Directive 2006/1/EC on the use of vehicles hired without drivers for the carriage of goods by road 1 provides for a minimum level of market opening for the use of hired goods vehicles in the single market. In doing so, it aims to (i) achieve optimum resource allocation by limiting the wasteful use of factors of production (e.g. capital tied up in underutilised vehicles) and (ii) increase the flexibility and productivity of the undertakings concerned. All objectives are associated with the use of hired vehicles.

However, at the same time, the Directive allows Member States to restrict the use of hired goods vehicles with a gross vehicle weight above six tonnes for own account operations. It also allows restricting the use of a vehicle which has been hired in a Member State different from the one where the undertaking hiring the vehicle is established.

These restrictions limit the effectiveness of the Directive. Moreover, they create an unnecessary burden on undertakings and a patchwork of rules which creates confusion among operators. Reducing the burden on undertakings and clarifying the rules is a core objective of the EU Regulatory Fitness Programme (REFIT) of which this proposal forms a part.

It is therefore proposed to remove the possibility to restrict the use of hired vehicles for own account operations. Moreover, the use of a vehicle hired in another Member State is to be allowed for at least four months to enable undertakings to meet temporary or seasonal demand peaks and/or to replace defective or damaged vehicles. Allowing Member States to limit the use of a vehicle hired in a Member State other than the one where the undertaking hiring it is established to four months seems necessary to avoid possible distortions given the considerable differences between them in the taxation of road vehicles.

Overall, the proposal ensures equal access for transport operators across the EU to the market for hired vehicles. It also ensures a uniform regulatory framework across the EU and enables transport operators to perform their transport activities in the most efficient way possible. As hired vehicles are usually newer, safer and less polluting, the proposal reduces the negative externalities of road transport.

This proposal is one of several proposals in the area of road transport which the Commission intends to adopt in 2017 to make the legislative framework governing the road transport sector in the EU fit for the future.

Hired goods vehicles are referred to in both Regulations (EC) No 1071/2009 2 and (EC) No 1072/2009 3 , in the context of the conditions for stable establishment of a transport operator (which is one of the requirements for access to the profession of road transport operator) and in the context of the rules on the Community licence, a certified copy of which must be put at the disposal of the licence holder for each hired vehicle. In this sense, the operation of hired vehicles is relevant to the access to the international road haulage market. Both Regulations and the Directive form the legal framework in which the road haulage sector operates in the EU. The enforcement of the provisions of these three legal acts is closely linked. As regards in particular the enforcement of the proposed (optional) time limitation, whereby the use of a vehicle hired in a Member State other than the one where the undertaking hiring it is established may be confined to four months, the amending proposal made in respect of Regulation (EC) No 1071/2009 is relevant. According to that proposal, Member States would be obliged to indicate the number plate of each vehicle at the disposal of a transport operator in their respective national electronic register. Such a rule should be of great help for monitoring compliance with any time limitation as referred to above.

The proposal is fully consistent with the priority of the Commission to create a deeper and fairer internal market. The internal market for the provision of transport services using hired goods vehicles and for the provision of vehicle renting and leasing services will be strengthened. It is also in line with the objectives of the common transport policy as described in the 2011 White Paper "Roadmap to a Single European Transport Area - Towards a competitive and resource efficient transport system". 4 This proposal also reduces the regulatory burden on operators and clarifies the legal framework - both of which are objectives of the EU's REFIT programme.

The legal basis for this Directive is Article 91(1) of the Treaty on the Functioning of the European Union (TFEU).

As indicated in Section 7.4 of the impact assessment, the proposal does not go beyond what is needed to address the identified problems. The proposal only contains some targeted amendments to the Directive which help improve the legislative framework in which the road haulage sector and the vehicle renting and leasing sector in the EU operate.

Since the act to be amended is a Directive, the amending act proposed should in principle take the same form.

