16.12.2006   

EN

Official Journal of the European Union

C 309/1

1.1

Free competition offers benefits to all market participants, especially consumers. Nevertheless, infringements of the laws governing this area have had a major impact on competing businesses and the rules allow for sanctions to be imposed, thus mitigating the economic impact of the lack of competition between companies.

1.2

In the past consumers have not had at their disposal any appropriate legal instruments based on competition law which would help them to take action or seek redress for any loss suffered in the market as a result of prohibited competitive practices. Only following on from the major changes in the internal market, in particular the liberalisation of sectors of general economic interest, has the debate opened on the need for instruments that would enable consumers to play a part in competition policy.

1.3

The first step in this direction was the appointment of a Consumer Liaison Officer within DG Competition to mediate between the DG and consumer organisations on competition-related matters in which his opinion was relevant. Today, three years later, his effectiveness has proved limited, owing to lack of resources.

1.4

In the meantime, in the main liberalised sectors, real restrictions on free competition have arisen, resulting in competitors being excluded from the market and clearly limiting consumers' economic rights. One of the reasons for this negative impact is the national approach adopted by most Member States with regard to liberalisation, with a trend towards protection for national businesses. The Commission should be given the necessary means to put a stop to such practices.

1.5

Article 153(2) TEC provides the Commission with the legal base for establishing a horizontal consumer protection measure in all Community policies, and in competition policy in particular, to ensure that the provisions of Articles 81 and 82 TEC cover the interests of consumers as well as of competing businesses affected by infringements of competition rules. In turn, the Member States will be required to ensure that their national laws also serve this purpose.

1.6

With this in mind, measures should be put in place providing compensation for any damages, especially to economic rights, caused by prohibited practices.

1.7

Systems for informing and consulting consumers must also be strengthened. If DG Competition retains its liaison officer, he should be given the means necessary to perform his duties, and DG SANCO must involve all the bodies with which it works, in order to have a greater impact on competition-related matters directly affecting consumer interests. In this regard, we believe that the European Competition Network could adapt its activities to incorporate any information and observations that national or Community consumer organisations wish to provide in order to make competition policy more efficient in the markets and to ensure that consumers' economic rights are recognised.

2.1

Free competition is a fundamental principle of the market economy, which is based on the idea that economic players, and more generally all private individuals accessing the market, have freedom of initiative. The need for rules combing free competition in the market and the rights of all persons involved in the market gave rise to the Treaty rules used to regulate it. At the height of the liberalisations, the European Commission stated the need (1) to strike a balance between the interests of businesses and those of consumers, bearing in mind new economic situations that had not been foreseen in competition law. It also stated its support for making voluntary instruments workable and for promoting dialogue between consumers and businesses in order to increase consumer confidence in the market, because competition could not achieve this on its own.

2.2

The current situation features some new aspects as set out in the Commission report on competition policy 2004 (2) and in the speech given by Commissioner Kroes (3). Both of these highlight the need to focus action on those sectors that are essential to the internal market and to competitiveness under the terms of the Lisbon agenda and, most particularly, taking account of consumers' interests, especially the effects of cartels and monopolies on their rights. This approach can be seen as a first step towards incorporating consumer protection as a measure for regulating the market from the consumer's point of view and not only from that of the supplier, which has been the case to date.

2.3

It should be stated that competition policy must apply to the EU as a whole, in cooperation with the Member States, not only because it applies to the single market and consequently to cross-border transactions but also because its purpose is to harmonise national legislation so that protectionist national policies are not implemented in order to favour domestic markets, discriminating against competitors. The Community authorities, especially the Commission, thus have a crucial role to play. The Commission is not only responsible for drawing up legislative proposals to regulate competition, but also for controlling mergers and state aid, in which the general interest must take precedence over each state's national interest.

2.4

The liberalisation of sectors of general interest and the regulation of financial services have led to attempts to establish a link between competition policy and other Commission policies, in particular consumer policy. In fact, the latest Report on Competition Policy (2004) states that one of the reasons for applying this policy rigorously is to increase consumer interest and confidence in the internal market.

2.5

Despite this declaration of principles, the analysis of the different provisions setting out European competition policy gives few practical details and indeed its position remains the same as before. In 2003, on the European Day of Competition (4), it was announced that a Consumer Liaison Officer would be appointed within DG Competition, with the remit to act in each of the areas covered by this policy, in order to watch over consumer interests. Information leaflets are also being published (5) to guide and inform consumers as to the content of competition policy and how it could affect their interests.

2.6

The tasks to be fulfilled by the Consumer Liaison Officer (6) include the following:

2.7

This trend in competition policy towards considering consumer interests as well would have to be applied across the board, thus putting an end to the clear-cut divisions between the Directorates-General for Competition and for Health & Consumer Protection. There would have to be ongoing coordination between all policies, not only at European level, but also between these and national policies, in order to ensure free market competition that benefits economic and social actors and consumers too.

3.1

Competition policy could be said to have recently undergone a major change, due not only to the widespread occurrence of what is known as economic globalisation but also to the much-needed reconciliation of service-sector liberalisation with other public service goals, such as ensuring the pluralism and reliability of the providers of these services. Competition policy is committed to playing a key role in implementing the aims of competitiveness as defined in the Lisbon Agenda, which focus on the smooth operation of the market economy and above all of economic mergers, which are crucial to the success of the European economy, vis-à-vis our international competitors, without any consequent loss of rights for European competitors and especially consumers.

3.2

The need to define competition policy as it affects consumers calls for a close look at the points regulating this matter, in other words, those corresponding to the articles in the Treaty and to its implementing regulations. Some of these have recently been amended, whilst others are pending adoption.

3.3.1

Agreements between undertakings are part and parcel of market relations and help to ensure that markets operate as they should, but these agreements are not always concluded for competitive reasons. Often the opposite is true; and even when the common market was created, there was discussion of the need to ban such agreements, where these aim to prevent, restrict or distort free competition. The same applies to associations of undertakings, which are most evident in cartels operating as business groupings, without any obvious coordination between them. Where their activity restricts or prevents free competition, it will be covered by the prohibition.

3.3.2

The legal basis of agreements and decisions between undertakings is the contract, which imposes obligations on the parties concerned. In both cases, their validity is conditional on compliance with the relevant legal provisions. The issue under consideration here is the effects of these agreements on third parties and in particular on the rules governing competition in the market.

3.3.3

The aim of the law is definitively to prohibit the end result, which is restriction on competition but it goes beyond this, since it declares all agreements or decisions void, with all the practical consequences that this entails for compensation for the harm done to competitors and to the economy in general by the distortion of the way in which markets operate.

3.3.4

The complexity of the situations covered by the rules set out in Article 81 of the Treaty, in national markets as well as in the European internal market, led the Commission to draw up what is known as the ‘modernisation package’ (8) which helps to bring the Treaty's provisions into line with the case-law of the courts and with the many situations which have occurred in the course of its application.

3.3.5

Rules on block exemptions have also been updated (9). This regulation presents new rules for exemptions in line with current market needs, and in particular for exemptions of technological agreements. The need for clear legislation that will make it easier to secure agreements between undertakings, without falling foul of the prohibition, requires boundaries to be set for cooperation between undertakings and must above all ensure that consumers never suffer as a result of these exemptions.

3.4.1

Article 82 of the Treaty prohibits any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it. This provision does not prevent a dominant position from occurring (in fact the trend has been to encourage economic mergers that allow European undertakings to compete with others throughout the world) but rather aims to prevent the dominance acquired being used to impose conditions on competitors, thus eliminating competition. In this case, the provision contained in this article is not concerned with the origin of this dominant situation, unlike Article 81, which is interested in the origin of the agreement or of the decisions, in order to be able to declare them void.

3.4.2

The effects of a dominant position are different to those of collusive practices, since this does not appear to affect competition, which may already be limited by an absence of competitors or by the insignificant role of competitors in the market. However, intervention is necessary on behalf of the consumer, whose interests will suffer as a result of the conditions imposed by the dominant enterprise in question (10).

3.4.3

Against this background, the Commission has been taking action in the main sectors where, because the sectors were liberalised only recently, companies enjoyed a dominant position in most EU countries, such as the telecommunications sector (11), or where, because major technological innovation was involved, companies faced no genuine competition, as in the case of Microsoft (12). Both cases were found to involve an abuse of a dominant position. In the first case, as a result of illegal price-fixing in the provision of telecommunications services (13). The ruling was also noteworthy because it concerned an economic sector subject to state regulation and the Commission thus felt that it should take action, even though prices were subject to sectoral regulation.

3.4.4

In the second case, concerning Microsoft, the issue was more complicated, because this is a US company with an almost total monopoly over the use of its computer systems. Nevertheless, the Commission decided that Article 82 had been infringed, through Microsoft's abuse of a dominant position in the PC operating systems market by refusing to provide information on interoperability and above all by bundling Windows Media Player with Windows. The Commission not only imposed substantial fines for a very serious infringement, but also required Microsoft to adopt a set of measures, making available information on its operating systems and unbundling the individual components of its Windows operating system.

3.5.1

The EC Treaty contained no specific article regulating mergers, initially because this type of economic operation was not common and later because Member State authorities supported mergers in order to make national companies more competitive. Nevertheless, when these mergers resulted in dominant positions, both Articles 81 and 82 were applied, but with one proviso; these mergers would not be examined as a matter of course, but only when an abuse of a dominant position had occurred.

3.5.2

To remedy this shortcoming and to make proper monitoring possible, on the basis of Articles 83 and 308 TEC, which allow for additional powers to achieve the stated aims — in this case free competition — the Council adopted a number of regulations leading up to the current Regulation 139/2004 (14) amending and improving Regulation (EC) 1310/97 (15) and in particular incorporating the case-law arising from the Gencor/Commission ruling (16).

3.5.3

The new regulation also amends jurisdictional aspects, by referring what the Commission or at least three Member States deem to be national issues to the national authorities in order significantly to reduce the work of the Community competition authorities. In our view, however, this responsibility can only be handed over to the Member States if it does not affect a substantial part of the common market, which makes it easier to prevent restriction of competition and protect the interests of those affected, especially consumers.

3.5.4

With regard to the amendments of substantive aspects, both the quantitative thresholds set out in Article 1 and the conceptual thresholds in Article 2 are more clearly defined, thus clarifying in what situations a dominant position occurs and in particular where competition is substantially reduced.

3.5.5

Other, equally important, aspects that have been changed, are those covering procedures, which have been substantially amended with regard to extending deadlines for referring cases to Member States, enabling the parties concerned to take more effective action, whilst respecting the provisions of national legislation. The same applies to deadlines for the requesting parties; in this case 15 working days at the very beginning of the procedure could be seen as being too rigid, as this would deny the parties the opportunity to familiarise themselves with any arguments submitted to the Commission in connection with the case. In any event, it should be pointed out that at no stage of the procedure is there any provision that allows consumers to take action and, what is more, the requirement to consider the interests of the employees of the undertakings and employment when evaluating mergers has disappeared from the text.

3.6.1

In Articles 81 and 82, the Community legislative authority has drawn up a non-exhaustive list of what it considers to be prohibited practices, with the first article covering collusive practices and the second abuse of a dominant position. It must be stated first of all that these lists are not complete, but simply indicate common practices in which these two forms of behaviour occur, which means that others having the same effects could be identified and would consequently be subject to the same prohibition.

3.6.2

The types of practice listed are similar in the two articles:

3.6.3

All of the behaviour listed can be classified into two groups, reflecting the situation in which they occur:

3.6.4

One of the most common types of abuse is price fixing, a concept which is interpreted broadly, to cover discounts, excessive profit margins, payment terms or rebates. Also covered are failing to honour prior commitments, deviating from price lists and not selling at the stated price. Consumers are affected in all of these cases — despite specific legislation protecting their rights, they are in a position of weakness vis-à-vis businesses that occupy a dominant position in the market and which are often the only supplier in that particular market.

3.7.1.1

In recent years, great progress has been made on opening up the European energy (electricity and gas) sector which until a short while ago was part of the public sector and as such was controlled in terms of supply pricing and terms. The Commission had provided for a market opening for all non-domestic customers by 1 July 2004 and for all domestic customers by 1 July 2007. The first deadline has not been entirely met and as matters stand today, total liberalisation of domestic consumption will also not be achieved.

3.7.1.2

The situation is complicated and the performance of privatised networks, especially in the electricity market, could even be described as a poor, with these companies investing little in maintenance, which has a significant impact on users, who experience frequent power outages.

3.7.1.3

However, the current electricity regulation (17) promotes cross-border trade in electricity and it can help to increase competition in the internal market, by means of a mechanism compensating network operators and by establishing non-discriminatory and transparent tariffs that are not distance-related.

3.7.1.4

The Commission then set up an energy sub-group, as part of the European Competition Network, in order to discuss and draw up an agreement on applying Community competition rules to the energy markets.

3.7.2.1

Legislation relating to the telecommunications sector developed significantly in 2002 (18), largely due to the updating of the package of rules on electronic communications, which adapted the networks so that they could be used by the new technologies. The various Member States' adaptation of the legislation produced uneven results; in fact, the Ninth Report (19) on the Implementation of the EU Electronic Communications Regulatory Package focused on the process of incorporating these regulations into national legislation, and on the tasks to be performed by the national regulatory authorities (NRAs).

3.7.2.2

The Ninth Report notes that the number of operators has remained stable, although some of these have simply stayed in their home market, whilst competitive pressure between operators has shifted from the international markets and long-distance calls to the local call market, with traditional operators experiencing a gradual reduction in calls of this type. Consumers have benefited from this in terms of call prices, but they can also lose out in some cases as a result of their original position being abused when it comes to signing new contracts.

3.7.2.3

Monitoring the telecommunications markets closely to determine the current state of competition to some extent helps to monitor operators in a dominant position, so that specific obligations can be imposed on them to ensure that consumers do not suffer the imposition of unfavourable conditions and prices. In any event, the Commission closely followed up the implementation of Directive 2002/77/EC in each of the Member States (20), with a view to remedying any shortcomings detected that not only restricted competition but also affected consumers' interests.

3.7.3.1.1

In 2003, the Commission opened dialogue with the civil aviation sector with a view to drawing up a common position on implementing competition policy in the alliances and mergers taking place in that sector. It also became clear this year that Regulation (EC) 1/2003 needed to be amended, in order to increase air transport between the Union and third countries, with the aim of creating an ‘open sky’ that would enable action to be taken on alliances between undertakings from Europe and from third countries, in particular the United States. During this period, the Commission looked at various agreements between undertakings and ruled that some contravened the rules of competition (21) and imposed changes in content and duration on others.

3.7.3.1.2

In the same period, the regulation setting out passengers' rights was adopted (22).

3.7.3.2.1

Regulation 1/2003 allows the national competition authorities to apply rules to defend competition in the rail sector. Community and national authorities are required to identify issues of common interest relating to rail liberalisation, in cooperation with the Directorate-General for Energy and Transport.

3.7.3.2.2

The first package of rail directives aimed at opening up the market was intended to ensure free movement in cross-border goods transport and to establish a reference framework for access to both goods and passenger services, setting routes, fares, etc.

3.7.3.2.3

The second package includes the liberalisation of national freight markets, and the opening-up of the national and international passenger market.

3.7.3.2.4

The overall aim is to secure a common approach to implementing competition legislation in the rail sector in order to prevent conflicting decisions being taken by national authorities and the Commission.

3.7.3.3.1

The maritime sector has one of the highest numbers of block exemptions, relating in particular to liner conferences and consortia, which comply with Regulation (EC) 823/2000, currently under review (23), and which seek to develop Article 81(3) TEC, because this allows maritime consortia and conferences to exceed the limits laid down in legislation provided that, the Commission having been notified, authorisation is obtained for the opposition procedure.

3.7.3.3.2

In practice, some consortia have taken advantage of these procedures to engage in practices not covered by the exemption, such as price fixing, which has led to the Commission taking action (24), to restrict the content of agreements. Similarly, the Court of First Instance (CFI) (25) delivered a ruling on an agreement between maritime transport undertakings not to give their customers discounts on the published tariff charges and surcharges.

3.8.1

The procedures under which the liberalisation of the sectors referred to above have taken place at national level, can be considered to be harmful as regards the internal market, having created oligopolies that have denied consumers genuine competition that would help to bring prices down and to stimulate competition between undertakings. The Commission should also look closely at the effects that mergers in the liberalised sectors have had to date, especially on consumers.

3.8.2

In general terms, the lack of transparency, the high and unjustified charges imposed on business customers and consumers and the vertical integration of undertakings have not brought about real competition in the liberalised markets. In fact, the terms of consumers' contracts have in many cases failed to meet the standards set for standard contracts.

3.8.3

The issue concerns the tools available to consumers for enforcing their rights in disputes with such companies, in particular by bringing legal action based on competition law, in particular on Articles 81 and 82 of the Treaty. The vast majority of complaints lodged with the competition authorities, the Commission and national authorities are made by businesses and the ECJ has not ruled on a single complaint made by a private individual.

3.8.4

The Commission's presentation of the Green Paper on Damages actions for breach of the EC antitrust rules  (26) must provide a tool for consumers, which will be discussed in detail in the EESC opinion to be drawn up on the subject.

4.1

Consumers do, of course, have a specific body of legislation setting out their rights and obligations (27). Article 153(2) TEC lays down that ‘Consumer protection requirements shall be taken into account in defining and implementing other Community policies and activities’. This is a horizontal policy and, as such, must form part of all policies affecting consumers. There is no doubt that, in the context of competition policy, consumers are an integral part of the market covered, because they represent demand within that market.

4.1.1

This paragraph attempts to determine which of consumers' recognised rights are affected by competition policy, in particular by the effects of non-compliance with these rules in the internal market, and in what manner these rights are affected. There is also a need to treat consumers as interested parties in this policy so that the Commission can take account of their interests when it has to take action in specific cases to establish market rules.

4.2.1

The concept of consumers' economic rights is based on the absence of any financial loss preventing the consumer or user from using or enjoying the goods or services acquired under the terms agreed with the undertaking should be clarified. The basic principle regulating this entire matter is that of good faith and proper balance between parties, which means that any instrument or clause contravening this principle can be deemed an abuse or contrary to the consumer's interest.

4.2.2

The relationship between antitrust policy and freedom of choice for consumers has been one of the main concerns of Community legislation, as recognised in former Article 85(3) and in the current Article 81 TEC, which establish that collusive agreements can only be authorised where, despite restricting competition, they offer some benefit to consumers. A typical example of this would be competitors sharing out geographical areas in order to secure total market coverage, even in areas that are not profitable.

4.2.3

In terms of consumer protection, supervising the market means being attentive to potential horizontal agreements, such as voluntary agreements, price cartels, common purchasing centres, market sharing, etc., as well as vertical agreements, such as contracts regulating relations between producers and importers, etc. Attention is also paid to abuses of a dominant position by means of practices that obstruct or prevent competitors from entering the market, to setting prices that are excessively high or low, exclusionary pricing or offering terms that discriminate between customers.

4.2.4

In its annual report, the Commission presents a large number of decisions on alleged concerted practices and abuses of a dominant position and some ECJ rulings that frequently mark changes in interpretation of the law and even require legislative changes to be made.

4.2.5

In recent years, the Commission has considered fewer and fewer cases, largely due to the firm line that national competition authorities have taken towards their own markets, and in particular as a result of the abolition of the notification system. DG Competition resolved 24 cases by formal decision, a very small number in comparison with the field of merger control, in which a large number (231) of formal decisions were taken (28), complying with the procedure set out in the amended regulation. Fewer decisions will be issued in the new phase, when in most cases national authorities will take over responsibility in this area.

4.2.6

Of the cases examined, some directly affected consumers or were particularly important to them. The individual decisions concerned the mobile telephone, broadcasting and airline sectors (29), and in the sectoral initiatives, measures were adopted in the transport, liberal professions, motor-vehicle and media sectors (30). All of the cases examined concerned price-related abuses, with Article 82 applying, as a result of abusive exclusionary pricing for the provision of goods or services (31).

4.3.1

The effectiveness of consumer policy will depend on consumers' participation in the policies that affect them, and they must thus be involved in all policies in which they have to date been excluded. One of the aims of the Consumer Policy Strategy (32) was to ensure that consumer organisations were sufficiently involved in Community policies and, indeed, one year later, a Consumer Liaison Officer was appointed in DG Competition.

4.3.2

Consumer organisations have a forum — the Consumers' Committee — the mechanism for taking action specifically on consumer policy, but this has not been extended to include participation in other policies. The current aim is for consumers to be able to make a contribution to Community initiatives, at all stages of the EU decision-making process. Minimum requirements will have to be set, enabling consumers to participate in consultative bodies, as already happens in agriculture and in particular in the newer bodies, such as those for transport, energy, telecommunications or any other that might be set up.

