EP inquiry committee into Panama Papers

panama-nl-2-2016On 14 April 2016, the European Parliament (EP) voted in favour of setting up an inquiry committee to investigate the so-called Panama Papers.

The committee is expected to have the power to investigate all European clientele of tax havens in Latin America. In addition, the newly set up parliamentary committee will exacerbate the debate over a review of existing EU tax policies. It could even call on the Commission to initiate additional new legislation aimed at strengthening tax transparency.

Currently, the Commission is amending the Accounting Directive to impose rules aimed at fighting tax evasion by multinational corporations. Under the proposed amendment, every company operating in the EU with global revenues exceeding EUR 750 million per year shall publish the amount of tax it pays in each EU Member State, as well as provide additional information on its activities. Information will include, inter alia, the nature of its activity, the total net turnover, the profit before tax, the amount of income tax due in each country, the tax actually paid and the accumulated earnings.

All this may adversely affect the position of shareholders and statutory bodies, as well as future business operations of multinational companies operating in the EU. Individuals may be embroiled in the scandal and face reputation issues.

Commission to review the ePrivacy Directive

e-privacy-nl-2-2016The Commission launched a public consultation on the evaluation and the possible changes to the current ePrivacy Directive. The ePrivacy Directive is a crucial piece of legislation setting-up specific rules concerning the processing of personal data in the electronic communication sector.

Since its adoption in 2009, the electronic communications industry has been rapidly growing. Due to rapid technical growth in the past years, the discussion table will likely contain the security and confidentiality of communications, inconsistent fragmentation of legislation at national level and the enlargement of scope of the ePrivacy Directive.

The feedback from the consultation will be used to prepare a new legislative proposal on ePrivacy, which is likely to be put forward by the Commission at the end of 2016.

The review of the ePrivacy Directive would affect electronic communications network providers, providers of electronic communication services, Internet content providers and companies active in the area of security.

EU to change environment for start-ups

startup-nl-2-2016The Commission has now started to shape the European start-up policy by launching a public consultation on improving the environment for European start-ups and fast growing firms.

The ideas and thoughts during the consultation will be used to prepare new legislation. Future measures will cover businesses from the creation of a start-up until the Scale-up phase, when successful startup companies expand, and even until the Exit phase, which includes a successful sale of a business, or a merger with another business.

This is a unique opportunity for entrepreneurs and various industries to lobby for the creation of practical legal rules at both EU and Member State level to address start-ups and their needs throughout their life cycle.

It is now the ideal time for all those interested and affected to let their voice be heard and shape the future European start-up policy.

The consultations have already started, with the deadline set on 31 July 2016.

EU to restrict peanut oil and hydrolysed wheat proteins in cosmetics

peanuts-nl-2-2016The Commission is considering possible restrictions on the use of peanut oil and hydrolysed wheat proteins (HWP) in cosmetic products.

In 2014, the Scientific Committee on Consumer Safety published two opinions raising scientific concerns on the use of peanut oil and hydrolysed wheat proteins in cosmetic products. According to the opinions, the exposure of skin to peanut proteins of peanut oil at certain level is deemed risky. Similar outcome was presented by the opinion with regard to HWPs.

The Commission has already prepared modifications to the Annex to the Cosmetics Regulation and opened public consultations thereon. The Commission proposes to restrict the maximum peanut protein level of peanut oil, its extracts and derivatives, in cosmetic products, as well as restrict the maximum molecular weight average of the peptides in hydrolysed wheat protein used in cosmetic products.

The above changes may have an enormous impact on cosmetic industry. In addition, the proposed implementation periods for changes to be implemented by the cosmetic industry proposed by the Commission are short (9 months for placing compliant products on the market and 12 months for withdrawing non-compliant products from the market).

The deadline to oppose the proposal in the public consultations is set on 1 July 2016.

EU carves the path to digitize European industry

digitization-nl-2-2016On 19 April 2016, the Commission presented a set of measures to support and connect national initiatives for the digitization of industry and related services across all sectors. While many parts of the economy have quickly adapted to digital technologies due to expected higher revenues, some traditional sectors (such as agro-food, textiles or steel) are lagging behind in their digital transformation.

A common European approach is necessary not only to ensure application across all sectors, but also to avoid market fragmentation. The Commission proposes concrete measures that focus on 5 priority areas – 5G, cloud computing, Internet of things, data technologies and cyber security.

The adoption of new legislation shall support the free flow of data and clarify ownership of data generated by smart devices and various sensors. It is without saying the new legislation may significantly affect the data protection area, smooth procedures to access the digitization tools and costs for businesses.

EU’s highest court endorses tobacco law

cigarette-package-nl-2-2016On 4 May 2016, the Court of the Justice of the European Union (CJEU) upheld stricter rules on tobacco packaging, the ban on menthol cigarettes and special rules on electronic cigarettes.

The CJEU has upheld the new EU regulation that requires tobacco firms to cover two-thirds of cigarette packets with health warning. In addition, the EU Court has endorsed tougher rules on e-cigarettes. E-cigarettes will be considered just like regular tobacco if they contain a certain concentration level of nicotine. The Court also confirmed the legality of the notification scheme for e-cigarettes when new products are introduced to the market. Last, the CJEU cleared also the ban on menthol cigarettes.

Despite the EU-wide rules, Member States still have a say on tobacco. Member States may go even further from the prescribed rules and opt for plain packaging. Member States can regulate e-cigarettes as medicines. And they can ban e-cigarettes, if they justify the ban by safety concerns.