Tag Archives: Exchange of information

Action plan to combat VAT fraud in the European Union

Action plan to combat VAT fraud in the European Union

Outline of the Community (European Union) legislation about Action plan to combat VAT fraud in the European Union

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Taxation

Action plan to combat VAT fraud in the European Union

Document or Iniciative

Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee on a coordinated strategy to improve the fight against VAT fraud in the European Union [COM(2008) 807 final – Not published in the Official Journal].

Summary

The European Commission presents a short-term plan, the aim of which is to achieve a coordinated strategy to combat tax fraud within the internal market. Three types of measure are proposed.

Scope

This Communication deals with the fight against VAT fraud and the recovery of this tax.

Preventing VAT fraud

The Commission proposes a set of measures to enhance tax systems and tax cooperation, with a view to the prevention of VAT fraud.

Firstly, the Commission proposes to introduce minimum Community standards for the registration and deregistration of traders in the VIES system in order to improve the reliability of information contained in the system.

Traders must also be able to have electronic confirmation of the name and address of business partners who are subject to VAT.

The harmonisation and simplification of invoicing rules is also planned in order to reduce the administrative burdens on business and to facilitate controls. These measures include for example common storage periods and harmonised rules concerning invoice dates.

In addition, the notion of the date of chargeability of VAT for intra-Community deliveries of goods and the provision of services should be harmonised to ensure that reporting takes place in both of the Member States concerned at the same time.

Detecting VAT fraud

In order to improve the detection of VAT fraud, the Commission intends to adopt measures to increase the effectiveness of Tax Administrations and in particular to promote better reporting between Member States in intra-Community transactions.

Rules are also proposed concerning VAT exemption on imports to better control these transactions.

The Commission is also seeking to enhance cooperation between Member States in the field of administrative cooperation. It is crucial that certain information be exchanged automatically. Many actions funded by the Fiscalis programme have already been implemented to this effect.

The establishing of a legal framework is proposed, allowing the competent authorities of one Member State to have automated access to specific data contained in the database of another Member State relating to the identification and activities of a trader.

Finally, the creation of a European network Eurofisc for early warning on the risks of VAT fraud and the analysis of these risks is proposed.

Collection and recovery of taxes

The Commission intends to propose measures to enhance the possibilities for Tax Administrations to recover VAT losses in cross border cases.

The principle of joint and several liability for tax losses should be applied to traders who do not provide the required information concerning intra-Community operations when this omission is the cause of tax losses.

The Commission also provides for the harmonisation of instruments laying down enforcement or precautionary measures with the aim of reducing administrative burdens and increasing the effectiveness of recovery.

It is also necessary to guarantee the appropriate protection of all VAT revenue in all Member States by all Member States.

Legislative proposals

The measures described above are in the form of four packages concerning:

  • the reduction of timeframes to speed up the exchange of information between Member States;
  • collection and recovery of taxes in cross border situations;
  • enhancing administrative cooperation between Member States;
  • certain aspects of the fight against fraud and invoicing.

Reflection on a longer term scale

The Commission suggests creating an ad hoc group involving tax authorities and representatives of large as well as small and medium-sized enterprises. The objective of this ad hoc group would be to examine how the use of IT tools could improve, to the mutual benefit of all parties, the relationship between taxpayers and tax authorities in terms of VAT obligations, audit, and communication in general.

Context

This short term action plan is the fruit of a long debate launched in 2006 by the Communication which dealt with the necessity of developing a coordinated strategy with a view to stepping up the fight against tax fraud. Different European institutions have looked into the question, as have Member States and representatives of the business world.

The action plan revises the VAT anti-fraud strategy.

Taxation of savings income

Taxation of savings income

Outline of the Community (European Union) legislation about Taxation of savings income

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Single market for capital

Taxation of savings income

Document or Iniciative

Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments.

Summary

The aim of the Directive is to enable savings income, in the form of interest payments made in one Member State to “beneficial owners” * who are individual residents for tax purposes in another Member State, to be made subject to effective taxation in accordance with the laws of the latter Member State. The automatic exchange of information between Member States concerning interest payments * is the means chosen to achieve effective taxation of these “interest payments” in the Member State where the beneficial owner is resident for tax purposes. Member States must therefore take the necessary measures to ensure that the tasks necessary for the implementation of this Directive – cooperation and exchange of banking information – are carried out by paying agents established within their territory, irrespective of the place of establishment of the debtor of the debt claim producing the interest.

Income concerned

The scope of this Directive is limited to taxation of savings income in the form of interest payments on debt claims, to the exclusion of the issues relating to the taxation of pension and insurance benefits. At territorial level, the Directive applies to interest paid by a “paying agent” * established within the territory to which the Treaty applies.

The general system: exchange of information

  • Information reporting by the paying agent

Where the beneficial owner is resident in a Member State other than that in which the paying agent is established, the Directive stipulates that the latter must report to the competent authority of its Member State of establishment a minimum amount of information, such as the identity and residence of the beneficial owner, the name and address of the paying agent, the account number of the beneficial owner or, where there is none, identification of the debt claim giving rise to the interest, and information concerning the interest payment.

