Tag Archives: Provision of services

Exemption for certain agreements between liner shipping companies

Exemption for certain agreements between liner shipping companies

Outline of the Community (European Union) legislation about Exemption for certain agreements between liner shipping companies

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Competition > Rules applicable to specific sectors > Competition in transport

Exemption for certain agreements between liner shipping companies (“consortia”)

Document or Iniciative

Commission Regulation (EC) No 906/2009 of 28 September 2009 on the application of Article 81(3) of the Treaty to certain categories of agreements, decisions and concerted practices between liner shipping companies (consortia).

Summary

This regulation applies to consortia * providing international liner shipping * services from or to one or more ports within the European Union (EU).

Exempted agreements

In accordance with Article 101(3) of the Treaty on the Functioning of the European Union (TFEU) (formerly Article 81(3) of the Treaty establishing the European Community (TEC)), Article 101(1) TFEU (formerly Article 81(1) TEC) is not applicable to the following activities of a consortium:

  • the joint operation of liner shipping services;
  • capacity adjustments in response to supply and demand fluctuations;
  • the joint operation or use of port terminals;
  • any other activity ancillary to those listed above, which is necessary for their implementation, such as:
    1. the use of a computerised data exchange system;
    2. an obligation on members of a consortium to limit use in the relevant market or markets to vessels allocated to the consortium;
    3. an obligation on members of a consortium not to assign or charter space to other vessel-operating carriers in the relevant market or markets except with the prior consent of the other members of the consortium.

Hardcore restrictions

The exemption above does not apply to a consortium that, directly or indirectly, alone or together with other factors under the control of the parties, has the object to:

  • fix prices when selling liner shipping services to third parties outside the consortium;
  • limit the capacity or sales except for the previously mentioned exempted capacity adjustments;
  • allocate markets or customers.

Conditions for exemption

To qualify for the exemption, the combined market share of the consortium members in the relevant market in which the consortium operates must not exceed 30 %, calculated by reference to the total volume of goods carried by the members within or outside the consortium. 5. To qualify for the exemption, members of the consortium must have the right to withdraw, subject to a maximum period of notice of six months, without any penalty, financial or otherwise. In the case of a highly integrated consortium, the maximum period of notice can be extended to 12 months.

Background

This regulation builds on Regulation (EC) No 823/2000 which expired on 25 April 2010. Although the justifications for a block exemption for liner consortia are still valid, Regulation 906/2009 ensures a greater convergence with other existing block exemption regulations for horizontal cooperation whilst taking into account current market practices in the liner industry.

Key terms used in the act
  • Consortium: an agreement or a set of interrelated agreements between two or more vessel-operating carriers which provide joint international liner shipping services exclusively for the carriage of cargo relating to one or more trades.
  • Liner shipping: the transport of goods on a regular basis on a particular route or routes between ports and in accordance with timetables and sailing dates advertised in advance and available, even on an occasional basis, to any transport user against payment.

References

Act Entry into force – Date of expiry Deadline for transposition in the Member States Official Journal
Regulation (EC) No 906/2009

26.4.2010 – 25.4.2015

OJ L 256 of 29.9.2009

Refund of VAT: taxable persons established in another EU country

Refund of VAT: taxable persons established in another EU country

Outline of the Community (European Union) legislation about Refund of VAT: taxable persons established in another EU country

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Taxation

Refund of VAT: taxable persons established in another EU country

Document or Iniciative

Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State of refund but established in another Member State [See amending act(s)].

Summary

This directive lays down the detailed rules for the refund of value added tax (VAT), provided for in Directive 2006/112/EC, to taxable persons not established in the European Union (EU) country of refund * but established in another EU country.

This directive applies to any taxable person not established in the EU country of refund who, during the refund period:

  • has not had in the EU country of refund, the seat of his economic activity, a fixed establishment from which business transactions were effected or, in the absence of such a seat or fixed establishment, his domicile or normal place of residence;
  • has not supplied any goods or services in the EU country of refund, with the exception of the supply of certain transport services and the supply of goods and services to a person who is liable to pay VAT.

Directive 2006/112/EC establishes the transactions which EU countries may exempt from VAT. EU countries must therefore refund to any taxable person not established in the country of refund any VAT charged in respect of goods or services supplied to him by other taxable persons in that EU country or in respect of the importation of goods into that country, when used for the purposes of the transactions listed in Directive 2006/112/EC.

To be eligible for a refund in the EU country of refund, a taxable person not established in this country must carry out transactions giving rise to a right of deduction in the EU country of establishment. When a taxable person not established in the EU country of refund carries out in his EU country of establishment both transactions producing a right of deduction and transactions not producing a right of deduction in that country, the EU country of refund will only pay the proportion of refundable VAT.

Refund application

This directive establishes a fully electronic procedure, whereby the taxable person not established in the EU country of refund addresses an electronic refund application to the EU country of refund and submits it to his EU country of establishment via the electronic portal of that country. The refund application relates to the purchase of goods or services which was invoiced during the refund period, and the importation of goods during the refund period.

The refund application must be submitted to the EU country of establishment by the 30 September of the calendar year following the refund period. The amount of VAT refund applied for must not be less than EUR 400. If the country is late in making the refund payment, the applicant will be entitled to interest on the amount of the refund.

This directive repeals Directive 79/1072/EEC, however its provisions continue to apply to refund applications submitted before 1 January 2010.

Key terms used in the act
  • EU country of refund: the EU country in which the VAT was charged to the taxable person in respect of goods or services supplied to him by other taxable persons in that EU country or in respect of the importation of goods into that EU country.

References

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

Directive 2008/9/EC

20.2.2008

1.1.2010

OJ L 44, 20.2.2008

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Directive 2010/66/EU

21.10.2010

OJ L 275, 20.10.2010

Successive amendments and corrections to Directive 2008/9/EC have been incorporated into the basic text. This consolidated version is for reference only.

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 314 of 1.12.2009].

This summary is for information only. It is not designed to interpret or replace the reference document, which remains the only binding legal text.

Public procurement in the fields of defence and security

Public procurement in the fields of defence and security

Outline of the Community (European Union) legislation about Public procurement in the fields of defence and security

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Internal market > Businesses in the internal market > Public procurement

Public procurement in the fields of defence and security

Document or Iniciative

Directive 2009/81/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of procedures for the award of certain works contracts, supply contracts and service contracts by contracting authorities or entities in the fields of defence and security, and amending Directives 2004/17/EC and 2004/18/EC (Text with EEA relevance). [See amending act(s)].

Summary

This Directive applies to public contracts in the fields of defence and security for:

  • the supply of military equipment;
  • the supply of sensitive equipment;
  • works, supplies and services directly related to military or sensitive equipment;
  • works and services for specifically military purposes or sensitive works and sensitive services.

Public procurement

Economic operators, whether they are natural or legal persons, can participate in invitations to tender in these fields. Groups of economic operators may also participate. If a contract is awarded to them, they may be required to assume a specific legal form.

