WT/TPR/S/248 Trade Policy Review 
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III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures 
1. The basic customs legislation is the EU Customs Code and its Implementing Regulation.1  
The Modernized Customs Code entered into force in June 2008, but is not yet applied, pending the 
application of the implementing provisions, due by 24 June 2013.2  The EU has exclusive competence 
in the field of customs.  Customs procedures, as defined in EU legislation, are harmonized and monitored at the level of the EU.  Under EU legisl ation, the term "customs procedure" means release 
for free circulation, transit, customs warehous ing, inward processing, processing under customs 
control, temporary admission, outward processing, and exportation.
3  National customs laws assist in 
the implementation of EU customs legislation.  Th e national administrations and courts of member 
States are in charge of executing EU customs legi slation under the oversight of the Commission and 
EU courts. 
2. The European Commission maintains a website of  customs legislation and related case law, 
and legislative proposals.4  The Trade Contact Group is the main venue for regular consultations 
between the European Commission and economic operators on EU customs matters.5 
3. EU customs legislation establishes the right of  appeal and defines the general principles 
underpinning this right.6  Appeals procedures are set out in national legislation, and vary across 
member States.  Appeals must be lodged in the member State where the decision under dispute has 
been taken.  Most member States require admini strative review before a decision can be appealed 
judicially.  The review by national courts of a d ecision taken by the customs administration of one 
member State is not binding on the customs administrations of other member States.  In this context, the Commission notes that national courts have the possi bility to refer cases to the Court of Justice of 
the EU for a preliminary ruling, which is binding on  all customs administrations and judges in the EU. 
4. In the context of the previous Review of the EU, some Members raised concerns and asked 
questions about the uniform implementati on of customs procedures across the EU.
7  In response, the 
EU indicated that these concerns were "misplac ed", for the EU had "fully harmonized customs 
procedures".8  In addition, the EU noted that "issues with  practical implementation" were not higher in 
the EU than in other large WTO Members.  The EU's administration of several laws and regulations pertaining to customs classification and valuation, an d the review of administrative actions relating to 
customs matters were the subject of WTO dispute settlement in 2005-06.
9 
                                                      
1 Council Regulation (EEC) No. 2913/92, 12 October 1992 (OJ L 302, 19 October 1992);  
and Commission Regulation (EEC) No. 2454/93, 2 July 1993 (OJ L 253, 11 October 1993). 
2 Regulation (EC) No 450/2008 of the European Parliament and of the Council, 23 April 2008 (OJ 145, 
4 June 2008). 
3 Article 4(16), Council Regulation (EEC) No. 2913/92, 12 October 1992. 
4 European Commission online information, "Legislation".  Viewed at:  http://ec.europa.eu/taxation_ 
customs/common/legislation/index_en.htm. 
5 European Commission document TAXUD/1426/2007 Revisi on 2, 18 December 2008.  Viewed at:  
http://ec.europa.eu/taxation_customs/resources/documents /customs/policy_issues/customs_trade_consultations/t
cg_terms_of_reference_en.pdf. 
6 Article 243, Council Regulation (EEC) No. 2913/92, 12 October 1992. 
7 See, for example, WTO document WT/TPR/M/214, 8 June 2009, and Add.1, 2 July 2009. 
8 WTO document WT/TPR/M/214, 8 June 2009. 
9 See WTO document series WT/DS315. European Union WT/TPR/S/248 
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5. The time needed to complete import procedures varies among member States.10  It is among 
the shortest in the world for Cyprus, Denmark, Estonia, Luxembourg, the Netherlands, and Sweden, 
but around twice the OECD average for Bulgaria, Greece, Poland, Slovakia, and Slovenia.  According 
to the Commission, these differences are due to geographical and logistical factors, and do not lead 
traders to favour particular ports. 
6. From July 2009, persons established in the EU  who are involved in activities covered by 
customs legislation must be in possession of a national number that is valid as an Economic Operator Registration and Identification (EORI) number, issu ed by the competent authority of the member 
State in which they are established.  Numbers valid  as EORI numbers are unique to each person and 
recognized throughout the EU;  prior to their introduction, registration and issue of identification numbers were regulated at the national level.  N on-established persons must  obtain an EORI number 
if they perform one of the activities listed in Article 41(3) of the Customs Code Implementing 
Regulation;  they must request an EORI number fro m the member State where they first perform one 
of these activities.  The Commission maintains a document containing the list of authorities 
responsible for assigning EORI numbers in each member State.
11 
7. During the period under review, the EU introduced advance cargo information requirements 
for imports as part of the so-called "safety and security amendment" to the Customs Code.12  From 
2011, carriers must lodge an electronic Entry Summary  Declaration (ENS) with the "customs office of 
first entry" into the EU.  Article 181c of the Cu stoms Code Implementing Regulation sets out several 
exceptions.  In addition, the ENS is not required fo r imports covered by a security agreement between 
the EU and another country.  These agreements exis t with Norway and Switzerland;  the agreement 
with Switzerland extends to Liechtenstein;  an ag reement with Andorra has been negotiated and is 
expected to enter into force in 2011.  The ENS must  be submitted electronically within the time limits 
specified for each mode of transportation (T able III.1).  Annex 30A of the Customs Code 
Implementing Regulation specifies the data elements that must be provided as part of the ENS.  The 
safety and security amendment was not subject to im pact assessment.  According to the Commission, 
the safety and security amendment is in line with  the World Customs Organization's (WCO) SAFE 
Framework of Standards adopted by  the WCO Council in June 2005. 
8. Member States conduct risk analysis for cu stoms control purposes on the basis of the 
information contained in the ENS.  A common ri sk management framework  has been operational 
since January 2007.13  The principles that govern risk management in the EU are set out in the 
Customs Code Implementing Regulation.14 
9. The Electronic Customs Decision instructed the European Commission to evaluate, in 
partnership with member States, "the common f unctional specifications" for a framework of single 
                                                      
10 Based on World Bank online information, "Doing Business:  Measuring Business Regulations", 
which compiles procedural requirements for exporting and importing a standardized cargo of goods by ocean transport.  Documents associated w ith every official procedure are co unted-from the contractual agreement 
between the parties to the delivery of goods-along with the time and cost n ecessary for completion.  Viewed at:  
http://www.doingbusine ss.org/methodology/trading-across-borders. 
11 See European Commission document TAXUD D(2009) 1608 rev. 5, 26 November 2010.  Viewed at:  
http://ec.europa.eu/ecip/documents/who_is/eori_national_implementation_en.pdf;  and TAXUD/2008/1633 rev.2, 23 August 2010.  Viewed at:  http://ec.europa.eu/ecip/documents/who_is/taxud1633_2008_rev2_en.pdf. 
12 Regulation (EC) No. 648/2005, 13 April 2005 (OJ L 117, 4 May 2005);  Commission Regulation 
(EC) No. 1875/2006, 18 Decemb er 2006 (OJ L 360, 19 December 2 006);  Commission Regulation (EC) 
No. 312/2009, 16 April 2009 (OJ L 98, 17 April 2009);  and Commission Regulation (EC) No. 414/2009, 
30 April 2009 (OJ L 125, 21 May 2009). 
13 Regulation (EC) No. 648/2005 of the European Parliament and of the Council, 13 April 2005. 
14 Articles 4f-j. WT/TPR/S/248 Trade Policy Review 
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window services by 15 February 2011.15  According to the Decision, single window services would 
involve the "seamless flow of data" between economic operators, customs authorities and other 
agencies, and the European Commission.  In additi on, it would allow economic operators to submit all 
information required for customs clearance, includi ng information required by agencies other than 
Customs.  Member States endorsed the common func tional specifications for the preparatory phase of 
single window services in December 2010.  Th e preparatory phase focuses on the automated 
validation of the customs declaration's supporting documentation. 
Table III.1 
Time limits for the entry summary declaration, January 2011 
Transportation mode Time limit for ENS submission 
Containerized maritime cargo (except short sea) 24 hours before loading in each fo reign load port if the vessel 
makes at least one call at a port in the customs territory of the EU 
Bulk and break bulk maritime cargo (except short sea) 4 hours befo re arrival at the first port in  the customs territory of the 
EU 
Short-sea shipping: 
Between the customs territory of the EU (except French overseas 
departments, Azores, Madeira a nd Canary Islands) and Greenland, 
Faroe Islands, Ceuta, Melilla, Iceland, ports on the Baltic Sea, 
ports on the North Sea, ports on the Black Sea, ports on the 
Mediterranean, and all ports of Morocco  
2 hours before arrival at the first port in the customs territory of the 
EU 
Movements with a duration of less than 24 hours between a 
territory outside the customs terr itory of the EU and the French 
overseas departments, Azores, Madeira and Canary Islands 2 hours before arrival at the first port in the customs territory of the 
EU 
Short haul flights (less than 4 hours duration) By the time of take off 
Long haul flights (duration of 4 hours or  more) 4 hours before arrival at the first airport in the customs territory of 
the EU 
Rail and inland waterways 2 hours before arrival at  the customs office of entry in the customs 
territory of the EU 
Road traffic At least 1 hour before arriva l at the customs office of entry in the 
customs territory of the EU 
Combined transport The applicable time limi t is determined by the mode of transport 
that enters the custom s territory of the EU 
Source:  WTO Secretariat, based on European Commiss ion working document TAXUD/2010/0051, Customs Code 
Committee:  Guidelines on entry and summary declar ations in the context of Regulation No. 648/2005, 
29 October 2010. 
10. EU member States may grant authorized econom ic operator status to interested persons 
involved in activities covered by customs legislatio n.  EU customs legislation specifies the criteria 
that member States must consider in assessing app lications for authorized economic operator status.16  
Participation in authorized economic operator progr ammes is voluntary.  Programme benefits depend 
on the type of certificate granted to the economic operator, and may include fewer customs controls, 
priority treatment during customs controls, and redu ced data requirements when filing an ENS.  The 
European Commission has published guidelines to  ensure "a common understanding and uniform 
application of the new customs legislation related to the [authorized economic operator] concept, and 
to guarantee the transparency and an equal treatment of economic operators."17  In addition, the EU 
set up a helpdesk and a dedicated network of c ontact points between the Commission and national 
customs authorities to ensure the uniform app lication of the authorized economic operator 
programme. 
                                                      
15 Article 4(4), Decision No. 70/2008/EC of the European Parliament and of the Council, 
15 January 2008 (OJ L 23, 26 January 2008). 
16 Articles 5a (2), Council Regulation (EEC) No. 2913/92, 12 October 1992 and Article 14h-k, 
Commission Regulation (EEC) No. 2454/93, 2 July 1993. 
17 European Commission document TAXUD/2006/1450, 29 June 2007.  Viewed at:  http://ec.europa. 
eu/ecip/documents/who_is /aeo_guidelines_en.pdf. European Union WT/TPR/S/248 
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11. Participation in EU authorized economic operator programmes is not open to persons 
established outside the EU, unless the economic opera tor is established in a country that has 
concluded a mutual recognition agreement with the EU .  There is one such agreement, with Japan.  
Non-established airline and shipping companies that ha ve a regional office in the EU and that benefit 
from certain customs simplification measures under the Customs Code Implementing Regulation may 
also apply for authorized status.18  Applications for authorized stat us must be submitted to the member 
State with "the best knowledge of th e applicant's customs related activities".19  Authorized status 
granted by one member State must be recognized by the customs authorities of all other member 
States. 
12. Under EU customs legislation, national custom s administrations must issue advance written 
rulings on tariff classification and origin matters.20  Advance rulings issued by the customs authorities 
of one member State are binding on national customs authorities of all other member States.21  The 
Customs Code Implementing Regulation sets out a pr ocedure to resolve inconsistencies in binding 
information issued by two or more member States.22  The European Commission maintains a public 
online database of advance writte n rulings on tariff classification.23 
13. The 2007 Customs Audit Guide , agreed between the Commission and member States, sets out 
a voluntary framework for post-clearance audits carri ed out by national authorities of member States. 
(ii) Customs valuation 
14. There have been no changes in customs valuation legislation since the last Review of the EU, 
in 2009.  The main legislation is the EU Cu stoms Code (Articles 28-36), and its Implementing 
Regulation (Articles 141-181a, and Annexes 23-29) .  The EU notified its customs valuation 
legislation and replied to the checklist of issues  on customs valuation to the GATT, prior to the 
establishment of the WTO.24 
15. The transaction value is the primary basis for determining customs value in the EU.  It 
includes international freight, insurance, and other c.i.f. charges.25  Around 95% of all import 
declarations are accepted in acco rdance with the transaction valu e method.  Administrative and 
judicial review of customs valuation decisions  are subject to appeal in each member State 
(see section (i) above). 
16. The Customs Valuation Section of the Customs Code Committee has published a 
compendium with commentaries and conclusions on specific valuation topics.26  The compendium, 
which contains an overview of European Court of Justice rulings relating to customs valuation, is 
updated regularly and available to the public. 
                                                      
18 Articles 324e, 445, and 448. 
19 European Commission document TAXUD/2006/1450, 29 June 2007.  Viewed at:  http://ec.europa. 
eu/ ecip/documents/who_is/aeo_guidelines_en.pdf. 
20 Article 12, Council Regulation (EEC) No. 2913/92, 12 October 1992. 
21 Articles 5 and 11, Commission Regulation (EEC) No. 2454/93, 2 July 1993. 
22 Article 9. 
23 European Commission online information, "European Binding Tariff Information".  Viewed at:  
http://ec.europa.eu/taxation_customs/dds2/ebti/ebti_home.jsp?Lang=en. 
24 GATT documents L/5008, 22 July 1980, and VAL/2/Rev.1/Add.6, 29 October 1981. 
25 Article 32.1(e), Council Regulation (EEC) No 2913/92, 12 October 1992. 
26 European Commission document TAXUD/800/2002-EN, September 2008.  Viewed at:  
http://ec.europa.eu/taxation_customs/resources/documen ts/customs/customs_duties/declared_goods/european/co
mpendium_2008_en.pdf. WT/TPR/S/248 Trade Policy Review 
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(iii) Rules of origin 
17. The EU applies non-preferential and preferential rules or origin.  The legal basis for non-
preferential rules of origin is Articles 22-26 of the Customs Code, and Articles 35-65 of the 
Implementing Regulation.  Non-preferential rules of origin are applied for several purposes, including 
the application of quantitative restrictions, MFN tari ff quotas, origin marking, contingency measures, 
and government procurement. 
18. The test to determine the origin for non-pr eferential purposes of imported goods produced in 
more than one country is "substa ntial transformation".  Under this test, a good is considered to 
originate in the country where it underwent its "last , substantial, economically  justified processing or 
working in an undertaking equipped for that pur pose and resulting in the manufacture of a new 
product or representing an important stage of manufacture".27  For certain goods, a list of working or 
processing operations is contained in Annexes 10 and 11 of the Implementing Regulation.  
Furthermore, the "list rules" published by the European Commission provide guidance to national 
customs authorities in assessing "substantial transformation".28  In general, these rules are expressed 
as a shift in tariff heading or subheading in the HS  nomenclature, a specified minimum level of value 
added, or a specific manufacturing or processing operation. 
19. In October 2010, the European Parliament adopted the Commission's proposal for a 
regulation establishing a scheme for origin marking.29  The proposed regulation would introduce 
compulsory origin marking for certain industrial products imported from non-EU countries except 
Iceland, Liechtenstein, Norway, Switzerland, and Turkey.  The proposed regulation's definition of 
country of origin is based on the EU's non-preferen tial rules of origin.  The products covered include 
textiles, footwear, leather, furnitu re, ceramic, and jewellery.  The draf t regulation must be adopted by 
the Council before its entry into force.  Agricultura l products and foodstuffs are already subject to 
origin marking or labelling for health, safety, or other regulatory purposes. 
20. Preferential rules of origin are maintained unde r preferential arrangements.  In general, to 
benefit from preferential treatment, goods that in corporate inputs from non-partner or non-beneficiary 
countries must undergo a certain amount of working or processing in the partner country or in the 
beneficiary country, as specified in an annex to each of the arrangements. 
21. A regulation containing revised rules of origin  for GSP entered into force in January 2011.30  
According to the Commission, this regulation "relaxes and simplifies rules and procedures for 
developing countries wishing to access the EU's pr eferential trade arrangements, while ensuring the 
necessary controls are in place to prevent fraud".31  A study conducted by the Commission in 2007 
concluded that the perceived complexity and restrictiv eness of the rules of origin  that existed prior to 
                                                      
27 Article 24, Council Regulation (EEC) No. 2913/92, 12 October 1992. 
28 European Commission online information, "Table of list rules applicable to products".  Viewed at:  
http://ec.europa.eu/taxation_customs/ customs/customs_duties/rules_origin/non-preferential/article_1622_en. 
htm. 
29 European Commission document COM(2005) 661 final, 16 December 2005.  Viewed at:  
http://www.europeanlawmonitor.org/legislation/2005/COM 2005661text.pdf;  and European Parliament press 
release, "MEPs vote for country-of-origin markings on non-EU goods, 21 October 2010.  Viewed at:  
http://www.europarl.europa.eu/en/pre ssroom/content/20101020IPR89448/h tml/MEPs-vote-for-country-of-
origin-markings-on-non-EU-goods. 
30 Commission Regulation (EU) No. 1063/2010, 18 November 2010 (OJ L 307, 23 November 2010). 
31 EU online information, "New developments:  th e future of rules of origin".  Viewed at:  
http://ec.europa.eu/taxation_customs/ customs/customs_duties/rules_origin/preferential/article_777_en.htm. European Union WT/TPR/S/248 
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the introduction of the revised rules partly expl ained the low use of certain GSP preferences, 
particularly for products of inter est to the least developed countries.32 
22. The revised GSP rules of origin are expressed as  changes of HS tariff heading or subheading, 
specific processing requirements, or value-added requirements.  The sectors that use methods other than value added include agricultural and pro cessed agricultural products, steel and non-ferrous 
metals, footwear, textiles and clothing, leather, a nd headgear and feathers.  The limit on the use of 
non-originating materials (the "general tolerance" level) has been raised from 10% to 15%.  Products 
under HS Chapters 50-63 remain subj ect to specific to lerance rules. 
23. Origin rules based on the value-added method allow up to 70% content of non-originating 
materials for most industrial and processed agricult ural products originating in the least developed 
countries, compared with up to 50% for other GSP beneficiary countries.  For most apparel products 
originating in the least-developed countries, the double transformation requirement has been replaced 
with a single transformation requirement. 
24. The revised rules of origin maintain the po ssibility of cumulating origin among the members 
of a regional group, subject to conditions.  Regi onal cumulation operates within three regional 
groups.
33  In addition, the revised regulation adds a fourth group consisting of Argentina, Brazil, 
Paraguay, and Uruguay, and allow cumulation across certain groups, subject to conditions.  Certain 
sensitive products are excluded from regional cumulation. 
25. GSP beneficiary countries may cumulate or igin with goods under Chapters 25-97 from 
Norway, Switzerland, Liechtenstein, and, with the en try into force of the revised rules or origin, 
Turkey.34  Furthermore, the Commission may, upon re quest from a GSP beneficiary country, allow 
"extended" cumulation between that beneficiary and a country that has a free-trade agreement in force 
with the EU, subject to conditions.  Products  under Chapters 1-24 are excluded from extended 
cumulation. 
26. Under the revised rules, a new self-certifica tion system, the Registered Exporter System 
(REX), will replace the current system of origin certif ication by public authorities from January 2017.  
Under the REX, GSP beneficiary countries must set up an electronic record of  registered exporters 
and transmit it to the European Commission.  GSP beneficiary countries may receive an additional 
three years for the implementation of the REX if they are not in a position to implement the new 
system by 1 January 2017. 
27. In the context of its previous Review, the Eu ropean Union indicated that it would consider 
extending the revised rules of origin for GSP to  other arrangements, de pending on the level of 
development of the countries involved, and "once the rules are adopted and tested within the GSP scheme".
35 
                                                      
32 European Commission internal do cument TAXUD/GSP-RO/IA/1/07, 25 October 2007.  Viewed at:  
http://ec.europa.eu/taxation_customs/ customs/customs_duties/rules_origin/preferential/article_777_en.htm. 
33 Brunei-Darussalam, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, and 
Viet Nam (group I);  Bolivia, Colombia, Costa Rica, Ec uador, El Salvador, Guatem ala, Honduras, Nicaragua, 
Panama, Peru, and Venezuela (group II);  and Banglade sh, Bhutan, India, Maldives , Nepal, Pakistan, and Sri 
Lanka (group III). 
34 Agreement in the form of an Exchange of Le tters between the Community and each of the EFTA 
countries that grants tariff prefer ences under the GSP (Norway and Switzerland), providing that goods 
originating in Norway or Switzerland shall be treated on their arrival on the customs territory of the Community 
as goods with content of Community origin (reciprocal agreement), OJ L 38, 8 February 2001. 
35 WTO document WT/TPR/M/214/Add.1, 2 July 2009. WT/TPR/S/248 Trade Policy Review 
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(iv) Tariffs 
(a) MFN tariff 
28. The EU grants MFN or better treatment to WTO and non-WTO Members. 
29. Under the Treaty on the Functioning of the EU, common customs tariff duties are set by the 
European Parliament and the Council, or th e Council based on a proposal from the Commission.36  
The basic legal instrument on the tariff is Regulation No. 2658/87.37  The tariff nomenclature, known 
as the Combined Nomenclature, is based on th e Harmonized Commodity Description and Coding 
System (HS).  The 2011 tariff reflects the fourth am endment to the HS (HS 2007).  The nomenclature 
and the rates of duty are contained in Annex I of  Regulation No. 2658/87.  An updated version of 
Annex I is published annually as a Commiss ion regulation in the L-Series of the Official Journal .38  
The Combined Nomenclature is specified at the eight-digit level. 
30. The EU maintains a public, online database that integrates tariff rates and other measures, 
including quantitative restrictions and contingenc y measures, applied on imports (and exports).  
According to the Commission, the database, known as TARIC, "secures the uniform application [of 
these measures] by all Member States and gives all ec onomic operators a clear view of all measures to 
be undertaken when importing or exporting goods."39  The codes under TARIC are specified at the 
ten-digit level. 
31. The following analysis is based  on the 2011 tariff.  Apart from ad valorem duties, the EU 
applies several non- ad valorem  type duties, mostly on agricultural products.  Furthermore, the EU 
uses seasonal duties and duties that are reduced if a product's declared price is above a certain level 
(entry price system).40  Entry prices apply on 28 tariff lines at the 8-digit level, including tomatoes, 
cucumbers, courgettes, citrus fruits, grapes, aprico ts, and plums.  The EU uses the "Meursing Table" 
to determine the customs tariffs for processed agricu ltural products based on what they are made of.  
These products include confectionary, cakes, and biscu its.  Their tariffs are defined according to the 
level of milk fats and proteins, sugar, and starch they contain.  The table results in thousands of 
possible combinations of tariffs. 
32. The Secretariat used averag e unit values to estimate the ad valorem  equivalents (AVEs) of 
non-ad valorem  tariff rates.  The data used to calculate import unit values are from Eurostat for 2010.  
The analysis excludes 144 lines for which AVEs could not be estimated.41  In the context of this 
Review, the Commission expressed reservations about  the Secretariat's methodology for estimating 
AVEs.42 
                                                      
