RESTRICTED  
  
WT/TPR/S/357  
17 May 2017  
(17-2649) Page: 1/219 
Trade Policy Review Body   
 
TRADE POLICY REVIEW  
REPORT BY THE SECRET ARIAT  
THE EUROPEAN UNION 
This report, prepared for the thirteenth Trade Policy Review of the European Union, has been 
drawn up by the WTO Secretariat on its own responsibility. The Secretariat has, as required by the  
Agreement establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement 
Establishing the World Trade Organization), sought clarification from the European Union on its 
trade policies and practices.  
 
Any technical questions arising fro m this report may be addressed to Messrs John Finn (tel: 022 
739 5081), Mario Kakabadse (tel: 022 739 5172), Pierre Latrille (tel: 022 739 5266), Ms  Denby 
Probst (tel: 022 739 5847) , Ms Takako Ikezuki (tel: 022 739 5534)  and Mr. Roger Kampf (tel: 022 
739 6 218).  
 
Document WT/TPR/G/357 contains the policy statement submitted by the European Union.  
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the first 
session of the meeting of the Trade Policy  Review Body on the European Union. This report was 
drafted in English.  WT/TPR/S/357 • European Union  
 
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  CONTENTS  
SUMMARY  ................................ ................................ ................................ ........................  9 
1   ECONOMIC ENVIRONMENT  ................................ ................................ ........................  13 
1.1   Recent Economic Developments  ................................ ................................ ................... 13 
1.1.1    Balance of payments  ................................ ................................ ................................ 16 
1.1.2    Monetary and exchange rate policies  ................................ ................................ .......... 17 
1.1.3    Fiscal position  ................................ ................................ ................................ ......... 18 
1.1.4    EU economic governance and structural reforms  ................................ .......................... 19 
1.2   Trade Performance  ................................ ................................ ................................ .....21 
1.2.1    Goods  ................................ ................................ ................................ .................... 21 
1.2.2    Services  ................................ ................................ ................................ ................. 25 
1.3   Foreign Direct Investment  ................................ ................................ ........................... 27 
2   TRADE AND INVESTMENT  REGIME  ................................ ................................ ............  31 
2.1   Legal and Institutional Framework  ................................ ................................ ................ 31 
2.2   Trade Policy Objectives  ................................ ................................ ............................... 32 
2.3   Trade Agreements and Arrangements  ................................ ................................ ........... 34 
2.3.1    WTO ................................ ................................ ................................ ...................... 34 
2.3.2    Regional and preferential agreements  ................................ ................................ ........ 34 
2.3.2.1    Reciprocal preferences  ................................ ................................ ........................... 34 
2.3.3    Unilateral preferences  ................................ ................................ .............................. 36 
2.4   Foreign Investment Policy  ................................ ................................ ............................ 37 
2.5   Aid for Trade  ................................ ................................ ................................ .............. 38 
3   TRADE POLICIES AND P RACTICES BY MEASURE  ................................ ........................  39 
3.1   Measures Directly Aff ecting Imports  ................................ ................................ .............. 39 
3.1.1    Customs procedures and requirements  ................................ ................................ .......39 
3.1.1.1    Trade facilitation  ................................ ................................ ................................ ...42 
3.1.1.1.1    Advance rulings, i.e. Binding Tariff Information/Binding Origin Information  ............... 43 
3.1.1.1.2    Electronic systems ................................ ................................ .............................. 43 
3.1.2    Customs valuation  ................................ ................................ ................................ ...44 
3.1.3    Rules of origin  ................................ ................................ ................................ ......... 46 
3.1.4    Tariffs  ................................ ................................ ................................ .................... 47 
3.1.4.1    Nomenclature and WTO bindings  ................................ ................................ ............ 47 
3.1.4.2    Applied rates  ................................ ................................ ................................ ........ 48 
3.1.4.3    Duty su spensions and special tariff treatment  ................................ ........................... 51 
3.1.4.4    Tariff quotas (TQ) and administration  ................................ ................................ ......52 
3.1.4.5    Preferential tariffs  ................................ ................................ ................................ .53 
3.1.5    Other charges affecting imports  ................................ ................................ ................. 53 
3.1.6    Import prohibitions, restrictions, and licensing  ................................ ............................ 57 
3.1.7    Anti-dumping, countervailing, and safeguard measures  ................................ ................ 58 
3.1.7.1    Anti-dumping and anti -subsidy measures  ................................ ................................ .58 WT/TPR/S/357 • European Union  
 
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  3.1.7.2    Safeguards  ................................ ................................ ................................ ........... 62 
3.2   Measures Directly Affecting Exports  ................................ ................................ .............. 64 
3.2.1    Export procedures and req uirements  ................................ ................................ .......... 64 
3.2.2    Export taxes, charges and levies  ................................ ................................ ................ 64 
3.2.3    Export prohibitions, restrictions, and licensing  ................................ ............................. 64 
3.2.3.1    Dual-use items export control regime  ................................ ................................ ......65 
3.2.4    Export credit, insurance and promotion  ................................ ................................ ......66 
3.2.5    Waste shipment trade regime  ................................ ................................ .................... 68 
3.2.6    Other measures  ................................ ................................ ................................ .......69 
3.3   Measures Affecting Production an d Trade  ................................ ................................ .......70 
3.3.1    Standards and other technical requirements  ................................ ............................... 70 
3.3.1.1    Institutional framework ................................ ................................ .......................... 73 
3.3.1.1.1    ESOs ................................ ................................ ................................ ................ 73 
3.3.1.1.2    European Commission  ................................ ................................ ........................ 75 
3.3.1.2    New Legislative Framework  ................................ ................................ .................... 76 
3.3.1.3    Conformity assessment ................................ ................................ .......................... 77 
3.3.1.3.1    Product marking  ................................ ................................ ................................ 77 
3.3.1.4    Accreditation  ................................ ................................ ................................ ........ 78 
3.3.1.5    Transparency  ................................ ................................ ................................ .......78 
3.3.2    Sanitary and phytosanitary measures  ................................ ................................ ......... 78 
3.3.2.1    Plants and plant products  ................................ ................................ ....................... 81 
3.3.2.2    Live animals and animal products  ................................ ................................ ........... 82 
3.3.2.3    Rapid Alert System for Food and Feed  ................................ ................................ .....83 
3.3.2.4    SPS Committee in the WTO  ................................ ................................ .................... 84 
3.3.3    Subsidies and other government as sistance  ................................ ................................ 84 
3.3.3.1    EU level subsidies  ................................ ................................ ................................ .84 
3.3.3.2    State aid in the member States  ................................ ................................ .............. 85 
3.3.3.2.1    State aid reform: implementation phase  ................................ ............................... 85 
3.3.3.2.2    Non-crisis state aid  ................................ ................................ ............................. 87 
3.3.3.2.3    Crisis-related aid  ................................ ................................ ................................ 89 
3.3.4    Competition policy  ................................ ................................ ................................ ...90 
3.3.4.1    Anti-trust ................................ ................................ ................................ ............. 91 
3.3.4.1.1    Anti-competitive agreements  ................................ ................................ ............... 91 
3.3.4.1.2    Abuse of dominant position  ................................ ................................ ................. 94 
3.3.4.2    Mergers and acquisition s ................................ ................................ ........................ 95 
3.3.4.3    International cooperation  ................................ ................................ ....................... 96 
3.3.5    Taxation  ................................ ................................ ................................ ................. 96 
3.3.5.1    Income tax  ................................ ................................ ................................ .......... 97 
3.3.5.2    Corporation tax ................................ ................................ ................................ .....98 
3.3.5.3    Value Added Tax  ................................ ................................ ................................ ...99 WT/TPR/S/357 • European Union  
 
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  3.3.6    State trading, state -owned enterprises, and privatization  ................................ ...........  100 
3.3.6.1    State trading  ................................ ................................ ................................ ...... 100 
3.3.6.2    State-owned enterprises  ................................ ................................ ......................  101 
3.3.6.3    Privatization  ................................ ................................ ................................ ....... 103 
3.3.7    Government procurement  ................................ ................................ .......................  104 
3.3.7.1    EU directives on public procurement  ................................ ................................ ...... 104 
3.3.7.2    The Government Procurement Agreement  ................................ ..............................  109 
3.3.8   Intellectual property rights  ................................ ................................ ......................  109 
3.3.8.1    Copyright and related rights  ................................ ................................ .................  112 
3.3.8.2    Industrial property  ................................ ................................ ..............................  114 
3.3.8.2.1    Patents  ................................ ................................ ................................ ...........  114 
3.3.8.2.1.1    Unitary patent  ................................ ................................ ...............................  114 
3.3.8.2.1.2    Biotechnological inventions  ................................ ................................ .............  116 
3.3.8.2.1.3    Standard -essential patents  ................................ ................................ .............  117 
3.3.8.2.2    Supplementary protection certificates  ................................ ................................ . 117 
3.3.8.2.3    Plant variety rights  ................................ ................................ ...........................  118 
3.3.8.2.4    Trademarks  ................................ ................................ ................................ ..... 119 
3.3.8.2.5    Geographical indications  ................................ ................................ ...................  121 
3.3.8.2.5.1    Agricultural products  ................................ ................................ ......................  121 
3.3.8.2.5.2    Non-agricultural products  ................................ ................................ ...............  125 
3.3.8.2.6    Industrial designs  ................................ ................................ .............................  125 
3.3.8.2.7    Undisclosed information  ................................ ................................ ....................  127 
3.3.8.2.7.1    Trade secrets  ................................ ................................ ................................  127 
3.3.8.2.7.2    Clinical trial data  ................................ ................................ ...........................  128 
3.3.8.3    Enforcement  ................................ ................................ ................................ ....... 129 
3.3.8.3.1    Economic impact  ................................ ................................ ..............................  129 
3.3.8.3.2    Enforcement within the EU  ................................ ................................ ................  130 
3.3.8.3.3    Enforcement at the EU's external borders  ................................ ............................  132 
3.3.8.3.4    International cooperation  ................................ ................................ ..................  134 
4   TRADE POLICIES BY SE CTOR  ................................ ................................ ...................  136  
4.1   Agriculture  ................................ ................................ ................................ ...............  136 
4.1.1    Trade  ................................ ................................ ................................ ...................  137 
4.1.2    Agricultural policies  ................................ ................................ ................................  138 
4.1.2.1    Domestic support  ................................ ................................ ................................  139 
4.1.2.1.1    Direct payments ................................ ................................ ...............................  139 
4.1.2.1.2    Internal market support measures  ................................ ................................ ..... 143 
4.1.2.1.3    Rural development  ................................ ................................ ...........................  149 
4.1.2.2    Export subsidies  ................................ ................................ ................................ . 151 
4.1.2.3    Market access  ................................ ................................ ................................ ..... 151 
4.1.3    Domestic support levels  ................................ ................................ ..........................  152 WT/TPR/S/357 • European Union  
 
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  4.1.4    WTO notif ications ................................ ................................ ................................ ... 152 
4.1.5    OECD monitoring and evaluation of agricultural policies  ................................ ..............  154 
4.2   Fisheries  ................................ ................................ ................................ ..................  155 
4.2.1    Fisheries in the EU  ................................ ................................ ................................ . 155 
4.2.2    Fish catches and aquaculture  ................................ ................................ ..................  156 
4.2.3    Trade  ................................ ................................ ................................ ...................  158 
4.2.4    Policies  ................................ ................................ ................................ .................  161 
4.2.4.1    The maximum sustainable yield (MSY) ................................ ................................ ... 162 
4.2.4.2    Discards and the landing obligation  ................................ ................................ ....... 162 
4.2.4.3    Regionalization  ................................ ................................ ................................ ... 163 
4.2.4.4    Management of fishing capacity  ................................ ................................ ............  163 
4.2.4.5    External policy  ................................ ................................ ................................ .... 164 
4.2.4.6    Aquaculture  ................................ ................................ ................................ ........  165 
4.2.4.7   Common Market Organisation  ................................ ................................ ...............  165 
4.2.4.8    Science and data collection  ................................ ................................ ..................  166 
4.2.4.9    Structural support  ................................ ................................ ...............................  166 
4.3   Services  ................................ ................................ ................................ ..................  167 
4.3.1    Audiovisual services  ................................ ................................ ...............................  167 
4.3.2    E–commerce in the Di gital Single Market  ................................ ................................ .. 169 
4.3.3    Financial services  ................................ ................................ ................................ ... 172 
4.3.3.1    Market size and structure  ................................ ................................ .....................  172 
4.3.3.1.1    Banking  ................................ ................................ ................................ ..........  172 
4.3.3.1.2    Insurance  ................................ ................................ ................................ ........  173 
4.3.3.1.3    Securities  ................................ ................................ ................................ ........  174 
4.3.3.2    Regulatory developments  ................................ ................................ .....................  175 
4.3.4    Transport services  ................................ ................................ ................................ . 178 
4.3.4.1    Maritime transport services and port services  ................................ .........................  178 
4.3.4.2    Air transport services  ................................ ................................ ..........................  180 
4.3.4.3    Road transport services  ................................ ................................ .......................  183 
4.3.4.3.1    Road passenger transport services  ................................ ................................ ..... 183 
4.3.4.3.2    Road freight transport ................................ ................................ .......................  184 
4.3.4.4    Rail transport  ................................ ................................ ................................ ..... 185 
5   APPENDIX TABLES  ................................ ................................ ................................ .. 190  
 
CHARTS  
 
Chart 1.1 Contribution t o GDP, 2012 Q1 -2016 Q3  ................................ ................................ ..15 
Chart 1.2 Balance of the current account as a % of GDP  ................................ ......................... 17 
Chart 1.3 General government deficit as a % of GDP, 2013 -15 ................................ ................ 19 
Chart 1.4 Direction of merchandise trade, 2013 and 2015  ................................ ....................... 23 
Chart 1.5 Composition of merchandise trade, 2013 a nd 2015  ................................ .................. 24 WT/TPR/S/357 • European Union  
 
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  Chart 1.6 Intra - and extra -EU exports of goods, 2015  ................................ ............................ 25 
Chart 3.1 Applied MFN tariff rates distribution, 2016  ................................ .............................. 51 
Chart 3.2 Overview of anti -dumping and anti -subsidy activity, 2013 -16 ................................ ....60 
Chart 3.3 Anti -dumping and anti -subsidy measures in force, by region, 2013 -16 ....................... 61 
Chart 3.4 Anti -dumping and anti -subsidy investigations in itiated by product sector, 
2013-16 ................................ ................................ ................................ ........................... 61 
Chart 3.5 O utcome of expiry reviews concluded, 2014 and 2016  ................................ .............. 62 
Chart 3.6 Number of dual -use items listed in categories of Annex 1 further to the adoption 
of Regulation (EU) No. 2015/2420, compared to Re gulation (EU) No. 1382/2014  ....................... 66 
Chart 3.7 CEN -CENELEC Portfolio of Harmonized Standards per business domain  ....................... 74 
Chart 3.8 State ai d in EU member States  ................................ ................................ .............. 89 
Chart 4.1 Domestic support in the EU, 2003/04 -2013/14  ................................ ......................  153 
Chart 4.2 Fish production in the EU -28, 2000 -14 ................................ ................................ . 156 
Chart 4.3 Trade balance, 2010 -15 ................................ ................................ ......................  159 
Chart 4.4 Fish imports by EU member States, 2010 -15 ................................ .........................  160 
 
TABLES  
 
Table 1.1 Selected indicators, 2013 -15 ................................ ................................ ................. 14 
Table 1.2 Extra -EU trade in services, by sector and partner, 2013 -15 ................................ .......26 
Table 1.3 Extra -EU FDI flows, 2013 -15 ................................ ................................ ................. 28 
Table 1.4 Extra -EU FDI stocks, 2013 -15 ................................ ................................ ............... 29 
Table 1.5 FDI stocks by major partner, 2013 -15 ................................ ................................ ....30 
Table 3.1 Main changes to customs procedures introduced by the UCC  ................................ .....40 
Table 3.2 Customs electronic systems pursuant to the UCC, 2016  ................................ ............ 44 
Table 3.3 Main customs valuation changes, CCC compared to UCC  ................................ ........... 45 
Table 3.4 Modifications to the CN not incorporated in its WTO bound commitments  .................... 48 
Table 3.5 Structure of MFN tariffs in the EU, 2016  ................................ ................................ ..48 
Table 3.6 EU's applied MFN tariff summary, 2016 ................................ ................................ ...49 
Table 3.7 Excise duties other than on EU harmonized products (alcohol, tobacco, and 
energy products), by member State, 2016/20 17 ................................ ................................ ....54 
Table 3.8 EU prohibitions or restrictions on imports, 2017  ................................ ....................... 57 
Table 3.9 Products subject to import licensing, 2017  ................................ .............................. 58 
Table 3.10 Selected official export credit agencies and their activities  ................................ .......67 
Table 3.11 Legal basis for technical requirements, stand ards, conformity assessment, and 
accreditation in the EU at end -2014 ................................ ................................ ..................... 70 
Table 3.12 Roles of main actors in setting and executing EU standardization policy 
(Commission -requested standardization ) ................................ ................................ .............. 75 
Table 3.13 Principal SPS legislation in the EU in 2017  ................................ ............................. 79 
Table 3.14 RASFF notifications, 2012 -15 ................................ ................................ ............... 83 
Table 3.15 Non -crisis related state aid  ................................ ................................ .................. 88 
Table 3.16 Use of crisis -related aid  ................................ ................................ ....................... 90 WT/TPR/S/357 • European Union  
 
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  Table 3.17 Competition policy legislative framework – selected rules  ................................ ........ 91 
Table 3.18 Anti -trust cases, investigations, decisions, and fines  ................................ ............... 93 
Table 3.19 Merger notifications and decisions 2013 -16 ................................ ........................... 96 
Table 3.20 Taxes and social contributions in the EU -28, 2012 -15 ................................ ............. 97 
Table 3.21 Personal income taxes and actual social contributions in the EU -28, 2015  ................. 97 
Table 3.22 Taxes on the income or profits of corporations including holding gains and 
employer soci al contributions  ................................ ................................ .............................. 99 
Table 3.23 VAT in the EU -28 ................................ ................................ .............................  100 
Table 3.24 Liabilities of public corporations in EU member States, 2015  ................................ .. 103 
Table 3.25 Public procurement thresholds in the EU from 1 January 2016  ...............................  105 
Table 3.26 Estimated value of public procurement by g eneral government in the EU 
2014-15 ................................ ................................ ................................ .........................  106 
Table 3.27 EU GPA thresholds 2016 -17 ................................ ................................ ...............  109 
Table 3.28 EU procurement and GPA key figures, 2009-12 ................................ ....................  109 
Table 3.29 Contribution of IP industries to EU employment, GDP and trade and average 
wage premium of IP -intensive industries, 2011 -13 average  ................................ ...................  110 
Table 3.30 Status of EU participation in WIPO conventions and treaties  ................................ .. 111 
Table 3.31 EUIPO - quantification of IPR infringement by sector ................................ .............  130 
Table 3.32 Enforcement of IPRs, 2013 -15 ................................ ................................ ...........  134 
Table 4.1 Total production value of agricultural products in the EU, 2011 -15 ...........................  136 
Table 4.2 Selected indicators of agricultural structure in the EU, 2013  ................................ .... 136 
Table 4.3 Exports and imports of agricultural products (HS2012 4 digit), 2 012-15 ...................  137 
Table 4.4 Net amounts for direct payments, 2015 -20 ................................ ...........................  139 
Table 4.5 Crop -specific payments for cotton  ................................ ................................ ........  142 
Table 4.6 Implementation of direct payments  ................................ ................................ ...... 142 
Table 4.7 Intervention and private storage aid  ................................ ................................ ..... 144 
Table 4.8 Temporary measures for dairy and livestock producers, 2014 -16 .............................  145 
Table 4.9 Temporary exceptional aid to producers of milk and milk products, beef and veal, 
and pig, sheep, and goat meat by member State  ................................ ................................ . 147 
Table 4.10 Temporary exceptional measures for fruits and vegetables, 2014 -16 ......................  148 
Table 4.11 National envelopes for rural development, 2014 -20 ................................ ..............  149 
Table 4.12 Rural development priorities and focus areas  ................................ .......................  150 
Table 4.13 Tariff quotas in the EU in 2016  ................................ ................................ ...........  152 
Table 4.14 OECD indicators for support to agriculture in the EU, 2009 -15 ...............................  154 
Table 4. 15 Summary of fishery production, 2010 -15 ................................ ............................  156 
Table 4.16 Overview of the EU fleet by member State, 2015  ................................ .................  158 
Table 4.17 European Union's applied MFN tariff summary, 2016  ................................ ............  160 
Table 4.18 List of fisheries agreements  ................................ ................................ ...............  165 
Table 4.19 Main economic indicators of the audiovisual services sector  ................................ ... 168 
Table 4.20 Consolidated banking indicators, 2014 and 2015  ................................ ..................  172 
Table 4.21 Performance indicat ors, 2014 and 2015  ................................ ..............................  173 
Table 4.22  Main economic indicators of the insurance sector (EU level)  ................................ ... 173 WT/TPR/S/357 • European Union  
 
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  Table 4.23 Number of insurance  companies, by type, origin and location of activity, 2015  ........  173 
Table 4.24  EU security market capitalization ................................ ................................ ........  174 
Table 4.25  Total assets under management by pension funds, 2015 -2016 ..............................  175 
 
BOXES  
 
Box 2.1 Objectives of the updated trade and investment policy strategy  ................................ ...33 
Box 3.1 Standards  ................................ ................................ ................................ ............. 72 
Box 3.2 New Legislative Framework  ................................ ................................ ..................... 76 
Box 3.3 State aid - tax rulings  ................................ ................................ ............................. 87 
 
APPENDIX TABLES  
 
Table A1.1 Selected indicators, 2013 -16 ................................ ................................ .............  190 
Table A1.2 Merchandise exports by dest ination, 2013 -15 ................................ ......................  191 
Table A1.3 Merchandise imports by origin, 2013 -15 ................................ .............................  192 
Table A1.4 Merchandise exports by product group, 2013 -15 ................................ ..................  193 
Table A1.5 Merchandise imports by product group, 2013 -15 ................................ .................  194 
Table A1.6 Intra - and extra -EU trade by member State, 2013 -15 ................................ ..........  195 
 
Table A2.1 Selected notifications to the WTO, April 2015 –February 2017  ................................  197 
Table A2.2 Statu s of dispute -related WTO matters involving the EU, March 2015 -February 
2017  ................................ ................................ ................................ .............................  199 
 
Table A3.1 Tariffs under preferential agreements, 2016  ................................ ........................  204 
Table A3.2 Official export credit agencies in EU member States  ................................ .............  206 
Table A3.3 Summary of the European Union's main legislative measures on intellectua l 
property rights, 2017  ................................ ................................ ................................ ....... 207 
Table A3.4 Term of protection of major intellectual property rights, 2017 ................................  210 
Table A3.5 SOEs in EU member States, 2015  ................................ ................................ ...... 213 
 
Table A4.1 Extra -EU-28 trade by major partner in 2010 -15 ................................ ...................  219 WT/TPR/S/357 • European Union  
 
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  SUMMARY  
1. The EU is a large, open economy with  a GDP of €14,711 billion and a total population of 508 
million. Trade is very important to the economy, with exports and imports of goods valued at 
€3,518 billion and services at €1,517 billion. The EU has competence over the customs union and 
commercial policy. There is free movement of goods, capital, and labour within the EU, and 19 of 
the 28 member States share a common currency. Since the last Trade Policy Review of the EU in 
2015, the EU economy continued to grow, but trade and economic developments varied 
considerably from one member State to another.  
2. Exports and imports increased between 2013 and 2015, reaching €1,789 billion and €1,729 
respectively, but were expected to have declined slightly in 2016. The EU remains critically 
important to world trade as the second -largest exporter and importer of goo ds, the largest 
exporter and importer of services, and the largest trading partner for 80 countries. The EU is also 
important as a destination for, and source of, investment, although foreign direct investment, both 
inward and outward, fluctu ated over the 2013-2015 period.  
3. In October 2015, the European Commission issued a new trade and investment policy for 
the EU – Trade for all: Towards a more responsible trade and investment policy . The new policy is 
intended to support the growth of global value chains,  services trade, and e -commerce. The main 
objectives include reducing non -tariff barriers and increasing trade in services, while benefiting 
from improved technology to facilitate cross -border provision of services and recognizing the 
importance of labour mobility and mutual recognition of professional qualifications. While actively 
participating in the WTO, the EU has also continued to negotiate trade agreements, which cover 
trade in goods and services, intellectual property, investment, government procure ment, access to 
energy and raw materials, customs and trade facilitation, competition, and regulatory cooperation. 
The Comprehensive Economic and Trade Agreement between Canada and the EU was signed in 
October 2016. The EU -Singapore Free Trade Agreement aw aits approval, pending an opinion of the 
Court of Justice of the EU on a question of EU competence. Negotiations on a number of other 
trade and investment agreements are also under way.  
4. The EU has exclusive competence over the customs union, while the cust oms administration 
authorities of the member States are responsible for applying the common customs legislation. 
Practically all customs procedures are electronic and cleared within one hour; paper forms are 
rarely required. On 1 May 2016, the main provisi ons of the new Union Customs Code (UCC) 
became applicable, replacing the Community Customs Code of 1992. The UCC aims to simplify and 
modernize customs procedures, bringing the rules into line with the EU treaties, and to move 
towards harmonized IT process es. 
5. Among the changes introduced by the UCC are: improvements to the Authorised Economic 
Operator (AEO) programme (which, in 2015, already covered 14,000 operators accounting for 
71% of imports); simplification of the systems for customs warehouses, free z ones, and temporary 
storage; improving the common risk management framework; reducing the validity of binding 
tariff information to 3 years and making it binding on the importer; phasing in electronic systems 
for customs by 2020; and streamlining and reorg anizing rules of origin and customs valuation.  
6. The simple average applied MFN tariff, at 6.3%, was slightly lower in 2016 than in 2014, as 
the EU applied the expanded list of ITA products and adjusted its nomenclature. Tariffs on 
agricultural products (WTO  definition) remain higher (simple average of 14.1%) than on non -
agricultural products (4.3%). In addition, more agricultural products are subject to non -ad 
valorem  tariffs, and tend to vary considerably within and among product groups. The EU has a 
compre hensive network of arrangements for preferential trade with free trade agreements and 
non-reciprocal preferences under the GSP, GSP+, and Everything -but-Arms regimes. GSP and 
GSP+ apply to over 6,000 of the EU's 9,414 tariff lines, with most of these produ cts duty free 
under GSP+ and about half of them duty free under GSP. The coverage for specific countries 
varies based on the triennial reviews by the EU, the most recent of which was conducted in 2016 
and resulted in graduation of some product sections for  India, Indonesia, Kenya, and Ukraine.  WT/TPR/S/357 • European Union  
 
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  7. New regulations relating to anti -dumping and countervailing measures were introduced in 
2016, although these were essentially a consolidation of earlier regulations and amendments. The 
EU is among the WTO's most frequ ent users of contingency measures. However, from 2009 to 
2013, there was a downward trend in investigations and the number of measures in force has 
remained fairly constant since then (varying between 121 and 137, with 136 in force at end 2016). 
New regula tions on safeguards were introduced in 2015, which, like the regulations on anti -
dumping and countervailing duties, were essentially a consolidation of existing regulations and 
amendments. No safeguard investigations were initiated during the review period , although 
surveillance measures were invoked in 2016 fo r some iron and steel products.  
8. Under the Animal and Plant Health Package, which was adopted by the Commission in 2013, 
new legislation on animal health, plant pests, and official controls were introd uced in 2016. The 
Package aims to simplify and modernize existing legislation on the food chain by condensing nearly 
70 different legislative acts down to four.  
9. There was no major change to the laws on technical requirements, standards, and related 
issues.  The approach remains unchanged of setting out the essential requirements for products in 
legislation, while establishing the technical means to meet those requirements through standards. 
In 2016, the Commission adopted a Standardization Package and issued  a Communication on 
standardization priorities for ICT for the Digital Single Market. Harmonized product legislation 
applies to many categories of products, with cableway installations, personal protective equipment, 
and gas appliances added in 2016. Once work has commenced on a European standard, members 
of the standards bodies cannot commence or continue national work on the same subject, and 
once a European standard has been developed, any conflicting national standards must be 
withdrawn.  
10. As part of the State Aid Modernisation (SAM) initiative, a new General Block Exemption 
Regulation came into force on 1 July 2014 and covered about 40% of the total value of aid 
measures in 2015. On 1 July 2016, new transparency requirements came into force and these are 
accompanied by an annual monitoring exercise by the Commission to review a sample of block -
exempted aid measures. Aid not falling under the block exemption or de minimis  regulations is 
subject to Commission guidelines. In addition, in May 2016, the Commiss ion issued a Notice on 
the notion of state aid which included clarification on state measures concerning infrastructure, 
culture and heritage conservation, and tax rules that could give an enterprise or group of 
enterprises a selective advantage. Total sta te aid (excluding transport and agriculture) by member 
States increased from €60 billion in 2012 to €91 billion in 2014, largely due to an increase in aid 
for environmental protection (including energy saving). During the review period, the Commission 
reached final decisions on a number of tax planning practices in Luxembourg, the Netherlands, 
Belgium, and Ireland, which are currently under appeal before the Court of Justice of the EU.  
11. The basic legislation on competition policy in the EU was not changed du ring the review 
period. Responsibility is shared between the EU and the member States, with the European 
Competition Network helping to ensure efficient and consistent application of the legislation across 
the EU by the Commission and the national authorit ies. Several important cases have been dealt 
with over the past two years covering cartels, abuse of dominant position, and mergers and 
acquisitions.  
12. The EU and the member States are parties to the Government Procurement Agreement and 
adopted the revised G PA through Council Decision 2014/115/EU. Under the revised GPA, the EU 
extended its commitments to provide for further market access opportunities for suppliers offering 
goods and services originating in GPA parties' economies. New sectors and contracting 
authorities/entities were included in the EU schedules, for example, the European External Action 
Service at EU level and a number of central government contracting authorities and sub -central 
entities of member States. Government procurement above the thr esholds in the Classical, 
Utilities, and Concessions Directives must be published on the online Tenders Electronic Daily 
(TED) and member States may advertise tenders on TED below these thresholds. Below these 
thresholds, national rules apply and these mus t respect general principles of EU law, including the 
principles of non -discrimination, equal treatment, transparency, mutual recognition, and 
proportionality set out in the Treaty on the Functioning of the EU. About 17% of the total value of 
public procur ement (excluding utilities) was advertised on the TED, but the proportion varied, from 
6% in Germany to 65% in Latvia.  WT/TPR/S/357 • European Union  
 
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  13. Intellectual property rights continue to be very important for the EU economy with over 40% 
of GDP generated by IPR -intensive industries (2011 -2013). Under the Commission's 2011 strategy 
for IP, a number of legislative measures were adopted, including a trademark reform package and 
a directive on trade secrets. Based on the Digital Single Market Strategy for Europe, presented by 
the Commiss ion in May 2015, work was under way during the review period to further modernize 
the legal framework for copyright protection and enforcement, in particular as regards copyright -
protected goods in the online environment. While the entry into force of the Agreement on the 
Unified Patent Court was still pending, significant steps were made to advance the administrative 
framework for the unitary patent. Comprehensive sections on the protection of geographical 
indications for agricultural products were include d in the more recent generation of FTAs that the 
EU concluded with a number of its trading partners. Modernization of the EU's regime regarding 
IPR enforcement also continued to be under consideration. Meanwhile, a number of studies were 
released by the EU  Intellectual Property Office that map the economic impact of counterfeiting and 
piracy in the EU, including a series of studies that quanti fy IPR infringements by sector.  
14. Agricultural policies did not change significantly over the review period, but the r eforms of 
the Common Agricultural Policy (CAP) adopted in 2013 have been fully applied since 2015. Under 
the CAP, member States have some flexibility within their national envelopes to decide the level of 
funding they apply to different direct payments sch emes and to rural development. While most of 
the direct payment schemes are decoupled from current production, voluntary coupled support is 
permitted up to 15% of the national envelope, or a higher percentage with approval from the 
Commission; alternativel y, under a derogation, member States are permitted to use up to 
€3 million. In addition, payments for cotton are also provided for in three member States. In 
response to measures taken by the Russian Federation banning imports of some products from the 
EU, a number of temporary measures were introduced to support dairy, livestock, fruit and 
vegetable producers, which included market support measures. Export refunds have not been 
granted since July 2013, although sugar produced outside the production quota i s notified in the 
EU's export subsidy notifications. However, production quotas for sugar are to be abolished from 
end-September 2017. Production quotas for milk were abolished from end -March 2015.  
15. The latest reform of the Common Fisheries Policy, which to ok effect on 1 January 2014, 
established a legal commitment to sustainable fishing levels, a ban on discards (the landing 
obligation), and measures to reduce overcapacity while continuing the use of multi -annual 
recovery and management plans. In February 2 017, there were 12 plans combining different 
fisheries management tools, including a maximum sustainable yield, the landing obligation, 
technical measures, and total allowable catches (TACs) and fishing quotas. In 2014, 31 stocks out 
of 59 were fished in a ccordance with estimates of the maximum sustainable yield (MSY) and, by 
2020, the TAC for all stocks are to be based on MSY estimates. EU fishing outside of EU waters is 
to be based on Regional Fisheries Management Organizations and through Sustainable Fis heries 
Partnership Agreements, while the EU cooperates with third countries and international 
organizations on illegal, unreported and unregulated fishing worldwide.  
16. In financial services, the reforms undertaken following the 2008 -09 financial crises were 
largely completed by 2015, but some new measures were introduced during the period under 
review. The legislation is grouped into three pillars: rules for the global financial system; rules to 
establish a safe, responsible, and growth -enhancing financial se ctor in Europe; and rules to 
complete the banking union to strengthen the euro. Under the first pillar, in 2015, a new 
regulation on securities financing transactions was adopted to improve transparency, and identify 
and quantify risks. In 2017, a new regu lation was adopted which is intended to improve the 
liquidity profile and stability of money market funds domiciled or sold in Europe. Under the second 
pillar, new directives were adopted on insurance distribution, payment services in the internal 
market, interchange fees for card -based payment transactions, money laundering and terrorist 
financing, and occupational pension funds. In addition, regulations were adopted on long -term 
investment funds and financial benchmarks (e.g. LIBOR and EURIBOR).  
17. In mariti me transport, a new regulation was adopted in March 2017 establishing a 
framework for the provision of port services and common rules on financial transparency of ports 
which will apply from 2019. The regulation applies to the 319 ports identified by the C ommission 
(out of a total of over 1,200) that carry 96% of all freight and 93% of all passengers and covers 
bunkering, cargo handling, mooring, passenger services, port reception facilities, pilotage and 
towage.  WT/TPR/S/357 • European Union  
 
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  18. Regarding rail transport, in mid -2016, the E U adopted the "technical pillar" and, at end -
2016, the "market pillar" of the "4th railway package", which is intended to create a single 
European rail area. These packages of directives and regulations essentially open domestic 
passenger services to compe tition through a system of open access for commercial services by 
2020 and the introduction of the principle of competitive awards of rail public services contracts by 
2023. They also reinforce independence requirements for infrastructure managers so as to  avoid 
distortions of competition and ensure the progressive harmonization of technical and safety norms.  
19. To a very large extent, the EU functions as a single economy with common import duties, 
import and export procedures, and rules on investment. Further more, the harmonization across 
the EU of many measures, including customs procedures, technical requirements, and SPS 
measures can facilitate access to the EU market and reduce the cost of developing and complying 
with regulations. However, in some cases, complying with EU requirements may add to the cost of 
doing business. Furthermore, agriculture remains relatively highly protected and the EU is a 
significant user of trade defence measures. The EU and its member States are important Members 
of the WTO and  the development of their policies, politics, and economy affects many other 
countries. Therefore, the trade and investment policies of the EU are important to other countries 
and the multilateral trading system, and how the EU addresses current challenges  are of interest 
to the WTO as a whole, including low average economic growth with large differences in growth 
among the member States, and the negotiations under Article 50 of the TFEU with the U.K. 
(Brexit).  
 WT/TPR/S/357 • European Union  
 
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  1  ECONOMIC ENVIRONMENT  
1.1.  The European Union's po pulation stood at 508 million in 2015 with a GDP per capita of 
€28,900.1 The EU has exclusive competence over the customs union, commercial policy, and – for 
those using the euro2 – monetary policy pursuant to the Treaty on the Functioning of the European 
Union (TFEU). The main sources of funding of the Union are small percentages of each country's 
gross national income, a small percentage of each member State's VAT revenues, and a large 
share of the import duties.3 The EU has an Economic and Monetary Union  (EMU) designed to 
further its objectives and improve the lives of its citizens by coordinating economic and fiscal 
policies and ensuring smooth operation of the single market. When examining the EU as a whole, 
it represents the world's largest trader in c ommercial services, second -largest merchandise trader, 
and second -largest in terms of GDP.4 Among the 28 member States, Germany, the U.K.,  and 
France are the largest in terms of GDP and trade. Like other developed economies, the EU services 
sector is the l argest contributor to GDP, followed by industry (Table 1.1).  
1.1  Recent Economic Developments  
1.2.  During the review period, the EU economy has continued its gradual albeit uneven economic 
recovery since the financial crisis, with an interim recovery followed by a euro area recession and 
then another recovery. However, it has not rebounded as fast as some other large economies, nor 
as fast as in previous downturns. It has been marked by an improvement in real GDP growth up to 
an annual rate of 2.2% in 2015 (Table 1. 1). Since mid -2014, the expansion has benefitted from 
historically low energy prices, a less restrictive fiscal policy stance, and a very accommodative 
monetary policy which included non -standard policy measures. The recovery has continued to be 
mainly dri ven by private consumption.  
1.3.  Exports of both goods and services have increased more than GDP over the period. The 
observed increase in the current account surplus is related to the lower costs of energy imports 
and the substantial depreciation of the euro a gainst major currencies during 2015 which, despite 
reversing slightly in 2016, raised the price competitiveness of companies in the euro area. In 
2016, these effects remained in place, but the expansion of exports and imports was slower than 
in preceding y ears. Inflation remained low or negative during the period, partly as a result of 
falling energy and commodity prices and a large output gap.  
1.4.  As measured in terms of gross value added for 2015, the main drivers of the EU economy are 
industry5 (19.3%); publ ic administration, defence, education, human health and social work 
activities (19.1%); and wholesale and retail trade, transport, accommodation and food services 
(18.9%).6 There were some reductions in manufacturing output during the period due to slow 
external growth that affected the sector's exports.7 The financial sector remains under pressure 
due to the persisting need for restructuring and balance sheet repair in the banking sector; and 
due to high non -performing loans in certain member States.8 
                                                
1 Eurostat online information. Viewed at: http://ec.europa.eu/eurostat/web/national -accounts/data/ 
main-tables  and http://ec.europa.eu/eurostat/web/population -demography -migration -projections/population -
data/main -tables . 
2 Currently 19 of the 28 member States use the euro currency (Austria, Belgium, Cyprus, Estonia, 
Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, 
Slovakia, Slovenia, and Spain), seven do not (Bulgaria, Croatia, Czech Re public, Hungary, Poland, Romania, 
and Sweden), and two have utilized the opt -out procedure (Denmark and the U.K.).  
3 European Commission online information. Viewed at: https: //europa.eu/european -union/about -eu/ 
money/revenue -income_en . 
4 WTO, World Trade Statistical Review, 2016 . Viewed at: https://www.wto.org/english/res_e/statis_e/ 
wts2016_e/ wts2016_e.pdf ; and IMF, online information. Viewed at: https://www.imf.org/external/pubs/ft/weo 
/2016/02/weodata/index.aspx . 
5 Excluding construction.  
6 Eurostat online i nformation. Viewed at: http://ec.europa.eu/eurostat/news/themes -in-the-spotlight/ 
gva-employment . 
7 European Commission online information. Viewed at: http://ec.europa.eu/economyfinance/ 
publications/eeip/pdf/ip025_en.pdf . 
8 IMF, 2016 Article IV Consultation : Euro Area , online information. Viewed at: https://www.imf.org/ 
external/pubs/ft/scr/2016/cr16219.pdf . WT/TPR/S/357 • European Union  
 
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  Table 1.1 Selected indicators, 2013 -15 
 GDP  
at current 
prices  
(2015)  Real GDP growth (%)  GDP per capita 
(2015)  Share in gross value added, % 
(2015)a 
€ billion  2013  2014  2015  € at 
current 
prices  PPSb Agriculture, 
forestry and 
fishing  Industryc Services  
EU-28 14,711  0.2 1.6 2.2 28,900  28,900  1.6 24.3 73.9 
   Austria  340 0.1 0.6 1 39,400  36,900  1.3 28.3 70.4 
   Belgium  410 -0.1 1.7 1.5 36,600  34,200  0.7 22.2 77.1 
   Bulgaria  45 0.9 1.3 3.6 6,300  13,600  4.8 27.9 67.3 
   Croatia  44 -1.1 -0.5 1.6 10,400  16,700  4.1 26.6 69.2 
   Cyprus  18 -6 -1.5 1.7 20,800  23,500  2.3 10.6 87.2 
   Czech Republic  167 -0.5 2.7 4.5 15,800  25,200  2.5 37.8 59.7 
   Denmark  272 0.9 1.7 1.6 47,800  36,600  1.2 22.9 75.8 
   Estonia  20 1.4 2.8 1.4 15,400  21,600  3.4 27.4 69.2 
   Finland  210 -0.8 -0.6 0.3 38,200  31,600  2.5 26.9 70.6 
   France  2,181  0.6 0.6 1.3 32,800  30,600  1.7 19.5 78.8 
   Germany  3,033  0.5 1.6 1.7 37,100  35,800  0.6 30.5 68.9 
   Greece  176 -3.2 0.4 -0.2 16,200  19,600  4.1 15.7 80.2 
   Hungary  110 2.1 4 3.1 11,100  19,700  4.1 31.9 64 
   Ireland  256 1.1 8.5 26.3 55,100  51,100  1 41.7 57.3 
   Italy 1,642  -1.7 0.1 0.7 27,000  27,800  2.2 23.5 74.2 
   Latvia  24 2.9 2.1 2.7 12,300  18,600  3.2 23.1 73.7 
   Lithuania  37 3.5 3.5 1.8 12,900  21,600  3.6 29.8 66.5 
   Luxembourg  51 4.2 4.7 3.5 89,900  76,100  0.2 12.1 87.7 
   Malta  9 4.6 8.4 7.4 21,400  26,700  1.3 15.2 83.5 
   Netherlands  677 -0.2 1.4 2 40,000  37,000  1.8 20 78.2 
   Poland  430 1.4 3.3 3.9 11,200  19,800  2.6 34.1 63.3 
   Portugal  180 -1.1 0.9 1.6 17,300  22,200  2.3 22.3 75.4 
   Romania  160 3.5 3.1 3.9 8,100  16,500  4.7 33.7 61.6 
   Slovakia  79 1.5 2.6 3.8 14,500  22,300  3.7 34.8 61.5 
   Slovenia  39 -1.1 3.1 2.3 18,700 23,900  2.4 32.7 64.9 
   Spain  1,076  -1.7 1.4 3.2 23,200  25,900  2.6 23.6 73.8 
   Sweden  447 1.2 2.6 4.1 45,600  35,700  1.3 25.7 72.9 
   United Kingdom  2,580  1.9 3.1 2.2 39,600  31,200  0.7 19.4 79.9 
a 2014 instead of 2015 for EU -28, Croatia, and Swed en. 
b In €, measured on the basis of purchasing power standards (PPS).  
c Including construction.  
 
Source:  Eurostat online database (nama_10_gdp), (nama_10_pc), and (nama_10_a64).  Viewed at : 
http://ec .europa.eu/eurostat/web/main/home  (database  accessed: February 2017) . 
1.5.  The EU's GDP growth was driven by private consumption during the review period 
(Chart  1.1). Household disposable income increased due to low energy prices, a general 
improvement in empl oyment, and to a lesser extent, from increases in labour incomes. The 
extended period of low consumer price inflation implied that increases in nominal disposable 
incomes translated into gains in purchasing power that supported private consumption. 
Investm ent remained relatively weak but began to pick up during the period. Net exports 
detracted from GDP growth in the latter part of the review period mainly due to weak foreign 
demand. There were significant differences in GDP growth rates across the member S tates during 
the period, with Ireland having the highest growth rate (26.3%) due almost entirely to 
methodological reasons9, and Greece the lowest ( -0.2%) in 2015.10 Two member States showed 
their first positive economic growth since the latest recession, t hus contributing to the recovery.  
                                                
9 The exceptional growth rate in 2015 was primarily due to the relocation to Ireland of a limited number 
of big economic operators. Eurostat online inform ation. Viewed at: http://ec.europa.eu/eurostat/documents/ 
24987/6390465/Irish_GDP_communication.pdf . WT/TPR/S/357 • European Union  
 
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  1.6.  The EU economy has also been impacted by external factors and remains at risk to external 
shocks. There has been weak global growth and global trade which has weighed on economic 
growth for the EU during the period. Emergi ng-economy demand in particular has been downcast 
and EU exports to some major markets have fallen as a result.  
Chart 1.1 Contribution to GDP, 2012 Q1 -2016 Q3  
(%age points)  
-1.0-0.50.00.51.02012Q12012Q22012Q32012Q42013Q12013Q22013Q32013Q42014Q12014Q22014Q32014Q42015Q12015Q22015Q32015Q42016Q12016Q22016Q3Chart 1.1 Contribution to GDP, 2012 Q1 -2016 Q3
(%age point)
GDP
Domestic demand, of which 
Consumption expenditure: Household and NPISH 
Net exports of goods and services
Eurostat online database.  Viewed at http://ec.europa.eu/eurostat/web/main/home (database a ccessed in Februray 2017).
.  Note: Seasonally and calendar -adjusted data.
Source:
 
Note:  Seasonally and calendar -adjusted data.  
 
Source:  Eurostat online database. Viewed at: http://ec.europa.eu/eurostat/web/main/home  (database 
accessed in February 2017).  
1.7.  There were a number of challenges or risks that impacted th e EU economy during the review 
period and will likely continue in the near future. The referendum in the U.K. (Brexit), high levels 
of refugees, oil price movements, terrorism, and elections/political uncertainty have all had an 
impact.11 The issue of refug ees has increased fiscal outlays in many countries and has prompted 
additional border controls.12 The impact on the U.K. and EU economies from the Brexit referendum 
is still unclear and a lot will depend on the outcome of the exit negotiations as regards ho w it will 
impact trade and investment flows13 (see Section 2.1).  
1.8.  Unemployment has seen declines as rates continue a gradual fall from an all -time high of 
11% in April 2013 to 9% in late 2015 (Table A1.1). In 2016, the unemployment rate reached 
8.5%, and the  lowest rate of 8.2% was reached in December of 2016, the lowest since February 
2009. Between October 2015 and 2016, 24 member States exhibited declines in unemployment 
                                                                                                                                                  
10 Eurostat online information. Viewed at: http://ec.europa.eu/eurostat/statistics -explained/index.php 
/National_accounts_and_GDP . 
11 European Commission online information. Viewed at: https://ec.europa.eu/info/publications/ 
european -economic -forecast -autumn -2016_en  https://ec.europa.eu/info/business -economy -euro/economic -
performance -and-forecasts/economic -forecasts/winter -2017-economic -forecast_en , and https://ec.europa.eu/ 
info/publications/economic -take-refugee -crisis-macroeconomic -assessment -eu_en . European Central Bank 
online information. Viewed at: https://www.ecb.europa.eu/pub/pdf/ecbu/eb201607.en.pdf . IMF, Euro Area, 
2016 Article IV Consultation . Viewed at: https://www.imf.org/external/pubs/ft/scr/2016/ cr162 19.pdf .  
12 European Commission online information. Viewed at: https://ec.europa.eu/info/publications/ 
economic -take-refugee -crisis-macroecon omic-assessment -eu_en . IMF, Euro Area, 2016 Article IV Consultation . 
Viewed at: https://www.imf.org/external/pubs/ft/scr/2016/cr16219.pdf . 
13 European Commission online information. Viewed at: https://ec.europa.eu/info/publications/ 
european -economic -forecast -autumn -2016_en  and https://ec.europa.eu/info/business -economy -
euro/economic -performance -and-forecasts/economic -forecasts/winter -2017-economic -forecast_en . WT/TPR/S/357 • European Union  
 
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  rates.14 However, in several member States unemployment rates still remain at relatively  high 
levels, and persistent issues such as high rates of long -term unemployment and youth 
unemployment remain concerns.15 Further, statistics verify that the working hours per employee 
have not recovered from the drop during the crisis and show an increase  of part -time work. There 
are also increases in the potential additional labour force and in the number of underemployed 
part-time workers. This signals that there remains substantial slack in the labour market. 
Unemployment rates also vary considerably am ong the member States, with the Czech Republic 
recording the lowest at 3.5% and Greece the highest at 23% in the last quarter of 2016.  
1.9.  As of February, the outlook for the EU economy for 2017 is one of continued steady growth ; 
GDP growth for the euro area is expected to be 1.6% in 2017, and about 1.7% in 2016.16 Private 
consumption, which has been the main driver, is expected to continue to be the main driver of 
GDP growth for 2017. Inflation in the euro area, which has been picking up since mid -2016, is 
expected to continue in the short term due to the end of falling energy prices, the rise in energy 
prices, and increases in import prices. It is expected that the EU economy will no longer be able to 
rely on the exceptional level of support from factors such as low oil prices, the lagged effects of 
the euro's past depreciation, and the start of very accommodative monetary policy. Monetary 
policy, however, is expected to remain supportive of growth over the coming years, and fiscal 
policy, which has significant ly eased in recent years, is not forecast to become restrictive again. 
Unemployment rates are expected to fall further. However, in several member States, legacies 
from the crisis, such as high unemployment, non -performing loans, high private and public de bt 
and deleveraging processes, as well as an ongoing process of balance sheet repair in the banking 
sector, also are expected to continue to weigh on growth.  
1.1.1   Balance of payments  
1.10.   The EU's current account surplus declined slightly in 2014, expanded to €167 b illion in 2015 
and increased to €216 billion in 2016.17 This accounts for a growing percentage of GDP, rising to 
1.1% in 2015 and 1.5% in 2016. Historically this follows a gradual growing positive balance since 
2012, prior to which the balance was negative.  The goods and services  balances remained positive 
throughout the review period, with a particular increase in the goods  balance to €133  billion in 
2015 mainly driven by low commodity prices and favourable exchange rates. The balance in goods 
increased to  €156.8 billion in 2016. The EU generally maintained positive current account balances 
with the United States, Switzerland, Brazil, and Hong Kong, China; while maintaining deficits with 
China, the Russian Federation, and Japan during the review period.  
1.11.   At the level of the individual EU member States in 2015, 20 had current account surpluses 
and 8 had deficits. Germany in particular stands out for having growing surpluses that significantly 
surpass the others (€253 billion in 2015); the Netherlands has the ne xt largest surplus at 
€59 billion.18 The largest deficit was recorded in the United Kingdom (€111 billion in 2015).19 
Germany's growing surplus reflects, inter alia , weak domestic demand, a strong fiscal position, and 
relatively weak investment. For the U.K whose current account deficit reached a record high in 
2015, the main reasons were increasing deficits in trade in goods and investment income.20 
1.12.    The situation is relatively similar when examining the current account in relation to GDP 
(Chart 1.2). Ireland , Denmark, the Netherlands and Germany had current account surpluses in 
excess of 8% of GDP for 2015; while the U.K. and Cyprus had the largest deficits of 4.3% and 
                                                
14 Eurostat online information.  Viewed at: http://ec.europa.eu/eurostat/documents/3217494/7883557/ 
KS-BJ-17-002-EN-N.pdf  and http://ec.europa.eu/eurostat/statistics -explained/index.php/Unemployment_ 
statistics . 
15 Eurostat online information. Viewed at: http://ec.europa.eu/eurostat/statistics -explained/index.php 
/Unemployment_statistics . 
16 European Commission online information. Viewed at: https://ec.europa.eu/info/business -economy -
euro/economic -performance -and-forecasts/economic -forecasts/winter -2017-economic -forecast_en . 
17 Eurostat online information. Viewed at: http://appsso.eurostat.ec.europa.eu/nui/submitViewTable 
Action.do . 
18 Eurostat online information. Viewed at: http://appsso.eurostat .ec.europa.eu/nui/submitViewTable 
Action.do . 
19 Eurostat online information. Viewed at: http://appsso.eurostat.ec.europa.eu/nui/submitViewTable 
Action.do . 
20 IMF, United Kingd om, 2016 Article IV Consultation . Viewed at: https://www.imf.org/external/pubs/ 
ft/scr/2016/cr16168.pdf . WT/TPR/S/357 • European Union  
 
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  3.0% of GDP respectively. The U.K.'s  large current account deficit in terms of GDP stood ou t, not 
only in Europe but also as it was the largest among all advanced economies.21 For those with 
surpluses, the situation was further magnified for most in 2015 compared to previous years.  
1.13.   The financial account situation was in deficit largely due to por tfolio debt outflows during the 
period. Germany was by far the largest net lender in terms of the financial account 
(€225 billion).22 
Chart 1.2 Balance of the current account as a % of GDPa 
-10.0-8.0-6.0-4.0-2.00.02.04.06.08.010.012.0EU-28AustriaBelgiumBulgariaCroatiaCyprusCzech RepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyLatviaLithuaniaLuxembourgMaltaNetherlandsPolandPortugalRomaniaSlovakiaSloveniaSpainSwedenUnited Kingdom
2013-2015
2015Chart 1.[EU28] Balance of the current account as % of GDP
CA% GDP
European Commission, European Economic Forecast Winter 2017, February 2017. Source:a
EU-28 vis -à-vis extra EU -28.  Each member State with the rest of the world (inclduing other EU members).  a
Simple average of three years . bb
 
a EU-28 vis-à-vis extra EU -28. Each member State with the rest of the world (including other EU 
members).  
b Simple average of three yea rs. 
 
Source:  European Commission, European Economic Forecast Winter 2017, February 2017.  
1.1.2   Monetary and exchange rate policies  
1.14.   The Eurosystem, which consists of the European Central Bank (ECB) and the national 
central banks of the euro area member States, is  responsible for defining and implementing 
monetary policy for the euro area. National central banks of the EU member States outside the 
euro area are part of the European System of Central Banks (ESCB) and are in charge of the 
conduct of monetary policy i n their respective jurisdictions. The Eurosystem's main objective is to 
ensure price stability, operationalized through its inflation rate target of close to, but below 2% . 
The main instruments at its disposal are open market operations, standing facilitie s, and minimum 
reserve requirements. In addition, since the financial crisis, the ECB has utilized several non -
standard measures, most prominently asset purchase programmes. During the review period, the 
ECB lowered its key policy rates to historically  low levels, with the deposit facility rate set at  -
0.40% since March 2016, and conducted purchases of private and public sector securities from 
October 2014 and March 2015 respectively.  
1.15.   In the context of the lower bound on interest rates, the ECB has been usi ng various asset 
purchase programmes (APP), i.e. quantitative easing, during the review period in order to achieve 
its price stability objective. The ECB commenced two programmes23 in September 2014 and 
launched its expanded APP in March 2015 , which continu ed throughout 201624. The goal of the 
                                                
21 IMF, United Kingdom, 2016 Article IV Consultation . Viewed at: https://www.imf.org/external/pubs/ft 
/scr/2016/cr16168.pdf . 
22 Eurostat online information. Viewed at: http://ec.europa.eu/eurostat/statistics -explained/index.php/ 
alance_of_payment_statistics#Financial_account . 
23 Third covered bond purchase programme (CBPP3) and asset -backed securities purchase programme 
(ABSPP).  
24 Public s ector purchase programme (PSPP) and corporate sector purchase programme (CSPP).  WT/TPR/S/357 • European Union  
 
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  expanded APP was to address risks related to long periods of low inflation and encourage 
momentum of the euro area's economic recovery. The monthly purchases were set at €60 billion 
during the early part of the review p eriod, and have been raised to €80 billion since April 2016. In 
December 2016 , the APP was extended until December 2017 , while the amount of monthly 
purchases is intended to be lowered back to €60 billion per month from April 2017.25 While public 
debt instr uments account for the majority of APP purchases, investment -grade euro corporate debt 
instruments were added to the pool of the APP -eligible securities in June 2016.26 In February 2017 , 
the total APP holdings amounted to €1,698 billion.27 
1.16.   Of the 28 member S tates, 19 are using the euro28, two have their currency pegged to the 
euro, and the remaining seven have free -floating currencies. The Eurosystem conducts foreign 
exchange interventions and holds and manages the euro area's foreign currency reserves. There is 
also the possibility that the Economic and Financial Affairs Council (ECOFIN Council) can conclude 
formal exchange rate agreements. For countries inside the EU but not using the euro, the 
Exchange Rate Mechanism (ERMII) can ensure that currency rate flu ctuations do not impact 
economic stability by fixing the exchange rate with the euro within set limits. During the review 
period , only Denmark participated in the ERMII by keeping its currency within +/ - 2.25% of the 
euro.29 
1.17.   During the review period, the eu ro weakened gradually against most currencies in 2015 and 
appreciated moderately for most of 2016. In 2015, the euro declined 3% in nominal effective 
terms against a basket of 38 currencies, but declined more substantially by 11% against its major 
trading partner's currency, the U.S. dollar. The euro also depreciated albeit to a lesser degree 
against the U.K. pound sterling and the Chinese renminbi. At the same time, the euro 
strengthened against the Brazilian real and the South African rand.30 In 2016, the euro 
appreciated slightly on balance against the basket of 38 currencies. The euro appreciated in 
particular against the U.K. pound sterling while it weakened slightly against the U.S. dollar. The 
euro remain s important beyond EU borders as it remains the second most important currency in 
the international monetary system, accounting for about 30% of global payments in 2016, and 
remains an important invoicing or settlement currency for extra -EU trade.31 However, the use of 
the euro as a foreign exchange rese rve and in international debt markets declined slightly during 
the review period.32 
1.1.3   Fiscal position  
1.18.   There was a gradual improvement of the fiscal situation across the EU during the review 
period, although the pace was expected to be slower in 2016 compared to 2015. Both the 
government deficit to GDP ratio ( -3% to -2.4%), and the debt to GDP ratio (86.7% to 85%) 
improved between 2014 and 2015 and, according to the Commission's winter 2017 forecast, were 
projected to have reached -1.9% and 85.1% of GDP respect ively in 2016 (Table A1.1).33 However, 
government debt levels remain historically high due to the relatively modest recovery.  A reduction 
in the deficit occurred between 2014 and 2015 for nearly all member States except Denmark and 
Greece; Germany, Estonia,  Luxembourg, and Sweden had positive government balances and 
Slovakia and Romania remained unchanged (Chart 1.3).  
                                                
25 ECB online information. Viewed at: https://www.ecb.europa.eu/mopo/implement/omt/html/index.en.  
html. 
26 The corporate sector purchase programme (CSPP) was added in June 2016.  
27 ECB online information. Viewed at: https://www.ecb.europa.eu/mopo/implement/omt/html/index.en . 
html. 
28 Lithuania was the last member State to join the euro  area, on 1 January 2015.  
29 European Commission online information. Viewed at: http://ec.europa.eu/economy_fi nance/euro/ 
adoption/erm2/index_en.htm . 
30 ECB, Annual Report 2015 . Viewed at: https://www.ecb.europa.eu/pub/ 
pdf/annrep/ar2015en.pdf?51b9735eed394d1acf8 eecf58bb0452e . 
31 ECB online information. Viewed at: https://www.ecb.europa.eu/pub/pdf/other/euro -international -role-
201606.en.pdf  and https://www.ecb.europa.eu/pub/pdf/ecbu/eb201607.en.pdf . 
32 ECB online information. Viewed at: https://www.ecb.europa.eu/ pub/pdf/other/euro -international -role-
201606.en.pdf . 
33 Eurostat online information. Viewed at: http://ec.europa.eu/eurostat/statistics -explained/inde x.php/ 
Government_finance_statistics  and European Commission online information. Viewed at: 
https://ec.e uropa.eu/info/business -economy -euro/economic -performance -and-forecasts/economic -forecasts/ 
winter -2017-economic -forecast_en .  WT/TPR/S/357 • European Union  
 
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  Chart 1.3 General government deficit as a % of GDP, 2013 -15 
(% of GDP)  
-10.0-8.0-6.0-4.0-2.00.02.04.0EU-28AustriaBelgiumBulgariaCroatiaCyprusCzech RepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyLatviaLithuaniaLuxembourgMaltaNetherlandsPolandPortugalRomaniaSlovakiaSloveniaSpainSwedenUnited Kingdom2013-2015 2015Chart 1.[EU28] General government deficit as % of GDP
% of GDP
Eurostat online database. Source: 
Viewed at http://ec.europa.eu/eurostat/web/main/home (Accessed database: Februray 2017).a
a Average is for 2013 -15 period. 
 
a  Average is for 2013 -15 period.  
 
Source:  Eurostat online database. Viewed at: http://ec.europa.eu/eurostat/web/main/home  (database 
accessed  in February 2017).  
1.19.   In 2015, deficit ratios were greater than the nominal defi cit target of -3% of GDP for six 
member States  – Croatia, France, Greece, Portugal, Spain, and the United Kingdom; and 17 had a 
debt to GDP ratio above 60%.34 Although fiscal policy generally eased over the review period, 
fiscal space is still limited in a number of EU member States and remains a national policy 
instrument although subject to more EU coordination.35 Thus there has been more reliance and 
use of monetary policies. The EU Commission has been encouraging member States to use their 
available fisca l space to increase investment and encourage growth.36 
1.20.   The EU had slight increases in absolute terms of total government revenues and 
expenditures between 2014 and 2015, but decreases relative to GDP. Revenues decreased to 
44.9% of GDP from 45.1%, and expen ditures to 47.3% of GDP from 48.1%. Across EU member 
States in 2015, most revenues were in the form of taxes (59.4% of total revenue) and net social 
contributions (29.4%); while expenditures were mainly social transfers (44.4%) and compensation 
of employee s (21.4%).37 
1.1.4   EU economic governance and structural reforms  
1.21.   The EU has had a number of policies over the years aimed at coordinating national and 
fiscal economic policies of the member States. In 1998 , the Stability and Growth Pact (SGP) was 
introduced to op erationali ze observance  of the Maastricht fiscal criteria after the completion of the 
monetary union and to strengthen the monitoring of fiscal policies. Subsequently, after the crisis, 
the EU fiscal framework was revised in 2011 with new Stability Pact re gulations, a directive on 
fiscal governance, a regulation on fiscal statistics, and regulations on surveillance of 
macroeconomic imbalances ("Six Pack"). The Treaty on Stability Coordination and Governance 
further strengthened the EU fiscal framework by in corporating the requirements for member 
                                                
34 Austria, Belgium, Croatia, Cyprus, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Malta, 
Netherlands, Portugal, Slo venia, Spain, and the United Kingdom.  Eurostat online information. Viewed at: 
http://ec.europa.eu/eurostat/statistics -explained/index.php/Government_f inance_statistics .  
35 ECB online information. Viewed at: http://www.ecb.europa.eu/pub/pdf/other/eb201604_article02.en. 
pdf?725c92b88a3f74b523 9d290ea2250a32 . 
36 European Commission online information. Viewed at: http://ec.europa.eu/economy_finance/ 
publications/eeip/pdf/ip038_en.pdf . 
37 Eurostat online informa tion. Viewed at: http://ec.europa.eu/eurostat/statistics -explained/index.php/ 
Government_finance_statistic  and http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=gov_10dd_ 
edpt1&lang=en . WT/TPR/S/357 • European Union  
 
- 20 - 
 
  States to introduce a mechanism for achieving the medium -term objective for fiscal policy in to 
their legislation. Finally, the "Two Pack" aimed at strengthening budgetary surveillance and 
providing a framework for co untries under financial distress.38 More recently, in 2015, the 
European  Commission issued a Communication on how to make use of flexibility within the rules of 
the SGP. This flexibility concerns, in particular, three aspects: (i) investment, in particular national 
contributions to the newly -established European Fund for Strategic Investment and other eligible 
instruments; (ii) structural reforms and their potential long -term positive impact on the budget 
and (iii) cyclical conditions.39 
1.22.   Since 2011 , the EU ha s introduced a Macroeconomic Imbalance Procedure (MIP)40 to 
identify, prevent, and address potentially harmful macroeconomic imbalances in member States. 
For countries that have excessive imbalances, enhanced surveillance is normally required and 
possibly f ollowed by enforcement or sanctions. In its latest report from 201741, the EU carried out 
in-depth reviews of 13 member States : imbalances were found in six countries42, excessive 
imbalances in six countries43, and  no evidence of imbalance in one case.44 Greec e was not 
reviewed as it was under a macroeconomic adjustment programme. Thus , specific monitoring is 
currently being carried out for six countries in order to measure the progress of implementation of 
recommended policy measures.45 
1.23.   The EU continues to foll ow its Europe 2020 strategy for smart, sustainable and inclusive 
growth.46 As such, it has set priorities and targets for certain aspects of the economy, these are:  
 Employment: 75% employment level for people aged 20 -64; 
 R&D: 3% of EU GDP invested in R&D;  
 Climate change and energy sustainability: greenhouse gas emissions 20% lower than 
1990 levels, 20% of energy coming from renewables, 20% increase in energy 
efficiency;  
 Education: reduce early school leavers to below 10%, at least 40% of 30 -34 year -olds 
having completed higher education; and  
 Fighting poverty and social exclusion: at least 20 million fewer people in or at risk.47 
1.24.   The EU has also identified three major economic priorities, these are: investment, fiscal 
responsibility, and structural reforms.48 Broadly speaking, structural reforms include making labour 
markets more adaptable, liberali zing services (see Section 1.2.2), improving the business 
environment, increasing competition, and boosting innovation. These reforms are being 
implemented through ea ch member States' National Reform Programmes and according to 
country -specific recommendations of the European Semester , often with financial help provided 
through the European Cohesion Policy.49 Regarding Europe 2020 goals, most of the progress has 
                                                
38 See previous report, WT/TPR/S/317/Rev.1 for information on the "Six Pack" and "Two Pack".  
39 European Commission onli ne information. Viewed at: http://ec.europa.eu/economy_finance/ 
economic_governance/sgp/pdf/2015 -01-13_communication _sgp_ flexibility_guidelines_en.pdf . 
40 Regulation (EU) No. 1176/2011 of the European Parliament and of the Council of 16 November 2011 
on the prevention and correction of macroeconomic imbalances. OJ 306/25 of 23.11.2011. European 
Commission online inform ation. Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX: 
32011R1176&from=en . 
41 European Commission , 2017 Alert Mechanism Report . Viewed at: 
https://ec.europa.eu/info/publications/2017 -european -semester -alert-mechanism -report_en . 
42 Germany, Ireland, the Netherlands, Slovenia, Spain, and S weden.  
43 Bulgaria, Croatia, Cyprus, France, Italy, and Portugal.  
44 Finland.  
45 Bulgaria, Spain, France, Croatia, Ireland, Italy, Portugal and Slovenia. European Commission online 
information. Viewed at: http://ec.europa.eu/economy_finance/economic_governance/macroeconomic_ 
imbalance_procedure/specific_monitoring/index_en.htm . 
46 European Commission online information. Vie wed at: http://eur -lex.europa.eu/legal -content/EN/TXT/ 
PDF/?uri=CELEX:52010DC2020&from=EN . 
47 European Commission online information. Viewed at: http://ec.europa.eu/europe2020/europe -2020-
in-a-nutshell/targets/index_en.htm . 
48 European Commission online information. Viewed at: 
http://ec.europa.eu/economy_finance/structural_eforms/index_en.htm . 
49 It has a budget of €352 billion for 2014 -20. European Commission online information. Viewed at: 
https://cohesiondata.ec.europa.eu/ . WT/TPR/S/357 • European Union  
 
- 21 - 
 
  been ob served in the areas of climate change and energy sustainability and education.50 As for 
structural reforms, progress remains slow in general, and more recently the reform momentum 
has overall slowed down. As a result, the full potential benefits o f growth a re not being grasped.51 
Reforms remain particularly sluggish in areas related to strengthening the business environment, 
employment, female labour market participation, and reducing barriers to competition in 
services.52 
1.25.   In 2015 , the Council of the EU issued  a recommendation on broad guidelines for the 
economic policies of the member States and of the European Union, and a recommendation on 
guidelines for employment policies, which together form the integrated guidelines for 
implementing the Europe 2020 strat egy ( "Europe 2020 integrated guidelines ").53 The broad 
guidelines include: promoting investment, enhancing growth through member States' 
implementation of structural reforms, removing key barriers to sustainable growth and jobs at 
Union level, and improving  the sustainability and growth -friendliness of public finances. The 
guidelines for the employment policies aim at a coordinated strategy for promoting a skilled and 
adaptable workforce by boosting demand for labour; enhancing labour supply, skills, and 
competences; enhancing the functioning of labour markets; and fostering social inclusion by 
promoting equal opportunities.54 In this respect, Country -Specific Recommendations (CSRs) issued 
within the European Semester also cover the labour market and social inclusion. Moreover, the EU 
has established , as a policy priority, the development of a European Pillar of Social Rights to create 
equal opportunities and access to the labour market, fair working conditions, and adequate and 
sustainable social protection in  the EU.55 
1.2  Trade Performance  
1.2.1   Goods  
1.26.   The importance of the EU in world merchandise trade is very significant as it ranks second 
overall in terms of both imports and exports (excluding intra -EU trade).56 Further, it is important 
to many of the world's smaller c ountries, as it is the largest trading partner for 80 countries.57 The 
total value of imports and exports climbed slightly over the period 2013 -15, by 2.5% and 3.1% 
respectively, thus increasing slightly the merchandise trade surplus (Chart 1.4) . According to the 
2016 provisional figures, EU exports will have declined slightly (2%) due to weak demand and 
imports will also have fallen slightly, by about 1%, compared to 2015.58 The EU accounted for 
14.4% of world imports and 15.2% of world exports in 2015.59 
1.27.   There were no  major shifts in trade among partner countries during the period 20 13-15 
(Chart 1.4). The United States remained the main export market , followed by China and 
Switzerland. Exports to the United States increased during the period, from 16.7% to 20 .8% of 
total exports, mainly due to increases in exports of machinery and transport equipment, and 
chemical products (Table A1.2). Exports to China also increased slightly from 8.5% to 9.5% of 
total exports. There were slight decreases in exports to the Ru ssian Federation, Switzerland, and 
                                                
50 Eurostat online information. Viewed at: http://ec.europa.eu/eurostat/web/europe -2020-indicators/ 
europe -2020-strategy . 
51 European Commission , Annual Growth Survey 2016 . Viewed at: http://ec.europa.eu/europe2020/ 
pdf/2016/ags2016_annual_growth_survey.pdf . 
52 IMF, Euro Area, 2016 Article IV Consultation . Viewed at: https://ww w.imf.org/external/pubs/ft/ 
scr/2016/cr16219.pdf . 
53 European Commission online information. Viewed at: http://ec.europa.eu/europe2020/pdf/Europe 
2020_guidelines_part1_en .pdf. 
54 European Commission online information. Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/ 
PDF/?uri=CELEX:32015D1848&from=EN . 
55 European Commis sion online information. Viewed at: https://ec.europa.eu/commission/priorities/ 
deeper -and-fairer -economic -and-monetary -union/towards -european -pillar-social -rights_en . 
56 WTO, International Trade Statistics 2015 . Viewed at: https://www.wto.org/ english/res_e/statis_e/ 
its2015_e/its 2015_e.pdf . 
57 European Commission online information. Viewed at: http://ec.europa.eu/trade/policy/eu -position -in-
world -trade/ . 
58 Eurostat online information. Viewed at: http://trade.ec.europa.eu/doclib/docs/2013/december/ 
tradoc_151969.pdf . 
59 WTO, World Trade Statistical Review 2016 . Viewed at: https://www.wto.org/english/res_e/statis_e/ 
wts2016_e/wts2016_e.pdf  and information provided by the authorities.  WT/TPR/S/357 • European Union  
 
- 22 - 
 
  Africa during the period. Exports to Switzerland fluctuated due to trade in non -monetary gold and 
exports to Africa declined as a share of total exports but remained stable in absolute terms.60 
1.28.   In terms of merchandise impo rts, the main sources were China (20.3%), the United  States 
(14.4%), and the Russian Federation (7.9%). Imports from China and the United States both 
increased, while those from the Russian Federation and Africa decreased (Chart 1.4, Table  A1.3). 
China acc ounted for one  fifth of EU imports with machinery contributing to the increase in imports. 
The decreases in imports from the Russian Federation and Africa can be attributed to lower prices 
and demand for energy and fuel products.  
1.29.   Trade by sector remained r elatively stable since the last review , with the exception of a 
significant decline in fuel imports due to low world fuel prices (Chart 1.5) . Imports of fuel products 
declined from 29.6% of imports in 2013 to 19% in 2015. Manufactured products account for about 
80% of EU exports, with transport equipment (18%) and chemicals (17.6%) the most significant 
subsectors exported (Table A1.4). Imported products are also concentrated in manufactured 
products (66%) but with a dispersed group of subsectors including c hemicals, office and 
telecommunication equipment, transport, other machinery, and clothing; followed by the mining 
sector, mainly fuels (23%) (Table A1.5). Agricultural products accounted for 8.7% of imports and 
7.9% of exports in 2015.  
1.30.   In 2015, the EU had  a record deficit in merchandise trade with China of €180  billion, and a 
record surplus with the United States of €122 billion.61 
                                                
60 Information provided by the authorities.  
61 European Commission online information. Viewed at: http://trade.ec.europa.eu/doclib/docs/2006/ 
september/tradoc_113465.pdf  and Eurostat online information. Viewed at: 
http://ec.europa.eu/eurostat/documents/ 2995521/7553974/6 -12072016 -BP-EN.pdf/67bbb626 -d55f-4032-
8c24-48e4c9f78c3a . WT/TPR/S/357 • European Union  
 
- 23 - 
 
  Chart 1.4 Direction of merchandise trade, 2013 and 2015  
Chart 1.[Reg -EU28]
Direction of merchandise trade, 2013 and 2015
2013 2015
(a)    Exports (f.o.b.)
Asia  
26.5%
Middle East
8.6%Americas
29.5%
Switzerland
8.5%
Norway  2.7%
Turkey 4.4%
Other 
CIS 
2.1%Russian 
Federation 
4.1%
Total:  €1,736 billion Total:  €1,789 billion
(b)    Imports (c.i.f.)
Norway 5.3%Europe  
15.0%Other America
7.7%
Middle East 
4.9%
Africa 
10.0%Americas
19.5%
Russian 
Federation 
12.3%Other 
1.0%
Switzerland
5.7%
Other Europe
1.1%Japan 3.4%Other Asia
11.8%
Other CIS
3.5%CIS
15.7% Turkey 3.0%Korea, Republic of 
2.1%
China
20.3%Europe 
15.0%Asia
39.9%Other America 
7.3%
Africa 
7.7%Middle East 
4.1%Americas 
21.7%
Russian 
Federation
7.9%Other 
1.0%
Norway
4.3%Switzerland
6.0%
Other CIS
2.7%Other Europe 
1.2%CIS
10.6%
Turkey 3.6%Korea, Republic of 
2.4%United States 
14.4%
Total:   €1,687 billion Total:   €1,729 billionOther Asia
13.7%United States
16.7%
Other Europe 2.1%United States 
20.8%
Source:  Japan
3.5%Asia
33.9%Switzerland
9.8%
Other  Europe 
1.9%Other 
America
8.7%
Africa 8.9%Other Asia
12.6%
China 
9.5%Other America
8.7%
China
16.6%Other    
1.6%
Africa 
8.6%
United States 
11.8%Japan   3.1%
Europe
19.2%
Middle East
7.8%Other 
2.4%
China 
8.5%
Europe
17.5%Japan 
3.2%
Asia   
27.9%
Norway  2.9%Americas
25.4%
Turkey  4.5%Other Asia
12.5%
WTO Secretariat calculations, based on Eurostat data.Korea, Republic of 
2.3%
Other CIS 
3.0% Russian Federation 
6.9%Korea, Republic of 
2.7%
 
Source:  WTO Secretaria t calculations, based on Eurostat data.  
 WT/TPR/S/357 • European Union  
 
- 24 - 
 
  Chart 1.5 Composition of merchandise trade, 2013 and 2015  
Chart 1.4 Composition of merchandise trade, 2013 and 2015
2013 2015
(a)    Exports (f.o.b.)
Other 
manufactures
9.0%
Manufactures
77.1%Iron and steel
1.9%
Chemicals
17.6%Non-
electrical 
machinery
12.1%Electrical 
machines
4.6%Textiles and 
clothing
2.4%
Office and 
telecommunication 
equipment
4.3%Power 
generating 
machinery
3.1%
Total:  €1,736 billion Total:  €1,789 billion  
(b)    Imports (c.i.f.)
Chemicals
9.4%Transport 
equipment  
6.2%Manufactures
55.8%Textiles  1.3%
Other 
machinery
9.7%Mining
33.8%Fuels
29.6%
Iron and steel
1.5%Office and 
telecommunication 
equipment
10.0%Clothing 4.2%
Other mining 4.2%
Office and 
telecommunication 
equipment
11.6%Iron 
and steel
1.7%Clothing 5.0%
Other 
mining 
3.8%Other
2.7%
Textiles 1.5%Agriculture
8.0%
Other semi -
manufactures
5.4%Transport 
equipment  
7.7%
Chemicals
10.7%Manufactures
65.8%
Total:   €1,687 billion Total:  €1,729 billion Manufactures
80.7%
Other 
manufactures
10.4%Other
2.4%Other 
manufactures
9.8%
Mining
9.3%
Chemicals
15.7%
Other 
machinery
11.7%Other semi -
manufactures
6.9%Mining
6.9%Agriculture
7.9%
Source :  WTO Secretariat calculations, based on Eurostat data.Other 
manufactures
8.6%Other semi -
manufactures
7.0%
Other semi -
manufactures
4.8%Transport 
equipment
16.5%
Agriculture
8.7%Other
5.9%Other
4.5%
Mining
22.8%Fuels
19.0%Transport 
equipment
18.0%Power generating 
machinery
3.0%Agriculture
7.7%
Iron and steel
2.2%
Non-electrical 
machinery
12.5%Textiles and 
clothing
2.3%
Office and 
telecommunication 
equipment
4.3%Electrical 
machinery
4.5%
 
Source:  WTO Secretariat calculations, based on Eurostat data.  
1.31.   Intra-EU trade is also important to many memb er States of the EU as their trade within the 
bloc is larger than extra -EU trade (Chart 1.6, Table A1.6). In 2015 , intra -EU trade was valued at 
€3,068 billion, increasing 4.6% from 2014, thus significantly greater than EU external exports and 
with a higher growth rate.62 The EU member States with the highest amounts of intra -EU imports 
and exports were Germany, France  (imports), and Netherlands (exports) (Table A1.6). In 2015, 
                                                
62 Eurostat online information. Viewed at: http://ec.europa.eu/eurostat/statistics -explained/index.php/ 
International_trade_in_goods . WT/TPR/S/357 • European Union  
 
- 25 - 
 
  intra-EU trade was larger than extra -trade for all member States except the United Kingdom.63 
Member States with the highest percentage of intra -EU exports in 2015 were Slovakia, 
Luxembourg, and t he Czech Republic (Chart 1.6).  
Chart 1.6 Intra - and extra -EU exports of goods, 2015  
(%) 
0.010.020.030.040.050.060.070.080.090.0
Intra EU-28 Extra EU-28Chart 1.[EU28] Intra -and extra -EU exports of goods, 2015
Eurostat database.  Viewed at:  http://ec.europa.eu/eurostat/web/international -trade -in-goods/data/database (Accessed 
database: February 2017)Source:  %
 
 
Source:  Eurostat database. Viewed at: http://ec.europa.eu/eurostat/web/international -trade -in-
goods/data/database  (database  accessed in  February 2017).  
1.2.2   Services  
1.32.   The EU's services sector, as in similar developed countries, continues to play a dominant 
role in the economy and  in trade. In 2015, services contributed 73.9% of the EU 's total gross 
value added, and 73.5% to employment.64 The EU continued to be the world's largest services  
importer and exporter (excluding intra -EU trade).65 Intra-EU trade in services is also very 
important t o the EU and its economy, as it is larger than external services  trade, accounting for 
more than 55% of EU member States' international transactions.66 
1.33.   Extra -EU trade in services continued its upward trend during 2014 -15 in both imports and 
exports. However  exports grew at a slower pace compared to imports, thus the services  trade 
balance, while remaining positive, actually contracted in the last two years from €178 billion in 
2013 to €146 billion in 2015 (Table 1.2). The category of "charges for the use of intellectual 
property" contributed significantly to this trend as their imports increased. The United Kingdom 
was the largest exporter of services outside the  EU in 2015, amounting to €189 billion, and 
Germany was the largest importer with €118 billion.67 The United Kingdom also had the largest 
services  trade surplus of €93 billion and Ireland the largest deficit of €34 billion.68 
1.34.   Extra-EU services trade, both im ports and exports, was concentrated in other business 
services (30% and 28% respectively) and transport (19% and 17%, respectively) in 2015; this did 
not change significantly during the review period. Both imports and exports of transport services 
                                                
63 Eurostat online information. Viewed at: http://ec.europa.eu/eurostat/statistics -explained/index.php/ 
International_trade_in_goods . 
64 Eurostat online information. Viewed at: http://ec.europa.eu/eurostat/statistics -explained/index.php/ 
National_accounts_and_GDP . 
65 WTO, International Trade Statistics 2015 . Viewed at: https://www.wto.org/english/res_e/statis_e 
/its2015_e/its2015_e.pdf . 
66 Eurostat online information. Viewed at: http://ec.europa.eu/eurostat/sta tistics -explained/index.php/ 
International_trade_in_services . 
67 Eurostat online information. Viewed at: http://ec.europa.eu/eurostat/statistics -explained/index.php/ 
International_trade_in_services . 
68 Information provided by the authorities.  WT/TPR/S/357 • European Union  
 
- 26 - 
 
  declined  slightly during 2013 -15, while other business services showed a slight increase during the 
same period. Within other business services, the largest component was technical, trade -related 
and other business services (this group comprises also services in t he areas of R&D, professional 
and management consultancy , etc.), comprising 48% of imports and 58% of exports in 2015. 
Within the transport sector, sea transport was the largest component (comprising 43%  of 
transport imports and 52% of transport exports) , followed by air transport for both imports and 
exports.69 
1.35.   The main external trading partners for services are the United States and Switzerland, for 
both imports and exports; the United States accounted for 31% of EU imports and 27% of exports 
and Switzerla nd for 11% of imports and 14% of exports in 2015 (Table 1.2). Both the United 
States' and Switzerland's services trade with the EU have a similar profile, the largest category of 
both imports and exports is other business services, followed by charges for the use of intellectual 
property on the import side and transport services on the export side. The U .K. was the EU's 
largest services  exporter, accounting for about 23% of EU services exports in 2015, and also 
accounted for the EU's largest services  surplu s of €93.4 billion.70 The largest services  importer was 
Germany, accounting for 18% of imports.71 
1.36.   EU services sector trade has been influenced by gradual liberalization and reforms resulting 
from the 2006 Services Directive . In 2012, the European Commission estimated that the Directive 
would generate  0.8% of GDP growth over five to ten years.72 The benefit to services  trade and FDI 
flows was also expected, with estimated increases of 7% and 4% , respectively.73 
Table 1.2 Extra -EU trade in services, by sector and partner, 2013 -15 
(€ million)  
  Exports  Imports  
  2013  2014  2015  2013  2014  2015  
Total  721,251  772,531  831,529  543,503  602,159  685,657  
 (% of total)  
By sector        
   Manufacturing services on physical inputs 
owned by others  2.9 2.6 2.4 1.4 1.2 1.2 
   Maintenance and repair services n.i.e.  1.3 1.3 1.4 1.5 1.3 1.4 
   Transport  19.5 18.2 17.3 21.9 20.1 18.5 
     Sea transport  10.4 9.6 8.9 9.5 8.7 8.0 
     Air transport  5.9 5.7 5.6 8.2 7.5 6.9 
     Other modes of transport  2.8 2.6 2.5 3.5 3.4 3.2 
     Postal and cour ier services  0.3 0.3 0.2 0.6 0.5 0.4 
   Travel  14.4 14.1 13.5 16.8 16.3 14.5 
     Business  2.4 2.4 2.4 3.7 3.8 3.5 
     Personal  12.0 11.7 11.1 13.0 12.5 11.0 
   Construction  1.8 1.8 1.6 1.0 0.8 0.8 
   Insurance and pension services  4.2 4.3 3.1 2.1 2.2 2.1 
   Financial services  10.6 10.3 10.5 6.9 6.3 6.0 
   Charges for the use of intellectual property 
n.i.e. 5.5 6.5 7.3 8.4 11.5 14.3 
   Telecommunications, computer, and 
information services  11.9 12.5 12.7 8.9 9.2 8.7 
     Telecommunications service s 2.5 2.3 2.2 2.4 2.3 2.2 
     Computer services  8.7 9.5 9.7 6.0 6.3 6.0 
     Information services  0.6 0.6 0.7 0.5 0.6 0.5 
   Other business services  25.5 26.5 28.3 28.1 28.1 30.2 
     Research and development services  4.1 4.3 4.3 5.2 5.7 7.3 
     Professional and management consulting 
services  7.4 8.1 7.7 7.8 7.7 8.3 
     Technical, trade -related, and other business 
services  14.0 14.1 16.3 15.1 14.7 14.7 
   Personal, cultural, and recreational services  1.1 1.0 0.9 1.8 1.9 1.6 
                                                
69 Eurostat online information. Viewed at: http://ec.e uropa.eu/eurostat/statistics -explained/index.php/ 
International_trade_in_services . 
70 Eurostat online information. Viewed at: http://ec.europa.eu/eu rostat/statistics -explained/index.php/ 
International_trade_in_services  and information provided by the authorities.  
71 Information provided by the authorities.  
72 European Commission online information , "Assessment of the economic impact of the Services 
Directive – Update of the 2012 Study". Viewed at: http://ec.europa.eu/DocsRoom/documents/13327/ 
attachments/1/ translations/en/renditions/native . 
73 European Commission online information , "The economic impact of the Services Directive: A first 
assessment following implementation". Viewed at: http:// ec.europa.eu/economy_finance/publications/ 
economic_paper/2012/pdf/ecp_456_en.pdf . WT/TPR/S/357 • European Union  
 
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    Exports  Imports  
  2013  2014  2015  2013  2014  2015  
   Government goods an d services n.i.e.  1.2 0.9 0.9 1.3 1.1 0.7 
By selected trading partners/regions         
European Free Trade Association  17.8 18.2 17.7 12.8 13.5 13.2 
   Iceland  0.1 0.2 0.1 0.2 0.2 0.2 
   Liechtenstein  0.1 0.1 0.1 0.1 0.1 0.1 
   Norway  3.8 3.6 3.4 2.6 2.7 2.4 
   Switzerland  13.9 14.3 14.0 9.9 10.6 10.6 
Turkey  1.4 1.4 1.5 2.8 2.6 2.4 
Russian Federation  4.3 3.9 3.0 2.6 2.1 1.7 
Africa  6.1 6.0 6.0 6.1 6.0 5.5 
Northern Africa  1.6 1.6 1.6 2.8 2.6 2.3 
   Egypt  0.5 0.5 0.6 0.9 0.8 0.8 
   Morocco  0.4 0.4 0.4 0.8 0.9 0.7 
Central and South Africa  4.5 4.4 4.4 3.4 3.4 3.2 
   South Africa  1.0 0.9 0.9 0.8 0.7 0.7 
   Nigeria  0.7 0.6 0.5 0.3 0.2 0.2 
America  36.4 35.9 36.7 41.5 44.4 44.9 
   Northern America  27.9 27.9 29.3 32.7 33.4 32.8 
     Canada  2.4 2.1 2.2 2.1 1.9 1.8 
     United States  25.4 25.8 27.2 30.5 31.4 31.0 
   Central America  3.8 3.7 3.3 6.1 8.4 9.6 
     Mexico  1.1 1.1 1.1 0.7 0.7 0.7 
   South America  4.6 4.2 4.0 2.6 2.6 2.5 
     Argentina  0.6 0.5 0.6 0.4 0.3 0.3 
     Brazil  2.1 2.0 1.9 1.2 1.2 1.3 
     Chile 0.4 0.4 0.5 0.3 0.3 0.3 
     Uruguay  0.2 0.2 0.1 0.1 0.1 0.1 
     Venezuela  0.4 0.3 0.2 0.1 0.1 0.1 
Gulf Arabian Countries  4.2 4.1 4.3 2.8 2.6 2.7 
China  3.8 3.8 4.5 3.9 3.8 3.8 
Hong Kong , China  1.3 1.4 1.3 1.9 1.8 1.7 
Japan  3.4 3.4 3.4 2.7 2.5 2.3 
Separate Customs Territory of Taiwan, Penghu, 
Kinmen and  Matsu (Chinese Taipei)  0.6 0.6 0.6 0.6 0.5 0.5 
India 1.6 1.6 1.7 2.3 2.0 2.0 
Indonesia  0.6 0.5 0.5 0.4 0.3 0.3 
Malaysia  0.7 0.6 0.5 0.6 0.5 0.5 
Philippines  0.2 0.2 0.2 0.3 0.3 0.3 
Singapore  2.4 2.7 3.1 2.7 2.7 3.1 
Thailand  0.5 0.4 0.4 1.1 0.9 0.8 
Australia  2.7 2.4 2.4 1.5 1.3 1.4 
New Zealand  0.3 0.3 0.3 0.2 0.2 0.2 
Note:  Data reported according to BPM6.  
 