Market thresholds and exclusions

This Directive shall apply to contracts which have a value excluding value-added tax (VAT) estimated to be no less than the following thresholds:

  • EUR 400,000 for supply and service contracts;
  • EUR 5,000,000 in the case of works contracts.

Exclusions

Certain specific contracts are excluded from the scope of this Directive, including:

  • contracts governed by specific procedural rules pursuant to an international agreement or arrangement between Member States and third countries and markets governed by the specific procedural rules of an international organisation purchasing for its purposes;
  • contracts for which the application of the rules of this Directive would oblige a Member State to supply certain information the disclosure of which it considers contrary to the essential interests of its security;
  • contracts awarded in the framework of a cooperation programme aimed at developing a new system;
  • contracts for the purposes of intelligence activities;
  • contracts awarded in a third country when forces are deployed outside the territory of the Union and transactions take place in the area of operations;
  • contracts relating to immovable property;
  • contracts awarded between governments.

Procedures

Contracting authorities/entities shall apply national procedures for the award of public contracts adjusted for the purposes of this Directive, by using the restricted procedure or the negotiated procedure with publication of a contract notice. An open procedure cannot be chosen.

Member States may use a competitive dialogue in the case of particularly complex contracts. In this case, contracting authorities/entities open a dialogue with the candidates selected in order to identify and define the means best suited to satisfying their needs.

There are also exceptional cases in which it is possible to use the negotiated procedure without publication of a contract notice.

The procedures are adjusted for the specific purposes of this Directive, in particular by proposing specific rules for the security of information, the security of supply and subcontracting.

The contracting authorities/entities may also conclude framework agreements, the duration of which may not exceed seven years. They must not, however, restrict competition.

Rules on advertising and transparency

Contracting authorities/entities may publish a prior information notice on their buyer profiles or on Tenders Electronic Daily (TED). They are obliged to publish a contract notice on TED with the sole exception of an exceptional negotiated procedure without publication of a contract notice.

In the case of restricted or negotiated procedures, contracting authorities/entities shall invite the selected candidates to submit their tenders and to negotiate. They shall also be invited to negotiate under the negotiated procedure. This invitation shall include contract documents, the deadline for receipt of tenders and an indication of any documents to be annexed.

For every contract or framework agreement, the contracting authorities/entities must draw up a written report describing the selection procedure chosen as well as information concerning the candidates.

Contract award criteria

Contracting authorities/entities shall award contracts on the basis of:

  • the most economically advantageous tender. Award shall then be based on various criteria linked to the subject-matter of the contract in question, such as quality, price or technical merit); or
  • the lowest price.

Subcontracting

Contracting authorities/entities may oblige the successful tenderer to organise a transparent and non-discriminatory competition when awarding subcontracts to third parties.

In addition, Member States may allow or require their contracting authorities/entities to ask that subcontracts representing at least a certain share of the value of the contract (a maximum of 30 %) be awarded to third parties following a transparent and non-discriminatory competition.

Review

A review of a decision taken by contracting authorities/entities may be sought in the event of an infringement of Community law. Member States must ensure that any operator that has suffered harm has access to effective and rapid rights to review. They may require that operators who wish to seek review either inform the contracting authority or first seek review from it.

During a review procedure, interim or final measures may be taken. In both cases, damages shall be granted to the persons concerned.

Context

The 2005 Green Paper on defence procurement highlighted the fact that it was essential to create a European market for defence equipment. This Directive should prove to be an appropriate legislative framework since it meets the specific requirements relating to goods and services in the fields of defence and security.

Reference

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

Directive 2009/81/EC

21.8.2009

21.8.2011

OJ L216, 20.8.2009

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 1177/2009

1.1.2010

OJ L 314, 1.12.2009

Regulation (EU) No 1251/2011

2.12.2011

OJ L 319, 2.12.2011

Successive amendments and corrections to Directive 2009/81/EC have been incorporated into the original text. This consolidated version is for reference only.

White Paper on services of general interest

White Paper on services of general interest

Outline of the Community (European Union) legislation about White Paper on services of general interest

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Internal market > Single market for services

White Paper on services of general interest

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 12 May 2004 entitled “White Paper on services of general interest” [COM(2004) 374 final – Not yet published in the Official Journal].

Summary

This White Paper presents the Commission’s conclusions following a broad public consultation launched on the basis of the Green Paper. The consultation showed up significant differences in points of view and outlook. Nevertheless, a consensus seems to have emerged on the need to ensure the harmonious combination of market mechanisms and public service missions. The White Paper sets out the Commission’s approach in developing a positive role for the European Union in fostering the development of high-quality services of general interest and presents the main elements of a strategy aimed at ensuring that all citizens and enterprises in the Union have access to high-quality and affordable services.

In submitting this White Paper, the Commission does not intend to close the debate that has developed at European level. Its aim is to make a contribution to the ongoing discussion and take it further by defining the Union’s role and a framework that allows these services to function properly.

SERVICES OF GENERAL INTEREST: AN ESSENTIAL COMPONENT OF THE EUROPEAN MODEL AND A SHARED RESPONSIBILITY OF THE PUBLIC AUTHORITIES IN THE EUROPEAN UNION

The White Paper stresses the importance of services of general interest as one of the pillars of the European model of society and the need to ensure the provision of high-quality and affordable services of general interest to all citizens and enterprises in the European Union. In the Union, services of general interest remain essential for ensuring social and territorial cohesion and for the competitiveness of the European economy.

While the provision of services of general interest can be organised in cooperation with the private sector or entrusted to private or public undertakings, the definition of public service obligations and missions remains a task for the public authorities at the relevant level. The relevant public authorities are also responsible for market regulation and for ensuring that operators accomplish the public service missions entrusted to them.

In this context, the White Paper states that responsibility for services of general interest is shared between the Union and its Member States. This shared responsibility is the concept underlying Article 16 of the EC Treaty, which confers responsibility upon the Community and the Member States to ensure, each within their respective powers, that their policies enable operators of services of general economic interest to fulfil their missions. The right of the Member States to assign specific public service obligations to economic operators and to ensure compliance is also implicitly recognised in Article 86(2) of the EC Treaty.

The EC Treaty gives the Community a range of resources to ensure that users have access to high-quality, affordable services of general interest in the European Union. The Commission takes the view that its powers are appropriate and sufficient for the maintenance and development of effective services throughout the Union. Nevertheless, it is primarily for the relevant national, regional and local authorities to define, organise, finance and monitor services of general interest.