36 Article 31, Treaty on the Functioning of the European Union. 
37 Council Regulation (EEC) No. 2658/87, 23 July 1987 (OJ L 256, 7 September 1987). 
38 The latest version is contained in Commission Regulation (EU) No. 861/2010, 5 October 2010 
(OJ L 284, 29 October 2010). 
39 European Commission online information, "Online customs tariff database (TARIC)".  Viewed at:  
http://ec.europa.eu/taxation_customs/ customs/customs_duties/tariff_asp ects/customs_tariff/index_en.htm. 
40 The rules for the application of the entry price fo r fruit and vegetables are laid down in Regulation 
(EC) No 1580/2007, 21 December 2007 (OJ L 350, 31 December 2007). 
41 AVEs were not estimated for lines with no or very low imports, or no entry prices;  regarding 
compound or alternate tariffs, only the ad valorem  component was used for the analysis. 
42 The Commission indicates that an y calculation of AVEs has shortcomings that can lead to distortions 
in the characterization of the actual level of tariff protections.  The Commission notes that it is therefore 
important to treat results of AVE calculations with gr eat caution, bearing in mind that the result can be 
influenced by several elements, including:  the base pe riod and partners chosen;  commodity prices;  exchange European Union WT/TPR/S/248 
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33. The 2011 tariff comprises 9,294 lines at the eight-d igit level, some 400 lines less than in 2008 
(Table III.2).  According to the Commission, the decrease in the number of tariff lines since 2008 is 
the result of the modernization of the EU's tariff  nomenclature.  The simple average applied MFN 
tariff rate, including the AVEs of non- ad valorem  tariff rates, was 6.4%, slightly less than in 2008.  
Based on the relevant WTO definition, the average applied rate for agriculture fell to 15.2% from 
17.9% in 2008.  This reflects increases in prices of  agricultural products and the resulting reduction in 
the AVEs of non- ad valorem  tariff rates applied on such produc ts.  The average applied rate for non-
agricultural products remained unchanged at 4.1% .  Around one-quarter of all tariff lines are duty 
free;  and approximately 9% of lines are "nuisance" rates. 
34. Close to 9% of all tariff lines have MFN ra tes exceeding 15%.  Under the WTO definition, 
dairy is subject to the highest average tariff rate , followed by tobacco, live animals and their products, 
and grains (Table III.3).  All rates above 100% are AVEs relating to agricultural goods;  these apply 
on prepared or preserved mushrooms (200.6% and 153.7%), concentrated or  sweetened milk and 
cream (164.8%), whey (139%), olive oil (159.3%), certain meats and edible meat offal (157.8% and 
122.9%), and isoglucose (120.6%).  The highest ra tes for non-agricultural products apply on motor 
vehicles (22%) and on fish (22-26%). 
Table III.2 
Structure of MFN tariffs (%) 
 2006 2008 2011 
Total number of lines 9,843 9,699 9,294 
Bound tariff lines (% of all tariff lines) 100.0 100.0 100.0 
Duty-free tariff lines (% of all tariff lines) 26.0 25.3 25.0 
Dutiable tariff lines average rate (%)   8.5 
Non- ad valorem  tariffs (% of all tariff lines)a 10.0 10.1 10.5 
Tariff quotas (% of all tariff lines) 3.4 4.8 4.9 
Non- ad valorem  tariffs with no AVEs (% of all tariff lines)  2.1 2.7 2.9 
Domestic tariff "spikes" (% of all tariff lines)b 5.6 5.3 5.7 
International tariff "peaks" (% of all tariff lines)c 9.0 8.4 8.7 
Overall standard deviation of  applied rates 14.0 14.1 10.3 
"Nuisance" applied rates (% of all tariff lines)d 9.4 9.6 8.8 
a Excluding Petroleum.  
b Domestic tariff spikes are defined as those exceeding three times the overall simple average applied rate. 
c International tariff peaks are defined as those exceeding 15%. 
d Nuisance rates are those greater than zero, but less than or equal to 2%. 
Source:   WTO Secretariat estimates, based on Common Cust oms Tariff, OJ L 284, 29 October 2010, and IDB WTO 
database. 
35. Around 11% of tariff lines are non- ad valorem .  On average, these continue to afford higher 
protection than ad valorem rates.  The average AVE of non- ad valorem  tariff rates is 24.7%, 
compared with 4.6% for ad valorem  duties.  Apart from agricultural products, non- ad valorem  tariff 
rates apply on 34 tariff lines, including mostly gl ass and watches, watch and clock movements, and 
watch cases. 
                                                                                                                                                                     
rates;  shocks in specific markets;  treatment of mi xed tariffs and tariff lines for which trade data are not 
available;  and the extent to wh ich preferential trade is includ ed in the unit value calculation. WT/TPR/S/248 Trade Policy Review 
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Table III.3 
Summary analysis of MFN tariff, 2011  
  Applied 2011 rates 
Analysis No. of linesa Simple avg. tariff 
(%) Range tariff 
(%) Std-dev 
(%) CV  
Total 9,294 6.4 0-200.6 10.3 1.6 
HS 01-24 2,251 15.0 0-200.6 17.6 1.2 
HS 25-97 7,043 3.7 0-85.7 3.8 1.0 
By WTO definitionb          
Agriculture 1,998 15.2 0-200.6 18.9 1.2 
Live animals and products thereof 323 22.2 0-157.8 23.4 1.1 
Dairy products 151 32.6 1-164.8 27.7 0.9 
Coffee and  tea, cocoa, sugar, etc. 293 15.6 0-120.6 15.7 1.0 
Cut flowers and plants 54 4.6 0-19.2 4.4 1.0 
Fruit and vegetables 428 15.0 0-200.6 15.1 1.0 
Grains 55 21.6 0-70.8 17.1 0.8 
Oil seeds, fats, oils and their products 164 7.3 0-159.3 17.0 2.3 
Beverages and spirits 279 13.8 0-117.7 17.2 1.3 
Tobacco 20 25.8 6.2-74.9 23.0 0.9 
Other agricultural products 231 5.9 0-93 12.1 2.0 
Non-agriculture (excl. petroleum) 7,255 4.1 0-26 4.1 1.0 
Fish and fishery products 375 11.1 0-26 6.2 0.6 
Mineral products, precious stones and precious 
metals 477 2.5 0-12 3.0 1.2 
Metals 1,002 1.7 0-10 2.2 1.3 
Chemicals and photographic supp lies 1,247 4.4 0-17.3 2.6 0.6 
Leather, rubber, footwear and travel goods 275 4.9 0-17 4.6 0.9 
Wood, pulp, paper and furniture 446 1.2 0-10 2.3 1.9 
Textiles and clothing 1, 207 8.0 0-12  3.1 0.4 
Transport equipment 257 5.0 0-22 5.0 1.0 
Non-electric machinery 885 1.7 0-9.7 1.4 0.8 
Electric machinery 451 2.8 0-14 3.2 1.1 
Non agricultural articles n.e.s. 633 2.5 0-13.9 1.9 0.8 
By ISIC sectorc      
Agriculture, hunting, forestry and fishing 555 8.7 0-93 12.4 1.4 
Mining 117 0.2 0-8 1.2 4.7 
Manufacturing 8,621 6.3 0-200.6 10.2 1.6 
By stage of processing      
Raw materials 1,142 6.8 0-93 10.2 1.5 
Semi-processed products 2,764 4.8 0-124.4 6.8 1.4 
Fully-processed products 5,388 7.1 0-200.6 11.6 1.6 
a Total number of lines is listed.  Tariff rates are based on a lower number of lines, since lines  with no AVEs have been exclu ded. 
b 41 tariff lines on petroleum products are not taken into account.  c International Standard Industrial Classification (Rev.2).   Electricity, gas and water are excluded (1 tariff line). 
Note: CV = coefficient of variation. 
Source : WTO Secretariat estimates, based on Common Custom s Tariff, OJ L 284, 29 Oc tober 2010, and IDB WTO 
database. 
36. The tariff shows escalation between semi- a nd fully processed goods, and reverse escalation 
between raw materials and semi-processed goods (Table III.3).  Tariff quotas cover around 5% of 
tariff lines (Chapter IV(1)). 
(b) WTO bindings 
37. The EU bound all tariff lines.  In general, applie d tariffs are at their bound rates.  The average 
bound tariff rate is 6.4%. European Union WT/TPR/S/248 
 Page 37 
 
 
38. The WTO certified Schedule of Concessions reflecting the EU's enlargement from 12 to 15 
member States became effective in February 2010.43  The EU's commitments with respect to 
agricultural market access, domestic support, and e xport subsidies to reflect the enlargement from 15 
to 27 member States have not yet been formally agreed in the WTO and consolidated in the EU's 
Schedule (see Chapter II(3)). 
39. The EU is covered by the collective General Co uncil waiver suspending the application of 
GATT binding disciplines to allow WTO Members to implement the HS 2007 changes pending the 
incorporation of these changes into their schedules of concessions.44  This waiver expires in 
December 2011 
(c) Tariff suspensions 
40. The Council may approve "autonomous" tariff suspensions and quotas on the basis of a 
proposal from the Commission.  These are temporary measures defined as "an exception to the normal state of affairs [that] permit the total ... or partial waiver ... of the normal duties applicable to imported 
goods".
45  According to the Commission, these measur es allow enterprises to obtain supplies at a 
lower cost, thus improving their competitive capacity and stimulating economic activity in the EU.  In 
addition to raw materials and semi-finished goods not  available within the EU, tariff suspensions may 
cover finished products and manufacturing equipm ent, subject to conditions.  Once an autonomous 
tariff suspension has been approved for a particular good, any person may import that good at the autonomous tariff rate. 
41. Member States transmit requests for autonomous tariff suspensi ons to the Commission, which 
examines them with the assistance of the Ec onomic Tariff Questions Group representing the 
industries of each member State.  In 2011, 1.3% of tariff lines are subject to autonomous tariff suspensions, compared with 1.4% in 2008.  A ccording to the Commission, as a general rule 
autonomous tariff suspensions are opened for a period  of five years, and are automatically prolonged 
if they are used sufficiently.  The Commission not es that an early termination of these measures is 
possible if economic circumstances change;  measur es are reviewed regularly, and interested parties 
may request to delete them.  Products covere d include basic chemicals, components for the 
microelectronics industry, and components for heavy and industrial machinery. 
(d) Preferential tariffs 
42. The EU grants tariff preferences unilaterally or in the context of bilateral ore regional free-
trade agreements (see Chapter II(4)).  Based on data provided by the Commission, the Secretariat 
estimated the average tariff rates applied on the EU 's preferential partners in 2011 (Table AIII.1). 
(v) Other charges 
43. In general, domestic and imported goods a nd services are subject to VAT in all member 
States, in accordance with the so-called VAT Directive.
46  VAT is assessed on the customs value plus 
duties, other charges, and incidental expenses for imports, and on the sale price for domestic products.  
VAT on imports must generally be paid at the ti me of customs clearance.  Goods are treated as 
imports for VAT purposes if they arrive from out side the EU (within the meaning of the VAT 
Directive) or via another EU country without havi ng been released for free circulation.  Imported 
                                                      
43 WTO document WT/Let/666, 19 March 2010. 
44 WTO document WT/L/809, 16 December 2010. 
45 European Commission document 98/C 128/02 (OJ C 128/2, 25 April 1998). 
46 Council Directive 2006/112/EC, 28 November 2006 (OJ L 347, 11 December 2006). WT/TPR/S/248 Trade Policy Review 
Page 38 
  
goods are in free circulation once the applicable du ties have been paid and the customs formalities 
complied with. 
44. VAT rates differ across member States.  The standard rate applied by member States must be 
at least 15%, and member States may apply up to tw o reduced rates of at least 5% on 21 categories of 
supplies of goods and services listed in Annex III of the VAT Directive, including food, water, 
medicines, certain medical equipment, books, news papers, periodicals, certain agricultural inputs, 
passenger transport, renovation and repairing of priv ate dwellings, social services that do not fulfil the 
conditions for exemption, and admi ssion to sporting events.  There are multiple derogations to the 
basic rate structure, resulting in the application in  member States of different combinations of rates.47  
Standard VAT rates cover about two thirds of total consumption, with  the remainder subject to other 
rates.48 
45. Member States may derogate from the VAT rules in specific circumstances and subject to 
Council authorization.49  The Commission publishes a list of the derogations in force in member 
States.50  In addition, under the VAT Directive, memb er States may retain "notified" derogation 
measures, provided these fulfil certain criteria and we re applicable on 1 January 1977 and notified to 
the Commission before 1 January 1978.51 
46. Domestic and imported alcoholic beverages, manufactured tobacco products, and energy 
products, including gasoline, natural gas, and electric ity are subject to excise duties in all EU member 
States.  Excise duty rates applied on these products vary across member States, but must be at least equal to the minimum rates establis hed in EU legislation, which al so defines the product categories 
subject to excise duties, and the basis on which they must be calculated.
52  A Council Directive 
adopted in February 2010 gradually increases minimum excise duty rates on cigarettes and fine-cut tobacco.
53  EU member States have not yet agreed to increase the minimum rates on alcoholic 
beverages, in line with inflation, as proposed by the Commission in 2006.54  The Excise Duty Tables 
published by the Commission contain the rates of excise duty on alcoholic beverages, tobacco, and 
energy levied by member States.55 
47. Under Council Directive 92/83/EEC, member States may levy reduced excise duty rates on 
beer and ethyl alcohol produced by small domestic  breweries and distilleries, as defined in the 
Directive.  Reduced rates may be lower than the mini mum rates defined in EU legislation, but not less 
than half the rate of the standard excise duty on these products.  Under the Directive, member States 
                                                      
47 Articles 102-129, Council Directive 2006/112/EC, 28 November 2006. 
48 European Commission document COM(2010) 695 fina l, 1 December 2010.  Viewed at:  http://ec. 
europa.eu/taxation_customs/resources/documents/common/consultations/tax/future_vat/com(2010)695_en.pdf. 
49 Articles 395 and 396, Council Directive 2006/112/EC, 28 November 2006. 
50 European Commission online information, "Table of  derogations".  Viewed at:  http://ec.europa.eu/ 
taxation_customs/taxation/vat/key_documents/table_derogations/index_en.htm. 
51 Article 394, Council Directive 2006/112/EC, 28 November 2006. 
52 Council Directive 92/83/EEC, 19 October 1992 (OJ L 316, 31 October 1992);  Council Directive 
92/84/EEC, 19 October 1992 (OJ L 316, 31 October 1992);  Commission Regulation (EC) No 3199/93, 
22 November 1993(OJ L 288, 23 November 1993);  Council Directive 95/59/EC, 27 November 1995 (OJ L 291, 
6 December 1995);  Council Directive 92/79/EEC, 19 October 1992 (OJ L 316, 31 October 1992);  Council 
Directive 92/80/EEC, 19 October 1992 (OJ L 316, 31 October 1992);  and Council Directive 2003/96/EC, 27 October 2003 (OJ L 283, 31 October 2003). 
53 Council Directive 2010/12/EU, 16 February 2010 (OJ L 50, 27 February 2010). 
54 European Commission document COM(2006) 486 final, 8 September 2006.  Viewed at:  
http://ec.europa.eu/taxation_customs/resources/documents/taxation/excise_duties/alcoholic_beverages/com 
(2006)486_en.pdf. 
55 European Commission document Ref 1.032, Excise Duty Tables (Parts I-III), January 2011.  Viewed 
at:  http://ec.europa.eu/taxation_customs/taxation/excise_duties/alcoholic_beverages/rates/index_en.htm. European Union WT/TPR/S/248 
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must apply the reduced rate on eligible beer and ethyl alcohol from other EU member States.56  
According to the Commission, alth ough the Directive is silent on whether similar reduced rates should 
be granted on beer and ethyl alcohol from outside  the EU, in practice similar tax reductions are 
provided in accordance with GATT commitments, usua lly on condition of a certificate of eligibility 
by the relevant national authority where the brewery or distillery is established.  The member States 
that maintain reduced excise duty rates for sma ll domestic breweries or distilleries are Austria, 
Belgium, Bulgaria, Czech Republic, Denmark, Estoni a, Finland, France, Germany, Greece, Ireland, 
Latvia, Luxembourg, the Netherlands, Portugal,  Romania, Slovakia, and the United Kingdom. 
48. Apart from VAT and excise duties on alcohol, tob acco, and energy, member States levy taxes 
on other goods and services.  The European Commission maintains a public database on member States' main taxes in revenue terms, and a list of minor taxes.
57 
(vi) Contingency measures 
49. According to the European Commission, "the de fence of EU production against international 
trade distortions should be considered as a necessar y component of an open and fair trade strategy".58 
50. In January 2008, the European Commission conclude d that "more reflection time is needed to 
seek the right answers to questions which were  raised during the intensive and somewhat 
controversial discussion on the TDI [trade  defence instrument] review process".59  According to the 
Commission, this decision was taken due to th e lack of consensus among member States and the 
European Parliament;  the Commission continues to believe that the periodic review of its 
contingency measures will help to ensure their e ffectiveness.  In this context the EU Trade 
Commissioner indicated that, once the economic crisis subsides, he plans to revisit "the question of whether our [contingency] instruments can be further refined, also in the light of any changes which 
may be required as a result of the Doha round".
60  During the period under review, the Commission 
and member States agreed on ways to improve transp arency in investigations.  As a result, during 
2010 the Commission revamped the TDI website a nd improved disclosures in investigations, among 
other initiatives.61 
51. Aspects of EU contingency measures were the subject of three WTO disputes during the 
review period.  Two complain ts were brought by China and one by India (Table AII.1).62  
52. According to the European Commission, 0.6% of total EU imports were subject to 
contingency measures in 2009, the same level as the year before. 
                                                      
56 Articles 4.3 and 22.3. 
57  European Commission online information, "Taxes in Europe database". Viewed at:  
http://ec.europa.eu/taxation_customs/taxation/gen_info/info_docs/tax_inventory/index_en.htm;  and "List of 
minor taxes, 2010 edition".  Viewed at:  http://ec.eu ropa.eu/taxation_customs/taxation/gen_info/info_docs/ 
tax_inventory/index_en.htm.  Minor taxes are defined as taxes yielding less than 0.1% of GDP in revenue. 
58 Europa online information, "Speaking Points:  An ti-dumping cases state of play and perspectives", 
Karel de Gucht, European Commissioner for Trade, 24 November 2010.  Viewed at:  http://trade.ec.europa. 
eu/doclib/docs/2010/november/tradoc_147051.pdf. 
59 European Commission document SEC(2009) 1413, 26 October 2009.  Viewed at:  http://trade.ec. 
europa.eu/doclib/docs/2009/october/tradoc_145263.pdf. 
60 Europa online information, "Opening Statement to the European Parliament", Karel de Gucht, 
European Commissioner for Trade November 2010.  Viewed at:  http://trade.ec.europa.eu/doclib/docs/ 
2010/february/tradoc_145788.pdf. 
61  European Commission document SEC(2010) 558 final, 13 October 2010.  Viewed at:  
http://trade.ec.europa.eu/doclib/doc s/2010/december/tradoc_147086.pdf. 
62 See WTO document series WT/DS405, DS397, and DS385. WT/TPR/S/248 Trade Policy Review 
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(a) Anti-dumping and countervailing duties 
53. The main EU legislation is contained in Regulation No. 1225/2009 on anti-dumping (AD) and 
Regulation No. 597/2009 on countervailing (CV) measures.63  The EU does not impose AD or CV 
measures on imports from Iceland, Liechtenstein, a nd Norway, except for fish and other goods that 
are outside the scope of the European Economic Area. 
54. The European Commission is responsible for conducting AD and CV investigations.  The 
adoption of AD and CV measures is subject to the ne w comitology rules that entered into force in 
March 2011.  These new rules establish the conditions  for control by the member States of the 
Commission's exercise of implementing power s under Article 291 TFEU (see Chapter II(1)).   
According to the Commission, these rules "will help to avoid the politicization of the process, leave 
less room for lobbying by any party or by third c ountries, and ensure a more robust trade defence 
policy".64  Prior to the entry into force of the Lis bon Treaty, the adoption of AD and CV measures was 
subject to "special procedures in which the Council frequently had the last word".65  In March 2011, 
the Commission issued a legislative proposal adapting several trade regulations, including on AD and 
CV duties, to the new comitology rules.  Th e Commission's proposal must be adopted by the 
Parliament and the Council in accordance w ith the ordinary legislative procedure. 
55. Initiations of AD investigations have fallen sli ghtly since the previous Review of the EU 
(Table III.4).  The number of new provisional measures increased while definitive measures 
decreased. 
56. The EU had 125 AD measures in force at end-2010, slightly fewer than two years earlier 
(Table III.5).  Imports from 27 countries or territories were affected.  China accounted for 44% of 
total AD measures, compared with 38% in 2008, wh ile India, Russia, and Thailand, each accounted 
for around 6%.  Undertakings are in effect for ni ne products from nine countries.  According to the 
Commission, the average duration of AD measures in the EU is between six and seven years;  approximately 12% of AD measures remain in place for more than ten years. 
Table III.4 
Anti-dumping investigations and measures imposed, 2006-10a 
 2006 2007 2008 2009 2010 
Investigation initiations  35 9 18 15 15 
Provisional measures 13 12 5 9 9 
Definitive measures  13 12 16 9 6 
Expired measuresb 9 16 2 3 14 
Confirmation of measure following expiry review 11 12 8 5 10 
Termination of measure following expiry review 8 3 5 0 1 
a As at 31 December 2010. 
b Measures that expired automatically after their five-year imposition. 
Source:  WTO Secretariat, based on European Commission (vari ous years), Anti-dumping, Anti-subsidy, Safeguard 
Statistics.  Viewed at:  http://ec.europa.eu/trade/tackling-unfair-trade/trade-defence], and information provided by 
the Commission. 
                                                      
63 Council Regulation (EC) No. 1225 /2009, 30 November 2009 (OJ L 343, 22 December 2009);  and 
Council Regulation (EC) No. 597/2009, 11 June 2009 (OJ L 188, 18 July 2009). 
64 European Commission press release IP/10/1735, "Comitology:  new rules for Commission's 
implementing powers, 16 December 2010. 
65 European Commission press release IP/10/1735, "Comitology:  new rules for Commission's 
implementing powers, 16 December 2010. European Union WT/TPR/S/248 
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57. Around one third of the goods subject to AD measu res in the EU are chemicals, 23% are base 
metals, including iron and steel, 7% are mineral products, and 6% are textiles, clothing, and 
footwear.66  Some of the highest definitive AD duties th at resulted from original investigations or 
reviews between June 2008 and June  2010 concern certain welded pipes of iron or non-alloy steel 
(90.6%) and certain prepared or preserved citrus fruits (up to 100.1%) from China, and stainless steel 
fasteners from Viet Nam (up to 707%).67 
58. The EU can impose AD measures only if the Comm ission determines that the measure is not 
against the wider interest of the EU economy.  Since the previous Review of the EU, no AD proceedings have been terminated due to a finding that the measure in question would be against the 
"Community interest". 
Table III.5 
Anti-dumping measures by country, 2006-10 
 2006 2007 2008 2009 2010 
Trading partner/region      
Algeria 1 1 1 1 1 
Armenia 0 0 0 1 1 
Australia 1 1 1 0 0 
Belarus 5 3 3 3 3 
Brazil 1 1 1 2 2 
Bulgaria 1 0 0 0 0 
China 40 44 48 54 54 
Chinese Taipei 6 6 6 6 5 
Croatia 2 2 1 1 1 
Egypt 0 0 1 1 1 
Faeroe Islands 1 1 1 0 0 
India 8 7 8 8 7 
Indonesia 6 5 5 5 4 
Israel 1 1 1 1 1 
Japan 1 0 0 0 0 
Kazakhstan 0 1 2 2 2 
Korea 5 5 5 5 5 
Laos 1 1 1 1 1 
Libya 1 1 0 0 0 
Macao, China 0 0 1 1 1 
Macedonia 0 0 1 1 1 
Malaysia 5 4 4 4 3 
Moldova 1 1 1 1 1 
Morocco 1 1 1 1 1 
Norway 2 2 0 0 0 
Pakistan 2 2 1 0 0 
Philippines 2 2 1 1 1 
Romania 2 0 0 0 0 
Russia 10 8 8 8 8 
Saudi Arabia 1 1 1 1 0 
Table III.5 (cont'd) 
                                                      
66 These data refer to the situation in August 2010. 
67 Only AD duties in the form of ad valorem  duties were considered.  See WTO documents 
G/ADP/N/180/EEC, 11 March 2009;  G/ADP/N/188/EEC, 6 November 2009;  G/ADP/N/195/EEC, 31 March 2010;  and G/ADP/N/202/EEC, 5 October 2010. WT/TPR/S/248 Trade Policy Review 
Page 42 
  
 2006 2007 2008 2009 2010 
South Africa 1 1 2 2 2 
Sri Lanka 1 1 1 1 1 
Thailand 8 7 7 8 7 
Turkey 2 1 0 0 0 
Ukraine 6 7 6 6 6 
United States 3 4 4 5 3 
Viet Nam 6 5 4 4 2 
Total number of measures 134 127 128 135 125 
Source:  WTO Secretariat, based on European Commission (vari ous years), Anti-dumping, Anti-subsidy, Safeguard 
Statistics.  Viewed at:  http://ec.europa.eu/trade/tackling-unfair-trade/trade-defence], and information provided by the Commission. 
59. Initiations of CV measures investigations increased between 2008 and 2009, then decreased 
in 2010 (Table III.6).  During 2010, the EU im posed 4 provisional measures and 3 definitive 
measures, compared with 1 provisiona l and 1 definitive measures in 2009. 
Table III.6 
Countervailing duty investigations  and measures imposed, 2006-10  
 2006 2007 2008 2009 2010 
Investigation initiations 1 0 2 6 3 
Provisional measures 0 0 0 1 4 
Definitive measures 0 0 0 1 3 
Expired measuresb 0 2 0 1 0 
Confirmation of measure following expiry review 1 1 1 0 1 
Termination of measure following expiry review 0 0 0 0 0 
a As at 31 December 2010. 
b Measures that expired automatically after their five-year imposition. 
Source:  WTO Secretariat, based on European Commission (vari ous years), Anti-dumping, Anti-subsidy, Safeguard 
Statistics.  Viewed at:  http://ec.europa.eu/trade/tackling-unfair-trade/trade-defence, and information provided by 
the Commission. 
60. At the end of December 2010, 11 CV measures were  in force, 3 more than in mid-2008.  Five 
measures apply on imports from India, and the rest on Brazil, Iran, Israel, Pakistan, the United Arab 
Emirates, and the United States.  The goods affected are PET and PET film, antibiotics, graphite 
electrode systems, sulphanilic acid, and biodiesel.  Undertakings are in effect for PET and sulphanilic 
acid from India. 
61. The highest definitive CV duties that resulted fro m original investigations or reviews between 
June 2008 and June 2010 concern antibiotics from India (up to 32%) and PET from India (up to 
19.1%).68  Five goods that were subject to CV meas ures in late 2010, were also subject to AD 
measures. 
(b) Safeguards 
62. Regulation No. 260/2009 contains th e general EU rules on safeguards.69  It applies on imports 
from outside the EU, except from Armenia, Azerbaij an, Belarus, the Democratic People's Republic of 
                                                      
