News | 2022


I. A&G Newsletter Q4 2022

I. COMMISSION TAKES ACTION ON 11 MEMBER STATES CONCERNING SINGLE-USE PLASTICS

Transition to a circular economy that replaces conventional business models and products with innovative and sustainable ones goes through a single-use plastics purge in the EU. Still, not all member countries have been keeping the same pace on transposing the Single-Use Plastic Directive into their national laws.

As a consequence, the Commission took legal steps against Belgium, Croatia, Denmark, Estonia, France, Ireland, Latvia, Poland, Portugal, Slovenia, and Finland. Those countries have not communicated to the Commission the necessary measures to guarantee the full transposition of the Directive.

The latter aims to avert and reduce the impact of single-use plastic products on the environment in general, and on the marine environment and human health in particular. The Directive is a key element of the Commission’s Plastic Strategy and the Circular Economy Action Plan.

To this end, the legislation includes several measures that reduce consumption of specific plastic products that are used once and for short periods, limit placing certain products on market, and other specific product requirements.

Under the Green Deal, Europe needs to meet its environmental objectives.
The aforementioned countries failed to fully transpose the Directive by the deadline. Therefore, the Commission sent them a letter of formal notice and a reasoned opinion to each of them.

France and Denmark were given two months to respond and address the shortcomings raised by the Commission. Meanwhile, the other nine countries that had received a letter of formal notice in January 2022, have not communicated the measures to ensure the transposition of the directive. They were given two months to respond and take measures. If not, the Commission may decide to refer the cases to the Court of Justice.

Alber & Geiger can help you represent your business interests and ensure your voice is heard by legislators.

II. EU ADOPTS MEDIA FREEDOM ACT

Disinformation, propaganda and state-controlled media are real threats to media pluralism and independence, especially in the digital age. Stressing the need for a free press, the Commission decided to tackle all forms of control and pressure over media with the European Media Freedom Act (EMFA). The novel set of rules, both rights, and duties of media players will protect journalists and editorial independence in private and public media services. Further on, it will ensure that media can operate without political interference and spyware while achieving public transparency on ownership of media outlets.
Besides the regulation, the EMFA comprises a Recommendation, which is not a binding legislative act. The Recommendation provides a toolbox of voluntary measures for media companies on editorial independence.
Moreover, the Commission proposed to set up a European watchdog, which will replace the existing one established under the Audiovisual Media Services Directive. The new watchdog will consist of a board of representatives of national regulatory authorities. The Board will have various tasks to wit: promoting a consistent application of the EU media law framework, issuing an opinion on national measures and decisions affecting media markets, coordinating national regulatory rules on non-EU media that pose a risk to public security, etc.
Next, European legislators, the EU Parliament, the Council, and the Commission will negotiate the text of the regulation. Media stakeholders should observe closely this legislation, as it will have a substantial impact on the EU media landscape.

Our experienced team can help you maximize the impact of your position in the European decision-making process and represent your interests in ensuing legislative process.

III. EU PREPARES RULES ON LIABILITY FOR AI

For Artificial Intelligence to thrive in the European Union, citizens must trust digital innovations.

The Commission adopted for the first time a proposal on AI liability rules that would set out a framework for excellence and trust in AI. Based on the new rules, victims of AI-related damage (be it individuals or businesses) will be eligible for the same standards of protection as they would if harm was caused under any other circumstances. Thus they will have the right to seek compensation for damages caused by AI systems.
The AI liability rules were adopted along with another proposal on updating the existing Product Liability Directive. Both proposals aim at modernizing EU liability rules conforming to the digital age, circular economy, and the impact of value chains. They include changes to existing rules and new sets of rules on strict liability, damages, and compensations.

As noted by the Commission, the purpose of the AI Liability Directive is to lay down uniform rules for access to information and alleviation of the burden of proof concerning damages caused by AI systems, establishing broader protection for victims, and fostering the AI sector by increasing guarantees.

Further on, the AI directive will harmonize certain rules for claims outside of the scope of the Product Liability Directive in cases of damage due to wrongful behavior such as breaches of privacy or damages caused by safety issues.

The Commission highlighted that the new rules strike a balance between protecting consumers and fostering innovation, removing additional barriers for victims to access compensation, while laying down guarantees for the AI sector by introducing, for instance, the right to fight a liability claim based on a presumption of causality.

Next, the proposal will need adoption by the European Parliament and Council.

Our team of experts can aid in benefiting from rule-changes and navigate the new legislative environment with ease.

IV. COMMISSION ACTS ON ASBESTOS-FREE FUTURE

Asbestos is not a problem of the past, and the Commission is acting to completely avoid it in the future. The dangerous substance was banned in the EU in 2005, yet it remains a threat to the health of workers and people exposed to asbestos products that were used in older buildings. The Commission noted that around 78 percent of occupational cancers recognized in the Member States are related to asbestos.

In October 2021, the European Parliament adopted a resolution calling for a European strategy for the removal of all asbestos.

Now the Commission drafted a comprehensive package on better protecting people from asbestos and ensuring an asbestos-free future.

The package includes a Communication on a European lifecycle approach to asbestos. It focuses on the protection of human health and the environment, in particular in implementing the European Green Deal and Europe’s Beating Cancer Plan. It spans the action needed to identify asbestos present in buildings, register the information, and safe removal or treatment of asbestos-containing waste while maximizing the protection of workers.

Moreover, the Communication focuses on improving the diagnosis and treatment of asbestos-related diseases.

The second component of the package is a proposal to amend the Asbestos at Work Directive to lower the occupational exposure limit value to asbestos; upgrade guidelines to support the Member States, employers, and workers in implementing the new directive; launch an awareness raising campaign on the safe removal of asbestos.
Next, the proposal will be discussed by the European Parliament, and the Member States with the Commission calling for swift approval. Once adopted. Member States will have two years to transpose the directive into national law.

Alber & Geiger can utilize its extensive European network to represent your business interests and propose legislative amendments on your behalf.

V. Commission Proposes Emergency Interventions in Energy Markets

Gas and electricity prices have reached record levels in 2022 and hit all-time highs following the Russian invasion of Ukraine. In response to the worsening situation in the energy market, the Commission published a proposal for exceptional electricity demand reduction measures as well as measures to redistribute the energy sector’s surplus revenues to final customers. The proposal aims at reducing the cost of electricity for consumers and ensuring supply during winter. Four measures are expected to achieve those goals: reduction of electricity demand, a temporary revenue cap on ‘inframarginal’ electricity producers, temporary solidarity contribution on excess profits generated from activities in the oil, gas, coal, and refinery sectors, and regulated prices to also cover small and medium-sized enterprises.

Moreover, the Commission stated that it will deepen its discussion with the Member States about the best ways to reduce gas prices, also analyzing various ideas for price caps and enhancing the role of the EU Energy Platform in facilitating lower price agreements with suppliers through voluntary joint purchasing.

Our team can assist you in getting ahead of concrete provisions of EU regulations to tailor them to your business interests to the highest possible extent.

VI. CEU APPROVES FIRST CAP STRATEGIC PLANS

The new Common Agricultural Policy is due to begin in 2023 and the Commission took an important step for the implementation of the policy by adopting the first package of CAP strategic plans for seven countries. Denmark, Finland, France, Ireland, Poland, Portugal, and Spain are the first that got their strategic plans approved, while the Commission stated that it is committed to quick approval of the 21 remaining plans. The seven plans represent a budget of over €120 billion, including over €34 billion dedicated exclusively to environmental and climate objectives and eco-schemes.

The new CAP policy is designed to shape the transition to a resilient, sustainable, and modern European agricultural sector. It will integrate a more effective way of working. It will provide that funding is distributed to medium and small-sided family farms, as well as to young farmers. They will be supported to take up innovations. Moreover, the CAP policy will allow for increased flexibility for the Member Countries to adapt measures to local conditions.

As noted by the Commission, the new CAP can be the cornerstone for food security and farming communities in the European Union.
The Plans will be in line with EU legislation and should contribute to the EU’s climate and environmental goals, including on animal welfare, as set out in the Commission’s Farm to Fork and Biodiversity strategies.

The CAP can also promote afforestation, fire prevention, restoration, and adaptation of forests. Farmers participating in eco-schemes may be rewarded, inter alia, for banning or limiting the use of pesticides and limiting soil erosion. Between 86% and 97% of the national utilized agricultural area will be farmed under good agricultural and environmental conditions.
Common Agricultural Policy 2023-2027: the Commission approves the first CAP strategic plans

VII. EU REGISTERS NEW INITIATIVE ON TOBACCO

The Commission registered a European Citizens’ Initiative that calls for rules that end the sale of tobacco and nicotine products to citizens born in 2010 onwards as well as measures on cigarette butt-free free beaches and national parks, extended outdoor vapor-free spaces, tobacco advertising, and its presence on audiovisual productions and social media, especially addressing covert advertising through influencers and product placement.