THE GUIDING PRINCIPLES OF THE COMMISSION’S APPROACH

The Commission’s approach is based on a number of principles that are reflected in the Community’s sectoral policies and can be clarified on the basis of the results of the debate on the Green Paper:

  • Enabling public authorities to operate close to citizens:
    The Commission respects the essential role of the Member States and of regional and local authorities in the area of services of general interest. The Community’s policies on services of general interest are based on various degrees of action and the use of various instruments, in line with the principle of subsidiarity.
  • Achieving public service objectives within competitive open markets:

    An open and competitive internal market, on the one hand, and the development of high-quality, accessible and affordable services of general interest, on the other, are compatible objectives.
  • Ensuring cohesion and universal access:

    The access of all citizens and enterprises to affordable, high-quality services of general interest throughout the territory of the Member States is essential for the promotion of social and territorial cohesion in the European Union, including the reduction of obstacles caused by the lack of accessibility of the outermost regions.
  • Maintaining a high level of quality, security and safety:

    The Commission wishes to guarantee, in addition to the supply of high-quality services of general interest, the physical safety of consumers and users, everyone involved in the production and delivery of these services and the general public, and, in particular, provide protection against possible threats such as terrorist attacks or environmental disasters.
  • Ensuring consumer and user rights:
    These include, in particular, access to services, in particular cross-border services, throughout the territory of the Union and for all groups of the population, affordability of services, including special schemes for persons on low incomes, physical safety, security and reliability, continuity, high quality, choice, transparency and access to information from providers and regulators.
  • Monitoring and evaluating performance:

    The Commission takes the view that systematic evaluation and monitoring is vital for maintaining and developing high-quality, accessible, affordable and efficient services of general interest in the European Union. The evaluation should be multidimensional and focus on all the legal, economic, social and environmental aspects. It should also take into account the features of the sector evaluated and situations specific to the various Member States and their regions.
  • Respecting the diversity of services and situations:

    The diversity of services must be maintained because of the different needs and preferences of users and consumers resulting from different economic, social, geographical or cultural situations. This is true in particular for social services, health care and broadcasting.
  • Increasing transparency:

    The principle of transparency is a key concept for the development and implementation of public policies regarding services of general interest. It ensures that public authorities can exercise their responsibilities and that democratic choices can be made and are respected. The principle should apply to all aspects of delivery and cover the definition of public service missions, the organisation, financing and regulation of services, as well as their production and evaluation, including complaint-handling mechanisms.
  • Providing legal certainty:
    The Commission is aware that the application of Community law to services of general interest could raise complex issues. It is therefore going to pursue an ongoing project to improve legal certainty associated with the application of Community law in the provision of services of general interest. It has already accomplished the modernisation of the existing public procurement rules and launched initiatives in the areas of state aid and public-private partnerships.

NEW APPROACHES FOR A COHERENT POLICY

One of the main questions in the public discussion concerned the need for a framework directive on services of general interest. The views expressed on this subject in the public consultation were divided, a number of Member States and the European Parliament being sceptical on the issue.

It is therefore uncertain whether a framework directive would be the best route to follow at this stage and would bring sufficient added value. Consequently, the Commission concludes that it would be best not to present a proposal for the time being. Rather, it will pursue and develop its sectoral approach by proposing, where necessary and appropriate, sector-specific rules that allow account to be taken of the specific requirements and situations in each sector.

The Commission will re-examine the feasibility and necessity of a framework law on services of general interest when the Constitutional Treaty comes into force, in particular the new legal basis introduced by Article III-122 which states that: “Without prejudice to Articles III-55, III-56 and III-136, and given the place occupied by services of general economic interest as services to which all in the Union attribute value as well as their role in promoting social and territorial cohesion, the Union and the Member States, each within their respective powers and within the scope of application of the Constitution, shall take care that such services operate on the basis of principles and conditions, in particular economic and financial, which enable them to fulfil their missions. European laws shall define these principles and conditions.” In addition, the Commission will review the situation of services of general interest in the European Union and the need for any horizontal measures in 2005. It plans to present a report of its findings by the end of 2005.

On the basis of the results of the public consultation, the Commission also considers it necessary to further clarify and simplify the legal framework for the financing of public service obligations. It intends to adopt a package of measures to that effect by July 2005 at the latest. Most elements of this package have already been submitted as drafts for consultation.

Furthermore, the public debate highlighted the need for a clear and transparent framework for the selection of undertakings entrusted with a service of general interest. The Commission intends to examine the EU legislation ensuring the transparent award of service concessions. It has therefore launched a consultation on the procurement aspects of public-private partnerships.

The Green Paper also generated considerable interest among stakeholders in the area of social and health services, who expressed a need for greater predictability and clarity to ensure a smooth development of these services. The Commission takes the view that it is useful to develop a systematic approach in order to identify and recognise the specific characteristics of social and health services of general interest and to clarify the framework in which they operate and can be modernised. This approach will be set out in a Communication on social services of general interest, including health services, to be adopted in the course of 2005.

Evaluating the operation of the services, at both Community and national level, is essential to ensure the development of high-quality services of general interest that are accessible and affordable in an environment undergoing constant change. The Commission has undertaken to intensify and improve its evaluation activities in the field of services of general interest.

On an internal level, the sectoral regulations put in place at Community level concern the large network industries. In the Commission’s view, the public consultation on the Green Paper has confirmed this approach. It will take into account the results of this consultation in the examinations of the various sectors.

On an international level, the Commission is determined to ensure consistency between the Community’s internal rules and the obligations on itself and the Member States pursuant to international trade agreements. It also wishes to promote services of general interest in development co-operation.

Related Acts

European Parliament Resolution of 13 January 2004 on the Green Paper on services of general interest [A5-0484/2003].

Parliament welcomes the Commission Green Paper and calls on the Commission to present a follow-up by April 2004 at the latest. It takes the view that certain services of general interest should be excluded from the scope of the competition rules, including health, education and social housing, as well as services of general interest aiming to maintain or increase plurality of information and cultural diversity. Moreover, Parliament calls on the Commission to defend this position at WTO negotiations and negotiations on the General Agreement on Trade in Services. It considers that it is neither possible nor relevant to draw up common definitions of services of general interest, or of the public-service obligations resulting from them, but that the European Union must lay down common principles, including the following: universality and equality of access, continuity, security and adaptability; quality, efficiency and affordability, transparency, protection of less well-off social groups, protection of users, consumers and the environment, and citizen participation, taking into account circumstances which are specific to each sector. It stresses the need to ensure that competition rules are compatible with public service obligations, and is opposed to liberalisation of the water supply. Parliament takes the view that water and waste services should not be subject to Community sectoral directives, but that the Union should keep its full responsibility for these sectors as regards quality and environment protection standards.

Commission Green Paper of 21 May 2003 on services of general interest [COM(2003) 270 final – Official Journal C 76 of 25.03.2004].

The Commission, in this Green Paper, undertakes to conduct a complete review of its policies on services of general interest. Its objective is to organise an open debate on the global role of the Union in the definition of the objectives of general interest pursued by these services and on how they are organised, funded and evaluated. The Green Paper also reaffirms the significant contribution of the internal market and competition rules to modernising and improving the quality and efficiency of many public services, to the benefit of Europe’s citizens and businesses. It deals with globalisation and liberalisation, raising the question of whether a general legislative framework should be established at Community level for services of general interest, and seeks to deal with these issues by asking questions about: the impact of any additional Community initiatives to implement the treaty, in full respect of the principle of subsidiarity; the principles likely to be incorporated in any framework legislation on services of general interest and the actual added value of legislation of that kind; the definition of good governance in the organisation, regulation, funding and evaluation of services of general interest; an examination of any new measure likely to be taken to increase legal certainty and facilitate consistent, harmonious coordination between the objective of safeguarding high-quality services of general interest and the rigorous application of the competition and internal market rules.