Moreover, the minimum amount of information concerning interest payment to be reported by the paying agent must distinguish between the specific categories of interest listed in the Directive. However, Member States may restrict the minimum amount of information to the total amount of interest or income and to the total amount of the proceeds from sale, redemption or refund.

  • Automatic exchange of information

Under the Directive, the competent authority of the Member State of the paying agent must communicate – at least once a year, within six months following the end of the tax year of the Member State of the paying agent – the information referred to above to the competent authority of the Member State of residence of the beneficial owner.

Context

As part of the “tax package” aimed at combating harmful tax competition, the European Union (EU) decided to draw up a legislative instrument to overcome existing distortions in the effective taxation of savings income in the form of interest payments.

This Directive builds on the consensus reached at the Feira European Council of 19 and 20 June 2000. During this Council, it was decided to set up of an automatic exchange of information system between all Member States. Belgium, Luxembourg and Austria benefited from a transitional period for the implementation of this measure during which, instead of providing information to the other Member States, they had to apply a withholding tax to the savings income covered by this Directive.

Key terms used in the act
  • Beneficial owner: any individual who receives an interest payment or any individual for whom an interest payment is secured, unless he provides evidence that it was not received or secured for his own benefit.
  • Paying agent: any economic operator who pays interest to or secures the payment of interest for the immediate benefit of the beneficial owner, whether the operator is the debtor of the debt claim which produces the interest or the operator charged by the debtor or the beneficial owner with paying interest or securing the payment of interest. In specific cases set out in Article 4 of the Directive, any entity established in a Member State to which interest is paid or for which interest is secured for the benefit of the beneficial owner is also considered a paying agent upon such payment or securing of such payment.
  • Interest payment: interest paid or credited to an account, relating to debt claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor’s profits, and, in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures; penalty charges for late payments are not regarded as interest payments; interest accrued or capitalised at the sale, refund or redemption of the debt claims referred to above; income deriving from interest payments either directly or through certain entities set out limitatively, distributed by undertakings for collective investment in transferable securities (UCITS) or certain undertakings for collective investment; income realised upon the sale, refund or redemption of shares or units in UCITS, if they invest directly or indirectly, via other undertakings for collective investment or entities, more than 40 % of their assets in debt claims.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Directive 2003/48/EC

16.7.2003

Date of application: 1.7.2005

OJ L 157 of 26.6.2003

The successive amendments and corrections to Directive 2003/48/EC have been integrated into the original text. This consolidated versionis for reference only.

RELATED ACTS

Proposal for a Council Directive of 13 November 2008 amending Directive 2003/48/EC on taxation of savings income in the form of interest payments [COM(2008) 727 final – Not published in the Official Journal].
This Proposal for a Directive aims at offsetting the shortcomings in the current directive, with a view to taxing savings income more effectively and eliminating the undesirable distortions of competition.

In this perspective, the main amendments proposed concern the following points:

  • the definition of the beneficial owner: a proposal for a ‘look-through’ approach to cover interest payments made to legal persons or arrangements held by individuals (the current directive only covers interest payments made for the immediate benefit of individuals);
  • the identification of beneficial owners: the recording of the date and place of birth of the beneficial owner in all cases and in addition the tax identification number of the beneficial owner when this number appears on documents presented for identification purposes is proposed;
  • the definition of the notion of paying agent: clarification of the notion of ‘paying agent on receipt’ and the introduction of a ‘positive’ definition of intermediary structures established in Member States and bound to act as ‘paying agents on reception’;
  • the definition of interest payment, in order to cover financial instruments that are equivalent to those which are explicitly covered: structured products that are equivalent in substance to debt commodities and some insurance products that are directly comparable to undertakings for collective investment since their performance is linked to debt claims or equivalent income;
  • the extension of the scope to all undertakings for collective investment in transferable securities (UCITS);
  • the communication of information by paying agents;
  • the introduction of a comitology procedure so as to quickly decide implementation measures related to the Directive.

 

Administrative cooperation in the field of value added tax

Administrative cooperation in the field of value added tax

Outline of the Community (European Union) legislation about Administrative cooperation in the field of value added tax

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Taxation

Administrative cooperation in the field of value added tax (until 31.12.2011)

Document or Iniciative

Council Regulation (EC) No 1798/2003 of 7 October 2003 on administrative cooperation in the field of value added tax and repealing Regulation (EEC) No 218/92 [See amending act(s)].

Summary

This regulation determines the conditions of cooperation between national authorities responsible for applying value added tax (VAT) legislation on:

  • supplies of goods and services;
  • intra-Community acquisition of goods;
  • importation of goods.

It also provides a structure for cooperation between these national authorities and the Commission.

More precisely, the regulation lays down rules and procedures to enable the competent authorities of European Union (EU) countries to cooperate and to exchange any information that may help them assess VAT correctly.

Definition of parties concerned and procedures

Each EU country designates a single central office to act as a point of contact for administrative cooperation. The competent authorities of EU countries may designate liaison departments and/or competent officials for direct exchanges of information. The central liaison offices are responsible for maintaining up-to-date lists of these departments or officials and making them available to the other EU countries concerned.

