The inclusion of de minimis State aid for affiliated companies
in the calculation of the total amount of aid is not adequate. The "safe harbour" provisions for certain loans and guarantees need to be adapted to the standard financial
periods, above all with respect to their maturities.
GBER: Amendments are necessary, above all, in terms of the support provided to
SMEs. The limitation on the duration of guarantees for loans to the founders of new
businesses should be abolished. In the case of corporate succession it must be possible
for family members or employees to take over the company. Furthermore, the assessment of the incentive effect has to be simplified. The burden of proof should be reviewed, above all for research/development and investment aid. Regional State aid for
large companies should also be able to be granted for new products, services or innovations. The criteria for the definition of undertakings in difficulty should be revised in
line with practical considerations.
The transparency rules must not result in more administrative burden for companies
or the publication of business secrets causing disadvantages for companies.
Costs:
There are no cost estimates available.
Contact person:
Patricia Sarah Stöbener
+49 (0) 30-20308 2715, [email protected]
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DIHK – 18 Proposals to Simplify EU Law
5th Proposal:
Making the VAT treatment of chain transactions manageable
Legal field:
VAT law
Legal basis:
Article 31, Article 32 and Article 141 of the VAT System Directive, § 3 para 6 and
7 and § 25b Value Added Tax Act.
Initial situation/
problem:
So-called third-party business or chain transactions are a common aspect of
everyday business life. These are processes in which several companies conclude
contracts for a delivery item, although the goods are delivered directly from the
first to the last business in the chain. The value-added tax regulations for these
cases are extremely complicated and incomprehensible to the party that has to
apply the law, resulting in impractical and expensive consequences.
If, for example, a German company executes its supply contract within the EU
through a German supplier, the intermediate German business has to register
itself for value-added tax in the EU receiving country where it has to pay tax on
the acquisition and offset it against the national tax in the destination country.
This results in costs, additional work and mistakes in many cases because the
complex regulation is unknown. The simplification rule provided for so-called
triangular transactions does not help because it presupposes that the three
companies involved are registered in different EU countries.
Proposed solution:
The VAT regulations for the execution of chain transactions need to be simplified. The registration of the intermediate business has to be avoided. This is
easily possible if the last business of a chain in the destination country is liable
for value-added tax and can fulfil all of its tax obligations there without any
significant additional effort. The existing simplification rule for triangular transactions, which provides for the transfer of the profit and income tax debt of the
intermediate business, should be extended to include chain transactions in
which the intermediate business is not registered in a third member state. This
would apply in the above example, for instance, in which two German companies are at the beginning of the chain. This transfer of the tax debt should also
be permitted in longer chains than those which involve only three parties.
Costs:
Individual estimates amount to €50,000 every year for companies which execute their supply contracts throughout the EU. The time required for each chain
transaction is estimated to be one and a half man-days, i.e. several hundred
euros.
Contact partners:
Brigitte Neugebauer
+49 (0) 30-20308 2604, [email protected]
Dr. Ulrike Beland
+49 (0) 30-20308 1503, [email protected]
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DIHK – 18 Proposals to Simplify EU Law
6th Proposal:
Extending simplification rules for warehouses in other EU countries
to all member states
Legal field:
Value-added tax law
Legal basis:
Article 32 of the VAT System Directive
Initial situation/
problem:
In order to keep supply routes short, many business owners decide to store
their goods in a warehouse situated directly on their foreign customers’
premises. The supplier remains the owner of the goods until the customer
removes the goods from the so-called "consignment store". From the perspective of value-added tax there are two procedures here: the transport of
the goods by the supplier from the domestic location to the foreign consignment store on the one hand, and the removal by the customer on the other.
According to the tax system, the supplier should have its consignment store
registered abroad, resulting in considerable costs.
Some EU States make use of a simplification procedure here: a single intraCommunity delivery is assumed, i.e. at the time of removal from the warehouse. In this way the upstream transport to the warehouse is not important
and the supplier does not have to be registered.
This simplification procedure does not apply throughout the EU. Germany, for
example, does not recognise this form of simplification. For companies, this
fiscal "patchwork" means that they have to find out about the respective
regulations separately for each member state and are required to undergo a
complicated registration procedure if no simplification rule applies.
Proposed solution:
The simplification opportunities provided by a consignment warehouse
should be introduced in all member states. For this, the value-added tax System Directive should be amended in such a way that the procedure has to be
implemented in all member states.
