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Digital Services Act

Digital Services Act proposal: the start of a new era in digital regulation

On 15 December, the European Commission published proposals for Regulations on the Digital Services Act (DSA) and the Digital Markets Act (DMA), with the goal to reform the digital space, creating a comprehensive set of new rules for all digital services, including social media, online market places, and other online platforms that operate in the European Union.

The proposed Regulation on a Digital Services Act aims to update the eCommerce Directive (ECD) from the year 2000 as well as introduce new binding, harmonized, EU-wide obligations which will have a significant impact on a wide range of digital services that connect consumers to goods, services and content. This blog post sheds some light on some of the main provisions of the Digital Services Act and their subsequent impact on businesses.

Which companies will be affected by the new Digital Services Act proposal?

The Digital Services Act proposal includes rules for online intermediary services. The obligations of different online players match their role, size and impact in the online ecosystem. Among the regulated groups are intermediary services offering network infrastructure (Internet access providers, domain name registrars), hosting services such as cloud and webhosting services, online platforms bringing together sellers and consumers such as online marketplaces, app stores, collaborative economy platforms and social media platforms, and very large online platforms. All online intermediaries offering their services in the EU Single Market, whether they are established in the EU or outside, will have to comply with the new rules. Micro and small companies will have obligations proportionate to their ability and size while ensuring they remain accountable.

An asymmetric approach: different obligations for different players

The Digital Services Act will introduce a series of new, harmonized EU-wide obligations for digital services, carefully graduated on the basis of those services’ size and impact. All intermediaries falling under the scope of the DSA will have obligations in terms of transparency and fundamental rights protection and would have to cooperate with national authorities. Additionally, all intermediaries not established in the EU but offering services in the Union will have to designate a legal representative in one of the Member States where the provider offers its services. The absence of general monitoring obligations, already enshrined in the ECD, will remain in place in the Digital Services Act. Additionally, the Commission has introduced a “good Samaritan” principle, under which providers of intermediary services are not excluded from liability exemptions because they carry out voluntary activities to detect and remove illegal content.

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For online platforms and hosting services, the proposal includes requirements for more detailed notice & action provisions. The proposal also introduces the concept of trusted flaggers, appointed by Member States authorities, whose notices should be processed with priority. Furthermore, the proposal introduces a “Know your business customer” principle, under which platforms will be required to obtain and verify identification information from the traders prior to allowing them to use their services. Finally, transparency obligations for online advertising will require online platforms to provide their users information on the sources of the ads they see online, including on why an individual has been targeted with a specific advertisement.

Platforms that reach more than 10% of the EU’s population (45 million users) monthly in average will be considered systemic in nature and will be subject to specific obligations to control their own risks. Very large online platforms will have to conduct yearly risk analyses, they will be subject at their own expenses to annual audits, adhere to transparency obligations for recommender systems as well as comply with additional measures for online advertising transparency. Finally, very large online platforms will have to appoint one or more compliance officers responsible for monitoring their compliance with the Digital Services Act Regulation. Member States will have to lay down the rules on penalties applicable to infringements of these rules by providers of intermediary services under their jurisdiction with the maximum not exceeding 6 percent of the annual income or turnover of the intermediary service.

Strengthened enforcement & cross-border cooperation

EU countries will be required to appoint a so-called “Digital Services Coordinator” to oversee enforcement of the regulation, which will have powers in terms of investigation, enforcement (including fines) and the imposition of access restrictions. Additionally, the coordinator would have the possibility of cooperating cross-border by requesting another digital service coordinator in a country of establishment to carry out an investigation. An independent advisory group of Digital Services Coordinators named the “European Board for Digital Services” will be established, which will contribute to the guidance and consistent application of the regulation and assist the digital service coordinators. For the case of very large platforms, the Commission will have direct supervision powers and, in the most serious cases, will be able to impose fines of up to 6 percent of the global turnover of a service provider.

What implications could the Digital Services Act proposal have for businesses?

Industry stakeholders’ responses to the proposal are mixed, with overall positive reactions to the extra harmonization measures, and the preservation of the ECD’s core principles. However, many raise concerns about the Act’s compatibility with other existing legislation, such as the Platform-to-Business Regulation and the Omnibus Directive, as well as the way the trusted flaggers’ concept would work in terms of transparency, an issue raised also by consumer protection groups. The inclusion of the requirement for non-EU companies to have a legal representative in the EU, while burdensome for such companies, has so far been accepted positively by European players as it would ensure a level playing field within the Single Market. Relating to the fines, the issue has been raised that the threat of significant fines for non-compliance might lead to preventive removal of content which might otherwise be considered legal, putting companies in the uncomfortable position of risking fines under the Digital Services Act or being criticized for violating freedom of expression by censorship.

Another example of businesses that would be impacted by the new rules are information society services offering a wide range of services such as search engines, cloud services and other platforms. Those businesses generally welcome the fact that the core foundations of the e-Commerce Directive are maintained, i.e. limited liability, no general monitoring obligations and the maintenance of the country of origin principle. However, there will be extra obligations for ‘very large online platforms’, having more than 45 million users across the Union. These platforms will have to provide regulators and outside groups with greater access to internal data, and appoint independent auditors who will determine if these firms are compliant with the new rules. The biggest tech companies will also be forced to provide greater transparency on online advertisements. These extra obligations will require additional resources and also raise a question about the legislative coherence between the Digital Services Act on the one hand, and provisions in for instance the recently published European Democracy Action Plan on the other.

Finally, there have been concerns among Big Tech companies that the criteria for identifying very large platforms need to be clearer and more inclusive, with several accusing the Commission of selection bias. Furthermore, the Digital Services Act is likely to have significant consequences for gig economy companies, such as well-known travel accommodation websites, as the extra requirements against illegal content and the provision of information on users would allow local authorities to require the removal of unregistered properties and receive information on hosts with outstanding tax obligations. City authorities in big European cities such as Amsterdam, Berlin and Paris, had adopted rules against said platforms and the Digital Services Act would allow them to enforce them.

What to expect next in the legislative process?

Following the publication of the Digital Services Act in December, the DSA will likely be the subject of long and arduous discussions in the Council of the EU and in the European Parliament. 

European Parliament

Within the European Parliament, on 29 April, the Conference of Presidents, which gathers the leaders of all political groups, reached an agreement on which committee can take the leadership on the Digital Services Act (DSA), Initially, IMCO was assigned the exclusive competence on the legislative file in view of its impact on the Single Market legislation, but LIBE, JURI and ITRE also argued that they should have competence.