Towards a single market in creative content online

Towards a single market in creative content online

Outline of the Community (European Union) legislation about Towards a single market in creative content online

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

Information society > Internet Online activities and ICT standards

Towards a single market in creative content online

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 3 January 2008 on Creative Content Online in the Single Market [COM(2007) 836 final – Not published in the Official Journal].

Summary

This Communication covers a wide range of subjects related to the online creative content sector *. It marks the launch by the Commission of its “online content” initiative, the aim of which is to enhance the availability of online creative content through developing new and innovative business models, and ensuring additional income for all those involved in the value chain.

It also aims to foster the emergence of a single European market for online music, films and games.

The continuous widespread availability of broadband internet access (roll-out of advanced mobile networks) and content distribution possibilities (mass availability of digital devices) are opening up new prospects for both the European online content industry and European consumers.

According to some studies covering the 25 Member States, revenue from the sale of online content will go from EUR 1.8 billion in 2005 to EUR 8.3 billion in 2010.

Existing regulation of the European online content sector is too fragmented and lacks transparency. One of the main objectives of the strategic i2010 framework launched in 2005 is the creation of an open and competitive market for the services of the European Union (EU) information society.

However, this situation gives rise to new challenges, ranging from copyright to consumer safety and technical (radio spectrum and broadband) issues. This Communication specifically relates to the distribution of online content.

Challenges associated with developing a single market for creative content online

Three objectives need to be met to ensure the transfer of creative content services to an online environment, namely:

  • to encourage European content contributing to European competitiveness while fostering the diversity of content creation and Europe’s cultural and linguistic heritage;
  • to modernise the legal framework relating to distribution of creative content taking into account copyright for the creation of content;
  • fostering the active role of users in content creation, selection and distribution.

On the basis of the public consultation held in 2006 on these issues, the Commission identifies the main challenges which merit Community action:

  • availability of creative content;
  • development of multi-territory licensing;
  • interoperability and transparency of Digital Rights Management systems (DRMs);
  • fight against piracy and illegal downloading of copyright-protected content.

The lack of availability of creative content intended for online distribution and the few operating licences granted to new platforms remain the main obstacles to the development of services proposing online content. The availability of creative content is not sufficiently stimulated by the development of new forms of distribution. Copyright holders fear losing control since the development of piracy in the digital environment has proved to be very damaging and distributors cannot reach agreement with content owners on the terms of trade for exploitation of content. This situation prevents licensing on new platforms for online content. Another concern relates to the high cost of transactions related to the granting of rights. By enhancing its role of facilitator at the heart of the new platform for discussion on online content, the Commission wishes to establish constructive dialogue between stakeholders.

The lack of multi-territory licences for creative content makes it difficult for online services to make full use of European cultural works outside their national markets, while content services are available across the Internal Market. The Commission had already recommended the implementation of a multi-territory licensing system specific to the field of musical words online.

The Commission encourages the establishment of a framework for the interoperability * and transparency of Digital Rights Management Systems which would enable copyright holders to enforce compliance in the digital environment while guaranteeing clear information for consumers on the terms of use for downloaded content and on the interoperability of corresponding online services.

The Commission invites access and service providers, copyright holders and consumers to work closely together on the basis of a “code of conduct” to combat online piracy and ensure that a wide range of online services are available legally.

Twofold approach: communication and consultation

The Commission’s approach is twofold. On the one hand, establishment of a new framework for discussion between stakeholders by creating a platform for discussion on all the issues raised by online creative content (content availability, improvement of mechanisms for the granting of rights, the development of multinational licensing, online copyright management, cooperation mechanisms to improve compliance with copyright in an online environment, etc.) and, on the other hand, preparation for the adoption of a Proposal for a Recommendation on online creative content by mid-2008.

By referring to the Annexes to this Communication, stakeholders are invited to give their views by 29 February on the main challenges associated with the development of a single market in creative content online.

Key terms used in the act
  • Creative content online: content and services such as online audiovisual creations (cinema, television, music and radio), online games, online publication, online educational content and content created by users.
  • Interoperability: interoperability means that several systems, whether identical or radically different, can communicate without ambiguity and work together. Interoperability is a very important concept for the global telephone network and the Internet, which are essentially heterogeneous networks, where diverse and varied equipment intersects. Communications must therefore comply with clear and uniform standards.

Related Acts

Council Conclusions of 20 November 2008 on the development of legal offers of online cultural and creative content and the prevention and combating of piracy in the digital environment [Official Journal C 319 of 13.12.2008].
The European Council notes in its conclusions that the online distribution of cultural and creative assets is a factor in accessing culture, in economic development, employment and cultural diversity. Its development potential in Europe is considerable but may be impeded by online piracy which infringes the remuneration of copyright holders and holders of related rights.
The Council invites Member States to draw out solutions with a view to combating online piracy whilst encouraging the development of the legal offer. Furthermore, Member States are also invited to promote audiovisual and film offer notably through the implementation of the Directive on audiovisual media services. In this regard, the European Commission is invited to cooperate closely with Member States.

Motor vehicle distribution and after-sales service

Motor vehicle distribution and after-sales service

Outline of the Community (European Union) legislation about Motor vehicle distribution and after-sales service

Topics

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

Internal market > Motor vehicles > Interactions between the automobile industry and specific policies

Motor vehicle distribution and after-sales service

Document or Iniciative

Commission Regulation (EU) No 461/2010 of 27 May 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices in the motor vehicle sector.

Summary

Article 101(3) of the Treaty on the Functioning of the European Union (TFEU) exempts vertical agreements * which confer sufficient benefits to outweigh the anti-competitive effects. Regulation (EC) No 1400/2002, which expired on 31 May 2010, provided the motor vehicle sector with a specific block exemption for vertical agreements for the purchase, sale or resale of new motor vehicles and vertical agreements for the provision of repair and maintenance services for such vehicles and for the distribution of spare parts. Regulation 461/2010 replaces Regulation 1400/2002.

Vertical agreements relating to the purchase, sale or resale of new motor vehicles

Regulation 461/2010 applies Regulation No 330/2010 to vertical agreements concerning the purchase, sale or resale of new motor vehicles. However, to give operators time to adapt to the general regime, those provisions of Regulation No 1400/2002 which relate to such agreements are extended until 31 May 2013.