Liaison departments and competent officials are required to inform their central liaison office when they send or receive a request for assistance or a reply to a request for assistance. They must also notify their central liaison office and competent authority of any request for assistance received that requires action outside their territorial or operational area.

The obligation for EU countries to assist each other does not cover the provision of information or documents obtained by the authorities when acting with the authorisation or at the request of a judicial authority, unless provided for in their national law.

Exchange of information on request

This concerns requests for information and for administrative enquiries sent by the competent authority of one EU country (the requesting authority) to the competent authority of another EU country (the requested authority) to obtain information that may help with the correct assessment of VAT. The requested authority has the obligation to provide the information requested. To that end, it may make administrative enquiries and act for the requesting authority as if it were acting on its own behalf.

The requesting authority may make a reasoned request for an administrative enquiry. In such cases, the requested authority must justify any failure to carry out the enquiry.

The requesting authorities must use a standard form for all requests for information and administrative enquiries.

As regards the time limit for providing information, the requested authority must provide the information without delay and no later than three months following the date of receipt of the request. However, if the requested authority is already in possession of the information, the time limit is reduced to a maximum of one month. In certain cases, the requesting and requested authorities may agree on different time limits.

If the requested authority is unable to respond to the request by the deadline, it must immediately inform the requesting authority in writing of the reasons for its failure to do so and indicate a timeframe within which it will be able to respond.

The requesting and requested authorities may agree to allow officials of the first to be present in the administrative offices of the latter. The officials of the requesting authority may also participate in the administrative enquiries with a view to exchanging information, but never to exercise the powers of inspection conferred on the officials of the requested authority. They must at all times be in possession of a written authority, which states their identity and official capacity.

EU countries may also agree to conduct simultaneous controls in their respective territories on the tax situation of taxable persons, if this is more effective than controls carried out by only one EU country.

Exchange of information without prior request

The competent authority of an EU country must forward information by automatic or structured automatic exchange to the competent authority of the EU country concerned when:

  • tax is meant to be charged in the EU country of destination and the effectiveness of the control system depends on information from the EU country of origin;
  • an EU country believes that a breach of VAT legislation has or might have been committed in the other EU country;
  • there is a risk of tax loss in the other EU country.

The exact categories of information to exchange, the frequency of exchanges and the practical procedures for exchanging information are determined by the Commission, assisted by a standing committee on administrative cooperation. In addition, each EU country must determine whether it will take part in the exchange of a particular category of information and whether it will do so in an automatic or structured automatic way.

The competent authorities of EU countries may forward to each other any information of which they are aware by spontaneous exchange.

Storage and exchange of information relating to intra-Community transactions

Each EU country must maintain an electronic database in which it stores and processes information relating to VAT. It is the responsibility of each EU country to ensure that its database is complete, accurate and kept up to date.

The competent authority of an EU country can obtain directly from any other EU country, or have direct access to, data stored on:

  • VAT identification numbers issued by the EU country receiving the information;
  • the total value of all intra-Community supplies of goods and services to persons holding a VAT identification number by all operators identified for the purposes of VAT in the EU country providing the information.

If necessary for the control of intra-Community acquisition of goods and supply of services to prevent a breach of VAT legislation, the competent authority of an EU country must receive directly, or have direct electronic access to, the following information:

  • the VAT identification numbers of the persons who effected the intra-Community supplies of goods and services;
  • the total value of such supplies to persons holding a VAT identification number.

EU countries must provide access to the information without delay and no later than one month from the end of the period to which the information relates.

Conditions governing the exchange of information

The requested authority may refuse a request for assistance. In such cases, it must always inform the requesting authority of its reasons. Requests for assistance may be refused if the provision of information:

  • imposes a disproportionate administrative burden;
  • is contrary to the laws or administrative practices of the requested EU country;
  • leads to the disclosure of commercial, industrial or professional secrets;
  • is against public policy.

Information communicated on the basis of this regulation is covered by the obligation of official secrecy and is protected under the national law of the EU country that received it. Therefore, this information may only be used for clearly specified purposes, such as:

  • establishing the assessment base;
  • collection or administrative control of tax (for the purpose of establishing the assessment base);
  • assessment of other levies, duties and taxes covered by Article 2 of Council Directive 76/308/EEC; and
  • in connection with judicial proceedings that may involve penalties, initiated as a result of infringements of tax law (the documents may be invoked as evidence).

Context

This regulation belongs to a series of tax harmonisation measures taken to complete the internal market.

In the interests of facilitating contacts between local and/or national tax authorities to combat fraud more effectively, this regulation brings together into a single legal instrument and reinforces the provisions of the Directive on mutual assistance by competent authorities in the field of direct and indirect taxation and the Regulation on administrative cooperation in the field of indirect taxation.

On 7 October 2010, the Council adopted Regulation (EU) No 904/2010 which repeals the current Regulation on 1 January 2012. However, chapter V (with the exception of Article 27, paragraph 4) remains applicable until 31 December 2012. Certain provisions from the new Regulation entered into force on 1 November 2010, others will apply from 1 January 2012 and 1 January 2015.