After a long-lasting debate, the President of the Conference of Committee Chairs, Mr. Antonio Tajani, proposed a solution. In order to reach a compromise, Tajani proposed to appoint all committees that challenged the leadership to be “associated” with IMCO under rule 57 of the European Parliament. Collaboration will take place through regular meetings between IMCO, ITRE, LIBE and JURI for the DSA proposal, and the rapporteurs of each committee will participate in all shadow meetings, the drafting of the IMCO reports, trilogue sittings and compromise amendments negotiations. All amendments of the associated committees will be voted in IMCO, while the mandate to enter trialogues will be voted in plenary, instead of committee sitting, to allow all associated committees to jointly vote and re-table amendments.

A parliamentary discussion on IMCO Rapporteur MEP Christel Schaldemose’s (Denmark, S&D) draft DSA report is set for 21 June. Within the LIBE Committee, MEP Patrick Breyer (Germany, Greens/EFA) has been appointed rapporteur. Within the JURI Committee, MEP Geoffroy Didier (France, EPP) has been selected as rapporteur. 

Council of the EU

As confirmed by the Portuguese Presidency of the Council of the EU, the Digital Services Act is discussed in the Internal Market Working Party, falling within the remit of the Competition Council formation. According to insights into a draft progress report on the DSA from the Portuguese Council Presidency, dated 27 April, there is overall support among the Member States for the ambition of the DSA proposal and the need to swiftly adopt it. A few issues have however been identified as sensitive political and legal issues, such as the need for effective implementation and better coordination between countries, their authorities and the Commission, in particular in terms of cross-border enforcement and the impact on the country-of-origin principle. Questions were also raised on enforcement vis-à-vis service providers established outside of the EU.  Further discussion will be needed on the scope, Article 6, Trusted Flaggers, the protection of trade secrets, out-of-court dispute settlements and the application date. The progress report will be presented to COREPER, after which it can be submitted to the Competitiveness Council on 27 May.

In terms of the time frame for adopting the DSA, France has announced a highly ambitious plan to conclude the negotiations for the proposal during its Presidency of the Council of the EU in the first half of 2022. The Commission shares this objective for the co-decision process to be finalized in a year and a half, however, it is useful to remember that other recent and major files, such as the General Data Protection Regulation and the Copyright Reform, took respectively 5 and 2.5 years to be adopted.

Dr2 Consultants closely monitors the developments on this file for its clients. If you would like to know more about the proposal, and how it might impact your business, please contact Dr2 Consultants.

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Data Governance Act: main elements and business implications

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Data Governance Act: main elements and business implications

Executive Vice-President, Margrethe Vestager, presented, on 25 November 2020, the European Commission’s new Data Governance Act (PDF), the first proposal to come out of its 2020 European Data Strategy. The Act was postponed several times since September, with a working draft leaked by several news outlets early November receiving serious criticism. The official document, published in November, has been adjusted and seems to have taken on board some of the concerns expressed. In this blog post, Dr2 Consultants explains the main elements of this Act and its business implications.

Main elements of the proposed Data Governance Act

The European Commission decided to opt for a regulation as the legal instrument for its Data Governance Act due to the predominance of elements that require a uniform application which would not leave margins of implementation to the Member States, in order to create a fully horizontal EU framework. These are the key elements of the draft regulation:

Re-use of data produced by the public sector

The Data Governance Act proposal aims to increase the amount of data available for re-use within the EU by allowing public sector data to be used for purposes different than the ones for which the data was originally collected. The type of data targeted by the Act are, for example, data generated by GPS, or healthcare data, which if put to productive use, could contribute to improving the quality of services. The data collected could be re-used for commercial or non-commercial activities and the Commission estimates that the implementation of the measures proposed could increase the economic value of data by up to €11 billion by 2028.

Data intermediaries

The Commission believes that, in order to incentivize individuals to share their data, they should trust the process by which those data are handled. To this end, it proposes to create “data intermediaries”, which will handle the sharing of data by individuals, public bodies and private companies. These data sharing service providers will come as a European alternative to the existing major tech platforms.

To uphold trust in said intermediaries, the Commission proposes to put in place several protective measures. First, intermediaries will have to notify public authorities of their intention to provide data-sharing services. Second, they will have to commit to the protection of sensitive and confidential data. Finally, the Commission will impose strict requirements to ensure the intermediaries’ neutrality. These providers will have to distinguish their data sharing services from other commercial operations, and are prohibited from using the data exchanged for any other purposes. Certain services that have been excluded from becoming new data intermediaries as part of the regulation include cloud service providers and data advertising brokers, data consultancies, or providers of data products.

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The early draft of the Data Governance Act, leaked in November, had caused controversy with regards to these intermediaries, as it required that they be legally established in the EU or EEA. This approach was strongly defended by Internal Market Commissioner, Thierry Breton, who has long been a champion of “data sovereignty”. The leaked proposal highlighted that this requirement was to facilitate the supervision of intermediaries’ compliance with the requirements of the Act.

However, several experts criticized the measures, saying that they would discriminate against foreign companies and therefore, violate the EU engagements as part of the World Trade Organization (WTO). The WTO forbids countries to require providers of data sharing services from abroad to be legally based within their own country.

Many businesses had also reacted with worry to the leaked document, claiming that the restriction of data flows could result in a loss of billions of euros in digital trade.

Despite Commissioner Breton’s strong defense of the so-called “data localization” aspect, other Commissioners, including Vice-President Vestager herself, were less favorable towards this approach, resulting in the Commission’s backtracking on this aspect in the final proposal. As it stands, the Data Governance Act only requires intermediaries to either have a place of establishment in the EU, or to designate a representative in Europe.

However, restrictions on the transfer of sensitive data to third countries remain in the final proposal.

Sector-specific data spaces

The proposed Act also aims at creating sector-specific data spaces to enable the sharing of data within a specific sector. For example, the Act plans for the creation of data spaces for transport, health, energy or agriculture.

Data altruism

The Data Governance Act also aims at creating favorable conditions for “data altruism”, meaning encouraging individuals to voluntarily donate personal data to serve the general interest. To do so, “personal data spaces” will be created to ensure that the data shared will only be used for purposes that individuals who donated it agreed to, such as, for example, medical research. Non-for-profit organizations will have the opportunity to sign up into a public register of “data altruism organization”.

European Data Innovation Board

Finally, the draft Data Governance Act plans for the creation of a European Data Innovation Board. Its missions would be to oversee the data sharing service providers (the data intermediaries) and provide advice on best practices for data sharing.

The Member of the European Parliament Miapetra Kumpula-Natri (S&D, Finland), who is the rapporteur for the Industry, Research and Energy Committee’s (ITRE) draft initiative report on the Data Strategy, welcomed the “ambitious” proposal. She called the Commission’s decision to leave it to national bodies to protect sensitive data “fair enough as compromise, but not good for the single market and harmonization”. The deadline for amendments of the draft report ended on 12 November and the final Committee vote is expected in January 2021.