Source:  Eurostat online database (bop_its6_det) and (bop_its6_tot) . Viewed at: http://ec.europa.eu/ 
eurostat/web/international -trade -in-services/data/database  (database accessed in February  2017).  
1.3  Foreign Direct Investment  
1.37.   The EU r emains in a dominant world position in terms of investment  – it has the largest 
investment inflows and outflows. However it has been impacted significantly by the economic crisis 
in which its share of world FDI flows fell from about 50% before the crisis t o 20% in 2014.74 From 
2009, the EU witnessed a steady increase in FDI that began to reverse in 2013 with FDI flows 
reaching the lowest levels in recent history in 2014. However, both inflows and outflows 
rebounded significantly in 2015 (Table 1.3).75 The dec line, in particular in 2014, can be attributed 
to large disinvestments in/by traditional partner countries.76 Most of the EU's FDI is attributed to 
special -purpose foreign -owned financial holding companies engaged in financial transactions. While 
these fina ncial vehicles usually have little activity in the member State of residence, they are 
typically used as "European hubs" for their investments – into the EU for non -EU companies, and 
out of the EU for EU companies. While the share of FDI through special pu rpose entities varies 
from year to year, it can be as high as 50% in some years and has been volatile during the period.  
                                                
74 Copenhagen Economics (2016),  "Towards a Foreign Direct Investment (FDI) Attractiveness 
Scoreboard ", prepared by Copenhagen Economics for the EU Commission. Viewed at: 
http://bookshop.europa.eu/en/towards -a-foreign -direct -investment -fdi-attractiveness -scoreboard -
pbET0116586/  [May 2017].  
75 UNCTAD, World  Investment Report 2016 . Viewed at: http://unctad.org/en/PublicationsLibrary/wir 
2016_en.pdf . 
76 Eurostat online information. Viewed at: http://ec.europa.eu/euros tat/statistics -explained/index. php/ 
Foreign_direct_investment_statistics . WT/TPR/S/357 • European Union  
 
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  1.38.   In 2014 , FDI outflows declined significantly mainly due to large declines for Switzerland, the 
United States, and Central American coun tries. These declines in outflows were particularly 
relevant to Luxembourg and the Netherlands due to investments by special -purpose entities.77 The 
EU saw a significant increase in the investment flows to Canada which more than doubled from 
€11.8 billion i n 2013 to €23.4 billion in 2014. The significant decline in inflows was due mainly to 
disinvestment from the United States, falling from €433 billion in 2013 to € -20 billion in 2014. 
Declines were also seen from Brazil, Singapore and Hong Kong, China but a t much lower levels.78 
2015 witnessed a reversal whereby both inflows and outflows rebounded to near 2013 levels.  
1.39.   In 2015, FDI inflows increased significantly for Ireland, Luxembourg, and Belgium while the 
largest outflows were with respect to Netherlands, Luxembourg, and Ireland (Table 1.3).79 The 
Irish economy had a surge in GDP in part due to large FDI flows in 2015. However, reported 
growth was distorted for several reasons, particularly due to the reclassification of multinational 
companies or their asse ts as being resident in Ireland,  and actual growth was between 5 and 
6%.80 
Table 1.3 Extra -EU FDI flows, 2013 -15 
(€ million)  
  Inward  Outward  
  2013  2014  2015  2013  2014  2015  
EU-28 506,799  98,740  466,881  546,7 78 58,287  529,496  
Austria  -4,295  -3,217  2,227  -4,613  -6,226  5,848  
Belgium  16,024  3,490  40,987  16,308  -8,934  1,826  
Bulgaria  85 288 304 86 183 8 
Croatia  155 670 -463 -216 -272 -104 
Cyprus  -2,474  -2,094  385 -1,693  31 14,333  
Czech Republic  901 139 269 .. .. 271 
Denmark  -721 3,116  1,412  3,700  953 2,853  
Estonia  156 306 -128 85 -5 -9 
Finland  1,004  813 1,307  583 -409 1,345  
France  12,752  -4,441  25,947  -1,238  13,643  8,030  
Germany  13,921  9,163  265 36,192  26,003  31,370  
Greece  1,080  1,388  638 230 951 887 
Hungary  -4,488  -2,364  -13,473  -1,878  8,385  -22,450  
Ireland  14,489  15,052  132,542  930 -8,842  86,696  
Italy 6,260  2,734  3,549  2,986  9,851  14,306  
Latvia  .. 343 393 .. 97 -60 
Lithuania  -45 -203 350 -42 -39 -3 
Luxembourg  279,525  35,013  131,872  235,859  54,149  168,758  
Malta  11,362  11,072  3,355  2,119  1,861  -4,884  
Netherlands  106,019  -7,111  76,094  191,154  -57,266  237,378  
Poland  -2,461  -938 309 281 290 357 
Portugal  .. .. .. .. .. .. 
Romania  -279 -123 .. -306 -271 -94 
Slovakia  .. 143 -201 .. -4 -78 
Slovenia  -15 38 185 -129 4 268 
Spain  12,405  6,431  7,450  .. 28,757  37,129  
Sweden  5,019  -2,334  1,259  8,597  592 14,069  
United Kingdom  .. 27,948  .. .. .. -68,179  
.. Not available.  
Source:  Eurostat database (bop_fdi6_geo). Viewed at: http://ec.europa.eu/eurostat/web/balance -of-
payments/data/database  (database accessed in February 2017).  
1.40.   In terms of FDI stocks, both inward and outward stocks increased in 2015 by 22.8% and 
14.9% respectiv ely, compared to 2014 (Table 1.4). Luxembourg and the Netherlands hold the 
largest inward and outward stocks due to financial transactions. As of 2015, the main outward and 
                                                
77 Mainly financial holding companies, foreign -owned, and principally engaged in cross -border financial 
transactions, with little or no activity in the member State of residence.  
78 Eurostat online information. Viewed at: http://ec.eur opa.eu/eurostat/statistics -explained/index.php/ 
Foreign_direct_investment_statistics . 
79 UNCTAD, World Investment Report 2016 . Viewed at: http://unctad.org/en/PublicationsLibrary/wir 
2016_en.pdf . 
80 National Treasury Management Agency online information. Viewed at: http://www.ntma.ie/business -
areas/funding -and-debt-management/irish -economy/  [November 2016].  WT/TPR/S/357 • European Union  
 
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  inward stocks of FDI were the United States and Switzerland (Table 1.5). The majori ty of both 
inward and outward stocks are in the services sector with financial and insurance activities the 
most prevalent.81 In recent years there have been increases in inflows to the financial services 
sector, while manufacturing and non -financial servic es account for smaller shares of inflows.82 
1.41.   According to a comparative FDI Attractiveness Scorecard assessment carried out on behalf 
of the European Commission by Copenhagen Economics, EU countries were seen to have a wide 
range of attractiveness from a hig h score of 75 to below 50 (out of 100). Finland, Ireland and the 
Netherlands had the highest scores, while Italy and Greece had the lowest.83 The assessment was 
based on four criteria - political, regulatory and legal environment ; infrastructure and good ma rket 
access ; knowledge and innovation capacity ; and cost competitiveness (including corporate tax 
rates). Those countries which were ranked lower tended to score poorly in terms of cost 
competitiveness and the burdensomeness and lack of transparency of the  regulatory environment. 
Not all countries have an identical potential to attract FDI and the study did not take into account 
the fundamental drivers of FDI, such as the size and affluence of the domestic market and 
geographical situation, but only those f actors which could be influenced by policymakers.  
Table 1.4 Extra -EU FDI stocks, 2013 -15 
(€ billion ) 
  Inward  Outward  
 2013  2014  2015  2013  2014  2015  
EU-28 4,130  4,758  5,842  5,456  6,000  6,894  
Austria  108 114 124 130 131 146 
Belgium  10 4 40 65 64 68 
Bulgaria  8 9 9 1 1 1 
Croatia  2 3 3 2 2 2 
Cyprus  55 41 41 132 125 146 
Czech Republic  13 12 12 .. 1 .. 
Denmark  19 24 32 57 59 69 
Estonia  3 3 3 1 1 1 
Finland  5 7 7 20 17 16 
France  152 152 184 389 425 464 
Germany  171 168 196 405 458 526 
Greece  3 4 5 14 13 13 
Hungary  69 66 55 85 90 90 
Ireland  77 103 483 144 156 198 
Italy 27 30 35 118 130 148 
Latvia  4 3 3 0 0 0 
Lithuania  2 2 2 0 0 0 
Luxembourg  1,023  1,393  1,622  937 1,309  1,603  
Malta  126 138 147 57 60 60 
Netherlands  1,520  1,591  1,825  1,799  1,777  2,091  
Poland  16 15 14 6 7 6 
Portugal  .. .. .. .. .. .. 
Romania  6 6 7 0 0 0 
Slovakia  .. 5 4 .. 0 0 
Slovenia  2 2 2 3 3 3 
Spain  90 102 108 227 257 273 
Sweden  68 57 63 109 114 128 
United Kingdom  542 691 803 741 784 824 
.. Not available.  
Source:  Eurostat database (bop_fdi6_geo). Viewed at: http://ec.europa.eu/eurostat/web/balance -of-
payments/data/database  (accessed database Febru ary 2017).  
                                                
81 Eurostat online information. Viewed at: http://ec.europa.eu/eurostat/statistics -explained/index.php/ 
foreign_direct_investment_s tatistics . 
82 Copenhagen Economics (2016),  "Towards a Foreign Direct Investment (FDI) Attractiveness 
Scoreboard ", prepared by Copenhagen Economics for the EU Commission. Viewed at: 
http://bookshop.europa.eu/en/towards -a-foreign -direct -investment -fdi-attractiveness -scoreboard -
pbET0116586/  [May 2017].  
83 Copenhagen Economics (2016),  "Towards a Foreign Direct Investment (FDI) Attractivenes s 
Scoreboard ", prepared by Copenhagen Economics for the EU Commission. Viewed at: 
http://bookshop.europa.eu/en/towards -a-foreign -direct-investment -fdi-attractiveness -scoreboard -
pbET0116586/  [May 2017] . WT/TPR/S/357 • European Union  
 
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  Table 1.5 FDI stocks by major partner, 2013 -15 
(€ billion ) 
  Inward  Outward  
 2013  2014  2015  2013  2014  2015  
Extra EU -28 4,130  4,758  5,842  5,456  6,000  6,894  
United States  1,676  1,785  2,436  1,836  2,059 2,561  
EFTA 584 611 733 750 782 922 
  Switzerland  492 502 627 677 692 829 
  Norway  68 71 76 67 77 85 
  Liechtenstein  22 36 31 2 4 0 
  Iceland  3 2 -1 5 8 8 
Canada  131 199 228 228 274 249 
Japan  151 164 176 81 72 88 
Brazil  101 117 127 277 332 327 
Hong Kong , China  57 90 80 113 128 119 
Bahamas  29 53 69 7 6 6 
Russia n Federation  53 56 61 192 163 172 
Singapore  37 53 59 99 116 154 
Israel  32 43 45 11 14 16 
United Arab Emirates  34 33 37 31 7 16 
Mexico  25 31 35 112 135 162 
China  36 24 35 126 143 168 
Australia  24 26 25 132 110 146 
Qatar  11 16 25 8 8 7 
South Korea  15 18 21 32 46 50 
South Africa  6 11 12 46 59 79 
Malaysia  14 11 11 20 20 19 
Turkey  8 9 7 57 67 76 
Saudi Arabia  6 7 6 16 17 22 
Egypt  7 1 0 43 49 41 
Source:  Eurostat database (bop_fdi6_g eo). Viewed at: http://ec.europa.eu/eurostat/web/balance -of-
payments/data/database  (database accessed in February 2017).  WT/TPR/S/357 •  Europea n Union  
 
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  2  TRADE AND INVESTMENT  REGIME  
2.1  Legal and Institutio nal Framework  
2.1.  There have been no significant changes to the legal and institutional framework regarding EU 
trade and investment policies since the previous Review in 2015. However, the scope of the EU's 
competence to sign and conclud e trade agreements  is under review.   
2.2.  The European Commission is in charge of developing and implementing the common trade 
policy of the EU in accordance with the objectives set out in Article 207 of the Treaty on the 
Functioning of the EU (TFEU). The common commercial policy , as it is referred to in the Treaty , is 
one of the exclusive competences of the EU mandated to the European Commission in accordance 
with Article 3 of the TFEU.  
2.3.  Over time, the scope of the common trade policy has been partially extended to include trade 
in se rvices, the protection of intellectual property rights, and foreign direct investment. The 
European Commission and the Council of Ministers work together to set the common customs 
tariff, guide export policy, and decide on trade protection or retaliation m easures where necessary. 
EU rules allow the Council to make trade decisions with qualified majority voting, but in practice 
the Council tends to employ consensus.  
2.4.  Regarding negotiating procedures1, the European Commission negotiates trade agreements 
with o utside countries and trading blocs on behalf of the Union as a whole. As a result of the 
Lisbon Treaty, both the Council of Ministers and the European Parliament must approve all such 
trade agreements before they can enter into force. The process for negot iating and concluding a 
new international trade agreement begins with discussions among all three EU institutions and a 
Commission impact assessment, including a public consultation on the content and options for any 
future trade accord. Provided there is a general agreement to proceed, the Commission initiates an 
informal scoping exercise with the potential partner country or trade bloc to determine  the range 
and extent  of topics to be considered in the negotiations.  
2.5.  The Commission then formulates the nego tiating directives, which set out the Commission's 
overall objectives for the future agreement. The directives are submitted to the Council for its 
approval, and shared with the European Parliament.  Provided the Council approves them, the 
Commission then l aunches formal negotiations for the new trade agreement on behalf of the EU. 
Within the Commission, the department that handles EU trade policy – the Directorate General for 
Trade (DG Trade) – is in charge of the negotiations but draws on expertise from ac ross the 
Commission. Typically, there are a series of negotiation rounds; the duration of the negotiations 
varies but can range from two to three years or longer.  
2.6.  During the course of negotiations, the Commission is expected to keep both the Council and 
the Parliament apprised of its progress. Throughout the negotiations, t he Council's Trade Policy 
Committee2 acts as the main forum for dialogue between the negotiators and the representatives 
of the member States. The Parliament may conduct its own oversight  hearings through its 
International Trade Committee (INTA). When negotiations reach the final stage, both parties to the 
agreement initial the proposed accord. It is then submitted to the Council and the Parliament for 
review. If the Council approves the a ccord, it authorizes the Commission to formally sign the 
agreement.  
2.7.  Once the new trade accord is officially signed by both parties, the Council submits it to the 
Parliament for its consent. The Parliament reviews the signed agreement both in the INTA 
Commi ttee and in plenary session. Although the Parliament is limited to voting up or down to the  
new accord, it can ask the Commission to review or address any concerns. After Parliament gives 
                                                
1 See DG T rade, Trade negotiations step by step , September 2013 . Viewed at: http://trade.ec.europa. 
eu/doclib/docs/2012/june/tradoc_149616.pdf ; and  Congressional Research Service, The European Union: 
Questions and Answers , RS21372, 24 July 2015. Viewed at: https://digital.library.unt.edu/ark:/67531/ 
metadc743511/m1/1/high_res_d/RS21372_2015Jul24.pdf . 
2 The Committee deals with trade policy matters within three main areas: WTO issues, bilateral trade 
relations and new trade -related EU legislation whe n it needs to be examined by the Council. Another 
configuration of the Committee – the Trade Policy Committee (Services and Investments) – assists and advises 
the Commission during negotiations on those matters.  WT/TPR/S/357 •  Europea n Union  
 
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  its consent and following ratification in the member States (if requ ired), the Council adopts the 
final decision to conclude the agreement. It may then be officially published and enter into force.  
2.8.  The text of the trade agreement itself provides the details for the actual entry into force of 
the agreement. In the case of a  "mixed agreement ", i.e. including elements falling under Member 
state competence , the agreement can only enter into force when all parties including the 28 
member States have ratified the agreement. If one (or more) of the member States does not ratify 
the agreement, it will not enter into force. If the Council decides to provisionally apply the 
agreement, it will remain provisionally applicable until terminated upon notification by the EU to 
the other negotiating party after the C ouncil has taken that dec ision.  
2.9.  Regarding the question of distribution of competences, in July 2015 the Commission 
requested an opinion from the European Court of Justice (ECJ) to clarify  the scope of EU 
competence to conclude the EU -Singapore Free Trade Agreement  (with implicatio ns for other trade 
agreements) under Article 218(11) of the TFEU ( Case A – 2/15).3 
2.10.   In this case, the Commission asked which provisions of the agreement with Singapore fall 
within the EU 's exclusive or shared comp etence and which remain within the EU member  States' 
remit and require approval by national instances . The Commission expressed the view that the 
Union has exclusive competence to conclude EUSFTA alone and, in the alternative, that it has at 
least shared competence in those areas where the Union 's competence is not exclusive.  
2.11.   On 30 October 2016, the EU and Canada signed a Comprehensive Economic and Trade 
Agreement (CETA) alongside the Strategic Partnership Agreement (SPA). T he Commission decided 
to propose CETA as a mixed agreement to facilitate its adoption in the Council. The Council gave 
its agreement to CETA and its provisional application on 27 October 2016. Following the European 
Parliament's vote to approve the agreement on 15 February 2017, CETA can be provisionally 
applied. Both parties first  need to notify each other that they have completed the necessary 
internal requirements. The exact timing for provisional application is therefore not yet certain.  
2.12.   The European Commission took note of the outcome of the U .K. referendum on EU 
membership hel d in June 2016 .4 The Commission has set up a taskforce that will take charge of 
preparing and conducting Brexit negotiations with the U .K., taking account of the framework for 
the U .K.'s future  relationship with the EU . 
2.2  Trade Policy Objectives  
2.13.   In October 2 015, the European Commission issued a new trade and investment policy for 
the EU, entitled Trade for all: Towards a more responsible trade and investment policy (Box 2.1.) 
The EU seeks to incorporate all of the principles set out in this policy document in to its trade and 
investment initiatives , including free trade agreements (FTAs), the outcome of which is subject to 
the mutual agreement between the parties.  
2.14.   The new trade policy supports the growth of global value chains, the increased importance 
of servi ces trade, and the growth of e -commerce, which is seen as a promising area for more 
opportunities for SMEs to expand their markets.  
2.15.   Key objectives of EU trade policy are to increase efforts to reduce non -tariff barriers and 
increase trade in services. Tech nology has facilitated the cross -border provision of services, and 
manufacturing operations also heavily depend on all kinds of services, such as training, transport, 
logistics, insurance, and telecommunications. The EU underlines the importance of placing  more 
emphasis on the need for mobility (e.g. of experts to install or maintain exported goods, senior 
managers, and other service providers) and the mutual recognition of professional qualifications.  
                                                
3 Essentially, the question submitted to the  Court was: Does the Union have the requisite competence to 
sign and conclude alone the Free Trade Agreement with  Singapore? More specifically: (i) which provisions of 
the Agreement fall within the Union 's exclusive competence ; (ii) which provisions of the  Agreement fall within 
the Union 's shared competence ; and (iii) is there any provision of the Agreement that falls within the exclusive 
competence of the member States?  
4 European Commission, Factsheet: "U.K. Referendum on Membership of the European Union:  Questions 
& Answers", 24 June 2016 . Viewed at: http://europa.eu/rapid/press -release_MEMO -16-2328_de.htm . WT/TPR/S/357 •  Europea n Union  
 
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  Box 2.1 Objectives of the updated trade and investment policy strategy  
The EU will focus attention on, inter alia, achieving the following:  
 
(i) A more effective policy that tackles new economic realities and lives up to its promises by:  
 
 Updating trade policy to ta ke account of the new economic realities such as global value chains, the digital 
economy and the importance of services.  
 Supporting mobility of technicians, experts and service providers.  
 Setting up an enhanced partnership with the member States, the Euro pean Parliament and stakeholders to 
better implement trade and investment agreements.  
 Including effective SME provisions in future trade agreements.  
 
(ii) A more transparent  trade and investment policy by extending the TTIP transparency initiative to all t he EU's trade 
negotiations.  
 
(iii) A trade and investment policy based on values by: 
 
 Responding to the public's expectations on regulations and investment: a clear pledge on safeguarding EU 
regulatory protection and a strategy to lead the reform of invest ment policy globally.  
 Expanding measures to support sustainable development, fair and ethical trade , and human rights, including 
by ensuring effective implementation of related FTA provisions and the Generalised Scheme of Preferences.  
 Including anti -corrup tion rules in future trade agreements.  
 
(iv) Progress in negotiations  to shape globalization by:  
 
 Re-energizing multilateral negotiations and designing an open approach to bilateral and regional agreements.  
 Strengthening EU presence in Asia and setting am bitious objectives with China.  
 Requesting a mandate for FTA negotiations with Australia and New Zealand.  
 Exploring launching new investment negotiations with Hong Kong, China; the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu (Chinese Taip ei); and the Republic of Korea.  
 Starting new ASEAN FTA negotiations with the Philippines and Indonesia, as and when appropriate.  
 
Source:  Communication Trade for All: Towards a more responsible trade and investment policy  adopted by 
the Commission on 14 O ctober 2015 in document COM(2015)497. Viewed in October 2016 at: 
http://trade.ec.europa.eu/doclib/docs/2015/october/tradoc_153846.pdf . 
2.16.   Furthermore, the EU wants to integra te investment rules, including liberalization and 
protection provisions , into its broader trade agreements ; prior to the entry into force of the Lisbon 
Treaty, investment protection agreements were negotiated exclusively by EU member States . A 
significant challenge for the EU's reformed investment policy is to ensure dispute settlement 
procedure s are fair and independent; this challenge is being addressed through the 
implementation of a new approach of clarifying the substance of investment protection stand ards 
and reforms with respect to the traditional investor -state dispute settlement system, as reflected 
in recently concluded FTAs with Canada and Viet Nam.  
2.17.   The new trade policy addresses growing concerns of the general public on transparency5 
and perceive d challenges to certain societal values. For example, the EU reiterates that any 
agreement it negotiates will not require EU member States to reduce the level of any public 
services such as water, education, health and social services. The Commission will encourage the 
Council to disclose negotiating mandates, publish draft chapters submitted to its negotiating 
partner, and reveal finalized texts earlier (even before the so -called "legal scrubbing" of texts). It 
will also step up its efforts to promote a fa ct-based debate within the member States and enhance 
its dialogue with civil society. Significantly, the EU also wants to do more to show the impact of an 
FTA after it has been applied. In the area of trade defence, the Commission has undertaken to 
make no n-confidential versions of complaints and review requests more available on an improved, 
dedicated website, starting in the first half of 2016 .6 
                                                
5 European Commission, Factsheet: Transparency in EU trade negotiations . Viewed in October 2016 at : 
http://trade.ec.europa.eu/ doclib/docs/2013/june/tradoc_151381.pdf . 
6 Since May 2016, the Commission has systematically publishe d executive summaries of all complaints 
for new investigation or requests for review of existing anti -dumping or anti -subsidy measures. This allows the 
public to be informed, in more detail, about any starting investigation and improves the possibilities for 
interested parties to be informed and hence to bring their contribution to the investigations. With regard to the 
commitment to provide more and easier access to the interested parties through a dedicated web platform, the WT/TPR/S/357 •  Europea n Union  
 
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  2.3  Trade Agreements and Arrangements  
2.3.1   WTO  
2.18.   While the EU reiterates the importance of the WTO as the central and pre -eminent forum for 
developing and enforcing the rules of global trade, it has moved away from a "single undertaking" 
approach by announcing that it will seek more issues -based negotiations at the multilateral level 
and limited plurilateral initiatives (still ultimately open to all WTO countries ) to achieve gradual 
improvements to international trade rules. The international negotiations with other WTO Members 
on the plurilateral Trade in Services Agreement (TiSA)7, the Information Technology Agreement  
(ITA) and the Environmental Goods Agreement (EGA)8 are also seen by the Commission as 
stepping stones to further liberalization in this area of trade in goods and services as well as trade -
related aspects of intellectual property.  
2.19.   The EU is an original Member of  the WTO and each EU member State is also a WTO 
Member. The EU, through the European Commission, represents all the member States in the 
WTO. The EU is a contracting party to the Agreement on Government Procurement (GPA), a 
participant in the ITA, and a si gnatory to the Agreement on Trade in Civil Aircraft. The trade 
policies of the EU have been reviewed 12 times by the WTO; the last Review was in July 2015.  
2.20.   On 5 October 2015, the EU finalized the ratification process of the Trade Facilitation 
Agreement, following the approval of the Agreement by the European Parliament and the EU 
member States on 9 September and 1 October 2015, respectively.9 
2.21.   The EU submitted numerous notifications to the WTO during the review period (August 2015 
to February 2017), covering , inter alia , agriculture, trade remedies, technical regulations, regional 
trade agreements, and preferential rules of origin (Table A2.1). Notifications on measures of trade 
in services were submitted for the sake of transparency . 
2.22.   Since the founding of th e WTO, the EU has been a major user of the Dispute Settlement 
Mechanism . It has been involved (as of February 2017) in 181 cases, 97 as complainant and 84 as 
defendant. In 167 other cases it has requested third -party status.  
2.23.   During the period under review,  the EU was involved in two new dispute settlement cases as 
a respondent, and in three  new cases as a complainant (Table  A2.2). In addition, the EU was a 
third party in 13 cases . 
2.3.2   Regional and preferential agreements  
2.3.2.1   Reciprocal preferences  
2.24.   Negotiating bilat eral agreements with important partner  countries remains  a key priority for 
the EU to open up more market opportunities and thus help achieve economic growth and job 
creation.10 
2.25.   The EU's preferential FTAs go beyond trade in goods. The new generation of EU F TAs cover 
goods, services, intellectual property, investment, government procurement, access to energy and 
raw materials, customs and trade facilitation, competition (including subsidies and state -owned 
                                                                                                                                                  
Commission has created a web -based platform called T RON which offers the parties involved in each particular 
procedure instant online access to the entire non -confidential case -related file. TRON provides relief particularly 
to smaller companies that are no longer obliged to request access to the file throu gh a Brussels -based 
representative. In addition, TRON was extended recently: a pilot phase, called "TRON notification", now 
enables the Commission to send all communications and notifications – for example preliminary investigation 
findings – to the intere sted parties.  
7 In February 2013, the Commission received the green light from the Council for negotiations covering 
all services sectors. Currently, 23 WTO Members are taking part in the negotiations . 
8 Since July 2014, the EU and 16 other WTO Members ha ve been negotiating the EGA to remove 
barriers to trade in environmental or "green" goods.  
9 DG Trade, The EU ratifies WTO Trade Facilitation Agreement , 5 October 2015 . Viewed at: 
http://trade.ec.europa.eu/doclib/press/index.cfm?id=1374 . 
10 DG Trade , Strategic Plan 2016 -2020. Viewed in October 2016 at : http://trade.ec.europa.eu/doclib/ 
docs/2016/august/t radoc_154919.pdf . WT/TPR/S/357 •  Europea n Union  
 
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  enterprises) , and regulatory cooperation. They contai n commitments on customs duty reduction, 
access to services markets – to be able to fully take advantage of the tariff engagements , and 
tools to reduce or eliminate "non -tariff barriers" such as technical regulations or unjustified 
sanitary barriers. In ad dition, the EU emphasi zes areas which are important in terms of values 
such as sustainable development and the protection of human rights.  
2.26.   The Commission also states that any new trade agreement s, concluded in the period 2016 -
2020, will also i nclude a spec ial focus on SMEs.  
2.27.   In order to ensure enforcement of the agreements, the EU aims to include provisions for an 
effective state -to-state dispute settlement  system. With regard to investor -state dispute 
settlement, an  effective and balanced investment court system will be included in new agreements 
to enforce investment protection provisions. Reforms have also been made to these provisions, to 
ensure that the standards are clearer and more precise, thus ensuring a high level of protection 
while preserving Stat es' right to regulate in the public interest . 
2.28.   As noted above, regarding the draft agreement for a comprehensive FTA with Singapore, 
the Commission is awaiting the ECJ's opinion on the question of E U competence to sign and ratify 
the FTA. Regarding the EU -Viet Nam FTA, for which negotiations were concluded, the legal review 
of the text is under way and is due to be presented to the Council for ratification and to the 
European Parliament  for consent in 2017. Also during the review period, as already noted, th e 
CETA agreement was signed in October 2016 (see paragraph 2.11 above).  
2.29.   The conclusion in 2017 of the negotiations  with Japan that began in 2013  on an FTA  
remains a strategic priority . The EU has also opened FTA negotiations with the Philippines and 
Indone sia. FTA n egotiations with Malaysia, Thailand and India are on hold. In 2016, the EU and 
Mexico began negotiations to modernize the EU -Mexico Global Agreement.  Negotiations to update 
and expand the existing FTA into a Deep and Comprehensive Free Trade Area  (DCFTA) are 
underway with Tunisia; comparable negotiations have also been launched with Morocco, but have 
not advanced significantly since the last review.  
2.30.   Regarding Kazakhstan, negotiat ions for an Enhance d Partnership and Cooperation 
Agreement (E PCA) to upgrade the current PCA were successfully concluded and t he EPCA started 
to app ly provisionally on 1 May 2016.  
2.31.   The EU has also launched negotiations for stand -alone bilateral investment treaties with 
China and Myanmar. N egotiations for a comprehensive EU -China investment agreement aim to 
replace the 27 existing BITs between individual EU member States and China with one 
comprehensive investment agreement . 
2.32.   As from 2017, an annual report on the i mplementation  of the EU FTAs will be produced. The 
reports are  intended to give greater visibility and coherence to the work already under way  in this 
area for each individual FTA in place between the EU and a given third -country or region . 
2.33.   The EU maintains the European Economic Area (EEA) Agreement with Iceland, Liech tenstein 
and Norway, permitting these countries to participate in the internal market for free movement of 
goods, services, capital and labour. Negotiations on further liberalization for agricultur e and 
fisheries are part of the EEA agreement. The EU also has customs unions with Andorra, San Marino 
and Turkey. Regarding Switzerland, the EU has several bilateral agreements covering, inter alia , 
trade in industrial and agricultural  and processed agricultural  products, public procurement, 
research, taxation of  savings, technical barriers to trade , and free movement of persons; 
agricultural negotiation s with Switzerland are on hold.  
2.34.   The EU's reciprocal trade relations with the African, Caribbean and Pacific (ACP) countries 
and regions aim at promoting ACP -EU tra de and investment. Trade with ACP countries represents 
more than 4% of EU  imports and exports.11 The EU is the main destination for agricultural and 
processed  goods from ACP partners, where commodities (e.g. oil) still form a large part of ACP -EU 
trade. The  Economic Partnership Agreements (EPAs), which have replaced the trade regime of the 
                                                
11 DG Trade 's Integrated Statistical Database . Viewed at: https://webgate.ec.europa.eu/isdb/new_gui 
/index.jsp#input=/isdb_static/isdb_menu/isdb_cfs/cfs_ce.html&output=https%3A//webgate.ec.europa.eu/ 
isdb_results/isdb_rsg/factsheets/countr y_factsheets/ce_cfs/regions/main/ce_cfs_main_2016_1031.pdf . WT/TPR/S/357 •  Europea n Union  
 
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  Cotonou and Lomé Conventions, intend to support trade diversification by shifting ACP countries' 
reliance on commodities to higher -value products and services. The majorit y of ACP countries are 
either implementing an EPA or have concluded EPA negotiations with the EU.  
2.35.   The EPA process involves seven regional configurations: West Africa, Central Africa, Eastern 
and Southern Africa (ESA), East African Community (EAC), Southern  Africa n Development 
Community (SADC), CARIFORUM , and the Pacific  region . During the review period, the SADC EPA 
was signed by the EU and the six SADC EPA countries on 10 June 2016 . The agreement applies 
provisionally as of 10 October 2016. Regarding West Africa, the so -called stepping stone EPAs with 
Côte d'Ivoire and Ghana entered into provisional application in September and December 2016, 
respectively.  
2.3.3   Unilateral preferences  
2.36.   The EU Generalised S cheme of Preferences (GSP), introduced in 1971 and implemen ted 
through successive Council regulations, is a trade policy instrument that continues to support 
sustainable development and good governance in developing countries. As noted in the previous 
Review, in 2012 the EU reformed the GSP (as set out by Regulati on (EU) N o. 978/2012 of the 
European Parliament and the Council of 25 October 2012 ) in order to focus support on developing 
countries most in need.  The GSP provides a general GSP arrangement and two special 
arrangements : 
 The general arrangement ( "Standard GSP") grants duty reductions for circa 66% of all EU 
tariff lines to countries of low or lower -middle income status, which do not benefit from 
other preferential trade access to the EU market. There are currentl y 30 Standard GSP 
beneficiaries.  
 The Special Incentive Arrangement for Sustainable Development and Good Governance 
("GSP+ ") grants complete duty suspension for essentially the same 66% of tariff lines as the 
Standard GSP, for countries especially vulnerable in terms of their economies' diversificatio n 
and import volumes. In return, beneficiary countries must ratify and effectively implement 
27 c ore international conventions12. As of November 2016 , there were nine GSP+ 
beneficiaries (Armenia, Bolivia, Cabo Verde, Georgia, Mongolia, Pakistan, Paraguay an d the 
Philippines) .13 As set out in the GSP Regulations, the initial lifetime of the GSP+ is 10 yea rs 
(i.e. it will apply until 31  December 2023 ). 
 The Everything But Arms ("EBA") special arrangement grants full duty -free, quota -free 
access for all products except arms and ammunition, for countries classified by the UN as 
LDCs. There are currently 49 EBA beneficiaries.  
2.37.   To apply for the GSP+  scheme , a country must: meet the thresholds for being considered a 
vulnerable economy in terms of its import share to th e EU and the diversification of those import s; 
have ratified and implemented the 27 conventions; not  have formulated reservations that are 
prohibited under the conventions or can be considered incompatible with the GSP Regulation ; and 
sign a binding undert aking to cooperate with the UN system and the European Commission in 
monitoring implementation . Failure to comply with these requirements can result in the suspension 
of the tariff concession.  
2.38.   In January 2016, the Commission published its first biannual re port14 to the European 
Parliament and the Council on the effects of the reformed GSP, in particular the GSP+ 
arrangement supporting sustainable development and good governance. The report covers 14 
countries that benefited from GSP+ preferences in 2014 and 2015 (Armenia, Bolivia, Cabo Verde, 
Costa Rica, Ecuador, El Salvador, Georgia, Guatemala, Mongolia, Pakistan, Panama, Paraguay, 
Peru and the Philippines) . 
                                                
12 There are 7 conventions on human rights, 8 work -related conventions of the ILO, 8 conventions on 
environmental protection and climate change , and 4 good governance conventions under UN auspices  against 
corruption and the control of illegal drugs.  
13 Georgia ceased to be a GSP+ beneficiary on 1 January 2017.  
14 EU Commission, 28.1.2016 COM (2016) 29 final. WT/TPR/S/357 •  Europea n Union  
 
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  2.39.   The report notes the countries' progress and shortcomings . The Commission observes that 
full implemen tation of the relevant conventions is not yet achieved and that the EU will continue to 
provide practical  support to achieve this goal. The 14 countries and EU stakeholders were given 
the opportunity to comment on the report's findings and the Commission i ntends to update the 
individual country scorecards regarding their compliance with GSP+ commitments. The next re port 
on the GSP regime is due by December 2017.  
2.40.   During the review period, other significant developments included the following: first, the 
November 2015 decision15 identifying the countries that will cease to benefit from the GSP due to 
their economic development level or application of an FTA with the EU as from 1 January 2017. 
Moreover, this decision provides for exclusion of Samoa from the EBA arrangement due to the 
country's graduation out of the LDC status as of 1 January 2019.  
2.41.   Second, in March 2016, the EU updated a list of products16 that had become sufficiently 
competitive that they no longer need support to be successfully exported to the E U. These 
products will no longer receive GSP preferences as from 1 January 2017 until 31 December 2019 
when the list will be reviewed. This decision, however, will only apply to Standard GSP countries.  
2.4  Foreign Investment Policy  
2.42.   As noted above, with the Lis bon Treaty coming into force on 1 December 2009, the EU 
acquired competence in the field of  investment. With a total of almost 1,400 bilateral investment 
treaties (BITs)17 with third countries that protect all forms of foreign investment, the EU member 
States together account for almost half of the investment protection agreements that are currently 
in force around the world. The agreements generally include investment protection standards 
which are enforced by investor -state dispute settlement. The differen ces between the BITs signed 
with different partners may be significant, which has sometimes led to an uneven playing field for  
EU companies investing abroad.  
2.43.   In negotiations, the EU deals with investment rules both in free trade agreements with third 
count ries, for example with Canada and Singapore, and also in stand -alone investment 
agreements, for example with China and Myanmar. With respect to such agreements, one as yet 
unresolved question concerns which aspects of investment now fall under exclusive EU  
competence: on the one hand there is the view that the common commercial policy covers only 
foreign direct investment and not portfolio investments; on the other hand, there is the view that 
the EU derives an implicit exclusive competence on portfolio inv estments from third countries from 
a rule in the internal market prohibiting the introduction of barriers at member State level to 
capital and payment flows from third countries.  
2.44.   The EU's comprehensive investment policy is being introduced on a progressive  basis so 
that the many member State BITs providing investment protection to European investors will be 
preserved until they are replaced by EU agreements. On 9 January 2013, Regulation (EU) 
No. 1219/2012 came into force which established transitional arra ngements to maintain in force 
existing member State BITs until their replacement. This Regulation also allows for the 
Commission to empower member States to negotiate with a third country to amend or conclude a 
BIT under certain conditions. The relatively high number of authorizations granted shows that 
member States remain active in negotiating BITs.18 
                                                
15 Commission delegated regulation  (EU) 2015/1979 of 28 August 2015 amending Annexes II, III and IV 
to Regulation (EU) No . 978/2012 of the European Parliament and of the Council applying a scheme of 
generali zed tariff preferences.  
16 Commission implementing regulation  (EU) 2016/330 of 8 March 2016 suspending the tariff 
preferences for certain GSP b eneficiary countries in respect of certain GSP sections in accordance with 
Regulation (EU) No . 978/2012 applying a scheme of generali zed tariff preferences for the period of 2017 -2019.  
17 Figure cited in Commission Concept Paper: Investment in TTIP and beyo nd – the path for reform . 
Viewed at: http://trade.ec.europa.eu/doclib/docs/2015/may/tradoc 153408.PDF . 
18 According to the Commission,  since entry into force of Regulation 1219 /2012, the Commission has 
adopted 87 authorization decisions, which corresponds to 219 notifications submitted by member States (MS): 
(i) 40 decisions authorizing MS to open 147 bilateral investment negotiations, of which 101 are new 
negotiations and 46 ar e renegotiations (pursuant to Article 9); (ii) 23 decisions authorizing MS to sign and 
conclude 18 new agreements and 21 protocols to existing agreements (pursuant to Article 11); and (iii) 24 WT/TPR/S/357 •  Europea n Union  
 
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  2.45.   The EU's investment policies aim to attract FDI by extending and deepening the single 
market, ensuring open and competitive markets inside and outside Europe , improving European 
and national regulation, and expanding and upgrading Europe's infrastructure and its scientific 
base. The EU aims to include high standards of investment protection in EU agreements containing 
investment provisions, namely: non -discrim ination; fair and equitable treatment; guarantees of 
prompt, effective, and adequate compensation in the event of expropriation; and the free transfer 
of funds.  
2.5  Aid for Trade  
2.46.   As was the case at the time of the previous Review, the EU and its member States are 
collectively the world's leading providers of Aid for Trade (AfT), covering all six categories: trade 
policy and regulation; trade development; trade -related infrastructure; building productive 
capacity; trade -related adjustment, and other trade -relate d needs.  
2.47.   The European Commission produces an annual monitoring report on EU AfT . The 201 5 
edition19, reporting on figures from 2014, notably highlighted, inter alia , that: 
 with a  total of €12.7 billion in 2014, the EU and its member States remained by a 
large margin the most significant AfT donor in the world;  
 two categories represent more than 90% of AfT commitments: trade -related 
infrastructure (covering  transport, storage, comm unication, and energy generation 
and supply ) and building productive capacity (covering projects in agriculture, 
forestry, fishing, industry, mineral resources and mining, and business in general);  
 even if the amounts are relatively small when compared to the two leading categories, 
commitments for EU and member States' trade -related assistance (TRA) reached 
€2.9 billion in 2014 – TRA mainly covers trade policy and regulation, and trade 
development;  
 Africa again received the largest share of AfT in 2014, with 34% of the EU and 
member States' total;  
 AfT commitments to LDCs decr eased in 2014, reaching €1.8  billion (their level of 
2012), as a result of the late entry into force of the new European Development Fund 
(EDF).  
2.48.   The EU is currently engaged in updating its 2007 AfT Strategy, which followed the launch of 
the 2005 WTO AfT In itiative. According to the Commission, the strategy notably included a number 
of quantitative objectives for financial support to trade -related needs that were, to a considerable 
extent, achieved in subsequent years.  
                                                                                                                                                  
decisions authorizing MS to maintain/enter into force 16 agreem ents signed after the Lisbon treaty and 17 
protocols to pre -Lisbon agreements, which were signed after the Lisbon Treaty (pursuant to Article 12).  
19 European Commission, Aid for Trade Report 201 5. Viewed at: https://ec.europa.eu/europeaid/files/ 
aid-for-trade-report -2015_en.pdf . WT/TPR/S/357 • European Union  
 
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  3  TRADE POLICIES AND P RACTICES BY MEASU RE 
3.1  Measures Directly Affecting Imports  
3.1.1   Customs procedures and requirements  
3.1.  Pursuant to Article 3 of the Treaty on the functioning of the European Union, the EU has 
exclusive competence with respect to the customs union. The EU's customs legislation provide s for 
its uniform application throughout the customs territory of the Union, but at the same time 
provides that the customs administrations of the member States are responsible for applying the 
customs legislation and are primarily responsible for the supe rvision of the EU's international 
trade.1 The individual member States also determine the location of the offices and areas for which 
they are competent. Thus, there is no central EU customs authority.  
3.2.  The member State customs authorities collect customs d uties on imported goods when they 
cross the external borders of the EU. In 2015, €23.3 billion was collected in customs and 
agricultural duties' revenue, of which €18.6 billion was transferred to the EU budget and the 
balance  remained with the member State s2; this accounted for 13.6% of the EU's budget.3 Most of 
the customs procedures are now done electronically, as more than 98% of customs declarations 
were submitted electronically in 2015.4 It should also be noted that, in some cases, accompanying 
documen ts were required in paper form. According to EU calculations, 91% of import declarations 
were cleared within one hour. In 2015, 165.7 million import declarations were made, covering 
347.3 million declared items.5 
3.3.  During the review period, the EU's new Unio n Customs Code's (UCC) main substantive 
provisions became applicable on 1 May 2016.6 The UCC was implemented with the following 
accompanying legislation (hereinafter, the acronym UCC refers to the UCC and these related Acts):  
 the UCC Delegated Act, and its  modifications, provide additional supplements to the 
UCC7; 
 the UCC Implementing Act provides for the uniform rules for the implementation of the 
UCC8; 
                                                
1 UCC, Articles 1, 3, and 5.  
2 Pursuant to Council Decision on the system of own resources of the European Union (5602/14), the EU 
member States retain 20% of the amounts collected by them, and the remaining 80% is transferred to the EU 
budget.  
3 European Commission online information. Viewed at: https://ec.europa.eu/taxation_customs/facts -
figures/customs -duties -mean -revenue_en . 
4 European Commission online information. Viewed at: http://ec.europa.eu/taxat ion_customs/facts -
figures/customs -is-business -friendly_en  and information provided by the authorities.  
5 European Commission online information. Viewed at: https://ec.europa.eu/taxation_customs/facts -
figures/eu -customs -union -unique -world_en  and information provided by the authorities.  
6 Regulation (EU) No. 952/2013 of the European Parliament and of the Council of 9 October 2013 laying 
down the UCC. OJ L 269 /1, 10 October 2013. European Commission online information. Viewed at: http://eur -
lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32013R0952&rid=1 . 
7 Regulatio n (EU) 2015/2446 of 28 July 2015 supplementing Regulation (EU) No. 952/2013 of the 
European Parliament and of the Council as regards detailed rules concerning certain provisions of the UCC. OJ 
L 343/1, 29 December 2015. European Commission online informati on. Viewed at: http://eur -
lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32015R2446&from=EN . Regulation (EU) 2016/341 of 17 
December 2015 supplementing Regul ation (EU) No. 952/2013 of the European Parliament and of the Council 
as regards transitional rules for certain provisions of the UCC where the relevant electronic systems are not yet 
operational, and amending Delegated Regulation (EU) 2015/2446. OJ L 69/1 , 15 March 2016. European 
Commission online information. Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX: 
32016R0341&from=EN . Regulatio n (EU) 2016/651 of 5 April 2016 correcting Delegated Regulation (EU) 
2015/2446 supplementing Regulation (EU) No. 952/2013 of the European Parliament and of the Council as 
regards detailed rules concerning certain provisions of the UCC. OJ L 111/1, 27 April  2016. European 
Commission online information. Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=OJ:L: 
2016:111:FULL&from=EN . 
8 Regulation (E U) 2015/2447 of 24 November 2015 laying down detailed rules for implementing certain 
provisions of Regulation (EU) No. 952/2013 of the European Parliament and of the Council laying down the 
UCC. OJ L 343/558, 29 December 2015. European Commission online in formation. Viewed at: http://eur -
lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32015R2447&from=EN . WT/TPR/S/357 • European Union  
 
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   the UCC Transitional Delegated Act, and its correction, provide transitional rules pending 
the creation of a fully electronic customs environment9; and  
 the UCC Work Programme provides for the development and deployment of the electronic 
customs systems.10 
3.4.  Thus, the combination of the enactment and entering into force of these new regulations 
begins a new era  that incorporates many changes and moves towards electronic customs 
clearance and harmonized IT processes. (See Section 3.1.1.1.2 for developments in IT processes.) 
The UCC aims to streamline and modernize customs procedures as well as better align the 
customs rules to new EU treaties. It is envisioned that full implementation of all the changes will 
be complete by 2020. The UCC replaces the previous Community Customs Code of 1992 that 
remained in force until 1 May 2016 when all the provisions of the UCC b ecame applicable. The 
changes to various customs procedures and processes are numerous. However, one of the main 
changes is a simplification of the customs declaration so that only three options are possible:  
 release for free circulation;  
 special procedure s (i.e. transit, storage, specific use, processing); or  
 (re-)export.  
3.5.  Where no simplified procedures are applied, traders are required to submit a commercial 
invoice, a customs value declaration, freight documents, and a packing list, pursuant to the Single  
Administrative Document (SAD) for imports into the EU. Upon completion of the necessary 
electronic infrastructures, these will change  as the key data elements from these separate 
documents will be inserted directly in the customs declaration. Traders will  have to make available 
supporting documents to customs when required. (See Section 3.1.1. 1.2 for customs electronic 
systems implementation.)  
3.6.  Other changes as a result of the UCC involve nearly all aspects of customs procedures and 
processes, as well as mo difications to other rules such as customs valuation, origin, etc. (See 
Sections 3.1.2, 3.1.3). Information provided here is indicative of the major changes and is not 
exhaustive (Table 3.1).  
Table 3.1 Main ch anges to customs procedures introduced by the UCC  
Subject  Change  
Authorised Economic Operator 
(AEO)  Further enhancing of the concept; extension of the benefits and a new 
criterion  
Binding tariff and origin 
information (BTI/BOI)  Binding on the trader; val id for 3 years, not 6  
EU establishment criteria  May be waived for inwar d processing  
Electronic customs declaration  Becomes standard (pending the development of IT systems)  
Inward processing drawback  Abolished  
Warehouses and free zones  Type D warehouses  and type II  free zone s eliminated  
Temporary storage  Storage period prolonged to 90 days; movement can be authorized  
Simplified proofs of status  Value threshold increased to €15,000  
                                                
9 Regulation (EU) 2016/341 of 17 December 2015 supplement ing Regulation (EU) No. 952/2013 of the 
European Parliament and of the Council as regards transitional rules for certain provisions of the UCC where 
the relevant electronic systems are not yet operational, and amending Delegated Regulation (EU) 2015/2446. 
OJ L 69/1, 15 March 2016. European Commission online information.  Viewed at: http://eur -
lex.europa.eu/legal -content/EN/TXT/PDF/?uri=OJ:L:2016:069:FULL&from=NL . Commission Delegated 
Regulation (EU) 2016/698 of 8 April 2016 correcting Delegated Regulation (EU) 2016/341 supplementing 
Regulation (EU) No . 952/2013 of the European Parliament and of the Council as regards transitional rules for 
certain provisions of t he UCC where the relevant electronic systems are not yet operational and amending 
Delegated Regulation (EU) 2015/2446. OJ 121/1, 11 May 2016. Viewed at: http:/ /eur-lex.europa.eu/legal -
content/EN/TXT/PDF/?uri=OJ:L:2016:121:FULL&from=EN . 
10 Commission Implementing Decision (EU) 2016/578 of 11 April 2016 establishing the Work 
Programme relating to the development and deployment of the electronic systems provided fo r in the UCC. OJ 
L 99/6, 15 April 2016. European Commission online information. Viewed at: http://eur -lex.europa.eu/legal -
content/EN/TXT/PDF/?uri=CELEX:32016D057 8&from=EN . WT/TPR/S/357 • European Union  
 
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  Subject  Change  
Financial guarantees  To be provided for special procedures or under pro cessing regimes; some 
exceptions for AEO  
Customs debt  Simplification of provisions concerning assessment  
Processing under customs 
control  Abolished  
Inward processing  Intention to re -export processed products is not required  
Bonded warehouses  Remote ret ail sales allowed from bonded stock  
Bill of discharge  New requirement when goods move to end use  
Source:  UCC. 
3.7.  The EU maintains a system of free zones and warehousing as part of its customs procedures. 
Free zones are special areas designated within the EU  customs territory where import duties, 
charges, etc. are not applied until they are formally imported into the territory. With the changes 
introduced by the UCC, there is now only one type of free zone that has a physical boundary 
supervised by the custom s authorities. Not all member States have free zones; as of early 2017, 
19 member States had free zones, of which Croatia, Lithuania, and the Czech Republic had the 
most.11 Authorization to set up a free zone rests with the national authorities of the membe r State 
concerned. With the changes introduced by the UCC as of 1 May 2016, in accordance with Article 
243 of the UCC, type II  free zones do not exist anymore. The situation is now equivalent to the 
customs warehousing procedure. As concerns warehousing, t he EU customs legislation has long 
provided for public and private customs warehouses. With the introduction of the UCC, the types of 
warehousing have been simplified and there are now three types: public warehouse type I, public 
warehouse type II, and pri vate; these generally correlate to the previous designations except for 
one (Table 3.1).12 There are different responsibilities of the warehouse keepers or the traders 
depending on the type of warehousing arrangement. Like free zones, customs warehousing al lows 
non-EU goods to be stored in a designated warehouse within the customs territory, while not being 
subject to import duties, charges, etc. The amount of working or processing is controlled in 
warehouses. Applicants need to provide a guarantee, demonstr ate economic need, and be 
established in the EU in order to be approved for warehousing.13 
3.8.  The EU has an Authorised Economic Operator (AEO) programme based on the customs -to-
business partnership initiative of the WCO. The programme consists of two different  statuses, 
Authorised Economic Operator, Customs  (AEOC) for economic operators14 authorized for 
simplification of customs procedures, and Authorised Economic Operator, Security and Safety 
(AEOS), for those entitled to facilitations relating to security and safety. An operator may hold 
both authorizations at the same time. AEOC status can be granted to any economic operator 
established in the EU territory who has not committed any serious or repeated infringement of 
customs or taxation rules, is financially s olvent, has appropriate record -keeping, and complies with 
the new criterion of proven practical or professional competence; an AEOS needs to comply also 
with appropriate security and safety standards. In principle, applications for AEO status should be 
submitted to the customs authority in the member State where the economic operator's main 
accounts for customs purposes are kept. The benefits for traders can include access to customs 
simplifications, fewer controls, priority treatment, prior notification, c hoice of place of control, etc. 
In 2015, AEO status was given to more than 14,000 business operators in the EU, accounting for 
71% of imports.15 The UCC also provides for reciprocity in granting the status to economic 
operators outside the EU who comply wit h similar legislation of other countries that are recognized 
by the EU. As of September 2016, the EU had five such mutual recognition agreements covering 
                                                
11 European Commission online information. Viewed at: http://ec.europa.eu/taxation_cus toms/sites/ 
taxation/files/resources/documents/customs/procedural_aspects/imports/free_zones/list_freezones.pdf  and 
information provided by the authorities.  
12 Previous warehousing designation Type D has been abolished with the UCC.  
13 Irish Tax and Customs  online information. Viewed at: www.revenue.ie/en/about/foi/s16/customs/ 
economic/customs -warehousing.pdf  and U.K. Government online. Viewed at: https://www.gov.uk/guidance/ 
customs -warehousing . 
14 An economic operator is defined as a person who in the course of his/her business is involved in the 
activities covered by the customs legislation.  
15 European Commission online information. Viewed at: https://ec.europa.eu/taxation_customs/sites/ 
taxation/files/facts_figures_en.pdf . WT/TPR/S/357 • European Union  
 
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  the AEOS status in force with China, Japan, Norway, Switzerland, and the United States.16 
Negotiations have started or are envisaged with other countries as well.  
3.9.  The EU had introduced a common customs risk management framework into its customs 
legislation, which is based on the recognition of a need to establish an equivalent level of 
protection in customs  controls for goods brought into or out of the EU, and to ensure a harmonized 
application of customs controls by the member States.17 The customs risk management framework 
(CRMF) was introduced in the previous customs legislation and is now covered by Artic le 46 of the 
UCC. In short, the CRMF comprises identification and control of high -risk goods, identification of 
priority control areas, systematic exchange of risk information, contribution of AEO partners, and 
pre-arrival/pre -departure security risk analy sis.18 Since 2014, the EU has been working on the 
implementation of its Strategy and Action Plan for Customs Risk Management in order to provide 
smooth and safe trade flows while ensuring security and safety.19 The strategy identifies key 
priorities to be ac hieved through an action plan. The main priorities are: data quality, information 
sharing, efficient controls and risk -mitigation, capacity -building, interagency cooperation, 
cooperation with traders, and international customs cooperation.20 Most of the obj ectives outlined 
have a gradual phase -in during 2014 -20.21 
3.10.   The UCC provides for the right to appeal against any decision taken by the customs 
authorities of the member States.22 The appeal has two levels, first, before the customs authorities 
or judicial aut hority; and subsequently, before a higher independent body. The actual bodies 
depend on the specific provisions in force in each member  State. The appeal must be lodged in the 
member State where the decision was taken or was applied for. No information was  available on 
the number of appeals, as member States have no obligation to provide such information.  
3.11.   In terms of enforcement, for 2015, the EU recorded 7,000 infringements of CITES and more 
than 19,000 infringements of goods presenting a risk for consumer s in terms of sanitary, 
phytosanitary and veterinary technical standards.23 
3.12.   There was also €394 million in unpaid duties detected in 2015 due to all types of fraud and 
irregularities discovered by Customs involving entitlements of over €10,000.24 
3.1.1.1   Trade facilitation  
3.13.   The EU and its 28 member States presented their instrument of ratification to the WTO 
Trade Facilitation Agreement on 5 October 2015. The member States and the EU continue to be 
active in the trade facilitation area, and 10 have become donors to the Trade Facilitation 
Agreement Facility, thus contributing to needs assessments and capaci ty-building work for trade 
facilitation.25 The EU has prioritized trade facilitation as one of their aid programme priorities, with 
                                                
16 European Commission online information. Viewed at: http://ec.europa.eu/taxation_customs/general -
information -customs/customs -security/authorised -economic -operator -aeo/authorised -economic -operator -
aeo_en#what_is . 
17 European Commission online information. Viewed at: http://ec.europa.eu/taxation_customs/general -
information -customs/customs -risk-management/measures -customs -risk-management -framework -crmf_en . 
18 European Commission online information. Viewed at: http://ec.europa.eu/taxation_customs/general -
information -customs/customs -risk-management/measures -customs -risk-management -framework -crmf_en . 
19 COM/2014/527, European Commission online information. Viewed at: http://eur -
lex.europa.eu/r esource.html?uri=cellar:a2e8d50b -2914-11e4-8c3c-01aa75ed71a1.0001.03/DOC_1&format 
=PDF . 
20 European Commission online information. Viewed at: http://ec.europa.eu/taxation_customs/general -
information -customs/customs -risk-management/priorities -eu-strategy -action -plan-customs -risk-
management_en . 
21 The progress on achieving the different objective s has been set out in a report . Viewed at: 
http://ec.europa.eu/taxation_customs/sites/taxation/files/res ources/documents/customs/policy_issues/risk_m
anagement/com_2016_476_en.pdf  and http://ec.europa.eu/taxa tion_customs/sites/taxation/files/resources/ 
documents/customs/policy_issues/risk_management/swd_2016_242_en.pdf . 
22 UCC, Articles 44 and 45.  
23 Accounting for over 35 million articles of counterfeit goods. European Commission online information. 
Viewed at:  https://ec.europa.eu/taxation_customs/sites/taxation/files/docs/body/customs_union_factsheet 
_en.pdf . 
24 European Commission online informa tion. Viewed at: https://ec.europa.eu/taxation_customs/facts -
figures/customs -sees-what-you-dont-protects -you_en . 
25 WTO online information. Viewed  at: http://www.tfafacility.org/ . WT/TPR/S/357 • European Union  
 
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  30% of all trade -related support including a component focused on trade facilitation.26 
Furthermore, the EU has also contribut ed to other trade facilitation work in other organizations, 
e.g. UNCTAD with the Trade Facilitation Implementation for the Economic Community of Central 
African States.27 
3.1.1.1.1   Advance rulings, i.e. Binding Tariff Information/Binding Origin Information  
3.14.   The EU's r ules and process for issuing advance rulings, i.e. Binding Tariff Information (BTI) 
and Binding Origin Information (BOI), have undergone changes with the entry into force of the 
UCC. In the case of BTI decisions, the main changes relate to the tightening o f procedures and the 
validity period of the information, which has been reduced from six years to three. Furthermore, 
BTI decisions are now binding on the trader. The UCC Implementing Act provides for a process to 
deal with divergent BTI decisions.  
3.15.   The EU has issued BTIs since 1991 and they are stored in a central EBTI database where 
there were approximately 245,000 valid BTI decisions as of January 2017.28 There were 50,781 
BTIs issued during 2016, an increase of about 2,200 from 2015 figures. In 2016, the highest 
incidence of BTIs w as in HS chapters 85, 39, 84, 64, and 73.  
3.16.   For BOIs, the main change was  that the decision is now binding on the holder of the 
decision against the EU customs authorities. The relevant details of BOI decisions are 
communicated to the European Commission  on a quarterly basis and compiled in a file which is 
then made available to all EU customs authorities. Article 23 of the UCC Implementing Act 
provides for a process to ensure the correct and uniform determination of origin, mainly with the 
purpose of avoiding the issuance of divergent BOI decisions.  
3.17.   Each year approximately 1,600 BOIs are issued by all EU customs authorities. It is to be 
noted that, in 2016, only 12 EU member States issued BOIs, and about 75% of BOIs were issued 
in one member State. The main HS chapters with the highest incidence are chapters 84, 55, 63, 
54 and 20.29 
3.1.1.1.2   Electronic systems  
3.18.   The EU has been working towards a single window application for customs to implement a 
solution in a staged approach. The first stage c oncerning the automated validation of supporting 
documents to the customs declaration is well progressed, with the integration of certificates in the 
phytosanitary area. The next stage will include the incorporation of other certificates, permits, and 
licences. One of the objectives of the UCC is to achieve EU harmonized IT processes, including  
streamlin ing and moderniz ing customs procedures. Furthermore, the UCC provides that: "All 
exchanges of information, such as declarations, applications or decisions, between customs 
authorities and between economic operators and customs authorities, and the storage of such 
information, as required under the customs legislation, shall be made using electronic data -
processing techniques."30 There is a transitional phase t o implement the necessary infrastructure 
by 2020. Nearly all existing systems are to be updated and integrated. There are 17 electronic 
systems identified for implementing the UCC, of which 3 are expected to become operational in 
2017 (Table 3.2). The othe rs are to be phased -in until 2020.  
                                                
26 European Commission online information. Viewed at: http://trade.ec.europa.eu/doclib/docs/2 017/ 
february/tradoc_155332.pdf . 
27 UNCTAD online information. Viewed at: http://unctad.org/en/pages/newsdetails.aspx?Original 
VersionID=1356  and information provided by th e authorities.  
28 European Commission online information. Viewed at: http://ec.europa.eu/taxation_customs/dds2/ 
ebti/ebti_home.jsp?Lang=en . 
29 Information provided by the a uthorities.  
30 UCC, Article 6.  WT/TPR/S/357 • European Union  
 
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  Table 3.2 Customs electronic systems pursuant to the UCC, 2016  
Electronic systems  Legal basis  Expected 
deployment  
UCC Registered Exporter System (REX)  Articles 6, 16 and 64  1.1.2017  
UCC BTI  Articles 6, 16, 22, 23 26, 27, 28, 
33 and 34  1.3.2017 (phase I)  
1.10.2018 (phase II)  
UCC Customs Decisions  Articles 6, 16, 22, 23 26, 27 and 28  2.10.2017  
Direct trader access to the European 
Information Systems (Uniform User 
Management and Digital Signature)  Articles 6 and 16  2.10.2017  
UCC AEO upgrade  Articles 6, 16, 22, 23 26, 27, 28, 
38 and 39  1.03.2018 (phase I)  
1.10.2019 (phase II)  
UCC Economic Operator Registration and 
Identification System upgrade (EORI 2)  Articles 6 and 9  1.3.20 18 
UCC Surveillance 3  Articles 6, 16 and 56  1.10.2018  
UCC Proof of Union Status (PoUS)  Articles 6, 16 and 153  1.03.2019  
UCC New Computerised Transit System (NCTS) 
upgrade  Articles 6, 16 and 226 -236 1.10.2019  
UCC Automated Export System (AES)  Articles 6 , 16, 179 and 263 -276 1.10.2019 
(component 1), 
1.3.2017 
(component  2) 
UCC Information Sheets (INF) for Special 
Procedures  Articles 6, 16, 215, 237 -242 and 
250-262 2.3.2020  
UCC Special Procedures  Articles 6, 16, 215, 237 -242 and 
250-262 1.03.2017 
(compone nt 1),  
to be defined 
(component  2) 
UCC Notification of Arrival, Presentation 
Notification and Temporary Storage  Articles 6, 16 and 133 -152 To be defined  
UCC National Import Systems upgrade  Articles 6, 16, 53, 56, 77 -80, 83 -
87, 101 -105, 108 -109, 158 -187 
and 194 -195 To be defined  
UCC Centralised Clearance for Import (CCI)  Articles 6, 16 and 179  1.10.2020  
UCC Guarantee Management (GUM)  Articles 6, 16 and 89 -100 1.10.2020 
(component 1),  
to be defined 
(component 2)  
UCC Import Control System upgrade (ICS 2 ) Articles 6, 16, 46 and 127 -132 1.10.2020  
Source:  UCC and UCC Work Programme, online information. Viewed at: https://ec.europa.eu/  
taxation_customs/bu siness/union -customs -code/ucc -work-programme_en  and http://eur -
lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32016D0578&from=EN . 
3.1.2   Customs valuation  
3.19.   With the  entry into force of the UCC provisions on customs valuation in May 2016, EU 
customs valuation provisions have been streamlined and re -organized since the last review and 
are now contained in Articles 69 to 74 of the UCC, Articles 127 to146 of the UCC Impl ementing 
Act, and Article 71 of the UCC Delegated Act. The UCC contains a structure for the main elements 
of customs valuation; it provides for transaction value, elements to be added to the price paid or 
payable, elements not to be included in the customs  value, secondary methods of customs 
valuation, and simplification. The provisions of the WTO Agreement on the Implementation of 
Article VII of GATT 1994 (Customs Valuation Agreement) are included in either the UCC or the 
UCC Implementing Act.  
3.20.   The UCC prov ides that the primary method of valuation is transaction value. Articles 71 and 
72 of the UCC provide for elements to be added to the price or not to be included in the 
transaction value, and Articles 128 and 129 of the UCC Implementing Act give further de tails on 
how to define the transaction value. The other methods of valuation which may be used are based 
on, in sequential order, the transaction value of identical or similar goods, the deductive value, the 
computed value, and a fall -back method as provid ed for in Article 74 of the UCC and Articles 141 
to 144 of the UCC Implementing Act. Provisions on transactions between related parties are laid 
down in Article 134 of the UCC Implementing Act. Other provisions of the UCC Implementing Act 
include elements on discounts, partial delivery, price adjustments for defective goods, valuation of 
conditions and considerations, royalties and licence fees, goods and services used for the WT/TPR/S/357 • European Union  
 
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  production of the imported goods, the place where goods are brought into the cust oms territory, 
transport costs, charges levied on postal consignments, currency conversion, supporting 
documents, and non -acceptance of declared transaction values.  
3.21.   In addition, compared to the previous Community Customs Code (CCC), other elements 
were mod ified or added by the adoption of the UCC. The EU has clarified the basic rules of customs 
valuation by adding further supplementing rules, in particular where there was ambiguity or a 
particular issue. In some cases, provisions that were previously in the  CCC were not included in 
the UCC, but rather in the implementing rules, regulations, or guidelines. Thus, the Commission 
has indicated that changes that were taken out of the legislation may come back through 
guidelines. Among these modifications, several  are particularly significant (Table 3.3). The new 
rules provide that the sale occurring immediately before the entry of the goods into the EU 
customs territory is the relevant sale for the application of the transaction value method; and the 
notion of "co ndition of sale" referred to in royalties and licence fees has, according to the 
Commission, been clarified in accordance with the most recent WCO guidance and thus led to re -
alignment of its own rules where there were inconsistencies. As regards simplific ation, special 
authorization may be granted to determine value on the basis of specific criterion when they are 
not quantifiable. According to the Commission, this authorization is granted on the condition that 
the customs value determined will not signifi cantly differ from that determined in the absence of 
an authorization.  
3.22.   As of March 2017, the new legislation had not been notified to the WTO Committee on 
Customs Valuation. The last modifications of the EU customs valuation laws notified to the WTO 
were i n 1995 and pertained to decisions of the Committee.31 
Table 3.3 Main customs valuation changes, CCC compared to UCC  
Subject  CCC UCC 
Transaction value 
(sale for export 
rule)a No equivalent provision in case of 
successive sales before valuation, only 
the last sale, which led to the 
introduction of the goods into the 
customs territory of the Community, or a 
sale taking place in the customs territory 
of the Community before entry for free 
circulation of the goods, shall constitute 
such indication. Etc.  The transaction value of the goods sold for 
export to the customs territory of the Union 
shall be determined at the time of 
acceptance of the customs declaration on the 
basis of the sale occurring immediately 
before t he goods were brought into that 
customs territory.  
Royalties and 
licence fees  A royalty or licence fee in respect of the 
right to use a trade mark  The price actually paid or payable for the 
imported goods shall be supplemented by 
royalties and licence fe es related to the 
goods being valued that the buyer must pay, 
either directly or indirectly, as a condition of 
sale of the goods being valued, to the extent 
that such royalties and fees are not included 
in the price actually paid or payable. Etc.  
Trademar ks The buyer is not free to obtain such 
goods from other suppliers unrelated to 
the seller  No equivalent provision  
Discounts  No equivalent provision  When transaction value is used, discounts 
shall be taken into account if the sales 
contract provides for t heir application and 
gives the amount.  
Partial delivery  No equivalent provision  When goods are part of a larger quantity of 
the same goods purchased in one 
transaction, the transaction value will be 
calculated on a pro rata  basis.  
                                                
31 WTO documents G/VAL/N/1/EEC/1 and G/VAL/N/1/EEC/1/Rev.1.  WT/TPR/S/357 • European Union  
 
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  Subject  CCC UCC 
Simplification  No equi valent provision. The customs 
authorities may authorize certain 
elements to be added to the price paid 
or payable, or certain charges not to be 
included in the customs value, although 
non quantifiable at the moment of 
incurrence of the customs debt, may be  
determined on the basis of appropriate 
and specific criteria. Etc.  The customs authorities may, upon 
application, authorize that amounts 
constituting elements of the price paid or 
payable, or amounts to be included in or 
excluded from the customs value fo r the 
price actually paid or payable, including 
items added to or deducted from it, be 
determined on the basis of specific criteria. 
Etc. 
Customs 
warehouse Type D  Customs value could be determined 
upon entering the warehouse  Provision abolished following the changes in 
the warehousing procedure.  
a Transitional provision on this first sale rule may be applied that allows valuation based on an earlier 
sale to be used for contracts concluded prior to 18 January 2016, and may apply up until 31 
December 2017 ( Article 347, UCC IA).  
Source:  The UCC, the UCC Implementing Act, and information provided by the authorities.  
3.1.3   Rules of origin  
3.23.   The EU's rules of origin have also changed as a result of the implementation of the UCC and 
its associated implementing rules. In particular, the rules contained in the UCC Delegated Act give 
detailed provisions for non -preferential origin rules, and the Implementing Act further clarifies 
many preferential rules.  
3.24.   Some changes were introduced, in particular for non -preferential rules of origin. The basic 
principles remain as per the wholly -obtained or substantial transformation definitions in the UCC:  
 Goods wholly obtained in a single country or territory shall be regarded as having their 
origin in that country or territory;  
 Goods, the  production of which involves more than one country or territory, shall be 
deemed to originate in the country or territory where they underwent their last, 
substantial, economically -justified processing or working, in an undertaking equipped for 
that purpo se, resulting in the manufacture of a new product or representing an important 
stage of manufacture.  
3.25.   The existing list of goods for which detailed rules for origin determination are included has 
been extended in the UCC Delegated Act for a few categories o f goods, the production of which 
involves more than one country or territory. Thus, traders are referred to an annex containing lists 
of substantial processing or working operations conferring origin by HS chapter, heading, sub -
heading, or specific sub -divisions called "splits". The lists mirror the work of the WTO Committee 
on Rules of Origin as per its Harmonised Work Programme (HWP) on harmonizing rules of origin 
but there are deviations.32 Where the rule was endorsed at the WTO's Committee on Rules of 
Origin, this rule was proposed; and where the rule was not endorsed at the WTO, the position of 
the EU in the HWP was proposed. The rules were adopted on the basis of detailed consultations 
with the interested industry sectors. In the new rules included in t he UCC Delegated Act, the EU 
reaffirms the principle of the WTO work programme for goods produced in more than one country, 
i.e. that substantial transformation is first based on the country where the production process has 
led to a change in tariff classi fication, and only where that criterion does not allow for the 
determination should another criterion be used.  
3.26.   There are 36 HS chapters33 listed, although most products in the lists are concentrated in 
the textiles and clothing, and iron and steel sectors, whereby the rules are complete for these 
sectors. In some cases, this work is not necessarily new as the EU previously  had the exact same 
rules for textiles. Where the list rule or chapter rules are not fulfilled, the residual rules are 
applied. The residu al rules include determining origin based on the origin of the major portion of 
the materials used to produce the product; the major portion of materials is determined either on 
the value or the weight of the materials used. Other chapters typically only c over a few products. 
                                                
32 WTO document G/RO/W/111/Rev.6.  
33 HS chapters 2, 4, 9, 14, 17, 20, 22, 34, 35, 42, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 
62, 63, 64, 69, 71, 72, 73, 82,  84, 85, 90, 91 and 94.  WT/TPR/S/357 • European Union  
 
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  Thus, where the chapter does not have origin -conferring criteria, origin is to be determined where 
the product underwent its last, substantial, economically -justified processing or working, on a 
case-by-case basis. As of March 2017, th e Commission website had not been updated to reflect 
the new rules of origin.34 
3.27.   Another element introduced for non -preferential origin determination was a list of minimal 
operations that may not be used to meet the substantial transformation test. The list includes 
minor operations, such as packing, putting up in sets, affixing marks or labels, etc. Previously, the 
list applied only to textile products; now, it will apply to all products.  
3.28.   For preferential rules, there have been fewer modifications with the i ntroduction of the UCC. 
Mainly, the rules have been clarified. The UCC Delegated Act and the Implementing Act lay down 
the rules of origin for the GSP and for Autonomous Trade Measures. Preferential rules of origin 
continue to be as outlined in the specifi c agreements. One notable change for the rules of origin in 
the GSP is the application of a new system of origin certification as from 1 January 2017, 
progressively replacing the certification of origin with certificates of origin Form A issued by 
authorit ies in an exporting country. The new system is based on statements on origin made by 
exporters who are registered by their competent authorities.  
3.29.   In terms of WTO notifications, the EU has not notified the latest modifications of its 
preferential origin rul es to the Committee on Rules of Origin. The most recent notifications are 
from 2014 and concern preferential rules pursuant to the free trade agreements with Moldova, 
Ukraine, and Georgia.35 
3.1.4   Tariffs  
3.30.   The EU's Council Regulation (EEC) No. 2658/87 of 23 July 1 987 establishes the Combined 
Nomenclature (CN) as the EU's common customs tariff for imports and exports, and for statistical 
purposes. It is updated yearly and provides the tariff nomenclature, description and the rates of 
duty applied by the customs unio n to external trade. The latest version of the nomenclature, 
applicable as from 1 January 2017, has been published with Commission Implementing Regulation 
(EU) 2016/1821 of 6 October 2016. As the EU is a signatory to the International Convention on the 
Harmonized Commodity Description and Coding System (Harmonized System) under the WCO, the 
CN is based on the Harmonized System (HS) nomenclature (6 -digit level).  
3.31.   Under the TFEU, common customs tariff duties are set by the European Parliament and the 
Council, or the Council based on a proposal from the Commission.36 In addition to publishing tariff 
information in the L -Series of the Official Journal of the European Union, the EU maintains a public 
online database (TARIC) that integrates tariff rates and other me asures, including quantitative 
restrictions (QRs) and contingency measures, applied to imports (and exports).  
3.1.4.1   Nomenclature and WTO bindings  
3.32.   There have been several nomenclature changes to the CN since its last review. In 2015, 35 
nomenclature changes were introduced, and in 2016, 82 such changes.37 These were mainly a 
result of statistical amendments to the nomenclature.  
3.33.   The EU has submitted the documentation giving proposed HS2007 and HS2012 changes to 
its WTO schedule; however, these have not been approved  nor certified as of March 2017. The EU 
                                                
34 European Commission online information. Viewed at: http://ec.europa.eu/taxation_customs/b usiness/ 
calculation -customs -duties/rules -origin/nonpreferential -origin/introduction_en . 
35 WTO documents G/RO/N/121, G/RO/N/122, and G/RO/N/123.  
36 Article 31, TFEU, only in respect of  the Council based on a proposal from the Commission.  
37 EU online inform ation. Viewed at: 
https://circabc.europa.eu/faces/jsp/extension/wai/navigation/container.jsp?FormPrincipal:_idcl=FormPrincipal:
_id1&FormPr incipal_SUBMIT=1&id=360f68dc -1753-4956-a809-8f56857a95fe&javax.faces.ViewState= 
WxHJC884YT2WE1p7wM9x7QYEEcmoGMBruwWdhPkGSecn07uGiJVLNlYwKFQLX4hu5Vc6tRRHWDj53A8Veh2VD
Z1VFaWL4M5NyUkzAHZsT9hxU9BSOWA3Vrq7Z8JOUuOgwDpTQtwYrF1iBbGzBy9yPB5Zwx4%3D ; and 
information  provided by the authorities.  WT/TPR/S/357 • European Union  
 
- 48 - 
 
  is covered by the HS2007, HS2012, and HS2017 waivers in order to implement the nomenclature 
changes as these have already been implemented in the CN.38 
3.34.   The EU's schedule of tariff commitments was last updated in Decem ber 2016 with the 
certification of Schedule CLXXIII, the schedule of the European Communities' 25 members, and 
includes the HS2002 nomenclature changes.39 It also includes the outcome of certain TQ 
negotiations for chicken and butter.40 However, there are a number of changes that the EU has 
made in the CN and continues to apply today but which have either not yet been incorporated in 
its WTO schedule or not notified to the WTO (Table 3.4).  
Table 3.4 Modifications  to the CN not incorporated in its WTO bound commitments  
Subject  WTO reference series  
Enlargement to 27  G/SECRET/26  
Prepared poultry meat TQ  G/SECRET/32  
Enlargement to 28  G/SECRET/35  
Additions to the lists of pharmaceutical products  Not notified  
ITA e xpansion  G/MA/TAR/RS/456  
Source:  WTO document G/MA/W/23/Rev.12 and information provided by the authorities.  
3.1.4.2   Applied rates  
3.35.   The EU's applied rates remain largely unchanged since its last Review, with the simple 
average tariff rate declining slightly from 6. 4% in 2014 to 6.3% in 2016 (Table 3.5). This is due to 
reductions in rates for the expanded list of International Technology Agreement (ITA) products and 
additional tariff codes in the nomenclature. Applied rates are generally identical to the WTO 
bindings , and the EU has bound 100% of tariff lines.  
Table 3.5 Structure of MFN tariffs in the EU, 2016  
(%) 
  MFN applied  Final bound  
  2014a 2016b 2016b 
1. Bound tariff lines (% of all tariff lines)  100.0  100.0  100.0 
2. Simple average tariff rate  6.4 6.3 6.4 
 Agricultural products (WTO definition)  14.4 14.1 14.4 
 Non-agricultural products (WTO definition)  4.3 4.3 4.4 
 Agriculture, hunting, forestry and fishing (ISIC 1)  7.7 7.8 8.7 
 Mining and quarrying (ISIC 2)  0.2 0.2 0.3 
 Manufacturing (ISIC 3)  6.4 6.3 6.4 
3. Duty-free tariff lines (% of all tariff lines)  25.1 26.1 25.1 
4. Simple average rate of dutiable lines only  8.6 8.6 8.6 
5. WTO tariff quotas (% of all tariff lines)c 5.0 4.7 4.7 
6. Non-ad valorem  tariffs (% of all tariff lines)  10.6 10.6 10.7 
7. Non-ad valorem  tariffs with no AVEs (% of all tariff lines)  3.1 3.0 3.0 
8. Domestic tariff peaks (% of all tariff lines)d 5.6 5.7 5.7 
9. International tariff peaks (% of all tariff lines)e 8.5 8.5 8.8 
10. Overall standard deviation of applied rates  12.0 12.1 12.2 
11. Nuisance applied rates (% of all tariff lines)f 6.9 7.7 7.8 
                                                
38 WTO documents WT/L/968, WT/L/969, and WT/L/999.  
39 WTO document WT/Let/1220.  
40 G/SECRET/25 and G/SECRET/30.  WT/TPR/S/357 • European Union  
 
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    MFN applied  Final bound  
  2014a 2016b 2016b 
Number of lines  9,379  9,414  9,414  
 Ad valorem  8,382  8,416  8,406  
   Duty-free lines  2,356  2,461  2,359  
 Non-ad valorem  997 998 1,008 
   Specific  651 652 662 
   Compound  199 199 201 
   Mixed  64 64 62 
   Otherg 83 83 83 
a Ad valorem equivalents (AVEs)  were estimated based on 2013 import data at the 8 -digit tariff from 
the Eurostat database. I f unavailabl e, the ad valorem  part is u sed for compound and mixed rates.  
b AVEs were estimated based on 2015 import data at the 8 -digit tariff from the Eurostat database. If 
unavailable, the ad valorem  part is used for compound and mixed rates.  
c Information based on the Official Journal  of the  European Union L 290 (31 October 2013) and L 285 
(30 October 2015).  
d Domestic tariff peaks are defined as those exceeding three times the overall simple average applied 
rate (indicator 6).  
e International tariff peaks are defined as those exceeding 15%.  
f Nuisance rates are those greater than zero, but less than or equal to 2%.  
g Other includes Agricultural Components (EA), Additional Duties for Sugar (AD S/Z), Additional Duties 
for Flour (AD F/M) and Entry Prices (EP).  
Note:  All tariff calculations exclu de in-quota lines. Year 2014 and 2016 tariff schedules are based on 
HS2012. Duty rates under ITA Expansion (as of 1 July 2016) were taken into account in calculations.  
Source:  WTO Secretariat calculations based on the WTO Integrated Data Base (IDB) and the  Eurostat 
database.  
3.36.   Agricultural tariffs stand out compared to industrial tariffs for several reasons: significantly 
higher rates, about three -fold; a higher percentage of non -ad valorem  rates; and a number of 
tariff lines for the implementation of tariff rate quotas. Nevertheless, average applied rates for 
agricultural products have generally declined in the medium term. Furthermore, some of the 
highest tariff rates and averages for certain sectors are in agriculture (Table 3.6). The dairy sector 
is partic ularly noteworthy, with average tariffs of over 35% and the highest rates of all tariffs. 
Other sectors with particularly high averages include sugar and confectionary, and animals and 
animal products.  
Table 3.6 EU's applied MFN tariff summary, 2016  
 Number 
of lines  Simple 
average 
(%) Tariff 
range  
(%) SDa Share of 
duty-free 
lines  
(%) Share of 
non-ad 
valorem  
tariffs  
(%) 
Total  9,414  6.3 0-695.5b 12.1 26.1 10.6 
HS 01 -24 2,456  14.2 0-695.5b 21.7 15.3 38.3 
HS 25 -97 6,958  3.7 0-35.6 3.7 30.0 0.8 
By WTO category        
WTO agricultural products  2,075  14.1 0-695.5b 23.7 19.1 46.4 
Animals and products thereof  351 19.4 0-132.5  21.3 15.1 68.7 
Dairy products  151 35.6 2.8-695.5b 65.0 0.0 100.0  
Fruit, vegetables, and p lants 508 13.0 0-169.9  13.9 11.8 16.9 
Coffee, tea, and cocoa and cocoa 
preparations  47 11.3 0-18.7 6.7 14.9 51.1 
Cereals and preparations  230 14.9 0-76.9 11.9 8.7 80.0 
Oilseeds, fats, oil and their products  174 6.0 0-103.5  10.4 35.6 6.9 
Sugars and conf ectionery  44 26.8 0-172.7  37.5 4.5 88.6 
Beverages, spirits and tobacco  305 12.8 0-76.8 15.9 18.0 55.4 
Cotton  6 0.0 0-0 0.0 100.0  0.0 
Other agricultural products, n.e.s.  259 5.8 0-168.7  16.0 51.0 22.0 
WTO non -agricultural products  7,339  4.3 0-26.0 4.4 28.1 0.5 
Fish and fishery products  500 12.2 0-26.0 6.5 8.0 0.0 
Minerals and metals  1,447  2.0 0-12.0 2.6 50.6 0.7 WT/TPR/S/357 • European Union  
 
- 50 - 
 
   Number 
of lines  Simple 
average 
(%) Tariff 
range  
(%) SDa Share of 
duty-free 
lines  
(%) Share of 
non-ad 
valorem  
tariffs  
(%) 
Chemicals and photographic 
supplies  1,248  4.4 0-17.3 2.7 25.1 0.3 
Wood, pulp, paper and furniture  438 1.2 0-10.5 2.3 73.5 0.0 
Textiles  850 6.6 0-12.0 2.4 1.9 0.1 
Clothing  341 11.6 6.3-12.0 1.3 0.0 0.0 
Leather, rubber, footwear and 
travel goods  264 5.0 0-17.0 4.7 21.6 0.0 
Non-electric machinery  882 1.8 0-9.7 1.4 23.1 0.0 
Electric machinery  447 2.6 0-14.0 2.8 24.8 0.0 
Transport equipment  253 5.0 0-22.0 5.0 11.9 0.0 
Non-agricultural products, n.e.s.  620 2.1 0-12.2 1.9 35.5 3.2 
Petroleum  49 2.5 0-4.7 2.0 38.8 0.0 
By ISIC sectorc       
ISIC 1 - Agriculture, hunting and 
fishing  639 7.8 0-168.7  12.8 35.2 18.5 
ISIC 2 - Mining and quarrying  115 0.2 0-8.0 1.0 93.0 2.6 
ISIC 3 - Manufacturing  8,659  6.3 0-695.5b 12.1 24.6 10.1 
By stage of processing        
First stage of processing  1,194  6.3 0-168.7  10.4 43.6 13.2 
Semi-processed products  2,771  4.9 0-172.7  7.4 31.5 3.8 
Fully processed products  5,449  7.1 0-695.5b 14.2 19.6 13.5 
a Standard deviation.  
b The tariff peak was calculated on a tariff line for which imports in 2015 were 0.1 tonnes. The next 
tariff peak in the dairy sector was 187.2%.  
c International Standard Industrial Classification (R ev.2). Electricity, gas and water are excluded 
(1 tariff line).  
Note:  Calculations for averages are based on the national tariff line level (8 -digit), excluding in -quota 
rates. Tariff schedule is based on HS2012. AVEs were estimated based on 2015 import da ta at the 
8-digit tariff from the Eurostat database. If unavailable, the ad valorem  part is used for compound 
and mixed rates.  
Source:  WTO Secretariat calculations based on the IDB database and the Eurostat database.  
3.37.   Non-ad valorem  tariffs constitute about  11% of tariff lines and comprise specific, combined, 
mixed, and other complex forms. They can be cumbersome, as calculating ad-valorem  equivalents 
may not be possible and determining the duty impact can be complex.  
3.38.   About 26% of tariff lines were duty free  in 2016, up from 25% in 2014. The slight rise can 
be attributed to the expansion of the ITA and nomenclature changes. Duty -free lines are 
concentrated in areas where the EU participates in plurilateral or similar agreements, i.e. Uruguay 
Round sectors, IT A, and pharmaceuticals. The sectors with the highest percentages of duty -free 
lines are for cotton, wood and paper, minerals and metals, and other agricultural products.  
3.39.   The largest incidences of tariffs are those that are less than 5%, which constitute ab out 
30% of tariff lines (Chart 3.1). Of these, about 8% are considered nuisance tariffs. There is a 
gradual decline in the incidence as the tariff rates rise, although a slight increase is seen for tariffs 
above 35%; they account for 1.5% of all tariff lin es. WT/TPR/S/357 • European Union  
 
- 51 - 
 
  Chart 3.1 Applied MFN tariff rates distribution, 2016  
(26.1%)(30.7%)
(23.5%)
(9.3%)
(3.8%)
(1.6%)(1.0%)(0.6%)(1.5%)
0.010.020.030.040.050.060.070.080.090.0100.0
05001,0001,5002,0002,5003,0003,500
Duty free >0%-5% >5%-10% >10%-15% >15%-20% >20%-25% >25%-30% >30%-35% >35%Chart 3.[distribution] Applied MFN tariff rates distribution, 2016
Number of tariff lines Per cent
Cumulative per cent
Number of lines (% of total)
WTO Secretariat calculations based on IDB database and Eurostat database.Note:
Source:Figures in parentheses indicate the share of total lines.  Calculations exclude in -quota rates and include AVEs, as available.  In 
case of unavailability, the ad valorem part is used for compound and mixed rates.  They do not add to 100% due to  
unavailability of AVEs for some  tariff lines (representing 1.9% of total tariff lines).  
 
Note:  Figures in parentheses indicate the share of total lines. Calculations exclude in -quota rates and 
 include AVEs, as available. If unavailable, t he ad valorem  part is used for compound and mixed 
 rates. They do not add to 100% due to the unavailability of AVEs for some tariff lines (representing 
 1.9% of total tariff lines).  
Source:  WTO Secretariat calculations based on the IDB database and the Eur ostat database.  
3.1.4.3   Duty suspensions and special tariff treatment  
3.40.   Pursuant to Council Regulation (EU) Nos. 1387/2013 and 1388/2013, the EU offers tariff 
suspensions and quotas to enable enterprises to use raw materials, semi -finished goods or 
components withou t being required to pay the normal duties. These suspensions or quotas can be 
permanent or temporary. As of July 2016, there were 2,497 duty suspensions and 102 quotas in 
force, which represents a n increase compared to recent years. The duty suspensions ar e 
concentrated in the chemical or allied sector (HS Section VI), machinery/mechanical appliances 
and electrical/electronic equipment (Section XVI), and plastics (Section VII). The value of tariff -
suspended imports for 2015 was estimated at €1.3 billion.41 
3.41.   In addition to the WTO Civil Aircraft Agreement, the EU also offers temporary duty -free 
imports for certain parts, components, and other goods of a kind to be incorporated in or used for 
civil aircraft and imported with airworthiness certifi cates pursuant to Council Regulation (EC) No. 
1147/2002.42 
3.42.   Commission Implementing Regulation (EU) 2016/189443 of 26 October 2016 contains 
provisions on the way the EU applies special additional duty rates for certain poultry meat, eggs, 
and egg albumin due to fixing representative prices. The previous regulation from 1995 has been 
amended by the new 2016 regulation, adjusting representative prices and applicable countries.  
                                                
41 Information provided by the authorities.  
42 Council Regulation (EC) No. 1147/2002 of 25 June 2002 temporarily suspen ding the autonomous 
Common Customs Tariff duties on certain goods imported with airworthiness certificates. OJ L 170/8 of 29 June 
2002. European Commission online information. Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/ 
PDF/?uri=CELEX:32002R1147 . 
43 Commission Implementing Regulation (EU) 2016/1894 of 26 October 2016 amending Regulation (EC) 
No. 1484/95 as regards fixing representative prices in the poultry  meat and egg sectors and for egg albumin. 
OJ L 293/28 of 28 October 2016. European Commission online information. Viewed at: http://eur -lex.europa. 
eu/legal -content/EN /TXT/PDF/?uri=CELEX:32016R1894 . WT/TPR/S/357 • European Union  
 
- 52 - 
 
  3.43.   The EU offers favourable tariff treatment for certain products due to their nature, qu ality or 
authenticity through the use of certificates. Pursuant to the latest tariff of the EU, such preferential 
treatment was provided for table grapes (0806), tobacco (2401), and nitrate (3102 and 3105). 
Certificates are issued by listed bodies authoriz ed to do so in the exporting country. Based on the 
list of authorized bodies, the benefits of this regime pertain to table grapes from the 
United  States; tobacco from Argentina, Bangladesh, Brazil, Canada, China, Colombia, Cuba, 
Guatemala, India, Indonesia , Mexico, the Philippines, South Korea, Sri Lanka, Switzerland, 
Thailand, and the United States; and nitrate from Chile.44 
3.44.   Pursuant to Regulation (EU) 2016/65445, the EU has applied additional customs duties46 on 
sweetcorn, eye glass frames, crane lorries, an d certain clothing from the United States due to the 
Continued Dumping and Subsidy Offset Act (CDSOA) compliance measures under the WTO. The 
level of suspension is adjusted annually to match the same level of nullification and impairment 
caused by the Act.  
3.1.4.4   Tariff quotas (TQ) and administration  
3.45.   The EU maintains tariff quotas (TQ) for three general types of imports: agricultural 
products, autonomous MFN quotas, and imports from certain countries pursuant to preferential 
agreements. In addition, pursuant to a 2012 EU regulation47, the EU has established tariff quotas 
for high -quality beef, applying only to imports from certain countries.48 Many MFN tariff quotas are 
allocated on a "first -come, first -served" basis. When the quotas of the application period for the  
products in question are used up, normal import duties are applied. TQs are managed centrally by 
the Commission, and can be consulted on an internet database which is updated daily.49 The EU 
grants preferential TQs in accordance with unilateral or reciproc al trade agreements.  
3.46.   Many TQs have undergone revision since the last Review as a result of the removal of 
quotas for certain agricultural products50 and quotas added for new FTAs. As of October 2016, 
there were 1,006 categories of TQs applied on a variety o f products.51 The majority of the TQs 
were country - or regional -specific TQs to implement FTA commitments, and about 230 were open 
to all importers as autonomous quotas . The TQs  open to all importers  are mainly applied on fish, 
agricultural products, chemic als, metals, machinery and equipment. Other TQs apply bilaterally to 
certain countries for individual products or to certain sectors such as handicrafts.52 
3.47.   The autonomous quotas and those pursuant to preferential arrangements are allocated on a 
first-come, first-served basis by the D irectorate -General (DG) for Taxation and Customs. 
Agricultural quotas are managed by the European Commission through import licenses.  
3.48.   In April 2016, the European Parliament and the Council of the European Parliament 
introduced em ergency autonomous trade measures for Tunisia, which resulted in the granting of 
                                                
44 Annex 9  of Commission Implementing Regulation (EU) No. 1101/2014 of 16 October 2014. European 
Commission online information. Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?ur i=OJ:L: 
2015:285:FULL&from=EN . 
45 Commission Delegated Regulation (EU) 2016/654 of 26 February 2016 amending Council Regulation 
(EC) No. 673/2005 establishing additional customs duties on imports. OJ L 114/1 of 28 April 2016. European 
Commission online information Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX: 
2016R0654 . 
46 Rate of 0.45% in 2016.  
47 Commission Implementing Regulation (EU) No. 481/2012 of 7 June 2012 laying down rules for the 
management of a tariff quota for high -quality beef. OJ L 148/9 of 8 June 2012. European Commission online 
information. Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32012R0481&from 
=EN. 
48 Argentina, Australia, Canada, New Zealand, the United States, and Uruguay.  
49 European C ommission online information. Viewed at: http://ec.europa.eu/taxation_customs/dds2/ 
taric/quota_consultation.jsp?Lang=en . 
50 See WTO document G/LIC/N/3/EU/5.  
51 European Commission online information. Viewed at: https://circabc.europa.eu/faces/jsp/extension/ 
wai/navigation/c ontainer.jsp?FormPrincipal:_idcl=FormPrincipal:_id1&FormPrincipal_SUBMIT=1&id=fef41906 -
43fe-4289-8176-5d2d75b2bea7&javax.faces.ViewState=mAoP%2FBAfhXLC%2BM%2BQlD7%2FCgi8CQn% 
2FzAX83BMa4TdGG3aAlL%2Fzn5NBwO4DO41tsD1Bzwng7%2Fecqiad2rKtZfnxnmeVQj%2FTRoWcl7%2BL Zin7B
crPk9VII%2BLJ%2FGavgbmIQxVORG9CQFki%2FU2oNGf0phyfirRhbDI%3D . 
52 For example, Australia and the United States pursuant to Article XXIV:6 and Article XXVIII 
negotiations.  WT/TPR/S/357 • European Union  
 
- 53 - 
 
  an annual duty -free TQ of 35,000 tons for imports of untreated olive oil originating in Tunisia.53 
Bilateral and autonomous quotas for imports of olive oil from Tunisia are man aged by Directorate -
General for Agriculture and Rural Development (DG AGRI) using the simultaneous examination 
method.54 
3.1.4.5   Preferential tariffs  
3.49.   The EU maintains preferential tariffs for imports from certain countries pursuant to its 
reciprocal or preferential  agreements. The agreements generally provide for duty -free access for 
57% to 99.9% of tariff lines. There has generally been an increase in the duty -free coverage since 
the last Review, reflecting the ongoing reduction of commitments gradually being stage d in. A 
number of trading partners/agreements, i.e. Andorra, CARIFORUM, ESA, Economic Partnerships, 
Fiji, Morocco, Palestine, San Marino, and LDC (EBA), have achieved tariff elimination on nearly all 
products, i.e. 99% or above (Table A3.1).  
3.50.   For non -recipr ocal preferential agreements, the EU provides preferential or duty -free rates 
to certain countries under GSP, GSP+, and "Everything But Arms" (EBA). The simple average 
overall tariff rates for 2016 under the three programmes remains unchanged since the las t Review 
at 4.1%, 1.8%, and 0%, respectively (Table A3.1). India, Indonesia, Nigeria, and Ukraine face 
slightly higher averages under GSP due to graduation. GSP and GSP+ preferences apply on over 
6,000 tariff lines with nearly identical coverage except for  about 60 lines. The main difference is 
that GSP+ provides a zero rate of duty on nearly all GSP+ eligible products, whereas GSP provides 
a zero rate of duty on about half the tariff lines, thus preferential rates apply on the remaining 
2,922 lines. The EU  performed the triennial review of the list of graduated products in 2016 and, 
as a result, has implemented changes to the eligible products for certain countries as of 1 January 
2017.55 These changes pertain to India (7 product sections), Indonesia (2), Ke nya (1), and 
Ukraine (2) whereby GSP preferences will not be eligible for these countries' products which have 
been "graduated" due to their competitive position for the period 2017 -2019. Country eligibility for 
the different preference programmes and the criterion has changed slightly over the review period 
(see Section 2.3).  
3.1.5   Other charges affecting imports  
3.51.   The main other duties or charges for imports into the EU are VAT and excise duties. Duties 
are chargeable and collected upon the importation into the t erritory of the Community by the 
national authorities in the case of VAT, or upon release for consumption in the case of excise duty; 
i.e. upon release for free circulation for non -EU goods unless arrangements are made to suspend 
payment. For VAT, the Comm ission has set out a list of common rules in the VAT Directive that are 
applicable in each member State and harmonize certain elements such as rates and exemptions.56 
It sets out minimum rates of 15% for the standard rate, and 5% for the reduced rate (appli cable 
only to 23 categories of certain goods and services specified in the VAT Directive); thus member 
States apply rates equal to or above these minima, varying by product and member State. The 
Directive also allows for numerous derogations to these gener al rules on rates, applied by member 
States under certain conditions.  
3.52.   For excise duties, the Commission has set out common provisions that include the 
categories of products that member States must apply excise duties to, principles on where excise 
                                                
53 The quota is for 2016 and 2017 and concerns HS codes 1509 10 10 and 1509 10 90. Regulation (EU) 
2016/580 of the European Parliament and of the Council of 13 April 2016 on the introduction of emergency 
autonomous trade measures for the Republic of Tunisia. OJ L 102/1, 18 April 2016. European Commission 
online information. Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/?qid=1475139131335&uri= 
CELEX:32016R0580 . 
54 Information provided by the authorities.  
55 Commission Implementin g Regulation (EU) 2016/330 of 8 March 2016 suspending the tariff 
preferences for certain GSP beneficiary countries in respect of certain GSP sections in accordance with 
Regulation (EU) No. 978/2012 applying a scheme of generalized tariff prefe rences for th e period of 2017 -19. 
OJ L 62/9 of 9 March 2016. European Commission online information. Viewed at: http://trade.ec.europa.eu/ 
doclib /docs/2016/march/tradoc_154349.pdf . 
56 Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax. OJ L 
347/1 of 11 December 2006. European Commission online information. Viewed at: http://eur -lex.europa.eu/ 
legal-content/EN/TXT/PDF/?uri=CELEX:32006L0112&from=EN . WT/TPR/S/357 • European Union  
 
- 54 - 
 
  duty re venue accrues, and rules on the production, storage and movement of excise products.57 In 
2016, excise duties were applied to energy products and electricity, alcohol and alcoholic 
beverages, and manufactured tobacco at the EU level, known as the products s ubject to EU 
harmonization.58 The Commission also establishes the minimum excise duty rates, although the 
member States generally apply higher rates based on their individual circumstances. Rates can 
vary considerably between member States depending upon th e product concerned.  
3.53.   For common EU excisable goods, there exists an excise duty suspension system for the 
transit of goods across borders, and thus the excise duty is payable when it is sold to the final 
consumer. The system, known as EMCS, is an electroni c system that documents and monitors the 
movement of excisable goods. Direct use of EMCS by economic operators requires an appropriate 
authorization. Authorizations, which allow for the suspension of the obligation to pay excise duty, 
are governed by natio nal rules, subject to the general provisions of Chapters III and IV of 
Directive 2008/118/EC. There are no restrictions on transport providers.  
3.54.   Member States may also charge excise duties on other products so long as they are non -
discriminatory and do not cause distortions of the single market. According to information from the 
Commission, Finland charges excise duties on beverage packages, and Germany charges an 
additional excise duty on alcoholic beverage blends.59 However, nearly all EU member States have  
many other excise duties on a wide variety of products and services, e.g. coffee, automobiles, and 
beverages (Table 3.7). There are currently no rules or plans to harmonize these other excise 
duties among member States.  The EMCS system allowing for the du ty to be suspended during 
transit between member States cannot be used for these excisable goods.  
Table 3.7 Excise duties other than on EU harmonized products (alcohol, tobacco, and 
energy products), by member  State, 2016/2017  
 Product  Rate Source  
Austria  None   
Belgium  Beverages  
Coffee  
Environmental  
Packaging   
 
€2.70 -4.50 per kg  
€9.86 or €1.41 per hl  http://finances.belgium.be/fr/entrepr
ises/accises  
Bulgaria  None   
Croatia  Coffee  
Non-alcoholic beverages  
Motor vehicles  HRK 6 -20/kg  
HRK 40 -240/hl  
1-14% http://www.ijf.hr/upload/files/file/EN
G/taxtable.pdf  
Cyprus  Cars 
Double cabin vehicles  
Other vehicles  
Motorcycles  
Smoked salmon and 
sturgeon  
Caviar  
Crystals  
Chinaware  From €0 to €2,2 50 
€0.26 per c.c.  
15% 
€1.71 or €2.56 per c.c.  
 