Costs:
Individual companies estimate that the fiscal expenditure for a consignment
warehouse abroad is €5000 a year.
Contact partners:
Brigitte Neugebauer
+49 (0) 30-20308 2604, [email protected]
Dr. Ulrike Beland
+49 (0) 30-20308 1503, [email protected]
9
DIHK – 18 Proposals to Simplify EU Law
7th Proposal:
Expanding tax exemption on intra-Community deliveries to cases of
upstream processing
Legal field:
VAT law
Legal basis:
Article 138 of the VAT System Directive
Initial situation/ problem:
Within the context of intra-Community deliveries, there are frequent
cases in which the goods are processed on behalf of the customer before
crossing the border. In Germany, such deliveries are exempted from tax
as intra-Community deliveries on the basis of the special provisions of §
6a para 1 sentence 2 of the Value Added Tax Act (UStG). However, this
provision does not apply uniformly throughout the EU. Other EU member
states do not permit tax exemption in some cases. German companies
which order raw materials in other EU countries and have them processed there before their onward delivery to Germany cannot be certain
that they will receive the goods tax-free on an intra-Community basis.
This results in costs and additional work.
Proposed solution:
The regulation in force in Germany under § 6a para 1 sentence 2 of the
Value Added Tax Act, according to which the delivery item can be processed on behalf of the customer before being transported or dispatched,
should be specified uniformly and reliably throughout the EU.
Costs:
There are no cost estimates available.
Contact person:
Brigitte Neugebauer
+49 (0) 30-20308 2604, [email protected]
10
DIHK – 18 Proposals to Simplify EU Law
8th Proposal:
Standardising the reverse charge throughout the EU
Legal field:
Value Added Tax Law
Legal basis:
Article 196 in conjunction with Article 44 of the VAT System Directive
Initial situation/
problem:
The taxation of services is based on the location where the service is provided.
Since 2010 this has been the location of the party receiving the service in all
cases where the services are provided between entrepreneurs (so-called B2B
cases). The VAT System Directive specifies the reverse charge procedure for
services provided across the border, so that the companies providing the service have to draw up a net invoice and do not have to be registered abroad.
However, not all types of services are covered by the simplification rule. There
are special rules in existence for services which are related to property (here
the location of the property is decisive), catering services (the location of the
work) and the transport of individuals (transport route).
Companies have to deal with the VAT law of each individual member state for
different types of services, as well as contracts for work and materials. In some
cases the national VAT regime applies additional regulations for the reverse
charge procedure, and in some cases it does not. The procurement of information in this field is complex and leads to errors. There are a number of interpretation issues relating, for example, to the treatment of subcontractors or
the scope of individual regulations. It is almost impossible to follow the large
number of changes to the law in the individual states, some of which are carried out in quick succession.
Proposed solution:
The reverse charge procedure must be generally applicable in b2b cases - contracts for services and work and materials. This eliminates many definition and
interpretation questions. The preconditions for the reverse charge should be
defined uniformly throughout the EU; this would also ensure that typable case
groups such as subcontractors, for example, would be subjected to uniform
treatment. The affected standard is Article 196 in conjunction with Article 44
of the VAT System Directive.
Costs:
The coordination requirement resulting from the difference methods of handling the "reverse charge" procedure is estimated to cost between €4000 and
€5000 a year for large companies. For the 1800 large industrial enterprises in
Germany (IW 2013) this would amount to an encumbrance of around €8 million.
Contact partners:
Brigitte Neugebauer
+49 (0) 30-20308 2604, [email protected]
Dr. Ulrike Beland
+49 (0) 30-20308 1503, [email protected]
11
DIHK – 18 Proposals to Simplify EU Law
9th Proposal:
Avoiding the duplication of value-added tax
Legal field:
Value-added tax law
Legal basis:
VAT System Directive
Initial situation/ problem:
VAT is largely harmonised within the European single market. Nevertheless, cases of double taxation remain in practice. The reasons for this are
essentially
 the different interpretation of a provision of the VAT System Directive,
 the different assessment of a specific situation by the tax administrations of the member states concerned,
 the different legal classifications of a procedure in the national legal
systems.