4.3.3

With regard to the issue now under consideration, there is no formal means of participation, and consumers are not even consulted on issues that the Treaty considers to concern them, such as exemptions from the rules on concerted practices, Article 81(3) and abusive practices that limit or control production, markets or technical development to the detriment of consumers, Article 82(b). It is therefore the responsibility of DG competition and consumer organisations to set up mechanisms for participation and consultation, through rules agreed on jointly and which will have an impact on the internal market, as set out in the White Paper on European Governance (33).

4.3.4

Equal responsibility falls to DG SANCO: it could use the European Consumer Consultative Group to take action on competition-related issues that affect consumers' rights.

4.3.5

Consumers' right to information concerning competition has been given a boost by the appointment of a liaison officer to act as a point of contact with them. European consumer organisations are informed regularly and national organisations and individual consumers have their own web page (34) which even includes a complaints form (35) for any harm they might suffer as a result of companies' anti-competitive behaviour.

5.1.1

Consumer organisations are regulated by national rules that lay down minimum requirements for them to be recognised and legitimate, to ensure that they have the legitimacy to exercise their rights as consumers when these rights are affected by any prohibited practice.

5.1.2

At European level, all organisations registered with DG SANCO are fully recognised and are entitled to be informed and consulted and are involved in any matter that is considered to fall within their sphere of competence.

5.1.3

This legitimacy, which is somewhat exclusive, can be questioned when competition-related issues are at stake, given that these tend to concern breaches of tangible consumer rights, including those that are limited to certain territories and to certain issues. A wide-ranging debate should be held on the concept of having the legitimacy to take action in this area.

5.2.1

Regulation 1/2003 EC (36) and what is known as the 'modernisation package' established the means of cooperation between the Commission and the competition authorities that form the European Competition Network (ECN) (37). This network started its work in 2003, with a working group that examined more general issues such how it would operate and the arrangements for communication between national authorities. It is now fully operational, and is divided into 14 sub-groups, which address sectoral issues (38).

5.2.2

Regulation 1/2003 grants the ECN's member authorities the means to help one another and to act on the instructions of the competent authority and more generally to gather all information needed to solve the problems under their consideration. They also take charge of investigations requested by national authorities, the results of which are forwarded in line with established procedure, so that they can be accessed by all parties concerned.

5.2.3

The ECN's action as part of the leniency programme is very important because Member States have signed a declaration committing themselves to abide by the rules set out in the notice referred to above. The network thus provides practical assistance to the national courts with jurisdiction over competition, which are also responsible for keeping up to date with the case-law of the European Court of Justice (39).

5.2.4

The necessary communication between the ECN, the competition authorities and the courts helps to disseminate information on cartels and abuses of a dominant position and the applicable procedure, thus enabling a decision to be taken on who should bring the case more rapidly than has until recently been the norm.

5.2.5

Another of the ECN's tasks is to detect infringements and this activity, which is really a form of prevention, diminishes the harmful effects on competitors and consumers. One task that should be highlighted is the network's action on exemption procedures, in which it must be assessed whether the outcome benefits consumers and even whether the agreement should include a reference to the tangible benefits that consumers can expect from it.

16.12.2006   

EN

Official Journal of the European Union

C 309/10

1.1

The Commission communication aims to offer a common approach  (1) to research and innovation in the context of the implementation of the Lisbon programme, which was written into the decisions taken by the Lisbon European Council in March 2000, and which set the EU the goal of becoming ‘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’ by 2010. That Council endorsed the plan set out by the Commission in its Communication entitled ‘Towards a European research area’ (2).

1.2

In its resolution of March 2002, the Barcelona European Council set the objective of increasing EU investment in research and development (R&D) to 3 % by 2010 and raising the proportion of private funding to two thirds. The Brussels European Council in March 2003, meanwhile, called for practical measures.

1.3

In its Communication of 30 April 2003‘Investing in research: an action plan for Europe’ the Commission outlined the measures required at national and European level, in accordance with an earlier Communication of September 2002 entitled ‘More research for Europe — Towards 3 % of GDP’ (3). The first official figures for R&D show that in 2003 ‘the R&D intensity was almost stagnant at 1.93 % of EU-25 GDP’. Only Finland and Sweden achieved the objective.

1.4

In March 2005, the European Council relaunched the Lisbon Strategy (4). The joint political will to do this had been reaffirmed in October 2005 in Hampton Court at an informal meeting of European heads of state and government, in response to the considerable need for greater competitiveness in the face of global competition.

1.5

The Commission's first initiative since signing up to the relaunched Lisbon Strategy was on the European Information Society 2010 (5). It required Member States to define their national information society priorities in their National Reform Programmes by mid-October 2005 with a view to contributing to the objectives set out in the communication on i2010.

1.6

Justification for the options and activities proposed stems from the contrast between external and internal factors: fierce global competition on the one hand; and rigidity and fragmentation in national markets faced with the need to build a single European area and promote the mobility of highly skilled workers, on the other. Accepting its limited expertise in this area, the Commission is seeking above all to act as a catalyst.

1.7

The Commission is seeking to strengthen the links between research and innovation, by means of a research policy centred on the production of new knowledge and its applications and on the provision of a structure for research and an innovation policy that focuses on translating knowledge into economic value and commercial success. In the bid to improve regulation, all measures with a potential impact on competitiveness are to undergo an impact assessment.

1.8

The assessment that accompanies the present communication chooses the last of three considered policy options (6):

1.9

The action plan set out in the communication is divided into four parts:

1.10

There are 19 actions covering three main fields: public policy and regulation, finance and taxation (7) and the role of the private sector (8).

1.11

Although the present communication appears to continue along the path traced out by its predecessor in 2003, the Commission now makes research and innovation a firm priority of the National Reform Programmes (NRP). The NRP are thus supported by Community funding targeting activities of European interest, by advice on coordinated policy development, and by improved platforms for mutual learning, in all regions where transnational cooperation offers high value added. R&D efforts are recognised in the stability pact, in which spending on R&D is authorised in excess of the 3 % deficit limit.

1.12

The EESC would also refer to the Esko Aho Report, despite it not being the subject of this consultation, noting in particular that the Commission mentions it in point 3.1 of its communication to the 2006 Spring European Council (Investing more in knowledge and innovation) but does not mention COM(2005) 488 final. The EESC regrets not having been consulted on that report and not having been able to make a prior assessment of it, and therefore includes it in the present debate.

1.13

In October 2005, in Hampton Court, a group of four people were appointed, with Mr Esko Aho acting as coordinator. The January 2006 report, which was submitted to the Commission with a view to the 2006 Spring European Council, made recommendations on accelerating the implementation of European and national initiatives for research and innovation. The report is based on the present communication but recommends greater integration [option 2, SEC(2005) 1289]. The report was presented to the Competitiveness Council and the Brussels European Council in March 2006. The European Council stressed the report's importance, and asked the Commission to assess it by September 2006 (9).

2.1

The EESC welcomes the communication, whose starting point is the partnership for growth and jobs, as it seeks to cover the complete gamut of research and innovation, including non-technological innovation. It outlines initiatives that would exceed the Barcelona 3 % objective (10) and describes in general terms the commitments made by the Community, detailing current and future measures to support research and innovation (11).

2.2

As the communication mentions, global competition to attract investment in research and innovation is constantly on the increase, not least in emerging economies such as China, India and Brazil. ‘The gap in research investment between the European Union and the United States is already in excess of EUR 120 billion per year and widening fast’ (12). The level of competition is such that in Europe no one country can succeed alone. Transnational synergy is the only way to promote research and innovation and to convert them into growth and jobs. In addition, research and innovation are needed to make the EU economy more sustainable, by finding solutions for economic growth, social development and environmental protection.

2.3

Under the Action Plan, the majority of Member States have begun to introduce national measures to stimulate R&D in the private sector and have set targets to raise investment in research to 2.6 % of GDP by 2010. This is where tax incentives come into their own (13). However, the level of research in the EU appears to be more or less stagnant, including in the private sector. The situation is a matter for concern.

2.4

The justification for the measures opens the debate on comparison of productivity between EU Member States and other countries.

2.4.1

First, there are various definitions of productivity (the ratio between the quantity of a good or service produced and the number of production factor units used). The most commonly used measure employs a single factor, labour, with hourly output per worker in the industrial sector as an indicator. This is the easiest figure to obtain, but it gives an incomplete picture and excludes capital from the production process.

2.4.2

Second, it is important not to make generalisations when comparing Europe and the USA but rather to pinpoint the main differences by sector and State, even within a country such as the USA. There are competitive European sectors and countries that are making considerable progress in their productivity. According to O'Mahony and van Ark (2003), calculations of unit labour costs in the manufacturing sector for the EU as a whole suggest that the EU is not competitive vis à vis the USA in high-tech sectors, but is elsewhere. However, it is the low wages in third countries, not the United States, that are the main source of competition in the traditional industries and that are putting real pressure on the EU. Dosi, Llerena and Labini (2005) are more critical and feel that the need for a European industrial policy should not be treated as taboo.

2.4.3

Third, the best measure is total factor productivity (TFP), ‘achieved by adjusting GDP for differences in all the inputs used’ (Calderon, 2001), which enables a better comparison between countries. To explain cross-country differences in productivity, empirical surveys have classified determinants of labour (and/or total) productivity growth into three groups. However, given the interdependence between countries, Calderón states that the differences in TFP between countries appear to be driven by the speed of technological diffusion (through trade, direct foreign investment or migration) (14).

2.4.4

If securing rapid diffusion makes all the difference, innovative SMEs must be key to dissemination while developing new markets. For the same reason, the choice of strategic priorities for research and innovation might favour the more speedy dissemination of knowledge.

2.4.5

Lastly, securing skilled personnel and company investment is a concern for the USA and Europe alike, especially vis à vis competition from China, itself short of the 75 000 highly skilled workers it needs to move into a service economy.

2.5

Meanwhile, there are two ‘macro’ visions that influence policy choice. On the one hand, there is an urgent need for organisational innovation as a precondition for technical innovation (Lam 2005 and OECD 2005), and this also applies to the European institutions (Sachwald 2005, Sapir et al 2003, Esko Aho 2006); and on the other, the reason why companies do not invest enough in R&D and innovation in Europe is the absence of an innovation-friendly market on which to launch new products and services (Esko Aho 2006). However, the EESC points out that the spirit of enterprise and risk-taking remain essential.

2.6

The shortcomings of the market as a generator of innovation are widely recognised in literature on the subject, starting with Arrow (1962) and Dasgupta and Stiglitz (1980). The Commission's framework programmes have been broadly based on a rationale of active support at micro level for company R&D, through a mixture of support for R&D and promotion of cooperation to overcome the most discouraging obstacles (facilitating the search for partners and promoting synergy-generating benefits in terms of market entry, downstreaming and economies of scale). However, these initiatives have not been sufficient to kick-start a sustainable innovation dynamic throughout the EU.

2.7

The EESC therefore welcomes the Commission's emphasis on the meso, sectoral and cross-border dimensions. Partnerships, networks, clusters, agglomerations, forums and dialogues highlight the importance of linkages, externalities and spillovers between companies and organisations, and in terms of geography, to facilitate innovation. Coordination of this kind can more easily identify factors impacting on levels of investment in innovation and bottlenecks.

2.8

However, although considerable resources and coordination potential will be required in order to see through the approach and measures proposed, no budgetary indications are provided. Furthermore, on the very page of its communication to the 2006 Spring Council where the Commission makes its only reference to the present communication, it mentions that ‘legislative proposals will only produce practical effects once adopted by Council and Parliament. In addition, many of the financing actions depend on the finalisation and implementation of the financial perspectives 2007-2013’. The ‘proposed actions are therefore only of an indicative nature’.

2.9

The EESC calls on the Commission to provide budget indications as soon as possible and to include a clear system setting a precise date for monitoring and evaluating this communication, for instance 2008. Furthermore, the EESC believes there is a need for a Commission report that brings together all the expert group reports relating directly to the communication, accompanied by an evaluation of the recommendations made. These indications must be consistent with the option and actions chosen. Lastly, as part of the drive to overcome existing fragmentation, it would be useful to have a chart listing all the people responsible at all levels (in the regions, Member States and European institutions) for coordinating the actions proposed in COM(2005) 488. The Commission has made prodigious efforts with the country trendcharts. These describe research and innovation institutions and could be used as the basis for such a chart. It would also be worthwhile looking into the experiences of US virtual agencies with regard to research and innovation.

2.10

The EESC would also note that the communication fails to define key concepts (research, innovation, knowledge and technology). The Commission, however, has backed trans-European research to arrive at those definitions. Work has also been done by Eurostat and the OECD to define innovation. The latest European Innovation Scoreboard on the ratio between innovation input and output develops the concept of innovation efficiency and views R&D as an innovation input. In addition, a clearer distinction must be drawn between actions targeting research and innovation as such and policies to promote the right conditions for innovation (such as: training, reception and support for worker mobility, support for SMEs and less-favoured regions during ICT uptake, where the costs are proportionately higher than for other players). In other words, a distinction must be made between innovation in the form of new products and services on the market and innovation as a process. The first is a necessary but not sufficient condition for dynamic endogenous growth.

2.11

The EESC has been following this matter very closely and has issued a number of opinions on the vast field covered by COM(2005) 488, but there is only room for a brief mention of them here. They include in particular an opinion on the European research area (CESE 595/2000), which picks up on all the themes covered in COM 488, especially in point 7 on ‘Research and technological innovation’ and point 8 on the need for ‘Staff exchanges between research centres and industry’.

2.12

Opinion CESE 724/2001 on Science and society noted the role which fundamental research has played in most of the great discoveries. The EESC's opinion on Europe and basic research (15) looks at the link with applied research, and stresses the question of patents: point 2.5 mentions the urgent need for a system of European patents that includes a grace period between the publication of scientific findings and the patenting of its use, following the example of the USA. It must be possible to obtain the Community patent quickly and at low cost. The EESC regrets the delay on this, which has been caused by language issues.

2.13

The EESC opinion on researchers in the European Research Area (16) backed the European Researcher's Charter and in point 5.4 agreed on the imperative need for exchanges between academia and industry. Recommending that greater value be placed on experts with years of experience, the opinion stressed the need for a greater compatibility and recognition of the various aspects of social security and housing, all the while aiming to protect family cohesion (point 5.5.5). Another opinion of note looked at science and technology (17). In its opinion on the seventh framework programme for research (18), the Committee stressed the importance of the endeavour and commented on the funding and organisation into sub-programmes and nine research subjects, on which it issued separate opinions (19).

2.14

In its opinion on competitiveness and innovation 2007-2013 (20), the EESC noted the importance of participation by SMEs and the social partners in innovation (21): for innovation to be successful, they have to be closely involved. In its recent opinion on a policy framework to strengthen EU manufacturing, the EESC welcomed the sectoral emphasis, but pointed out that coordination requires resources, whereas there is no budget. It hoped that workers' skills, which remain a cross-sectoral issue, would receive the necessary attention. A more integrated industrial policy is very important: the EU manufacturing industry ‘employs over 34 million people’ and ‘over 80 % of EU private sector R&D expenditures are spent in manufacturing’.

3.1

The EESC especially welcomes the Commission's efforts to promote a competitive European system for intellectual property and to lay down rules for disseminating research results (2007-2013), and recommends paying special attention to the management of innovative patents in the context of the instruments mentioned in point 2.7.

3.2

A better system for disseminating knowledge is key to competitiveness. Attention should be given to the Innovation Relay Centres initiative and the Commission's idea of providing SMEs with vouchers for innovation-strategy consultancy services as part of the CIP. Cross-border clusters would facilitate dissemination, and their importance will be recognised in a forthcoming communication on clusters in Europe. Work on a clusters database is due to start in 2006.

3.3

The EESC stresses the importance of the social dimension of innovation, and of actions to raise the value of human and social resources as generators of research and innovation. It hopes that the next version of the Oslo Manual (OECD-Eurostat) will include statistics to take account of this, including indicators for qualified human capital and for other places that spawn innovation: universities and other educational institutions and joint industry/State body/university platforms.

3.4

As regards State aid for innovation, which can have a major leverage effect on company spending on research, the EESC welcomes the attention given to SMEs and asks the Commission to view job creation as an investment in research and innovation, if the jobs are specifically targeted on these two areas. The EESC also underlines the need to promote innovative SME start-ups using instruments such as venture capital funds including the involvement of the European Investment Fund.

3.5

Given the global competition mentioned in point 2.4.5 above, an important factor in innovation is having the right human resources at all levels. The communication focuses on scientific resources. However, non-scientific skilled jobs are also worthy of attention. Supply and demand for specific skills and expertise should be more closely matched according to sectoral needs. With a view to finding swift and effective solutions, it would be useful to involve all the social partners and stakeholders concerned. The EESC asks the Commission to launch a debate on this subject.

3.6

In addition, in order to offer mobility, progress is needed on joint European skill charts, necessary for each sector or theme, not forgetting the qualitative dimension of education (values, equal opportunities). As the Employment and Education and Culture DGs also deal with the subject of ‘human resources’, their research and innovation initiatives should also be included in the present communication in order to cover the entire gamut.

3.7

The EESC invites the Commission to promote research and innovation in all possible sectors: competitiveness problems are not exclusive to the hi-tech sector. The proposed measures could include the strategic management of change following a massive uptake of new technologies in SMEs. The involvement of social partners and other stakeholders would be essential here.

3.8

The EESC agrees with the Esko Aho report that companies with more than 250 workers are not given proper attention, probably because the definition of SME is too restrictive compared with those of the United States and Japan. In the EESC's view, the special attention given to funding innovative SMEs is necessary for creating a European economy of innovation with social cohesion. It is no surprise that the Emilia Romagna Paxis region is one of the most active despite the fact that other innovation indicators in Italy are less favourable. Similarly, business support services must be specialised to cater for the specific characteristics of SMEs in their various forms (cooperatives, other third sector undertakings, etc.).

3.9

The EESC would like the Commission to mention research and innovation measures involving other regions. The Commission already takes a world view in the Trendcharts and a number of other initiatives. Following Communication 346 of 25 June 2001 on ‘The International dimension of the European Research Area’, the INCO section of the FP6 made a point of encouraging the involvement of third countries, and this is set to continue in the FP7. These measures could be highlighted in a special section. The role which urban and metropolitan areas play in innovation also deserves greater study.

3.10

The EESC recommends that the Commission evaluate the timing of technological investment, liberalisation and restructuring, given that companies, especially large ones, have to consider changes in management at the same time as research and innovation investment needs (for instance in the field of energy, transport and network industries).

3.11

Furthermore, the EESC would point out that it may be necessary to strike the right balance between promoting innovation, focusing on the joint marketing and licensing of new products and services by companies, and competition law.

3.12

The EESC considers innovation to be an input for a competitive economy with social cohesion and not as an end in itself. While accepting that this will be a challenge, the EESC would call on the Commission to collate statistics and promote studies in order to gauge the links between innovation, competitiveness and social cohesion more effectively, with a view to evaluating results clearly and effectively and putting them across to the European public in a convincing way. As others have said: ‘build ambitious, technologically daring missions justifiable for their intrinsic social and political value’ (Dosi et al, 2005).

3.13

In addition, viewing innovation as a system, the EESC asks the Commission to coordinate its work with the European Investment Bank (EIB) in order to secure a synergistic relationship between EIB programmes, the European Investment Fund, the seventh research framework programme and the framework programme for competitiveness and innovation (CIP), and thus ensure that innovation becomes a dynamic and well structured system.

16.12.2006   

EN

Official Journal of the European Union

C 309/15

1.1

The Committee welcomes this proposal for a Regulation of the European Parliament and of the Council on advanced therapy medicinal products and amending Directive 2001/93/EC and Regulation (EC) No 726/2004.

1.2

Against a backdrop of accelerating scientific progress, especially in the field of biotechnology, there is a real need for clarification, rigour and expertise.

1.3

The aim of the proposal is to provide a coherent picture of the various advanced therapies, to fill the existing regulatory gap and to bolster specific evaluation by the European Medicines Agency in these new disciplines. This will secure:

1.4

Given the particularities of advanced therapy products, it is essential to provide a robust and comprehensive regulatory framework that is applicable in all Member States.

1.5

A regulation is therefore considered as being the most appropriate legal instrument. This is all the more important given that current public health issues regarding advanced therapy medicinal products will remain unresolved in the EU until a specific legislative system is put in place.

1.6

However, some aspects of this draft regulation may give rise to implementing problems, in view of the definitions used, with the draft directive on medical devices. Care must be taken to ensure that the final text clears up outstanding questions and possible doubts. For instance:

2.1

An article by article examination of the regulation raises a number of comments, questions and recommendations. With regard to Article 2: ‘Definitions’ (1):

2.2

The definitions concerning gene therapy and somatic cell therapy do not generally pose any problems given that reflection and experience have led to a consensus. These products are classed as medicines and are already regulated as such within the Community.