68 O n l y  C V  m e a s u r e s  i n  t h e  f o r m  o f  ad valorem  duties were considered.  See WTO documents 
G/SCM/N/185/EEC, 18 March 2009;  G/SCM/N/195/EEC, 19 October 2009;  G/SCM/N/203/EEC, 
26 April 2010;  and G/SCM/N/212/EEC, 11 October 2010. 
69 Council Regulation (EC) No. 260/2009, 26 February 2009 (OJ L 84, 31 March 2009). European Union WT/TPR/S/248 
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Korea, Kazakhstan, Russia, Tajikistan, Turkmenistan , Uzbekistan, and Viet Nam.  Safeguards applied 
on imports from these countries are subject to Regulation No. 625/2009.70  Imports of textile products 
from certain non-members of the WTO are also excl uded from the coverage of  the general safeguard 
rules.  Regulation No. 427/2003 g overns the imposition of transitiona l product-specific safeguards on 
imports from China.71 
63. The Commission is in charge of conducting safe guard investigations in cooperation with 
member States.  The adoption of definitive safeguard measures is not subject to the standard regime under the new comitology rules (see Chapter II(1)).   Unlike AD and CV measures, the adoption of 
definitive safeguards requires a positive opinion voted by qualified majority of a committee composed 
of member State representatives. 
64. The EU has not applied any safeguard measur es since 2005.  During the period under review, 
one safeguard investigation was initiated, and no  definitive safeguard measures were imposed.  
The investigation, launched in June 2010, con cerns wireless wide area networking modems.
72  
The proceeding was terminated in January 2011 as th e request for the investigation was withdrawn.  
One surveillance measure, on steel products of any origin, has been in place since 2002.73   Under EU 
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".74  Surveillance is a 
system of automatic import licensing during a limited period.   
65. Under the EU-Korea free-trade agreement, the parties may adopt a "b ilateral safeguard" re-
introducing temporarily MFN duties on bilateral trade if, as a result of trade liberalization, an increase 
in imports would cause or threaten to cause serious injury.75  The European Parliament voted in 
favour of the Regulation implementing this provision in February 2011.  A similar Regulation exists 
under the EU's Economic Partnershi p Agreements (see Chapter II(4)).76 
(vii) Restrictions and controls 
66. The EU does not maintain quantitative restric tions on imports from WTO Members to protect 
domestic producers.  Certain steel products from Russia and Kazakhstan, and certain textiles from 
Belarus and the Democratic People's Republic of Korea are subject to import quotas.77 
67. The EU maintains import surveilla nce schemes for certain steel pr oducts regardless of origin.  
According to the latest EU reply to the questionnaire on import licensing procedures, import surveillance schemes seek to improve the "transpare ncy of import trends", and are not intended to 
limit market access.
78  The surveillance scheme on imports of certain steel products is administered 
through automatic licensing;  set up in 2002, its duration has been prolonged until end-2012.79  
                                                      
70 Council Regulation (EC) No. 625/2009, 7 July 2 009 on common rules for imports from certain third 
countries, OJ L 185, 17 July 2009. 
71 Council Regulation (EC) No. 427/2003, 3 March 2003 (OJ L 65, 8 March 2003). 
72 See OJ C 171, 30 June 2010. 
73 Commission Regulation (EC) No. 117/2005, 26 January 2005 (OJ L 24, 27 January 2005);  and 
Commission Regulation (EC) No. 469/2005, 23 March 2005 (OJ L 78, 24 March 2005). 
74 Article 11(1), Council Regulation (EC) No. 260/2009 of 26 February 2009 on the common rules for 
imports, OJ L 84, 31 March 2009.  
75 Article 3.1, Free Trade Agreement between the European Union and the Republic of Korea.  Viewed 
at:  http://trade.ec.europa.eu/doclib/press /index.cfm?id=443&serie=273&langId=en. 
76 Council Regulation (EC) 1528/2007, 20 December 2007 (OJ L 348, 31 December 2007). 
77 WTO document G/LIC/N/3/EEC/13, 18 October 2010. 
78 WTO document G/LIC/N/3/EEC/13, 18 October 2010. 
79 Commission Regulation (EU) No. 1241/2009, 16 December 2009 (OJ L 332, 17 December 2009). WT/TPR/S/248 Trade Policy Review 
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The EU ended the surveillance scheme on eight categories of textile products from China on 
31 December 2008 and on imports of certain text ile and clothing products from Uzbekistan in 
May 2010.  According to the Commission, its bilate ral textile agreements with Russia and Serbia do 
not foresee any quantitative restrictions on imports or exports. 
68. Pursuant to Article 130(1) of Regulation No. 1234/2007, the Commission may impose 
licensing requirements on imports of certain agricultural products.80  The products that require an 
import licence, as listed in Annex II, Part I, of Re gulation No. 376/2008, include cereals, rice, sugar, 
olive oil and table olives, flax and hemp, milk a nd milk products, beef and veal, fruit and vegetables, 
and processed fruits and vegetables.  Import licences are issued by the compet ent authorities of the 
member States at the request of operators.  In a ddition, imports of agricultural products subject to 
tariff quotas administered by methods other than first-come, first served are subject to licensing.  The licensing requirements are set out in Regulation 1301/2006 and individual regulations establishing the modalities for the quotas.  The Co mmission notes that licences for imports under 
tariff quotas are granted in a non-discriminatory way on the basis of the "simultaneous examination 
method.  In general, importers must lodge a secur ity to apply for an import licence.  The amount of 
the security depends on the product, and is forfeited if the product in question is not imported during 
the period of validity of the licence. 
69. Quantitative restrictions and controls on imports  are in place to implement sanctions imposed 
by United Nations resolutions, and pr ovisions under international treati es or conventions.  In addition, 
the EU maintains unilateral import contro ls to attain non-economic objectives. 
70. For example, imports of timber and timber produc ts from countries that have entered into a 
Forest Law Enforcement Governance and Trade ( FLEGT) "Voluntary Partnership Agreement" (VPA) 
with the EU are subject to licensing.
81  As part of these agreements, timber-producing countries 
voluntarily agree to set up a national scheme to verify the legality of their shipments of timber and timber products to the EU.  FLEGT VPAs have b een ratified with Ghana (September 2009), and 
the Republic of Congo and Cameroon (February 2011) ;  signature and ratification of a VPA with 
the Central African Republic is ongoing (Mar ch 2011).  Negotiations are ongoing with the 
Democratic Republic of Congo, Gabon, Indonesia, Li beria, Malaysia, and Viet Nam.  There are no 
operational FLEGT licensing schemes, pending the development and tes ting of appropriate 
verification systems. 
71. In October 2010, the EU adopted legislation that  prohibits placing illegally harvested timber 
and timber products containing such timber on the EU market.
82  Under Regulation No. 995/2010, 
"operators" who place domestically produced or imported timber and timber products on the EU 
market for the first time must exer cise "due diligence" to minimize the risk that such products contain 
timber harvested in contravention of the appli cable legislation in the country of harvest.83  D u e  
diligence involves a risk management exercise based on information and criteria set out in the 
Regulation.  In addition, persons trading timber a nd timber products within the EU, other than those 
placing such products for the first time on the EU ma rket, must keep records of their suppliers and 
customers.  The Regulation will be applied from 3 March 2013, and two implementing measures, to 
be developed by the Commission, must be adopted by 3 March and 3 June 2012.  Timber and timber 
                                                      
80 Council Regulation (EC) No 1234/2007, 22 October 2007 (OJ L 299, 16 November 2007). 
81 See Council Regulation (EC) No. 2173/2005, 20 December 2005 (OJ L 347, 30 December 2005);  
and Commission Regulation (EC) No 1024/2008, 17 October 2008 (OJ L 277, 18 October 2008). 
82 Regulation (EU) No. 995/2010 of the European Parliament and of the Council, 20 October 2010 
(OJ L 295, 12 November 2010). 
83 Article 4(2), Regulation (EU) No. 995/2010 of the European Parliament and of the Council 
of 20 October 2010. European Union WT/TPR/S/248 
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products covered by valid licences under FLEGT or  the Convention on International Trade in 
Endangered Species of Wild Fauna and Flora are cons idered to comply with the requirements of the 
new Regulation. 
(viii) Technical regulations and standards 
72. During the last Review of the EU, some Member s stated that the EU's regulatory practices, 
and its technical regulations and conformity  assessment procedures had become increasingly 
important in determining access to the EU market , sometimes creating, in their view, unnecessary 
obstacles to trade.84  In response, the EU indicated that its regulations pursue legitimate objectives, are 
subject to a thorough impact assessment, are deve loped according to a transparent process allowing 
ample opportunity for interested parties from othe r WTO Members to participate and make their 
views known, and are largely based on relevant inte rnational standards.  While recognizing that the 
number of regulatory requirements in some areas ha d increased, the EU noted that this reflects 
scientific progress and the identification of new risks.   In addition, the EU indicated that it provides 
technical assistance to assist developing countries in meeting regulatory requirements. 
73. Technical regulations and conformity assessmen t procedures are adopted at national and EU 
levels.  Only goods that are not covered by the EU's "fully harmonizing" legislation may be subject to 
national technical regulations or conformity assess ment procedures.  Harmonizing legislation is 
legislation adopted jointly by the European Parlia ment and the Council, or by the Commission when 
the European Parliament and the Council have gr anted the relevant implementing powers to the 
Commission.  The general legal basis for the adop tion of harmonizing legislation relating to the 
establishment and functioning of the EU intern al market is Article 114 TFEU.  Other TFEU 
provisions may also provide a relevant legal basis, depending on the subject.  For example, there is a 
substantial body of legislation in the field of agricultural products based on Article 38 TFEU. 
74. Under Regulation No. 764/2008, the Commissi on must publish "a non-exhaustive list of 
products which are not subject to Community harmonisation legislation".85  According to the 
Commission, around 25% of the EU goods market is not covered by harmonizing rules.86 
75. The EU last updated its notification on the implementation and administration of the TBT 
Agreement in November 2006.87  It implemented obligations under the TBT Agreement through 
Decision 94/800/EC.88  The Commission has overall respons ibility for the implementation and 
administration of the TBT Agreement.89  The TBT enquiry point for EU legislation is the Enterprise 
and Industry Directorate-General of the Commission.90  Member States have designated TBT enquiry 
points for national legislation. 
                                                      
84 WTO document WT/TPR/M/214, 8 June 2009. 
85 Article 12(4), Regulation No. 764/2008 of the Euro pean Parliament and of the Council, 9 July 2008 
(OJ L 218, 13 August 2008).  For the list of non-harmonized products.  Viewed at:  
http://ec.europa.eu/enterpri se/intsub/a12/index.cfm?fuseaction=a12.menuproducts. 
86 European Commission staff working document SEC(2009) 1684/2.  Viewed at:  http://ec.europa.eu/ 
eu_law/docs/docs_infringements/annual_report_26/en_sec_sectors_autre_document_travail_service_part1_v4clean.pdf. 
87 WTO document G/TBT/2/Add.12/Rev.3/Suppl.1, 22 November 2006. 
88 Council Decision (of 22 December 1994) conc erning the conclusion  on behalf of the 
European Community, as regards matte rs within its competen ce, of the agreements reached in the Uruguay 
Round multilateral negotiations, OJ  L 336, 23 December 1994. 
89 WTO document G/TBT/2/Add.12/Rev.3, 18 October 2005. 
90 WTO document G/TBT/ENQ/37, 15 June 2010. WT/TPR/S/248 Trade Policy Review 
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76. The EU notified 146 technical regulations and conformity assessment procedures to the WTO 
between October 2008 and mid-January 2011 (28 in  2008, 63 in 2009, 50 in 2010, and 5 in 2011).  
The notifications cover products such as househol d appliances, electric and electronic equipment, 
machinery, motor vehicles and parts, fuels, cons truction materials, measuring devices, textile and 
apparel, chemicals, fertilizers, food, water, wine, vitamins and minerals, cosm etics, seal products, and 
genetically modified plants.  The notifications normally specify a comment period of at least 60 days, and a proposed date of adoption after the expiry of the comment period.  During the period under 
review, the EU submitted a large number of a ddenda, providing additional information on the 
adoption, entry into force, and content of the final text of previously notified TBT measures. 
77. Individual member States notified around 140  technical regulations and conformity 
assessment procedures during the period under review.  France accounted for the largest share, with 
21%, followed by the Czech Republic and Slovenia (14%  each), Finland (10%), and Denmark, Italy, 
and Sweden (around 8% each).  Estonia, Germany,  Hungary, Lithuania, the Netherlands, Poland, 
Portugal, Slovakia, Spain, and the United Kingdom have also made notifications.  Notifications 
covered, inter alia , construction materials, fire safety equi pment, measuring devices, machine tools, 
dairy and other agricultural products, food additi ves and supplements, alcohol and alcoholic 
beverages, veterinary medicines, fertilizers, moto r vehicles, arms and ammunition, and tobacco and 
tobacco products.  For approximately 17% of indi vidual member State notifications, the comment 
period, or the period between the date on which a not ification was published and its date of adoption, 
was less than 60 days. 
78. Between October 2008 and January 2011, WTO Members raised concerns in the TBT 
Committee over several measures proposed or adopt ed by the EU or individual member States 
(Table III.7).  Of the 17 new concerns raised, one was followed by formal dispute settlement. 
79. Since the last Review of the EU, France has notified one recognition agreement under 
Article 10.7 of the TBT Agreement.
91  By the EU or by any other member State no notifications were 
submitted under Article 10.7. 
Table III.7 
Specific trade concerns over EU TBTs, October 2008-January 2011 
Issue Selected WTO references Member(s) concerned First raised 
Proposed regulation on cosmetic 
products G/TBT/M/46;  
G/TBT/N/EEC/186 and 
Corr.1 China 05.11.2008 
Non-inclusion of napropamide in 
Annex 1 of Council Directive 
91/414/EEC G/TBT/M/46;  
G/TBT/N/EEC/203 India 05.11.2008 
Measure on novel foods G/TBT/M/46, 47;  
G/TBT/N/EEC/188 Colombia, Costa Rica, Ecuador, Mexico, Peru 05.11.2008 
Draft Commission Directive 
amending Council Directive 
67/548/EEC (dangerous chemical substances) G/TBT/M/46, 47, 48;  
G/TBT/N/EEC/212 Australia, Botswana, Brazil, Canada, Chile, China, 
Colombia, Cuba, Dominican Republic, Ecuador, 
India, Indonesia, Japa n, Korea, Mauritius, 
Philippines, South Africa, Turkey, United States, Venezuela, Zimbabwe 05.11.2008 
Requirement on the capacity 
labelling of batteries and 
accumulators G/TBT/M/46 Japan 05.11.2008 
Table III.7 (cont'd) 
                                                      
91 WTO documents G/TBT/10.7/N/108, 9 June 2010.  In addition, several notifications by Ukraine 
under Article 10.7 of the TBT Agr eement specified some EU member St ates as parties to the notified 
agreements. European Union WT/TPR/S/248 
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Issue Selected WTO references Member(s) concerned First raised 
Regulation concerning trade in 
seal productsa G/TBT/M/47, 48, 49, 51;  
G/TBT/N/EEC/249 and 
Adds. 1-2;  
G/TBT/N/EEC/325 Brazil, Canada, Norway 18.03.2009 
Marketing standards for olive oil G/TBT/M/47;  
G/TBT/N/EEC/226 New Zealand, United States 18.03.2009 
Requirements for ride-on lawn 
mowers (France) G/TBT/M/47, 48, 49, 51 United States 18.03.2009 
Implementing measures of the 
Directive on eco-design of 
energy-using products G/TBT/M/47, 49;  
G/TBT/N/EEC/208 and 
Add.1;  228 and Add.1;  229 Adds 1 and 2;  234 and 
Add.1;  237 and Add.1;  
and 273 and Add.1 China 18.03.2009 
Certification programmes, 
labelling schemes, geographical 
indications and regional 
certification quality measures for 
agricultural products (Green Paper on Agricultural Product 
Quality Policy) G/TBT/M/47, 48 Mexico, United States 18.03.2009 
Tariff rate quota on meat and 
meat products G/TBT/M/48 Argentina, Australia, Paraguay, Uruguay 25.06.2009 
Restrictions on the marketing and 
use of organostannic compounds G/TBT/M/48, 49;  
G/TBT/N/EEC/244 and 
Add.1 Japan 25.06.2009 
Ban on products containing 
biocide Dimethylfumarate 
(DMF) G/TBT/M/48;  
G/TBT/N/EEC/258 and 
Add.1 Japan 25.06.2009 
Accreditation and market 
surveillance relating to the 
marketing of products G/TBT/M/48, 49, 51;  
G/TBT/N/EEC/152 Australia, Korea, Thailand, United States 25.06.2009 
Regulation on marketing 
standards for poultry meat G/TBT/M/48, 49, 51;  
G/TBT/N/EEC/267 Australia, Brazil 25.06.2009 
Draft dairy regulation (Italy) G/TBT/M/50, 51;  
G/TBT/N/ITA/13 Australia, New Zealand 24.03.2010 
Registration for traditional herbal 
medicinal products G/TBT/M/51 China, Ecuador, India 23.06.2010 
EU restriction on the use of 
certain hazardous substances in 
electrical and electronic 
equipment G/TBT/M/46, 47, 48, 49, 
51;  G/TBT/N/EEC/247 
and G/TBT/Notif.00/310, 
Corr.1 Australia, Canada, China, Israel, Japan, Jordan, 
Korea, Republic of, Malaysia, Mexico, Thailand, 
Egypt, United States, Venezuela 31.03.1999 
Ban on the use of nickel-
cadmium in batteries G/TBT/M/48;  
G/TBT/N/EEC/98 Australia, Canada, China, Japan, Thailand, Egypt, 
United States, Venezuela 11.06.1999 
Regulation on certain wine sector 
products G/TBT/M/46, 47, 48, 49, 
51;  G/TBT/N/EEC/15, 
Corr.1-2;  
G/TBT/N/EEC/57;  
G/TBT/N/EEC/252 and Add.1;  and G/TBT/N/EEC/264 and 
Add.1 Argentina, Australia, Bo livia, Brazil, Canada, New 
Zealand, Mexico, Paraguay, Peru, South Africa, 
United States, Uruguay 01.10.1999 
Table III.7 (cont'd) WT/TPR/S/248 Trade Policy Review 
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Issue Selected WTO references Member(s) concerned First raised 
Regulation on the registration, 
evaluation and authorization of 
chemicals (REACH) G/TBT/M/46, 47, 48, 49, 
51;  G/TBT/N/EEC/52 and 
Adds.1-5;  Add.3/Rev.1;  
G/TBT/N/EEC/295 and 
297;  G/TBT/N/EEC/333-6 Argentina, Australia, Botswana, Brazil, Canada, 
Chile, China, Chinese Ta ipei, Colombia, Costa 
Rica, Cuba, Dominican Republic, Ecuador, El 
Salvador, Indonesia, Israel, Japan, Korea, Kuwait, 
Malaysia, Mexico, Pakistan, Philippines, Qatar, Saudi Arabia, Singapore, South Africa, 
Switzerland, Thailand, Egypt, United States, 
Uruguay 20.03.2003 
Restrictions on the use of Deca-
bromo diphenylether (deca-BDE) 
by Sweden G/TBT/M/46, 47;  
G/TBT/N/SWE/59 Chinese Taipei, Israel, Japan, Jordan, United States 15.03.2006 
Fire performance of construction 
products G/TBT/M/48;  
G/TBT/N/EEC/92 and 
Add.1 Brazil, Colombia, Japan, Korea, Republic of, 
Mexico, Philippines, Thailand, United States 15.03.2006 
Regulation on classification, 
labelling and packaging of 
substances and mixtures (ATPs and CLP) G/TBT/M/49, 51;  
G/TBT/N/EEC/151 and 
Adds.1-2;  G/TBT/N/EEC/212 and 
Adds.1-3;  and 
G/TBT/N/EEC/163 and Add.1-2, Add.1/Corr.1 Argentina, Australia, Botswana, Brazil, Canada, 
Chile, China, Colombia, Cuba, Dominican 
Republic, Ecuador, India, Indonesia, Japan, Korea, Republic of, Malaysia, Mauritius, Philippines, 
Russian Federation, South Africa, Zimbabwe, 
Thailand, Turkey, Unite d States, Venezuela 05.07.2007 
Ban on seal products (Germany) G/TBT/M/46;  
G/TBT/N/DEU/5 and 
Add.1 Canada, Norway 20.03.2008 
Production and labelling of 
organic products G/TBT/M/47, 49;  
G/TBT/N/EEC/101 and 
Add.1 Argentina, Cuba, Ecuador 20.03.2008 
Chemical requirements for toys G/TBT/M/50;  
G/TBT/N/EEC/184 and 
Add.1 China, Korea 20.03.2008 
a Continued to formal dispute settlement. 
Source: WTO Secretariat.  
80. Technical regulations and conformity assessment procedures at the EU a nd national levels are 
developed and adopted under pro cedures governing the development and adoption of regulation in 
general.  These procedures vary significa ntly across member States (Table III.8). 
81. Technical regulations and conformity assessmen t procedures are established at the EU level 
through EU legislative acts adopted by the Eur opean Parliament and the Council, or by the 
Commission on the basis of implementing powers conferred by means of an EU act.  Following the entry into force of the Lisbon Treaty in December 2009, the adoption of technical regulations and conformity assessment procedures by the Commission on the basis of implementing powers is subject to a new legal framework (see Chapter II(1)). 
82. The Commission maintains a website for public  consultations on policy and legislative 
initiatives.
92  Notices of preparation of legislation are published in the EU Official Journal  "C series";  
once adopted, legislation is published in the Official Journal  "L series", as required by the Treaty on 
the Functioning of the EU.  Although there is no statutory requirement to publish notices of 
preparation of legislation, the Commission indicat ed that these are publishe d.  According to the 
Commission, the period allowed between publication of a measures and its application to economic 
operators varies depending on the measure and whet her the measure needs to  be transposed into 
national legislation.  The Commission noted that, in general, the minimum implementation period for 
                                                      