In the last two cases in particular it is hardly possible for taxpayers to
achieve a quick solution without considerable costs. No relevant procedure is provided for which places the member states under an obligation
to resolve their differences of opinion. The mutual agreement procedure
provided for in Article 25 of the OECD Model Tax Convention does not
contain any obligation on the part of the member states to reach an
agreement either. The use of the so-called "SOLVIT" procedure is optional
and does not substantiate any legal claim. Taxpayers are therefore obliged
to avail themselves of legal processes, which in various member states can
result in conflicting decisions.
Proposed solution:
Introduction of a two-stage process:
1. Abolition of the obligation to pay the required VAT amount a second
time for as long as the difference of opinion associated with the double taxation has not been resolved. In practice, the claim could be suspended if the VAT for the same goods or service has already been paid
once in another member state. This suspension would last until the
double taxation had been eliminated.
2. Elimination of the actual double taxation by means of a mutual
agreement process between the fiscal administrations of the member
states concerned, and by an arbitration process if necessary if such a
procedure fails.
Costs
No cost estimates are available.
Contact person:
Brigitte Neugebauer
+ 49 (0) 30-20308 2604, [email protected]
12
DIHK – 18 Proposals to Simplify EU Law
10th Proposal:
Enabling EU-wide VAT registration through national registration offices
Legal field:
Value-Added Tax Law
Legal basis:
VAT System Directive
Initial situation/
problem:
Since January 1, 2010 there has been an exclusively electronic procedure in use
within the EU for the input tax refund process. The application is submitted exclusively via the electronic portal of the EU state in which the company is located (in
Germany through the Federal Central Tax Office - BZSt). The state in which the
company is located sends an acknowledgement of receipt, checks the fundamental
eligibility of the applicant and forwards applications to the EU states for which the
company is applying for a refund of the VAT that has been paid.
For certain electronic services to consumers a so-called mini one-stop-shop/MOSS)
is to be introduced as of January 1, 2015. The registration, submission of the VAT
return and the payment of the VAT can then all be handled in the respective country in which the company is located even though the service is provided in another
EU country.
Generally, however, the restriction continues to exist at the national registration
offices that companies located in one state cannot be registered for other EU states
for the purposes of VAT. The company therefore has to contact the registration
office of the corresponding EU state for the purposes of registration. This represents a bureaucratic obstacle. Particularly because the electronic portals of the
national registration offices are currently only drawn up in the respective national
language and are therefore difficult to access.
Proposed solution:
The principle of the one-stop shop should be extended. In the short-term it must be
possible for companies to register for the purposes of VAT in other EU states in the
electronic portals of the state in which they are located. The national authority
must - as with the refund procedure - forward the applications to the corresponding EU states. In addition, the portals of the national registration offices should at
least also be accessible by means of an English translation and therefore easier to
understand.
Costs:
In a single company the costs of translation work associated with the input tax
refund procedure can be up to €1000 a year.
Contact partners:
Brigitte Neugebauer
+49 (0) 30-20308 2604, [email protected]
Dr. Ulrike Beland
+49 (0) 30-20308 1503, [email protected]
13
DIHK – 18 Proposals to Simplify EU Law
11th Proposal:
Designing REACH to be SME-friendly
Legal field:
Environmental law
Legal basis:
Regulation (EC) no. 1907/2006 governing the registration, evaluation, authorisation and restriction of chemical substances (REACH).
Initial situation/
problem:
In its report on the implementation of REACH dated February 5, 2013, the
Commission recognises the high costs associated with REACH, which makes its
implementation more difficult for SMEs in particular. The proposed forms of
relief - adjustment of the fees for SMEs, guidance on transparency, nondiscrimination and a fair share of the costs within SIEF (Substance Information
Exchange Fora) - scarcely make the costs easier to bear, however.
Significant additional financial burdens are to be expected on the one hand due
to the declining quantity thresholds for registration. By the middle of 2018, substances with an annual volume of 1 to 100 t also have to be registered. Many
companies will then have to deal with the registration for the first time and a
high proportion of small businesses will be expected. Furthermore, the first authorisation procedures are currently starting for substances which have been
included in Annex XIV. This is also likely to impose significant financial burdens
on companies.
Proposed solution:
There is no current need to revise the REACH Regulation at the moment - this
opinion is shared by the European Commission. The reason for this is that any
such revision of the REACH Regulation would be associated with the risk that
the measures which have already been taken by companies to deal with the very
complex procedures for registering, evaluating and authorising substances
would have to undergo fundamental changes.