€5.13 per kg  
30% 
20% 
20% http://www.mof.gov.cy/mof/customs
/customs.nsf/All/A2C3593B5465A799
422577D 6002FEAC4?OpenDocument  
Czech Rep.  none   
Denmark  Ice cream and chocolate  
Coffee and tea  
Incandescent lamps and 
electrical fuses  
Cigarette paper  
Coal 
 
Landfill  
Hazardous waste  
Packaging  
Piped water  Kr 5.58 to 6.98 per litre  
Kr 0.75 to 18.29 per kg  
 
Kr 0.59 to 8.79 per p iece 
Kr 5 per piece 
Kr 1,051 to 2 ,078 per 
tonne  
Kr 475 per ton  
Kr 160 per ton  
Varies by type  
Kr 6.25 per m3 http://www.skat.dk/SKAT.aspx?oId=
1921338  
                                                
57 Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise 
duty and repealing Directive 92/12/EEC, http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX: 
02008L0118 -20140101&from=EN . 
58 EU online information. Viewed at: https://ec.europa.eu/taxation_customs/business/excise -duties -
alcohol -tobacco -energy/excise -duties -alcohol/excise -duty-rates_en . 
59 EU online information. Vie wed at: https://circabc.europa.eu/sd/a/a16788cf -068a-47db-85b8-
20cc22f14966/EDT -Ref%201045%20(I -Alcohol)%20 -%20January% 202016.pdf . WT/TPR/S/357 • European Union  
 
- 55 - 
 
   Product  Rate Source  
Sulphur  
Nitrous oxides  
Tyres  
Pesticides  
 
Chlorinated sol vents  
Batteries  
 
Motor vehicles  
Gaming  
Insurance  Kr 23.3 per kg  
Kr 11.7 per kg 
Kr 5 to 225 per piece  
Kr 107 per kg or litre per 
agent  
Kr 2 per kg  
Kr 6 to 120 per kg or 
package  
Varies by type  
Varies by game  
1.1%  
Estonia  Packaging (gla ss, 
plastic, metal, paper, 
cardboard, wood)  From €0.6 to €2.5 per kg 
depending on type  https://www.emta.ee/eng/business -
client/excise -duties -assets -
gambling/about -excise -duties/ rates-
excise -duty 
Finland  Sweets, ice cream and 
soft drinks  
Beverage containers  
Oil waste  
Oil protection  
Landfill  Range from €0.11 per 
litre to €1.4 per kg  
€0.51 per litre  
€0.0575 per kg  
€0.50 per tonne  
€70 per tonne  http://www.tulli.fi/en/finnish_custom
s/publications/excise_tax/excise_tax
ation/016.pdf  
http://www.tu lli.fi/fi/yrityksille/verot
us/valmisteverotettavat/index.jsp  
France  Non-alcoholic beverages  From €0.54 to €102.61 
per hl  http://www.douane.gouv.fr/articles/a
12186 -tarifs-2016-droits -des-alcools -
boissons -alcooliques -et-non-
alcooliques  
Germany  Coffee  
Coffee products  
Nuclear fuel  
Biofuels  €2.19 to €4.78 per kg  
€0.12 to €3.83 per kg  
145 euros per gram  
Quota system  http://www. zoll.de/DE/Fachthemen/
Steuern/Verbrauchsteuern/verbrauch
steuern_node.html  
Greece  Electronic cigarette 
refills  
Coffee  
Instant coffee and coffee 
containing products   
€0.10 per ml  
€2 to €3 per kg  
 
€4 per kg  https://www2.deloitte.com/content/d
am/Deloitte/gr/Documents/tax/gr_in
direct_tax_customs_leg_43892016_e
n_noexp.pdf   
Hungary  none   
Ireland  Gaming  
Betting  
Entertainment  
Vessels  and aircraft  €505 to €630  
1%-15% 
€500 
€500 http://www.revenue.ie/en/tax/excise
/duties/excise -duty-rates.html  
Italy Nitrogen oxide 
emissions  
Sulfur emissions  
Lubricating oils  
Bitumen oil   
€209.00 per tonne/year  
€106.00 per tonne/year  
€787.81 per 1,000 kg  
€30.99 per 1,000 kg  https://www.agenziadoganemonopoli
.gov.it/portale/documents/20182/88
9198/Aliquote+nazionali+aggiornam
ento+al+1+gennaio+2015.pdf/9109f
7b8-985a-4837-b0e0-ac09fdbbc77e  
Latvia  Non-alcoholic beverages  
Coffee  €7.4 per 100 litres  
€142.29 per 100 kg  http://www.fm.gov.lv/en/s/taxes/exc
ise_duty/  
Lithuania  Coal 
Coke and lignite  €3.77 to €7.53 per tonne  
€4.63 to €8.98 per tonne  https://finmin.lrv.lt/en/competence -
areas/taxation/main -taxes/excise -
duties  
Luxembourg  none   
Malta  Non-alcoholic beverages  
Plastic bags, CN 3923  
Toilet waters, CN 3303  
Make-up, CN 3304  
Hair products, CN 3305  
Shampoo, CN 330510  
Personal hygiene 
products, 3307  
Aftershave, deodorisers, 
3307 
Shower gel, 3401  
Prefabricated concrete 
structures, CN 681091  
Ceramic tiles, CN 6907, 
6908 
Glass sheets, CN 7005  
Iron bars, CN 7213  
Iron rods, CN 721310  €400 per 1,000 litres  
€425 per 100 kg  
€220 per 100 litres  
€50 per 100 litres/kg  
€50 per 100 litres/kg  
€3 per 100 litres  
 
€3 per 100 litres/kg  
 
€50 per 100 litres/kg  
€3 per 100 litres/kg  
 
€25.60 per 1,000 kg  
 
€7.50 per 1,000 kg  
€16 per 1,000 kg  
€30 per 1,000 kg  
€5 per 1,000 kg  https://customs.gov.mt/docs/default
-source/rates -of-exchange/Rates -of-
Exchange -2016/learn -
more.pdf?sfvrsn=0  WT/TPR/S/357 • European Union  
 
- 56 - 
 
   Product  Rate Source  
Iron bars, CN 72139110, 
72139149, 72142000  
Iron beams, CN 7216  
Wire mesh, CN 
73142010, 73142090 
and 73143900   
€15 per 1,000 kg  
€50 per 1,000 kg  
 
 
€30 per 1,000 kg  
Netherlands  Non-alcoholic drinks  €8.83 per hl  https://www.government.nl/topics/e
xcise-duty/contents/excisable -
products  
http://download.belastingdienst.nl/d
ouane/docs/tarievenlijst_accijns_acc
0552z72fol.pd f 
Poland  Cars 3.1% or 18.6%  http://www.finanse.mf.gov.pl/in/exci
se-duty/basic -information  
Portugal  Motor vehicles  
Plastic bags  .. .. 
Romania  Green coffee  
Roasted coffee  
Solub le coffee  
Natural fur products  
Articles from crystal  
Jewelleries from gold 
and/or platinum  
Cars 
Perfume products  
Microwave ovens  
Air conditioning units  
Hunting and other guns  
Yachts and boats  €680 per tonne  
€1,000 per tonne  
€4 per kg  
45% 
55% 
 
25% 
€1 per cm3 
10-35% 
20% 
20% 
100%  
30 to 50%  http://www.aneir -
cpce.ro/chapter5/excise1.htm  
Slovakia  Coal 
Natural gas  
 
Compressed natural gas  €10.62 per tonne  
€1.32 to €9.36 per MWh  
€0.141 to €  0.01989 per 
kg https://www.financnasprava.sk/en/in
dividuals/taxes -individuals/excise -
duties  
Slovenia  none   
Spain  Perfume  
Coal .. .. 
Sweden  Advertising  
Waste (landfills)  
Pesticides  
 
Gravel  
Lottery  
Gaming  
 
 
Profits (monetary gains)  
Automobile insurance  8%, 3% for periodicals  
SEK 500 per tonne  
SEK 34 per kilo active 
ingredient  
SEK 15 per tonne  
35% 
Varies by number of 
tables (SEK 2,000 -
25,000)  
30% 
32% http://www.skatteverket.se/foretago
chorganisationer/skatter/punktskatte
r.4.71004e4c133e23bf6db80005701
3.html  
U.K. Betting  
Vehicles  
Biofuels  
Climate change  10-50% varies by game  
£0-2,000 varies  
£0.5795 per litre  
£0.00195 to £0.00559 
per kWh or £0.01251 to 
£0.01526 per kg 
depending on commodity  https://www.gov.uk/government/pub
lications/uk -trade -tariff-excise -
duties -reliefs -drawbacks -and-
allowances/uk -trade-tariff-excise -
duties -reliefs -drawbacks -and-
allowances#introdu ction 
https://www.gov.uk/government/pub
lications/rates -and-allowance -excise -
duty-gambling -duty/excise -duty-
gambling -duty-rates#gambling -
duties  
https://www.gov.uk/government/pub
lications/vehicle -excise -duty/vehicle -
excise -duty 
.. Not available.  
Source:  As not ed in the table.  WT/TPR/S/357 • European Union  
 
- 57 - 
 
  3.1.6   Import prohibitions, restrictions, and licensing  
3.55.   The EU maintains import restrictions and prohibitions, and also maintains a licensing system 
for certain imports. The products subject to these provisions have not substantially changed sinc e 
the last Review although there have been a number of amendments. There are a number of 
prohibited or restricted products, with many of them attributable to international agreements, i.e. 
to protect the environment or similar (Table 3.8).  In addition, the  EU has import prohibitions on 
cat and dog fur, and products thereof; and seal products.60 According to the Commission, they 
consider these as internal measures and not border measures.  Pursuant to an EU regulation61, the 
Commission has rules to restrict inv asive alien species The implementing regulation which came  
into force in August 2016 provides a list of species and implementation.62 According to the 
Commission, no QRs were in place as of March 2017, and the regulation only set s the framework. 
Products pr ohibited due to sanctions, export control measures applied to dual -use goods, TBT, and 
SPS measures are not covered in this section (see Sections 3.2 and 3.3, respectively, for the 
restrictions on these products).  
Table 3.8 EU prohibitions or restrictions on imports, 2017  
Product  Measure  Rationale  Legislation  
Controlled substances that 
deplete the ozone layer  Prohibition  Montreal Protocol  Regulation (EC) 
No. 1005/2009  
Certain animal and plant 
species  Restrict ion CITES  Regulation (EU) 
No. 750/2013  
Certain goods which could 
be used for capital 
punishment, torture or 
other cruel, inhuman or 
degrading treatment or 
punishment  Restriction  Protection of human life or 
health, protection of public 
morals  Council Regu lation (EC) 
No. 1236/2005  
Waste  Restriction  Basel Convention  Regulation (EC) 
No. 1013/2006  
Fish of vessels from 
Cambodia and Guinea  Prohibition  Protection of the 
environment  Regulation (EC) 
No. 1005/2008 and Council 
Implementing Decision of 
24 March 2014  
Source:  WTO document G/MA/QR/N/EU/3.  
3.56.   For import licensing, there are nine categories of products subject to licensing (Table 3.9). 
New licencing procedures were introduced on certain iron and steel products in April 2016 as 
safeguard surveillance measure s (see Section 3.1.7.2); and in 2015 for sugar from EBA 
beneficiaries. Although not new, the EU decided to include drug precursors in its latest notification 
to the WTO.63 Most of the licensing requirements, notably those linked to TQs, concern agricultural  
products; and others pertain mainly to international agreements to protect the environment or 
similar (e.g. CITES, Montreal Protocol, Basel Convention, Kimberley Process). According to the 
authorities, the EU import licensing system is based on the premis e that no import licences are 
required except for specific products from certain origins. The EU maintains a central system 
(SIGL64) for the integrated management of licences for certain products subject to licence, i.e. 
textiles.65 
                                                
60 Regulation (EC) No. 1523/2007 and Commission Implementing Regulation (EU) 2015/1850. European 
Commission online information. Viewed at: http://eu r-lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX: 
32007R1523&from=EN  and http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX: 
32015R1850&from=EN . 
61 Regulation (EU) No. 1143/2014. European Commission online information. Viewed at: http://eur -lex. 
europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32014R1143&fro m=EN . 
62 Commission Implementing Regulation (EU) 2016/1141. European Commission online information. 
Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/ ?uri=CELEX:32016R1141&from=EN  and 
http://ec.europa.eu/environment/pdf/13_07_2016_news_en.pdf . 
63 WTO document G/LIC/N/3/EU/5.  
64 Système Intégré de Gestion de Licenses.  
65 European Co mmission online information. Viewed at: http://trade.ec.europa.eu/sigl/ . WT/TPR/S/357 • European Union  
 
- 58 - 
 
  Table 3.9 Products subject to import licensing, 2017  
Product  Regime  Automatic/  
non-automatic  Legislation  
Textiles  Quant itative restrictions from 
Belarus and the Democratic 
People's Republic of Korea; 
outward processing traffic 
arrang ements; surveillance regime  Non-automatic  Regulation (EU) 936/2015 
and Regulation (EU) No. 
2016/2148  
Agriculture (cereals and 
rice, sugar, olive oil and 
table olives, milk and 
milk products, beef and 
veal, pigmeat, poultry 
meat, eggs and egg 
products incl uding egg 
albumin, garlic, 
preserved mushrooms, 
ethanol from 
agricultural products, 
hemp)  Mainly to administer TQs  Non-automatic  Regulation (EU) 
No. 2016/1237 and 
Regulation (EU) 
2016/1239  
Iron and steel products  Surveillance of iron and steel 
products  Automatic  Commission 
Implementing Regulation 
(EU) No. 2016/670  
Ozone -depleting 
substances  To control prohibited or restricted 
ODS goods  Non-automatic  Regulation (EC) 
No. 1005/2009  
Rough diamonds  To implement the Kimberley 
Process Certification Scheme  Non-automatic  Regulation (EC) 
No. 2368/2002  
Shipment of waste  To control the import of waste and 
hazardous waste pursuant to the 
Basel Convention  Automatic  Regulation (EC) 
No. 1013/2006  
Harvested timber  To implement the voluntary EU 
FLEGT scheme for legally 
harvested timber  Automatic  Council Regulation 
No. 2173/2005  
Endangered species 
(CITES)  To control imports of endangered 
species listed in Appendices I, II, 
and III of CITES  Non-automatic  Council Regulation (EC) 
No. 338/97 and 
Commission Regulation 
(EC) No.  1320/2014  
Drug precursors  To monitor trade and 
authorization of imports of drug 
precursors  Automatic  Council Regulation (EC) 
No. 111/2005, Regulation 
(EU) 2015/1011, and 
implementing Regulation 
(EU) No. 2015/1013  
Source:  WTO document G/LIC/N/3/EU/5 and European Commission information. Viewed online at: 
http://trade.ec.europa.eu/doclib/docs/2013/may/tradoc_151262.pdf . 
3.1.7   Anti-dumping, countervailing, and safeguard measures  
3.1.7.1   Anti-dumping and anti -subsidy measures  
3.57.   In the EU's trade defence sector, new regulations have been put in place for the main anti -
dumping, countervailing (also termed anti -subsidy by the EU), and safeguard rules during the 
review period. The two main regulation s for anti -dumping and anti -subsidies are:  
 Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 
on protection against dumped imports from countries not members of the EU – Codified 
Version66; and  
 Regulation (EU) 2016/1037 o f the European Parliament and of the Council of 8 June 2016 
 on protection against subsidized imports from countries not members of the EU – 
 Codified Version .67 
                                                
66 OJ L 176, 30 June 2016, p. 21. European Commission online information. Viewed at: http://eur -lex. 
europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32016R1036&from=EN . 
67 OJ L 176, 30 June 2016, p. 33. European Commission online information. Viewed at: http://eur -lex. 
europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32016R1037&from=EN . WT/TPR/S/357 • European Union  
 
- 59 - 
 
  3.58.   The main structure and basic elements follow the previous Regulations.68 The Regulations 
were re -published in 2016 in order to codify a number of previous amendments made to the 
Regulations in 2014, and did not contain any new substantive elements. The new codified version 
of the Regulations were notified to the WTO in October 2016.69 The amendments t o the 
Regulations made in 2014 and which had been notified to the respective WTO Committees in 2014 
were primarily related to the decision -making procedures for the imposition of anti -dumping and 
anti-subsidy measures. The most significant change from 2014  is that now the Commission has 
responsibility for imposing anti -dumping and anti -subsidy measures, with no formal involvement of 
the Council. Member States are, however, consulted through a number of different types of 
procedures which apply under the EU' s comitology rules, including an appeals procedure. Some 
specific rules were also introduced regarding the exchange of information with the European 
Parliament and Council.  
3.59.   More recently, in November 2016, the European Commission adopted a proposal to the 
European Parliament and the Council to amend both the Anti -dumping and Anti -Subsidy 
Regulations.70 As of March 2017, the proposal was following the ordinary legislative procedure and 
would need a decision by both the European Parliament and the Council befo re entering into force.  
3.60.   The other main elements of the EU anti -dumping and anti -subsidy rules remain the same. 
The Commission investigates allegations of dumping or subsidies based on a complaint from 
producers, but it may also self -initiate investigations . An investigation determines whether there 
has been dumping or subsidization, whether material injury has occurred, whether there is a link 
between the dumping/subsidy and the injury, and whether the imposition of measures is in the 
EU's interest. If meas ures are imposed, the exporters may offer "undertakings", meaning that an 
arrangement is made on the price, and additional duties will not be collected. After the initial 
investigative process, the EU legislation provides for a number of possible reviews d epending on 
circumstances, i.e. expiry reviews, interim reviews, newcomer investigations, absorption 
investigations, and circumvention investigations. The reviews continue to be a major part of the 
process and have outnumbered new investigations in recent years (Chart 3.2).  
3.61.   In addition, the EU has other regulations that pertain to the injurious pricing of vessels, i.e. 
Regulation 2016/103571, and to unfair pricing and subsidies for airline services, Regulation 
868/2004.72 The regulation pertaining to airline services was being reviewed during 2013 -2015, as 
it did not adequately address the specific characteristics of the aviation service sector, and thus, it 
was never applied.73 According to the authorities, a legislative proposal is expected to be 
presented in  the first half of 2017, in which the new regulation will replace Regulation 868/2004 
once the EU decision -making process is completed. The regulation pertaining to vessels emanates 
from the OECD Shipbuilding Agreement and, while based on the WTO Anti -dump ing Agreement, 
goes further to address the specific nature of ship -purchase transactions. This 2016 Regulation 
replaces the previous Regulation, Council Regulation (EC) No. 385/96. The Regulation has never 
been used, as it will not enter into force until t he Shipbuilding Agreement enters into force.  
                                                
68 Regulation (EC) No. 1225/2009 and Regulation (EC) No. 597/2009. Commission online information. 
Viewed at: http://trade.ec.europa.eu/doclib/docs/2010/april/tradoc_146035.pdf ; and http://eur -lex.europa.eu/ 
LexUriServ/LexUriServ.do?uri=OJ:L:2009:188:0093:0126:EN:PDF . 
69 WTO documents G/ADP/N/1/EU/3 and G/SCM/N/1/EU/2.  
70 European Commission online information. Viewed at: http:// europa.eu/rapid/press -release_IP -16-
3604_en.htm . 
71 Regulation (EU) 2016/1035 of the European Parliament and of the Council of 8 June 2016 on 
protection against injurious pricing of vessels. OJ L 176/1 of 30  June 16. European Commission online 
information.  Viewed at: http://trade.ec.europa.eu/doclib/docs/2016/june/tradoc_154704.en.L176 -2016.pdf . 
72 Regulation (EC) No. 868/2004 of the European Parliament and of the Council of 21 April 2004 
concerning protection against subsidization and unfair pricing practices causing injury to Community air 
carriers in the supply of air services from countries not members of the European Community. OJ L 162/1 of 30 
April 2004. Euro pean Commission online information. Viewed at: http://eur -lex.europa.eu/legal -content/EN/ 
TXT/PDF/?uri=CELEX:32004R0868&from=EN . 
73 Commission Staff Working Doc ument accompanying the 34th Annual Report from the Commission to 
the European Parliament and the Council on the EU's Anti -Dumping, Anti -Subsidy and Safeguard activities 
(2015). European Commission online information. Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT 
/PDF/?uri=CELEX:52016SC0330&from=en ; and European Commission online information viewed at: 
http://ec.europa.eu/smart -regulation/impact/planned_ia/docs/2014_move_009_unfair_pricing_practices_ 
en.pdf . WT/TPR/S/357 • European Union  
 
- 60 - 
 
  3.62.   In 2013, the EU initiated procedures to modernize its trade defen ce instruments to make 
them more accessible and better targeted to certain unfair trading practices. However, the process 
stalled in 2014 but was later revived in 2015, and discussions were still continuing in the Council in 
late 2016.74 
3.63.   A number of WTO disputes concerning contingency measures have been initiated during the 
review period concerning the EU (see Section 2).  
3.64.   Since the inception of the W TO, the EU has been one of the WTO's most significant users of 
trade remedies, as it ranks third overall in terms of anti -dumping initiations and second in terms of 
countervailing duty initiations.75 More recently, since 2009, there has been a general decli ne from 
the historically high levels of measures in force, and they reached a historical low in 2012 before 
rising again in 2013. For 2014, 2015, and 2016, there has been a slight increase in new 
investigations compared with 2013. The number of review inve stigations has fluctuated 
(Chart  3.2). According to EU calculations, the amount of imports subject to trade remedies was 
0.25% of total imports in 2015.76 
Chart 3.2 Overview of anti -dumping and anti -subsidy act ivity, 2013 -16 
91614 1536 2233
2533
37 20 33
020406080100
2013 2014 2015 2016New investigations initiated Review investigations initiated Judicial reviewsChart 3.[eu]  Overview of Anti -dumping and anti -subsidy activity, 2013 -16
Number
Annual Reports from the Commission to the European Parliament and the Council on the EU's Anti -Dumping, Anti -Subsidy 
and Safeguard activities (2013 -2015).; and European Commission  Anti -dumping, Anti -subsidy, Safeguard -Statistics 
covering the 12 months of 2016 .  Viewed at: http://trade.ec.europa.eu/doclib/docs/2017/january/tradoc_155243.pdf 
[February 2017].Source: 
Source:  Annual Reports from the Commission to the European Parliament and the Council on the EU's 
  Anti-Dumping, Anti -Subsidy and Safeguard activities (2013 -2015); and European Commission 
  Anti-Dumping, Anti -Subsidy, Safeguard – Statistic s covering the 12 months of 2016. Viewed at: 
  http://trade.ec.europa.eu/doclib/docs/2017/january/tradoc_155243.pdf  [February 2017].  
3.65.   The number of anti -dumping and anti -subsidy measures in force has remained relatively 
stable over the review period, and its composition by region has not changed significantly. The 
vast majority of measures in place are from Asia, accounting for 83% of the measures in 2016, 
with the next larg est incidence from non -EU Europe (11%). Among Asian countries, China 
accounts for the largest  share of measures (Chart 3.3).  
 
                                                
74 Report from the Commission to the European Parliament and the Council, 3 4th Annual Report from the 
Commission to the European Parliament and the Council on the EU's Anti -Dumping, Anti -Subsidy and 
Safeguard activities (2015).  
75 WTO online information. Viewed at: https://www.wto.org/english/tratop_e/adp_e/AD_InitiationsBy 
RepMem.pdf  and https://www.wto.org/english/tratop_e/scm_e/CV_InitiationsByRepMem.pdf . 
76 Report from the Commission to the European Parliament and the Council, 34th Annual Report from the 
Commission to the European Parliament and the Council on the EU's Anti -Dumping, Anti -Subsidy and 
Safeguard activities (2015).  WT/TPR/S/357 • European Union  
 
- 61 - 
 
  Chart 3.3 Anti-dumping and anti -subsidy measures in force, by region, 2013 -16 
4 3 327 787108
9710411216
1214152
2
020406080100120140160
2013 2014 2015 2016
Africa Americas Asia Europe Middle EastChart 3.[eu]  Anti -dumping and anti -subsidy measures in force, by region, 2013 -16
Number of measures, including extensions (Cumulated) 
a
a Non-EU European countries including  Belarus,  Bosnia and Herzegovina, Russia , Republic of Moldova, Turkey, and Ukraine.
Annual Reports from the Commission to the European Parliament and the Council on the EU's Anti -dumping, Anti -Subsidy 
and Safeguard activities (2013 -15); and European Commission  Anti -dumping, Anti -subsidy, Safeguard -Statistics 
covering the 12 months of 2016. Viewed at: http://trade.ec.europa.eu/doclib/docs/2017/january/tradoc_155243.pdf 
[February 2017].Source:
 
a Non-EU European countries include Belarus; Bosnia and Herzegovina; the Russia n Federation ; 
Republic of Moldova; Turkey; and Ukraine.  
Source:  Annual Reports from the Commission to the European Parliament and the Council on the EU's Anti -
Dumping, Anti -Subsidy  and Safeguard activities (2013 -2015); and European Commission Anti -
Dumping, Anti -Subsidy, Safeguard - Statistics covering the 12 months of 2016. Viewed at: 
http://trade.ec .europa.eu/doclib/docs/2017/january/tradoc_155243.pdf  [February 2017].  
3.66.   The rise in new investigations in 2014 and 2015 was largely attributed to increases in 
investigations in two sectors — iron and steel, and chemical and allied products (Chart 3.4). In 
2016, the largest sector concerned was iron and steel. Increased investigations in that sector were 
similar in other countries during the same period and reflect the world overcapacity of the sector. 
The process is complaint -driven and reflects the sectors  from which the EU received properly 
substantiated complaints.  
Chart 3.4 Anti-dumping and anti -subsidy investigations initiated by product sector, 
2013 -16 
126
1196
133
42
2 1
024681012141618
2013 2014 2015 2016Chemical and allied Textiles and allied Iron and steel Other metals OtherChart 3.  Anti -dumping and anti -subsidy investigations initiated by product sector, 2013 -16
Number of investigations initiated
Annual Reports from the Commission to the European Parliament and the Council on the EU's Anti -Dumping, Anti -Subsidy 
and Safeguard activities (2013 -2015).; and European Commission  Anti -dumping, Anti -subsidy, Safeguard -Statistics 
covering the 12 months of 2016 .  Viewed at: http://trade.ec.europa.eu/doclib/docs/2017/january/tradoc_155243.pdf 
[February 2017].Source:  
 
Source:  Annual Reports from the Commission to the Eu ropean Parliament and the Council on the EU's 
Anti-Dumping, Anti -Subsidy and Safeguard activities (2013 -2015); and European Commission Anti -
dumping, Anti -subsidy, Safeguard - Statistics covering the 12 months of 2016. Viewed at: 
http://trade.ec. europa.eu/doclib/docs/2017/january/tradoc_155243.pdf  [February 2017].  WT/TPR/S/357 • European Union  
 
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  3.67.   As concerns review investigations, they account for about two thirds of the EU's workload on 
trade remedies. T he largest sub -component is attributed to expiry reviews, and EU law provides 
that the measures may stay in place for up to five years, upon which they expire automatically 
unless an expiry review is requested. There was a slight increase in 2016 in the nu mber of expiry 
reviews concluded by confirmation of duties (71%) compared to 2014 (60%) (Chart 3.5).  
Chart 3.5 Outcome of expiry reviews concluded, 2014 and 2016  
64
Confirmation of duty Termination and repeal of the measures52Chart 3.  Outcome of expiry reviews concluded, 2014 and 2016
Number
Source:2014 2016
Annual Reports from the Commission to the European Parliament and the Council on the EU's Anti -dumping, Anti -Subsidy 
and Safeguard activities (2013 -15); and European Commission  Anti -dumping, Anti -subsidy, Safeguard -Statistics 
covering the 12 months of 2016. Viewed at: http://trade.ec.europa.eu/doclib/docs/2017/january/tradoc_155243.pdf 
[February 2017].
 
Source:  Annual Reports from the Commission to  the European Parliament and the Council on the EU's Anti -
Dumping, Anti -Subsidy and Safeguard activities (2013 -2015); and European Commission Anti -
Dumping, Anti -Subsidy, Safeguard - Statistics covering the 12 months of 2016. Viewed at: 
http://trade.ec.europa.eu/doclib/docs/2017/january/tradoc_155243.pdf  [February 2017].  
3.1.7.2   Safeguards  
3.68.   The Commission is in charge of conducting safeguard investigations in cooperation with 
member States. Under the relevant safeguard legislation, the Commission may decide to impose 
surveillance if the "trend in imports of a product originating in a third country threatens to cause 
injury to EU producers".  
3.69.   The EU has issued new regulations in respect  to safeguards during the review period; these 
regulations were an update and replaced the regulations from 2009. The EU's safeguard legislation 
is outlined in three separate regulations based on the country or products concerned; i.e. there are 
separate r ules for textile products, and two others dependent on whether the country concerned is 
a WTO Member or not:  
 Regulation (EU) 2015/478 of the European Parliament and of the Council of 11 March 2015 
on common rules for imports (codification)77, i.e. imports f rom WTO Members;  
 Regulation (EU) 2015/755 of the European Parliament and of the Council of 29 April 2015 on 
common rules for imports from certain third countries (recast)78, i.e. imports from non -WTO 
Members; and  
 Regulation (EU) 2015/936 of the European Par liament and of the Council of 9 June 2015 on 
common rules for imports of textile products from certain third countries not covered by 
                                                
77 OJ L 83, 27 March 2015, p. 16.  European Commission online information. Viewed at: http://trade.ec. 
europa.eu/doclib/docs/2015/march/tradoc_153323.pdf . 
78 OJ L 123, 19 May 2015, p. 33. European Commission  online information. Viewed at: http://eur -lex. 
europa.eu/eli/reg/2015/755/oj . WT/TPR/S/357 • European Union  
 
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  bilateral agreements, protocols or other arrangements, or by other specific Union import 
rules (recast)79, i.e. rules for t extiles.  
3.70.   According to the Commission, the regulations published in 2015 are not new ones as such 
but, for each relevant regulation, they merely consolidate into one new regulation all the 
amendments that took place since 2009. It is recalled that the most important changes concerned 
the EU decision -making process and, in particular, the fact that, in the case of imposition of a 
definitive safeguard measure, the member States deliver their binding opinion by qualified 
majority.  
3.71.   Furthermore, there are special  bilateral safeguard regulations, which were already covered 
in previous TPRs that the EU maintains regarding some countries. A new agreement was concluded 
with Moldova during the review period.80 The regulations pertaining to the agreements with certain 
other countries have also been updated during the review period reflecting the consolidation 
process.81 
3.72.   While there have been no safeguard investigations during the review period82, the EU has 
invoked surveillance measures in 2016 pursuant to Article 10 of Reg ulation (EU) 2015/478 and 
Article 7 of Regulation (EU) 2015/755. The Commission Implementing Regulation (EU) 2016/670 
put into force  the surveillance measure one day after its publication, i.e. it runs from 30 April 2016 
until 15 May 2020, on certain iron and steel products. Citing significant increases in imports of iron 
and steel between 2012 and 2015, from 41.8 to 55 million tonnes, global overcapacity, and the 
vulnerable situation of the industry, the Commission determined there was a threat of injury t o 
Union producers.83 
3.73.   Thus, importers of certain iron and steel products are required to submit a surveillance 
document (obtained automatically upon a simple request) before the products can be released for 
free circulation, in order to provide advanced stat istical information allowing for the rapid analysis 
of import trends. The regulations provide that the surveillance document is to be issued within five 
working days by authorized national authorities listed in the Annex, and it applies to imports from 
all non-EU member countries except products originating from Iceland, Liechtenstein, and Norway.  
3.74.   As of March 2017, the EU has not notified the Committee on Safeguards of any of its 
changes to its laws or regulations on safeguards.  
                                                
79 OJ L 160, 25 June 2015, pp. 1 -54. European Commission online information. Viewed at: http://eur -
lex.europa.eu/legal -content/EN/TXT/?uri=celex:32015R0936 . 
80 Regulation (EU) 2016/400 of the European Parliament and of the Council of 9 March 2016 
implementing the safeguard clause and the anti-circumvention mechanism provided for in the Association 
Agreement between the European Union and the European Atomic Energy Community and their member 
States, of the one part, and the Republic of Moldova, of the other part. OJ L 77, 23 March 2016, p. 53. 
81 Regulation (EU) 2015/938 of the European Parliament and of the Council of 9 June 2015 on the 
safeguard measures provided for in the Agreement between the European Economic Community and the 
Kingdom of Norway. OJ L 160/57, 25 June 2015. European Commi ssion online information viewed at: 
http://eur -lex.europa.eu/eli/reg/2015/938/oj/eng/pdfa1a . Regulation (EU) 2015/475 of the European 
Parliament and of the Council of 11 March 2015 on the safeguard measures provided for in the Agreement 
between the European Economic Community and the Republic of Iceland. OJ L 83/1, 27 March 2015. European 
Commission online information. Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX 
:32015R0475&from= EN . 
82 The last safeguard measures were applied in 2005.  
83 Commission Implementing Regulation (EU) 2016/670 of 28 April 2016 introducing prior Union 
surveillance of imports of certain iron and steel products originating in certain third countries. OJ L 115/37 of 
29 April 2016. European Commission online information. Viewed at: http://trade.ec.europa.eu/doclib/docs/ 
2016/april/tradoc_154479.imports -surveillance.en.L115 -2016.pdf . Corrigendum to Commission Implementing 
Regulation (EU) 2016/670 of 28 April 2016 introducing prior Union surveillance of imports of certain iron and 
steel products originating in certain third countries. OJ L 116/40 of 30 April 2016. European Commission online 
information. Viewed at: http://trade.ec.europa.eu/doclib/docs/2016/may/tradoc_154516.corr -imports -
surveillance.en.L116 -2016.pdf . WT/TPR/S/357 • European Union  
 
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  3.2  Measures Directly Affecting Exports  
3.2.1   Export procedures and requirements  
3.75.   On 29 December 2015, the EU published Commission Delegated Regulation (EU) 2015/2446 
and Commission Implementing Regulation (EU) 2015/2447, both providing detailed rules 
supplementing and implementing the UCC, whi ch came into effect on 1 May 2016.  
3.76.   Under the UCC, for goods to be taken out of the customs territory of the EU a pre -departure 
declaration must be lodged electronically with the competent customs office within a specific time -
limit before the goods are tak en out of the customs territory of the EU, normally before departure 
or, in the case of a deep sea container port, before loading. There are some exceptions to the 
requirement for a pre -departure declaration, in principle for electrical energy and goods le aving by 
pipeline.84 
3.77.   Goods to be taken out of the customs territory of the Union are subject to customs 
supervision and may be subject to customs controls. A hard copy of the Export Accompanying 
Document is no longer to be presented at the office of exit; o nly the Master Reference Number 
needs to be notified. The Export Control System (ECS) is a trans -European system enabling EU 
member States to exchange the export declaration data and exit information between the customs 
office of export and the customs off ice of exit. The ECS covers indirect exports, where goods are 
exported from one member State and exit the customs territory of the Union from another 
member State, meaning that the Office of Export and the Office of Exit are located in two different 
member  States. For indirect exports, the usage of the ECS has been mandatory since July 2009. 
Direct exports, where the Office of Export and Office of Exit are in the same member State, are 
handled by the National Export System of each member State. The ECS will  be replaced by the 
Automated Export System (AES) and will be built on the functionalities of the current Export 
Control System Phase 2 (ECSP2) and will cover the changes introduced by the UCC. According to 
the Commission, new customs simplifications, such  as centralized clearance, require the 
development of new system functionalities in the AES.  
3.78.   Certain provisions of the UCC will only be implemented when the AES is deployed in order to 
support the new functionalities. For that purpose, the European Commiss ion adopted an additional 
Regulation85 that lays down provisions for a transitional period between 1 May 2016 and 
31 December 2020, during which these electronic customs enhancements are to be finalized.  
3.79.   Regarding the definition of an exporter under Article  1(19) of the UCC Delegated Act, the 
exporter must: (i) have the power to determine that the goods are to be brought outside the EU; 
and (ii) be established in the customs territory of the EU. In this respect, being "established" 
means that the exporter is  a person having in the EU: a registered office; headquarters; or a 
permanent business establishment. Thus, non -EU companies are able to export goods out of the 
EU if they do so through an exporter as defined in Article 1(19) of the UCC Delegated Act, such  as 
a customs representative that is identified as being responsible for complying with the export 
procedure.  
3.2.2   Export taxes, charges and levies  
3.80.   The EU does not impose export -related duties or taxes. Following the introduction of the 
UCC, inward processing u nder the drawback system has been withdrawn.  
3.2.3   Export prohibitions, restrictions, and licensing  
3.81.   The EU maintains restrictions and prohibitions on exports to some countries and/or regions 
on the basis of foreign and security policy, and on some goods on the g rounds of safety, the 
environment, public morality, public policy or public security, or of the protection of the health and 
life of humans, animals and plants, of national treasures possessing artistic, historic or 
                                                
84 European Commission  (2016), Export and Exit out of the European Union – Title VII UCC, "Guidance 
for MSs and Trade", ref. Ares (2016) 2184402, 10 May 2016. http://www.unwg.ch/ . Viewed at: http://ec. 
europa.eu/tax ation/customs/business/union -customs -code/ucc -guidance -documents -en [November 2016].  
85 Commission Delegated Regulation (EU) 2016/341 of 17 December 2015.  WT/TPR/S/357 • European Union  
 
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  archaeological value, or of industrial a nd commercial property, as well as compliance with 
international conventions. In addition, capital and payment transactions with some economic 
regions and specific persons, organizations or institutions may be restricted.  
3.82.   From 16 April 2015, Regulation (EU ) 2015/479 on common rules for exports codified and 
replaced Regulation (EC) No. 1061/2009 which had been substantially amended on previous 
occasions. The Regulation sets out the basic principle that exports should be free of QRs but allows 
for some except ions to prevent or remedy a critical situation arising from the shortage of essential 
products and to allow international undertakings entered into by the EU or its member States to be 
fulfilled.86 The Regulation applies to all products, whether industrial or agricultural. In terms of 
procedure, if an EU country considers that protective measures might be necessary due to unusual 
developments in the market, it must notify the Commission, which then advises the other EU 
countries. The Committee on Safeguards comprising EU member State representatives (set up 
under Regulation (EU) 2015/478 on common rules for imports) assists the Commission in 
implementing the Regulation. The list of QRs that are currently in force are contained in the most 
recent EU notificati on to the WTO .87 Salient export restrictions in the notification refer to: the 
banning of the exports of metallic mercury and certain mercury compounds; the prohibition or 
restriction of the export of certain hazardous chemicals; and restrictions on the exp ort of waste.  
3.83.   Export prohibitions, export authorization requirements and other restrictions are imposed by 
means of specific legislation , such as Council Regulation (EC) 428/2009 setting up a Community 
regime for the control of exports, transfer, brokering  and transit of dual -use items (see below).  
3.2.3.1   Dual-use items export control regime  
3.84.   Dual-use export controls implement international commitments to prevent the proliferation 
of weapons of mass destruction (WMD), in particular under UN Security Council Resolut ion 1540 
(2004). They include international agreements, such as the Chemical Weapons Convention (CWC), 
the Biological and Toxin Weapons Convention (BTWC) and the Nuclear Non -Proliferation Treaty 
(NPT), and multilateral export control regimes, such as the W assenaar Arrangement (WA), the 
Nuclear Suppliers Group (NSG), the Australia Group and the Missil e Technology Control Regime 
(MTCR).  The EU is not a member of the MTCR or the WA but EU member States participate in 
those regimes. In the NSG, the EU, represen ted by the European Commission , has observer 
status, while it is a full member of the Australia Group. The decisions of the regimes regarding the 
lists of items to control are integrated into EU law.  
3.85.   According to Article 2(i) of Regulation 428/2009, dual -use objects are items "including 
software and technology, which can be used for both civil and military purposes. These items 
include all goods, which can be used for both non -explosive uses and assisting in any way the 
manufacture of nuclear weapons or oth er nuclear explosive devices". Dual -use objects thus include 
nuclear materials, telecommunications and information security, sensors and lasers, a variety of 
software, machine tools, chemical manufacturing equipment, avionics technology and civil 
unmanned aerial vehicles.  
3.86.   The Commission acknowledges the challenges in generating reliable statistics on dual -use 
exports as there is no correspondingly defined economic sector.88 Nevertheless, it is estimated that 
controls apply ing to dual -use items, represent abo ut 3.4%89 of EU total exports in 2014. Dual -use 
items are listed in the EU Control List and are classified in 10 categories (Chart 3.6).  
3.87.   As described in detail in the previous Review, the EU export control regime is governed by 
Council Regulation (EC) No. 4 28/2009, which provides for common EU control rules, and a 
common EU list of dual -use items, as well as coordination and cooperation to support consistent 
implementation and enforcement throughout the EU.90 The Regulation is binding and directly 
                                                
86 Regulation (EU) 2015/479 of the European Parliament and the Council of 11 March 2015 on common 
rules for exports.  
87 Notification document G/MA/QR/N/EU/3 of 31 January 2017.  
88 Report from the Commission to the European Parliament and the Council on the implementation of 
Regulation (EC) No. 428/2009 in document COM(2016) 521 final, Brussels, 24 August 201 6. 
89 Figure based on actual export control licences applied on items exported by the EU.  
90 Regulation (EC) No. 428/2009, which includes various amendments since 2009, notably the October 
2014 addition of controls on so -called "intrusion software" in accord ance with the WA. See Regulation (EU) No. WT/TPR/S/357 • European Union  
 
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  applicable throughout the EU. EU member States nevertheless need to take certain 
complementary measures for implementing some of its provisions, e.g. in relation to enforcement 
and applicable penalties. An overview of national measures is published at regular interva ls.91 
Chart 3.6 Number of dual -use items listed in categories of Annex 1 further to the adoption of 
Regulation (EU) No. 2015/2420, compared to Regulation (EU) No. 1382/2014  
143759834210830227213464126
1687510034910830230217466126
0 100 200 300 400 500Aerospace and propulsionMarineNavigation and avionicsSensors and lasersTelecommunications and information securityComputersElectronicsMaterials processingSpecial materials and related equipmentNuclear material, facilities, and equipment
2015 (Regulation 2420)
2014 (Regulation 1382)Chart 3.6 Number of dual -use items listed in categories of Annex 1 further to the adoption of  
Regulation (EU) No. 2015/2420, compared to Regulation (EU) No. 1382/2014
See p. 7 of report cited in footnote 115. Source:Nr. of items in Regulation
 
Source:  See p. 7 of report cited in  footnote 115. 
3.88.   The 2009 dual -use Regulation recognizes four types of export authorization: (i) individual 
export authorizations (licences) granted by national authorities; (ii) global export authorization 
issued by national authorities; (iii) EU general ex port authorization issued by the European 
Commission ; and (iv) national general export authorization issued by national authorities. The 
Regulation also establishes a dual -use coordination group to examine questions regarding the 
application of the Regulat ion. 
3.89.   The Regulation has been amended on multiple occasions since its adoption; however, the 
September 2016 proposal by the Commission92 recommends a modernization of EU export 
controls, which can be broadly grouped into two categories: changes that seek to clarify and 
simplify the EU dual -use export control regime, and the introduction of a new category of controls 
aimed at cyber -surveillance technology. T he proposal has been submitted to the Council and the 
European Parliament for discussion in the ordinary  legislative procedure.  
3.2.4   Export credit, insurance and promotion  
3.90.   EU governments, as other governments in the world, provide officially supported export 
credits through Export Credit Agencies (ECAs) in support of national exporters competing for 
overseas sale s. Such support can take the form of: loans offered to foreign buyers of ECA 
countries' goods and services; loan guarantees by an ECA covering the repayment risk on the 
foreign buyer's debt obligations incurred in the purchase of the ECA country's exports;  export 
credit insurance provided to exporters in the ECA's home country; or, if the foreign borrower 
defaults, the ECA will pay the exporter the outstanding balance owed by the foreign 
                                                                                                                                                  
1382/2014. Furthermore, on 24 December 2015, the Commission published Commission Delegated Regulation 
2015/2420, replacing the list of controlled items under the EU's Dual-Use Regulation No. 428/2009 (contained 
in its Annex I). This new dual -use export control list reflects changes made in 2014 to the international control 
lists on which the EU list is based. The changes relate mainly to the control of machine tools, avionics 
technology and aircraft wing -folding sys tems, spacecraft equipment and civil unmanned aerial vehicles (UAVs), 
and the removal from control of certain encrypted information security products. Annex IV (on intra -EU 
controls) has been amended to reflect these changes as well.  
91 European Commission  online information. Viewed at: http://ec.europa.eu/trade/import -and-export -
rules/export -from-eu/dual -use-controls/  [November 2016].  
92 Proposal for a regulat ion of the European Parliament and of the Council setting up a Union regime for 
the control of exports, transfer, brokering, technical assistance and transit of dual -use items; see document 
COM(2016) 616 final of 28 September 2016.  WT/TPR/S/357 • European Union  
 
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  borrower/purchaser. ECAs can be government institutions or private com panies operating on 
behalf of governments (Table 3.12 and  Appendix Table  A3.2).  
3.91.   Data on the size of total official export credit worldwide are, according to the Economist 
Intelligence Unit (EIU), not available. However, EIU estimates put the ECAs of France , Germany 
and the U.K. in the top 10 ECAs of global trade finance, with total lending amounts for the 3 
countries (sum of loans, guarantees and export credit insurance) of US$14 billion, US$37.1 billion 
and US$9.8 billion, respectively, in 2013.93 
Table 3.10 Selected official export credit agencies and their activities  
Austria  Oesterreichische Kontrollbank AG (OeKB)  Export guarantees of the Austrian Government 
and OeKB funding via clients' banks  
Belgium  Delcred ere - Ducroire  Public credit insurer covering companies 
against political and commercial risks  
Denmark  Eksport Kredit Fonden (EKF)  EKF guarantees safeguard against various 
risks: contract cancellation, bankruptcy, 
import bans, forex restrictions, etc.  
Germany  AuslandsGeschäftsAbsicherung der BRD  Covers export credit guarantees, investment 
guarantees and untied loan guarantees  
Spain  Compañía Española de Seguros de Crédito a la 
Exportación (CESCE)  Spanish export credit agency managing export 
credit insuran ce on behalf of the Spanish 
State  
U.K. U.K. Export Finance  Provides, inter alia,  credit insurance against 
non-payment under an export contract and 
letter of credit guarantee scheme  
Source:  OECD list of export credit agencies. Viewed at: http://www.oecd.org/trade/xcred/eca.htm  and 
individual websites.  
3.92.   When the Lisbon Treaty entered into force, the European Parliament and Council became 
co-legislators on trade issues, including export credits. The Parl iament was involved in ensuring 
transparency, and accountability requirements were included in Regulation No. 1233/2011 on the 
"Application of certain guidelines in the field of officially supported export credits". The Regulation 
requires member States, a s well as their respective ECAs, to comply with the Union's objectives 
and obligations.  
3.93.   Under Regulation 1233/201194, EU member States must table an Annual Activity Report on 
their export credit activities to the European Commission, which transmits these r eports, together 
with an annual review based on the information contained in these reports. The European 
Parliament adopted, on 2 July 2013, a resolution on the first reporting exercise under Regulation 
1233/2011.  
3.94.   Concerning export credit insurance for tra nsactions with medium - and long -term cover, 
Directive 98/29 aims to harmonize the various public systems for such insurance in order to 
prevent distortion of competition among EU firms. It lays down the common principles which must 
be observed by export cr edit insurers and which concern the constituents of cover (scope of cover, 
causes of loss and exclusions of liability, and indemnification of claims), premiums, country cover 
policy and notification procedures. In its 2012 Communication on short -term expor t credit 
insurance95, the Commission has set out rules to help ensure that state aid does not distort 
competition among export credit insurers, and helps create a level playing field among exporters. 
It seems that member State export credit schemes are exam ined on a case -by-case basis.96 
                                                
93 The Global Export Cred it Dimension report. Viewed at: http://www.nam.org/Issues/Global -Export -
Credit -Dimension -Web. 
94 Regulation (EU) No. 1233/2011 of the European Parliament and of the Council of 16 N ovember 2011 
on the "Application of certain guidelines in the field of officially supported export credits", and repealing Council 
Decisions 2001/76/EC and 2001/ 77/EC; OJ EU L 326/45 of 8 December 2011.  
95 Communication from the Commission to the member Sta tes on the application of Articles 107 and 
108 of the TFEU to short -term export -credit insurance (2012/C 392/01). See the Official Journal  of 19 
December 2012.  
96 For example, in 2016 the Commission found that the Austrian short -term export -credit scheme 
continues to be in line with EU state aid rules. The Commission's assessment showed that private insurers are 
supplying exporters with various insurance products to cover the risk of non -payment by foreign buyers. 
However, there is a lack of insurance covera ge for risks of non -payment by foreign buyers due to natural and WT/TPR/S/357 • European Union  
 
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  3.95.   The EU contributes, from the budget, to closer cooperation at European level and to 
research for joint action with regard to EU member States and business organizations. This 
includes coordination with European programmes and  with member States' export promotion 
programmes to participate in international exhibitions, trade forums, conferences, seminars and 
sector -specific business delegations. The cooperation with trade federations, national export 
promotion organizations and European chambers in non -EU countries pursues two aims: first of 
all, to ensure that any activities in a particular market strengthen the European dimension in trade 
and, secondly, to focus activities on a number of target countries to increase trade flows , including 
in particular South East Asian countries.  
3.96.   Trade promotion organizations (TPOs) exist in different forms in many countries, including 
EU member States, and act as an effective tool to support companies abroad. TPOs support the 
internationalizati on of SMEs in member State countries by providing consulting services, basic 
market information, advisory services and information about trade fairs or development aid 
projects.  
3.97.   Through its trade policy under Article 207 of the TFEU, the EU improves access  for European 
businesses to other countries' markets, such as through the negotiation and enforcement of trade 
agreements. This also includes the identification and legal/economic analysis, monitoring and 
reporting concerning trade barriers in other countr ies, and the development of databases to 
provide information on international trade, international trade agreements and import 
requirements in the EU market.  
3.2.5   Waste shipment trade regime  
3.98.   According to the Commission, around 25% of waste shipments sent from t he EU to 
developing countries in Africa and Asia may be thought to contravene international regulations.97 
The amendment to the waste shipment regulation (WSR) introduced through Regulation (EU) No. 
660/2014 required member States to establish inspection pl ans for waste shipments by 1 January 
2017. These inspections plans shall include a minimum set of elements and shall be based on a 
risk assessment.  
3.99.   According to data from 2012, around 400,000 tonnes of Waste Electrical and Electronic 
Equipment (WEEE) could  be illegally exported out of the EU annually .98 When waste arrives 
illegally at a destination country, that waste is often dumped or mismanaged in a way that causes 
serious negative impacts on human health and the environment.  
3.100.   The significantly lower costs  for waste treatment and disposal in developing countries is an 
important economic driver for illegal waste shipments. These lower costs are mainly a result of 
less stringent environmental and health regulation than in the EU, and indeed complete side -
stepping of controls in some cases. If recycling standards and capacity are not adequate in the 
country of destination, potential environmental and health hazards are simply being exported to 
other parts of the world.  
3.101.   As noted in the previous Review, the EU WS R99 bans all exports of hazardous waste to 
non-OECD countries and all exports of waste for disposal outside the EU/EFTA. Illegal waste 
shipments must be taken back when detected. The WSR allows non -hazardous waste to be 
exported for recovery operations outs ide the OECD but requires national authorities to verify that 
it will be managed in an environmentally sound manner in facilities that are operated in 
accordance with standards that are broadly equivalent to standards established in the EU. The 
WSR require s member States to lay down rules on the penalties applicable for the infringement of 
its provisions. The penalties provided for must be effective, proportionate and dissuasive. The WSR 
                                                                                                                                                  
man-made catastrophes. The Austrian scheme allows the State to provide reinsurance to insurance companies 
active in Austria that covers these risks incurred by exporters. As such, coverage is  currently not sufficiently 
provided by the market; there is no risk that the State intervention will crowd out existing suppliers. The 
Commission therefore concluded that the scheme was in line with its 2012 Communication. The scheme is 
authorized until 3 1 December 2020. See: http://europa.eu/rapid/press -release_MEX -16-306_de.htm . 
97 Commission's own estimate. Viewed at: http://ec.europa.eu/environment/waste/shipments/ . 
98 "Countering WEEE Illegal Trade", project CWIT - summary report, 30 August 2015.  
99 Regulation (EC) No. 1013/2006 of 14 June 2006. OJ L 190, 12 July 2006 , pp. 1 –98. WT/TPR/S/357 • European Union  
 
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  also requires member States to cooperate, bilaterally and multilateral ly, with one another in order 
to facilitate the prevention and detection of illegal shipments.  
3.102.   Whether a shipment is authorized under the WSR, and under what conditions, depends on 
the cross -border movement, the processing method, the type of waste and the  country of 
destination. EU legislation imposes stricter requirements on some types of waste than others, 
depending on the environmental and health risk. In the case of e -waste for example, the EU 
introduced the so -called WEEE Directive in order to prevent  and reduce the adverse impacts from 
the generation and management of WEEE. This Directive came into force in 2003 and was recast in 
2012.  
3.103.   The EU has introduced extensive amendments to both the WSR100 (in 2014) and the WEEE 
Directive101 (in 2012) concerning in spections and enforcement. Amendments to the WSR 
introduced in June 2014 will not fully come into force until 2017.102 These amendments have the 
potential to improve inspection and enforcement on the ground, to the extent that the individual 
member States ar e willing and able to provide the necessary budgetary and staff resources to 
implement the new provisions effectively. As the Commission has pointed out, while some member 
States have thorough, well -functioning inspection systems targeting either illegal w aste shipments 
in ports or on the sites of waste producers and collectors, others lag behind. This leads to "port 
hopping" – exporters of illegal waste choosing to export their waste from member States with the 
most lenient controls.  
3.104.   In July 2016, the Comm ission adopted an implementing regulation103 setting out a 
preliminary correlation table between customs and waste codes. The table, which has been 
integrated in the customs' TARIC database, is expected to serve as a tool to assist in curbing 
illegal exports  of waste out of the EU. This regulation is in line with the further measures foreseen 
by the Commission in its Circular Economy Action Plan adopted on 2 December 2015 to help 
ensure that the WSR is effectively implemented and that illegal shipments causin g raw material 
leakage are addressed more effectively.  
3.2.6   Other measures  
3.105.   Restrictions on economic and financial relations with one or more third countries 
(sanctions) are, according to the EU, one of its tools to promote the objectives of the Common 
Foreign a nd Security Policy (CFSP), namely peace, democracy and respect for the rule of law, 
human rights and international law. Sanctions are designed to bring about a change in policy or 
activity by the target country, entities or individuals; at the same time, t he EU makes every effort 
to minimize adverse consequences for the civilian population or for legitimate activities.  
3.106.   The EU implements all sanctions imposed by the UN Security Council. In addition, the EU 
may reinforce UN sanctions by applying additional au tonomous measures. Alternatively, where the 
EU deems it necessary, it may decide to impose autonomous sanctions in the absence of UN 
measures. EU restrictive measures are given full legal effect through the combination of a CFSP 
Council decision adopted un animously, and a Council Regulation adopted under Article 215 of the 
TFEU.  
                                                
100 In 2013, the Commission proposed a revisi on to the WSR to provide for stronger national inspections 
of waste shipments, which was officially adopted in 2014 as Regulation (EU) No. 660/2014 of 17 July 2014. OJ 
L 189 of 27 June 2014, pp. 135 –142. 
101 In December 2008, the European Commission proposed  to improve the WEEE Directive. This resulted 
in the adoption of a recast directive which came into force in August 2012 (Directive 2012/19/EU). One of the 
key changes was the introduction of mandatory collection targets. OJ L 197/38 of 24 July 2012.  
102 By 1 January 2017, member States were to have established inspection plans, including the 
objectives and priorities of the inspections, the geographical area covered by the inspection plans and the tasks 
assigned to each authority involved. The inspection pla ns must be based on a risk assessment carried out for 
specific waste streams and sources of illegal shipments. They are to be regularly reviewed and  updated at least 
every three years.  
103 Commission Implementing Regulation (EU) No. 2016/1245 of 28 July 2016  setting out a preliminary 
correlation table between codes of the CN provided for in Council Regulation (EEC) No. 2658/87 and entries of 
waste listed in Annexes III, IV an d V to Regulation (EC) No. 1013/2006 of the European Parliament and of the 
Council on shipments of waste. OJ L 204/11 of 29 July 2016.  WT/TPR/S/357 • European Union  
 
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  3.107.   In order to guarantee that the restrictive measures are directly binding on EU citizens and 
businesses, these measures require that a regulation under Article 215 of the TFEU is ado pted. The 
regulation, adopted by the Council on the basis of a joint proposal from the EU High 
Representative for Foreign Affairs and Security Policy and the European Commission, contains 
details on the precise scope of the measures decided upon by the Cou ncil, and their 
implementation. The regulation usually enters into force on the day following its publication in the 
EU Official Journal. All EU restrictive measures can be found on the EEAS webpage.104 In certain 
instances, a limited number of restrictive m easures, which have included arms embargoes105 and 
travel bans, have been adopted only by a CFSP Decision by the Council. Such a decision is binding 
on EU member States.  
3.3  Measures Affecting Production and Trade  
3.3.1   Standards and other technical requirements  
3.108.   There  has been no major change to the basic legislative framework on the development of 
technical requirements, standards, conformity assessment or accreditation in the EU over the 
review period (Table 3.1 1). 
Table 3.11 Legal basis for technical requirements, standards, conformity assessment, 
and accreditation in the EU at end -2014  
Legislation    
Regulation (EC) No. 
765/2008  of the European Parliament and of 
the Council of 9 July 2008 setting out 
the requirements fo r accreditation 
and market surveillance relating to 
the marketing of products, and 
repealing Regulation (EEC) 
No. 339/93  Lays down rules on the organization and 
operation of accreditation for conformity 
assessment bodies. The Regulation provides 
a framewor k for market surveillance, a 
framework for controls on products from 
third countries, and lays down the general 
principles for CE marking.  
Decision No. 
768/2008/EC  of the European Parliament and of 
the Council of 9 July 2008 on a 
common framework for the 
marketing of products, and repealing 
Council Decision 93/465/EEC  Sets out a common framework for the 
marketing of products. The Decision is a 
political commitment rather than applicable 
legislation, but it does require the European 
Parliament, Council, and  Commission to 
adhere to its principals when preparing 
legislation.  
Regulation (EC) No. 
764/2008  of the European Parliament and of 
the Council of 9 July 2008 laying 
down procedures relating to the 
application of certain national 
technical rules to product s lawfully 
marketed in another member State, 
and repealing Decision 
No. 3052/95/EC  Lays down the rules and procedures to be 
followed by the competent authorities of a 
member State for decisions which may 
hinder the free movement of a product 
lawfully marke ted in another member State. 
The Regulation also provides for the 
establishment of product contact points in 
the member States.  
Regulation (EU) No. 
1025/2012  of the European Parliament and of 
the Council of 25 October 2012 on 
European standardization, ame nding 
Council Directives 89/686/EEC and 
93/15/EEC and Directives 94/9/EC, 
94/25/EC, 95/16/EC, 97/23/EC, 
98/34/EC, 2004/22/EC, 2007/23/EC, 
2009/23/EC and 2009/105/EC of the 
European Parliament and of the 
Council and repealing Council 
Decision 87/95/EEC and Decision 
No. 1673/2006/EC of the European 
Parliament and of the Council  Establishes rules for cooperation between 
European standardization organizations, 
national standardization bodies, member 
States, and the Commission. It also sets out 
rules for the est ablishment of European 
standards and European standardization 
deliverables for products and services, the 
identification of ICT technical specifications 
eligible for referencing, the financing of 
European standardization, and stakeholder 
participation in E uropean standardization.  
                                                
104 European External Action Service. Viewed at: http://eeas.europa.eu/topics/sanctions -policy/423/ 
sanctions -policy_en#Who+is+responsible+for+implementing+EU+sanctions%3F . 
105 See Article 346(1)(b) of the TFEU.  WT/TPR/S/357 • European Union  
 
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  Legislation    
Directive 2001/95/EC  of the European Parliament and of 
the Council of 3 December 2001 on 
general product safety  Applies principally to products which are not 
covered by harmonization legislation and 
sets up the rapid alert system (RAPEX) 
between the member States and the 
Commission and associated measures for 
products deemed to be dangerous.  
Source:  European Commission.  
3.109.   The EU framework of technical regulations, standards and conformity assessment is 
described in the updated Blue Guide on the implementation of EU product rules 2016.106 The 
document provides guidance on the application of product -related directives and regulations, 
which serve as harmonization legislation for non -food and non -agricultural products destined for 
the EU market. Most of the EU product -related directives and regulations are drafted following the 
so-called "New Approach" - now labelled the New Legislative Framework and described in previous 
EU TPRs107 - technique to technical regulations and standards which ca lls for common essential 
requirements for a particular product sector or addressing a particular risk to be made mandatory 
by legislation, while technical specifications aimed at achieving these essential requirements are 
contained in voluntary harmonized standards. As per EU Regulatio n 1025/2012 (Chapter 1, 
Article  2), a harmonized standard "means a European standard adopted on the basis of a request 
made by the Commission for the application of EU harmonization legislation".  
3.110.   Although the application of ha rmonized standards is voluntary, products which are made in 
compliance with those standards are presumed to be in conformity with the corresponding 
essential requirements of the applicable legislation (Box 3.1). Market operators are free to use 
alternative  routes to demonstrate compliance with EU regulatory requirements. The Blue Guide108 
explains in more detail how the exact means of meeting the essential requirements is left to those 
making products available on the market.  
3.111.   The approach to product legislati on in the EU (known as the "Old Approach") according to 
which the authorities drew up detailed regulations containing all the required technical and 
administrative requirements for each type of product109 is still employed for certain products, such 
as motor  vehicles. Other specific approaches to EU harmonization have been developed in sectors 
such as pharmaceuticals, chemicals, cosmetics, and construction products, tailored to their 
particular needs.  
3.112.   EU-produced and imported goods, lawfully placed on the mar ket of an EU member State 
but not covered by EU harmonizing legislation, can be marketed freely throughout the single 
market even if they do not comply with the technical regulations of the member State of 
destination (this is the mutual recognition princi ple stemming from the TFEU as developed by 
Court of Justice of the EU). The only exceptions to this principle are restrictions introduced for 
reasons specified in Article 36 of the TFEU, or for other overriding reasons of public interest, that 
are proporti onate to the aim pursued. Regulation (EC) No. 764/2008 aims to ensure the correct 
application of the mutual recognition principle in individual cases. Pursuant to this regulation, 
member States that use existing technical regulations to restrict market acc ess for products 
lawfully marketed in another member State must justify their position with technical or scientific 
evidence, and must grant economic operators affected by the restriction an opportunity to prov ide 
comments.  
                                                
106 Published on 26 July 2016 by  the European Commission in the Official Journal  of the EU C 272.  
107 Formally launched in 1985 through the Council Resolution on a new approach to technical 
harmonization and standards (85/C 136/01) of 7 May 1985.  
108 Commission Notice: The "Blue Guide" on th e implementation of EU products rules 2016 (2016/C 
272/01), OJ C 27 2, 26 July 2016, pp. 1 -149. 
109 Blue Guide 2016, p. 6.  WT/TPR/S/357 • European Union  
 
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  Box 3.1 Standards  
The WTO TBT Agreement clearly distinguishes standards from "technical regulations" (a type of legislation) in 
its Annex 1 definitions: standards are voluntary in application, whereas technical regulations are mandatory. 
This essential difference is also recognized by the EU. For example, the first recital of Regulation 1025/2012 
states: 'The primary objective of standardization is the definition of voluntary technical or quality 
specifications'. The key characteristics of stan dards as distinct from legislation include:  
Legislation  Standards  
Mandatory  Voluntary  
Created by legislator  Developed by interested parties through private 
standardization organizations' processes  
Consultation depending on public authorities' 
policies110 Full open and transparent public consultation  
Decided by legislator  Based on consensus of interested parties  
Revised when legislator decides111 Considered for revision at least every 5 years  
For the New Approach/New Legislative Framework  
Sets high -level essential requirements  Offer technical means of meeting essential 
requirements of legislation  
 
Source:  CEN-CENELEC Guide 30: European Guide on Standards and Regulation - Better regulation through 
the use of voluntary standards - Guidance for policy maker s, Edition 1, 2015 -06. Viewed at: 
ftp://ftp.cencenelec.eu/EN/EuropeanStandardization/Guides/30_CENCLCGuide30.pdf . 
3.113.   The European standardization system was reviewe d in 2011 and 2012 and was covered in 
previous TPR reports. The resulting standards regulation112, adopted in October 2012, clarifies the 
relationship between regulations and standards, and confirms the role of the three European 
standards bodies in developi ng harmonized standards. The emphasis is also on cooperation 
between European standardization organizations and international standardization bodies. 
According to the Commission, the adoption of the Regulation on European standardization has 
created a fram ework for a more transparent and efficient European standardization system for 
industry sectors. This Regulation also deals with the rapid evolution of technology and the way in 
which new products and services, such as 'smart' or connected devices (referre d to as the 
'Internet of Things') or the Cloud, transform markets. The process outlined in Articles 13 and 14 
seeks to ensure that innovative state -of-the-art global information, communication and technology 
(ICT) specifications can be used in Europe as en ablers for innovation and growth.113 
                                                
110 According to Article 11 of the Treaty on the European Union, 'the European Commission shall carry 
out broad consultations with parties  concerned in order to ensure that the Union's actions are coherent and 
transparent'. Consultation is a continuous process and formal stakeholder consultations complement the 
Commission's broader interaction with stakeholders (e.g. meetings or exchanges or  through existing 
permanent platforms for dialogue). In the process of the evaluation or the preparation of a legislative or policy 
initiative or the implementation of an existing intervention, "stakeholder consultation" should be carried out. 
Stakeholder consultation is governed by four principles: participation, openness, effectiveness and coherence. 
See: http://ec.europa.eu/smart -regulation/guidelines/toc_guide_en.htm . 
111 The Commission is committed to evaluating, in a proportionate way, all EU spending and non -
spending activities intended to have an impact on society or the economy. A commitment to evaluation is 
included in Article 318 of the TFEU. More specific requirements are often written into individual legal acts. 
Furthermore, the Commission examines all suggestions from stakeholders, and submits those relevant - on 
how to make EU laws more effective and efficient - to the REFIT Platform for advice. In general, EU produc t 
regulations are evaluated at least every five years. See: http://ec.europa.eu/smart -regulation/guidelines/ 
toc_guide_en.htm . 
112 Regulation (EU) No. 1025/2012 of the European  Parliament and the Council of 25 October 2012 on 
European standardization, amending Council Directives 89/686/EEC and 93/15/EEC and Directives 94/9/EC, 
94/25/EC, 95/16/EC, 97/23/EC, 98/34/EC, 2004/22/EC, 2007/23/EC, 2009/23/EC and 2009/105/EC of the 
Europ ean Parliament and of the Council, and repealing Council Decision 87/95/EEC and Decision No. 
1673/2006/EC of the European Parliament and of the Council, OJ L 316/12 of 14 November 2012.  
113 European Commission  (2016), ICT Standardisation Priorities for the D igital Single Market , 
Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions, COM(2016) 176 final, 19 April 2016.  WT/TPR/S/357 • European Union  
 
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  3.114.   In a 2016 Communication114, the Commission elaborated a comprehensive approach to 
standardization for priority ICT technologies that play an essential role in the completion of the 
Digital Single Market.  
3.115.   To reinforce the pa rtnership between the European institutions and the European 
standardization community, the Commission announced in its Single Market Strategy its intention 
to launch a Joint Initiative on Standardization, bringing together public and private institutions and 
organizations in a collaborative dialogue process. The shared objective is to establish common 
standardization values, to promote European and international standardization, to develop 
standards in a timely, open, transparent and inclusive manner, to s upport and promote innovation 
for all and to increase competitiveness of European companies by increasing global value chains. 
This will be done by implementing 15 specific actions by 2019 in order to strengthen not only the 
European standardization system  but also the public -private -partnership at the basis of it.  
3.116.   On 1 June 2016, the Commission adopted a Standardization Package on European 
Standards for the 21st Century, containing four elements: (i) a Communication on European 
Standards for the 21st Centu ry115; (ii) a staff working document on Tapping the potential of 
European service standards to help Europe's consumers and businesses116; (iii) a report from the 
Commission to the European Parliament and Council on the implementation of the Standards 
Regulatio n (EU) 1025/2012117; and (iv) the annual Union work programme for European 
standardization for 2017.118 This was followed on 13 June 2016 by the signature of the Joint 
Initiative on Standardisation.  
3.3.1.1   Institutional framework  
3.3.1.1.1   ESOs  
3.117.   There are three European standar dization or ganiz ations (ESOs): the European Committee 
for Standardization (CEN); the European Committee for Electrotechnical Standardization 
(CENELEC); and the European Telecommunications Standards Institute (ETSI). The members of 
CENELEC and CEN include t he national standards bodies (NSBs) of 33 European countries, 
including all the member States of the EU, EFTA countries, and those countries candidates for EU 
membership that fulfil the membership criteria. It is a condition of membership of both CEN and 
CENELEC that at least 80% of European standards are adopted identically by each member.119 
3.118.   Specific CEN activities cover: accessibility, air and space, bio -based products, chemistry, 
construction, consumer products, energy and utilities, food, health and safe ty, healthcare, heating, 
ventilation and air conditioning, ICTs, innovation, machinery safety, materials, measurement, 
nanotechnologies, pressure equipment, security and defence, services, transport and packaging.  
3.119.   Specific CENELEC activities cover electro -technical standardization in sectors including: 
electric vehicles, smart grids and smart metering, household appliances, electrical engineering, 
fibre optic communications, fuel cells, medical equipment, railways, and solar electricity systems. 
An increasi ng number of sectors are being addressed together by CEN, CENELEC and ETSI 
regarding, for example, innovative technologies, smart grids and eco -design.  
3.120.   ETSI specializes in telecommunications, broadcasting and services standards, and uses a 
different partic ipation model to CEN and CENELEC. ETSI's membership includes global industry 
players as well as NSBs and others. ETSI allows direct participation in its technical committees 
from businesses including non -EU companies that have interests in Europe, and its standards are 
freely available on its website. As with CEN and CENELEC, ETSI is subject to EU Regulation 
1025/2012 in relation to its activities as an ESO.  
                                                
114 Communication from the Commission: ICT Stand ardisation Priorities for the Digital Single Market . 
Brussels, 19 April 2016 in COM(2016) 176 final.  
115 Document COM(2016)) 358 final.  
116 Available at: http://ec.europa.eu/DocsRoom/documents/16823 . 
117 Document COM /2016/0212  final. 
118 Document SWD (2016) 185 final.  
119 European Commission  online information. Viewed at: https://ec.europa.eu/growth/single -market/ 
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  3.121.   ESOs are the only organizations authorized to create European standards (EN). As of 
September 2016, 19,854 European standards (ENs and HDs) have been created by CEN and 
CENELEC for products and services, of which around 20% are defined as harmonized standards.120 
In addition, there are around 40,000 standardization deliverables by ETSI.121 In 2015, CEN and 
CENELEC approved and published some 473 harmonized standards which were intended for 
citation in the EU Official Journal , in support of specific directives and regulations.122 CEN and 
CENELEC also accepted 14 new standardization requests from the European Com mission , relating, 
inter alia, to eco -design and energy labelling of energy related products. An overview of 
harmonized standards by business domain in 2016 is given in Chart 3.7.  
Chart 3.7 CEN-CENELEC Portfol io of Harmonized Standards per business domain  
1127153956124222327548667
46816666779129202206273307316329373487751
0 100 200 300 400 500 600 700 800ElectronicsPackagingServicesEnvironmentMaterialsChemistryICTHVACGeneral Standards (Quality, Measurement,...)Utilities and energyElectrical engineeringTransportHousehold goods, sports and leisureBuilding and civil engineeringHealthcareHealth and safetyMechanical engineering
Main Amendment/ISChart 3.[EU]
CEN-CENELEC Portfolio of Harmonized Standards per business domain
CENELEC.  CEN -CENELEC Quarterly Statistical Pack 2016 Q4.  Viewed at: ftp://ftp.cencenelec.eu/EN/AboutUs/InFigures/CEN -
CENELEC_StatPack2016 -Q4.pdf [February 2017].Source:
 
Source:  CENELEC. CEN -CENELEC Quarterly Statistical Pack 2016 Q4. Viewed at: ftp://ftp.cencenelec.eu/ 
EN/AboutUs/In Figures/CEN -CENELEC_StatPack2016 -Q4.pdf  [February  2017].  
3.122.   Standards are created or modified by experts in technical committees or working groups. 
The members of CEN and CENELEC are the national standards bodies of the member States, which 
monitor and deleg ate experts to participate in ongoing European standardization. European 
standards, always CEN/CENELEC/ETSI ones, are implemented as national standards by each of the 
33 members of CEN/CENELEC/ETSI and "conflicting national standards shall be withdrawn"123, 
which results in a single standard for accessing the EU single market. CEN and CENELEC rules 
require that, when work is started on a European standard, a 'standstill' procedure applies, and 
members cannot start or continue national work on the same subject . National standards' 
development has to be reported at least annually by each NSB under EU Regulation (EU) No. 
1025/2012 to provide transparency on national work programmes. In the case of harmonized 
standards, standstill and withdrawal are compulsory.  
3.123.   CEN and CENELEC standards are significantly aligned with ISO and IEC standards. 
According to the latest statistics available, 72% of all the standards in the CENELEC catalogue are 
identical to IEC standards, while 32% of standards in the CEN catalogue are id entical to ISO 
publications.124 Participation in international standards development is arranged by the NSB of 
each country via their membership of the International Organization for Standardization (ISO) and 
                                                
120 CEN-CENELEC Guide 30, p. 5. Viewed at: ftp://ftp.cencenelec.eu/EC/EuropeanStandardization/ 
Guides/30_CENCLCGu ide30.pdf . 
121 On the ETSI website, the figure is 40,517 standards in the database including all versions of the 
standards.  
122 Annual Report 2015, p. 2.  
123 CEN-CENELEC Guide 30, p. 8.  
124 CEN-CENELEC Quarterly Statistical Pack, Q4 2016, p. 13. Viewed at: ftp://ftp.cencenelec.eu/EN/ 
AboutUs/InFigures/CEN -CENELEC_StatPack2016 -Q4.pdf . WT/TPR/S/357 • European Union  
 
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  the International Electrotechnical Commission (IE C) or their European counterparts, CEN and 
CENELEC.  
3.3.1.1.2   European Commission  
3.124.   In addition to the three ESOs, the European Commission plays a role in standardization by 
funding participation in the standardization process by small and medium -sized companies and 
non-governmental organizations, such as environmental and consumer groups and trade unions. 
The Commission issues standardization requests for harmonized standards in support of EU policy 
and legislation, and supports financially the work of the ESOs, but i s not involved in the process of 
standard -setting, which is carried out by the ESOs. EU -funded research and innovation projects 
also make their results available to the standardization work of the standards -setting organizations 
(Table 3.1 2). 
Table 3.12 Roles of main actors in setting and executing EU standardization policy 
(Commission -requested standardization)  
Main actors  Tasks and/or roles  
The legislator  (the Council, 
including member States, and 
the Europe an Parliament)  - sets the legal framework and boundaries for standardization policy;  
- decides how to use standards or other technical specifications in Union 
legislation;  
- may challenge harmonized standards providing, or intended to provide, a 
legal effe ct (formal objection);  
- in some cases, a member State may regulate how standards requested by 
the Commission can be used to comply with national conditions.  
Commission  - implements Union standardization policy and sets priorities;  
- proposes new legislat ion where application is supported by standards;  
- manages other specific standardization -related tasks assigned to it in 
Union legislation (e.g. adoption of standardization requests, assessment of 
compliance of documents drafted by ESOs with its initial r equests, 
publication of the references of harmonized standards in the Official Journal , 
adoption of decisions to remove publication of the references of harmonized 
standards from the Official Journal , management of Union financing on 
European standardizati on); 
- manages relations between the Union and the ESOs.  
ESOs (together with their 
members and stakeholders)  - execute the technical work requested in standardization requests;  
- coordinate the technical work to develop and adopt state -of-the-art 
technica l specifications in cooperation with their members on the basis of 
consensus between those participating in the standardization work;  
- ensure that the transparency and inclusiveness requirements in the 
regulation are respected and appropriately reported;  
- offer the references of the requested technical specifications to the 
Commission, which then assesses the compliance of technical specifications 
with the requirements of the relevant Union legislation.  
European stakeholder 
organizations meeting the 
criteria in Annex III and 
financed by the Union 
(Annex III organizations)  - have a specific status under the regulation to make the Commission -
requested standardization process more inclusive;  
- ensure that SMEs', consumers', workers' and environmental interes ts are 
made known to the Commission before the Union work programme (UWP) 
or new standardization requests are adopted;  
- have direct access to policy development and technical work within the 
ESOs on the basis of the regulation.  
Source:  European Commissio n Staff Working Document: Vademecum on European standardisation in 
support of Union legislation and policies. Part I: Role of the Commission's standardization requests 
to the European standardisation organisations, p. 11. Document SWD(2015) 205 final, Brus sels, 
27.10.2015. Viewed at: http://ec.europa.eu/DocsRoom/documents/13507/attachments/1 
/translations . WT/TPR/S/357 • European Union  
 
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  3.125.   According to CEN -CENELEC, 19% of European standards in 2016 were  developed following 
a request from the European Commission .125 The majority of these standards specifically respond 
to harmonized regulatory requirements across the single market. Other European standards that 
are not developed to meet European Commission r equests meet other market needs. These 
include test methods, specifications for products and services, business process standards and 
guidance on good practice.  
3.3.1.2   New Legislative Framework  
3.126.   Existing legislation has been reviewed to bring it in line with NLF c oncepts, see Box 3.2. 
The date of applicability depends on the product category.126 Where products are not regulated by 
specific EU technical legislation, they are always subject to the EU's General Product Safety 
Directive127 as well as to possible additional  national requirements.  
3.127.   An explanation of the different elements of the NLF and how it works is contained in the 
new version of the Blue Guide on the implementation of EU product rules 2016.128 
Box 3.2 New Legisla tive Framework  
The NLF aims to: (i) improve market surveillance  rules to better protect both consumers and professionals 
from unsafe products, including those imported from outside the EU. In particular, this applies to procedures 
for products which can pose danger to health or the environment; (ii)  set clear and transparent rules for the 
accreditation  of conformity assessment bodies; (iii)  improve confidence in the conformity assessment  of 
products through s tronger and clearer rules on the requirements for the notification of conformity assessment 
bodies; (iv) clarify the meaning of CE marking  and enhance its credibility; and (v) establis h a common legal 
framework for industrial products in the form of a toolbox of measures for use in future legislation. This 
includes definitions of terms commonly used in product legislation, and procedures to allow future sectorial 
legislation to become m ore consistent and easier to implement.  
The NLF consists of three regulatory elements: (i) Regulation (EC) 765/2008  setting out the requirements 
for accreditation  and the market surveillance of products; (ii) Decision 768/2008  on a common framework 
for the marketing of products, which includes reference provisions to be in corporated whenever product 
legislation is revised. In effect, it is a template for future product harmonization legislation; and 
(iii) Regulation (EC) 764/2008  laying down procedures relating to the application of certain national 
technical rules to products lawfully marketed in another EU country.  
Alignment of product legislation: A main objective of the Commission is to bring product harmonization 
legislation in  line with the reference provisions of Decision 768/2008/EC . The following directives and 
regulations were aligned with these reference provisions:  
1. Toy safety - Directive 2009/48/EU  
2. Transportable pressure equipment - Directive 2010/35/EU  
3. Restriction of hazardous substances in electrical and electronic equipment - Directive 2011/65/EU  
4. Construction products - Regulation (EU) No. 305/2011  
5. Pyrotechnic articles - Directive 2013/29/EU  
6. Recreational craft and personal watercraft - Directive 2013/53/EU  
7. Civil explosives - Directive 2014/28/EU  
8. Simple pressure vessels - Directive 2014/29/EU  
9. Electromagnetic compatibility - Directive 2014/ 30/EU  
10. Non-automatic weighing instruments - Directive 2014/31/EU  
11. Measuring instruments - Directive 2014/32/EU  
12. Lifts - Directive 2014/33/EU  
13. Equipment for explosive atmospheres ( ATEX) - Directive 2014/34/EU  
14. Radio equipment - Directive 2014/53/EU  
                                                
125 Calculation based on the CEN -CENELEC portfolio of harmonized standards cited or to be c ited in the 
OJEU, p. 19 of the CEN -CENELEC Quarterly Statistical Pack, 2016, Q4. Viewed at: ftp://ftp.cencenelec.eu/EN/ 
AboutUs/InFigures/CEN -CENELEC_StatPack2016 -Q4.pdf . 
126 For example, the new Electromagnetic Compatibility Directive (2014/30/EU) replaced the existing 
directive and became applicable on 20 April 2016.  
127 The General Product Safety Directive (GPSD 2001/95/EC) requires that all consumer products on the  
EU market are safe. The Directive recognizes that national legislation may set legal requirements as to the 
safety of consumer products that go beyond this general safety requirement. Hence, the harmonization is 
considered to set a minimum level of safety  that must be met in all cases. Generally, the GPSD does not apply 
to products where there is harmonization legislation in place.  
128 Commission Notice of 5 April 2016; The Blue Guide on the implementation of EU product rules 2016. 
Brussels, 5 April 2016 C(2 016) 1958 final. Viewed at: http://ec.europa.eu/DocsRoom/documents/18027/ . WT/TPR/S/357 • European Union  
 
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  15. Low voltage - Directive 2014/35/EU  
16. Pressure equipment - Directive 2014/68/EU  
17. Marine equipment - Directive 2014/90/EU  
18. Cableway i nstallations - Regulation (EU) 2016/424  
19. Personal protective equipment - Regulation (EU) 2016/425  
20. Gas appliances - Regulation (EU) 2016/426  
Further aligning proposals are pending on medical devices and in vitro diagnostic (IVD) medical devices.  
Source:  European Commission. Viewed at: https://ec.europa.eu/growth/single -market/goods/new -
legislative -framework_de . 
3.128.   An NLF directive requires member States to implement the  legislation at national level 
within a set timeframe. This gives more flexibility to the member States, as they can reflect the 
principles of the legislation within their own legal and administrative frameworks.  
3.3.1.3   Conformity assessment  
3.129.   The conformity assess ment procedure is carried out before the product is placed on the EU 
market. It is a mandatory step for the manufacturer in the process of assessing and ensuring 
compliance with specific EU legislation. The purpose of conformity assessment is to ensure 
consistency of compliance during all stages, from design to production, and to allow acceptance of 
the final product. Conformity assessment procedures in the EU product legislation range from a 
self-certification examination and production quality control sys tem, to a full quality assurance 
system, depending on the impact of the product on the protection of public interest (health, 
safety, environment, etc.). Several pieces of EU legislation require the involvement of a notified 
body in the conformity assessme nt process.  
3.130.   Conformity assessment bodies that have been notified by the national authorities in the 
member State of their establishment to provide conformity assessment prescribed by EU 
harmonized legislation are listed in the New Approach Notification and  Designated Organizations 
(NANDO) information system.  
3.3.1.3.1   Product marking  
3.131.   To sell products in the EU market of 28 member States as well as in Norway, Liechtenstein 
and Iceland, foreign suppliers are required to apply CE marking whenever their product is covere d 
by specific product legislation that provides for this. The CE marking is the manufacturer's 
declaration that a product meets the requirements of the applicable EC directives. It is the 
responsibility of manufacturers both within and outside the EU to en sure that their products, where 
applicable, comply with the relevant directives before affixing the CE marking and placing them on 
the market in Europe.  
3.132.   Only the products that fall within the scope of at least one of the 20 or more directives 
require the C E marking. These include, for example: the Low Voltage Directive (2014/35/EU); the 
Machinery Directive (2006/42/EC); the Medical Device Directive (93/42/EEC); the Radio 
Equipment Directive (20 14/53/EU); the Restriction of Hazardous Substances Directive 
(2011/65/EU); and the Electromagnetic Compatibility (EMC) Directive (2014/30/EU).  
3.133.   The CE marking addresses itself primarily to the national control authorities of the member 
States, and its use simplifies the task of essential market surveillance of regulated  products. As 
market surveillance was found lacking, the EU adopted the NLF, which entered into force in 2010 
(Box 3.2). As mentioned before, this Framework is like a blueprint for all CE marking legislation, 
harmonizing definitions, responsibilities of ec onomic operators, European accreditation and market 
surveillance. The CE marking is not intended to include detailed technical information on the 
product129, but there must be enough information to enable the inspector to trace the product back 
to the manufa cturer or the local contact established in the EU.  
                                                
129 This detailed information should not appear next to the CE marking, but rather on the declaration of 
conformity (whic h the manufacturer or authorized representative must be able to provide at any time, together 
with the product's technical file), or the documents accompanying the product.  WT/TPR/S/357 • European Union  
 
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  3.3.1.4   Accreditation  
3.134.   Accreditation is the last level of public control in the EU conformity assessment system and 
is designed to ensure that conformity assessment bodies have the technical competence to carry 
out their duties. The European Cooperation for Accreditation ( http://www.european -
accreditation.org ) is the organization representing the national accreditation bodies. Membership is 
open to the  national accreditation bodies in countries in the European geographical area that can 
demonstrate that they operate an accreditation system compatible with appropriate ISO/IEC 
standards and EU legal requirements.  
3.3.1.5   Transparency  
3.135.   To help prevent the creation of technical barriers to trade, the Commission manages two 
notification procedures: one for the internal market of the EU and one at WTO level.  
3.136.   According to Directive (EU) 2015/1535 , EU member States must communicate to the 
Commission any draft technical regulation before its adoption. Starting from the date of 
notification, a three -month standstill period comes into place, during which the EU member State 
must refrain  from adopting the technical regulation in question. This procedure enables the 
Commission and other EU member States to examine the proposed text and react to it. The 
Commission and other EU member States may submit a detailed opinion or comments to the d raft 
if they deem that the notified text may create barriers to the EU internal market. The notified 
drafts and their translations in all EU languages are available in the Technical Regulat ions 
Information Systems database  (TRIS).  
3.137.   At the WTO level, under the TBT notification procedure, between 1 January 2015 and 
31 December 2016, the EU submitted 176 notifications under Article 10.6 to the TBT Committee, 
and individual member States submitt ed another 52. In the same time -period, WTO Members used 
the TBT Committee to raise specific trade concerns relating to notifications made by the EU, and 
the EU raised its own concerns with measures proposed or implemented by other Members.  
3.138.   The Official J ournal , as the official publication of the EU, publishes all EU harmonized 
technical rules, and lists the standards reference numbers linked to legislation 
(http://ec.europa.eu/growth/single -market/european -standards/harmonised -standards/index 
_en.htm ). 
3.3.2   Sanitary and phytosanitary measures  
3.139.   As noted in the last report, to a large extent SPS measures in the EU have been 
harmonized, and most measures a re taken by the EU, although member States may, and 
sometimes do, take specific measures in specific circumstances.130 
3.140.   EU member States are members of the Codex Alimentarius Commission, the World 
Organization for Animal Health (OIE), and contracting parties to the International Plant Protection 
Convention (IPPC). The EU itself is a member of Codex and a contracting party to the IPPC.  
3.141.   Since the last Review in 2015, a new regulation on transmissible animal diseases (Animal 
Health Law)131 and a new law on plant pe sts (Plant Health Law)132 were adopted ( Table 3.13). In 
addition, the European Commission  noted that a new regulation on official controls is close to 
                                                
130 WTO document WT/TPR/S/317/Rev.1, 21 October 2015, para. 3.98.  
131 Regulation (EU) 2 016/429 of the European Parliament and of the Council of 9 March 2016 on 
transmissible animal diseases and amending and repealing certain acts in the area of animal health ('Animal 
Health Law').  
132 Regulation (EU) 2016/2031 of the European Parliament of the  Council of 26 October 2016 on 
protective measures against pests of plants, amending Regulations (EU) No. 228/2013, (EU) No. 652/2014 and 
(EU) No. 1143/2014 of the European Parliament and of the Council and repealing Council Directives 
69/464/EEC, 74/647/E EC, 93/85/EEC, 98/57/EC, 2000/29/EC, 2006/91/EC and 2007/33/EC . WT/TPR/S/357 • European Union  
 
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  adoption. The new regulation will replace Regulation (EC) No. 882 /2004133 and repeal Regulation 
(EC) No. 854/2004.134 
3.142.   The Animal Health Law is to become applicable on 21 April 2021 and the Plant Health Law 
on 14 December 2019, except for the provisions relating to a phytosanitary certificate for exports 
(from 1 January 2021 ), and a change to the obligation to information the authorities of suspected 
pests (from 1 January 2017). In the meantime, several implementing measures are to be adopted 
by the Commission to complement the new rules.  
3.143.   The new legislation on animal health,  plant pests, and official controls are part of the 
Animal and Plant Health Package which was adopted by the Commission in May 2013. The Package 
aims to simplify and modernize the existing legislation covering the food chain. It condenses 
nearly 70 differe nt legislative acts to four, covering: official controls; animal health; plant health; 
and related financing measures.  
Table 3.13 Principal SPS legislation in the EU in 2017  
Legislation  Last 
amended  Note  
Regulation (EC) No. 178/2002 of the 
European Parliament and of the Council 
of 28 January 2002 laying down the 
general principles and requirements of 
food law, establishing the European 
Food Safety Authority and laying down 
procedures in matters of food safety  
 2014 The General Food Law.  
Regulates the safety of food and feed produced or consumed in the 
internal market; established a framework for controlling and 
monitoring the risks and their prevention and management, and 
created the European Food Safety Author ity (EFSA) for the control 
and evaluation of food and feed.  
Regulation (EC) No. 852/2004 of the 
European Parliament and of the Council 
of 29 April 2004 on the hygiene of 
foodstuffs  2009 On the hygiene of foodstuffs.  
General rules for food business operato rs on the hygiene of 
foodstuffs, putting primary responsibility on the operators, 
implementation of procedures based on the HACCP principles and 
good hygiene practice, and ensuring that imported foods are at least 
the same, or equivalent, hygiene standard as food produced in the 
EU 
 
Regulation (EC) No. 853/2004 of the 
European Parliament and of the Council 
of 29 April 2004 laying down specific 
hygiene rules for food of animal origin  
 2016 Supplementing Regulation (EC) No. 852/2004.  
Setting out specific rul es on hygiene for food of animal origin for 
food business operators and applying to unprocessed and processed 
products of animal origin.  
Regulation (EC) No. 854/2004 of the 
European Parliament and of the Council 
of 29 April 2004 laying down specific 
rules for the organization of official 
controls on products of animal origin 
intended for human consumption  2015 Setting out specific rules on the organization of official controls on 
products of animal origin intended for human consumption. The 
Regulation appl ies in addition to Regulation (EC) No. 882/2004.  
Regulation (EC) No. 882/2004 of the 
European Parliament and of the Council 
of 29 April 2004 on official controls 
performed to ensure the verification of 
compliance with feed and food law, 
animal health and animal welfare rules  2014a On official controls for verification of compliance with feed and food 
law, animal health, and animal welfare rules. The Regulation sets 
out general rules for the performance of official controls to verify 
compliance with rules a iming, in particular, at: (a) preventing, 
eliminating or reducing to acceptable levels risks to humans and 
animals, either directly or through the environment; and (b) 
guaranteeing fair practices in feed and food trade and protecting 
consumer interests, in cluding feed and food labelling and other 
forms of consumer information.  
 
Directive 2002/99/EC of 16 December 
2002 laying down the animal health 
rules governing the production, 
processing, distribution and introduction 
of products of animal origin for hum an 
consumptionb 2013 Setting out rules for the production, processing, distribution, and 
introduction of products of animal origin for human consumption. 
The Directive lays down the general animal health rules governing 
all stages of the production, proces sing and distribution within the 
EU and the introduction from third countries of products of animal 
origin and products obtained therefrom intended for human 
consumption.  
 
                                                
133 Regulation (EC) No. 882/2004 of the European Parliament and of the Council of 29 April 2004 on 
official controls performed to ensure the verification of compliance with feed and food law, an imal health and 
animal welfare rules.  
134 Regulation (EC) No. 854/2004 of the European Parliament and of the Council of 29 April 2004 laying 
down specific rules for the organization of official controls on products of animal origin intended for human 
consump tion. WT/TPR/S/357 • European Union  
 
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  Legislation  Last 
amended  Note  
Regulation (EU) 2016/429 of the 
European Parliament and of the Council 
of 9 March 2 016 on transmissible 
animal diseases and amending and 
repealing certain acts in the area of 
animal health ('Animal Health Law')   Animal Health Law  
Repeal of Council Directive 64/432/EEC, Council Directive 
77/391/EEC, Council Directive 78/52/EEC, Council Di rective 
80/1095/EEC, Council Directive 82/894/EEC, Council Directive 
88/407/EEC, Council Directive 89/556/EEC, Council Directive 
90/429/EEC, Directive 91/68/EEC, Council Decision 91/666/EEC, 
Council Directive 92/35/EEC, Council Directive 92/65/EEC, Council  
Directive 92/66/EEC, Council Directive 92/118/EEC, Council 
Directive 92/119/EEC, Council Decision 95/410/EC, Council Directive 
2000/75/EC, Council Decision 2000/258/EC, Council Directive 
2001/89/EC, Council Directive 2002/60/EC, Council Directive 
2002/99/ EC, Council Directive 2003/85/EC, Council Regulation (EC) 
No. 21/2004, Council Directive 2004/68/EC, Council Directive 
2005/94/EC Council Directive 2006/88/EC, Council Directive 
2008/71/EC, Council Directive 2009/156/EC, Council Directive 
2009/158/EC and R egulation (EU) No . 576/2013 of the European 
Parliament and of the Council. Inter alia,  the Law consolidates 
animal health legislation and aims to simplify and clarify the rules 
relating to prevention and eradication of diseases.  
 