European Parliament and Council review of Data Governance Act

The Data Governance Act is currently being reviewed by the Council of the EU and the European Parliament.

The Presidency of the Council of the EU presented a first compromise text of Data Governance Act on 22 February 2021.  The compromise text notably focuses on better aligning the proposal  with the GDPR, specifically with regards to the definition of certain concepts, such as ‘data sharing service provider’ or ‘data altruism’. The compromise text also amends the proposal to include obligations to ensure interoperability between data sharing services, or obligations for data altruism organizations to provide easy withdrawal mechanisms and high level of security for the storage and processing of data collected based on data altruism.

Within the European Parliament, the Industry, Research and Energy Committee (ITRE) is responsible for the Data Governance Act. It held a first exchange of views with the Commission on 18 March. Generally, MEPs welcomed the proposal, but joined the Council’s position in stressing the importance of guaranteeing the consistency of the DGA with existing Data legislation, such as the GDPR, ePrivacy Directive or Open Data Directive. MEPs also underlined the need to facilitate access to data-sharing for SMEs, and called for better clarification of the role of data intermediaries. Those concerns are transcribed in the amendments proposed in the ITRE Committee’s Draft Report on the file, presented by rapporteur Angelika Niebler (EPP, Germany) on 26 March 2021.

Next steps

The Council of the EU, through the Working Party on Telecommunications and Information Society, is continuing its work towards the adoption of a Council position. Within the European Parliament, committees for opinion (Committee on Internal Market and Consumer Protection and Committee on Civil Liberties, Justice and Home Affairs) will vote on the Data Governance Act on 21 June and 1 July, respectively, followed by ITRE Committee on 15 July. The vote in plenary is planned for the September plenary session (13-16 September).

Data Governance Act’s potential implications for businesses and next steps

In terms of potential implications for businesses, some industry representatives have already raised concerns about the extra barriers to data flows that the draft Act risks creating through the assessment provision of third countries’ data protection regimes, with the option of blocking the transfer of highly sensitive data, the definition of which is, so far, unclear. An additional issue that has been also highlighted is that the Act could allow for discrimination on the basis of a quasi-licensing scheme it would set up, requiring companies to notify the authorities if they want to become service providers. Given the vague wording of the proposal, it could allow for selective revocation of said licenses, giving authorities the power to remove certain providers from the list.

In the third quarter of 2021, the Commission is also expected to present the Data Act, attempting to create an environment conducive to increased data sharing among businesses and governments.

Dr2 Consultants continuously monitors the developments around the EU Data Strategy. Should you be interested in further information on the Data Governance Act proposal and how it could impact your organization, you can reach out to Dr2 Consultants at info@dr2consultants.eu or find more information on our website.

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EU Trade Policy: business opportunities and way forward

Open, sustainable and assertive. These are the three keywords of the new EU Trade Policy that the Executive Vice-President and Trade Commissioner, Valdis Dombrovskis, outlined in his speech at the opening of the EU Industry Days on 26 February.

The Industry Days are at their 4th edition and aim to gather policymakers, industry representatives and stakeholders to reflect together on the challenges ahead and the best practices put forward by the European business community. During this 4-day celebration at the end of February, the EU Executive Agency for Small and Medium-sized Enterprises (EASME) showcased 31 projects funded by the European Commission which targeted the digitalization, climate-neutrality and competitiveness of the post-COVID European economy.

EU trade policy tailored to the EU’s twin transition

It is in this context that Executive VP Dombrovskis, in his opening speech, addressed the participants of the first day with an explicit reference to open trade, sustainable growth and assertive leadership. The way forward for the EU in the post-COVID era is marked by a renewed stimulus to the green and digital transitions in order to build a competitive advantage for European companies on global markets. EU trade policy plays a pivotal role in leveraging on the EU leadership in green technologies, but at the backbone of the strengthened trade policy is the industrial policy. The acknowledgement of the twin transition also in the EU’s external trade policy once again highlights the opportunities for innovative European companies to take a leading role not only on the European, but also the global stage.

European exports count for 35 million jobs and a 12% wage premium due to trade-induced competitiveness. However, the EU Industrial Strategy, which has been put forward one year ago, needs to be updated to take into account the reality of the post-COVID world. To do so, what is required is the reestablishment of the fully functioning Single Market and the recovery of national economies through the NextGenerationEU package, which is financed by the EU budget and which the Member States should use not only to build back from the crisis, but also to invest in the long-term competitiveness of the industry. The NextGenerationEU package provides tangible funding opportunities for sustainable and digital projects through the Recovery and Resilience Facility.

The twin transition of digital and sustainable policies, and the acceleration of the transformation and recovery, is achieved by delivering on the European Green Deal. The fostered digitalization of the economy will trigger further structural changes and increase productivity and trade. The business opportunities unleashed by the twin transition will touch upon different sectors of the economy, including the transport and logistical sectors.

Automotive sector and SMEs as case examples

For example, the automotive value chain is indeed one of the main sectors where the adoption of new technologies, combined with the use of specific raw materials to be imported through trade, can provide a tangible benefit to our industry. The production of batteries and semi-conductors is just an example of how this uptake could be capitalized on for our economy, and they denote a sector where the EU can easily boost its strategic capacity through public and private partnership. As such, EU trade policy will present the European automotive sector with a crucial boost to ensure its global competitiveness.

Therefore, the European Union needs to remove the barriers to the uptake of the new technologies, especially for SMEs. Likewise, a lack of digital skills is to be addressed, in order to further upskill our workforce and increase our trade surplus. A greater role for the EU sustainability agenda and support for the Paris Climate ambitions is therefore envisaged for the next years. Learn more about our sustainability sector here.

Open strategic autonomy at global level

However, the EU efforts in increasing the sustainability of the industry and avoiding carbon leakage may not be sufficient if they do not take place in a framework of concertation and close cooperation with other global actors. To do so, the EU is ready to take the lead and be recognized a benchmark of the economic benefit of sustainable policies applied to the industrial system.

It is for this reason that the EU trade policy must work in synergy with other key players, including industrial policy. The assertive approach of the EU trade policy will help protect the European businesses against the abuse and the unfair trading practices of those countries that will not abide by the sustainable vows. Concretely, new legislative proposals on the screening of foreign subsidies in the Single Market will aim to support European companies. Additionally, a new anti-coercion instrument is in the making, which will enable the EU to act fast when its openness is abused.

Open strategic autonomy is the key concept to lead the way forward for the EU, which can be achieved through a close cooperation between trade and industry, a liberalization of trade in environmental goods and services, a boost to e-commerce and, last but not least, an increased green and digital transformations of our economy.