The European Citizens’ Initiative is entitled ‘Call to achieve a tobacco-free environment and the first European tobacco-free generation by 2030′. It aims at protecting younger generations from tobacco addiction and taking action against smoking and tobacco-related environmental damage.

The Commission considered the initiative legally admissible as it fulfilled all the formal conditions.

However, registration does not prejudge the final legal and political conclusions of the Commission on this initiative and the action it will intend to take, if any, in case the initiative obtains the necessary support.
The organizers have six months to open the signature collection. The Commission will have to act if the initiative receives 1 million statements of support within 1 year, from at least 7 different Member States.

VIII. EU EASED ENVIRONMENTAL RULES TO INCREASE CEREAL PRODUCTION

The Commission proposed a short-term suspension of EU crop rotation rules to increase cereal production and address strong risks related to food security following the impacts of the war in Ukraine.

The request that came from several Member States is estimated to put 1.5 million hectares of land back into production. Normally, those farmland areas would be left aside for soil quality preservation and improvement of biodiversity.

The derogation is limited and will apply only in 2023 and is restricted to what is strictly necessary to address global food security concerns. Thus, plants used for feeding animals like maize and soya are excluded.

“Every tonne of cereals produced in the EU will help to increase food security worldwide,” the Commission statement pointed out.

Moreover, it is added that the proposal was a result of careful balancing between global food availability and affordability on one hand, and the protection of biodiversity and soil health on the other. The Commission stressed that the transition to a resilient and sustainable agricultural sector in line with the Farm to Fork and Biodiversity Strategies, and the Nature Restoration Law must continue despite the situation.

IX. EU PROPOSES NEW RULES ON SUBSTANCES OF HUMAN ORIGIN

The European regulatory framework on standards of quality and safety for substances of human origin (SoHO) intended for human application will align with developments in the sector over the last 20 years. Even though the current legislation adopted in 2002 and 2004 has improved the safety and quality standards related to SoHO, shortcomings, and gaps have been identified.

Thus, the Commission published a proposal that will repeal the Blood Directive and the Tissues and cells Directive.

As noted by the Commission, with the new regulation citizens will be safer in donating or receiving vital substances of human origin (SoHO). The latter includes blood, cells, tissues, and other substances such as breast milk or microbiota. Meanwhile, solid organs will remain regulated under the Organs Directive.

The new regulation will aim at facilitating the cross-border circulation of SoHO, reinforcing solidarity between health authorities, ensuring a supply of critical substances, implementing digital-ready policies, and promoting innovation and high standards of safety and quality.

Next, the proposal will be discussed in parallel by the Council and the European Parliament until the final text is agreed upon. Upon adoption and publication, most provisions will come into force after a transition period of two years, while a three-year transition period will apply for particular provisions.

II. A&G Newsletter Q3 2022

I. EU to Propose a Nature Restoration Law

Biodiversity has been a topic that has recently been getting more attention within the EU sphere. After three decades since any major legislative efforts, the European Commission has now revealed plans to propose a new nature restoration law to work in conjunction with their goals on biodiversity, as outlined in the Commission’s 2030 biodiversity strategy.

Currently still in its drafting stage, the upcoming proposal will take large steps to ensure better conservation and restoration habits that could be targeted directly at the national level and will likely come with binding restoration targets. Agricultural productions, construction, pollution, overexploitation and climate change are contributors to Europe’s biodiversity loss, factors which in the wake of current geopolitical events could worse. As such, the upcoming proposal carries significant political weight. Early reports of the upcoming proposal include restoration targets for soils, wetlands, peatlands, free-flowing rivers and marine areas, with potentially more upcoming in the future.

While initially planned for publication in 2021, have pushed back the publication of the draft proposal, likely due to issues pertaining to planning and implementation of goals, and setting achievable targets to ensure member state cooperation. Already there have been some concerns by the agricultural sector regarding the viability of the targets, urging the European Commission to consider the growing needs of the European Union.

Alber & Geiger can help you represent your business interests and ensure your voice is heard by legislators.

II. EU to Reform Consumer Credit Directive

The fourteen-year-old EU Consumer Credit Legislation was initially established with the goal of harmonizing the EU framework on credit and facilitating the emergence of a functioning internal market in consumer credit while providing a high level of consumer protection. The digitalization of the consumer credit sector, and consumers in general, have led to drastic changes in consumer decision making, and the emergence of new providers in the market have led to and decrease in transparency and consumer protection. This was further accelerated by the global health crisis, leaving EU households more financially vulnerable.

The revisions proposed by the European Commission include an extension of the scope of the directive, proposing to cover all loans up to €100.000, interest-free credit, short-term loans up to three months and crowdfunding credit platforms. Further, the proposal suggests a cap on interest rates, as well as annual rate changes, to be set by member states, if not already existing. Adjustments regarding information provision are also proposed, such as the delivery of pre-contractual information to the customer earlier, and more transparent creditworthiness assessments in the interest of the consumer.

The public consultation process has revealed mixed positions on the European Commission proposal, with an overall support for harmonization of current rules and inclusion of the digital environment. However, other revisions, such as information provision and overall scope of the directive, are heavily favoured by consumer organizations, while business associations are more in favour of non-regulatory interventions, or changes limited to the digitalization aspect of the credit sector.

Overall, the varying opinions and financial regulation aspect of the proposal mean that there will likely be delays in its implementations, expected to be later this year.

Our experienced team can help you maximize the impact of your position in the European decision-making process and represent your interests in ensuing legislative process.

III.EU to Increase Share of Rail Traffic

After thorough review of the previous EU rail freight network concluded in mid 2021, general consensus in the European Commission has been that there needs to be more initiative by the European Union to increase rail usage, infrastructure and support all throughout the member states. The new Cross-border rail traffic proposal aims to better the management and coordination of rail transport, in line with the European Green Deal and the sustainable and smart mobility strategy.

Currently, freight rail transport is heavily underutilized in the European Union due to the lack of competitiveness within the sector and the lack of sufficient rail infrastructure. This is not only due to mismanagement of the current systems, but also because minimal cooperation between EU member states and stakeholders in terms of digitalization, traffic systems, transparency requirements, etc.

The cross-border rail traffic legislative proposal has set fourth multiple legislative and non-legislative measures to improve rail usage. Most importantly, railway capacity management to ensure the increased use of current rail infrastructure via improvements made in timetable designs, asset management and capacity allocation. Further improvements are to be made in the areas of traffic and contingency management, stronger integration of rail transport in multi-modal logistic chains, performance monitoring and infrastructure use conditionality.

Looking at the public consultation, the different policy options outlined by DG Mobility and Transport are met with different responses. A majority of respondents do not see a simple Refinement of the existing legal framework for rail freight and passenger traffic as a sufficient measure to bring change to the sector. A substantial portion of respondents favour the DGs suggestion of a comprehensive modernisation and harmonisation of rules, processes and tools for freight, while also implementing some centralization aspects at a European level.

The European Commission envisions the adoption of the new proposal in the third quarter of 2022 and based on the general support for change received by participants of the public consultation, timely adoption could be possible.

Our team of experts can aid in benefiting from rule-changes and navigate the new legislative environment with ease.

IV. EU to update smoking regulations

In line with the European Commission’s ‘Beating Cancer’ plans, announced in 2021, the Commission is now looking to revise and update its recommendations on smoke free environments. The last recommendations made by the European Commission were issued in 2009, calling on Member states to provide protection from tobacco smoke in indoor spaces, indoor public spaces, public transportation and other public spaces, as deemed appropriate. Since then, the tobacco industry has moved towards alternative smoking products, such as electronic cigarettes and heated tobacco devices. As of now, these alternative methods of smoking are not covered by the smoking recommendations.

The EU Directorate-General for Health and Food Safety, in its proposal for a directive revision outlines the issue with these alternative smoking products, citing multiple studies conducted on the novel products and their mostly unknown long-term effects on public health and safety. The update would add this product category under the coverage of the EU smoking recommendation and addressing the technological developments. Moreover, the new revision aims to correct certain grey-areas left by the 2009 recommendation, pertaining to the definition of ‘indoor’ or enclosed spaces, leaving some quasi indoor and outdoor spaces only under the supervision of member states on a case-by-case basis and exposing the public to potential harm.