92 European Commission online information, "Your Voice in Europe".  Viewed at:  
http://ec.europa.eu/yourvoice/index_en.htm. European Union WT/TPR/S/248 
 Page 49 
 
 
harmonization legislation is between  18 and 24 months;  it may be longer for legislation that breaks 
new ground or introduces substantial am endments to existing requirements. 
Table III.8 
Selected aspects of regulation in  four member States, early 2010 
General legislative framework 
Belgium The federal, three regional, and three community governments legi slate in their areas of compet ence;  laws issued by the 
federal government and decrees issued by regions and comm unities (called "ordinances" in the case of Brussels-capital 
region) are on an equal footing;  in add ition, each government has a sub-structure of  secondary regulations, also on an equal 
footing with each other. 
Germany Federal laws are usually fleshed out in secondary legisl ation issued by the Länder.  Länder issue their own laws and 
regulation in areas of exclusive Land competence;  they may delegate implementation responsibilities to the counties and 
municipalities:  The hierarchical status of legal instru ments depends on the enacting body .  Municipalities do not have 
legislative powers per se, but can issue im plementing bye-laws on permits and licences. 
Sweden In general, primary legislation (p roposed by the government and enacted by parliament) is fleshed out in secondary 
regulations (ordinances and regulations) by government agencies :  Only the parliament and the government have the right, 
under the Instrument of Government, to issue legal norms;  however both the parliament and the government may delegate 
rulemaking powers to government ag encies and local governments. 
United 
Kingdom Primary legislation, which is contained in acts of parliament, often confers power s on the executive to make legislation, 
which is either notified to, or approved by, the parliament;  the assemblies in Scotland, Wales and Northern Ireland can make 
laws in their own areas of competence. 
Forward planning  
Belgium Each government issues a policy statement agreed by  the coalition parties at the beginning of a legislature. 
Germany The coalition agreement adopted by the coalition parties at  the beginning of each legislative term sets the general pol icy 
framework;  the chancellery summarizes ongoing and future mini sterial projects in a document that is regularly updated. 
Sweden Based on the coalition agreement at the start of each pol itical term, the prime minister's office submits a list of upco ming bill 
proposals twice a year to the parliament. 
United Kingdom The annual Queen’s speech on the opening of the parliament sets  out the main lines of the legislative programme for the 
coming year.  Major policy proposals are presented in white pape rs by government ministries.  Forward planning procedures 
for secondary regulations are much less devel oped and there is no systematic coordination. 
Rulemaking procedures  
Belgium General procedures for making new fe deral regulations are laid down in severa l circulars related to the operation of th e 
Council of Ministers. 
Germany The constitution and the Administra tive Procedures Act set out a framework of general administrative procedure 
requirements;  more elaborate standardized procedures to creat e new legislation at the federal level are set out in the Joint 
Rules of Procedure of the federa l ministries, which are binding. 
Sweden The Instruments of Government sets out consultation procedures for rulemaking. 
United 
Kingdom There is no general administrative procedure law;  instead, the UK relies on a range of codes and guidance covering different 
policy fields and issued by different government entities. 
Public consultation  
Belgium Stakeholders are generally consulted through a dense, highly structured and extensiv e network of advisory boards 
comprising representatives of target groups related to vari ous policy/regulatory issues.  Other forms of consultation, 
including more open "notice and comment" pr ocedures using the Internet to reach out directly to citizens, are emerging 
alongside the traditional approach. 
Germany Public consultation by the federal government is formally regulated by the Joint Rules of Procedure, which specifies th at 
ministries must consult early and exte nsively with a range of stakeholders.  In practice, individual ministries have significant 
latitude on such issues as feedback, timing, publication of comm ents, and selection of consulta tion partners.  Informal pre-
consultation rounds (with the Länder, municipalities and associati ons) are the norm at an early st age in the process before a 
bill is drafted.  Although e-consultation is an important and steadily emerging feature, the federal government has 
nonetheless not yet established a single web portal for all current and previous consultation on federal initiatives. 
Sweden Public consultation by the government with parties affect ed by draft legislation is in principle mandatory.  A key eleme nt of 
the consultation process is the Committee of Inquiry:  before  the government makes legislative proposals, a Committee of 
Inquiry writes a report that is referred to relevant bodies for consideration;  reports are publ ished.  Beyond the Committee of  
Inquiry system, which covers major legisla tion, there is a general requirement to consult.  There are no explicit or shared 
guidelines on how to carry out this consultation.  Ministries and agencies may define their own approach, including direct 
consultation of the public. 
Table III.8 (cont'd) WT/TPR/S/248 Trade Policy Review 
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Public consultation 
United 
Kingdom The Code of Practice on Consulta tion, revised in 2008, promotes an open consultations ap proach, but the recent review of 
the Code of Practice on Consultation showed that there was con cern at the way consultations are carried out in practice.  
The Code applies to all central government departments and agencies that have a clos e relationship with a parent department.  
All departments put their consultation exercises on a department al web page;  work is under wa y to develop a comprehensive 
online tool providing access to all central government consultations. 
Access to regulations  
Belgium Regulations are accessible through different official publi cations and websites;  regulati ons at the federal, regional,  and 
community levels are published in the official journal, which is  available online;  in addition , regulations are compiled in a 
website, with consolidated ve rsions and search facilities. 
Germany Once a law or an ordinance is enacted, it is promulgated in the federal official journal.   A publicly available databas e of 
federal administrative regulations has been in place since 2006. 
Sweden There is an obligation on the government to publish acts and ordinances, including amendments, in the Swedish Code of 
Statutes;  there is also an online database containing a direct ory of all laws, ordinances and government agency regulations.  
The government also publishes bi-annually general information on important new laws that will enter into force in the 
coming six months. 
United 
Kingdom Several databases of informati on on regulations are available, but none is co mprehensive;  the Ministry of Justice is 
extending the statute law database which will cover primary and secondary regulations in current form, i.e. including 
subsequent amendments 
Ex-ante impact assessment  
Belgium Ex ante impact assessment is a relatively new policy in  Belgium, and still a "work in pr ogress".  With the exception of  the 
process in Flanders, impact assessment remains mostly focu sed on administrative burdens, a lthough there have been recent 
efforts to extend its scope. 
Germany Impact assessment is backed up by a comprehensive handb ook issued by the Interior ministry in 2006.  Key impacts are 
covered including environmental, economic a nd social.  The process is applied to pr imary legislation, a nd partially covers 
secondary regulations.  The approach is comprehensive on paper,  but in practice impact assessment appears to have a limited 
impact on decision-making. 
Sweden A new policy seeks to promote a more systematic and more  coherent approach going beyond  impacts on small firms, and a 
strengthened institutional framework.  The emphasis remains firmly on the economi c and business aspects.  The centrepiece 
of the revised approach is a new Regulatory Impact Assessme nt Ordinance for the government agencies, which entered into 
force in January 2008.  The ordinance sets specific requirements for impact assessment. 
United 
Kingdom The government has recently updated its policy on ex ante imp act assessment;  the new process is designed to promote 
greater transparency and sharpen the a pproach via enhanced quantification and a process to promote "early stage" 
consideration of costs and benefits before a policy is too adva nced, the overall objective being to ensure that the benefits of  
new regulations justify the burdens.  Wide-ranging in stitutional and methodological support is in place. 
Enforcement  
Belgium Inspections and enforcement follow the lines of Belgium' s division of competences between governments.  For areas of 
federal competence, inspections are under the responsibility of units  of relevant ministries, or administrative agencies;  the 
same structure applies to regions and communities with respect to their competences.  There is  a significant enforcement role 
at the local level of government.  Risk analysis  is well established in inspection methodologies. 
Germany Most legislation adopted at the fe deral level is implemented and enforced by  the Länder, which rely extensively on the 
districts, counties, and municipalities to ex ecute state and even federal legislation.  Risk based approaches to enforcement ar e 
not explicitly practiced. 
Sweden The current approach to enforcem ent is complex and widely acknowledged to be in need of reform.  Enforcement 
responsibilities are spread across a range of bodies, and regulated in different ways through more than 230 laws.  The 
government has started to take steps to ra tionalise and clarify enforcement responsibilitie s.  A risk based approach is not yet  
used to a large extent. 
United 
Kingdom Responsibilities for enforcement are divided between national regul atory agencies and local authorities.  There has been a 
reappraisal of the approach to enforcemen t, resulting in the adoption of new statut es (Regulatory Enforcement and Sanctions 
Act, enacted in July 2008, and the Regulators Compliance Code , which came into force in April 2008).  There has been 
steady progress towards the adoption of common principles  of regulatory enforcement based on risk assessment. 
Regulatory streamlining  
Belgium Procedures for ex post review of regulations are still under development.  Le gislation only rarely provides for ex post  review.  
Sunset clauses are not commonly used.  At the federal level, one of the "Twelve Strategic Wo rks" outlined in the policy note 
of the federal government provided for the introduction of ex post evaluation of existing laws.  This led to the establishment 
of the Parliamentary Committee for Legislative Monitoring in  2007.  Regional governments are also trying to develop ex 
post review mechanisms. 
Table III.8 (cont'd) European Union WT/TPR/S/248 
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Regulatory streamlining 
Germany The federal government has passed se veral laws to repeal redundant regulations , and a Simplification Act to clean up th e 
stock of environmental regulations.  However, the German syst em does not encourage sunset clauses or other devices that 
would trigger reviews of individual regulations. 
Sweden Sweden is active in the use of di fferent processes aimed directly at regulat ory streamlining.  The Action Plan for Bette r 
Regulation, set up in 2006, is updated annually and covers a broad range of  regulatory simplification measures. 
United 
Kingdom Although there are a number of useful initiatives, there is no syst ematic effort to consolidate or simplify the regulatory stoc k.  
A new impact assessment form requires officials to commit to a date when they will review the actual costs and benefits of 
any new proposal, and establish whether the policy has achieved th e desired effects.  This post implementation review should 
typically occur within three years of implemen tation, depending on the nature of the policy. 
Source :  WTO Secretariat, based on OECD (2010), Better Regulation in Europe (various issues), Paris. 
 
83. According to the Commission, the EU notifi es draft measures to the WTO once a complete 
text of the measure is available, but at a stage when comments can be taken into account.  Some WTO 
Members consider that public consultations on EU regulatory proposals could be enhanced.93  F o r  
example, one Member noted that, by the time th e EU issues public notices of proposed regulations, 
deliberations among EU member States have progressed too far to allow for the meaningful 
consideration of trading partners' views. 
84. Proposed technical regulations and conformity assessment procedures may be subject to 
impact assessment by the Commission.  Pursuant to the EU's "Better Regulation Policy", all "major" policy initiatives and legislative proposals "w ith potential significant economic, social, and 
environmental impacts" must undergo impact assessment.  Under the Commission's guidelines on 
impact assessment, revised in 2009, assessment shoul d include analyses of the effects of trade and 
investment policies on foreign and domestic busin esses and consumers, and of particular policies on 
the EU's WTO obligations.
94 
85. The requirements relating to technical regulations and conformity assessment procedures are 
listed by sector in the Export Helpdesk website of the Commission.95  In addition, an overview of EU 
legislation relating to various product areas is  available on the website of the Commission's 
Directorate-General for Enterprise and Industry.96 
86. Under the "new approach" to technical harm onization launched in the mid-1980s, technical 
regulations adopted at the EU level contain "essential requirements" expressed in terms of 
performance-based indicators or objectives, leavi ng manufacturers free to determine the technical 
characteristics to comply.  Essential requirements define  the results to be attained, or the hazards to be 
dealt with, without specifying any particular technical  solution.  Technical solutions to meet essential 
requirements are set out in harmonized standard s developed by the European Standardization 
Organizations based on a mandate from the Commissi on.  Compliance with these standards confers a 
presumption of conformity with the essential requi rements covered by the standards.  Technical 
regulations adopted prior to the introduction of the new approach usually establish detailed specific 
technical requirements.  Motor vehicles are entirel y subject to the old approach.  New-approach 
regulations cover a wide variety of products, incl uding electrical and electronic products, pressure 
equipment and gas appliances, toys, machinery, medical devices, radio and telecom equipment, elevators, personal protective equipment, equi pment for use in explosive atmospheres, and 
recreational craft.  The Commission does not have data  on the market shares of products subject to old 
                                                      
93 WTO document WT/TPR/M/214, 8 June 2009. 
94 European Commission document SEC(2009) 92, 15 January 2009.  Viewed at:  http://ec.europa.eu/ 
governance/impact/commission_guidelines/docs/iag_2009_en.pdf. 
95 Export Helpdesk online information.  Viewed at:  http://exporthelp.europa.eu/index_en.html. 
96 See, for example:  http://ec.europa .eu/enterprise/sectors/index_en.htm. WT/TPR/S/248 Trade Policy Review 
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and new approach legislation.  According to the Commission, some sectors, for example chemicals, 
are subject to both types of approaches. 
87. In the context of its previous Review, the EU stated that EU legislation relies on supplier's 
declaration of conformity for a "major part" of goods marketed in the EU.97  Some of the goods 
subject to supplier's declaration of conformity are electrical and electronic products, energy-related 
products subject to eco-design requi rements, radio and telecom equipment, most machinery, toys, 
refrigeration appliances, and some categories of pr essure equipment, personal protective equipment, 
recreational craft, and medical devices.  In addition,  supplier's declaration of conformity is used for 
goods that, in the absence of more specific safety le gislation at the EU level, are subject to the 
General Product Safety Directive.98  These goods include childcare goods, textiles, and several other 
consumer goods.  Third-party co nformity assessment conducted by "notified bodies" is used for 
products deemed high-risk.  Notified bodies are cert ification, inspection, and testing bodies designated 
by member States to perform specific confor mity assessment activities mandated under EU product 
legislation.  The designation of notified bodies by member States involves a technical assessment, 
typically based on accreditation, and a political decision whereby member States take responsibility 
for the operation and supervision of the notified body.99  Conformity assessment bodies that are not 
established in the EU cannot qualify as notified bodies. 
88. In July 2008, the European Parliament and the Council adopted the New Legislative 
Framework, a package of measures that seeks to re move "the remaining obstacles to free circulation 
of products" within the EU.  The New Legislativ e Framework consists of Decision No. 768/2008 and 
Regulation 765/2008.100  Decision No. 768/2008 contains comm on principles and reference provisions 
for the future development of (or amendment of exis ting) harmonizing legislation.  It sets out a menu 
of conformity assessment procedures, and the criteri a to choose among them, including the nature of 
the risk associated with the product, the need to avoid imposing too burdensome conformity 
assessment requirements in relation to the risks, and the appropriateness of the conformity assessment 
procedure to the type of product, and to the type  and degree of risk.  According to the Commission, 
the Decision transposes into EU legislation the toolbox of conformity assessment procedures 
elaborated by the ISO Conformity Assessment Comm ittee.  In developing new or amending existing 
legislation, EU legislators must justify any departure from the common principles and reference 
provisions contained in Decision 768/2008.  Duri ng 2010, the Commission held public consultations 
on its proposal to align ten existing new-a pproach directives to the new provisions of 
Decision No. 768/2008.101 
89. Pursuant to the New Legislative Framework, accreditation should be the preferred method for 
determining the technical competence of a particul ar certification, inspection, or testing body under 
EU product legislation that requires third-party c onformity assessment.  From January 2010, the EU 
applies a new common framework on accreditation, set  out in Regulation 765/2008.  Accreditation 
was previously governed by national legislation.  According to the Commission, in the absence of a 
common legal basis, member States had been using "different approaches to accreditation, applying 
                                                      
97 WTO document WT/TPR/M/214/Add.1, 2 July 2009. 
98 Directive 2001/95/EC of the Eu ropean Parliament and of the Co uncil, 3 December 2001 (OJ L 11, 
15 January 2002). 
99 WTO document G/TBT/M/51, 1 October 2010. 
100 Regulation (EC) No. 765/2008 of the European Parliament and of the Council of 9 July 2008 
(OJ L 218, 13 August 2008);  and Decision No 768/2008/EC of the European Parliament and of the Council, 9 July 2008 (OJ L 218, 13 August 2008). 
101 European Commission online information, "New Legislative Framework for the marketing of 
products: Proposal to align ten product harmonisation directives to Decision 768/2008".  Viewed at:  http://ec.europa.eu/enterprise/newsroom/cf /itemlongdetail.cfm?item_id=4289&lang=en. European Union WT/TPR/S/248 
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differing systems with uneven rigour".102  The objectives of the new accreditation framework are to:  
create confidence in the quality of conformity assessment bodies and their certificates;  ensure 
common and transparent rules for the assessment of  the competence and monitoring of conformity 
assessment bodies;  and stabilize the accreditation system in the EU. 
90. Under the new framework, member States must  appoint a single national accreditation body, 
which must operate accreditation under the prin ciples set out in Regulation No. 765/2008.  For 
example, national accreditation bodies cannot be invo lved in conformity assessment, operate on a for-
profit basis, or compete with other accreditation bodies in the member State where they are established, or elsewhere in the EU.  The new framework recognizes the European Cooperation for 
Accreditation (EA), as the official accreditation "i nfrastructure", responsible for managing peer 
evaluations of national accreditation bodies' conform ity to the relevant legal requirements.  All 
national accreditation bodies must be members of th e EA, and regularly subm it to peer evaluation. 
91. National accreditation bodies must recognize the e quivalence of the services of other national 
accreditation bodies that have successfully passed th e peer review.  Member States cannot refuse 
certificates or test reports issued by a conformity assessment body accredited by another member 
State's national accreditation body.
103  Regulation No. 765/2008 does not contain provisions relating 
to the recognition of non-EU accreditation bodies, or  the acceptance of certification and test reports 
issued by such bodies. 
92. Under EA policy, the relationship with accr editation bodies from countries outside EFTA or 
the "European neighbourhood" should be managed through the International Accreditation Forum 
(IAF) Multilateral Recognition Agreement (MLA) a nd the International Laboratory Accreditation 
Cooperation (ILAC) Mutual Recognition Agreement (MRA).104  According to the policy, "in certain 
exceptional cases, EA could offer to ABS [accred itation bodies] from some of these countries the 
possibility of signing a Cooperation Agreement", subj ect to conditions, including the fulfilment by the 
foreign accreditation body of "all the specific requirements established by EA for its members, pursuant to Regulation (EC) 765/2008".  Regard ing countries from the European neighbourhood, the 
EU has concluded an agreement on conformity assessment and acceptance of industrial products 
(ACAA) with Israel in the field of  pharmaceuticals.  This agreement is not yet in force (March 2011).  
In addition, ACAA negotiations are ongoing with  Croatia and the Former  Yugoslav Republic of 
Macedonia.  Preparations for ACAA negotiations ar e under way in additional sectors with Israel, and 
with Algeria, Egypt, Jordan, Lebanon, Morocco, the Palestinian Authority, Tunisia, and Ukraine.  
ACAAs are a specific type of mutual recognition ag reement based on the alignment with the EU of 
relevant product legislation and infrastructure. 
93. Some WTO Members have expressed concerns about the possible impact of the new EU 
accreditation framework on member States' recogn ition of non-EU accreditation bodies under the IAF 
MLA, and the ILAC MRA (see Table III.7 above).  In response, the EU indicates that the common 
accreditation framework is a tool to support the EU 's internal regulatory policy based on the existing 
international accreditation framework.  In addition,  the EU notes that the common framework is not 
                                                      
102 European Commission online information, "Single Market for Goods:  Accreditation".  Viewed at:  
http://ec.europa.eu/enterprise/policies/single-market- goods/regulatory-policies-common-rules-for-products/new-
legislative-framework/accr editation/index_en.htm. 
103 Article 11, Regulation (EC) No. 765/2008 of the European Parliament and of the Council, 
9 July 2008. 
104 European co-operation for Accreditation document EA-1/13:  2009, EAs Relationship with 
Accreditation Bodies not being Members of the EU or EFTA, May 2009.  The follo wing participate in the 
European neighbourhood policy:  Algeria, Armenia, A zerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, 
Lebanon, Libya, Moldova, Morocco, Palestinian Authority, Syria, Tunisia, Ukraine. WT/TPR/S/248 Trade Policy Review 
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intended to "change or undermine" internati onal cooperation agreements between accreditation 
bodies; and does not "affect or force changes in  the accreditation practices in third countries". 
94. In addition to a common accreditation framework, Regulation No. 765/2008 sets out common 
principles for market surveillance.  According to the Commission, a majority of member States have 
made legal and administrative changes to meet these requirements.105  Under the Regulation, customs 
authorities must carry out "appropriate checks on the characteristics of products on an adequate scale" 
before those products can be marketed in the EU.106 
95. In principle, EU and imported goods that ar e not covered by EU harmonizing legislation and 
have been lawfully placed on the market of a member  State can be marketed in another member State, 
even if they do not comply with the technical regul ations of the member State of destination.  The 
only exceptions to this principle are restrictions in troduced for reasons specified in Article 36 TFEU, 
or for other overriding reasons of public interest th at are proportionate to the aim pursued.  According 
to the Commission, the most common justification fo r restrictions on the free movement of goods is 
related to the protection of health and life of hum ans, animals, and plants.  As recognized by the 
European Parliament and the Council, "many problem s still exist as regards the correct application of 
the [mutual recognition] principle".107 
96. In July 2008, the European Parliament and the Council adopted Regulation No. 764/2008 "to 
minimise the possibility of technical rules' creati ng unlawful obstacles to the free movement of goods 
between Member States".108  Under the procedures, which apply from May 2009, member States that 
use technical regulations to restrict market access 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 opportuni ty to provide comments.  The new procedures 
operate alongside the notification procedure under Directive 98/34/EC, through which the 
Commission and member States have monitored me mber States' proposals to introduce technical 
regulations or conformity assessm ent procedures since the early 1980s.109  Between the entry into 
force of Regulation No. 764/2008 and December 2010, the Commission received 1,114 notifications 
from 7 member States denying within their territory the marketing of non-harmonized products 
lawfully marketed in other member States.  The no tifications cover articles of precious metal, food 
additives, foodstuffs, fertilizers, and medicinal products. 
97. Although compliance with "harmonized European st andards" is voluntary, in practice there is 
a strong incentive for EU and foreign manufacturers to meet the standards referred to in new-approach 
technical regulations.  This is because under the ne w approach to product regulation, only products 
that conform to "harmonized European standards"  benefit from the presumption of conformity with 
the relevant legislative requirements.  Harmonized European standards are developed by the European 
Standards Organizations, that is, the European  Committee for Standardization, the European 
Committee for Electrotechnical Standardization, and the European Telecommunications Standards 
Institute, upon request from the European Commissi on.  European Standards Organizations have 
                                                      
105  European Commission document ENTR/C1/McM/nt ARES.c1(2010).  Viewed at:  http://ec.europa. 
eu/enterprise/policies/single-market-goods/files/new-legi slative-framework/nlf_ implementation_report_en.pdf. 
106 Article 27(1), Regulation (EC) No. 765/2008 of  the European Parliament and of the Council, 
9 July 2008. 
107 Regulation (EC) No. 764/2008 of the European Parliament and of the Council, 9 July 2008 
(OJ L 218, 13 August 2008). 
108 Regulation (EC) No. 764/2008 of the European Parliament and of the Council, 9 July 2008. 
109 Directive 98/34/EC of the European Parliament and of the Council, 22 June 1998 (OJ L 24, 
21 July 1998). European Union WT/TPR/S/248 
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accepted the WTO Code of Good Practice.  In addition, all member States have notified the 
acceptance of the Code by one or more of  their national standards organizations. 
(ix) Sanitary and phytosanitary standards (SPS) 
98. The European Union and each of its member St ates have notified enquiry points under the 
SPS Agreement.110  The Directorate General for Health and Consumers of the European Commission 
is the EU notification authority.111  Member States are members of the Codex Alimentarius 
Commission, the World Organization for Animal Hea lth (OIE), and the International Plant Protection 
Convention (IPPC).  The EU is a member of Codex and the IPPC. 
99. The EU notified 56 regular and 3 emer gency SPS measures to the WTO between 
October 2008 and mid-January 2011.  The EU cons iders that, of the 35 notified measures for which 
there was a relevant international standard, 27 conformed to that international standard.  Apart from 
the emergency notifications, almost 60% of notif ications specified the multilaterally recommended 
60-day period for public comment;  for the rest, th e EU considered that a comment period was not 
applicable, or the period between the publication of  the notification and the adoption of the measure 
was less than 60 days.  The EU identified 15 notifie d measures as "trade facilitating".  In addition, 
during the period under review, the EU submitted a large number of adde nda, providing additional 
information on previously notified SPS measures. 
100. The Netherlands made the only notification from a member State during the period under 
review.112  The notification covers an emergency measure affecting imports of ornamental plants from 
China. 
101. Since the last Review of the EU, WTO Me mbers have discussed concerns in the SPS 
Committee regarding several EU measu res (Table III.9).  Of the ten trade concerns raised, two have 
been resolved or partially resolved, and one was followed by formal dispute settlement, with a panel 
established in November 2009.113  In October 2010 the EU submitted a document to the SPS 
Committee identifying 14 specific trade concerns that it had raised, and that it considered resolved.114 
Table III.9 
Specific trade concerns over EU SPS measures, October 2008 to January 2011a 
 Relevant source documentb Raised by Date first raised Solution 
Maximum residue levels of 
pesticides G/SPS/R/61 India October 2010 Not reported 
Regulation 1099/2009 on the 
humane treatment of animals G/SPS/R/59 India June 2010 Not reported 
Artificial colour warning labels G/SPS/ R/59 United States March 2010 Not reported 
Risks arising from carambola 
fruit fly in French Guyana G/SPS/R/58 Brazil March 2010 Not reported 
Measures related to wood 
packaging material G/SPS/R/58 Canada November 2000 Resolved 
Regulation on novel foods G/SPS/R/56 Colomb ia, Ecuador, Peru March 2006 Not reported 
Greece's inspection and testing 
procedures for imported cereals G/SPS/R/55 Canada March 2005 Not reported 
Table III.9 (cont'd) 
                                                      
110 WTO document G/SPS/ENQ/25, 15 October 2009. 
111 WTO document G/SPS/NNA/15, 15 October 2009. 
112 WTO document G/SPS/N/NLD/69, 24 December 2008. 
113 See WTO document series WT/DS389. 
114 WTO document G/SPS/GEN/1051, 14 October 2010. WT/TPR/S/248 Trade Policy Review 
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 Relevant source documentb Raised by Date first raised Solution 
Import restrictions on cooked 
poultry G/SPS/R/53 China October 2007 Partially 
resolved 
Maximum residue levels for pesticides in cacao G/SPS/R/53 Ecuador October 2008 Not reported 
Restrictions on U.S. poultry 
exports G/SPS/R/51 United States October 2006 Under dispute 
settlement 
a Covers concerns raised, addressed, or  resolved between mid 2008 and October 2010. 
b Only the most recent source document is cited. 
Source: WTO Secretariat.  
 