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Sustainable Corporate Governance – accounting for your supply chain

Supply chains of European businesses often stretch far beyond the EU territory, where the EU’s environmental, social and human rights may no longer apply. Consumers increasingly expect companies to « do no harm » throughout their operations and supply chain. To this end, as also announced in the European Green Deal and in accordance with the UN Sustainable Development Goals, the European Commission will, in the second quarter of 2021, introduce new rules on incorporating sustainability in long-term business strategies. This proposal for sustainable corporate governance will create a new framework to give sustainability a more prominent role in the board room, while reviewing the obligations companies currently have under the Non-Financial Reporting Directive. As the new legislation is expected to place additional reporting obligations on many European companies, this article will take a look at its expected scope and impact on your company’s business activities.

The future EU corporate governance framework should steer companies towards more long-term visions that incorporate sustainability, which in this context not only includes their environmental impact but also human and social rights. A powerful instrument to achieve this could be the introduction of due diligence duties. These duties could not only require companies to respect their own employees’ working rights and limit their own environmental footprint, but it would also oblige companies to actively trace the conditions under which early production processes further up the supply chain take place. For example, did your direct supplier pay a fair price to the farmer he bought cocoa from? And what can a company do to make sure these farmers produce in a sustainably sound way?

Currently, some multinational companies and national governments are taking a frontrunner role in tackling these kinds of questions. However, a failure to create a level playing field in the EU with regard to due diligence obligations could hamper companies’ willingness to keep on taking on this leadership role. The EU’s proposal for a horizontal sustainable corporate governance framework should incentivize broader categories of companies to undertake due diligence.

The proposal for a sustainable corporate governance framework will go hand in hand with a revision of the Non-Financial Reporting Directive (NFRD), which currently requires large companies to disclose information on their handling of social and environmental challenges.

A European solution will have to balance the need for a level playing field and the risks of overburdening smaller companies with new obligations. As the Commission currently still is in the process of carrying out an impact assessment, the exact categories of sectors and product groups to be included in the scope will still need to be determined in the upcoming months. Although it is evident that the Commission’s Directorate-General for Justice and Consumers (DG JUST), responsible for the sustainable corporate governance proposal, intends to include all industries in this horizontal framework, it is still undecided if, for example, SMEs will be included in the Directive’s scope.

What do we already know about the proposal for a sustainable corporate governance and how could this impact European businesses?

The proposal for a sustainable corporate governance framework will go hand in hand with a revision of the Non-Financial Reporting Directive (NFRD), which currently requires large companies to disclose information on their handling of social and environmental challenges. Even though this revision of the NFRD could clarify the requirement to report on due diligence processes, this would not yet be underpinned by an obligation to undertake due diligence, including mitigation of negative impacts.

This could be addressed by the sustainable corporate governance proposal, which could oblige companies to identify and mitigate risks relating to human rights, climate and environment. Where the UN Guiding Principles on Business and Human Rights currently lay down steps for e.g. proper human rights due diligence, the EU could give this a binding character through its proposal for a Directive, obliging Member States to transpose a due diligence obligation into national law.

Moreover, the proposal could oblige company directors to take into account sustainability aspects in the formulation of corporate strategies, by requiring them to set science-based and time-bound targets for e.g. climate, deforestation and biodiversity, including the set-up of the necessary enforcement mechanisms. The Commission is currently still in the process of developing the appropriate methodology for clear targets and benchmarks.

With the exact impact still dependent on the choices the Commission will make in the upcoming months and the feedback provided by stakeholders in the process, strict due diligence requirements and duty of care for directors could increase the organizational and administrative burden for companies to set up internal processes including reporting and transparency obligations. These obligations would come on top of the obligation to disclose business strategy information under the revised NFRD. Even if the Commission encourages sustainable corporate governance through voluntary instruments, companies will be pressured to incorporate sustainability in their business strategies.

Next steps

The European Commission recently ran a public consultation on sustainable corporate governance. The outcomes of this public consultation will complement the results of two studies conducted by the European Commission on Directors’ duties and sustainable corporate governance, and on due diligence requirements through the supply chain.

After that, the European Commission will make the choice between various policy instruments and finalize the legislative proposal for a Directive, which is expected to be published by the European Commission in the second quarter of 2021.

If you would like to determine the impact the EU’s sustainability initiatives have in your specific case, check out our European Green Deal Impact Scan, or learn more about our monitoring services to receive regular updates on this topic.

EU-UK Trade and Cooperation Agreement: the impact on the transport industry

Four years after the Brexit referendum, the UK officially severed its ties with the EU on 31 December 2020. In the final moments of the transition period, and after more than nine months of negotiations, the EU and the UK reached an EU-UK Trade and Cooperation Agreement (TCA) on 24 December, outlining the terms of their post-Brexit partnership. The agreement provides for continued and sustainable air, road, rail, and maritime connectivity, albeit with limitations for UK companies when entering the EU’s Single Market. So, what are the main changes in the new relationship compared to the transition period? And what impact does the new agreement have on the EU-UK transport connectivity?

Air transport: providing a framework for EU-UK air transport connectivity  

The key takeaways of the agreement

The EU-UK Trade and Cooperation Agreement replaces existing EU legislation regulating the operation of UK airlines in the EU vice versa. The agreement states that British air carriers holding a valid license may continue to transport passengers and freight between the UK and the EU without limits on capacity or frequency. However, they are not allowed to operate between EU airports anymore. Onward carriage (‘5th freedom’) will be possible for the carriage of cargo to/from a third country (e.g. Paris-London-New York), if Member States agree this bilaterally and reciprocally with the UK.

To ensure a level playing field, both the EU and the UK agreed to eliminate all forms of discrimination which would safeguard fair competition between EU and the UK air carriers in each other’s markets. Moreover, the agreement includes ownership and control requirements to determine what airlines are considered ‘Community carriers’ and what airlines are considered ‘UK carriers’. To be considered as a ‘Community air carrier’, meaning an EU airline, the company must be majority-owned by EU interests. However, UK carriers which had a UK operating licence on 31 December 2020, may also be owned and controlled by EU/EEA/Swiss nationals.

The effects of the agreement

Due to the new ownership and control requirements, certain airlines have moved, such as EasyJet, Ryanair and Wizz Air, to stop UK investors from buying shares after 1 January 2021. The same airlines also announced that existing UK shareholders would see their voting rights restricted, and will not be allowed to attend, speak, or vote at meetings anymore.