Regulation (EU) 2016/2031  of the 
European Parliament of the Council of 
26 October 2016 on protective 
measures against pests of plants, 
amending Regulations (EU) No. 
228/2013, (EU) No. 652/2014 and (EU) 
No. 1143/2014 of the European 
Parliament and of the Council and 
repealing Counc il Directives 
69/464/EEC, 74/647/EEC, 93/85/EEC, 
98/57/EC, 2000/29/EC, 2006/91/EC 
and 2007/33/EC   Repeal of Directive 2000/29/EC  
Protective measures against the introduction of organisms which are 
harmful to plants or plant products.  
a Currently under rev iew (see para 3.141.   ). 
b In addition to Directive 2002/99/EC, there are many other legislative acts in the EU relating to 
animal health (see the directives repealed by Regulation (EU) 2016/429).  
Source:  European Commission  and Eurlex http://eur -lex.europa.eu/homepage.html . 
3.144.   The European Commission  is responsible for developing draft proposals for legislation and, 
where the legislation delegates the authority, delegated acts .135 The Standing Committee on 
Plants, Animals, Food and Feed (PAFF Committee) is the principal regulatory body responsible for 
delivering opinions on draft implementing measures. The PAFF Committee is made up of 14 
different sections, each responsible for d ifferent aspects related to SPS measures.136 In addition, 
there are five committees that are also responsible for specific SPS -related issues:  
 Regulatory Committee under Directive 2001/18/EC on the deliberate release into the 
environment of genetically modif ied organisms;  
 Regulatory Committee under Directive 2009/41/EC on the contained use of genetically 
modified microorganisms;  
 Standing Committee on Plant Variety Rights;  
 Standing Committee on Zootechnics; and  
 Biocidal Products Committee.  
3.145.   The EFSA, establishe d under the General Food Law of 2002, is an independent agency 
responsible for risk assessment for food and feed safety, nutrition, animal health and welfare, 
plant protection, and plant health, as well as, through environmental risk assessments, the 
                                                
135 A legislative act may delegate to the Commission the power to adopt non -legislative acts of general 
application to supplement or amend certain non -essential elements of a legislative act (Article 290 of the 
Treaty on the Functioning of the European  Union). Legal acts adopted by the Commission in this way are 
referred to as 'delegated acts'.  
136 General Food Law, Biological Safety of the Food Chain, Toxicological Safety of the Food Chain, 
Controls and Import Conditions, Animal Nutrition, Animal Health and Animal Welfare, Genetically Modified Food 
and Feed and Environmental Risk, Phytopharmaceuticals, Plant Health, Propagating Material of Ornamental 
Plants, Propagating Material and Plants of Fruit Genera and Species, Seeds and Propagating Material for 
Agriculture and Horticulture, Forest Reproductive Material, and Vine.  WT/TPR/S/357 • European Union  
 
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  possible impact of the food chain on biodiversity.137 The Health and Food Audits and Analysis 
Directorate (formerly known as the Food and Veterinary Office (FVO)) of the Commission is 
responsible for audits, inspections, and related activities to assess complianc e with EU food safety 
and quality, animal health and welfare, and plant health legislation within the EU, and compliance 
with EU import requirements in third countries exporting to the EU.  
3.146.   The Commission's TRAde Control and Exp ert System (TRACES) is an onl ine system which 
manages official controls and route planning for imports of animals, semen and embryos, food, 
feed and plants which must be accompanied by health certificates and/or trade documents. All 
harmonized certificates for exporting to the EU are available on TRACES which is used to notify the 
relevant authorities in the importing member State of the arrival of a consignment.138 
3.147.   According to the Commission, SPS measures taken in the EU are normally based on 
international standards or, in other cases - including the absence of an international measure - 
based on the scientific opinion of the EFSA.139 
3.3.2.1   Plants and plant products  
3.148.   The new Regu lation (EU) 2016/20 31 on protective measures against plant pests extends 
the definition of pests to include non -parasi tic plants that could have a severe economic, social, or 
environmental impact within the EU. It also lists pests as being in the category of quarantine pests 
or quality pests. Quarantine pests are those that pose the greatest danger for the EU and are to b e 
eradicated and/or protected zones created to prevent their spreading outside areas where they are 
endemic.  
3.149.   The new Regulation also includes measures to tackle pests from outside the EU under 
which the Commission will be able to implement precautionary me asures for emerging risks from 
plants coming from certain non -EU countries. A category of "high risk" plants, plant products or 
other objects has been created for plants, plant products or other objects which present, on the 
basis of a preliminary assessme nt, a pest risk of an unacceptable level for the EU. Therefore their 
introduction into the EU from a third country will be prohibited, pending the completion of a full 
risk assessment.  
3.150.   The new rules also propose to extend, simplify and harmonize the existi ng plant passport 
scheme. This means that an extended range of plants, plant products or other objects will need:  
 a phytosanitary certificate before being imported into the EU (attesting conformity with 
Union legislation); and  
 a plant passport for movement  within the EU.  
3.151.   Plant passports will also be needed for all movements between professional operators, but 
not for sales to final non -professional users. The new rules would also require relevant professional 
operators to be registered in a single register.140 
3.152.   Under the currently applicable legislation on trade in plants and plant products (Directive 
2000/29/EC)141, a phytosanitary certificate from the competent authorities in the exporting 
country is required for plants for planting, some fruits, vegetables, se eds and cut flowers. Once in 
the EU, a plant passport may replace the phytosanitary certificate. Imports into the EU of most 
plants and plant products from most countries do not require prior approval or notification, 
although they are subject to rules on food safety and customs procedures and inspection. The 
competent authorities in the member States must be notified of imports of some food and feed 
products of non -animal origin from specified third countries which must enter the EU through 
                                                
137 EFSA online information. Viewed at: http://www.efsa.europa.eu/  [December 2016].  
138 Directorate -General for Health and Food Safety (DG SANTE) onl ine information. Viewed at: 
http://ec.europa.eu/food/animals/traces_en  [December 2016].  
139 WTO document WT/TPR/S/317/Rev.1, 21 October 2015, para. 3.104.  
140 European Council online information. Viewe d at: http://www.consilium.europa.eu/en/policies/animal -
plant-health -package/plant -health/  [December 2016].  
141 Council Directive 2000/29/EC of 8 May 2000 on  protective measures against the introduction into the 
Community of organisms harmful to plants or plant products and against their spread within the Community.  WT/TPR/S/357 • European Union  
 
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  designated poin ts of entry where they are subject to additional controls.142 The list of products and 
exporting countries is reviewed quarterly.  
3.153.   The procedure for approving genetically modified organisms (GMOs) has not changed. An 
application for approval for use of a GMO for food, feed, cultivation, or release on the market for 
other purposes (e.g. cut flowers) must be made to the competent authority in a member State. 
The EFSA, in collaboration with the member States' scientific bodies, conducts a risk assessment 
and deli vers an opinion. On the basis of the opinion, the Commission prepares draft legislation to 
grant or refuse authorization. Directive (EU) 2015/412143 gives the member States more flexibility 
to restrict or prohibit cultivation of a GMO in their territory eith er during the authorization 
procedure, by demanding to exclude their territory from the geographical scope of the application, 
or, after authorization has been granted, by adopting measures that prohibit or restrict cultivation 
of specific GMOs. The Commis sion has also proposed a review of the decision -making process on 
GMOs.144 
3.154.   As at end -2016, one GMO is approved for cultivation (with ongoing procedure s for renewal 
of authorization) and 72 for food and feed uses. In addition, 3 applications for cultivation a nd 47 
for food and feed uses were pending. There are also 5 GMO flowers approved for sale in the EU.  
3.3.2.2   Live animals and animal products  
3.155.   The new Animal Health Law does not make significant changes to the existing system for 
the entry into the EU of animals an d animal products.  
3.156.   Under the currently applicable legislation, to export live animals and animal products, 
products of animal origin for human consumption, animal by -products and derived products to the 
EU, the competent authority of the exporting country must be recognized as being able to "ensure 
credible inspection and controls throughout the production chain, which cover all relevant aspects 
of hygiene, animal health and public health"145 and provide adequate guarantees.146 In addition, 
the country of origi n must: be authorized for the specific species of animals or animal products; 
and, where appropriate, have an approved residue plan for the relevant animal species, a 
salmonella control programme for poultry and poultry products, and meet other requirement s 
depending on the animal and/or product.  
3.157.   At the request of the supplying country, the EU normally audits the country to ensure that 
all the criteria provided for in the EU legislation are met. Based on the results of the audit, the 
country may then be add ed to the list of countries authorized to export to the EU. In some cases, 
and depending on the animal health situation within a country, part of a country may be 
authorized to export to the EU, or different parts of a country may face different requiremen ts. 
Additions to the list of approved third countries, territories, zones, or compartments are made 
through amendments to the relevant legislation following approval of a Commission proposal by 
the PAFF Committee.147 
3.158.   In addition, an establishment in a third country that would like to export to the EU needs 
to be added to the list of eligible exporters. It must inform its national authorities, which may then 
make a request to the Health and Food Audits and Analysis Directorate in the EU, after they have 
                                                
142 Commission Regulation (EC) No. 669/2009 of 24 July 2009 implementing Regulation (EC) No. 
882/2004 of the European Parliament and of the Council as regards the increased level of official controls on 
imports of certain feed and food of non -animal origin and amending Decision 2006/504/EC.  
143 Directive (EU) 2015/412 of the European Parliament and of t he Council of 11 March 2015 amending 
Directive 2001/18/EC as regards the possibility for the member States to restrict or prohibit the cultivation of 
GMOs in their territory.  
144 Commission Proposal for a Regulation of the European Parliament and of the Coun cil amending 
Regulation (EC) No. 1829/2003 as regards the possibility for the member States to restrict or prohibit the use 
of genetically modified food and feed on their territory, COM(2015) 177 Final, 22 April 2015.  
145 Commission (2007), EU import conditi ons for fresh meat and meat products, Directorate -General for 
Health and Consumers.  
146 Commission (2010), General guidance on EU import and transit rules for live animals and animal 
products from third countries , SANCO/7166/2010.  
147 For example, Commission R egulation (EU) No. 206/2010 of 12 March 2010 laying down lists of third 
countries, territories or parts thereof authorized for the introduction into the EU of certain animals and fresh 
meat, and the veterinary certification requirements.  WT/TPR/S/357 • European Union  
 
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  verified that production in the establishment is compliant with, or equivalent to, the requirements 
laid down in the EU legislation.148 
3.159.   Imports of live animals and animal products must be accompanied by a health certificate 
issued by the competent authorities of t he exporting country, stating that the animals or products 
meet EU import requirements. Before their arrival on EU territory, the approved Border Inspection 
Post (BIP)149 of arrival must be notified through TRACES (at least 24 hours before arrival for live 
animals) using the Common Veterinary Entry Document (CVED). At the BIP, the consignment must 
undergo official controls, including documentary, identity, and physical checks, which may include 
laboratory tests. Depending on the risks associated with the anim al product concerned, physical 
checks may be reduced.150 
3.160.   Where a recurrent problem has been identified with a specific animal product from a third 
country, special import conditions may be applied, such as reinforced testing or pre -export testing 
in the coun try of origin.151 
3.3.2.3   Rapid Alert System for Food and Feed  
3.161.   The Rapid Alert System for Food and Feed (RASFF) allows food and feed authorities of the 
member States and the Commission to exchange information about measures taken in response to 
direct and indirect r isks to human health from food, and human and animal health and the 
environment from feed.152 Member States notify risks detected in products already on the market 
(market notifications) and when products are refused entry into the EU (border rejections).  
Table 3.14 RASFF notifications, 201 2-15 
Year Alerta Border 
rejectionb Information for 
attentionc Information for 
follow -upd 
Original notification      
2012 523 1,712  679 507 
2013 584 1,438  679 429 
2014 725 1,357 605 402 
2015 750 1,380  476 378 
Follow -up notification      
2012 2,312  906 664 1,325  
2013 2,376  525 763 1,493  
2014 3,280  571 670 1,377  
2015 4,030  417 538 1,219  
a Alert notifications are sent when a food or feed presenting a serious health risk is on the market and 
when rapid action is required.  
b Border rejections concern food and feed consignments that have been tested and rejected at the 
external borders of the EU (and the EEA) when a health risk has been found.  
c Information notifications for at tention are related to a product that is present only in the notifying 
member country, or has not been placed on the market, or is no longer on the market.  
d Information notifications for follow -up are related to a product that is, or may be, placed on the  
market on another member country.  
Source:  Commission (2016), RASFF - The Rapid Alert System for Food and Feed - 2015 Annual Report,  
Publications Office of the EU, p. 30.  
                                                
148 The lists of est ablishments are available from DG SANTE on: https://ec.europa.eu/food/safety/ 
international_affairs/trade/third_en  [December 2016].  
149 Commission Decision of 28 September  2009 drawing up a list of approved border inspection posts, 
laying down certain rules on the inspections carried out by Commission veterinary experts and laying down the 
veterinary units in TRACES (notified under document C(2009) 7030).  
150 Commission Decis ion 94/360/EC of 20 May 1994 on the reduced frequency of physical checks of 
consignments of certain products to be implemented from third countries, under Council Directive 90/675/EEC.  
151 DG SANTE online information. Viewed at: http://ec.europa.eu/food/animals/vet -border -control/  
special -import -conditions_en  [December 2016].  
152 Regulation (EC) No. 178/2002 (General Food Law), Article 50.  WT/TPR/S/357 • European Union  
 
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  3.3.2.4   SPS Committee in the WTO  
3.162.   The EU and each member State have notified enquiry points un der the SPS Agreement.153 
The Directorate -General for Health and Food Safety (DG SANTE) of the European Commission is 
the EU notification authority.154 
3.163.   In 2015 and 2016, the EU made a total of 107 notifications to the Committee on Sanitary 
and Phytosanitary Me asures in the WTO, of which: 47 were addenda; 8 were emergency 
notifications; 1 was a supplementary notification; and the remainder were regular notifications. In 
addition: Germany made 1 emergency notification and 1 regular notification; France made 2 
regular notifications, 2 emergency notifications, and 1 addendum; and Slovenia made 1 
emergency notification.  
3.164.   During this period, WTO Members used the SPS Committee to raise two new specific trade 
concerns about measures taken in the EU or a member State155 and referred to eight concerns 
that had been raised earlier.156 The EU has also used the Committee to ra ise its concerns in nine 
cases.  
3.3.3   Subsidies and other government assistance  
3.165.   Subsidies in the EU are granted both out of the EU budget and by member States in t he 
form of state aid. The most recent information and statistical data concerning subsidies granted 
during the years 2013 and 2014 is contained in the EU's subsidies notification to the WTO and 
member States' addenda submitted in August 2015.157 
3.3.3.1   EU level sub sidies  
3.166.   The two largest areas of expenditure out of the EU budget in 2013 and 2014 were 
agriculture and structural operations, comprising the European Agriculture Guarantee Fund, the 
European Agricultural Fund for Rural Development, and the Cohesion Fund. A nother notable area 
of expenditure is research. The structural funds comprise the European Regional Development 
Fund (ERDF) and the European Social Fund (ESF). ERDF resources focus on the co -financing of 
productive investment leading to job creation and ma intenance and investment in infrastructure. 
The ESF supports programmes in education and job market improvement, and the Cohesion Fund 
covers member States whose gross national income per inhabitant is less than 90% of the EU 
average, and, inter alia , funds projects in the field of transport and environmental infrastructure.  
3.167.   The overall goal of the Cohesion policy, the EU's key investment policy, is to support job 
creation, business competitiveness, economic growth and sustainable development in all regions . 
The policy is put in place for a seven -year period, currently 2014 -2020. The EU's intervention 
regarding the Cohesion policy is being carried out via the ERDF, the ESF and the Cohesion Fund. 
The budget for the current 2014 -2020 period158 is estimated to am ount to €346 billion, or one 
third of the EU budget, according to the latest notification. Additional funding from the member 
States will bring the total amount spent to € 477 billion. Outlays  under the ERDF, the Cohesion 
Fund and the ESF amounted to €56.8 bi llion in 2013 and €52.8 billion in 2014.  
                                                
153 WTO document G/SPS/ENQ/ 16, 21 December 2016.  
154 WTO document G/SPS/NNA/8, 21 December 2016.  
155 EU proposal to amend Regulation (EC) No. 1829/2003 to allow EU member States to restrict or 
prohibit the use of genetically modified food and feed (ID 396), EU restrictions on exports of  pork from the 
State of Santa Catarina (ID 407).  
156 Agricultural biotechnology approval process (ID 110), France's ban on Bisphenol A (BPA) (ID 346), 
EU phytosanitary measures on citrus black spot (ID 356), EU ban on mangoes and certain vegetables from 
India (ID 374), EU withdrawal of equivalence for processed organic products (ID 378), EU revised proposal for 
categorization of compounds as endocrine disruptors (ID 382), EU proposal to amend regulation (EC) No. 
1829/2003 to allow EU member States to restrict  or prohibit the use of genetically modified food and feed (ID 
396), and EU restrictions on exports of pork from the State of Santa Catarina (ID 407).  
157 WTO document G/SCM/N/284/EU of 7 August 2015; subsidies granted by individual member States 
are contain ed in addenda to this notification.  
158 For the programming period 2014 –20, the legal basis, according to the EU notification, comprises: 
Commission Delegated Regulation (E U) No.480/2014 of 3 March 2014 supplementing Regulation EU 
No. 1303/2013 . WT/TPR/S/357 • European Union  
 
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  3.3.3.2   State aid in the member States  
3.168.   The provision of state aid by member States is regulated under Articles 107 to 109 of the 
TFEU. As the previous Secretariat report points out, member States are, in principle, required  to 
notify state aid measures to the Commission, which has to approve the aid measures before they 
can be implemented. The Secretariat report laid out in some detail the content of the 
Commission's 2012 State Aid Modernisation (SAM) initiative.159 
3.169.   The overal l aim of the initiative is to (i) focus enforcement on cases with the biggest 
impact on the internal market; (ii) reduce the administrative burden for member States; and (iii) 
increase legal certainty for public authorities and companies. This report will focus on salient 
aspects of the implementation of the reform over the past two years.  
3.3.3.2.1   State aid reform: implementation phase  
3.170.   On 1 July 2014, the Commission's new General Block Exemption Regulation160 (GBER) 
entered into force. As a key part of SAM, it enlarg es the categories of state aid that can be 
implemented without prior notification to the Commission. For categories of state aid already 
previously exempted from notification, the GBER increases the amounts that can be granted. The 
GBER applies to all sect ors of the economy with some exceptions. Sectoral restrictions are set out 
in Article 1, paragraphs  3-5 of the Regulation, and include specific activities in the fishery and 
aquaculture sector, in the primary production of agricultural products, the coal s ector, the steel 
sector, shipbuilding, and the synthetic fibres sector.  
3.171.   The current GBER will remain in force until 31 December 2020, and authorizes aid in 
favour of: regional investment; aid to SMEs and aid for access to finance for SMEs; environmental 
protection; consultancy in favour of SMEs; research, development and innovation; training; 
employment of disadvantaged and disabled workers; culture and heritage conservation; local 
infrastructures; broadband infrastructures; sport and multifunctional recrea tional infrastructures; 
and transport for residents of promoted regions. Each of the GBER articles which cover the 
activities listed above lists the eligible costs which may be assisted and the aid intensities (limits) 
which apply to these activities.  
3.172.   As a result of the reform and the entry into force of the new GBER, a substantial number of 
measures with a limited impact on competition are exempted from prior notification. According to 
the Commission, about 90% of new measures are, as of 1 July 2014, exemp ted from prior 
notification under the GBER. The Commission further states that the share of GBER expenditure in 
total aid measures was around 40% in 2015 and was expected to increase further.161 
3.173.   Although the 2014 GBER revision makes it easier for member Stat es to implement 
straightforward measures involving state aid, more transparency is required from them in terms of 
identifying aid measures, beneficiaries and amounts granted. On 1 July 2016, the new 
transparency requirements for state aid entered into forc e and became mandatory based on Article 
9 and Annex III of the GBER, and were reflected in notifications and decisions. According to the 
Commission, the main aim of the transparency requirements is to further the accountability of aid -
granting authorities and to help lessen procedural asymmetries by aligning the transparency 
requirements across all the recently revised state aid rules. The transparency obligation is 
complemented by annual monitoring exercises in which the Commission reviews a sample of 
block-exempted aid measures to verify that they comply with the conditions of the GBER. 
Together, increased transparency and monitoring will help to ensure that the expanded GBER is 
used as intended.  
                                                
159 See WTO do cument WT/TPR/S/317, pp. 65 -68. See also the Commission's SAM website at: 
http://ec.europa.eu/competition/state_aid/modernisation/index_en.html . 
160 Commission Regulation ( EU) No. 651/2014 of 17 June 2014 declaring certain categories of aid 
compatible with the internal market in the application of Articles 107 and 108 of the Treaty, published in the 
Official Journal of the European Union L 187/1. The Regulation harmonizes th e rules which previously existed 
across five separate regulations, and enlarges the categories of state aid covered by the exemption.  
161 Data published in Commission Staff Working Document (p. 5), a ccompanying the document  
Commission Report on Competition P olicy 2015, Brussels, 15 June 2016, SWD(2016) 198 final. Viewed at: 
http://ec.europa.eu/competition/publications/annual_report/2015/part2_en.pdf . WT/TPR/S/357 • European Union  
 
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  3.174.   In December 2016, the Commission's public consultations on e xpanding the GBER to 
include aid to ports and to airports ended.162 A decision is expected in the first quarter of 2017.  
3.175.   The other exemption applies to state aids of minor importance ( de minimis ) which have a 
negligible effect on trade among member States. T he new de minimis  regulation was adopted in 
December 2013 and is applicable since 1 January 2014.163 
3.176.   For aid that is not covered by the GBER, the Commission has revised and streamlined most 
state aid guidelines to align them along a set of common principles for assessing the compatibility 
of aid with the internal market. The aim of this alignment exercise was to foster greater coherence 
across policy fields and increase predictability for member States when devising measures that are 
not covered by the GBER. In principle, the various guidelines specify how the Commission is to 
exercise its discretion under Article 107(3) of the TFEU.  
3.177.   The guidelines cover a wide field of policy actions, for example:  
 The Research, Development and Innovation Framework164 facilitate s the granting of aid 
measures with the aim of more R&D investment, better access to finance and improved 
framework conditions.  
 The Risk Finance State Aid Guidelines165 are designed to facilitate a more rapid 
distribution of risk finance aid to innovative an d growth -oriented small and medium -
sized businesses.  
 The Broadband Guidelines166 support member States in meeting the challenge of 
funding shortfalls concerning the provision of adequate broadband coverage, notably in 
rural areas.  
 Other areas concern, for ex ample, rescue and restructuring aid (guidelines adopted 9 
July 2014167), regional aid (guidelines adopted 19 June 2013168) and aviation 
(guidelines adopted 20 February 2014169). 
3.178.   On 19 May 2016, the Commission published a new guidance document on the notion of 
state aid, the so -called "Notice on the notion of state aid".170 This Notice is the last part of the 
Commission's SAM initiative and is designed to help member States and public authorities to draw 
up funding in ways which do not distort competition. The clari fications contained in the Notice 
reflect the case law of the Court of Justice as well as the approach followed in Commission 
decisions. The Notice facilitates the identification of public investments that qualify as state aid. It 
clarifies the various con stituent elements of the notion of state aid, i.e. the existence of an 
undertaking, the imputability of the measure to the State, its financing through state resources, 
the granting of an advantage, the selectivity of the measure and its effect on competit ion and 
trade between member States. The Notice also focuses on certain sectors to provide more detailed 
guidance.  
3.179.   For example, Section 7 of the Notice contains specific clarification on state measures 
concerning infrastructure. Section 2.6 discusses cultu re and heritage conservation, including 
                                                
162 DG Competition online information. Viewed at: http://ec.europa.eu/competition/consultations/2016 
_second_gber_review/index_en.html  [November 2016].  
163 Council Regulation ( EU) No. 734/2013 amending Regulation (EC) No. 659/1999 laying down detailed 
rules for the application of Article 93 of the EC Treaty, OJ L 204/15, 31 July 2013.  
164 Communication from the Commission, Framework for state aid for research and development and 
innovation , OJ C 198, 27 June 2014.  
165 Communication from the Commission, Guidelines on state aid to promote risk finance investments , 
OJ C 19, 22 January 2014. Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/?uri=CELEX:52014X 
C0122(04) . 
166 Communication from the Commission, EU Guidelines for the application of state aid rules in relation 
to the rapid deployment of broadband networks , OJ 2013 C 25, 26 January 201 3. 
167 See OJ C 249 of 31 July 2014.  
168 See OJ C 209 of 23 July 2013.  
169 See OJ C 99 of 4 April 2014.  
170 Full title: Commission Notice on the notion of state aid as referred to in Article 107(1) of the TFEU 
(2016/ C 262/01). OJ C 262/1 of 19 July 2016.  WT/TPR/S/357 • European Union  
 
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  nature conservation. In the domain of tax measures, Section 5.4.4 elaborates, inter alia , on when 
a tax ruling171 gives a company or a group of companies a selective advantage (Box 3.3).  
Box 3.3 State aid - tax rulings  
Since June 2013, the Commission has been investigating the tax ruling practices of member States. The 
Commission extended this information inquiry to all member States in December 2014, including a list of tax 
rulings issued in recent years, on the basis of which individual tax rulings have been requested.  
 
The list of final decisions adopted since 2014 concerning tax planning practices and the list of formal ongoing 
investigations is presented below.  
 
Final dec isions  
 
Member 
State  Title Date of 
decision  Press 
release  Case No./  
link to case  Status  
Ireland  State aid implemented by 
Ireland to Apple  30.08.2016  IP/16/2923  SA.38373  Appealed  
The 
Netherlands  State aid implemented by the 
Netherlands to Starbucks  21.10.2015  IP/15/5880  SA.38374  Appealed  
Luxembourg  State aid which Luxembourg 
granted to Fiat  21.10.2015  IP/15/5880  SA.38375  Appealed  
Belgium  Excess Profit exemption in 
Belgium – Art. 185§2 b) CIR92  11.01.2016  IP/16/42  SA.37667  Appealed  
 
Open formal investigations  
 
Member 
State  Title Date of 
decision  Press relea se Case No./  
link to case  
Luxembourg  Alleged aid to Amazon  07.10.2014  IP/14/1105  SA.38944  
Luxembourg  Alleged aid to McDonald's  03.12.2015  IP/15/6221  SA.38945  
Luxembourg  Possible state aid in favour of GDF Suez  19.09.2016  IP/16/3085  SA.44888  
 
Source:  European Commission  website: http://ec.europa.eu/competition/state_aid/tax_rulings/ 
index_en.html . 
3.3.3.2.2   Non-crisis state aid  
3.180.   In 2014, €99 billion were provided for non -crisis sta te aid (excluding transport), a 45% 
increase over spending in 2013172 (Table 3.15). The biggest categories were: environmental 
protection, including energy saving which registered an almost three -fold increase over 2013 and 
accounted for more than 40% of tot al spending173; regional development; research and 
development, including innovation; and the agricultural sector. Thus, around 85% of state aid to 
industry and services was earmarked for horizontal objectives of common interest, that is, aid that 
is not gra nted to specific sectors of the economy. Member States used mainly grants ( €58 billion) 
as instruments for state aid, followed by tax exemptions ( €28 billion).  
3.181.   In addition, €44 billion was provided for rail transport ( €21 billion for public service 
obligat ions and pensions, and €23 billion for infrastructure and other aid). Over 50% of the 
subsidies provided in 2014 came from France ( €15 billion) and Germany ( €38 billion). The 
United  Kingdom, Poland and Italy are the next biggest providers of state aid.  
                                                
171 See al so Commission working paper on state aid and tax rulings, June 2016. Viewed at: 
http://ec.europa.eu/competition/state_aid/legislation/working_paper_tax_rulin gs.pdf . 
172 Updated information on state aid provided by EU member States is regularly published by the 
Commission on the state aid scoreboard.  
173 The increase of renewable energy support schemes (RES) in the reporting stems, among others, 
from the increased  awareness by member States of the state aid nature of subsidies to RES following the 
adoption of the 2014 Energy and Environmental Aid Guidelines. Indeed, 2014 shows an increase of the 
reported state aid on environmental protection and energy savings of a bout €28.5 billion at EU level.  WT/TPR/S/357 • European Union  
 
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  Table 3.15 Non-crisis related state aid  
 2009  2010  2011  2012  2013  2014  
Total state aid (excluding 
transport)  72,826.8  73,086.1  66,794.7  68,454.7  68,022.8  98,686.9  
Non-agricultural aid  65,914.5  63,813.9  57,914.4  59,535.0  59,720.4  90,978.4  
of which (by objective)        
   Closure aid  19.3 15.4 1,461.2  1,478.3  1,534.4  1,446.3  
   Compensation of damages 
caused by natural disasters  3.6 41.3 78.4 34.5 282.0  695.3  
   Culture  1,537.0  1,859.2  1,944.8  2,375.2  2,693.6  3,553.8  
   Employment  2,631.3  2,803.4  2,747.6  2,803.3  2,900.1  2,725.8  
   Environmental protection incl. 
energy saving  14,245.8  14,064.9  13,003.2  14,473.9  15,503.5  42,085.5  
   Heritage conservation  40.1 318.3  404.8  578.8  575.2  532.2  
   Promotion of expo rt and 
internationalization  286.4  277.6  314.7  284.2  251.0  172.7  
   Regional development  16,061.0  14,237.6  13,163.5  12,333.5  12,967.6  14,751.0  
   Rescue and restructure  1,070.3  1,341.0  721.4  731.6  585.9  651.3  
   Research and development 
incl. innovation  10,938.0  10,777.2  10,030.4  9,458.5  9,220.4  9,457.2  
   Sectoral development  10,848.5  9,881.1  5,391.1  6,057.1  4,999.3  4,666.6  
   SME incl. risk capital  5,723.4  4,593.3  4,011.5  4,103.0  3,543.2  3,752.5  
   Social support to individual 
consumers  1,110.8  2,130 .6 3,411.1  3,231.8  3,335.8  5,356.0  
   Training  971.0  846.7  906.9  1,085.0  824.6  643.9  
   Other  428.0  626.2  323.7  506.1  504.0  488.1  
of which (by aid instrument)        
   Equity participation  1,073.0  706.6  295.2  494.0  545.9  623.5  
   Grant  34,196.8  32,969 .5 31,104.6  32,131.9  32,080.3  57,564.8  
   Guarantee  2,532.7  2,904.8  3,070.3  2,893.3  3,353.9  2,677.7  
   Soft loan  2,272.2  1,716.1  1,712.0  1,604.7  1,265.5  1,791.3  
   Tax deferral  191.6  58.9 35.4 36.9 41.5 34.6 
   Tax exemption  25,633.6  24,676.1  21,689.3  21,615.5  22,183.0  28,108.9  
   Other  14.6 781.8  7.6 758.7  250.3  177.6  
of which        
   Co-financeda 8,435.6  6,708.7  6,303.7  5,936.5  5,805.2  8,414.5  
   Not co -financed  57,479.0  57,105.2  51,610.7  53,598.5  53,915.2  82,563.9  
Agricultural aid  6,912.3  9,272.2 8,880.4  8,919.7  8,302.4  7,708.5  
of which        
   Agriculture and rural 
development  6,712.3  9,141.2  8,770.5  8,835.9  8,232.5  7,667.8  
   Aid granted to fisheries and 
aquaculture  199.9  131.0  109.8  83.8 69.9 40.7 
Transport aid (excluding 
railways)  2,954.2 2,123.5  2,230.4  1,925.5  1,566.0  1,918.5  
of which        
   Road 199.9  141.9  227.0  248.5  109.8  83.3 
   Maritime transport  1,536.1  1,473.4  1,476.6  1,268.4  1,187.8  1,164.3  
   Inland water transport  10.0 18.1 21.8 17.2 27.0 53.2 
   Air transport  918.5  270.9  296.7  315.8  196.5  545.6  
   Other transport  289.7  219.3  208.2  75.5 44.8 72.2 
Railways supportb .. .. .. 41,118.7  42,315.3  43,681.8  
   Public service obligations 
(PSO) and pensions  .. .. .. 18,927.8  19,008.3  21,532.9  
   Infrastructure and other aid  .. .. .. 22,190.9  23,353.7  22,747.7  
.. Not available.  
a From 2014, member States are required to indicate for co -financed schemes: (i) the percentage of 
aid that is co -financed; and (2) the total amount of aid that is co -financed including both national 
and EU structural funds expenditure. Before 2014, only national expenditure was reported for aid 
measures that were co -financed by Community funding.  
b The Commission notes that railways support includes a significant amount that is not classified as 
state aid. 
Source:  Commission online information, State Aid Scoreboard 2015. Viewed at: 
http://ec.europa.eu/competition/state_aid/scoreboard/index_en.html#tables  [November  2016].  WT/TPR/S/357 • European Union  
 
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  3.182.   In absolute terms in 2014, Germany and France provided over 50% of the total of non -
crisis related state aid in the EU, including support for public service obligations and pensions for 
rail transport (Chart 3.8). In Germany's case, 80% of total st ate aid (less railways) was devoted to 
environmental protection, including energy saving. In France, a significant proportion of aid was 
for PSO, pensions and infrastructure for railways.  
Chart 3.8 State aid i n EU member States  
(€ million)  
05,00010,00015,00020,00025,00030,00035,00040,00045,00050,000
State aid (less rail transport)
Rail transport (public service obligations + pensions)Chart 3. State aids (including railway support transport for pensions and public service obligations), 2014
(€million)
Commission online information. Viewed at:  http://ec.europa.eu/competition/state_aid/scoreboard/index_en.html#tables [March 
2017].Source:
 
Source:  Commission online information. Viewed at: http://ec.europa.eu/competition/state_aid/scoreboard 
/index_en.htmltables  (March 20 17). 
3.3.3.2.3   Crisis -related aid  
3.183.   As covered in previous Secretariat reports, in relation to financial institutions, the 
Commission updated and prolonged a series of communications adopted during the crisis. The 
2013 Banking Communication and the 2009 Recapitalizati on and Impaired Assets Communications 
address state guarantees on liabilities, recapitalizations and asset relief measures. The Bank 
Recovery and Resolution Directive174 (BRRD), which entered into force on 1 January 2015, lays out 
resolution rules for banks in all member States with the aim of better protecting taxpayers from 
having to bail out banks in distress. The BRRD has been transposed in all EU member States. 
According to the Commission, the rules "allow state aid control to continue to ensure a consis tent 
policy response to the financial crisis throughout the EU."175 
3.184.   The Commission further notes176 that, by end -2016, it had analysed more than 100 banks 
(or about one third of Europe's banking sector by assets) under the special crisis rules. Of those 
banks,  around 60 were restructured and around 40 were orderly liquidated. The amount of aid 
approved has decreased over the period 2008 -2014 (Table 3.16). The Commission points out that 
only a part of state aid to the financial sector has, in practice, been used , with only around a third 
of guarantees approved by the Commission being provided to banks by the member States. The 
volume of aid in the form of capital (recapitalizations and impaired asset measures) has declined 
considerably over the period. Similarly,  outstanding guarantees and other liquidity support, having 
peaked in 2009, have declined considerably since then. Requests for, and use of, crisis -related 
state aid has varied from one member State to another.  
                                                
174 European Parliament and Council Directive 2014/59/EU of 15 May 2014 establishing a framework for 
the recovery and resolution of credit institutions and investment firms, OJ L 173, 12 June 2014.  
175 See p.51 of Commission staff wo rking document on competition policy cited in FN 161 above . 
176 See p.52 of Commission staff working document on competition policy cited in FN 161 above . WT/TPR/S/357 • European Union  
 
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  Table 3.16 Use of crisis -related aid  
 
Belgium  
Denmark  
Germany  
Ireland  
Greece  
Spain  
France  
Italy  
Luxembourg  
Netherlands  
Austria  
Portugal  
Slovenia  
U.K. 
Total EU -28 
Recapitalizations  
2008 14.4 0.5 20.0 - - - 13.2 - 2.5 14.0 0.9 - - 49.4 115.2  
2009 3.5 8.0 32.9 11.0 3.8 1.3 9.3 4.1 0.1 - 5.9 - - 9.7 90.7 
2010 - 1.9 6.7 35.3 - 9.5 - - - 4.8 0.6 - - 34.6 93.5 
2011 - 0.3 3.6 16.5 2.6 8.5 - - - - - - 0.3 3.2 35.0 
2012 2.9 - 0.9 - 30.9 40.4 2.6 2.0 - - 2.0 6.8 0.5 - 90.8 
2013 - - - - 3.5 2.1 - 1.9 - 4.2 1.8 1.1 2.4 3.3 20.5 
2014 - - - - - - - - - - 0.8 4.9 0.4 - 7.6 
Impaired asset measures  
2008 - - 9.8 - - - - - - - - - - - 9.8 
2009 7.7 - 24.8 - - - 1.2 - - 5.0 0.4 - - 40.4 79.5 
2010 - - 45.0 2.6 - 2.9 - - - - - 3.1 - - 54.0 
2011 - - - - - - - - - - - - - - - 
2012 9.4 - 0.4 - - 25.5 - - - - 0.1 - - - 35.4 
2013 4.7 0.3 - - - 4.5 - - - - - - - - 9.5 
2014 - - - - - - - - - - - - 0.3 - 0.3 
Guarantees on liabilities  
2008 9.0 145.0  18.7 180.3  - - 8.7 - 0.4 0.9 2.4 1.2 - 33.5 400.4  
2009 46.8 6.4 135.0  284.3 1.5 36.1 92.7 - 1.6 36.0 15.5 5.2 1.0 158.2  835.8  
2010 32.8 22.3 132.0  196.3  26.7 55.8 91.5 - 1.4 40.9 19.3 5.0 2.2 150.7  799.8  
2011 26.4 23.0 34.7 110.5  56.3 61.7 71.8 10.9 1.2 33.2 17.1 8.5 1.6 115.2  589.0  
2012 45.6 1.2 10.0 83.5 62.3 72.0 53.4 85.7 1.9 19.4 11.8 16.6 0.2 21.9 492.1  
2013 36.9 0.7 3.0 37.2 47.8 53.6 46.9 81.7 3.8 12.4 2.4 14.4 0.1 9.1 352.3  
2014 37.6 - 2.0 10.6 60.0 11.1 36.1 22.0 0.6 - 4.0 3.5 1.8 14.1 204.5  
Liquidity measures, other than guarantees on liabilities  
2008 - 0.6 3.6 - 0.5 2.3 - - - 13.2 - 1.1 - - 22.2 
2009 - 2.0 - - 4.3 19.3 - - 0.1 30.4 - 3.7 - 6.9 70.1 
2010 - 0.7 4.7 - 6.9 19.0 - - 0.1 7.9 - 3.8 - 18.5 62.6 
2011 - - - 0.1 6.6 13.5 - - 0.1 3.8 - 2.5 - 33.3 60.6 
2012 - - - 0.7 2.8 3.5 - - 0.1 3.8 - 0.2 - 32.7 44.3 
2013 - 0.0 - 0.9 2.3 0.2 - - 0.1 3.8 - - - 26.8 34.6 
2014 0.0 0.2 - - 2.2 - - - 0.1 4.7 - - - 24.0 31.6 
Note:  - refers to zero, 0.0 is greater than zero, but rounded to 0.0.  
 Other member States either did not use crisis -related aid (Bulgaria, Croati a, the Czech Republic, 
Estonia, Malta, Romania and Slovakia) or relatively small amounts (Lithuania, Hungary, Poland and 
Finland).  
Source:  Commission State Aid Scoreboard 2015 - Aid in the context of the financial and economic crisis. 
Viewed at: http://ec.europa.eu/competition/state_aid/scoreboard/financial_economic_crisis_aid_ 
en.html  [November 2016].  
3.3.4   Competition policy  
3.185.   The EU and the member States s hare responsibility for the application of the law on 
competition in the EU through DG Competition and the competition authorities of the member 
States.177 The European Competition Network (ECN) was established in 2004 based on a 
Commission Notice178 and a Joi nt Statement of the Council and the Commission on the Functioning 
of the Network of Competition Authorities.179 The ECN was created to provide for an efficient 
separation of work between the EU and the member States and consistent application of 
competition rules. The objective of the ECN is to help build the legal framework for enforcement of 
EU competition law with respect to cross -border business practices which restrict competition.  
3.186.   The basic legislative structure for competition policy in the EU has not changed during the 
period under review ( Table 3.17). 
                                                
177 The Competition Authorities of the member States are available at: http://ec.europa.eu/competition/ 
ecn/competition_authorities.html  [December 2016].  
178 Commission Notice on cooperation within the Network of Competition Authorities (2004/C 101/03).  
179 Joint Statement of the Council and the Commission on the Functioning of the Network of Competition 
Authorities, 15435/02 Add 1. Viewed at: http://ec.europa.eu/competition/ecn/joint_statement_en.pdf  
[Decem ber 2016].  WT/TPR/S/357 • European Union  
 
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  Table 3.17 Competition policy legislative framework – selected rules  
Rule Note  
Treaty on the Functioning of the European Union  
TFEU Article 101  Prohibits agreements between two or more independent market 
operators that restrict competition.  
TFEU Article 102  Prohibits firms holding a dominant position in a relevant market 
from abusing that position.  
TFEU Article 105  The Commissio n may undertake investigations and make 
decisions, upon request by a member State or on its own 
initiative, concerning possible violations of the TFEU rules on 
competition policy. Such decisions may be appealed to the 
Court of Justice of the EU.  
TFEU Arti cle 106  Limited exceptions to the Treaty competition rules for 
undertakings required to operate services of general economic 
interest.  
Regulations and Directives  
Council Regulation (EC) No. 1/2003 of 16 
December 2002  On the implementation of the rules o n competition laid down in 
Articles 81 and 82 of the EC Treaty (now Articles 101 and 102 
of the TFEU).  
Council Regulation (EC) No. 139/2004 of 20 
January 2004  On the control of concentrations between undertakings (the EC 
Merger Regulation).  
Directive 20 14/104/EU of the European 
Parliament and the Council of 26 November 
2014  On certain rules governing actions for damages under national 
law for infringements of the competition law provisions of the 
member States and of the EU.  
Commission Regulation 773/2 004/EC of 7 
April 2004  Relating to the conduct of proceedings by the Commission 
pursuant to Articles 81 and 82 of the EC Treaty.  
Commission Regulation (EU) No. 330/2010 
of 20 April 2010  On the application of Article 101(3) of the TFEU to categories of 
vertical agreements and concerted practices.  
Commission Regulation (EU) No. 316/2014 
of 21 March 2014  On the application of Article 101(3) of the TFEU to categories of 
technology transfer agreements.  
Commission Implementing Regulation (EU) 
No. 1269/2013 of 5 December 2013  Amending Regulation (EC) No. 802/2004 implementing Council 
Regulation (EC) No. 139/2004 on the control of concentrations 
between undertakings.  
Other  
Communication from the Commission  
OJ 2011/C 11/01  Guidelines on the applicability of Arti cle 101 of the TFEU to 
horizontal cooperation agreements.  
Communication from the Commission  
OJ 2014/C 89/03  Guidelines on the application of Article 101 of the TFEU to 
technology transfer agreements.  
Communication from the Commission  
OJ 2006/C 210/02  Guidelines on the method of setting fines imposed pursuant to 
Article 23(2)(a) of Regulation No. 1/2003.  
Communication from the Commission  
OJ 2013/C 167/07  On quantifying harm in actions for damages based on breaches 
of Article 101 or 102 of the TFEU.  
Practical Guide  
SWD(2013) 205 - C(2013) 3440  Quantifying harm in actions for damages based on breaches of 
Article 101 or 102 of the TFEU.  
Communication from the Commission  
OJ 2009/C 45/02  Guidance on the Commission's enforcement priorities in 
applying Article  82 of the EC Treaty to abusive exclusionary 
conduct by dominant undertakings.  
Commission Notice  
OJ 2013/C 366  On a simplified procedure for treatment of certain 
concentrations under Council Regulation (EC) No. 139/2004.  
Source:  DG Competition, WTO Secre tariat, and EUR -Lex. 
3.3.4.1   Anti-trust  
3.187.   Although Article 101 and 102 of the TFEU and Council Regulation (EC) No. 1/2003 are 
generally applicable, there are specific rules for some sectors. During the period under review 
there has been no change to the rules for th ese specific sectors, including agriculture, fisheries, 
insurance, postal services, professional services, transport, and telecommunications.180 
3.3.4.1.1   Anti-competitive agreements  
3.188.   The general prohibition on agreements that restrict competition in Article 101 of the  TFEU, 
does not apply to agreements among companies with a combined market share of 10% for 
                                                
180 DG Competition online information. Viewed at: http://ec.europa.eu/competition/index_en.html  
[December 2016].  WT/TPR/S/357 • European Union  
 
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  horizontal agreements or 15% for vertical agreements ( de minimis ). Furthermore, Article 101 may 
not apply to agreements:  
 That lead to economic benefits (such as imp rovements in production or distribution, or 
to technical or economic progress);  
 Where the restrictions are required to achieve these benefits;  
 Where consumers benefit from a fair share of the efficiency gains; and  
 Where the agreement must not eliminate c ompetition for a substantial part of the 
products concerned.  
3.189.   The Commission Guidelines relating to horizontal cooperation agreements set out general 
principles for assessment of information exchange among competitors, including information 
shared through t hird parties, agencies, suppliers, or customers. Such information could cover 
concerted practices or be related to fixing of prices or quantities.  
3.190.   Commission Regulation (EU) 330/2010 on vertical agreements and concerted practices is a 
block exemption regul ation (BER) which sets out the requirements for a vertical agreement to 
qualify as exempt from Article 101(1) of the TFEU. These requirements include five "hardcore" 
restrictions which would disqualify an agreement from the exemption:  
 Suppliers may not fix  minimum resale prices;  
 Suppliers may not apply restrictions on the territory into which they sell or to customers 
that buy the products;  
 Distributors may not be restricted from selling to end -users, although suppliers may be 
prohibited from selling to una uthorized distributors;  
 Authorized distributors must be free to sell or buy the goods to or from other authorized 
distributors; and  
 A manufacturer of spare parts may not restrict a buyer from selling them to end -users, 
independent repairers, or service pro viders.  
3.191.   In addition, to be covered by the BER, both supplier and buyer must not have a market 
share greater than 30%. Furthermore, specific conditions apply to vertical agreements that include 
non-competition obligations during or on termination of the con tract, and obligations relating to 
the exclusion of specific brands in a selective distribution system.  
3.192.   Commission Regulation (EU) No. 316/2014, the Technology Transfer Block Exemption 
Regulation (TTBER), exempts licensing agreements between companies with  limited market share 
(20% for agreements between competitors, and 30% for agreements with non -competitors) and 
meet conditions set out in the Regulation, which include similar "hardcore" restrictions to those 
that apply under Commission Regulation (EU) No . 330/2010.  
Investigation procedure  
3.193.   The investigation and redress procedures have not changed over the review period. 
Following an investigation, a Statement of Objections (SO) may be issued informing the parties of 
the Commission's objections. The compani es then have the right to defence in writing and, if they 
so wish, at an oral hearing under an independent Hearing Officer after which the Commission 
reviews its initial objections. If the Commission's objections are not fully met, a draft decision is 
subm itted to the Advisory Committee, made up of the representatives of the competition 
authorities of the member States, and then to the College of Commissioners for adoption. 
Alternatively, the Commission may make a commitment decision under which the parties  may 
make legally binding undertakings to address the Commission's objections. The parties to a 
Commission decision have the right of appeal to the General Court, and General Court decisions 
may be then appealed to the Court of Justice.  
3.194.   Under the 2006 Guid elines on the method of setting fines, fines are based on a 
percentage, up to 30%, of sales in the relevant sector for each company participating in an 
infringement. In addition, the Commission may add an additional "entry fee" of 15 -25% of annual WT/TPR/S/357 • European Union  
 
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  relevant  sales while the company was participating in the cartel and not necessarily only during 
the period of infringement. In cases of repeat offenders, the fines may be increased by up to 
100% and take account of the decisions of the national competition author ities of the member 
States as well as Commission decisions.  
Leniency  
3.195.   Immunity from fines or a reduction in fines may be possible in cases where an enterprise 
involved in a cartel cooperates with the Commission. To qualify for immunity, a company in a 
cartel must be the first to inform the Commission of the cartel, and provide enough information to 
start an investigation of the participating companies. Reductions in fines may be possible for 
companies that no longer participate in the cartel and provide evid ence of significant added value 
to the Commission. In these cases, fines may be reduced by up to 50% for the first company to 
comply with these conditions, with lower rates for the following ones.  
Investigations and fines imposed  
3.196.   In 2016, the level of fine s imposed on cartels was €3,561 million ( Table 3.18), of which 
€2,926 million was related to the trucks cartel, with Daimler being fined €1,009 million, DAF €753 
million, Volvo/Renault €670 million, and Iveco €495 million. In this  case, MAN was not fined, as it 
had revealed the existence of the cartel to the Commission.181 
Table 3.18 Anti-trust cases, investigations, decisions, and fines  
 Note  2012  2013  2014  2015  2016  
Commission investi gations   6 5 21 43  
NCA investigations   106 116 173 136  
Submitted by NCAs   91 60 101 100  
A. 101  Anti-competitive agreements  61% 66% 67% 69%  
A. 102  Abuse of dominant position  28% 21% 29% 24%  
A. 101/102  Combined  11% 13% 4% 7%  
Cartels  
Commission        
Cases decided  No 5 4 10 5 5 
Fines imposed  € million  1,816  1,666  1,689  366 3,561  
Source:  DG COMP, Cartel Statistics. Viewed at: http://ec.europa.eu/competition/cart els/statistics/statistics. 
pdf [December 2016].  
3.197.   In addition, in December 2016, the Commission stated that the cartel investigation into 
euro interest rate derivatives had been completed, with fines of €485 million imposed on Crédit 
Agricole, HSBC, and JP Morgan Chase after other banks had reached a settlement in December 
2013 ( Barclays, Deutsche Bank, RBS and Société Générale).182 
3.198.   In other cases, following a request for comments, the Commission has accepted and made 
legally binding, commitments by companies.  For example, commitments undertaken by container 
liner shipping companies on price transparency: where 14 carriers agreed that instead of only 
announcing price increases, they would provide maximum prices and the main elements 
thereof.183 
                                                
181 European Commission (2016), Antitrust: Commission fines truck producer s €2.93 billion for 
participating in a cartel , Press release, 19 July 2016. Viewed at: http://ec.europa.eu/competition/ antitrust/ 
news.html  [December 2016].  
182 European Commission (2016) , Anti-trust: Commission fines Crédit Agricole, HSBC and JPMorgan 
Chase €485 million for euro interest rate derivatives cartel , Press release, 7 December 2016. Viewed at: 
http://ec.europa.e u/competition/antitrust/news.html  [December 2016].  
183 European Commission (2016), Anti-trust: Commission accepts commitments by container liner 
shipping companies on price transparency , Press release, 7 July 2016. Viewed at: http://ec.europa.eu/ 
competition/antitrust/news.html  [December 2016].  WT/TPR/S/357 • European Union  
 
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  3.199.   Among the other in vestigations of note were the inquiries launched in May 2015 into the 
e-commerce sector in the EU, with initial findings published in September 2016184 following an 
earlier initial finding that geo -blocking is wide -spread in the EU.185 
3.200.   In addition, the 2014 di rective on antitrust damages actions is intended to reduce the 
obstacles to compensation for consumers. The directive was to have been implemented by the 
member States through their legal systems by 27 December 2016. The directive on damages was 
complement ed by the Commission recommendations on collective redress and the Communication 
and Practical Guide on quantifying anti -trust harm in damages actions.  
3.3.4.1.2   Abuse of dominant position  
3.201.   In the review period, there has been no significant change to anti -trust proc edures in 
abuse of dominance (Article 102 of TFEU), and the Commission's priorities in assessing abuse of a 
dominant position are set out in the 2009 Communication on enforcement priorities in applying 
Article 102 of the TFEU to abusive exclusionary conduc t by dominant undertakings.  
3.202.   In the Communication, dominance is defined as: "a position of economic strength enjoyed 
by an undertaking, which enables it to prevent effective competition being maintained on a 
relevant market, by affording it the power to beh ave to an appreciable extent independently of its 
competitors, its customers and ultimately of consumers". The definition of relevant market is 
based on the product itself (including possible substitutes), and the geographic market. Market 
share is used as  an indicator of the importance of a firm in a market, and the Commission 
considers it unlikely that a company with a market share of less than 40% would be dominant. 
However, other factors are also taken into account, including the ease with which other c ompanies 
can enter the market; the existence of countervailing buyer power; the overall size and strength of 
the company and its resources; and the extent to which it is vertically integrated.  
3.203.   Dominance is not, per se , illegal, and a dominant company is en titled to compete with 
others. However, it has a special responsibility to ensure that its conduct does not distort 
competition. Examples of practices that could be abusive include: exclusive purchasing 
requirements; below -cost price -setting; refusing to s upply inputs indispensable for competition in 
an ancillary market; tying; loyalty rebates; and charging excessive prices.  
3.204.   The investigation and redress procedures have not changed over the review period and, 
with the additional importance of defining the r elevant market, the steps are the same as cartel 
investigations. Similarly, the fines that may be imposed for abuse of dominant position are the 
same, mutatis mutandis , as those for cartels, and there is also the possibility of claims for 
damages from cons umers.  
3.205.   The cases concerning abuse of dominant position during the review period include ongoing 
procedures with Google, with statements of objections on comparison shopping, restricting third 
party websites from displaying search adds from competitors186, and the Android operating system 
and applications187. In addition, the Commission opened formal investigations to assess whether 
Anheuser -Bush InBev SA abused its dominant position on the Belgian beer market by hindering 
imports of its beer from neighbouring c ountries188, and whether Qualcomm abused its dominant 
                                                
184 European Commission (2016), Anti-trust: Commission publishes initial findings of e -commerce sector 
inquiry , Press release, 15 September 2016. Vi ewed at: http://ec.europa.eu/competition/antitrust/news.html  
[December 2016].  
185 European Commission (2016), Anti-trust: e -commerce sector inquiry finds geo -blocking is wide -
spread througho ut EU , Press release, 18 March 2016. Viewed at: 
http://ec.europa.eu/competition/antitrust/news.html  [December 2016].  
186 European Commission (2016), Anti-trust: Commission takes further step s in investigations alleging 
Google's comparison shopping and advertising -related practices breach EU rules , Press release, 14 July 2016. 
Viewed at: http://ec.europa.eu/competition/antitrus t/news.html  [December 2016].  
187 European Commission (2016), Anti-trust:  Commission sends Statement of Objections to Google on 
Android operating system and applications , Press release, 20 April 2016. Viewed at: http://ec.europa.eu/ 
competition/antitrust/news.html  [December 2016].  
188 European Commission (2016), Anti-trust: Commission opens formal investigation into AB InBev's 
practices on Belgian beer market , Press release, 30 June 2016. Vi ewed at: http://ec.europa.eu/competition/ 
antitrust/news.html  [December 2016].  WT/TPR/S/357 • European Union  
 
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  position by offering incentives to buy chipsets from Qualcomm, and whether Qualcomm engaged 
in "predatory pricing".189 
3.3.4.2   Mergers and acquisitions  
3.206.   Under the Merger Regulation, all mergers with an EU dimension are reviewed by the 
Commission, where an EU dimension is defined as either:  
 a merger where the parties have;  
o a combined worldwide turnover greater than €5,000 million; and  
o each party has an EU -wide turnover greater than €250 million; or  
 a merger where the  parties have;  
o a combined worldwide turnover greater than €2,500 million;  
o a turnover greater than €100 million in each of at least three member States;  
o at least two of the firms with a turnover greater than €25 million in each of these 
three member State s; and  
o at least two firms with an EU -wide turnover greater than €100 million each.  
3.207.   In other cases, the competition authorities of the member States may need to approve the 
merger, and there is a referral mechanism to allow transfers of cases from a member State t o the 
Commission or vice versa.  
3.208.   All mergers with an EU dimension must be notified to the Commission before they are 
implemented. A simplified procedure for merger approval applies to mergers which are considered 
unlikely to raise problems for compet ition. Since 2014, more cases have fallen under the simplified 
procedure, such as those with a combined market share of 20% for horizontal mergers and 30% 
for vertical mergers, or where the increase in market share resulting from a merger is quite small. 
A white paper suggesting further legislative change was issued by the Commission in July 2014.190 
The proposed changes were summarized by the Commission191 in a previous report.192 In August 
2016, the Commission launched a further evaluation of procedural and jur isdictional issues of EU 
merger control, in order to assess whether there is scope for legislative changes.193 
3.209.   After being notified, the Commission has 25 working days to complete a Phase I 
investigation, at the end of which the merger is cleared with or wit hout remedies or, if there are 
outstanding concerns, a Phase II investigation is opened. A Phase II investigation is a much more 
detailed analysis of the effect of the merger on competition, including claims of efficiency gains 
that could result from the m erger. The result of the Phase II investigation is to unconditionally 
clear the merger, approve it subject to remedies, or prohibit it.  
3.210.   If the conclusion is that the merger will probably impede competition, the Commission 
sends a statement of objections to  the parties, who have the right to respond and to request a 
hearing by the Hearing Officer. As for decisions relating to cartels and abuse of dominant position, 
all Commission decisions and/or procedural conduct may be appealed to the General Court and 
then, on points of law, to the Court of Justice of the EU.  
                                                
189 European Commission (2015), Anti-trust: Commission opens two formal investigations against 
chipset suppl ier Qualcomm , Press release, 16 July 2015. Viewed at: http://ec.europa.eu/competition/antitrust 
/news.html  [December 2016].  
190 European Commission (2014), White Paper – Towards more effe ctive EU  merger control, 
COM(2014)449 final, 9 July 2014.  
191 DG Competition online information. Viewed at: http://ec.europa.eu/competition/mergers/ 
legislation/regulations.html#merger_reg  [December 2016].  
192 WTO document WT/TPR/S/317/Rev.1, paras 3.183 -3.184.  
193 DG Competition online information. Viewed at: http://ec.europa.eu/competition/consultations/2016_ 
merger_control/index_en.html  [April 2017].  WT/TPR/S/357 • European Union  
 
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  Table 3.19 Merger notifications and decision s 2013-16 
 2013  2014  2015  2016  
Notified cases  277 303 337 337 
  Withdrawn  1 6 8 8 
Phase I decisions      
  Out of scope  0 0 1 7 
  Compatible  252 280 297 299 
  Compatible with remedies  11 12 13 17 
Phase II decisions      
  Compatible  2 2 1 1 
  Compatible with remedies  2 5 7 6 
  Prohibited  2 0 0 1 
Source:  DG Competition. Viewed at: http://ec.europa.eu/competition/mergers/overview_en.html  [December 
2016].  
3.3.4.3   International cooperation  
3.211.   The EU cooperates with other competition authorities, and has competition agreements 
and cooperation arran gements with a variety of countries as set out in previous reviews. During 
the review period, a new agreement was signed with South Africa in 2016. In addition, competition 
provisions have also been included in numerous general cooperation or association a greements, or 
trade agreements.  
3.212.   The EU has also been supportive of greater multilateral cooperation through the 
International Competition Network (ICN), the UNCTAD Intergovernmental Group of Experts on 
Competition Policy, and the OECD Competition Committee . The EU considers that these 
multilateral forums provide an important platform to promote open competition and fight 
protectionism; this enables competition authorities worldwide to respond to cases more efficiently 
through coordinated inspections across several jurisdictions.194 
3.3.5   Taxation  
3.213.   As outlined in the previous Review, the main priorities of EU tax policy continue to focus on 
eliminating tax barriers to cross -border economic activity, and combatting harmful tax competition 
as well as tax evasion and tax  fraud.  
3.214.   The Commission has also adopted a tax reform package with the aim of overhauling the 
way in which companies are taxed in the Single Market. To this end, on 25 October 2016, the 
Commission relaunched proposals for a Common Consolidated Corporate Tax  Base195 (CCCTB) 
after a lack of agreement on the original proposal from 2011. The proposed directives (the first for 
a common tax base and the second bringing in consolidation and formula apportionment) are 
currently under discussion with member States. In terms of the main changes to the original 
proposal, the CCCTB will be mandatory for companies with a turnover of more than €750 million, 
whereas previously it was a general opt -in system. Also, the Commission wants member States to 
first agree on the commo n tax base before tackling the EU -wide consolidation of tax returns.  
3.215.   For the EU -28 in 2015, total receipts from taxes and social contributions amounted to the 
equivalent of 40.0% of GDP or €5,878 billion (Table 3. 20). In 2015, income taxes (i.e. taxes on 
individual and household income) were the most important (9.4% of GDP), followed by VAT 
(7.0%) and employers' social contributions (6.9%).  
                                                
194 DG Competition online information. Viewed at: http://ec.europa.eu/competition/internat ional/ 
bilateral/  [December 2016].  
195 Proposal for a Council Directive on a CCCTB in document COM(2016) 683 final, 25 October 2016.  WT/TPR/S/357 • European Union  
 
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  Table 3.20 Taxes and social contributions in the EU -28, 2012 -15 
(€ bill ion) 
 2012  2013  2014  2015  
Total receipts from taxes and social contributions (including imputed 
social contributions) after deduction of amounts assessed but unlikely to 
be collected  5,320  5,422  5,602  5,878  
  Total tax receipts  3,535  3,614  3,742  3,949  
    Taxes on production and imports  1,805  1,829  1,903  2,002  
      Taxes on products  1,483  1,501  1,560  1,648  
        Value added type taxes (VAT)  928 939 976 1,033  
        Taxes and duties on imports excluding VAT  57 57 60 65 
        Taxes on products, e xcept VAT and import taxes  497 504 523 551 
      Other taxes on production  322 328 343 354 
    Current taxes on income, wealth, etc.  1,701  1,747  1,804  1,907  
      Taxes on income  1,582  1,621  1,673  1,769  
        of which:       
       Taxes on individua l or household income including holding gains  1,240  1,272  1,322  1,389  
       Taxes on the income or profits of corporations including holding gains  332 336 338 364 
      Other current taxes  118 126 131 139 
    Capital taxes  30 38 35 40 
  Net social con tributions  1,799  1,824  1,873  1,941  
    of which:       
    Employers' actual social contributions  943 951 980 1,014  
    Households' actual social contributions  725 741 759 790 
Source:  Eurostat online database [gov_10a_taxag]. Viewed at: http://appsso.eurostat.ec.europa.eu/ 
nui/show.do?dataset=gov_10a_taxag&lang=en  [December 2016]. Includes taxes collected by the 
institutions of the EU in the context of the cust oms union.  
3.3.5.1   Income tax  
3.216.   Taxes and employee social contributions in the member States differ considerably in their 
economic significance, and the systems of income tax vary from one member State to another 
with different categories of income subject to income  tax. For example, in Denmark, where social 
contributions remain by far the lowest, personal income taxes are by far the highest. In contrast, 
workers in Cyprus have the lowest income taxes in the EU. Tax systems also vary widely among 
progressive tax syst ems and between progressive and flat tax systems. Governments with flat tax 
policies impose a fixed rate on income tax, the lowest being 10% in Bulgaria.196 
3.217.   A further feature of variation is that the share of tax revenue accounted for by local taxes 
and soci al security funds is substantial in some member States (e.g. Denmark) and very small in 
others (e.g. Malta).  
Table 3.21 Personal income taxes and actual social contributions in the EU -28, 2015  
(% of GDP)  
 Taxe s on 
individual or 
household 
income 
including 
holding 
gainsa Households' 
actual social 
contributionsa Compulsory 
employees' 
actual social 
contributionsa Tax 
systemb Top rate 
of 
income 
tax 
(%)b Income for 
maximum 
income tax 
(single 
person)b 
Austria  10.9 8.0 7.9 Progressive 
5 brackets  50 €90,000  
Belgium  12.6 5.6 5.5 Progressive 
5 brackets  50 €38,080  
Bulgaria  3.1 3.1 3.1 Flat rate  10  
Croatia  3.6 5.6 5.6 Progressive 
3 brackets  40 HRK 
158,400  
                                                
196 See "The Tax Burden of Typical Workers in the EU -28 – 2016", Institut Economique Molinari. Viewed 
at: http://www.institutmolinari.org/IMG/pdf/tax -burden -eu-2016.pdf . WT/TPR/S/357 • European Union  
 
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   Taxe s on 
individual or 
household 
income 
including 
holding 
gainsa Households' 
actual social 
contributionsa Compulsory 
employees' 
actual social 
contributionsa Tax 
systemb Top rate 
of 
income 
tax 
(%)b Income for 
maximum 
income tax 
(single 
person)b 
Cyprus  2.7 2.7 2.7 Progressive 
4 brackets  35 €60,000  
Czech 
Republic  3.6 5.3 5.2 Flat rate  15  
Denmark  26.5 0.7 0.0 Hybrid 
system  55.8c  
Estonia  5.8 0.6 0.6 Flat rate  20  
Finland  13.3 4.2 4.0 Progressive 
4 brackets  31.75  €72,300  
France  8.8 5.6 5.6 Progressive 
5 brackets  45 €152,108  
Germany  9.1 8.8 8.5 Progressive 
formula  45 €254,447  
Greece  5.4 6.3 6.3 Progressive 
3 brackets  42 €42,000  
Hungary  5.0 5.5 5.5 Flat rate  15  
Ireland  7.7 1.5 1.5 Progressive 
2 brackets  40 €33,800  
Italy 12.2 4.4 4.3 Progressive 
5 brackets  43 €75,000  
Latvia  5.9 2.5 2.5 Flat rate  23  
Lithuania  3.9 3.8 3.8 Flat rate  15  
Luxembourg  9.2 6.3 6.2 Progressive 
19 brackets  40 €100,000  
Malta  6.4 2.9 2.9 Progressive 
3 brackets  35 €60,000  
Netherlands  7.7 9.1 9.1 Progressive 
3 brackets  52 €66,421  
Poland  4.7 7.4 7.4 Progressive 
2 brackets  32 PLN85,528 
(€20,441)  
Portugal  7.3 3.9 3.9 Progressive 
5 brackets  48 €80,000  
Romania  3.7 3.1 3.1 Flat rate  16  
Slovakia  3.1 5.8 5.8 Progressive 
2 brackets  25 €35,022.31  
Slovenia  5.1 9.0 9.0 Progressive 
4 brackets  50 €70,907.20  
Spain  7.4 3.4 3.4 Progressive 
5 brackets  45 €60,000  
Sweden  15.1 0.1 0.1 Progressive 
2 brackets  25 SEK625,800 
(€66,905)  
United 
Kingdom  9.2 3.0 2.6 Progressive 
3 brackets  45 £150,000 
(€206,657)  
Source:  a. Eurostat online database [gov_10a_taxag]. Viewed at: http://appsso.eurostat.ec.europa.eu/
 nui/show.do?dataset=gov_10a_taxag&lang=en  [December 2016].  
b. DG Taxation and Customs Union (2016), Taxation trends in the European Union - Data for the EU 
member States, Iceland and N orway, Edition 2016.  
c. Includes local tax (average 24.91%).  
3.3.5.2   Corporation tax  
3.218.   The EU average top rate of tax on corporate income has been gently declining in recent 
years, falling from 23.8% in 2009 to 22.5% in 2016. Corporate tax rates still differ signifi cantly 
within the Union (Table 3. 22). 
3.219.   The nominal tax rate on corporate income varies between a minimum of 10% in Bulgaria 
to top rates equal to, or above, 30% in Belgium, France, Italy and Malta. However, tax provisions 
may limit the rate effectively appl ied as outlined, inter alia , in the most recent World Bank/PwC WT/TPR/S/357 • European Union  
 
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  report on paying taxes.197 In the case of most member States, the charges related to labour are 
more important than taxes on profits.  
Table 3.22 Taxes on the income or profits of corporations including holding gains and 
employer social contributions  
(% of GDP for 2015, tax rates 2015)  
 Taxes on the 
income or 
profits of 
corporations 
including 
holding gains, 
(% of GDP)a, b Employers' 
actual social 
contr ibutionsb Nominal 
corporate 
income tax 
rateb Profit 
taxesc, d Labour 
taxesc, d Otherc,d 
Austria  2.3 8.0 25.0 16.9 34.2 0.5 
Belgium  3.4 5.6 33.0 9.1 48.9 0.7 
Bulgaria  2.1 3.1 10.0 5 20.2 1.8 
Croatia  1.9 5.6 20.0 19.4 1.5 0 
Cyprus  5.9 2.7 12.5 9.5 13.4 1.8 
Czech Republic  3.4 5.3 19.0 9.1 38.4 2.5 
Denmark  2.6 0.7 22.0 19 3.2 2.8 
Estonia  2.1 0.6 20.0 7.9 38.8 2 
Finland  2.2 4.2 20.0 11.7 25.1 1.3 
France  2.6 5.6 33.33/34.4  0.4 53.5 8.9 
Germany  2.4 8.8 15.0 23.2 21.3 4.4 
Greece  2.2 6.3 29.0 22.4 27.7 0.6 
Hungary  1.7 5.5 10.0/19.0  9.9 34.3 2.3 
Ireland  2.7 1.5 12.5/25.0  12.4 12.2 1.4 
Italy 2.0 4.4 27.5/31.4  17 43.4 1.6 
Latvia  1.6 2.5 15.0 6.3 26.6 3 
Lithuania  1.5 3.8 15.0 5.9 35.2 1.6 
Luxembourg  4.5 6.3 21.0 4.6 15.7 0.5 
Malta  6.3 2.9 35.0 32.4 10.9 0.5 
Netherlands  2.7 9.1 20.0/25.0  20.6 19.4 0.4 
Poland  1.8 7.4 19.0 14.5 24.9 1 
Portugal  3.1 3.9 21.0 12.5 26.8 0.5 
Romania  2.3 3.1 16.0 11.6 25.8 1 
Slovakia  3.7 5.8 22.0 10.5 39.7 1.4 
Slovenia  1.5 9 17.0 12.7 18.2 0.1 
Spain  2.4 3.4 25.0 12.4 35.9 0.7 
Sweden  3.0 0.1 22.0 13.1 35.4 0.6 
United Kingdom  2.5 3.0 20.0 18.3 10.9 1.7 
Source:  a. Eurostat online database [gov_10a_taxag]. Viewed at: http://appsso. eurostat.ec.europa.eu/nui/  
show.do?dataset=gov_10a_taxag&lang=en  [December 2016];  
b. DG Taxation and Customs Union (2016), Taxation trends in the European Union - Data for the EU 
member States, Iceland and Norway, Edition 2016.  
c. World Bank/PwC (2017), P aying Taxes 2017, p. 115. Nominal rates do not include various 
surcharges (e.g. regional surcharges).  
d. The last three columns relate to the PwC/World Bank indicators for the Total Tax Rate. This 
measures the amount of taxes and mandatory contributions bo rne by businesses in the second year 
of operation, expressed as a share of commercial profit.  
3.3.5.3   Value Added Tax  
3.220.   Since the last Review, the Commission has proposed an action plan on VAT198, outlining 
the principles according to which a future single European VA T system would be organized. A 
                                                
197 See http://www.pwc.com/gx/en/services/tax/paying -taxes -2017.html ; and http://www.pwc.com/gx/  
en/paying -taxes/pdf/pwc -paying -taxes -2017-appendix2.pdf . 
198 Communication from the Commission to the European Parliament, t he Council and the European 
Economic and Social Committee on an action plan on VAT: Towards a single EU VAT area – Time to Decide in 
document COM(2016) 148 final o f 7 April 2016.  WT/TPR/S/357 • European Union  
 
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  central feature of the plan is the proposed change to the country of destination principle in 
connection with cross -border shipments of goods. The action plan also outlines possible ways of 
granting members States more flexib ility to introduce reduced rates.199 
3.221.   As shown in Table 3.2 3, the importance of VAT to member State government revenues 
differs significantly from one member State to another, ranging from 13.0% of GDP in Croatia to 
4.7% in Ireland. The standard rate – i.e. the rate that EU member States have to apply to all non -
exempt goods and services – must be no less than 15%, but there is no maximum. Member States 
also have the option to apply one or two reduced rates (to goods and services listed in Annex III of 
the VAT  Directive) which must be no less than 5%.  
Table 3.23 VAT in the EU -28 
(% of GDP for 2015, tax rates 2016)  
 VAT 
(% of GDP)  Standard rate 
(%) Reduced rate 
(%) Parking rate 
(%) Zero-rated  
Austria  7.7 20.0 10/13  13.0  
Belgium  6.7 21.0 6/12 12.0 Yes 
Bulgaria  9.0 20.0 9.0   
Croatia  13.0 25.0 5/13   
Cyprus  8.6 19.0 5/9   
Czech Republic  7.3 21.0 10/15    
Denmark  9.4 25.0   Yes 
Estonia  9.2 20.0 9.0   
Finland  9.1 24.0 10/14   Yes 
France  6.9 20.0 5.5/10    
German y 7.0 19.0 7.0   
Greece  7.3 24.0 6/13   
Hungary  9.7 27.0 5/18   
Ireland  4.7 23.0 9/13.5  13.5 Yes 
Italy 6.2 22.0 5/10   
Latvia  7.7 21.0 12.0   
Lithuania  7.7 21.0 5/9   
Luxembourg  6.8 17.0 8.0 14.0  
Malta  7.4 18.0 5/7  Yes 
Netherlands  6.6 21.0 6.0   
Poland  7.0 23.0 5/8   
Portugal  8.6 23.0 6/13 13.0  
Romania  8.1 20.0 5/9   
Slovakia  6.9 20.0 10.0   
Slovenia  8.3 22.0 9.5   
Spain  6.5 21.0 10.0   
Sweden  9.1 25.0 6/12  Yes 
United Kingdom  6.9 20.0 5.0  Yes 
Source:  Eurostat online database [gov_10a_ taxag]. Viewed at: http://appsso.eurostat.ec.europa.eu/nui/  
show.do?dataset=gov_10a_taxag&lang=en  [December 2016]. DG Taxation and Customs Union 
(2016), VAT Rate s Applied in the member States of the European Union, Situation at 1 August 2016, 
taxud.c.1(2016).  
3.3.6   State trading, state -owned enterprises, and privatization  
3.3.6.1   State trading  
3.222.   During the review period, the EU has notified one state -trading enterprise pursuant t o 
Article XVII of GATT 1994 and its Understanding. Thus, the Swedish distributor of alcoholic 
beverages, Systembolaget AB, has been notified as a retail monopoly.200 It has a contract with the 
                                                
199 Regarding the minimum rate, by means of Directive (EU) 2016/856, the Counci l extended the period 
of validity of the 15% minimum VAT standard rate until the end of 2017.  
200 WTO document G/STR/N/16/EU.  WT/TPR/S/357 • European Union  
 
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  Government of Sweden for the exclusive retail resale of alcoholic  beverages, and may import, but 
not export, these products. The monopoly has been put in place with the aim of reducing the total 
alcohol consumption by limiting availability.201 
3.223.   However, there are a few other enterprises in EU member States that have exclus ive 
privileges with respect to the sale or distribution of certain products. The British Wool Marketing 
Board, pursuant to the British Wool Marketing Scheme of 1950, has exclusive rights with respect 
to grading and marketing wool from U.K.-registered produ cers.202 Furthermore, the Finnish state 
monopoly alcohol distributor, Alko, and its related state -owned producer/importer, Altia, have a 
similar role to Sweden's Systembolaget in order to limit the type and distribution of alcoholic 
beverages in Finland.203 The EU authorities were in agreement that these entities were state -
trading enterprises pursuant to Article XVII, and would be notifying them to the WTO in the future.  
3.224.   Article 37 of the TFEU provides some provisions with respect to state monopolies, i.e. to 
ensure that they provide non -discriminatory treatment when operating commercially. This Article 
provides that there will be no discrimination for the goods when procured or marketed, i.e. 
imported or exported between member States, when the state either di rectly or indirectly 
supervises, determines, or appreciably influences such intra -EU imports or exports.204 Thus, these 
provisions apply to the EU internal market but not to external trade. State monopolies are subject 
to general EU rules, including, for exa mple, rules on competition, freedom of establishment and 
non-discrimination.  
3.3.6.2   State -owned enterprises  
3.225.   The EU has no common definition of state -owned enterprises (SOEs), rather each member 
State has its own legal provisions, and there are various forms of st ate ownership. Thus, a direct 
comparison across member States is difficult to apply in many cases due to lack of uniformity. 
However, a 2016 institutional paper by the European Commission had, for its purposes, defined 
SOEs as companies where the state exe rcised control, regardless of the size of state ownership.205 
Furthermore, it is the member States that retain competence for SOEs, including their functioning, 
funding, and policy.  Article 345 of the TFEU states that: "The Treaties shall in no way prejudice  the 
rules in member States governing the system of property ownership". For example, the Treaties 
will not interfere with a member State's choice to organize (part of) its economy on the basis of 
SOEs as opposed to private companies. However, general EU r ules are applicable also to SOEs 
including, for example, rules on competition, freedom of establishment and non -discrimination. It 
is noted that, as many member States are also members of the OECD, they, in principle, follow the 
non-binding Guidelines on C orporate Governance of SOEs, which aims to provide transparency and 
disclosure, a rules -based environment, equitable treatment of shareholders, responsibilities for 
board members, rationales for state ownership, etc.206 
3.226.   SOEs continue to play a significant ro le in the EU by providing a large share of the output 
and employment, while significant disparities remain among member States as to the level and 
scope of public ownership. According to the EC's Institutional Paper on SOEs, most member States 
have signifi cant participation of SOEs in the energy and rail sectors. In the new member States, 
there tends to be SOEs in many sectors of the economy due to historical legacies, while in the 
EU-15, SOEs are more concentrated in the network sectors.207 While there has b een a gradual 
                                                
201 WTO document G/STR/N/16/EU.  
202 British Wool Marketing Board online information. Viewed at: http://www.britishwool.org.uk/  and 
http://www.britishwool.org.uk/assets/uploads/BWMB -Full-Accounts -2014.pdf ; and Department for 
Environment, Food and Rural Affa irs archived information at: http://webarchive.nationalarchives.gov.uk/ 
20080910140806/http:/www.defra.gov.uk/farm /livestock/pdf/britishwool -review0408.pdf . 
203 Online information: https://www.altiagroup.com , https://www.alko.fi/ , and https://en.wikipedia.org/ 
wiki/Alko . 
204 Consolidated Version of the TFEU, European Commission online information. Viewed at: http://eur -
lex.europa.eu/legal -content/E N/TXT/PDF/?uri=CELEX:12012E/TXT& from=EN . 
205 "State -Owned Enterprises in the EU: Lessons Learnt and Ways Forward in a Post -Crisis Context", 
European Commission online information. Viewed at: http://ec.europa.eu/economy_finance/publications/eeip/ 
ip031_en.htm . 
206 European Commission online information. Viewed at: http://ec.europa.eu/economy_finance/events/ 
2015/20151124 -workshop/documents/eu_guidelines presentation__hans_en.pdf . 
207 "State -Owned Enterprises in the EU: Lessons Learnt and Ways Forward in a Post -Crisis Context", 
European Commission onl ine information. Viewed at: http://ec.europa.eu/economy_finance/publications/eeip/  
ip031_en.htm . WT/TPR/S/357 • European Union  
 
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  overall reduction in SOEs in most member States over the last 15 years, there has been somewhat 
of a reversal during the financial crisis, when many member States intervened or took equity 
interests in financial sector companies in particular . This has prompted further scrutiny and 
examination of SOEs, particularly as to their financial performance and impact on fiscal balances. 
Concerns have been raised as to their market functioning, public finances, and financial stability.  
3.227.   There have also been reports of the reform of SOEs in the EU in the last 15 years, with 
reductions in direct government control, improved corporate governance, and modifications to the 
legal framework in which SOEs operate. Many of these improvements can be related to adh ering to 
the OECD Guidelines. In particular, there have been improvements in transparency in Italy; 
separation of ownership and regulatory functions in Lithuania; progress in the selection of 
supervisory boards in Croatia; and improvement in reporting moda lities in several member 
States.208 There is also a Commission Directive on transparency of financial relations between 
member States and public undertakings to ensure the transparency of public funds made available 
to state -owned companies.209 However, while information is to be reported to the Commission 
pursuant to this Directive, it was not available.  
3.228.   One of the areas where comparability can be undertaken among member States is with 
respect to a recent requirement for member States to report on the particip ation of the 
government in the capital of public and private corporations.210 The liabilities of public corporations 
as they pertain to its overall fiscal position have been an important benchmark in the aftermath of 
the financial crisis. This data demonstra tes that government participation in public or private 
corporations can be beneficial if they produce profits, or alternatively, create a liability on public 
finances in the case of unprofitability. The government's role in the backing of SOEs varies 
considerably by member State ( Table 3.24 ). The member States with the largest exposure in 
terms of liabilities are Germany and the Netherlands, whereby SOE liabilities exceed GDP (110% 
and 108% respectively). Other significant liabilities exist for France, Gree ce, Ireland, Luxembourg, 
Slovenia, Portugal, Belgium, and the U.K., where it exceeds 50% of GDP. It is important to note 
that, for all member States report ing significant liabilities, nearly all relate to the financial sector. 
Most member States' liabiliti es are with respect to the central government, except for Germany 
and Finland where most is at the level of the local government.  
3.229.   An overview was undertaken of government ownership in enterprises as reported by the 
individual member States (Table  A3.5), as  there is no common reporting at the EU level. In view of 
the differences in SOE definitions (i.e. some reporting includes only majority ownership, whereas 
others include all shareholding or investments of the state), and varying levels of detailed 
informa tion available, particularly at the sub -central level, the information set out in the Table is 
meant to provide only a rough overview of governments as stakeholders in enterprises. In most 
member States, governments have ownership interests in at least 50 enterprises; while the figure 
varies considerably, with Italy having over 10,000. When sub -central enterprises with state 
involvement are also accounted for, Germany, Romania, and Sweden have a considerable number 
of such enterprises, with Germany having t he largest overall. These enterprises operate in all 
sectors of the economy, while the largest ones tend to be concentrated in the energy, financial, 
and transport sectors. While some member States have moved towards privatization of the 
network sectors in  recent years, there remains a significant number of SOEs in the postal and 
telecommunications sectors.  
3.230.   Information on the size, prevalence, financial exposure, profitability, and employment of 
enterprises where governments own stakes was also compiled whe re available (Table A3.5). In 
general, the larger the number of such enterprises, the larger the assets owned by the state. Five 
member States (Austria, Germany, Hungary, Italy, and Slovenia) had government -owned or 
-invested assets (where available) which  met or exceeded 50% of GDP. This type of assets 
exceeded 100% of the GDP for Slovenia. Where information on profitability was available, 
enterprises where governments were involved tended to earn a profit for the state and contributed 
                                                
208 Ibid. 
209 The Directive applies to enterprises with a turnover of more than  €40 million (or a balance sheet 
total of €800 million for public credit institutions) and more detailed information on manufacturing public 
undertakings with a turnover of more than €250 million. Commission Directive 2006/111/EC of 16 November 
2006. Online  information. Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX: 
32006L0111& from=EN . 
210 Council Directive 2011/85/EU. OJ L 306/41 of 23 November 2011. Online information. Viewed at: 
http://eur -lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:306:0041:0047:en:PDF . WT/TPR/S/357 • European Union  
 
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  positively to the go vernment's budget. The exceptions being Denmark and Portugal, where losses 
were reported.  
Table 3.24 Liabilities of public corporations in EU member States, 2015  
(% of GDP)  
  Of which:  Of which controlled by:  
 Total 
liabilities  Financial  Non-
financial  Central 
govt.  State 
govt.  Local 
govt.  Social 
security  
Austriaa 33.05  18.53  14.52  11.85  16.64  4.56 n.a. 
Belgium  51.44  37.35  14.09  42.19  3.94 5.31 n.a. 
Bulgaria  12.12  3.61 8.50 9.83 n.a. 2.29 n.a. 
Croatia  10.70  4.87 5.83 8.63 n.a. 2.02 0.04 
Cyprus  b b b b b b b 
Czech Repa 12.21  n.a. 12.21  11.09  n.a. 1.12 n.a. 
Denmark  31.10  10.74  20.36  15.83  n.a. 15.28  n.a. 
Estonia  8.71 n.a. 8.71 8.35 n.a. 0.36 n.a. 
Finland  43.18  20.24  22.94  17.72  n.a. 25.46  n.a. 
Francea 62.66 44.14 18.52  56.87  n.a. 5.79 n.a. 
Germanya 110.41  105.81  4.60 22.47  37.97  49.97  n.a. 
Greece  91.37 83.51 7.86 91.37  n.a. n.a. n.a. 
Hungary  20.50  15.37  5.14 19.65  n.a. 0.85 n.a. 
Ireland  50.23  44.22  6.01 50.23  n.a. n.a. n.a. 
Italy 47.41  26.80  20.62  43.25 n.a. 4.15 0.01 
Latvia  20.79  n.a. 20.79  13.89  n.a. 6.91 n.a. 
Lithuania  6.92 0.16 6.75 5.97 n.a. 0.94 n.a. 
Luxembourg  80.75 75.33 5.41 80.62  n.a. 0.13 n.a. 
Malta  22.33  3.67 18.66  22.33  n.a. n.a. n.a. 
Netherlands  108.10  90.31  17.79  95.11  n.a. 12.99  n.a. 
Poland  31.26  19.54 11.72  29.50  n.a. 1.75 n.a. 
Portugal  72.83  68.83  4.00 72.03  n.a. 0.79 n.a. 
Romania  8.26 3.97 4.30 6.92 n.a. 1.34 n.a. 
Slovakia  1.63 0.33 1.31 1.41 n.a. 0.23 n.a. 
Slovenia  67.72  47.72  20.00  60.47  n.a. 0.65 6.60 
Spain  29.57  26.16  3.41 28.97  0.40 0.21 n.a. 
Sweden  44.75  19.19  25.56  21.24  n.a. 20.30  3.22 
U.K.a 55.80  54.50  1.30 54.90  n.a. 0.90 n.a. 
n.a. Not applicable.  
a 2014 data.  
b Not reported.  
Source:  Eurostat online information viewed at: http://ec.europa.eu/eurostat/web/government -finance -
statistics/data/database  and http://appsso.eurostat.ec.eur opa.eu/nui/show.do?dataset=gov_cl_ 
liab&lang=en . 
3.3.6.3   Privatization  
3.231.   As with state enterprises, privatization is in the exclusive competence of the individual 
member States, as per Article 345 of the TFEU noted above. Privatization of state enterprises or 
asset s is thus subject to each member States' privatization laws, if they exist. Often member 
States undergoing certain reforms have also published privatization plans outlining how the state 
intends to privatize assets and in what time -frame. There is neither a specific EU policy nor law 
with respect to privatization but general EU rules (e.g. on non -discrimination, freedom of 
establishment, and competition) are applicable also to privatizations by member States.  
3.232.   Rather, privatization in EU member States has be en driven by other policy factors. In 
particular after the financial crisis, as part of various economic monitoring, surveillance, and 
reforms in certain member States, a number of privatization initiatives have been proposed and 
completed. Certain member States have agreed to privatize certain state assets as part of financial 
packages or ongoing reforms. For example, Spain has agreed to the privatization and restructuring WT/TPR/S/357 • European Union  
 
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  of certain state -owned banks as part of its state aid package.211 Greece has recently agreed to 
more privatization of state assets in order to obtain additional funding.212 Member States have also 
pursued privatization upon the recommendation of other bodies such as the EU Council, the IMF, 
and the OECD. Lithuania has pursued SOE reform prior  to its adoption of the euro and, as it works 
toward becoming a member of the OECD, it has undergone further review and analysis of its SOEs 
and privatization programme.213 
3.233.   According to the 2014/2015 Privatization Barometer Report, the EU showed the largest 
number of privatization transactions in the early 1990s, with its most recent peak during the 
financial crisis.214 Since then, there has been an increase in transactions since 2012, but the EU 
has accounted for a minority of the number and value of privatiza tions worldwide during 2014 -
2015. In 2014 and 2015, the number of EU privatizations was belo w its historical average, 
amounting to €56.3 billion in 2014. Among the EU member States, the U.K. was the leading 
country (in terms of number of transactions and value) in privatizations in recent years, followed 
by Spain and Greece.  
3.3.7   Government procuremen t 
3.3.7.1   EU directives on public procurement  
3.234.   In 2015, total general government public procurement expenditure on works, goods and 
services in the EU (excluding utilities) was €2,015.3 billion, or over 13% of GDP,  with 
€349.2  billion published on the Tenders Elect ronic Daily (TED) supplement to the Official Journal of 
the EU. Including defence and utilities, the total value of government procurement in the EU and 
published on TED was €450.2 billion.215 
3.235.   The EU rules on public procurement are set in three directives: t he Classical Directive216; 
the Concessions Directive217, and the Utilities Directive (water, energy, transport, and postal 
services).218 The last Review outlined the changes introduced in these three Directives219, which 
entered into force on 17 April 2014 with 24  months for transposition into domestic law by the 
member States, with 30 months for the provisions on e -procurement. As at 5 January 2017, 
12 member States had transposed all three Directives into national law.220 
3.236.   All procurement carried out in the EU above  the specified thresholds must comply with the 
requirements of the EU directives on procurement. The applicable thresholds were amended, with 
effect from 1 January 2016, for 2016 and 2017 ( Table 3.25). Public procurement above the  
thresholds must be published on TED. A contracting authority may also publish a prior information 
notice (PIN) to announce a possible upcoming tender. Local and regional authorities may use the 
PIN as a call for tenders.  
3.237.   For public procurement below the t hresholds, national rules apply, and these national rules 
must respect the general principles of EU law, including the TFEU principles of non -discrimination, 
equal treatment, transparency, mutual recognition, and proportionality.  
                                                
211 European Commission o nline information. Viewed at: http://ec.europa.eu/economy_finance/articles/  
eu_economic_situation/2016 -04-18-statement -spain_en.htm . 
212 European Commission online information. Viewed at: http://ec.europa.eu/economy_finance/ 
assistance_eu_ms/greek_loan_facility/ ; and Financial Times online information vi ewed at: https://www.ft.com/  
content/81dc1d54 -84f5-11e6-8897-2359a58ac7a5 . 
213 OECD online information. Viewed at: https://www.oecd.org/daf/ca/Lithuania_SOE_Review.pdf . 
214 Privatization Barometer online information. Viewed at: http://www.privatizationbarometer.net/PUB 
/NL/5/5/PB_A R2014 -2015.pdf . 
215 DG Grow (2016), Public Procurement Indicators 2015, DG GROW G4 – Innovative and e -Procurement 
– 19 December 2016.  
216 Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public 
procurement and repealin g Directive 2004/18/EC.  
217 Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 on the 
award of concession contracts.  
218 Directive 2014/25/EU of the European Parliament and of the Council of 26 February 2014 on 
procurement b y entities operating in the water, energy, transport and postal services sectors and repealing 
Directive 2004/17/EC.  
219 WTO document WT/TPR/S/317/Rev.1, 21 October 2015, Section 3.3.2.  
220 Czech Republic, Denmark, Germany, Greece, France, Italy, Hungary, Malt a, Netherlands, Poland, 
Romania and Slovakia.  WT/TPR/S/357 • European Union  
 
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  Table 3.25 Public procurement thresholds in the EU from 1 January 2016  
(€) 
Directive  Type  Threshold  
Concessions Directive  
Directive 2014/23/EU and Commission Delegated Regulation (EU) 2015/2172 of 24 November 2015 amending 
Directive 2014/23/EU of the European Parliament and of the Council in respect of the application thresh olds for the 
procedures for the award of contracts  
 All works or services concessions  5,225,000  
Classical Directive (contracts for public works, public supply and public service)  
Directive 2014/24/EU and Commission Delegated Regulation (EU) 2015/2170 of 24 November 2015 amending 
Directive 2014/24/EU of the European Parliament and of the Council in respect of the application thresholds for the 
procedures for the award of contracts  
Central 
government 
authorities  Works contracts, subsidized works contracts  5,225,000  
All contracts concerning social and other specific services listed in 
Annex XIV  750,000  
All subsidi zed services  209,000  
All other service contracts and all design contests  135,000  
All supplies contracts awarded by contracting authorities not 
operating in the field of defence  135,000  
Supplies contracts awarded by contracting authorities operating in 
the field of defence  Annex III products 
135,000  
Other products 209,000  
Sub-central 
contracting 
authorities  Works contracts, subsidi zed works  contracts  5,225,000  
All services concerning social and other specific services listed in 
Annex XIV  750,000  
All other service contracts, all design contests, subsidi zed service 
contracts, all supplies contracts  209,000  
Utilities (Sectors) Directive  
Directive 2014/25/EU and Commission Delegated Regulation (EU) 2015/2172 of 24 November 2015 amending 
Directive 2014/23/EU of the European Parliament and of the Council in respect of the application thresholds for the 
procedures for the award of contracts  
 Works contracts  5,225,000  
 All services concerning social and other specific services listed in 
Annex XVII  1,000,000  
 All other services contracts, all design contests, all supplies 
contracts  418,000  
Source:  WTO document GPA/W/336/Add.9, 1 March 2016; an d DG Growth online information. Viewed at: 
https://ec.europa.eu/growth/single -market/public -procurement/rules -implementation/thresholds_en  
[Dece mber 2016].  
3.238.   In 2015, the importance of total general government expenditure on works, goods, and 
services (excluding utilities) in the member States varied from as low as 5.5% of GDP in Cyprus 
and 7.2% in Ireland, to 20.0% in the Netherlands and 18.2% in F inland. In 2015, 17% of the total 
value of public procurement (excluding utilities) was advertised on the TED, although this also 
varied from one member State to another, from as low as 6% in Germany and 8% in Portugal to 
65% in Latvia and 50% in Estonia ( Table 3.26). 
3.239.   Several factors may explain the low proportion of procurement published in the TED, such 
as the small value of individual contracts, and the various degrees of centralization among 
member States: most of the smaller c ontracting authorities may never make a purchase large 
enough to fall into the scope of the directives, and member States with a generally higher degree 
of centralization are more likely to have tender invitations published in the Official Journal because 
procurement tends also to be centralized. The Commission also noted that member States are not 
required to publish below -threshold procurement in TED, and the practice varies among member 
States: in some member States, contracting entities thus publish bel ow-threshold procurement, 
whereas some publish above -threshold procurement only.  
 WT/TPR/S/357 • European Union  
 
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  Table 3.26 Estimated value of public procurement by general government in the EU 
2014 -15 
(€ billion)  
 2014  2015  
 GDP Estimated 
total 
value  Estimated value of 
tenders in TED  GDP Estimated 
total 
value  Estimated value of 
tenders in TED  
  excluding 
utilitiesa  excluding 
utilities 
and 
defence  including 
utilities 
and 
defence   excluding 
utilitiesa  excluding 
utilities 
and 
defence  including 
utilities 
and 
defence  
Belgium  401 58.7 9.3 11.7 410 59.5 10.5 13.8 
Bulgaria  43 5.5 2.1 2.7 45 6.2 2.2 2.9 
Czech 
Republic  157 21.5 7.5 10.5 167 24.2 4.7 6.4 
Denmark  265 38.3 11.7 14.2 272 38.7 12.5 17.8 
Germ any 2,924  442.0  23.7 310 3,033  461.7  27.6 35.1 
Estonia  20 2.7 1.1 1.4 20 2.9 1.4 1.8 
Ireland  193 18.0 3.7 4.3 256 18.3 4.4 5.2 
Greece  178 18.9 2.1 3.9 176 19.0 1.8 3.2 
Spain  1,037  104.9  13.9 18.2 1,076  111.4  13.7 17.6 
France  2,140  317.0  53.0 64.9 2,181 317.2  50.9 65.5 
Croatia  43 6.0 2.5 3.5 44 5.7 2.1 3.0 
Italy 1,620  169.2  27.3 35.2 1,642  170.3  32.3 40.8 
Cyprus  18 1.0 0.3 0.3 18 1.0 0.3 0.3 
Latvia  24 2.7 1.7 2.3 24 2.9 1.9 2.4 
Lithuania  37 3.7 1.6 2.2 37 3.9 1.2 1.7 
Luxembourg  49 5.9 0.7 0.8 51 6.3 0.6 0.8 
Hungary  105 16.2 3.8 6.1 110 17.3 2.9 4.8 
Malta  8 0.9 0.3 0.4 9 1.0 0.4 0.4 
Netherlands  663 134.9  11.8 13.4 677 135.6  14.1 16.1 
Austria  330 43.4 5.6 7.6 340 45.2 5.3 7.4 
Poland  411 51.5 18.3 28.8 430 52.1 19.1 27.6 
Portugal  173 17.0 1.8 2.3 180 17.7 1.4 2.5 
Romania  150 16.4 5.1 8.1 160 18.7 6.7 9.1 
Slovenia  37 5.1 1.1 1.4 39 5.2 1.3 1.7 
Slovak 
Republic  76 10.9 5.8 7.1 79 13.4 3.7 4.4 
Finland  205 37.7 6.8 8.7 209 38.0 7.4 8.8 
Sweden  433 70.8 14.7 18.2 447 72.1 17.5 21.7 
United 
Kingdom  2,261  312.6  82.6 112.4  2,577  349.7  101.2  127.6  
EU-28 14,001  1,933.2  319.7  421.3  14,708  2,015.3  349.2  450.2  
% of GDP   13.8%  2.3%  3.0%   13.7%  2.4%  3.1%  
a These estimates include expenditure on items which are exempt under the EU directives, such as 
contra cts below the thresholds. They also include expenditure which may not be classified as public 
procurement, for example, the costs of health care and medical products reimbursed through 
statutory health insurance funds or by government.  
Source:  DG Grow (201 6), Public Procurement Indicators 2015 , DG GROW G4 – Innovative and 
e-Procurement, and Eurostat.  
3.240.   Under the Classical Directive, and the Utilities Directive221, the public authorities can 
choose among different procedures, including:  
 Open procedure, when all eligible economic operators may submit a tender;  
 Restricted procedure, when the contracting authority invites tenders from a selected group 
of those that respond to the TED advertisement;  
                                                
221 Directive 2014/24/EU, Articles 26 -32; and Directive 2014/25/EU, Articles 43 -50. WT/TPR/S/357 • European Union  
 
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   Competitive procedure with negotiation is similar to a restricted p rocedure follow ed by 
negotiations with the selected economic operators;  
 Competitive dialogue, when the contracting authority enters into a dialogue with a selection 
from among the suppliers that responded to the TED advertisement in order to find a 
suitab le product or service to meet its needs. Tenders are then invited from a selection of 
bidders; and  
 Innovation partnership, which was introduced in 2014, under which a selection is made from 
suppliers that responded to the TED advertisement followed by nego tiations for "search and 
innovation projects aimed at meeting the needs identified by the contracting authority that 
cannot be met by existing solutions".222 
3.241.   Each procedure of public procurement is subject to minimum time -limits for the submission 
of tenders . For example, after the publication of a contract notice under the open procedure, the 
minimum time -limit is 35 days but this can be reduced to 15 days if a prior information notice has 
been published.  
3.242.   The methods for calculating the estimated value of a procurement are set out in the 
Directives223 and include aggregation rules intended to prevent a single public procurement 
requirement being subdivided with the intention or effect of reducing the value below the threshold 
amounts. For example:  
 For framework  agreements, and dynamic purchasing systems, the value should be the 
maximum estimated value of all contracts for the total term;  
 For innovation partnerships, the value should be the maximum estimate of research and 
development activities for all stages o f the partnership as well as supplies, services or works 
to be developed and procured at the end of the partnership; and  
 For concessions, the value is the total turnover of the concessionaire for the duration of the 
concession.  
3.243.   The procurement authority ma y divide a requirement into lots but, if the total value of 
these lots is greater than the threshold, then EU level rules will apply to the awarding of each lot, 
except for small lots, for which the amounts are below the following de minimis  levels:  
 €80,00 0 for supplies or services; or  
 €1 million for works; and  
 Provided the aggregate value of the lots to be excluded from aggregation is no more than 
20% of the total value.  
3.244.   A simplified regime applies for contracts with an estimated value of less than €750,00 0 for 
services listed in Annex XIV of the Classical Directive224 with no procedural rules apart from the 
requirements for advance publication, equal treatment of bidders, and the announcement of the 
results.  
3.245.   Under the directives, contract awards are based o n the most economically advantageous 
tender (MEAT) which "shall be identified on the basis of the price or cost, using a cost -
effectiveness approach, such as life -cycle costing …, and may include the best price -quality ratio, 
which shall be assessed on the  basis of criteria, including qualitative, environmental and/or social 
aspects, linked to the subject matter of the public contract in question".225 The criteria used for 
assessment are set out in the request for tenders. In assessing the life -cycle cost, im puted values 
for environmental externalities may be included. In addition, the contracting authorities may take 
into account criteria linked to the production process of the works, services or supplies to be 
                                                
222 Directive 2014/23/EU, Article 31.  
223 Directive 2014/24/EU, Article 5; Directive 2014/23/EU, Article 8; and Directive 2014/25/EU , 
Article  16. 
224 Social, health, cultural, and assimilated services; legal services; hotels and restaurant services, and 
catering and canteen services.  
225 Directive 2014/24/EU, Article 67.  WT/TPR/S/357 • European Union  
 
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  purchased, such as the inclusion of vulnerable a nd disadvantaged people, or the use of non -toxic 
substances. Furthermore, a contracting authority may require that works, supplies, or services 
bear specific labels certifying environmental, social or other characteristics, as long as the label 
requirement s only concern criteria which are linked to the subject matter of the contract and are 
appropriate to define characteristics of the works, supplies or services and that equivalent labels 
are accepted.  
3.246.   E-procurement is becoming progressively mandatory, with  electronic notification and 
access to tender documents by April 2016; electronic submission of offers for central purchasing 
bodies by April 2017; and electronic submission of offers for all contracting authorities by October 
2018.  
3.247.   Under Directive 2014/55 /EU of 16 April 2014, m ember States must keep up -to-date all the 
information about certificates required in national public procurement procedures and on the 
E-Certis database.226 The Directive also contains provisions on dynamic purchasing systems 
(electron ic systems allowing public purchasers to consult a large number of potential suppliers of 
standardized, "off -the-shelf" works, supplies or services), electronic auctions, and electronic 
catalogues. Member States had until April 2016 to transpose the Direct ive into national law.  
3.248.   In terms of contract award notices, in 2014, 48% were for services, 29% for works, and 
23% for goods. In terms of procedures, in 2011, about 75% of contract award notices (51% by 
value) were under open procedure, 7.1% (12.1% by value ) were under negotiated procures with 
competition, and 6.8% (20.8% by value) were restricted procedures.227 
3.249.   The Remedies Directives228, as modified in particular by Directive 2007/66/EC229, provide 
for legal remedies in cases of breaches of EU Public Procurement  Directives. These remedies 
include a "standstill period", which requires contracting bodies to provide at least 10 days' 
suspension after tender awards and before the public contract can be signed, and more stringent 
rules against illegal direct awards of  public contracts so that they may be rendered ineffective by 
national courts.  
3.250.   On 24 January 2017, the European Commission published a report, accompanied by a 
detailed evaluation, on the operation of the Remedies Directives. The Commission concluded that 
the Directives have contributed to making the procurement procedure in EU countries more fair, 
transparent, open and efficient, and confirmed this by the fact that economic operators are using 
them to challenge deviations from public procurement  rules: ove r four years (2009 -12), more than 
50,000 first instance decisions were taken.230 
3.251.   Therefore, the Commission has proposed to maintain the Remedies Directives. 
Notwithstanding this, it proposes that the shortcomings identified in the evaluation be addressed 
through, inter alia,  stronger cooperation and exchanges of best practices (in particular via a 
network of first instance remedies bodies); a Remedies Scoreboard based on objective indicators 
to promote the collection of data; guidance documents to ease the pr actical implementation of the 
Remedies Directives; and enforcement actions when problems could not be solved by cooperative 
means. The Commission also stated that, since the thresholds of EU rules are aligned with those of 
the Government Procurement Agreem ent (GPA), and their substantive provisions are broadly 
similar to those of the GPA, the follow -up to the evaluation can be expected to contribute to the 
proper implementation of the GPA as well.  
                                                
226 Viewed at : http://ec.europa.eu/markt/ecertis/login.do?selectedLanguage=en  [December 2016].  
227 European Commission (2014), Annual Public Procurement Implementation Review 2013 , Commission 
Staff Working Document, SWD(2014) 262 final, 1 August 2014 . 
228 Council Directive 92/13/EEC of 25 February 1992 coordinating the laws, regulations and 
administrative provisions relating to the application of Community rules on the procurement procedures of 
entities operating in the water, energy, transport and tele communications sectors; and Council Directive 
89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions 
relating to the application of review procedures to the award of public supply and public works contract s. 
229 Council Directives 89/665/EEC and 92/13/EEC with regard to improving the effectiveness of review 
procedures concerning the award of public contracts, amended by Directives 2007/66/EC and 2014/23/EU.  
230 European Commission  (2017), Report from the Commis sion to the European Parliament and the 
Council on the Effectiveness of Directive 89/665/EEC and Directive 92/13/EEC, as modified by Directive 
2007/66/EC, Concerning Review Procedures in the Area of Public Procurement , COM(2017) 28 Final, 24 
January  2017. WT/TPR/S/357 • European Union  
 