Overall, the proposal is still in its infancy, currently in its evidence gathering stage. Feedback so far has been very mixed, with strong opinions on either side of the spectrum. While adoption is still far away, proposed for late 2023, it is likely there will be considerable efforts by the tobacco industry to portrait their new products as different from conventional tobacco products.

Alber & Geiger can utilize its extensive European network to represent your business interests and propose legislative amendments on your behalf.

V. EU to set new food waste targets

As part of the European Green Deal, currently at the centre of the EU’s decision making, the European Commission is now proposing new EU-wide targets for food waste reduction. In the EU, up to 20% of all food produced ends up as food waste, not only serving as a large inefficiency in the agri-food chain, but also contributing up to 10% to total greenhouse gas emissions. Reducing food waste would alleviate pressure from agricultural production and lessen ethical considerations associated with throwing away food.

The objective of the proposal for directive are threefold. To improve knowledge and awareness on levels of impact of food waste, influence attitudes towards food waste and encourage food waste prevention measures along the production chain and ensuring change in the food value chain towards less waste, such as cooperation between different supply chain actors, awareness programmes, voluntary agreements, food donations and more. While the directive is aimed to cover the EU-level, each member state is free to choose the most appropriate and efficient measures on the national level to ensure best results. So far, there has been large variation across member state regarding food waste reduction efforts, leading to calls for more unified and coordinated approaches to be taken by the European Commission.

The proposal outlines different policy objectives, associated with their respective level of ambition. In a first step, the scope of action, target expression (percentage versus absolute) and member state obligations are proposed, while the second policy steps cover varying food waste reduction targets of 15-25% to 40-50% by 2030.

Currently in its public consultation stage, the proposal has received support by the public and industry associations, calling for more unified efforts across the European Union. The Commission predicts the proposal adoption in mid 2023, a target timeline that is realistic for this proposal.

Our team can assist you in getting ahead of concrete provisions of EU regulations to tailor them to your business interests to the highest possible extent.

III. A&G Newsletter Q2 2022

I. EU to Harmonize Certification of Organic Farming

On March 31st, the new European Commission ‘Organic Action Plan’ was approved by the European Parliament for implementation. In this new legislation, the EU puts emphasis on the further development of the organic farming sector. The new plan builds on the achievements of the prior 2014-2020 action plan and reinforced the commitment of the European Union to achieve the Farm to Fork Strategy’s target of 25% organically farmed land by 2030.

Importantly, the new action plan also seeks to widen the certification of organic farming, looking to cover the entire value chain of organic productions. According to EU analysis, this would drastically improve the recognition and consumption of organic products, thus also encouraging the increase in organic farming. Specifically, the new action plan aims to enhance transparency and traceability in the organic production value chain, not only enhancing oversight, but also consumer trust.

Overall, the new Organic Action Plan rests on the successful achievements of the past organic strategies, which have successfully increased the area under organic production by 66% in the last 10 years and led to improved biodiversity in organically farmed land by close to 30%. Public consultation on the action plan saw the widespread recognition of the issues surrounding organic farming and the threats posed by lack of traceability and in non-harmonized certification, such as the competition of the EU organic production label with private label products.

Alber & Geiger’s expert team can help you make sense of the rules and overcome hurdles to your business.

II. EU to revise Cosmetics Product Regulation

As part of the European Union’s flagship chemical strategy for sustainability, the European Commission now opened the public consultation on the ‘Cosmetics Product Regulation’, aiming to revise the regulation and boost innovation for safe and sustainable chemicals and address the environmental and health concerns caused by harmful chemicals. The consultation seeks the public’s opinion on multiple topics, such as expanding the range of prohibited chemicals in cosmetics, updating labelling requirements on cosmetics and increasing risk assessment requirements.

The updates to the cosmetics product regulation have three aims overall, largest of which is to improve effectiveness, efficiency and coherence of safety assessments across EU legislation. Here, the European Commission is considering merging the current regulatory body, the Scientific Committee on Consumer Safety, with a centralized European agency, such as the European Chemicals Agency. This would improve efficiency, transparency and consistency of chemical safety.
Another regulatory improvement considered by the EC is concerned with the definitions of nanomaterials found in cosmetics, usually as a means of efficient substance carriers or skin penetration. Here, the aim is to update the definitions to be coherent across chemical sectors and update the transparency requirements on nanomaterials.

Further, improvements are aimed at the labelling requirements of the cosmetics sector. While the essence of the practice won’t change, and manufacturers will still be obliged to provide detailed ingredient lists, the European Commission is looking to increase consumer understanding and avoid overloading the product packages with information. Here, specifics on the direction the European Commission will go are likely to result from the public consultation.

Overall, as part of the chemical strategy for sustainability, the updates to the cosmetics product regulations are aimed at consumer protection and coherence among EU legislation. With the current consultation ending in June 2022, the earliest adoption of a draft legislation could be seen towards the very end of 2022, albeit delays being a possibility.

Our experienced team can help you maximize the impact of your position in the European decision-making process and represent your interests in ensuing legislative process.

III.EU to accelerate Solar energy adoption

The European Green Deal has been the centre of EU policymaking in recent years. Renewable energy deployment lays at the heart of the Green Deal and its acceleration will have large positive impact on achieving the goals set out by the leading EU policy. With the recent conclusion of the consultation period on the ‘EU solar energy strategy’, the European Commission has come closer to decreasing EU dependence on fossil fuels and lowering energy prices.

2020 has been the largest year for solar energy so far, supplying 5% of the European Union’s electricity. As part of the European Green deal and especially in light of the recent geopolitical developments, the EU has made several pledges to increase that number. The new EU solar energy strategy reflects these efforts, aiming to tackle the most common problems with solar adoptions such as tendering procedures, financial support, permitting and grid connections. Further, the plan aims to increase market availability of solar products by driving the prices down through support for competition in the sector, while maintaining high standards of production and sustainability requirements.

The public consultation has overall received good support for the accelerated strategy, heavily criticising European dependence on third country fossil fuels. Overall, the strategy came at the right time to further incentivize member states to coordinate an accelerated approach to the energy transition. This is further supported by widespread calls in the European Parliament of raising the renewable energy targets from 32% to 45%, with some MEPs even suggesting higher numbers. While specific policy options have not been set out yet, the widespread support will likely yield an early adoption of the strategy in the second quarter of 2022.

Our team has extensive experience in the technology and energy sectors and can offer advice and services to grow your company.

IV. EU to revamp VAT for the digital age

After 30 years, the Value Added Tax (VAT) system in the European Union is getting an update. The new proposal aims to bring the system into the digital age and reduce both fraud and burden on businesses and governments. Now in its public consultation stage, the ‘VAT in the digital age’ legislative proposal is indicated for European Commission adoption in the third quarter of 2022.

With an increasingly digital economy, the European Union has been in dire need of an update to the outdated VAT legislation, considering cross-border sales of goods and services across EU member states. Currently, national instruments are not sufficient in tackling cross border and e-commerce fraud, as indicated by a large discrepancy between expected VAT and collected VAT on a European level. The new VAT proposal aims to solve this issue by simplification and harmonization of current rules and their modernization to help businesses benefit from the potentials of the single market. The plan includes different objectives, such as making VAT compliance easier for EU businesses operating in the digital space, creating a harmonized framework to combat tax fraud and prevent market fragmentation and ensuring the fair treatment of regular and platform economies.

The European Commission is currently looking at different policy options, ranging from the introduction of digital invoicing and reporting obligations to a single VAT registration platform across all member states. With the current consultation in progress, it is likely that there will be changes made to the policy options in question. The public consultation has already received heavy criticism on the introduction of digital taxation from EU citizens, and we are yet to see how companies react to the proposed changes of VAT procedures.

Alber & Geiger can use its extensive experience and network in the European Union to represent your business interests and propose amendments to maintain the viability of your e-commerce projects.

V. EU to revise food packaging information

With the ‘Farm to Fork’ strategy, the European Commission has recently focused its effort on creating a more fair, healthy, and environmentally friendly food system. An important addition to that is a revision of the current food labelling practices such as standardized front-of-pack nutritional labelling, origin information and date markings.

The revision proposal stems from multiple studies conducted by the European Commission on consumer behaviour and expectation in regard to food packaging. Most importantly, the lack of harmonization on nutritional labelling, along with current abuse of nutritional and health claims on products can impact consumer health. Currently, there are no regulations on what kind of product is allowed to bear nutrient or health claims. The proposal aims to change that by restricting such practices on products that are excessively high on e.g., sugars or saturated fats.