Road transport: new border and customs checks result in administrative burden

The key takeaways of the agreement

As the UK has left the Single Market and Customs Union, border and customs checks have been reintroduced starting 1 January 2021. Haulers crossing the border from the EU to the UK or vice versa must ensure that they possess the necessary paperwork to cross the border with their goods. Passengers must also be in possession of the correct travel documentation. Regarding transport of private citizens, the UK continues to recognize EU driving licenses, but Member States no longer recognize driving licenses issued by the UK. Under the EU-UK Trade and Cooperation Agreement, haulers may continue to operate and transit between UK and EU territory without needing specific permits or additional certificates of professional qualification or licenses.

The effects of the agreement

In practice, road transport (especially transport of goods) has been highly disturbed due to the newly introduced border and customs checks. As a result of the increased administrative burden and longer waiting time at the border, increasing delivery times as well as the chance of spoiled goods, hiding of stowaways in vehicles, or other risks engaging the liability of haulers, many companies have decided to suspend their EU-UK service. This is for example the case of DPD or German company DB Schenker.

Maritime transport: no market access restrictions, but seaports will have to accommodate border and customs checks

The key takeaways of the agreement

The agreement maintains the principle of unrestricted access to international maritime markets and trades. This means that each party must grant access to ships sailing under any flag. Each party must also provide port services such as pilotage, towing or port assistance to international maritime transport service suppliers. Moreover, safety and environmental issues related to maritime transport are not regulated by EU law but by international treaties. UK companies and vessels will need to continue operating within the scope of this international regulatory framework.

The effects of the agreement

Although the agreement will require limited adaption from the maritime transport sector, maritime seaports will have to accommodate significant trade volumes that are transported by sea and facilitate haulers crossing the border from the EU-UK or vice versa by ferry. Around half of the UK exports and imports are heading towards continental Europe. Vice versa, for EU Member States, specifically those situated on the Atlantic coast, trade with the UK constitutes a big part of their overall trade numbers. As such, maritime seaports play an important role in facilitating the new border and customs checks as well as accommodating the subsequent traffic flows.

Rail transport: EU-UK cooperation continues on rail safety matters

The key takeaways of the agreement

The agreement itself does not include any specific provision for rail services. EU-based railway undertakings need to apply for UK licensing to run services in the UK, for which the UK has determined a deadline on 31 January 2022. UK-based railway undertaking running domestic services in the EU need an operating license issued by an EU Member State. The UK is no longer a member of the European Railway Agency (ERA) since 31 January 2020 and will not be seeking membership. However, the British Government encourages its rail industry to continue to work with ERA at technical and working levels, and has announced its intention to continue cooperating with the ERA on safety related matters.

The effects of the agreement

In practice, cross-border railway undertakings had prepared for the end of the transition period by requesting the relevant authorizations and licenses. Therefore, cross border rail services, such as the Eurostar, have continued with way less disturbance than road traffic. The Eurostar service was briefly suspended in December to limit the spread of the newly-identified COVID-19 variant, but not as a consequence of Brexit. Traffic has since then resumed, to the capacity allowed by the COVID travel restrictions in place on both sides of the Channel.

The limited impact of Brexit on rail freight, compared to road freight, can be explained by the much smaller number of goods transiting by trains compared to goods transiting by truck. If road customs check congestions are not reduced, however, this could trigger a reorganisation of supply chains to the benefit of the rail freight sector.

Next steps: ratification and implementation of the agreement

It is important to note that the EU-UK Trade and Cooperation Agreement and the rights and conditions it contains are not set in stone. Firstly, it is for now an “agreement in principle”, and will be provisionally applied from 1 January until 28 February 2021, pending the final consent of the European Parliament. Additionally, there are still some aspects unclear in terms of the enforcement of the agreement.

Once ratified, the agreement plans for the creation of a Joint Partnership Council, which will oversee the realization of the agreements’ objectives and facilitate its implementation. To fulfil this mission, it has the power to amend the substantive provisions of the agreement. The Joint Partnership Council will be composed of varying EU and UK ministers, depending on the topic that is discussed. It is not yet clear when the Joint Partnership Council will hold its session or at what frequency, and what the exact impact of its creation will be.

Dr2 Consultants has extensive expertise and network by providing support to stakeholders in the transport sector, ranging from rail and aviation to the maritime sector, and assists companies understand the consequences and implications of Brexit. We tailor our services, knowledge and expertise to support organizations in the most bespoke way and achieve tangible results. If you would like to know more and gain support in understanding the post-Brexit regulatory maze, please contact us via our website.

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Offshore renewable energy - waves

Offshore renewable energy: EU takes next steps

With the EU’s new offshore renewable energy strategy (ORES) – “EU Strategy to harness the potential of offshore renewable energy for a climate neutral future” (published on 19 November 2020), the European Commission is widening the scope of its offshore activities. From focusing on offshore wind energy (bottom-fixed), the Commission aims to facilitate the further development of other offshore energy technologies such as floating wind energy, wave and tidal energy, but also floating solar energy and the use of algae. Our blog post sheds some light on upcoming opportunities and challenges from the offshore renewable energy strategy for the different offshore energy technologies.

Maritime spatial planning as a basis

Maritime spatial planning (coordination of use of marine space and resources) will be key to the further development of offshore renewable energy technologies. In the framework of the Maritime Spatial Planning Directive, the Commission aims to ensure sufficient space and resources are available for offshore technologies by coordinating the submission of national maritime spatial plans due by 31 March 2021. Such maritime spatial planning should be carefully coordinated with different national energy and climate plans but also the protection of vulnerable marine ecosystems.

Offshore renewable energy - Floating solar farm

Floating solar farm

 

From focusing on offshore wind energy (bottom-fixed), the Commission aims to facilitate the further development of other offshore energy technologies.

Different offshore renewable energy operators, as well as energy grid operators, are strongly encouraged to engage both on a European and national level to improve the quality of existing and future spatial planning. These exchanges will be facilitated by the European Commission throughout 2021 and beyond.

A clearer EU regulatory framework to facilitate investments

While offshore renewable energy projects are mainly nationally driven, the Commission wants to facilitate the further development of more complex, cross-border projects. Most importantly, the Commission clarifies the current regulatory framework for offshore bidding zones in its accompanying Staff Working Document. Furthermore, The Commission will ensure that the forthcoming revision of the state aid rules and the Renewable Energy Directive provide a fully updated and fit-for-purpose framework in order to cost-effectively deploy clean energy, including renewable offshore energy.

The lofty ambitions of the Commission will provide a very good opportunity for large-scale cross-border project operators to benefit from a changing regulatory framework. Such operators are advised to keep a close eye on the upcoming changes to the European electricity legislation, which will facilitate their activities. If you would like to stay up to date on the latest developments in the EU energy sector, visit our monitoring services webpage to find out how Dr2 Consultants can support you.