The European Commission, the European Chemicals Agency ECHA, the member
states and the national chemical agencies must ensure the intensive preparation
of companies in particular who will have to deal with the registration process
for the first time for the 2018 registration deadline, as well as the transparent
and SME-friendly implementation of the REACH registration. The authorisation
procedures for substances listed in Annex XIV must also be manageable for
SMEs and with respect to substances which are only used in special applications.
Costs
According to the European Commission, the costs which have already been
incurred for the first registration phase up to the end of November 2010 by
companies for the REACH legislation amounts to €2.1 billion (EU COMM Reach
2013).
Contact person:
Mirko Fels
+32 (0)2 286 1664, [email protected]
14
DIHK – 18 Proposals to Simplify EU Law
12th Proposal:
Not allowing "Eco-design" to get out of hand
Legal field:
Environmental law
Legal basis:
Directive 2009/125/EC for the creation of a framework for the stipulation of requirements for the environmentally compatible design of energy consumption-related products (new version of Directive 2005/32/EC)
Initial situation/ With the so-called Eco-design Directive, mandatory requirements are specified for increasing numbers of products - the light bulb ban is only one of the consequences.
problem:
There are already regulations in existence for energy efficiency and environmentally
compatible design (= eco-design), for example for television sets, refrigerators and electric motors. In the future it is possible that shower heads and water taps, as well as
windows and insulation materials will be regulated by eco-design specifications. The
background to this is that the directive has been expanded from "energy-operated" to
"energy consumption-related" products - i.e. also to those products which indirectly
affect energy consumption. Which products these are specifically is largely determined
by the European Commission: it is the Commission which draws up a list and then issues detailed specifications for individual products, so-called implementing measures.
There are already 20 such eco-design regulations, with a further 30 already in preparation. But that is not enough: after the expansion to include energy consumption-related
products, eco-design is now being demanded for all products, as well as for systems or
processes. In addition to energy efficiency, further consideration should also be given to
resource efficiency. This threatens to cause an overload - of specifications and their
consequences.
Proposed solution:
The eco-design Directive is in danger of itself becoming an instrument used to steer
extensive production and technology developments which curtails a range of products,
disenfranchises consumers and inhibits innovation. The reason for this is that the regulations make high product standards mandatory instead of taking "low end" product
versions which are no longer contemporary out of the market. For this reason the EU
legislators should refrain from further expanding the regulations. In view of the ongoing
implementation process, such expansion is premature, and is very questionable anyway:
the cost to business is not proportionate to the - hoped-for - benefits to the environment and climate.
A sense of proportion is also required within the current scope of the Directive: new
eco-design requirements governing resource efficiency must not lead to regulatory duplication. For electrical and electronic devices, for example, there are already regulations in existence on the use of substances and recycling. Regulations on water taps
and shower heads are of concern because saving water in many regions of Europe
would be unnecessary or even harmful; due to the population decline in Germany, as
well as the conscious use of water, many water pipes are no longer sufficiently flushed
through. In the same way, eco-design regulations for windows and insulation material
are questionable, as there is already a directive on the total energy performance of
buildings.
Costs
Cost estimates are not available.
Contact person:
Mirko Fels
+32 (0)2 286 1664, [email protected]
15
DIHK – 18 Proposals to Simplify EU Law
13th Proposal:
Simplifying initial status reports for soil and groundwater
Legal field:
Environmental law
Legal basis:
Article 20 paragraph 2 Industrial Emissions Directive (IED), § 10a Federal
Immission Control Act, § 4a paragraph 4 9th Federal Immission Control Ordinance
Initial situation/
problem:
Directive 2010/75/EU on industrial emissions imposes an obligation on the
operators of large industrial plants to submit a "report on the initial status
of soil and groundwater" (AZB) when applying for a new permit for an industrial plant. This obligation applies to plants in which hazardous substances are handled that can cause considerable pollution of the soil and
groundwater. The background to the AZB is the expansion of the operator's
obligations after the closure of the plant. After the plant has been closed
down, its operator must remove the soil and groundwater contamination
that has been caused by the operation of the plant. The AZB is intended to
serve as the basis for the before and after comparison.