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  3.3.7.2   The Government Procurement Agreement  
3.252.   The EU and the member S tates are parties to the WTO plurilateral GPA, and adopted the 
revised GPA through Council Decision 2014/115/EU.231 Under the revised GPA, the EU extended its 
commitments to provide for further market access opportunities for suppliers offering goods and 
services originating in GPA parties' economies. New sectors and contracting authorities/entities 
were included in the EU schedules, for example, the European External Action Service at EU level 
and a number of central government contracting authorities and su b-central entities of member 
States.232 The GPA thresholds for 2016 -2017 are set out in Table 3.27. 
Table 3.27 EU GPA thresholds 2016 -17 
(€) 
 Central government 
entities  Sub-central gov ernment 
entities  Other entities  
 SDR € SDR € SDR € 
Goods  130,000  135,000  200,000  209,000  400,000  418,000  
Services  130,000  135,000  200,000  209,000  400,000  418,000  
Construction 
services  5,000,000  5,225,000  5,000,000  5,225,000  5,000,000  5,225,000  
Source:  WTO document GPA/W/336/add.9, 1 March 2016.  
3.253.   The total value of contracts covered by the GPA was €286.4 billion in 2012, of which 
€283.4 billion was attributed to the 27 member States (Croatia acceded to the EU in 2013) an d 
€3 billion to the EU institution s (Table 3.28). 
Table 3.28 EU procurement and GPA key figures, 2009 -12 
(€ billion)  
EU procurement  2009  2010  2011  2012  
Value of contracts covered by the GPA  250.8  227.9  237.3  286.4  
Value of contracts above thresholds  353.4  318.8  335.4  365.6  
Value of contracts awarded under Article XV GPA  
(i.e. limited tendering contracts)  14.5 9.9 7.3 12.3 
Total expenditures on goods and services  2,346.0  2,416.65  2,405.9  2,422.5  
Source:  WTO documen ts: GPA/108/Add.7 and GPA/114/Add.5, both dated 22 October 2014; and 
GPA/119/Add.6, 6 June 2016.  
3.3.8   Intellectual property rights  
3.254.   In a world of increasingly knowledge -based economies, in which companies heavily rely on 
innovation and creativity, as well as qua lity, the adequate protection and enforcement of 
intellectual property rights (IPRs) continue to play a key role for EU business to maintain its 
competitiveness. The economic importance of IPRs both in terms of employment and contribution 
to the EU's GDP w as once again confirmed by a joint EPO/EUIPO report released in October 
2016.233 The report updated an earlier study that was published in September 2013.234 An 
overview of its main findings is provided in Table 3.2 9. It shows that an important share of the 
EU's total GDP, amounting to 42.3% on average during the period 2011 to 2013, was generated 
by IPR -intensive industries. The trademark -intensive industry made again by far the biggest 
contribution both to employment and the EU's GDP, followed by the patent -intensive and design -
intensive industries. As regards the EU's external trade, the design -intensive industry saw the 
biggest surplus with net export s worth more than €243 billion.  
                                                
231 2014/115/EU: Council Decision of 2 December 2013 on the conclusion of the Protocol Amending the 
Agreement on Government Procurement.  
232 WTO document GPA/113, 2 April 2012.  
233 EPO/EUIPO, Intellectual Property Rights Intensive Industries and Economic Perform ance in the 
European Union, Industry -Level Analysis Report, 2nd edition, October 2016. Viewed at: https://euipo.europa. 
eu/tunnel -web/secure/webdav/guest/document_library/observatory/documents/IPContributionStudy/ 
performance_in_the_European_Union/performance_in_the_European_Union_full.pdf . 
234 See previ ous TPR Report, WT/TPR/S/317/Rev.1, para. 3.254.  WT/TPR/S/357 • European Union  
 
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  Table 3.29 Contribution of IP industries to EU employment, GDP and trade and average 
wage premium of IP -intensive industries, 2011 -13 average  
IP right  Share of 
total EU 
direct 
employment  
(%) Share of 
total direct 
and indirect 
employment 
(%) Share of 
total EU 
GDP 
(%) Average wage 
premium 
compared to 
non-IPR-
intensive 
industries  
(%) Share of 
EU exports  
(€ million, 
2013)  Share of 
EU imports  
(€ million, 
2013)  
All IPR 
industries  27.8 38.1 42.3 46 1,605,516  1,509,099  
Copyright -
intensive 
industries  5.4 7.1 6.8 64 119,554  102,389  
Patent -
intensive 
industries  10.3 16.7 15.2 69 1,231,966  1,157,909  
Plant 
variety -
intensive 
industries  0.5 0.6 0.4 n.a. 5,065  5,369  
Trade 
mark-
intensive 
indus tries 21.2 30.3 35.9 48 1,275,472  1,261,002  
GI-
intensive 
industries  n.a. 0.2 0.1 31 12,923  1,335  
Design -
intensive 
industries  11.9 17.9 13.4 38 945,084  701,752  
n.a. Not applicable.  
Source:  Intellectual Property Rights Intensive Industries and Economic P erformance in the European Union, 
Industry -Level Analysis Report, joint EPO/EUIPO study, 2nd edition, October 2016.  
3.255.   The recognition of the key role that IPRs play in the EU economy had also led the 
European Commission to adopt its comprehensive IP strategy  in 2011.235 During the reporting 
period, a number of legislative measures were put in place that implement  the initiatives 
announced in the Commission's earlier strategy. These include the adoption of the trademark 
reform package and of the Trade Secrets Di rective. In addition, important work was undertaken to 
further modernize the legislative framework for copyright protection and enforcement with a 
particular focus on copyright -protected goods in the online environment. For this purpose, a 
number of legisl ative proposals were submitted by the European Commission in September 2016. 
Significant steps were also taken towards the putting into place the unitary patent. Meanwhile, 
work progressed on the review of the IPR enforcement regime in the EU, again with a  particular 
focus on the need to adapt the regime to respond to challenges in the online environment. These 
measures and initiatives are discussed in more detail in the relevant sections below.  
3.256.   The Commission Communication on a Digital Single Market Strate gy for Europe, of 6 May 
2015236, announced legislative initiatives to further harmonize national copyright laws and related 
exceptions, to pave the way towards wider online access to works by users across the EU, and to 
further modernize the IPR enforcement regime. It also called on the EU's trading partners to 
ensure that IPRs can be effectively enforced. A Commission Communication on Upgrading the 
Single Market (the Single Market Strategy), of 28 October 2015237, identified additional steps to 
further consoli date the EU's IPR framework. These include  measures to support the use of IP by 
                                                
235 Communication on a Single Market for IPRs, COM(2011) 287 final, 24 May 2011. Viewed at: 
http://eur -lex.europa .eu/legal -content/EN/TXT/PDF/?uri=CELEX:52011DC0287&from=EN . See also the 2013 
TPR Report, WT/TPR/S/284/Rev.2, para. 3.241.  
236 COM(2015) 192 final. Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX: 
52015DC0192&from=EN . 
237 COM(2015) 550 final. Viewed at: http://eur -lex.europa.eu/legal -content/EN /TXT/PDF/?uri=CELEX: 
52015DC0550&from=EN  and SWD(2015) 202 final http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri= 
CELEX:52015SC0202&from=EN . WT/TPR/S/357 • European Union  
 
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  SMEs. In November 2016, for example, a Start -Up and Scale -Up initiative238 was adopted, which 
puts forward policy actions to support access to and use of IP by SMEs in Europe. Other steps 
identified by the Strategy include the need to address uncertainties regarding the link between the 
unitary patent and national patents and national supplementary protection certificates (SPC) 
granted under the SPC regime, and, in due course, con sideration of the possible creation of a 
unitary SPC title.  
3.257.   The IPR regime in the EU is governed by both EU legislation and legislation in member 
States. Based on Article 118 of the TFEU, the EU has put in place an extensive body of IP 
legislation. Table A 3.3 in the Annex provides  an overview of the principal legislative measures 
adopted by the EU, as well as their status of notifications to the WTO. Member States' legislation 
implements and complements, where appropriate, EU legislation and commitments und er 
international agreements.  
3.258.   During the period under review, the EU has constructively contributed to discussions and 
work in the TRIPS Council, including as regards the agenda items on non -violation and situation 
complaints, IP and innovation, e -commerce and the review of implementing legislation. It has 
submitted comprehensive reports on its technical cooperation activities and on incentives provided 
to the private sector to transfer technology to least developed countries for consideration by other 
WTO M embers.239 The EU has also notified and introduced new legislation in the field of IPRs to the 
TRIPS Council, including the trademark reform package and t he Trade Secrets Directive 
(see Table  A3.3 for the summary of the main legislation, as well as the secti ons below on 
trademarks and undisclosed information).  
3.259.   The EU is an observer to WIPO, while its member States are WIPO member States. 
Table  3.30 provides an overview of the status of the EU's participation in individual WIPO treaties. 
Given that the 2015 Ge neva Act of the Lisbon Agreement on Appellations of Origin and 
Geographical Indications now also allows for the membership of international organizations, the EU 
will give due consideration to the possibility of becoming party to the Geneva Act. The EU and  24 
of its member States240 are also UPOV contracting parties.  
Table 3.30 Status of EU participation in WIPO conventions and treaties  
Convention/treaty  Signed  Accepted  In force  
Beijing Treaty on Audiovisual Per formances  19 June 2013    
Marrakesh VIP Treaty  30 April 2014    
Trademark Law Treaty  30 June 1995    
WIPO Copyright Treaty  20 December 1996  14 December 2009  14 March 2010  
WIPO Performances and Phonograms Treaty  20 December 1996  14 December 2009  14 March 2 010 
Hague Agreement   24 September 2007  1 January 2008  
Madrid Protocol   1 July 2004  1 October 2004  
Source:  WTO Secretariat.  
3.260.   The EU's competence to conclude international agreements in the field of IPRs continues to 
be subject to judicial review. Thus, th e CJEU has been asked by the European Commission to 
provide an Opinion regarding the EU's competence to conclude the Marrakesh Treaty to Facilitate 
Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print 
Disabled.241 In its Opinion of 14 February 2017242, the Court held the view that the Marrakesh 
Treaty did not fall within the scope of the EU's exclusive competence to deal with its common 
                                                
238 COM (20 16) 733 final http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:52016DC07 
33&from=EN  and SWD (2016) 373 final http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri= 
CELEX:52016SC0373&from=EN . 
239 Documents IP/C/W/617/Add.7 and IP/C/W/616/Add.7.  
240 Except Cyprus, Greece, Luxembourg and Malta.  
241 The Commissi on has also sought the Court's Opinion regarding the competence to conclude the EU -
Singapore FTA that was initialled in September 2013 and that includes a section dealing with the protection 
and enforcement of IPRs. The Advocate General's Opinion in Opinio n Procedure 2/15 was released on 21 
December 2016. Viewed at: http://curia.europa.eu/juris/document/docum ent.jsf?text=&docid=186494& 
pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=606566 . 
242 Opinion 3/15, viewed at: http://curia.europa.eu/juris/document/document.jsf?text=&docid 
=183130&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=784638 . WT/TPR/S/357 • European Union  
 
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  commercial policy pursuant to Article 207 of the TFEU. While reiterating its earlier ruli ng according 
to which the rules adopted by the EU in the field of IP which have a specific link to international 
trade are capable of falling within the scope of "commercial aspects of IP" as referred to in Article 
207(1) TFEU243, the Court found that the Ma rrakesh Treaty was not intended to promote, facilitate 
or govern international trade in accessible format copies, nor could the cross -border exchange of 
such copies be equated with international trade that was driven by commercial purposes. The CJEU 
nevert heless confirmed the EU's exclusive competence to conclude the Marrakesh Treaty, as it fell 
within an area that was already largely harmonized by common rules at EU level that had been 
established by the Information Society Directive244, and that may be affe cted by certain mandatory 
provisions of the Marrakesh Treaty on exceptions and limitations.  
3.3.8.1   Copyright and related rights  
3.261.   For the EU economy, but also for its international competitiveness and cultural diversity, 
copyright and neighbouring rights continue t o play a key role. There are 33 sectors of the economy 
considered copyright -intensive , accounting directly for over 11.6 million jobs, or 5.4% of total 
direct employment in  the EU on average from 2011 to 2013.245 These figures are even higher 
when indirect employment generated by the copyright -intensive industry is taken into account 
(more than 15 million jobs, or 7.1% of total employment). The same industry is also reported t o 
have contributed a share of 6.8%, equivalent to alm ost €915 billion, value added to the EU's total 
GDP during the same period. As regards the EU's external trade, the copyright -intensive industry 
generated a net surplus of €17.1 billion, with total exports worth almost €120 billion in 2013.  
3.262.   Digital technol ogies are having a strong impact on the development of the copyright -
intensive industry. For example, 49% of EU internet users reportedly access music  or audiovisual 
content online.246 In 2015, digital revenues also became, for the first time, the primary re venue 
stream for recorded music, thus overtaking income from physical formats and generating 45% of 
global revenues (see Section 4.3.1 ).247 
3.263.   The EU's legal framework ( acquis ) for copyright and neighbouring rights is shaped by a set 
of 10 directives that had t o be implemented by its member States (see Table A3.3.). The 
overarching objective of approximating the standards of protection is to create a sound basis for 
the free movement of protected creative works and services offering access to these works within 
the internal market.  
3.264.   Based  on the comprehensive  IP strategy  adopted  in 2011,  the EU is continuing  the review  
and modernization  of its legislative  framework  under  which  copyright  and related  rights  can be 
protected  and enforced.  As part of this process,  and noting  the important  technological  
developments,  the European  Commission  presented  its Digital  Single  Market  Strategy  for Europe  in 
May 2015.248 Besides  proposing  to take action  in a number  of other  sectors,  the Strategy  
specifically  addressed  the need to modernize  the copyright  framework  in order  to enhance  EU-wide 
access  to protected  digital  content.  To do so, the Commission  announced  a series  of legislative  
proposals  regarding  both the online  protection  and enforcement  of copyright -protected  material.  A 
further  communication  of 9 December  2015 set out the details  of how to achieve  "a modern,  more 
European  copyright  framework".249 The suggested  measures  aim at ensuring  wider  access  to 
content  in Europe,  adapting  exceptions  to digital  and cross-border  environm ents, achieving  a well-
functioning  marketplace  for copyright,  and providing  an effective  and balanced  enforcement  
system.  
                                                
243 Case C -414/11 (Daiichi Sankyo Co. Ltd and Sanofi -Aventis Deutschland GmbH v DEMO Anonimos 
Viomikhan iki kai Emporiki Etairia Farmakon ). Viewed at: http://curia.europa.eu/juris/document/document.jsf? 
text= &docid=139744&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=2446481 . 
244 Directive 2001/29/EC of 22 May 2001 on the harmonization of certain aspects of copyright and 
related rights in the information society, OJEU L167/10.  
245 EPO/EUIPO, Intellect ual Property Rights Intensive Industries and Economic Performance in the 
European Union, Industry -Level Analysis Report, 2nd edition, October 2016. Viewed at: 
https://euipo.europa.eu/tunnel -web/secure/webdav/guest/document_library/observatory/documents/ 
IPContributionStudy/performance_in_the_European_Uni on/performance_in_the_European_Union_full.pdf . 
246 See explanatory memorandum to the proposal for a regulation on ensuring the cross -border 
portability of online content services in the internal market, COM(2015) 627 final, 9 December 2015.  
247 See IFPI Globa l Music Report 2016. Viewed at: http://www.ifpi.org/downloads/GMR2016.pdf . 
248 Document COM (2015)192 final, 6 May 2015.  
249 Document COM (2015) 626 final, 9 December 2015.  WT/TPR/S/357 • European Union  
 
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  3.265.   Subsequently,  the European  Commission  has submitted  a series  of legislative  proposals  to 
modernize  the EU's copyright  regime  since December  2015.  The measures  proposed  in September  
2016 were also explained  in a Commission  Communication  on Promoting  a Fair, Efficient  and 
Competitive  European  Copyright -Based  Economy  in the Digital  Single  Market.250 The envisaged  
legislative  measures  that are yet to be discussed  by the European Parliament and the Council of 
the European Union include:  
 A proposal for a regulation ensuring the cross -border portability of online content 
services in the internal market:251 the aim is to allow residents in the EU to use 
legitimate digital content purchased or subscribed to in their principal country of 
residence anywhere in the EU;  
 A proposal for a Directive on Copyright in the Digital Single Market252: among others, the 
suggested introduction of a negotiating mechanism  is conceived to facilitate the 
conclusion of licensing agreements to support the availability of audiovisual works on 
Video on Demand (VoD) platforms. The proposed Directive also provides for mandatory 
exceptions in the field of education, research and pr eservation of cultural heritage to 
adapt them to the digital and cross -border environment, as well as rules to achieve a 
well-functioning marketplace for copyright, including rules to ensure that right holders 
are receiving adequate remuneration. In partic ular, Article 11 suggests that 
neighbouring rights for press publishers be introduced into EU law for the digital use of 
their publications253; 
 A proposal for a regulation laying down rules on the exercise of copyright and related 
rights applicable to certai n online transmissions of broadcasting organizations and 
retransmissions of television and radio programmes254: inspired by the existing legal 
framework for traditional transmissions via satellite and retransmissions via cable255, the 
draft regulation proposes  that similar conditions be put in place for online distribution of 
television and radio programmes, providing for a simple and fast clearance process 
regarding rights needed for certain online services; and  
 In order to implement the WIPO Marrakesh Treaty into EU law, the proposed legislative 
measures also include the introduction of mandatory exceptions for people with print 
disabilities. For that purpose, the Commission has suggested to adopt a regulation on 
the cross -border exchange between the Union and  third countries of accessible format 
copies of certain works and other subject matter protected by copyright and related 
rights for the benefit of persons who are blind, visually impaired or otherwise print 
disabled256, and a directive on certain permitted uses of works and other subject matter 
protected by copyright and related rights for the benefit of persons who are blind, 
visually impaired or otherwise print disabled and amending Directive 2001/29/EC on the 
harmonization of certain aspects of copyright and related rights in the information 
society.257 
3.266.   In an important case decided on 8 September 2016, the CJEU interpreted the concept of 
"communication to the public" under the Information Society Directive (2001/29/EC), in particular, 
whether this included t he posting on a website of hyperlinks to protected works freely available on 
another website without the authorization of the right holder. The Court found that the 
determination of this question would depend on whether such links were provided without the  
pursuit of financial gain by a person who did not know or could not reasonably have known the 
                                                
250 Document COM (2016) 592 fin al, 14 September 2016.  
251 Document COM (2015) 627 final, 9 December 2015.  
252 Document COM (2016) 593 final, 14 September 2016.  
253 For a critical view on the proposed introduction of neighbouring rights for press publishers, see the 
Opinion of the CEIPI, 28 No vember 2016. Viewed at: http://www.ceipi.edu/en/news/piece -of-news/?tx_ttnews 
%5Btt_news%5D=9416&cHash=6d5162a2ffb84d27e79a48f01e 12d9e7 . 
254 Document COM (2016) 594 final, 14 September 2016.  
255 Satellite and Cable Directive 93/83/EEC , OJ EU L 248/15 of 6 October 1993 . 
256 Document COM(2016) 595 final, 14 September 2016.  
257 Document COM(2016) 596 final, 14 September 2016.  WT/TPR/S/357 • European Union  
 
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  infringing nature of the publication of the works concerned, or whether they were provided for 
precisely such purpose, in which case the knowledge would have to be presumed.258 
3.267.   Also in September 2016, the CJEU issued another important judgment regarding the 
interpretation of both substantive provisions and remedies available under the Enforcement 
Directive (2004/48/EC).259 First, the Court held that the provision of f ree-of-charge internet access 
to the general public constituted an information society service within the meaning of Article 12(1) 
of the Directive where the service was offered for the purposes of advertising the provider's goods 
and services. The Court a lso found that, in order for such information society service to be 
considered to have been provided, the access to a communication network "must not go beyond 
the boundaries of a technical, automatic and passive transmission of the required information." 
Further conditions, such as a contractual relationship between the provider and the recipient or the 
provider using advertising to promote the service, were not required. As regards the liability of the 
service provider, the CJEU confirmed that it did not apply where the three conditions laid down in 
Article 12(1) of the Directive were met, i.e. the transmission of the information was not initiated 
by the provider, nor was the receiver of the transmission selected or the information contained in 
the transmi ssion selected or modified by the provider. While the copyright holder was thus not 
entitled to claim compensation from the provider on the ground that the network was used by 
third parties to infringe its rights, it was not precluded from seeking injuncti ve relief to have the 
provider ordered to prevent or to stop any copyright -infringing act by its customers. Taking into 
account the interest of the owner to protect its copyright on the one hand, and of the provider to 
conduct a business on the other hand,  the Court held that such an injunction could be limited to 
order the provider to password -protect access to the internet, provided that users were required to 
reveal their identity in order to obtain the password.  
3.3.8.2   Industrial property  
3.3.8.2.1   Patents  
3.268.   Patent -intens ive industries in the EU are reported to h ave contributed to more than 
36 million direct and indirect employments, which represents a share of 16.7% of total 
employment in the EU on average from 2011 to 2013. During the same period, this industry has 
held a share of more than 15%, or t he equivalent of €2 trillion, of the EU's total GDP. Also on a 
positive note, exports of the patent -intensive industries amounted to €1.2 trillion and registered a 
net surplus of €74 billion.260 
3.269.   With 160,000 new patent applications in 2015, the European Pate nt Office (EPO) was 
among the top five offices that accounted for a combined share of 82.5% of global patent 
applications. While China saw the fastest growth (+18.7%), the increase in filings at the EPO 
(+4.8%) exceeded those in other patent offices, such as the U .S. (+1.8%) and the Republic of 
Korea (+1.6%).261 In 2015, the EPO granted 68,431 patents, and 684,004 applications were 
pending. Most patent applications were in the fields of medical technology, digital communication 
and computer technology.  
3.3.8.2.1.1   Unitar y patent  
3.270.   As noted in a previous TPR report262 and for the reasons explained therein, the European 
Parliament and the Council reached a political agreement on the unitary patent package in 
December 2012. Regulation (EU) No. 1257/2012 of 17 December 2012 on "I mplementing 
Enhanced Cooperation in the Area of the Creation of Unitary Patent Protection"263 will allow right 
                                                
258 Case C -160/15 (GS Media), 8 September 2016. Viewed at: http://curia.europa.eu/juris/document/ 
document.jsf?docid=183124&doclang=EN . 
259 Case C -484/14 (Mc Fadden v Sony Music Entert ainment Germany GmbH), 15 September 2016. 
Viewed at: http://curia.europa.eu/juris/liste.jsf?num=C -484/14 . 
260 EPO/EUIPO, Intellectual Property Rights Intensive Industries and Economic Perfor mance in the 
European Union, Industry -Level Analysis Report, 2nd edition, October 2016. Viewed at: https://euipo.europa. 
eu/tunnel -web/secure/webdav/guest/document_library/observatory/documents/IPContributionStudy/ 
performance_in_the_European_Union/performance_in_the_European_Union_full.pdf . 
261 WIPO, Wo rld Intellectual Property Indicators 2016. Viewed at:  http://www.wipo.int/edocs/pubdocs/ 
en/wipo_pub_941_2016.pdf . 
262 WT/TPR/S/284/Rev.2, paras. 3.257 to 3.267 (pp. 94 -96). 
263 OJEU L 361/1, 31 December 2012.  WT/TPR/S/357 • European Union  
 
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  holders to potentially get patent protection in 26 member States (except Croatia and Spain)264 
based on a single request. Council Regulation (EU) No.  1260/2012 of 17 December 2012 deals 
with applicable translation arrangements.265 They will apply from the date of entry into force of the 
third component of the unitary patent package, i.e. the international Agreement on the Unified 
Patent Court (UPC Agreem ent), which was signed by 25 EU member States (except Croatia, Poland 
and Spain) in early 2013.266 It establishes the framework for a specialized court with exclusive 
competence for litigation regarding European patents, European patents with unitary effect 
('unitary patent'), supplementary protection certificates issued for a product covered by such a 
patent, and European patent applications. Acceptance by 13 member States, including the 3 
member States with the highest number of European patents in force (G ermany, France and the 
U.K.) is required for its entry into force. By December 2016, 11 member States had ratified the 
UPC Agreement, including France, but not Germany or the U.K.267 On 28 November 2016, the U.K. 
Government confirmed that it was proceeding w ith preparations to ratify the UPC Agreement, and 
thus to participate in the system, also noting that the UPC was not an EU institution, but an 
international patent court.268 
3.271.   The unitary patent is expected to make it simpler and less expensive for inventors to 
obtain patent title, thus fostering foreign direct investment and innovative activities in the EU, 
including by SMEs. This will be supported by consistent and uniform jurisprudence on patent 
matters by the UPC, together with expeditious judicial proceed ings and more predictability in 
patent litigations.269 
3.272.   On the administrative side, important agreements were reached among the 26 
participating EU member States as regards the fee structure and the distribution of revenues of 
the unitary patent. In June 2015 , it was agreed that the renewal fees would be equal to the sum of 
national renewal fees in Germany, France, the U.K. and the Netherlands. An inventor would thus 
pay less than €5,000 over 10 years for the participating countries, instead of about €30,000 under 
the current regime, which is expected to make the unitary patent attractive for small companies, 
and competitive in comparison with third countries, inc luding the U.S. and Japan. In November 
2015, the 26 participating EU member States also agreed to the distribution of fees during the 
initial period: 50% would be retained by the EPO; the other half would be distributed among them, 
based on, inter alia , their respective GDP and the number of patent applications filed.270 
3.273.   As referred to in the previous TPR report271, earlier action for the annulment of the unitary 
patent package filed by Spain and Italy was dismissed by the CJEU. In two follow -up cases, Spain 
again sought the annulment of the unitary patent package. In both cases, the CJEU dismissed the 
action taken by Spain. As regards Regulation (EU) No. 1257/2012, the Court held that the 
Regulation merely established the conditions under which a European paten t previously granted by 
the EPO could benefit from unitary effect at the request of the right holder, and defined what was 
meant by unitary effect. According to the Court, the Regulation was neither intended to delimit the 
conditions for the grant of Europ ean patents nor to import the procedure for granting such patents 
laid down by the EPC into EU law. The CJEU also confirmed the legal basis for the Regulation: as 
unitary patent protection under the Regulation served to provide uniform protection in the 
participating member States, it fell within the scope of Article 118 of the TFEU, according to which 
the EU was competent to adopt measures for the creation of European IPRs. Furthermore, as 
regards Article 9 of the Regulation which assigns the power to part icipating member States acting 
in a select committee of the EPO's Administrative Council to determine the level and distribution of 
                                                
264 In September 2015, Italy joined the unitary patent and became the 26th member of the enhanced 
cooperation  on unitary patent protection. See European Commis sion, Daily News, 30 September 2015. Viewed 
at: http://europa.eu/rapid/press -release_MEX -15-5748_en.htm . 
265 OJEU L 361/89, 31 December 2012.  
266 The text of the Agreement on a Unified Pat ent Court can be accessed at: http://eur -lex.europa.eu/ 
LexUriServ/LexUriServ.do?uri=OJ:C:2013:175:0001:0040:EN:PDF . 
267 The status of signature and accepta nce of the Agreement can be viewed at European Commission 
online information. Viewed at: https://www.consilium.europa.eu/en/documents -publications/agreements -
conventions/agreement/?aid=2013001 . 
268 See press release " U.K. signals green light to UPC Agreement", 28 November 2016. Viewed at: 
https://www.gov.uk/government/news/uk -signals -green -light-to-unified -patent -court-agreement . 
269 See European Commission statement at the Council for TRIPS meeting on 8 -9 November 2016, 
IP/C/M/83/Add.1, paras. 377 -379. 
270 Viewed at: http://ec.europa.eu/growth/tools -databases/newsroom/cf/itemdetail.cfm?item_type= 
251&lang=en&item_id=8561 . 
271 WT/TPR/S/317/Rev.1, para. 3.272.  WT/TPR/S/357 • European Union  
 
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  renewal fees, the Court found that member States were required to adopt all necessary measures 
under national law to impleme nt legally binding Union acts pursuant to Article 291(1) of the TFEU. 
Given that the EU was not a party to the European Patent Convention (EPC), it fell inevitably to 
participating member States to adopt the measures that cover the EPO's expenses for carry ing out 
the additional tasks generated by unitary patent protection.272 
3.274.   With respect to the applicable translation arrangements, the CJEU recognized that 
Regulation (EU) No. 1260/2012 differentiated between the EU's official languages. But, according 
to the Court, the Regulation pursued a legitimate objective, as it was conceived to create a 
uniform and simple translation regime in order to facilitate patent protection for small and 
medium -sized enterprises by making access to it easier, less costly and legal ly more secure.273 The 
Court also confirmed the respect of the principle of proportionality, as the Regulation maintained a 
balance between the interests of applicants for a unitary patent in facilitating access to such 
protection and those of other economic  operators in accessing translations of texts that confer 
rights.  
3.3.8.2.1.2   Biotechnological inventions  
3.275.   In the field of biotechnological inventions, the EPO's Enlarged Board of Appeal adopted two 
important decisions in "Tomatoes II" and "Broccoli II" on 25 March 201 5.274 Noting the exclusion of 
essentially biological processes from patentability, the Enlarged Board of Appeal held that this did, 
however, not preclude the grant of patents for plants and plant material obtained from such 
processes, provided the basic pate ntability criteria were met. The reasoning for these decisions 
was that exclusions from patentability of essentially biological processes under Article 53(b) of the 
EPC had to be narrowly interpreted. The decisions were subject to a controversial debate.275 
3.276.   These and other issues were addressed by the work of the Expert Group set up by the 
European Commission in November 2012276 which presented its Final Report on the development 
and implications of patent law in the field of biotechnology and genetic engineeri ng on 17 May 
2016.277 It reviewed primarily issues related to (i) the patentability of plant -related inventions, 
focusing on the scope of essentially biological processes for the production of plants and the 
patentability of plants obtained by such processes , the interface with plant variety protection, and 
the breeder's exemption; (ii) the patentability of human embryonic stem cells and the related use 
of human embryos for industrial and commercial purposes; and (iii) the scope of patents related to 
biologic al material. This Report provided a useful overview of definitional and legal issues, 
including relevant CJEU jurisprudence, as well as recent technological developments. According to 
most of the experts, the Biotech Directive278 should not be reopened.  
3.277.   The interface between patents and plant variety rights was also debated at a symposium 
organized by the then Dutch Presidency in May 2016.279 To deal with the issues raised, the 
Commission undertook to work on a clarifying notice that would look at relevant prov isions of the 
Biotech Directive.280 Subsequently, the patentability of products obtained from essentially 
biological processes became the object of a Commission Notice of 3 November 2016. While not 
legally binding, the purpose of the Notice was to clarify th e intention of the EU legislators (the 
                                                
272 Case C -146/1 3 (Spain v Parliament and Council), 5 May 2015. Viewed at: http://curia.europa.eu/ 
juris/document/document.jsf?text=&docid=164092&doclang=EN . 
273 Case C -147/13 (Spain v Council), 5 May 2015. Viewed at: http://curia.europa.eu/juris/liste.jsf?num= 
C-147/13 . 
274 Case G 2/12 and G 2/13. They can be accessed at the EPO Board of Appeal decisions databas e at: 
http://www.epo.org/law -practice/case -law-appeals/advanced -search.html . 
275 As reported by IP Watch, EPO Backs Patents on Conventional Plants: Broccoli, Tomato Cases 
Decided, 1 April 2015. Viewed at: http://www.ip -watch.org/2015/04/01/epo -backs -patents -on-conventional -
plants -broccoli -tomato -cases -decided/. 
276 See previous TPR Report, WT/TPR/S/317/Rev.1, para. 3.273.  
277 Available at: http://ec.europa.eu/DocsRoom/documents/18604/attachments/1/translations/ . 
278 Directi ve 98/44/EC on the legal protection of biotechnological inventions, OJEU L 213/13, 30 July 
1998.  
279 Symposium on "Finding the Balance – Exploring Solutions in the Debate Surrounding Patents and 
Plant Breeders' Rights", Brussels, 18 May 2016; unofficial repo rt of the outcome available at: http://european -
seed.com/ip -symposium -explores -patents -pbr/. 
280 See also the European Parliament's Resolution of 17 December 2015 on patents and plan t breeders' 
rights, available at: http://www.europarl.europa.eu/sides/getDoc.do?pubRef= -//EP//TEXT+TA+P8 -TA-2015-
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  Council and the European Parliament) when enacting certain provisions of the Biotech Directive.281 
In particular, recognizing that Article 4 of the Directive did not explicitly mention the patentability 
of products eman ating from essentially biological processes, the Commission took the view that 
the negotiating history of the Directive, as well as various provisions of it, confirmed the 
legislator's intention to exclude plants, animals and parts thereof that are obtaine d through 
essentially biological processes from patentability. It recognized that this reading of the Directive 
was different from the EPO's Enlarged Board of Appeal's decisions, which had to be guided by its 
legal order, namely the EPC and its implementin g regulations in the light of the preparatory work 
that had led to the signing of the EPC in 1973 and the intention of its drafters, and not by the 
negotiating history of the Biotech Directive. Subsequently, the EPO announced on 12 December 
2016 that all e xamination and opposition proceedings relating to plants and animals obtained by 
an essentially biological process were stayed ex officio  in order to allow EPO member States to 
consider the potential impact of the Commission Notice on the EPO's examination  practice.282 
3.278.   Also as part of the outcome of the aforementioned symposium, it was agreed that 
cooperation between the Community Plant Variety Office (CPVO) and the EPO should be further 
increased. Already in February 2016, the two offices had signed an admin istrative arrangement. 
The purpose was to enhance cooperation and to increase transparency, including through the 
exchange of information and practices between the CPVO and the EPO.283 
3.3.8.2.1.3   Standard -essential patents  
3.279.   The interface between standards and patents wa s already discussed in the previous TPR 
report.284 Since then, the CJEU followed the opinion of the Advocate General and, in a judgment of 
16 July 2015, clarified the conditions under which a holder of a patent essential to a standard can 
apply for an injunc tion without infringing competition law.285 
3.280.   In particular, the Court found that the holder of a standard -essential patent who has 
committed to the standardization body to licence third parties on fair, reasonable and non -
discriminatory terms, may seek an inj unction to stop the infringement or to recall the products 
concerned without abusing its dominant position. Prior to seeking such an injunction, the right 
holder must, however, alert the alleged infringer of the infringement and, if the latter is prepared 
to sign a licensing agreement, submit an offer for a licence, including the applicable terms, such as 
the royalty to be paid and the way in which it is to be calculated.  
3.281.   In this judgment, the Court took into account the need to avoid injunctions becoming a n 
instrument for the right holder to distort licensing negotiations, aimed at securing high royalties, 
on the one hand, and, by not limiting injunctions to narrowly circumscribed circumstances, the 
respect of their essential function to incentivize innovat ive activities, on the other. It thus 
recognized the need to preserve the balance between ensuring free competition and safeguarding 
the owner's patent rights, including the right to effective enforcement.  
3.3.8.2.2   Supplementary protection certificates  
3.282.   Although clo sely related to, and conferring the same rights as, the basic patent, SPCs have 
been described by the Commission as a sui generis  IP category that only applies after expiry of the 
basic patent. Making SPCs available aims to restore effective patent protect ion for certain 
regulated products; they are designed to compensate the right holder for the time it takes from 
the filing of a patent application to the marketing authorization, and the potentially negative 
impact resulting from the reduction of the effec tive period of market exclusivity to recover R&D 
                                                
281 OJEU C 411/3, 8 November 2016.  
282 EPO Notice of 24 November 2016 concerning the staying of proceedings due to the Commission 
Notice on certain articles of Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 
on the legal protection  of biotechnological inventions. Viewed at: https://www.epo.org/law -practice/legal -
texts/official -journal/information -epo/archive/20161212.ht ml. See also EPO press release of 12 December 
2016, viewed at: https://www.epo.org/news -issues/news/2016/20161212.html . 
283 EPO press release of 11 February 2016. Viewed at: http://www.epo.org/news -issues/news/2016/  
20160211a.html . 
284 WT/TPR/S/317/Rev.1, para. 3.276.  
285 Case C -170/13 (Huwai Technologies Co. Ltd v ZTE Corp.). Viewed at: http://curia.europa.eu/juris 
/document/document.jsf?text=&docid=165911&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1
&cid=165126 . WT/TPR/S/357 • European Union  
 
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  investment. SPCs are available for medicinal products (Regulation (EC) No. 469/2009) and plant -
protection products (Regulation (EC) No. 1610/96).286 
3.283.   The European Commission Communication on Upgrading the Singl e Market, of 28 October 
2015, identified SPCs among the issues that required further consideration in order to consolidate 
the IP framework in the EU.287 In particular, the relationship between the unitary patent and SPCs 
that are granted by national authori ties and, in due course, consideration of the possible creation 
of a unitary SPC title were raised.  
3.284.   The above Communication also called for exploring the introduction of an SPC 
manufacturing waiver in order to allow EU -based generic and biosimilar manufact urers to produce 
for export during the lifetime of the SPC. Such a waiver has already been included as an option in 
the Comprehensive Economic and Trade Agreement (CETA) concluded with Canada. The section on 
sui generis protection for pharmaceuticals expli citly provides for an exception that allows "the 
making, using, offering for sale, selling or importing of products for the purpose of export during 
the period of protection".288 
3.3.8.2.3   Plant variety rights  
3.285.   According to a joint EPO/EUIPO report of October 2016289, the plant variety rights intensive 
industries accounted for about 1 million direct employments on average between 2011 and 2013, 
which represented a share of 0.5% of total direct employment in the EU. In the same period, it 
contributed 0.4%, or €51 billion, to the EU's total GDP.  
3.286.   In the EU, plant varieties can be protected either under national plant variety right 
systems or as a Community Plant Variety Right (CPVR). As regards the latter, Council Regulation 
(EC) No. 2100/94 of 27 July 1994 on CPVRs290 establis hed a separate regime that provides for a 
unitary right to exploit a plant variety with effect across the EU via a single application to the 
CPVO.291 The term of protection is 25 years, and 30 years in the case of potato, vine and tree 
varieties, extendable for a further 5 years in certain cases. National plant variety rights or patents 
cannot coexist with CPVRs: when a CPVR is granted, the corresponding national title becomes 
ineffective as long as the CPVR is in force.  
3.287.   CPVRs are granted and administered by the CPVO. On 31 December 2016, there were 
24,956 titles in force, with 2,980 titles granted in 2016 alone, which represented a slight increase 
of about 4% compared to 2015.292 About half of the titles in force were for ornamental crops, while 
the fruit secto r ranked last with only 1,654 titles.  
3.288.   Commission Regulation (EC) No. 1238/95 of 31 May 1995 establishing implementing rules 
for the application of Regulation 2100/94/EC as regards the fees payable to the CPVO293 has been 
amended several times. Commission Imp lementing Regulation (EU) No. 2015/2206 of 30 
November 2015294 has considerably reduced the fee for the processing of applications filed by 
electr onic means via the online application system made available on the CPVO website. This fee 
amounts to €450, whereas the fee payable to the CPVO for the processing of applications filed by 
                                                
286 For further details, please see 2013 TPR report, WT/TPR/S/284/Rev.2, para. 3.268.  
287 COM(2015) 550 final. Viewed at: https://ec.europa.eu/transparency/regdoc/rep /1/2015/EN/1 -2015-
550-EN-F1-1.PDF . See also the European Council conclusions on Strengthening the Balance in the 
Pharmaceutical Systems in the EU and its member States, 17 June 2016, available at: http://www.consilium. 
europa.eu/en/press/press -releases/2016/06/17 -epsco -conclusions -balance -pharmaceutical -system/ . 
288 Article 20.27, para.9. Viewed at: http://ec.europa.eu/trade/policy/in -focus/ceta/ceta -chapter -by-
chapter/ . 
289 Intellectual Property Rights Intensive Industries and Economic Performance in the European Union, 
Industry -Level Analysis Report, October 2016. Viewed at: https://euipo.eu ropa.eu/tunnel -web/secure/webdav/ 
guest/document_library/observatory/documents/IPContributionStudy/performance_in_the_European_Union/pe
rformance_in_the_European_Union_full.pdf . 
290 OJEU L 227/1, 1 September 1994.  
291 For more details regarding the protection of plant variety rights in the EU, see also WTO document 
WT/TPR/S/284/Rev.2, 28 November 2013, para. 3.269.  
292 See CPVO statistics. Viewed at: http://cpvo.europa.eu/en/about -us/what -we-do/statistics . 
293 OJEU L 121/31, 1 June 1995.  
294 OJEU L 314/22, 1 December 2015.  WT/TPR/S/357 • European Union  
 
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  other means remains unchanged at €650.295 The system for online CPVO ap plications was 
introduced in March 2010. In 2016, almost 93% of applications were submitted online, which has 
allowed the CPVO to reduce processing times for applications.  
3.289.   Pursuant to Commission Implementing Regulation (EU) No. 2016/2141 of 6 December 
2016296, the following other CPVO fees apply from 1 January 2017:  €1,530 to €3,350 for a 
technical examination, depending on the species to which the plant variety belongs; and an annual 
fee at a flat rate of €330 per variety and per year of protection . The fee for proceedings before the 
Board of Appeal amounts to €1,50 0.297 
3.290.   The CPVO is also represented in the legal and enforcement working groups of the 
European Observatory on Infringements of IPRs. It provided input into the Observatory's  case-law 
database project which will collect national case law regarding IPR enforce ment. Since 2015, the 
CPVO has also been building up its own database that aims at facilitating access to relevant case 
law in EU member States and other relevant instances.298 
3.3.8.2.4   Trademarks  
3.291.   Among the IPR -intensive industries, the trademark -intensive industry c ontributed by far 
the biggest share to employment and GDP in the EU. Almost 46 million people  were directly 
employed in this sector, and another 20 million employments depended indirectly on this industry. 
This represented 21% of total direct employment an d 30% of total direct and indirect employment 
on average from 2011 to 2013. The sector contributed €4.8 trillion value added, which was 
equivalent to 36% of the EU's total GDP, in that same period. The trademark -intensive industry's 
exports represented €1. 275 trillion in 2013, while net exports only amounted to €14.5 billion, 
given that the EU imports in this sector were also the highest among all IPR -intensive industries 
(€1.26 trillion).299 
3.292.   Trademarks can be registered in the EU either under national tradem ark systems or as an 
EU trademark which provides the right holder with EU -wide protection by means of a single 
registration at the EUIPO. Since the EU's adherence to the Madrid Protocol in 2004, international 
registration of a trademark at WIPO is also ava ilable to seek protection in any country that is a 
signatory of the Madrid Protocol.  
3.293.   In 2015, more than 130,000 trademark applications were filed at the EUIPO. This 
represented a total increase of more than 11% compared to 2014; direct applications saw a 
growth of 8.2%, amounting to 108,000 applications, while applications for international 
registrations increased by 27.4% (almost 22,000 applications, equivalent to 16.8% of the total 
number of applications). Ninety -eight per cent of the applications were fi led electronically with the 
Office.300 On average, it took less than 20 weeks to register a trademark, and 5 weeks for an 
opposition decision, down from 18 weeks in 2010, despite the growth of oppositions which 
increased by almost 10% to more than 17,000 in 2015. A  total of 1,337,709 EU trademarks were 
registered by the EUIPO from 1996 to February 2017.301 
3.294.   During the reporting period, the EU's trademark regime witnessed a substantive overhaul. 
Following the Commission's announcement of its intention to review a nd modernize the EU's 
                                                
295 Viewed at: http://cpvo.europa.eu/en/applications -and-examinations/fees -and-payments . 
296 OJEU L 332/13, 7 December 2016.  
297 Commission Regulation (EC) No. 572/2008 of 19 June 2008 amending Regulation (EC) No. 1238/95 
as regards the level of the annual fee and the fees relating to technical examination, payable to the CPVO, and 
the manner of pa yment, OJEU L 161/7, 20 June 2008.  
298 PVR case law is available at: https://cpvoextranet.cpvo.europa.eu/PVRCaseLaw . 
299 EPO/EUIPO, Intellectual Property Rights Intensive Industries and Economic Pe rformance in the 
European Union, Industry -Level Analysis Report, 2nd edition, October 2016. Viewed at: https://euipo.europa. 
eu/tunnel -web/secure/webdav/guest/document_library/observatory/documents/IPContributionStudy/ 
performance_in_the_European_Union/performance_in_the_European_Union_full.pdf . 
300 EUIPO, Annual Report 2015. Viewed at: https://euipo.europa.eu/ohimportal/en/annual -report  
301 Viewed at: https://euipo.europa.eu/tunnel -web/secure/webdav/guest/document_library/contentPdfs/ 
about_euipo/the_office/statistics -of-european -union -trade -marks_en.pdf . This also includ es trademarks which 
are not valid anymore. According to the Chief Economist of the EUIPO, there were 1,132,532 validly registered 
EU trademarks in force on 29 January 2017.  WT/TPR/S/357 • European Union  
 
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  trademark regime in 2011 and the submission o f legislative proposals in 2013302, the trademark 
reform package was adopted in December 2015. The legislative reform aims at making the 
trademark regime more accessible and efficient, includ ing through reduced costs, simpler and 
faster procedures, as well as enhanced predictability and legal security.  It also provides more 
effective tools to fight counterfeit products, including those transiting EU territory.303 
3.295.   The trademark reform package con sists of two legislative measures:  
 Regulation (EU) 2015/2424 amending Council Regulation (EC) No. 207/2009 on the 
Community trademark and Commission Regulation (EC) No. 2868/95 implementing 
Council Regulation (EC) No. 40/94 on the Community trademark and r epealing 
Commission Regulation (EC) No. 2869/95 on the fees payable to the Office for 
Harmonization in the Internal Market (OHIM).304 It amends the legal framework for EU 
trademarks (formerly "Community trademarks") administered by the EUIPO (formerly 
known as the "Office for Harmonization in the Internal Market"). Among others, the 
Regulation introduced the EU certification mark. It also streamlined the procedures 
before the EUIPO by excluding the possibility to file EU trademark applications with 
national o ffices. Furthermore, fees for EU trademarks were reduced and are the same 
now for applications and renewals (€1,000/€850, if electronically filed); the opposition 
fee has been brought down to €320 (previously €350). The Regulation is directly 
applicable in  the EU's member States. It entered into force on 23 March 2016; and  
 Directive (EU) 2015/2436 to approximate the laws of the member States relating to 
trademarks.305 It further harmonizes the legal framework for national trademark regimes 
in EU member States  which coexist with the EU trademark regime, including as regards 
the protection of trademarks with reputation, collective trademarks, procedural rules and 
the classification of goods and services. The Directive entered into force on 12 January 
2016; membe r States have until 14 January 2019 to transpose the Directive into 
national law.  
3.296.   Among the common features of the trademark reform package is an updated definition of 
what may constitute a trademark, which removed the requirement of graphic representabili ty. 
Pursuant to Article 4 of the Regulation and Article 3 of the Directive, "a trademark may consist of 
any sign, in particular words, including personal names, or designs, letters, numerals, colours, the 
shape of goods or of the packaging of goods, or sou nds". Such signs must be distinctive and be 
represented "in a manner which enables the competent authorities and the public to determine the 
clear and precise subject matter of the protection".  
3.297.   The trademark reform package also includes provisions that are  specifically directed 
towards combating trademark counterfeiting more effectively. Both the Regulation (Article 9(4)) 
and the Directive (Article 10(4)) thus entitle the right holder, among others, to prevent all third 
parties from bringing counterfeit goo ds originating from third countries into the territory of the 
member State where the trademark is registered without being released for free circulation (goods 
in transit). The recitals (15 and 21, respectively) emphasize the compatibility with the EU's WT O 
obligations, in particular GATT Article V and the Doha Declaration on the TRIPS Agreement and 
Public Health. They also clarify that this entitlement applies to all customs situations, including 
transit, transhipment, warehousing, free zones, temporary st orage, inward processing or 
temporary admission, also when the goods are not intended to be placed on the EU market 
(recitals 16 and 22, respectively). However, goods transiting the EU customs territory that bear a 
trademark that is confusingly similar to an EU trademark, or goods infringing other IPRs are not 
covered by this provision. Furthermore, the entitlement lapses if the declarant or holder of the 
goods provides evidence in subsequent proceedings before the EU trademark court that the right 
holder i s not entitled to prohibit the placing of the goods on the market of the country of final 
destination. Also, recitals 19 and 25, respectively, recall the need for appropriate measures to 
ensure the smooth transit of generic medicines and, for that purpose,  clarify that the right holder 
                                                
302 See previous TPR report, WT/TPR/S/317/Rev.1, para. 3.284.  
303 See statement by the European Commission at the TRIPS Council meeting on 7 -8 June 2016, 
IP/C/M/82/Add.1, paras. 7 -19. 
304 OJEU L 341/21, 24 December 2015.  
305 OJEU L 336/1, 23 December 2015.  WT/TPR/S/357 • European Union  
 
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  cannot take action based upon similarities between international non -proprietary names for active 
ingredients in the medicines and related  trademarks.  
3.298.   As discussed in the previous TPR report306, these substantive trademark prov isions 
complement the procedural rules on goods in transit in Regulation (EU) No. 608/2013 which 
covers enforcement measures at the EU's external borders. The latter clarified that when 
medicines merely transit EU territory, customs should take account of any substantial likelihood of 
the diversion of such medicines onto the EU market when assessing a risk of IPR infringement.  
3.299.   When the European Commission introduced the trademark reform package to the TRIPS 
Council in June 2016, it stressed that the new leg islation was not intended to impede access to 
legitimate generic medicines that were transiting EU territory in order to be delivered to patients in 
developing countries.307 At the same meeting, however, a number of developing countries 
expressed concerns ab out the potentially negative impact of the relevant provisions on trade in 
legitimate goods transiting EU territory. In particular, shifting the burden of proof to the declarant 
or holder of the goods was seen as problematic, as well as the absence of suff icient safeguards 
against the abuse of enforcement procedures.308 
3.300.   Much of the IPR -specific case law of the CJEU and the General Court continues to address 
trademark matters.309 This section limits itself to discussing one important case during the 
reporting pe riod. Other cases relevant to trademark law can also be found in the enforcement 
section below.  
3.301.   The CJEU interpreted the geographical reach of reputation of a Community trademark in its 
preliminary ruling of 3 September 2015.310 This is important, since earl ier registered trademarks 
with reputation enjoy a higher level of protection under EU law. They are protected not only 
against later registration of identical or confusingly similar trademarks that are used for similar 
goods or services, but also when such  trademarks are used for goods or services that are not 
similar, provided that the use takes unfair advantage of, or is detrimental to, the distinctive 
character or the reputation of the earlier trademark. The Court interpreted the relevant provision 
(Article 4(3) of Directive 2008/95/EC, now Article 5(3)(a) of Directive (EU) 2015/2436) as 
meaning that an earlier trademark can be considered as having acquired reputation in the EU if the 
reputation can be established in a substantial part of the EU's territo ry311 which may coincide with 
the territory of a single member State, not necessarily including the country in which the 
application for the later trademark was filed. To benefit from protection in such cases, the right 
holder had to provide evidence, howeve r, that a commercially significant part of the public in the 
member State where the application for the later trademark had been filed was familiar with the 
Community trademark and made a connection with the later national mark. The right holder also 
had t o prove that there was injury caused to the earlier mark or that there was at least a serious 
risk of such injury occurring in the future.  
3.3.8.2.5   Geographical indications  
3.3.8.2.5.1   Agricultural products  
3.302.   Geographical indications (GIs) continue to play a significant role in the EU market for wine, 
spirits, agricultural products and foodstuffs.312 According to an EUIPO report of April 2016313, the 
                                                
306 WT/TPR/S/317/Rev.1, paras. 3.285 -3.286.  
307 See minutes of the TRIPS Council meeting on 7 -8 June 2016, IP/C/M/82/Add.1, para. 15.  
308 See statement by Brazil, IP/C/M/82/Add.1, paras. 30 -37, supported by India (IP/C/M/82/Add.1, 
paras. 38 -44), South Africa (IP/C/M/82/Add.1, paras. 45 -47), China (IP/C/M/82/Add.1, paras. 51 -54) and 
Indonesia (IP/C/M/ 82/Add.1, paras. 55 -56). 
309 For a comprehensive overview of case law regarding trademark and design matters, see EUIPO, 
Overview of GC/CJ Case Law 2015; viewed at: https://euipo.europa.eu/ohimportal/en/web/guest/news/ -
/action/view/2930045 . A database is accessible at: https://euipo.europa.eu/eSearchCLW/#basic . 
310 Case C -125/14 (Iron&Smith kft v Unilever NV). View ed at: http://curia.europa.eu/juris/liste.jsf?& 
num=C -125/14 .  
311 For the definition of what constitutes "having a reputation in the EU", see the earlier landmark 
judgment in Case C -301/0 7 (PAGO International GmbH v Tirol Milch registrierte Genossenschaft mbH), 
6 October 2009. Viewed at: http://curia.europa.eu/juris/liste.jsf?num=C -301/07 .  
312 For details regarding the econ omic relevance of Gis, see the previous TPR report, 
WT/TPR/S/317/Rev.1, para. 3.289.  WT/TPR/S/357 • European Union  
 
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  estimated GI product market in the EU amounted to more than €54 billion in 2010, of which 
products worth more than €11 billion were exp orted. The report also assumed that domestic 
consumption of products protected by EU GIs represented €48 billion in 2014, with wine 
representing more than half of the share of this consumption.  
3.303.   A joint EPO/EUIPO report of October 2016314 estimated that GI -intensive industries 
generated about 0.1%  of the EU's overall GDP, equivalent to €18 billion,  value added,  in the 
period 2011 -2013. It represented a 0.2% share of total employment in the EU. As regards the 
EU's external trade, about 20% of total sales of EU GI products are exported outside the EU, 
between 25% and 30% of processed agricultural products are covered by GIs, and 80% of total 
wine exports and almost all spirits exports are also covered by GIs.  
3.304.   The top 10 GIs came from Germany, Spain, France, Italy  and the U.K. and represented 
28% of the sales in the EU.315 In France, approximately 32% of products sold were GI -
protected.316 Sales of products protected by third -country GIs were dominated by a few products, 
such as Café de Colombia from Colombia and Tequi la from Mexico. The average premium price 
that consumers were prepared to pay for GI products was 2.23 times higher than the price for a 
comparable non -GI product, with the highest premiums paid for wines and spirits.  
3.305.   Protection of GIs for agricultural pro ducts at EU level can be obtained in one of the 
following ways: as protected designation of origin (PDOs) or protected GI (PGIs) for wines and 
agricultural products and foodstuffs, or as GI for spirits and aromatized wines (for an overview of 
relevant legi slation, see Table A3.3).  
3.306.   To do so, the EU has established exclusive and unitary GI protection systems for wines 
(1970), spirits (1989), aromatized wines (1991), and other agricultural products and foodstuffs 
(1992). Through these systems, protected names for the products covered enjoy far -reaching 
protection throughout the EU, based on a single application process. The key provisions are 
currently laid down for wine in Regulation (EU) No. 1308/2013 of 17 December 2013317, for 
aromatized wines in Regulation ( EU) No. 251/2014 of 26 February 2014318, for spirits in Regulation 
(EC) No. 110/2008 of 15 January 2008319, and for agricultural products and foodstuffs in 
Regulation (EU) No. 1151/2012 of 21 November 2012.320 
3.307.   Procedures for the application for registration of G Is originating in the EU have been 
described in previous reports.321 As regards GIs of products of non -EU origin, they may be 
protected in the EU either through direct application or by means of inclusion in FTAs. In the 
former, the application may be sent e ither directly, or through the authorities of the country where 
the geographical area is located, to the Commission. No  fees are required for applications from 
third countries. The average registration time for EU and non -EU GIs in the past two years has 
been approximately two years.  
                                                                                                                                                  
313 See the EUIPO Report on Infringement of Protected Geographical Indications for Wine, Spirits, 
Agricultural Products and Foodstuffs in the EU, April 2016. Viewed at: https://euipo.europa.eu/tunnel -web/ 
secure/webdav/guest/document_library/observ atory/documents/Geographical_indications_report/geographical
_indications_report_en.pdf .  
314 Intellectual Property Rights Intensive Industries and Economic Performance in the European Union, 
Industry -Level Analysis Report, October 2016. Viewed at: https://euipo.europa.eu/tunnel -
web/secure/webdav/guest/docu ment_library/observatory/documents/IPContributionStudy/performance_in_the
_European_Union/performance_in_the_European_Union_full.pdf .  
315 See the EUIPO Report on Infringement of Protected Geographical Indications for Wine, Spirits, 
Agricultural Products and  Foodstuffs in the EU, April 2016, p. 28. Viewed at: https://euipo.europa.eu /tunnel -
web/secure/webdav/guest/document_library/observatory/documents/Geographical_indications_report/geograp
hical_indications_report_en.pdf . 
316 Ibid, p. 5.  
317 OJEU L 347/671, 20 December 2013. Viewed at: http://eur -lex.europa.eu/LexUriServ/LexUriServ.do 
?uri=OJ:L:2013:347:0671:0854:EN:PDF . 
318 OJEU L 84/14, 20 March 2014.  
319 OJEU L 39/16, 13 February 2008. Consolidated version. Viewed at: http://eur -lex.europa.eu/LexUri 
Serv/LexUriServ.do?uri=CONSLEG:2008R0110:20090120:EN:PDF . 
320 OJEU L 343/1, 14 December 2012. Viewed at: http://eur -lex.europa.eu/LexUriServ/LexUriServ. 
do?uri=OJ:L:2012:343:0001:0029:en:PDF . See also previous TPR report, WT/TPR/S/317/Rev.1, para. 3.291.  
321 Notably in WT/TPR/S/284/Rev.2, 28 Nove mber 2013, paras. 3.280 -3.281.  WT/TPR/S/357 • European Union  
 
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  3.308.   According to the 2016 EUIPO report referred to above, nearly 3,400 EU GI names are 
registered in four databases maintained by the European Commission. In addition, in December 
2016, the EUIPO database listed about another 1,500  third-country GIs that are protected 
pursuant to bilateral agreements concluded by the EU with a number of countries.322 
3.309.   The Commission administers the following databases that provide access to EU and third -
country GIs registered in the EU:  
 The Database of  Origin and Registration (DOOR)323 for agricultural products and 
foodstuffs contains names registered or applied for as PDOs and PGIs. As of 1 
December 2016, there were 1,323 GIs registered (619 PDOs and 704 PGIs), including 
23 third -country names, such as Dongshan Bai Lu Sun and nine other GI names from 
China; Khao Sangyod Muang Phatthalung and three other GI names from Thailand; 
Darjeeling from India; Café de Colombia from Colombia; and Café de Valdesia from the 
Dominican Republic. As of early January 2017,  DOOR also showed another 114 
applications for registration and 37 names that were published for opposition.  
 DOOR is a transparency tool, but has no legal status. It includes non -EU GIs registered 
in the EU through direct applications. GIs for third -countr y products protected under 
an international agreement to which the EU is a party may also be entered in the 
register. In this regard, the list of relevant international agreements and the list of 
protected GIs under those agreements are to be published and  regularly updated by 
the Commission pursuant to Article 11 of Regulation (EU) No. 1151/2012.324 
 The wine register " E-Bacchus "325 is a database which includes the register of protected 
designations of origin and protected GIs from member States and third count ries that 
are protected in the EU under Regulation (EU) No. 1308/2013. As of 1 December 
2016, 1,291 wine names qualified as PDOs and 459 as PGIs were registered for EU 
wine, as well as two PDOs for third -country wine, namely Vale dos Vinhedos (Brazil) 
and Napa Valley (United States). At the same date, the wine register also listed 437 
third-country GIs and 696 names of origin protected in the EU in accordance with 
bilateral agreements on trade in wine that the EU has concluded with a number of its 
trading p artners.  
 Spirits bearing a GI are registered in Annex III of Regulation (EC) No. 110/2008. 
According to Article 17 of the Regulation, applications for a new GI to be registered 
may be submitted to the Commission by the member State of origin of the spirit or, in 
the case of third -country GIs, either by the competent authorities in that country or 
directly to the Commission.  
 "E-Spirit Drinks "326, a register of GIs protected, or applied for, in the EU for spirits 
originating in member States and third countries , listed a total of 245 established EU 
names on 1 December 2016, as well as third -country names protected in the EU (Ron 
de Guatemala (Guatemala) and Pisco (Peru)). In addition, seven applications for new 
EU GIs and two applications for third -country names  are under examination (Tequila 
(Mexico) and Russian Vodka (Russian Federation)).  
 The Register of Geographical Designations for Aromatised Drinks Based on Wine 
Products327 contains a list of five names protected in the EU.  
3.310.   In its judgment of 21 January 2016328, the CJEU had an opportunity to provide an 
interpretation of the term "evocation" in Article 16 of Regulation (EC) No. 110/2008. The provision 
                                                
322 The database can be accessed at: https://euipo.europa.eu/ohimportal/en/practice . 
323 Viewed at: http://ec.europa.eu/agriculture/quality/door/list.html . 
324 Viewed at: http://ec.europa.eu/trade/policy/countries -and-regions/agreements/   
325 Viewed at: http://ec.europa.eu/agriculture/markets/wine/e -bacchus/ . 
326 Viewed at: http://ec.europa.eu/agriculture/spirits/ . 
327 Viewed at: https://ec.europa.eu/agriculture/sites/agriculture/files/quality/documents -links/pdf/rgi -
aromatised -wine-products_en.pdf . 
328 Case C -75/15 ( Viiniverla Oy v Sosiaali - ja terveysalan lupa - ja valvontavirasto ). Viewed at: 
http://curia.europa.eu/juris/liste.jsf?&num=C -75/15 . WT/TPR/S/357 • European Union  
 
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  protects registered GIs, among others, "against any misuse, imitation or evocation, even if the 
true origin of t he product is indicated or the GI is used in translation or accompanied by an 
expression such as "like", "type", "style", "made", "flavor" or any other similar term ". According to 
the CJEU, the act of evocation is determined by reference to the perception of the average, 
reasonably well -informed, observant and circumspect, consumer, the concept being understood as 
covering European consumers and not only consumers in the member State where the product 
concerned is manufactured. The Court found that the use of a name that evokes a registered GI 
may not be authorized, even if there is no likelihood of confusion.  
3.311.   Given the importance of GIs for the EU's external trade, the Commission has sought to 
include a comprehensive section on GI protection for agricultura l products in the more recent 
generation of FTAs. As a consequence, a large number of EU and third -country GIs are now 
protected through bilateral and regional agreements.329 
3.312.   The following agreements with GI coverage have been finalized or have entered into force 
since the last report330: 
 The FTA with Viet Nam for which negotiations were concluded on 1 February 2016 
includes one of the more comprehensive GI sections. As well as detailed provisions 
regarding the protection of GIs, exceptions and their relationsh ip with trademarks, it 
requires both parties to maintain a registration system. In addition, a list of GIs 
protected under the Agreement is contained in Annex GI; it includes 39 names from 
Viet Nam. On the institutional side, a Working Group, including GIs , will be 
established, among others, to amend the list of registered GIs and to exchange 
information on legislative and policy developments in this area;  
 In a similar vein, Protocol 3 attached to the Economic Partnership Agreement with 
Southern African Dev elopment Community  (SACD) EPA States331, signed on 10 June 
2016 and provisionally applied since 10 October 2016, covers GI protection together 
with winemaking practices and certification requirement s, but is applied only to 
South  Africa and the EU for the ti me being. It includes detailed rules about the scope 
of protection, the relationship with trademarks and enforcement of GIs, as well as 
Annex I with a non -exhaustive list of more than 100 GIs from South Africa and more 
than 250 from the EU that are to be p rotected in both parties' jurisdictions and that 
third-country manufacturers will no longer be allowed to use for exports of their 
products to the EU and South Africa. On the other hand, the Economic Partnership 
Agreement concluded with the East African Co mmunity Partner States in October 2014 
has only limited provisions in the field of GIs, recognizing their importance for 
sustainable agriculture and rural development. GIs are included in areas of future 
cooperation to develop policies and legal frameworks  that support the identification, 
registration and marketing of GI -protected products332; 
 The Stabilisation and Association Agreements concluded with Bosnia and Herzegovina 
(entry into force: 1 June 2015), as well as with Kosovo (entry into force: 1 April 20 16) 
both include an agreement on the reciprocal recognition, protection and control of 
wine, spirit and aromatized wine names with detailed provisions regarding the 
protection of GIs and a list of protected names;  
 The Association Agreements concluded with Ukraine  (provisionally applied since 
1 November 2014 and the Deep and Comprehensi ve Free Trade Agreement since 
1 January 2016), as well as Georgia and Moldova (both entered into force on 1 July 
2016) all comprise comprehensive provisions regarding the prot ection and 
                                                
329 For a list of selected earlier agreements, see previous  TPR report, WT/TPR/S/317/Rev.1, para. 3.296, 
FN. 287.  
330 The texts of the agreements can be accessed at: http://ec.europa.eu/trade/policy/countries -and-
regions/agreements/ . 
331 The SADC EPA Group consists of 6 out of 15 members of the SADC (Botswana, Lesotho, 
Mozambique, Namibia, Swaziland and South Africa). Angola has observer status and may join the Agreement 
in the future.  
332 As regards the CARIFORUM -EU EPA, the parties are e ngaged in exploratory talks to implement Article 
145 regarding the rendez -vous clause on GIs, in order to reach an agreement on the protection of GIs in their 
respective territories in the near future.  WT/TPR/S/357 • European Union  
 
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  enforcement of GIs. Elements for the registration and control of GIs and criteria to be 
included in objection procedures as well as lists of protected names are covered in 
annexes to the respective agreements. On the institutional side, each agr eement also 
provides for the establishment of GI sub -committees, which aim at addressing specific 
problems regarding the protection of GIs as well as updating GI lists.  
 As part of the CETA that was signed at the EU -Canada Summit on 30 October 2016333, 
Canada  undertook to grant the higher level of protection under Article 23 of TRIPS to 
the majority of the 143 listed GIs that are protected in the EU, upon entry into force of 
the Agreement. Exceptions will only apply with respect to 19 names that are conflictin g 
with names already in use in Canada.334 In particular, for the first time in 20 years, EU 
producers will be allowed to use certain famous names, such as 'Prosciutto di Parma' 
and 'Prosciutto di San Daniele' for their exports to Canada. These names are prot ected 
GIs in the EU, and will, departing from the principle of "first in time, first in right", be 
allowed to coexist with Canadian trademarks that were registered earlier. Canada also 
agreed to strengthen its border measures, including with respect to goo ds infringing 
GIs.335 
 Similarly, the EU and Kazakhstan Enhanced Partnership and Cooperation Agreement 
(EPCA), provisionally applied since 1 May 2016, includes a section on GIs that provides 
for detailed rules concerning the scope of protection, the relations hip with trademarks 
and the enforcement of GIs. The EPCA foresees negotiations on the protection of GI 
names within seven years from its entry into force.  
3.313.   In addition to the wide range of FTAs that provide for GI protection and an institutional 
framework t o enhance cooperation, other forms of cooperation activities are in place with a 
number of developing countries.336 
3.3.8.2.5.2   Non-agricultural products  
3.314.   The protection of GIs for non -agricultural products is not harmonized at EU level, and 
therefore remains governed by  different national laws.337 National appellation systems are 
available in 15 EU member States.338 In addition, GIs for non -agricultural products may also be 
protected as collective EU trademarks339, as well as under unfair competition laws.  
3.315.   The European Commiss ion continued to explore the possibility of extending GI protection 
to non -agricultural products at EU level.340 In its Communication on Upgrading the Single Market, 
of 28 October 2015341, it committed to take work forward on how to make the most of Europe's 
traditional know -how. 
3.3.8.2.6   Industrial designs  
3.316.   According to a joint study by the EUIPO and the EPO342, industrial designs rank among the 
top three IPR -intensive industries in terms of job creation and share of the EU's total GDP. They 
                                                
333 Viewed at: http://ec.europa.eu/trade/policy/in -focus/ceta/ . 
334 See Commission Summary of the Final Negotiating Results of December 2014. Viewed at: 
http://trade .ec.europa.eu/doclib/docs/2014/december/tradoc_152982.pdf . 
335 Viewed at: http://trade.ec.europa.eu/doclib/press/index.cfm?id=1567 . 
336 See previous report WT/TPR/S/317/Rev.1, 21 October  2015, para. 3.297.  
337 For a detailed description of the protection provided in certain EU member States and the legal 
instruments currently available at the level of the EU, see previous TPR report, WT/TPR/S/317/Rev.1, 
21 October 2015, para. 3.298.  
338 Belgium (Wallonia), Bulgaria, Croatia, Czech Republic, Estonia, France, Germany, Hungary, Latvia, 
Poland, Portugal, Romania, Slovakia, Slovenia and Spain (region of Murcia).  
339 See explanation provided in an earlier Secretariat report, WT/TPR/S/284/Rev.2, 28 Nov ember 2013, 
para. 3.287.  
340 See the information on ongoing work provided at: http://ec.europa.eu/growth/industry/intellectual -
property/geographical -indications/non -agricultural -products_en . 
341 COM (2015) 550 final. Viewed at: https://ec.europa.eu/transparency/regdoc/rep/1/2015/EN/1 -2015-
550-EN-F1-1.PDF . 
342 Intellectual Property Rights Intensive Industries and Economic Performance in the EU, Industry -Level 
Analysis Report, 2nd edition, October 2016. Viewed at: https://euipo.europa.eu/tunnel -web/secure/webdav/ WT/TPR/S/357 • European Union  
 
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  are reported to have generated  about 12%, or 25.6 million, of direct employments, and 
contributed about 13.5%, or €1.8 trillion, to the EU's GDP on average from 2011 to 2013. As 
regards the EU's external trade, the design industry has by far generated the biggest surplus, with 
total ex ports amounting to €945 billion, and net exports to €243 billion.  
3.317.   In the EU, there are three ways of registering industrial designs:  
 Registration as a Community design at the EUIPO.343 A Registered Community Design 
(RCD) is protected throughout the EU for a maximum period of 25 years. Furthermore, 
Regulation (EC) No. 6/2002 also provides for the protection of unregistered Community 
designs for a period of no more than three years from the date of making the design 
available to the public in the EU;  
 Under any of the national design systems maintained by EU member States. Directive 
98/71/EC344 on the legal protection of designs harmonized the design laws of member 
States with respect to provisions in national systems that most directly affect the 
functioning of th e EU's internal market, so that right holders are given consistent and 
equivalent protection in all member States; or  
 Through international registration at WIPO.345 This is possible since the approval of the 
EU's accession to the Hague Agreement concerning t he international registration of 
industrial designs in December 2006.346 
3.318.   By December 2016, more than 1 million RCDs were registered at the EUIPO, and about 
85,000 new designs are registered each year.347 In 2015, the Office saw a slightly reduced number 
of app lications for RCDs compared to 2014, amounting to 97,500 applications in total. More than 
86,000 applications were filed directly with the Office, while international filings increased by 
10.5% to over 11,300 applications in the same year.348 Design e -filing saw steady growth, and 
reached 92% of all applications filed in 2015, which represents a 7% increase compared to 
2014.349 On average, it took five days to register a design in 2015. Registration and publication 
fees together amount to €350; renewal fees range from €90 (first time) to €180 (fourth time).350 
3.319.   The EUIPO makes two databases available to search for registered designs: eSearch plus, 
which provides access to a database of RCDs,  and DesignView351, which combines entries in the 
EUIPO's database of designs with the registered design information held by any of the participating 
national offices. As of 20 June 2016, international design data held by WIPO have also been 
integrated into DesignView, thus adding more than 227,000 designs to the search facility. In total, 
DesignView thus makes information about more than 10 million designs accessible.  
3.320.   Industrial design protection in the EU has been the object of a comprehensive assessment, 
both in legal and economic terms. The final Report on the Economic Review of Industrial Design in 
Europe  was released in January 2015.352 It reviewed the econo mic contribution of designs, how 
these are protected in the EU, and the rationale for protecting designs. It also discussed specific 
issues, including in relation to enforcement and the advent of new technologies such as 3D 
printing, as well as the diverge nt situation in EU member States regarding the availability of design 
protection for visible spare parts for complex products. The Report noted that only a minority of 
                                                                                                                                                  
guest/document_library/observatory/documents/IPContributionStudy/performance_in_the _European_Union/ 
performance_in_the_European_Union_full.pdf . 
343 Council Regulation (EC) No. 6/2002 of 12 December 2001 on Community Designs, OJEU L 3/1, 
5 January 2002.  
344 OJEU L 289/28, 28 October 1998.  
345 For more details, see previous TPR report, WT/TPR/S /284/Rev.2, 28 November 2013, paras. 3.291 -
3.292.  
346 Council Decision 2006/954/EC of 18 December 2006, OJEU L 386/28, 29 December 2006.  
347 See the EUIPO design portal at https://euipo.europa.eu/ohi mportal/en/designs . 
348 EUIPO Annual Report 2015, p. 15. Viewed at: https://euipo.europa.eu/tunnel -web/se cure/webdav/ 
guest/document_library/contentPdfs/about_euipo/annual_report/annual_report_2015_en.pdf . 
349 EUIPO Annual Report 2015, p. 16.  
350 Viewed at: https://euipo.euro pa.eu/ohimportal/en/rcd -fees-directly -payable -to-euipo  
351 Both databases can be accessed at https://euipo.europa.eu/ohimportal/en/rcd -search -availability . 
352 Viewed at: http://ec.europa.eu/growth/tools -databases/newsroom/cf/itemdetail.cfm?item_id=8844 . WT/TPR/S/357 • European Union  
 
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  designs are formally protected in the EU, partly because firms seek other ways to protec t their 
designs, partly because they are simply not aware of existing avenues to protect them.  
3.321.   The final Report on the Legal Review on Industrial Design Prot ection in Europe  was 
published in April 2016.353 It examined the impact of harmonization in terms of facilitating the 
system of design protection, assessed the coexistence of design protection at national and EU 
level, and discussed the need for updating th e current legal framework and for further harmonizing 
legislation in EU member States. Key substantive issues that were addressed by the Report include 
the definition of industrial design, the impact of new technologies in areas such as spare parts and 
3D printing, the relationship between laws providing for the protection of designs and copyright, 
etc. 
3.3.8.2.7   Undisclosed information  
3.3.8.2.7.1   Trade secrets  
3.322.   There have been important legislative developments regarding the harmonization of the 
protection and enforcement of tr ade secrets in the EU. Since the previous TPR report354, the 
Directive on the Protection of Undisclosed Know -How and Business Information (Trade Secrets) 
Against Their Unlawful Acquisition, Use and Disclosure355 has been adopted after approval by the 
European Parliament356 and by the Council.357 EU member States have until June 2018 to comply 
with the Directive.  
3.323.   While other categories of IP, including patents, design rights and copyright, play an 
important role for businesses that seek to protect the results of the ir innovative activities, trade 
secrets are an alternative or complementary means to achieve this objective. Companies generally 
value them at least as much as other forms of IP. This was confirmed by a survey on trade secret 
use by companies in the EU tha t was launched in November 2012: 75% of the respondents ranked 
trade secrets as strategically important for their company's growth, competitiveness and 
innovative activity; and 20% reported at least one attempt to misappropriate trade secrets, also 
noting that the risk had increased since 2002.358 The protection of undisclosed, valuable 
knowledge can thus have an important function in order to stimulate innovative activity and 
cooperation among private sector actors, in particular SMEs, and also research inst itutions.  
3.324.   However, misappropriation of trade secrets has been on the rise in the EU for some time. 
Among others, this has been facilitated by the significant heterogeneity of laws regarding the 
protection of trade secrets in EU member States so far, notwit hstanding the minimum standards 
set by the TRIPS Agreement, potentially causing a fragmentation of the internal market. The 
Directive therefore aims at harmonizing the legal framework through the establishment of certain 
standards that are applicable acros s the EU while also preserving the possibility for EU member 
States to provide for stricter rules at national level.  
3.325.   To do so, the Directive provides for a common definition of trade secrets in line with Article 
39.2 of TRIPS. Trade secrets are thus unders tood to cover know -how, as well as business and 
technological information, provided that there is a legitimate interest in keeping them confidential 
and a legitimate expectation that the confidentiality will be preserved. The protected know -how or 
informat ion must be of actual or potential commercial value to the person lawfully controlling the 
trade secret. Trivial information, the experience and skills gained by employees in the normal 
course of their employment, as well as information that is known among , or readily accessible to, 
                                                
353 Viewed at: http://ec.europa.eu/growth/tools -databases/newsroom/cf/itemdetail.cfm?item_id=8845 . 
354 See the section on trade secrets in WT/TPR/S/317/Rev.1, para. 3.300.  
355 Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016, OJEU L 
157/1 of 15 June 2016; the initial Commission proposal of 28 November 2013 was circulated in document 
COM(2013) 813 final, and is available at: http://eur -lex.europa.eu/legal -
content/EN/ALL/?uri=CELEX:opoku8ukki52013 PC0813 . 
356 See EP legislative resolution of 14 April 2016. Available at: http://www.europarl.europa.eu/sides/ 
getDoc.do?pubRef= -//EP//TEXT+TA+P8 -TA-2016-0131+0+DOC+XML+ V0//EN . 
357 Press release 244/16 of 27 May 2016 ( http://www.consilium.europa.eu/en/press/press -releases/ 
2016/05/27 -trade-secrets -new-directive/ ). 
358 See Section 2.1. of the Commission proposal for a directive on the protection of undisclosed know -
how and business information (trade secrets)  against their unlawful acquisition, use and disclosure, 
COM(2013)813 final of 28 November 2013.  WT/TPR/S/357 • European Union  
 
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  persons within the circles that normally deal with the kind of information concerned, are excluded 
from the scope of the Directive. In a similar vein, the independent discovery of the same know -
how or information, as well as rev erse engineering of a lawfully acquired product remain possible, 
as they are defined as lawful acquisitions of trade secrets.  
3.326.   While not providing for criminal sanctions, the Directive requires EU member States to 
make civil procedures and remedies availabl e to trade -secret holders so that they can take 
effective action in order to either prevent or obtain redress for the unlawful acquisition, use or 
disclosure of their trade secret. These measures should make it easier for holders of trade secrets 
to defend  their rights in courts and to seek compensation where such trade secrets have been 
misappropriated.  
3.327.   The general provisions are inspired by the general obligations evoked in Article 41 of 
TRIPS. They call for fair and equitable procedures that are effectiv e and dissuasive, are not 
unnecessarily complicated or costly, and do not entail unreasonable time -limits or unwarranted 
delays. Also, EU member States are required to provide for safeguards against the abuse of the 
measures, procedures and remedies provid ed for by the Directive, and to avoid the creation of 
barriers to legitimate trade in the internal market.  
3.328.   The Directive has been conceived as a contribution to the smooth functioning of the EU's 
internal market. It aims at establishing a deterrent effect against the illegal disclosure of trade 
secrets in order to allow for the safe exchange of knowledge between research institutions and the 
private sector, in particular SMEs which usually rely more on trade secret protection. This clear 
and uniform legal f ramework is expected to boost an environment that is supportive of innovation, 
research and development, as well as competitiveness within the EU.359 
3.329.   At the same time, in an attempt to address concerns raised with respect to the Directive's 
potential impact on a range of fundamental rights, the Directive seeks to take a balanced approach 
to preserve the freedom of expression, as well as the public interest in access to information. In 
particular, provisions are included to ensure the exercise of investigative  journalism and the 
protection of journalistic sources, as well as the mobility of workers and the protection of whistle -
blowers who act in order to protect the general public interest. While industry welcomed the 
Directive as a useful tool to fight more e ffectively against the misappropriation of trade secrets, 
critics deplored the broad definition of trade secrets, as well as the lack of clarity of the exceptions 
to the unlawful acquisition, use and disclosure of trade secrets, which would create legal 
uncertainty.  
3.3.8.2.7.2   Clinical trial data  
3.330.   The legal framework currently in force in the EU in order to provide for the protection of 
clinical trial data, as required by Article 39.3 of TRIPS, was set out in earlier TPR reports.360 In 
particular, it provides for a regim e of exclusivity periods of eight plus two plus one years during 
which generic manufacturers cannot rely on the data submitted by the originator company to the 
regulatory authorities, nor market the generic product.361 
3.331.   The EU's recent policy and legal framew ork regarding public access to clinical trial data was 
also described in the previous TPR report.362 Regulation (EU) No. 536/2014 of the European 
Parliament and of the Council of 16 April 2014 on Clinical Trials on Medicinal Products for Human 
Use363 thus prov ides, among others, that an EU database be set up and maintained by the 
European Medicines Agency (EMA) with a view to ensuring an appropriate level of transparency in 
clinical trials. The Regulation is expected to become applicable by October 2018 once th e full 
functionality of the EU database has been verified.  
                                                
359 See the statement by the EU delegation at the TRIPS Council meeting on 8 -9 November 2016, 
IP/C/M/83/Add.1, paras. 48 -59. 
360 WT/TPR/S/284/Rev.2, paras. 3.295 -3.297 and WT/TPR/S/317/Rev.1, paras. 3.301 -3.303.  
361 Directive 2004/27/EC of 31 March 2004 amending Directive 2001/83/EC on the Community code 
relating to medicinal products for human use (OJEU L 136/34, 30 April 2004).  
362 WT/TPR/S/317/Rev.1, paras. 3.301 -3.303. 
363 OJEU L 158/1, 27 May 2014.  WT/TPR/S/357 • European Union  
 
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  3.332.   Following the adoption of the EMA's new policy on the publication of clinical data for 
medicinal products for human use in October 2014364 and extensive consultations with 
stakeholders, the EMA, as t he first regulatory authority worldwide, has already started providing 
open access to such data on 20 October 2016.365 The objective is to avoid duplication of clinical 
trials and to encourage innovative activities to develop new medicines, and also to allow  academics 
and researchers to reassess clinical trial data.  
3.333.   For applications for marketing authorization in the EU submitted since January 2015, as 
well as for applications to vary a marketing authorization submitted since July 2015, reports 
presented by o riginator companies will thus be made publicly accessible 60 days after the 
European Commission's decision regarding an application.366 The data include the clinical overview 
and summary, as well as study reports on individual clinical studies and their appe ndices. After the 
initial publication of data for six medicines in 2016367, the EMA intends to progressively add online 
data for all applications received since early 2015.  
3.334.   The EU database, provided for under Regulation (EU) No. 536/2014, shall contain 
information submitted in the clinical trials application and during the assessment procedure. In 
principle, this information will be accessible to the public, unless the confidentiality of the 
information can be justified on a number of grounds.368 It is expected  that the database will be put 
in place as of October 2018. A summary of the results of a clinical trial and a layperson summary 
shall be submitted in the database within one year from the end of the clinical trial in all member 
States, irrespective of the  outcome. Additionally, the clinical study report shall be submitted 30 
days after a marketing authorization for a medicinal product has been granted, the procedure 
completed, or the marketing authorization application withdrawn.369 
3.3.8.3   Enforcement  
3.3.8.3.1   Economic impa ct 
3.335.   Mapping the economic impact of counterfeiting and piracy in the EU helps to better 
understand the importance that the fight against IPR -infringing activities has taken in recent years 
for the European Commission and national authorities. The magnitude o f such activities was 
illustrated by a joint OECD/EUIPO study on Trade in Counterfeit and Pirated Goods that was 
presented on 18 April 2016. It provided empirical evidence regarding the magnitude of 
counterfeiting and piracy at global level.370 As specifical ly regards the situation in the EU, the study 
found that imports of counterfeit and pirated goods into the EU market were worth almost $116 
billion in 2013, which was the equivalent of 5% of the EU's total imports. Section 6 of the study 
lists Hong Kong, C hina; China; the United Arab Emirates; and Turkey as the top four provenance 
economies of counterfeit goods imported into the EU. Watches, leather articles and footwear were 
identified as the top three industries exposed to the import of counterfeit goods.  This said, the 
scope of the study needs to be read in conjunction with the definitions and parameters on which it 
is based. Thus, counterfeiting and piracy in this context encompasses infringements of copyright, 
trademarks, design rights and patents, and is thus defined in a broader manner than is the case 
under the TRIPS Agreement.371 At the same time, only IPR infringements related to tangible goods 
were assessed, not those occurring online.  
3.336.   Since March 2015, the EUIPO has released a number of sectoral stu dies that illustrate the 
impact of counterfeiting and piracy on the EU's economy, including as regards lost sales and 
revenues, lost jobs and also lost government revenues. Among the sectors that were reportedly 
most affected by IPR -infringing activities w ere clothing, accessories and footwear; 
                                                
364 Available at: http://www.ema.europa.eu/docs/en_GB/document_library/Other/2014/10/WC50017 
4796.pdf . 
365 Press release. Viewe d at: http://www.ema.europa.eu/ema/index.jsp?curl=pages/news_and_events/ 
news/2016/10/news_detail_002624.jsp&mid=WC 0b01ac058004d5c1 . 
366 The EMA's clinical data publication website can be accessed at: https://clinicaldata.ema.europa.eu/ 
web/cdp/home . 
367 Available at: https://clinicaldata.ema.europa.eu/web/cdp/home . 
368 Article 81.4 of Regulation (EU) No. 536/2014 as outlined also in WT/TPR/S/317/Rev.1, para 3.301.  
369 Article 37 of Regulation (EU) No. 536/2014.  
370 See summary of main findings at: http://ec.europa.eu/growth/tools -databases/newsroom/cf/ 
itemdetail.cfm?item_id=8774 . 
371 See footnote 14 to Article 51 of TRIPS.  WT/TPR/S/357 • European Union  
 
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  pharmaceuticals; as well as cosmetics and personal care. Table 3. 31 provides an overview of the 
main findings in the 11 sectors covered by these studies.  
Table 3.31 EUIP O - quantification of IPR infringement by sector  
Sector  Sales lost 
by the 
sector  Revenues 
lost by the 
sector  Sales lost in 
related 
sectors  Direct 
jobs lost  Direct and 
indirect 
jobs lost  Government 
revenue lost  
Cosmetics, 
personal care  7.8%  €4.7 bn  €4.8 bn  51,561  78,959  €1.7 bn  
Clothing, 
accessories, 
footwear  9.7%  €26.3 bn  €17 bn  363,000  518,281  €8.1 bn  
Sports goods  6.5%  €500 mn  €350 mn  2,800  5,800  €150 mn  
Toys, games  12.3%  €1.4 bn  €850 mn  6,150  13,168  €370 mn  
Jewellery, watches  13.5%  €1.9 bn  €1.6 bn  15,000 28,500  €600 mn  
Handbags, luggage  12.7%  €1.6 bn  €1.6 bn  12,100  25.700  €516 mn  
Recorded music 
industry  5.2%  €170 mn  €166 mn  829 2,155  €63 mn  
Spirits, wine  3.3% 
(4.4% 
spirits 
sales, 
2.3% wine 
sales)  €1.3 bn  €1.7 bn  4,800  23,300  €1.2 bn  
Pharmaceutical s 4.4%  €10.2 bn  €7.1 bn  37,700  90,900  €1.7 bn  
Pesticides  13.8%  €1.3 bn  €1.5 bn  2,600  11,700  €238 mn  
Smartphones  8.3%  €4.2 bn  n.a n.a n.a n.a 
n.a.  Not applicable.  
Source:  EUIPO, Sectoral Studies, published between March 2015 and March 2017.372 
3.337.   Another EUI PO report of April 2016373 estimated the market of goods infringing EU GIs at 
€4.3 billion in 2014, which corresponds to 9% of the EU's total GI product market, and the 
consumer loss at up to €2.3 billion during the same period. Infringements were mostly cau sed by 
acts of imitation or evocation of protected GIs (42%), as well as by misleading information about 
the origin of non -GI products (38%). In addition, about 20% of infringements resulted from non -
conformity with product specifications by producers from  the relevant GI area.  
3.338.   Also, a 2015 Situation Report on Counterfeiting in the EU374, jointly prepared by Europol 
and OHIM, emphasized the absence of a comprehensive analysis of the criminal dimension of 
counterfeiting in the EU, in particular in the online e nvironment, and called for a more structured 
and systematic intelligence effort. While the Report noted that much of the counterfeiting activities 
were still taking place in third countries, it also pointed to the growing importance of free trade 
zones for  counterfeiters, as well as to the production of counterfeit goods in the EU as a less costly 
and lower risk operation to market such IPR -infringing goods in the internal market. The Report 
found that the Internet was the most significant enabler for the d istribution of an ever -increasing 
range of counterfeit goods.  
3.3.8.3.2   Enforcement within the EU  
3.339.   Enforcement of IPRs in the EU, both in traditional commerce and online, continued to be 
framed by Directive 2004/48/EC on the Enforcement of IPRs (IPRED) and Directive 2001/29/EC on 
the Harmonisation of Certain Aspects of Copyright and Related Rights in the Information 
                                                
372 Available at: https://euipo.europa.eu/ohimportal/en/web/observatory/quantification -of-ipr-
infringement . The study on the Economic Cost of IPR Infringement in the Smartphones Sector was carried out 
in collaboration with the ITU.  
373 EUIPO Report on Infringement of Protected GIs for Wine, Spirits, Agricultural Products and Foodstuffs 
in the EU. Viewed at: https://euipo.europa.eu/tunnel -web/secure/webdav/guest/document_library/ 
observatory/documents/Geographical_indications_report/geographical_indications_report _en.pdf . 
374 Viewed at: https://euipo.europa.eu/ohimportal/documents/11370/80606/2015+Situation+Report 
+on+Counterfeiting+in+the+EU . WT/TPR/S/357 • European Union  
 
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  Society.375 An overview of the main enforcement provisions was provided by the previous TPR 
report.376 
3.340.   As also noted in the previous report377, consultations on  the civil enforcement of IPRs in 
the EU, including the operation and possible review of the Enforcement Directive, have been held 
since 2011, but have not yet resulted in any  concrete legislative proposal.  
3.341.   In its Communication on a Digital Single Market S trategy for Europe of 6 May 2015378, the 
European Commission announced its intention to make legislative proposals, among others, to 
modernize the EU's regime of IPR enforcement, with particular attention being paid to commercial -
scale infringements and the applicability across borders. In December 2015, this was followed by a 
public consultation on the evaluation and modernization of the current legal framework, including 
as regards the operation of the Enforcement Directive in the online environment.379 In pa rallel, the 
European Commission also consulted the public on due diligence and supply chain integrity.380 The 
purpose was to identify existing private sector mechanisms to survey supply chains and, on this 
basis, to map and promote best practices in order to  reduce the risk of IPR infringements in 
legitimate supply chains. However, only few responses were received, given that companies were 
not prepared to reveal the requested information that was considered to be too confidential and 
detailed, and also prefe rred to focus exclusively on illegitimate supply chains.  
3.342.   An assessment of the role of intermediaries regarding the enforcement of IPRs, including 
counterfeit goods, in the Digital Single Market was also part of the European Commission's 
ongoing work regard ing the evaluation and modernization of the IPR enforcement regime in the 
EU. This included consideration of the need to amend the existing legal framework in this regard, 
and the promotion of voluntary cooperation mechanisms.381 As part of the latter approa ch, the 
European Commission proactively supported the putting into place of memoranda of understanding 
(MoU) in order to dissuade online, commercial -scale IPR infringements.382 Following the 2011 MoU 
on the sale of counterfeit goods via the Internet383, anothe r MoU was thus opened for signature on 
21 June 2016 with a view to establishing a code of best practices to combat the sale of counterfeit 
goods over the Internet.384 In particular, the signatories committed themselves to offer efficient 
and effective notice  and take -down procedures, and to cooperate with each other, as well as with 
customs and law enforcement authorities.  
3.343.   First launched in 2009 by the European Commission and subsequently transferred to the 
OHIM in 2013385, renamed EUIPO since March 2016, the E uropean Observatory on Infringements 
of IPRs (Observatory) has among its principal tasks to collect and monitor information regarding 
counterfeiting and piracy in the EU's internal market, as well as to foster collaboration through a 
network of public and private sector actors. In order to provide evidence and data required for EU 
policymakers to take informed decisions, the Observatory hosts a number of important information 
resources regarding IPR enforcement. In particular, it administers two databases, i.e. the 
Enforcement Database386 that provides access to information on IPR -protected goods and supports 
enforcement agencies in identifying counterfeit goods, and the Anti -Counterfeiting Intelligence 
                                                
375 OJEU L 157/45, 30 April 2004; and OJEU L 167/10, 22 June 2001.  
376 See para. 3.307, Table 3.23, Document WT/TPR/S/317/Rev.1.  
377 WT/TPR/S/317/Rev.1, para. 3.311.  
378 Document COM(2015) 192 final.  
379 The summary of the responses can be viewed at: http://ec.europa.eu/growth/tools -databases/ 
newsroom/cf/itemdetail.cfm?item_id=8580 . 
380 The report on this consultation can be viewed at: http://ec.europa.eu/growth/tools -databases/ 
newsroom/cf/itemdetail.cfm?item_id=8603 . 
381 European Commission, Communication on Online Platforms and the Digital Single Market 
Opportunities and  Challenges for Europe, COM(2016) 288 final, 25 May 2016. Viewed at: 
https://ec.europa.eu/transparency/regdoc/rep/1/2016/EN/1 -2016-288-EN-F1-1.PDF .  
382 See Commiss ion Declaration on the Facilitation and Monitoring of MoUs Seeking to Dissuade 
Commercial Scale IP -Infringing Activities in the Internal Market, COM(2016) 3724 final, 20 June 2016. Viewed 
at: http://ec.europa.eu/DocsRoom/documents/18023/ attachments/2/translations/ . 
383 Viewed at: http://ec.europa.eu/DocsRoom/documents/10468/attachmen ts/1/translations/ . 
384 Viewed at: http://ec.europa.eu/DocsRoom/documents/18023/attachments/1/translations/ . 
385 See previous TPR report, WT/TPR/S/317/Rev.1, para. 3.315.  
386 The database can be accessed at: https://euipo.europa.eu/ohimportal/en/web/observatory/ 
enforcement -database . WT/TPR/S/357 • European Union  
 
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  Support Tool (ACIST).387 The latter offers statistics with respect to goods suspected of infringing 
IPRs that are detained at borders and in the internal market. Information that can be accessed 
includes, in particular, detention by a member State, both at the border and inland, countries of 
provenance, categories  of infringing goods, and how the IPR was infringed.  
3.344.   During the reporting period, the Enforcement Directive was the object of a number of 
preliminary rulings issued by the CJEU. For example, in its judgment of 17 March 2016388, the 
Court had an opportunity t o provide an interpretation of Article 13(1) of the Directive and, in 
particular, the kind of damages that the competent judicial authority shall order the infringer who, 
knowingly, or with reasonable grounds to know, engaged in an infringing activity to p ay. The CJEU 
found that merely calculating the damages on the basis of hypothetical royalties would not be 
sufficient for the purposes of providing the right holder with full compensation, as it would only 
cover the material damage suffered by him or her. Therefore, the Court held that the right holder 
must also be entitled to claim compensation for the moral prejudice that he or she has suffered as 
a result of the infringing activity.  
3.345.   In another judgment of 7 July 2016389, the CJEU pronounced itself on the m eaning of an 
"intermediary whose services are being used by a third party to infringe an IPR" and the conditions 
that apply for an injunction to be issued against such intermediary within the meaning of Article 11 
of the Enforcement Directive. Considering that the Directive was not limited to electronic 
commerce but also applied to the provision both of online and physical sales points, the Court 
draws on earlier jurisprudence in which it had examined the issues at stake with respect to online 
marketplaces.  The Court thus confirmed that, in an analogy with its earlier findings, according to 
which an online access provider who permits access without proposing any other services or 
exercising a review , provided a service within the meaning of Article 11 and th erefore had to be 
considered as  an intermediary, the tenant of market halls who sublet sales points to traders who 
used them to sell counterfeit products also constituted an intermediary in the context of the 
Enforcement Directive. As regards the condition s applying to an injunction pursuant to Article 11, 
third sentence, of the Directive, the Court recalled the principles established in an earlier 
judgement concerning injunctions against intermediaries in an online marketplace.390 In particular, 
it confirmed  that such injunctions had to be equitable, proportionate and balanced, protecting IPRs 
whilst not creating any barriers to legitimate trade.  
3.3.8.3.3   Enforcement at the EU's external borders  
3.346.   Since 1 January 2014, e nforcement at the EU borders is governed by Regula tion (EU) No. 
608/2013 of the European Parliament and of the Council, as well as Commission Implementing 
Regulation (EU) No. 1352/2013.391 
3.347.   As noted in the previous TPR report, Regulation (EU) No. 608/2013 also addressed the 
handling of medicines transiting t he EU territory by customs.392 In a different context, the 
detention of generic medicines in transit was again considered in the Council for TRIPS at its 
meeting on 7 -8 June 2016393 when a number of developing countries expressed serious concerns 
about the EU' s newly adopted trademark reform package and how it related to the provisions in 
the Customs Regulation.394 Regarding the overall scale of goods transiting the EU territory, 
                                                
387 The database can be accessed at: https://euipo.europa.eu/ohimportal/en/web/observatory/anti -
counterfeiting -intelligence -support -tool. 
388 Case C -99/15 (Christian Liffers v Producciones Mandar ina SL, Mediaset España Comunicación SA). 
Viewed at: http://curia.europa.eu/juris/document/document.jsf?t ext=&docid=175159&pageIndex=0&doclang 
=EN&mode=req&dir=&occ=first &part=1&cid=757416 . 
389 Case C -494/15 (Tommy Hilfiger Licensing LLC, Urban Trends Trading BV, Rado Uhren AG, Facton 
Kft., Lacoste SA, Burberry Ltd v Delta Center a.s.). Viewed at: http://curia.europa.eu/juris/document/doc 
ument.jsf?text=&docid=181465&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first &part=1&cid=645661 . 
390 Judgement of 12 July 2011, Case C -324/09 (L'Oréal and Others). Viewed at: http://curia.europa.eu/ 
juris/liste.jsf?num=C -324/09 . 
391 OJEU L 181/15, 29 June 2013, also notified to the WTO in document IP/N/1/EU/E/1, 10 July 2013; 
and OJEU L 341/10, 18 December 2013. For a more detailed description of Regulation (EU) No. 608/2013, see 
previous TPR report, WT/TPR/S/317/Rev.1, paras. 3.304 -3.305. For an overview of the main provisions 
relating to border measures, see also Table 3.23  of document WT/TPR/S/317/Rev.1.  
392 WT/TPR/S/317/Rev.1, 21 October 2015, para. 3.305.  
393 See minutes of the meeting in IP/C/M/82/Add.1.  
394 See section on trademarks above, para. 3. 271. WT/TPR/S/357 • European Union  
 
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  however, customs statistics for 2015 showed a further decrease of detention of such goods to only 
0.20% of the total number of actions undertaken by customs authorities at the EU's external 
borders.395 
3.348.   The Commission was requested to submit a report on the implementation of Regulation 
(EU) No. 608/2013 by end -2016 that would also cover any relevant incidents concerning medicines 
transiting the EU customs territory, including the potential impact on the EU's commitments on 
access to medicines under the 2001 Doha Declaration on the TRIPS Agreement and Public Health, 
as well as measures taken t o address any adverse effects. The report will be available within the 
first half of 2017.  
3.349.   At the external border of the EU, customs authorities may suspend the release of, or 
detain, goods that are suspected of infringing or found to have infringed IPRs. In most cases, 
customs authorities act upon applications from right holders. However, customs may also act 
ex officio  if they have sufficient grounds for suspecting that goods infringe an IPR. In such cases, 
they will notify the detention/suspension to the  importer within one working day, and to the right 
holder on the same day or promptly thereafter. The right holder must submit an application for 
action within four working days of receiving the notification. If no application is submitted within 
this period, the goods are released.  
3.350.   The European Commission's annual reports provide statistical information and data about 
customs interventions which support the analysis of IPR infringements occurring in the EU. 
According to the latest report396, there were 81,00 0 cases of IPR -infringing goods being detained 
by customs in 2015, representing a total of more than 40 million articles with a domestic retail 
value of the genuine  products of over €640 million (Table 3. 32). The observed decrease in the 
number of cases compared to previous years was reportedly due to the smaller number of cases in 
postal traffic.  
3.351.   Cigarettes accounted for 27% of the articles detained, followed by other g oods (10%), 
toys (9%), labels, tags and stickers (8%) and foodstuffs (7%). The share of products potentially 
harmful to human health and safety remained high, amounting to 25.8% in 2015. Alcoholic and 
non-alcoholic beverages, tobacco products and medicines  were among the product categories that 
saw fewer articles detained than in previous years, whereas increases were observed with respect 
to foodstuffs, other body care items, handbags, etc.  
3.352.   In terms of countries of provenance of IPR -infringing goods import ed into the EU, the 
report noted that China continued to be the main source. As regards specific product categories, 
other countries also ranked high, including Benin for foodstuffs, Mexico for alcoholic beverages, 
Turkey for clothing, and India for medici nes. 
3.353.   The close cooperation between customs and the private sector is illustrated by the steadily 
increasing number of applications for action submitted by right holders to customs, rising from 
2,888 in 2004 to 33,191 in 2015; only about 2.45% of interventi ons by customs were initiated 
ex officio . In more than 80% of the detention procedures, the goods concerned were destroyed 
with the agreement of the holder of the goods and the right holder. In more than 9% of the cases, 
the right holder initiated a court case to determine the infringement. In another 8.5%, the goods 
were subsequently released by customs because either the right holder did not take action 
(5.75%) or the goods were found to be original (2.77%). In over 85% of the cases, customs 
action began while the goods were under an import procedure; in almost 12%, goods were 
discovered while in transit within the EU, and only 0.20% of the cases concerned goods in transit 
to a declared destination outside the EU.  
 