2.2.1

The definition of a tissue engineered product seems more complex however. As currently worded, the first indent of Article 2(1)(b) states that a tissue engineered product ‘contains or consists of engineered cells or tissues’, without specifying ‘as an integral part’. In practice, therefore, medical devices which contain tissue engineered products ‘with an ancillary function’ are also included among innovative medicinal products. This makes the provisions of the proposed directive on medical devices meaningless.

2.2.2

The wording of the second indent of Article 2(1)(b) could also give rise to implementing difficulties and, in particular, overlap with the medical device directive. As tissue engineered products are covered by legislation on medicinal products, it would be desirable to mention their primary activity of disease treatment or prevention, or of altering physiological functions through pharmacological, immunological or metabolic action, rather than just referring to their properties for ‘regenerating, repairing or replacing a human tissue’, as these properties are also shared by some types of medical device.

2.3

An effort has been made to narrow down the exact definition of a ‘tissue engineered product’ as much as possible. Nevertheless, the difference from cell therapy (bone marrow transplants, stem cell transplants, umbilical cord blood transplants, adult or embryonic stem cells, etc.) is not entirely clear.

2.4

The Committee proposes that examples of products currently considered to have been generated by tissue engineering be used as a starting point for attempts to clarify the definition. This would assist understanding, particularly since it is no secret that the subject is the focus of debate and controversy, particularly regarding embryonic stem cells.

2.5

At this point, there are no ethical problems apart from those surrounding human embryonic stem cells (HESC).

2.6

The controversy centres on the means of producing stem cells. More specifically, the production of these cells by nuclear transfer (in other words cloning) raises major ethical questions, and no real consensus has been found within the European Union to this day. Current concerns focus on the risks of reproductive cloning, egg trafficking and the commercialisation of human body parts.

2.7

Such practices are explicitly condemned by the European Convention on Bioethics (Oviedo Convention, 1998) and by the International Bioethics Committee (UNESCO, 1997).

2.8

In the absence of a consensus between EU Member States, HESC use falls within national responsibility.

2.9

The detail given in the recitals (2) is therefore essential, as it gives clear consideration to the reality of the debate and states that this text regulating advanced therapy medicinal products at Community level is not designed to ‘interfere with decisions made by Member States on whether to allow the use of any specific type of human cells, such as embryonic stem cells, or animal cells’.

2.10

Neither is it designed to ‘affect the application of national legislation prohibiting or restricting the sale, supply or use of medicinal products containing, consisting of or derived from these cells’.

3.1

The harmonisation of the principles governing other modern biotechnological medicines currently covered by Community-level regulations involves a centralised authorisation procedure, i.e. a single scientific evaluation of the quality, safety and effectiveness of advanced therapy medicinal products.

3.2

However, unlike traditional medical treatments, these therapies by their very nature require specific pre-clinical and clinical procedures, with particular emphasis on expertise, risk management and post-marketing authorisation (MA) pharmacovigilance.

3.3

The present draft regulation is right to stress the need to develop specific expertise in the evaluation of these products within the European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP (3)), also involving patient associations in the evaluation groups.

3.4

The proposal to set up a Committee for Advanced Therapies (CAT (4)) which the CHMP would consult on everything concerning the evaluation of data regarding advanced therapy medicinal products before issuing its final scientific opinion, is key.

3.5

This committee will bring together the few top experts currently working in the Community in the area of advanced therapy medicinal products and selected representatives of the parties concerned.

3.6

It is wholly justified as it will provide a means of defining not only scientific procedures but also standards for good clinical and manufacturing practice and will follow evaluation through to marketing authorisation (MA) and beyond to post-marketing authorisation.

3.7

The mention of the principle whereby ‘human cells or tissues contained in advanced therapy medicinal products should be procured from voluntary and unpaid donation’ is important. It responds to the constant concern to raise safety standards for tissue and cells, remove the risk of commercialising human body parts, and protect human health.

3.8

The proposal confirms the advisory role of the European Medicines Agency. This role will be critical on all kinds of issue that may arise as science evolves, be it the production of advanced therapy medicines, good manufacturing practice or rules relating to the summary of product characteristics, labelling or the package leaflet stating technical specificities, or when it is necessary to define the dividing line with other fields (such as cosmetics or certain medical devices).

3.8.1

Some have pointed out that the procedures used might be expensive, whereas national authorisation procedures are by nature more economical. There is also the problem of national transition periods being longer than EU transition periods (five years as opposed to two). The political risk posed by decentralised national procedures may hinder access to advanced therapy medicinal products, as some Member States have access and others do not.

3.9

Lastly, the proposal takes a useful look at the economic dimension (5). In the context of global competition in the health industry, the European Union must claim its rightful place on both the internal and global markets.

3.10

The economic risks linked with uncertainty or rapid changes in science, and the considerable cost of studies, hold back major and lasting investment in the field of medicine and advanced therapy medicinal products in particular.

3.11

Furthermore, it is frequently small and medium-sized companies that carry out the studies necessary to demonstrate the quality and non-clinical safety of advanced therapy medicinal products, and these do not always originate from previous experience in the pharmaceutical field (typically taking the form of spin-offs from biotech laboratories or manufacturers of medical devices).

3.12

The Commission proposes a ‘system of early evaluation and certification of quality and non-clinical safety data by the Agency, independently of any marketing authorisation application’ in order to support and encourage SMEs carrying out studies. This seems appropriate.

3.12.1

Meanwhile, in tissue engineering, products are often developed by SMEs, with the generation of start-ups and spin-offs, rather than by major pharmaceutical companies. This gives rise to a number of comments:

3.13

The aim of facilitating the evaluation of any subsequent request for marketing authorisation using the same data, should be supported and encouraged.

3.14

However, care should be taken and the provision altered if necessary in order to take account of rapid developments in scientific data (e.g. duration of data validity, data storage conditions), to provide permanent protection for patient health and, more generally, to abide by ethical standards.

3.15

The planned report on the ‘implementation of this Regulation after experience has been gained’ should provide an opportunity for debate within the bodies concerned (in particular the Committee for Advanced Therapies (CAT) and the Committee for Medicinal Products for Human Use (CHMP)).

3.15.1

However, the subordination of the CAT to the CHMP (the original mechanism for providing expertise) will weigh procedures down considerably and may give rise to unnecessary contradictions.

3.16

More generally, the planned publication of the report (Chapter 8, Article 25) could include not only ‘comprehensive information on the different types of advanced therapy medicinal products authorised pursuant to this Regulation’ but also information and results concerning the incentive measures provided for in Chapter 6 (Articles 17-18 and 19): ‘Scientific Advice’, ‘Scientific recommendation on advanced therapy classification’ and ‘Certification of quality and non-clinical data’.

4.1

On the whole, this draft regulation is relevant and useful. It provides a means of keeping up with scientific developments and deciding on definitions and the conditions for using advanced therapy medicinal products, thus serving patients' interests.

4.1.1

These new technologies offer patients great hopes in terms of overcoming human suffering. However, if they are to respond to legitimate expectations, especially in the field of regenerative medicine, research must be supervised using essential tests, and the protocols for these must offer an absolute guarantee of patient safety. With this aim in view, the main objectives set out in the Justification of the Commission's proposal for a Regulation (point 2.1) should be to guarantee not just a high level of health protection but also to give a guarantee of medicinal quality assurance. The issue of non-used waste — a rarely-discussed environmental aspect — must also not be overlooked.

4.2

The regulation is important, especially in the realms of gene therapy and somatic cell therapy. The caution exercised with regard to both definitions and the use of the products of tissue engineering clearly shows that the draft regulation is not intended to settle the debate once and for all or to pre-empt the deliberations of each Member State, since the ethical debate is not yet resolved and since it depends on varying interpretations of humanist values.

4.2.1

This draft regulation creates the preconditions for closing the regulatory gap that exists between its subject matter and the draft directive on medical devices. The general principle of risk evaluation applies to both advanced therapy medicinal products and medical devices. Complications may arise with combination products (i.e. medical devices containing tissue engineered elements). In such cases, both quality and safety must be guaranteed, and the evaluation must also cover the efficacy in use of an innovative medicinal product in a specific medical device.

4.3

In conclusion, the Committee endorses the proposed regulation while also stressing certain areas of concern for which clear solutions will be needed in order for the directive to be implemented successfully.

16.12.2006   

EN

Official Journal of the European Union

C 309/18

1.1

This opinion is a referral from the Commission and is a follow-up of its Communication of March 2005 Better Regulation for Growth and Jobs in the European Union  (1).

1.2

Simplification should result in a high quality regulatory framework, easier to understand and more ‘user friendly’.

1.3

Simplification should increase respect for EU legislation and, in the process, reinforce its legitimacy.

1.4

The Committee believes that Member States have a heavy responsibility to ensure that EU measures are properly transposed into their national law and enforced. The Committee recognises that the Interinstitutional Agreement on Better Lawmaking (2) provides a ‘code of conduct’ for Member States in better transposition and application of EC directives. What is important is that the resulting regulatory framework at national level is both as balanced in terms of content and as simple as possible for business, employees, consumers and all civil society players.

1.5

The Committee wishes socio-professional actors to be associated with the ‘comitology’ procedures of simplification of regulation, on a model similar to the SLIM committees, but in a more systematic way and upstream of this regulation, rather than a posteriori as it was the case of the SLIM experiments.

1.6

The Committee would like to see more consultation between the Commission and stakeholders similar to that which has lead to the Communication under discussion. It believes that this would be a material assistance to the ‘co-regulation’ (3) referred to in the Communication's paragraph 3d. It regrets, however, the absence of any reference to ‘self-regulation’ (4), something for which the EESC has been calling for some time (5).

1.6.1

However, the Committee acknowledges that there is a danger with self-regulation that instead of rules which are binding on stakeholders, the stakeholders themselves conclude voluntary agreements which they may or may not choose to comply with.

1.7

The European Court of Justice is playing an increasing role in the interpretation of European Community directives and has found itself having to interpret the sometimes ambiguous wording of directives which emerge from the ‘co-decision’ process. The ECJ is also being required increasingly to give guidance to national courts where their activities are complementary. The Committee notes the progress made by the ECJ in reducing by 12 % the number of cases pending concerning Member States failure to notify, incorrect application and non conformity with EC directives.

1.8

The Committee acknowledges the importance of this Commission Communication in implementing the Lisbon programme, in which progress has been lamentably slow owing to the reluctance of governments of Member States to carry out the commitments they entered into at Lisbon.

1.9

The EESC particularly welcomes the Commission's commitment to make more extensive use of information technology and hopes that the Commission will ensure that whatever arrangements are set up for improved IT, they will be compatible with national arrangements (or that national arrangements should be compatible with the EU's!).

1.10

The EESC has always supported the declaration by the Six Presidencies ‘Advancing regulatory reform in Europe’ of 7 December 2004 (6) and hopes that the presidencies to follow will support the same declaration (7).

1.11

The EESC is aware of the European Parliament's reports on better regulation and in particular the Gargani report on Strategy for the simplification of the regulatory environment  (8).

1.12

The Committee acknowledges that the current Commission is making a determined effort to build on the SLIM and BEST sectoral initiatives. The framework action (February 2003-December 2004) resulted in the screening of about 40 policy sectors and the adoption by the Commission of about 40 simplification proposals. To date, nine simplification proposals related to that programme are still pending.

1.13

The Committee acknowledges that the enlargement of the European Union to 25 Member States has also increased the regulatory burden both on the Commission services and on new Member State bureaucracies.

1.14

Simplification and better lawmaking are complementary activities involving Council and Parliament as well as the Commission, with the advice of the EESC and the CoR where necessary.

1.15

The Committee reiterates its support frequently expressed in previous opinions on the importance of alleviating the regulatory and financial burdens on business, especially SMEs.

2.1

The Committee has over the years delivered a number of opinions on Simplification going back to a request from the European Council in 1995 when a working party was set up to consider ways of simplifying EU rules.

In this series of opinions, the EESC has concluded that:

2.2

There is a necessary interaction between simplification and better implementation and enforcement. The current Commission Communication shows signs of having taken account of some of the conclusions of previous EESC reports recognising that ‘simplification is not a new issue’. The series of Commission Communications dates back to 1997, i.e. two years after the EESC's first call for simplification.

3.1

The Communication recognises that the requirement is for simplification, not only at Community but also at national level to make things easier and more cost-efficient for citizens and operators.

3.2

An important part of the new simplification strategy at EU level is a review of the acquis. It sets out an ambitious 3 year rolling programme from 2005 to 2008 based on stakeholders' practical experience with an approach based on continuous in-depth sectoral assessment.

3.3

The Commission's approach to simplification is based on five instruments (10):

3.4

The Commission's Communication recognises that it can only succeed with support from other EU Institutions and above all of Member States. An important part would be the recognition by the latter of the need to keep the implementation of EU legislation as close as possible to the original directives agreed under the co-decision procedure and not to add on (or ‘gold-plate’).

3.5

The Communication takes account of the findings of the widespread consultation process with the Member States and stakeholders. The conclusion of the process is that EU proposals should:

The last is probably the most far-reaching concern of stakeholders.

The Commission's Communication in its Annex 2 lists 222 measures for simplification. The Commission's simplification programme covers the period 2005 to 2008.

3.6

The first Company Law Directive (68/151/EEC) was simplified, updated and modernised in 2003 to maximise the potential of modern information tools and technologies and to enhance transparency regarding public limited liability companies. However, the modified Directive could well be included in a possible recast or codification exercise. A public consultation has been launched at the end of last year to collect stakeholders' views on such options.

4.1

Generally, ‘simplification’ must not be misunderstood as a means of achieving deregulation ‘through the back door’. Social standards — and in particular standards for the protection of employees, consumers and the environment — must not be undermined or watered down as a result of administrative simplification.

4.2

The Committee welcomes the Communication and supports the Commission in pointing out that the success of simplifying the regulatory environment depends as much on the Member States and their regulatory agencies as it does on the European Institutions.

4.2.1

It would be helpful if a code of conduct could be drawn up as previously suggested in EESC opinions (13) (see also Appendix I).

4.2.2

The EESC recalls the fact that the success of the simplification programme will not depend solely on the Commission's ability to deliver, but also on the co-legislators' capacity to adopt within a reasonable timeframe the simplification proposals tabled by the Commission.

4.2.3

It should be recalled that the interinstitutional agreement on ‘better lawmaking’ stipulates in its § 36 that ‘within six months of the date upon which this Agreement comes into force, the European Parliament and the Council, whose task it would be as legislative authority to adopt at the final stage the proposals for simplified acts, need to modify their working methods by introducing, for example, ad hoc structures with the specific task of simplifying legislation’.

4.3

The Communication acknowledges the importance to SMEs and to consumers of the simplification initiative. Poorly drafted EU or national legislation leaves consumers uncertain as to their rights and their possibilities of redress.

4.4

The Committee also welcomes the Commission's commitment to improving the process of producing Impact Assessments, not only in the context of burdens on business, but also in their impact on consumers, on disadvantaged groups (such as people with disabilities) and on the environment. In line with the declared goal of the Lisbon process of creating ‘more growth and employment’, impact assessments for employees and employment in general would also be very positive. Especially welcome is the suggestion that there should be more use made of ‘one-stop-shops’ and its reference in certain directives to ‘virtual’ or ‘self-testing’ in the context of motor vehicles.

4.5

It would be helpful if the Commission could produce an impact assessment to justify its withdrawal of proposals as it is now doing for new proposals.

5.1

The Communication implies that the process of adapting directives to technical progress (‘comitology’) needs to be made more transparent — something urged frequently by the European Parliament. Member States have a responsibility in this, however. The comitology work is carried out by ‘national experts’ and there is considerable evidence to suggest that these ‘experts’ do not take account of their government's views in their comitology activities (an example of this is the 1979 Birds Directive to which the technical annexes were added by ‘experts’ after ministers had given their approval in Council to the directive itself).

5.2

The importance of simplification to consumers, social partners and other ‘stakeholders’ should be highlighted. Conflicts between national implementing legislation and the original EC directives on which they are based add greatly to the work load of the European Court of Justice (ECJ) whose role is ‘interpretation’ but which is increasingly finding itself having to fill in details which appear to be overlooked or for which the requirement for Council unanimity has failed to produce a satisfactory text e.g. in taxation matters. However, the fact that the ECJ is increasingly being given the role of a political decision-maker is a problem. The ECJ lacks a clear political basis for this, besides exceeding its remit. It therefore takes decisions which should be taken by democratically elected authorities.

5.3

The EESC acknowledges that the Commission itself has made an effort and there have been several hundred repeals and declarations of obsolescence, which should have significantly contributed to reducing the volume of the acquis but not necessarily reducing burdens on business, on employees, on consumers or on other ‘stakeholders’. The Committee acknowledges that there are still areas where more legislation is needed at EU level in order to defend the environment and the rights of employees, consumers and disadvantaged groups (such as people with disabilities or other minorities), and to make sure that they all can have full access to the benefits of the single market.

5.3.1

On the other hand the most commonly employed system to date is that of updating. While this permits the introduction of certain necessary changes so as to update the regulations, the aim of simplification is not always achieved; indeed, on the contrary, measures are sometimes superimposed so that old and new regulations exist side by side in some Member States causing confusion to stakeholders. Enforcers in Member States may be left in doubt as to whether or not they are acting in accordance with their legal institutions.

5.3.2

The simplification features of each simplification proposal of the Rolling Programme should be clearly spelled out in the corresponding exploratory memorandum, and, where relevant, the accompanying Impact Assessment. The Commission services should carefully monitor these proposals in the course of their inter-institutional decision-making process to ensure that the simplification dimension is preserved, as required by Interinstitutional Agreements (on the ‘codification technique’ (14), on the ‘recasting technique’ (15) and on ‘Better Lawmaking’ (16)).

5.4

The Committee draws attention once again to its long series of opinions on the need for better regulation and simplification, particularly to its most recent opinion on ‘Better Lawmaking’  (17) in response to a request for an exploratory opinion of the UK Presidency.

5.5

The Committee reiterates its frequently expressed wish that the process of better regulation and simplification should continue following the Six Presidencies declaration (18).

16.12.2006   

EN

Official Journal of the European Union

C 309/22

1.1

One of the priorities of the Community customs action programme (Customs 2007), adopted by the Council in 2002, was a complete overhaul of the current customs Code [Council Regulation (EEC) No 2913/92], which has become outdated following developments in the markets and technology, the adoption of various Treaties and, above all, successive EU enlargements.

1.2

The idea of a completely modernised code was prompted by the fact that the old Code — which is still in force — ‘has not kept pace with either the radical changes to the environment in which international trade is conducted … or with the changing focus of customs work’. The proposal in question is in line with Community policy — particularly with the principles of the internal market and consumer protection, and with the Lisbon Strategy — and forms the basis for further measures to streamline customs systems and procedures and to bring rules into line with common standards governing Member States' IT systems as they are drawn up.

1.2.1

The Commission believes that this raft of measures will make it possible to incorporate the Council's eGovernment and ‘better regulation’ initiatives, and to achieve a number of specific objectives, including increased security and safety at external borders, reduced risk of fraud and, lastly, greater consistency with other Community policies, particularly fiscal policy.

1.3

The new Code must be seen in the context of the Lisbon Strategy, which seeks to make Europe ‘a more attractive place to invest and work’; it is also in line with the Commission's proposals, approved by the Council in December 2003, to create a simple, paperless environment. Moreover, another vehicle for the Council's policy is the parallel Proposal for a decision on a paperless environment for customs and trade [COM(2005) 609 of 30 November 2005], on which the EESC will draw up a separate opinion.

1.4

The new elements introduced by the new Code are not just a matter of form or updating rules; the changing focus of customs policy is much more important. Over the past 20 years, the role of customs has gradually been shifting away from the collection of duties towards much greater focus on application of non-tariff measures, in particular those related to security and safety, controlling illegal immigration, combating fraud, money-laundering, narcotic drug trafficking, sanitary measures, health, the environment and consumer protection, as well as the collection of VAT and excise duties. The Commission document does not explicitly mention under security and safety a secondary element which is certainly part of customs' role — the valuable assistance they provide in combating arms trafficking and terrorism. In this context, there is a gap in the plans for IT systems, on which the EESC comments in point 3.1.3.1 below.

1.5

Another new element is the introduction of computerised procedures. The current Code provides for these procedures — and they are widely adopted in almost all Member States — but they are optional both for national customs and for users. The new Code, however, makes them compulsory; this is necessary to eliminate the need for paper — the aim of the parallel initiative described in point 1.3 above.

1.6

The Code has been drawn up in line with Commission policy and with due regard for the procedures laid down in the areas of feasibility, transparency and impact assessment. The EESC is pleased to note that the civil society sectors concerned have been consulted and are largely in favour; it agrees with the Commission regarding respect for the legal bases and for the subsidiarity and proportionality principles, but reserves the right to comment on the impact assessment at a later date.