REFERENCES

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 1798/2003

1.1.2004

OJ L 264 of 15.10.2003

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 885/2004

1.5.2004

OJ L 168 of 1.5.2004

Regulation (EC) No 1791/2006

1.1.2007

OJ L 363 of 20.12.2006

Regulation (EC) No 143/2008

20.2.2008

OJ L 44 of 20.2.2008

Regulation (EC) No 37/2009

1.1.2010

OJ L 14 of 20.1.2009

Regulation (EU) No 904/2010

1.11.2010

OJ L 268 of 12.10.2010

RELATED ACTS

Commission Regulation (EC) No 1174/2009 of 30 November 2009 laying down rules for the implementation of Articles 34a and 37 of Council Regulation (EC) No 1798/2003 as regards refunds of value added tax under Council Directive 2008/9/EC [Official Journal L 314 of 1.12.2009].

Report from the Commission to the Council and the European Parliament of 18 August 2009 on the application of Council Regulation (EC) No 1798/2003 concerning administrative cooperation in the field of value added tax [COM(2009) 428 final – Not published in the Official Journal].

Commission Regulation (EC) No 1925/2004 of 29 October 2004 laying down detailed rules for implementing certain provisions of Council Regulation (EC) No 1798/2003 concerning administrative cooperation in the field of value-added tax [Official Journal L 331 of 5.11.2004].
This regulation establishes the categories of information to be exchanged without prior request, the frequency with which such exchanges must take place and other rules for implementing certain provisions of Regulation (EC) No 1798/2003.

Exchange of information from criminal records

Exchange of information from criminal records

Outline of the Community (European Union) legislation about Exchange of information from criminal records

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Justice freedom and security > Judicial cooperation in criminal matters

Exchange of information from criminal records

Document or Iniciative

Council Framework Decision 2009/315/JHA of 26 February 2009 on the organisation and content of the exchange of information extracted from the criminal record between Member States.

Summary

The objectives of this framework decision are to:

  • define how a convicting Member State is to transmit information on the conviction to the Member State of which the convicted person is a national;
  • define the obligations of the Member State of which the person is a national to store information on convictions and the procedures which that Member State is to follow when replying to requests for information about its nationals;
  • establish a framework for the development of a computerised system of exchange of information on convictions.

Member States are to designate a central authority to carry out the tasks relating to exchanges of information on convictions. For transmitting information and for replying to a request for information, Member States may designate more than one central authority.

Obligations of Member States

Along with information on the conviction, the convicting Member State has the obligation to provide information on the nationality(ies) of the person convicted on its territory in its criminal record.

The central authority of the convicting Member State is obliged to inform the central authorities of the Member State(s) of which the convicted person is national of any convictions of that person provided in its criminal record as soon as possible, including any subsequent alterations or deletions of this information. Such notification must include information on the convicted person, the nature and contents of the conviction, as well as the offence that gave rise to the conviction. The central authority is also to transmit optional information if entered in the criminal record and additional information if available, as listed in the framework decision.

The Member State of which the convicted person is a national has an obligation to store information transmitted to it, as well as to reply to requests for information on convictions within the given period of time. The convicting Member State may stipulate that the information it transmits to the Member State of the convicted person’s nationality may not be retransmitted by the latter for any other purpose than for criminal proceedings.

Requesting information and replying to requests

When information from the criminal record of a Member State is requested, its central authority may in return request information from the criminal record of the central authority of another Member State. The same applies when a person requests information from his/her criminal record from a Member State, provided that s/he is a resident/national of one of the Member States concerned. All requests to central authorities must be made with the form annexed to the framework decision.

When the central authority of the Member State of which the person is a national is asked for information, it is to transmit information on convictions that were handed down on its territory, in other Member States or in third countries and that were either stored by it or entered in its criminal record. All replies to requests for information must be made with the form annexed to the framework decision and within 10 working days from receiving the request. In case the request was made by a person for information from his/her record, the reply must be sent within 20 working days from its receipt.

The requesting Member State may use personal data transmitted to it only for the purposes the data was requested for, unless it is used to prevent an immediate and serious threat to public security.

The Council should adopt further instruments setting up the format of exchanges of information extracted from criminal records and any other means for organising and facilitating such exchanges between Member States by 27 April 2012.

This framework decision repeals Decision 2005/876/JHA on the exchange of information extracted from the criminal record.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Framework Decision 2009/315/JHA

27.4.2009

27.4.2012

OJ L 93 of 7.4.2009

Related Acts

Council Decision of 6 April 2009 on the establishment of the European Criminal Records Information System (ECRIS) in application of Article 11 of Framework Decision 2009/315/JHA [Official Journal L 93 of 7.4.2009].
This decision implements Framework Decision 2009/315/JHA in establishing the European Criminal Records Information System (ECRIS). The system will enable an electronic interconnection of criminal records, where information on convictions is exchanged between Member States in a uniform and easily computer-transferable manner.
The objectives of this decision are to:

  • set up the general architecture for the electronic exchange of information extracted from criminal records. ECRIS is a decentralised information technology system based on the criminal record databases in Member States. It consists of an interconnection software that allows exchanges of information between the national databases and of a common communication infrastructure, which will initially be the Trans-European Services for Telematics between Administrations (S-TESTA) network;
  • create a standardised European format of transmission of information on convictions. In this respect it provides for two reference tables of categories of offences and categories of sanctions, which should facilitate the automatic translation and enable the mutual understanding of the information transmitted by using a system of codes. Member States are to refer to these tables when transmitting information on the offence giving rise to the conviction and information on the content of the conviction.