Vertical agreements relating to the motor vehicle aftermarket

Regulation 461/2010 also applies Regulation No 330/2010 to vertical agreements concerning conditions for the purchase, sale or resale of spare parts for motor vehicles, or for the provision of repair and maintenance services for motor vehicles, so long as these fulfil the requirements for exemption under Regulation No 330/2010, and do not contain any of the following hardcore restrictions described in Regulation 461/2010:

  • restriction of the sales of spare parts for motor vehicles by members of a selective distribution system;
  • restriction, agreed between a supplier of spare parts or repair equipment and a manufacturer of motor vehicles, of the supplier’s ability to sell those goods to authorised or independent distributors, repairers or end users;
  • restriction, agreed between a manufacturer of motor vehicles which uses components for the initial assembly of motor vehicles and the supplier of such components, of the supplier’s ability to visibly place its trade mark or logo on the components supplied.

In accordance with Regulation No 19/65/EEC, when parallel networks of similar vertical restraints cover more than 50 % of a relevant market, the Commission may decide that this regulation does not apply to vertical agreements that include specific restraints relating to that market.

Key terms used in the act
  • Vertical agreement: an agreement or concerted practice entered into between two or more undertakings each of which operates at a different level of the production or distribution chain, and relating to the conditions under which the parties may purchase, sell or resell certain goods or services.

References

Act Entry into force – Date of expiry Deadline for transposition in the Member States Official Journal
Regulation No 461/2010

1.6.2010 – 31.5.2023

OJ L 129 of 28.5.2010

Fees Payable to the Office for Harmonisation in the Internal Market

Fees Payable to the Office for Harmonisation in the Internal Market

Outline of the Community (European Union) legislation about Fees Payable to the Office for Harmonisation in the Internal Market

Topics

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

Internal market > Businesses in the internal market > Intellectual property

Fees Payable to the Office for Harmonisation in the Internal Market (OHIM)

Document or Iniciative

Commission Regulation (EC) No 2869/95 of 13 December 1995 on the fees payable to the Office for Harmonisation in the Internal Market (Trade Marks and Designs) [See amending acts].

Summary

The fees governed by the Regulation include an application fee for a Community trade mark, a fee for opposition to a Community trade mark, registration and renewal fees, a fee for an application for revocation or for a declaration of invalidity, an appeal fee and a fee for the cancellation of the registration of a licence or other right.

Payment of fees

Fees and charges due to the Office must be paid:

  • by payment or transfer to a bank account held by the Office;
  • by delivery or remittance of cheques made payable to the Office; or
  • in cash.

Currency of payment

All fees and all costs relating to a Community trade mark application must be paid in euros.

Payment details

For all payments, the name of the person making the payment must be indicated and the following information must be provided:

  • when paying the application fee, the purpose of the payment, i.e. “application fee”;
  • when paying the registration fee, the file number of the application being registered and the purpose of the payment, i.e. “registration fee”;
  • when paying the opposition fee, the file number of the application, the name of the applicant for a Community trade mark whose application is being opposed and the purpose of the payment, i.e. “opposition fee”;
  • when paying the revocation or invalidity fee, the registration number, the name of the holder of the Community trade mark against which the application is directed and the purpose of the payment, i.e. “revocation fee” or “invalidity fee”.

Deemed date of payment

The date on which a payment is considered to have been made to the Office is as follows:

  • for a deposit or transfer: the date on which the amount of the payment or transfer is actually entered in a bank account held by the Office;
  • for delivery or remittance of cheques: the date on which the cheque is received by the Office, provided that it is honoured;
  • for a cash payment: the date on which the cash payment is received.

Insufficient payment

In principle, a payment deadline is deemed to have been met only if the full amount of the fee has been paid in due time. If the fee is not paid in full, the amount paid will be refunded after the payment deadline has passed.

Refund of insignificant amounts

Where an excessive sum is paid to cover a fee, the excess will not be refunded if the amount is insignificant and the party concerned has not expressly requested a refund. (It is for the President to determine what constitutes an insignificant amount.)

Refund of fees following refusal of protection

If protection is refused the fee to be refunded is shown in the table in Article 2. In the case of an individual mark the fee to be refunded is €1100, plus €200 for each class of goods and services. In the case of a collective mark the fee to be refunded is €2200 plus €400.

If the refusal concerns part of the goods and services, the fee to be refunded is equal to 50% of the difference between the fees per class paid and the fees per class which would have been payable.

Reduction in the fees payable to the OHIM from 2005 and 2009

The Commission decided to reduce the fees payable to the OHIM by adopting Regulation (EC) No 1687/2005 of 14 October 2005, which is designed to reduce the cost of protecting intellectual property for businesses operating in the EU’s single market. This reduction in fees is the result of productivity gains at the OHIM, which therefore wanted to pass the savings on to business as a whole.

Regulation (EC) No 355/2009 of March 2009 reduces the fees charged by the OHIM and simplifies the fee structure by fixing the amount of the registration fee for a Community trade mark at zero. Only the application fee need be paid. The registration fee is also fixed at zero in relation to international registrations. These reductions in fees are carried out in order to ensure that the OHIM budget is balanced while fostering access to the Community trade mark system for users.

The consequences of the reductions made in 2009 include the following:

  • entreprises will only have to pay an application fee of €1050 instead of the €1750 that it previously cost to apply for and register a Community trade mark;
  • applications made by Internet will be charged at an even lower rate, which will be €900 instead of the €1600 payable in total at present.

References

Act Entry into force – Date of expiry Deadline for transposition in the Member States Official Journal

Regulation (EC) No 2869/95

22.12.1995

_

OJ L 303, 15.12.1995

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 781/2004

1.10.2004

OJ L 123 of 27.4.2004

Regulation (EC) No 1042/2005

25.7.2005

OJ L 172 of 5.7.2005

Regulation (EC) No 1687/2005

22.10.2005

OJ L 271 of 15.10.2005

Regulation (EC) No 355/2009

1.5.2009

OJ L 109 of 30.4.2009

Related Acts

Communication of 22 December 2006 from the Commission to the European Parliament and the Council – The financial perspectives of the Office for Harmonisation in the Internal Market (Trade Marks and Designs) [COM(2006) 865 final – Not published in the Official Journal].
This Communication deals with the long-term management of the financing of the OHIM. The OHIM provides EU-wide protection for trade marks and designs for companies from all over the world. It is funded by the businesses that use its services. The OHIM is generating substantial cash reserves, particularly as a result of the ever increasing number of applications for trade marks and designs. Despite fee reductions in 2005, cash reserves are expected to increase still further in the next few years. However, the annual surplus cannot be allowed to continue to exceed the financial resources needed by the Office to operate. The Commission has therefore proposed a periodic review of the fees payable for Community trade marks in order to ensure that the OHIM has a more balanced budget.

Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark [Official Journal L 78/1 of 24.3.2009].

The competitiveness of business-related services

The competitiveness of business-related services

Outline of the Community (European Union) legislation about The competitiveness of business-related services

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 services

The competitiveness of business-related services

Document or Iniciative

Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions – The competitiveness of business-related services and their contribution to the performance of European enterprise [COM(2003) 747 final – Not published in the Official Journal].

Summary

This Communication, which contains an economic analysis of the role of services in the European economy and examines their competitiveness, seeks to reflect their importance in the overall EU economy and to signal the Commission’s commitment to improving the framework conditions within which business-related services operate.