However, an AZB has to be drawn up not only when the plant is initially
constructed, but also upon every modification to the plant which is associated with the introduction of new relevant hazardous substances to the
production process. For individual companies which change their working
processes several times a year in some cases, for example because they
have to be adapted to new production requirements, this involves a significant amount of bureaucracy. Because before any modification to the plant,
new samples of the soil and groundwater have to be taken and the initial
status report adapted if necessary.
Proposed solution:
Companies which as a result of their production process have to carry out
frequent changes to the substances used should have this task made easier
for them. For example, consideration can be given to the regular adaptation
of the AZB at greater intervals. This would mean that the meaning and purpose of the regulation, i.e. the removal of plant-related soil and groundwater contamination after operations are closed down, would also be
achieved. The risk of a soil and groundwater remediation obligation would
remain with the plant operator, who has to return the land on which the
plant is located to a proper condition after the plant is closed down.
Costs
Cost estimates are not available.
Contact person:
Dr. Katharina Mohr
+49 (0) 30-20308 2210, [email protected]
16
DIHK – 18 Proposals to Simplify EU Law
14th Proposal:
Making the tachograph obligation more friendly to SMEs
Legal field:
Traffic law
Legal basis:
Proposal COM (2011) 451 final amending Regulation no. 561/2006 concerning
social legislation relating to road traffic and Regulation no. 3821/85 on the
recording equipment in road traffic.
Initial situation/
problem:
As a matter of principle, all professional drivers are obliged to comply with the
driving and rest periods stipulated by the EU and record these by means of a
digital tachograph. According to Regulation 561/2006, exceptions apply for
certain drivers who use their vehicle to transport materials, equipment or machines as part of their profession, for example building site vehicles, postal
services within the framework of the universal sevice and certain vehicles used
in conjunction with gas and electricity supplies. In addition, there are other
vehicles which - in the same way as the vehicles covered by the above exceptions - only travel within an area that is restricted to a few kilometres. These
include courier, parcel and express services, as well as local service vehicles.
Due to the limited area, driving breaks are not required here.
The EU stipulates that vehicles covered by the exception do not have to install
such a recording device only up to a maximum of 100 km. Above this limit,
every company is obliged to install the digital recording equipment, to convert
the vehicle accordingly, maintain the device and manage the data. There is,
however, no significant increase in safety.
Proposed solution:
The installation obligation for vehicles which are covered by the exceptions
under Article 13 of Regulation 561/2006 should only apply in the future from
a distance of 150 km and up. This would take into account the fact that the
companies affected by the exceptions frequently only cover short distances
and use only a few vehicles, the conversion of which is disproportionately expensive for small and medium-sized enterprises in particular.
Consideration should also be given to expanding the exceptions to certain categories of vehicles which are currently not - or only partly - covered, such as
construction site vehicles or courier, express and parcel services.
Costs
The purchase costs for the digital recording device are approximately €1500
each. In addition, there are the costs of conversion, maintenance and data
management. The European Commission assumes that the potential relief to
business would be €415 million (EU COMM ABRplus 2014).
Contact partners:
Holger Kindler
+32 (0)2 286 1628, [email protected]
Dr. Patrick Thiele
+49 (0)30 20308 2110, [email protected]
17
DIHK – 18 Proposals to Simplify EU Law
15th Proposal:
Simplifying reports for the control of OTC derivative trading
Legal field:
Financial market, derivatives trading (European market infrastructure regulation,
EMIR)
Legal basis:
Regulation (EU) no. 648/2012
Initial situation/
problem:
As a consequence of the financial market crisis, the heads of state and government decided at the G20 summit in 2009 to impose greater controls on
OTC derivatives trading. The resolutions were implemented by Regulation
(EU) no. 648/2012 of the European Parliament and of the Council dated July
4, 2012 on OTC derivatives, central counterparties and trade repositories
(ABl. L 201 of July 27, 2012, page 1) (European market infrastructure regulation, EMIR).
The provisions of the EU Regulation apply directly in Germany. If they make
extensive use of OTC derivatives, companies have to comply with special
risk management requirements. A particular burden for small and mediumsized enterprises is the fact that they have to report derivatives transactions
to a trade repository and - according to the German EMIR Implementation
Act - have these checked by an auditor. The imposition of burdens on companies operating in the real economy by means of a control law which is
aimed at the financial market is disproportionate.