1.7

The Commission has looked at four different approaches to the issue, opting in the end for a solution which provides for closer cooperation between national customs' IT systems, on the grounds of the need to comply with the subsidiarity principle and Member States' clear reluctance to accept a solution based on a centralised European system. The EESC notes that this decision was unavoidable but points out that the latter option would have provided a more reliable, simpler and less burdensome solution for users. The subsidiarity principle would then have been devolved at European level rather than national level.

2.1

In February 2005, the EESC commented on a Proposal for a Regulation of the European Parliament and of the Council amending the Customs Code (1), which, even then, proposed innovations concerning a paperless environment and integrated management of external borders. The EESC is pleased to note that the principles enshrined in that proposal, on which its comments had been broadly positive, have also been included in the present proposal and converted into specific provisions which, once again, in general, it can accept.

2.2

The raft of new provisions is evidence of greater focus on operators' rights and needs, taking into account, where necessary, any damages that may result from the procedures. Both the streamlining of legislation and the concentration of customs procedures — which are being reduced from the current 13 to three: import, export and special procedures — are evidence of this approach. Moreover, in the drafting process, two-thirds of the articles of the present Code are amended, merged or transferred to the implementing provisions, with the result that the number of articles falls from 258 to 200.

2.2.1

The EESC congratulates the Commission on its sensitive, laborious work, in which it has respected the general principles of the internal market and shown great respect for operators' rights and needs. Incidentally, however, it notes that the lack of an implementing regulation — which the Commission does, moreover, have the power to draw up — leaves room for some uncertainty for the moment as regards a number of provisions: it therefore calls for a new implementing regulation to be drawn up and adopted without delay.

3.1.1

Article 3 lists the national territories making up the Community customs territory. It does not call for any particular comment, apart from the uncertainty raised by paragraph 3, which states: ‘Certain provisions of the customs legislation may apply outside the customs territory of the Community within the framework of legislation governing specific fields or of international conventions’. Legal certainty does not allow a law to mention ‘certain provisions’ without specifying in the same text or an appendix which provisions are referred to. From a legal point of view — and also for reasons of transparency — it needs to be clearly specified in detail which territories and legislation are being referred to. All too often, the public — and experts, too — fail to notice exemptions and derogations granted on various occasions in various different ways: these exemptions and derogations are often genuine distortions of competition, and they are not always temporary.

3.1.2

Generally speaking, the exchange and protection of data (Articles 5, 6 and 7) do not call for any particular comment, as the proposed legislation is in line with the normal protection provided by public administrations for people's privacy and business confidentiality. The EESC particularly welcomes the provisions in Article 8, which require customs authorities to provide information on the application of customs legislation, and to further transparency by making legislation, administrative rulings and application forms available on line to operators free of charge.

3.1.2.1

The first paragraph of Article 5 warrants particular attention. It requires electronic data processing techniques to be adopted for all exchanges of data, documents, decisions and notifications between economic operators and customs authorities. This provision, which is wholly appropriate where businesses and professional operators are concerned, could cause difficulties where the importer (or, more rarely, the exporter) is a private individual and not necessarily an ‘economic operator’. The problem is anything but minor, at a time when the amount of on-line and catalogue purchases of goods in countries outside the EU is growing exponentially. The EESC notes that the matter is currently being discussed under the comitology procedure and suggests that private individuals be explicitly included among those permitted under Article 93 to submit summary declarations. The provisions of Article 94, granting customs authorities the possibility of accepting paper-based import summary declarations although only in exceptional circumstances, should also be amended. Alternatively, or in addition, the possibility could be explored of extending to private individuals the right to submit the occasional simplified declarations — again paper-based — provided for in Article 127.

3.1.2.2

On a more general note, although still on the subject of electronic data processing techniques, the EESC points out the high costs of the new integrated data processing system; these costs have to be borne within a short period of time, while a substantial part of the benefits (particularly where quality is concerned) will only become apparent in the medium to long term. Some Member States already seem to be concerned at both the costs that will have to be borne and the obligation to respect the timeframes for implementing the new systems; others — particularly those which are most advanced in terms of computerisation — feel that it would be costly to change recently introduced systems to come into line with the joint system. The EESC acknowledges these concerns, which the Commission must not ignore. However, it believes that the benefit to Europe of having an efficient, modern customs system is worth some individual sacrifices, which could perhaps be alleviated by assistance in specific cases of documented need.

3.1.3

Article 10 requires Member States to cooperate with the Commission ‘with a view to developing, maintaining and employing an electronic system for the common registration and maintenance of records’ of all operators and authorisations granted. Any uncertainty regarding the nature and operation of the system is cleared up in Article 194: each Member State is to maintain its own electronic data processing system, ensuring interoperability with the systems of the other Member States in accordance with rules and standards established by the Commission, assisted by the Customs Code Committee. The system is scheduled to enter into force on 30 June 2009. The EESC believes that a system based on national databases exchanging — once interoperability is ensured — information and updates may well prove difficult to manage, as well as costly. Above all, it is somewhat unlikely that a system of this kind could actually become operational within the specified timeframe. The Commission's impact assessment estimated the additional cost of implementing the system at EUR 40-50 million per year, a figure which various experts feel to be over-optimistic.

3.1.3.1

Moreover, there is a clear, crucial shortcoming in the system planned, or at least in the mission statement: there is no specific provision for access to the electronic data processing systems of authorities combating terrorism and organised crime, with, of course, due regard for the rules protecting privacy and production activities. The EESC has repeatedly highlighted this aspect, on a number of occasions. The Council has for years been stressing the need for cooperation between the different authorities — criminal and financial police, customs, secret services, Olaf and Europol, but, regrettably, without significant results thus far.

3.1.4

Article 11 raises a particular concern. It stipulates that customs representatives can ‘perform the acts and formalities laid down in the customs legislation’, appointed by an operator and acting in the operator's name and on their behalf (direct representation) or on their own behalf (indirect representation). Paragraph 2 requires customs representatives to be established within the Community customs territory, but nothing further. Moreover, the EESC notes that the Commission states in its Explanatory Memorandum that ‘The rules on representatives have been changed, with former restrictions being withdrawn’; these were incompatible with a computerised environment and with the principles of the single market. The inference is that customs representatives have a single authorisation (Community passport) enabling them to operate throughout Community territory in the name of any operator, wherever the operator may be established. This article needs to be made more explicit; a separate regulation could lay down procedures for creating a register or list etc. along the lines of the arrangements for authorised economic operators, discussed in point 3.1.5 below.

3.1.5

Another figure of interest is the authorised economic operator (Articles 4 and 13 to 16). In practice, this is a business (more often than an individual) which can guarantee that it is responsible, solvent and professional to a sufficiently high degree to be accredited by Member States' customs authorities as having the right to a certain number of facilitations in the area of controls and procedures. The Commission reserves the right to specify, on the basis of Article 196, the procedures for granting the status of authorised economic operator. The EESC takes note of these provisions, which are clearly intended to facilitate international trade and the creation of an environment conducive to trade, but it also notes that a great deal will depend on the conditions for granting this status and the rules for preventing any abuse thereof. Moreover, it is not clear whether authorised economic operators will be granted a ‘European passport’.

3.1.6

Article 22 marks a decisive step towards harmonising customs regimes, by requiring Member States — albeit in fairly loose terms — to adopt administrative and criminal penalties for failure to comply with Community customs legislation. The EESC agrees, of course, on the need to achieve harmonised rules on this sensitive issue, but it remains to be seen how receptive Member States will be to endeavours to lay down rules or guidelines on criminal matters, which are an area where resistance or, at least, reservations, are to be expected.

3.1.7

Articles 24, 25 and 26 deal with appeals against administrative decisions (Article 23 excludes decisions taken by a judicial authority), laying down a two-stage procedure. The first step is appeal before the customs authorities and the second appeal before a higher, judicial or other authority. In the case of penalties a general principle similar to the estoppel principle applies, except where the customs authorities consider that ‘irreparable damage’ may be caused to the person who lodged the appeal; the EESC is pleased to note this indication of concern for the needs of the citizen.

3.1.8

Article 27 lays down the — clearly necessary — possibility for customs authorities to carry out controls of all kinds (physical, administrative, accounting and statistical). It also provides for an electronic risk management system to be implemented, ‘with the purpose of identifying and evaluating the risks and developing the necessary measures to counter the risks’. This system, which Member States are to implement in cooperation with the Commission by 30 June 2009 at the latest, will also be regulated by rules laid down by the Commission on the basis of Article 196. In any case, the EESC welcomes the measure and hopes that the Commission has made quite sure that all the Member States are willing to implement a system which will presumably prove to be costly and sensitive to manage.

3.1.9

Article 30 exempts from customs controls and formalities the cabin and hold baggage of passengers on intra-Community flights and sea-crossings, but without prejudice to security and safety checks and checks linked to prohibitions or restrictions laid down by the Member States: this is tantamount to saying that the exemption only applies in countries which have not laid down prohibitions or restrictions. Since there are always restrictions in place everywhere, if only with regard to goods subject to excise duty, the general rule is, in practice nullified and customs' power to carry out controls on both cabin and hold baggage remains intact.

4.1

Titles II — VIII deal with customs formalities and procedures, and broadly retain the content of the Code currently in force. The EESC does not intend to analyse these provisions in detail, as they have already been discussed extensively during the consultations held with stakeholders before the text was drawn up. It will therefore merely comment on a few articles of particular interest.

4.2

Article 55 states that a customs debt is incurred even in the case of smuggled or illegally-trafficked goods (defined as ‘goods which are subject to measures of prohibition or restriction on importation or exportation of any kind’): customs duties are due in any event, without prejudice to the application of other criminal or administrative measures. However, counterfeit currency and narcotic drugs which do not enter the authorised circuits are exempt from the customs debt; these kinds of trafficking are clearly viewed purely as criminal offences, except in cases where a Member State's legislation requires customs duties to serve as the basis for determining financial penalties. Despite an opinion to the contrary from the European Court of Justice, the EESC does not believe that customs authorities should be deprived of the legitimate income they would have gained from establishing a customs debt — administrative and criminal penalties apart — at least in the case of narcotic drugs, whose value could be set at the respective market price. The fact that a drug is imported illegally does not change the fact that it is still an import. In other words, while the reason for exempting counterfeit currency is clear, the reason for exempting narcotic drugs is not.

4.3

Under Article 61, customs authorities may authorise an operator to provide a comprehensive guarantee to cover its customs debts. Article 64 states that one of the forms that this guarantee can take is an undertaking given by a guarantor, and Article 66 specifies that it can be provided by a ‘bank or other officially recognised financial institution accredited in the Community’. This provision is important in that it acknowledges that any bank or financial institution from any European country can provide a valid guarantee for customs in another country: this is an important principle which is already in force but which in practice is often obstructed by customs in various countries. However, it is not yet clear what is meant by the phrases ‘officially recognised’ and ‘accredited in the Community’: the EESC feels that they are superfluous and misleading, as banks and financial institutions established in the Community already have a ‘European passport’ and no further indications are necessary.

4.4

Again on the subject of guarantees, Article 83 gives the Commission the possibility, again under the ‘Article 196’ procedure, of adopting a ‘special procedure’ for securing payment from guarantors. However, no information is given as to what the special procedure consists of or its scope. If this is a reference to the petition for prosecution of the guarantor ‘at the first request’ it is certainly nothing new, as this kind of guarantee already exists and is provided for by other regulations (such as the EU Financial Regulation). If, however, other formulas are implied, it would be as well to specify them because the cost of a guarantee varies according to the risk and the procedures for prosecuting the guarantor.

4.5

Furthermore, Article 83 stipulates that interest on customs debts is to be charged for the period between the date of expiry and the date of actual payment; Article 84 caters for the opposite case, where it is a customs authority which is in debt towards the importer or exporter: here, it is explicitly stipulated that no interest is due for the first three months. The EESC stresses this clear, unacceptable discrepancy between the ways in which the public authority and the general public are treated.

5.1

The provisions of this title are essential for understanding the Code's structure and scope. The keystone is Article 196, which states that in implementing the legislation ‘the Commission shall be assisted by the Customs Code Committee, hereinafter referred to as “the Committee”’, acting under ‘Articles 4 and 7 of Decision 1999/468/EC’ and ‘having regard to the provisions of Article 8 thereof’. In practice, this means that the Commission has the power — albeit with the assistance of the committee — to regulate all aspects of the Customs Code, in line with normal Community procedure. The EESC has no objection to this but trusts that the rules adopted will respect users' needs and will be sufficiently flexible as to be able to be updated at the appropriate time in line with progress in techniques, technology and commercial practice.

5.2

Under the powers conferred on it by Article 196, the Commission (Article 194) can adopt measures laying down:

5.2.1

The Commission's powers are therefore fairly broad and include the right to determine, itself (second indent), the cases in which, and conditions under which, Member States may be required to revoke or amend a decision. The EESC notes that while, in the cases covered by the first and third indents, the Commission is performing its institutional role of coordinating and implementing decisions adopted or endorsed by the Council, in the case of the second indent it is exercising power in an anomalous way, even though, all things considered, this may be justified by circumstances and the EESC is certainly not opposed to it.

5.2.2

On a general note, the EESC points out that the decision to carry out controls on operations of all kinds effected by the public — including commercial transactions and customs work — will affect free trade, and that it derives from political decisions, endorsed by the EU and the Member States within their different remits. The Commission, of course, implements these decisions.

5.2.3

The EESC hopes that the customs reform will not upset the necessary balance between free trade and users' and end-consumers' safety and security, and that it will be carried out with due respect for the professionalism of customs staff and importers/exporters' employees.

16.12.2006   

EN

Official Journal of the European Union

C 309/26

1.1

The EESC supports the Commission's proposal to devote the next five years to the dynamic consolidation of the financial services industry by implementing and strengthening current legislation and by simultaneously avoiding excessive regulatory additions (so-called gold-plating), while respecting the spirit of the Lisbon Strategy and the features of the European social model.

1.2

It is essential, not least in the opinion of the EESC, that the role and activities of supervisory authorities be enhanced, thereby optimising coordination as provided for level-3 committees under the Lamfalussy process.

1.2.1

The EESC believes that it would be premature at this point to establish a single EU supervisory authority that could, in future, promote market integration, but considers it would be useful to recommend that European authorities identify a main supervisory authority, the one situated in the (home) country of the parent company, which would also be entrusted with the task of supervising the activities of subsidiaries and controlled companies situated in other EU Member States. The advantages that would be gained by European-scale companies and consumers are obvious.

1.3

The growing importance of financial activities in the economy (often referred to as the financialisation of the economy) is underpinned by the improved efficiency of financial transactions. Although the financialisation of the economy is reflected in a significant capacity for economic and job growth in the financial sector, it can also adversely affect the whole economy. The power of stock markets focused on shareholder value can also thwart industrial strategies. Commercial and financial pressures can lead to problems in the long term and, as is the case at the moment, lead to unplanned takeover bids, a large percentage of which have led to the destruction of value in the short term.

1.3.1

It must be remembered however that, at least in the short- to medium-term, in the wake of consolidation, there are fewer jobs in the financial industry, which gives rise to growing insecurity among the workforce. The EESC stresses the need to take account of the social consequences of consolidation and hopes that the Member States would adopt appropriate social shock absorbers and support professional training and retraining schemes, which are vital in achieving the objectives of the Lisbon strategy.

1.4

The EESC endorses the objectives of simplification, codification and a commitment towards clarification with a view to achieving ‘better regulation’ and to this end warmly welcomes the Commission's continued commitment to frequent and open consultation with all stakeholders, and to carrying out impact assessments prior to every new proposal, including the social and environmental dimensions and external factors impacting on the whole economic system.

1.4.1

The EESC calls for work on the FSAP to be given a higher profile and to be more widely debated, not exclusively by experts.

1.5

The EESC welcomes the Commission's proposal to issue a Communication/Recommendation on UCITS, with a view to overcoming current obstacles to the free circulation of these financial instruments.

1.6

It is essential to strengthen consumer information, financial culture and awareness. The Commission's intention, therefore, to launch specific initiatives with European consumer associations, is welcome, but the Commission should deal more actively with the Member States, in order that they can be persuaded to establish more robust ways of involving stakeholders at national level. The EESC is happy to contribute to these initiatives by working in tandem with consumer associations and national ESCs.

1.7

Current supervisory rules, which differ across Member States, force companies to comply with requirements in connection with drawing up balance sheets and providing company information. Adoption of the IFRS could represent the ideal opportunity to standardise these information requirements at EU level. The EESC notes that the IASB, a privately-funded international standards body does not fully reflect the present world economic situation and hopes that it will be willing to cooperate internationally with other bodies, for example the European Commission.

1.8

With regard to the directives on the retail market, the EESC reserves the right to comment specifically on the directive on consumer credit, which should be approved as soon as possible, and on the directive on payments services, for which it is drawing up a separate opinion. With regard to the directive on mortgage credit, however, the EESC, though supporting the objectives, has expressed well-grounded concerns about the feasibility of early integration of the credits market. Lastly, as regards clearing and settlement arrangements, the EESC would warmly welcome the adoption of a framework directive.

1.9

The Commission has expressed doubts on adopting the so-called ‘26th regime’ in the area of financial services. The EESC takes note of this and declares that it is willing to assess — once they have been laid down — the conditions for effective application, which must always protect the interests of consumers and provide them with genuine value.

1.10

With regard to future initiatives, the EESC has shown:

1.11

The EESC is convinced that European standards regulating financial services are of a very high quality and that the EU can look forward to becoming a point of reference for all the other countries. Europe should open up a dialogue with both newly-industrialised countries (such as India, Brazil and China), as the Commission is suggesting, and less developed countries that need substantial assistance to develop their financial services markets.

1.12

The EESC supports all European and national institutions in their fight against crime and terrorism. Here again, in line with the Commission's emphasis on the need for the financial system to provide full and ongoing cooperation with the competent authorities, the EESC supports and reiterates this call to both the financial institutions and the competent authorities who ought to inform the financial intermediaries of the follow-up given to the information provided.

2.1

The White Paper on Financial Services Policy 2005-2010 sets out several objectives aimed at the dynamic consolidation of the financial services industry, recognising that an efficient financial market is the cornerstone of an economic growth and development strategy. Dynamic consolidation is the leitmotiv of the White Paper, which sets the objective of removing the remaining barriers to the free circulation of financial services and capital, notwithstanding the significant progress already made by the 1999-2005 FSAP.

2.2

The key role of regulation for the functioning of financial markets warrants the focus and emphasis given by the White Paper to the need to implement and strengthen existing legislation, and at the same time avoids excessive regulatory additions (so-called gold-plating), particularly by Member States.

2.3

Analysis of the legal framework must include consideration of the limits, remit and coordination responsibilities of supervisory authorities within the EU. While in the current climate, maintaining a national approach to supervision may still remain the best form of consumer and investor protection, it is important to recognise the two significant problems inherent to this approach.

2.3.1

Not integrating supervision at supranational level substantially limits market integration. It is therefore necessary to promote and strengthen close cooperation between Member State authorities. Risk management in the major European banks with operations in several Member States, is implemented at group level on a consolidated basis. The supervisory authorities must be in a position to accurately assess the risk profile of these major European groups.

2.3.2

The retention of a substantial national-level element in supervision must not provide an opportunity for raising those barriers against dynamic consolidation at EU level whose gradual removal is called for by the White Paper.

3.1

In a recent opinion, the EESC set out its views on the Green Paper on Financial Services Policy (2005-2010). As the White Paper incorporates many of the proposals set out there, the EESC reiterates views already put forward and will briefly recapitulate them in this opinion (1).

3.1.1

The White Paper highlights the economic and employment growth potential of the financial services industry. The Committee believes, however, that this central premise of the document must be considered carefully and realistically, in light of various well-documented facts.

3.2

The industry consolidation process can lead to greater efficiency and economies of scale, which can ultimately benefit shareholders of intermediaries' risk capital (through increased return on invested capital) and financial services users (through a reduction in the cost of those services).

3.3

At the same time, however, substantial empirical evidence points to reduced employment in the financial industry following consolidation, which gives rise to growing insecurity among the workforce. There is no concealing the fact that business plans presented during mergers and acquisitions focus mainly on cost savings achieved by lowering labour costs. While in the short term, consolidation may lead to a net loss of jobs, it should also be recognised, however, that it provides room for the development of innovative services and areas of activity, which will in turn have a positive impact on employment. By lowering the barriers which hinder financial service providers from fully exploiting the synergies of cross-border mergers, banks would be able to provide their services at a lower cost, which would ensure that pricing policies were more attractive to customers and, consequently, boost demand. As a result, financial intermediaries would step up investment, which would have positive repercussions, not least in terms of employment. These new jobs, with certain exceptions, such as call centre and back office functions, generally attract more highly qualified and better-paid professional profiles.