102. According to the Commission, SPS measures ar e adopted mostly at EU level, although 
member States may also adopt SPS measures.  Th e main EU legislation on SPS is contained in 
Regulation No. 178/2002, known as the General F ood Law;  Regulations No. 852/2004, 853/2004, 
and 854/2004 on food hygiene;  Regulation No. 882/ 2004 on official controls;  and Council Directive 
2000/29/EC on plant health.115 
103. The Commission's Animal Health Strategy for the period 2007-13 aims to replace "the 
existing series of linked and interrelated policy ac tions by a ... single clear regulatory framework 
converging as far as possible with the OIE/ Codex recommendations/standards and guidelines".116  
The deadline for the preparation of a legislative propo sal on animal health is March 2012.  In addition, 
the Commission intends to adopt, in a package with the draft animal health law, legislative proposals 
for:  a review of the regulation on official controls for feed and food;  plant health legislation;  and 
legislation on seeds and propagation materials. 
104. The adoption of EU basic acts on SPS require th e assent of both the European Parliament and 
the Council under the ordinary legislative proce dure (see Chapter II(1)).  SPS measures at the EU 
level are usually established on the basis of im plementing powers conferred on the Commission by 
means of an EU basic act.  Thus, their formulati on and adoption has been subject to the "comitology" 
procedure.  The main regulatory committees involved in the development of SPS measures are the Standing Committee on the Food Chain and Animal  Health and the Standing Committee on Plant 
Health.  Following the entry into force of the Lis bon Treaty in December 2009, new rules govern the 
Commission's exercise of implementing powers (see Chapter II(1)).  Furthermore, under the Lisbon 
Treaty, SPS measures may also be established on th e basis of powers conferred on the Commission to 
adopt "delegated acts". 
105. The General Food Law set out the general prin ciples governing food and feed at EU and 
national levels.  Measures adopted under the Law must be  based on risk analysis  "except where this is 
not appropriate to the circumstance s or the nature of the measure".
117  According to the Commission, 
no measures have been adopted under this excep tion since the last Review of the EU.  Risk 
                                                      
115 Regulation (EC) No. 178/2002 of the European Parliament and of the Council, 28 January 2002 
(OJ L 31, 1 February 2002);  Regulation (EC) No. 852/2004 of the European Parliament and of the Council, 
29 April 2004 (OJ L 139, 30 April 2004);  Regulation (EC) No. 853/2004 of the European Parliament and of the Council of, April 2004 (OJ L 139, 30 April 2004);  Regulation (EC) No. 854/2004 of the European 
Parliament and of the Council, 29 April 2004 (OJ L 139, 30 April 2004);  Regulation (EC) No. 882/2004 of 
the European Parliament and of the Council, 29 April 2004 (OJ L 191, 28 May 2004);  and Council Directive 2000/29/EC of 8 May 2000 (OJ L 169, 10 July 2000). 
116 European Commission (2007a). 
117 Article 6(1), Regulation (EC) No. 178/2002 of the European Parliament and of the Council, 
28 January 2002. European Union WT/TPR/S/248 
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management must take into account the opinions of the European Food Safety Authority, an 
independent institution that provides scientific advice on food safety issues. 
106. The General Food Law permits the establishment of "provisional" measures if "the possibility 
of harmful effects on health is identif ied but scientific uncertainty persists".118  These measures must 
be "proportionate and no more trade restrictive of tr ade than is required to achieve the high level of 
health protection" in the EU, and must be re viewed "within a reasonable period of time". 
107. Measures adopted under the General Food Law mu st take into consideration international 
standards, "except where such standards or relevant  parts would be an ineffective or inappropriate 
means for the fulfilment of the legitimate objectiv es of food law or where there is a scientific 
justification, or where they would result in a diffe rent level of protection from the one determined as 
appropriate in the Community".  Regarding animal health and food of animal origin, the Commission 
indicates that EU legislation is largely based  on OIE/Codex recommendations, standards, and 
guidelines.119  According to the Commission, there ar e areas where the EU could increase its 
convergence with these standards, including di sease status, imports, quality and evaluation of 
veterinary services, laboratory testing, animal nutr ition, and vaccination.  Regarding measures in the 
field of plant health and products of non-animal origin, the Commission notes that the EU always 
follows the relevant international standards. 
108. Imported food must comply with the relevant requirements of EU food law and animal health 
law;  conditions recognized by the EU to be at least equivalent to these requirements;  or the requirements contained in specific agreements.  Th e EU has SPS agreements  with Andorra, Canada, 
Chile, EFTA, Faroe Islands, Liechtenstein, Mexico, New Zealand, San Marino, Switzerland, and the 
United States.  These agreements are available online.
120 
109. Imports of live animals and products of animal origin are prohibited unless they are from a 
country or region that has received prior approval, an d thus appears on the relevant "third country list" 
managed by the Commission.  The term products of animal origin covers food that has been derived 
from animals or comes from animals, whether pro cessed (e.g., ham, marinated fish, egg powder, and 
gelatine) or not (e.g., fresh meat, fish ery products, raw milk, eggs, and honey).121  It also covers 
products not intended for human consumption, whet her processed (e.g., pet food) or not (e.g., raw 
material for pharmaceutical use, wool, hides, and skins). 
110. Requests for first-time imports of live animal s and products of animal origin must be 
submitted to the Commission by the competent national authority of the exporting country.  
In general, the approval process involves an audit, including an on-site visit, by the Commission's 
inspection service, the Food and Veterinary Office (FVO).  The objective of the inspection is to evaluate whether the animal and public health situ ation, official services, legal provisions, control 
systems, and production standards meet EU require ments.  The Commission indicates that it does not 
charge a fee for its audits and pays for the expenses of the audit team. 
111. If the outcome of the inspection is satisfactory, the Commission prepares draft legislation to 
include the country in question in the lists rega rding animal and public health.  The Commission 
adopts the draft legislation provided that the Standing Committee on the Food Chain and Animal 
Health agrees.  Approvals may cover all or part of  a country, reflecting its animal and public health 
                                                      
118 Article 7(1). 
119 European Commission (2007a). 
120 EU online information, "International Affairs:  San itary and Phytosanitary Agreements".  Viewed at:  
http://ec.europa.eu/food/international/trade/agreements_en.htm. 
121 European Commission document (2006b). WT/TPR/S/248 Trade Policy Review 
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status and the type of animal or product of anim al origin for which approval is sought.  Applicant 
countries must be OIE members, have systems in place for the rapid detection, reporting, and confirmation of OIE listed diseases, and fulfil othe r legislative requirements.  The Commission has 
published guidance on these requirements.
122 
112. In addition to being entered in the relevant  list, countries seeking to export animals and 
products of animal origin to the EU must obtai n approval for their residues monitoring programme.  
Individual slaughterhouses, processing plants, fishi ng vessels, and other establishments must also be 
listed for export to the EU on the basis of a proposal from the exporting country.  In general, only products of animal origin from establishments that appear on the relevant list can export to the EU.  
For food, these approvals also involve the adoption of legislation by the Commission.  The 
Commission has published guidance on the criteria for these approvals.
123  Imports of meat are also 
subject to certification on the protection of animals at the time of slaughter or killing.124  There are no 
statutory limitations regarding the duration of the pro cess to approve first-time imports of live animals 
and products of animal origin. 
113. Unlike for animals and products of animal orig in, first-time imports of plants and their 
products require pre-approval.  The same princi ple applies on food of non-animal origin, which 
includes fruits, vegetables, cereals, drinks, spices, c ondiments, and food of mineral origin.  All food  
must comply with the general requirements on food hygiene in Regulation No. 852/2004, and, depending on the product, on contaminants, pesticide residue levels, food additives, food irradiation, 
novel foods, and radioactivity.  There are also  product-specific requirements for quick frozen 
foodstuffs, foodstuffs for particular nutritional purposes,  and genetically modified organisms.  Certain 
plants and plant product must comply with phytosanitary requirements. 
114. Control procedures on imports of animals a nd products of animal origin are largely 
harmonized across the EU.
125  Imports of these products must be accompanied by health certification 
attesting to the fulfilment of EU import conditions.126  They must undergo official controls at an EU 
approved border inspection post, a nd may be subject to additional controls at their country of 
destination.  The list of approved "border inspection posts" is reviewed three or four times per year;  
there are around 300 within the EU.  The official  controls in the border inspection posts involve 
documentary, identity, and physical checks.  The frequency of physical checks can be reduced for 
products of animal origin subject to EU harmonize d requirements, taking into consideration the risk 
profile of the product in question.127  Live animal imports must be notified to the border inspection 
post at least 24 hours before arrival, while imports  of products of animal origin must be notified 
before arrival.  The first part of the Common Veterina ry Entry Document is used for this notification;  
the notification can be carried out electronically th rough the Trade Control and Expert System, known 
as TRACES.  Consignments of live animals and products  of animal origin must also be accompanied 
by the model health certificate set out in EU legisl ation for the relevant species or product.  In the 
                                                      
122 European Commission document SANCO/7166/2010.  Viewed at:  http://ec.europa.eu/food/ 
international/trade/importing_en.htm.  See also, European Commission online information, "International 
Affairs, Import Conditions".  Viewed at:  http:// ec.europa.eu/food/international/ trade/index_en.htm. 
123 European Commission document SANCO/7166/2010.  Viewed at:  http://ec.europa.eu/food/ 
international/trade/importing_en.htm.  See also, European Commission online information, "International Affairs, Import Conditions".  Viewed at:  http:// ec.europa.eu/food/international/ trade/index_en.htm. 
124 The principal legislation on animal welfare is listed in:  European Commission online information, 
"Animal Welfare:  Main Community Legislative Refe rences".  Viewed at:  http://ec.europa.eu/food/ 
animal/welfare/references_en.htm. 
125 Council Directive 97/78/EC , 18 December 1997 (OJ L 24, 30 January 1998). 
126 Council Directive, 17 December 1996 (OJ L 13, 16  January 1997). 
127 Decision 94/360/EC, 20 May 1994 (OJ L 158, 25 June 1994). European Union WT/TPR/S/248 
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absence of an EU model health certificate for a particular species or pr oduct, member States may 
establish their own import requirements. 
115. Certain products of animal origin are subject  to "special import c onditions", which consist 
mostly of 100% testing of each import consignmen t or pre-export testing and certification.  These 
measures affect nine WTO Members and involve fi shery products, horse and rabbit meat, poultry, 
eggs and egg products, honey,  and milk powder (July 2010).128 
116. National authorities must organize regular official  controls for imports of feed and food of 
non-animal origin.  Control activities at national leve l must take place at an appropriate place, which 
may be the border, point of release for free circulation, or retail outlets.129  In general, feed and food of 
non-animal origin may enter the EU without certif ication by the exporting country or pre-arrival 
notification.  Consignments of cer tain imports of feed and food of non-animal origin specified in 
Annex I to Regulation No. 669/2009 must be notified pr ior to arrival, and must enter the EU through 
designated points of entry, where they are subject to reinforced controls.130  These include 
documentary checks on all consignments, and iden tity and physical checks, including laboratory 
analysis, at the frequency established by the Anne x.  Annex I is subject to quarterly review. 
117. Plants and plant products listed in Council Dire ctive 2000/29/EC (Annex V, Part B) must be 
accompanied by a phytosanitary certificate issued  by the competent authority of the exporting 
country, and are subject to border controls, including physical inspection.131  The frequency of 
controls may be reduced for products from specific countries, based on risk profiling.132  There are 51 
products from specific countries subject to reduced inspections.133  Unless determined by member 
States on an exceptional basis for particular commoditi es, imports of plants and plant products are not 
restricted to specific border posts. 
118. The Rapid Alert System for Food and Feed  (RASFF) is a network managed by the 
Commission that allows food and feed authorities of  member States to exch ange information about 
measures taken in response to serious risks detected in relation to food and feed.  The legal basis for 
RASFF is the General Food Law, which sets out the criteria for notification to RASFF.134  F o r  
example, members of RASFF are required to notify re jections of food or feed at the border if the 
consignment is rejected because of a risk to human or  animal health.  Border rejections represent just 
under half of the original notifications to RASFF.135  In 2009, there were about twice as many border 
rejection notifications regarding food of non-animal or igin than animal origin.  The main category of 
food of non-animal origin notified in border rejections  is “nuts, nut products and seeds”, while fish is 
the main category of food of animal origin. 
                                                      
128 Albania, Bangladesh, China, Gabon, India, Indonesia, Mexico, Myanmar, and Ukraine.  European 
Commission online information, "Special Import Conditions".  Viewed at:  http://ec.europa.eu/food/animal/ 
bips/special_imports_en.htm. 
129 Article 15(2), Regulation (EC) No. 882/2004 of the European Parliament and of the Council of 
29 April 2004 (OJ L 191, 28 May 2004). 
130 Commission Regulation (EC) No 669/2009, 24 July 2009 (OJ L 194, 25 July 2009). 
131 Council Directive 2000/29/EC , 8 May 2000 (OJ L 169, 10 July 2000). 
132 Commission Regulation (EC) No. 1756/2004, 11 October 2004 (OJ L 313, 12 October 2004). 
133 European Commission online information, "No tification of Reduced Plant Health Checks for 
Certain Products".  Viewed at:  http://ec.eur opa.eu/food/plant/organisms/imports/recommended_ 
products2008.pdf. 
134 Article 50. 
135 European Commission (2010e). WT/TPR/S/248 Trade Policy Review 
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119. Under Regulation No. 882/2004, the Commission may recognize specified pre-export checks 
that a non-EU member State carries out on feed and food.136  The Commission recognizes pre-export 
controls carried out by the United States on peanut s and derived products with respect to aflatoxins.137  
The EU is discussing with Canada the possibility of recognizing Canada's pre-export checks of wheat 
and certain derived products w ith respect to ochratoxin A. 
120. The use of genetically modified organisms (GMOs) is regulated at EU level on the basis of 
Regulation No. 1829/2003 on genetically modifi ed food and feed, Directive 2001/18/EC on the 
deliberate release of GMOs into the environmen t, and Regulation 1830/20 03 on the traceability and 
labelling of GMOs, and food and feed produced from GMOs.138  Member States may not legislate 
with respect to the cultivation of GMOs, only to th eir use.  In July 2010, the European Commission 
adopted a proposed regulation to amend Directive 2001/ 18/EC to allow member States to restrict or 
prohibit the cultivation in all or part of their territo ries of GMOs authorized at the EU level.  Under 
the proposed regulation, member States may adopt measures with respect to the cultivation of GMOs 
in their territories, but not with respect to the import into the EU of authorized GM seeds and plant 
propagating material, and the products of their harvest .  Prohibitions or restrictions would be based on 
grounds other than those covered by the environmen tal and health risk assessment under the existing 
EU authorization system for GMOs.  According to this system, the level of protection of human and 
animal health and of the environment chosen in th e EU may not be revised by a member State.   
121. Under the proposed regulation, member States mu st notify measures they intend to adopt, and 
the reasons for adopting them, to the Commission and to the other member States one month prior to 
their adoption.  The proposed legislation does not change the authorization procedure for GMOs.  The 
Commission's legislative proposal is subject to the procedure on co-decision with the European 
Parliament and the Council. 
122. According to the Commission, the new approach  is necessary "to achieve the right balance 
between maintaining the EU system of authorisati ons based on scientific assessment of health and 
environmental risks and the need to grant freedom  to Member States to address specific national, 
regional or local issues raised by the cultivation of GMOs".139  Several member States have prohibited 
or restricted cultivation of GMOs authorized at the EU level.  For example, Austria, France, Germany, 
Hungary, and Lithuania have prohibited maize MON 810;  Austria has prohibited maize T 25;  and 
Austria, Hungary, and Luxembourg have prohibited Amflora potato.  According to the scientific 
opinion of the European Food Safety Agency, "t hese measures were not based on new or additional 
scientific information since the authorizations we re granted and therefore such measures were not 
justified from a legal point of view."140  A judgement issued by the Court of Justice of the EU in 
July 2009 considered that legislation adopted by  Poland to prohibit the marketing of GM seeds was 
contrary to EU law.141 
                                                      
136 Article 23. 
137 Commission Decision 2008/47/EC, 20 December 2007 (OJ L 11, 15 January 2008). 
138 Regulation (EC) No. 1829/2003 of the European Parliament and of the Council, 22 September 2003 
(OJ L 268, 18 October 2003);  Directive 2001/18/EC of the European Parliament and of the Council, 
12 March 2001 (OJ L 106, 17 April 2001);  and Regulation (EC) No. 1830/2003 of the European Parliament and 
of the Council, 22 September 2003 (OJ L 268, 18 October 2003). 
139 European Commission document COM(2010) 380 final, 13 July 2010.  Viewed at:  
http://www.reading.ac.uk/foodlaw/ pdf/com2010_380-gm-cultivation.pdf. 
140 European Commission document COM(2010) 380 final, 13 July 2010.  Viewed at:  
http://www.reading.ac.uk/foodlaw/ pdf/com2010_380-gm-cultivation.pdf. 
141 Case C-165/08. European Union WT/TPR/S/248 
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(2) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Registration and documentation 
123. Persons established in the EU who are involved in activities covered by customs legislation 
must be in possession of a national number that is  valid as an Economic Operator Registration and 
Identification (EORI) number (see section (1)(i)). 
124. Since July 2009, export declarations must be lodged electronically at the customs office of 
export, i.e., the customs office designated by the customs authorities for the completion of the 
formalities (for goods destined to leave the customs territory of the Community).142  In principle, 
export declarations for containerized maritime cargo must be lodged at least 24 hours before the cargo 
is loaded on the outbound vessel;  export declarations  for other cargo must be lodged before the goods 
leave the EU.143  The EU Customs Code Implementing Regulation specifies certain exceptions.144   
125. Export declarations must contain the security da ta specified in Annex 30A of the EU Customs 
Code Implementing Regulation.  Security data are not required for exports to Liechtenstein, Norway, 
and Switzerland.  Exports from authorized economic operators are subject to reduced security data 
requirements (see section (1)(i)). 
(ii) Export taxes and fees 
126. The EU does not apply taxes on exports.   
(iii) Restrictions and controls 
127. There have been no major changes, during the review period, in the EU legal framework 
governing export restrictions and controls.  EU memb er States maintain quan titative restrictions and 
controls on exports for fore ign policy and security reasons.145  Arms exports are controlled at the 
member State level.  In assessing applications to e xport arms listed in the EU Common Military List, 
member States have agreed to follow the EU Code of Conduct on Arms Exports.146  The Common 
Military List was updated in March 2008.147 
128. Exports of "dual-use" items are controlled at th e EU level.  The EU's dual-use export control 
system, set out in Regulation No. 428/2009, defines dual-use items as "items, including software and 
technology, which can be used for both civil and military purposes, and shall include all goods which 
can be used for both non-explosive uses and assist ing in any way in the manufacture of nuclear 
weapons or other nuclear explosive devices".148  The list of controlled dual-use items is contained in 
                                                      
142 Article 161(5), Council Regulation (EEC) No 2913/92, 12 October 1992. 
143 Article 592b, Commission Regulation (EEC) No 2454/93, 2 July 1993. 
144 Article 592a, Commission Regulation (EEC) No 2454/93, 2 July 1993. 
145 Regulation (EEC) No. 2603/69 of the Council, 20 December 1969 establishing common rules for 
exports, (OJ L 324, 27 December 1969). 
146 European Union Code of Conduct on Arms Exports, 5 June 1998.  Viewed at:  
http://www.consilium.europa.eu/uedocs/cmsUpload/08675r2en8.pdf. 
147 Common Military List of the European Union, adopted by the Council on 23 February 2009 
(OJ C 65, 19 March 2009). 
148 Article 2, Council Regulation (EC) No. 428/2009 of 5 May 2009 setting up a Community regime for 
the control of exports, transfer, brokering and transit of dual-use items, OJ L 134, 29 May 2009. WT/TPR/S/248 Trade Policy Review 
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Annex I of the Regulation.  Member States may impose export controls on unlisted dual-use items 
under certain conditions specified in the Regulation.149 
129. Exports of most controlled items to Aust ralia, Canada, Japan, New Zealand, Norway, 
Switzerland, and the United States are authorized under the Community General Export 
Authorizations.  The specific conditions for exporti ng under the Authorizations are specified in Annex 
II of Regulation No. 428/2009;  member States may impose certain additional administrative requirements. 
130. All other exports controlled under Regulati on No. 428/2009 are subject to authorization 
granted by the member State where the exporter is es tablished.  There are national general, global, or 
individual authorizations, all of which are valid th roughout the EU.  France, Germany, Greece, Italy, 
the Netherlands, Sweden, and the United Kingdom ha ve national general authorizations, which must 
be granted in accordance with the conditions set out in Article 9(4) of the Re gulation.  I ndividual and 
global authorizations are granted to one exporter, a nd cover either one end user (individual) or several 
countries and end users (global).  In assessing appli cations for individual or global authorizations, 
member States must take into considera tion the criteria specified in the Regulation.
150 
131. The European Commission indicates that "there is a lack of transparency across Member 
States regarding both the scope and conditions of use of national gene ral export authorisations and the 
list of exporters denied access to na tional general export authorisations".151  According to the 
Commission, "this leads to regulatory treatment of certain exports that benefits businesses established 
in one Member State at least partly at the expense of businesses established in and national security 
interests of other Member States, and is not in the best interests of the Community as a whole". 
132. The European Commission proposes creating new Community General Export Authorizations 
"to simplify the current legal system, enhance the EU industry's competitiveness and establish a level 
playing field for all EU exporters when they export certain items to certain destinations".152  
The proposal is under discussion in the Council and the European Parliament.  In addition, as part of its blueprint for EU trade policy, the Commissi on announced in November 2010 that it would adopt a 
Green Paper "seeking to improve [the EU's] export control system".
153 
(iv) Official support and related fiscal measures 
133. The EU provides export subsidies to eligible exporters of certain agricultural products 
(Chapter IV(1)). 
134. In June 2010, a WTO panel issued its report on a complaint by the United States against 
certain EU measures affecting trade in large civil aircraft.154  Among the panel's findings was that 
certain instances of financing by Germany, Sp ain, and the United Kingdom for the design and 
                                                      
149 Articles 4 and 8. 
150 Article 12. 
151 European Commission document COM(2008) 854 final, 16 December 2008.  Viewed at:  
http://trade.ec.europa.eu/doclib/docs/2009/january/tradoc_142038.pdf. 
152 European Commission document COM(2008) 854 final, 16 December 2008.  Viewed at:  
http://trade.ec.europa.eu/doclib/docs/2009/january/tradoc_142038.pdf. 
153 European Commission (2010). 
154 WTO document WT/DS316/R, 30 June 2010. European Union WT/TPR/S/248 
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development of the A380 aircraft constitute prohib ited export subsidies.  The EU has appealed the 
panel's report.155 
135. Under the EU Customs Code's drawback system, importers can claim repayment of import 
duties paid on imported goods if they export such go ods in the form of "compensating products", that 
is, products resulting from processing operations.156  In addition, the Customs Code establishes a 
suspension system whereby imported goods intended for export in the form of compensating products 
are not subject to import duties.157  Once in force, the Modernized  Customs Code will eliminate the 
drawback system.  The Commission indicates that there are no data on the value of repayments under the drawback system.  In additio n, the Commission notes that drawback has not played an important 
role in the EU. 
(v) Finance, insurance, guarantees, and promotion 
136. Official export credits are subject to EU rules.  The Directive on medium- and long-term 
export credit insurance establishes principles for official insurance and guarantee arrangements, 
premiums, and cover policies.
158  Export credits are granted at the member State level through official 
export credit agencies. 
137. Following the onset of the financial crisis in  2008, the European Commission simplified the 
"escape clause" for short-term export insurance.159  Under the escape clause, member States may, 
subject to authorization from the Commission, o ffer export credit insurance cover for "marketable 
risks", provided that the cover is tempor arily unavailable in the private market.160  Marketable risks 
are defined as commercial and political risks on pub lic and non-public debtors established in the EU 
and eight other OECD countries, with a maximum risk period of less than two years.  Member States 
must notify the Commission of their intention to use the escape clause. 
138. Under the new simplified procedures, member States invoking the escape clause must provide 
evidence of the lack of cover for short-term export credit from a large, well-known international 
private export credit insurer, and a national credit insu rer.  Alternatively, they must demonstrate that 
insurers refused to cover specific operations of at l east four well-established e xporters in its territory.  
Between mid-December 2008 and Oc tober 2010, the European Commission authorized 13 simplified 
export-credit schemes (Austria, Belgium, Denmark,  Finland, France, Germany, Hungary, Latvia, 
Lithuania, Luxembourg, the Netherlands, Slovenia, and Sweden).161 
139. In January 2011, the Commission issued a Communication extending the procedural 
simplification on short-term expor t credit insurance until end 2011.162  The Commission notes that 
                                                      
155 In parallel the EU challenged a number of U.S. meas ures affecting trade in large civil aircraft.  In 
July 2010, the Chairman of the panel set up in the context of this disput e informed the Dispute Settlement Body 
that the panel expects to complete its work in the first half of 2011. 
156 Article 114.1(b), Council Regulation No. 2913/92, 12 October 1992. 
157 Article 114.1(a). 
158 Council Directive 98/29/EC, 7 May 1998 (OJ L 148, 19 May 1998). 
159 Communication from the Commission-Temporary Community Framework for State Aid Measures 
to Support Access to Finance in the Current Financia l and Economic Crisis (OJ C 16, 22 January 2009). 
160 Communication of the Commission to Member States amending the communication pursuant to 
Article 93(1) of the EC Treaty applying Articles 92 and 93  of the Treaty to short-term export-credit insurance 
(OJ C 325, 22 December 2005). 
161 European Commission document SE C(2010) 1462 final, 1 December 2010.  Viewed at:  http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=SEC:2010:1462:FIN:EN:PDF. 
162 Communication of the Commission-Temporary Union framework for State aid measures to support 
access to finance in the current financial and economic crisis (OJ C 6, 11 January 2011). WT/TPR/S/248 Trade Policy Review 
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"companies still find it difficult to find coverage from private insurers in many sectors and many 
Member States".  In addition, the Commission decide d in December 2010 to extend the application of 
the underlying legal framework on short-term e xport-credit insurance (the 1997 Communication) until 
end 2012.163 
140. The EU provides assistance to promote its agricultural products and food outside the EU 
(Chapter IV(1)).  In addition, export promotion schemes are in pl ace at the national or sub-national 
levels. 
(3) MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Business framework and foreign investment regime 
141. Legal and administrative barriers to entrepreneursh ip in the EU are below the OECD average.  
Among EU member States, barriers to entrepreneursh ip are highest in Poland and Greece, and lowest 
in the United Kingdom, the Netherlands, and Sweden.164 
142. Corporate income is taxed in every member Stat e, but the rates and the rules for determining 
the tax base differ substantially.  Unlike indir ect taxes, EU law does not specifically require 
harmonization of direct taxes.  Corporate income tax rates in the EU average 23.2%.165  T h e  t o p  
statutory tax rate on corporate income ranges from 10% in Bulgaria and Cyprus to 35% in Malta. 
143. The Treaty on the Functioning of the EU prohibits restrictions on capital movements among 
EU member States, and between EU and non-EU members.166  Restrictions on direct investment from 
non-EU members that were in place in Decemb er 1993 (December 1999 for Bulgaria, Estonia, and 
Hungary) are exempt from this prohibition.167  Also exempt are restrictions "justified on grounds of 
public policy or public security", and those take n "to prevent infringement of national law and 
regulations, in particular in the field of taxa tion and the prudential s upervision of financial 
institutions, or to lay down procedures for the declaration of capital movements for purposes of 
administrative or statistical information".168 
144. Following the entry into force of the Lisbon Treaty in December 2009, the adoption of 
measures on direct investment between EU and non- EU members requires the assent of the Council 
and the European Parliament, in accordance with the ordinary legisl ative procedure (Chapter II(1)).  
However, under EU rules on capital movements, if the measure is "a step backwards in Union law as 
regards the liberalisation of the movement of capital to or from third countries", it must be adopted by 
the Council unanimously, in consultati on with the European Parliament.169  The Commission notes 
that no such measures have been adopted since the last Review of the EU.  In exceptional 
circumstances, the Council may adopt temporary safeguard measures restricting capital movements 
                                                      