Targeted funding opportunities for offshore renewable energy deployment and R&I

Most importantly, the Commission aims to unlock new private investments as these are expected to carry the bulk of financing needs. The new InvestEU fund will play a key role, with the European Investment Bank acting as a European Climate Bank. In addition, existing and future EU funding instruments such as the NER 300, the Recovery and Resilience Facility and the Connecting Europe Facility are expected to substantially fund mature cross-border projects. Furthermore, investment programs such as Horizon Europe, the Innovation Fund and the Modernisation Fund will provide support for research, innovation and demonstration projects underpinning the future development and deployment of innovative offshore energy technologies in Europe.

Whether your organization is active in early stage R&I activities, demonstration of innovative technologies or the further deployment and rollout of offshore renewable energy infrastructure, the above mentioned EU funding instruments will serve a supporting role to the changing regulatory framework.

In conclusion, the Commission aims to tackle the challenge of creating the optimum environment to maintain and accelerate the current European momentum in offshore renewables. As such, the EU is ready to support frontrunners in this area to preserve its own leading role on a global level.

The Commission is actively inviting all stakeholders to discuss the policy actions proposed in this strategy and to join forces in taking this action forward without delay. Dr2 Consultants is ideally placed to support your organization to identify the opportunities in upcoming financial and policy developments. Fore more information, contact us at info@dr2consultants.eu or call us at +32 (0)2 512 37 22.


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European cities and regions: three reasons to get active at EU level

Over the past decades, European cities and regions have been an important driver of the European economy. With major societal transformations such as the energy transition and digitalization looming, cities are expected to become even more important enablers, while regions are challenged to keep up. As such, EU policies and funding initiatives become increasingly important for cities and regions. In this blog post, Dr2 Academy, Dr2 Consultant’s educational institute, highlights the three main opportunities for European cities and regions across Europe to act upon.

1. European cities and regions at the heart of the EU budget

On the eve of the new EU’s seven-year budget cycle, and in the political context of a major economic recovery from COVID-19, the EU’s co-legislators have to make important decisions regarding the dispersion of EU funds. With EU initiatives increasingly materializing in cities and regions, more financing instruments come at the disposal of local authorities.

The grants from the EU’s Recovery and Resilience Facility will be linked to national and regional investments in sustainable and smart solutions, such as clean energy technologies, charging stations, building renovations,  scale-up of data cloud capacities, and the rapid roll-out of broadband services. In the execution of the national recovery plans, Member States are required to spend 30% of its investments via the Recovery Fund on climate action, while another 20% will have to be spent on digital projects. This presents opportunities to cities and regions to inform national administrations about the needs at a local level in order to unlock funding.

Moreover, during the next EU budget cycle, the Commission will aim to modernize Regional Development and Cohesion Policy. Sixty-five to eighty-five percent of European Regional Development Fund and Cohesion Fund resources will be allocated to the five different priorities (in the areas of digitization, climate, transport, social policy, and urban development) that the Commission has formulated, depending on Member States’ relative wealth. Developing regions and cities in the EU have the opportunity to obtain financing via the managing authorities in the Member States, especially when the region shows its added value to one of the priority areas.

In addition, in order to ensure that all cities and regions across the EU can overcome the preconditions for the transition towards a climate neutral Europe, the EU has established the Just Transition Fund, earmarking funds for cities and regions to ensure a fair transition. With new project calls coming up early 2021 for various funding programs, it is crucial that European cities and regions are aware of the funding opportunities and subsequent eligibility requirements.

2. The EU ecosystem: fertile environment for coalition-building and partnerships

For European cities and regions, the EU ecosystem provides par excellence opportunities to broaden their networks, exchange best practices and form coalitions to effectively influence EU policy. For example, in the context of the Urban Agenda for the EU, which brings together the Commission, national ministries, city governments and other stakeholders to promote better regulation, easier access to funding and more knowledge sharing on issues relevant for cities, an umbrella project of the EU smart cities policy called the  European innovation partnership on smart cities and communities (EIP-SCC) was set up. It provides a platform that aims at delivering practical knowledge and capacity-building opportunities, facilitating access to financing, and introducing potential partners to each other.

Besides these programs, stakeholder communities such as EUROCITIES and the institutionalized representation in the European Committee of the Regions (CoR) also provide ample opportunities to build a European wide network and share best practices. Moreover, these networks can enable cities to engage with policymakers, receive information, and access EU funding.

3. Cities as frontrunners and active shapers of EU policies

Given that most of the EU citizens live in cities, they play an important role in the implementation of EU policy. While EU’s urban areas are important contributors to the EU’s energy consumption and greenhouse gas emissions, they are at the same time considered important drivers of the EU’s climate ambitions. Through the greening and digitalization agendas of the EU there are plenty of opportunities for cities to fulfil a leading role. Initiatives that have been recently published, such as the Circular Economy Action Plan, the EU Strategy for Energy System Integration, the expected Strategy for Sustainable and Smart Mobility (9 December) and the Renovation Wave initiative are expected to have a profound impact on European cities.

Dr2 Academy

To make the most out of these opportunities at EU level in terms of financing, coalition-building and policy influence, Dr2 Academy offers a wide range of tailor-made services targeted to organizations and professionals whose work is impacted by EU policies. To accommodate the needs of European cities and regions, Dr2 Academy has developed a dedicated curriculum combining theory and practice, that teaches civil servants about the working of the EU institutions, the impact of EU policies at regional/local level, coalition-building, and the execution of effective Public Affairs strategies. In case of questions, do not hesitate to get into contact with us.

Dr2 Academy also organizes EU Public Affairs trainings. More information can be found here.

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US and EU flags

US-EU relationship after Joe Biden’s election – an analysis

On Saturday 7 November, five days after American voters went to the polls, Joseph Biden was finally projected by US media to have won enough Electoral College votes to become the next President of the United States, defeating outgoing President Donald Trump. Waves of congratulations immediately came from all over Europe. Many expressed relief that Trump failed to be reelected, given the tense US-EU relationship under his administration. Given the global reach of Dr2 Consultant’s clients, we’ve assessed the impact of the US Election on the US-EU relationship. We are therefore offering an analysis of the repercussions of Democratic candidate Joe Biden’s election on trade, environmental and digital issues.

Trade: a more stable partner but many disputes still to settle

The US-EU trading relationship under Trump’s leadership was highly confrontational. The US President complained countless times about the US trade deficit with the EU. He also intensified a sixteen-year-long tariffs war with the EU over state subsidies granted to Airbus and Boeing, imposing tariffs on European steel and aluminum, as well as on German cars or French wines and cheese, amongst others.

Despite having just raised tariffs in retaliation on about $4 billion worth of US goods, the EU is hoping that Joe Biden’s election will bring an opportunity to fix ongoing disputes, including the Boeing-Airbus feud, as announced by Trade Commissioner Valdis Drombrovskis. EU Trade Ministers also met virtually on Monday, 9 November, to prepare for the “rebooting” of transatlantic relations.