3.4

While accepting, therefore, that industry consolidation does not have an overall negative effect on employment, the EESC firmly stresses that the gap in terms of both time and different professional qualifications that exists between the loss and creation of new jobs cannot be ignored. At a time when the emphasis is shifting from job protection to employment possibilities, Member States should give priority to supporting professional training and retraining schemes, as well as providing an appropriate system of social shock absorbers.

3.5

If workers see that they can readily put their qualifications and skills to use, even in a rapidly changing economy, they will be less reluctant to accept the decreased job stability entailed by the dynamic consolidation of the industry. This observation should prompt recognition of professional training as not only an instrument for containing social instability, but also as a vital factor in the long-term success of the dynamic consolidation plan and, more generally, of the Lisbon Strategy, which aims to transform the European economy into the most important knowledge-based economy in the world . Moreover, an appropriate social network which would contribute to mitigate the often serious effects of these stages of transition needs to be created.

4.1.1

The three guiding principles on the road to better regulation are identified as simplification, codification and clarification. It is important to move in this direction in order to ensure legal consistency, simplified application and uniform implementation.

4.1.2

The EESC welcomes the Commission's proposals on better regulation, in particular its continued commitment to frequent and open consultation with all stakeholders, its commitment to carrying out impact assessments for every new proposal, centring on economic costs and benefits in the broad sense, including the social and environmental dimensions. A commitment, together with the Council and the Parliament, to improve the quality of legislation and the external factors impacting on the whole economic system is equally important.

4.1.3

The EESC shares the Commission's view of the challenge of ensuring that EU legislation is both properly implemented on time and that it is subsequently properly applied by the 25 Member States, with further enlargements in the pipeline. The Committee also concurs with the need to curb goldplating , i.e. unilaterally adopting additional regulations that go against the principle of the single market. In fact, the unjustifiable variety of national consumer protection regulations is one of the principal obstacles to the integration of financial services across the EU.

4.1.4

The EESC also stresses the fundamental importance of ex-post evaluations of whether the rules actually achieve their objectives and, at least for the sectors covered by the so-called Lamfalussy process, of whether markets evolve in line with the expectations it contains.

4.1.5

Ensuring consistency between EU and national legislation must begin with the most significant sectors or where there are the greatest harmonisation and legal consolidation difficulties, as in the case of UCITS distribution and marketing. Increased competition and efficiency in this sector inevitably brings about greater scope for distribution and marketing, which are still greatly hindered by an ill-defined legal framework. We therefore particularly welcome the Commission's proposal to issue a communication/recommendation in the course of 2006 and a white paper on asset management in November.

4.1.6

The Commission will propose to incorporate 16 existing insurance directives into a single directive. The EESC supports this codification proposal and considers it an excellent example, which should also be followed in other areas, by adopting legislation aimed at bringing together, simplifying and streamlining all of the issues covered by the various directives.

4.1.7

The EESC also endorses the use of infringement proceedings where any incorrect implementation or application of Community law is found, but must point out that, in recent times, the Commission has been greatly influenced by the Council and has been increasingly reluctant to go down this road.

4.1.8

The improvement and rationalisation of the retail financial services industry must not overlook the issue of consumer information, education and awareness — these factors are essential to the maximum effectiveness of any legal framework. The EESC strongly backs the Commission's intention, therefore, to launch specific initiatives at EU level with consumer associations and financial industry representatives, but feels that the Commission should make greater efforts to ensure that at national level such practices are highly recommended, if not mandatory. The EU consumer newsletter, is, in theory, an excellent initiative. The Commission must be aware, however, that information tools must have an element of proximity to the consumer. The EESC calls on the Commission to work with the Council and the Parliament, to ensure that more robust ways of involving stakeholders at national level are examined, based along the lines of what it envisages at EU level. Developing FIN-NET, a tool that is currently unknown to the vast majority of consumers, is a step in the right direction. In connection with the review of the role of this instrument, the EESC recommends involving both consumer and civil society organisations and the social players, and could itself support the initiative by, for example, working in tandem with national consumer associations and ESCs.

4.1.9

The EESC believes that at a time when the Commission is stressing the importance of circulating information, particularly among consumers, investors and financial industry employees, the issue of the language in which documents are available must not be underestimated. The Commission needs to focus on this issue, sparing no effort in ensuring that the essential documents at least are available in as many languages as possible.

4.1.10

The EESC welcomes the attention given to consumers and to bank and financial services staff and to their regular consultation on major issues. The added value of market integration lies in consumer satisfaction, while due attention must be paid to the social impact of decisions taken. Nevertheless, previous financial directives have not always taken this approach. The observations put forward in the General comments section of this opinion are intended to firmly stress this perspective.

4.1.11

With regard to interaction with other areas of EU economic policy, the EESC has already highlighted that, for the major European groups (2), the VAT system can hinder the strengthening of financial services and is pleased that the Commission intends to present a legislative proposal in this regard. Particular attention needs to be given to assessing the economic, social and environmental impact of the desired VAT harmonisation process. The EESC has also shown how the current situation could hinder the complete integration and full development of the financial market. Furthermore, the EESC highlights the case of outsourcing, which could be greatly incentivised by a non-harmonised taxation system, with negative effects on employment, on the quality of services and on the reliability of the whole system. The EESC hopes that this subject will be given careful consideration, given that various instances of outsourcing have had less than ideal results.

4.2.1

The objective of increased coordination of market supervisory authorities is clearly one we would share. This objective could be facilitated by giving an increasingly decisive role to level-3 committees, and harmonising the responsibilities of their members under the Lamfalussy process, as part of the completion of the EU legal framework. This would result in both an easing of the Commission's workload and a decreased risk of goldplating by Member States or supervisory authorities.

4.2.2

The EESC believes that it would be premature at this point to consider establishing a single EU supervisory authority which would be responsible for coordinating supervisory activities. Nonetheless, the Committee believes that national supervisory authorities must engage in active and continuous cooperation, and work towards establishing common codes of conduct and standard procedures. The ensuing increase in mutual trust would represent a first step on the road to the future establishment of an EU supervisory authority for the major financial, banking and insurance groups operating in various Member States. One of the first important decisions to be made should be to identify a main supervisory authority situated in the country hosting the parent company, which would be responsible for supervising subsidiaries and controlled companies situated in other European states. Multinationals and supervisory authorities could effectively benefit from the single market, by not having to repeatedly present balance sheets and information documents and by not having to take account of different national regulations.

4.2.3

The method used, for instance, in the Market Abuse Directive should be promoted. The presentation of a very detailed draft directive ensured a high level of uniformity in its subsequent transposition, leaving a significant margin of responsibility to regulators: this was also shared at EU level, and specified the duties to be transferred to the remit of the various supervisory authorities.

4.2.4

The adoption of the IFRS was an important opportunity to streamline financial reporting by business management and bring it in line with modern standards. It could also represent an opportunity to standardise at EU level the types of data that intermediaries must present to their respective supervisory authorities. The EESC believes that with the adoption of the IFRS there are no longer any grounds for deferring or delaying the achievement of this objective, which is a pre-requisite for efficient and effective supervisory coordination and cooperation at EU level. Nevertheless, these should be brought into line with the corresponding objectives of the EU Solvency II project. Those companies which have not yet harmonised their balance sheets and consolidated balance sheets with the IFRS should not however be at a disadvantage compared with companies that are obliged to do so.

4.3.1.1

Retail banking is covered by three major initiatives. With regard to mortgage credit, the EESC (3) has already expressed well-grounded concerns about the feasibility of integrating the market, in the light of legal implications and significant difficulties which were outlined in a recent opinion. The EESC awaits the Commission's line of approach and replies to the objections submitted.

4.3.1.2

The amendments to the directive on consumer credit proposed by the Commission, currently under examination by the European Parliament, improve the previous proposal without fully meeting the needs of consumers. The EESC awaits the outcome of the examination and hopes that the directive will be approved shortly.

4.3.1.3

The payments services directive also has an important role to play. Cross-border payments services are still something of a grey area. The financial system must subject itself to the competition, transparency and comparability rules issued by DG Competition. The creation of a Single European Payment Area (SEPA) by 2010 is an ambitious and desirable objective that will ensure that cross-border payments are more efficient and provide consumers with a guarantee. However, it must be taken into consideration that efficient and low-cost systems (such as the direct debit system) are already in place in some Member States. When the SEPA is implemented, the users' interests must be taken into account and added value provided. The EESC is currently drawing up an opinion — specifically on payments services — in which the Committee will set out its detailed assessment.

4.3.1.4

The reappraisal of the notion of qualifying shareholdings, through the revision of Articles 16 and 15 of, respectively, the Banking Directive and the Insurance Directive, is a key initiative to prevent certain supervisory authorities from hindering the balanced development of the internal market, using the prudential management of financial systems as a pretext. The EESC considers that improving the efficiency of a system, rather than limiting the transfer of control of companies, offers the best guarantee of its stability.

4.3.1.5

As regards clearing and settlement arrangements, the lack of a regulatory framework has contributed to the persistence of serious diseconomies and genuine abuses. Cross-border settlement and clearing infrastructures are more costly and less efficient than national ones. The EESC would warmly welcome the issue of a framework directive with a view to increasing the competitive capacity of European operators, not least when competing internationally. An efficient and well-ordered market attracts investment and Europe needs to attract investment if it genuinely wishes to pursue the objectives of economic and job growth.

4.3.2.1

The EESC agrees with the Commission's assessments following its examination of the unjustified barriers to the full achievement of free movement of capital and cross-border investments.

4.3.2.2

The Commission has expressed doubts on the so-called ‘26th regime’ in the area of financial services. On the other hand, the minimum harmonisation principle has created too many differences. The ‘home country’ principle has been a formidable instrument of liberalisation and competition within the EU. Indeed, the more solidly mutual trust over the quality of internal legislation in each Member State is anchored, the more fully this principle will be accepted by the Member. In this regard, the goal of full harmonisation of rules is a significant catalyst, enriching and consolidating these trust-based relations which underpin the progressive creation of a common culture. This should lead to the harmonisation of the essential provisions of financial services contracts. The EESC would like to point out that, on the other hand, no evidence of the (effective) applicability of the 26th regime has been adopted so far and that the Commission should, in any case, conduct an in-depth assessment of its application. In a recent opinion, the EESC stated that: ‘[the] 26th regime (…) could be a valid option only after it has been ascertained, through a thorough study of the laws and contracts of all 25 countries, that the “parallel” instrument does not contravene the rules and laws of any of them. At all events, it is necessary that standardisation rules should not hinder the supply of new products and thus become a brake on innovation ’ (4).

4.3.3.1

In its recent opinion on the Green Paper of July 2005, the EESC has shown the usefulness of action in the area of UCITS  (5). ‘Investment funds compete against financial products such as unit-linked policies, perceived as comparable by investors, despite the fact that they are governed by a very different legal framework. This can distort investors' choices with negative repercussions on cost and risk levels in the investments concerned. The EESC believes that this problem cannot be addressed with reduced competition or by easing the restrictions and guarantees imposed on investment funds. We would call instead for an upward adjustment of standards so that financial products that are perceived as being a direct alternative to investment funds are subject to regulatory requirements that are comparable to those pertaining to such funds.’ The imbalance in the requirements of funds and unit-linked policies, the incomplete development of the European Passport due to the obstacles that certain supervisory authorities continue to create, the lack of transparency of costs, especially exit costs, and market fragmentation with the associated high costs are some of the problems outlined. Nevertheless, the EESC expresses concern at the development, in some Member States, of guaranteed capital funds without the need for the management company to have sufficient own funds, with the result that, in the event of particularly disadvantageous market trends, consumers could be inadequately protected. The EESC calls on the Commission to remedy this shortcoming, by establishing appropriate corporate responsibility obligations for companies issuing guaranteed capital funds and by setting a precise and adequate level of monitoring. The EESC is particularly aware of the pressure to achieve more efficient UCITS, not least due to the fact that, being a significant component of pension fund schemes, they can make a substantial contribution to resolving a problem that was rightly pointed out at the beginning of the White Paper, i.e. the financing of the considerable pensions deficit which affects most European economies.

4.3.3.2

The EESC agrees with the Commission on the importance, which is not merely economic, of having access to a bank account. In modern economies, having a bank account in practice confers a kind of economic citizenship on individuals. In certain Member States, this citizenship right is legally recognised, thereby obliging the financial system to ensure that basic banking services can be provided at minimum cost. In other EU countries, a strong awareness of the issue is spreading among companies, which, for a few euros a month, offer a ‘package’ of services associated with current accounts.

4.3.3.3

The aim to remove obstacles to the mobility of cross-border accounts is commendable and could contribute to lowering bank charges. The possibility of opening online bank accounts could actually bring the objective of ensuring intra-European mobility of accounts within reach. However, it must be remembered that not all consumers are IT-oriented. The Commission should propose a satisfactory alternative for these people, who usually belong to the more vulnerable sectors of the population. It must be emphasised that only the consolidation of effective and constructive cooperation between the supervisory authorities can give concrete form to this possibility. Acting on proposals set out in the White Paper, on 16 May 2006 the European Commission (6) decided to entrust an expert group with the task of assessing customer mobility in relation to bank accounts.

4.4.1

The Commission's ambitious goal of giving Europe a leading role in setting standards at global level is certainly to be welcomed. Furthermore, in line with the recommendations of the Doha Round, the EESC hopes that Europe will steer the most advanced countries in a commitment to provide less developed countries with proper technical and financial assistance in regulatory and implementation issues relating to the agreements and standards adopted. The advance of international integration must also take account of the needs of weaker economies which need to attract investment. The EESC trusts that the Commission will bear these needs in mind during negotiations and discussions with the other more advanced economies.

4.4.2

The EESC supports the Commission and the other European institutions in their fight against all kinds of criminal activities — frequently connected with international terrorism — and is committed to combating the criminal use of financial systems. There are many types of economic crime: corporate and commercial fraud, money laundering, tax evasion and corruption. Illicit funds are frequently channelled through financial services systems to serve criminal ends. The EESC calls on the financial institutions to provide the best possible assistance to the authorities concerned, who, on the other hand, should take sufficient heed of their recommendations. If financial institutions are kept abreast of the follow-up given to information supplied to the authorities in connection with suspect transactions, they will be more motivated to continue and step up the efforts required.

16.12.2006   

EN

Official Journal of the European Union

C 309/33

2.1

These proposals seek to establish a link between the Community registered design system and the Hague system for the international registration of industrial designs, by the accession of the EC to the Geneva Act of the Hague Agreement. The first proposal is to accede to the Act. The second is to amend the relevant Regulations to make this possible.

2.2

The Hague System is based on the Hague Agreement concerning the International Registration on Industrial Designs. This Agreement is constituted by three different Acts; the 1934 London Act, the 1960 the Hague Act and the 1999 Geneva Act. The three acts are autonomous and coexist with respect to their substantive provisions. Contracting parties may decide to become party to only one, two or all three Acts. They automatically become members of the Hague Union, which at present has 42 Contracting States, including 12 EU members (1).

2.3

Accession would allow designers throughout the EC to protect new and original designs in any of the Geneva Act countries with a single application. It would add another route by which applicants could protect their designs, with protection available at a national level, at Community level through the Community Registered Design and internationally through the Hague system.

2.4

The result would be a simpler, more economically efficient and cost effective system. Under the Hague system, applicants are not required to provide translations of documents, do not have to pay separate fees to offices and agents in different countries, nor do they have to keep watch on the different deadlines for renewal of national applications. Instead, a single application is deposited at a single location with a single fee, resulting in multiple international registered design rights in nominated Geneva Act countries.

2.5

The Community design system allows designers to protect new and original designs, which are characterised by their visual appearance, by the granting of individual monopolies over registered designs, which are unitary in character and valid throughout the EC. Registered design rights also exist in each of the Member States but the Community design is an economical and convenient way of obtaining uniform protection throughout the Community by any business operating in the European market.

2.6

The Hague Agreement Concerning International Registration of Industrial Designs provides a system, administered by the World Intellectual Property Organisation (WIPO) by which filing a single design application together with a single fee will result in a bundle of registered designs in nominated contracting states. The Hague system can be used by any resident or national of or business established in a state, which is party to the Agreement. At present WIPO does not receive applications filed though national offices. Direct filing at WIPO avoids confusion and duplication and the possibility of overpayment to the OHIM.

2.7

One of the advantages of the Hague system is that it facilitates the modification of design protection and renewal at its expiry.

2.8

The Geneva Act of the Hague Agreement entered into force on 23 December 2003. Among other modifications to make the system more accessible, it allows for the accession of intergovernmental organisations such as the EC to the Hague system. Currently, 19 countries are parties to the Geneva Act including Switzerland, Singapore and Turkey. A number of Member States have yet to sign and/or ratify.

2.9

The Geneva Act allows applications in only one of two official languages — English and French.

2.10

The United States is due to accede to the Act in November 2006 and accession by both the EU and the US should encourage other major trading partners (China, Japan, Korea) to accede allowing registration in several significant countries.

2.11

The proposal establishes a link between the EC, which is regarded as a single country under the Act and the Hague system thereby increasing its usefulness.

3.1

The proposal for a Council Decision [COM(2005) 687 final] allows the EC to act as a single country in the Hague union in relation to the Community Design system. The amendment to regulation EC/6/2002 (Community Designs Regulation) gives effect to the accession to the Geneva Act.

3.2

The amendment of regulation EC/40/94 (the Community Trade Mark Regulation) allows for the Office for Harmonization in the Internal Market (OHIM) in Alicante to accept fees for designs registered under the Geneva Act.

3.3

The legal base for the proposal to amend these two Community Regulations is Article 308 of the EC Treaty.

3.4

The European Parliament is consulted. The two proposals are not subject to co-decision.

3.5

Voting in the Council is by unanimity.

4.1

It is not expected that additional costs will be incurred by this proposal as it concerns amendments to Regulations which have direct applicability to Member States.

4.2

Currently, design registrations are subject to filing fees and renewal fees in each country in which they are filed. Typical national filing fees are estimated to be generally under EUR 100 but in addition, there is the cost and inconvenience of currency conversion when filing internationally.

16.12.2006   

EN

Official Journal of the European Union

C 309/35

1.1

The Commission proposal concerns the conditions, rules and procedures according to which undertakings, universities, research centres and other legal persons receive support from the Seventh R&D Framework Programme.

1.2

The Committee welcomes the majority of the proposed regulations and views them as improvements with the potential to bring about a considerable simplification of the administrative procedures. In that connection, the Committee recommends that there also be greater standardisation and more consistent application as regards the Commission's internal implementing rules, which are still pending (in the applicable criteria, for example).

1.3

However, since the Commission's internal implementing rules are still pending, some of the specific outcomes of the proposed regulations cannot yet be assessed. In such cases (e.g. reimbursement of additional costs), the Committee recommends retaining the existing rules at least for the time being, so that grant recipients do not lose out.

1.4

The Committee welcomes the planned new support ceilings for grant recipients and their respective areas of activity. In particular, it also welcomes the fact that this will lead to improvements in support for SMEs.

1.5

The Committee recommends the equal treatment of all research institutes that receive their core funding from the State, irrespective of their legal status.

1.6

The Committee recommends that in the future parties to contracts be given greater freedom in the contractual arrangements, but also in the choice of instruments. This concerns in particular access rights to foreground and/or background owned by one of the parties. Royalty-free access rights should be offered here as an option, but not unconditionally — as has been proposed for certain cases.

1.7

See chapter four for further details.

2.1

In its proposal for the Seventh R&D Framework Programme (2007–2013) (1), abbreviated as the FP7, the Commission outlined the objectives, content, themes and budget for its support of research, technological development and demonstration activities during this period. The Committee has already adopted opinions on the framework programme (2) and on the preparatory and accompanying proposals in particular for the specific programmes (3).

2.2

The Commission proposal discussed here concerns the conditions, rules and procedures which apply to the participation of undertakings, universities, research centres and other legal persons in actions under the Seventh R&D Framework Programme, in the sense of their receiving support from the programme.

2.3

An important point which should be noted here is that the Commission intends to simplify the administrative procedures associated with research funding. This intention was welcomed and endorsed by previous opinions; for its part, the Committee reiterates its previous recommendation that administrative procedures should be made simpler and less burdensome, thus enhancing the effectiveness of the European research programme: ‘as they stand, the application and approval procedures involve too much work and are too expensive, causing difficulties for scientific and industrial users. The European research programme must be a worthwhile venture for those taking part in it, including in terms of the risk involved in making the application. This also applies in particular to smaller players, such as SMEs or smaller research groups from universities and research centres’  (4). According to the Commission's statements, the proposed rules for participation are intended to bring about such simplification.