                                                
395 DG Taxation a nd Customs Union, Report on EU Customs Enforcement of IPRs 2015. Viewed at: 
https://ec.europa.eu/taxation_customs/sites/taxation/files/2016_ipr_statistics.pdf , see Chart 17.  
396 DG Taxation and Customs Union, Report on EU Customs Enforcement of IPRs 2015. Viewed at: 
https://ec.europa.eu/taxation_customs/sites/taxati on/files/2016_ipr_statistics.pdf . WT/TPR/S/357 • European Union  
 
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  Table 3.32 Enforcement of IPRs, 2013 -15 
 2013  2014  2015  
Customs actions     
Applications by right holders  26,865  20,929  33,191  
Number of cases  86,854  95,194  81,098  
Number of articles  35,940,294  35,568,982  40,728,675  
Domestic retail value ( €) 768,227,929  617,046,337  642,108,323  
 
Breakdown of cases in 2015   (%) 
IPR in relation to detained articles  Trademark  93.83  
Patent  0.86 
Design and model right  3.94 
Copyright/related right  0.58 
Results  Destruction of goods  81.98  
Court case init iated 9.21 
No action undertaken  5.75 
Original goods  2.77 
Settlement out of court  0.29 
Cases per procedure  Imports  85.27  
Transit EU  11.81  
Transit  0.20 
Warehouse  1.41 
Transhipment  0.21 
(Re-)Export  1.10 
Top 5 categories by articles  Cigarette s 27.00  
Other goods  
Toys 10.00  
9.00 
Labels, tags, stickers  8.00 
Foodstuff  7.00 
Source:  European Commission (2014), Report on EU Customs Enforcement of IPRs: Results at the EU Border 
– 2013. Viewed at: http://ec.europa.eu/taxation_customs/resources/documents/customs/customs 
_controls/counterfeit_piracy/statistics/2014_ipr_statistics_en.pdf . 
3.3.8.3.4   Interna tional cooperation  
3.354.   Building on its 2014 Strategy for the Enforcement of IPRs in Third Countries397, the 
European Commission released an updated survey in July 2015.398 Based on input by various 
sources, including the Observatory, national authorities and priva te sector stakeholders, the 
survey identified a list of priority countries in which IPR enforcement remained a particular 
concern, and also listed countries in which the situation had improved. In its report of 13 May 
2015399, the European Parliament's Commi ttee on International Trade supported the European 
Commission's approach to promote enhanced IPR protection and enforcement through  the WTO 
and other international bodies, as well as through  bilateral trade agreements. This would help EU 
IPR owners to enfo rce their rights, and also developing countries to develop their domestic 
frameworks to support R&D activities. At the same time, the Committee also recalled that the 
TRIPS Agreement needed to be implemented in a balanced and effective manner. The Committe e 
therefore called on the Commission and EU member States to ensure that, among others, generic 
medicines transiting EU territory are not negatively affected by the border measures put in place 
to ensure that counterfeit medicines are not imported into the  EU. 
3.355.   The EU continued to address IPR enforcement and related technical cooperation in many of 
its bilateral and regional trade agreements, taking into account the level of development of its 
trading partners. Among the trade agreements that were establishe d during the reporting period 
were: the Association Agreements with Georgia and Mold ova (applied as of 1 July 2016)400, the 
Association Agreement with Ukraine (applied as of 1 January 2016), the Enhanced Partnership and 
Cooperation Agreement with Kazakhstan (provisionally applied as of 1 May 2016), the CETA signed 
                                                
397 See previous TPR report, WT/TPR/S/317/Rev.1, para. 3.316.  
398 Commission Staff Working Document, SWD(2015) 132 final, 1 July 2015. Viewed at: 
https://euipo.europa.eu/ohimportal/documents/11370/0/Report+on+the+protection+and+enforcement+of+in
tellectual+property+rights+in+third+countries . 
399 Viewed at: http://www.europarl.europa.eu/sides/getDoc.do?pubRef= -//EP//NONSGML+REPORT+A8 -
2015-0161+0+DOC+PDF+V0//EN . 
400 The texts of these agreements can be viewe d at: http://ec.europa.eu/trade/policy/countries -and-
regions/agreements/#_europe . WT/TPR/S/357 • European Union  
 
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  with Canada on 30 October 2016, and the Free Trade Agreement between the EU and Viet Nam for 
which negotiations were concluded in February 2016. Other trade agreements, such as the 
Stabilisation and  Association Agreements concluded with Bosnia and Herzegovina (1 June 2015) 
and with Kosovo (1 April 2016), as well as the EPAs conclu ded with the SADC (signed on 
10 October 2016, provisionally applied) and West Africa (provisionally applied as of 3 Septem ber 
2016) do not, however, include a detailed section on IPR enforcement.  
3.356.   The Commission finances and steers several technical cooperation programmes aimed at 
strengthening IPR protection and enforcement in third countries. Present cooperation programmes 
include, in particular, China, the ASEAN region, the Russian Federation, and India. Future 
cooperation programmes will extend to the region of Latin America. In general, the EUIPO is 
entrusted with the technical implementation of those cooperation programme s.401 Through the 
Observatory, the EUIPO has also established a database in collaboration with the European 
Commission. The Anti -Counterfeiting Rapid Intelligence System (ACRIS) serves the collection of 
data of IPR -infringement cases affecting European compa nies in third countries.402 Furthermore, 
the EUIPO has also intensified cooperation with Europol with a view to better monitoring online IP 
crime.  
                                                
401 Under Regulation (EU) No. 386/2012, OJ EU L 129/1, 16 May 2012, the EUIPO was tas ked with 
building strategies and developing tools to enforce IPRs through international cooperation with IP offices in 
third countries, as well as to build capacity in third countries.  
402 The database can be accessed at: https://euipo.europa.eu/ohimportal/en/web/observatory/anti -
counterfeiting -rapid-intelligence -system . WT/TPR/S/357 • European Union  
 
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  4  TRADE POLICIES BY SE CTOR  
4.1  Agriculture  
4.1.  The output value of agricultural goods in the EU declined to €371.2 billion in 2015, having 
peaked at €387.5 billion in 2013. Crops represented 57% of production value in 2015 with wheat 
and spelt, and fresh vegetables as the most important crops. Animals and animal products 
represented 43% of production value, with milk alone representing 14% of total agricultural output 
followed by pigs and cattle with nearly 9% each ( Table 4.1). 
Table 4.1 Total production value of agricultural products in the EU, 2011 -15 
(€ million at producer prices)  
 2011  2012  2013  2014  2015  
All products  365,394  376,926  387,495  379,972  371,221  
Crops  209,768  212,909  218,269  209,503  211,175  
 Cereals  55,241  59,028  55,195  52,574  49,581  
  Wheat and spelt  26,321  29,151  26,889  26,350  26,182  
  Grain maize  13,874  12,612  12,308  11,734  9,260  
 Oil seeds  12,259  12,757  11,842  12,041  11,947  
 Forage plants  27,777  26,757  28,773  25,130  23,951  
 Fresh vegetables  27,400  29,092  30,769  29,702  33,200  
 Plants and flowers  21,347  20,261  20,067  20,341  20,358  
 Fruits  22,579  21,988  25,116  23,635  26,025  
 Wine 18,676  18,496  21,860  21,722  22,391  
 Potatoes  10,865  9,849  11,694  9,345  9,877  
Animals and animal products  155,626  164,017  169,226  170,468  160,045  
 Cattle  29,601  32,473  32,394  31,170  31,883  
 Pigs 33,676  36,668  37,426  35,961  33,571  
 Poultry  19,137  20,527  21,629  21,529  21,655  
 Milk 53,584  51,910  57,538  60,724  51,744  
 Eggs 7,754  10,082  8,805  8,987  9,463  
Source:  Eurostat.  
4.2.  For the EU, crop and animal production, and hunting and related service activities contributed 
1.4% to total gross value added in 2014, while the manufacture of food products, beverages, and 
tobacco products contributed another 2.1%. The importance of agriculture in the economy varies 
from one member State to another, from less than 1% o f total GVA in Belgium, Germany, 
Luxembourg, Malta, Austria, Finland, Sweden and the United Kingdom to 5% in Romania and 
Bulgaria. Among the member States, the four biggest producers (France, Germany, Italy, and 
Spain) represented over half of total output  value in 2015.  
4.3.  In 2013, there was the equivalent of 9.5 million full time jobs in agriculture in the EU; nearly 
6 million of these are in five member States (Poland, Romania, Italy, Spain, and France). 
Agricultural structures varied considerably among th e member States with average farm size 
ranging from 1.2 ha in Malta up to 133 ha in the Czech Republic, and standard output per holding 
varying from €3,303 in Romania to €303,765 in the Netherlands ( Table 4.2). 
Table 4.2 Selected indicators of agricultural structure in the EU, 2013  
 Utilized 
agricultural 
area (UAA)  Number of 
holdings  Average 
UAA per 
holding  Standard 
output per 
holding  Standard 
output per 
ha 
 '000 ha  '000 ha €/holding  €/ha  
Belgium  1,307.9  37.8 34.6 222,634  6,428  
Bulgaria  4,650.9  254.4  18.3 13,111  717 
Czech Republic  3,491.5  26.3 133.0  169,408  1,274  
Denmark  2,619.3  38.8 67.5 246,722  3,657  
Germany  16,699.6  285.0  58.6 162,271  2,770  
Estonia  957.5  19.2 49.9 35,243  706 
Ireland  4,959.5  139.6  35.5 35,906  1,011  WT/TPR/S/357 • European Union  
 
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   Utilized 
agricultural 
area (UAA)  Number of 
holdings  Average 
UAA per 
holding  Standard 
output per 
holding  Standard 
output per 
ha 
 '000 ha  '000 ha €/holding  €/ha  
Greece  4,856.8  709.5  6.8 11,421  1,668  
Spain  23,300.2  965.0  24.1 37,284  1,544  
France  27,739.4  472.2  58.7 120,527  2,052  
Croatia  1,571.2  157.5  10.0 12,887  1,291  
Italy 12,098.9  1,010.3  12.0 43,346  3,620  
Cyprus  109.3 35.4 3.1 14,003  4,531  
Latvia  1,877.7  81.8 23.0 12,103  527 
Lithuania  2,861.3  171.8  16.7 11,171  671 
Luxembourg  131.0  2.1 63.0 150,871  2,395  
Hungary  4,656.5  491.3  9.5 11,352  1,198  
Malta  10.9 9.4 1.2 10,341  8,896  
Netherlands  1,847.6  67.5 27.4 303,765  11,095  
Austria  2,726.9  140.4  19.4 40,385  2,080  
Poland  14,409.9  1,429.0  10.1 15,254  1,513  
Portugal  3,641.6  264.4  13.8 17,053  1,238  
Romania  13,055.9  3,629.7  3.6 3,303  918 
Slovenia  485.8  72.4 6.7 13,943  2,078  
Slovakia  1,901.6  23.6 80.7 76,887  953 
Finlan d 2,282.4  54.4 42.0 62,464  1,489  
Sweden  3,035.9  67.2 45.2 69,674  1,541  
United Kingdom  17,327.0  185.2  93.6 117,817  1,259  
EU-28 174,613.9  10,841.0  16.1 30,542  1,896  
Source:  Eurostat.  
4.1.1   Trade  
4.4.  In 2015, the EU had a surplus in trade in agricultural products ( WTO definition1) with exports 
of US$141 billion and imports of US$126 billion. In U.S. dollar terms, both exports and imports of 
agricultural products have declined since 2013, although agricultural imports as a percentage of 
total imports increased to 6.5 % in 2015 and agricultural exports as a percentage of total exports 
increased to 6.9%. Distilled spirits followed by wine are the biggest exports, while coffee and soya 
bean cake are the main imports ( Table 4.3). 
Table 4.3 Exports and imports of agricultural products (HS2012 4 digit), 2012 -15 
(US$ million)  
Exports  2012  2013  2014  2015  Top 4 destinations  
TOTAL  Exports of all products  2,250,137  2,326,342  2,339,709  2,041,196  United States ; China; 
Switzerland; Turkey  
Total agriculture exports  144,222  156,299  160,014  141,150  United States; China; 
Switzerland; Russian 
Federation  
of which        
2208 Undenatured ethyl alcohol of an 
alcoholic strength by volume of 
less than 80 % vol.; spirits , 
liqueurs and other spirituous 
beverages  13,072  13,294  12,800  11,416  United States; 
Singapore; China; 
Russian Federation  
2204 Wine of fresh grapes  11,394  11,913  11,974  10,890  United States; 
Switzerland; China; 
Canada  
1001 Wheat and meslin  5,163  7,605  8,372 7,025  Algeria; Egypt; Saudi 
Arabia; Morocco  
                                                
1 For the purposes of this section of the Trade Policy Report, the definiti on of agriculture product s used 
is that set out in Annex 1 of the Agreement on Agriculture where fish and fish products are taken to include 
tariff lines under HS2012 Headings 020840, 03, 05 0800, 050900, 051191, 1504, 1603, 1604, 1605, and 
230120.  WT/TPR/S/357 • European Union  
 
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  Exports  2012  2013  2014  2015  Top 4 destinations  
1901 Malt extract; food preparations of 
flour, groats, meal, starch or malt 
extract, not containing cocoa or 
containing less than 40% by 
weight of cocoa n.e.s.  4,687  5,760  7,207  6,260  China; Hong Kong, 
China ; Saudi Arabia; 
Nigeria  
2106 Food preparations not elsewhere 
specified or included  5,592  6,425  6,618  5,665  United States; Russian 
Federation; 
Switzerland; Saudi 
Arabia  
0203 Meat of swine, fresh, chilled or 
frozen  4,853  5,073  4,893  4,387  Japan; China; Rep ublic 
of Korea; United 
States  
1806 Chocolate and other food 
preparations containing cocoa  4,032  4,459  4,855  4,213  United States; Russian 
Federation; 
Switzerland; UAE  
0406 Cheese and curd  4,632  5,024  4,787  3,863  United States; 
Switzerland; Japan; 
Saudi Ar abia 
2309 Preparations of a kind used in 
animal feeding  3,432  3,825  4,109  3,781  Russian Federation; 
United States; 
Switzerland; Japan  
1905 Bread, pastry, cakes, biscuits and 
other bakers' wares  3,526  3,921  4,135  3,753  United States; 
Switzerland; Norway;  
Saudi Arabia  
Imports  2012  2013  2014  2015  Top 4 sources  
TOTAL  Imports of all products  2,357,624  2,243,427  2,281,342  1,947,831  China; United States; 
Russian Federation; 
Switzerland  
Total agricultural imports  130,568  134,048  137,402  125,984  Brazil, United  States; 
Argentina; China  
of which        
901 Coffee  11,749  9,843  10,410  9,828  Brazil; Switzerland; 
Viet Nam; Colombia  
2304 Oil-cake … of soyabean oil  9,584  9,677  10,018  8,265  Argentina; Brazil; 
United States; 
Paraguay  
1201 Soya beans, whether or not 
broken 6,959  7,418  6,995  5,852  Brazil; United States; 
Paraguay; Canada  
802 Other nuts, fresh or dried, 
whether or not shelled or peeled  6,004  6,010  6,062  5,562  United States; Turkey; 
Iran; Australia  
1511 Palm oil  3,211  4,024  4,776  4,843  Indonesia; Malaysia ; 
Papua New Guinea; 
Colombia  
1801 Cocoa beans  4,042  3,501  4,208  4,649  Côte d'Ivoire; Ghana; 
Cameroon; Nigeria  
803 Bananas, including plantains, fresh 
or dried  3,710  3,993  4,129  3.743  Colombia; Ecuador; 
Costa Rica; Dominican 
Republic  
2204 Wine of fresh g rapes, including 
fortified wines; grape must other 
than that of heading 20.09  2,528  3,391  3,544  3,071  Chile; United States; 
Australia; South Africa  
2401 Unmanufactured tobacco; tobacco 
refuse  3,210  3,272  3,262  3,010  Brazil; United States; 
Malawi; Tanzania  
2009 Fruit juices (including grape must) 
and vegetable juices, unfermented 
and not containing added spirit, 
whether or not containing added 
sugar or other sweetening matter  3,150  3,077  3,227  2,634  Brazil; Costa Rica; 
Thailand; Turkey  
Source:  UNSD Comtra de. 
4.1.2   Agricultural policies  
4.5.  Agricultural policies have not changed substantially since the last Review of the EU, but the 
implementation of the reforms adopted in 2013 have been fully applied since 2015 based on the 
2013 regulations and the secondary regulat ions adopted in March 2014. The European Agriculture 
Guarantee Fund (EAGF) covers direct payments and market measures (Pillar  I), and the European 
Agricultural Fund for Rural Development (EAFRD) finances the EU contribution to rural 
development programmes (Pillar II).  WT/TPR/S/357 • European Union  
 
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  4.1.2.1   Domestic support  
4.1.2.1.1   Direct payments  
4.6.  Since 1 January 2015, a new direct payments scheme has been applied, based on Regulation 
(EU) No.  1307/2013 and implementing legislation in Commission Regulations (EU) Nos. 639/2014 
and 641/2014. The national c eilings for each member State for each year were set out in 
Regulation (EU) No. 1307/20132 (as amended). The national ceilings provide for convergence 
among the member States and the rules governing direct payments require internal convergence 
within each member State so that payments per hectare move towards a more uniform level 
within each member State and among the member States.  
4.7.  Each member State had some flexibility to transfer some funding from direct payments to 
rural development, or vice versa. Elev en member States3 chose to transfer funds from direct 
payments to rural development with a total transfer of €6.4 billion over the 2015 -20 period, and 
five member States4 transferred a total of €3.4 billion from rural development to direct payments. 
The ne t amount for direct payments for each member State is shown in Table 4.4. 
4.8.  Since 1 January 2015, active farmers have had access to the compulsory schemes provided 
by all member States (the basic payment or single area payment, the greening payment, and the 
young farmers' scheme) and, if the member State has so decided, the voluntary schemes 
(redistributive payment, support in areas with natural constraints, and coupled support). Member 
States also have the option of applying a small  farmers' scheme, which is a simplified scheme that 
replaces all other direct payments and exempts eligible farmers from greening and cross -
compliance controls. Apart from the small farmers' scheme, all direct payment programmes are 
subject to provisions t o ensure compliance with basic standards relating to the environment, food 
safety, animal and plant health and animal welfare (cross -compliance).5 
Table 4.4 Net amounts for direct payments, 2015 -20a 
(€ million)  
 2015  2016  2017  2018  2019  2020  
Belgium  524 510 502 489 482 505 
Bulgaria  721 789 790 791 793 799 
Czech Republic  840 839 839 857 857 873 
Denmark  870 852 834 826 818 880 
Germany  4,913  4,881  4,848  4,820  4,793  5,018  
Estonia  114 115 124 134 144 169 
Ireland  1,215  1,213  1,212  1,211  1,211  1,211  
Greece  2,110  2,087  2,064  2,043  2,022  2,119  
Spain  4,902  4,911  4,926  4,940  4,953  4,954  
France  7,302  7,271  7,239  7,214  7,190  7,437  
Croatia  183 202 240 278 316 304 
Italy 3,897  3,847  3,797  3,750  3,702  3,704  
Cyprus  51 50 50 49 49 49 
Latvia  181 206 230 255 280 303 
Lithuania  418 443 467 492 517 517 
Luxembourg  34 34 34 34 33 33 
Hungary  1,277  1,276  1,274  1,274  1,274  1,270  
Malta  5 5 5 5 5 5 
                                                
2 Regula tion (EU) No . 1307/2013 of the European Parliament and of the Council of 17 December 2013 
establishing rules for direct payments to farmers under support schemes within the framework of the common 
agricultural policy and repealing Council Regulation (EC) N o. 637/2008 and Council Regulation (EC) 
No. 73/2009 . 
3 France, Latvia, the United Kingdom, Belgium, the Czech Republic, Denmark, Germany, Estonia, 
Greece, the Netherlands, and Romania.  
4 Croatia, Malta, Poland, Slovakia, and Hungary.  
5 Regulation (EU) No . 1306/2013 on the financing, management and monitoring of the common 
agricultural policy, Regulation (EU) No . 640/2014 with regard to the integrated administration and control 
system and conditions for refusal or withdrawal of payments and administrative pe nalties applicable to direct 
payments, rural development support and cross -compliance and Regulation (EU) No . 809/2014 laying down 
rules for the application of Regulation (EU) No . 1306/2013 . WT/TPR/S/357 • European Union  
 
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   2015  2016  2017  2018  2019  2020  
Netherlands  749 737 724 713 701 832 
Austria  693 692 692 692 692 692 
Poland  3,359  3,376  3,392  3,411  3,430  3,062  
Portugal  566 574 582 591 599 599 
Romania  1,600  1,773  1,801  1,873  1,903  1,903  
Slovenia  138 137 136 135 134 134 
Slovakia  436 439 442 445 449 304 
Finland  523 523 524 524 525 525 
Sweden  697 697 698 699 700 700 
United Kingdom  3,170  3,177  3,184  3,192  3,201  3,592  
a Additional temporary exceptional aid to farmers in the livestock sectors (Commission Delegated 
Regulation (EU) 2015/1853).  
Note:  The crop specific payments for cotton are included in the figures abov e. The figures are before the 
application of the financial discipline. They do not cover direct payments for POSEI ("Programme 
d'Options Spécificques à l'Éloignement et l'Insularité" (for the outermost regions of the EU)), and 
SAI (smaller Aegean Islands) in Regulations (EU) Nos. 228/2013 and 229/2013.  
Source:  Regulation (EU) No. 1307/2013 (as last amended by Regulation (EU) No. 1378/2014 and 
Commission Delegated Regulation (EU) No. 2016/142).  
Basic Payments and Single Area Payments  
4.9.  Eighteen member States a pply the Basic Payment Scheme6, while all others apply the Single 
Area Payment Scheme. Each of the ten member States using the Single Area Payment Scheme 
provides a uniform payment per eligible hectare. Eligibility for the Basic Payment Scheme or the 
Single Area Payment Scheme is a precondition for the complementary payments under the 
decoupled income schemes (greening payment, the young farmers' scheme, payments for areas 
with natural constraints, the small farmers' scheme, and redistributive payments).  
4.10.   For those member States that apply the Basic Payments Scheme, the entitlement to receive 
payments under the old single payment system expired at the end of 2014 and new entitlements 
were allocated in 2015. As a general rule, entitlements were allocated to th ose that applied for an 
allocation and:  
 were active farmers in 2015 (that is those people and businesses: involved in producing, 
rearing, or growing agricultural produce; keeping land in a suitable state for grazing or 
cultivation; or doing the minimum nec essary to land that is naturally kept suitable for 
grazing or cultivation); and  
 had been entitled to direct payments in 2013.  
In addition, member States had the option to extend eligibility to those who were active farmers in 
2015 and:  
 in 2013, were produc ing fruits, vegetables, seed potatoes, ware potatoes, or ornamental 
plants, or who cultivated vineyards; or  
 were allocated an entitlement to the Single Payment System in 2014, or were active farmers 
in 2013.  
4.11.   Allocations from the national ceilings to the Ba sic Payment Scheme or the Single Area 
Payments vary from 12.4% in Malta, to 68% in Luxembourg ( Table 4.6). 
Greening payment  
4.12.   Each member State was required to allocate 30% of the national ceiling for direct payments 
to agricultural  practices beneficial for the climate and the environment (Greening). To qualify for 
                                                
6 Austria, Belgium, Croatia, Denmark, Finland, France, Germany, G reece, Ireland, Italy, Luxembourg, 
Malta, the Netherlands, Portugal, Slovenia, Spain, Sweden, and the United Kingdom.  WT/TPR/S/357 • European Union  
 
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  payments, three basic requirements must be met relating to crop diversification and maintenance 
of permanent grass land, and each holding over 15 ha must have at least 5% of the area 
designated as an "ecological focus area". To qualify as an ecological focus area, land use must 
meet a number of criteria which vary from one member State to another and include landscape 
features (e.g. trees in groups, field margins, trees in lines, ditches, and hedges), buffer strips, 
short rotation coppice, catch crops, or nitrogen -fixing crops.  
4.13.   Exemptions to these criteria may apply, such as for farmers participating in the small 
farmers' scheme, farmers with a large proportion of grassland,  and farmers that meet the 
requirements for organic production.7 
Payment for young farmers' scheme  
4.14.   Each member State is required to operate the young farmers' scheme which provides 
additional payments to farmers aged 40 years or under who are setting up in  farming for the first 
time as head of an agricultural holding, or who have already done so within the five years 
preceding the scheme. Each member State can reserve up to 2% of the ceiling or direct payments 
to the scheme and has the flexibility to decide  the method for calculating the payment, the 
number of hectares for which the payment is granted (between 25 and 90), and whether to add 
additional criteria.  
Redistributive payments  
4.15.   Seven member States, plus Belgium (Wallonia) and U.K . (Wales), opted to ap ply 
redistributive payments in 2015 by providing additional direct payments for the first 3 to 54 
hectares. The additional payments varied fro m €133 per hectare for the first 30 hectares in 
Belgium (Wallonia) to €25 per hectare for the first 52 hectares in France. Under the redistributive 
payments scheme, each member State may use up to 30% of the national ceiling for payments for 
the first 30 h ectares or up to the average farm size.  
4.16.   Five of these member States, plus Belgium (Wallonia), did not apply the reduction of 
payments mechanism, which allows for a cap in basic payments at €150,000 or reductions for 
payments over this threshold. Other mem ber States applied caps at various levels, or the 
minimum reduction of 5% on basic payments greater than €150,000 ( Table 4.6). 
Payments for areas with natural constraints  
4.17.   In addition to various schemes under Pillar II that support  areas with natural constraints, 
each member State had the option to reserve up to 5% of the national ceiling or support for areas 
with natural constraints. Denmark is the only member State that opted to provide payments under 
Pillar I.  
Voluntary coupled s upport  
4.18.   All member States, except Germany, opted to provide coupled support where payments are 
linked to production by amounts that, in 2016, varied from 0.2% of the national ceiling (Ireland) 
to 20.5% (Portugal) and 57.2% (Malta). In general, coupled suppo rt was limited to 8 or 13% of 
the national ceiling, plus an additional 2% for protein crops. For coupled support greater than 
these limits, approval from the Commission was required. Malta's allocation of 57.2% arises from a 
derogation allowing a member St ate to use €3  million for voluntary coupled support.  
4.19.   Beef and veal production is the most supported sector, followed by dairy products, sheep 
and goat meat, and protein crops.  
4.20.   In addition to voluntary coupled support, the EU provides for payments for cotton in  Greece, 
Spain, and Bulgaria ( Table 4.5).8 
                                                
7 Council Regulation (EC) No . 834/2007 of 28 June 2007 on organic production and labelling of organic 
products and repealing Regulation (E EC) No . 2092/91 . WT/TPR/S/357 • European Union  
 
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  Table 4.5 Crop -specific payments for cotton  
 Area  
ha Fixed yield  
tonne/ha  Payment  
€/ha  
Bulgaria  3,342  1.2 2015: 584.88  
   2016 and onward:  649.45  
Greece  250,000  3.2 234.18  
Spain  48,000  3.5 362.15  
Source:  Regulation (EU) No. 1307/2013, Article 58.  
Table 4.6 Implementation of direct payments  
(Of national ceiling for 2016 calendar year (unless s tated otherwise))  
 BPS/ 
SAPa, 
b Redistributivea Reduction of 
payments 
mechanismc Young farmer 
paymenta Voluntary coupled supporta 
     25% of  
 Productsd 
Belgium 
(Wallonia)  
42.2%  9.5%  First 30 
entitlements – 
€133 None 
1.7%  Average direct 
payment/ha  16.7%  Beef, milk, sheep meat  
Belgium 
(Flanders)   Cap €150,000  
Bulgaria  47.8%  7.1%  First 30 ha – 
€77 5% over €150,000, 
100% over 300,000 
after deduction for 
salaries  0.1%  SAPS rate  15.0%  Beef, fruit and veg, 
milk, protein, sheep 
meat 
Czech 
Republic  54.8%  .. .. 5% over €150,000  0.2%  SAPS rate  15.0%  Beef, fruit and veg, 
hops, milk, protein, 
sheep meat, potatoes, 
sugar beet  
Denmark  66.2%  .. .. 5% over €150,000  0.6%  Average direct 
payment/ha  2.8%  Beef 
Germany  62.0%  7.0%  First 30 
entitlements – 
€50, next 16 – 
€30 None 1% Basic 
payment flat 
rate .. .. 
Estonia  66.0%  .. .. 5% over €150,000 
after deduction for 
salaries  0.3%  SAPS rate  3.7%  Beef, fruit and veg, 
milk, sheep meat  
Ireland  67.8%  .. .. Cap at €150,000  2% Average direct 
payment/ha  0.2%  Protein  
Greece  60.2%  .. .. Cap at €150,000 
after deduction for 
salaries  2% Average value 
of 
entitlements  7.8%  Beef, cereals, fruit and 
veg, grains and 
legumes, protein, rice, 
seeds, sheep meat, 
silkworms, sugar beet  
Spain  55.9%  .. .. 5% over €150,000 
after deduction for 
salaries  2% Average value 
of 
entitlements  12.1%  Beef, fruit and veg, 
grain legumes, milk, 
nuts, protein, rice, 
sheep meat, sugar beet  
France  44.0%  10.0%  First 52 
entitlements – 
€25 None 1.0%  Average direct 
payment/ha  15.0%  Beef, cereals, fruit and 
veg, hemp, hops, milk, 
protein, sheep meat, 
potatoes  
Croatia  43.5%  10.0%  First 20 
entitlements – 
€34 None 2% Basic 
payment flat 
rate 15.0%  Beef, fruit and veg, 
milk, protein, sheep 
meat, sugar beet  
Italy 58.0%  .. .. 5% over €150,000,  
cap at 500,000 after 
deduction for 
salaries  1% Average value 
of 
entitlements  11.0%  Beef, cereals, fruit and 
veg, grain legumes, 
milk, oilseeds, olive oil, 
protein, sheep meat, 
potatoes  
Cyprus  61.3%  .. .. 5% over €150,000  0.7%  Average direct 
payment/ha  8.0%  Fruit and veg, milk, 
sheep meat  
Latvia  53.4%  .. .. 5% over €150,000 
after deduction for 
salaries  1.56%  Average direct 
payment/ha  15.0%  Beef, cereals, fruit and 
veg, milk, oilseeds, 
protein, seeds, sheep 
meat, potatoes  
Lithuania  38.8% 15.0%  First 30 ha – 
€50 None 1.25%  Average direct 
payment/ha  15.0%  Beef, fruit and veg, 
milk, protein, sheep 
meat 
                                                                                                                                                  
8 Regulation (EU) No. 1307/2013 also provides for payments in Portugal but there is no production in 
Portugal, and no payments are made.  WT/TPR/S/357 • European Union  
 
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   BPS/ 
SAPa, 
b Redistributivea Reduction of 
payments 
mechanismc Young farmer 
paymenta Voluntary coupled supporta 
     25% of  
 Productsd 
Luxemburg  68.0%  .. .. 5% over €150,000 
after deduction for 
salaries  1.5%  Lump sum  0.5%  Protein  
Hungary  54.6%  .. .. 5% over €150,000, 
cap at 176,000  0.4%  Average direct 
payment/ha  15.0%  Beef, fruit and veg, 
milk, protein, rice, 
sheep meat, sugar beet  
Malta  12.4%  .. .. 5% over €150,000  0.4%  Average value 
of 
entitlements  57.2%  Beef, fruit and veg, 
milk, sheep meat  
Netherlands  67.5%  .. .. 5% over €150,000  2% Average direct 
payment/ha  0.5%  Beef, sheep meat  
Austria  65.9%  .. .. Cap at €150,000  
after deduction for 
salaries  2% Average direct 
payment/ha  2.1%  Beef, sheep meat  
Poland  45.7%  8.3%  First 3 ha – €0, 
next 27 ha – 
€41 Cap at €150,000  1% Average direct 
payment/ha  15.0%  Beef, flax, fruit and 
veg, hemp, hops, milk, 
protein, sheep meat, 
potatoes, sugar beet  
Portugal  47.5%  .. .. 5% over €150,000  2% Basic 
payment flat 
rate 20.5%  Beef, fruit and veg, 
milk, rice, sheep meat  
Romania  50.7%  5.3%  First 5 ha – €5, 
next 25 ha – 
€45 None 0.85%  SAPS rate  13.1%  Beef, fruit and veg, 
grain legumes, hemp, 
hops, milk, protein, 
rice, seeds, sheep 
meat, silkworms, sugar 
beet 
Slovenia  53.5%  .. .. 5% over €150,000  
after deduction for 
salaries  1.5%  Average direc t 
payment/ha  15.0%  Beef, cereals, fruit and 
veg, milk, protein  
Slovak 
Republic  56.7%  .. .. 5% over €150,000  0.3%  Average direct 
payment/ha  13.0%  Beef, fruit and veg, 
hops, milk, sheep 
meat, sugar beet  
Finland  49.4%  .. .. 5% over €150,000  1% Average direc t 
payment/ha  19.6%  Beef, cereals, fruit and 
veg, milk, protein, 
sheep meat, sugar beet  
Sweden  55.5%  .. .. 5% over €150,000  1.5%  Average direct 
payment/ha  13.0%  Beef 
U.K. 
(England)  
65.8%  1.0%  .. 5% over €150,000  
1.56%  Average value 
of 
entitlements  
1.7%  Beef, sheep meat  U.K. (NI) .. Cap at €150,000  Average direct 
payment/ha  
U.K. 
(Scotland)  .. 5% over €150,000,  
cap at €600,000  Average value 
of 
entitlements  
U.K. (Wales)  First 54 
entitlements – 
€25.63  5% over €150,000, 
30% over 200,000,  
55% over  250,000, 
cap at 300,000  Basic 
payment flat 
rate 
.. Not available.  
a % for BPS/SAP, redistributive, young farmer payment, and voluntary coupled support refers to 
percentage of national ceiling.  
b BPS – Basic Payment Scheme,  SAP – Single Area Payment.  
c The reductions of payments are a percentage of reductions applying to the total amount of the basic 
payments (BPS or SAP). Member States may also deduct the amounts of salaries actually paid for 
agriculture.  
d Beef refers to beef and veal, protein refers  to protein crops, and sheep meat refers to sheep and 
goat meat.  
 
Note:   30% of each national ceiling is reserved for greening, therefore, percentage allocations add up to 
70% in all cases except Denmark, which is the only member State to allocate some of Pillar I to 
areas with natural constraints (0.4% of the national ceiling).  
Source:  European Commission.  
4.1.2.1.2   Internal market support measures  
4.21.   For the purposes of this section, internal market support measures are defined as those that 
work inside the customs te rritory of the EU to support prices paid to farmers through reduced WT/TPR/S/357 • European Union  
 
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  production or other supply control measures, or by encouraging consumption. Market access and 
export measures, which can also lead to positive transfers to producers through higher domesti c 
prices, are dealt with below under export subsidies and market access.  
4.22.   The Common Market Organisation (CMO) for agricultural products is set out in Regulation 
(EU) No. 1308/2013.9 Since the last review, the public intervention regime has been simplified,  
e.g. through Regulation (EU) No. 2016/123810 and Implementing Regulation (EU) 
No. 2016/124011, while other aspects of public intervention remain the same, such as the prices, 
periods, limits for intervention, list of eligible products, and reference prices for private storage 
aid. The Commission may initiate intervention above the limits if the market situation, especially 
market prices, so requires.  
4.23.   In 2015 and 2016, private storage aid for butter, cheese, and pig meat plus intervention 
and private storage aid for skimmed milk powder were used to address declining demand for these 
products ( Table 4.7 and more details below).  
Table 4.7 Intervention and private storage aid  
(Tonnes)  
 Inter vention 
price  
€/tonne  Period  Limits  Purchases  
2015  Purchases
2016  Sales  
2015  Sales 
2016  
Common 
wheat  101.31  1 Nov. -31 May  3,000,000      
Durum wheat  101.31  1 Nov. -31 May  0     
Barley  101.31  1 Nov. -31 May  0     
Maize  101.31  1 Nov. -31 May  0     
Paddy rice  150.00 1 Apr. -31 July  0     
Beef and veala 1,890.40  All year  0     
Butterb 2,217.51  1 Mar. -30 Sept.  50,000      
Skimmed milk 
powder  1,698.00  1 Mar. -30 Sept.  109,000  40,280  334,551c  40c 
 Reference price  
€/tonne  Aid for 
storage 
2014  Aid for 
storage 
2015  Quantities aided 2016  
White sugar  404.40     
Raw sugar  335.20     
Olive oil      
  Extra virgin  1,779.00     
  Virgin  1,710.00     
  Lampante (2 
degrees)  1,524.00     
Butter  2,217.51  21,557  141,366  143,587  
Cheese  ..  31,877  52,950  
Skimmed milk 
powder  1,698 .00 17,342  52,062  86,989c 
Pig meat  1,509.39   63,969  90,867c 
Sheep and 
goat meat  ..    
Flax fibre  ..    
.. Not available.  
 
a The reference price for beef and veal  is fixed at €2,224 per tonne and the public intervention price is 
85% of the reference threshold (Articles 7.1(d) and 13.1(c) of Regulation (EU) No. 1308/2013).  
                                                
9 Regulation (EU) No . 1308/2013 of the European Parliament and of the Council of 17 December 20 13 
establishing a common organiz ation of the markets in agricultural products and repealing Council Regulations 
(EEC) No . 922/72, (EEC) No . 234/79, (EC) No . 1037/2001 and (EC) No . 1234/2007 . 
10 Commission Delegated Regulation (EU) 2016/1238 of 18 May 2016 suppleme nting Regulation (EU) 
No. 1308/2013 of the European Parliament and of the Council with regard to public intervention and aid for 
private storage . 
11 Commission Implementing Regulation (EU) 2016/1240 of 18 May 2016 laying down rules for the 
application of Re gulation (EU) No . 1308/2013 of the European Parliament and of the Council with regard to 
public intervention and aid for private storage . WT/TPR/S/357 • European Union  
 
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  b The reference price for butter is €246.39 per 100 kg and the public intervention price is 90 % of the 
reference price (Article 7.1(e) of Regulation (EU) No. 1308/2013 and Article 2.1(d) of Council 
Regulation EU No. 1370/2013).  
c As at 15 December 2016.  
 
Note:  There are no "sales" from private storage as property remains with the private operators who store 
the product under contract with no obligation to sell at the end of the contract period.  
 
Source:  Regulation (EU) No. 1308/2013, Council Regulation (EU) No. 1370/2013 and European Commission.  
Dairy  
4.24.   The production quota system for milk in the EU w as abolished on 31 March 2015.  
4.25.   Following the measures taken by the Russian Federation in August 201412, the EU took 
several measures to address the decline in demand for dairy products which included extending 
the buying -in period for intervention for butte r and skimmed milk powder (SMP) and introducing 
private storage aids for butter, SMP, and cheese, and increasing the quantities that may be bought 
into intervention. In addition, EU funding was made available for dairy, beef and veal, and sheep, 
goat and p ig meat producers with the potential for additional member State financing ( Table 4.8). 
Table 4.8 Temporary measures for dairy and livestock producers, 2014 -16 
Date  Implementing/
Deleg ated 
Regulation No.  Description  
4 Sept. 
2014 949/2014  Buying -in period for butter and SMP intervention for 1 March to 
30 September extended to 31 December 2014  
 947/2014  Until 31 December 2014, private storage aids for butter for 90 -120 days 
storage at:  
- €18.93 per tonne for fixed storage  
- €0.28 per tonne per day for contractual storage  
 948/2014  Until 31 December 2014, private storage aids for SMP for 90 -120 days 
storage at:  
- €8.86 per tonne for fixed storage  
- €0.16 per tonne per day for contractual  storage  
 950/2014  
992/2014  Until 31 December 2014, private storage aids for certain cheeses for 60 -
120 days at:  
- €15.57 per tonne for fixed storage costs  
- €0.40 per tonne per day for contractual storage  
(Repealed 22 September 2014)  
26 Nov.  1263/2014  EU aid for milk producers in Estonia, Latvia, and Lithuania of €28.7 million 
plus national aid up to a total of €28.7 million  
16 Dec.  1337/2014  PSA for butter (947/2014) and SMP (948/2014) extended to 28 February 
2015 
 1336/2014  Buying in period for but ter and SMP intervention opened from 1 January to 
30 September 2016  
19 Dec.  1370/2014  EU aid for milk producers in Finland of €10.7 million plus national aid of up 
to €10.7 million  
25 Feb. 
2015 2015/303  PSA for butter and SMP extended to 30 September 201 5 
17 Sept.  2015/1549  Buying -in period for butter and SMP intervention for 2015 extended to 31 
December 2015 and made available from 1 January to 30 September 2016.  
 2015/1548  PSA for butter (947/2014) and SMP (948/2014) extended to 29 February 
2016 
15 Oct. 2015/1851  PSA rates for SMP amended  
90-120 days storage at:  
- €8.86 per tonne for fixed storage  
- €0.16 per tonne per day for contractual storage  
365 days:  
- €8.86 per tonne for fixed storage  
- €0.36 per tonne per day for contractual storage  
 2015/1852  Up to 100,000 tonnes distributed among the member States, priv ate 
storage aids for certain cheeses for 60 -120 days at:  
- €15.57 per tonne for fixed storage costs  
- €0.40 per tonne per day for contractual storage  
                                                
12 WTO document WT/TPR/S/345, 24 August 2016, paragraph 3.46.  WT/TPR/S/357 • European Union  
 
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  Date  Implementing/
Deleg ated 
Regulation No.  Description  
 2015/1853  For the period to 30 September 2016, €420 million EU aid for farmers in 
the beef and veal, mil k and milk products, pig, sheep and goat meat 
sectors. National contributions of up to 100% allowed.  
17 Feb. 
2016 2016/224  PSA for butter (947/2014) and SMP (948/2014) extended to 30 September 
2016 
 2016/225  Setting maximum volumes per member State for P SA for cheese 
(2015/1852) and setting 30 September 2016 as the final date for 
applications  
1 April  2016/482  Closing SMP intervention at fixed price for the period ending 30 September 
2016. Offers received on 31 March 2016 accepted at 60.09% of the offer. 
Intervention up to 30 September by tender.  
11 April  2016/558 and  
2016/559  Period permitting producer organizations, including cooperatives, in the 
milk sector to enter voluntary agreements to plan production applying for 
periods up to 12 October 2017.  
15 April 2016/591  Intervention limits for 2016 set at:  
- 100,000 tonnes for butter;  
- 218,000 tonnes for SMP  
19 April  2016/606  Closing SMP intervention by tender (2016/482)  
21 April  2016/626  SMP intervention buying -in price set  at €1,698 per tonne.  
25 May  2016/826  Closing SMP intervention at fixed price for the period ending 30 September 
2016. Offers received up to 24 May accepted at 10.4707% of the offer. 
Intervention up to 30 September by tender  
9 June  2016/914  Maximum SMP i ntervention price by first tender €1,698/tonne (2016/826)  
23 June  2016/1020  Maximum SMP intervention price by second tender €1,698/tonne 
(2016/826)  
24 June  2016/1042  Intervention limits for 2016 set at:  
- 100,000 tonnes for butter;  
- 350,000 tonnes for  SMP 
28 June  2016/1058  Closing SMP intervention by tender (2016/826)  
8 Sept.  2016/1619  PSA for SMP extended to 28 February 2017 ((948/2014)  
 2016/1614  Buying -in period for SMP intervention for 2016 extended to 31 December 
2016 and made available from 1 January to 30 September 2017.  
 2016/1613  €350 million in exceptional adjustment aid to milk producers and farmers in 
other livestock sectors to be spent by 30 September 2017 at the latest. 
National contributions of up to 100% allowed for the same measures. 
Measures taken by member States for prod ucers engaged in: reducing 
production; small -scale farming; extensive production; environmental and 
climate friendly production; implementation of cooperative projects; 
implementation of quality or value -added schemes; and training in financial 
instruments  and risk management.  
 2016/1615  Extension of period permitting producer organizations, including 
cooperatives, in the milk sector to enter voluntary agreements to plan 
production applying for periods up to 12 April 2017.  
 2016/1612  EU aid for reduction in milk production at €140 per tonne of reduction. Total 
funding for the programme is €150 million. The programme covers 4 
reduction periods of 3 months each starting in October 2016. Applicants are 
limited to one of the 4 periods, except for the first and  fourth.  
29 Nov.  2016/2080  Opening of tenders to sell SMP from intervention stocks. Initial quantity put 
on sale was 22,004 tonnes.  
Source:  European Commission (2016), Global overview of measures taken for the dairy sector since 2014 , 
last updated 8 Sept ember 2016. Viewed at: http://ec.europa.eu/agriculture/milk/policy -
instruments/global -view_en.pdf . 
4.26.   The additional aid to producers of milk and milk products, beef an d veal, and pig, sheep, 
and goat meat under these exceptional measures was allocated among the member States as 
shown in Table 4.9. WT/TPR/S/357 • European Union  
 
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  Table 4.9 Temporary exceptional aid to producers of  milk and milk products, beef and 
veal, and pig, sheep, and goat meat by member State  
(€ million)  
 2014/2015  2016  2017  
Belgium  .. 13.0 11.0 
Bulgaria  .. 6.0 8.8 
Czech Republic  .. 11.2 10.3 
Denmark  .. 11.1 9.3 
Germany  .. 69.2 58.0 
Estonia  6.9 7.6 8.1 
Ireland  .. 13.7 11.1 
Greece  .. 2.3 1.7 
Spain  .. 25.5 14.7 
France  .. 62.9 49.9 
Croatia .. 1.8 1.5 
Italy .. 25.0 20.9 
Cyprus  .. 0.4 0.3 
Latvia  7.7 8.5 9.8 
Lithuania  14.1 12.6 13.3 
Luxembourg  .. 0.7 0.6 
Hungary  .. 9.5 9.5 
Malta  .. 0.1 0.1 
Netherlands  .. 29.9 23.0 
Austria  .. 7.0 5.9 
Poland  .. 28.9 22.7 
Portugal  .. 4.8 4.0 
Romani a .. 11.1 10.9 
Slovenia  .. 1.4 1.1 
Slovakia  .. 2.5 2.1 
Finland  10.7 9.0 7.5 
Sweden  .. 8.2 6.9 
United Kingdom  .. 36.1 30.2 
.. Not available.  
Source:  Commission Delegated Regulations (EU) 1263/2014 of 26 November 2014, 1370/2014, 2015/1853 
of 15 Octobe r 2015, and 2016/1613 of 8 September 2016.  
Fruits and vegetables  
4.27.   The EU regime for fruits and vegetables has not changed over the past two years, apart 
from measures taken to respond to the ban on imports of some agricultural products by the 
Russian Federa tion from August 2014 (see below). Support for fruit and vegetable production in 
the EU is focused on producer organizations. In order to qualify for funding, a producer 
organization must be recognized by the member State as meeting specific criteria, incl uding 
having an operational programme. Only after being recognized as producer organizations can 
these entities have access to EU financial assistance through the implementation of an operational 
programme. The operational programme may be funded by an ope rational fund which is financed 
by the organization and/or its members and EU assistance. EU assistance is limited to 50 -60% of 
the total operational fund and 4.1 -4.7% of marketed production. Transitional assistance may also 
be provided to producer groups,  which are legal bodies formed by farmers to help them acquire 
the status of recognized producer organizations.13 
4.28.   In addition to the measures taken for dairy and livestock in response to the ban on imports 
of certain agricultural products by the Russian Fed eration in August 2014, the EU introduced a 
number of temporary exceptional measures for fruits and vegetables to reduce supply. These 
measures were based on existing provisions for market withdrawals, green harvesting, and non -
harvesting.  
4.29.   The temporary ex ceptional measures were covered by a number of Commission delegated 
regulations which included withdrawals from the market for free distribution, animal feed, 
composting, and distillation. Up to 30 November 2016, about 1.5 million tonnes of fruits and 
vegetables were withdrawn from the market at a cost of about €416 million.  
                                                
13 DG AGRI online information. Viewed at: http://ec.europa.eu/agriculture/fruit -and-vegetables/ 
producer -organisations/index_en.htm  [November 2016].  WT/TPR/S/357 • European Union  
 
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  Table 4.10 Temporary exceptional measures for fruits and vegetables, 2014 -16 
Date  Delegated 
Regulation 
(EU) No.  Description  
21 August 
2014 913/2014  Financial assistance to producer organizations  and producers of peaches 
and nectarines for withdrawal operations and promotion activities. 
Withdrawal operations for free distribution were permitted up to 10% of 
each producer organization or producer's marketed production and were 
to operate until 30 S eptember 2014. Support for promotion activities by 
producer organizations covered the period to 31 December 2014.  
29 August 
2014 932/2014  Support for producers of certain fruits and vegetables for withdrawal, 
non-harvesting, and green harvesting. Total EU  aid of up to €125 
million, of which €82 million was for apples and pears for the period up 
to 30 November 2014.  
29 September 
2014 1031/2014  Support for producers of certain fruits and vegetables for free 
distribution, withdrawal, green harvesting or non -harvesting subject to 
maximum support levels set out in the Regulation. The support was to 
be available up to the quantity limits set out in the Regulation or 31 
December 2014.  
19 December 
2014 1371/2014  Extending the product coverage of 1031/2014 to incl ude lemons and 
reopening, from 1 January 2015. The support was to be available up to 
the quantity limits set out in the Regulation or until 30 June 2015.  
7 August 2015  2015/1369  Extending the product coverage of 1031/2014 to include peaches and 
nectarines  and reopening, from 8 August 2015. The support was to be 
available up to the quantity limits set out in the Regulation or until 30 
June 2016.  
10 June 2016  2016/921  Laying down further temporary exceptional support measures for 
producers of certain fruits  and vegetables.  
Source:  DG AGRI online information. Viewed at: http://ec.europa.eu/agriculture/russian -import -ban/legal -
acts/index_en.htm  [November 2016].  
Sugar  
4.30.   Internal support measures for sugar are based on:  
 production quotas for 19 member States which total 13.5 million tonnes of sugar beet;  
 a minimum price of €26.29 per tonne of sugar paid by factories to farmers  for in -quota 
sugar beet; and  
 reference threshold s of €404.4 for white sugar and €335.2 per tonne for raw sugar with 
private storage aid possible based on the reference thresholds, market prices, costs, and 
margins ( Table 4.7).14 
4.31.   For market years 2013/14 to 2016/17, out -of-quota sugar production has averaged about 
3.7 million tonnes.15 According to the European Commission, out -of-quota sugar was used for 
industrial uses, ethanol and exports within the limits set out in the EU's export subsidy 
commitments. Production quotas for suga r are to be abolished on 30 September 2017.  
Other  
4.32.   The School Milk Scheme remains in operation for milk and other dairy products for children 
in pre -school establishments , and primary and secondary schools. Under the scheme, the subsidy 
ranges from €16.34 per 100 kg for flavoured milk products (minimum 75% milk) to €163.14 per 
100 kg for Grana Padano and Parmigiano Reggiano cheeses. The subsidy is available for 0.25 litres  
of milk or milk equivalent per school day per child. In the 2014/15 school year, the total EU 
                                                
14 DG AGRI online information. Viewed at: http://ec.europa.eu/agriculture/sugar/index_en.htm  
[November 2016].  
15 DG AGRI (2016), Committee for the Common Organisation of Agricultural Markets – update 29 
September 2106, Balance Sheet , Working Document , Point 1.2B. Viewed at: 
http://ec.europa.eu/agriculture/sugar/balance -sheets/balance -sheet_en.pdf  [November 2016].  WT/TPR/S/357 • European Union  
 
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  budget contribution was €67 million with an additional €53 million from national and private 
sources. Croatia (which acceded to the EU in July 2013) and Greece d id not participate in the 
scheme in the 2014/15 school year.  
4.33.   EU funding of up to 100% is available for products disposed of for free distribution to 
charities and foundations for food aid or for distribution to penal institutions, schools, hospitals, 
etc., up to a maximum of 5% of the volume of production marketed by the producer organization. 
Under the School Fruit and Vegetable Scheme, fruits and vegetables are provided for school 
children together with accompanying measures to make the scheme effective at co-financing rates 
that vary from 75 -90%. The scheme has a total allocation of €150 million for the school years 
2016/17 and 2017/18. Participation in the scheme is voluntary for Finland, Sweden, and the 
United Kingdom.16 The School Milk Scheme and the S chool Fruit and Vegetable Scheme are to be 
merged into a single scheme in August 2017.17 
4.34.   The Fund for European Aid to the Most Deprived (FEAD), which is administered by DG EMPL, 
supports the member States' actions to provide material assistance to deprived persons, including 
food aid, based on each member State's operational programme. A total of €3.8 billion in real 
terms was earmarked for the FEAD for 2014 -20, with additional co -financing of at least 15% from 
the member States.18 
4.1.2.1.3   Rural development  
4.35.   Rural development,  or Pillar II of the Common Agricultural Policy (CAP), is funded through 
the European Agricultural Fund for Rural Development (EAFRD) under Regulation (EU) 
No. 1305/2013 of 17 December 2013 and secondary legislation on its implementation.19 In 
addition to t he funds provided by the EU under the EAFRD, the member States also provide co -
funding at rates that depend on the type of project and the me mber State. Total funding from the 
EAFRD for 2014 -20 is €100 billion and co -funding from the member States is an additional 
€61 billion. The national envelopes for EARFD funding are shown in Table 4.11. 
Table 4.11 National envelopes for rural development, 2014 -20 
(€ million)  
 2014  2015  2016  2017  2018  2019  2020  
Belgium  41 97 110 97 97 103 103 
Bulgaria  - 503 505 340 340 339 339 
Czech Republic  - 470 503 345 343 323 322 
Denmark  90 90 136 145 153 152 152 
Germany  665 1,498  1,686  1,404  1,401  1,398  1,395  
Estonia  104 104 111 123 126 127 129 
Ireland  - 470 460 313 313 313 313 
Greece  - 907 1,008  703 702 700 698 
Spain  - 1,780  1,780  1,186  1,184  1,183  1,183  
France  4 2,336  3,364  1,666  1,668  1,671 1,675  
Croatia  - 448 448 282 282 282 282 
Italy - 2,223  2,232  1,493  1,496  1,499  1,502  
Cyprus  - 28 28 19 19 19 19 
Latvia  138 151 153 155 157 159 161 
Lithuania  230 230 230 230 230 230 230 
Luxembourg  - 21 21 14 14 14 15 
                                                
16 Commission Implementing Decision of 30 March 201 6 on the definitive allocation of Union aid to 
member States under the school fruit and vegetables scheme for the period from 1 August 2016 to 31 July 
2017, C(2016) 1729 final. Viewed at: http://ec.europa.eu/agriculture/sfs/documents/decision.pdf  [November 
2016].  
17 DG AGRI online information. Viewed at: http://ec.europa.eu/agriculture/milk/school -milk-scheme_en  
[November 2016].  
18 DG EMPL online information. Viewed at: http://ec.europa.eu/social/main.jsp?langId=en&catId=1089  
[February 2017]  
19 Commission Delegated Regulation (EU) Nos. 807/20 14 of 17 November 2014 and 994/2014 of 
13 May 2014, Commission Implementing Regulation (EU) No. 808/2014 of 17 July 2014, and European Union 
Guidelines for State aid in the agriculture and forestry sectors and in rural areas 2014 to 2020.  WT/TPR/S/357 • European Union  
 
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   2014  2015  2016  2017  2018  2019  2020  
Hungary  - 743 737 489 488 487 487 
Malta  - 21 21 14 14 14 14 
Netherlands  87 87 118 118 118 118 118 
Austria  558 559 561 562 564 566 567 
Poland  1,570  1,176  1,193  1,192  1,191  1,189  1,187  
Portugal  577 578 579 580 581 582 582 
Romania  - 1,723  1,752  1,187  1,185  1,142  1,140  
Slovenia  119 119 119 120 120 120 121 
Slovakia  271 213 216 215 215 215 215 
Finland  335 337 338 340 342 343 345 
Sweden  - 387 378 249 250 250 250 
United Kingdom  476 848 851 755 754 755 756 
Technical 
assistance  34 34 34 34 34 34 34 
Note:  The amounts for rural develo pment include transfers between pillars. Technical assistance is not 
assigned to member States.  
Source:  Regulation (EU) No. 1305/2013, Annex I (as last amended by Regulation (EU) No. 1307/2016).  
4.36.   Regulation (EU) No. 1305/2013 sets out common priorities for rural development and each 
member State, or region in a member State, has drawn up a rural development programme based 
on at least four of these priorities. Each priority has a number of focus areas and the rural 
development programmes include quantitative  targets for each focus area ( Table 4.12). 
4.37.   There are 118 rural development plans in the 28 member States, with 20 national 
programmes and eight member States with two or more regional programmes. Each plan sets 
targets for the pri orities and at least 30% of funding must be for measures relating to the 
environment and climate change and 5% for the LEADER programme which provides grants for a 
variety of community -led programmes under the sixth priority on social inclusion, poverty 
reduction and economic development in rural areas.  
4.38.   As noted in the previous review, some of the Pillar II programmes and measures are 
targeted at farmers and intended to improve efficiency (e.g. investments in physical assets), 
productivity in the sector (e. g. aid for young farmers) (under Priority 2), and risk reduction (e.g. 
aid for restoring production potential after damage by natural disasters, subsidies for insurance 
premiums, and income stabilization) (under Priority 3).20 According to the Commission, 4 4% of 
funds of all the rural development plans are for improving ecosystems, 20% for improving farm 
viability and competitiveness, and 10% for food chain organization, animal welfare and risk 
management ( Table 4.12). 
Table 4.12 Rural development priorities and focus areas  
 Priority  % of funds  
1 Knowledge transfer and innovation   
1.A Innovation, cooperation, and the development of the knowledge base   
1.B Links between agriculture, fo od production and forestry and research and 
innovation, including for the purpose of improved environmental 
management and performance   
1.C Learning and vocational training   
2 Farm viability and competitiveness, and promoting innovative farm 
technologies  and sustainable management of forests  20 
2.A Improving the economic performance of all farms   
2.B Entry of adequately skilled farmers   
3 Food chain organization, including processing and marketing of 
agricultural products, animal welfare, and risk mana gement  10 
3.A Improving competitiveness   
3.B Risk prevention and management   
4 Restoring, preserving and enhancing biodiversity  44 
4.A Biodiversity   
4.B Water management   
4.C Preventing soil erosion and improving soil management   
                                                
20 WTO document WT /TPR/S/317/Rev.1, 21 October 2015, para. 4.48. WT/TPR/S/357 • European Union  
 
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   Priority  % of funds  
5 Resource efficien cy and supporting the shift towards a low carbon 
and climate resilient economy in agriculture, food and forestry 
sectors  8 
5.A Efficiency in water use   
5.B Efficiency in energy use   
5.C Supply and use of renewable sources of energy   
5.D Reducing greenh ouse gas and ammonia emissions   
5.E Carbon conservation and sequestration   
6 Social inclusion, poverty reduction and economic development  15 
6.A Diversification, creation and development of small enterprises   
6.B Local development   
6.C Accessibility, use and quality of information and communication technologies   
Source:  Regulation (EU) No. 1305/2013 of 17 December 2013; and DG AGRI (2016), Rural Development 
Programmes 2014 -2020.  
4.1.2.2   Export subsidies  
4.39.   The European Commission stated that no export subsidies have been granted by the EU 
since July 2013. The most recent notification from the EU for the 2014/15 marketing year shows 
that no export refunds were provided in that year, although the EU continued to notify exports of 
out-of-quota sugar as being subsidi zed although no export refunds are provided.21 As noted above, 
production quotas for sugar will be abolished from end -September 2017. Furthermore, although 
Regulation (EU) No. 1308/2013 does provide for the export refunds in exceptional situations, the 
refund rates were set at zero in 2013 and have not changed, and the European Commission stated 
that the EU applies the Decision of the Nairobi Ministerial Conference on the elimination of export 
subsidies.  
4.1.2.3   Market access  
4.40.   During the period under review there was  no substantial change to market access for 
agricultural products in the EU.  
4.41.   On average, bound tariffs on agricultural products (WTO definition) (simple average MFN 
tariff of 14.1%) remain higher than on non -agricultural products (simple average MFN tarif f of 
4.3%) and vary considerably from one agricultural product to another with a standard deviation of 
23.7 compared to 4.4 for non -agricultural products ( Section 3.1.4 ). In addition, many agricultural 
products are subject to non -ad valorem  duties that can  also vary from simple specific duties to 
more complex forms, such as those in the Meursing Table.22 However, imports of agricultural 
products from least developed countries and from many developing countries can enter the EU at 
zero or reduced tariffs unde r the EU's everything -but-arms initiative, its GSP and GSP+ schemes, 
and its network of trade agreements.  
4.42.   Tariffs for some cereals may be adjusted based on import prices. For high quality common 
wheat, durum wheat (high, medium and low quality), maize, fli nt maize, sorghum, and rye23, the 
duty is €157.030524 minus the c.i.f. import price with further adjustments depending on the 
product, port of unloading, quality, and other factors as set out in Commission Regulation (EU) 
No. 642/2010.25 On the basis of these calculations, the import d uty was fixed at zero in November 
2014 in Commission Implementing Regulation (EU) No. 1206/2014.26 
                                                
21 WTO document G/AG/N/EU/29, 20 May 2016.  
22 Regulation (EU) No. 510/2014 of the European Parliament and of the Council of 16 April laying down 
the trade arrangements applicable to certain goods resulting from the processing of agricultural products and 
repealing Council Regulations (EC) No . 1216/2009 and (EC) No . 614/2009 . 
23 CN codes 1001 11  00, 1001 19 00, ex 1001 91 20 ( common wheat seed ), ex 1001 99 00 (high 
quality common wheat other than for sowing), 1002 10 00, 1002 90 00, 1005 10 90, 1005 90 00, 1007 10 90 
and 1007 90 00 . 
24 That is, the intervention price (€101.31 per tonne) plus 55%.  
25 Commission Regulation (EU) No. 642/2010 of 20 July on rules of application (cereal sector import 
duties) for Council Reg ulation (EC) No. 1234/2007.  
26 Commission Implementing Regulation (EU) No . 1206/2014 of 7 November fixing the import duties in 
the cereals sector applicable from  8 November 2014 . WT/TPR/S/357 • European Union  
 
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  4.43.   The entry price system applying to certain fruits and vegetables27 continues to be applied as 
set out in Commission Implementing Regulation (EU) No. 543/2011.  
4.44.   The EU has notified the systems for the administration of 124 tariff quotas, of which: 44 are 
current access quotas; 6 are non -tariffied product quotas; 36 are minimum access quotas; and 42 
are post -Uruguay Round quotas opened under Article XIV.6 or XXVIII  of GATT. A variety of 
administration methods are used although the majority are open to all supplying countries and are 
open for 12 months, and about half are allocated on a first -come, first -served basis ( Table 4.13).28 
Table 4.13 Tariff quotas in the EU in 2016  
 Number of quotas  
Country allocation   
Erga omnes  83 
Country specific  41 
Quota opened   
1 July to 30 June  53 
1 January to 31 December  55 
Quota allocation   
First-come, fi rst-served  60 
Import licences issues by the competent 
authorit(y)(ies) of the member State(s)  64 
Source:  WTO document G/AG/N/EU/31, 2 September 2016; and EU/31/Corr.1, 13 January 2017.  
4.45.   The most recent notification for imports within tariff quotas for the  EU is for marketing year 
2015/2016 and calendar year 2015 for 122 tariff quotas. Fill rates for these quotas varied 
considerably with 37 fully, or very nearly filled (over 90%), another 11 were 50 -90% filled, 
another 39 less than half filled, and 35 had n o in-quota imports reported.29 
4.46.   The EU has reserved the right to use the special agricultural safeguard on 539 tariff lines. 
Actual use has been much less. At end -2016 the most recent notification on use of the SSG in the 
EU noted that the volume -based SSG w as not invoked in 2014/15 although it was made 
operational on 15 fruit and vegetable products (corresponding to 28 tariff lines), while the 
price-based SSG was made operational on 8 tariff lines for poultry products. In these cases the 
term "made operation al" means prices are monitored and the price -based SSG may be charged if 
the import price is below the trigger price or, for the volume -based SSG, import volumes are 
calculated, but the EU has never invoked the volume -based SSG.30 
4.1.3   Domestic support levels  
4.1.4   WTO notifications  
4.47.   The last DS:1 notification from the EU for domestic support was for marketing year 2013/14 
and includes the changes that resulted from the 2013 reform of the CAP as implemented during 
the marketing year 2013/14. The notified value of suppor t shows little change compared to the 
previous notifications for the three years before 2013/14.  
                                                
27 The products covered by Implementing Regulation (EU) No . 543/2011 are: tomat oes; cucumbers; 
artichokes; courgettes; sweet oranges; clementines; mandarins; lemons; table grapes; apples; pears; 
apricots; cherries, other than sour; peaches and nectarines; plums; cucumbers for processing; and sour 
cherries  
28 WTO document G/AG/N/EU/31,  2 September 2016 and 31/Corr.1, 13 January 2017  
29 WTO documents G/AG/N/EU/3 3, 13 January 2017 . 
30 WTO document G/AG/N/EU/28, 17 May 2016.  WT/TPR/S/357 • European Union  
 
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  Chart 4.1 Domesti c support in the EU, 2003/04 -2013/14 
(€ million)  
010,00020,00030,00040,00050,00060,00070,00080,0002003/042004/052005/062006/072007/082008/092009/102010/112011/122012/132013/14de minimis total
Current total AMS
Blue Box
Green Box
Null for chartChart 4.[domestic support] Domestic support in the EU 2003/04 -2012/13
05,00010,00015,00020,00025,00030,00035,0002003/042004/052005/062006/072007/082008/092009/102010/112011/122012/132013/14Others
Olive oil
Sugar
Dairy
Cereals
Fruit and
vegetables
Beef
05,00010,00015,00020,00025,00030,0002003/042004/052005/062006/072007/082008/092009/102010/112011/122012/132013/14Other
Sheep and goats
Dairy
Beef
Crops(€million)
Green, Blue and Amber Boxes 
(including de minimis) Amber box 
(excluding de minimis)
010,00020,00030,00040,00050,00060,00070,00080,0002003/042004/052005/062006/072007/082008/092009/102010/112011/122012/132013/14Other
Decoupled income support and SAPS
Structural adjustment, 
environment and regional 
assistance
General services
WTO notifications. Source:Blue BoxGreen Box
 
Source:  WTO notifications.  WT/TPR/S/357 • European Union  
 
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  4.1.5   OECD monitoring a nd evaluation of agricultural policies  
4.48.   Compared to the methodology used to calculate the level of support provided under the 
Amber, Blue, and Green Boxes in the WTO, the OECD's annual monitoring and evaluation reports 
on support to agriculture in OECD coun tries use a different methodology to calculate the value of 
support which is expressed in a number of indicators, including: the Produce Support Estimate 
(PSE) for gross transfers from consumers and tax payers to agricultural producers; the Total 
Support E stimate (TSE) for transfers to the agricultural sector in general; and the Single 
Commodity Transfers (SCT) for transfers to specific commodities. As previously noted, the PSE 
represents the value of transfers to producers, unlike support under the Amber B ox, Blue Box and 
Green Box, which measure compliance with WTO commitments. Therefore, the value of support as 
notified to the WTO is neither compatible nor comparable with the values calculated by the 
OECD.31 
4.49.   Overall, the percentage PSE (that is support as a percentage of gross farm receipts), has 
been fairly stable over the 2011 -15 period, ranging from 20.0% to 18.1%, considerably below the 
levels of the 1990s. Market price support increased to nearly €21 billion, from a low of €11  billion 
in 2011. The incr ease in the value of market price support is the result of several factors, including 
lower commodity prices as domestic producers in the EU are, to some extent, protected from 
changes in world market prices by tariffs. As a result, market price support fo r common wheat, 
and sugar increased from zero in 2011 to €3.9 billion and €1.4 billion respectively in 2015.  
Table 4.14 OECD indicators for support to agriculture in the EU, 200 9-15 
(€ million (except producer  NPC))  
 2009  2010  2011  2012  2013  2014  2015  
Total         
 Value of production  304,303  329,707  363,372  374,778  385,031  385,031  368,516  
 TSE 98,340  91,726  91,581  99,335  104,107  94,227  93,972  
 PSE 86,166  79,206  78,380  86,003  91,018  81,560  81,119  
 SCT 26,898 18,022  15,226  21,058  26,409  20,519  26,420  
 MPS 21,511  13,725  10,971  17,096  22,499  16,357  20,914  
 Producer NPC         
Common wheat         
 Value of production  14,803  19,449  26,744  27,870  29,893  28,094  28,612  
 SCT 2 0 0 0 1,008  552 3,948  
 MPS 0 0  0 0 1,008  552 3,948  
 Producer NPC  1.00 1.00 1.00 1.00 1.03 1.02 1.16 
Refined sugar         
 Value of production  3,581  3,161  3,971  3,927  3,704  4,425  3,588  
 SCT 623 76 41 71 759 1,165  1,422  
 MPS 551 0 0 23 706 1,146  1,233  
 Producer NPC  1.19 1.00 1.00 1.01 1.24 1.35 1.53 
Milk        
 Value of production  39,303  44,815  50,732  50,066  55,203  58,581  49,786  
 SCT 611 685 655 720 736 950 1,758  
 MPS 0 0 0 0 (41) (25) 347 
 Producer NPC  1.01 1.01 1.01 1.01 1.01 1.01 1.02 
Beef and veal         
 Value of produc tion 24,034  25,036  26,588  28,666  28,290  27,362  28,864  
 SCT 9,798  4,547  4,196  9,598  11,768  7,082  8,641  
 MPS 7,785  2,919  2,592  8,076  10,294  5,643  6,794  
 Producer NPC  1.48 1.13 1.11 1.39 1.58 1.26 1.32 
Pig meat         
 Value of production  30,031  30,373  33,822  36,852  37,621  34,211  31,329  
 SCT 112 536 23 27 650  (60) (471)  
 MPS 0 511 0 0 641 (65) (472)  
 Producer NPC  1.00 1.02 1.00 1.00 1.02 1.00 1.00 
                                                
31 WTO document WT/TR/S/284/Rev.2, 28 November 2013, paragraph 4.34.  WT/TPR/S/357 • European Union  
 
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   2009  2010  2011  2012  2013  2014  2015  
Poultry         
 Value of production  12,907  13,411  14,990  15,715  16,237  16,464  16,597  
 SCT 4,902  3,852  3,472  3,187  1,715  2,088  958 
 MPS 4,806  3,833  3,453  3,161  1,708  2,082  957 
 Producer NPC  1.59 1.40 1.30 1.25 1.12 1.15 1.09 
Sheep meat         
 Value of production  3,742  3,835  4,830  4,678  4,578  4,639  4,648  
 SCT 1,323  792 325 310 709 470 589 
 MPS 839 475 0 3 401 50 (27) 
 Producer NPC  1.29 1.14 1.00 1.00 1.10 1.01 1.00 
Note:  Total support estimate (TSE) is the annual monetary value of all gross transfers from taxpayers and  
consumers arising from policy measures that support agriculture, net of associate d budgetary 
receipts, regardless of their objectives and impacts on farm production and income, or consumption 
of farm products.  
 Producer support estimate (PSE) is the annual monetary value of gross transfers from consumers 
 and taxpayers to agricultural producers, measured at the farm -gate level, arising from policy 
 measures that support agriculture, regardless of their nature, objectives or impacts on farm 
 production or income.  
 Single commodity transfer (SCT) is the annual monetary value of gross tran sfers from consumers 
 and taxpayers to agricultural producers, measured at the farm -gate level, arising from policy 
 measures directly linked to the production of a single commodity such that the producer must 
 produce the designated commodity in order to receive the transfer.  
 Market price support (MPS) is an indicator of the annual monetary value of gross transfers from 
 consumers and taxpayers to agricultural producers arising from policy measures creating a gap 
 between domestic producer prices and refe rence prices of a specific agricultural commodity 
 measured at the farm -gate level.  
 The Producer Nominal Protection Co -efficient (Producer NPC) is an indicator of the nominal rate of 
 protection for producers measuring the ratio between the average price received by producers (at 
 farm gate), including payments per tonne of current output, and the border price (measured at 
 farm-gate level).  
Source:  OECD Producer and Consumer Support Estimates database. Viewed at: 
 http://www.oecd.org/chile/producerandconsumersupportestimatesdatabase.htm  [December 2014].  
4.2  Fisheries  
4.2.1   Fisheries in the EU  
4.50.   Fisheries represented about 0.05% of total gross value added (GVA) in 2014 although it s 
importance varies from one member State to another, being most important in Greece (0.43% of 
GVA), Malta (0.37% of GVA), and Croatia (0.35% of GVA). Greece, France, Italy, Spain and the 
United Kingdom accounted for nearly 70% of EU GVA in fishing in 2014 .32 Employment in the 
fisheries and aquaculture sectors also represents a small proportion of total employment (0.07% 
of total employment in 2015).33 
4.51.   Demand for fish and fish products in the EU has continued to increase. In 2015, EU 
consumers spent €54 billi on on fish and fish products, an increase of 3.2% compared to 2014. In 
2014, per capita fish consumption also increased to 25.5 kg, 3.5% higher than in 2013.34 
4.52.   A recent study shows that the profitability of the EU fishing fleet increased in 2014 as 
compared  to 2013 and this trend is expected to have continued in 2015 and 2016 mainly as a 
result of increased landings and lower fuel costs.35 
                                                
32 Eurostat. Viewed at: http://ec.europa.eu/eurostat/web/national -accounts/data/database  [February 
2017].  
33 Statistical information was provided by the EU authorities.  
34 EUMOFA, The EU Fish Market – 2016 Edition , pp. 15 -16. 
35 STECF, JRC Scientific and Policy Reports : The 2016 Annual Economic Report on the EU Fishing Fleet  
(STECF 16 -11), July 2016. Viewed at: https:/ /stecf.jrc.ec.europa.eu/documents/43805/1481615/201607_ 
TECF+16 -11+-+AER+2016_ RC103591.pdf , p. 21 [February 2017].  WT/TPR/S/357 • European Union  
 
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  4.2.2   Fish catches and aquaculture  
4.53.   From 2001 to 2012, total fisheries production in the EU followed a downward trend driven 
by a fall in capture production. A rise was then observed from 2012 for capture production, 
increasing by 11.5% from 2013 to 2014. According to the EU authorities, no clear pattern can be 
identified from the most recent figures, especially the 5% decrease reg istered in fish catch in 2015 
indicating that EU total fisheries production is likely to shrink again. On the other hand, although 
the EU has experienced a slight decline in aquaculture production over the last 15 years, recent 
figures showed a 7.8% increa se in 2014 after production reached its lowest level since 2000 in 
2013.  
Chart 4.2 Fish production in the EU -28, 2000 -14 
(Million tonnes)  
0.01.02.03.04.05.06.07.08.09.0200020012002200320042005200620072008200920102011201220132014Catches AquacultureChart 1.[EU28 fish] Fish production in the EU28, 2000 -14
WTO Secretariat's estimates, based on Eurostat (fish_ca_main), (fish_aq_q) and (fish_aq2a).  Viewed at:   
http://ec.europa.eu/eurostat/data/database   [February 2017].Source:  (million tonnes)
 
Source:  WTO Secretariat estimates, based on Eurostat (fish_ca_main), (fish_aq_q) and (fish_aq2a). Viewed 
at: http://ec.europa.eu/eurostat/data/database  [February 2017].  
4.54.   The EU's total fish catch was estimated at 5.4 million tonnes in 2014, which accounted for 
81% of  total EU production. Most of the EU catch was in the Northeast  Atlantic (over 70% of total 
EU catches), followed by the Mediterranean and the Black Sea (8% of total EU catches).36 In terms 
of weight landed in 2014, herring (741,000 tonnes) was the most imp ortant, followed by Atlantic 
mackerel (591,000 tonnes), and European sprat (383,000 tonnes). In terms of landed value, 
Atlantic mackerel was the most important at €542 million, followed by European hake 
(€366  million), Norway lobster (€310 million), and ye llow fin tuna (€297 million).37 Within the EU, 
the most important producers in terms of volume in 2014 were Spain, Denmark, the 
United  Kingdom, France, and the Netherlands, representing about 65% of the total EU catch 
production (Table 4.15).  
Table 4.15 Summary of fishery production, 2010 -15 
('000 tonnes live weight)  
  2010  2011  2012  2013  2014  2015  
Total production         
EU-28 6,271  6,081  5,641  6,007  6,653  .. 
EU-28 as % of world  3.7%  3.4%  3.1%  3.1%  3.4%  .. 
  Spain  995 1,073  1,024  1,130  1,394  .. 
  United Kingdom  807 794 832 821 967 914 
                                                
36 Eurostat. Viewed at: http://ec.europa.eu/eurostat/web/fisheries/d ata/database  [February  2017]. 
37 STECF, JRS Scientific and Policy Reports, The 2016 Annual Economic Report on the EU Fishing Fleet  
(STECF 16 -11), July 2016. Viewed at: https://stecf.jrc.ec.europa.eu/documents/43805/1481615/2016 -
07_STECF+16 -11+-+AER+2016_JRC103591.pdf , p. 78 [February 2017].  WT/TPR/S/357 • European Union  
 
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    2010  2011  2012  2013  2014  2015  
  Denmark  860 716 536 700 779 905 
  France  643 681 666 729 544 .. 
  Netherlands  443 409 391 371 439 427 
  Total top -5 producers  3,748  3,672  3,450  3,751  4,121  .. 
  Top-5 producers as  % of total EU -28 59.8%  60.4%  61.2%  62.4%  61.9%  .. 
Catches         
EU-28 4,999  4,833  4,420  4,829  5,382  5,144  
EU-28 as % of world  5.5%  5.1%  4.8%  5.1%  5.7%  .. 
  Spain  742 799 758 904 1,109  902 
  Denmark  828 716 503 668 745 869 
  United Kingdo m 605 595 626 618 752 702 
  France  440 487 461 529 544 497 
  Netherlands  376 365 345 324 375 365 
  Total top -5 producers  2,991  2,961  2,693  3,043  3,525  3,335  
  Top-5 producers as  % of total EU -28 59.8%  61.3%  60.9%  63.0%  65.5%  64.8%  
Aquaculture        
EU-28 1,272  1,248  1,221  1,178  1,270  .. 
EU-28 as % of world  1.6%  1.5%  1.4%  1.2%  1.3%  .. 
  Spain  254 274 267 226 285 .. 
  United Kingdom  201 199 206 203 215 212 
  France  203 194 205 200 .. .. 
  Italy 154 164 137 141 149 .. 
  Greece  121 111 109 114 104 106 
  Total top -5 producers  933 942 923 771 753 .. 
  Top-5 producers as  % of total EU -28 73.3%  75.5%  75.6%  75.1%  59.3%a .. 
.. Not available.  
 
a Data for 2014 are not complete.  
 
Note:  Total catches are calculated as the sum of the seven regions covered by  legal acts, namely:  
 Northwest Atlantic (FAO Major Fishing Area 21), Northeast Atlantic (Area 27), Eastern Central 
Atlantic (Area 34), Mediterranean and Black Sea (Area 37), Southwest Atlantic (Area 41), Southeast 
Atlantic (Area 47), and Western Indian Oc ean (Area 51).  
 
Source:  WTO Secretariat estimates, based on FAO Stat. Viewed at: http://www.fao.org/fishery/ statistics/en ; 
and Eurostat (fish_ca_main), (fish_aq_q) and (fish_aq2a). Viewed at: http://ec.europa.eu/eurostat 
/data/database  [February 2017 ]. 
4.55.   Aquaculture production in the EU -28 was small relative to capture with total production of 
1.3 million tonnes (19% of EU -28 fish productio n), valued at €3,923 million in 2014.38 The EU's 
aquaculture production, in terms of volume, was mainly co ncentrated in Spain, the 
United  Kingdom, France, Italy, and Greece, which accounted for over 70% of the total. On the 
other hand, in terms of value, th e United Kingdom was the largest producer in the EU with 24% of 
the total production value, followed by France (17.7%), Spain (12.0%) and Greece (11.3%) in 
2014.39 This was found to be due to the lower unit value of mussels (0.50€/kg), which represented 
77% of the Spanish aquaculture production volumes, but only 23% of the value.40 The main 
aquaculture species produced in weight terms were Mediterranean mussels (321,000 tonnes), 
Atlantic salmon (189,000 tonnes), blue mussels (147,000 tonnes), rainbow trout (1 37,000 
tonnes), and Pacific cupped oysters (128,000 tonnes), representing more than half (72%) of the 
total EU aquaculture production.41 
                                                
38 Eurostat. Viewed at: http://ec .europa.eu/eurostat/web/fisheries/data/database  [February  2017]. 
39 Eurostat. Viewed at: http://ec.europa.eu/eurostat/web/fisheries/data/database  [February 2017 ]. At 
the time of writi ng, 2013 data were used for France since no 2014 data were available in the Eurostat 
database.  
40 Eurostat. Viewed at: http://ec.europa.eu/eurostat/web/fisheries/data/database ; and EUMOFA. Viewed 
at: https://www.eumofa.eu/  [February 2017].  
41 STECF , JRC Scientific and Policy Reports, Reports of the Scientific, Technical and Economic Committee 
for Fisheries (STECF) - Economic Report of EU aquaculture  sector (STECF -16-19), October 2016. Viewed at: 
https://stecf.jrc.ec.europa.eu/documents/43805/1491449/_2016 -10_STECF+16 -19+-
+EU+Aquacult ure_JRCxxx.pdf , p. 43 [February 2017].  WT/TPR/S/357 • European Union  
 
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  4.56.   Fleet capacity in the EU has continued to decline: the number of vessels decreased steadily 
from some 95,000 in 2000 to 84,000 in 2015. The EU -28's fishing fleet in 2015 had a combined 
capacity of 1.6 million gross tonnes and a total engine power of 6.4 million kilowatts (Table 
4.16).42 
4.57.   The structure of the fishing fleet varies from one member State  to another. In 2015, Greece 
had the greatest number of vessels (approximately 15,000), followed by Italy and Spain. Although 
Greece accounted for 18.2% of the total number of vessels, its fleet represented only 4.5% of the 
gross tonnage and 6.8% of the ki lowatts of the EU fleet ( Table 4.16). 
Table 4.16 Overview of the EU fleet by member State, 2015  
 Number of vessels  Gross tonnage  Kilowatts  
 Number  % of 
total 
number  Size 
('000)  % of 
total GT  Gross 
tonnage 
(GT) 
per 
vessel  Power 
('000)  % of 
total 
kilowatts  Kilowatt 
per 
vessel  
European Union  84,280  100.0%  1,591  100.0%  18.9 6,393  100.0%  75.9 
Belgium  76 0.1%  14 0.9%  185.2  45 0.7%  596.4  
Bulgaria  1,981  2.4%  7 0.4%  3.3 58 0.9%  29.3 
Croati a 7,727  9.2%  52 3.3%  6.7 419 6.6%  54.2 
Cyprus  832 1.0%  3 0.2%  4.0 38 0.6%  45.4 
Denmark  2,369  2.8%  66 4.2%  28.0 220 3.4%  93.0 
Estonia  1,538  1.8%  13 0.8%  8.8 44 0.7%  28.8 
Finland  2,723  3.2%  15 1.0%  5.7 157 2.5%  57.6 
France  6,910  8.2%  172 10.8%  24.9 999 15.6%  144.6  
Germany  1,443  1.7%  64 4.0%  44.3 141 2.2%  97.9 
Greece  15,368  18.2%  72 4.5%  4.7 434 6.8%  28.3 
Ireland  2,144  2.5%  63 4.0%  29.4 193 3.0%  89.9 
Italy 12,316  14.6%  158 9.9%  12.8 987 15.4%  80.1 
Latvia  686 0.8%  25 1.6%  36.0 43 0.7%  63.1 
Lithuania  145 0.2%  45 2.8%  309.9  50 0.8%  347.4  
Malta  1,005  1.2%  7 0.4%  6.9 73 1.1%  72.6 
Netherlands  829 1.0%  127 8.0%  153.2  304 4.7%  366.1  
Poland  875 1.0%  34 2.2%  39.1 82 1.3%  93.2 
Portugal  8,047  9.5%  95 5.9%  11.7 357 5.6%  44.4 
Romania  151 0.2%  1 0.1%  5.8 6 0.1% 39.9 
Slovenia  169 0.2%  1 0.0%  3.5 9 0.1%  50.5 
Spain  9,396  11.1%  341 21.4%  36.3 797 12.5%  84.8 
Sweden  1,318  1.6%  29 1.8%  22.3 163 2.5%  123.5  
United Kingdom  6,232  7.4%  187 11.8%  30.0 774 12.1%  124.2  
Source:  WTO Secretariat estimates, based on Eurostat  (fish_fleet). Viewed at: http://ec.europa.eu/eurostat/ 
data/database  [February  2017].  
4.2.3   Trade  
4.58.   The EU is a net importer of fish and fish products and the trade deficit has continued to 
grow: in 2015 , the EU had a trade deficit of €17.9 billion, with imports of €22.7 billion and exports 
of €4.8 billion ( Chart 4.3). Although the deficit increase was mainly due to imports of frozen and 
fresh products, imports of prepared and preserved fish have been gradually increasing ( Chart 4.3). 
Trade in fish and fish products accounted for 1.3% of total extra EU -28 imports and 0.3% of total 
extra EU -28 exports in 2015.  
4.59.   Among EU members, and including  intra-EU trade, most of the member States had trade 
deficits; Italy  had the largest trade deficit of €4.4 billion, followed by France (€3.8 billion).  
                                                
42 Eurostat. Viewed at: http://ec.europa.eu/eurostat/web/fisheries/data/database  [February 2017 ]. WT/TPR/S/357 • European Union  
 
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  Chart 4.3 Trade balance , 2010 -15 
-25-23-20-18-15-13-10-8-5-30358
2010 2011 2012 2013 2014 2015
Fresh Frozen
Dried-salted-smoked Prepared-preserved
Unspecified BalanceChart 1.[EU28 fish] Trade balance, 2010 -15
Eurostat database.  Viewed at:  http://epp.eurostat.ec.europa.eu/newxtweb/ [February, 2017]. Source:  (€billion)
Exports
Imports
9237233141008062613430-38-40-54-66-84-90-113-120-188-334-414-684-735-827-1,851-2,371-2,513-3,803-4,400
-5,000 -2,000  1,000DenmarkNetherlandsIrelandGreeceLithuaniaCroatiaMaltaEstoniaLatviaCyprusBulgariaSloveniaHungarySlovakiaLuxembourgPolandCzech RepublicRomaniaFinlandAustriaSwedenPortugalBelgiumUnited KingdomGermanySpainFranceItaly(€million)
Year
2015
Note: A minus ( -) sign indicates trade deficit. Extra -EU28Trade balance including 
intra -EU trade
 
Source:  Eurostat database. Viewed at: http://epp.eurostat.ec.europa.eu/newxtweb/  [February  2017].  
4.60.   The major suppliers for extra -EU-28 imports of fish and fish products were Norway, China, 
and Iceland, which accounted for 24.6%, 7.1%, and 4.9%, respectively, in 2015. About 70% of 
total No rwegian supplies were salmon, followed by cod (14%), and Herring (3%). The top three EU 
destinations for extra -EU imports were Spain, Sweden, and the United Kingdom, representing 
about 44% of total extra -EU-28 imports. In terms of species imported by the E U, major imported 
species included salmon, cod, and tropical shrimp (Table  A4.1).  
4.61.   The value of fish products imported into the EU grew faster than volume (4.9% per year in 
value from 2010 to 2015 compared to 0.2% in volume) due to increases in unit prices for several 
species, although unit prices for tuna and salmon remained relatively stable over this period 
(Chart  4.4).43 
4.62.   EU exports increased to €4.8 billion in 2015, having grown by an average of 7.3% per year 
in the period from 2010 to 2015. In 2015, the United States remained the biggest market for EU 
exports, accounting for 12.5% of total fishery exports, followed by Norway (10.6%) , and China 
(8.7%). Those main export destinations showed a positive growth over the period from 2010 to 
2015, except for the Russian Federation, mainly due to the Russian import ban on imports of some 
agri-food products from the EU (Table A4.1).44 With reg ard to species, salmon accounted for the 
largest share (14.9%) of EU exports, followed by fishmeal and mackerel (6.5% for both species) 
(Table A4.1).  
4.63.   Imports in the fisheries subsector were subject to relatively high tariff protection of 12.2%, 
compared to  the overall average of 6.3% in 2016 (Section 3.1.4.). All tariff rates were expressed 
as ad valorem  tariffs with a range of 0 -26%. Table 4.17 presents the simple average applied MFN 
tariff rates applied to major i mported species in the EU market, without taking in -quota tariff rates 
into consideration. The EU's trade policy instruments for fishery products include WTO tariff quotas 
and autonomous (non -WTO) tariff quotas for the processing industry to assist its com petitiveness. 
                                                
43 EUMOFA database. Viewed at: http://www.eumofa.eu/  [February  2017]. 
44 European Commission online information, " EU responses to the Russian import ban: Market data ". 
Viewed at: http://ec.europa.eu/agriculture/russian -import -ban/market -data/index_en.htm  [February  2017]. WT/TPR/S/357 • European Union  
 
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  The EU's autonomous tariff quotas are established every three years for certain fish and fish 
products.45 
Chart 4.4 Fish imports by EU member States, 2010 -15 
2.503.003.504.004.505.005.506.006.507.007.508.00
2010 2011 2012 2013 2014 2015Miscellaneous shrimp:
7.72 €/kg, +12%
Tropical 
shrimp:
7.55 €/kg, 
-0.3%
Octopus:
5.52 €/kg, +10%
Salmon:
5.22 €/kg, -
2%
Cod:
4.47 €/kg, 
+22%
Tuna  (canned 
or loins) :
4.16 €/kg, 
+2%
 15 16 17 18 19 20 21 22 23 24
 - 1 2 3 4 5 6 7
2010 2011 2012 2013 2014 2015Volume Value(Volumes in million 
tonnes )(Values in 
billion €)
Eurostat database.  Viewed at:  http://epp.eurostat.ec.europa.eu/newxtweb/; and 
EUMOFA.  Viewed at https://www.eumofa.eu/ [February, 2017].Source:  Extra -EU28 imports of fish and fishery prodcutsChart 4.4 Fish imports by EU member States, 2010 -15
Prices of major extra -EU imported species and 
% change 2014 -2015
(€/kg)
 
Source:  Eurostat database. Viewed at : http://epp.eurostat.ec.europa.eu/newxtweb/ ; and EUMOFA. Viewed 
at: https://www.eumofa.eu/  [February  2017].  
Table 4.17 European Union's applied MFN tariff summary, 2016  
Major imported species  Simple average (%)  Tariff range (%)  
Mackerel  18.8 14-25 
Skipjack tuna  16.6 0-24 
Miscellaneous tunas  16.6 0-25 
Shrimp Crangon spp.  18.0 18 
Anchovy  16.7 10-25 
Herring  14.9 10-20 
Miscellaneous shrimps  17.7 12-20 
Yellowfin tuna  11.6 0-24 
Other molluscs and aquatic invertebrates  15.8 0-26 
Horse mackerel  15.0 15 
Other marine fish  13.5 7.5-20 
Other cold -water shrimps  14.7 12-20 
Caviar, livers and roes  14.2 10-20 
Bluefin  tuna 12.0 0-22 
Cod 12.2 7.5-20 
Octopus  12.8 8-20 
Greenland halibut  11.4 7.5-15 
Salmon  5.0 2-15 
Fish oil  2.7 0-10.9 
Fishmeal  0.0 0.0 
Note:  Calculations for averages are based on the 8 -digit tariff line level, excluding in -quota rates.  
Source:  WTO Se cretariat calculations based on IDB database and Eurostat database.  
                                                
45 Council Regulation (EU) No. 2015/2265, 7 December 2015 . WT/TPR/S/357 • European Union  
 
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  4.2.4   Policies  
4.64.   The EU has exclusive competence for the conservation of marine biological resources46 
under the Common Fisheries Policy (CFP) and for the conclusion of international agreements. 
Shared competence between the EU and the member States applies to other fishery issues, 
including responsibility for implementation of EU rules and for registration of vessels and other 
matters related to the jurisdiction of vessels.  
4.65.   The fisheries policy of the EU is covered in the CFP, which established a set of rules for 
managing European fishing fleets and for conserving fish stocks. Since its introduction in the 
1970s, the CFP has been reformed several times, most recently in 2014.  
4.66.   The latest reform of th e CFP took effect from 1 January 2014, after several years of 
negotiations. The objective of the reform is to ensure that fishing and aquaculture activities are 
ecologically, economically and socially sustainable in the long term, and it applies an ecosyst em 
approach in fisheries management.47 The new fisheries regime is based on three main regulations: 
the basic regulation on the CFP (Regulation (EU) No. 1380/2013 of the European Parliament and 
the Council);  the common organization of the markets in fishery  and aquaculture products 
(Regulation (EU) No. 1379/2013 of the European Parliament and the Council ); and the European 
Maritime and Fisheries Fund (Regulation (EU) No. 508/2014  of the European Parliament and the 
Council ). The main aspects include:  
 a legall y binding commitment to fishing at sustainable levels (maximum sustainable yield);  
 a ban on discarding fish (the landing obligation);  
 decentralized decision -making (regionalization, the bottom -up approach);  
 measures to reduce overcapacity, with an obligati on to report on the balance between fleet 
capacity and fishing opportunities;  
 sustainable fisheries partnership agreements;  
 data collection and management by EU countries under the Data Collection Framework;  
 a policy framework for the sustainable developm ent of EU aquaculture;  
 production that is more market -oriented through the common organization of the markets; 
and 
 funding to support the objectives of the reform of the CFP.  
4.67.   Under the reformed CFP, the multi -annual recovery and management plans, which wer e 
introduced in the 2002 reform, continue to play an important role in managing almost all 
important stocks and fisheries with clear objectives and rules at the core of the conservation 
policy. As of February 2017, there were 12 plans (including for over -fished species such as cod, 
herring, and sprat in the Baltic Sea).48 They combine different fisheries management tools, 
including a maximum sustainable yield, the landing obligation, technical measures, and total 
allowance catches (TACs) and quotas.49 
                                                