Business-related services

Business services cover knowledge-intensive business services, such as information technology (IT) consulting, management consulting, advertising and professional training services, as well as operational services consisting of services such as industrial cleaning, security services and secretarial services. The business services sector is not just the largest creator of employment, it also adds more value to the economy than any other macro-economic sector. It has the highest growth potential, more new enterprises are created than in any other sector, and business-related services provide the foundation for the knowledge-based economy.

Growth of business-related services is usually explained by the migration of employment from the manufacturing industry to services due to the outsourcing of the services functions previously produced in-house. But the reasons for the growth are much more complex. Changes in production systems, more flexibility, stronger competition on international markets, the increasing role of ICT and knowledge and the emergence of new types of services are other important factors. Business services have a key role to play in fulfilling the objective set at the Lisbon European Council in March 2000 of making Europe the most competitive and dynamic knowledge-based economy in the world by 2010.

The business-related services sector in Europe does, however, lag well behind the growth in productivity recorded in the United States. This will, in future, threaten the prospects for employment in Europe. There is a genuine danger that services jobs may be transferred to the US and Asia unless the political authorities respond quickly to the challenges facing business-related services in the EU. The main challenges in a knowledge-based economy relate to the ability to remain competitive, and that depends to a great extent on the capacity to invest in IT and R&D. Unfortunately, in this respect the EU is trailing far behind the United States: overall IT expenditures in the EU amounted to 4.2 % of GDP in 2001 compared to 5.3% in the US, whilst EU average R&D expenditures were 13 % – with large differences across Member States – against the US figure of 34 %.

As a result of this situation, and despite the significant share (26 %) of international trade (imports and exports) in business-related services held by European services compared to US services (18 %), in absolute terms the overall net US balance is double the EU one (35 billion versus 17 billion) and is clearly better in terms of the imports/exports cover rates: 124% of surplus versus 108%. This is explained by the fact that the EU is a major importer of business-related services, implying only a small net surplus. The positive net balance is created by relatively large surpluses for financial and insurance services, transportation and IT services, whereas some knowledge-intensive business services (legal, accounting and management services, advertising and market research) and royalties show a large deficit.

Challenges and political priorities

In order to be competitive on the international market, European companies need to be able to rely on framework conditions which are designed to rise to the challenges presented in a global market. This communication first of all identifies the main challenges facing business-related services in the EU in the form of the following five elements:

  • Market integration and competition in business-related services markets is not vigorous enough to ensure and strengthen their competitiveness;
  • The inputs necessary for the production (labour qualifications, integration of ICT and capital) are lacking in quality and quantity;
  • The outputs from business-related services enterprises are not sufficiently transparent (standards), valued (reporting on intangible assets) or documented (quality);
  • The provision and use of business-related services is limited in less developed regions, which mainly affects SMEs and convergence processes;
  • Knowledge about the sector and the markets is scarce, hampering the decision-making ability of enterprises and policymakers.

This communication lists a number of actions which can be taken to tackle each of these five challenges. In response to a business-related services market which is not vigorous enough in terms of market integration and competition, for example, it proposes the:

  • Elimination of obstacles to trade in services in the Internal Market and international trade. The abolition of legal and administrative obstacles to cross-border trade and investment in the EU has been stepped up following the Directive on Services in the Internal Market and the possible extension of the Notification Directive (98/34), together with the liberalisation of international trade in business-related services (see the ‘Services’ Directive). The reduction, or indeed elimination, of economic, social, cultural, etc. barriers hampering the full integration of service markets within Europe may be achieved through the promotion of complementary measures such as the reinforcement of entrepreneurship, networks, skills, common quality standards or innovation;
  • Boosting of competition in the business-related services markets. The competitiveness of business-related services can only be obtained through competitive markets. The introduction of competition in some service sectors like telecommunications and air transport has increased the number of enterprises operating under market conditions, reducing prices, improving quality and boosting employment and the range of services offered;
  • Modernisation of public administrations. The competitiveness of many business-related services is closely linked to the performance of public administrations. However, a wide range of services, traditionally provided by public authorities, can also be delivered by businesses. In particular, the development of e-government and the good management of services of general economic interest with enhanced private financing can result in better co-operation between public and private operators in the interest of users and providers of these services. Public Private Partnerships (PPPs) should thus be encouraged, leading to gains in efficiency and also lower costs to the user as a result of competitive pressure.

With regard to the lack of quality and quantity in the inputs necessary for production (labour qualifications, integration of ICT and capital), this communication proposes efforts to:

  • Ensure continuous learning and updating of skills. The shift towards a knowledge-based economy depends on a labour force with skills adapted to this change, ensuring its employability and thus leading to a better balance between employment protection and flexibility of work organisation (e.g., part-time, teleworking). Furthermore, it facilitates the mobility of workers, helping to overcome skills imbalances, in particular in sectors such as computer and other knowledge-intensive services. Policy measures related to the qualifications of the labour force in the EU must be implemented in order to avoid a delocalisation of services professions, similar to what has been experienced within manufacturing;
  • Support the integration of ICT into business processes. All enterprises in the field of business-related services, especially SMEs, must fully exploit the potential of ICT to increase their competitiveness. This has already happened in the US, where productivity growth acceleration occurred in sectors using as well as producing ICT. However, ICT-using services in Europe have shown weak productivity growth in the last years. ICT should be more and better integrated into business-related services using ICT;
  • Encourage R&D and innovation in business-related services. Some of Europe’s most innovative companies are to be found in the services sector, but the overall level of R&D in this sector is generally low and lags substantially behind the US. Policy innovation initiatives should promote both specific actions oriented towards services activities (e.g. the role of organisational service innovation), and the more active participation of services companies in R&D programmes. The involvement of services companies in the national and European R&D programmes should be improved to address their specific problems and needs. The EU target of devoting 3 % of GDP to research and development will be less difficult to achieve if the business-related services sector plays a larger role, reflecting its overall economic weight.

This communication also notes that the results from business-related services enterprises are not sufficiently transparent (standards), valued (reporting on intangible assets) or documented (quality). It does, however, propose the following actions:

  • The introduction of such voluntary standards. These voluntary standards permit the user to compare products and prices, thus enforcing competition and efficiency in the market. Standards benefit the services providers by enabling them to focus on the internal process of services production and obtain some economies of scale. They are also able to increase the market presence and negotiating position of services providers by compliance with standards. The Commission will promote the setting up of such voluntary standards led by the services providers, in the same way as for manufactured products;
  • The introduction of a single method of reporting intangible assets. Productivity improvement in business-related services depends heavily on investment in intangibles, such as training, customer relationship management, brand image, internal organisation, investment in software and ICT. Businesses have now gained considerable experience in the use of various voluntary guidelines for reporting on intellectual capital and other forms of intangible assets. The Commission will bear these efforts in mind while identifying a single method of reporting intangible assets;
  • The drawing up of quality indicators. A knowledge-based society cannot be competitive without high quality services. In addition, European services should be ready to compete internationally in quality since low-wages countries (e.g. those in Asia) are often in a better position to compete in costs. The Commission, however, encourages and supports the drawing up of quality indicators and promotes best services practices.