Exchange of information between the law enforcement authorities of the Member States

Exchange of information between the law enforcement authorities of the Member States

Outline of the Community (European Union) legislation about Exchange of information between the law enforcement authorities of the Member States

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Justice freedom and security > Police and customs cooperation

Exchange of information between the law enforcement authorities of the Member States

Document or Iniciative

Communication from the Commission to the Council and the European Parliament of 16 June 2004: Towards enhancing access to information by law enforcement agencies [COM(2004) 429 final – Not published in the Official Journal].

Summary

In this communication, the Commission proposes an approach aimed at improving free circulation of information between the law enforcement authorities of the Member States and the authority in charge of crime prevention. These authorities include the police forces, customs authorities, financial intelligence units, the judicial authorities and all the public bodies involved in the detection of security threats, conviction and punishment. The Commission’s proposals come in the wake of the declaration on combating terrorism of the European Council of 25 March 2004 and encompass legal, technical and organisational measures for combating terrorist threats and organised crime.

The Commission points out that there are two main obstacles to this free circulation of information. The first is that the information tends to be compartmentalised at both organisational and legal levels. For example, it is divided between different ministries and services and is intended for use in different procedures, thereby affecting the nature and sensitivity of the information that can be handled by the services. The second obstacle is the lack of a clear policy on information channels, resulting in disagreement on the choice of channel and on how to handle sensitive and confidential information.

The three main objectives proposed by the Commission are therefore the following:

  • to take stock and analyse the conditions needed to improve access to, and the use and exchange of, relevant information on law enforcement and crime prevention;
  • to introduce an EU intelligence-led police and judicial policy;
  • to maintain a strict balance between effective respect for citizens’ rights and an increase in state powers of obtaining and using information in order to ensure that the security level demanded by these citizens is maintained by democratic processes.

In order to achieve these objectives, the Commission points out that the policy on exchange of information between the law enforcement agencies must take into account several factors. Firstly, there must be common and concerted action by the national, European and international agencies. As well as security, respect for individual rights, human rights and fundamental freedoms must be ensured. Compatible information exchange systems protected against unlawful access are also needed, as are common standards for information storage, analysis and exchange between the relevant services.

The Commission calls on the Member States to implement an information policy aimed at:

  • making accessible necessary and relevant data for the law enforcement authorities and those responsible for preventing crime and terrorism;
  • promoting the production and use of EU criminal intelligence that is of high-quality in both strategic and operational terms;
  • building trust between the relevant services, in particular through personal data protection.

Access to data and information

The main aim of the information policy is to make the information needed for combating terrorism and organised crime accessible to all the EU law enforcement authorities who need this information in order to carry out their statutory tasks. To this end, the Commission proposes launching initiatives associated with conditions for access to information and with data collection and exchange.

The main obstacles to data sharing identified by the Commission are created by the lack of:

  • common standards for data processing and access;
  • compatible crime definitions and statistics;
  • culture of cooperation between the relevant authorities and between public- and private-sector players;
  • awareness of data protection rules.

The Commission proposes laying down transparent and straightforward conditions for access to data. Member States will be responsible for the implementation of these conditions. The Commission intends to launch studies on:

  • needs and restrictions in this area;
  • conditions of access;
  • data protection and security procedures.

The information policy introduces the principle of right of equivalent access to data. Once established, this principle would allow mutual exchange of data between the authorities and agencies in the Member States based on the standards and conditions applicable in the Member State in which the data are to be accessed.

This principle of equivalent access is underpinned by the following basic considerations:

  • the security of the Union and its citizens is a joint responsibility;
  • Member States depend on each other to enforce laws in order to combat terrorism and organised crime;
  • the law enforcement authorities in the various Member States fulfil similar tasks;
  • the law enforcement authorities act lawfully when accessing data.

In order to develop further the principle of equivalent access, the Commission proposes introducing minimum standards for the collection of data. It also plans to create a network of databases or a central database.

Lastly, the Commission wishes to promote research on security co-financed by the AGIS programme. In addition, a preparatory security research action for 2004-06 is aimed at launching a comprehensive European security research programme from 2007.

Enforcement of EU intelligence-led law

The second objective of the information policy is to establish measures aimed at developing intelligence-led law enforcement in the EU. The police and judicial authorities are to be encouraged to enhance cooperation through intelligence-led actions. The Commission intends to make the necessary information available to a criminal intelligence network and to format this information so that it can be used throughout the EU. The aim is to improve the security of the EU and its citizens while respecting individuals’ fundamental rights and the rule of law.

The Commission envisages a two-phased approach. In the first phase, it proposes that the Member States’ criminal intelligence services should meet on a monthly basis, under the aegis of Europol, to exchange intelligence and discuss their strategic assessments. In the second phase, these services could produce criminal intelligence using standardised analytical tools.

