Brussels Brief - November 2, 2007
November 2, 2007
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KEY DEVELOPMENTS
VAT: France and United Kingdom Suggest Reduced VAT Rate on Green Products
Elena Kostadinova
France and the United Kingdom have asked the European Commission to consider whether the European Union could introduce reduced VAT rates for energy efficient products. This initiative is expected to be discussed at the meeting of the EU Council of Finance Ministers on 13 November 2007. The EU Member States will have to decide whether the Commission should prepare an amendment of the EU VAT Directive and which energy efficient products would be affected. Any such proposal will need to be unanimously accepted by all EU Member States for its adoption. Reducing VAT rates is, however, a politically delicate subject in the European Union.
Competition: Draft Legislative Package on Settlement Procedure for Cartels
Kate DaSilva
The European Commission has launched a public consultation on a settlement package regarding cartel cases. As part of the package, parties will acknowledge their involvement in cartels, admit liability and agree to a faster settlement procedure. Settlements would aim to simplify the administrative proceedings and could reduce litigation in cartel cases, thereby freeing resources to pursue more cases. The draft proposal would allow the Commission to impose a lower fine on parties who agreed to the settlement procedure. Comments on the package of documents should be made by 21 December 2007. Following these comments a revised proposal will be prepared, in consultation with Member State competition authorities, for final adoption in 2008.
Taxation: Spanish Non-Resident Tax Breaches EU Rules
Geert Dierickx
The European Commission has requested that Spain amend its tax rules for non-Spanish EU residents working in Spanish diplomatic or consular offices. Pursuant to Spanish legislation, a person who is recruited in an EU Member State other than Spain to work abroad in a diplomatic office or in any other similar institution continues to be treated as a non-resident for tax purposes. As a non-resident, one cannot benefit from personal or family allowances. However, people who were Spanish residents before being recruited are treated as residents benefiting from the tax allowances. According to the Commission, this tax treatment is contrary to the free movement of persons. If Spain does not respond satisfactorily within two months, the Commission may refer this issue to the European Court of Justice.
Consumer Protection: Mattel Recall on Lead Paint Toys
Chen Dingsheng
Mattel has announced a recall of certain toys sold under their Fisher-Price brand in Canada, Ireland, the United Kingdom and the United States, due to excessive levels of lead in the paint. The European Commission received prior notice of the recall, which enabled it to provide advice to companies on the recall process and to circulate full information to all EU Member State authorities through the EU RAPEX (Rapid Alert System) for dangerous consumer goods. This fourth Mattel recall comes as the European Commission is in the final stages of a two month review of the consumer product safety mechanisms in place in Europe.
State Aid: Commission Issues Guidelines on the Recovery of Illegal Subsidies
Benoît Keane
The European Commission has issued guidelines on the recovery of subsidies granted in contravention of EU State aid rules. The EU Member State that granted the subsidy has to recover from the beneficiary any public subsidy in breach of the rules, plus interest. However, in the past this has proved to be very difficult to implement as essentially it is the Member States’ responsibility to recover the funds they granted in the first place. The new guidelines consolidate the Commission’s past approach on this issue and set out the parameters for enforcing the recovery of aid from the beneficiary. The Commission has also said that it will monitor the recovery of aid more closely and that it will not hesitate to enforce recovery orders before the European Courts.
Trade: EU Steelmakers Demand Tariffs on China Imports
Chen Dingsheng
The European Confederation of Iron and Steel Industries (Eurofer) has announced that it has filed two anti-dumping complaints with the European Commission. The requests concern imports of stainless steel products from China, South Korea and Taiwan, and hot-dipped metallic coated sheet and strip from China. Eurofer said that the European steel industry had sustained “material injury” following a 3,300 per cent surge in steel imports from China over the past four years. However, importers warned such duties could affect some seven million metalworkers and mechanical engineers in Europe who rely on cheap imports to remain competitive. The Commission has not yet formally confirmed receipt of this request. The case could further test EU-China relations, which are already strained by issues relating to consumer protection, counterfeiting, Chinese export subsidies and the rising trade barriers faced by EU businesses to access Chinese markets.
Air Transport: An Important Step Towards the Single European Sky
Patricia Armesto
The European Commission has adopted a new Regulation on “voice channel spacing”. This Regulation allows an increase in the number of frequencies available for air to ground communications in the areas where air traffic management is used. Consequently, more interoperability between systems in Europe will be achieved. This legal instrument supports the coordinated introduction in the air and on the ground of a more efficient technical solution in air navigation throughout Europe, consisting of a reduction in the channel spacing from 25 to 8.33 KHz. The new legislation complements three regulations recently adopted with the aim of modernising air traffic management systems within the “Single European Sky”. The “Single European Sky” is a unified European system created to improve industry’s efficiency, enhance safety and reduce carbon dioxide emissions.
Internal Market: A Boon for Financial Markets and Investor Protection as the MiFID Enters into Force
Kate DaSilva
On 1 November 2007, the Markets in Financial Instruments Directive (MiFID) will enter into force. The MiFID will replace the existing Investment Services Directive and harmonise national rules for investment services and the operation of exchanges by creating a robust, common regulatory framework for Europe's securities markets. This harmonisation will provide authorised investment firms, banks and exchanges with a "passport" to unrestricted operation throughout the European Union. The MiFID will increase competition and efficiency among exchanges, multilateral trading facilities and investment firms. Consequently, investors will have access to a greater number of trading venues and stronger protection. Significant market developments are already underway in anticipation of this new, more competitive environment.
NEXT WEEK’S EVENTS
Monday 5 November – Friday 9 November 2007
COUNCIL MEETINGS
Justice and Home Affairs Council (JHA) (8 November 2007)
COURT OF JUSTICE
Judgments
Agriculture
Joined Cases C-260/06, C-261/06 Escalier
Approximation of laws
C-224/07 Commission v Luxembourg
Environment and consumers
C-60/07 Commission v Czech Republic
C-40/07 Commission v Italy
Fisheries policy
C-141/05 Spain v Council
Freedom of movement for persons
C-379/05 Amurta
Free movement of goods
C-221/06 Stadtgemeinde Frohnleiten and Gemeindebetriebe Frohnleiten
C-143/06 Ludwigs-Apotheke
C-374/05 Gintec
Industrial Policy
C-75/07 Commission v France
Intellectual property
C-20/05 Schwibbert
Taxation
C-251/06 Ing. Auer
Opinions
Freedom of establishment
C-293/06 Deutsche Shell
Intellectual property
C-304/06 P Eurohypo v Office for Harmonisation in the Internal Market
COURT OF FIRST INSTANCE
Judgments
Environment and consumers
T-374/04 Germany v Commission
Intellectual property
T-28/06 RheinfelsQuellen H. Hövelmann v OHMI (VOM URSPRUNG HER VOLLKOMMEN)
T-407/05 SAEME v OHMI - Racke (REVIAN's)
T-90/05 Omega v OHMI - Omega Engineering (Ω OMEGA)
T-459/05 MPDV Mikrolab v OHMI (manufacturing score card)
Law governing the institutions
T-194/04 Bavarian Lager v Commission