Proposed solution:
An examination should be carried out as to whether simplifications can be
made to the clearing and reporting obligations. Possible starting points for
this are, for example:


Raising the limits beyond which companies are subject to a clearing obligation
(currently > 100 derivatives or a nominal value of more than €100 million) or
at least an increase in the limits for the confirmation requirement by the auditor,
Possibility of reporting aggregated data.
Costs
Reporting and verification obligations are estimated by individual small and
medium-sized enterprises (200 employees) to involve costs of €30,000. The
Federal Statistical Office assumed in its first estimate that 6000 companies
would be affected (Destatis SKM 2013). The resulting cost burden would be
€180 million.
Contact person:
Dr. Tim Gemkow,
+49 (0) 30-20308 1507, [email protected]
18
DIHK – 18 Proposals to Simplify EU Law
16th Proposal:
Preventing an increase in bureaucracy for the "Made in …" origin
marking
Legal field:
Product safety law
Legal basis:
Article 7 of Consumer Products Safety Regulation KOM 2013 (78 final) of February 13, 2013, Article 114 of the Lisbon Treaty.
Initial situation/
problem:
Up to now the EU Commission has tried in vain to make the information on the
country of origin "Made in" obligatory for some sectors of industry and only for
products from third countries which are imported into the EU. In the middle of
January 2013 it withdrew its proposal (KOM (2005), 661) because the member
states rejected "Made in" and there was a risk that this would infringe WTO rules.
However, at the beginning of February 2013 the Commission presented a new
initiative for the introduction of a mandatory country of origin statement, now
against a background of product safety considerations and better traceability of
products. On April 15, 2014 the European Parliament voted on the draft. Under
the heading "Consumer Safety" the failed regulation, which was originally
planned for imported goods in 2010, is being expanded to cover all goods with
the exception of food and feed products, as well as medical and veterinary products. This applies to goods produced within the EU (they can be identified with
"Made in EU" or statement of the specific country), as well as imports from third
countries.
The regulation should be rejected:
 It is disproportionate and creates unnecessary bureaucracy. Companies would
have to maintain extensive levels of documentation and estimates of the value of the supplied parts. In the case of products which are produced from
many small parts this is difficult to determine and can increase the costs of
the goods considerably.
 It does not provide any additional safety for the consumer or authorities. The
determination of the country of origin according to customs law also gives
the consumer a false sense of security. The reason for this is that the origin
according to trade policy in customs law is intended to prevent the circumvention of anti-dumping regulations and does not take into account the perspective of the consumer.
Proposed solution:
The existing regulations for better traceability in the Product Safety Directive are
sufficient. The manufacturers, importers and distributors already have to be indicated in the products (cf. Article 8). If this specific information is missing, the
statement of the country of origin does not provide any further help.
Costs:
The complex documentation causes significant costs, with some companies estimating the amount for this to run into six figures. There is no estimate available
of the total financial burden.
Contact partners:
Doris Möller
+49 (0)30-20308 2704, [email protected]
Stefan Walkowiak
+49 (0)30-20308 2321, [email protected]
19
DIHK – 18 Proposals to Simplify EU Law
17th Proposal:
Reducing the bureaucracy for
ERDF/ESF and EAFRD funding
Legal field:
EU regional policy
Legal basis:
Regulation (EU) no. 1303/2013 with joint provisions on the European Structural and
Investment Fund and repealing Regulation (EC) no. 1083/2006 of the Council.
Initial situation/
problem:
In the pro rata financing of funds from the European Regional Development Fund
(ERDF), the European Social Fund (ESF) and the European Agricultural Fund for Rural
Development (EAFRD) on the part of the countries, a complex bureaucratic process is
set in motion. Numerous checks by various bodies are required. In the case of the
climate protection directive, for example, there are 10 institutions that could carry
out checks. A further problem is the refund of costs for projects based on a separate
document regardless of the project volume. Depending on the project size, there are
between 100,000 and 1 million documents involved, which have to be retained by
the organisation executing the project or the beneficiary.
A further financial burden is the annual reporting requirements during project implementation, especially for SMEs. Here, data often has to be transferred several
times and to several bodies.
Proposed solution:
Subsidies with ERDF/ESF and EAFRD funds should be made less bureaucratic. For this,
the following measures are required:
 A single check with final notification and a binding effect for all suppliers of
capital/participants. The bureaucracy required could be reduced by 80 per cent in
each case of funding as a result.
 Reduction in separate document proof obligations in favour of more all-inclusive
amounts - for both personnel costs and material costs - and shorter retention
periods.
