Monday 17 April 2017

Single market compliance and enforcement

In the blog entries Evidence-based European market reforms? and  Services in EU single market strategy and European standards, public procurement and intellectual property, we used the analytical staff working document underpinning the promised proposals and actions in parallel with the condensed single market communication:
A Single Market Strategy for Europe - Analysis and Evidence; Brussels, 28.10.2015 SWD(2015) 202 final (108 pages)

Upgrading the Single Market: more opportunities for people and business; Brussels, 28.10.2015 COM(2015) 550 final (22 pages)

Compliance and enforcement

Section 4.1. A culture of compliance and smart enforcement encompasses pages 16-17 of the communication and pages 79-86 of the supporting working document.

The SWD (page 83) makes this remark on implementation plans for new legislation:

As part of the Better Regulation Agenda, the Commission should ensure efficient monitoring of EU law throughout the full regulatory life-cycle from the proposal of new legislation, to its adoption, transposition, notification, implementation, enforcement and evaluation, with the overall objective of ensuring clarity, operability and enforceability of EU legislation.

The SWD paper explains the Better Regulation Agenda, but since we are interested in new legislation connected with the single market strategy, we refer to the more detailed better regulation communication, which was accompanied by two Commission staff working documents:

Better regulation for better results - An EU agenda; Strasbourg, 19.5.2015 COM(2015) 215 final

Regulatory Fitness and Performance Programme (REFIT): State of Play and Outlook; Strasbourg, 19.5.2015 SWD(2015) 110 final

Better Regulation Guidelines; Strasbourg, 19.5.2015 SWD(2015) 111 final

At least with regard to the number of pages, the communication is the mere tip of the better regulation iceberg.

The Commission outlined a new instrument for monitoring the single market and its planned scope, SWD(2015) 202 pages 85-86:

The ability to obtain timely, comprehensive, reliable and robust quantitative and qualitative information directly from affected firms would improve enforcement of the Single Market acquis and help addressing flaws in existing legislation. The introduction of a Single Market Information Tool (SMIT), which will allow the collection of information directly from selected market participants, will help the Commission to ensure the optimal enforcement of the Single Market acquis.

The use of the SMIT by the Commission will be decided on a case by case basis and will be adequate and proportionate to the intended objectives. This tool will not be a blanket right to require information from any firm at any time. First of all, before engaging into such an exercise, the Commission will analyse whether already available data are sufficient to address the issues at stake. Second, information request will only be addressed to a subset of the most affected firms. Third, the data sought through the SMIT will normally be readily available to the market players concerned, such as questions relating to the market behaviour, cross-border trade and business model and will typically cover factual market data (e.g. market size and share, level of imports etc.), company data (e.g. cost structure, profits, volumes, new products, ownership, control, participations in other companies, etc.) and facts-based analysis of the market functioning (e.g. regulatory and entry barriers, entry cost, growth rate of the market, growth perspectives or overcapacity). The Commission will consider existing best practice, including from the competition law domain, when shaping the procedural and administrative process of the SMIT, notably with regard to confidentiality-related issues.

In a nutshell:

Data analytics tool for monitoring Single Market legislation (2017)

Proposal for market information tools allowing the Commission to collect information from selected market players (2016)

Right now, the latest edition of the online Single Market Scoreboard is 07/2016.

Services Directive: notification

An improved notification procedure with regard to the Services Directive 2006/123, section 4.2, communication pages 17-18, SWD pages 86-90, was seen as necessary:

As a result, the additional economic gains to be achieved from reforms carried out in 2012 to 2014 are limited. Of the 1.8 % potential additional GDP growth estimated by the Commission in 2012, reforms adopted by mid-2014 are estimated to yield a limited EU GDP long-term growth of no more than 0.1 %.

This lack of progress shows the need for an improved notification procedure allowing for more preventive enforcement.

In short:

Legislative proposal modelled on the successful features of the current notification procedure under Directive (EU) 2015/1535 for services currently not covered by that Directive (2016)

Single market for goods
Communication pages 18-20 and SWD pages 90-100, section 4.3. Strengthening the Single Market for goods taught us that the Commission was going to present an EU-wide Action Plan to increase awareness of mutual recognition and revise the Mutual Recognition Regulation 764/2008.  


Action Plan to increase awareness of the mutual recognition principle (2016)

Revision of Mutual Recognition Regulation (2017)

Comprehensive set of actions to further enhance efforts to keep non-compliant products from the EU market (including a possible legislative initiative) (2016-2017)

Ralf Grahn

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