46 Official Journal  of the European Union,  Consolidated version of the Treaty on the Functioning of t he 
European Union,  C2012/ 326/1, 26 October 2012, Article 3 and 4.  
47 European Parliament and the Council Regulation (EU) No. 1380/2013 , Article 2.  
48 European Union online information, "Multi -Annual Plans". Viewed at: http://ec.europa.eu/fisheries/cfp 
/fishing_rules/multi_annual_plans_en  [February, 2017].  
49 TACs are the EU 's main resource management measure to set catch limits (i.e. the amount of each 
species to be caught) for most commercial fish stocks. TACs are shared between EU members i n the form of 
national quotas and are fixed on an annual or bi -annual basis (for deep -sea stocks) on the basis of scientific 
advice on the stock status from advisory bodies such as the In ternational Council for the Exploration of the Sea 
(ICES) and the Scientific, Technical and Economic Committee for Fisheries (S TECF) for the Council on TACs. 
For stocks that are shared or jointly managed with non -EU countries, the TACs are agree d with thos e non -EU 
countries. EU countries can exchange q uotas with other EU countries. Each member State is responsible for 
ensuring that the quotas are not overfished. Sanctions for not complying with quotas or other rules may be 
applied at both member States and fishing vessel level.  WT/TPR/S/357 • European Union  
 
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  4.2.4.1   The max imum sustainable yield (MSY)  
4.68.   The CFP sets the maximum sustainable yield (MSY) as the main approach to managing 
fishing practices. The MSY aims at restoring and maintaining fish stocks at levels that allow 
fishermen to catch a maximum proportion of a fish s tock without leading to long -term depletion 
and a reduction in overall yield.50 The new regulation states that the MSY exploitation rate (i.e. the 
level which gives the highest yield in the long run) should, where possible, be achieved by 201551 
and on an in cremental basis by 2020 at the latest for all stocks. According to the latest figures, in 
2014, 31 stocks out of 59 MSY -assessed stocks were fished in accordance with the MSY and, in 
2016,  various TACs were set at or below the MSY (e.g. western and central  herring, plaice, and 
main basin salmon in the Baltic Sea, and cod, haddock, saithe, nephrophs, and herring stocks in 
the North  Sea).52 
4.69.   An effective MSY approach can be implemented using fishery management instruments, 
including multi -annual plans, and TACs . Multi -annual plans under the new CFP include the target of 
fishing at MSY and a deadline for achieving this target. TACs have been managed on the basis of 
MSY since 2015.  
4.2.4.2   Discards and the landing obligation  
4.70.   The landing obligation was introduced as an imp ortant element of the new CFP in order to 
end discarding of by -catch.53 The landing obligation requires that all fish catches must be landed, 
except when subject to specific exemptions. The ban applies to all species in EU waters that are 
managed through TA Cs and quotas and, in the Mediterranean, those subject to minimum legal 
landing sizes. This new instrument leads to more reliable catch data and thus supports better 
management. It also serves as a driver for the use and improvement of more selective gear and 
fishing techniques to reduce unwanted catches.54 
4.71.   Since 1 January 2015, the new policy has been put in place on a fishery -by-fishery basis 
and it will cover all EU fisheries by January 2019, both within EU waters and in non -EU waters. 
Time frames for fis h species and geographical areas are set out in Article 15(1) of Council 
Regulation (EU) No. 1380/2013. For instance, as of January 2015, all pelagic fisheries such as for 
herring, mackerel, and swordfish and fisheries for salmon in the Baltic Sea were cov ered. Details 
of the implementation are specified in multi -annual plans or in specific discard plans when no 
multi-annual plan is in place.55 The use of undersized fish under the landing obligation is restricted 
to non -direct human consumption, such as fish  meal, pet food, pharmaceuticals, and cosmetics.56 
In order to ensure compliance by the EU with its international obligations, the landing obligation 
does not apply to fisheries covered by agreements under the International Commission for the 
Conservation o f Atlantic Tunas (ICCAT) (only for bigeye tuna, yellowfin tuna, bluefin tuna in the 
Atlantic and Mediterranean and swordfish in the Atlantic) and the Northwest Atlantic Fisheries 
Organization (NAFO) (industrial fisheries for capelin).57 
4.72.   Given that previousl y discarded fish must now be landed, the CFP provides some flexibility 
for stocks which are subject to the landing obligation. The member States may use a year -to-year 
flexibility of up to 10% of their permitted landings. Moreover, in case of catches of sp ecies that are 
subject to the landing obligation and are caught in excess of quotas of the stocks (or if there is no 
                                                
50 European Parliament and the Council  of Regulation (EU) No. 1380/2013 , Article 2 (2).  
51 At the 2002 World Summit on Sustainable Development  in September 2002, the Commission and 
member States signed up to the aim of achieving MSY for  depleted stocks by 2015 at the latest. Viewed at: 
http://eur -lex.europa.eu/legal -content/all/ALL/?uri=URISERV:l66037  [February, 2017].  
52 European Union online information, "The 2016 quotas to ensure sustainable fisheries in EU ". Viewed 
at: https://ec.europa.eu/fisheries/2016 -quotas -ensure -sustainable -fisheries -eu_en  [February, 2017] . 
53 Discarding is the practice of returning unwanted catches to the sea during the process of being 
caught. Fish are already dead or damaged; technical restrictions prohibit landing, for example due to 
undersized fish or no quota availability.  
54 Maritime A ffairs and Fisheries online magazine , "Reform of the Common Fisheries Policy: a 
sustainable future for fis h and fishermen", August 2013. Viewed at:  https://ec.europa.eu/dgs/maritimeaffairs_ 
fisheries/magazine/en/policy/reform -common -fisheries -policy -sustainable -future -fish-and-fishermen  [October 
2016].  
55 European Parliament and the Council  Regulation (EU) 1380/2013 , Article 15 (5) and (6) . 
56 European Parliament and the Council  Regulation (EU) 1380/2013 , Article 15 (11).  
57 Commission delegated regulation (EU) 2015/98 and 2016/171.  WT/TPR/S/357 • European Union  
 
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  quota), these additional catches may be deducted from the remaining quota of an another stock 
provided that they do not exceed 9% of the qu ota for that species. However, this is only applicable 
when the stock exceeding the quota is within safe biological limits.58 
4.73.   Under certain conditions, catches can be discarded after 1 January 2015. These catches are 
not counted against the relevant quota, but they must be fully recorded. The landing obligation 
does not apply to59: 
 species for which fishing is legally prohibited;  
 species for which scientific evidence demonstrates high survival rates; and  
 catches falling under de minimis  exemptions, which can  be applied to up to 5% of total 
annual catches of all species in certain cases.  
4.74.   The member States are required to ensure that all fishing activities are sufficiently 
documented in order to monitor compliance with the landing obligation. Monitoring complia nce is 
ensured through various measures, such as professional observers or closed -circuit television 
(CCTV). The European Maritime and Fisheries Fund (EMFF) requires member States to report on 
results (number of serious infringements detected and landings subject to physical controls) and 
output (number of projects on implementing the Union's control, inspections and enforcement 
system) indicators in their EMFF operational programmes and implementing reports.  
4.2.4.3   Regionalization  
4.75.   The reform has put an emphasis o n more decentralized governance by having a decision -
making process at national and regional level. The Green Paper that preceded the 2014 reform of 
the CFP recognized that different regions and communities may require specific local measures: 
"The current  decision -making framework of the CFP does not distinguish principles from 
implementation: all decisions are taken in Council at the highest political level. This has resulted in 
a focus on short -term considerations at the expense of the longer term enviro nmental, economic 
and social sustainability of European fisheries."60 
4.76.   Under the reformed CFP, the member States may submit joint recommendations for 
achieving the conservation objectives of the Union, if certain conditions are met, such as having 
consulted relevant Advisory Councils. The recommendations must be based on scientific advice 
and be compatible with relevant conservation measures and/or multi -annual plans. If these 
conditions are met, the Commission may adopt those measures by means of delegated o r 
implementing acts.61 As of February 2017, the European Commission had received joint 
recommendations by three member States (Denmark, Germany, and Sweden) for fisheries in two 
basins (North Sea and Baltic Sea).62 
4.2.4.4   Management of fishing capacity  
4.77.   The reform o f the CFP requires member States to adjust their fishing capacities to bring 
them into line with fishing opportunities. The member States are required to submit an annual 
report on the balance between the fishing capacity of their fleet and the fishing opp ortunities, 
using the guidelines prepared by the European Commission.63 If imbalances between capacity and 
opportunities are identified, action plans should be incorporated into the report. These reports are 
required to be submitted to the Commission by 31 March each year, and are made publicly 
available. A failure to report, or to implement actions, may result in a suspension or interruption of 
relevant EU financial assistance.  
                                                
58 European Parliament and the Council  Regulation (EU) 1380/2013 , Article 1 5 (8). 
59 European Parliament and the Council  Regulation (EU) 1380/2013 , Article 1 5 (4). 
60 European Commission document  COM (2009)163, 22 April 2009.  Viewed at: http://eur -
lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:52009DC0163&from=EN  [February 2017].  
61 European Parliament and the Council  Regulation (EU) 1380/2013 , Article 18.  
62 European Union  online information , "Managing fisheries ". Viewed at: 
http://ec.europa.eu/fisheries/cfp/fishing_rules_en  [February  2017]; and Commission Dele gated Regulation 
(EU) 2017/117 and 2017/118, 5 September 2016 . 
63 European Commission document  COM (2014) 545 final , 2 September 2014. Viewed at: http://eur -
lex.europa.eu/legal -content/all/ALL/?uri=COM:2014:0545:FIN  [February 2017].  WT/TPR/S/357 • European Union  
 
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  4.78.   The member States are required to comply with a fleet entry/exit scheme without 
introducing additional fishing capacity. Departures from the fishing fleet should not be supported 
by public aid unless fishing licences and authorizations are withdrawn. In addition, when fishing 
vessels are withdrawn with public aid, their corresponding fishing capacities should not be 
replaced.  
4.79.   Under the CFP reform, a member State may introduce a system for transferable fishing 
concessions (TFC), which is a way to allocate the yearly national quotas among fishermen in a 
given member State. Among EU membe rs, TFCs have been used for example in Denmark, Estonia, 
Lithuania, the Netherlands, Sweden, and the United Kingdom.64 
4.2.4.5   External policy  
4.80.   EU fishing activities outside EU waters are based on the same principles as fishing within the 
EU. Arrangements for fishin g outside the EU are to be developed through Regional Fisheries 
Management Organizations (RFMOs) and through Sustainable Fisheries Partnership Agreements 
(SFPAs).  
4.81.   The EU has actively continued to participate in two types of RFMOs: for highly migratory fish  
stocks (6 tuna RFMOs) and for other fish stocks (11 non -tuna RFMOs).65 The EU is also an active 
participant in multilateral negotiations on the law of the sea and international fisheries law under 
the United Nations Convention on the Law of the Sea (UNCLOS ), and other international 
agreements and conventions dealing with fishing such as UN FAO, and the UN Conference on 
Sustainable Development. The EU continues to cooperate with third countries and international 
organizations to fight illegal, unreported, an d unregulated (IUU) fishing worldwide.  
4.82.   Regarding arrangements with non -EU countries, the EU has two types of fishing 
agreements: "Northern Agreements" on joint management of shared stocks with Norway, Iceland 
and the Faeroe Islands (reciprocal agreements);  and SFPAs, in the context of which the EU 
provides financial and technical support in exchange for fishing rights, mainly with developing 
countries.  
4.83.   SFPAs aim at improving some aspects of earlier Fisheries Partnership Agreements, by 
stressing resource con servation and environmental sustainability in the exclusive economic zone 
(EEZ) of partner countries. For instance: European vessels must possess authorization to fish in 
waters in accordance with partnership agreements; and they may catch only surplus sto ck, which 
can be exploited in a sustainable manner (consistent with the MSY approach) based on scientific 
assessments provided by scientific committees or RFMOs' recommendations and on information 
exchanges with partner countries.66 
4.84.   There are two types of S FPAs currently in force, tuna agreements and mixed agreements. 
While tuna agreements allow EU vessels to pursue migrating tuna stocks along the shores of Africa 
and the Indian Ocean, mixed agreements provide them with access to a wide range of fish stocks 
in a partner's EEZ. The EU currently has 12 active SFPA protocols in force with non -EU countries 
(Table 4.18). Additionally, the EU has nine dormant bilateral agreements without a protocol in 
force with Comoros, Eq uatorial Guinea, Gabon, the Gambia, Kiribati, Mauritius, Micronesia, 
Mozambique, and Solomon Islands. This implies that EU vessels are not allowed to carry out 
fishing activities in waters of these countries.67 
                                                
64 According to the EU authorities, m ember States exc hange part of their quotas on a yearly basis; 
these exch anges are referred to as swaps, which are done at member State level . Tonnes exchanged represent 
close to 13% of the total TAC agreed by the Council.  
65 European Union online information, " Regional fis heries management organisations (RFMOs) ". Viewed 
at: http://ec.europa.eu/fisheries/cfp/international/rfmo_en  [February 2017 ]. 
66 European Parliament and the Council  Regulation (EU) 1380/2013 , Article 31 (4). 
67 European Union online information, "Bilateral agreements with countries outside the EU". Viewed at: 
https://ec.europa.eu/fisheries/cfp/international/agre ements_en  [February 2017].  WT/TPR/S/357 • European Union  
 
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  Table 4.18 List of fisheries agreements  
Country  Expiry date  Type  Total contribution 
from the EU budget 
per year  Earmarked for 
fisheries policy 
development  
Cabo Verde  22.12.2018  Tuna €550,000 /€500,000  €275,000/€250,000  
Cook Islands  13.10.2020  Tuna €385,0 00/€350,000  €350,000  
Côte d'Ivoire  30.6.2018  Tuna €680,000  €257,500  
Greenland  31.12.2020  Mixed  €16,099,978  €2,931,000  
Guinea -Bissau  23.11.2017  Mixed  €9,200,000  €3,000,000  
Liberia  8.12.2020  Tuna €715,000/€650,000/ 
€585,000  €357,500/€325,000/ 
€292,500  
Madagascar  31.12.2018  Tuna €1,566,250/€1,487,500  €700,000  
Mauritania  15.11.2019  Mixed  €59,125,000  €4,125,000  
Morocco  27.2.2018  Mixed  €30 million  €14 million  
São Tomé and Principe  22.5.2018  Tuna €710,000/€675,000  €325,000  
Senegal  19.11.2019  Tuna (+ hake 
component)  €1,808,000/€1,668,000  €750,000  
Seychelles  17.1.2020  Tuna €5,350,000 in 2014 to 
€5,000,000 in 2019  €2,600,000  
Comoros  Protocol expired on 31 December 2016  
Equatorial Guinea  Protocol expired on 30 June 2001  
Gabon  Protocol expired on 23 July 20 16 
The Gambia  Protocol expired on 30 June 1996  
Kiribati  No protocol in force since 16 September 2015  
Mauritius  Protocol expired on 27 January 2017  
Micronesia  No protocol in force since 25 February 2010  
Mozambique  Protocol expired on 31 January 2015  
Solomon Islands  No protocol in force since 9 October 2012  
Source:  European Commission online information, "Bilateral agreements with countries outside the EU". 
Viewed at: http://e c.europa.eu/fisheries/cfp/international/agreements_en  [February 2017].  
4.2.4.6   Aquaculture  
4.85.   Sustainable aquaculture is another focus of the new reform. Under the new CFP, the 
Commission establishes non -binding strategic guidelines on common priorities and targets for the 
development of sustainable aquaculture activities.68 These guidelines focus on four areas: 
simplifying administration procedures; securing sustainable development and growth of 
aquaculture through coordinated spatial planning; increasing the competi tiveness of EU 
aquaculture; and promoting the EU's high quality and environmental standards.69 
4.86.   In accordance with the new CFP, the member States developed multi -annual plans for the 
development of sustainable aquaculture within their territories in 2014 -15 which address  the four 
priorities identified in the Strategic Guidelines for the sustainable development of EU aquaculture 
and proposed concrete actions to address them.70 
4.2.4.7   Common Market Organisation  
4.87.   The Common Market Organisation (CMO) is an integral part o f the reformed CFP. Its general 
objective is to guarantee sustainable fisheries and to strengthen the competitiveness of the EU 
fishery and aquaculture sector. The new CMO has moved away from a price and intervention 
mechanism to market -oriented production : only storage aid has been maintained for a limited 
period (i.e. until the end of 2018) to facilitate the phasing in of production and marketing plans. In 
addition, the new CMO aims at ensuring a level playing field in the market by means of common 
market  standards (uniform requirements for seafood sold in the EU), regardless of the origin.  
                                                
68 European Parliament and the Council  Regulation (EU) 1380/2013 , Article 34 (1) . 
69 European Commission document , COM (2013) 229 final, 29 April 2013. Viewed at: https://ec.europa. 
eu/fisheries/sites/fisheries/files/docs/body/com_2013_229_en.pdf  [February 2017].  
70 European Union online information, " Multiannual national plans ". Viewed at: http://ec.europa.eu/ 
fisheries/cfp/aquaculture/multiannual -national -plans_en  [February 2017].  WT/TPR/S/357 • European Union  
 
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  4.88.   The revised CMO regulation contains new rules on consumer information for fishery and 
aquaculture products. The following information must accompany the products covere d by this 
part of the regulation71: 
 the commercial designation and scientific name of the species;  
 whether a product was caught at sea, in freshwater, or farmed;  
 the catch or production area, and the fishing gear used; and  
 whether a product has been defrost ed, and the date of minimum durability, where 
appropriate.  
4.89.   Additional information may be provided voluntarily such as the date of catch or landing, 
information on environmental, social or ethical matters, production techniques and nutritional 
content. This  voluntary information must be clear, non -ambiguous and verifiable and may not 
mislead the consumer.  
4.90.   In addition, the Commission has set up the European Market Observatory for Fishery and 
Aquaculture Products (EUMOFA) for the purpose of strengthening marke t transparency and 
efficiency, to meet the new mandate on market intelligence as defined in Article 42 of the CMO 
Regulation (No. 1379/2013). This tool is intended to assist stakeholders, including producers, in 
obtaining economic knowledge of fish markets . Information (e.g. the volume, value and price of 
fishery and aquaculture products) is made publicly available on EUMOFA website: www.eumofa.eu . 
4.2.4.8   Science and data collection  
4.91.   The newly reformed CFP requires member States  to increase data collection and to share 
information. Data should be collected covering biological, environmental, technical, and socio -
economic issues for fisheries management in order to carry out the ecosystem -based approach in 
an effective manner.72 Every year each member State submits a report on their national data 
collection programmes, which are made publicly available.73 If a member State fails to carry out 
data collection and sharing in a timely manner, it may face a suspension or interruption of f inancial 
assistance.74 
4.92.   The acquisition and management of such data are eligible for funding through the European 
Maritime and Fisheries Fund (EMFF).  
4.2.4.9   Structural support  
4.93.   On 15 May 2014, the European Maritime and Fisheries Fund (EMFF) was adopted and 
applied r etroactively from 1 January 2014. It replaced the European Fisheries Fund (EFF), which 
had been the structural support for the fisheries and aquaculture sector for the period 2007 -2013.  
4.94.   The EMFF has a total budget of €6.4 billion from 2014 to 2020, of which €5.7  billion are 
managed under shared management and allocated to the member States. €647 million are 
managed by the Commission for measures concerning the Integrated Maritime Policy, control and 
data collection, market intelligence, advisory councils, communication activities and voluntary 
contributions to international organizations. Each member State is allocated a share of the total 
budget, based on a number of criteria related to t he size of its fishing industry established in 
accordance with Article 16 of the EMFF Regulation (Regulation No. 508/2014). Among the EU 
member States, Spain is the largest recipient of the funding (20% of the total EMFF), followed by 
France (10.2%), and I taly (9.3%).75 The member States can decide which measures covered by 
the EMFF to implement, based on their own operational programmes (discussed with and approved 
                                                
71 European Parliament and the Council  Regulation (EU) 1379/2013, Article 35; and European 
Commission online infor mation, " Consumer information ". Viewed at: 
http://ec.europa.eu/fisheries/cfp/market/consumer -information_en  [February 2017].  
72 European Parliament and the Council  Regulation (EU) 1380/2013, Article 25 (2).  
73 European Parliament and the Council  Regulation (EU) 1380/2013, Article 25 (3); and Commission 
Implementing Decision (EU) 2016/1701 , August 2016 . 
74 European Parliament and the Council  Regulation (EU) 1 380/2013 , Article 25 (7). 
75 European Union (2016), Facts and figures on the Common Fisheries Policy  – 2016 Edition , page 52. 
Viewed at: https://ec.europa.eu/fisheries/sites/fisheries/files/d ocs/body/pcp_en.pdf  [February  2017].  WT/TPR/S/357 • European Union  
 
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  by the Commission) setting out their priorities and the relevant targets.76 As a general condi tion, 
the pursuit of the objectives of the EMFF shall not result in an increase in fishing capacity.  
4.95.   The primary purpose of the EMFF is to contribute to the objectives of the CFP:  
 promoting competitive, environmentally sustainable, economically viable and socially 
responsible fisheries and aquaculture;  
 fostering the implementation of the CFP;  
 promoting a balanced and inclusive territorial development of fisheries and aquaculture 
areas; and  
 fostering the development and implementation of the Union's Integr ated Maritime Policy in a 
manner complementary to cohesion policy and to the CFP.  
4.96.   In addition to the EMFF, the member States may provide state aid to the fisheries and 
aquaculture sector, subject to the specific rules on state aid and specific guidelines.77 De minimis  
state aid cannot exceed €30,000 per beneficiary over three years and cannot exceed 2.5% of the 
annual turnover on fisheries output per member State. Furthermore, certain types of subsidies 
may be provided to small and medium -sized enterprises f or projects reflecting the objectives of 
the EMFF and with eligible costs that do not exceed €2  million or if the amount of aid does not 
exceed €1  million per beneficiary per year, in accordance with Article 2 of the Fisheries Block 
Exemption Regulation.78 Beyond the de minimis  and block exempted aid, each member State must 
notify any state aid scheme to the Commission, declaring that it complies with the TFEU before it 
can be implemented.79 
4.97.   According to the OECD, in 2013 the fisheries support estimate for th e EU was €353 million, 
of which: more than half was for general service support, such as infrastructure, management of 
resources, and capacity building; and the reminder went towards individual fishermen for certain 
payments such as for the purchase of inp uts. However, data were not available for all EU member 
States.80 
4.98.   The EU budget for the fisheries and aquaculture sector averaged €790 million per year for 
2012-2015 (€704 in 2012 and €916 in 2015). Over 80% of the €916 million budgeted for 2015 
corresponde d to structural investment funding of the fisheries and aquaculture sector (EFF and 
EMFF), and the remainder was for the compulsory contributions to RFMOs, other international 
organizations (including FAO), and SFPAs. Less than half of that budget was sche duled for support 
to the catch subsector. Other support included programmes related to control and data collection 
activities in support of the CFP,  aquaculture, processing, the sustainable development of fisheries 
and aquaculture dependent areas, the deve lopment of maritime policy as well as for contributions 
to international organizations, technical cooperation, and other headings such as market 
intelligence.81 
4.3  Services  
4.3.1   Audiovisual services  
4.99.   Audiovisual services, defined as motion picture, video, and televi sion programme 
production, and programming and broadcasting activities, constitute  a significant services sector 
for the EU economy, as evidenced by the figures contained in Table 4.19 below.  
                                                
76 European Union online information, " EMFF – country files : Operational Programmes 2014 -2020". 
Viewed at: http://ec.europa.eu/fisheries/cfp/emff/co untry -files_en  [February  2017].  
77 Communication from the Commission – Guidelines for the examination of State aid to the fishery and 
aquaculture sector, OJ C217, 2 July 2015.  
78 Commission Regulation  (EU) No . 1388/2014 . 
79 Council Regulation (EU) 2015/1589 , Article 3; and Commission Regulation 794/2004, Article 2.  
80 Calculations were based on OECD Stat on Fisheries Support Estimate  (FSE). Viewed at: 
https://stats.oecd.org/Index.aspx?DataS etCode=FISH_GFT#  [February 2017]. Data were available for 11 
countries: Belgium, Denmark, Estonia, France, Greece, Netherlands, Portugal, Slovenia, Spain, Sweden, and  
United Kingdom.  
81 European Union Budgets. Budget online. Viewed at: http://eur -lex.europa.eu/budget/www/index -
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  Table 4.19 Main e conomic indicators of the audiovisual services sectora 
  2013  2014  2015  
Gross value added and employment     
   Gross value added at current prices (€ billion)  70.1 .. .. 
        % of value -added of total services  0.8 .. .. 
        % of value -added of t otal economy  0.6 .. .. 
   Total employment audio  (in 1,000)  770.5  791.7  .. 
        % in total employment in services  0.5 0.5 .. 
        % in total employment  0.3 0.3 .. 
Tradea    
   Trade balance (€ billion)  0.95 -0.66 0.73 
        Exports (€ billion ) 5.6 5.0 4.5 
           % of extra -EU 28's total service exports  0.8 0.6 0.5 
        Imports (€ billion)  4.7 5.6 3.8 
           % of extra -EU 28's total service imports  0.9 0.9 0.6 
FDI    
   Inward (€ billion)     
      Financial transactions  0.5 -1.4 .. 
      Position  6.0 4.1 .. 
   Inward (% of GDP)    .. 
      Financial transactions  0.004  -0.01 .. 
      Position  0.04 0.03 .. 
   Outward (€ billion)     
      Financial transactions  -6.1 0.5 .. 
      Position  21.0 19.9 .. 
   Outward (% of GDP)     
      Financial transactions  -0.05 0.004  .. 
      Position  0.4 0.3 .. 
Foreign affiliates sales/turnover     
   Inward: € in billion  18.3 .. .. 
      % of total inward foreign affiliates  0.6 .. .. 
   Outward: € in billion  8.3 .. .. 
      % of total o utward foreign affiliates  0.2 .. .. 
.. Not available.  
 
a Classification code J59_J60 from NACE Rev.2 – Statistical classification of economic activities in 
 the European Community.  
Source:  WTO Secretariat calculations, based on Eurostat database [January 2017].  
4.100.   The regulatory regime of audiovisual services in the EU was described in detail in the last 
TPR report82 and has not changed substantially since. However, on 25 May 2016, the Commission 
adopted a new legislative proposal amending the Audiovisual Medi a Services Directive (AVMSD)83 
in order to adapt it to new realities.84 
4.101.   The main aspects requiring such an adaptation in the view of the Commission85 are: the 
multiplication of the type of broadcasters (traditional TV broadcasters, video -on-demand (VOD) 
providers and video -sharing platforms), the decreasing average TV viewing time especially among 
young people, the increasing share of internet video in internet traffic (forecasted to increase from 
64% in 2014 to 80% by 2019), the low share of revenues invested  by on -demand service 
providers in original programing (1%) as compared to traditional TV broadcasters (20%), the 
                                                
82 Document TPR/S/317 dated 18 May 2015, pp. 144 -154. 
83 Directive (EU) No. 2010/13 of 10 March 2010. Viewed at: http://eur -lex.europa.eu/legal -content/EN/ 
TXT/PDF/?uri=CELEX:32010L0013& from=EN . 
84 Document Com (2016) 0287 final. Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/? 
uri=CELEX:52016PC0287&from=EN . 
85 European Commission online information, " Revision of the Audiovisual Media Services Directive 
(AVMSD) ". Viewed at:  https://ec.europa.eu/digital -single -market/en/revision -audiovisual -media -services -
directive -avmsd . WT/TPR/S/357 • European Union  
 
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  fragmented rules across the EU faced by the industry regarding the compulsory share of European 
content, the fact that 31% of video -on-demand (VOD) services available in one EU member State 
are established in another member State, and the need for more independence of the regulators 
from government and industry.  
4.102.   The first main element of this proposal is the reinforcement of the country of origi n (COO) 
principle. This principle will be maintained and facilitated by: (i) simplifying the rules determining  
which country has jurisdiction over a provider, (ii) requiring member States to provide information 
regarding which providers are under their jur isdiction and maintaining an up -to-date database to 
ensure transparency, and (iii) clarifying cooperation procedures between member States regarding 
permissible limitations to COO.  
4.103.   The second element of the proposal is enhanced promotion of European works by: 
(i) allowing member States to impose financial contributions on providers of on -demand services 
established in other member States (but only on the turnover generated in the imposing country), 
and (ii) requiring on -demand players to promote European co ntent to a limited level through a 
minimum quota obligation (20% share of the audiovisual offer of their catalogues) and an 
obligation to give prominence to European works in their catalogues. An exemption from these 
requirements for low turnover companies , thematic services, and small and micro enterprises has 
been proposed.  
4.104.   The third element is enshrining t he independence of audiovisual regulators in EU law by 
ensuring that they are legally distinct and functionally independent from the industry and 
gover nment (i.e. they do not seek nor take instructions), operate in a transparent and accountable 
manner set out by law, and have sufficient powers. In addition, the role of the European 
Regulators Group for Audiovisual Media Services (ERGA) would be set out i n the Directive. ERGA 
would be given an advisory role in assessing EU co -regulatory codes and in the procedures 
derogating from the country of origin.  
4.105.   Finally, the proposal also contains more flexible provisions regarding television advertising 
and rules o n the prohibition of hate speech and on the protection of minors.  
4.3.2   E–commerce in the Digital Single Market  
4.106.   The regulatory regime of e -commerce within the EU has been described in detail, as a sub -
segment of distribution services, in the last TPR report86 and has not substantially changed since. 
However, in the framework of its Digital Single Market  Strategy (DSM)87, the European 
Commission has presented 16 legislative and non -legislative a ctions. These are ongoing initiatives 
which are subject to the ordinary legislative procedure involving both the Council and the 
European Parliament and therefore their exact outcome cannot be foreseen.  
4.107.   Among the DSM proposals, the European Commission prop osed two legislative packages in 
December 2015 and in May 2016 , aimed at boosting e -commerce by simplifying, clarifying and 
harmonizing the EU's regulatory framework. It has also launched an e -commerce sector enquiry 
and has made proposals to reduce the ad ministrative burden on businesses arising from the 
different VAT regimes. It plans to submit further proposals on single electronic registration and 
payment, and a common VAT threshold.  
4.108.   The Commission considers that the full potential of online sales is no t yet well exploited in 
the EU: in 2015, only 10% of EU wholesalers and retailers sold online to other EU countries, while 
almost three times as many (27%) did so within their own country. Similarly, in 2016, only 18% of 
consumers purchased online from ano ther EU country, while almost three times as many (49%) 
did so from their own country.88 
                                                
86 Document WT/TPR/S/317 dated 18 May 2015, pp. 154 -159 for distrib ution as a whole, and p. 158 in 
particular for distance selling and e -trade.  
87 European Commission online information, "Digital Single Market". Viewed at: https://ec.europ a.eu/ 
digital -single -market/en/digital -single -market . 
88 This could be explained notably by a mix of factors such as : a low level of consumer confidence in 
cross-border offers stemming from a gap in EU legislation in the area of consumer protection related  to 
defective digital content  and additional costs incurred by traders when selling cross -border due to  the WT/TPR/S/357 • European Union  
 
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  4.109.   If, for instance, the barriers related to contract law were lifted, it is estimated that around 
122,000 more businesses would sell online across borders. Cross -border E U trade could increase 
by around €1 billion, and the total number of consumers buying online from other EU countries 
could reach up to 70 million. This would open up new markets, especially for small and medium -
sized enterprises (SMEs), increase competitio n, and contribute to economic growth – lower 
consumer prices are expected to boost consumption  in the EU by €18 billion  and EU GDP  is 
expected to increase by €4 billion from its current level.89 
4.110.   The first legislative package is composed of proposals for two  directives, one on the supply 
of digital content (e.g. streaming music)90 and one on the online sale of goods91 (e.g. buying 
clothes online). The two proposals are meant to tackle the main obstacles to cross -border e -
commerce in the EU: legal fragmentation in the area of consumer contract law and resulting high 
costs for businesses – especially SMEs, and low consumer trust when buying online from another 
country.  
4.111.   Measures contained in the online sales of goods proposal include a clear -cut, harmonized 
set of consumer rights92 vis-à-vis defective goods combined with a reversal of the burden of proof 
and the introduction of a two-year guarantee period . For example, if a consumer discovers today 
that a product he/she purchased online more than 6 months ago is defe ctive and asks the seller to 
repair or replace it, he/she may be asked to prove that this defect existed at the time of delivery. 
Under the proposed new rules, throughout the two -year guarantee period, the consumer will be 
able to ask for a remedy without having to prove that the defect existed at the time of delivery.  
4.112.   The proposal on the supply of digital content sets clear and specific consumer rights for  
digital content . For instance, a consumer who downloads a game that does not work properly may 
curren tly receive only a discount on downloading other games in the future as compensation. 
Under the proposed directive, consumers will be able to request that such problems be fixed and, 
if this is not feasible or not done properly, obtain a price reduction or  terminate the contract and 
be fully reimbursed.  
4.113.   These proposals aim at allowing businesses to supply digital content and sell goods online 
to consumers throughout the EU based on the same set of contract rules. Businesses now face an 
additional one -off co st of €9,000 to adapt to the national contract law of each new member State 
they wish to sell to. With the new EU -wide rules, a business could save up to €243,000 if it wishes 
to sell to all 27 other EU countries.  
4.114.    The second legislative package proposed b y the Commission in May 2016 is composed of 
three draft regulations and one piece of guidance material, namely: one regulation aimed at 
addressing unjustified geo -blocking and other forms of discrimination on the grounds of 
nationality, residence, or estab lishment93; one regulation on cross -border parcel delivery services 
aimed at increasing the transparency of prices and improving regulatory oversight94; one 
                                                                                                                                                  
fragmentation of the national rules in this area as well as in copyright protection, as well as by insufficient 
market transparency in i ntra-EU cros s-border parcel transport leading to higher prices for cross -border 
transport and for SME vendors . 
89 European Commission press release. " Commission proposes modern digital contract rules to simplify 
and promote access to digital content and online sales a cross the EU ". Viewed at:  http://europa.eu/rapid/ 
press -release_IP -15-6264_en.htm . 
90 Document Com (2015)  634 final dated 9 D ecember 2015 , Proposal for a directive on certain aspects 
concerning contracts for the supply of digital content . Viewed at : http://eur -lex.europa.eu/legal -content/EN/ 
TXT/PDF/?uri=CELEX:52015PC0634&from=EN . 
91 Docume nt Com( 2015) 635 final dated 9 December 2015, Proposal for a directive  on certain aspects 
concerning contracts for the online and other distance sales of goods . Viewed at: http://eur -lex.europa.eu/ 
legal-content/EN/TXT/PDF/?uri=CELEX:52015PC0635&from=EN . 
92 i.e. a right to have the defective goods repaired, replaced, a right to price reduction or to terminate 
the contract.  
93 Document COM(2016) 289 final, dated 25  May 2016, Proposal for a regulation on addressing geo -
blocking and other forms of discrimination based on customers' nationality, place of residence or place of 
establishment within the internal market and amending Regulation (EC) No . 2006/2004 and Direct ive 
2009/22/EC . Viewed at: http://ec.europa.eu/DocsRoom/documents/16742 . 
94 Docum ent COM(2016) 285 final, dated 25 May 2 015, Proposal for a regulation on cross -border parcel 
delivery services . Viewed at : http://ec.europa.eu/DocsRoom/documents/16805 . WT/TPR/S/357 • European Union  
 
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  regulation designed to strengthen enforcement of consumers' rights95; and finally guidance 
material to  clarify, among others, what qualifies as an unfair commercial practice in business -to-
consumer (B2C) transactions in the digital world.96 
4.115.   The proposed regulation on geo -blocking and other geographically based restrictions 
undermining online shopping and cr oss-border sales addresses the problem of customers not being 
able to buy goods and services from traders located in a different member State, or being 
discriminated against in terms of prices or sales conditions compared to nationals. The problem 
equally affects consumers and businesses as end users of products and services, and exists both in 
the online environment and in physical -world situations. The draft regulation on geo -blocking aims 
to ensure that customers seeking to buy products and services in a nother EU country, either online 
or in person, are not discriminated against in terms of access to prices, sales or payment 
conditions in view of their nationality, residence or place of establishment. This is achieved by 
identifying specific situations wh ere no significant additional burden on companies derives from 
serving foreign customers and therefore no differential treatment can be justified; accordingly, the 
regulation does not impose an obligation to deliver across the EU and actively sell in other  member 
States.  
4.116.   As part of the same package, the European Commission also adopted an initial 
Communication on Online Platforms in which it conducted a comprehensive assessment of the role 
of online platforms, formulated the Commission's policy approach to online platforms, and 
identified areas where action or further assessment may be necessary. The Commission is also 
carrying out a targeted fact -finding exercise on B2B practices in the online platforms sphere. It is, 
for example, analysing whether certain business users of online platforms are experiencing unfair 
treatment by platforms. The Commission is also, in parallel, looking at measures to render the 
fight against illegal content online more effective, without intermediaries losing the liability 
exemp tion under the e -Commerce Directive. The policy approach is, in this regard, to ensure a 
balanced development of the platform -business model, by maintaining healthy ecosystems that 
work for all actors, including those active in e -commerce.  
4.117.   The draft regula tion on cross -border parcel delivery services is aimed at increasing price 
transparency and regulatory oversight of cross -border parcel delivery services so that consumers 
and retailers can benefit from more affordable deliveries and return options even to  and from 
peripheral regions. Prices charged by postal operators to deliver a small parcel to another member 
State are on average 3 to 5 times higher than domestic prices, without a clear correlation to the 
actual costs . The Commission is not proposing a c ap on delivery prices. Price regulation is only a 
means of last resort, where competition does not bring satisfactory results. The Commission will 
take stock of progress made in 2019 and assess if further measures are necessary.  The regulation 
would give n ational postal regulators the data they need to monitor cross -border markets and 
check the affordability and cost -orientation of prices. It would also encourage competition by 
requiring transparent and non -discriminatory third -party access to cross -border parcel delivery 
services and infrastructure for those parcel delivery service providers who want to expand cross -
border. They would be able to benefit from economies of scale by using the universal service 
providers' (existing) cross -border networks which should encourage new entrants or existing 
(domestic) providers to expand, creating in turn more competition. The Commission will publish 
the prices of universal service providers to increase peer competition and tariff transparency.  
4.118.    The draft regulation o n cooperation between national authorities responsible for the 
enforcement of consumer law aims to  reform the Consumer Protection Cooperation 
(CPC)  Regulation, which governs the powers of enforcement authorities and the manner in which 
they can cooperate.  The new regulation would give more powers to national authorities to better 
enforce consumer rights. They would be able to check if websites geo -block consumers or offer 
after-sales conditions not respecting EU rules (e.g. withdrawal rights); to order the immediate 
take-down of websites hosting scams; and to request information from domain registrars and 
banks to detect the identity of the responsible trader. In case of EU -wide breaches of consumer 
                                                
95 Document COM  (2016) 283  final, dated 25 M ay 2016, Proposal for a regulation on cooperation 
between national authorities responsible for the  enforcement of consumer protection laws. Viewed at: 
http://ec.europa. eu/consumers/consumer_rights/unfair -trade/docs/cpc -revision -proposal_en.pdf . 
96 Document SWD  (2016) 163 final, dated 25 may 2016, Commission staff working document guidance 
on the implementation/application of Directive 2005/29/EC on unfair commercial practices . Viewed at : 
http://ec.europa.eu/justice/consumer -marketing/files/ucp_guidance_en.pdf . WT/TPR/S/357 • European Union  
 
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  rights, the Commission would be able to coordinate common a ctions with national enforcement 
authorities to stop these practices. It would ensure swifter protection of consumers, while saving 
time and resources for member States and businesses.  
4.119.   The updated guidance material on unfair commercial practices clarifies the application of 
the Unfair Commercial Practices Directive. For instance, any online platform that qualifies as a 
"trader" and promotes or sells goods, services, or digital content to consumers must make sure 
that its own commercial practices fully compl y with EU consumer law. Platforms must state clearly 
that rules on unfair commercial practices do not apply to private persons selling goods, and search 
engines would be required to clearly distinguish paid placements from natural search results. The 
revised guidance also incorporates two sets of self -regulatory principles agreed among 
stakeholders: one will help comparison tools better comply with the Directive and the other will 
assist in the enforcement of the unfair commercial practices rules against mi sleading and 
unfounded environmental claims.  
4.120.   During the period under review, the European Commission also launched an e -commerce 
sector enquiry aimed at obtaining an overview of the prevailing market trends, gathering evidence 
on potential barriers to comp etition linked to the growth of e -commerce, and understanding the 
prevalence of certain, potentially restrictive, business practices and the underlying rationale for 
their use. The results are not expected to be available by the EU TPR meetings.  
4.121.   Finally, e -commerce related proposals concerning a modern and more European copyright 
framework were adopted on 9 December 2015 (see Section 3.3.7 on intellectual property rights).  
4.3.3   Financial services  
4.3.3.1   Market size and structure  
4.122.   Tables 4.20 to 4.25 list the main indica tors of the three sub -segments of financial services: 
banking, insurance, and securities at EU level.  
4.3.3.1.1   Banking  
Table 4.20 Consolidated banking indicators, 2014 and 2015  
 2014  2015  
Number of credit institutions , by type of unit    
Stand -alone credit institutions  3,971  3,797  
Banking groups  441 449 
Number of credit institutions, by origin    
Domestic credit institutions  3,419  3,277  
Foreign -controlled subsidiaries and branches  993 969 
Total number of credit in stitutions  4,412  4,246  
 
(€ billion)  
Assets of credit institutions  2014  2015  
Domestic credit institutions, of which:  34,490.61  33,797.88  
Large  25,301.45  24,376.23  
Medium -sized 8,203.97  8,364.61  
Small  985.19  1,057.04  
Foreign -controlled subsidiaries and branches  9,180.28  8,793 .04 
As % of total  21.02  20.65  
Total assets  43,670.89  42,590.92  
 
Employment  2014  2015  
Euro area  2,020,091  2,009,591  
EU 2,888,258  2,864,106  
Source:  Information provided by the European Commission based on the ECB's SDW.  
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  Table 4.21 Performance indicators, 2014 and 2015  
(%) 
Capital adequacy 
indicators  Domestic banks  
Foreign banks  All Large  Medium -
sized  Small  
2014  2015  2014  2015  2014  2015  2014  2015  2014  2015  
Overall solvency ratio  20.55  17.51  22.95  17.68 16.55  16.99  18.47  18.24  31.81  19.15  
Tier 1 ratio  17.24  14.70  18.85  14.49  14.58  15.02  15.65  15.78  27.24  16.60  
Capital buffer  12.55  9.51 14.95  9.68 8.55 8.99 10.47  10.24  23.81  11.15  
(%) 
Non-performing 
debt instruments 
and accumulated 
impairment  Domesti c banks  Foreign banks  
Alla Large  Medium -
sized  Small  
2014  2015  2014  2015  2014  2015  2014  2015  2014  2015  
Gross non -performing 
debt instrumentsb - 4.73 4.87 3.58 7.71 7.54 3.21 2.97 5.16 3.87 
Net non -performing 
debt instrumentsc - 30.19  19.09  21.83  56.67 52.79  21.23  18.59  16.57  13.96  
Total accumulated 
impairmentd - 49.53  53.42  53.85  44.77  45.77  30.15  33.74  52.57  53.89  
a No figures available for 2014.  
b Per total gross debt instruments.  
c Per total own funds for solvency purposes.  
d Per total gross non -performing debt instruments.  
Source:  Information provided by the European Commission based on the ECB's SDW.  
4.3.3.1.2   Insurance  
Table 4.22 Main economic indicators of the insurance sector (EU level)  
Number of EU insura nces companies (2015)  3,786 (top 3 member States: Germany – 
463; United  Kingdom – 402; and Spain – 
315) 
Number of employees (2015)  985,000 (top 3 member States: Germany – 
295,000; France – 147,000; and 
United  Kingdom – 101,000)  
EU premiums as percentage of world total premiums (%)  2013: 35%; 2014: 35.5%; 2015: 32.3%  
EU total gr oss written premiums (2015, € bln)  1,207  
EU life gross written premiums (2015, € bln)  733 
EU non -life gross written premiums (2015, € bln)  347 
EU health gross written premiums (2015, € bln)  127 
EU total insurers' investment portfolio (2015, € bln)  9,897 
Source:  Information provided by the European Commission based on EIOPA, Insurance Europe.  
Table 4.23 Number of insurance companies, by type, origin and location of activity, 2015  
 Total  
Life enterprises   
1 National enterprises  745 
2 Branches of third (non -EU/EEA) countries  16 
1 + 2 Total under national supervision  761 
3 Branches of EU/EEA countries  123 
1 + 2 + 3 Total activity in the country  884 
Branches in EU/EEA countries  86 
Branches in third (non -EU/EEA) countries  5 
Non-life enterprises   
1 National enterprises  1,704  
2 Branches of third (non -EU/EEA) countries  30 
1 + 2 Total under national supervision  1,734  
3 Branches of EU/EEA countries  521 
1 + 2 + 3 Total activity in the country  2,255  
Branch es in EU/EEA countries  355 
Branches in third (non -EU/EEA) countries  33 WT/TPR/S/357 • European Union  
 
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   Total  
Composite enterprises   
1 National enterprises  216 
2 Branches of third (non -EU/EEA) countries  0 
1 + 2 Total under national supervision  216 
3 Branches of EU/EEA countries  35 
1 + 2 + 3 Total activity in the country  251 
Branches in EU/EEA countries  32 
Branches in third (non -EU/EEA) countries  15 
Reinsurance enterprises   
1 National enterprises  377 
2 Branches of third (non -EU/EEA) countries  2 
1 + 2 Total under national supervision  379 
3 Branches of EU/EEA countries  17 
1 + 2 + 3 Total activity in the country  396 
Branches in EU/EEA countries  26 
Branches in third (non -EU/EEA) countries  18 
Total   
1 National enterprises  3,042  
2 Branches of third (non -EU/EEA) countries  48 
1 + 2 To tal under national supervision  3,090  
3 Branches of EU/EEA countries  696 
1 + 2 + 3 Total activity in the country  3,786  
Branches in EU/EEA countries  523 
Branches in third (non -EU/EEA) countries  73 
Note:  Data for Luxembourg is for 2014.  
Source:  Informati on provided by the European Commission based on EIOPA.  
4.3.3.1.3   Securities  
Table 4.24 EU security market capitalization  
(€) 
 Quoted shares issued  
Total  MFIs  Non-MFI corporations  
Financial corporations 
other than MFIs  Non-financial 
corporations  
Euro area  6,665,784  912,921  479,192  5,273,671  
Non-euro area  3,056,578  - - - 
Total  9,722,362  - - - 
 
Source:  Information pro vided by the European Commission based on the ECB's SDW . Data are for October 
2016 for euro -area member States and for end -2015 for non -euro-area member States.  
 Securities other than shares issued  
Total  MFIs  
(including 
euro system)  Non-MFI corporations  General 
government  Financial 
corporations 
other than MFIs  Non-
financial 
corporations  
Euro area  16,500,074  4,200,134  3,311,356  1,176,910  7,811,6733  
Non-euro area  6,919,757  2,069,887  1,402,855  587,356  2,859,660  
Total (EU -28 fixed 
composition)  23,419, 831 6,270,021  4,714,211  1,764,266  10,671,333  
Note:  MFI: monetary financial institution.  
Source:  Information provided by the European Commission based on the ECB's SDW. Data are for October 
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  Table 4.25 Total assets under management by pension funds, 2015 -2016  
(€ million)  
 2016 (Q2)  2016 (Q1)  2015 (Q2)  
Euro area  2,376,018  2,310,126  2,219,622  
EUa - - 3,622,720  
a Figures for the EU for 2016 were not yet available. The figure for 2015 refers to end of year.  
Source:  Information provided by the European Commission  based on the ECB's SDW and EIOPA.  
4.3.3.2   Regulatory developments  
4.123.   The financial reform undertaken in the aftermath of the 2008 -2009 financial crisis is about 
to reach the final stages of its completion. Most of the regulatory packages proposed by the 
Commission h ad already been adopted by the time of the last report in May 2015. Still, some 
additional pieces of legislation have been adopted during the period under review while others 
continue to be discussed. The Commission still groups this legislation or draft l egislation into three 
"pillars": those aimed at building new rules for the global financial system; those aimed at 
establishing a safe, responsible and growth -enhancing financial sector in Europe; and those aimed 
at completing the banking union to strength en the euro. However, the two legislative packages 
composing the third pillar (respectively the single supervision mechanism and the single resolution 
mechanism) were both adopted before the period under review and dealt with in the previous 
report. The th ird pillar is therefore completed.  
4.124.   Regarding the first pillar, only one new regulation was adopted during the period under 
review, namely Regulation (EU) 2015/2365 of the EU parliament and of the Council on 
Transparency of Securities Financing Transactions  (SFTR).97 This new regulation, proposed by the 
European Commission in January 2014, improves the transparency of securities financing 
transactions in the shadow banking sector. These new rules also help identify the risks associated 
with these financial tr ansactions, as well as their magnitude. The Regulation enhances 
transparency in three ways: first, it introduces the reporting of all securities financing transactions 
(SFT), except those concluded with central banks, to central databases known as trade 
repositories. Depending on their category, firms should start reporting at different stages from 12 
to 21 months after the entry into force of the relevant regulatory technical standards. Second, 
investment funds will be required to start disclosing informat ion on the use of SFTs and total 
return swaps to investors in their regular reports and in their pre -contractual documents from the 
entry into force of the regulation, while the existing funds will have 18 months to amend them; 
and finally, the regulation introduces some minimum transparency conditions that should be met 
on the reuse of collateral, such as disclosure of the risks and the need to grant prior consent. 
These will apply 6 months after the entry into force of the regulation.  
4.125.   Second, a Regulation  on Money Market Funds98 has been agreed by co -legislators and is 
expected to be published in the Official Journal around April 2017. This regulation covers money 
market funds (MMFs) that are domiciled or sold in Europe and aims to improve their liquidity 
profile and stability. As to liquidity, MMFs that offer constant redemption or purchase price 
(constant net asset value (CNAV) MMFs and a new model of low volatility net asset value (LVNAV) 
MMF) would be required to have at least 10% of their portfolio in a ssets that mature within a day 
and another 30% that mature within a week. MMFs that offer variable price (VNAV MMFs) are 
required to hold 7.5% of daily maturing assets and 15% of weekly maturing assets. This 
requirement is there to allow the MMFs to repay investors who want to withdraw funds at short 
notice. In order to avoid a single issuer bearing undue weight in the net asset value (NAV) of an 
MMF, exposure to a single issuer would be capped at 5% of the CNAV MMF's portfolio (in value 
terms). For VNAV MM Fs, a single issuer could account for 10% of the portfolio. It establishes 
common rules to ensure that the fund manager has a good understanding of investor behaviour, 
and to provide investors and supervisors with adequate information. The regulation prohi bits 
sponsor support from third parties, including banks.   
                                                
97 Viewed at:  http://eur -lex.europa.eu/legal -content/EN/TXT/?uri=CELE X:32015R2365 . 
98 COM/2013/0615 final – 2013/0306 (COD) . Viewed at : http://eur -lex.europa.eu/legal -content/EN/ALL/ 
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  4.126.   The second, still un -adopted, proposal of this pillar is a proposal for a regulation on 
structural measures improving the resilience of EU credit institutions.99 The goal of this proposal is 
to stop  the biggest and most complex banks from engaging in the risky activity of proprietary 
trading. The new rules would also give supervisors the power to require those banks to separate 
certain potentially risky trading activities from their deposit -taking bu siness if the pursuit of such 
activities compromises financial stability.  
4.127.   In order to achieve this goal, the draft regulation proposes to first ban proprietary trading 
in financial instruments and commodities, i.e. trading on own account for the sole purpo se of 
making profit for the bank. This activity entails many risks but no tangible benefits for the bank's 
clients or the wider economy. Second, the proposal would grant supervisors the power and, in 
certain instances, the obligation to require the transfe r of other high -risk trading activities (such as 
market -making, complex derivatives and securitization operations) to separate legal trading 
entities within the group ("subsidiarization"). This aims to avoid the risk that banks would 
circumvent the ban on the prohibition of certain trading activities by engaging in hidden 
proprietary trading activities which become too significant or highly leveraged and potentially put 
the whole bank and wider financial system at risk. Banks will have the possibility of no t separating 
activities if they can show to the satisfaction of their supervisor that the risks generated are 
mitigated by other means. Third, the new regulation would provide rules on the economic, legal, 
governance, and operational links between the sepa rated trading entity and the rest of the 
banking group.  
4.128.   Regarding the second pillar, seven proposals were adopted by the Commission during the 
period under review  relating to measures aimed at establishing a safe, responsible and growth -
enhancing financial  sector in Europe.  
4.129.    The first such adopted proposal is the Directive (EU) 2016/97 of the European Parliament 
and of the Council of 20  January 2016 on insurance distribution (so -called IDD/IMD).  The Directive 
regulates the way insurance products are sold. I t lays down the information that should be given 
to consumers before they sign an insurance contract, it imposes certain conduct of business and 
transparency rules on distributors, it clarifies procedures and rules for cross -border business, and 
it contain s rules for the supervision and sanctioning of insurance distributors in case they breach 
the provisions of the Directive. The rules apply to the sale of all insurance products. However, 
more prescriptive rules apply to those distributors that sell insuran ce products that have an 
investment element such as unit -linked life insurance contracts.  
4.130.   The second proposal adopted during the period under review is the Directive (EU) 
2015/2366 of the European Parliament and of the Council of 25 November 2015 on paymen t 
services in the internal market (so -called PSD2), aimed at enhancing consumer protection, 
promoting innovation and improving the security of payment services. New rules include:  
 Introduction of strict security requirements for the initiation and processi ng of electronic 
payments and the protection of consumers' financial data;  
 
 Opening the EU payment market for companies offering consumer or business -oriented 
payment services based on access to information about the payment account – the so -called 
"paymen t initiation services providers" and "account information services providers";  
 
 Enhancing consumers' rights in numerous areas, including reducing the liability for non -
authorized payments, introducing an unconditional ("no questions asked") refund right fo r 
direct debits in euros; and  
 
 Prohibition of surcharging (additional charges for the right to pay, e.g. with a card) 
regardless of whether the payment instrument is used in shops or online.  
                                                
99 COM/201 4/043 final – 2014/0020  (COD). Vie wed at : http://eur -lex.europa.eu/legal -content/EN/ALL/ 
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  4.131.   The third element of the second pillar adopted during the period under review is Regulation 
EU 2015/751 of 29 April 2015 on interchange fees for card -based payment transactions.100 It is 
aimed at promoting competition in the payment card market by capping interchange fees, 
increasing transparency for retailers and address ing certain business practices of schemes and 
banks. This regulation provides that:  
 Interchange fees for consumer debit cards are capped at 0.2% and for consumer 
credit cards at 0.3% of the value of the transaction;  
 Territorial restrictions in licence agre ements or scheme rules for issuing cards or 
acquiring transactions are prohibited;  
 Payment card schemes and processing entities need to be independent and schemes 
should not favour their own subsidiaries over competing processing entities;  
 Consumers and r etailers can steer towards the most efficient payment type; and  
 Retailers are offered transparency about the level of fees they need to pay to their 
payment services provider.  
4.132.   The fourth adopted proposal of the second pillar is the Directive (EU) 2015/849 of the 
European Parliament and of the Council of 20 May 2015 on the prevention of the use of the 
financial system for the purposes of money laundering or terrorist financing amending Regulation 
(EU) No. 648/2012 of the European Parliament and of the Counci l, and repealing Directive 
2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC 
("the 4th Anti-Money Laundering Directive"). The fourth adopted proposal is Regulation (EU) 
2015/847 of the European Parliament and of t he Council of 20 May 2015 on information 
accompanying transfers of funds and repealing Regulation (EC) No. 1781/2006.  
4.133.   In addition, in July 2016, the Commission made a proposal for a Directive of the European 
Parliament and of the Council amending Directive  (EU) 2015/849 on the prevention of the use of 
the financial system for the purpose of money laundering or terrorist financing and amending 
Directive 2009/101/EC.101 The proposal contains a provision that stipulates that EU member States 
shall ensure that Un ion credit institutions and financial institutions acting as acquirers only accept 
payments carried out with prepaid cards issued in third countries where such cards meet the 
requirements as provided in the Directive (Article 12(3) of the proposal). The pr oposal also covers 
issues on other terrorist financing risks (virtual currencies, financial intelligence units' access to 
information, centralized bank account registers, enhanced customer due diligence towards high -
risk third countries). In addition, the Commission also proposes to further enhance accessibility of 
information on beneficial ownership for legal entities and legal arrangements.  
4.134.   The fifth adopted element of the second pillar is regulation on long -term investment 
funds.102 It provides for a new i nvestment fund framework designed for investors who wish to put 
money into companies and projects for the long -term. The creation of clearly defined European 
long-term investment funds (ELTIFs) will help tackle barriers to long -term investment in, for 
exam ple, infrastructure projects, thereby stimulating employment and economic growth. ELTIFs 
only focus on alternative investments that fall within a defined category of long -term asset classes 
whose successful development requires a long -term commitment from investors.  
4.135.   The sixth adopted element of the second pillar is regulation on financial benchmarks such 
as LIBOR and EURIBOR.103 This regulation is aimed at restoring confidence in the integrity of 
                                                
100 Regulation EU 2015/751 of 29 April 2015 on interchange fees for card-based pay ment transactions  – 
OJ L123/1 of 19.5.2015 . Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX: 
32015R0751&from=EN   
101 COM (2016) 450 final  of 5 July 2016. Viewed at : http://eur -lex.europa.eu/legal -content/EN/TXT/PDF 
/?uri=CELEX:52016PC0450&qid=1484227555181&from=EN . 
102 Regulatio n (EU) 2015/760 of the European Parliament and of the Council of 29 April 2015 on 
European long -term investment funds . Viewed at: http://eur -lex.europa.eu/legal -content/E N/TXT/?uri= 
CELEX%3A32015R0760 . 
103 Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices 
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  benchmarks. A benchmark is an index (statistical measure), calc ulated from a representative set 
of underlying data, that is used as a reference price for a financial instrument or financial contract 
or to measure the performance of an investment fund.  
4.136.   Finally, the seventh adopted element of the second pillar is a dire ctive on revised rules for 
occupational pension funds.104 The new rules aim to: first, ensure that occupational pensions are 
sound and better protect pension scheme members and beneficiaries; second, better inform 
members and beneficiaries about their entitl ements; third, remove obstacles faced by occupational 
pension funds operating across borders; and fourth, encourage occupational pension funds to 
invest long -term in economic activities that enhance growth, the environment and employment. 
EU countries must  transpose the new rules into their national law by 13 January 2019.  
4.137.   Negotiations on a Financial Transaction Tax are still ongoing. The 10 participating member 
States in the enhanced cooperation are continuing discussions to find a compromise on the design  
of the common Financial Transaction Tax.105 
4.3.4   Transport services  
4.138.   The single market for transport services was achieved in the nineties, with the notable 
exceptions of port services and railways, and its regulatory framework was stabilized and re -
casted during  the first decade of the millennium. It has remained largely unchanged since. 
However, in the context of the Commission's Better Regulation policy, the regulatory framework is 
periodically evaluated in so -called "regulatory fitness checks" or "REFIT" exerc ises (also entailing 
public consultations). If it is found that the regulatory framework requires updating or 
modification, additional legislative proposals will need to be prepared, subject to appropriate 
impact assessment.  
4.139.   Since the last TPR report deali ng with transport services in 2013106, the most notable 
developments have been the adoption of the fourth railway package liberalizing domestic railways 
and the regulation establishing the freedom to provide port services and introducing new 
transparency rul es at the end of 2016 by the Parliament and the Council.  
4.3.4.1   Maritime transport services and port services  
4.140.   The very liberal market access rules for maritime transport services, stricto sensu , as well 
as the relevant external policy instruments, date back to th e late eighties and have not 
significantly changed since. There are no significant trade -relevant regulatory changes to report 
since the last TPR report dealing with transport services in 2013.  
4.141.   The main development since 2013 regarding maritime transport, lato sensu,  is the 
adoption on 3 March 2017 of the regulation establishing a framework for the provision of port 
services and common rules on the financial transparency of ports (Regulation 2017/352). This  
regulation will apply as of 2019.107 
4.142.   Over 1,200 comm ercial seaports operate along some 70,000 kilometres of the Union’s 
coasts. In 2014, around 3.5 billion tonnes of cargo transited through the main European ports 
(ports handling more than 1 million tonnes per year). Intra -EU shipping represents 44% of the 
tonnes handled in EU ports. Seaports are key nodal points of the EU intermodal transport chains 
using short sea shipping as an alternative to saturated land transport routes and as a way to 
                                                                                                                                                  
investment funds and a mending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No . 596/2014 . 
Viewed at http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32016R1011& from=en . 
104 Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on 
the activities and supervision of institutions for occupational retirement provision (IORPs) . Viewed at 
http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32016L2341&from=EN . 
105 For more details on these ongoing discussions see the note of the General Secretariat of the Council 
of the European Union to the COREPER and the Council on the state of play of the proposal (document 
13608/16 FISC164/ECOFIN 948 of 28 October 2106) and notably its annex on the "core engine"(i.e. the basic 
principles) of the financial transaction task, viewed at: http://data.consilium.europa.eu/doc/ document/ST -
13608 -2016-INIT/en/pdf . 
106 WT/TPR/S/284 dated 28 May 2013, pp. 154 -171. 
107 http://eur -lex.europa.eu/legal -content/EN/TXT/?qid=1488981754157&uri=CELEX:32017R0352 . WT/TPR/S/357 • European Union  
 
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  connect peripheral or island areas. In terms of passenger transpor t, EU ports handled 402 million 
maritime passengers in 2014.  
4.143.   2,200 port operators currently employ around 110,000 port dockers. In total, ports 
represent up to 3 million (direct and indirect) jobs in the 22 maritime member States. 96% of all 
freight and 93 % of all passengers through the EU ports transit through the 319 seaports identified 
in the Commission's proposal for Guidelines on the trans -European transport network (TEN -T). 
4.144.   The new regulation is applicable only to these 3 19 ports  and has two aims: est ablishing 
the rules under which port services are provided and setting new reinforced rules on financial 
transparency.  
4.145.   The freedom to provide services will be applicable to port services. However, managing 
bodies of a port may impose minimum requirements o n the providers of specific port services. 
When imposed, these requirements shall only relate to professional qualifications, financial 
capacity, good repute, availability of services, necessary equipment or maritime safety, general 
safety and security in the port, and relevant environmental and labour requirements. These 
requirements should not be used as a way of implicitly introducing market barriers and therefore 
the criteria should be objective and proportionate ensuring the fair treatment of all opera tors, both 
existing and potential. Potential operators should have access to training to acquire relevant 
specific local knowledge.  
4.146.   These provisions will not be imposed on cargo handling services and passenger terminals 
as these services are often organize d by means of concession contracts falling within the scope of 
the Directive (EU) 2014/25 of 26 February 2014 on procurement by entities operating in the 
water, energy, transport and postal services sectors. This directive has been described in detail in 
the section on government procurement of the last TPR report.108 The port regulation covers, 
therefore, the following port services either inside the port area or on the waterway access to and 
from the ports: bunkering, cargo handling, mooring, passenger serv ices, port reception facilities, 
pilotage and towage. Cargo handling, passenger services and pilotage are excluded from Chapter 
II (provision of port services); member States may decide to include pilotage under this chapter. 
Member States are encouraged t o introduce Pilot Exemption Certificates (PECs) in order to 
improve efficiency in ports.  
4.147.   Where there are objective and properly justified cases, the stated freedom to provide 
services could be subjected to a limitation of the number of service providers. I f a limitation is 
applied, an open, non -discriminatory and transparent selection procedure needs to be followed.  
4.148.   A member State will have the possibility to designate authorities competent to impose a 
public service obligation, in line with the applicable state aid rules. The obligations of public 
services must be clearly defined, transparent, non -discriminatory and verifiable and must relate 
among others to the availability (no interruption), accessibility (to all users), affordability (for 
certain categor ies of users), and the safety, security and environmental sustainability of the port 
service. In the case of public service obligations imposed by a competent authority in a port or in 
several ports, the authority will have the opportunity to organize and commercially exploit specific 
port services itself, under the condition that its activity remains confined to the port or ports in 
which it imposes public service obligations. If a m ember State  decides to impose public service 
obligations , for the same ser vice, in all its maritime  ports, it shall notify those  obligations to the 
Commission.  
4.149.   Employees' rights will be safeguarded and the member States will have the option to 
further strengthen these rights in the event of a transfer of undertakings and the rel evant staff 
working for the old undertaking.  
4.150.   Regarding the second objective of the port regulation, increased financial transparency, 
the provisions of the regulation apply also to cargo handling, passenger services, pilotage and 
dredging. Where managing b odies of the port benefit from public funds, there shall be transparent 
accounting in order to show the effective and appropriate use of these public funds.  Where 
designated port service providers have not been subject to an open public tendering procedure  
                                                
108 Document WT/TPR/S/317 dated 18 May 2015, p. 88; the full text of the directive was viewed at:  
http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32014L0025&from=EN . WT/TPR/S/357 • European Union  
 
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  and in the case of internal operators, it should be ensured that the price for the service is 
transparent and non -discriminatory and that it is set proportionately to the cost of the service 
provided.  
4.151.   Managing bodies of the port shall define the port infr astructure charges in an autonomous 
way and according to their own commercial and investment strategy. The port infrastructure 
charges may be varied in accordance with commercial practices in relation to the frequent use of 
the port or in order to promote a more efficient use of the port infrastructure, short sea shipping, 
or the high environmental performance, energy efficiency or carbon efficiency of transport 
operations.  
4.152.   The regulation also contains a series of provisions related to the training of staff , the 
handling of complaints, user consultation and transitional arrangements.  
4.153.   In addition to the port regulation, the Commission is considering further clarification of the 
state aid rules to ports notably by including certain port investments in the bloc k exemption 
regulation ( Commission Regulation (EU) No. 651/2014 of 17 June 2014109 declaring certain 
categories of aid compatible with the internal market i n application of Articles 107 and 108 of the 
Treaty, "GBER"). The GBER enables member States to implement state aid measures without prior 
Commission approval because they are unlikely to distort competition. The Commission is now 
proposing to further wide n the scope of the GBER to facilitate unproblematic state support to ports 
(and airports). The proposal provides for the exemption from the notification obligation of projects 
if the aid amount does not exceed a certain threshold. The aid shall be granted to transport -
related investments and shall not go beyond what is necessary to make the investment happen, 
taking into account future revenues from the investment. The proposal limits the percentage of the 
investment costs that can be subsidized depending i n particular on the size of the investment and 
the type of infrastructure. Finally, the aided port infrastructure shall be made available to 
interested users on an equal and non -discriminatory basis on market terms.  
4.154.   Finally, the Commission has undertaken a  series of measures to simplify procedures in 
ports, in particular by avoiding unnecessary controls by customs for the movement of goods within 
the internal market ("Blue Belt " project). The main instrument to assess the EU status of goods is 
the use of the customs goods manifest data introduced with the entry into force of the Union 
Customs Code on 1 May 2016 (for the moment limited to authorized issuers). Customs authorities 
may accept the use of commercial, port or transport information systems for submission of the 
customs goods manifest data.  
4.3.4.2   Air transport services  
4.155.   The EU aviation sector employs directly between 1.4 and 2 million people and supports 4.7 
to 5.5 m illion jobs (including indirect and induced impacts).110 The EU accounts for 25% of global 
air traffic.111 The direct contribution of aviation to EU GDP is €110 billion, while the overall impact, 
including tourism, is as large as €510 billion through the multiplier effect.112 There are 32 EU 
airlines among the top 150 by revenue.113 Essentially as a result of the e stablishment of the single 
aviation market, the number of intra -EU routes increased from 874 in 1992 to 3,522 in 2015 
(+6.2% per annum) while the number of extra -EU routes increased too but to a slightly lesser 
degree (from 988 to 2621, i.e. +4.3 % per ann um). The number of intra -EU routes served by 
more than two carriers increased from 93 in 1992 to 599 in 2015 (+540%), while the number of 
extra-EU routes served by more than two carriers also increased during the same period though at 
a slower pace (from 7 7 to 308, i.e. +300%).114 Air transport users enjoy an unprecedented choice 
                                                
109 Viewed at:  http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=OJ:L:2014:187:FULL&from=EN .  
110 Commission Staff Working Document accompanying the document "An Aviation Strategy for Europe", 
SWD (2015) 261 final dated 7 December 2015, p. 18. Viewed at: http://eur -lex.europa.eu/legal -content/EN/ 
TXT/PDF/?uri=CELEX:52015SC0261&from=en . 
111 Commission Staff Working Document accompanying the document "An Aviation Strategy for  Europe", 
SWD (2015) 261 final dated 7 December 2015, p. 20.  
112 Document COM(2015) 598 final dated 7 December 2015 " An Aviation Strategy for Europe",  p. 2. 
Viewed at: https://ec.europa.eu/transparency/regdoc/rep/1/2015/EN/1 -2015-598-EN-F1-1.PDF . 
113 Commission Staff Working Document accompanying the document "An Aviation Strategy for Europe", 
SWD (2015) 261 final dated 7 December 2015, p. 23. 
114 Commission Staff Workin g Document accompanying the document "An Aviation Strategy for Europe", 
SWD (2015) 261 final dated 7 December 2015, p. 18. WT/TPR/S/357 • European Union  
 
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  of air travel opportunities at competitive prices. The share of low cost carriers in the total number 
of weekly seats available went up during the same period from 2% to 48%. These c arriers made 
greater use than traditional networks carriers of 5th and 7th freedoms and of the cabotage rights 
brought about by intra -EU liberalization.115 
4.156.   The EU aviation regulatory framework was described in detail in the penultimate TPR 
report in 2013 and  has since undergone only incremental changes.116 
4.157.   The regulatory framework of the three auxiliary services to aviation explicitly covered by 
the GATS – aircraft repair and maintenance, the selling and marketing of aviation services, and 
computer reservation services – remains so far unchanged. The "Aviation Strategy for Europe" 
document published by the Commission on 7 December 2015117 does not plan any regulatory 
changes for the time being, save for air safety rules.  
4.158.   As for the selling and marketing of air tra nsport, there are no EU -wide nor member State 
level restrictive regulations and the selling and marketing of air transport services within the EU is 
basically devoid of any GATS type restrictions.  
4.159.   The regulation of the third type of services covered explic itly by the GATS, computer 
reservation systems (CRS) , was included in the regulatory "fitness check" of the single aviation 
market referred to in the May 2013 TPR report. This "fitness check" involved three regulations: 
Regulation (EC) 80/2009 on a Code of  Conduct for computerized reservation systems; Regulation 
(EC) 1008/2008  on common rules for the operation of air services in the EU (recast of the third 
liberalization package);  and Regulation (EC) 785/2004 on insurance requirements for air carriers 
and a ircraft operators. The fitness check was concluded in June 2013 and its results published.118 
4.160.   With regard to CRS,  the fitness check identified a number of areas where the Code could 
be marginally improved, albeit not necessarily in the immediate future. As t o providers other than 
CRS providers that continue to develop products providing some, but not necessarily all, the 
functionalities of a CRS, it is important to consider the correct scope of Regulation 80/2009 and 
whether its objective should be limited to  ensuring an undistorted market for air travel distribution 
in market segments where only CRS providers might be considered to have a strong market 
presence, in particular business travel. In addition, future market developments may require 
ensuring an unb iased choice to the consumer across all available platforms which may provide 
information on the available air travel services to customers. However, the relevant marketing and  
technological evolutions are still in progress, which renders adaptations to th e legislative 
framework difficult at present. It was therefore decided not to amend Regulation 80/2009 for the 
time being, an approach also suggested by the December 2015 aviation strategy document. 
However, the CRS Regulation will be evaluated, starting u nder this Commission mandate.  
4.161.   Regarding airport -related services, the May 2013 TPR report referred to a series of 
legislative proposals known as the "airport package" and containing proposals for the revision of 
the regulatory framework for landing slots, noise regulations and curfews, and ground handling 
services.119 One of these three proposals, on noise regulation, was adopted by the Parliament and 
the Council and became regulation(EU) No. 598/2014 of 16 April 2014 "on the establishment of 
rules and proced ures with regard to the introduction of noise -related operating restrictions at 
Union airports within a Balanced Approach and repealing Directive (EC) 2002/30 ".120 This 
regulation increases the transparency in the process of setting noise -related restriction s at 
airports, and confers a scrutiny role on the Commission which does not replace a member State's 
final decision.  
                                                
115 Commission Staff Working Document accompanying the document "An Aviation Strategy for Europe", 
SWD (2015) 261 final dated 7 Decembe r 2015, p. 17. 
116 WT/TPR/S/ 284 rev 1  dated 14 October  2013, pp. 154 -157. 
117 Document COM (598)final, viewed at: http://eur -lex.europa.eu/legal -content/EN/ALL/?uri=COM: 
2015: 598:FIN .  
118 Document SWD (2013) 208 final dated 6 June 2 013. Viewed at : https://ec.europa.eu/transport/ 
sites/ transport/files/modes/air/internal_market/doc/fitness_check_internal_aviation_market_en_commission_ 
staff_working_document.pdf . 
119 For details on these proposals see WT/TPR/S/284 dated 28 May 2013, pp. 155 -156. 
120 Viewed  at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32014R0598&from=EN . WT/TPR/S/357 • European Union  
 
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  4.162.   The proposal on slots, which was essentially aimed at allowing market -based mechanisms 
for slot exchanges, remains under discussion. The pr oposal on ground handling was withdrawn by 
the commission in June 2015. Slots and ground handling services therefore remain regulated 
respectively by Regulation (EC) 793/2004 and Directive (EC) 96/67.121 While the December 2015 
aviation strategy document fro m the Commission urges the Parliament and the Council to adopt 
the slot proposal, it considers that for the time being no regulatory changes are needed for ground 
handling services.  
4.163.   Regarding airport services, stricto sensu,  the December 2015 aviation stra tegy document 
indicates that the Commission w ill assess the necessity to review  the Airport Charges Directive 
(Directive (EC) 2009/12 of 10 March 2009122) and w ill work with the Airport Observatory to 
monitor trends of both intra -EU and extra -EU connectivity  in Europe, and to identify any 
shortcomings and the appropriate measures to be taken.  
4.164.   Regarding air navigation services the same document  urges the European Parliament and 
the Council to swiftly adopt the 2013 Single European Sky (SES 2+) proposals.123 Those proposals 
are focused on seven points:  
− Achieving full organizational and legal separation between the national supervisory authority 
and air navigation service providers.  
− Reinforcing the economic regulation of service provision by creating a fully indepe ndent 
regulatory body.  
− Opening the market for support services.  
− Focusing the governance of air navigation service providers on customer needs.  
− Reviewing the concept of functional airspace blocks to make it more flexible, performance -
oriented and driven by industrial partnerships.  
− Making the Network Manager a more industry -led organization as a prerequisite to extending 
its powers and functions.  
− Rearranging the institutional landscape of various European bodies operating in the air traffic 
management field, in particular focusing EASA on technical regulation and Eurocontrol on 
network functions.  
4.165.   SES2+ also provided the opportunity to clarify the role of the Single European Sky Air 
Traffic Management Research (SESAR) project in the Single European Sky (SES) by  providing a 
further legal basis for the necessary regulatory actions.  
4.166.   The regulatory framework of commercial aviation services in terms of licencing (granting of 
Airline Operating Certificate), ownership rules , and intra -EU market access rules remains  
governed by Regulation (EC) 1008/2008 which is a recast of the 1992 third liberalization package. 
Regulation (EC) 1008/2008 was part of the 2013 regulatory "fitness check" exercise initiated by 
the Commission. The conclusions of this exercise were t hat the o bjectives of Regulation (EC) 
1008/2008 on common rules for the operation of air services in the EU to consolidate the existing 
liberalization legislation and to provide some clarifications have been achieved. Issues that have 
been identified as problematic  either  fall outside of the scope of the Regulation (access of non -
scheduled services to extra -EU markets), require some technical guidance (leasing  and restriction 
of traffic rights) , necessitate better dissemination of best practices among enforcement bo dies 
(public service obligations, price transparency, and passenger protection in case of insolvency) , or 
merely require continuing monitoring and enforcement. The Commission therefore considered that 
no legislative changes were warranted; a position recon firmed by the December 2015 aviation 
strategy paper.  
                                                
121 For a detailed description of this legislation see: WTO document S/C/W/2 70 dated 18 July 2006 
pp. 95-98 for ground handling services and WTO document S/C/W/270/Add.2 dated 28 September 2007, 
pp. 378-382 for slots.  
122 The text of the 2009 directive was viewed at: http://eur -lex.europa.eu/LexUriServ/LexUriServ.do? 
uri=CELEX:32009L0012:EN:NOT ). 
123 Document COM(2013)409 final and COM(2013) 410 final of 11/06/2013. Viewed at: http://eur -lex. 
europa.eu/LexUriServ/LexUriServ.do?uri=COM:2013:0409:FIN:EN:PDF  and http://www.europarl .europa.eu/ 
meetdocs/2009_2014/documents/com/com_com(2013)0410_/com_com(2013)0410_en.pdf . WT/TPR/S/357 • European Union  
 
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  4.167.   In accordance with its Aviation Strategy, the Commission will carry out an evaluation in 
order to assess to which extent Regulation No. 1008/2008 on common rules for the operation of 
air services in the Community and containing provisions on ownership and control contributed to 
the creation of an efficient internal aviation market, an improved safety level, and better consumer 
protection. This evaluation will be completed in early 2018.  
4.168.   The Commission wil l, during the first half of 2017, present a legislative proposal to replace 
Regulation (EC) No. 868/2004 on the protection against subsidization and unfair pricing practices. 
The new regulation will replace Regulation 868/2004 once the EU decision -making p rocess is 
completed.  
4.169.   As of January 2013, 979 bilateral (member State level) air transport agreements have 
been adapted so as to include the Community clause124, 235 of which through a direct amendment 
of the bilateral agreement and 744 through 46 horizontal agreements, i.e. through an agreement 
with the EU or through a formal record of consultations with the EU, bringing the total number of 
third countries having accepted EU designation to 117.  
4.170.   As described in the previous TPR report dealing with transport se rvices in 2013125, in 
November 2012 the EU suspended the application of its aviation Emission Trading Scheme 
(Directive (EC) No. 2008/101) to non -EU airlines and to extra -EU flights in order to encourage 
multilateral discussion at ICAO on market -based measur es. In October 2016, an agreement was 
reached at ICAO: it will oblige airlines to offset the growth of their CO2 emissions post -2020. To 
do so, airlines will buy "emission units" generated by projects reducing CO2 emissions in other 
sectors of the economy (e.g. renewable energies). In its first phase (2021 -2026), 65 countries  will 
participate on a voluntary basis. All EU member States wil l join from the start . In its second phase 
(2027 -2035) participation is mandatory; except for those exempted (countries with small aviation 
activities). In that light, and if appropriate, the Commission may also make a proposal to  review 
the scope of the European Union Emissions Trading System , with due consideration to be given to 
the necessary consistency with EU 2030 climate objectives and policy.  
4.171.   Finally, on 23 November 2 016, the Commission indicated its intention to develop a specific 
piece of legislation to allow the development of an EU single drone services market whose 
potential is estimated by various studies to be between 200 million euros and several billion. 
Techn ical work is under way in that respect.  
4.3.4.3   Road transport services  
4.3.4.3.1   Road passenger transport services  
4.172.   The only significant development that took place regarding road passenger transport 
relates to the coach and buses operated on international lines.  
4.173.   The Commis sion is currently carrying out an impact assessment exercise on the possible 
revision of the Regulation (EC) No. 1073/2009 on common rules for access to the international126 
market for coach and bus services. The main objective of this possible revision woul d be to 
improve the competitiveness of coach and bus services vis-à-vis other modes of transport and to 
ensure a level playing field for operators. On 14 December 2016, the Commission launched a 
public consultation on the review of this regulation. This fo llows two fact -finding studies in 2009 
and in 2016127, and an ex -post evaluation to be published in April 2017 on the website of DG 
MOVE. Those studies were not able to provide precise data on the employment and turnover of 
this segment of road passenger tra nsport. The ex post evaluation of the Regulation has shown that 
                                                
124 European Commission document. Viewed at: 
https://ec.europa.eu/transport/sites/transport/files/modes/air/international_aviation/external_aviation_policy/
doc/table_ -_asa_brought_into_legal_conformity_since_ecj_j udgments -_january_2013.pdf . 
125 WT/TPR/S/284 REV1 dated October 2013, pp. 156 -157. 
126 International means the international carriage of passengers by coach and bus within the territory of 
the EU.  Access to non -EU carriers to the EU market is covered by bilat eral agreements between member States 
and third countries and, for occasional services, by the (multilateral) Interbus Agreement.  
127 The full text of the 2016 study can be viewed at: https://ec.europa.eu/transport/sites/transport/files 
/modes/road/studies/doc/2016 -04-passenger -transport -by-coach -in-europe.pdf . WT/TPR/S/357 • European Union  
 
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  the main problems linked to the regulation are the inability of coach and bus services to gain 
market shares vis-à-vis other modes of transport and restricted competitions among undertakings.  
4.3.4.3.2   Road freight transport  
4.174.   The main development regarding road freight transport is the publication by the 
Commission of a "REFIT " ex post evaluation128 of Regulation (EC) No. 1071/2009 on access to the 
occupation of road transport operator and Regulation (EC) N o. 1072/2009 on access to the 
international road haulage market.  
4.175.   According to the 2014 report from the Commission to the European Parliament and the 
Council on the State of the Union Road Transport Market129, the road haulage market in the EU 
comprises aroun d 600,000 predominantly small enterprises, with an average size of four 
employees per company. This number has been stable over recent years with 80% of companies 
counting less than 10 employees, whereas 99% have less than 50 employees. The road haulage 
sector employed around three million people in 2011.  
4.176.   National transport operations carried out by domestically registered vehicles account for 
about two thirds of all transport activities. The remaining one third corresponds to international 
transport activi ties and national transport operations carried out by vehicles registered in another 
member State (which are defined as cabotage). Cabotage operations merely account for slightly 
more than 1% of total transport activity. Cabotage is defined in Regulation ( EC) No. 1072/2009 as 
"national carriage for hire or reward carried out on a temporary basis in a host Member State". It 
is restricted to three cabotage operations in the seven days following international carriage by the 
non-resident haulier (registered in  another member State) to the host country. Cabotage activities 
have gone up (by around 50%), but are still at a relatively low level. The strong increase in 
cabotage activities is partly due to the lifting in 2009 and 2012 of special transitional restrict ions 
on hauliers from most countries that joined the EU in 2004 and 2007, respectively.  
4.177.   The share of international transport operations (i.e. between two or more member States) 
has increased during the last decade, from 30% of all road freight transport ac tivities in 2004 to 
33% in 2012. This is a sign of the increasingly integrated single market in the EU. Four fifths of all 
international transport activities between member States are carried out by vehicles which are 
registered either in the member State of loading or in the member State of unloading. One fifth is 
carried out by vehicles which are registered in a country other than the one of loading or 
unloading, including in non -EU countries (i.e. cross -trade), up from around one eighth in 2004. 
The shar e of cross -trade in all road freight transport activities has gone up from 4 to 7% between 
2004 and 2012.  
4.178.   Having grown by more than 80% between 2004 and 2012, cross -trade is the most 
booming segment of the road haulage market. It benefits from the fact tha t international transport 
activities are completely liberalized within the EU. Indeed EU hauliers are the most active in 
international transport within the EU (including cross -trade), while access to the EU international 
transport market by non -EU hauliers  is subject to transport permits regulated by bilateral or 
multilateral agreements. Traffic between EU member States and third countries remains regulated 
by bilateral agreements signed at member State level (or at the EU level in the case of 
Switzerland).  
4.179.   The conclusions of the REFIT exercise were that the regulations cover most of the key 
issues which are relevant to the objectives of reducing competitive distortion and establishing 
more harmonized conditions for access to the profession and to the intern ational road transport 
market. The remaining problems are mainly due to issues of interpretation and/or enforcement, 
rather than from the targeting of the rules themselves. The implementation difficulties identified 
by the REFIT exercise are very different  levels of control exercised by member States (e.g. on 
cabotage), lack of cooperation between (at least some) member States, notably as regards 
compliance with the stable and effective establishment criterion, different interpretations of the 
notions of ca botage (scope of operation) and of principal establishment (notably in terms of 
                                                
128 Commission staff working document SWD(2016) 350 final d ated 28 October 2016 . Viewed at: 
https://ec.europa.eu/transport/sites/transport/files/swd20160350.pdf . 
129 Document COM (2014) 222 final dated 14 April 2014.  WT/TPR/S/357 • European Union  
 
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  facilities required), lack of clarity as to which infringements should lead to loss of good repute , and 
additional conditions on access to the occupation of road haulier impose d by some member States.  
4.180.   The Commission also published in November 2016 the results of a public consultation on 
these regulations held between June and September 2016.130 The Commission is currently carrying 
out an impact assessment exercise on the possible revision of the regulations. The main objectives 
of this possible revision would be to: (1) clarify existing provisions, which have raised problems of 
interpretation and implementation; (2) strengthen enforcement of the Regulations and promote 
consistent e nforcement throughout the EU; and (3) promote a level playing field in the road freight 
transport market.  
4.3.4.4   Rail transport  
4.181.   The main development s since 2013 regarding rail transport were the adoption in mid -2016 
of the "technical pillar" and at end -2016 of th e "market pillar" of the 2013 "fourth railway 
package". The fourth package essentially opens the last closed rail transport segment, domestic 
passengers services, to competition by 2020 via a system of open access for commercial services 
on the one hand an d the introduction of the principle of competitive awards of rail public services 
contracts by 2023 on the other hand. Moreover, it reinforces independence requirements for the 
infrastructure managers so as to avoid distortions of competition; it is also a imed at ensuring the 
progressive harmonization of technical and safety norms.  
4.182.   The technical pillar of the first package is composed of two directives and one regulation: 
Directive (EU) 2016/797  of 11 May 2016 on the interoperability of the rail system within the 
European Union (recast)131, Directive (EU) 2016/798  of 11 May 2016 on railway safety (recast)132, 
and Regulation (EU) 2016/796  of 11 May 2016 on the European Union Agency for Railways and 
repealing Regulation (EC) No. 881/2004.133 Member States have until June 2019 to transpose the 
directives into domestic legislation but may delay implementation by one year if they provide 
justifica tion to the European Commission and the European Union Agency for Railways (formerly 
the European Railway Agency). The ERA Regulation is directly applicable, and does not require 
transposition.  
4.183.   The technical pillar is aimed at saving firms from having to s ubmit multiple applications for 
operations extending beyond one single member State. The European Railways Agency (ERA) will 
issue authorizations for placing vehicles on the market and safety certificates for railway 
undertakings that are valid throughout the EU. Until now, railway undertakings and manufacturers 
have been required to be certified separately by all national safety authorities (NSA) in those 
member States with rail systems, depending on where the trains would operate.  
4.184.   The new legislation make s ERA a "one -stop-shop" which will act as a single entry point for 
all such applications. This information and communication system will make the procedure easy 
and transparent. It will also ensure consistency in the case of different applications for simi lar 
authorizations.  ERA will ensure a uniform application of EU rules, for example by supervising the 
streamlining of national rules and monitoring the national safety authorities.  
4.185.   ERA will also act as "system authority" for the pan -European ERMTS (Europea n Rail Traffic 
Management System), in particular delivering ERTMS trackside pre -authorizations, and telematics 
applications. Greater harmonization at the EU level will lead to significant reductions in costs and 
the administrative burden for railway undert akings wishing to operate across Europe.  
4.186.   Another aim of the technical pillar is to reduce the large number of national rules that still 
exist. The Agency is already working on an action plan to reduce them. These rules create a risk of 
insufficient transpa rency and disguised discrimination against  new operators, especially the smaller 
ones, and this is a serious risk for new investors. Reduction and simplification of the current rules 
will contribute to achieving the Single European Railway Area, increasing  cross-border traffic, and 
boosting the competitiveness of the railway sector.  
                                                
130 The results o f the consultation can be viewed at: http://ec.europa.eu/transport/sites/transport/files/ 
2016-review -road-regulations -summary.pdf . 
131 Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32016L0797&from=EN . 
132 Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32016L0798&from=EN . 
133 Viewed at: http://eur -lex.europa.eu/legal -content /EN/TXT/PDF/?uri=CELEX:32016R0796&from=EN . WT/TPR/S/357 • European Union  
 
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  4.187.   Regarding safety, the recast of the Railway Safety Directive revises the role of the national 
safety authorities (NSAs) and reallocates the responsibilities between them and ERA . ERA will play 
a major role as it will be granting the single safety certificate. National Safety Authorities' activities 
will be more focused on the supervision of the rail companies operating in their respective 
countries and on activities requiring eit her presence on the territory or local linguistic skills (such 
as inspections/audits). Moreover, to ensure that NSAs perform these activities effectively, the 
Agency will monitor their performance and decision -making. In addition, ERA will coordinate 
information sharing on safety. In that respect it has already started preparing the new tool for 
occurrence reporting that is widely used in the aviation sector. This tool will facilitate the exchange 
of information among the actors who identify or are informed  about a safety risk, and in particular 
will allow information to be shared quickly after an accident.  
4.188.   ERA will start delivering vehicle authorizations, ERTMS trackside pre -authorizations, and 
safety certificates three years after the entry into force of t he package. However, as regards other 
tasks, such as the monitoring of national safety authorities and national rules, ERA will start 
performing its duties immediately after adoption of the relevant dispositions.  
4.189.   The market pillar of the fourth railway pac kage is composed of one directive and two 
regulations: Directive (EU) 2016/2370 on the opening of the market for domestic passenger 
transport services by rail and the governance of the railway infrastructure  and amending Directive 
2012/34/EU134; Regulation ( EU) 2016/2338 on the opening of the market for domestic passenger 
transport services by rail  and amending Regulation (EC) No. 1370/2007135; and Regulation (EU) 
2016/2337 on common rules for the normalization of the accounts of railway undertakings  and 
repeal ing Regulation (EEC) No. 1192/69.136 
4.190.   The directive, which is also called the "governance directive", deals essentially with the 
relationship between the infrastructure manager and the railway operators with access to  networks 
for the purpose of operating dom estic passenger services, transparency of financial flows of 
infrastructure managers (in particular when they are part of a vertically integrated undertaking), 
and coordination between the infrastructure manager and its users as well as between 
infrastruct ure managers.  
4.191.   Regarding the relationship between the infrastructure manager and the railways operators, 
the directive establishes  the principle that member States shall be free to choose between different 
organizational models, ranging from full structural  separation to vertical integration, subject to 
appropriate safeguards to ensure the impartiality of the infrastructure manager as regards the 
essential functions (capacity allocation and infrastructure charging), traffic management, and 
maintenance planni ng. 
4.192.   Infrastructure managers have to be legally distinct from any railway undertaking 
(company) and, in vertically integrated undertakings, from any other legal entities within the 
undertaking. There is a prohibition against holding certain double mandates (such as being, at the 
same time, a member of a management board of the infrastructure manager and of a railway 
undertaking) and, for vertically integrated undertakings, a prohibition against certain performance -
based elements of remuneration (e.g. from ot her legal entities of the vertically integrated 
undertaking). These prohibitions contribute to ensuring the independence of infrastructure 
managers from railway undertakings.  
4.193.   Moreover, given that decision -making by infrastructure managers with respect to t rain 
path allocation and decision -making with respect to infrastructure charging are essential functions 
that are vital for ensuring equitable and non -discriminatory access to rail infrastructure, stringent 
safeguards are put in place to avoid any undue in fluence being brought to bear on decisions taken 
by the infrastructure manager relating to such functions. No railway undertaking or other legal 
entity may exercise a decisive influence on decisions of the infrastructure manager concerning the 
essential fu nctions. Additional safeguards apply in vertically integrated undertakings, where other 
legal entities may not have a decisive influence on decisions concerning appointments and 
dismissals of persons in charge of taking decisions on the essential functions  and where it needs to 
be ensured that the mobility of staff in charge of essential functions does not create conflicts of 
                                                
134 Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32016L2370&from=EN . 
135 Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32016R2338&from=EN . 
136 Viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/PDF/?uri=CELEX:32016R2337&from=EN . WT/TPR/S/357 • European Union  
 
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  interest. Moreover, access to sensitive information concerning essential functions must be 
restricted to authorized staff of the infr astructure manager.  
4.194.   Appropriate measures shall also be taken to ensure that the functions of traffic 
management and maintenance planning are exercised in an impartial manner to avoid any 
distortion of competition. Persons in charge of taking decisions in r espect of those functions should 
not be affected by any conflict of interest. Moreover, infrastructure managers should ensure that 
railway undertakings have access to relevant information in cases of disruptions.  
4.195.   Regulatory bodies shall have the power to m onitor traffic management, renewal planning, 
as well as scheduled and unscheduled maintenance works, in order to ensure that they do not lead 
to discrimination. In this respect, they are also entitled to decide on appropriate measures to 
correct discrimina tion, market distortion and other undesirable developments in the market.  
4.196.   While, in principle, the infrastructure manager should be responsible for development, 
operation, maintenance and renewal of the network, these functions may be shared between 
variou s infrastructure managers, provided that all of them meet the independence requirements 
set out in the Directive.  
4.197.   Moreover, infrastructure managers may also outsource certain functions or tasks to other 
entities, provided that no conflicts of interest aris e and that confidentiality of commercially 
sensitive information is guaranteed and the infrastructure manager retains supervisory power and 
ultimate responsibility. Such other entities may, as a general rule, not be railway undertakings,  or 
entities contro lling railway undertakings or being controlled by railway undertakings. If essential 
functions are outsourced, the entity in charge of performing the essential functions must comply 
with all independence requirements defined in the Directive. For verticall y integrated undertakings, 
the Directive also clarifies that essential functions can only be outsourced to another entity within 
the vertically integrated undertaking, if such entity exclusively performs the essential functions.  
4.198.   As an exemption from the ge neral prohibition against outsourcing tasks to railway 
undertakings, the execution of works and related tasks on development, maintenance and renewal 
of infrastructure may also be outsourced to entities controlling railway undertakings or being 
controlled by railway undertakings. This is, however, only permitted if such outsourcing would not 
create any conflicts of interest, the confidentiality of commercially sensitive information is 
guaranteed, and the infrastructure manager retains supervisory power and ultimate responsibility.  
4.199.   Regarding financial transparency, financial transfers between the infrastructure manager 
and railway undertakings, and in vertically integrated undertakings between the infrastructure 
manager and any other legal entity of the integ rated undertaking, shall be prevented, where they 
could lead to a distortion of competition on the market, in particular as a result of cross -
subsidization. Infrastructure managers may use income from infrastructure network management 
activities that invol ve the use of public funds solely to finance their own business or to pay 
dividends to their investors, which may include the State and private shareholders, but not 
undertakings that are part of a vertically integrated undertaking and exercise control ove r both a 
railway undertaking and that infrastructure manager (e.g. holding companies). Loans between 
legal entities of a vertically integrated undertaking shall only be granted, disbursed and serviced at 
market rates. The accounts of the infrastructure man ager and other legal entities within a 
vertically integrated undertaking shall be kept in a way that allows for separate accounting and 
transparent financial circuits.  
4.200.   With a view to facilitating the provision of efficient and effective rail services withi n the 
Union, a European Network of Infrastructure Managers shall be established. Tasks of the network 
will include development of the Union railway infrastructure, monitoring and benchmarking 
performance, tackling cross -border bottlenecks , and cooperation on questions concerning charging 
and capacity allocation for international services. Regarding access to infrastructure, member 
States may decide to limit access if the new open access services would compromise the economic 
equilibrium of an existing publi c service contract. While some member States already grant 
unlimited access to the infrastructure for domestic passenger services, other member States will 
make use of the possibility of access limitations. In such cases, when an operator that intends to 
order capacity to run a new open access domestic passenger service requests capacity, the 
regulatory body is informed and must give the competent authorities and PSO operators the WT/TPR/S/357 • European Union  
 
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  possibility to request an analysis of the expected economic impact of the new  service on existing 
public service contracts covering the same route. The regulatory body is required to carry out an 
objective economic analysis on the basis of criteria determined in an implementing act to be 
adopted by the Commission in order to determ ine whether the economic equilibrium of a public 
service contract would be compromised. If the regulatory body concludes that the economic 
equilibrium of the PSO contract would not be compromised, the member State cannot limit the 
access. If the regulatory  body concludes that the economic equilibrium of the PSO contract would 
be compromised, the member State may deny access, limit access rights, or impose conditions.  
4.201.   Finally, the Directive sets the principle that through -ticketing systems should be 
interope rable and non -discriminatory . The provisions concerning independence of infrastructure 
managers, corresponding regulatory oversight, and cooperation within the European network of 
infrastructure managers, must be transposed into national law by 25 December  2018, while the 
provisions on access to the infrastructure for the purpose of operating domestic passenger services 
will apply as from 1 January 2019 in order to allow open access services to start operations in 
December 2020.  
4.202.   Regulation (EU) 2016/2338 on  the opening of the market for domestic passenger transport 
services by rail is also called the Public Services Obligations (PSO) regulation, since the opening of 
domestic markets will essentially take the form of tendering for public services contracts. I t 
stipulates that domestic passenger markets will be opened up for competition and that the 
principle of mandatory tendering for public service contracts in rail will be established at the latest 
by 2023. The aim of the regulation is to encourage railway o perators to become more responsive 
to customer needs, improve the quality of their services and improve their cost -effectiveness.  
4.203.   The regulation amends the previous regulation on public services contract awards in the 
area of transport by setting clearer r ules on the specification of public services obligations and 
their scope of application as well as a new framework guaranteeing that railway operators will 
encounter non -discriminatory access conditions to rail rolling stock that will incentivize them to 
participate in tender procedures for a rail public service contract. P ublic service contracts for public 
passenger transport services by rail should be awarded on the basis of a competitive tendering 
procedure, except for those cases set out in this regulat ion. Procedures for competitive tendering 
of public service contracts should be open to all operators, should be fair, and should respect the 
principles of transparency and non -discrimination. In exceptional circumstances, where public 
service contracts fo r public passenger transport services by rail are awarded on the basis of a 
competitive tendering procedure, the competent authority may decide to temporarily award new 
contracts directly  with a duration not exceeding 5 years in order to ensure that servic es are 
delivered in the most cost -effective way. Follow -up contracts that concern the same public service 
contracts must not be awarded on the basis of this same provision. To increase competition, 
competent authorities may decide to award public service c ontracts covering parts of the same 
network or package of routes to different railway undertakings. They may do this by announcing, 
prior to  launching the tender procedure, that they will limit the number of contracts that they 
intend to award to the same railway undertaking.  
4.204.   Where certain conditions related to the nature and structure of the railway market or the 
railway network are fulfilled, competent authorities may decide to award public service contracts 
for public passenger transport services by rail  directly where such a contract would result in an 
improvement in the quality of services or cost -efficiency, or both.  
4.205.   When preparing competitive tendering procedures, competent authorities should assess 
whether measures are necessary to ensure effective a nd non -discriminatory  access to suitable rail 
rolling stock. Competent authorities should make the assessment report publicly available . 
4.206.   The new regulation clarifies that in the performance of public service contracts, public 
service operators should compl y with obligations applicable in the field of social and labour law 
established by Union law, national law or collective agreements. It also reiterates that Directive WT/TPR/S/357 • European Union  
 
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  2001/23/EC137 shall apply to a change of public service operator where such a change consti tutes 
a transfer of undertaking within the meaning of that Directive.  
4.207.   Where competent authorities, in accordance with national law, require public service 
operators to comply with certain quality and social standards, or establish social and qualitative 
criteria, those standards and criteria should be included in the tender documents and in the public 
service contracts. While respecting Directive 2001/23/EC, such tender documents and public 
service contracts shall, where applicable, also contain information  on the rights and obligations 
relating to the transfer of staff taken on by the previous operator.  
4.208.   Finally, the third element of the market pillar of the fourth railway package, Regulation 
(EU) 2016/2337 on common rules for the normalization of the accoun ts of railway undertakings 
repeals a 1969 regulation with the same object (regulation E EC) No. 1192/69 but which dealt with 
the only railways undertakings then operating – state-owned monopolies – and has therefore 
become outdated.  
 