Further, the new proposal aims to unify origin information practices. With growing demand on origin information, EU member states have enacted mandatory labelling nationally, and the proposal aims to unify these laws Union wide. The last issue the revision seeks to fix is the common misunderstanding of date markings. According to studies, misunderstanding of date markings cause up to 10% of EU wide food waste; a problem that the Farm to Fork strategy looks to mitigate.

It is expected that this reform will have great impact on achieving the objectives set out in the overarching Farm to Fork strategy. The new measures would help consumers make better choices, as well as level the playing field between food business operators, some of which use misleading tactics in order to promote a ‘healthier’ product. It is also expected that the bill will lead to more sustainable consumer consumption, driven by demand for more sustainable products and less waste.

Overall, the public consultation shows a positive response for the harmonization of food labelling and the other measures, with some concerns for the implementing costs on business sides by participating representative organizations. After the release of the official summary of the consultation, it is expected that this revision will likely come into effect in the last quarter of 2022.

Alber & Geiger can put its distinguished policy team at your disposal to help you further understand and influence the current and future state of food regulations.

VI. EU to revise Alcohol Tax

As part of the revision of the tax structures on alcohol and alcoholic beverages that came into effect in January of 2022, the EU is now looking to update excise duty rates on alcohol. The last changes made to excise duty rates were in 1992, and along with the European Union’s general push for tax harmonization on alcohol, the excise duties are now under review.

Current legislation on excise duties on alcohol specify the minimum rates of duty on different alcoholic products such as beer, wine, fermented beverages, intermediate products, and ethyl alcohols. While member states can set duties according to national preferences, they are required to be above the minimum EU level.

The revision of excise duties on alcohol products does not only stem from the harmonization efforts by the European Union. Both the ‘Europe’s Beating Cancer Plan’ and ‘United Nations Sustainable Development Goals’ specify the societal cost of alcohol and harmful consumption. The current review of the excise duties thus will seek to measure the impact of alcohol consumption against these economic and social costs and utilize taxation as a levelling instrument to combat harmful consumption.

Currently, the rates and structures of excise duty on alcohol and alcoholic beverages are under evaluation, supported by the open public consultation session till July 2022. While a previous proposal in 2006 did not get adopted, it is likely that the new proposal will pass in the Commission. As of now, planned adoption of the new excise duty structures are planned for mid 2023.

Our expert team can help protect the industry and utilize their experience to advocate on your behalf.

IV. A&G Newsletter Q1 2022

I. EU to strengthen regulation of crypto

As the widespread adoption of cryptocurrencies accelerates, the European Union is pushing for stronger regulation on the emerging asset class, citing concerns over money laundering and lack of oversight on the sector. Currently, the EU remains one of the laxer regulators of cryptocurrencies, aiding in the adoption and innovation of blockchain technology.

First attempts at serious regulation of digital finance such as cryptocurrencies were proposed in 2020 with the “Markets in Crypto Assets” (MiCA) bill, outlining standards, safeguards, and an increase in supervisory power over digital assets. Further legislations have been drafted regarding anti-money laundering measures such as an increase in customer verification procedures and transfer traceability. However, recent concerns over Facebook’s project of creating an asset pegged online currency (stablecoin) have once again flared up discussion over the economic implications of cryptocurrencies and the need for more concrete regulation on the digital asset.

In 2022, it can be expected that the EU will set its sights on more tangible regulatory frameworks regarding crypto. Late last year, the European Council adopted its position on the MiCa framework, meaning that negotiations in the European Council and European Parliament can now start, prior to the adoption of the text. The new framework promises to continue the facilitation of growth for the modern technology by allowing crypto firms to operate more easily across the European Union. However, the MiCA also aims to protect market competition and the Union’s monetary policy by heavily controlling issuing of asset pegged crypto by private companies, while making institutionalized digitalization easier. Overall, this year promises regulatory changes and commitment to the development of crypto related assets.

Alber & Geiger can advise in matters of consumer and privacy protection in crypto in the onset of the new regulatory package and help you maintain your rights and anonymity.

II. EU to shift towards greener aviation

As part of the overall push towards a greener Europe, Brussels lawmakers are now considering phasing out the exemption on fuel tax for the aviation industry. The current energy tax system dates back to 2006, however is not a fitting policy anymore in today’s regulatory climate, where a sustainable future is a key priority.

The plan to tax kerosene and therefore push airlines towards the development of more sustainable aviation fuels is to occur over a ten-year period, starting in 2023. The European Commission stated in a draft document, that the current exemptions on taxation of such pollutants is ‘no longer coherent with the present climate challenges and policies. A further step towards pushing for a greener aviation sector falls under the ReFuelEU Aviation policy, adopted in late 2021, seeking to gradually increase the percentage of sustainable aviation fuels in aviation fuels by binding jet fuel manufacturers to increasing fuel mixing.

Multiple voices within EU institutions however call the EU proposal too disruptive and are asking for amendments to the legislation for effective implementation without economic distortions. The proposed legislation involving taxation, the unanimous approval of all European Union member states is required, making the passing of such policy a lengthy process, with the aviation industry utilizing lobby support for the amendment of the new proposal.
Alber & Geiger can use its extensive experience in EU Affairs to strengthen your position and propose amendments to maintain the economic viability of the aviation industry.

III.EU rules on the trucking sector

The European trucking sector will face major challenges in the first quarter of 2022, as the EU Mobility Package comes into effect. Adopted in 2020 after over three years of negotiations, the legislation aims to increase the quality of life and working conditions of lorry drivers and decrease unfair competition in the transport sector across the European Union.

The package focuses on a guaranteed minimum pay for drivers in their origin country, a substantial issue because of the international, cross border nature of the transport sector. Further, new rules on working time are included in the package, setting new standards for maximum daily and weekly working hours, and upping the minimum rest period both within transport and between transports. This also guarantees that drivers are eligible to return to their home country during mandatory rest periods, leading to an increase in quality of life for long-haul lorry drivers. The newly adopted legislation aims to fight ‘letterbox’ companies, which are typically registered in administratively cheaper countries, but operate almost exclusively outside of the establishment country. Here, the new rulings mandate the return of trucks to their country of origin at least every eight weeks.

Even though the package has just been finalized by the EU, member countries with large road transport sectors have already filed for the suspension of the measures. These countries, including Bulgaria, Hungary, Poland, and Romania, are citing the economic impact of the additional measures to local businesses, potentially leading to heightened unemployment and sector shrinkage due to the increased costs associated with the mobility package. The ruling by the Court of Justice of the EU is expected later this year.

Our experienced team can help you maximize the impact of your position in the European decision-making process and put you in an advantageous position to achieve your agenda.

IV. EU regulation of artificial intelligence

In April 2021, the European Union unveiled a new benchmark regulatory framework on artificial intelligence (AI), with the aim of specifying the use of AI systems and addressing risks and accompanying concerns about the technology. This first ever attempt to enact horizontal regulation of AI seeks to codify the standards of the EU trustworthy AI paradigm, requiring legal, ethical, and robust artificial intelligence application.

The approach taken by the European Commission is one of risk-based assessment and classification of artificial intelligence use. Limited risk systems, for example, operating with human contacts such as chatbots or biometric categorization systems, would be subject to a limited set of transparency obligations under the new law. High-risk systems, on the other hand, such as ones operating with impact on human safety or fundamental rights, would face strict regulation, transparency requirements and regular auditing procedures.

As of November 2021, the legislative proposal is awaiting a draft report on the European Parliament and European Council, followed by the vote and trialogue on the text. Seeing as this proposal is the first of its kind, the developments in this sphere will have major influence on shaping legislation of AI worldwide. And while there is general support towards the commission proposal, experts and stakeholders alike are already calling for amendments and revisions of the benchmark legal framework.

Alber & Geiger can use its expert team on legislative matters to strengthen your position and capitalize on AI related projects, setting international standards under the new legislation.

V. EU to assess grocery delivery services

On-demand grocery delivery services such as ‘Getir’, ‘Gorillas’, or ‘Flink’ are increasingly coming under pressure by both National and Regional Lawmakers. These ultra-fast delivery services saw dramatic growth during the last few years due to the corona pandemic. Lockdown regulations and fears of getting sick popularized these services, promising grocery delivery, sometimes within 10 minutes of ordering. The growth of such companies, however, also led to the emergence of ‘dark stores’, distribution hubs for these services in and around popular neighbourhoods.