Dr2 Consultants expects the EU to take Joe Biden’s election as an opportunity to re-start the EU-US Free Trade Agreement negotiations, which had died during Obama’s mandate after strong backlash from both sides’ civil societies. Although under Biden’s leadership, negotiations will remain difficult.

Furthermore, Biden’s election might finally allow the World Trade Organization to fill its Secretary General’s seat. Trump’s administration has been blocking the nomination of Ngozi Okonjo-Iweala, former minister of Nigeria, despite her being backed by the majority of WTO members.   Although the Democratic Party shares some concern with Republicans over the WTO dispute settlement mechanism, Biden’s proclaimed support of multilateralism could help unlock the situation.

Thanks to Joe Biden’s election, cooperation could also increase on how to deal with China. EU officials hope that cooperation can be found on the protection of emerging technologies, especially 5G networks, to alleviate dependency on Chinese telecom companies. Officials from the Biden campaign have communicated that the future president would be open to cooperating on those topics.

Therefore, although trade relations will not change drastically with Biden’s election, and many disputes remain to be settled, the EU will at least benefit from a more stable and open interlocutor. This will at least result in clearer decisions, which European businesses trading with or involved in the US will benefit from, as they need predictable, transparent, and enforceable trading rules.

Joe Biden

Joe Biden – President-elect of the United States of America

Photo license: Gage Skidmore

Environment and climate change: converging goals on emissions

Climate change is one area in which Biden and the EU see eye-to-eye and cooperation will surely increase, benefiting US-EU relationship.

Although the US have left the Paris Agreement on 4 November 2020, as Trump wanted, Joe Biden has vowed to reenter it as soon as he takes office. Biden also made strong commitments during his campaign to reverse the Trump administration’s detrimental environmental actions, including adopting a $2 trillion green stimulus package, with the objective of cutting US emissions to net zero by 2050, similar to the EU’s target. Furthermore, in terms of sustainable finance, Biden has pledged $5 trillion to support the ecological transition, similarly to EU’s $4 trillion commitment to its own transition.

However, to implement his climate agenda domestically, Biden will have to gain approval from Congress, which might prove tricky if the Senate remains controlled by the Republicans.

Still, Biden’s will to implicate the US in climate talks will likely reignite multilateral cooperation on environmental issues. Additionally, aligned EU and US goals in terms of emissions could give European companies an opportunity to export environmental-friendly solutions and expertise.

Digital and Technology: opposition on Digital Taxation will likely remain

The EU has been attempting to adopt a European Digital Tax for several years, and the Commission has expressed determination to present an EU digital tax proposal if global talks fail to reach an agreement by mid-2021.

Currently, there are ongoing negotiations between 137 countries within the Organization for Economic Cooperation and Development (OECD) about an international tax system, which would redefine the way tech companies are taxed. This would notably impact companies providing digital services, allowing countries where they operate and make significant profit to tax them even if they do not have business operations there. The EU Commission supports this approach and will likely not introduce a separate European Digital Tax if a deal is found at the OECD level.

Trump’s administration however has been less than favorable to allowing foreign countries to tax US digital companies. The US policy under Trump was to use trade sanctions to retaliate against countries seeking to tax U.S. tech companies, as it did when France adopted a digital services tax.

During his campaign, Biden has criticized digital tech giants, and proposed a minimum tax on digital companies. This position could raise the hopes that he would support the taxation system negotiated at the OECD level, or that he at least will not threaten countries adopting digital taxes as strongly as Trump did. However, many observers underline that Democrats have always been just as opposed to a global digital services tax as Republicans, and the OECD does not believe that the change of leadership will increase significantly the chances of success of the negotiations. The deadline for an agreement to be found, originally set for the end of 2020, has already been postponed to mid-2021.

If the OECD negotiations do not result in an agreement on a taxation system, Dr2 Consultants expects companies providing digital services to likely face an EU-level tax. Dr2 Consultants helps its client keep track of the different tax initiatives and understand the potential impact of their business.

There will certainly also be a lot of discussions between the EU and the US on other key digital topics, from content regulation to EU-US data flows and the privacy shields talks.

European Commission President Ursula von der Leyen’s twitter thread following Biden’s election summarizes well the EU’s general position regarding Biden’s election: “It is time for a new transatlantic agenda fit for today’s world”, mentioning notably the work to be done on “health, climate, digital [and] reform of the multilateral rules-based system”.

Although Trump’s departure from the White House will likely facilitate communication with the US, the relationship will not go back to the pre-Trump status quo overnight.

Dr2 Consultants continuously monitors the evolution of the US-EU relationship. Should you be interested in further information on how Joe Biden’s election and his agenda could impact your business, you can reach out to Dr2 Consultants at info@dr2consultants.eu or find more information on our website.

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Recovery of the EU tourism industry and its way to a smart and sustainable sector

The COVID-19 pandemic has a devastating impact on the tourism sector, directly affecting 22 million jobs and 2.3 million businesses. In Europe, the tourism sector accounts for around 5% of the EU’s total workforce and almost 4% of the EU’s GDP. As we are witnessing a second wave of infections and subsequent travel restrictions in the EU, the outlook for the sector is not promising. What measures have been taken so far, and how will the recovery of the EU tourism industry be ensured?

Support measures at EU and Member States level

As an initial response to support the sector, the European Commission adopted a package of initiatives in May to allow for a coordinated framework to resume transport and tourism, including guidelines on safe and healthy travel, guidance for lifting internal borders and recommendations on vouchers issued by package travel organizations. However, as the EU has limited competence in the field of tourism, its guidelines are non-binding, thereby hampering the effectiveness of its actions.

At a national level, most Member States introduced economic assistance packages that also covers the tourism sector, including extended deadlines for payments of social charges and wage subsidies, loans and guarantees for workers. The EU competition framework was amended to facilitate this kind of direct support that would normally not be in line with the state aid rules.

Additionally, in order to further facilitate coordination of travelling across the EU, Member States recently adopted a recommendation establishing common criteria and a common framework on travel measures in response to the COVID-19 pandemic. However, individual Member States remain responsible for implementing the content of the recommendation, leading to a patchwork of measures and consequently insecurity and unclarity about travel.

European Parliament’s push for coordination of the recovery of the EU tourism industry

The European Parliament (EP) has been very vocal in the role it thinks the EU should play in the recovery of the EU tourism industry. On 29 June, the EP adopted a resolution calling for additional measures to save the EU’s tourism and travel sector. Around that time, different political groups (such as Renew Europe, S&D) in the EP published individual position papers on tourism, all advocating for more European coordination.

