Publications / McDermott Newsletters / Brussels Brief - February 8, 2008

Brussels Brief - February 8, 2008

February 8, 2008

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KEY DEVELOPMENTS

Internal Market:  Parliament Adopts Plan to Liberalise Postal Markets

Andrea Hamilton

The European Parliament has approved the Postal Services Directive, giving final political approval to the reform of the European postal markets.  The text adopted by the Parliament reflects an overall political compromise that was already endorsed by the Council of the European Union.  The purpose of the Directive is to provide better postal services through competition.  In particular, the Directive requires EU Member States to open their postal markets to competition by the end of 2010.  These are currently estimated to be worth approximately EUR 90 billion.  Member States that have joined the European Union since 2004 will have an additional two years to liberalise their postal markets, but their national postal services may not be able to enter competitive markets in other Member States until the newer Member States have opened their national postal markets to competition. 

 

Mergers:  Infringement Procedure Against Spain for Conditions Imposed on Endesa Acquisition

Juan Gutiérrez

The European Commission has sent a letter of formal notice to Spain concerning the conditions imposed by the Spanish Energy Regulator (CNE) on the acquisition of Endesa by Enel and Acciona.  On 5 December 2007, the Commission declared the conditions imposed by CNE to be contrary to the EC Treaty rules on the freedom of establishment, free movement of capital and free movement of goods.  The Commission required Spain to withdraw the conditions by 10 January 2008 but Spain did not comply with this mandate.  The letter of formal notice is the first step in infringement proceedings under Article 226 of the EC Treaty.  If there is no satisfactory reply within 15 working days, the Commission may issue a formal request to Spain to comply with its decision.  The Commission may then bring the case before the European Courts.

 

Internal Market:  New Regulation to Introduce Single EU Legislation forCosmetics

Mélanie Bruneau

The European Commission has proposed a new Regulation for cosmetics that aims to: (i) improve the safety of cosmetics placed on the EU market; (ii) simplify notification requirements in order to cut administrative costs for companies by 50 per cent; (iii) adopt rules for reporting undesirable effects to the supervising authorities; (iv) coordinate enforcement of product withdrawal decisions among EU Member States; and (v) replace national laws implementing the 1976 Cosmetic Directive.  The 1976 Directive has become a complex patchwork of 55 amendments without coherent terminology.  Moreover, the existing provisions for the ban on and the phasing-out of animal tests on cosmetic products by 2009/2013 would remain applicable.

 

Taxation:  Commission Requests that Germany Ends Discriminatory Rules Applied to Non-Resident Taxpayers

Jonathan Aitken

In March 2007 the European Commission formally asked Germany to amend the withholding tax system applied to certain categories of non-resident taxpayers.  Under the system, resident taxpayers were able to declare their income annually, net of business expenses, whereas non-residents (in particular artists, sportsmen and journalists) were taxed at source and subsequently had to claim back overpaid tax through a refund procedure.  In April 2007 the German Federal Ministry of Finance made the following changes to the system for non-residents: (i) business expenses may be deducted in the withholding tax procedure but only when they exceed 50 per cent of gross receipts; and (ii) the withholding tax rate is increased from 25 per cent to 40 per cent in cases where business expenses are allowed for deduction.  In the Commission's view, this new restricted possibility for non-residents is still incompatible with the principle of freedom to provide services in the Internal Market.  The Commission has therefore formally asked Germany again to modify the withholding tax system.

 

Telecommunications:  Commission Refers Poland and Belgium to ECJ

Chen Dingsheng

In a new round of infringement proceedings concerning telecoms rules, the European Commission has referred a number of cases to the European Court of Justice (ECJ).  Two examples of these concern Poland and Belgium.  Poland will be taken to the ECJ as legislative changes introduced in August 2006 still do not ensure the full independence of the Polish regulator.  The Polish Government still controls significant shareholdings in a number of telecommunication companies and the Polish President of the Council of Ministers has unlimited discretion to dismiss the head of the national regulator.  Poland has also been sent a reasoned opinion for retaining broadband retail regulation without conducting the market analysis that is required under EU law.  Belgium is being taken to the ECJ in relation to universal service, i.e., the obligation imposed on operators of electronic communications networks and/or services to provide a minimum set of services to all users, regardless of their geographical location within the national territory, at an affordable price (Directive 2002/22/EC).   Belgium’s problems relate to the financial mechanism for tariffs, such as the calculation of net costs and the unfair burden on operators.