163 Communication of the Commission amending the period of application of Communication of the 
Commission to the Member States pursuant to Article 93(1) of the EC Treaty applying Articles 92 and 93 of the 
Treaty to short-term export-credit in surance (OJ C 329, 7 December 2010). 
164 As measured by the "Barriers to Entrepreneurship " indicator for 2008 in the OECD's "Indicators of 
Product Market Regulation" database.  Viewed at:  http://www.oecd.org/document/36/0,3343,en_2649_34323_ 
35790244_1_1_1_1,00.html.  The data are available for 21 EU member States. 
165 European Commission (2010d). 
166 Article 63(1). 
167 Article 64, TFEU. 
168 Article 65(1)(b). 
169 Article 64, TFEU. European Union WT/TPR/S/248 
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with non-EU member States subject to the conditions set out in Article 66 of the Treaty on the 
Functioning of the EU. 
145. The Treaty on the Functioning of the EU prohibits measures that restrict the "freedom of 
establishment" of EU nationals in the territory of another member State.  This means that companies 
or firms formed in accordance with the law of a member State, and having their registered office, 
central administration, or principal place of busin ess in the EU can establish agencies, branches, or 
subsidiaries in the territory of another member State.170  Freedom of establishment extends to the EU 
subsidiaries of non-EU companies, but not to their branches or agencies. 
146. EU member States have long maintained a polic y of national treatment of foreign direct 
investment (FDI), subject to sector-specific restricti ons.  Empirical analysis shows that member States 
did not react to the recent financial and economic  crisis by introducing new FDI restrictions.171 
147. The overall level of restrictiveness on FDI in most EU member States is lower than the 
OECD average.172  Luxembourg, the Netherlands, Portugal, Romania, and Slovenia maintain the 
lowest level of FDI restrictions among member States, and Poland the highest.  On average, restrictions on FDI are highest in real estate, fishi ng, transport, agriculture, and media.  They mostly 
take the form of equity limitations.  Other ba rriers to FDI are requirements on key personnel and 
reciprocity requirements regarding investments fro m outside the EU (Box III.1).  Member States' 
special rights in certain state-owned enterprises ha ve also been found to restrict investment (see 
section (ii) below. 
148. Several member States, including France, Ge rmany, and the United Kingdom maintain FDI 
review procedures for national security purposes.  During the period under review, Germany amended 
its Foreign Trade and Payments Act to broaden the scope of investme nt reviews.  Under the amended 
Act, the Federal Ministry of Economics and Technol ogy can examine foreign investment transactions 
to determine whether they jeopardize public interest  or public security.  Reviews are carried out only 
on transactions resulting in the acquisition of 25% or more of a resident company by investors from 
outside the EU or EFTA;  transactions by EU -based companies may be examined if a non-EU 
shareholder owns 25% or more of the voting shares of  that company if there are indications of abuse 
or circumvention.
173 
149. There are no notification requirements under Germ any's investment review procedures.  The 
Federal Ministry of Economics and Technology is responsible for determining whether a particular 
foreign investment transaction is covered by the Ac t.  It uses information from the Federal Agency of 
Banking Supervision and the weekly lists of transac tions issued by the Federal Competition Agency.  
In principle, the Ministry must decide whether to conduct a review within three months of the 
acquisition.  It must issue an administrative act informing the companies concerned about the 
initiation of the review.  Investors under revi ew must submit the documents listed in the Federal  
Gazette  of 24 April 2009. 
150. Germany's Ministry of Economics and Technolog y may prohibit or impose conditions on a 
foreign investment transaction within two mont hs of receiving the required information.  The 
Ministry's decision is subject to judicial review.  The Ministry has not prohibited or imposed conditions on any transaction under the amended Act.  The Secretariat did not receive official data on 
the number of cases reviewed. 
                                                      
170 Articles 49 and 54, TFEU. 
171 London Economics (2010). 
172 Based on 2010 data for 24 EU member States.  See Kalinova, Palerm and Thomsen (2010).   
The Data are available for 24 EU member States. 
173 Paragraph 53(1), Verordnung zur Durchführung des Außenwirtschaftsgesetzes . WT/TPR/S/248 Trade Policy Review 
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Box III.1:  Reciprocity requirements in selected EU member States, December 2010 
Austria :  extraction, preparation, and storage of mass minera ls;  operation of oil refineries, gas plants, filling 
stations, and district heating;  trading of fuels;  investment in transport services, including road freight, taxis, 
buses;  establishment of tour operators an d travel agencies by non-resident entities 
Belgium :  establishment of travel agen cies by enterprises originatin g in non-EU member States 
France :  establishment in the banking and financial servic es sector of non-resident investors originating in 
non-EU member States;  establishment of insurance companies originating in non-EU member States;  
investment by non-EU residents in:  political and general information publications appearing at least once per month (other than those intended for foreign communities in France) and audio-visual communication 
services;  insurance brokerage;  exploration, extraction, and exploitation of hydrocarbons, and waterfalls;  and 
acquisition of agricultural land adjacent to the Swiss border 
Germany :  establishment of airline enterprises with headquarters abroad 
Greece :  establishment of travel agencies by ente rprises originating in non-EU member states 
Ireland :  foreign acquisition of shipping vessels registered in Ireland 
Italy :  foreign investment in the exploration and exploitation of liquid and gaseous hydrocarbons;  granting of 
tour operator and travel agent licences to nationals of non -EU member states, or to enterprises in such states 
United Kingdom :  authorization of mergers and take-overs involving investors from non-EU member states 
Source :  WTO Secretariat, based on OECD Code of Liberalization of Capital Movements, 2010.  Viewed at:  
http://www.oecd.org/daf/investment/codes. 
151. In Germany, prior to acquiring a resident comp any, foreign investors may request a certificate 
confirming that their acquisition does not compromise  public policy or public security.  Applications 
must be accompanied by a general outline of the pl anned acquisition, and information on the investors 
and their activities.  If the Ministry of Economic s and Technology does not launch an examination 
within one month of receiving an application, the cer tificate is deemed to be issued.  Certificates are 
legally binding. 
152. Under France's Decree 2005-1739, certain invest ments in "sensitive" sectors from companies 
whose corporate headquarters are outside the EU or the European Economic  Area (EEA) are subject 
to notification and review.174  These investments are reviewable if they result in:  control of a firm 
with corporate headquarters in France;  acquisition of  a branch of a firm with corporate headquarters 
in France;  or acquisition of more than one-third of the capital or voting rights of a firm with corporate 
headquarters in France. 
153. Investments in sensitive sector s from companies whose corporate headquarters are in the EU 
or EEA are also subject to review under France 's Decree, but under less stringent conditions.175  For 
some sensitive sectors, investment s from these companies are reviewed  only if they result in control 
of a firm with corporate headquarters in France, or in the acquisition of a branch of a firm with corporate headquarters in France.  For other sens itive sectors, reviews are carried out exclusively on 
investments that result in the acquisition of a branch of a firm with corporate headquarters in France.  
                                                      
174 The Decree lists the following sensitive sector s:  gambling;  private security;  research, 
development, and production to stem the use of pathogens or toxins in terrorist activities;  equipment designed to intercept communications;  testing and certification of information technology systems;  supply of goods or 
services relating to the security of information systems;   dual-use goods and technology;  cryptology equipment 
and services;  businesses certified for national defence;  production of, or trade in weapons, munitions and explosives for military applications, or equipment used in warfare;  and businesses under contract to supply 
research or equipment to the Ministry of Defence or its subcontractors.  Articles R153-1 and 2, Monetary and 
Financial Code. 
175 Articles R153-3 et seq., Monetary and Financial Code. European Union WT/TPR/S/248 
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In addition, some sensitive sectors are define d more narrowly for investments from companies 
headquartered in the EU or EEA than for other investments. 
154. The entity responsible for carrying out investme nt reviews in France is the Ministry of 
Economy, Finance, and Industry.  Reviews must  be completed within two months after the 
submission of information by the investor.  The Mini stry may prohibit a particular transaction, or set 
conditions to mitigate the security concerns raised  by it.  The Ministry's decision to prohibit a 
transaction may be appealed administratively and judicially.  The Secretariat has no data on the 
number of cases reviewed or on their outcome. 
155. In December 2010, work was under way to address the European Commission's formal 
request to France to modify Decree 2005-1739 of 30 December 2005.176  The Commission is 
concerned that some aspects of this decree are in  contradiction with EU law and could discourage 
investment from other member States. 
(ii) State trading and state owned enterprises 
156. During the period under review, the EU notified that it does not maintain "any state trading 
enterprises in accordance with the wo rking definition contained in pa ragraph 1" of the Understanding 
on the Interpretation of Article XVII.177  Individual member States did not submit any notifications 
pursuant to Article XVII of the GATT 1994. 
157. State-owned enterprises have exclusive rights in  respect of imports of alcoholic beverages 
(Finland and Sweden), gas (Greece and Luxembourg) , and electricity (Luxembourg).  In 2007, the 
Court of Justice of the EU ruled that Sweden's ba n on imports of alcoholic beverages was a prohibited 
quantitative restriction under EU law, and could not be justified as a means to protect human life and 
health (Box III.2). 
Box III.2:  Sweden's import monopoly on alcoholic beverages 
Under a Swedish law examined by the Court of Justice of the EU in 2007, imports and retail sales of alcoholic beverages in 
Sweden may be carried out exclusively by Systembolaget, a state-owned enterprise. 
The Court of Justice ruled that the prohibition on imports of  alcoholic beverages by privat e individuals is a prohibited 
quantitative restriction on imports under EU law.  Although Swedish law require s Systembolaget to supply, and if 
necessary, import alcoholic beverages that  it does not offer, the Court indicate d that individuals importing alcoholic 
beverages through Systembolaget are confronted with "a vari ety of inconveniences with wh ich they would not be faced 
were they to import the beverages themselves." 
The Court rejected the justif ications for the import ban provided by Sweden , i.e., to limit the c onsumption of alcohol 
generally, and to protect young persons from the harmful effects of alcohol.  It cons idered the ban "unsuitable" for attaining 
the objective of limiting alcohol c onsumption generally because of the "rather margin al nature of its effects in that regard".  
Under the law, the consumer can always request Systembolaget to s upply alcoholic beverages.  Furthermore, because the 
law bans imports by private individuals irrespective of age, th e Court found that it "clearly goes beyond what is necessary 
for the objective sought, which is to pr otect younger persons against the harm ful effects of alcohol consumption." 
The Commission notes that, following the Court's decision, the Swedish Government retains full powers on the retail sale 
of alcoholic beverages through its alc ohol retail monopoly Systembolag et, with the exception of distant purchases of 
alcohol for private consumption from other member States.  Ac cording to the Commission, "t his has been required by the 
Court of Justice of the European Union while interpreting th e Treaty rules on the free movement of goods (Articles 34-36 
TFEU)". 
Source : WTO Secretariat, based on Court of Justice of the EU, Case C-170/04 Klas Rosengren and Others v  
Riksaklagaren, 5 June 2007;  and information provided by the Commission.  
                                                      
176 European Commission press release IP/06/1353, "Free movement of capital: Commission calls on 
France to modify its legislation establishing an authoris ation procedure for foreign investments in certain sectors 
of activity", 12 October 2006.  Viewed at:  http://e uropa.eu/rapid/pressReleasesAction. do?reference=IP/06/ 
1353&format=HTML&aged=0&language=EN&guiLanguage=en. 
177 WTO document G/STR/N/12/EEC, 18 September 2009. WT/TPR/S/248 Trade Policy Review 
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158. As indicated in the Secretariat Report for the previous Review of the EU, state ownership 
varies significantly across member States.  The ex tent of state ownership across business sectors, 
measured as the proportion of sectors where the state controls at least one firm, is below the OECD 
average in Belgium, Estonia, Ireland, the Nether lands, and the United Kingdom, and above average in 
the Czech Republic, France, Greece, It aly, Poland, Slovenia, and Sweden.178 
159. Long-standing de jure monopolies are in effect in  several member States, for example in rail 
transportation, energy, utilities, and gambling.  Unde r the third Postal Directive, member States must 
abolish all remaining postal service monopolies by 31 December 2010.179  Cyprus, the Czech 
Republic, Greece, Hungary, Latvia, Lithuania, Lu xembourg, Malta, Poland, and Romania, which 
together represent 5% of the EU letter post mark et, may postpone the implementation of the third 
Postal Directive by two years.  According to a st udy prepared for the Commission, although the postal 
markets in Estonia and Finland have been fully liberalized, licensing requirements inhibit market 
entry in the correspondence segment in Estonia, and the letters market in Finland (Chapter IV(2)(iv)).
180 
160. In addition, EU member State governments often enjoy special rights in certain state-owned 
companies.  Some of these measur es have been challenged on the basi s that they infringe EU rules on 
the free movement of capital (Box III.3 and section (i) above). 
Box III.3:  Selected member State's sp ecial rights in state-owned companies 
Germany :  In October 2007, the Court of Justice of the EU ruled in case C-112/05 that Germany had failed 
to fulfil its obligations under EU rules on the free movement of capital by maintaining in force three 
provisions of the 1960s law that privatized the car ma nufacturer Volkswagen.  These provisions grant public 
authorities (the Land of Lower Saxony and potentially, the Federal Government) automatic representation on the company's supervisory board, limit the voting rights of  every shareholder to 20% of the share capital, and 
fix the blocking minority at 20% for the most important decisions of the general assembly of shareholders.  In 
its ruling, the Court pointed out that the 20% voting cap, in conjunction with the 20% blocking minority, were derogations from German general law on limited liability companies.  According to the Court, the Land 
of Lower Saxony, which had a share of approximately 20%, could oppose important resolutions based on a 
lower level of investment than would be required under general company law.  The Court concluded that this situation was liable to dissuade investors from othe r member States, and thus was a restriction on the free 
movement of capital.  Regarding the right of the Federal Government and the Land of Lower Saxony to 
appoint two representatives each to the supervisory boar d of Volkswagen, provided th at they are shareholders 
but irrespective of the extent of their holding, the Court stated that this gave two public actors the possibility 
of exercising influence in excess of their investment levels, and was therefore a restriction on the movement 
of capital.  
In late 2008, Germany abolished the provisions on the automatic representation of public authorities on the 
board, and the 20% voting cap.  The Law's provision fixing a 20% blocking minority remains in place.  
Germany's Ministry of Justice considers that, with th e recent amendments to th e Volkswagen law, Germany 
has applied the Court of Justice's ruling "speedily and fully".
 
Box III.3 (cont'd) 
 
                                                      
178 As measured by the "Scope of public enterprises" indicator for 2008 in the OECD's "Indicators of 
Product Market Regulation" database.  Viewed at:  http://www.oecd.org/document/ 36/0,3746,en_2649_34323_ 35790244_1_1_1_1,00.html.  The data cover 21 EU member States. 
179 Directive 2008/6/EC of the European Parliament and of the Council, 20 February 2008 (OJ L 52, 
27 February 2008). 
180 ITA Consulting GmbH and WIK-Consult GmbH (2009). European Union WT/TPR/S/248 
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Greece :  Under Law 3631/2008 the acquisition by shareholders other than the State of voting rights in 
"strategic companies" is limited to 20%, unless prior approval is granted by an inter-ministerial privatization 
committee.  In addition, the Law requ ires the ex-post validation by the Minister of Economy and Finance of 
important corporate and certain specifi c management decisions pertaining to  these companies.  According to 
the Commission, which began a procedure to contest certain aspects of Law 3631/2008 in May 2008, the 
criteria for granting prior approval to acquire voting rights beyond 20% are imprecise, and there are no criteria for ex-post validation of certain company decisions by the Minister of Economy and Finance.  The 
Commission considers that "this situation gives the administrative authorities a wide margin of discretion, 
which ... restricts the rights of potentia l investors deriving from [EU rules on] the free movement of capital".  
In addition, the Commission considers that the scope of Greece's law is un clear, thus creating uncertainty.  
The Commission concludes that the prior approval and ex-post validation schemes go beyond what is necessary to ensure the objec tives pursued by the Government.  The cas e was referred to the Court of Justice 
of the EU in February 2011. 
The powers also allow the Minister to veto certain key management decisions, and to appoint a non-voting 
director.  Special powers clauses we re introduced into the articles of association of several companies, 
including ENI (petrochemical and energy), Telecom It alia (telecommunications), Enel (electricity), and 
Finmeccanica (defence).  The Decree of the President of the Co uncil of Ministers of 10 June 2004 defined 
criteria for the exercise of special powers, requiring th at special powers be exerci sed "solely when justified 
by important and compelling reasons in the public interest concerning, more particularly, public policy, 
public security, public health and defence", and that  they take the form of "measures appropriate and 
proportionate to the protection of those interests". 
In its ruling of March 2009 in case C-327/2009, the Court of Justice of the EU found that the criteria for the 
exercise of special powers were formulated in a "gen eral and imprecise manner".  Moreover, the Court ruled 
that the lack of any connection between the criteria and the powers to oppose the acquisition of shareholdings 
and the conclusion of pacts by shareholders "increas es the uncertainty surroundi ng the circumstances in 
which those powers may be exercised and gives them a discretionary nature".  In November 2009, the Commission called on Italy to apply this ruling. 
Portugal :  Energias de Portugal (EDP) was privatized in six successive phases between 1997 and 2006. 
Currently, the Portuguese State holds 25.73% of th e share capital.  The legal framework governing the 
privatization of EDP and the articles of association set out  special rights for the Stat e in the company.  These 
special rights include veto rights on resolutions to amend the company's ar ticles of association, and the right 
to appoint a director in the company.  The articles of association impose a limit on voting rights in the general 
assembly for all shareholders holding more than 5% of the capital of the comp any, except for the State 
entities.  The Commission considers that these special powers are unjustified restrictions on the free 
movement of capital and the right of establishment under the Treaty on the Functioning of the EU, in so far 
as they hinder both direct investment and portfolio investment.  In 2008, it referred the case to the European Court of Justice.  In its November 2010 ruling, th e Court found that Portugal had failed to fulfil its 
obligations regarding the free movement of capital and rejected Portugal's defence that maintaining special 
state rights in the company was a matter of public security  and security of energy supply.  In March 2011, the 
Commission formally asked Portugal for information on measures taken to comply with the Count's ruling. 
Source:  WTO Secretariat, based on Court of Justice of the EU, Case C-112/05, Commission v Germany, 
23 October 2007;  Federal Ministry of Justice press release, " Bundesregierung:  Urteil des EuGH 
zum VW-Gesetz eins zu eins umgesetzt ", 30 January 2009.  Viewed at:  http://www.bmj.bund.de;  
Court of Justice of the EU, Case C-326/07, Commission v Italy, 26 March 2009;  Court of Justice 
of the EU, Case C-543/08, Commission v. Portugal, 11 November 2010;  and European Commission online information, "Surveillance and analysis of capital movements:  infringement 
procedures".  Viewed at: http://ec.europa.e u/internal_market/capital/analysis/index_en. 
htm#infringments. WT/TPR/S/248 Trade Policy Review 
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(iii) Subsidies and other government assistance 
(a) General legal and institutional framework 
161. Subsidies and other government assistance are gr anted at the EU and member State levels.  
The latest EU subsidies notification to the WTO,  submitted in December 2009, covers both types of 
subsidies, and contains statistical information at least up to end 2008.181  The EU replied to questions 
on its notification posed by Australia, Canada, Japan, and the United States.182  Questions referred to 
support for agricultural products, fisheries, shipbuilding, mining, civil aircraft research, 
pharmaceuticals, and support provided in the context of regional schemes. 
162. The Treaty on the Functioning of the EU prohibits "any aid granted by a Member State or 
through State resources in any form whatsoever whic h distorts or threatens to distort competition by 
favouring certain undertakings or the production of certain goods ... in so far as it affects trade 
between Member States".183  State aid that contributes to the achievement of "well-defined objectives 
of common European interest", including growth, employment, cohesion or environmental protection, 
may be considered compatible with the EU common market, and therefore, allowed.184 
163. The authority to determine whether state aid is  allowed rests with the European Commission.  
The Commission's assessment of aid is generally a "balancing of the positive effects of aid (in terms 
of contributing to the achievement of a well-defi ned objective of common interest) and its negative 
effects (namely the resulting distortion of competition and trade)".185  The principles of the balancing 
test have been incorporated into "horizontal guide lines" for specific categories of state aid, including 
research, innovation, environmen tal protection, regional developm ent, small and medium-sized 
enterprises, training, employment, and risk capital.  The horizontal guidelines, which cover all sectors, 
define the conditions under which member States may grant particular types of aid. 
164. In general, EU member States must notify the Commission, and obtain its authorization, 
before granting state aid.  State aid eligible un der the General Block Exemption Regulation, which 
entered into force in August 2008, is not subject to prior notification and scrutiny.186  Neither is de 
minimis support (€200,000 or less per company over a period of three years).187  Nearly €11 billion 
was awarded on the basis of block exemptions in 2009.188  In general, individual aid awarded under an 
aid scheme does not need to be notified, provi ded the Commission has approved the terms and 
conditions of the particular scheme.  If the aid granted to a single beneficiary under an existing 
scheme exceeds specific statutory thresholds, it is subj ect to notification and authorization.  State aid 
granted in the absence of Commission approval is au tomatically classified as "unlawful aid".  The 
Commission must order member States to recover unla wful aid that is found to be incompatible with 
the EU common market.   
(b) Overall assistance 
165. Assistance granted at the EU level is mos tly for agriculture and "structural actions" 
(Chapter IV(1)).  The EU's structural actions, wh ich comprise the structural funds and the Cohesion 
                                                      
181 WTO document G/SCM/N/186/EEC, 23 December 2009.  Subsidies granted by individual member 
States are contained in addenda to this notification. 
182 WTO documents G/SCM/Q2/EEC/62-66. 
183 Article 107(1). 
184 OECD document DAF/COMP/GF/WD(2010)3, 11 January 2010.  Viewed at:  http://www.oecd.org/ 
dataoecd/52/2/44377696.pdf;  and European Commission (2008). 
185 European Commission (2008). 
186 Commission Regulation (EC) No 800/2008, 6 August 2008 (OJ L 214, 9 August 2008). 
187 Commission Regulation (EC) No 1998/2006, 15 December 2006 (OJ L 379, 28 December 2006). 
188 This figure refers to aid granted to industry and services. European Union WT/TPR/S/248 
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Fund, seek to "strengthen the economic and social cohesion [of the EU], in particular by reducing 
disparities between the levels of development of th e various regions and the backwardness of the least 
favoured regions".189  According to the Commission, only a fraction of Cohesion policy funding is 
covered by state aid rules, as the majority of sp ending relates to general infrastructure or non-
economic activities.  In addition, the Commission indi cates that the respect of state aid rules is an 
explicit requirement for benefitting from the structural funds. 
166. According to the latest EU subsidies notifi cation, outlays under the European Regional 
Development Fund, Cohesion Fund, and the Instrume nt for Pre-accession Assistance totalled close to 
€37 billion in 2008, the latest year available, co mpared with around €29 billion in 2006.  The EU 
notification did not specify the allocation of these funds by member State or sector.  The European Regional Development Fund accounts for approximate ly 80% of this assistance:  as one of the 
structural funds, it is mainly used to co-finance i nvestment for the creation or maintenance of jobs, 
infrastructure, and the development of local business initiatives and the activities of small and 
medium-sized enterprises. 
167. The remainder of this section provides an overview of assistance granted by member States 
during the period under review, as measured by state aid data published by the European Commission.  
Given that assistance sometimes takes the form of  regulatory or general measures that do not entail 
state aid,  these data do not cover all assistance granted by member States;  in particular, they do not 
reflect the total size of fiscal stimulus packages adopted by some  member States during the economic 
crisis, and therefore underestimate assistance provided by member States during the period under review.  For example, certain types of labour mark et support granted directly to workers under some 
of these stimulus packages may not be subject to st ate aid control by the Commission, and is therefore 
not included in the data presented in this section of the Report.  Similarly, demand support measures, 
like car-scrapping schemes, to the extent that they do not discriminate with regard to the origin of the 
product, are not counted as state aid. 
168. State aid provided by member States totalled a pproximately €427 billion in  2009, or 3.6% of 
EU-27 GDP.
190  On average, member States granted approximately €268 billion per year between 
2007 and 2009, roughly three-and-a-half times th e average for 2004-06.  This reflects the sharp 
increase in state aid provided by member States in  response to the financial and economic crisis 
(Chart III.1). 
169. The United Kingdom granted the largest amount of state aid in 2009 (€124 billion), followed 
by Germany (€116.8 billion), France (€42.3 bi llion), Belgium (€34.3 billion), and Greece 
(€14.3 billion).  Relative to economic size, state ai d was highest in Belgium (10.2% of national GDP), 
followed by the United Kingdom (7.9%), Ireland (7.7%) , Greece (6%), and Latvia (5.8%).  For seven 
member States, the share of state aid in national GDP was less than 1%. 
                                                      