To this end, the Commission would like to involve Europol more closely and increase its importance. It also plans to call on the Chiefs of Police Task Force (CPTF) to set up a common curriculum for training intelligence officials of the European Police College (CEPOL).

Building of trust

The third objective of the information policy is to contribute to the building of trust between the authorities, officials and partners responsible for law enforcement in Europe by establishing a joint platform of shared values, standards and policies. Another aim of the information policy is to develop working relations between the Member States. The Commission plans to present more proposals in this area by the end of 2005.

Related Acts

Draft Framework Decision of 28 April 2004 on the retention of data processed and stored in connection with the provision of publicly available electronic communications services or data on public communications networks for the purpose of prevention, investigation, detection and prosecution of crime and criminal offences, including terrorism [JAI(2004) 8 – Not published in the Official Journal].
This draft framework decision is an initiative of France, Ireland, Sweden and the United Kingdom. It proposes retaining data processed or transmitted on public communications networks in order to prevent, detect and prosecute crimes and criminal offences, including organised crime and terrorism.

Communication from the Commission to the Council and the European Parliament of 16 December 2003: Transfer of Air Passenger Name Record (PNR) Data: A Global EU Approach [COM(2003) 826 final – Not published in the Official Journal].

This communication proposes better standards of protection for personal data transferred from the EU in the context of reinforced aviation and border security as part of the fight against terrorism.

Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications) [Official Journal L 201 of 31 July 2002].

European critical infrastructures

European critical infrastructures

Outline of the Community (European Union) legislation about European critical infrastructures

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Justice freedom and security > Fight against terrorism

European critical infrastructures

Document or Iniciative

Council Directive 2008/114/EC of 8 December 2008 on the identification and designation of European critical infrastructures and the assessment of the need to improve their protection.

Summary

This directive sets up a procedure for identifying and designating European critical infrastructures (ECIs) *. At the same time, it provides a common approach for assessing these infrastructures, with a view to improving them to better protect the needs of citizens.

Member States must go through a process of identifying potential ECIs, with the help of the Commission if required. Member States should make use of a series of criteria to identify these potential ECIs. The cross-cutting criteria take into account possible casualties and economic and public effects, while the sectoral criteria consider the specificities of each ECI sector. This directive currently concerns only the energy and transport sectors and their subsectors as identified in Annex I. Additional sectors might be added with the review of the directive.

Each Member State should go through a cooperative designation process for potential ECIs located on its territory. This process involves discussions with other Member States, which could be significantly affected in case of the loss of service provided by an infrastructure. In order for an infrastructure to be formally designated as an ECI, the Member State on whose territory it is located must give its assent.

The identification and designation of ECIs by Member States must be completed before 12 January 2011, after which they are to be reviewed regularly.

The Member State on whose territory an ECI is located must inform the Commission annually of the number of potential and designated ECIs for each sector.

Member States must ensure that an operator security plan (OSP) or an equivalent measure is in place for each designated ECI. The purpose of the OSP process is to identify the critical assets of the ECI as well as the existing security solutions for protecting them. The minimum content to be covered is defined in Annex II of the directive. The OSPs must be reviewed regularly.

Member States must also ensure that a security liaison officer or equivalent is designated for each ECI. The officer serves as the contact point between the owner/operator of the ECI and the Member State authority concerned. The purpose is to allow for the exchange of information regarding the risks and threats relating to the ECI.

Within a year from designating an ECI in the subsectors, Member States are to conduct an assessment of the threats relating to it. In addition, Member States are to report to the Commission every two years on the risks, threats and vulnerabilities the different ECI sectors are facing. The need for additional Community measures to protect ECIs will be assessed on the basis of these reports.

To support the owners/operators of ECIs, the Commission provides access to best practices and methodologies regarding the protection of critical infrastructure. Furthermore, it supports the related training activities and exchanges of new technical information.

Any sensitive information regarding the protection of ECIs may be treated only by persons having the appropriate level of security clearance and only for the purposes the information was originally intended.

A European critical infrastructure contact point (ECIP contact point) is to be appointed in each Member State. Their purpose is to coordinate any ECI-related issues among Member States and the Commission.

Background

On 12 December 2006, the Commission adopted the communication on a European Programme for Critical Infrastructure Protection (EPCIP), which sets out an overall framework for critical infrastructure protection activities at EU level. The process of identifying and designating ECIs is one of the key elements of EPCIP.

The Council conclusions of April 2007 reaffirmed Member States’ responsibility in managing the protection of critical infrastructures located on their respective territories. Simultaneously, the Council welcomed the Commission’s efforts in developing a European procedure to identify and designate ECIs and in assessing them with a view to improving their protection.