The staff working document related to the ex-post evaluation of Directive 2006/1/EC has been adopted together with this proposal. 6 An external study was carried out in 2015-16. Its final report is published on the Commission's website. 7

Interested parties had several opportunities to provide contributions during both the ex-post evaluation and the impact assessment process. Next to targeted stakeholder interviews (27 interviews were carried out in autum 2015 for the ex-post evaluation and 33 in the second half of 2016 for the impact assessment), there was a 12-week online public consultation (covering both ex-post evaluation and impact assessment) that took place between 11 August and 4 November 2016 (attracting 27 responses) and a 7-week consultation of SMEs between 22 September and 11 November 2016 through the SME panel of the Enterprise Europe Network. The consultation of the SME panel consisted of two separate questionnaires, one on the use of hired goods vehicles (156 responses) and the other on the use of hired buses and coaches (94 responses).

The consultation provided a number of data and valuable relevant contributions from practitioners. One of its outcomes was that the absence of EU rules on the use of hired buses and coaches was not really a problem and that there was no specific market segment dealing with hired buses and coaches. This is why one of the originally envisaged policy options that would have extended the scope of the Directive to the use of hired buses and coaches has been discarded.

The consultation also provided some input on the justifications by Member States for applying restrictions on the use of hired vehicles. Some public authorities and trade union representatives fear more competitive pressure from the removal of restrictions regarding the use of hired vehicles for own account operations and more difficulties in enforcing road transport legislation from allowing the use of vehicles hired in another Member State. While the justifications for restrictions on the use of vehicles hired in another Member State have been taken into account, those related to restrictions on the use of hired vehicles for own account operations were not convincing.

The Commission was supported by an external contractor who carried out a study on the ex-post evaluation of the Directive and a support study for the impact assessment.

The initiative is supported by an impact assessment, which has received a positive opinion with reservations from the Regulatory Scrutiny Board. The reservations were addressed by providing more detail on the policy context, by explaining the magnitude of the problems identified and why they should be addressed now, by discarding the original policy option that would have extended the scope of the Directive to the use of hired buses and coaches (as no case could be made for this option), by explaining the risks of not achieving the expected outcome of the preferred option (in particular in view of possible incentives for tax planning or tax optimisation and possible difficulties for Member States in enforcing road transport legislation), by providing an attempt of quantification of the reduction in administrative costs and by providing more information on the stakeholder consultation.

The following policy options have been examined:

Option 0: Issue guidelines and recommendations.

Option 1: Targeted legislative amendments.

Option 1a: Allowing the use of hired goods vehicles for own account operations throughout the EU.

Option 1b: Allowing the use of goods vehicles which an operator established in one Member State has hired in another Member State for a certain period of time (three-to-four months) e.g. to meet temporary or seasonal demand peaks.

Option 1c: Combination of Option 1a and Option 1b.

Option 2: Same (or at least no more restrictive) rules for the use of hired vehicles as for the use of vehicles owned by undertakings.

Option 1c is the preferred option as it is the most effective option that addresses all the identified problems without going beyond what is necessary to do so. It is better than Option 2 as the latter would not remove the patchwork of rules in the EU related to the use of hired vehicles. Instead the different rules of the various Member States would remain in place as long as they did not put hired vehicles in a worse position than vehicles owned by the operators (e.g. requirements related to the re-registration of a vehicle purchased / hired in another Member State).

Under the preferred option, operating costs of EU hauliers could be reduced by a total of EUR 158 million in 2030. An operator switching from owned vehicles to hired vehicles should see his operating costs go down by around 2%. In addition, the vehicle rental / leasing sector stands to gain some EUR 81 million, bringing the total annual economic benefit to around EUR 240 million in 2030. In addition, it would lead to almost 5 000 additional jobs, 2 900 in the vehicle rental / leasing sector and 1 700 in the road haulage business.

The proposal is part of the Commission's REFIT programme. It aims at simplifying the rules on the use of hired vehicles. The market opening for the use of hired goods vehicles for own account operations will remove any restrictions which in turn will reduce compliance costs by the operators. Providing a uniform framework for the use of vehicles hired in another Member State (at least for up to four months) is expected to provide legal clarity and save operators up to EUR 12.8 million in costs for de-registration and re-registration of their vehicle.