Faced with the limited provision and use of business-related services in less developed regions, this communication stresses the need for such services to feature more often in regional development policy. The development of regional markets for business-related services is a necessary element in the catching-up process for the less favoured European regions. These services can also contribute to the creation of a more competitive regional environment and thus attract inward investment.

Finally, with a view to facilitating decision-making by enterprises and policy-makers, this communication proposes improving the level of economic information and analysis, in particular through improved services statistics. Improvement of the knowledge and statistical coverage of business-related services is an essential instrument for giving guidance to decision-making by business operators, policymakers and other stakeholders, and for monitoring progress in the implementation of the policy action areas described in this Communication.

Establishment of a coherent policy framework

The challenges identified in the analysis must be dealt with urgently. If not, the European business-related services sector is at the risk of losing markets. At the start of 2004, the Commission set up a European forum on business-related services which will be composed of the Community institutions, Member State representatives, professional organisations, workers representations, research institutions and other enterprise-related stakeholders.

Key figures
Business-related services constitute the largest sector of the economy, employing around 55 million people in 2001 – or nearly 55 % of total employment in the EU market economy.
The business-related services sector (excluding financial services) constituted 53 % of total employment in the EU market economy in 2000, while manufacturing had a 29 % share (or around 29 million people employed). The sector can be seen to be dynamic: of the more than 1 million new enterprises established in 2000 in the 10 Member States for which data are available, 66 % of all new enterprises were started in business-related services.
Business-related services are especially prevalent in the Netherlands (65 %) and the United Kingdom (61 %). The least dominant role of business-related services, in terms of employment, is found in Portugal (45 %), Germany (46 %) and Italy (48 %).
On average, the total value added created by business-related services constitutes 54 % in 2001 compared to 34 % for manufacturing. The share of the value added differs substantially across Member States, as business-related services in the Netherlands account for 61 % and the United Kingdom for 60 %, compared to 44 % in Finland and 48 % in Germany.
The services sector is characterised by a very large number of micro enterprises (less than 10 employees). These constitute 33 % of total employment within the services sector in the EU compared to 18 % in manufacturing. In business-related services, micro-enterprises are most dominant in the distributive trades (38 %). On the other hand, a similar proportion of employment is found in large enterprises by business-related services (33 %, compared to 30% in manufacturing). Transport and communication is characterised by a large share of employment in large enterprises (57 %)

Distance contracts for financial services

Distance contracts for financial services

Outline of the Community (European Union) legislation about Distance contracts for financial services

Topics

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

Internal market > Financial services: general framework

Distance contracts for financial services

Document or Iniciative

Directive 2002/65/EC of the European Parliament and of the Council of 23 September 2002 concerning the distance marketing of consumer financial services and amending Council Directives 90/619/EEC, 97/7/EC and 98/27/EC [See amending acts].

Summary

Scope

The Directive covers contracts for retail financial services (banking, insurance, payment and investment services, including pension funds) that are negotiated at a distance (e.g. by telephone, fax or over the Internet), i.e. by any means which do not require the simultaneous physical presence of the parties to the contract.

Right to reflect

The Directive gives the consumer the right to reflect before concluding a contract with a supplier. The supplier is thus required to transmit a draft contract to the consumer, in writing or on a durable medium (e.g. floppy disk, CD-ROM or e-mail), including all the contractual terms and conditions. The reflection period is 14 days, during which all the terms and conditions remain valid. The parties are nonetheless free to agree on a longer period or to negotiate other conditions.

Right to withdraw

The consumer has the right to withdraw within 14 days (30 days in the case of life assurance and personal pension operations) in the following circumstances:

  • when the contract has been signed before the consumer has received prior notice of the contractual terms and conditions (e.g. consumer takes out an insurance policy in order to obtain immediate cover);
  • when the consumer has received the contractual terms and conditions but has been unfairly induced to conclude the contract during the reflection period.

If the consumer exercises the right of withdrawal after having already agreed to partial performance of the service, he may be required to pay the supplier for the service rendered. If the service has been rendered in its entirety before the right of withdrawal is exercised, that right can no longer be exercised and the consumer will have to pay for the service. Consumers must be informed in advance of the price to be paid (or of the basis on which it will be calculated).

In order to avoid speculative manoeuvres, the right of reflection or withdrawal does not apply to services whose price is liable to fluctuate as a result of developments on financial markets (e.g. the securities market).

Right to reimbursement

Certain financial services, notably futures (e.g. an instruction given by a consumer to purchase a certain number of shares at a fixed price), may sometimes be totally or partially unavailable at the time of performance of the contract. In this case, the consumer is entitled to reimbursement of the sums paid over to purchase the services.

Cancellation of payment by card in the event of theft

In the event of fraudulent use of his credit card, the consumer may request cancellation of the payment or reimbursement of any amount already paid.

Protection against unsolicited supply of services

Customers are protected by Directive 2005/29/EC, which regards the unsolicited supply of services as an unfair commercial practice. Failure to reply to an offer to supply services does not put the customer under an obligation and does not constitute tacit consent.

Complaints procedures

Member States must ensure that adequate and effective complaints and redress procedures (court, administrative and out-of-court) are put in place for the settlement of possible disputes between suppliers and consumers.

Sanctions

Member States must also ensure that operators and suppliers of communication means put an end, technology permitting, to illicit activities performed using means of distance communication.

Background

The proposal for a Directive is intended to supplement European Parliament and Council Directive 97/7/EC, which ensures appropriate consumer protection in respect of most products and services other than financial services (excluded in view of their specific characteristics). It aims to rectify this legal omission by establishing common rules to govern the conditions under which distance contracts for financial services are concluded.

References

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

Directive 2002/65/EC

09.10.2002

09.10.2004

JO L 271 of 09.10.2002

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Directive 2005/29/EC

12.06.2005

12.12.2007

JO L 149 of 11.06.2005

Directive 2007/64/EC

25.12.2007

1.11.2009

OJ L 319 of 5.12.2007

Successive amendments and corrections to Directive 2002/65/EC have been incorporated in the basic text. This consolidated version  is for reference purpose only.

Markets in financial instruments and investment services

Markets in financial instruments and investment services

Outline of the Community (European Union) legislation about Markets in financial instruments and investment services

Topics

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

Internal market > Financial services: transactions in securities

Markets in financial instruments (MiFID) and investment services

Document or Iniciative

Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC [Official Journal L 145 of 30.4.2004]. [See amending acts].

Summary

In accordance with the Financial Services Action Plan, the EU has adopted a Directive designed to strengthen the Community legislative framework for investment services and regulated markets with a view to furthering two major objectives:

  • to protect investors and safeguard market integrity by establishing harmonised requirements governing the activities of authorised intermediaries;
  • to promote fair, transparent, efficient and integrated financial markets.