Key terms used in the act

  • Critical infrastructure: an asset, system or part thereof located in Member States that is essential for the maintenance of vital societal functions, health, safety, security, economic or social well-being of people, and the disruption or destruction of which would have a significant impact on a Member State as a result of the failure to maintain those functions.
  • European critical infrastructure (ECI): critical infrastructure in Member States, the disruption or destruction of which would have a significant impact on at least two Member States.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Directive 2008/114/EC

12.1.2009

12.1.2011

OJ L 345 of 23.12.2008

Corporate and financial malpractice

Corporate and financial malpractice

Outline of the Community (European Union) legislation about Corporate and financial malpractice

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Single market for capital

Corporate and financial malpractice

The aim of this Communication is to provide a holistic approach on how to reduce the risk of financial and corporate malpractice covering also taxation and law enforcement.
There are four lines of “defence” against corporate malpractice: internal control in a company, independent third parties, and supervision and enforcement.

Document or Iniciative

Communication from the Commission to the Council and the European Parliament of 27 September 2004 on preventing and combating corporate and financial malpractice [COM(2004) 611 final – Not published in the Official Journal].

Summary

This Communication is the Commission’s response to the Enron and Parmalat financial scandals that caused immense disruption to capital markets. The Commission is aware that there is an effective EU framework for dealing effectively with most of the financial issues raised, viz. the Financial Services Action Plan (FSAP) and the existing action plans (COM(2003) 284), and it sets out in this Communication a holistic strategy covering financial services, internal issues, justice and tax policy.
The Commission identifies four lines of “defence” against corporate malpractice that focus on a series of measures involving matters ranging from the internal control in a company, through auditors and supervision to measures necessary to comply with the law.

First line of defence – internal control in a company and corporate governance

Boards of companies have fiduciary obligations towards the company itself and its shareholders as well as obligations towards stakeholders at large.
Before the end of 2004 the Commission will take the following measures:

  • enhance transparency of intra-group transactions as well as of transactions with related parties;
  • clarify the responsibilities of board members for financial statements and key non-financial information;
  • oblige all listed companies to make public annually a corporate governance statement.

The Commission will look into:

  • after 2006, criteria for the disqualification of directors and wrongful trading;
  • the use of bearer shares and bonds, which can be used to blur the ultimate beneficial owners;
  • bond market transparency in accordance with the Directive on Markets in Financial Instruments (MiFID), including risk transfer to the retail sector.

Second line of defence – independent third parties

The second line of defence is made up, above all, of the auditors, but accounting firms, banks, investment bankers and lawyers, as well as rating agencies and financial analysts, also have an important role to play. At this control level, transactions must be transparent and conflicts of interest reduced to a minimum.

In this connection, the Commission has presented a proposal for a directive on statutory audit of annual accounts and consolidated accounts (COM(2004) 177 final). The proposal provides for:

  • full group auditor responsibility for consolidated accounts;
  • the establishment of audit committees in public-interest entities;
  • auditor rotation;
  • strengthening of sanction regimes.

In the area of customs cooperation, the EU acquired two important legislative instruments in 2005:

  • a Regulation to prevent money laundering that requires cash control based on a declaration system for amounts exceeding EUR 15 000;
  • an anti-money laundering Directive covering trust and company service providers.

The Commission will look more closely at financial analysts and credit rating agencies as regards:

  • access to inside information from insurers;
  • the way they carry out their credit assessment;
  • entry barriers in the industry;
  • conflicts of interest.

Third line of defence – supervision

Member States play a key role in enforcing EU legislation regarding supervision and public scrutiny.
In October 2005 the EU Council reached a political agreement on the proposal for a directive on statutory audit (COM(2004) 177 final) that requires adequately funded, effective and independent public supervision for all statutory auditors and audit firms.

More than one authority is involved in supervising the institutions operating on financial markets. In the Commission’s view, it is important to develop deeper cooperation between sectors:

  • in the Member States, between the different authorities with the task of supervising institutions operating on their financial markets, and in particular in the securities, banking and insurance sectors;
  • at European level, between the European supervisory authorities. A framework for voluntary cooperation exists here between the members of the Committee of European Securities Regulators (CESR), the European Banking Committee (EBC), the European Insurance and Pension Committee (EIOPS), the Committee of Insurance and Occupational Pension Supervisors (CEIPS) and the Committee of Banking Supervisors (CEBS).

The Commission envisages a clear division of labour between the national level and the European level of supervision, and one that favours the latter in the event of cross-border transactions. As part of more wide-ranging cooperation between these two levels, the Commission would like to see improved transparency of tax systems by facilitating access to, and the exchange of, information. The possibility of using a single direct tax identification number for companies will be looked into.

In order to improve administrative cooperation, the Communication sets out the following practical measures:

  • in the short term, better use of existing EU instruments and the exchange of best practices between Member States;
  • in the medium term, broadening of the scope for joint investigations in direct tax matters both between Member States and, at national level, between the different services involved;
  • in the longer term, possible extension of the automatic exchange of information could be extended to other areas of direct taxation or other types of income by using new technologies.

The Commission and the Member States are developing concrete proposals targeted at cases of tax fraud and avoidance involving complex and opaque structures.

Outside the EU, far greater transparency and exchange of information with third countries as well as with dependent or associated territories should be promoted. For this, better consistency is essential in defining EU policies towards cooperative and non-cooperative tax havens.

