Brussels Brief - November 17, 2006
November 17, 2006
Full Printable Version in PDF Format
(Adobe Acrobat Reader required, available for free download here)
KEY DEVELOPMENTS
Internal Market: European Parliament Approves Services Directive
Philip Torbøl
The European Parliament has voted in favour of the text for a services directive agreed in the EU Council in July. After years of debate, including a complete redraft of the directive, the way now seems paved for final adoption by the Council. Pursuant to the proposed directive, providers of cross-border services are subject to the laws of the Member State in which they are established – not subject to the laws of the Member States to which the service activity is actually provided. Labour law is, however, excluded from this rule, as well as criminal law, gambling laws and social services, including broadcasting, postal services, audiovisual services, temporary employment agencies, public transport, and healthcare. Implementation of the new directive is expected in early 2010.
Environment: Commission to Propose Revision of EU Emissions Trading Scheme in 2007
Elena Kostadinova
The European Commission has presented its report on the application of the European Union’s Emissions Trading Scheme (ETS). The report is accompanied by proposals for revision of the scheme, which would require broad stakeholder consultation. A working group including stakeholders should present a report by 30 June 2007, after which the Commission could make new legislative proposals. The focus of the review will be on expanding the scope of the scheme by including new greenhouse gases, such as nitrous oxides, and new sectors. Another objective is the harmonisation of the methods for determining the cap on emissions and for allocation of emission allowances. This review comes in addition to an EU initiative for bringing aviation into the ETS.
Trade: Russia Reaches Trade Deal with US
Michal Cieplinski
After years of negotiations, Russia’s agreement with the US lifts one of the last remaining barriers to its entry into the World Trade Organisation (WTO). The exact terms of the agreement were not released but US officials said Moscow had agreed to open the Russian market to American beef, poultry, pork, corn, wheat and fruit. The agreement also allowed US banks and insurance companies to set up and expand. Russia is the largest economy still outside the WTO. Its WTO bid still faces a number of hurdles, as the country must reach agreement with Costa Rica and confirm previous deals with Georgia and Moldova, which have both seen their wine and agricultural products banned in Russia. Georgia, in particular, is likely to try to use Russia’s desire for WTO membership as leverage in negotiations. Political tensions between Russia and its southern neighbour are high, and Georgia’s small economy has been damaged by the bans as well as by a transportation blockade.
Mergers : Commission Gives Conditional Clearance to GDF-Suez Merger
Yannis Virvilis
After a second phase in-depth investigation, the European Commission has decided to clear the merger between the two energy companies Gaz de France (GDF) and Suez, subject to a number of conditions, including the divestment of entities controlled by the two companies. The initial investigation by the Commission had shown that, mainly due to the high barriers to entry in the sector, the combination of the two entities would significantly impede effective competition on the gas and electricity markets in France and Belgium. However, the commitments presented by the parties were deemed adequate to remove these concerns. Under this commitments package, Suez will divest Distrigaz, a company active in the gas market, and it will relinquish control over Fluxys, a gas network operator. GDF will divest (i) its stake in the joint venture SPE, a Belgian player in the electricity and gas market, and (ii) its subsidiary Cofathec Coriance, which is active in the French district heating market.
Trade: “External Transit” of Trademarked Goods
Philip Bentley QC
The European Court of Justice (ECJ) has confirmed that, while goods are passing through a Member State under “external transit” customs procedures, they are deemed not to be in EU territory and cannot therefore be seized under the Counterfeit Goods Regulation (EC) No 3294/95. Thus Diesel SpA, the owner of a German trademark, was unable to prevent the transit through Germany of jeans manufactured outside the EU in infringement of Diesel’s trademark rights. The jeans were destined for Ireland, where Diesel had no trademark protection. The ECJ explained that the position would have been different, however, if the owner had taken steps that necessarily entailed the placing of the goods on the market in Germany, such as offering them for sale there. The ECJ also ruled that the illegality of the manufacture of the goods outside the EU was of no assistance to Diesel.
State Aid: Commission Orders Suspension of Payment by Italy to AEM Torino
Mélanie Bruneau
The European Commission has approved under EC Treaty State aid rules a EUR 16 million subsidy to be granted by Italy to AEM Torino, an Italian utility company that produces, distributes and sells electricity and heating. The aid that Italy intends to grant to AEM Torino is intended to compensate for costs incurred in the liberalisation process within the electricity sector. However, AEM Torino has received a significant amount of illegal aid in the past which has not yet been reimbursed. Given the potential distortion of competition, the Commission has ordered Italy to suspend payment of the new aid until AEM Torino reimburses the previous illegal aid. The Commission has recently decided to refer Italy to Court for failure to act on this matter.
Agriculture: Member States to be Charged For Stockpiling Sugar
Alexandra Rogers
The European Commission has imposed definitive charges on five Member States for failing to prevent the build-up of surplus stocks of sugar prior to their accession in May 2004. Estonia, Cyprus, Latvia, Malta and Slovakia will have to pay charges totalling approximately EUR 57 million over the next four years. Before each enlargement of the EU, prospective Member States have been required to ensure that there was no speculative stockpiling of agricultural products which would upset the balance of the entire EU market. Surplus stocks of sugar were found in these five countries despite the Commission having extended the deadline for compliance. Producers aimed to increase their sugar stocks to take advantage of the EU sugar price which is about three times higher than world market levels.
Justice and Home Affairs: New Rules on Tracing Fund Transfers
Andrea Hamilton
The EU Council has adopted a regulation requiring closer tracking of fund transfers in order to prevent, investigate, and detect money laundering and terrorist financing. The regulation aims to improve the traceability of payments by imposing (i) identification requirements on payers, and (ii) verification requirements on payment service providers. These measures are intended to complement Directive 2005/60/EC on money laundering and terrorist financing. Moreover, the new regulation’s more restrictive tracking requirements reflect recommendations made by the G7 financial action task force in 2001, following the September 11 terrorist attacks in the United States.
Trade: WTO General Council Approves Vietnam Membership
James Arneill
The World Trade Organisation (WTO) General Council has approved Vietnam’s membership agreement, allowing it to become the 150th member of the WTO. Vietnam is now required to ratify the deal and will become a member 30 days after it has informed the WTO of such ratification. The deal ends over 11 years of preparation, including eight years of negotiations. Vietnam’s accession documents include a 560 page schedule of commitments on goods, a 60 page schedule of commitments on services and a 260 page report describing Vietnam’s legal and institutional set-up for trade. In addition to guaranteeing compliance with the various WTO multilateral agreements, Vietnam has also signed the plurilateral Information Technology Agreement.
Monday 20 November – Friday 24 November 2006
COUNCIL MEETINGS
Agriculture and Fisheries Council (20 – 21 November 2006)
Economic and Financial Affairs Council (ECOFIN) (21 November 2006)
Transport, Telecommunications and Energy Council (23 November 2006)
COURT OF JUSTICE
Judgments
Agriculture
C-300/05 ZVK
Competition
C-238/05 ASNEF-EQUIFAX
Environment and consumers
C-486/04 Commission v Italy
C-315/05 Lidl Italia
Taxation
C-5/05 Joustra
Opinions
Approximation of laws
C-6/05 Medipac - Kazantzidis
COURT OF FIRST INSTANCE
Judgments
Agriculture
T-282/04 Italy v Commission
State aid
T-217/02 Ter Lembeek v Commission