All over the European Union, cities have taken increased notice of these dark stores, with both citizens and authorities complaining about the nuisance and hazards these distribution hubs pose. Constant restocking of the de facto warehouses, noise and heightened traffic hazards are only some of the issues cities are experiencing, leading to growing discontent. An increasing number of cities have now taken measures against such services. Amsterdam and Rotterdam for example, have issued a one-year freeze on the opening of new dark stores, halting the growth of the expanding companies. The French city of Lyon further denied the opening of dark stores entirely in 2021, citing disturbances of public space and safety.

The current situation clearly mirrors the initial emergence of services like Uber and Airbnb a few years ago, and cities will likely follow suit when it comes to protecting local interest. On an EU scale, there has been little coherent reaction, although the companies involved have already voiced the desire to expand all throughout the union. It can be expected that these delivery services will heavily advocate for the benefits of their services and positive effects on employment and consumer choice, however, some companies have already noted their willingness to cooperate and find mutually acceptable solutions with European Cities.

Our team can assist you in getting ahead of concrete provisions of EU regulations to tailor them to your business interests to the highest possible extent.

VI. EU targets alcoholic beverages

The European Union’s flagship food policy, the Farm to Fork (F2F) strategy, has taken large strides towards the ideation and implementation of greener and more sustainable food policy, both in terms of producers and consumers. Harmonized food labelling has, of recent, been part of that discussion. However, proposals for implementing nutritional score labelling on alcoholic beverages containing over 1.2% alcohol has caused increased attention to the topic.

Pushback against universal food labelling initially came with the conception of the Nutri-Score system in 2017 by France. The system was initially introduced to provide clear information to consumers to choose healthy and sustainable diets, by placing a five-colour nutrition label on the front of food packages, ranging from ‘A’ as a good nutritional score, to ‘E’ as a bad score. Since its launch, however, the Nutri-Score system has received harsh criticism because of its ambiguity, potential for manipulation and simplification of nutritional data.

In the latest proposal by the creator of Nutri-Score, alcoholic beverages, which under the 2011 regulation are exempt from providing nutritional declaration, should receive an ‘F’ label on the score system, thus giving it its own last place category. Multiple countries, headed by Italy, as well as anti-Nutri-Score lobby groups, have now come together and voiced their discontent, reiterating the previous flaws of the scoring system and now adding the threat of damaging the European Wine sector.

With the rising pressure on the French system, other labelling schemes, such as Italy’s ‘Nutrinform’ have gained momentum, with advocates placing emphasis on consumer education and scientific data. It is expected that the European Union proposes a universal food labelling policy as part of the F2F strategy in the fourth quarter of this year, but which system prevails is not clear of yet.

Alber & Geiger can aid in the protection of the heritage rich wine industry and use its extensive experience to direct EU opinions towards more suitable solutions.

V. A&G Newsletter Q4 2021

I. EU to target pesticides and artificial fertilizers

Within its agenda for the plenary session from 18 to 21 October 2021, the European Parliament is set to debate the Commission’s Farm to Fork strategy and vote on its own-initiative report. The draft report was adopted in September 2021 after heavy amending following the opinions of sceptical MEPs within other committees. Although the Parliament’s decisions will not be legally binding on this occasion, they will signal how much momentum lies behind the Commission’s plan among lawmakers, and what compromises can be expected.

The file touches upon fiercely debated provisions such as potentially mandatory nutrition labels on the front of food packaging, a statement that industrial-scale farming increases the risk of zoonotic viruses jumping to humans, or a mention to Europeans’ excessive meat consumption. Critics have raised the alarm over potential negative spill overs from the EU’s new farm policy such as a drop in food production leading to a loss of competitiveness for European farmers along with a mere exporting of the environmental damage of food production. A report by the Commission’s own research service allegedly identified such risks as real possibilities, which prompted fierce criticism from MEPs leading to the plenary vote.

The Commission itself has stressed in its responses to parliamentary questions that targets within the Farm to Fork strategy – i.e., to halve pesticide usage by 2030, dramatically curb fertilizers, and ensure that a quarter of EU farmland is organic – are aspirational guidelines that will depend on the adoption and transposition of over 27 individual measures. These will include the ordinary review and impact assessment procedures of the sustainable use of pesticides directive or the Common Agricultural Policy, which means the political battle is far from over and will be long and arduous.

Alber & Geiger can use its extensive experience representation of agribusiness to strengthen your position in the legislative process.

II. EU to target connected devices in push for enhanced cybersecurity

The 2021 State of the Union Address also saw the European Commission announce an initiative to raise the cybersecurity requirements for digital services employed in critical sectors of the economy and society. The initiative will build on the existing proposal for a Directive on Security of Network and Information Systems (NIS2) that is currently processing through stages at the European Parliament. Boldened security standards for smart devices commonly used by European consumers is welcome by many, with a significant number of voices having raised the alarm over the lack of provisions to this effect.

The revision of the NSI2 is expected to update the regulatory framework and ensure that key manufacturers of connected devices, believed to often disregard cybersecurity as a selling point of their products, implement high standards in the protection of the users’ data across different devices. The creation of a European network of Security Operation Centres is also expected to regularly scan the network using artificial intelligence technologies to detect cyber threats. Lastly, the commitment to create a Joint Cyber Unit presented last June was reiterated with the objective of coordinating and setting up a European crisis management capability in the cybersecurity space.

There are a significant number of voices among Europe’s digital industry who had already underlined the lack of baseline cybersecurity requirements, pointing out insufficient existing rules and calling for a horizontal regulation. However, a call for caution about proliferation of EU proposals to regulate the cyber environment has also been made. Many believe that Europe needs more harmonized targets and easily implementable rules to achieve the right protection for Europeans while helping the domestic industry build cyber security capabilities at scale while retaining competitiveness and profitability.

Our expert team can help influence opinions and agendas on EU digital policy matters at the highest political level.

III.EU to review waste management rules

As the EU’s Circular Economy Action Plan materialises into concrete measures, the remainder of 2021 has some important developments in line concerning the regulatory framework of waste management. Before the end of year, the European Commission is expected to come up with a proposal for a regulation set to replace the Packaging and Packaging Waste Directive as the previous impact assessments and public consultations have led the European Commission to believe the current regulatory framework falls short of delivering on environmental targets. The European Commission has equally announced that a review of the Waste Framework Directive is underway with the start of a public consultation scheduled for the second quarter of 2022.

In a high level of ambitions scenario, the new rules could require all packaging to be reusable or recyclable under a new and enforceable definition of re-usable packaging. In certain applications where alternative reusable productions or systems are possible or consumer goods and be handled safely without packaging, forbidding the use of certain packaging materials and polymers is being considered. Producer Responsibility Schemes whereby businesses placing any kind of packaging on the single market ought to be directly involved in the collection and recycling of packaging waste are already meant to be fully operational by 2024.

Many welcome the revamp of the packaging and waste rules as key area to deliver tangible results on the Green Deal’s environmental goals. The European Parliament has reiterated its objective to make all packaging reusable or recyclable in an economically viable way by 2030 in. a resolution from February 2021. However, some voices have called for emphasis on the cost effectiveness and the preservation of competitiveness aspects in an already heavily regulated sector as the different proposals will process through stages at the EU’s co-legislating institutions.

Our team can guide you through the legislative changes being considered to maximise the impact of your positions in the European decision-making process, and to put you in a position to benefit from them.

IV. EU to boost local semiconductor industry

A European Chips Act was pitched by the European Commission during the annual State of the Union address aiming to increase Europe’s self-reliance and competitiveness in an increasingly critical industry. Its implications can be vast and range across many industries including the automotive, computer or home appliances sectors.

The idea is still at a very infant stage without a concrete date for a proposal from the Commission nor any mention in the 2021 work program. However, further steps can be expected in 2022 if the ambitious objective of boosting Europe’s share of semiconductor production to 20% by 2030. The momentum for introducing provisions to that effect has been building up in the face of persistent shortages and supply chain disruptions during the Covid-19 pandemic. As a result, there are now a significant proportion of voices who believe the issue goes beyond business considerations and touches the core of Europe’s geopolitical and technological sovereignty, making it a priority at a time of European growing “strategic autonomy”.

The European Commission has laid down three core areas where to expect EU action. First, a European semiconductor research strategy would aim to build up on already existing first-rate research capacity and aim to align it with European strategic interests and ambitions. Secondly, a collective plan to enhance European production capacity by directly supporting the creation of large-scale fabrication plants capable of producing the most advanced and energy-efficient semiconductors. Last, a framework for international cooperation and partnership with the aim to secure European supply chains through both diversification and creation of domestic capacity. A plethora of financing sources can be expected at both European, national, regional, and private level, as well as a potential dedicated European Semiconductor Fund.