The Communication states that:

  • the EU partners should improve transparency and the exchange of tax information;
  • the EU should provide reinforced technical assistance or economic support for a limited period of time;
  • bilateral agreements on the exchange of information on tax havens should be reached between the EU and the individual member countries of the Organisation for Economic Cooperation and Development (OECD).

Fourth line of defence – law enforcement

This line of defence is concerned mainly with police forces and the judicial authorities responsible for investigations and prosecutions that may have both a preventive and a repressive effect. The Commission has attempted to provide the Member States with more effective legal instruments to combat financial crime. These are:

  • the Millennium Strategy published in 2000 by the Commission;
  • the Framework Decision on combating fraud and counterfeiting of non-cash means of payment adopted by the Council in 2001;
  • the Framework Decision on money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds of crime adopted in 2001;
  • the 2000 Council Decision concerning arrangements for cooperation between financial intelligence units (FIUs) of the Member States;
  • the 2003 Communication on a comprehensive EU anti corruption policy.

At EU level, the Commission has identified a number of improvements that need to be made:

  • the exchange of information and cooperation between national authorities, Europol and Eurojust regarding investigations and prosecutions. In 2004 Eurpol and Eurojust signed a cooperation agreement (PDF )
  • cooperation between regulatory bodies and law enforcement services;
  • the exchange of information on bank accounts and other bank-related information already provided for in the Protocol to the Convention on Mutual Assistance in Criminal Matters between the Member States of the European Union;
  • cooperation between the financial and other business sectors and law-enforcement authorities as part of a close partnership between the public and the private sector;
  • financial investigation, which must be accompanied by severe penalties for the wilful destruction of documents;
  • the traceability of financial flows, which could be introduced for the recording of electronic payments. The ” Cyber Tools OnLine Search for Evidence ” project (CTOSE) (could enable the gathering of electronic evidence;
  • the effects of certain disqualifications should be enforced throughout the EU and not simply in the country ordering the disqualification.

The Commission would like to see Member States establish specialised national bodies that could cooperate at European level with a view to effective identification, freezing, seizing and confiscation of laundered proceeds.

Context

The Communication fits into the general framework laid down by the Financial Services Action Programme (FSAP) and the Action Plan modernising company law and enhancing corporate governance (COM(2003) 284), which lay down the political foundations at Community level. The Communication stresses that these action plans should not be changed but, instead, should be implemented in a timely manner and by ensuring effective control of the application of legislation.

EURES: the European Employment and Job Mobility Network

EURES: the European Employment and Job Mobility Network

Outline of the Community (European Union) legislation about EURES: the European Employment and Job Mobility Network

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Living and working in the internal market

EURES: the European Employment and Job Mobility Network

Document or Iniciative

Commission Decision 8/2003/EC of 23 December 2002 implementing Council Regulation (EEC) No 1612/68 as regards the clearance of vacancies and applications for employment.

Summary

The Commission’s objective is to reinforce and consolidate EURES as a fundamental instrument by networking the employment services of the EEA countries and Switzerland.

The members and partners of EURES are:

  • the national and local employment services;
  • the employment services responsible for the cross-border regions;
  • the other specialised employment services notified to the Commission;
  • the trade union and employers’ organisations designated by the members.

The activities of the members and partners include:

  • creation of placement services for jobseekers, including customised services, matching services for workers and employers, and support services for employers wishing to recruit staff in another European country;
  • dissemination of up-to-date information on living and working conditions and trends on the labour market;
  • development of cooperation between the employment and social services, the social partners and other institutions concerned at the level of the Member States, the cross-border regions and the various employment sectors;
  • surveillance and evaluation of obstacles to mobility, including differences in legislation and administrative procedures, skilled labour surpluses and shortages and migration flows.

The members and partners undertake to integrate their vacancy databases into the EURES database and to:

  • provide the other members and partners with full and up-to-date information about vacancies and applications, the labour market, living and working conditions, obstacles to mobility and any other information required for the creation of a European network. Moreover, they undertake to protect personal data and to provide the necessary infrastructure and services, such as computer terminals;
  • appoint and train EURES managers and advisers, as well as other service providers. The managers are responsible for the European dimension of the organisation, including the coordination and implementation of EURES activities, the achievement of the objectives, the dissemination of information and representing the member in the EURES working group. The advisers, having received initial training, provide occupational guidance in the area of placements and integrate the EURES services in their own organisations;
  • evaluate all the EURES activities in terms of quantity, quality and impact and inform the EURES Coordination Office of the results.

Jointly, the members and partners are developing partnerships of the cross-border regions. Pursuing the same activities and objectives, these partnerships are managed by a framework agreement with a term of at least three years which commits the signatories to providing EURES services to the other members. Decisions are made by the steering committee comprising representatives of the members of the partnership.

Administrative coordination is provided by the European Coordination Office (or “EURES Coordination Office”), managed by the European Commission’s Employment, Social Affairs and Equal Opportunities DG. It is also responsible for analysing mobility in Europe, formulating a general approach and monitoring and evaluating EURES activities.

For strategic planning purposes, the Commission consults the High-Level Strategy Group, comprising the heads of the members of the network and chaired by a Commission representative.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Decision 8/2003

10.1.2003

OJ L 5, 10.1.2003