2.4

The Commission proposal thus explains the applicable rules aimed at ensuring that Community funding for research and development under FP7 is as effective, efficient and fair as possible.

2.5

The proposed rules for the participation of undertakings, research centres and universities should therefore ‘provide a coherent and transparent framework to ensure efficient implementation and ease of access for all participants in the Seventh Framework Programme’. They are intended to promote a wide range of undertakings, research centres and universities and enable participation from the outermost regions of the Community.

3.1

The Rules for Participation for the Seventh Framework Programme proposed by the Commission are intended to implement many aspects of that simplification and to build upon principles established in the Sixth Framework Programme (FP6). A few important points are briefly summarised in this chapter.

3.2

The Commission's proposal covers the following aspects: introductory provisions, conditions for participation in indirect actions and the relevant procedures, the Community financial contribution, rules for dissemination and use of findings, access rights to and protection of background and foreground, and the role of the European Investment Bank.

3.3.1

At least three legal entities must participate in indirect actions, each of which is established in a Member State or associated country, and no two of which are established in the same Member State or associated country.

3.3.2

For coordination and support actions, and actions in favour of training and career development of researchers, the minimum condition is the participation of one legal entity.

3.3.3

For indirect actions to support investigator-driven ‘frontier’ research projects funded in the framework of the European Research Council, the minimum condition is the participation of one legal entity established in a Member State or in an associated country.

3.4.1

For research and technological development activities, the Community financial contribution may reach a maximum of 50 % of the total eligible costs.

3.4.1.1

However, in the case of public bodies, secondary and higher education establishments, research organisations (5) and SMEs, it may reach a maximum of 75 % of the total eligible costs.

3.4.2

For demonstration activities, the Community financial contribution may reach a maximum of 50 % of the total eligible costs.

3.4.3

For activities supported by frontier research actions, coordination and support actions, and actions for the training and career development of researchers, the Community financial contribution may reach a maximum of 100 % of the total eligible costs.

3.4.4

For management and audit certificates, and other activities not covered by paragraphs 1, 2 and 3 of Article 33, the Community financial contribution may reach a maximum of 100 % of the total eligible costs.

3.4.5

For Networks of Excellence, a special lump sum is proposed. The amount of the lump sum is established by the rules for participation as a fixed amount calculated according to the number of researchers to be integrated in the Network of Excellence and the duration of the action.

—

The Rules identify the procedures for issuing calls for proposals, for submission, evaluation, selection, award and support for proposals.

—

The evaluation process developed for previous framework programmes is continued without major changes. A model grant agreement will be established by the Commission that will establish the rights and obligations of participants vis-à-vis the Community and each other.

—

Three forms of grants are proposed: reimbursement of eligible costs, lump sums, and flat-rate financing. For frontier research actions, the European Research Council's Scientific Council will propose appropriate funding arrangements.

3.6

There should be as much continuity as possible in the rules for dissemination and use and access rights (ownership, protection, publication, dissemination and use, and access rights to background and foreground). The changes should allow participants more flexibility as their projects progress. The option of excluding background and of defining terms and conditions other than those established by the Rules remains. The coherence of dissemination and publication requirements has been improved.

3.7

As in the Sixth Framework Programme (FP6), participants in a consortium will have the responsibility to fully carry out the tasks entrusted to them even if one of the participants fails to comply with assigned tasks. However, the principle of financial collective responsibility established in FP6 for most actions is not continued. Depending on an assessment of the risks inherent in European research funding to the Community budget, a mechanism may be introduced to cover the financial risk of a participant's failure to reimburse any amount due to the Community. Therefore, bank guarantees are only to be requested in the rare case in which pre-financing represents over 80 % of the grant.

4.1

Simplification. The Committee supports the extremely important objective of simplifying all of the procedures that the Commission had been using until now or that the Commission has requested of R&D actors. The Committee sees its comments as a constructive contribution to their achievement and is aware that achieving this objective is not straightforward, given the general budgetary rules and the call for transparency — a call which the Committee itself subscribes to. It would be particularly useful to try out administrative procedures which have been simplified even further, within the limits of what is legally possible, on selected pilot projects; the resulting experiences could help in reaching decisions on future measures.

4.1.1

Improvements. The Committee recognises that the Commission has made efforts to achieve this aim and to ensure that the Community provides the best possible support for research. In that connection, it regards many points in these proposals as clear improvements to the existing procedures, for example with regard to reimbursement of costs (Articles 30 and 31), to forms of grant, as well as to grant agreements, contracts and appointment letters (Articles 18 and 19); however, in the latter case the new rules will only represent an improvement if payment and above all reporting arrangements are also simplified. In that connection, the Committee would also refer to its earlier recommendations on simplification (6), which, among other things, concern the harmonisation of the procedures requested by the Commission with those of other funding or supervisory bodies in terms of content and timetable (7).

4.1.2

Standardisation. Efforts to standardise the procedures followed or requested by the Commission — e.g. costing or credit rating — more closely also serve to meet the objective of simplification. In the interests of the Single Market and also of greater legal certainty, the Committee fully concurs with this (8). Unfortunately, full standardisation will not be achieved unless the various recipients of grants, such as universities, in the different Member States for their part apply standardised or aligned accounting systems.

4.2

Other rules and measures. To achieve simplification and standardisation, the Commission will need to adopt further measures, which are as yet only outlined in the proposal, for example in Article 16.4: ‘The Commission shall adopt and publish rules to ensure consistent verification of the existence and legal status of participants in indirect actions as well as their financial capacity’. Since these other rules, referred to henceforth as ‘the Commission's internal implementing rules’, are still pending, in certain cases it is still too early to assess what the impact of the corresponding proposals of the Commission will be.

4.2.1

Consistent interpretation and criteria. Furthermore, the Committee expects consistent interpretation of the Commission's internal implementing rules, especially those concerning the legal and financial aspects of projects, in all relevant Commission departments, enabling further progress towards simplification and standardisation and ensuring that the respective R&D actors do not lose out by comparison with existing arrangements. In general, the Committee recommends additional clarification in the Commission's internal implementing provisions to close any remaining loopholes in the Commission's proposal, in the interests of legal certainty.

4.2.2

Support measures. However, the helpdesks and ‘clearing houses’ proposed or already provided by the Commission should ensure that the messages given out by the Commission are consistent and uniform. The Committee sees this as a important and useful measure. However, it should also be ensured that a consistent approach is followed in internal Commission procedures and in the requirements and decisions of project officers.

4.2.3

Reporting requirements. For example, it is also important to avoid situations, apart from in well justified exceptional cases, in which project officers request mid-term reports over and above what is required by the rules, and in which several versions of identical information have to be included in various reports (9). It is also important to standardise reporting requirements, not only in terms of formal requirements but also in terms of content.

4.2.4

Mid-term assessment. In view of the fact that the 7th Framework Programme will run for seven years, the Committee also recommends that a mid-term assessment of both the programme and the rules for participation be carried out halfway through this period in order to make any necessary adjustments.

4.2.5

Project officers. Another important requirement for simplification, standardisation and for effective administrative procedures in general, which also serves to maintain the necessary continuity (see next point), is for project officers to have detailed specialist knowledge of the subject in question and to know the persons concerned; project officers cannot confine themselves to a purely administrative role unless they have in-depth subject and background knowledge. The Committee would refer to its recommendations (10) on this point (11), which it has reiterated on several occasions.

4.3

Continuity. Given that any change in the rules means a break in continuity and additional friction, it is important to carefully consider whether the Commission's proposed changes would actually translate into significantly enhanced efficiency so as to outweigh such disruption, or whether it would be better to retain the existing rules. The Committee acknowledges that the Commission's proposal envisages retaining many rules which have proved effective. However, in the case of some proposed changes it is not clear whether they would actually represent an improvement on existing rules. In such cases the Committee recommends that continuity should be the primary consideration.

4.4

Community financial contribution — reimbursement and forms of support. Subject to a satisfactory resolution of the questions which are still open (e.g. in point 4.5), the Committee sees the relevant Commission proposals as a substantial improvement and supports them.

4.4.1

SMEs. In particular, the Committee welcomes (Article 33-1, second sentence) the increase in support ceilings, e.g. (12) for SMEs from 50 % to 75 %. It sees this partly as a reflection of its earlier recommendation to offer more and better incentives for greater SME participation in the Seventh R&D Framework Programme and also to promote closer networking of SMEs and research institutes (13).

4.4.2

Higher education establishments etc. The Committee also welcomes the fact that support ceilings will rise to 75 % in public bodies, secondary and higher education establishments and research organisations as well (also Article 33-1, second sentence). In that connection, it recommends that Article 33 be worded more clearly so that it is possible to distinguish more easily between profit and non-profit making parties.

4.4.3

Average rates for personnel costs. The Committee believes that giving participants the option of applying average rates for personnel costs could help to achieve simplification (Article 31-3 (a)).

4.4.4

Management costs. In the interests of maintaining the necessary continuity, the Committee also welcomes the fact that 100 % reimbursement of management costs will continue. However, the proposal to unconditionally do away with the previous ceiling of 7 % for this type of expenditure could cause problems, unless stringent standards are applied to the necessary management costs in some other way. Admittedly, the previous 7 % ceiling was found to be too low, given that administration, coordination, etc. required a great deal of expenditure, and it should therefore be raised. However, unlimited reimbursement of all administrative costs should not be allowed to result in an unwelcome inflation rather than reduction in management costs.

4.5

Additional costs for universities. Under the Commission proposal, universities and similar research institutions should no longer be able to have 100 % of their so-called additional costs (14) reimbursed. Although other accounting models are proposed, the Committee feels that the proposal could cause problems, given that such institutions do not usually have suitable analytical accounting procedures to calculate full costs (15). What is more, it is too early to tell if the possible alternative of a flat rate proposed by the Commission will make them significantly worse off, as the Commission's internal implementing rules for this proposal are still pending (see above). Therefore, if full cost accounting is not available to these institutions, the Committee recommends retaining the existing rule on 100 % reimbursement of additional costs, at least until it is certain that other accounting models (16) will not result in these institutions losing out by comparison with existing arrangements.

4.6

Legal status of research organisations. The Committee feels that research organisations which are mainly State-funded should receive equal treatment in all respects (and in all articles of the regulation, for example Article 33-1 and Article 38-2), irrespective of their legal status. This means for example that non-profit making research organisations or research centres established under private law which receive their core funding from the State (17) should also be placed on an equal footing with public-law organisations. Ultimately, the choice of most appropriate legal status for such research institutes lies within the legislative competence of the Member States, and should certainly not result in any differentiation of Community research funding.

4.7

Intellectual property. The rules proposed in Articles 39-43 are intended to ensure that rights to intellectual property derived from findings financed by EU taxpayers' money cannot be transferred to companies outside Europe without being subject to any controls.

4.7.1

Open source software. In general, the only chance that software developed within the framework of Community funded research projects currently has of becoming widely available and widely used and of therefore producing spin-off commercial versions or services, is if it is offered as ‘open source’. For this purpose, the consortium should be granted as much freedom as possible as regards license conditions.

4.8

Access rights. Access rights (Articles 48-52) (18) to foreground and/or background owned by the parties do not concern all foreground and background owned by one of the parties (e.g. a university or research centre), but only to foreground and background derived from the work or preparatory activity of organisational entities or groups involved in the relevant joint project and which are needed by the other participants in the indirect action to complete their work. The Committee therefore welcomes Article 48 which enables this issue to be clarified separately for each project through the drawing up of positive and/or negative lists  (19) agreed by all parties to the contract. Furthermore, positive lists can also be used to prevent any disclosure of the existence of background which is to be kept confidential. However, in order not to slow down the start of the project unnecessarily, it would make sense to set a deadline of e.g. up to six months after the beginning of the project for these lists to be drawn up.

4.9

Royalty-free access to foreground and background. The Committee has reservations about regulations that will grant unconditional access to foreground and background on a royalty-free basis. In general, it recommends that project partners be granted as much freedom as possible so that they are able to reach the most appropriate agreement. It may make sense, for example, to also grant R&D actors royalty-free access rights.

4.9.1

Background for the implementation of a measure. The proposal to always grant R&D actors royalty-free access rights to background, as long as it is essential for the implementation of an indirect measure, is to be welcomed in principle. In certain cases, however, an exclusive regulation of this type can cause difficulties for the relevant actors. The Committee therefore recommends modifying the final sentence of Article 50-2 (20).

4.9.2

Background for the use of foreground. However, the proposal to always grant R&D actors access rights to background royalty-free, as long as it is essential for the use of foreground, could cause problems. Background was acquired using R&D actors' own resources, the resources of former funding bodies or with the public resources of the respective Member States, and is subject to relevant obligations and conditions (21). Should the proposed Commission regulation be applied, there is a risk that especially powerful R&D actors, and those actors with a high level of know-how potential would not be able or even willing to participate, and therefore would be excluded from participating. The Committee therefore recommends deleting or modifying Article 51-5 (22).

4.9.3

‘Frontier’ research. Although most of the research and development activity envisaged as part of ‘frontier’ research is in the field of basic research, the distinction between basic and applied research is often (23) blurred, as the Committee has pointed out on several occasions. Therefore the same negative outcomes mentioned above are to be expected here. This should be avoided at all costs and thus taken into account in the regulations. The Committee therefore recommends deleting Article 52-1 or modifying it accordingly (24).

4.9.4

Specific Groups. There is no definition in the Commission proposal of the work for Specific Groups. It should certainly not be confused with the definition for ‘frontier’ research, or even considered to be the same.

4.10

Free choice of instruments. The Committee reiterates its recommendation (25) that projects should not be tied in advance to particular instruments, but that ‘applicants must be able to adjust the structure and size of projects to best suit the task at hand. Otherwise, projects will be established whose size and structure are determined by the prescribed policy tools rather than by optimum scientific and technical requirements. The tools must serve R&D working methods and objectives — never the reverse.’ To this end, the option of Specific Targeted Research Projects (STREPs) should be continued, as they are a particularly suitable instrument for supporting participation by SMEs and smaller research groups.

4.11

Discontinuation of the principle of financial collective responsibility. The Committee is pleased that the principle of financial collective responsibility is to be discontinued; it would point out that it has already referred to the problems arising from this in its recommendations on the sixth framework programme (26).

4.11.1

Risk fund. The Committee therefore supports the proposal to establish a risk fund to cover possible defaults, with a small percentage of the financial contribution to indirect actions being paid into the fund (Article 38(1)). However, it would be advisable for the Commission to specify the proposed range of percentages when publishing the proposal, depending on the estimated level of risk. The Committee is also pleased that possible surpluses from amounts set aside to cover risks will be reimbursed to the framework programme and constitute earmarked revenue.

4.11.2

Exemption. However, the Committee would recommend that Article 38(2) exempt all research institutes which receive their core funding from the State, irrespective of their legal status, from this requirement (27).

4.11.3

Project abandonment. The Committee would also refer to the proposed technical collective responsibility of project participants (see Article 18(4)). In the Committee's opinion, even a consortium should have the option of deciding to abandon a project if excessive expenditure or scientific or technical considerations mean that continuation ceases to be worthwhile or reasonable. Articles 18(4) and 18(5) should be amended accordingly.

4.12

Programme committees. Under the Commission's proposal, programme committees responsible for streamlining procedures will no longer have the task of approving funding for proposed projects. In the Committee's view, this should only happen if the Commission selects projects on the basis of assessors' evaluations. Otherwise, work programmes and budget allocation should remain subject to approval by the relevant programme committee. (A possible compromise would be to submit a ‘call implementation plan’ after completion of evaluation to the programme committee for it to discuss and formally adopt.) This would not slow the process down in any way as the programme committee would no longer be taking decisions on individual projects.

4.13

Grant agreement. The relevant Article here (19-8) makes reference to the Charter for Researchers and the Code of Conduct for the Recruitment of Researchers. The Committee would like to point out that this Charter is only a recommendation and is therefore not binding. Furthermore, the Committee notes that it actually welcomes many elements of the Charter but that it has also recommended that it be revised, in particular because it contains too many regulations and certain criteria are not clear (28).

4.14

European Investment Bank. The Committee welcomes the proposal for a grant for the European Investment Bank to cover risks arising from loans in support of the research objectives of the Seventh R&D Research Framework Programme, and the proposed accompanying rules. Such loans should be provided for demonstration projects (e.g. in the fields of energy or security research) in particular.

16.12.2006   

EN

Official Journal of the European Union

C 309/41

1.1

The EESC welcomes the Commission's proposals on the new rules for the participation of undertakings, research centres and universities in implementing the Seventh Framework Programme (FP7) in the areas of research, development and training in the nuclear sector and the dissemination of its results for the period 2007-2011.

1.2

The proposals aim to simplify and streamline procedures and methods with a view to the practical implementation of the Lisbon strategy, as redefined by the European Councils in 2005 and March 2006, and in order to meet the needs of the various research players and end users. However, final judgment on the success of these measures can only be made after the implementation rules are finalised.

1.3

The Commission proposals up to and including Chapter III are virtually identical to those relating to the 7th RTD Framework Programme in the non-nuclear sector (1), even though the numbering is different (2). The Committee therefore refers to its opinion on the subject and reiterates and draws attention to the comments contained therein (3) which are also of relevance to the text of the proposal currently under review, up to and including Chapter III.

1.4

In particular, the Committee believes that the European nuclear fusion programme is a text-book example of genuine integration of Community efforts and of fully coordinated action, in the framework of the European Fusion Development Agreement (EFDA) and the Contracts of Association.

1.4.1

This programme plays a key role for the EU in the area of fusion energy research, and leads to ongoing Community support in the form of financial and human resources and is enhanced by high environmental sustainability through the ITER/DEMO project activities (4).

1.5

The Committee is convinced that nuclear energy (5), which generates approximately one third of the electrical energy currently produced in the European Union (6), contributes to the independence and security of energy supplies (7) and to the sustainability of European economic development, in line with the Kyoto Agreements; this, however, is on condition that better, more efficient and safe waste management standards are applied and that competitive European research and industries in the area of nuclear technology and services can be developed.

1.6

The Committee considers that appropriate levels of Community funding are scheduled for research, training, demonstration activities, coordination and support, networks of excellence, and the financing of fusion energy research.

1.6.1

The EESC stresses the need to promote research and the application of clean and safe technologies, in accordance with the needs and characteristics of individual Member States and urges that respect be shown for the decision of those Member States which do not consider that nuclear energy provides the answer to the problem of how to meet their future energy requirements and also take account of this stance in their research programmes.

1.7

The EESC highlights the role of training activities and programmes designed to develop careers in research and stresses that these actions are particularly important for the private sector, civil society and the general public.

1.8

The EESC believes that to enable participation in EURATOM FP7 and its specific programmes, it is vital to provide a framework of rules that is simple, comprehensible, clear-cut and transparent and that, above all, can provide certainties to potential players, particularly those of a smaller scale, on the principles and criteria that govern access to contracts and project management, as well as their evaluation, selection and formulation.

1.8.1

The EESC regrets that this is not always reflected in the proposal and believes that the efficacy of these rules should be monitored by independent experts after a reasonable period of time and that the assessment report should be submitted to the Council and the Committee.

1.9

The Committee considers that in order to respect the ‘value for money’ principle vis-à-vis European taxpayers, the promotion and dissemination of research results is essential. It therefore points out that a fair balance must always be struck between, on the one hand, the protection of Community interests and the concerns of the Member States, not least as regards defence, and intellectual and industrial property rights, and on the other, the equally significant risks that could arise in cases of an inadequate dissemination of scientific and technical information in the sector concerned.

1.9.1

Lastly, the Committee believes it is essential that the IPR helpdesk be reinforced in order to offer timely and proactive assistance to potential participants in grant agreements and for indirect measures to support researcher training and development, as well as for the preparation and signature of consortium agreements.

2.1

The EESC welcomes the fact that this matter has been referred to it in good time, and is fully aware that it has exclusive powers regarding consultation on EURATOM Treaty matters. The EESC attaches great importance to these powers, in view of the extremely sensitive nature of nuclear energy within society and the need for proper information and consultation.

2.2

Atomic energy raises serious public involvement issues, on account of the major risks and waste processing problems inherent in the sector.

2.2.1

The EESC calls for a clear statement of intent to strengthen performance and safety/security evaluation models in this area by means of permanent information, consultation and training structures.

2.2.2

The aim should be to launch a process of better governance with a view to identifying the best strategic options, and to addressing public concerns about the use of nuclear energy and its long-term impact.

2.3

The Committee has already expressed its views (8) on the Commission's proposals for simplifying (9) administrative procedures and reducing the effort these involve, in the context of the proposed decisions on the EC Seventh Framework Programme and the EURATOM Seventh Framework Programme, which were adopted on 6 April 2005.