Alber & Geiger can use its extensive experience in EU affairs to strengthen your position to capitalize from projects such as these.

 

V. EU to update emissions standards for vehicles

The European Commission is expected to come up with a proposal for a regulation on emissions standards for all petrol and diesel cars, vans lorries and buses. The so-called Euro 7 regulation concluded its public consultation period in late 2020 and will be proposed to Parliament and Council before the end of 2021. Although Euro 7 is widely perceived as a key tool to deliver on the EU’s Green Deal emissions reduction targets coming from the transport sector, concerns have been voiced over an excessive level ambition potentially trumping the competitiveness of Europe’s automotive industry.

A key area where the regulation is meant to improve on its predecessors Euro 6 and VI is the monitoring of real-world emissions from vehicles for their lifetime on the road. Measurement of on-road pollutant emissions data currently goes through post-processing, which averages emissions during accelerations and excludes some relatively high emissions of heavy-duty vehicles, particularly in urban traffic. Many thus believe that measurement should target actual tailpipe emissions during a vehicle’s daily use for a comprehensive depiction of emissions according to driving circumstances. Provisions to this effect are envisaged should the Commission opt for the highest-level of ambitions course of action.

The two more moderately ambitious alternatives currently on the table consider stricter limits on CO2 and NOx as well as the inclusion of harmful ultra-fine particles (PN10), ammonia (NH3) and nitrous oxides (N20) that were previously excluded from measurements of vehicle emissions. Furthermore, hybrid cars could also be forced to drive in electric-only mode in certain locations. The proposed regulation is expected to be adopted by 2025 after the proposal has gone through the usual back and forth between the EU institutions.

Our experienced team can assist you in shaping concrete provisions of EU regulations to tailor them to your business interests to the highest possible extent.

VI. EU-US Trade and Technology Council

There was a great deal of enthusiasm over the EU-US Trade and Technology Council (TTC) inaugurated on 29 September 2021 for a much-needed revival of transatlantic cooperation in a host of issues from the fight against climate change to the challenges of the technological revolution. Although the meeting in Pittsburgh was just the first of many encounters, it set the tone for how Brussels and Washington want to cooperate and pursue mutual interests. The event sent a strong signal of the two sides’ renewed wishes for an enhanced partnership and the need to overcome differences in the face of mounting global challenges.

The sheer size of the EU-US economic relationship only is enough cause to pursue the benefits of a closer partnership. Together, they account for a quarter of global trade and almost half of global GDP. It is no surprise that the business community welcomed the TTC with open arms as the first step towards building a reliable institutional framework for business opportunities to take full advantage of the transatlantic relationship’s tremendous potential to that effect. The ten working groups are now expected to advance their work and align shared trade and technology priorities on areas such as common technology standards, supply chain security, or data governance.

For the TTC to turn into a complete success, much of the work ahead will need to iron out the two bloc’s differences in some thorny issues. Chief among the contentious points is data protection regulation, where the EU’s notoriously strict standards have already prevented both sides to reach an agreement in the past whereby full disclosure of personal data between companies and organisations could take place with safety guarantees. Yet, officials insisted differences in some areas will not trump progress in others. All eyes are now on the TTC as a potential enabler of the Transatlantic Trade and Investment Partnership (TTIP)’s revival.

Alber & Geiger can put its distinguished internal relations team at your disposal to help you further understand and influence the current state of EU-US relations.

VI. A&G Newsletter Q3 2021

I.EU to target pre-installed phone applications

The Digital Marketing Act (DMA) is currently processing through the stages at the EU Parliament level. Much like the GDPR, the DMA will have direct effect throughout all Member States and is intended to be a revolutionary piece of legislation for the modern technological age that seeks to protect consumers from some of the unsavoury practises of the multi-national tech giants. Amongst the proposals for reform being looked at currently are measures, which would prevent these corporations from pre-installing their own applications such as Google Chrome or Microsoft Outlook onto every one of the individual devices manufactured by them.

There are a significant proportion of voices who believe that the capacity to do this affords these huge corporations with a disproportionate competitive advantage, which leads towards them behaving like oligopolies, given in practise how so few phone users reconfigure these basic applications once they have begun using each device. The momentum for introducing provisions to this effect in the DMA has been accelerated by pronouncements on the part of both the Body of European Regulators for Electronic Communications and the UK Competition Authority, where both voiced concerns about the impact on effective choice for consumers by allowing these corporations to continue pre-install their own applications.

Many believe a decision to introduce provisions to this effect would be a positive step in tandem with other efforts by the EU to cut down on oligopolistic tendencies on the part of these corporations. In this respect many would point to the decision by the EU Commission to fine Google more than €4 billion in July 2018 for their practise of allowing the biggest manufacturers to exclusively pre-install Google products on their devices. Many also believe legal provisions to this effect would enable consumers and broader society to effectively tackle the data harvesting business models of corporations such as Google, which largely rely on the consumer’s use of their pre-installed applications.

Alber & Geiger can use its extensive experience in EU affairs to strengthen your position in the legislative process.

II.EU to targets anti-competitive foreign subsidies

In May 2021, the EU Commission announced plans through which legal instruments would be introduced to prevent the practise of third countries affording subsidies to many of its successful companies within the EU Single Market, which had the effect of negatively distorting competition.

In the White Paper released by the EU Commission, it suggested that three different tools would be implemented which would empower authorities to identify, investigate and penalise subsidies of this nature. These tools would be specified to distinguish between differing sorts of subsidies such as those in the sphere of mergers and acquisitions, those which generally facilitate the gaining of competitive advantages for companies as a result of subsidies, and those which distort public tenders.

This latest White Paper follows a similar trend from summer 2020, when EU Competition Commissioner also presented a white paper detailing the EU Commission’s plans to level the playing field with regards anti-competitive subsidies. The overarching goals of both these plans is to solidify a means of redress for honest EU companies being put a financial disadvantage as a result of these practises by third country governments. There is some concern, however, in the wake of the publication of the White Paper that the three differing instruments will have the effect of creating loopholes, confusing overlaps and could ultimately create more legal uncertainty. There are also concerns regarding the ultimate effectiveness of these tools given the likelihood that much of the relevant evidence in these investigations will be located beyond the EU’s jurisdiction. The consultation period on the proposal closed in mid-June 2021, and could ultimately take up to two years to be fully ratified by the Council of the EU and the EU Parliament.

Our expert team can help influence opinions and agendas on EU competition matters.

III.EU to support geothermal technology

The Renewable Energy Directive first drafted in 2009, has long been the showcase legislative instrument through which the EU has demonstrated its commitment to creating ambitious reforms throughout the EU with respect to climate action. The Directive in its original form contained policy initiatives and guidance that sought to ensure that the EU would reach its goal of 32% of energy coming from renewable sources by 2030. The Directive was recast in 2018 shortly in the wake of the agreement of the Paris Climate Accord. Whilst in many respects the Directive has been successful, many in the geothermal energy sphere has been left disappointed by the Directive’s effectiveness in terms of encouraging use of this form of renewable energy.

However, in the wake of proposals under the European Green Deal, consideration is once again being given to revisiting the Directive with the aim of removing the many structural barriers that exist with regards to harvesting geothermal energy. These barriers are significantly acute in terms of the costs that exist for producers regarding exploration and drilling. Two key features of a yet again recast Directive that could help to reduce structural prices include provisions for de-risking measures and power purchase agreements (PPA).

PPAs, in fact, seek to reduce the burden that is placed on businesses alone in engaging in the sophisticated and risky work associated with harvesting and creating the necessary infrastructures associated with geothermal energy. A PPA would have the potential to create a balanced funding environment, whereby businesses would at first pay for the installation and maintenance of the necessary harvesting infrastructure. That said, there would also be a firm contractual commitment on the part of consumers to pay for this energy normally over the course of a contract lasting decades.

Our team can guide you through the legislative changes being considered in order to maximise the impact of your positions in the European decision-making process, and to put you in a position to benefit from them.

IV. EU approval of the Covid recovery fund

May 2021 saw the final approval given to the historic €672 billion EU Covid recovery fund (composed of grants and loans) that was agreed on by EU leaders in July 2020. The simultaneous ratification of the “Own Resources Decision” will enable the EU Commission to finance the fund by the EU Commission borrowing directly from the money markets on behalf of the EU as a whole, and later distributing its borrowing to Member States. It is envisaged the borrowing will be repaid by 2058.