The European Parliament’s Tourism Task Force (TTF), a dedicated group in the Committee on Transport and Tourism (TRAN) has been a vocal supporter of developing a strategy for sustainable tourism for some years, advocating the EU to take concrete steps towards establishing a broad, EU-wide vision. Currently, the TRAN Committee is in the process of drafting a report on the development of this strategy.

In the short term, before the finalization of such a strategy for the future of the tourism sector, the TFF argues that a separate budget line of €300 million is needed to support the sector and stresses the importance of considering the tourism industry in drawing up national recovery plans. The TRAN Committee also calls on the Member States to financially support the industry and apply common criteria for travel.

Agenda for a sustainable and smart tourism industry

On 12 October, the European Commission organized the European Tourism Convention in order to facilitate discussions among stakeholders on the recovery as well as the future of a sustainable tourism industry. According to Commissioner Thierry Breton, the Convention marks a first step towards a EU policy framework for the tourism sector.

Based on the conclusions of the Tourism Convention and the recent developments in the European Parliament, Dr2 Consultants identifies four important trends that will dominate the agenda for the recovery of the tourism sector.

  • The strategy for the future of the tourism sector should stimulate a dual transition towards a more sustainable and smarter sector, by accelerating investments. This could lead to the development of safe and seamless tourism experiences powered by the digitalization (data sharing, multimodal travel) and greener holidays (eco-tourism);
  • Sufficient investments in the sector are needed to ensure the recovery of the EU tourism industry. The European Parliament’s TTF proposal to create a separate budget line for tourism worth €300 million is not yet taken up within the draft MFF proposal. However, the European Commission has announced that the new Recovery and Resilience Facility, worth €560 billion, could also be used for the recovery of the sector;
  • Liquidity problems in the sector should be addressed, in particular to small and medium sized enterprises (SMEs). SMEs should be empowered and be able to operate more innovatively with digital tools and financial instruments, either through the proposed budget line or state aid;
  • Collaboration is key between the tourism industry, European politicians, and EU Member States. Policymakers on an EU level should cooperate and coordinate measures in the travel industry and engage with stakeholders to understand what is needed to build a new agenda or strategy for tourism of the future.

 Next steps

As travel restrictions and containment measures are still in place within the EU, a coordinated approach among the Member States is a prerequisite for the recovery. The main challenge for the tourism sector and policy-makers in the short to medium term remains to swiftly enhance cooperation to ensure the recovery of the EU tourism industry in the long term, ready for the current and any future crises.

At the same time, it is to be seen what the Commission will do in building an agenda for the future smart and sustainable tourism industry, as its workplan for 2021 does not reflect any concrete actions for the future industry so far. However, by organizing a convention on tourism, it has put the issue more plainly on the agenda and set the table for constructive dialogue between the sector and policymakers. It is expected that the final report of the European Parliament on establishing an EU strategy for sustainable tourism will further shape the debate on the sector’s future, inviting the European Commission to respond by developing a concrete vision for the future.

The anticipated recovery measures for the post-COVID-19 era will have a major impact on the EU budget and the EU policy agenda. In this challenging context, it is crucial to remain up-to-date with the latest developments and to be flexible in order to adjust and act quickly. Dr2 Consultants supports your organization in getting a better grip on the contingency and recovery measures that are announced at EU level. Visit our COVID-19 services webpage to learn more.

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Transparency in the EU: a state of play

With approximately 30,000 lobbyists, Brussels is known as the world’s second lobbying capital, following Washington D.C. Even though the EU’s relatively small civil service is heavily dependent on the input of stakeholders, voices calling for more transparency have become stronger and stronger. Dr2 Academy explains the state of play of transparency in the EU.

Should transparency be an obligation?

Already since the European Commission’s 2016 proposal for an interinstitutional agreement on a mandatory Transparency Register, the different EU institutions have been debating the form of a ‘one-size-fits-all’ Transparency Register (hereafter: “the Register”). The Register, introduced in 2011, is a database that provides insights into all activities carried out by organizations with the intention of directly or indirectly influencing the decision-making processes of the EU and/or shaping the implementation of existing legislation. The Register has been set up to answer core questions such as what interests are being pursued, by whom and with what budget. The system is operated jointly by the European Parliament and the Commission.

In recent years, the European Parliament and Commission have tried to convince the Council of the EU to become more transparent by applying the Register. Currently, meetings with Commissioners, cabinet members or Commission officials at the helm of the Directorate-Generals need to be registered. In the European Parliament, the use of the Register has also become more of a common practice, in an effort by Members of the European Parliament (MEPs) to increase transparency towards their constituencies. Some MEPs make the presence in the Register a condition to accept meetings. The Council of the EU, however, has been lagging behind: most meetings still take place behind closed doors.

No registration, no meeting?

The most controversial issue in the negotiations is the principle of ‘no registration, no meeting’. This would mean organizations can no longer meet policymakers from the EU institutions if they are not in the Register. Following recent progress in the negotiations (which focused on additional clarity on the future purpose and scope for an enhanced Register), this conditionality will be further discussed in the coming months with all three institutions expressing their intention to reach an agreement as soon as possible. Furthermore, a revised Register is likely to include additional guidelines on virtual communication channels, as the nature of meeting policymakers changed significantly due to the COVID-19 pandemic and subsequent teleworking policies and travel restrictions.

In the meantime, the different political groups in the European Parliament are increasing their transparency efforts. In June 2020, transparency watchdog Transparency International launched a new feature on the EU Integrity Watch, in which it tracks lobby meetings with MEPs. This led to a total of 10,000 logged meetings by the end of September 2020, with the percentage of MEPs reporting their meetings increasing from 37% to 44%.  However, there are internal discrepancies in the consistent usage of the Register. Mainly Scandinavian and Western European countries, as well as the liberal and green political groups are most consistent in their logging of meetings. Pressure from civil society, therefore, seems to work, but an obligation would make these efforts redundant.

A mandatory Register and its implications for Public Affairs

A mandatory Register could relieve lobbying in the EU of its somewhat dubious reputation, as well as enhance citizens’ trust in EU decision-making. Even though it is still unclear what the exact scope of the future Register would be, it is apparent that organizations will have to become more transparent about their activities in Brussels – regardless whether this is due to intrinsic motivation, or due to (mandatory) external obligations.

Organizations engaging in EU Public Affairs should, therefore, consider transparency and ethical interactions with policymakers to be an integral part of their daily work.

Dr2 Academy

The Dr2 Academy offers a wide range of tailor-made services targeted to organizations and professionals active in public or private sectors and whose work is impacted by EU policies. To learn more, please visit our Dr2 Academy webpage.

Dr2 Academy


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