2.3.1

The Commission has singled out ten fundamental measures as being ‘crucial factors for success’, which are to be implemented with a view to simplifying the procedures for accessing, participating in and managing the FP7. The EESC has stated on the subject that ‘As they stand, the application and approval procedures involve too much work and are too expensive, causing difficulties for scientific and industrial users. The European research programme must be a worthwhile venture for those taking part in it, including in terms of the risk involved in making the application’ (10).

2.3.2

The EESC has also stressed the importance of involving SMEs ‘even more closely in research, development and innovation’ and has emphasised that ‘to win, SMEs set up specifically to develop and market innovative high-tech products above all need [adequate] start capital and venture capital’. In order to achieve this, ‘procedures must be kept practicable and in due proportion to the resources of SMEs’ (11).

2.3.3

The Commission set out the following points on simplifying regulation procedures:

2.4

Furthermore, the current proposal presents several changes with respect to the previous Regulation (12), in particular with regard to: the aim of the proposal; definitions; confidentiality; the evaluation, selection and attribution of proposals; the different forms of grants; refund of costs; the ceilings for Community contributions; consortium risks; the dissemination, use and rights of access; specific rules for the European Fusion Development Agreement and the Agreement on Staff Mobility.

2.4.1

With regard to those sections which are common to the present proposal and the counterpart proposal on the EC Seventh Framework Programme (Proposal for a Regulation of the European Parliament and of the Council laying down the rules for the participation of undertakings, research centres and universities in actions under the Seventh Framework Programme and for the dissemination of research results (2007-2013) (13), the Committee would refer to the opinion which it is currently drawing up on the latter proposal (14).

2.5

The Committee agrees with the limits set for nuclear research funding and training. It particularly welcomes the fact that contribution ceilings will rise from 50 % to 75 % for SMEs, public bodies, education establishments, universities and research organisations (15), and that coordination and support actions, and actions in favour of training and career development of researchers may reach a maximum of 100 % of the total eligible costs.

2.5.1

Furthermore, the Committee suggests indicating, in a table to be appended to the proposal, the various types of activity and the relevant maximum contribution rate in place, as well as the possibility of combining these contributions, particularly for research infrastructure, with other types of Community aid (Structural Funds, etc.).

3.1

The EESC regards it as essential to ensure a framework of rules for participation in the 7th EURATOM framework programme and its specific programmes that is simple, comprehensible, clear and transparent, and exists in all the Community languages. This framework should in particular provide potential participants, especially smaller bodies, with certainty about the principles and criteria covering availability, participation conditions, presentation and assessment of project proposals, classification and contractual obligations, rates and systems for distributing Community co-financing, protection of industrial and intellectual property and exploitation and diffusion of knowledge, without prejudice to specific provisions on the thematic priority for fusion energy.

3.1.1

In particular, the Committee recommends that, with the exception of any particular predefined criteria, the selection and award criteria for the indirect actions covered by Article 14, are reincorporated. These general criteria are:

3.2

The Committee has already given its view on the general themes relating to the simplification and rationalisation of the framework programmes for Community nuclear research, in its opinions on the 7th EURATOM framework programme and on these two specific programmes covering (a) nuclear energy with special reference to fusion energy research and (b) the nuclear research activities of the Joint Research Centre. The Committee is also drawing up an opinion on the proposal for participation rules relating to the 7th framework programme of non-nuclear Community research (16).

3.3

As regards the rules governing the EURATOM programme, the Committee attaches special importance to the need for a more radical simplification of the formalities concerning the presentation of the files.

3.3.1

The Committee is pleased that the joint responsibility previously provided for in EURATOM FP6, which could have been a significant obstacle to the participation of small and medium-sized bodies (firms, universities, etc.), has been removed from the current proposal. Instead, the Commission may retain approximately 1 % of the Community contribution (17), as a guarantee against the risk of lack of coverage in consortia (Article 37). A considerable part of the research activities in the EURATOM sector can also be entrusted to small and medium-sized bodies, for whom this rule could have been a serious obstacle to participation.

3.4

The EESC has reservations about the large number of possible derogations to the participation rules laid down in the more than 50 articles proposed, as well as the considerable possibilities of varying criteria and regulations being laid down in the annual work programmes, the specific programmes and the invitations to present proposals. These derogations concern in particular: the number of participants and additional access conditions (Article 11); the principles of evaluation, selection and award (Article 14 (1)); the exceptions to the publication of invitation to tender (Article 13); the evaluation criteria with the possibility of laying down additional specific criteria (Article 14 (2)); the Community financial contribution to networks of excellence (Article 34(1) and (3)).

3.4.1

With regard to networks of excellence, the Committee has serious reservations about making the contribution in the form of a flat-rate sum, as it may never materialise and prove to be completely out of touch with reality. This could hamper the development of networks of excellence, which are necessary to the achievement of the specific objectives set out in the programme.

3.5

The Committee underlines that the necessary flexibility of management and definition of the needs in individual projects should not be achieved at the cost of the clarity, certainty and transparency of the participation requirements, the predefined evaluation and selection criteria, and a firm framework for the proposed financing and co-financing arrangements.

3.6

The Committee takes the view that when the grant agreement allows the research consortium the possibility of using invitations to tender to carry out certain work or extend certain activities, the invitations to tender should be organised according to the rules laid down by the Commission, to ensure maximum transparency and accessibility of information.

3.7

The EESC underlines the importance of the provisions on monitoring and control of the programmes and indirect actions for research, demonstration, coordination and training in the nuclear field; it also suggests establishing a ceiling for expenditure on those functions and on the management of invitations to tender, assessment, selection and contract follow-up and auditing of the financed projects. This ceiling should not exceed an overall cost equivalent to between 7 % and 10 % of the overall Community resources of the 7th EURATOM framework programme. The aim should be to devote the bulk of the resources to genuinely primary activities (research, demonstration and training) and to the achievement of practical results which can be transferred to market applications, which are the final objectives of a Community framework programme of research.

3.7.1

In this context, the EESC recommends that, in the framework of IDABC (18), the compilation, archiving and management of the monitoring results are stored in an integrated database.

3.8

The Committee welcomes the Commission's proposals as regards the forms of grants: reimbursement of eligible costs in the form of a lump sum or flat-rate financing. However, it suggests that the most suitable methodology should be clarified, including with regard to simplification of eligible costs, and that a prospectus of the various options be appended to the regulation to make it more comprehensible to potential users.

3.9

The Committee recommends summarising the various types of Community financial contribution described in Articles 32 and 34 in a table and annexing it to the proposal. This table should include upper funding limits and any possibilities for combining them (particularly for research infrastructure) with aid from the Structural and Cohesion Funds, the European Investment Bank and the European Investment Fund, not forgetting provisions made in the JEREMIE initiative (19) that should facilitate the participation of smaller bodies in the 7th EURATOM framework programme.

3.10

As for the proposed rules on dissemination, use and access rights, notwithstanding the distinction between acquired and previous knowledge and exceptions in the military and security fields, the Committee believes it is essential that the IPR helpdesk be expanded in order to offer timely and proactive assistance to potential participants in grant agreements (see Article 18(5) and (6), and Articles 19 and 21) and indirect measures to support researcher training and development, and for the preparation and signature of consortium agreements, which lay down additional rules on the dissemination and use of results and intellectual property rights (Article 23).

3.11

Lastly, with regard to the ‘Fusion energy research’ thematic area, in the two opinions mentioned earlier the Committee placed great emphasis on the importance of controlled thermonuclear fusion research in the context of the ITER project, the preparatory programme (DEMO), and studies on confinement (20).

3.11.1

The EESC takes note that the annual base rate proposed for the Community's financial contribution in the above-mentioned thematic area should not exceed 20 % over the duration of the 7th EURATOM framework programme. The Committee considers this rate as the necessary lever for an essential contribution by the Member States to a well coordinated (see point 1.4) community programme providing the indispensable basis, anchorage and input for the Joint Undertaking ITER and to DEMO. While this rate may be appropriate for a start, it is questionable whether it will be sufficient over the whole duration of the programme as the incentive for a satisfactory and necessary funding contribution on the part of the Member States. The Committee therefore recommends that, as a precautionary measure, this rate be raised to 25 %, which would still be only half or one third (with respect to Article 32, §1) of what would otherwise be contributed by the Community. Moreover, the Committee feels that these upper limits, as a rule should also be applied.

3.11.2

Concerning the proposed maximum contribution rate of 40 % for specific cooperative projects in the area of Contracts of Association, with priority support for ITER/DEMO initiatives and for initiatives in the context of the Agreement on Staff Mobility, the Committee questions whether, in the long run, this rate may be sufficient for desired projects or actions to initiate the required member states contribution. The Committee refers to Article 52, point 2.

4.1

The Committee questions the removal from Subsection 1 (‘Calls for proposals’) of the provision relating to the possible prior issue of calls for expressions of interest, to enable a measure's objectives and justification to be accurately pinpointed and assessed and to avoid the unnecessary administrative costs involved both in preparing proposals that cannot be adopted and in submitting them to the Commission and independent assessors for selection and evaluation.

4.2

Calls for expressions of interest could be accompanied by Proposers' Information Days, designed to involve potential scientific and industrial users more closely in defining Community nuclear research policy initiatives.

4.3

The EESC would stress the potential dangers of the insufficient dissemination of scientific and technical information in the sector. While recognising that some reservations should be expressed on this subject, there is no need to rule it out entirely. In practice this might mean drawing up an extremely precise technical protocol for content and dissemination methods, taking into account the requirements of security/safety and reliability, while safeguarding a maximum of transparency.

4.4

The EESC feels that it is very important to provide greater information on the rules governing (i) checks that the necessary conditions are met, and (ii) the legal status of participants, and to disseminate them more widely. Similarly, clear and comprehensible rules on the simplified procedures in place for the two-stage submission of proposals and criteria and requirements for the two-step evaluation should be made available to all research players.

4.4.1

These rules should be made available not only to the expert evaluators, but also to project proposers, in accordance with unambiguous and uniform criteria.

4.5

The EESC would also stress the benefits of organising training and information initiatives on the safety/reliability of nuclear power, not only for researchers but also for representatives of civil society and for the general public, while also bolstering instruments and procedures for the development of sound, watertight models for assessing the reliability and safety of atomic energy.

4.6

On the assessment of research results, their dissemination and the protection of intellectual and industrial property rights, a number of rules and safeguards are provided for by the present proposal, the grant agreements, the consortium agreements, Article 24 and the other provisions of the EURATOM treaty (21), the Contracts of Association, the European Fusion Development Agreement, the European joint undertaking for ITER and related international agreements, and, lastly, multilateral agreements such as the Agreement on Staff Mobility. Additionally, the EESC thinks that a revised ‘IPR-EURATOM guide for proposers’ should be disseminated as widely as possible, outlining obligations and benefits for potential participants in the research, demonstration, training and development activities of the 7th EURATOM framework programme in a clear and transparent way.

16.12.2006   

EN

Official Journal of the European Union

C 309/46

1.1

Regarding the tramp and cabotage sectors, the EESC endorses the proposed extension to these sectors of the procedural competition rules of Regulation 1/2003 (1). It appreciates the ongoing discussions between the Commission and the shipping industry regarding the application of Articles 81and 82 to tramp shipping. In the absence of complaints and legal precedents in the tramp sector, more information will be required about its operation and agreements. The EESC therefore welcomes the Commission's initiative to launch a study on the economic and legal characteristics of the tramp sector. For the sake of legal certainty, the EESC urges the Commission to provide guidance (prior to lifting the exclusion to Regulation 1/2003) regarding the self-assessment of the compatibility with EU competition law of various forms of cooperation agreement in the tramp sector.

1.2

With reference to the liner sector, the EESC notes the Commission's proposal's to repeal the block exemption of liner shipping conferences from the EC Treaty competition rules on the basis that the four cumulative conditions of Article 81(3) of the EC Treaty are no longer fulfilled. The Commission takes the view that repeal will result in lower transport costs, whilst maintaining reliability of services on all trades, and enhance the competitiveness of European industry. The EESC reserves its position to see whether the proposed repeal will have sustainable effect.

1.3

The EESC recommends the Commission to take the safety aspect (loss of quality shipping as a result of flagging out from the EU) into consideration — in addition to the pure competitive factors — when repealing the block exemption for liner shipping conferences.

1.4

The EESC recommends that the Commission should also take the human resources aspect (impact on employment for European seafarers) into consideration — in addition to purely competitive factors — when repealing the block exemption for liner shipping conferences.

1.5

The EESC notes the Commission's intention to issue appropriate guidelines on competition in the maritime sector so as to help smooth the transition to a fully competitive regime. The Commission intends to promulgate the guidelines by end 2007. Prior to this promulgation, the Commission — as an interim step in the preparation of the guidelines — will publish an ‘issues paper’ on liner shipping in September 2006. The EESC calls upon the Commission to draw up the guidelines in close contact with the relevant stakeholders and to inform the relevant EU institutions accordingly.

1.6

The Commission proposal is the result of a review process, which started in 2003, involving all relevant EU institutions and stakeholders. The Commission also contracted three studies from independent consultants, who looked into the issues arising from a repeal of the block exemption regime and whose findings are published on the website of the Directorate General for Competition.

1.7

The EESC has also taken note of the fact that the Commission's proposal to repeal the block exemption for liner shipping is based only on Article 83 of the EC Treaty (competition rules), whereas the legal basis of Regulation 4056/86 was Article 83 (competition rules) in combination with Article 80(2) (transport policy) of the EC Treaty. The EESC would appreciate some information from the Legal Service of the European Parliament about whether the transport considerations are ancillary to the competition considerations and whether the Service maintains its view about the dual legal basis as per its previous opinion (2).

1.8

The EESC, anticipating possible conflicts of law in the future resulting from legal instruments of other jurisdictions, urges the Commission to devise a provision in the guidelines tackling such problems. Such a provision regarding consultations will minimise frictions and lead to mutually acceptable solutions internationally.

1.9

The EESC notes that the Commission recognises that competition law is not applied in the same way in all jurisdictions throughout the world and that divergences exist. The Commission also recognises the increasing importance of international cooperation between competition law enforcement authorities.

1.10

The EESC welcomes the fact that the Commission is pursuing a dual policy of developing enhanced bilateral cooperation with the EU's main trading partners and of examining ways to expand multilateral cooperation in the field of competition. The EESC therefore encourages the Commission to accelerate efforts to ensure that such cooperation and dialogue will help to identify potential problems resulting from a repeal of Regulation 4056/86 in the EU and to solve such problems in a constructive way, thereby respecting the particularities of each others' legal system. Consistency in how liner services are dealt with between different countries is indeed vital to international trade.

1.11

The EESC calls upon the Commission to take into account the outcome of the dialogue and cooperation between the Commission and its main trading partners when drafting the guidelines on competition in the maritime sector.

1.12

The EESC acknowledges that the following elements have been referred to in the Explanatory Memorandum of the Commission proposal and maintains that they should be taken into account when drafting the guidelines on competition in the maritime sector:

1.13

The EESC believes that the Commission should also take into account the interests of small and medium-sized businesses in repealing Regulation 4056/86. Small and medium-sized businesses constitute the backbone of the EU economy and they play an important role in the context of the revised Lisbon Strategy. Markets should remain open to the current and potential competition, including small and medium-sized shipping operators.

1.14

The EESC maintains that although consolidation may have positive effects for EU industry (efficiency gains, economies of scale, cost savings), caution is needed to avoid that consolidation — which may follow the repeal of Regulation 4056/86 — results in fewer players in the relevant markets, i.e., less competition.

1.15

Under a new regime, the EESC invites the two interested parties at European level, — shippers and carriers — to engage in discussions on issues of mutual interest and significance.

2.1.1

Maritime transport services are key to the development of the EU economy with maritime transport carrying 90 % of the external trade and 43 % of the intra-EU trade. Maritime transport has been an international and globalised activity since antiquity. Basically, it is provided according to two types of services: liner and tramp which operate like buses and taxis of the seas respectively. The EU flagged fleet accounts for 25 % of the world fleet and EU shipowners control over 40 % of the world fleet. Another 40 % of the world fleet belongs to countries of the Pacific basin. EU shipping and its customers (charterers/shippers) operate in a highly competitive environment in overseas and European markets.

2.1.2

Regulation 4056/86 lays down detailed rules for the application of competition rules (Articles 81 and 82 of the Treaty) to liner shipping services to and from Community ports. Tramp vessel services, however, were excluded from the scope of Regulation 4056/86. Originally the Regulation had two functions. It contained procedural provisions for the enforcement of the EC competition rules in the maritime transport sector. This function has become redundant after 1 May 2004, when liner transport became subject to the general competition enforcement rules of Regulation 1/2003. Regulation 1/2003, however, does not apply to international tramp vessel services and cabotage services. Secondly, Regulation 4056/86 lays down certain specific substantive competition provisions for the maritime sector and notably a block exemption for liner shipping conferences allowing them under certain conditions to fix prices and regulate capacity.

2.2.1

The liner shipping market has changed considerably since Regulation 4056/86 was adopted. The continuing trend towards containerisation has led to an increase in the number and size of cellular container vessels and to an emphasis on global route networks in response to changes in global trade patterns. This has contributed to the popularity of new operational arrangements, to a decline in the significance of liner conferences and to a considerable increase in powerful outsiders. In other parts of the world, as in the US the introduction of the Ocean Shipping Reform Act (OSRA) 1999 has changed the rules for conferences serving the US trades allowing confidential service contracts. Today, global liner carriers operate mainly in East-West trades as well as in North — South trades, whilst small and medium-sized carriers mainly operate in the North — South trades and in European short sea shipping.

2.2.2

The UNCTAD Code of Conduct for Liner Conferences was originally devised to regulate the liner conference system in trades between developed and developing countries (3). Thirteen EU Member States and Norway have ratified, approved or acceded to the Code of Conduct and Malta signed but has not ratified it. It is (4) referred to in several EU agreements with third countries and in the acquis communautaire (Regulations 954/79, 4055/86, 4056/86, 4058/86). Despite its virtual redundancy in the deep-sea liner trades, legally speaking, the UNCTAD Code still exists.

2.2.3

Transport users (shippers and freight forwarders) have systematically questioned the conference system which they consider does not deliver adequate, efficient and reliable services suited to their needs. In particular, the ESC (5) believes removal of the block exemption of conferences will allow improved customer-provider partnerships focusing on logistics solutions that help EU businesses to compete internationally. Likewise, consumers would benefit from slightly reduced prices when rates charged on in-bound products to the EU declined. Shipowners, on the contrary, have been of the opinion that liner conferences have contributed to service stability and that the conference regime has enabled them — both globally and regionally — to cope with imbalances (whether seasonal or geographical or due to climate conditions) on most trades. Meanwhile, global carriers (members of ELAA (6)) and the ESC have entered into a dialogue with the Commission assisting it in developing an alternative system that is compliant with EC competition rules.

2.2.4

In 2003, the Commission launched a review of Regulation 4056/86 with the aim of determining whether reliable scheduled maritime services could be achieved by less restrictive means than horizontal price fixing and capacity regulation. To that end, the Commission issued a Consultation Paper in March 2003 and organised a Public Hearing with the relevant stakeholders in December 2003. Furthermore, the Commission issued a discussion paper in June 2004 and a White Paper in October 2004 followed by extensive consultations with interested stakeholders. The European Parliament (7) and the EESC (8) delivered their opinions on the White Paper on 1 December 2005 and 16 December 2004 respectively and they both concurred that review rather than repeal was the preferable course of action. In December 2005, the Commission eventually issued a proposal for a Regulation repealing Regulation 4056/86.

2.3.1

Although nearly 80 % of the entire maritime transport of dry and liquid bulk commodities worldwide operates on a tramp basis, this vast sector is a terra incognita to most. The basic characteristics of tramp shipping are: a globally competitive market, a close to perfect competition model, volatile and unpredictable demand, many small entrepreneurial companies, global trade patterns, ease of entry and exit, extreme cost effectiveness, and responsiveness to development of markets and shippers' needs. The tramp services market is highly fragmented and overall it has worked to the satisfaction of charterers and shippers without any major problems with competition rules, neither internationally nor within the EU. The absence of complaints regarding this sector is a further proof of its highly competitive and satisfactory characteristics. In view of the above, Regulation 4056/86 provides that tramp shipping services are activities to which it does not apply. Articles 81 — 82 of the EC Treaty apply directly to this sector. Moreover, international tramp vessel services (and cabotage services) do not fall within the scope of Regulation 1/2003 (procedural competition rules).

2.4.1

In view of the changes to the structure of the market and industry since 1986, the European Commission has concluded that the four cumulative conditions, as laid down in Art. 81(3) of the EC Treaty, for granting a block exemption to liner conferences are no longer fulfilled. For this reason, the Commission has proposed to repeal Regulation 4056/86 in its entirety and notably the liner conference block exemption (Articles 3 to 8, 13 and 26). Certain provisions considered redundant are also repealed in line with the EC's overall policy to reduce Community legislation (Articles 2 and 9). The Commission takes the view that such a repeal will result in lower transport costs, whilst maintaining reliability of services on all trades and enhancing the competitiveness of European industry.