 

State Aid:  Commission Authorises Regional Aid to Qimonda for DRAM Wafer Project in Germany

Patricia Armesto

The European Commission has authorised the granting of regional aid amounting to EUR 165.6 million, which will be provided by German authorities to Qimonda for the conversion of its existing facilities and the construction of a new DRAM wafer plant in Dresden.  DRAMs (also known as "memory chips") are highly complex microchips that are used in computers, entertainment electronics, mobile communications and other electronic devices.  The high-tech investment project by Qimonda is expected to contribute significantly to the regional development of Saxony, a disadvantaged area with a low standard of living and high unemployment rate.  As the regional aid does not exceed any of the relevant assessment thresholds on aid intensity, market power and additional production capacity, the Commission has decided that it is compatible with the common market.

 

Internal Market:  Czech Republic, Poland and Spain Referred to ECJ for Failure to Implement MiFID

Elena Kostadinova

The European Commission has referred the Czech Republic, Poland and Spain to the European Court of Justice for their failure to implement the “Markets in Financial Instruments Directive” (MiFID) and its implementing Directive.  The MiFID creates a new legal framework for the provision of investment services in the European Union.  A key feature of the MiFID is the option for investment firms to use the authorisation obtained in one EU Member State to provide financial services in another Member State.  The deadline for implementation of the MiFID expired on 31 January 2007 and its provisions have been applicable since 1 November 2007.  The failure of these Member States to implement the MiFID would deprive investment firms from the opportunity to benefit fully from the new regime.

 

Internal Market:  Commission Investigates Gambling Services in Germany and Sweden

Bróna Heenan

The European Commission has formally requested information from both Germany and Sweden on their national legislation in relation to the supply of gambling services.  In Germany, the questions focus on the provisions of new legislation that: (i) bans games of chance on the internet; (ii) restricts advertising on television, internet, jerseys or billboards; and (iii) prohibits financial institutions from processing payments related to unauthorised games of chance.  In Sweden, the restrictions under investigation are related to poker games and tournaments that are offered online by the Swedish State-owned company while similar services offered by operators licensed and regulated in other EU Member States are banned.  Germany and Sweden have two months to reply to these requests for information, failing which the Commission may bring an action before the European Court of Justice.

 

NEXT WEEK’S EVENTS

Monday 11 February – Friday 15 February 2008

 

COUNCIL MEETINGS

Eurogroup (11 February 2008)

Economic and Financial Affairs Council (ECOFIN) (12 February 2008)

Education, Youth and Culture Council (EYC) (14 February 2008)

 

COURT OF JUSTICE

Judgments

Area of Freedom, Security and Justice

C-2/06 Kempter

 

Freedom of establishment

C-450/06 Varec

 

Free movement of capital

C-274/06 Commission v Spain

 

Free movement of goods

C-244/06 Dynamic Medien

 

State aid

C-199/06 Centre d'exportation du livre français

C-419/06 Commission v Greece

 

Opinions

Citizenship of the Union

C-33/07 Jipa

 

Freedom of establishment

Joined Cases C-329/06, C-343/06 Wiedemann

Joined Cases C-334/06, C-335/06, C-336/06 Zerche

C-414/06 Lidl Belgium

 

COURT OF FIRST INSTANCE

Judgments

Agriculture

T-266/04 Spain v Commission

 

Intellectual property

T-146/06 Sanofi-Aventis v OHMI - GD Searle (ATURION)

T-189/05 Usinor v OHMI - Corus (UK) (GALVALLOY)

T-378/04 Orsay v OHMI - Jiménez Arellano (Orsay)

T-39/04 Orsay v OHMI - Jiménez Arellano (O orsay)

 

Social policy

T-351/05 Provincia di Imperia v Commission

 

State aid

T-289/03 BUPA and Others v Commission

 

McDermott Will & Emery

McDermott Will and Emery