Since the point of agreement at an EU Council summit last summer the specifics of the agreement has been debated and scrutinised by the parliaments of the respective Member States in the intervening time. In Poland in particular, approval of the project was significantly delayed by disagreements within the ruling coalition as to how exactly to distribute the fund internally within Poland. Disappointment may well exist within some quarters of the EU given the almost year long delay that has followed between agreement and final approval, particularly in the face of the urgent circumstances caused by the pandemic. Disappointment may well also exist that the fund has already been somewhat diluted from the original figure of €750 billion to €672 billion.

However, now finally with the ratification of the Polish and Austrian parliament all pieces seem to be in place to ensure that the fund will begin being distributed from this July. Large proportions of the fund will be earmarked for larger EU economies that took significant heavy hits during the pandemic such as Italy, France and Spain. The fund (like its US equivalent) also provides significant business opportunities to implement modern reforms to economies such as the ring fencing of 37% of the fund for projects related to climate action, and a further 20% will be targeted at smoothening the transition to a new digital economy.

Alber & Geiger can use its extensive experience in EU affairs to strengthen your position so as to capitalize from projects such as these.

V. EU-China investment agreement

In May 2021, the EU Parliament voted overwhelmingly to halt any legislative progression of the Comprehensive Agreement on Investment (CAI) that had been agreed between China and the EU until such point that Chinese officials agreed to lift sanctions they had imposed on five MEPs. These sanctions are regarded as a reaction to sanctions imposed by the EU Parliament on Chinese officials believed to be connected with the internment of the Chinese Uyghur population in conditions that fall far below human rights standards.

The halting of the CAI ratification process is indeed a considerable blow given that the deal was only agreed in principle as recently as December 2020. It had been hoped that the CAI would prove a significant milestone step in the amelioration of trading relationships between the EU and the traditionally protectionist Chinese markets. Under the terms of the CAI, China had agreed to allow much more external access to their markets and had also agreed to provisions which would seek to create a more levelled trading relationship between the EU and China, in addition to provisions which would commit China to improving their sustainable development mechanisms and improve their labour rights laws.

This stalling of ratification of the CAI looks unfortunately like it could well be a pro-longed delay, given how intrinsically such a deal is connected to the broader geo-political facts relating to EU-China relations. Neither side in their comments so far seem prepared to compromise first over the lifting of the sanctions, and hence the future of the CAI currently is very much uncertain.

Alber & Geiger can put its distinguished international relations team at your disposal to help you further understand the current state of EU-China trading relations.

VI. EU Commission to reduce carbon heavy imports into EU

In June 2021, media outlets received leaks indicating the EU Commission’s plans to reduce carbon imports into the EU by placing tariffs on goods, which traditionally carried large carbon footprints. Many of these goods are related to the construction and infrastructure sectors of the global economy such as steel, cement and electricity. The obtained information suggested that these tariffs will be manifested through a tool known as the carbon border adjustment mechanism, which will be formally presented to the public by the EU Commission in mid-July.

It is hoped that the introduction of these tariffs will help facilitate the EU as a whole in matching the carbon reduction ambitions of many of its competitors. It is expected that the EU Commission will emphasise that exemptions from the tariffs will be made for both EFTA Member States within the Customs Union such as– Iceland, Liechtenstein, Norway and Switzerland, and for economically developing countries. The tariffs, therefore, will predominantly be designed to penalise imports from developed countries who have chosen not to take similar wide ranging steps to reduce their carbon prints, so hence there is no guarantee that such goods coming from close EU partners like the United States or the United Kingdom will be exempt from these tariffs.

EU based companies importing these kinds of targeted products are expected to be required to obtain digital certificates, which contain a record of the carbon emissions on the products they are importing, thereafter tariffs will be placed on imports with a suitably high carbon foot print. This obligation to obtain this license will be an additional obligation in this area, given that EU based power companies are already required to obtain permits for work that generates large amounts of carbon emissions. The cost of these certificates are expected to be closely linked to the pre-existing permits. These plans are expected to be phased in on a gradual basis from 2023, and will be fully operational from 2026.

Our experienced team can help influence opinions and agendas.

VII. A&G Newsletter Q2 2021

I. Council to go ahead with the country-by- country reporting directive

On February 25, the Portuguese Presidency of the Council of the European Union earned widespread support from member states to advance with the European public country-to-country reporting directive. The directive aims to require multinational corporations to publish their profits and taxes paid in each EU member state in which they operate.

Overall, the directive aims to construct a new oversight regime that identifies instances of corporate tax avoidance in Europe. While businesses do favor transparency, they are also concerned that making profits public would harm their competitiveness. In fact, many businesses feel that the EU decision to move ahead will not necessarily help assess tax liabilities properly. They argue that it would be a duplication of the work carried out by the tax authorities, which will harm the level playing field on top.

The directive is expected to enter the legislative process later this summer, with trilogue negotiations between the Commission, Council, and Parliament planned for June. While a portion of the directive has been agreed to, the Council and Parliament are still grappling over the intensity of the directive’s transparency rules and have considerable disagreements to reconcile.

Alber & Geiger can defend your interests during the legislative process.

II. Commission to present digital tax proposal

The Commission is expected to present its proposal establishing an EU-wide digital tax this coming June – a long anticipated centerpiece of the Commission’s digital and economic strategies. Following the recent change in US administrations, with the Biden administration signaling a favorable stance toward the issue, momentum for creating international standards on a digital levy has built steadily. The development is of particular significance for larger technology firms, as these entities would be most affected by an EU-wide digital tax.

While the Commission has expressed it preference for an agreement within the OECD to establish an international digital tax framework, this preference has not halted the Commission from coming forward with its own proposal. Executive Vice President of the Commission Margrethe Vestager recently noted that while the proposal aims to be tabled in June, a digital tax will not become operational until 2023.

However, a select grouping of Member States, as well as several multinational corporations and business associations, are poised to oppose the Commission’s effort, instead preferring such a framework be crafted within the OECD.

We can assist technology and telecommunications firms achieve their legislative and regulatory goals in the EU.

III. Commission to bolster promotion of EU agricultural products

Promoting EU agricultural products is a clear priority of the Commission’s annual work program. In 2021 alone, the Commission will spend €182.9 million to promote European agri-food products within the Single Market and abroad. Having launched a public consultation on the review of such policies, the Commission has created the opportunity for stakeholders to shape the way in which certain key goals take form. The consultation period is currently open and will remain so until June 23.

First and foremost, nearly half of the Commission’s budget in this policy area (€86 million) will be tethered to the objectives of the European Green Deal, supporting schemes for organic products, best practices in sustainable agriculture, and other aspects of reforming the agri-food industry to better fight climate change. Additionally, an important part of the consultation will concern defining safety standards of EU agri-food products, as well as a range of quality schemes.

With regard to external markets, the Commission has placed a clear priority on high-growth markets. In particular, Canada, Mexico, Japan, and South Korea have been viewed as targets for specific EU exports, namely those from Europe’s dairy, olive oil, and wine sectors.

Our experienced team can help influence opinions and agendas.

IV. Commission reviews key aspects of Banking Union

In launching its consultation on the review of bank crisis management and deposit insurance framework, the Commission aims to present a proposal for a regulation that establishes a set of policies for handling bank failures and better protects depositors. The consultation, open now until May 20, allows stakeholders to influence a critical institutional development in the landscape of the EU’s financial sector, as well as to shape the broader contours of debate on the Banking Union. Specifically, the consultation concerns three legislative texts: the Bank Recovery and Resolution Directive (BRRD), the Single Resolution Mechanism Regulation (SRMR), and the Deposit Guarantee Schemes Directive (DGSD).

At its core, the forthcoming regulation is expected to shield public monies from bank failures, instead diverting the burden of institutional insolvencies to the shoulders of the broader banking industry. Thus, the consultation is of particular importance to credit institutions, investment first, electronic payment platforms, as well as relevant national financial bodies and agencies.

Alber & Geiger can get your message to the appropriate audience.

V. Suspension of Boeing-Airbus tariffs positions transatlantic trade talks to reopen

After years of punishing each other for subsidies granted to Airbus and Boeing, the EU and US agreed on March 5 to suspend their retaliatory tariffs for four months. The removal of these tariffs will affect billions of dollars in goods, ranging from tractors to wine to cheese.