                                                
137 Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the member 
States relating to the safeguarding of employees' rights in  the event of transfers of undertakings, businesses or 
parts of undertakings or businesses, OJ L 82, 22.3.2001, pp.16 –20.  
  WT/TPR/S/357 • European Union  
 
- 190 - 5  APPENDIX TABLES  
Table  A1.1 Selected indicators, 2013 -16 
 Inflation rate  
(HICP -annual average rate of 
change), %  Unemployment rate  
(% of labour force)  General government gross 
debt (% of GDP)  General government 
surplus/deficit  
(% of GDP)  Current a ccount 
balance  
(% of GDP) a 
 2013  2014  2015  2016  2013  2014  2015  2016  2013  2014  2015  2013  2014  2015  2013  2014  2015  
EU-28 1.5 0.5 0.0 0.3 10.9 10.2 9.4 8.5 85.7 86.7 85 -3.3 -3 -2.4 1.1 0.9 1.1 
Austria  2.1 1.5 0.8 1.0 5.4 5.6 5.7 6.0 81.3 84.4 85.5 -1.4 -2.7 -1 1.6 2.6 2.5 
Belgium  1.2 0.5 0.6 1.8 8.4 8.5 8.5 8.0 105.4  106.5  105.8  -3 -3.1 -2.5 1.1 -0.1 0.2 
Bulgaria  0.4 -1.6 -1.1 -1.3 13.0 11.4 9.2 7.7 17 27 26 -0.4 -5.5 -1.7 1.2 0.0 0.4 
Croatia  2.3 0.2 -0.3 -0.6 17.3 17.3 16.3 12.8 82.2 86.6 86.7 -5.3 -5.4 -3.3 1.6 1.1 5.0 
Cyprus  0.4 -0.3 -1.5 -1.2 15.9 16.1 15.0 13.3 102.2  107.1  107.5  -4.9 -8.8 -1.1 -4.9 -4.4 -3.0 
Czech Republic  1.4 0.4 0.3 0.6 7.0 6.1 5.1 4.0 44.9 42.2 40.3 -1.2 -1.9 -0.6 -1.1 -1.2 -1.2 
Denmark  0.5 0.4 0.2 0.0 7.0 6.6 6.2 6.2 44.7 44.8 40.4 -1.1 1.5 -1.7 7.8 8.9 9.2 
Estonia  3.2 0.5 0.1 0.8 8.6 7.4 6.2 .. 10.2 10.7 10.1 -0.2 0.7 0.1 -0.2 1.0 2.1 
Finland  2.2 1.2 -0.2 0.4 8.2 8.7 9.4 8.8 56.5 60.2 63.6 -2.6 -3.2 -2.8 -1.9 -1.3 -0.7 
France  1.0 0.6 0.1 0.3 10.3 10.3 10.4 9.9 92.3 95.3 96.2 -4 -4 -3.5 -2.9 -3.2 -2.0 
Germany  1.6 0.8 0.1 0.4 5.2 5.0 4.6 4.1 77.5 74.9 71.2 -0.2 0.3 0.7 6.9 7.5 8.5 
Greece  -0.9 -1.4 -1.1 0.0 27.5 26.5 24.9 .. 177.4  179.7  177.4  -13.2 -3.6 -7.5 -2.2 -2.6 0.0 
Hungary  1.7 0.0 0.1 0.4 10.2 7.7 6.8 .. 76.6 75.7 74.7 -2.6 -2.1 -1.6 3.8 2.0 3.1 
Ireland  0.5 0.3 0.0 -0.2 13.1 11.3 9.4 7.9 119.5  105.2  78.6 -5.7 -3.7 -1.9 2.1 1.7 10.2 
Italy 1.2 0.2 0.1 -0.1 12.1 12.7 11.9 .. 129 131.9  132.3  -2.7 -3 -2.6 1.0 1.9 1.6 
Latvia  0.0 0.7 0.2 0.1 11.9 10.8 9.9 9.7 39 40.7 36.3 -0.9 -1.6 -1.3 -2.1 -2.0 -0.8 
Lithuania  1.2 0.2 -0.7 0.7 11.8 10.7 9.1 8.0 38.7 40.5 42.7 -2.6 -0.7 -0.2 1.4 3.8 -2.2 
Luxembourg  1.7 0.7 0.1 0.0 5.9 6.0 6.5 6.3 23.5 22.7 22.1 1 1.5 1.6 5.6 5.1 5.2 
Malta  1.0 0.8 1.2 0.9 6.4 5.8 5.4 4.8 68.4 67 64 -2.6 -2.1 -1.4 3.1 9.6 5.2 
Netherlands  2.6 0.3 0.2 0.1 7.3 7.4 6.9 6.0 67.7 67.9 65.1 -2.4 -2.3 -1.9 10.2 8.5 8.5 
Poland  0.8 0.1 -0.7 -0.2 10.3 9.0 7.5 6.3 55.7 50.2 51.1 -4.1 -3.4 -2.6 -0.5 -1.4 0.1 
Portugal  0.4 -0.2 0.5 0.6 16.4 14.1 12.6 11.2 129 130.6  129 -4.8 -7.2 -4.4 0.7 -0.3 -0.3 
Romania  3.2 1.4 -0.4 -1.1 7.1 6.8 6.8 6.0 37.8 39.4 37.9 -2.1 -0.8 -0.8 -0.6 -0.1 -0.6 
Slovakia  1.5 -0.1 -0.3 -0.5 14.2 13.2 11.5 9.7 54.7 53.6 52.5 -2.7 -2.7 -2.7 1.5 0.6 0.1 
Slovenia  1.9 0.4 -0.8 -0.2 10.1 9.7 9.0 7.9 71 80.9 83.1 -15 -5 -2.7 3.6 6.2 5.4 
Spain  1.5 -0.2 -0.6 -0.3 26.1 24.5 22.1 19.6 95.4 100.4  99.8 -7 -6 -5.1 1.5 1.0 1.3 
Sweden  0.4 0.2 0.7 1.1 8.0 7.9 7.4 6.9 40.4 45.2 43.9 -1.4 -1.6 0.2 5.1 4.8 4.7 
United Kingdom  2.6 1.5 0.0 0.7 7.6 6.1 5.3 .. 86.2 88.1 89.1 -5.7 -5.7 -4.3 -4.4 -4.7 -4.3 
.. Not available.  
a EU-28 with the extra -EU countries.  Each member State with all other countries (including other EU countries). Figures are based on Table 50 from European 
Commission, European Economic Forecast Wi nter 2017.  
Source:  Eurostat online database (prc_hicp_aind), (tipsun20), (tsdde410), and (tec00127). Viewed at: http://ec.europa.eu/eurostat/web/main/home  (database 
accessed in February 2017); and European Commission, European Economic Forecast Winter 2017, February 2017.  WT/TPR/S/ 357 •  European Union  
 
- 191 - 
 
  Table A1. 2 Merchandise exports by destination, 2013 -15 
  2013  2014  2015  
Total (€ billion)  1,736.4  1,702.9  1,789.2  
 (% of total)  
Americas  25.4 26.8 29.5 
 United States  16.7 18.3 20.8 
 Other America  8.7 8.5 8.7 
  Canada  1.8 1.9 2.0 
  Brazil  2.3 2.2 1.9 
  Mexico  1.6 1.7 1.9 
Europe  19.2 17.7 17.5 
 EFTA 12.8 11.4 11.4 
  Switzerland  9.8 8.3 8.5 
  Norway  2.9 2.9 2.7 
 Other Europe  6.4 6.3 6.2 
  Turkey 4.5 4.4 4.4 
Commonwealth of Independent States (CIS)  9.9 8.6 6.2 
  Russian Federation  6.9 6.1 4.1 
Africa  8.9 9.1 8.6 
  South Africa  1.4 1.4 1.4 
  Algeria  1.3 1.4 1.2 
  Egypt  0.9 1.0 1.1 
Middle East  7.8 8.1 8.6 
  United Arab Emirates  2.6 2.5 2.7 
  Saudi Arabia, Kingdom of  1.9 2.1 2.2 
  Israel  1.0 1.0 1.1 
Asia 26.5 27.8 27.9 
 China  8.5 9.7 9.5 
 Japan  3.1 3.1 3.2 
 Other Asia  14.8 15.0 15.3 
  Korea, Republic of  2.3 2.5 2.7 
  India 2.1 2.1 2.1 
  Hong Kong, China  2.1 2.0 2.0 
  Australia  1.8 1.7 1.8 
  Singapore  1.7 1.7 1.7 
  Chinese Taipei  0.9 1.0 1.0 
Other  2.4 2.0 1.6 
Source:  Eurostat. Viewed at: http://ec.europa.eu/eurostat/web/international -trade/data/data base (database 
accessed in February 2017).  WT/TPR/S/ 357 •  European Union  
 
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  Table A1. 3 Merchandise imports by origin, 2013 -15 
  2013  2014  2015  
Total (€ billion)  1,687.4  1,692.2  1,729.2  
 (% of total)  
Americas  19.5 19.9 21.7 
 United States  11.8 12.4 14.4 
 Other America  7.7 7.5 7.3 
   Brazil  2.0 1.8 1.8 
   Canada  1.6 1.6 1.6 
   Mexico  1.0 1.1 1.1 
Europe  15.0 15.2 15.0 
 EFTA 11.1 11.0 10.5 
   Switzerland  5.7 5.8 6.0 
   Norway  5.3 5.0 4.3 
 Other Europe  3.9 4.2 4.6 
   Turkey  3.0 3.2 3.6 
Commonwealth o f Independent States (CIS)  15.7 14.2 10.6 
   Russian Federation  12.3 10.8 7.9 
   Kazakhstan  1.4 1.4 0.9 
Africa  10.0 9.2 7.7 
   Algeria  1.9 1.7 1.2 
   South Africa  0.9 1.1 1.1 
   Nigeria  1.7 1.7 1.1 
Middle East  4.9 4.6 4.1 
   Saudi Arabia, Kingdom o f 1.8 1.7 1.2 
Asia 33.9 35.7 39.9 
 China  16.6 17.9 20.3 
 Japan  3.4 3.3 3.5 
 Other Asia  13.9 14.5 16.1 
   Korea, Republic of  2.1 2.3 2.4 
   India 2.2 2.2 2.3 
   Viet Nam  1.3 1.3 1.7 
   Chinese Taipei  1.3 1.4 1.5 
   Malaysia  1.1 1.2 1.3 
   Thailand  1.0 1.1 1.1 
   Singapore  1.0 1.0 1.1 
Other  1.0 1.2 1.0 
 
Source:  Eurostat. Viewed at: http://ec.europa.eu/eurostat/web/international -trade/data/database  (database 
 access ed in February 2017).  WT/TPR/S/ 357 •  European Union  
 
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  Table A1. 4 Merchandise exports by product group, 2013 -15 
  2013  2014  2015  
Total (€ billion)  1,736.4  1,702.9  1,789.2  
 (% of total)  
Primary products  17.0 16.6 14.8 
   Agriculture  7.7 7.9 7.9 
     Food 6.3 6.6 6.6 
     Agricultural raw material  1.3 1.3 1.3 
   Mining  9.3 8.7 6.9 
     Fuels 7.0 6.4 4.8 
     Non-ferrous metals  1.4 1.3 1.3 
     Ores and other minerals  1.0 0.9 0.8 
Manufactures  77.1 79.3 80.7 
   Iron and steel  2.2 2.2 1.9 
   Chemicals  15.7 16.4 17.6 
     Organic chemicals  2.6 2.6 2.8 
     Pharmaceuticals  6.5 6.9 8.0 
     Plastics  2.2 2.3 2.2 
     Essential oils and resinoids and perfume materials  1.5 1.6 1.6 
     Fertilizers  0.2 0.2 0.2 
     Other chemicals  2.8 2.8 2.9 
   Other se mi-manufactures  7.0 7.1 6.9 
   Machinery and transport equipment  40.8 41.7 42.1 
     Office machines & telecommunications equipment  4.3 4.2 4.3 
        Electronic data processing and office equipment  1.4 1.4 1.3 
        Integrated circuits and electron ic components  0.9 0.9 1.0 
        Telecommunication equipment  2.0 1.9 2.0 
     Transport equipment  16.5 17.1 18.0 
        Automotive products  10.9 11.3 11.6 
        Other transport equipment  5.6 5.8 6.4 
     Other machinery  20.0 20.3 19.8 
        Power generating machines  3.0 3.1 3.1 
        Non-electrical machinery  12.5 12.7 12.1 
        Electrical machines  4.5 4.6 4.6 
   Textiles  1.0 1.0 1.0 
   Clothing  1.3 1.4 1.4 
   Other manufactures  9.0 9.5 9.8 
Other  5.9 4.1 4.5 
 
Source:  Eurostat. Viewed at: http://ec.europa.eu/eurostat/web/international -trade/data/database  
 (database accessed in February 2017).  WT/TPR/S/ 357 •  European Union  
 
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  Table A1. 5 Merchandise imports by product group, 2013 -15 
  2013  2014  2015  
Total (€ billion)  1,687.4  1,692.2  1,729.2  
 (% of total)  
Primary products  41.8 38.4 31.5 
   Agriculture  8.0 8.1 8.7 
     Food 6.6 6.8 7.3 
     Agricultural raw material  1.4 1.3 1.4 
   Mining  33.8 30.3 22.8 
     Fuels 29.6 26.3 19.0 
     Non-ferrous metals  2.1 2.0 2.1 
     Ores and other minerals  2.1 2.0 1.8 
Manufactures  55.8 59.0 65.8 
   Iron and steel  1.5 1.6 1.7 
   Chemicals  9.4 9.8 10.7 
     Organic chemicals  2.3 2.4 2.6 
     Pharmaceuticals  3.4 3.7 4.2 
     Plastics  1.2 1.3 1.3 
     Essential oils and resinoids and perfume materials  0.4 0.4 0.5 
     Fertilizers  0.2 0.2 0.3 
     Other chemicals  1.7 1.7 1.8 
   Other semi -manufactures  4.8 5.1 5.4 
   Machinery and transport equipment  25.9 27.2 31.0 
     Office machines & telecommunications equipment  10.0 10.0 11.6 
        Electronic data processing and office equipment  4.1 4.1 4.4 
        Integrated circuits and electronic components  1.3 1.3 1.5 
        Telecommunication equipment  4.6 4.5 5.8 
     Transport equipment  6.2 6.7 7.7 
        Automotive products  2.9 3.1 3.7 
        Other transport equipment  3.3 3.6 4.0 
     Other machinery  9.7 10.5 11.7 
        Power generating machines  2.0 2.1 2.4 
        Non-electrical machinery  3.9 4.3 4.7 
        Electrical machines  3.9 4.1 4.7 
   Textiles  1.3 1.4 1.5 
   Clothing  4.2 4.6 5.0 
   Other manufactures  8.6 9.2 10.4 
Other  2.4 2.6 2.7 
Source:  Eurostat. Viewed at: http://ec.europa.eu/eurostat/web/international -trade/data/database  (database 
accessed in February 2017) .  
  WT/TPR/S/357 • European Union  
 
- 195 - Table A1. 6 Intra - and extra -EU trade by member State, 2013 -15 
 Trade in € billion  Intra - and extra -EU trade (%)  
2013  2014  2015  2013  2014  2015  
Intra -
EU-28 Extra -
EU-28 Total  Intra -
EU-28 Extra -
EU-28 Total  Intra -
EU-28 Extra -
EU-28 Total  Intra -
EU-28 Extra -
EU-28 Intra -
EU-28 Extra -
EU-28 Intra -
EU-28 Extra -
EU-28 
Exports                       
EU-28 2,839  1,736  4,575  2,933  1,703  4,636  3,068  1,789  4,857  62.1 37.9 63.3 36.7 63.2 36.8 
Austria  92 39 132 94 40 134 97 41 138 70.1 29.9 69.9 30.1 70.1 29.9 
Belgium  248 105 353 251 104 356 257 101 358 70.1 29.9 70.7 29.3 71.9 28.1 
Bulgaria  13 9 22 14 8 22 15 8 23 59.9 40.1 62.4 37.6 64.9 35.1 
Croatia  6 4 10 7 4 10 8 4 12 61.9 38.1 63.4 36.6 65.9 34.1 
Cyprus  1 1 2 1 1 1 1 1 2 57.9 42.1 56.6 43.4 52.1 47.9 
Czech Republic  99 23 122 108 23 132 119 24 142 81.1 18.9 82.2 17.8 83.3 16.7 
Denmark  53 30 83 53 30 84 53 33 86 63.6 36.4 63.7 36.3 61.3 38.7 
Estonia  9 4 12 9 3 12 9 3 12 71.0 29.0 72.3 27.7 75.1 24.9 
Finland  31 25 56 32 24 56 32 22 54 55.3 44.7 57.3 42.7 58.9 41.1 
France  260 178 437 263 174 437 268 188 456 59.4 40.6 60.1 39.9 58.8 41.2 
Germany  619 469 1,088  649 476 1,125  693 503 1,196  56.9 43.1 57.7 42.3 57.9 42.1 
Greece  13 14 27 13 14 27 14 12 26 47.1 52.9 48.3 51.7 54.2 45.8 
Hungary  63 18 81 67 17 83 72 17 89 77.8 22.2 80.0 20.0 81.3 18.7 
Ireland  50 37 88 50 41 92 59 52 112 57.3 42.7 55.0 45.0 53.1 46.9 
Italy 210 180 390 219 180 399 226 186 412 53.8 46.2 54.9 45.1 54.8 45.2 
Latvia  7 4 11 8 3 11 8 3 11 66.4 33.6 68.5 31.5 69.2 30.8 
Lithuania  14 11 25 13 11 24 14 9 23 55.5 44.5 54.8 45.2 61.3 38.7 
Luxembourg  11 3 14 12 3 14 13 2 16 81.1 18.9 82.6 17.4 84.1 15.9 
Malta  1 2 3 1 1 2 1 1 2 44.9 55.1 50.1 49.9 45.1 54.9 
Netherlands  383 123 506 384 122 506 389 125 513 75.7 24.3 75.9 24.1 75.7 24.3 
Poland  116 39 154 128 37 166 142 37 180 75.0 25.0 77.4 22.6 79.3 20.7 
Portugal  33 14 47 34 14 48 36 14 50 70.3 29.7 70.8 29.2 72.8 27.2 
Romania  35 15 50 37 15 53 40 14 55 69.6 30.4 71.1 28.9 73.7 26.3 
Slovakia  54 11 65 55 10 65 58 10 68 82.9 17.1 84.4 15.6 85.5 14.5 
Slovenia  19 6 26 20 7 27 22 7 29 74.8 25.2 75.3 24.7 76.0 24.0 
Spain  151 89 239 156 88 244 166 89 255 62.9 37.1 63.8 36.2 65.1 34.9 
Sweden  73 53 126 72 51 124 74 52 126 57.7 42.3 58.5 41.5 58.5 41.5 
United Kingdom  177 230 407 182 198 380 184 230 415 43.5 56.5 47.9 52.1 44.4 55.6  
  WT/TPR/S/357 • European Union  
 
- 196 -  Trade in € billion  Intra - and extra -EU trade (%)  
2013  2014  2015  2013  2014  2015  
Intra -
EU-28 Extra -
EU-28 Total  Intra -
EU-28 Extra -
EU-28 Total  Intra -
EU-28 Extra -
EU-28 Total  Intra -
EU-28 Extra -
EU-28 Intra -
EU-28 Extra -
EU-28 Intra -
EU-28 Extra -
EU-28 
Imports                       
EU-28 2,770  1,687  4,457  2,854  1,692  4,546  2,994  1,729  4,723  62.1 37.9 62.8 37.2 63.4 36.6 
Austria  106 32 138 105 32 137 108 33 141 76.6 23.4 76.8 23.2 76.8 23.2 
Belgium  226 114 340 222 120 342 212 126 338 66.4 33.6 65.0 35.0 62.8 37.2 
Bulgaria  15 10 26 16 10 26 17 9 26 59.7 40.3 61.7 38.3 64.3 35.7 
Croatia  11 5 17 13 4 17 14 4 19 66.9 33.1 76.2 23.8 77.7 22.3 
Cyprus  3 1 5 4 1 5 4 1 5 70.5 29.5 71.4 28.6 73.6 26.4 
Czech Republic  83 25 109 90 26 116 99 29 127 76.8 23.2 77.4 22.6 77.3 22.7 
Denmark  51 22 73 52 23 75 54 24 77 70.1 29.9 69.5 30.5 69.5 30.5 
Estonia  11 2 14 11 3 14 11 2 13 82.1 17.9 81.7 18.3 81.7 18.3 
Finland  39 20 58 39 18 58 40 15 54 66.3 33.7 68.1 31.9 73.0 27.0 
France  348 165 513 345 165 509 354 163 517 67.8 32.2 67.7 32.3 68.5 31.5 
German y 575 314 889 595 314 909 622 326 948 64.7 35.3 65.5 34.5 65.6 34.4 
Greece  22 25 47 23 25 48 23 21 44 47.2 52.8 48.2 51.8 52.9 47.1 
Hungary  54 21 75 59 20 79 64 19 83 71.7 28.3 75.2 24.8 76.6 23.4 
Ireland  37 18 54 40 20 61 46 23 69 67.3 32.7 66.5 33.5 66.1 33.9 
Italy 200 161 361 204 153 357 217 153 370 55.4 44.6 57.1 42.9 58.7 41.3 
Latvia  11 3 13 11 3 13 10 3 13 80.0 20.0 80.5 19.5 79.4 20.6 
Lithuania  16 10 26 17 9 26 17 8 25 60.3 39.7 65.6 34.4 67.7 32.3 
Luxembourg  16 4 20 16 4 20 15 6 21 79.0 21.0 80.0 20.0 72.3 27.7 
Malta  3 1 5 3 2 5 3 2 5 71.0 29.0 62.7 37.3 65.3 34.7 
Netherlands  206 238 444 203 240 444 212 250 463 46.3 53.7 45.8 54.2 45.9 54.1 
Poland  108 48 156 117 51 168 125 52 177 69.0 31.0 69.6 30.4 70.7 29.3 
Portugal  41 16 57 44 15 59 46 14 60 72.0 28.0 74.8 25.2 76.5 23.5 
Romania  42 13 55 44 14 59 49 14 63 75.8 24.2 75.4 24.6 77.1 22.9 
Slovakia  46 16 62 47 15 62 52 14 66 74.3 25.7 76.1 23.9 78.7 21.3 
Slovenia  18 8 25 18 8 26 19 8 27 70.1 29.9 69.1 30.9 70.0 30.0 
Spain  142 115 256 155 115 270 171 110 281 55.3 44.7 57.3 42.7 60.7 39.3 
Sweden  83 38 121 84 38 122 87 37 125 68.9 31.1 68.8 31.2 70.0 30.0 
United Kingdom  258 239 497 275 244 520 303 262 565 51.8 48.2 53.0 47.0 53.6 46.4 
Source:  Eurostat database. Viewed at: http://ec.europa.eu/eurostat/web/international -trade -in-goods/data/database  (database  accessed  in February 2017 ).WT/TPR/S/ 357 •  European Union  
 
- 197 - 
 
  WT/TPR/S/357 • European Union  
 
- 197 - Table A2. 1 Selected notifications to th e WTO, April 2015 –February 2017  
Legal provision  Description of 
requirement  Frequency  WTO document  
General Agreement on Tariffs and Trade 1994  
Article XVII:4(a)  State  trading enterprises 
and products traded by 
them Annual 
(triennial full 
notification 
and annual 
changes)  G/STR/N/16/EU, 30 September 2016  
Agreement on Agriculture  
Articles 10 and 18.2  Export subsidies 
(Tables  ES:1 and ES:2)  Annual  G/AG/N/EU/29, 20 May  2016 
(covers the marketing year 2014/2015)  
G/AG/N/EU/25, 17 June 2015  
(covers the marketing  year 2013/2014)  
 
Article 16.2  Possible negative effects of 
the reform programme on 
least developed and net 
food-importing developing 
countries (Table NF:1)  Annual (items 
1 to 3) and 
ad hoc (item 
4) G/AG/N/EU/32, 4 November 2016  
(covers the calendar year 2015)  
G/AG/N/EU/27, 4 March 2016  
(covers the calendar year 2014)  
 
Article 18.2  Administration of tariff 
quotas (Table MA:1)  One-off then 
changes 
ad hoc G/AG/N/EU/31, 2 September 2016  
(covers calendar year 2016 and 
marketing year 2015/2016 ) 
 
Domestic sup port 
commitments (Table  DS:1)  Annual  G/AG/N/EU/34, 8 February 2017  
(covers marketing year 2013/2014)  
 
G/AG/N/EU/26, 2 November 2015  
(covers marketing year 2012/2013)  
 
Imports under tariff quotas  
(Table MA:2)  Annual  G/AG/N/EU/33, 13 January 2017  
(covers m arketing years 2014/2015 and 
2015/2016 and calendar year 2015)  
 
G/AG/N/EU/30, 2 September 2016  
(covers marketing year 2013/2014 and 
calendar year 2014)  
 
G/AG/N/EU/24, 28 May 2015  
(covers marketing year 2012/2013 and 
calendar year 2013)  
 
Articles 5 .7 and 18.2  Use of special safeguard 
provisions (Table MA:5)  Annual  G/AG/N/EU/28, 17 May 2016  
(covers marketing year 2014/2015)  
 
G/AG/N/EU/23, 21 May 2015  
(covers marketing year 2013/2014)  
Article 18.3  New or modified domestic 
support measures exempt 
from reduction 
(Table  DS:2)   G/AG/N/EU/35, 8 February 2017  
General Agreement on Trade in Services  
Article III:3  Measures that significantly 
affect trade in services  Ad hoc  S/C/N/867, 19 September 2016  
S/C/N/866, 19 September 2016  
S/C/N/865, 19 September 2016 
 
Article III:4 and/or IV:2  Contact and enquiry points  Once, then 
changes  S/ENQ/78/Rev.16, 22 April 2016  
Article V:7(a)  Regional trade agreement  Ad hoc  S/C/N/856, 13 January 2016  
Agreement on Implementation of Article VI of the GATT 1994 (Anti -Dumpi ng Agreement)  
Article 16.4  Anti-dumping actions  Ad hoc  G/ADP/N/291, 18 October 2016  
G/ADP/N/284, 19 April 2016  
G/ADP/N/277, 15 October 2015  
G/ADP/N/270, 16 April 2015  
 
Article 16.4  Anti-dumping actions  Semi-annual  G/ADP/N/286/EU, 7 October 2016  
G/ADP/N/2 80/EU, 8 April 2016  
G/ADP/N/272/EU, 21 October 2015  
 WT/TPR/S/ 357 •  European Union  
 
- 198 - 
 
  WT/TPR/S/357 • European Union  
 
- 198 - Legal provision  Description of 
requirement  Frequency  WTO document  
Article 18.5  New or changes to laws or 
regulations relevant to the 
Agreement and the 
administration of such laws 
and regulations  Ad hoc  G/ADP/N/1/EU/3, 1 November 2016  
Agreement on Government Procureme nt 
Article XXII:8  Statistical data  Annual  GPA/WPS/STAT/7, 24 July 2015  
Work programme on SMEs  Ad hoc  GPA/WPS/SME/33, 26 September 2016  
GPA/WPS/SME/32, 26 September 2016  
GPA/WPS/SME/18, 10 June 2016  
GPA/WPS/SME/7, 7 August 2015  
 
Agreement on Import Lice nsing Procedures  
Article s 1.4(a), 5, 7.3 
and/or 8.2(b)  Import licensing 
procedures  Ad hoc  G/LIC/N/1/EU/9, 20 October 2016  
G/LIC/N/1/EU/8, 31 May 2016  
G/LIC/N/1/EU/7, 18 September 2015  
G/LIC/N/1/EU/6, 18 September 2015  
 
 Questionnaire  Annual  G/LIC/N/3/EU/ 5, 21 October 2016  
G/LIC/N/3/EU/4, 12 October 2015  
 
Decision on Notification Procedures for Quantitative Restrictions  
 Decision on notification 
procedures for quantitative 
restrictions   G/MA/QR/N/EU/3, 31 January 2017  
Agreement on Subsidies and Counterv ailing Measures  
Article 25.1  Subsidies  Annual 
(triennial full 
notification 
and annual 
changes)  G/SCM/N/284/EU, 7 August 2015  
Article 25.11  Countervailing duty actions  Ad hoc  G/SCM/N/310, 12 October 2016  
G/SCM/N/302, 16 March 2016  
G/SCM/N/295, 9 October 2 015 
 
Countervailing duty actions  Semi-annual  G/SCM/N/305/EU, 27 September 2016  
G/SCM/N/289/EU, 21 October 2015  
G/SCM/N/281/EU, 13 April 2015  
 
Article 27.11  Countervailing duty actions  Semi-annual  G/SCM/N/298/EU, 8 April 2016  
 
Article 32.6  Laws and regu lations  Ad hoc  G/SCM/N/1/EU/2, 1 November 2016  
 
Agreement on Trade -Related Aspects of Intellectual Property Rights  
Article 63.2  Laws and regulations  Once, then 
changes  IP/N/1/EU/6 (IP/N/1/EU/U/3),  
4 November 2016  
IP/N/1/EU/5 (IP/N/1/EU/T/6 ), 
28 April 201 6 
IP/N/1/EU/4 (IP/N/1/EU/T/5) , 
28 April 2016  
 
Agreement on Safeguards  
Article 12.6  Legislation  Ad hoc  G/SG/N/1/EU/2, 12 June 2015  
 
Agreement on the Application of Sanitary and Phytosanitary Measures  
Article 7 and Annex B, 
paragraph 5  Proposed and adopt ed SPS 
regulations  Ad hoc  Several notifications (series 
G/SPS/N/EU)  
 
Agreement on Technical Barriers to Trade  
Articles 2, 3, 5, 7 and 10  Proposed and adopted 
technical regulations and 
conformity assessment 
procedures  Prior to or, for 
urgent 
problems, 
immediately 
after the 
measure is 
taken  Several notifications (series 
G/TBT/N/EU)  
Council for Trade in Services  
 Preferential treatment for 
LDCs Ad hoc  S/C/N/840, 18 November 2015  
Source:  WTO Secretariat.   
  WT/TPR/S/357 • European Union  
 
- 199 - Table A2. 2 Status of di spute -related WTO matters involving the EU, March 2015 -February 2017  
Subject of dispute  Raised by/against (WTO 
document)  Request for 
consultations  Panel established/panel 
report circulated  AB report 
circulateda Other developments  
As respondent  
 
Anti-dump ing measures on certain 
cold-rolled flat steel products from 
Russia  Russia Federation  
(WT/DS521)  27.02.2017  No No  
Measures related to price 
comparison methodologies  China (WT/DS516)  12.12.2016  No No  
Conditional tax incentives for 
large civil aircraft  United States (WT/DS487)  19.12.2014  Panel composed on  
22 April 2015  No Panel report submitted for 
adoption at the DSB meeting on 
16 December 2016  
Measures affecting tariff 
concessions on certain poultry 
meat products  China (WT/DS492)  08.11.2015  Panel comp osed on 
3 December  2015 No  
Cost adjustment methodologies 
and certain anti -dumping 
measures on imports from the 
Russian Federation — (second 
complaint)  Russian Federation 
(WT/DS494)  07.05.2015  Panel established on 
16 December 2016  No  
Countervailing meas ures on 
certain polyethylene 
terephthalate  Pakistan (WT/DS486)  05.11.2014  Panel composed on 
13 May 2015   
Anti-dumping measures on 
biodiesel from Indonesia  Indonesia (WT/DS480)  10.06.2014  Panel composed on 
4 November  2015   
Certain measures relating to t he 
energy sector  Russian Federation 
(WT/DS476)  30.04.2014  Panel composed on 
7 March  2016   
Cost adjustment methodologies 
and certain anti -dumping 
measures on imports from the 
Russian Federation  Russian Federation 
(WT/DS474)  23.12.2013  Panel established 
22 July 2014   
Anti-dumping measures on 
biodiesel from Argentina  Argentina (WT/DS473)  19.12.2013  Panel report circulated on 
29 March  2016 AB report 
circulated on 
6 October  2016 The reports were adopted on 
26 October  2016. Argentina and 
the EU agreed on a re asonable 
period of time to implement of 9 
months and 15 days expiring on 
10 August 2017  
Measures on Atlanto -Scandian 
herring  Denmark (WT/DS469)  04.11.2013  n.a.  Withdrawn (mutually agreed 
solution) on 21  August  2014 
Certain measures on the 
importation an d marketing of 
biodiesel and measures 
supporting the biodiesel industry  Argentina (WT/DS459)  15.05.2013  No  In consultations   
  WT/TPR/S/357 • European Union  
 
- 200 - Subject of dispute  Raised by/against (WTO 
document)  Request for 
consultations  Panel established/panel 
report circulated  AB report 
circulateda Other developments  
Certain measures affecting the 
renewable energy generation 
sector  China (WT/DS452)  05.11.2012  No  The EU accepted the request of 
Japan to join the consultations 
on 19  November  2012. Australia 
and Argentina requested to join 
the consultations on 
19 November  2012 
Certain measures concerning the 
importation of biodiesels  Argentina (WT/DS443)  17.08.2012  No   
Anti-dumping measures on 
imports of certain fatty alcohols 
from Indonesia  Indonesia (WT/DS442)  30.07.2012  Panel composed on 
18 December  2014   
Seizure of generic drugs in 
transit  Brazil (WT/DS409)  12.05.2010  No n.a. None 
Seizure of generic drugs in 
transit  India (WT/DS408)  11.05.2 010 No n.a. None 
Anti-dumping measures on 
certain footwear  China (WT/DS405)  04.02.2010  18 May 2010/  
28 October  2011 No Implementation notified by 
respondent on 
17 December  2012 
Measures prohibiting the 
importation and marketing of 
seal products  Norway (W T/DS401)  05.11.2009  21 April 2011  22 May 2014  Reasonable period of time 
expires on 18  October  2015 
Measures prohibiting the 
importation and marketing of 
seal products  Canada (WT/DS400)  02.11.2009  25 March  2011 22 May 2014 Reasonable period of time 
expires  on 18 October 2015  
Definitive anti -dumping 
measures on certain iron or steel 
fasteners  China (WT/DS397)  31.07.2009  23 October 2009/  
3 December 2010  15 July 2011  Implementation notified by 
respondent on 23 October 2012  
Certain measures affecting 
poultry meat and poultry meat 
products  United States (WT/DS389)  16.01.2009  19 November 2009  n.a. None 
Expiry reviews of anti -dumping 
and countervailing duties 
imposed on imports of PET  India (WT/DS385)  04.12.2008  No n.a. None 
Tariff treatment of certain 
informat ion technology products  Chinese Taipei (WT/DS377)  12.06.2008  23 September 2008/  
16 August 2010  No Implementation notified by 
respondent on 20 July 2011  
Tariff treatment of certain 
information technology products  Japan (WT/DS376)  28.05.2008  23 September 20 08/ 
16 August 2010  No Implementation notified by 
respondent on 20 July 2011  
Tariff treatment of certain 
information technology products  United States (WT/DS375)  28.05.2008  23 September 2008/  
16 August 2010  No Implementation notified by 
respondent on 20 Ju ly 2011  
Certain measures prohibiting the 
importation and marketing of 
seal products  Canada (WT/DS369)  25.09.2007  25 March 2011   Panel established, but not yet 
composed on 25 March 2011  
Regime for the importation of 
bananas  Panama (WT/DS364)  22.06.2007  No  Settled or terminated 
(withdrawn, mutually agreed 
solution) on 8 November 2012   
  WT/TPR/S/357 • European Union  
 
- 201 - Subject of dispute  Raised by/against (WTO 
document)  Request for 
consultations  Panel established/panel 
report circulated  AB report 
circulateda Other developments  
Regime for the importation of 
bananas  Colombia (WT/DS361)  21.03.2007  No  Settled or terminated 
(withdrawn, mutually agreed 
solution) on 8 November 2012  
Measures affecting th e tariff 
quota for fresh or chilled garlic  Argentina (WT/DS349)  06.09.2006    In consultations on  
6 September 2006  
Definitive safeguard measure on 
salmon  Norway (WT/DS328)  01.03.2005    In consultations on  
1 March 2005  
Measures affecting trade in large 
civil aircraft  United States (WT/DS316)  06.10.2004  20 July 2005/30 June 2010  18 May 2011  Compliance proceeding on -going 
on 13 April 2012  
Aid for commercial vessels  Korea, Republic of 
(WT/DS307)  13.02.2004    In consultations on  
13 February 2004  
Measures aff ecting imports of 
wine Argentina (WT/DS263)  
 04.09.2002    In consultations on  
4 September 2002  
Provisional safeguard measures 
on imports of certain steel 
products  United States (WT/DS260)  30.05.2002  16 September 2002   Panel established, but not yet 
compos ed on 
16 September  2002 
Generalized System of 
Preferences  Thailand (WT/DS242)  07.12.2001    In consultations on  
7 December 2001  
Tariff-rate quota on corn gluten 
feed from the United States  United States (WT/DS223)  
 25.01.2001    In consultations on  
25 January 2001  
Measures affecting soluble coffee  Brazil (WT/DS209)  12.10.2000    In consultations on  
12 October 2000  
As complainant  
 
Tariff treatment of certain 
agricultural and manufacturing 
products  Russian Federation 
(WT/DS485)  31.10.2014  Panel report circu lated on 
12 August 2016     
 
Recourse to Article 22.2 of the 
DSU in the U.S. — clove 
cigarettes dispute  Indonesia (WT/DS481)  13.06.2014  No  Settled  
Anti-dumping duties on light 
commercial vehicles from 
Germany and Italy  Russian Federation 
(WT/DS479)  21.05 .2014  Panel composed on 
18 December  2014; p anel 
report to be circulated in the 
second half of January 2017    
Measures on the importation of 
live pigs, pork and other pig 
products from the 
European  Union  Russian Federation 
(WT/DS475)  08.04.2014  23 October 2014; panel report 
circulated on 19  August  2016  Appealed by Russia Federation 
on 23  September  2016; 
cross-appeal  by the EU on 
28 September  2016 
Certain measures concerning 
taxation and charges  Brazil (WT/DS472)  19.12.2013  Panel es tablished on 
17 December  2014; p anel 
report  circulated on 
14 December 2016    
Recycling fee on motor vehicles  Russian Federation 
(WT/DS462)  09.07.2013  Panel established, but not yet 
composed     
  WT/TPR/S/357 • European Union  
 
- 202 - Subject of dispute  Raised by/against (WTO 
document)  Request for 
consultations  Panel established/panel 
report circulated  AB report 
circulateda Other developments  
Measures imposing anti -dumping 
duties on high -performance 
stainless steel seamless tub es 
("HP-SSST") from the 
European  Union  China (WT/DS460)  13.06.2013  11 September  2013; panel 
report circulated on 
13 February 2015  AB report 
circulated on 
14 October  2015 China removed the measure by 
the end of the reasonable period 
of time on 22  August  2016 
Measures affecting the 
importation of goods  
 Argentina (WT/DS438)  25.05.2012  Panel established on 
28 January  2013; panel report 
circulated on 22  August  2014 AB report 
circulated on 
15 January  2015 Implementation notified on 
14 January 2016  
Measures rel ated to the 
exportation of rare earths, 
tungsten and molybdenum  China (WT/DS432)  13.03.2012  23 July 2012 AB report 
circulated on 
7 August 2014  The People's Republic of China 
removed the measure by the 
end of the reasonable period of 
time on 2 May 2015 
Measures relating to the feed -in 
tariff program  Canada (WT/DS426)  11.08.2011  20 January  2012/  
19 December  2012 n.a. Panel report under appeal on 
5 February 2013  
Anti-dumping measures on 
imports of stainless steel sheet 
and strip in coils from Italy  United St ates (WT/DS424)  01.04.2011  n.a.   
Provisional anti -dumping duties 
on certain iron and steel 
fasteners  China (WT/DS407)  07.05.2010  No n.a. In consultation  
Taxes on distilled spirits  Philippines (WT/DS396)  29.07.2009  19 January 2010  21 December  2011 Implem entation notified by 
respondent on 28  January  2013 
Measures related to the 
exportation of various raw 
materials  China (WT/DS395)  23.06.2009  21 December  2009 30 January  2012 Implementation notified by 
respondent on 28  January  2013 
Certain taxes and other 
measures on imported wines and 
spirits  India (WT/DS380)  22.09.2008  No n.a. None 
Customs valuation of certain 
products from the European 
Communities  Thailand (WT/DS370)  25.01.2008  No n.a.  
Measures affecting trade in large 
civil aircraft — second complain t United States (WT/DS353)  27.06.2005  17 February 2006/  
31 March 2011  12 March 2012  Compliance proceedings ongoing 
on 23  October 2012  
Countervailing duties on olive oil, 
wheat gluten and peaches  Argentina (WT/DS330)  29.04.2005    In consultations  
Section 776 of the Tariff Act of 
1930 United States (WT/DS319)  05.11.2004    In consultations on  
5 November 2004  
Measures affecting trade in large 
civil aircraft  United States (WT/DS317)  06.10.2004  20 July 2005   Panel composed on  
20 July 2005  
Anti-dumping measure s on 
imports of certain products from 
the European Communities  India (WT/DS304)  08.12.2003    In consultations on  
8 December 2003  
Laws, regulations and 
methodology for calculating 
dumping margins (zeroing)  United States (WT/DS294)  12.06.2003  19 March 2004/  
31 October  2005; then 
Article  21.5 circulated on  
17 December 2008  18 April 2006  
then Article 21.5 
circulated on 
14 May 2009  On 2 July 2012 the EU withdrew 
its request under Article 22.2 of 
the DSU   
  WT/TPR/S/357 • European Union  
 
- 203 - Subject of dispute  Raised by/against (WTO 
document)  Request for 
consultations  Panel established/panel 
report circulated  AB report 
circulateda Other developments  
Measures concerning imported 
spirits  Colombia (WT/DS502)  13.01.2016  Panel established on 
26 September 2016    
n.a. Not applicable.  
a AB refers to Appellate Body.  
Source:  WTO Secretariat .  WT/TPR/S/357 • European Union  
 
- 204 - 
 
  Table A3. 1 Tariffs under preferential agreements, 2016  
 
Simple average tariff 
rate (%)  Duty -free rates 
(including MFN duty -
free) as a percentage of 
total tariff lines in each 
category (%)  
 
Overall  WTO 
Agr. WTO 
non-
Agr. Overall  WTO 
Agr. WTO 
non-
Agr. 
MFN 6.3 14.1 4.3 26.1 19.1 28.1 
Albania  0.3 1.1 0.1 97.4 92.2 98.8 
Algeriaa 2.5 12.0 0.0 84.4 29.5 99.9 
Andorra  0.0 0.2 0 99.0 95.3 100 
Bosnia and Herzegovina  0.4 1.3 0.1 97.1 90.9 98.8 
Cameroona 0.1 0.3 0.0 98.9 96.0 99.8 
CARIFORUMa, b 0.0 0.1 0.0 99.0 96.5 99.8 
Central Americaa 1.3 6.4 0.0 90.8 58.7 99.8 
Ceuta -Melilla  2.5 12.2 0.0 84.7 31.2 99.9 
Chile 1.9 8.9 0.0 89.9 55.0 99.7 
Colombiaa 1.0 4.7 0.0 93.6 71.3 99.9 
Eastern and Southern Africa (ESA)a, b 0.0 0.1 0.0 99.0 96.5 99.8 
Economic Partnershipsa, b 0.0 0.1 0.0 99.0 96.5 99.8 
Ecuador  1.8 8.7 0.0 89.2 54.6 99.0 
Egypta 0.2 0.7 0.0 98.9 95.7 99.8 
Faroe Islands  3.3 13.7 0.6 79.4 21.8 95.7 
Fijia 0.0 0.1 0.0 99.0 96.5 99.8 
Georgiaa 0.0 0.1 0 98.9 95.2 100 
Icelandc 1.6 7.1 0.2 87.6 60.9 95.1 
Israel  0.6 2.4 0.1 95.8 82.0 99.6 
Jordan  0.7 0.2 0.8 94.2 95.8 93.8 
Korea, Rep. ofa 0.2 0.5 0.1 96.5 92.6 97.6 
Kosovo  0.7 1.1 0.6 94.8 92.2 95.5 
Lebanon  0.2 1.1 0.0 97.5 88.5 100.0  
Liechtensteinc 2.5 10.9 0.3 82.0 38.2 94.4 
Mexico  1.7 8.2 0.0 90.6 57.9 99.8 
Moldovaa 0.0 0.2 0 98.9 95.0 100 
Montenegro  0.3 1.1 0.1 97.4 92.3 98.8 
Morocco  0.1 0.4 0 99.5 97.7 100 
Norwayc 2.6 11.3 0.3 81.6 37.6 94.0 
Overseas countries & territories  0.1 0.6 0 98.8 94.4 100 
Palestine  0.0 0.1 0 99.0 95.3 100 
Papua New Guineaa 0.1 0.3 0.0 98.9 96.0 99.8 
Perua 0.8 4.0 0.0 94.0 73.2 99.9 
San Marino  0.0 0.0 0.0 99.9 99.9 99.9 
Serbia  0.3 1.1 0.1 97.5 92.2 99.0 
South Africa  1.3 4.2 0.5 89.4 73.8 93.8 
Switzerland  2.8 10.3 0.8 82.1 39.8 94.1 
Syria 3.4 13.2 0.8 78.4 24.2 93.7 
The former Yugoslav Republic of Macedonia  0.3 1.1 0.0 97.9 92.2 99.6 
Tunisia  2.4 11.8 0.0 84.4 29.8 99.8 
Turkey  1.6 7.8 0.0 90.4 56.5 100.0  
Ukrainea 1.4 4.2 0.7 88.2 77.5 91.2 WT/TPR/S/357 • European Union  
 
- 205 - 
 
   
Simple average tariff 
rate (%)  Duty -free rates 
(including MFN duty -
free) as a percentage of 
total tariff lines in each 
category (%)  
 
Overall  WTO 
Agr. WTO 
non-
Agr. Overall  WTO 
Agr. WTO 
non-
Agr. 
GSP 4.1 12.3 1.9 57.2 25.0 66.3 
     Indiad 4.7 12.4 2.7 48.8 23.6 55.9 
     Indonesiad 4.3 12.6 2.1 54.1 22.4 63.1 
     Nigeriad 4.1 12.3 2.0 57.1 25.0 66.1 
     Ukrained 4.1 12.3 1.9 56.9 25.0 65.9 
GSP+  1.8 8.7 0.0 89.2 54.6 99.0 
LDCs (EBA)b 0.0 0.1 0.0 99.0 96.5 99.8 
a Implementation (goods) is not completed yet.  
b According to Commission Implementing Regulation (EU) 2015/1550, a beneficiary country is 
required to obtain a licence in order to benefit from duty -free and quota -free accessfor sugar (HS -
1701). Duty -free and quota -free access status is applied to countries listed in Annex I of the 
regulation. For Table A3.1, tariff codes under HS 1701 were treated as dut y-free rates in 
calculations.  
c The lowest rates taken between EEA and each bilateral agreement for Iceland, Liechtenstein, and 
Norway for calculations.  
d Sector graduations from Standard GSP are taken into account.  
 
Note:  All tariff calculations exclude i n-quota lines. If no preferential rate is applied, the corresponding MFN 
rate is used for the calculations. Ad valorem  equivalents (AVEs) were estimated based on 2015 
import data at the 8 -digit tariff from the Eurostat database. In case of unavailability, the ad valorem  
part is used for compound and mixed rates.  
  
 0.0 refers to >0 and <0.05; 100.0 refers to >99.55 and <100.  
 
Source:  WTO Secretariat calculations based on IDB database and Eurostat database.  WT/TPR/S/357 • European Union  
 
- 206 - 
 
  Table A3. 2 Official ex port credit agencies in EU member States  
Country  Agency  Internet link  
Austria  Oesterreichische Kontrollbank AG (OeKB)  http://www.oekb.at  
Belgium  Delcredere - Ducroire  http://www.delcredereducroire.be/en/  
Bulgaria  Bulgarian Export Insurance Agency (BAEZ)  www.baez -bg.com  
Czech Republic  Export Guarantee and Insurance Corporation 
(EGAP)  http://www.e gap.cz  
 Czech Export Bank  http://www.ceb.cz  
Denmark  Eksport Kredit Fonden (EKF)  http://www.ekf.dk  
Estonia  KredEx  http://www.kredex.ee/en/  
Finland Finnvera OyJ  http://www.finnvera.fi  
 Finnish Export Credit Ltd (FEC)  http://www.fec.fi  
France  Banque Publique d'Investiss ement Assurance 
Export  http://www.bpifrance.fr  
Germany  AuslandsGeschäftsAbsicherung der 
Bundesrepublik Deutschland  http://www.agaportal.de/en/index.html  
 Euler Hermes  http://www.hermes -kredit.com  
Greece  Export Credit Insurance Organization (ECIO)  http://www.ecio.gr  
Hungary  Hungarian Export Credit Insurance Ltd  http://www.exim.hu/en/  
 Hungarian Expo rt-Import Bank Plc (EXIM)   
Italy SACE S.p.A. Servizi Assicurativi del 
Commercio Estero  http://www.sace.it/GruppoSACE/  
content/it/index.html  
Luxembourg  Office du Ducroire (ODD)  http://www.ducroire.lu  
Netherlands  Atradius  http://www.atradius.com/nl/en/  
dutchstatebusiness/index.jsp  
Poland  Korporacja Ubezpieczén Kredytów 
Ekspo rtowych (KUKE)  http://www.kuke.com.pl  
Portugal  Companhia de Seguro de Créditos  http://www.cosec.pt  
Romania  Banca de export -import a României  www.eximbank.ro  
Slovak Republic  Export -Import Bank of the Slovak Republic 
(Eximbank SR)  http://www.eximbanka.sk  
Slovenia  Slovenska Izvozna in razvonjna banka, d.d. 
(SID)  http://www.sid.si/home  
Spain  Compañía Española de Seguros de Crédito a 
la Exportación (CESCE)  http://www.cesce,es  
 Secretaría de Estado de Comercio (Ministerio 
de Economía)  http://www.mcx.e s 
Sweden  Exportkreditnämnden (EKN)  http://www.ekn.se  
 AB Svensk Exportkredit (SEK)  http://www.sek.se/en  
United Kingdom  U.K. Export Finance  http://www.ukexportfinance.gov.uk  
Source:  OECD online information, "Official Export Credits Agencies". Viewed at: 
http://www.oecd.org/trade/xcred/eca.htm . 
  
  WT/TPR/S/357 • European Union  
 
- 207 - Table A3. 3 Summary of the European Union's main legislative measures on intellectual property rights, 2017  
Intellectual 
property right  Legislative measure  Notification to Council for TRIPS pursuant 
to Article  63.2 TRIPS  
Copyright and 
related rights  
  Directive 93/83/EEC  of 27 September 1993 on the coordination of certain rules concerning copyright and rights 
related to copyright applicable to satellite broadcasting and c able retransmission  
 Directive 96/9/EC of 11 March 1996 on the legal protection of databases  
 Council Decision 2000/278/EC of 16 March 2000 on the approval, on behalf of the European Community, of the 
WIPO Copyright Treaty and the WIPO Performances and Phono grams Treaty  
 Directive 2001/29/EC  of 22 May 2001 on the harmonization of certain aspects of copyright and related rights in 
the information society (Information S ociety Directive)  
 Directive 2001/84/EC  of 27 September 2001 on the resale right for the benefit of the author of an original work 
of art  
 Directive 2006/115/EC  of 12 December 2006 on rental right and lending right and on certain rights related to 
copyright in the field of intellectual property  
 Directive 2006/116/EC of 12 De cember 2006 on the term of protection of copyright and certain related rights  
 Directive 2009/24/EC of 23 April 2009 on the legal protection of computer programs  
 Directive 2011/77/EU of 27 September 2011 amending Directive 2006/116/EC of 12  December  2006 on  the 
term of protection of copyright and certain related rights  
 Directive 2012/28/EU of 25 October 2012 on certain permitted uses of orphan works  
 Directive 2014/26/EU of 26 February 2014 on collective management of copyright and related rights and multi -
territorial licensing of rights in musical works for online use in the internal market  
 IP/N/1/EU/C/5  
 
IP/N/1/EEC/C/2  
IP/N/1/EU/C/8  
 
IP/N/1/EU/C/1  
 
IP/N/1/EU/C/6  
 
IP/N/1/EU/C/3  
 
IP/N/1/EU/C/10  
IP/N/1/EU/C/7  
IP/N/1/EU/C/4  
 
IP/N/1/EU/C/2  
IP/N/1/EU/C/9  
Trade  marks  Council Regulation (EC) No. 207/2009 of 26 February 2009 on the Community trade  mark 
 Regulation (EU) 2015/2424 of 16 December 2015 amending Council Regulation (EC) No . 207/2009 on the 
Community trade mark and Commission Regulation (EC) No . 2868/95 imp lementing Council Regulation (EC) 
No. 40/94 on the Community trade mark, and repealing Commission Regulation (EC) No . 2869/95 on the fees 
payable to the Office for Harmonization in the Internal Market (Trade Marks and Designs)  
 Directive 2008/95/EC of 22 Oc tober 2008 to approximate the laws of the member States relating to trade  
marks  
 Directive (EU) 2015/2436 of the European Parliament and of the Council of 16 December 2015 to approximate 
the laws of the member States relating to trade  marks  
 Commission Regul ation (EC) No . 2868/95 of 13 December 1995 implementing Council Regulation (EC) No . 
40/94 on the Community trade mark, as amended by Commission Regulation (EC) No . 782/2004 of 26 April 
2004, Commission Regulation (EC) No . 1041/2005 of 29 June 2005, and Com mission Regulation (EC) No . 
355/2009 of 31 March 2009  
 Commission Regulation (EC) No . 216/96 of 5 February 1996 laying down the procedures of the Boards of 
Appeal of the Office for Harmonization in the Internal Market (Trade  marks and Designs)  
 Commission Re gulation (EC) No. 2082/2004 of 6 December 2004, amending Regulation (EC) No.  216/96 laying 
down the rules of procedure of the Boards of Appeal of the Office for Harmonization in the Internal Market 
(Trade  marks and Designs)  IP/N/1/EU/T/2  
IP/N/1/EU/T/6  
 
 
 
IP/N/1/EU/T/1  
IP/N/1/EU/T/5  
 
 
IP/N/1/EU/T/7, IP/N/1/EU /T/8 and 
IP/N/1/EU/T/4  
 
IP/N/1/EU/T/ 9 
 
IP/N/1/EU/T/3  
 
  
  WT/TPR/S/357 • European Union  
 
- 208 - Intellectual 
property right  Legislative measure  Notification to Council for TRIPS pursuant 
to Article  63.2 TRIPS  
Geographical 
indications   Wines : Regulation (EU) No. 1308/2013 of 17 December 2013 establishing a common organization of the 
markets in agricultural  products  
 Commission Regulation (EC) No. 607/2009 of 14 July 2009, laying down certain detailed rules regarding 
protected designations of origin and geographical indications, traditional terms, labelling and presentation of 
certain wine sector products  
 Aromatised Wines : Regulation (EU) No. 251/2014 of 26 February 2014 on the definition, description, 
presentation, labelling and the protection of geographical indications of aromatised wine products and repealing 
Council Regulation (EEC) No. 1601/91  
 Spirit Dri nks: Regulation (EC) No. 110/2008 of 15 January 2008 on the definition, description, presentation, 
labelling and the protection of geographical indications of spirit drinks  
 Commission Implementing Regulation (EU) No . 716/2013 of 25 July 2013 laying down ru les for the application 
of Regulation (EC) No . 110/2008 on the definition, description, presentation, labelling and the protection of 
geographical indications of spirit drinks  
 Agricultural products and foodstuffs : Council Regulation (EU) No. 1151/2012 of 2 1 November 2012 on quality 
schemes for agricultural products and foodstuffs  
 Commission Delegated Regulation (EU) No . 664/2014 of 18 December 2013 supplementing Regulation (EU) No . 
1151/2012 with regard to the establishment of the Union symbols for protecte d designations of origin, 
protected geographical indications and traditional specialities guaranteed and with regard to certain rules on 
sourcing, certain procedural rules and certain additional transitional rules  
 Commission Implementing Regulation (EU) No. 668/2014 of 13 June 2014 laying down rules for the application 
of Regulation (EU) No . 1151/2012 on quality schemes for agricultural products and foodstuffs  
 IP/N/1/EU/G/4  
 
IP/N/1/EEC/4 and IP/N/1/EEC/G/5  
 
 
IP/N/1/EU/G/5  
 
 
IP/N/1/EEC/4 and IP/N/1/EEC/G/6  
 
IP/N/1/EU/ G/6 
 
 
IP/N/1/EU/G/3  
 
IP/N/1/EU/G/ 7 
 
 
 
IP/N/1/EU/ G/8 
Industrial designs   Directive 98/71/EC of 13 October 1998 on the legal protection of designs  
 Council Regulation (EC) No. 6/2002 of 12 December 2001 on Community designs, as amended by Council 
Regulation (EC) No. 1891/2006 of 18 December 2006  
 Commission Regulation (EC) No. 2245/2002 of 21 October 2002 implementing Council Regulation (EC) No. 
6/2002, as amended by Commission Regulation (EC) No. 876/2007 of 24 July 2007  
 Commission Regulation (EC) N o. 2246/2002 of 16 December 2002 on the fees payable to the Office for 
Harmonization in the Internal Market (Trademarks and Designs) in respect of the registration of Community 
designs, as amended by Commission Regulation (EC) No. 877/2007 of 24 July 2007  
 Council Decision 2006/954/EC of 18 December 2006 approving the accession of the EC to the Geneva Act of 
the Hague Agreement concerning the international registration of industrial designs, adopted in Geneva on 2 
July 1999  
 IP/N/1/EU/D/1  
IP/N/1/EU/D/2  
 
IP/N/1/EU/D/3  
 
IP/N/1/EU/D/4  
 
 
IP/N/1/EU/D/5  
Patents   Directive 98/44/EC of 6 July 1998 on the legal protection o f biotechnological inventions  
 Regulation (EC) No. 1901/2006 of 12 December 2006 on medicinal products for paediatric use and amending 
Regulation (E EC) No. 1768/92, Directive 2001/20/EC, Directive 2001/83/EC and Regulation (EC) No. 726/2004  
 Regulation (EC) No. 816/2006 of 17 May 2006 on compulsory licensing of patents relating to the manufacture 
of pharmaceutical products for export to countries with public health problems  
 Regulation (EU) No. 1257/2012 of 17 December 2012 implementing enhanced cooperation in the area of the 
creation of unitary patent protection  
 Regulation (EU) No. 1260/2012 of 17 December 2012 implementing enhanced cooperation in the a rea of the 
creation of unitary patent protection with regard to the applicable translation arrangements  IP/N/1/EEC/P/4  
IP/N/1/EU/P/2  
 
IP/N/1/EEC/P/5  
 
IP/N/1/EU/P/1  
 
IP/N/1/EU/P/8  
 
Supplementary 
protection 
certificates   Regulation (EC) No. 1610/96 of 23 Jul y 1996 concerning the creation of a supplementary protection certificate 
for plant protection products  
 Regulation (EC) No. 469/2009 of 6 May 2009 concerning the supplementary protection certificate for medicinal 
products  
 IP/N/1/EU/P/4  
 
IP/N/1/EU/P/3   
  WT/TPR/S/357 • European Union  
 
- 209 - Intellectual 
property right  Legislative measure  Notification to Council for TRIPS pursuant 
to Article  63.2 TRIPS  
Plant varieties   Council Regulation (EC) No. 2100/94 of 27 July 1994  on Community plant variety rights , as amended by 
Council Regulation (EC) No . 2506/95 of 25 October 1995, Council Regulation (EC) No . 807/2003 of 14 April 
2003, Council Regulation (EC) No . 1650/2003 of 18 June 2003, Council Regulation (EC) No . 873/2004 of 29 
April 2004 and Council Regulation (EC) No. 15/2008 of 20 December 2007  
 Council Regulation (EC) No . 2470/96 of 17 December 1996 providing for an extension of the terms of a 
Community plant v ariety right in respect of potatoes  
 Commission Regulation (EC) No. 874/2009 of 17 September 2009, establishing implementing rules for the 
application of Council Regulation (EC) No. 2100/94 as regards proceedings before the Community Plant Variety 
Office, a s amended by Commission Implementing Regulation (EU) 2016/1448 of 1 September 2016  
 Commission Regulation (EC) No. 1238/95 of 31 May 1995 establishing implementing rules for the application of 
Council Regulation (EC) No. 2100/94 as regards the fees payable  to the Community Plant Variety Office, as 
amended by Commission Regulation (EC) No. 329/2000 of 11 February 2000, Commission Regulation (EC) No. 
569/2003 of 28 March 2003, Commission Regulation (EC) No. 1177/2005 of 20 July 2005, Commission 
Regulation (EC ) No. 2039/2005 of 14 December 2005, Commission Regulation (EC) No. 572/2008 of 19  June 
2008, Commission Implementing Regulation (EU) No. 510/2012 of 15 June 2012, Commission Implementing 
Regulation (EU) No. 623/2013 of 27 June 2013, Commission Implementin g Regulation (EU) No. 1294/2014 of 4 
December 2014, Commission Implementing Regulation (EU) No. 2015/2206 of 30 November 2015 and 
Commission Implementing Regulation (EU) 2016/2141 of 6 December 2016  
 Commission Regulation (EC) No. 1768/95 of 24 July 1995, e stablishing implementing rules on the agricultural 
exemption provided for in Article 14(3) of Council Regulation (EC) No. 2100/94, as amended by Commission 
Regulation (EC) No. 2605/98 of 3 December 1998  
 IP/N/1/EEC/P/3  
 
 
 
IP/N/1/EU/P/9  
 
IP/N/1/EU/P/5  
 
 
IP/N/1/EU/P/6  
 
 
 
 
 
 
 
 
IP/N/1/EU/P/7  
Protection of 
layout designs   Council Directive 87/54/EEC  of 16 December 1986 on the legal protection of topographies of semicond uctor 
products  
 Council Decision 94/824/EC of 22 December 1994 on the extension of the legal protection of semiconductor 
products to persons from a Member of the WTO  
 IP/N/1/EEC/L/1  
 
IP/N/1/EEC/L/2  
Undisclosed 
information and 
clinical trial data   Directive 2001/83/EC of 6 November 2001 on the Community code relating to medicinal products for human 
use, as amended by Directive 2004/27/EC of 31 March 2004  
 Directive 2004/27/EC of 31 March 2004 amending Directive 2001/83/EC on the Community code relating to 
medicinal products for human use  
 Regulation No. 726/2004 of 31 March 2004 laying down Community procedures for the authorisation and 
supervision of medicinal products for human and veterinary use and establishing a European Medicines Agency  
 Directive (EU) 2016 /943 of 8 June 2016 on the protection of undisclosed know -how and business information 
(trade secrets) against their unlawful acquisition, use and disclosure  
 Regulation No . 536/2014 of 16 April 2014 on clinical trials on medicinal products for human use, a nd repealing 
Directive 2001/20/EC  IP/N/1/EU/U/1  
 
IP/N/1/EU/U/4  
 
IP/N/1/EU/U/2  
 
IP/N/1/EU/U/3  
 
IP/N/1/EU/U/5  
Enforcement  
  Directive 2000/31/EC of 8 June 2000 on certain legal aspects of information society services, in particular 
electronic commerce, in th e internal market (E -Commerce Directive)  
 Directive 2004/48/EC of 29 April 2004 on the enforcement of IPRs  
 Regulation (EU) No.386/2012 of 19 April 2012 on entrusting the Office for Harmonization in the Internal Market 
(Trade Marks and Designs) with tasks re lated to the enforcement of intellectual property rights, including the 
assembling of public and private -sector representatives as a European Observatory on Infringements of 
Intellectual Property Rights  
 Regulation (EU) No. 608/2013 of 12 June 2013 concerni ng customs enforcement of IPRs  
 Commission Implementing Regulation (EU) No . 1352/2013 of 4 December 2013 establishing the form provided 
for in Regulation (EU) No . 608/2013 of the European Parliament and of the Council concerning  customs 
enforcement of inte llectual property rights  IP/N/1/EU/E/2  
 
IP/N/1/EEC/E/4  
IP/N/1/EU/E/3  
 
 
 
IP/N/1/EU/E/1  
IP/N/1/EU/E/4  
Source:  WTO Secretariat.   
  WT/TPR/S/357 • European Union  
 
- 210 - Table A3. 4 Term of protection of major intellectual property rights, 2017  
Type of right  Term of prote ction  Competent agency at the 
EU level  
Copyright    
 Authors' right s Life of the author plus 70 years irrespective of the date the work was lawfully made available to 
the public. In the case of joint authorship the term should be calculated after the death  of the last 
surviving author. In the case of anonymous or pseudonymous works, 70 years after the work is 
lawfully made available to the public. If the pseudonym does not leave any doubt as to the identity 
of the author, then protection is for the life of the author plus 70 years irrespective of the date the 
work was lawfully made available to the public  
 Copyright is protected 
without registration  
 Work published in volumes  Protection runs from the time the work was lawfully made available to the public  
 Cinematographic or audiovisual worksa 
 Protection expires 70 years after the death of the last of the following persons to survive, whether 
or not these persons are designated as co -authors: principal director (wh o is always considered an 
author), author o f the screenplay, author of the dialogue and  composer of the original music  
 
 Performers  Protection expires 50 years after the date of the performance. However, if a fixation of the 
performance otherwise than in a phonogram is lawfully published or lawful ly communicated to the 
public within this period, the rights expire 50  years  from the date of the first such publication or 
the first such communication to the public, whichever is the earlier; in the case of a fixation of the 
performance in a phonogram, t he rig hts shall expire after 70 years  
 
 Producers of phonograms  Protection expires 50 years after the fixation is made. However, if the phonogram has been 
lawfully published within this period, the rights expire 70  years  from the date of the first lawful 
publication. If no lawful publication has taken place, and the phonogram has been lawfully 
communicated to the public within this period, the rights will expire 7 0 years  from the date of the 
first lawful communication to the public  
 Producers of a filmb Protection expires 50 years  after the fixation is made. However, if the film is lawfully published or 
lawfully communicated to the public during this period, the rights will expire 50 years  from the 
date of the first such publication or the first such commu nication to the public, whichever is the 
earlier  
 
 Broadcasting organizations  Protection expires 50 years  after the first transmission of a broadcast whether transmitted by wire 
or over the air, including by cable or satellite  
 
 Photographsc Life of the author plus 70 years no matter when it was lawfully made available to the public. In the 
case of joint authorship, the term should be calculated after the death of the last author. In the 
case of anonymous or pseudonymous works, 70  years after the work is lawfully made available to 
the public. If the pseudonym does not leave any doubt as to the identity of the author then 
protection is for the life of the author plus 70  years no matter when the work was lawfully made 
available to the public  
  
  WT/TPR/S/357 • European Union  
 
- 211 - Type of right  Term of prote ction  Competent agency at the 
EU level  
Patents    
Any inventions, in all field s of technology, that 
are new, involve an inventive step, and are 
susceptible of industrial application  20 years from the date of filing; under a supplementary protection certificate, an additional period 
of market exclusivity of up to five years may be granted for medicinal and plant protection 
products; an extension of another six months is available under paediatric legislation  
 European Patent Office 
(EPO) for European patents  
Plant varieties    
Plant varieties which are disti nct, uniform, 
stable, and new  Plant varieties for 25 years. Protection may be extended for 5 years. Varieties of vine, tree and 
potato species for 30 years  
 Community Plant Variety 
Office (CPVO)  
Trademarks    
Any signs represented graphically, particular ly 
words, including personal names, designs, 
letters, numerals, the shape of goods or their 
packaging, provided that such signs are 
capable of distinguishing the goods or services 
of one undertaking from those of other 
undertakings  
 10 years from the date of filling of application, may be renewed for an indefinite number of 10 -
year periods  European Union Intellectual 
Property Office (EUIPO)1 for 
European Union trademarks  
Geographical indications    
Indications which identify a good as 
originating in the te rritory of a Member or a 
region or locality in that territory, where a 
given quality, reputation or other 
characteristics of the good are essentially 
attributable to its geographical origin  
 For GIs protected as PDO/PGI, the term of protection is indefinit e, unless the geographical 
indication ceases to be protected  European Commission DG 
Agriculture  
Industrial designs    
Designs that are new and have individual 
character. A design is considered new if no 
identical design (i.e. one whose features differ 
only in immaterial details) has been made 
available to the public. It has individual 
character if the overall impression it produces 
on the informed user differs from the overall 
impression produced on such a user by any 
design which has been made available to the 
public  
 Registered design: one or more periods of 5 years, up to a maximum of 25 years from the date of 
filing. Unregistered design: 3 years after publication  EUIPO for Community 
designs  
                                                
1 The European Union Intellectual Property Office (EUIPO) was known as Office for Harmonization in the Internal Market (OHIM) u ntil 23  March 2016. For more 
information see Directive (EU) 2015/2436 of the European Parliament and of the Council of 16 December 2015 to approximate the  laws of the member States relating to 
trademarks.   
  WT/TPR/S/357 • European Union  
 
- 212 - Type of right  Term of prote ction  Competent agency at the 
EU level  
Undisclosed test or other data    
Data the origination of whi ch involves 
considerable effort and which must be 
submitted to regulatory authorities in order to 
obtain marketing approval of pharmaceutical 
or of agricultural chemical products which 
utilize new chemical entities  8-11 years of data and marketing protecti on European Medicines Agency 
(EMA) grants marketing 
authorization  
a The principal director of a cinematographic or audiovisual work is considered the author. The author of the screenplay and/or  the author of a dialogue are 
designated as co -authors.  
b The term "film" designates a cinematographic or audiovisual work or moving images, whether or not accompanied by sound.  
c Photographs are protected under Community law only if they are the author's own intellectual creation. Member States may prov ide pr otectio n for other 
photographs.  
Source:  WTO Secretariat.   
  WT/TPR/S/357 • European Union  
 
- 213 - Table A3. 5 SOEs in EU member States, 2015  
 No. of SOEs  Definition of SOE by the 
member State in 
providing statistics  Indicative SOEs and 
sectors concerned  Main indicators  Main i ndicator 
as % GDP  References  
Austriaa 108 All companies in which the 
federal government has a 
direct or majo rity interest 
(over 50% equity)  Kommunalkredit Austria 
AG (financial), 
Österreichische 
Bundesbahnen -Konzern 
(rail transport)  -total assets, €190 bi llion 
-revenue, €18.7 billion  
-liabilities, €149 billion  
-avg. number of employees, 
104,952  55.9% (assets)  https://english.bmf.gv.at/bud
get-economic -
policy/Management -of-State -
Owned -Enterprises.html  
https://www.bmf.gv.at/budget
/das-
budget/Ausgliederungen_und_
Beteiligungen_des_Bun des_Ok
tober_2015.pdf?5b0v62  
 
Belgium  73 Federal government as 
shareholder, investor, or 
equity stakeholder  Belgacom (telecom), bpost 
(post), BNP Paribas 
(financial)  -total assets, €2.11 billion  
-operating income, €0.6 million  
-profit before tax, €84.3 million  
 0.5% (assets)  http://www.sfpi -
fpim.be/en/key -figures ; 
http://www.sfpi -
fpim.be/sites/default/files/atta
chments/sfpi_rapport_annuel_
2015.pdf  
Bulgaria  240 State enterprises and 
commercial companies with 
at least 50% participation by 
the state  Bulgarian Energy Ho lding 
(energy), National Electric 
Company (energy)  -net profit/loss, BGN 85 million  13% (revenue)  http://www.minfin.bg/bg/page
/522; 
http://www.minfin.bg/bg/pa ge
/1122 ; 
http://ime.bg/en/articles/expl
oring-the-financial -state-of-
bulgarian -soes/  
Croatia  Holdings in LLCs, 
223; Shares in joint -
stock companies, 
412; Real estat e 
holdings, 1,016,085  Companies and legal entities 
of strategic importance to 
Croatia; companies where 
Croatia has a majority 
share; companies where 
Croatia has a minority share 
but where Croatia has a 
special interest  Croatia airlines (air 
transport), Cro atian 
Motorways (road 
transport), Croatian 
Forests (forestry)  Data for companies of strategic 
importance, and those which the 
state has majority or minority 
share:  
-total revenues, HRK 54.2 billion  
-total expenditure, HRK 52.0 
billion,  
-operating profit, H RK 2.1 billion  
-number of employees, 53,519  
 16.2% (revenues)  https://imovina.gov.hr/objavlj
en-registar -drzavne -
imovine/1349 ; http://registar -
imovina.gov.hr/ ; 
https://imovina.gov.hr/UserDo
csImages//dokumenti/Izvjesca
//Izvje%C5%A1%C4%87e%2
0o%20provedbi%20Plana%20
upravljanja%20imovinom%20
u%20vlasni%C5%A1tvu%20R
epublike%20Hrvatske%20za%
202015.%20godinu%20 -
%20sije%C4%8Danj%202016
.pdf 
Cyprus  54 .. Cyprus Ports Authority 
(ports), Cyprus 
Telecommunications 
(telecom)  .. .. http://www.mof.gov.cy/mof/m
of.nsf/page51_gr/page51_gr?
OpenDocument  
Czech Rep.  50 Equity investments of  the 
Ministry of Finance in 
companies  Skoda (automobiles), 
Harvardský průmyslový 
holding (industrial), E.ON 
S.E (energy)  -holdings, CZK 100 billion and 
€102 million  
-registered capital, CZK 170 
billion and €2.7 billion  2.2% (holdings in 
CZK only)  http://www.mfcr.cz/cs/verejny
-sektor/majetek -
statu/majetkove -
ucasti/2016/majetkove -ucasti -
ministerstva -financi -ke-26617   
  WT/TPR/S/357 • European Union  
 
- 214 -  No. of SOEs  Definition of SOE by the 
member State in 
providing statistics  Indicative SOEs and 
sectors concerned  Main indicators  Main i ndicator 
as % GDP  References  
Denmark  30 Stakeholder in joint stock 
compani es, public 
companies, and international 
or investment funds  DONG Energy (energy), 
TV2 Danmark (commun -
ications)  -total assets, Kr. 333 billion  
-equity, Kr. 91 billion  
-net sales, Kr. 113 billio n 
-profit/loss, Kr. -2.5 billion  
-employees, 18,725  
 16.4% (asse ts) https://www.fm.dk/publikation
er/2015/statens -selskaber -15; 
https://www.fm.dk/publikation
er/2016/statens -selskaber  
 
Estoniab 36 private 
companies, 75 
foundations, 142 
non-profits  State as sole owner or 
having exclusive or majority 
stake; for non -profits, where 
government exercises rights 
as an appointed member  
 Eesti Energia (Energy), 
Port of Tallinn  For privat e companies and 
foundations:  
-total assets, €7,124 million  
-total revenue, €2,545 million  
-total avg. number of 
employees, 26,985  
 35.5% (assets)  https://www.eesti.ee/eng/cont
acts/riigi_osalusega_ariuhingu
d_2; http://www.fin.ee/riigi -
osalusega -ariuhingute -ja-
sihtasutuste -aruanded  
Finland  63 A state majority -owned 
company in which the State 
holds a majority of the 
aggregate of votes; a state 
associated company in which 
the State holds a minimum 
of 10 and maximum of 50% 
of the aggregate votes  Finnair (air transport), 
Neste (energy)  Data for the 29 portfolio 
companies:  
-total assets, €39.4 billion  
-net sales, €23.1 billion  
-operating profit, €2 billion  
-state dividends, €1.5 billion  18.8% (assets)  http://vnk.fi/en/value -of-
state-shareholdings ; 
http://vnk.fi/documents/1061
6/1221497/2015_OO+vuosike
rtomus+Eng.pdf/b3dab59c -
f9a4-4340-847b-6e98ef9f4aca  
France  81 List of companies per Decree 
No. 20 04-963 plus 
shareholdings in companies 
in which the Government 
holds less than 1% of the 
capital  EDF (electricity), La Poste 
(post), SNCF (rail 
transport)  -total state shareholdings, €90 
billion  
-total revenues, €147 billion  
-total dividends received by the 
state, €3.9 billion  
-annual average number of 
employees, 1,666,000  6.7% (revenues)  http://www.economie.gouv.fr/
files/files/directions_services/a
gence -participations -
etat/RAPPORT_D'ACTIVITE_AP
E_2015 -2016_MD.pdf ; 
http://www.economie.gouv.fr/
files/files/directions_services/a
gence -participations -
etat/Rapport_APE(1).pdf  
 
Germany  673 (Federal) and 
15,314 in total 
(including states and 
municipalities)  Where the federal 
government  has a direct 
investment or indirect 
investment of 25% or 
€50,000 capital ; for others, 
where government has more 
than 50% of the capital or 
voting rights  KfW (financial), Deutsche 
Bahn (Rail), Deutsche 
Telekom (Telecom)  Data for all types:  
-total assets,  
€1.86 trillion  
- total revenue, €528.7 billion  
- total expenditure,  
€513.8 billion  
 61% (assets)  http://www.bundesfinanzminis
terium.de/Content/DE/Monats
berichte/2016/06/Inhalte/Kapi
tel-3-Analysen/3 -4-
Beteiligung -des-Bundes -an-
Unternehmen.html#f1  
https://www.destatis.de/DE/Z
ahlenFakten/GesellschaftStaat
/OeffentlicheFinanzenSteuern/
OeffentlicheFinanzen/FondsEin
richtungenUnternehmen/Tabell
en/Jahresab schluesse_Wirtsch
aftsbereiche.html  
  
  WT/TPR/S/357 • European Union  
 
- 215 -  No. of SOEs  Definition of SOE by the 
member State in 
providing statistics  Indicative SOEs and 
sectors concerned  Main indicators  Main i ndicator 
as % GDP  References  
Greece  13 Chapter A of Law 
3429/2005, 48 of 
the general 
government with a 
budget over €10 
million, plus others 
in privatization 
portfolio  State owned enterprises 
defined by law  OSE (rail infrastructure), 
EGNATIA ODOS 
(highways)  -total state assets, €50 billion  
For chapter A:  
-total revenues, €2.62 billion  
-profit, €573 million  
For general governmentd 
-total revenues, €726 million  
-profit, €287 million  28.4% (assets)  https://www.oecd.org/policy -
briefs/greece -reforming -the-
state-owned -enterprises -
sector.pdf ; 
http://www.mi nfin.gr/sites/def
ault/files/financial_files/12mon
th_2015_BULLETIN.pdf ; 
http://www.minfin.gr/sites/def
ault/files/financial_files/DEKO_
targets_6month_2016.p df 
 
Hungary  500+  State -owned business 
enterprises in which it has a 
majority or minority 
ownership or exercises 
ownership rights  MVM Hungarian Electricity 
(energy), Szerencsejáték 
Ltd (gaming)  -total assets, Ft 17 trillion HUF  50% (assets)  http://www.mnv.hu/en/top_m
enu/company  
 
Ireland  241 Financial and non -financial 
bodies that are directly or 
indirectly controlled by a 
government office or lack 
autonomy  Irish Bank Resolution 
Corporation (financial),  
TSB Group (financial), 
Coillte Teoranta (natural 
resources)  .. .. http://www.finance.gov.ie/site
s/default/files/FINANCE%20AC
COUNTS %202015%20 -
%20To%20PrintRoom%2009.
08.2016.pdf ; 
http://www.cso.ie/en/media/c
soie/surveysandmethodologies
/documents/pdfdocs /nationala
ccounts/RegPubSecBodiesOct2
016.pdf  
Italyc 34 under the 
Department of 
Treasury, including 
10,964 in total  For Department of Treasury, 
listed and non -listed 
companies where the state 
has majority or controlling 
shareholding; total is 
companies w here there is 
public participation  
 Eni (energy), Ferrovie 
dello Stato (rail transport), 
RAI (communications)  For Department of Treasury:  
-total assets,  €969 billion  
For all:  
-employment, 953,100  59% (assets)  http://www.dt.mef.gov.it/en/a
ttivita_istituzionali/partecipazi
oni/elenco_partecipazioni/ ; 
http://www.istat.it/it/archivio/
173587 ;  
http://www.rgs.mef.gov.it/_D
ocumenti/VERSIONE -I/Attivit --
i/Rendiconto/Conto_del_bilanci
o_e_Conto_del_patrimonio/Il -
Patrimo/PS -2014.pdf  
Latvia  200 SOEs, state -owned equity 
shares, equi ty shares 
belonging to the SOEs and 
SOEs effectively controlled 
by the State  Citadele Banka (Financial), 
Latvenergo Group 
(Energy), Latvijas 
dzelzceļš Group (Railway)  -total assets, €8.17 billion  
-total turnover, €3.41 billion  
-profit, €164.4 million  
-avg. number of employees, 
52,239  
-investment in fixed assets, 
€676.5 million  34% (assets)  http://www.pkc.gov.lv/images
/Kapitalsabiedribas/Annual_Re
port_on_SOEs.pdf ; 
http://www.pkc.gov.lv/images
/Kapitalsabiedribas/gada_pars
kats_web.pdf  
Lithuania  131 State as full or majority 
share owner  Lietuvos Geležinkeliai 
(Lithuanian Railways),  
Lietuvos Energija (Energy)  -total assets, €5.73 billion  
-annual turnover, €759 million  
authorised capital, €6.24 billion  15.5% (assets)  http://www.turtas.lt/lt/privatiz
avimasiframe/informaciniai -
biuleteniai.html ; 
https://www.oecd.org/daf/ca/
Lithuania_SOE_Review.pdf   
  WT/TPR/S/357 • European Union  
 
- 216 -  No. of SOEs  Definition of SOE by the 
member State in 
providing statistics  Indicative SOEs and 
sectors concerned  Main indicators  Main i ndicator 
as % GDP  References  
Luxembourg  119 Direct state holdings in 
private companies (both 
listed and non -listed); 
institutions, foundations, 
and economic interest 
groups; international 
financial institutions  BNP Paribas (financial), 
Cargolux (air cargo 
transport)  Private companies: - value of 
state participation, €642 million;  
institutions, foundations, and 
economic interest groups: €1.77 
billion  
International financial 
institutions: €4.6 billion  
 13.7% (state 
participation 
value)  http://www.te.public.lu/fr/part
icipations/societes_droit_prive
.html; 
http://www.mf.public.lu/public
ations/rapports/rapport_activit
e_annexes_2015.pdf  
 
Malta  11 under Malta 
Investment Manage -
ment Company 
Limited, 25 under 
Malta Government 
Investments, plus 
many others under 
Ministry of Finance 
portfolio  .. Enemalta (utilities), Malta 
Freeport Corporation 
(port), Air Malta (airline)  .. .. http://mgismalta.com/index.p
hp/portfolio -2/; 
http://mimcol.com.mt/  
 
Netherlandsb 38 Where the Dutch state owns 
shares  Schipol Airport (airport), 
NS (rail transport), ABN 
AMRO (financi al) -total state share of assets, 
€300 billion  
-state equity, €26 billion  
-state dividends received, €863 
million  44.3% (assets)  https://www.gov ernment.nl/to
pics/state -owned -
enterprises/contents/portfolio -
of-state-owned -enterprises ; 
https://www. rijksoverheid.nl/o
nderwerpen/staatsdeelneming
en/documenten/jaarverslagen/
2015/10/15/jaarverslag -
beheer -staatsdeelnemingen -
2014 
Poland  398 Where the state treasury 
held a majority or minority 
interest  LOT (air transport), 
ENERGA (energy)  -share value, PLN  39.3 billion  2.2% (share 
value)  http://www.msp.gov.pl/pl/poli
tyka-wlascicielska/podmioty -
nadzorowane -pr-
1/37,Podmioty -nadzorowane -
przez -MSP.html?page=1 ; 
http://www.msp.gov.pl/en/pri
vatisation/statistics/7209,Own
ership -transformatio n-of-
state-enterprises -as-of-31-
December -2015.html ; 
http://bip.msp.gov.pl/bip/mie
nie-skarbu -
panstwa/sprawozdania -o-
stanie/9882,31 -grudnia -2014-
r.html  
Portugal  86 Companies in which the 
state can directly or 
indirectly exercise a 
dominant influence.  TAP (air transport), Caixa 
Geral de Depositos 
(financial)  -total assets, €58.99 billion  
-total earnings before 
interest/taxes, €1.16 billion  
-total turnover, €7.0 billion  
-net profit/loss, €452 million  32.8% (assets)  http://www.utam.pt/ ; 
http://www.utam.pt/document
os/Boletim%20Informativo%2
0SEE%20 -
%204%C2%BA%20Trimestre
%20de%202015.pdf  
  
  WT/TPR/S/357 • European Union  
 
- 217 -  No. of SOEs  Definition of SOE by the 
member State in 
providing statistics  Indicative SOEs and 
sectors concerned  Main indicators  Main i ndicator 
as % GDP  References  
Romania  296 central and 
1,261 local/regional  Companies in which the 
state or administrative 
territory are sole 
shareholders or have a 
participation rate that 
provides control; where the 
state has guardianship; or 
where the state exercises 
control in terms of voting 
rights, members of the 
management, or influence 
by clause, contract or 
association  Posta Romana (post), 
Romgaz (energy), 
Hidroelectrica (energy)  For central SOEs:  
 
-total equity, RON 66.64 billion  
-assets owned by state, RON 
28.04 billion  
-total fiscal value, RON 37.91 
billion  
-profits, RON 4.76 billion  
-dividends to state, RON 2,150 
billion 
-employees, 200,563  
For local/regional SOEs:  
-net fiscal value, RON 9.42 
billion  
-assets owned by local 
authorities, RON 3.39 billion  
-employees, 102,692  
 4.4% (assets)  http://discutii.mfinante.ro/stat
ic/10/Mfp/guvernanta/RAPORT
ANUAL2015PRIVINDACTIVITA
TEAIP_06122016.pdf  
 
Slovakiab 66 Majority or minoring 
ownership by the state  Národná  diaľničná  spoločn
osť (highways), 
Železnice  Slovensk ej repu
bliky (rail transport)  
 -total equity, €21.4 billion  
-total profit/loss, €837 million  27.1% (equity)  https://www.finance.gov.sk/D
efault.aspx?CatID=10397  
 
Slovenia  114, plus additio nal 
under Pension Fund 
Management  Direct and indirect holdings 
of the Republic of Slovenia  Gen Energija (energy), 
Abanka Vipa (banking), 
Posta Slovenije (post)  -total assets, €61.3 billion  
-total equity, €19.6 billion  
-net income, €1.33 billion  157% (asset s) www.sdh.si/en -us/asset -
management/the -portfolio -by-
sectors  
 
Spainc 17 (majority), 10 
(minority), plus 
indirect in over 100. 
Plus 574 public 
companies  State majority or mi nority 
shareholdings in companies; 
and indirect shareholdings. 
Public companies where the 
public administration has the 
capacity to control the policy  Agencia EFE 
(communications), SAECA 
(financial), Grupo Correos 
(post)  For majority, minority, and 
indirec t shareholdings:  
-net worth, €4.95 billion  
-operating income, €4.45 billion  
-total turnover, €4.17 billion  
-employment, 73,239  
 0.46% (net worth)  http://www.sepi.es/default.as
px?cmd=0001&IdContainer=2
34&lang=&idLanguage=_EN&i
dContraste =; 
http://www.sepi.es/default.as
px?cmd=0001&IdContaine r=2
32&anio=2015&lang=&idLang
uage=_EN&idContraste =; 
http://www.igae.pap.minhap.g
ob.es/sitios/igae/es -
ES/ContabilidadNaciona l/infem
pPublicas/Paginas/empresaspu
blicas.aspx   
  WT/TPR/S/357 • European Union  
 
- 218 -  No. of SOEs  Definition of SOE by the 
member State in 
providing statistics  Indicative SOEs and 
sectors concerned  Main indicators  Main i ndicator 
as % GDP  References  
Swedena, b 49 (An additional 
119 owned by 
county councils and 
1,756 by 
municipalities in 
2014)  State wholly owned and 
partly owned companie s 
managed actively by the 
state Vattenfall (energy), 
Systembolaget ( alcohol 
distribution), LKAB 
(minerals)  -total assets, 1,539 SEK billion  
-employees, 165,000  
-net profit, 16.5 SEK billion  
-market value, 460 SEK billion  36.8% (assets)  http://www.government.se/go
vernment -policy/state -owned -
enterprises/  
http://www.government.se/co
ntentassets/0126b664c843479
d8696d1be5 46fe4b6/annual -
report -state-owned -
companies -2014 
http://www.scb.se/en_/Findi n
g-statistics/Statistics -by-
subject -area/Public -
finances/Local -Government -
finances/Publicly -owned -
enterprises/Aktuell -
Pong/11928/220669/  
U.K.e 3,038 (2,591 
academy trusts, 218 
parent companies, 
and 229 subsidiary 
companies)  Companies in government 
includ ing private limited, 
unlimited, community 
interest companies, royal 
charter, statutory, trading 
fund, registered societies, 
and industrial and provident 
societies. Public corporations 
refer to market entities that 
are controlled by central or 
local governm ents and 
derive more than 50% of 
production costs from the 
sale of goods or services at 
economically significant 
prices.  Lloyds Bank (financial), 
Royal Bank of Scotland 
(financial)  Public corporations:  
-total assets, £564.9 billion  
-revenues from sales, £6 .6 
billion  
-total liabilities, £910.4 billion  
-avg. number of employees, 
115,433  
 30.2% (assets)  https://www.nao.org.uk/wp -
content/uploads/2015/12/Com
panie s-in-
Government_updated.pdf ; 
https://www.gov.uk/governme
nt/uploads/system/uploads/att
achment_data/file/539465/PE
SA_2016_Publication.p df; 
https://www.gov.uk/governme
nt/uploads/system/uploads/att
achment_data/file/525617/WE
B_whole_of_gov_accounts_20
15.pdf  
 
.. Not available.  
a Data includes only state (centrally) owned SOEs.  
b 2014 data.  
c 2013 data.  
d First 6 months of 2016.  
e 2014-15 fiscal year data.  
 
Note:  The SOEs may not be wholly or majority state -owned, and the state may not exercise control over the S OEs named in the table.  
 
Source:  Compiled by the WTO Secretariat from sources listed in the table. GDP figures from Eurostat.   
  WT/TPR/S/357 • European Union  
 
- 219 - Table A4. 1 Extra -EU-28 trade by major partner in 2010 -15 
(€ million and %)  
 2010  2011  2012  2013  2014  2015  Share 
in 2015  
(%) Growth 
p.a. 
2010 -15 
(%) Major traded products in 2015  
(as a share of extra -EU trade with each partner)  
EU-28 imports  17,903  19,269  19,520  20,085  21,405  22,739   4.9 Salmon (20.4%); cod (9 .7%); tropical shrimp (8.9%)  
Norway  3,923  3,960  4,066  4,707  5,112  5,589  24.6 7.3 Salmon (70.9%); cod (14.1%); herring (3%)  
China  1,545  1,720  1,622  1,503  1,509  1,611  7.1 0.8 Alaska pollock (22.9%); cod (18.1%); salmon (10.1%)  
Iceland  935 994 975 985 938 1,117  4.9 3.6 Cod (50%); redfish (6.9%); fishmeal (6.9%)  
Morocco  841 860 878 901 961 1,113  4.9 5.7 Octopus (27.8%); sardine (12.7%); miscellaneous shrimps (12.5%)  
United States  802 923 887 815 893 1,035  4.6 5.2 Alaska pollock (23.8%); homarus spp . (11.2% ); salmon (10.2%)  
Ecuador  685 834 954 1,073  1,067  1,029  4.5 8.5 Tropical shrimp (54.3%); skipjack tuna (28.4%); yellowfin tuna (8.2%)  
Viet Nam  862 930 850 794 912 1,015  4.5 3.3 Freshwater catfish (24.7%); tropical shrimp (21.9%); miscellaneous 
shrimps (2 0.8%)  
India 539 619 627 637 876 918 4.0 11.2 Tropical shrimp (44.3%); miscellaneous shrimps (18.1%); other molluscs 
and aquatic invertebrates (16.8%)  
Argentina  623 587 521 573 573 625 2.7 0.1 Miscellaneous shrimps (69.3%); hake (13.8%); squid (6.2%)  
Canada 341 357 366 395 442 548 2.4 10.0 Miscellaneous shrimps (47%); homarus spp . (22.1%); other cold -water 
shrimps (8%)  
Russian 
Federation  272 327 350 387 432 537 2.4 14.6 Cod (64.7%); Alaska pollock (15.4%); haddock (8.6%)  
Faroe Islands  438 473 493 552 546 506 2.2 2.9 Salmon (45.9%); cod (17.5%); saithe(=coalfish) (8.5%)  
Thailand  819 903 828 738 646 481 2.1 -10.1 Skipjack tuna (25.8%); squid (17.8%); miscellaneous shrimps (13.7%)  
Chile 385 445 410 450 489 477 2.1 4.4 Salmon (32.4%); other mussels (25.1%) ; hake (9.1%)  
EU-28 exports  3,397  3,856  4,423  4,521  4,666  4,829   7.3 Salmon (14.9%); fishmeal (6.5%); mackerel (6.5%)  
United States  393 470 452 508 582 603 12.5 9.0 Salmon (59.2%); octopus (7.4%); other marine fish (4.3%)  
Norway  356 429 462 499 551 513 10.6 7.6 Fish oil (31.9%); fishmeal (30%); mackerel (9%)  
China  231 261 324 343 397 422 8.7 12.9 Salmon (18.2%); cod (15.8%); Greenland halibut (12.9%)  
Switzerland  296 319 342 371 360 398 8.2 6.1 Other marine fish (25.6%); salmon (21.8%); other freshwater  fish (5.7%)  
Japan  257 303 305 307 283 344 7.1 6.0 Bluefin tuna (46.4%); miscellaneous tunas (10.5%); caviar, livers and 
roes (5.4%)  
Nigeria  156 153 256 192 276 272 5.6 11.7 Mackerel (46.5%); herring (23.8%); blue whiting (11.9%)  
Viet Nam  48 105 137 161 181 205 4.2 33.9 Greenland halibut (48.6%); salmon (15.9%); toothfish (6.6%)  
Egypt  112 100 132 113 130 147 3.0 5.6 Horse mackerel (43%); herring (25.7%); mackerel (23.9%)  
Morocco  107 115 107 102 116 143 3.0 6.0 Shrimp crangon spp . (57.2%); anchovy (15.1 %); other cold -water 
shrimps (12.4%)  
Hong Kong  82 88 73 74 80 122 2.5 8.2 Other marine fish (13.7%); toothfish (10.8%); rock lobster and sea 
crawfish (10.4%)  
Korea, Republic of  48 45 59 69 75 114 2.4 18.9 Other molluscs and aquatic invertebrates (43.9%) ;fishmeal (10.9%); 
squid (8.2%)  
Australia  34 40 49 63 82 86 1.8 20.2 Salmon (47.8%); other marine fish (7.2%); anchovy (6%)  
Russian 
Federation  255 224 219 211 161 71 1.5 -22.6 Other cold -water shrimps (43.7%); miscellaneous small pelagics (17.1%); 
herring  (9.8%)  
Brazil  64 82 82 79 84 67 1.4 0.9 Cod (74.4%); other sharks (8.1%); other marine fish (7.4%)  
Source:  WTO Secretariat  calculations, based on Eurostat online database. Viewed at: http://ec.eu ropa.eu/eurostat/data/database  [February 2017].  
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