Authorisation conditions and procedures

The Directive requires the Member States to harmonise the rules governing investment services and activities. To that end, the Member States must set up an authorisation system enabling investment firms to operate throughout the EU. These firms must be registered and the register must be accessible to the public. Each authorisation is notified to the European Securities and Markets Authority (ESMA).

ESMA is able to develop draft regulatory technical standards. Furthermore, it assists the Commission in its relations with third countries and in assessing their markets.

In other words, the Directive must allow investment firms, banks and stock exchanges to offer their services across borders on the basis of the authorisation issued by the competent authority of their home Member State *. Since authorisation is subject to the same conditions in all the Member States, it will promote the harmonisation of rules governing investment firms.

In this context, the Directive is intended to align national rules governing the provision of investment services and the operation of stock exchanges, with the ultimate aim of creating a single European “securities rule book” *. It will benefit investors, issuers and other market stakeholders by promoting efficient and competitive markets.

Prudential assessment

This Directive is also intended to establish the harmonisation of the assessment rules of procedure and criteria for the acquisition of a qualifying holding *. Its objectives include the maximum harmonisation of the notification thresholds for an envisaged acquisition or the disposal of a qualifying holding, and the maximum harmonisation of the assessment procedure and the list of assessment criteria.

In the context of an envisaged acquisition, the prudential assessment of the shareholders and of management fulfils detailed criteria and is conducted jointly by the competent authorities.

The Directive states in particular that the competent authorities judge the appropriateness of the proposed acquirer and the financial soundness of the envisaged acquisition on the basis of:

  • the reputation and experience of those who direct the business of the insurance company following the envisaged acquisition;
  • the financial soundness of the proposed acquirer;
  • the existence of reasonable grounds to suspect an operation or attempt to launder money or finance terrorism.

Investor protection

The Directive will considerably enhance investor protection by setting business of conduct rules for providing investment services to clients and minimum standards for the mandate and powers that national competent authorities must have at their disposal. It also establishes effective mechanisms for real-time cooperation in investigating and prosecuting breaches of the rules.

Transparency and market integrity

The Directive creates an obligation to safeguard market integrity, to report transactions and to keep records. ESMA has access to this information.

In particular, it establishes a pre-trade transparency obligation. This requires “internalisers” (i.e. firms dealing on own account * by executing client orders outside regulated markets or multilateral trading facilities *) to disclose the prices at which they will be willing to buy from and/or sell to their clients. However, it limits this disclosure obligation to transactions not above standard market size, defined as the average size of orders executed in the market.

Each Member State is responsible for establishing a list of regulated markets and communicating this to the other Member States and ESMA.

This means that European wholesale markets will not be subject to the pre-trade transparency rule and that wholesale broker-dealers will not be exposed to significant risks in their role as market makers.

Operator protection

The Directive includes a set of protective measures for “internalisers” when they are obliged to quote, so that they can provide this essential service to clients without running undesirable risks. These measures include the possibility of updating and withdrawing quotes.

The Directive also establishes a fair market for retail investors. It prevents financial institutions from discriminating between such investors, e.g. by offering some of them improvements to publicly quoted prices.

Appointing competent authorities

Member States must appoint their competent authorities and send the necessary information to the Commission, ESMA and the competent authorities of the other Member States. The competent authorities act as a point of contact in the Member States. ESMA keeps a list of these authorities up-to-date. These authorities are required to cooperate closely with ESMA.

Member States and ESMA may conclude cooperation agreements concerning:

  • the supervision of credit institutions;
  • the procedures of liquidation and bankruptcy of firms;
  • the procedures for statutory audits of the accounts of investment firms;
  • the supervision of bodies involved in the procedures of liquidation and bankruptcy of investment firms;
  • the supervision of persons charged with carrying out statutory audits of the accounts of insurance undertakings, credit institutions, investment firms and other financial institutions.

Final provisions

The Directive is designed to improve the Community rules on securities markets. It therefore sets out the general obligations which Member State authorities must enforce.

Implementing measures, reports and reviews will be adopted by the Commission following consultations with market participants from the Member States and taking into account the opinion of the Committee of European Securities Regulators.

Key terms used in the act
  • Home Member State: for an investment firm: if the investment firm is a natural person, the Member State in which its head office is situated; if it is a legal person, the Member State where its registered office is situated or the Member State where its head office is situated (if, under national law, the legal person does not have a registered office). For a regulated market: the Member State in which the regulated market is registered or, if under the law of that Member State it has no registered office, the Member State in which its head office is situated.
  • Transferable securities: those classes of securities which are negotiable on the capital market, with the exception of instruments of payment, such as: shares in companies and other securities equivalent to shares in companies, partnerships or other entities, and depositary receipts in respect of shares; bonds or other forms of securitised debt, including depositary receipts in respect of such securities; any other securities giving the right to acquire or sell any such transferable securities or giving rise to a cash settlement determined by reference to transferable securities, currencies, interest rates or yields, commodities or other indices or measures.
  • Qualifying holding: any direct or indirect holding in an investment firm which represents 10 % or more of the capital or of the voting rights, or any other possibility of exercising a significant influence over the management of the investment firm in which that holding subsists.
  • Dealing on own account: trading against proprietary capital resulting in the conclusion of transactions in one or more financial instruments.
  • Multilateral trading facility (MTF): a multilateral system, operated by an investment firm or a market operator, which brings together multiple third-party buying and selling interests in financial instruments – in the system and in accordance with non-discretionary rules – in a way that results in a contract.

References

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

Directive 2004/39/EC

30.4.2004

31.1.2007

OJ L 145, 30.4.2004

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Directive 2006/31/EC

28.4.2006

31.1.2007

OJ L 114, 27.4.2006

Directive 2007/44/EC

21.9.2007

20.3.2009

OJ L 247, 21.9.2007

Directive 2008/10/EC

20.3.2008

OJ L 76, 19.3.2008

Directive 2010/78/EU

4.1.2011

31.12.2011

OJ L 331, 15.12.2010

Successive amendments and corrections to Directive 2010/78/EU have been incorporated in the basic text. This consolidated version is for reference purpose only.

Related Acts

Proposal for a Directive of the European Parliament and of the Council on Alternative Investment Fund Managers and amending Directives 2004/39/EC and 2009/…/EC [COM(2009) 207 final – Not published in the Official Journal].
This Proposal aims to establish regulatory and supervisory standards for hedge funds, private equity and other systemically important market players. The Proposal meets the need to strengthen the regulation and oversight of managers following the financial turbulence of 2007-2008.
It applies to managers managing alternative fund portfolios with assets of at least Euro 100 million.
It defines a framework relating to:

  • rights and obligations of managers;
  • operating conditions and initial authorisation in relation to liquidity;
  • treatment of investors;
  • supervisory cooperation information sharing and mediation.

Codecision procedure (2009/0064/COD)

Commission Directive 2006/73/EC of 10 August 2006 implementing Directive 2004/39/EC of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive [Official Journal L 241 of 2.9.2006].
The purpose of this Directive is to establish a harmonised framework of organisational requirements and operating conditions for investment firms.