Trade Commissioner Valdis Dombrovskis labeled the move as a “reset” for transatlantic relations meant to provide an opportunity to create a “comprehensive and long-lasting negotiated situation.” With transatlantic trade talks expected within this four-month timeframe, the EU agricultural sector will benefit heavily during the suspension period. To ensure retaliatory tariffs don’t reemerge after the suspension period, the agricultural industry should take serious interest in engaging in the negotiation process to ensure EU-US trade disputes on aircraft subsidies are settled.

Moreover, Europe’s aim for enhanced transatlantic cooperation can be seen in its proposal to establish a Trade and Technology Council comprised of US and EU officials.

Our trade team enjoys long-lasting relationships and understands the complexities to help shape decisions.

VI. Commission advocates for tougher, greener approach to trade

On February 18, the EU’s trade Commissioner Valdis Dombrovskis announced that Europe’s trade policy will regard the commitments delineated in the Paris Climate Accord’s as “essential elements” in all future trade deals. Additionally, the EU’s new trade approach will look to liberalize trade in green products and services while also brokering agreements to reduce third country subsidies of fossil fuels. Recent evidence of this trade approach can be observed in the Commission’s promise to delay ratifying the EU-Mercosur deal unless Brazil steps up its environmental commitments.

Furthermore, the Commission will look to develop a new mechanism to defend the EU from prospective coercive and distortive maneuvers from third countries. Potential mechanisms could include the establishment of an EU export credit facility, an office of a chief trade enforcement officer, and upgraded enforcement regulations.

Alber & Geiger can help third countries navigate the trade environment and advance their goals in Brussels.

VIII. A&G Newsletter Q1 2021

I. EU establishes Capital Market Union

With the publication of the Capital Market Union Action Plan, the EU Commission has defined the roadmap for the unification of the European capital market. The EU Commission’s policy has three objectives: to support the objectives of the Green Deal; to encourage individuals to invest in long-term projects; and to unify national markets by tackling regulatory barriers.

In more detail, the EU Commission schedules more than 16 targeted actions to achieve a unified capital market. Among the actions planned by the EU Commission are a harmonisation of the shareholders rights, a strengthening of investment protection rules, a review of the security rules and the unification of insolvency rules. In addition, the EU Commission will promote individual investment in pensions and long-term investment, including through reform of financial reporting.

The EU Commission has set the roadmap for its banking and financial policy for the years 2021 to 2024. The action plan presented is already taking concrete form, notably with the opening of public consultations on long-term investment funds. It is essential for companies of the banking and financial sector to strengthen their presence at the European institutions in order to provide their input into the development of the Capital Market Union’s action plan.

Alber & Geiger can put its expertise in European affairs at your disposal in order to make your position in the European institutions prevail.

II. EU to regulate digital finance

The digitalisation of the financial sector has been identified as a priority for the EU Commission, which in the coming months will adopt forward thinking actions to prepare the future of the digital sector. The digital strategy for the financial sector outlines the EU’s actions and ambitions for the coming months and years.

Concretely, the strategy has four main axes: tackling the fragmentation of the digital single market for financial services, reviewing the regulatory framework to make it fit to the digital transition, promoting data-driven innovation, and addressing the challenges linked to the sector digitalisation. Several regulations to this effect are already in the making, in particular a directive on crypto-assets which aims to establish a tailor-made regime for economic operators, new rules for IT services to prevent the risks of cyber-attacks, as well as a new strategy for retail payments.

With the adoption of this strategy, the EU Commission has set itself a roadmap that schedules a thorough overhaul of the legislation and regulatory framework of the financial and digital sector. These regulations are going to have an important impact on the European and international financial sector, so it is vital for companies concerned to engage with European decision-makers.

Alber & Geiger can use its extensive experience in EU affairs to strengthen your position in these regulatory procedures.

III. EU presents greener and more digital consumer law

By presenting its new Consumer Agenda, the EU is laying the foundations for its vision of consumer policy until 2025. The Communication schedules more than 22 actions aimed in particular at helping the green transition and adapting legislation to digital commerce. It is also scheduled to strengthen the enforcement of consumer rights and enhance international cooperation.

In more detail, the EU Commission will take regulatory measures to change the information rules with the explicit aim of combating greenwashing. It is also scheduled to revise the directive on the sale of goods in order to give a right to repair to consumers, as well as to revise the general directive on product safety. In addition, the EU Commission will boost the international dimension of its consumer law: it plans to strengthen collaboration at multilateral level, but also at bilateral level as an action plan with China is listed as the EU Commission’s priority.

In less than 5 years, the EU Commission intends to re-evaluate almost all of its consumer legislation in order to strengthen its role in the green transition and adapt it to the changes brought about by digital technology. the EU Commission will take measures that will change consumer law, which will have an impact on the entire goods and commerce industry, including the digital sector. It is central for the sectors concerned to participate in the review of current regulations as well as in the development of future regulations in order to shape the new European consumer law.

Our team can guide you through the regulatory review process in order to maximise the impact of your positions in the European decision-making process.

IV. EU adopts Class Actions

On 24 November, the European Parliament adopted the Collective Redress Directive (CR Directive), ending a process started in 2018 following the “Dieselgate”. The CR Directive defines the minimum criteria for adopting class actions throughout the EU.

In concrete terms, the CR Directive allows consumer associations to collectively sue companies that have caused them harm through the class action mechanism. Class actions may be brought in all areas relating to data protection, financial transactions, travel and tourism, energy, communication and all infringements of general consumer law. Unlike the US, EU class actions will not be able to seek punitive damages and will have to be limited to repairing the damage, but at the same time the costs to the plaintiffs will be limited in order to promote its use. Another limitation is that only consumer associations with a recognised interest in the field may be qualified entities able to launch class actions.

In summary, this directive heralds an important change in European consumer law by encouraging the use of class actions. Member States are free in defining the mechanisms at national level as the Directive sets only minimum standards. Member States have up to two years to define the class action procedures and these must be applicable at the latest 6 months after this deadline. The EU in the midst of a major paradigm shift in the field of consumer protection and large portions of the economy are potentially concerned by future class actions.

Our expertise will enable you to make your interests prevail here.

V. The EU Digital Service Act (DSA)

By introducing the Digital Service Act (DSA), the EU Commission announces a radical change in the way digital services operate and in their liability rules. The aim of the EU Commission is to make the major digital services more transparent and, above all, more active in the fight against illegal content by increasing the liability rules of the digital services.

The DSA redefines the transparency obligations of digital services as they will now be obliged to provide more information at the request of users about targeted advertisements. The biggest change, however, are in the liability rules for digital services. The prevailing rule was that services were hardly ever liable for hosted content. From now on, digital services may be sanctioned for hosting illegal content, unless it is proven that they have acted expeditiously to remove this content. Digital Service Coordinators will be established at the national level to monitor the internal procedures set to improve the removal of illegal content.

All the digital services of more than 45 million users are directly concerned by the DSA, which will radically change the way they operate. If they do not comply with the new regulations, the penalties may be as high as 6% of total business income. The DSA will have an unprecedented transformative impact on the way digital services operate.

Our expertise in EU affairs and our contacts with the EU institutions and Member States will enable you to represent your interests in the forthcoming discussions.

VI. The EU Digital Market Act (DMA)

The ambition of the EU Commission with the Digital Market Act (DMA) is clear: to force the Large Online Platforms (LOPs) to change the way they operate as it aims to remedy anti-competitive practices. It is set to be the most important and ambitious regulation in the digital field for years.By introducing the Digital Service Act (DSA), the EU Commission announces a radical change in the way digital services operate and in their liability rules. The aim of the EU Commission is to make the major digital services more transparent and, above all, more active in the fight against illegal content by increasing the liability rules of the digital services.

In concrete terms, the DMA consists of two pillars: an ex-ante list of prohibited or strictly regulated practices, and a Market Investigation Tool. This ex-ante list will be divided into several categories. The blacklist simply prohibits a number of practices, such as not sharing the collected data with third parties, the collection of data beyond what is necessary and limitations on self-referencing. The Market Investigation Tool should enable the Commission to enrich the ex-ante list of prohibited practices as well as the list of LOPs. Although DMA focuses on LOPs, we are on the verge of a radical change in the functioning of the digital market as a whole.

The DMA aims to change the structure of the digital market by strengthening the EU Commission’s anti-trust powers in an unprecedented way. The first companies concerned are the LOPs, which will have to change some of their practices in depth. These LOPs are the GAFAMs, but all platforms with significant market power are also potentially concerned. Other smaller digital companies are also concerned as they will now be able to challenge anti-competitive practices much more easily and with faster effects.

With a proven track record of success, Alber & Geiger can help you bring your case directly to European decision-makers.