 Only one-time reporting requirements for companies.
 Focus on a centrally compiled annual implementation report for the operational
programmes per member state and more transparent publication of the implementation reports by the European Commission.
 Reduction in obligations for a subsidised company to publish information on its
Internet site about the supported project. Only the information required for verification of the proper use of the funds should be subject to compulsory publication.
 Avoiding "gold-plating" through further synthesis and interim reports.
 Shortening of the application procedure, as these are significantly more complex
compared to programmes without EU co-financing.
Costs
Cost estimates are not available.
Contact person:
Holger Kindler
+32 (0) 2 286 1628, [email protected]
20
DIHK – 18 Proposals to Simplify EU Law
18th Proposal:
Avoiding additional bureaucracy in EU funding instruments
Legal field:
EU funding programmes
Legal basis:
Implementation of the EU framework programme COSME, here: COSME Loan
Guarantee Facility (LGF).
Initial situation/
problem:
The programme to promote the competitiveness of companies and for SMEs
(COSME) is intended to improve access for SMEs to finance with the help of
financial instruments. With COSME, the European Investment Fund (EIF) offers financial intermediaries such as the KfW and regional development and
guarantee banks financial instruments for funding opportunities. These are
forwarded to SMEs through commercial banks.
In the existing EU funding framework, SMEs are already informed about financial support from the EU when they conclude a credit agreement. Under
the new framework, however, it is planned for companies to be informed
separately in a letter accompanying the credit agreement. This letter would
have to be signed by the companies and returned to the bank. The financial
institution is also supposed to store this letter separately. This means unnecessary bureaucracy for the financial institutions and the SMEs.
Proposed solution:
Companies should be informed of the financial support from the EU when
they conclude the credit agreement, as is the situation now. Information
about an accompanying letter is sufficient. If there are additional conditions,
these should be integrated in the credit agreement and no additional signatures obtained on separate documents. Furthermore, there should be no additional document retention requirements.
Costs
There are no cost estimates available.
Contact person:
Alexandra Böhne
+32 (0) 2 286 1638, [email protected]
21
DIHK – 18 Proposals to Simplify EU Law
Sources
CSES 2011: Centre for Strategy & Evaluation Services: Disclosure of non-financial information
by Companies, Final report, December 2011.
http://ec.europa.eu/internal_market/accounting/docs/non-financial-reporting/com_2013_207study_en.pdf
Destatis 2013: Statistisches Bundesamt: Statistical Yearbook 2013, Wiesbaden, S. 519.
Destatis SKM 2013: Standard-Cost-Modell Web-Database (WebSKM-Datenbank), Rechtliche
Vorgaben, § 20 WpHG.
https://wwwskm.destatis.de/webskm/online;jsessionid=BCA0C33F182F0BE2C4AEFD49D3203E1B.tomcat_SK
M_2_1?operation=suchen&cleanup=true&suchbegriff=EMIR&x=0&y=0
EU Comm ABRplus 2014: European Commission: ABRplus – List of Measures for Follow-up,
Brüssel 2014.
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http://europa.eu/rapid/press-release_MEMO-13-336_de.htm
EU Comm Reach 2013: European Commission: COMMISSION STAFF WORKING DOCUMENT,
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http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52013SC0025&from=EN
EUROCHAMBRES 2013: EUROCHAMBRES positionpaper: European Commission’s proposal for a
Directive on disclosure of non-financial and diversity information by certain large companies
and groups COM(2013)207, Oktober 2013.
http://www.eurochambres.eu/objects/3/Files/EUROCHAMBRES_Position_Paper_Disclosure_NonFinancial_Diversity_Information.pdf
IHK-Unternehmensbarometer 2012: Deutscher Industrie- und Handelskammertag: Gesellschaft
gewinnt durch unternehmerische Verantwortung, Ergebnisse des IHK-Unternehmensbarometers
2012, Berlin 2012.
IW 2013: Deutschland in Zahlen, Köln 2013.
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Commission’s application of the SME test, November 2013.
http://www.eurochambres.eu/DocShare/docs/1/NKFFAPDAIIGAJLPJPDDAPMGLG85CFD6O4NH7S
KA9Y44Y/EUROCHAMBRES/docs/DLS/SME_Test_Benchmark_2013-2013-00787-01.pdf
22