189 WTO document G/SCM/N/186/EEC, 23 December 2009. 
190 This figure excludes aid to the railway sector and aid for compensation for "services of general 
economic interest" due to lack of data.  Services of general economic interest are defined in EU competition law 
as "economic activities that public authorities identify as  being of particular importance to citizens and that 
would not be supplied (or would be supplied under differ ent conditions) if there were no public intervention."  
The sources of data on state aid are:  European Comm ission document SEC(2010) 1462  final, 1 December 2010.  
Viewed at:  http://eur-lex.europa. eu/LexUriServ/LexUriSe rv.do?uri=SEC:2010:1462:FIN:EN:PDF;  and 
European Commission online information, "State Aid control:  Studies and reports".  Viewed at:  http://ec.europa.eu/competition/state_ai d/studies_reports/expenditure.html. WT/TPR/S/248 Trade Policy Review 
Page 72 
  
0.00.51.01.52.02.53.03.54.0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Chart III.1
Overall level of aid provided by member States, 1992-2009
% of GDP
Note:
Source:Total aid excludes railways.
Data for Austria, Sweden, and Finland are included from 1995 onwards, for EU-10 Member States from 2000, 
for Bulgaria and Romania from 2002.
European Commission online information, Scoreboard:  Data on State Aid Expenditure.  Viewed at:  
http://ec.europa.eu/competition/state_aid/studies_reports/expenditure.html.EU-27
 
170. Excluding aid granted in response to the financ ial and economic crisis, average annual state 
aid decreased from €76.1 billion in 2004-06 to €70. 1 billion in 2007-09.  Twelve member States 
reduced their average state aid levels between  2004-06 and 2007-09.  Rela tive to economic size, 
Bulgaria recorded the highest level of non-crisis  aid in the EU (2.1% of national GDP) in 2009, 
followed by Malta (2%), Hungary (1.5%), and Finla nd (1.2%).  Non-crisis state aid was 0.4% of 
national GDP or less in Estonia, Luxembourg,  Italy, Netherlands, and the United Kingdom. 
171. The bulk of non-crisis state aid provided by member States was directed at manufacturing, 
followed by agriculture.  The share of manufacturing in total state aid increased significantly between 
2004-06 and 2007-09, while the share of transport decreased.  Other sectors' shares remained relatively stable (Chart III.2). 
172. Excluding crisis-related measures, grants a nd tax exemptions were the most common 
instruments for provision of state aid, accoun ting for approximately 93% of the total in 2009.
191  Soft 
loans, guarantees, and equity participation accounted fo r slightly less than 7% of total aid.  Austria, 
Bulgaria, Cyprus, Denmark, Luxembourg, and Slovenia used grants for the bulk of state aid.  France, 
Germany, Ireland, Malta, Portugal, Slovakia, Swed en, and the United Kingdom used tax exemptions 
for at least 50% of state aid.  Including aid in response to the financial and economic crisis, around 
half of total state aid in 2009 was in the form of e quity participation, followed by guarantees (36% of 
total aid), and grants (10%). 
                                                      
191 The total comprises aid for industry and services only. European Union WT/TPR/S/248 
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01020304050607080
Manufacturing
sectorsFinancial
servicesOther services Agriculture Fisheries Coal Other non
nanufacturing
sectorsTransport (excl.
railways)Chart III.2
Non-crisis aid provided by member States, 2004-09
% of total aid
Source:
European Commission online information, "Scoreboard:  Data on State Aid Expenditure".  Viewed at:  
http://ec.europa.eu/competition/state_aid/studies_reports/expenditure.html.Average 2004-06
Average 2007-09
 
 
(c) Assistance in response to the financial and economic crisis 
173. Following the onset of the financial crisis  in 2008, the Commission issued several 
communications providing guidance on the design and implementation of state aid in support of 
banks.192  The communications cover public guarantees, recapitalization measures, impaired asset 
relief, and "restructuring aid".  They are based on the consideration that the severity of the crisis 
justifies, for a limited period, state aid measures on the basis of Article 107(3)(b) of the Treaty on the 
Functioning of the EU, which stipulates that "aid to  remedy a serious disturbance in the economy of a 
Member State" may be compatible with the EU common market.  According to the Commission, the 
objective of the guidance is to ensure that emerge ncy measures granted to maintain financial stability 
"guarantee a level playing-field between banks located  in different Member States as well as between 
banks who receive public s upport and those who do not".193 
174. Between October 2008 and October 2010, the Co mmission authorized state aid measures for 
the financial sector in 22 member States on the basis of Article 107(3)(b) of the Treaty on the 
Functioning of the EU.194  The "maximum volume" of this state aid totalled nearly €4,590 billion, or 
                                                      
192 See Communication from the Commission – The applica tion of State aid rules to measures taken in 
relation to financial institutions in the context of the curre nt global financial crisis (OJ C 270, 25 October 2008);  
Communication from the Commission – Th e recapitalisation of financial ins titutions in the current financial 
crisis:  limitation of aid to the minimum necessary and safeguards against undue distortions of competition (OJ 
C 10, 15 January 2009);  Communication from the Commission on the treatment of impaired assets in the 
Community banking sector (OJ C 72, 26 March 2009);  and Communication from the Commission on the return 
to viability and the assessment of the restructuring measures in the financial sector in the current crisis under the State aid rules (OJ C 195, 19 August 2009). 
193 European Commission (2009a). 
194 European Commission documen t COM(2010) 701, 1 December 2010 .  Viewed at:  http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0701:FIN:EN:PDF. WT/TPR/S/248 Trade Policy Review 
Page 74 
  
some 40% of EU-27 GDP.195  Around three-quarters was in the form of guarantees, including the 
blanket guarantees covering all bank  debts adopted by Denmark and Ireland.  According to the 
Commission, member States relied principally on guarantee measures, because they had a "stabilising 
effect for the financial sector without weighing he avily on the public finances as opposed to more 
interventionist instruments such as recapitalisa tions or the cleaning of impaired assets".196  Denmark, 
France, Germany, Ireland, and the United Kingdom a ccounted for nearly 70% of approved state aid 
for the financial sector. 
175. The "amount actually used" of state aid in 2009, which reflects the volume of aid 
implemented by member States, totalled €1,107 b illion, or around 9% of EU-27 GDP.  Approximately 
three quarters corresponds to guarantees, under gene ral schemes and ad hoc interventions in support 
of individual financial institutions. 
176. The Economic and Financial Affairs Council,  composed of the Economics and Finance 
Ministers of member States, concluded in December 2009 that it was necessary to design a transparent and coordinated strategy to phase out  support measures for banks and avoid negative spill-
over effects.
197  To provide incentives for banks to "ex it" from support measures, the Commission 
defined several requirements for the renewal of bank guarantees beyond 30 June 2010, including 
higher fees based on banks' creditworthiness.  In addition, the Commission requires that, from 2011, 
member States submit a restructuring plan for every bank receiving state support in the form of recapitalizations or impaired-asset relief.
198  Previously, only distressed banks, i.e., banks that 
received state support above 2% of their risk-wei ghted assets, were subject to this requirement. 
177. Apart from support to the financial sector, me mber States provided support for the real 
economy, mostly within the broader framework of the European Economic Recovery Plan, adopted in 
December 2008 to ensure a coordina ted EU response to the crisis.199  The Plan called on member 
States to devote 1.2% of GDP to counter the effect s of the crisis and adopt short-term measures in 
support of employment, infrastructure, construction,  and business.  As part of the Plan, the EU 
adopted in early 2009 a "temporary framework" allowing member States to provide state aid in 
response to "the exceptional difficulties of compan ies to obtain finance" until the end of 2010.200  Like 
the communications on bank support, the temporary fra mework is based on the consideration that the 
severity of the crisis justifies, for a limited peri od, state-aid measures on the basis of Article 107(3)(b) 
of the Treaty on the Functioning of the EU. 
                                                      
195 The maximum volume is the upper limit of support approved by the Commission;  it does not 
represent the amounts handed to financial institutions. 
196 European Commission document SE C(2010) 1462 final, 1 December 2010.  Viewed at:  http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=SEC:2010:1462:FIN:EN:PDF. 
197 European Council press release 16838/09 (Press 352), "2981st Council meeting, Economic and 
Financial Affairs", Brussels, 2 December 2009.  Viewed  at:  http://www.consilium.eu ropa.eu/uedocs/cms_Data/ 
docs/pressdata/en/ecofin/111706.pdf. 
198 European Commission press release IP/10/1636, "State aid:  Commission prolongs crisis framework 
0077ith stricter conditions", 1 Decem ber 2010.  Viewed at:  http://eur opa.eu/rapid/pressReleasesAction. 
do?reference=IP/10/1636&format=HTML&aged=0&language=EN&guiLanguage=en. 
199 European Commission document COM(2008) 800 fina l, 26 November 2008.  Viewed at:  http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0800:FIN:EN:PDF. 
200 Communication from the Commission-Temporary Community framework for State aid measures to 
support access to finance in the curr ent financial and economic crisis (OJ C 83, 7 April 2009);   and European 
Commission press release IP/08/1993, "State aid:  Commi ssion adopts temporary framework for Member States 
to tackle effects of credit squeeze on real  economy", 17 December 2008.  Viewed at:  
http://europa.eu/rapid/pressReleases Action.do?reference=IP/08/1993. European Union WT/TPR/S/248 
 Page 75 
 
 
178. The temporary framework opened up new po ssibilities for member States to provide 
assistance to firms in the form of:  grants of up to €500,000 per firm for investments or working 
capital ("500k measure");  subsidized loans and subsid ized guarantees;  and aid for the production of 
"green" products.  In addition, the temporary framework set out temporary adaptions of existing state-
aid instruments on risk capital aid for small a nd medium-sized enterprises, and short-term export 
credit insurance (section (2)(v)).  The 500k measure was not available to firms in the fisheries sector; 
grants were capped at €15,000 for firm s producing primary agricultural products.201  State-aid 
measures adopted under the temporary framework are s ubject to ex ante notification and authorization 
by the Commission. 
179. Member States could adopt measu res under the temporary framework until the end of 2010.  
In December 2010, the Commission agreed to ex tend certain temporary framework measures until 
end 2011.  According to the Commission, "a lim ited prolongation of certain measures currently set 
out in the temporary framework, accompanied by  the introduction of stricter conditions on the 
prolonged measures, constitutes a central element of a gradual return to normal state-aid rules, while 
limiting their impact on competition."202 
180. The prolonged temporary framework maintain s the possibility of providing subsidized 
guarantees and subsidized loans, including for the production of green products under stricter 
conditions.  It reduces the maximum subsidy for guara ntees, and prohibits subsidized loans to finance 
large firms' working capital.  Firms in difficulty, as defined under EU state-aid rules, are not eligible 
for state-aid measures adopted under the prolonged temporary framework.  In addition, the 
Commission decided to make permanent the upper  limit on annual risk capital aid temporarily 
introduced by the original temporary framework. 
181. The prolonged temporary framework discontinu es the provision that allowed member States 
to grant up to €500,000 per company for investments or working capital.  The Commission considers that, although the provision in the temporary framewo rk was useful as a "short-term instrument when 
the uncertainty of the economic outlook was at the highest, it has also given rise to disparities in the 
internal market".
203  According to the Commission, around 7% of funds allocated by member States 
and approved by the Commission under this provision were  actually paid out, and nearly 80% of aid 
disbursed was concentrated in one member State (Germany). 
182. Between mid-December 2008 a nd October 2010, the Commission approved 73 schemes 
under the temporary framework and 4 ad hoc aid measures, totalling maximum aid of €82.5 billion 
(0.7% of EU-27 GDP).  Schemes for aid up to €500,000 per company were implemented in 23 member States, subsidized guarantee schemes in 18, subsidized loan schemes in 8, reduced interest 
loan schemes for the production of green products in  5, and risk capital schemes in 6.  In addition, 
Latvia, Romania, and Sweden received approval  for 5 ad hoc aid measures, mostly to car 
manufacturers.  Twelve member States put in place schemes providing up to €15,000 for agricultural 
producers. 
                                                      
201 "Communication from the Commission amending the Temporary Community Framework for State 
aid measures to support access to fina nce in the current financial and eco nomic crisis"(OJ C261, 31 October 
2009. 
202 "Communication of the Commission-Temporary Union framework for State aid measures to support 
access to finance in the current financial and economic crisis" (OJ C6, 11 January 2011). 
203 "Communication of the Commission-Temporary Union framework for State aid measures to support 
access to finance in the current financial and economic crisis" (OJ C6, 11 January 2011). WT/TPR/S/248 Trade Policy Review 
Page 76 
  
183. France and Germany maintained the largest  number of measures under the temporary 
framework, with seven aid schemes each, followed by Hungary, Italy, Latvia, and the United 
Kingdom.  Cyprus adopted no measures under the temporary framework. 
184. The Commission estimates that measures appr oved under the temporary framework totalled 
€81.3 billion in 2009, or almost 0.7% of EU-27 GDP.  The amount of aid granted by member States 
was slightly below 3% of the maximum volume approved. 
185. Assistance provided under the temporary framework was not sector specific.  Thus, there are 
no consolidated data on the volume of aid under th e temporary framework disaggregated by economic 
sector.  Nonetheless, some parts of member States ' fiscal stimulus packages targeted particular 
economic sectors.  According to one estimate, one-thi rd of all measures introduced by member States 
under the European Economic Recovery Plan were s ector specific.  The automobile sector, along with 
tourism and construction received the largest share of sectoral support (Box III .4).204 
186. In its assessment of support measures introdu ced under the European Economic Recovery 
Plan, the Commission concluded that they did not unduly distort competition, and that they helped to 
achieve long-standing EU objectives like enhancing research, development, and innovation, extending 
ICT, improving transport links, and using energy more efficiently.  Nonetheless, the Commission indicates that these measures could hinder much needed  adjustment and restructuring in the targeted 
sectors.  According to the Commission, "it is theref ore important to plan the credible withdrawal of 
these measures once growth becomes dur ably anchored so as to avoid lo nger lasting distortions in the 
functioning of markets".
205 
Box III.4:  Support for the EU automobile industry during the 2008-09 economic crisis 
In autumn 2008, tighter credit conditions and falling business and consumer confidence sparked by the 
financial crisis led to a collapse in demand and a severe drop in output and capacity utilization throughout the EU.  The ensuing economic crisis severely affected the automobile industry.  Car sales in the EU decreased by 
between 25% and 45% in nine member States between September 2008 and January 2009.  Production 
decreased in all five main vehicle- producing countries (Germany, France, Spain, United Kingdom, and Italy), 
with particularly sharp reductions in Italy (-23%) and France (-16%) between 2007 and 2008. 
Several EU member States responded to these conditions  by granting significant support for the automobile 
industry.  Some measures sought to ease car companies' access to finance and encourage the industry to adapt 
to environmental legislation.  For example, the "P acte Automobile" announced by France in February 2009 
includes subsidized loans to Renault and PSA Peugeot-Citroen to finance clean vehicles (€6.5 billion), loans to these companies' internal banks (€2 billion), a nd guarantees and funds for suppliers.  In the United 
Kingdom, the Automotive Assistance Programme includes €2.5 billion in loans and guarantees to the 
automotive sector.  Germany, Romania, and Sweden also  introduced supply-side measures.  Most supply-side 
measures were granted under non-sector-specific schemes approved by the Commission on the basis of the 
temporary framework. 
Box III.4 (cont'd) 
 
                                                      
204 European Commission (2010b). 
205 European Commission (2009b). European Union WT/TPR/S/248 
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In addition, several member States se t up sector-specific demand support.  At  least 12 member States (Austria, 
Denmark, France, Germany, Greece, Italy, Luxembourg, the Netherlands, Portugal, Slovakia, Sweden, and the 
United Kingdom) introduced temporary "scrapping schemes" that provided consumer subsidies for replacing old, energy-inefficient vehicles.  The total cost of these programmes in 2009-10 ranged from €10 million in 
Luxembourg to €5.8 billion in Germany. 
Following the introduction of scrapping schemes, new car registrations increased in the EU in early 2009, with 
substantial increases in Austria, Germany, Italy, Port ugal, Slovakia, and the United Kingdom.  In addition, 
production in sectors related to the automobile industry registered increases during the first eight months of 
2009, particularly in Germany.  There is some evidence that scrapping schemes had cross-border spillover 
effects.  For example, German imports of cars increased significantly during the first half of 2009, particularly 
from France, Italy, Romania, and Slovakia. 
The European Commission indicates that  the extent of aid received by th e automotive sector appears to be 
linked to the perceived importance of this sector in the economy at large.  The sector's size in terms of value 
added, although relatively small for the EU as a whol e (1.5% of EU GDP), is significant for some member 
States, including the Czech Republic and Germany, wh ere it is almost 4% of national GDP.  In many car- 
producing countries, including Hungary, Slovakia, and Spain, a large share of output is exported. 
There were concerns about possible conditions attached to some supply-side measures.  For example, during the 
Pacte Automobile's signing ceremony, th e President of France stated that Renault and PSA had undertaken a 
very important commitment not to close any of their sites for the duration of their loans, and to make every 
effort to avoid layoffs.  Following discussions with  the Commission on these loans, the French authorities 
formally undertook to ensure that the loan agreements would not contain any conditi ons concerning "either the 
location of [the car manufacturers'] activities or the requirement to prioritize France- based suppliers".  
According to the Commission, a similar issue was raised in the context of state aid that Germany intended to 
grant to another car manufacturer, Adam Opel GmbH, under an approved temporary framework scheme related 
to the sale by General Motors of its Opel/Vauxhall European operations to an investor.  General Motors 
eventually reversed its decision to sell Opel. 
Source : European Commission (2010), Product Market Review 2009:  Microeconomic consequences of the 
crisis and implications for recovery, European Economy 11/2009;  European Commission document 
SEC(2010) 1462, Facts and figures on State aid in the Member States Accompanying the Report from 
the Commission (State Aid Scoreboard, Autumn 2010 Update), 1 Decembe r 2010;  European 
Commission press release MEMO/09/90, "State ai ds: the Commission obtains guarantees from the 
French government on the absence of protectionist measures in  the French plan for aid to the 
automotive sector", 28 February 2009;  Elysée online information, "Pacte Automobile", viewed at:  
http://www.elysee.fr/presi dent/les-dossiers/economie/face-a-la-c rise/relance/pacte-automobile-9-
fevrier-2009/signature-des-accords-de-soutie n-a-la-filiere.6213.html;  and OECD (2009), Economic 
Outlook  86, 2009.  
(iv) Government procurement  
187. In the EU, as in other WTO Members, gove rnment procurement accounts for a very 
significant proportion of total economic activity and represents a core function of government, with 
major implications for economic structure and growth.206  In 2007, the EU public procurement totalled 
€ 2,088 billion (16.8% of its GDP), of which € 367.2 billion (3% of GDP, and 18% of total public 
procurement) was above-threshold procurement, i.e. , procurement covered by EU legislation rather 
than national legislation of EU member States.207    
188. Public procurement policy in the EU aims to achieve the best value for money through open, 
transparent and non-discriminatory procedures, c onsistent with the underlying objectives of the 
                                                      
206 In total, government procurement has been es timated to account for 15-20% of GDP in OECD 
economies, on average.   See OECD (2002). 
207 WTO document GPA/94/Add.4, 15 July 2010. WT/TPR/S/248 Trade Policy Review 
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Internal Market.  All procurements carried out in the European Union above specified thresholds must 
comply with the requirements of the EU Directives on procurement, which are reflected in relevant 
legislation and regulations of the EU member States .  In particular, procur ement above the relevant 
thresholds must be advertised EU-w ide and must follow uniform procedures.208  Furthermore, given 
the EU's status as a party to the WTO Agreement of  Government Procurement (GPA), the Directives 
themselves in addition to the member States' legislation must conform to the GPA.   
189. The EU is a key player in the ongoing re negotiation of the Gove rnment Procurement 
Agreement in the WTO.  In addition to the GPA, th e EU has signed a number of bilateral agreements 
covering government procurement.  In many cases, the texts of these agreements are based on the 
GPA.  Hence, the positions taken by the EU in  the GPA and bilateral negotiations will have 
significant consequences for the future of the Agreement. 
(a) Procurement Directives and the GPA 
190. Above-threshold public procurement continu es to be regulated by Directive 2004/17/EC, 
which coordinates the procurement procedures of en tities operating in the water, energy, transport, 
and postal services sectors (the Utilities Directive);  and Directive 2004/18/EC, on the coordination of 
procedures for the award of public work contracts,  public supply contracts, and public services 
contracts.  Directive 2009/81/EC, on defence and secu rity procurement, entered into force in August 
2009, opening procurement in this sector purel y at the EU level to European suppliers.209  Member 
States must comply with the provisions of these Direc tives, which have to be transposed into national 
legislation.  All member States have by now impl emented the 2004 procuremen t legislative package, 
although Luxembourg transposed these Directives only at the end of 2009.210  For supplies, services, 
and construction services (works), thresholds are specified in Commission Regulation (EC) 
No. 1177/2009, 30 November 2009, ame nding Directives 2004/17/EC and 2004/18/EC  (Table III.10).   
191. Since the previous Review of the EU in 2009,  the procedures for awarding contracts, as 
specified under the EU procurement Directives, have not changed.211  Moreover, according to the 
Commission, during the global crisis, no "buy local" requirement was imposed at any level through government procurement.  The Commission highlighted  to interested parties some existing provisions 
of the EU procurement Directives.  For example, Directive 2004/18/EC allows recourse to accelerated 
procedures if justified on grounds of urgency.  In December 2008, the Commission recognized that 
the exceptional nature of the global crisis could jus tify the use of this accelerated procedure, reducing 
the overall time limit of procuremen t from 87 days to 30 days.  Following this, the Commission set up 
a monitoring mechanism on the application of this option by member States. 
192. The EU public procurement regime aims to ensure  the best possible value for money to create 
opportunities to purchase better quality and value supp lies and services.  To achieve this objective, 
open and transparent procedures must be followed.  Procurement above the stipulated thresholds must 
be advertised in the Official Journal  (S series), which is freely accessible on the Tenders Electronic  
Daily website.
212  In 2008, procurement published in the Official Journal represented between 1.2% 
and 9.6% of member States' GDP, between 7.1% and 61.1% of total procurement (Table III.11).  
The percentage varies among EU member States;  for example, it is comparatively low in Germany, 
while much higher in Latvia, Bulgaria, and Estonia.  The authorities attribute these variations to the 
                                                      
