Brussels Brief - March 16, 2007
March 16, 2007
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KEY DEVELOPMENTS
Internal Market: EU Requires Cigarette Lighters to be Child-Resistant
Michal Cieplinski
The European Commission has enhanced consumer safety protection by requiring that, as of 11 March 2007, all cigarette lighters that are dangerous to children are no longer placed on the European market. The Decision requires governments to (i) ensure that cigarette lighters placed on the EU market are “child-resistant”, and (ii) prohibit the placing on the market of lighters which resemble objects that are particularly attractive to children (also called “novelty lighters”). Manufacturers and importers of cigarette lighters will be required to submit all relevant documents to the competent Member States’ authorities, including test reports on child-resistance. All lighters already in stock on the market before 11 March 2007 may still be sold. The Commission plans to adopt a further Decision setting a deadline for the selling off of such stocks, which will most likely be 11 March 2008.
Competition: Commission Issues Statement of Objections in Flat Glass Cartel
Yannis Virvilis
The European Commission has confirmed that it has sent a Statement of Objections to the members of an alleged cartel in the market for flat glass. Statements of Objections in cartel cases constitute a formal initiation of proceedings against companies accused of collusion and in most cases they lead to high fines. In the present case flat glass manufacturers are being accused of fixing prices. The information on which the Commission has based its accusations was collected during “dawn raids” conducted in February and March 2005, as well as information supplied by the alleged participants in the cartel within the framework of leniency applications.
Taxation: ECJ Rules on UK's Thin Cap Legislation
Jérôme Cloarec
UK “Thin capitalisation” legislation is an anti-avoidance measure which provides that interest payments made by a UK resident company to certain non-resident group members are treated as distributed profits and are therefore taxed (unlike similar payments to UK resident group members, which are not). The legislation aims to prevent the artificial reduction of taxable profits through the distribution of profits under the guise of tax-deductible interest payments. Following a claim that the legislation discriminates between UK and non-UK companies, the High Court in London referred questions to the European Court of Justice (ECJ) on the compatibility of the legislation with EU law. On 13 March the ECJ ruled that the legislation does constitute a restriction on the freedom of establishment within the EU in those cases where the loan is granted by a controlling company in another EU Member State. However, the thin cap legislation could be justified if it was based on objective elements making it possible to identify purely artificial transactions, and provided that in such cases the interest payment was taxable only to the extent that it exceeded an arm’s length amount.
Taxation: Commission Proposes to Increase Excise Duty Rates on Commercial Diesel
Andrea Hamilton
The European Commission has proposed to increase minimum excise duty rates on commercial diesel in an effort to restore competition in the liberalised haulage market and reduce environmental harm. At present, excise duty rates on commercial diesel constitute between 6 and 18 per cent of a haulier’s costs, and vary widely among the Member States. According to the Commission, hauliers distort competition and harm the environment when they engage in “tank tourism” – making detours to purchase diesel in lower tax Member States. The current proposal aims to harmonise excise duty rates on commercial diesel, and thereby restore competition and reduce environmental harm, by raising the minimum duty rate from EUR 302 to EUR 380 per 1,000 litres by 2014, with an intermediate step of EUR 359 in 2012.
Air Transport: Single European Sky Evaluation Reveals Scope for Improvement in Air Traffic Management
Marta Becerra
On 12 March 2007 the European Commission released an independent evaluation of the impact of the Single European Sky legislation in the air traffic management performance carried out by the Eurocontrol Performance Review Commission (EPRC). The evaluation will assist the Commission in the preparation of the first report on the implementation of the Single European Sky due in April 2007. The EPRC recognises that efficiency remains a major issue. Inefficiencies in the current air traffic management system, such as low productivity and high fragmentation of air traffic management systems, cost airspace users some EUR 3 billion per year. The evaluation concludes that future efforts should focus on the development, under the existing Single European Sky framework, of non-regulatory actions such as guidance material, support to national supervisory authorities and facilitation of cooperation between parties, without necessarily introducing new legislation.
Internal Market: EU Set to Make M&A Rules in Banking Free From Political Influence
Elena Kostadinova
The European Parliament has supported the European Commission’s proposal to make the procedures on assessing mergers and acquisitions (M&A) in the banking sector more transparent and free from political intervention. The initiative is part of the general debate on protectionism. Current EU rules allow national supervisory authorities to block proposed M&A if they consider that the “sound and prudent management” of the target company could be put at risk. The proposal would clarify what constitutes “sound and prudent management” by setting out five criteria. Member States may not impose requirements that are more stringent than those set out in the Directive concerning the notification to, and approval by, the competent authorities of acquisitions of voting rights or capital. EU ministers are expected to approve the changes at the EU Council meeting on 27 March 2007.
Competition: Plea Bargaining to be Introduced in Europe
Philip Torbøl
The European Commission is considering the introduction of a plea bargaining option in cartel investigations similar to that which exists in the United States. At a conference in Brussels on EC Competition Policy, Commissioner Neelie Kroes explained that the number of applications for immunity in cartel cases continues to increase and forces the Commission to consider ways to handle cartel investigations more efficiently. She suggested that regulators should be able to reach agreement with the parties involved on the scope and the duration of the infringement as well as on the parties’ liability. The parties would be rewarded for their cooperation by a rebate on the fine. This autumn the Commission is expected to launch consultations on this initiative and on proposals in the field of private antitrust litigation.
Monday 19 March – Friday 23 March 2007
COUNCIL MEETINGS
Agriculture and Fisheries Council (19 – 20 March 2007)
Transport, Telecommunications and Energy Council (22 March 2007)
COURT OF JUSTICE
Judgments
Freedom of establishment
C-383/05 Talotta
Privileges and immunities
C-437/04 Commission v Belgium
Regional policy
C-15/06 P Regione Siciliana v Commission
Opinions
Citizenship of the Union
Joined Cases C-11/06, C-12/06 Morgan
Environment and consumers
C-194/05 Commission v Italy
C-195/05 Commission v Italy
Social policy
C-458/05 Jouini and Others
COURT OF FIRST INSTANCE
Judgments
Intellectual property
T-215/03 SIGLA v OHMI - Elleni Holding (VIPS)
T-322/05 Brinkmann v OHMI - Terra Networks (Terranus)
T-364/05 Saint-Gobain Pam v OHMI - Propamsa (PAM PLUVIAL)