The proposal respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union. 8

The proposal has no implications on the Union budget.

The implementation of this Directive will be closely monitored. The Commission will submit a report on the implementation and effects of this Directive at the latest five years after the transposition deadline. By further liberalising the use of hired goods vehicles, this Directive is expected to boost the market for hired vehicles and lead to lower costs and more flexibility and profitability for operators. The relevant information is to be gathered from national competent authorities, from representatives of the vehicle renting and leasing business and through a survey among road transport operators. Useful information is also expected to come from the national electronic registers of road transport undertakings. As transport operators will in the future have to indicate the number plate of the vehicles at their disposal, it should be straightforward to get an overview of the share of foreign-registered vehicles in the vehicle fleet from these registers.

The main elements of the proposal are the following:

Amendment of Article 2 of Directive 2006/1/EC

Article 2 provides the framework for the rules which Member States apply to the use of hired vehicles on their own territory by undertakings established on the territory of another Member State. In this context, the limitation of the scope of this Article to "traffic between Member States" is outdated as hired vehicles may also be used for cabotage operations in line with the provisions of Regulation (EC) No 1072/2009.

The current provisions allow Member States to restrict the use of vehicles hired in a Member State other than the one where the undertaking hiring them is established. This creates a patchwork of rules across the EU and legal uncertainty which in turn prevents undertakings from benefiting from potentially more economically attractive hiring deals across the border. It is therefore proposed to allow undertakings to use vehicles hired anywhere in the EU all over the EU.

As vehicle taxation rates still differ considerably in the EU, and in order to avoid fiscal distortion, Member States may limit the time of use on their respective territories of a vehicle hired in a Member State other than the one where the undertaking hiring it is established, however not below a minimum period of four months. This four-month minimum period is meant to ensure that vehicles hired (and registered) in another Member State may be used to meet in particular short-term, seasonal or temporary demand peaks or to replace defective or damaged vehicles.

Amendment of Article 3 of Directive 2006/1/EC

Article 3 provides the framework for the rules which Member States apply to the use of hired vehicles by undertakings established on their own territory. The current provisions apply to hired vehicles registered or lawfully put into circulation in the Member State itself, "provided that the conditions laid down in Article 2 are satisfied." As the amended Article 2 allows the use of hired vehicles registered or lawfully put into circulation in any Member State, paragraph 1 is amended to remove this inconsistency. It should be possible to use a vehicle that has been registered or put into circulation in compliance with the laws in a Member State other than the one where the undertaking hiring it is established not only for transport operations in any other Member State (in line with the amended Article 2), but also for transport operations in the Member State where the undertaking hiring it is established.

Paragraph 2 is deleted as Member States should no longer have the freedom to restrict the use of hired goods vehicles for own account operations. Undertakings throughout the EU should be allowed to use hired vehicles for own account operations and profit from the associated benefits. They should not be restricted to the use of vehicles owned by them or to outsourcing the transport operation to an undertaking providing such services for hire and reward. The vehicles owned by undertakings that use them for own account operations are often underutilised and on average older, less safe and more polluting than hired vehicles.

New Article 5a in Directive 2006/1/EC

This Directive is a step forward in the market opening for the use of hired vehicles for the carriage of goods by road. By allowing the use of a vehicle hired in a Member State other than the one where the undertaking hiring it is established, at least for a period of four months, and by removing the restrictions on the use of hired goods vehicles for own account operations, the Directive opens up new possibilities for both undertakings hiring vehicles and undertakings active in the vehicle rental / leasing business across the EU.

The implementation and effects of this new Directive and its impact on transport operators for own account or for hire and reward and on the vehicle rental / leasing sector should be assessed in a report to be submitted by the Commission. This should be done once sufficient evidence is available, which should be the case five years after the end of the transposition period (six and a half years after the new Directive enters into force). On the basis of that report, the Commission will assess whether further measures should be taken.