State Aid: Commission Outlines Comprehensive Five Year Reform of State Aid Policy
The European Commission has adopted a State Aid Action Plan outlining the guiding principles for a comprehensive reform of State aid rules and procedures over the next five years. The Commission’s intention is to encourage Member States to focus aid on improving the competitiveness of European Union (EU) industry. Within this it aims to create sustainable jobs (more aid for research and development, innovation and risk capital for small firms), improve public services, and ensure social and regional cohesion, sustainable development and cultural diversity. The Commission also aims to rationalise and streamline procedures in order to improve their efficiency and transparency, and to exempt certain state subsidies from the notification obligation. Interested parties are invited to submit comments on the Action Plan until 15 September 2005, after which detailed reform proposals will be presented.
Internal Market: New Anti-Money Laundering Directive Adopted
The European Community (EC) has adopted the Third Anti-Money Laundering Directive that will replace existing rules on cooperation in this field within the Internal Market. The new Directive will extend the scope of those rules to trust and company service providers. It also goes further than the 2003 revision of the Forty Recommendations of the Financial Action Task Force (the international anti-money laundering body), which the new Directive incorporates into EC law, by bringing within its scope traders in goods and services where a cash payment in excess of EUR 15,000 is made. Those subject to the Directive will be required to identify and verify the identity of their customers, monitor their business relationship with customers, ensure training of personnel and establish internal preventative policies and procedures, as well as reporting suspicions of money laundering and terrorist financing to the relevant public authorities. Additional safeguards will also apply to transactions involving higher risks such as trading with correspondent banks outside the EU. The EU’s Member States have agreed to adopt the new rules within two years of their publication, which is expected by the end of 2005
Trade: Mandelson Urges Textiles Industry to Adjust and Focus on Chinese Opportunities
In a speech to European textile producers in Florence, European Trade Commissioner, Peter Mandelson, reiterated his commitment to trade liberalisation, and his policy based on the need to “manage change and adjustment rather than to manage trade”. In relation to the textile sector, European industry should for example plan for 250 million Chinese soon being able to afford luxury goods, including expensive clothes. In the short term, however, the Commissioner promised “breathing space” to the textile industry to help smooth the transition. While hoping that this could be achieved through a negotiated solution with China “that is mutually acceptable to both sides”, Mandelson is prepared to use all tools at his disposal, including the introduction of safeguard measures if necessary. In the meantime, the investigations into surges of Chinese textile imports will be looking at the overall picture. For example, while imports of men’s shirts from China have increased by more than 100 per cent in the first quarter of 2005, overall imports of men’s shirts into the EU have dropped by 8 per cent.
State Aid: Commission Approves Recapitalisation of Alitalia
The European Commission has found that the recapitalisation of Alitalia and its services subsidiary does not constitute a breach of the EU State aid rules, as it does not involve any State aid. However, the Commission added that the Italian State during the company’s recapitalisation should behave as a prudent investor. At the same time, the Commission ruled that the participation of the Italian State in the future increase of capital of the carrier must take place under the same conditions and at the same price as private investors. In addition, the Commission took the view that the EUR 400 million loan that Italy was authorised to grant to Alitalia had not been misused.
State Aid: Commission Approves Financing for the “Chaîne Française d’Information Internationale” (CFII)
The European Commission has approved financing for a new international news channel, the “Chaîne française d’information internationale”(CFII), under EC State aid rules. The CFII will take the form of a joint venture in which France Television, the French public broadcasting company, and TF1, a French private broadcasting company, will have joint control. The aim is to provide foreign audiences with the French point of view on international news. Although the financing of CFII constituted State aid, the Commission took the view that it could nevertheless be authorised as a project financing a service of general economic interest. The mechanism for financing the channel provided satisfactory guarantees against overcompensation for the public service costs by means of a mechanism for reusing any profits from one financial year for public service tasks in the following year. The project also offered sufficient guarantees against possible risk of distortion of competition, in particular by preventing unjustified transfers of public funds to France Television and TF1.
The European Parliament has approved on a first reading the proposed Directive on reinsurance, which is "insurance for insurers". Direct insurers, who issue policies for businesses and individuals, insure with reinsurers to meet their risks in full. The proposal introduces the system for authorisation and financial supervision of a reinsurance undertaking by the Member State, in which it has its head office (“home country control”). It provides harmonised rules on the conditions for obtaining a licence. Once licensed in one Member State a company will be allowed to conduct reinsurance business across the European Union. The proposal also sets out “prudential rules” for the supervision of reinsurance undertakings, which include rules on the establishment of technical provisions (amounts put aside to cover contractual commitments) and rules on the investment of assets covering those technical provisions. It is proposed that Member States implement the Directive within a period of two years after adoption. However, the European Parliament has suggested an additional transitional period of 12 months to allow for the abolition of “collateral systems”, which require reinsurers to pledge assets to cover outstanding claims provisions.
NEXT WEEK’S EVENTS
Monday 13 June – Friday 17 June 2005
General Affairs and External Relations Council (13-14 June 2005)
European Council (General Affairs and External Relations) (16-17 June 2005)
COURT OF JUSTICE
Joined Cases C-462/03, C-463/03 Strabag
C-349/04 Commission v Luxembourg
Freedom to provide services
C-104/04 Commission v France
C-456/03 Commission v Italy
Law governing the institutions
C-123/02 Parliament v Royal & Sun Alliance Insurance
C-124/02 Parliament v AIG Europe
C-125/02 Parliament v HDI International
Approximation of laws
C-86/03 Greece v Commission
Joined Cases C-138/03, C-324/03, C-431/03 Italy v Commission
Joined Cases C-232/04, C-233/04 Güney-Görres
C-466/03 Albert Reiss Beteiligungsgesellschaft
COURT OF FIRST INSTANCE
Joined Cases T-71/03, T-74/03, T-87/03, T-91/03 Tokai Carbon v Commission
T-186/04 Spa Monopole v OHMI - Spaform (SPAFORM)
T-7/04 Shaker v OHMI - Limiñana y Botella (Limoncello della Costiera Amalfitana shaker)
T-17/02 Olsen v Commission
T-171/02 Regione autonoma della Sardegna v Commission