2.4.2

Prior to repealing the block exemption for liner conferences, the Commission intends to issue guidelines on competition in the maritime sector so as to help smooth the transition to a fully competitive regime. The Commission intends to promulgate these guidelines by end 2007. Prior to this promulgation, the Commission — as an interim step in the preparation of the guidelines — will publish an ‘issues paper’ on liner shipping in September 2006.

2.4.3

The Commission proposal on repealing Regulation 4056/86 also contains a proposal to amend Regulation 1/2003 with a view to bringing international tramp vessel services and cabotage services under the scope of this Regulation.

3.1

The EESC believes that the current issue merits a balanced approach taking into account the following factors: the benefits of competition to the competitiveness of EU industry, the changing patterns of world trade and its effect on the provision of transport services, international transport implications for the EU's major trading partners as well as for developing countries, the views of global shippers and carriers, and the views of small and medium-sized carriers and shippers.

3.2.1

Tramp shipping operates in a global market under conditions of perfect competition. This unique characteristic of the tramp sector, recognised by practitioners and academics, was also acknowledged by the EU in Regulation 4056/86. The EESC understands the need to bring this sector under the procedural competition rules of Regulation 1/2003 and, therefore, endorses the proposed approach. The EESC welcomes the Commission's initiative to launch a study on the economic and legal characteristics of the tramp sector. For the sake of legal certainty, the EESC urges the Commission to provide guidance (prior to lifting the exclusion to Regulation 1/2003) regarding the self-assessment of the compatibility with EU competition law of various forms of cooperation agreements in the tramp sector. The absence of complaints and legal precedents in the tramp sector is a proof of its operation under conditions of perfect competition. In order to provide legal yardsticks for its self-assessment under EC competition rules, more information will be required about its operation and agreements. The EESC also appreciates the ongoing discussions between the Commission and the shipping industry regarding the application of Articles 81-82 to tramp shipping.

3.2.2

Concerning maritime cabotage the EESC agrees with the proposed treatment, i.e. cabotage to become subject to the procedural rules of Regulation 1/2003. The vast majority of agreements in this sector would not affect intra — EU trades nor create any restrictions on competition.

3.2.3

In the light of the above, the EESC agrees with the Commission's approach on the future treatment of the tramp and cabotage sectors.

3.3.1

Regarding the liner sector, the EESC notes the Commission proposal to repeal the block exemption of liner shipping conferences from the EC Treaty competition rules on the basis that the four cumulative conditions of Article 81(3) of the EC Treaty are no longer fulfilled. The Commission takes the view that such a repeal will result in lower transport costs, whilst maintaining reliability of services on all trades, and enhance the competitiveness of European industry. The EESC reserves its position to see whether the proposed repeal will have sustainable effect.

3.3.2

The EESC notes the Commission's intention to issue appropriate guidelines on competition in the maritime sector so as to help smooth the transition to a fully competitive regime. The EESC calls upon the Commission to draw up the guidelines in close contact with the relevant stakeholders and to inform the relevant EU institutions accordingly.

3.3.3

The Commission's proposal is the result of a review process, which started in 2003, involving all relevant EU Institutions and stakeholders. The Commission also contracted three studies from independent consultants, who looked into the issues arising from a repeal of the block exemption regime and whose findings are published on the DG COMP website.

3.3.4

The EESC has also taken note of the fact that the Commission proposal to repeal the block exemption for liner shipping is based only on Article 83 of the EC Treaty (competition rules), whereas the legal basis of Regulation 4056/86 was Article 83 (competition rules) in combination with Article 80(2) (transport policy) of the EC Treaty.

3.3.5

The EESC notes that the Commission recognises that competition law is not applied in the same way in all jurisdictions throughout the world and that divergences exist. The Commission also recognises the increasing importance of international cooperation between competition law enforcement authorities.

3.3.6

The EESC welcomes the fact that the Commission is pursuing a dual policy of developing enhanced bilateral cooperation with the EU's main trading partners and of examining ways to expand multilateral cooperation in the field of competition. The EESC therefore encourages the Commission to accelerate efforts to ensure that such cooperation/dialogue will help to identify potential problems resulting from a repeal of Regulation 4056/86 in the EU and to solve such problems in a constructive way, thereby respecting the particularities of each others' system/jurisdiction. Consistency in how liner services are dealt with between different countries is indeed vital to international trade.

3.3.7

The EESC calls upon the Commission to take into account the outcome of the dialogue/cooperation between the Commission and its main trading partners when drafting the guidelines on competition in the maritime sector.

3.3.8

The EESC acknowledges that the following elements have been referred to in the Explanatory Memorandum of the Commission proposal and maintains that they should be taken into account when drafting the guidelines on competition in the maritime sector:

3.3.9

The EESC recommends that the Commission should also take the human element into consideration (impact on employment for European seafarers) — in addition to purely competitive factors — when repealing the block exemption for liner shipping conferences. The EESC also requests from the Commission to evaluate the scope of this impact, especially through consulting the Sectoral Social Dialogue Committee on Maritime Transport.

3.3.10

The EESC recommends the Commission to take the safety aspect (loss of quality shipping as a result of flagging out from the EU) into consideration — in addition to purely competitive factors — when repealing the block exemption for liner shipping conferences.

3.3.11

The EESC believes that the Commission should also take into account the interests of small and medium-sized businesses in repealing Regulation 4056/86. Small and medium-sized businesses ‘constitute the backbone of the EU economy’ and they play an important role in the context of the revised Lisbon Strategy. Markets should remain open to the actual and potential competition, including for small and medium-sized shipping operators and shippers.

3.3.12

The EESC maintains that although consolidation may have positive effects for EU industry (efficiency gains, economies of scale, cost savings), caution is needed to avoid that consolidation — which may follow the repeal of Regulation 4056/86 — results in fewer players in the relevant markets, i.e., less competition.

3.3.13

Under a new regime, the EESC invites the two interested parties at European level — shippers and carriers — to engage in discussions on issues of mutual interest and significance.

4.1.1

The EESC notes that Regulation 4056/86 had a dual legal basis (Articles 80(2) and Articles 81-82 and 83 referring to transport policies and competition respectively), whilst the proposal maintains only one (Arts. 81-82). The EESC also notes that the single legal basis is upheld by the Legal Service of the Council. It would appreciate knowing from the Legal Service of the European Parliament whether the transport considerations are ancillary to the competition considerations and whether the Service maintains its view about the dual legal basis as per its previous opinion (December 2005).

4.2.1

The Commission proposes to abolish Article 9 of Regulation 4056/86 on the basis that it does not believe that a repeal of the liner conference block exemption would create the risk of possible conflict of international laws. The Commission's reasoning is that such a conflict of law would only arise if one jurisdiction prohibits something which another jurisdiction requires. The Commission is not aware of any jurisdiction that imposes such an obligation on liner shipping operators.

4.2.2

The EESC, anticipating possible conflicts of law in the future resulting from legal instruments of other jurisdictions, urges the Commission to devise a provision in the guidelines tackling such problems. Such a provision regarding consultations will minimise frictions and lead to mutually acceptable solutions internationally.

16.12.2006   

EN

Official Journal of the European Union

C 309/51

1.1

Cabin crew should be certified or licensed by a competent Authority in order to guarantee proficiency in their functions (safety, security, medical aspects, passenger management, etc), as well as technical qualifications on each aircraft type that they are required to work on.

1.2

Careful consideration must be given by the European Aviation Safety Agency (EASA) before allowing equipment suppliers autonomy to approve component designs without recourse to either EASA or the aircraft manufacturers.

1.3

Non European Airlines should be approved by EASA before they are allowed to fly into or to over fly EU airspace.

1.4

There should be only one rule maker and that must be EASA. This should allow for the future harmonisation of aerodrome regulations, and should as far as possible, avoid competitive distortion between EU and non-EU airports. EASA should be strengthened and given more powers, like those of the European Civil Aviation Conference (ECAC).

1.5

EASA should consider how best for the industry to protect the safety and integrity of communications, data links and onboard avionic systems such as electronic flight bags (EFB) from hacking.

1.6

EASA must ensure that future development of aircraft such as Light Business Jets (LBJs) are regulated to ensure that owners and fliers have sufficient flight hours before being allowed to commence flight operations. LBJs will have ceilings of 25 000 ft or more and should be required to meet the maintenance and operational standards of larger commercial jets.

1.7

EASA must have the necessary protocols in place before any consideration is given for the approval of unmanned aerial vehicle (UAV) flights outside segregated airspace.

1.8

Random drug and alcohol tests should be carried out on both flight and cabin crews.

1.9

EASA should also ensure that local regulators are properly qualified for the job, and also have enough staff and finance.

1.10

A detailed scientific study of the effect on flight and cabin crew of fatigue, stress, and deep vein thrombosis (DVT) should be undertaken by EASA.

1.11

A review of the policy and procedures for the granting of a General Aviation Pilots Licences and the certification of General Aviation aircraft should be carried out.

1.12

EASA should ensure that the introduction of a European General Aviation Licence, with endorsements, ratings, pertaining to the approved aircraft to be flown takes place.

1.13

Safety of crew, passengers and residents of areas affected by air corridors must over-ride political considerations in banning airlines using European air space.

2.1

With the cooperation of member states and their experts, a black list of 96 airlines has been published. 93 of them are facing outright bans and three are facing operational restrictions. Separately, France is considering the introduction of a new system of safety labels that could be used in advertising.

2.2

Europe has been under pressure to improve its aircraft safety legislation since early 2004, when a charter aircraft owned by Flash airlines crashed in the Red Sea killing 148 people, mostly French tourists. That crash highlighted the lack of co-ordination among governments about sharing safety information, since it then emerged that Flash had been banned by the Swiss aviation authorities.

2.3

Consistency and harmonisation among member states in relation to the standards of operation of airlines is crucial, if the black list is to have the desired effect. Member states must avoid a situation where for economic and social reasons one state decides that an airline listed is ‘marginally acceptable’ to operate on its airports while the other member states see the airlines standards as unacceptable.

2.4

However, Brussels has been asked to intervene in some disputes, notably, when Turkey was angered about a decision by some European Governments, led by Netherlands, to withdraw temporarily the landing rights of Onur Air, a budget Turkish airline on safety grounds. Separately, Greece is under pressure to make progress in its investigation of the crash of the Helios Airways aircraft that was flying from Larnaca in Cyprus.

2.5

Areas of concern are general maintenance standards, crew training, crew flying hours, and rest periods and fuel saving practices, and noise commitment, also air traffic control.

2.6

Since the increased competition in the aviation sector, and the precarious financial position of many airlines, has brought about increased pressure in crews to take off in conditions which they would not normally fly in, and also to fly planes that are not completely air worthy. The crews are under increasing pressure to take off as the airlines under EU regulations have either put up the passengers for a night, or compensate them for delays. All this impinges on safety. There is also the added problem that many national aviation authorities tend to turn a blind eye to the enforcement of many regulations, where the national airline is concerned.

2.7

Despite a ban in a number of European countries, because of safety concerns, a certain airline is still flying into Brussels and Paris. Switzerland, with its stern cultural fixation with business confidentiality, had banned 23 aircraft from flying through its airspace, although the names, and even the number of companies, remained classified.

3.1

Fatigue has been blamed in numerous aviation accidents over the years and is a continuing problem facing crews flying aircraft of all sizes. But how can a pilot recognise when he or she is too tired to fly? What roles do sleep cycles, dehydration, nutrition and illness play in identifying and responding to fatigue?

3.2

Pilots going through various time zones are bond to suffer fatigue and impairment of judgement. They are supposed to be able to take rest periods on long flights, but for this they need proper facilities which should include flat beds, etc.

3.3

There is plenty of evidence to show that fatigue is a factor in safety. In a recent National Transportation Safety Board report on the fatal crash at Kirksville, Missouri on the 19 October 2004 — The NTSB outlined ‘the less than optimal overnight rest time available, the early reporting time for duty, the length of the duty days, the number of flight legs, the demanding conditions — non-precision approaches flown manually in conditions of low ceiling and reduced visibilities — encountered during long duty days, it is likely that fatigue contributed to the pilots' degraded performance and decision making.’

3.4

True or not, no pilot with a modicum of experience can deny having occasionally had to battle a bout of fatigue or that it somehow affected their performance. The quality of sleep during rest periods is very important.

3.5

Diet and nutrition also play any important role. For example, any pilot from a brand new student to the about to retire captain will tell you that the beverage of choice among pilots is coffee. However, while coffee is a stimulant and causes a temporarily increased level of alertness, fatigue is symptomatic of its withdrawal. Furthermore, coffee is a diuretic, which causes the body to discharge more fluid than it is taking in, resulting in dehydration, which in turn can cause fatigue.

3.6

Boredom is a major problem with tiredness on long haul flights, where aircraft are almost completely automatic. To keep the crew alert, some airlines particularly in trans-Siberia flights insist that the automatic pilot is re-set every hour.

3.7

Many of the accidents in aviation are due to pilot error, and fatigue is a major cause of those errors.

3.8

It is planned for EASA to take over the licensing process and replace the current JAA in this area, however the use of International Civil Aviation Organisation (ICAO) licences obtained in the US and operated by pilots in Europe may not be affected by this change.

4.1

All improvement regarding rest requirements for flight crew should — where practicable — also apply to cabin crew, who must be fully alert in preventing any safety or security occurrence as well as the case of emergency.

4.2

Cabin crew should have adequate training in resuscitation and be always competent in their native language, and at least ICAO level 4 English, and be able to facilitate communication with passengers in the event of an emergency.

5.1

The EESC has already expressed its views on air traffic control (ATC) and problems associated with it (1). The proposed SESAR system, if and when it is introduced, should improve safety. This is subject to another paper of the EESC (2), but this does not get away from the fact that Europe needs a uniformed ATC system which transgresses boundaries of all countries and where Eurocontrol would be recognised as a ‘Federal Regulator’ similar to, e.g. the Federal Aviation Administration (FAA) in the USA. The awarding of the first contract in Eurocontrol's TMA2010+ programme is welcomed.

5.2

There is strong need for standardisation and integrated systems to be introduced throughout Europe in the interests of safety.

5.3

It is desirable to also introduce appropriate certification of air traffic safety electronics personnel (ATSEP).

6.1

There appears to be a difficulty for some member states to convert their national rules to European Part 66 standards. Maintenance licences issued by states are based on the requirements set by the Joint Aviation Authorities (JAA) and were adopted into national law to give them legal teeth. Under the EASA system, however, the licensing rules are subject to European Union law. Enforcing them appears to be a lengthy process and subject to appeal.

6.2

In 2005 all 25 EU members took up a derogation option under which they were given until September 2005 to meet Part 66. Dates set by EASA for states to comply with safety rules need to be enforced or at lease agreed dates should be made with all parties so as to avoid the need for extension of deadlines or transition periods.

6.3

The EESC wonders if there is a provision for EASA to monitor, if required, the outsourcing of maintenance by Low Cost Carriers (LCC) to maintenance facilities in third countries.

6.4

Adequate time needs to be allowed for inspection on the ground, particularly in the turn around of the aircraft. The 25 minutes on average for short haul can certainly not be considered as adequate in all cases.

6.5

Adequate resources need to be allocated also, and also qualified staff who use only certified parts to carry out maintenance.

6.6

Random inspections and audits should be carried out by the National Aviation Authority to see that standards are being maintained.

7.1

Airline companies must be financially sound and properly financed before a start up licence is granted, states should be also required to monitor financial performance on a regular basis to ensure that there is no ‘corner cutting’.

7.2

They must have experience and have competent management available to them.

8.1

The current intention of the European Commission is to further extend the competencies of EASA in the field of regulation (including safety and interoperability) of airports, air traffic management and air navigation services.

8.2

We support EASA as created by regulations 1592/200/EC and believe that a European framework for procedures and authorisations for aircraft and appliances issued by a single authority certainly improve aviation safety and efficiency in Europe.

8.3

There is an opportunity for EASA to address the issue of standards and recommended practices (SARPS) and the anomalies that are created by the ‘Recommended Practice’ and ‘Standard Practices’ found in the ICAO Annex documentation.

9.1

Private pilot licensers (PPL) operating on FAA licences in European airspace should be required to have an EASA endorsement on their licence.

9.2

All general aviation aircraft (GA) must comply with EU standards set by EASA before being allowed to fly in European airspace.

10.1

EASA should produce guidelines/rules for protecting specific equipment or networks against ‘acts of unlawful interference’ as defined by ICAO.

10.2

Apart from the increasing use of Ethernet (LAN) and IP the other areas of vulnerability would be:

11.1

EASA must have the necessary powers to regulate this area of the industry not only from airworthiness and design but also the certification of ground operators, launching systems etc.

11.2

All regulations pertaining to conventional aircraft must be considered obligatory for UAVs and all airspace users should be consulted where this type of activity could affect those users.

12.1

EASA is the overall EU regulator. It lays down the principles and rules for airline safety in the EU. It is under financed, under staffed, and it has no power of enforcement.

12.2

It depends on various National Regulators to enforce rules and regulations.

12.3

This amounts to self-regulation. No national regulator would be likely to clamp down on an airline in its jurisdiction, unless there was an extremely serious problem.

12.4

National regulators are also responsible for all aircraft, which are registered in their country, and whose company have offices located there. These aircrafts and crews are very often based and operated out of other EU countries. This makes proper regulation more problematic.

12.5

The requirement by EASA to the National Regulators to implement its decisions could lead to an un-even implementation of the rules and regulations in the EU, due to different interpretations. This could lead in the airline industry to flags of convenience where one country appears more lax in the interpretation of regulations than others.

12.6

Meanwhile, the Airport Security Regulator, ECAC, has the power to audit local levels of compliance. EASA should have this.

12.7

EASA is currently funded from certification revenues which has left it with a forecast loss of EUR 15 million for 2006, it is critical that the necessary funding from central government be forth coming to ensure EASA's future.

16.12.2006   

EN

Official Journal of the European Union

C 309/55

1.1

The EESC endorses the Commission's desire to modernise, simplify and adapt the laws governing waste. It approves, in particular, the initiative in presenting the thematic strategy on the prevention and recycling of waste and the spirit of the strategy. It is essential to support the desire to ensure that the legislation in question is applied equally and on a general basis, in order to prevent distortions as regards the environment, public health and competition in the market for waste products. With a view to avoiding the lodging of appeals and the initiation of legal proceedings, the EESC stresses the importance of setting out clear and precise definitions and annexes to the proposal for a Directive. It does, however, regret that the provisions in respect of the prevention of waste lack ambition. The EESC draws attention to the fact that a prerequisite for any desire to achieve real sustainable development is the existence of an effective policy of preventing and reclaiming waste, bearing in mind the growing scarcity and increasing cost of raw materials; the EESC does, however, urge that instruments be developed at EU level in order to ensure that the goals which have been set can be achieved in both qualitative and quantitative terms. In this regard the proposal for a Directive displays real weakness. Furthermore, the Commission appears to believe that relaxing the procedures for obtaining permits to run processing installations will encourage recycling. This approach is misguided and will result in negative environmental consequences and health risks. Furthermore, it does not comply with the principles of the Aarhus Convention regarding public access to information on waste. Indeed, the permit comprises technical elements linked to environmental protection; it is a public document and is accompanied by requirements as to information and monitoring. It is in no way an obstacle to the development of processing or recycling but on the contrary provides the necessary guarantees, with the administrative bodies monitoring due respect for standards and the implementation of the best available techniques.

1.2

The introduction of the life-cycle concept into waste policy is also, in the EESC's view, a wholly appropriate course of action, as is the approach aimed at bringing about a reduction in the volume of waste sent for landfill, reclaiming compost and energy, promoting clean recycling and preventing waste.

1.3

As regards the proposal for a Directive, the EESC considers that too absolute an affirmation of the desire to respect the principle of subsidiarity runs the risk of being in contradiction with the desire to have legislation which is applied on a general and harmonised basis throughout the EU.

1.4

The EESC urges that the integration/repeal of the Directive on hazardous waste does not result in inferior regulation and inferior public health protection. The EESC considers that, as drafted at present, the text fails to provide adequate guarantees. At the very least, it should be specified that hazardous waste mixtures and permit exemptions are not authorised for this type of waste. It is the classification as ‘hazardous’ or ‘non-hazardous’ that governs the particular precautions and obligations for the transportation and treatment of waste. Any oversimplification in this field cannot be seen as a step forward for environmental protection.

1.5

The EESC stresses that the type of recycling which should be encouraged is that which does not have a damaging impact on the environment and which really does make it possible to reclaim materials.

1.6

The EESC really doubts whether the comitology process is an apposite means of defining a number of specific criteria for clarifying when certain waste ceases to be waste.