208 WTO document WT/TPR/M/214/Add.1, 2 July 2009, p. 223. 
209 EU online information.  Viewed at: http://ec.europa.eu/internal_market/publicprocurement/ 
dpp_en.htm. 
210 European Communities (2009a) and (2009b). 
211 For details of the procedures, see WTO (2009). 
212 TED online information.  Viewed at:  http://ted.europa.eu/. European Union WT/TPR/S/248 
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different structures of the public sector (and its spen ding power) in the respective member State.  In 
total, procurement subject to the publication re quirement accounted for 3.1% of GDP and 18.2% of 
total expenditures for goods and services, indicatin g that the remainder is regulated under national 
legislation. 
Table III.10 
Minimum public procurem ent thresholds, 2010-11a 
(Euros) 
n.a. Not applicable. 
a Threshold amounts do not include VAT. 
b Contracts that are subsidized at more than 50% by the contr acting authorities involve either civil engineering to build hospi tals, 
facilities intended for sports, recreation a nd leisure, school and univers ity buildings, and buildings used for administrative 
 purposes or the services connected to the aforementioned types of projects.  
c Specific sectors refer to fields of research and development,  telecommunications (CPC Reference No. 752), hotel and restauran t 
services, transport by rail and waterway, provision of personnel, vocational training, investigation and security, legal, healt h and 
social, recreational, cultu ral and sporting services. 
d Utilities include water, energy, transport,  postal and telecommunications services. 
Source : Commission Regulation (EC) No. 1177/2009, 30 Nove mber 2009, amending Directives 2004/17/EC and 
 2004/18/EC. WTO documents GPA/W/299/ Add.4, 1 January 2008, and GP A/W/309/Add.4, 5 February 2010.  
Table III.11 
Selected procurement indicators, 2006-08 
 Value of procurement published in the OJ as a 
percentage of GDP Value of procurement published in the OJ as a 
percentage of total public procurement 
     2006      2007     2008    2006    2007 2008 
Austria 1.7 1.7 2.4 9.7 9.2 12.5 
Belgium 2.4 3.2 3.6 16.3 21.7 23.8 
Bulgaria .. 8.5 8.7 .. 51.9 52.2 
Cyprus 4.4 5.1 4.6 37.1 49.0 44.5 
Czech Republic 5.2 4. 1 5.3 19.4 16.2 21.0 
Denmark 3.0 3.2 3.0 20.2 21.6 19.5 
Estonia 7.3 7.2 8.2 42.8 42.3 45.3 
Finland 3.1 3.6 3.9 19.0 22.1 23.6 
France 3.4 3.4 3.7 19.7 19.4 21.1 
Germany 1.7 1.1 1.2 10.2 6.8 7.1 
Greece 5.6 3.5 2.8 59.9 36.4 30.0 
Hungary 6.8 4.5 5.2 31.7 20.8 26.0 
Ireland 3.3 3.4 2.5 26.1 24.3 16.0 
Italy 3.0 2.3 2.3 21.1 16.5 16.4 
Latvia 13.8 12.3 9.6 82.9 77.1 61.1 
Lithuania 4.2 4.2 3.6 25.3 23.8 20.8 
Table III.11 (cont'd)  Supplies Services Works 
2008-09 2010-11 2008-09 2010-11 2008-09 2010-11 
Public contracts, other than for utilities       
EU GPA contracting authorities  133,000 125,000 133,000 125,000 5,150,000 4,845,000 
Other public sector contracting authorities 206,000 193,000 206,000 193, 000 5,150,000 4,845,000 
Contracts subsidized at more than 50% by the 
contracting authorityb n.a. n.a. 206,000 193,000 5,150,000 4,845,000 
Service designs contests       
  Central government authorities n. a. n.a. 133,000 125, 000 n.a. n.a. 
  Other authorities n.a. n. a. 206,000 193,000 n.a. n.a. 
  Specific sectorsc n.a. n.a. 206,000 193,000 n.a. n.a. 
Utilitiesd       
All sectors, except service design contests  412,000 387,000 412,000 387,000 5,150,000 4,845,000 
Service designs contests n.a. n.a. n.a. 387,000 n.a. n.a. WT/TPR/S/248 Trade Policy Review 
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 Value of procurement published in the OJ as a 
percentage of GDP Value of procurement published in the OJ as a 
percentage of total public procurement 
     2006      2007     2008    2006    2007 2008 
Luxembourg 1.4 1.2 1.3 10.5 9.0 9.1 
Malta  1.8 2.0 1.2 12.0 14.5 8.0 
Netherlands 2.3 1.8 1.9 9.1 7.0 7.1 
Poland 5.2 5.8 7.2 28.3 32.0 38.3 
Portugal 1.9 1.7 2.5 12.4 10.7 14.9 
Romania ..  7.3 7.4 .. 33.6 36.9 
Slovakia  3.1 3.6 3.7 11.9 14.1 15.2 
Slovenia 5.0 6.6 5.1 25.9 43.4 32.8 
Spain 4.2 4.1 3.6 28.9 26.7 23.9 
Sweden 3.0 3.0 3.5 16.9 16.8 18.8 
United Kingdom 4.6 3.9 4.4 25.4 22.3 23.5 
Total .. 3.0 3.1 .. 17.9 18.2 
..  Not available. 
Source : Eurostat (undated), Public procuremen t advertised in the Official Journal .  Viewed at:  http://appsso.eurostat. 
ec.europa.eu/nui/setupM odifyTableLayout.do. 
193. After a contract is awarded, contracting authorities are required to  post an award notice on the 
TED website.  There is an automatic reminder syst em to EU contracting authorities to ensure full 
compliance with the relevant publication obligations .  According to the authorities, in 2008, 85% of 
the notices of intended procurement were followed by a contract award notice.213  Although it is 
difficult to identify the exact nationality of su ccessful suppliers/service providers, the Commission 
started to establish a methodology to monitor cross-border procurement, including from non-EU 
origin.214  The authorities provide that, in 2007 (the latest  year for which data are available), contracts 
of a total value of €12 billion (3.3% of total a bove-threshold procurement,  and 3.9% of total 
procurement open to GPA partne rs) were awarded to suppliers  originating from non-EU GPA 
signatories.   
194. The EU is a party to the WTO Government Pr ocurement Agreement (GPA), and the 27 EU 
member States must comply with the EU's oblig ations under the GPA.  The GPA applies to 
procurement contracts of value above certain sp ecified thresholds.  As required by the GPA, 
thresholds in national currencies are to be notified by parties every two years.215  The EU notified its 
GPA thresholds for 2010-11216, which are the same as those under the EU procurement Directives.  
Commission Regulation (EC) No. 1177/2009 stipulates that, one of the objectives of Directives 2004/17/EC and 2004/18/EC is to allow the contrac ting entities and the contracting authorities to 
comply with the obligation laid down in the GPA.  Thus, the thresholds under those Directives should 
be aligned to correspond to the euro equivalents,  rounded down to the nearest thousand, of the 
thresholds set out in the GPA.
217 
195. Although the thresholds are the same, the coverage  of the GPA is different from that of the 
Directives.  The GPA covers entities, goods, a nd services, including construction services, as 
                                                      
213 WTO document WT/TPR/M/214/Add.1, 2 July 2009, p. 222. 
214 WTO document WT/TPR/S/214/Rev.1, p. 67. 
215 WTO document GPA/1, dated 5 March 1996, Annex 3. 
216 WTO document GPA/W/309/Add.4, 5 February 2010. 
217 OJ L 314/64, 1 December 2009.  Viewed at:  http://eur-lex.europa.eu/L exUriServ/LexUriServ. 
do?uri=OJ:L:2009:314:0064:0065:EN:PDF. European Union WT/TPR/S/248 
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specified in EU’s Appendix I.  In 2007, out of total € 367.2  billion above-threshold procurement in 
the EU, € 309.6 billion (84%) was open to GPA partners.218   
196. Article XX of the GPA requires each party to provide a mechanism by which a supplier may 
challenge alleged breaches of the GPA before an  independent and impartial review body.  These 
procedures must meet the minimum standards of Arti cle XX regarding the nature of the review body, 
the procedures for the hearing, and the remedies available.   
197. The Remedies Directiv e, Directive 2007/66/EC, whic h supplemented and amended the 
Directives 89/665/EC and 92/13/EC, introduced two features.  First, following an award decision for  a public contract, contracting authorities must wait  at least ten days before signing a contract.  
This "standstill period" gives bidders  time to examine the decision and decide whether to initiate a 
review procedure.  If a review procedure is in itiated, the procurement process is automatically 
suspended until the review body reaches a decision.  Second, more stringent rules were stipulated 
against illegal direct award of public contracts.  In both cases, national courts or review bodies may 
nullify signed contracts if these rules are not followed.   Member States had until December 2009 to bring their legislation into compliance with this Di rective.  By March 2011, all Member States but one 
had transposed the Directive.  The Commission is currently checking the implementing measures 
communicated by member States.  .  
198. The rules governing the EU government procurem ent market are designed to ensure an open 
and transparent government procurement system.  Nonetheless, suppliers from third countries do not 
have an automatic and enforceable right to par ticipate in the EU procurement market, unless "an 
international agreement concluded by the EU in the field of public procurement grants them the right 
to do so (GPA or bilateral agreements with the EU)".
219  In this regard, participation in the GPA 
provides an enforceable right to the EU procurem ent market covered by the EU’s commitments under 
the GPA. 
199. EU procurement Directives do not apply to co ntracts below thresholds, and to certain 
exempted sectors (such as the telecommunications and broadcasting sectors).220  Public procurement 
that is not directly covered by EU legislation is covered by national rules.  Member States are 
understood to have discretionary authority in such  cases to allow the participation of non-EU bidders 
in their procurement market, and suppliers from third countries have no enforceable right.  For example, press reports suggested some forei gn firms were excluded from bidding for UK public 
sector IT contracts.
221  The EU considers that procurement be low thresholds does not need to follow 
the detailed rules of the EU procurement Directives;   nevertheless the general principles of EU law 
(transparency, equal treatment and non- discrimination) must be respected.   
200. The EU strongly supports the accession of new me mbers to the GPA, with long-term strategy 
to turn the GPA into a multilateral agreement.222  At the same time, the EU is keen on negotiating 
bilateral agreements covering gove rnment procurement.  The EU has a key objective to contribute 
through its bilateral trade relations  to the setting of effective, mode rn, and international procurement 
                                                      
218 WTO document GPA/94/Add.4, 15 July 2010. 
219 WTO document WT/TPR/M/214/Add.1, 2 July 2009, p. 47. 
220 European Communities (2009a). 
221 Computerweekly.com.  Viewed at:  http://www.computerweekly.com/Articles/2009/02/17/234874/ 
UK-public-IT-handicapped-by-procurement-process-say-Indian-IT.htm;  and SME Times  online information.  
Viewed at:  http://smetimes.trad eindia.com/smetimes/news/top-stories/2010/Aug/20/industry-missing-
opportunities-in-global-governmental-procuremen.html. 
222 European Commission document COM(2009)592 final, 28 October.  Viewed at:  http://eur-
lex.europa.eu/LexUriServ/LexUriSer v.do?uri=CELEX: 52009DC0592:EN:NOT. WT/TPR/S/248 Trade Policy Review 
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principles, and to substantially liberalize public  procurement markets.  When negotiating with 
developing countries, the EU's main emphasi s is on encouraging transparency and the 
creation/strengthening of regional procurement mark ets.  The EU now includes substantial chapters 
on public procurement in all its  bilateral trade agreements.223  So far, it has such agreements with 
CARIFORUM, Central America, Chile, Colombia, Iraq, Mexico, Peru, South Korea, and Switzerland.  
The EU stated that it is firmly committed to ensuri ng eventual GPA accession by its bilateral partners, 
and that it works to ensure the procurement chapter in  its bilateral agreements is consistent with the 
GPA.  When negotiating with partners that are al ready GPA signatories, the bilateral agreements are 
intended to deepen the commitments undertaken in  the GPA framework, either by enhancing the 
rules, or by broadening the market access commitments, or both. 
201. The EU is an important player in the ongoi ng renegotiation of the text and coverage 
commitments of the GPA.  The te xt was provisionally agreed in 2006, but cannot be brought into 
force until negotiations on the coverage of the Ag reement have also been concluded.  The present 
negotiation includes the launch of a new set of  work programmes in the WTO Committee on 
Government Procurement, which will explore th e interaction of the GPA with key social 
considerations including the access to procurement markets by small and medium-sized enterprises 
(SMEs), and the implementation of "green" procurement.224  The EU reaffirms its commitment to the 
rapid completion of the GPA negotiations, whic h would increase coverage of the Agreement, 
ultimately leading to the expansion of the GPA membership.   
(b) E-procurement 
202. To modernize and simplify procurement procedures and in accordance with the e-
Government transition in some member States,  the Commission adopted an Action Plan for e-
Procurement in 2004.225  However, the Commission's evaluation suggested that less than 5% of total 
procurement budgets were awarded through electronic systems in 2010.  The EU considered that e-
procurement has the potential to yield important improvements in the efficiency of individual purchases, the overall administration of public proc urement and the functioning of the markets for 
government contracts.
226  Thus, the Commission issued its Green Paper on expanding the use of e-
procurement in the EU in October 2010.227 
(c) Other objectives of the public procurement regime 
203. Although the principal objective of government proc urement in the EU is to ensure the best 
value for money, the 2004 Directives also men tion the possibilities of reflecting social and 
environmental considerations in technical specifications, selection and award criteria, as well as 
contract performance clauses.228  At the same time, member States have national legislation 
provisions, intended to achieve social and envi ronmental objectives through the public procurement 
system.  Currently, a key challenge for the EU (as fo r other GPA parties) is to find ways to accord due 
                                                      
223 EU online information.  Viewed at:  http:/ /ec.europa.eu/trade/crea ting-opportunities/trade-
topics/public-procurement/. 
224 WTO document GPA/106, 9 December 2010, paragraph 35. 
225 Government institutions and other public-sector or ganizations purchase supplies and services or 
tendering public works through the use of electronic communications and transactions. 
226 European Commission document SEC(2010) 1214 final, 18 October 2010.  Viewed at:  
http://ec.europa.eu/internal_market/consultations/d ocs/2010/e-procurement/evaluation-report_en.pdf. 
227 European Commission document COM(2010) 571 final, 18 October 2010.  Viewed at:  http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0571:FIN:EN:PDF. 
228 For example, Article 26 of the Directive 2004/18/EC provides that the conditions governing the 
performance of a contract may concern so cial and environmental considerations. European Union WT/TPR/S/248 
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weight to such objectives consistent with its resp ective policy interests and goals while ensuring that 
their implementation does not undermine the GPA' s core principles of non-discrimination, 
transparency, and fair procedures.229 
204. To illustrate the interplay of these issues, belo w-threshold procurement in the EU is regulated 
by national legislation, which must follow the basic principles of the Treaty on the Functioning of the 
European Union (transparency, non-discrimina tion, and equal treatment).  The procurement 
Directives stipulate detailed rules/methods for estimating the value of contracts230, and an artificial 
split-up into smaller lots to circumvent the Directive represents an infringement.231  Nonetheless, the 
contracting authorities may award contracts in lots with a view to accommodating social 
considerations, or promoting partic ipation of SMEs in procurement, provided that the procurement 
requirement is not subdivided to avoid the application of the EU Directives.232   
205. In this connection, to promote SMEs par ticipation in the public procurement market, 
contracting authorities in some member States have suggested to award a specific call for tender into 
composite lots.  One example is the 2006 Code on P ublic Procurement in France.  The same Code 
also stipulated other measures to facilitate SMEs:  bidders may be asked to indicate in their offers 
whether they intend to subcontract to third parti es including SMEs (Article 48);  and the economic 
monitoring mechanism within the Ministry of Ec onomy, Finance and Industry must report the number 
of contracts awarded to SMEs (Articles 130 and 131). 233 
206. In Germany, many states have special laws a nd regulations to support SMEs;  under the two 
main methods contracting authorities may split contr act into lots;  and a clause may be included in 
contract conditions requiring contractors to subcontract to SMEs. 
207. Green public procurement (GPP) is "a pro cess whereby public authorities seek to procure 
goods, services and works with a reduced environmen tal impact throughout their life cycle when 
compared to goods, services and works with the same primary function that would otherwise be procured".
234  The 2004 Directives clarified how public  procurement can include environmental 
considerations, while national legislation in some  member States also defined national criteria and 
approaches to GPP.  Some have expressed the view that the EU procurement Directives lack 
flexibility, and tend to constrain member States ' ability to achieve their social/environmental 
objectives through public procurement.   
208. In July 2008, the Commission issued a co mmunication "Public procurement for a better 
environment",235 which proposed that 50% of all public te ndering procedure should be green by 2010, 
where "green" means compliant with core GP P criteria set out by the Commission in the 
Communication.  The Communication also provide d guidance on how to reduce the environmental 
                                                      
229 The role of such objectives is also expected to figure in the "Future Work Programmes" of the 
Committee on Government Procurement, following the entry into force of the revised text of the Agreement. 
230 Article 9 of Directive 2004/18/EC, and Article 17 of Directive 2004/17/EC. 
231 Article 9 (3) of Directive 2004/18/EC, an d Article 17 (2) of Directive 2004/17/EC. 
232 European Commission online information, "Study on the incorporation of Social Considerations in 
Public Procurement in the EU – Proposed Elements for taking account of the Social Considerations in Public 
Procurement", 21 July 2008, p. 34.  View ed at:  http://ec.europa.eu/social/main. 
jsp?catId=331&langId=en&newsId=417&furtherNews=yes. 
233 PublicTendering.com online information.  "Code des marches publics 2006". Viewed at:  
http://www.publictendering.com/pdf/legislation/ cmp2006.pdf. 
234 European Commission document COM (2008) 400 final, 16 July 2008.  Viewed at http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0400:FIN:EN:PDF. 
235 European Commission document COM (2008) 400 final, 16 July 2008.  Viewed at http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0400:FIN:EN:PDF. WT/TPR/S/248 Trade Policy Review 
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impact caused by public sector consumption, an d how to use GPP to stimulate innovation in 
environmental technologies, products, and services.  The EU stated that the GPP is a voluntary policy.
236   
(d) Future directions  
209. In 2010, the Commission issued a Communication announcing a future review of its public 
procurement regime.237  The Commission finds that as the interaction between EU rules and national 
rules can be complex, there is a need for simplification of procedures.238  It seems that the levels of 
participation by firms from other member States in  procurement procedures remain low compared to 
the import penetration in the private sector, indica ting a potential for more cross-border trade.  The 
Commission has announced its intention to prepare a legislative proposal by the end of 2012, with a 
view to simplifying and updating the European rules to make the award of contracts more flexible and to enable public contracts to be put to better use in support of other policies.  There is recognition, 
however, that legislative changes need to be cons istent with the EU's in ternational commitments, 
notably the GPA, in particular regarding the threshol ds for applying the EU public procurement rules.  
The Commission is currently undertaking consultati ons and an economic impact evaluation of the 
current EU procurement directives, as well as an impact assessment, examining the various possible 
policy options, taking into consid eration the implementation of the EU's international commitments, 
such as the GPA.
239 
210. As noted, the policy challenges are to be consider ed not only in the context of the EU's own 
Procurement Guidelines but also in the Future Work Programmes of the Agreement on Government 
Procurement (after the revised GPA text comes into  force), in which the EU will play a significant 
role.  This is an important context in which the EU will be able to provide input of its own experience 
with green and social and "other" obj ectives in the procurement process.   
(v) Competition policy  
211. Competition policy in the European Union remains a central pillar of the Single Market, 
protecting consumers from abusive practices and ensu ring that entry to particular lines of business or 
geographic localities is not deterred by anti-compe titive practices.  Over time, competition policy in 
the EU has been progressively refined through deve lopments such as the "more economic approach", 
which have enhanced the relevant authorities' fo cus on the economic effects of changes in market 
structures and of companies' behaviours in such markets.  Arguably, this has brought about a higher level of convergence/harmonization with the co mpetition policies of major economic partners, 
thereby reducing (though not eliminating) the scope for conflicts of jurisdiction with those partners 
and enhancing possibilities for bene ficial economic integration. 
(a) Legislative framework 
212. As outlined in the previous Review of the EU, Council Regulation No . 1/2003 implements the 
rules on competition laid down by Articles 101 an d 102 of the Treaty on the Functioning of the 
                                                      
236 WTO document WT/TPR/M/214/Add.1, 2 July 2009, p. 220. 
237 European Commission document COM(2010) 608 final, 27 October 2010.  Viewed at: 
http://ec.europa.eu/internal_market/smact/docs/single-market-act_en.pdf;  and European Commission document 
COM(2011) 15 final, 27 January 2011.  View ed at:  http://eur-lex.europa.eu/LexUriServ/ 
LexUriServ.do?uri=COM:2011:0015:FIN:EN:PDF. 
238 European Commission document COM(2011) 206/4, 13 April 2011. 
239 European Commission document COM(2011) 15 final, p. 54, 27 January 2011.  Viewed at:  
http://eur-lex.europa.eu/LexUriServ/ LexU riServ.do?uri=COM:2011:0015:FIN:EN:PDF. European Union WT/TPR/S/248 
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European Union.240  Article 101 prohibits anti-competitive agreements between undertakings that 
"may affect trade between Member States"241, except for those beneficial, on balance, to economic 
efficiency and consumers.  Article 102 prohibits, as incompatible with the internal market, the abuse 
of a dominant position, without exception. 
213. Article 101 does not apply to agreements of minor importance ( de minimis ) where the 
aggregate market share of the undertakings is sma ll (for example, less than 10% for competitors, or 
15% for non-competitors).  Also, it does not apply to agreements or practices in the insurance sector, 
and the motor vehicle business.  Furthermore, block exemptions apply automatically in case of certain 
restrictive agreements, both vertical and horizontal, if  they tend to improve economic efficiency.  For 
block exemptions to apply to a given agreement, th e parties' combined market shares must be below a 
level (depending on the type of block exemption) at which it can be assumed that the parties do not 
have market power.  Moreover, in order to bene fit from block exemption, an agreement must not 
contain "hardcore restrictions" of competition such as price fixing, output limitation or market 
sharing. Where an agreement falling under a block exemption restricts competition, the Commission 
and/or the competition authorities of member States may withdraw the benefits of these exemptions.  The Commission did not withdraw these benef its during the Review  period (2009-2011).    
214. The main regulation governing merger contro l at the EU level is Council Regulation 
No. 139/2004, 20 January 2004 (the Merger Regulat ion), implemented by Commission Regulation 
No. 802/2004, 7 April 2004. Under the Merger Regula tion, all concentrations with a "Community 
dimension" are subject to exclusive review  by the European Commission prior to their 
implementation. These are mergers where the par ties have a combined worldwide turnover of 
€5 billion and each party has a Community-wide turnove r of €250 million.  Mergers with a combined 
worldwide turnover of €2.5 billion are also examined  by the Commission if:  (i) the parties' combined 
turnover exceeds €100 million in at least three EU memb er States; (ii) each party has a turnover of 
€25 million in the same three EU member States; and (iii) the individual Community-wide turnover of each party exceeds €100 million.  If these thresholds ar e not met, mergers may be subject to review 
under national laws of the member States. 
215. The aim of the Merger Regulation is to exam ine whether a concentration would significantly 
impede effective competition, notably through the cr eation or strengthening of a dominant position.  
In such cases, the concentration is prohibited, or conditionally approved if the parties provide 
remedies to fix the identified problem. All othe r mergers must be unconditionally approved.  In 
accordance with the stand-still obligation, no me rger can be consummated unless approved by the 
Commission. Most mergers are approved within the in itial (first phase) period, without the need for an 
in-depth (second phase) investigation. In 2010, there were 274 merger notifications to the 
Commission (up from 259 in 2009), of which 253 were unconditionally approved in the first phase, 14 were conditionally appr oved in the first phase, 3 were appr oved after a second-phase investigation, 
and 4 were withdrawn.
242  No merger was prohibited.   
                                                      
240 Articles 101 and 102 of the TFEU have repl aced Articles 81 and 82  of the EC Treaty.   
241 Article 101 of the Treaty prohibits agreements that:  (i) directly or indirectly fix purchase or selling 
prices or any other trading conditions;  (ii) limit or control production, markets, technical developments, or 
investment;  (iii) share markets or sources of supply;  (i v) apply dissimilar conditions to equivalent transactions 
with other trading partners;  and (v) make the conclusion  of contracts subject to the acceptance by other parties 
of further obligations unrelated to the subject of the contract.   
242 EU online information.  Viewed at:  http:// ec.europa.eu/competition/mergers/statistics.pdf. WT/TPR/S/248 Trade Policy Review 
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(b) Enforcement procedures  
216. The responsibility for public enforcement of co mpetition policy across the EU is shared by 
the European Commission and the national competition authorities of the member States.  The system that has evolved for allocation of enforcement work between these two levels of authority is itself an 
interesting illustration of policy design and appli cation within a multi-level system of governance.  
Overall, significant enforcement responsibility lies with  the national authorities to the extent that this 
is deemed consistent with effective policy admi nistration and the sound administration of the Single 
Market.   
217. The EU established its European Competition Ne twork (ECN) to facilitate cooperation among 
the responsible authorities and enhance the efficien cy of policy application within the system of 
shared jurisdiction.  Within the ECN, the Co mmission and member States' competition authorities 
share information and attempt to agree on the alloca tion of cases.  Cases are to be dealt with by a 
single competition authority as often as possible.  Wher e an agreement or practice substantially affects 
competition in more than one member State, the Network members seek to ensure that the case is 
assigned to the authority which is well placed to deal  with it.  If more than three Member States are 
substantially affected by an agreement or practice,  the Commission will be particularly well placed to 
handle the case.
243 
218. In its 2009 Report on the functioning of the enforcement system after the first five years, the 
Commission noted that the challenge of boosting enforcement of the EU competition rules, and 
ensuring their consistent and cohere nt application, had been largely achieved.  It indicated that 
enforcement of the EU competition rules had greatly  increased since the entry into force of Council 
Regulation 1/2003.  Between May 20 04 and March 2009, more than 1,000 cases were pursued on the 
basis of the EU competition rules involving a wide variety of sectors.  Discussions on case allocation arose in very few cases and was resolved swiftly
 .244 
219. Nevertheless, the Commission maintains its aut hority to enforce relevant provisions of the 
Treaty directly, and is an important player in the overall system of competition law enforcement.  In 
particular, the Commission may conduct investigati ons and take decisions either following a 
complaint or on its own initiative, when it suspects there may be a violation of the Treaty concerning 
competition policy. 
220. The Commission may impose fines and/or periodic penalty payments.  The Court of Justice 
reviews the Commission’s activities and may rule against the Commission’s decisions.  Since 2009, 
the Court has ruled against the Comm ission's decisions in fines and in  the rejection of the complaint 
in some cases.  The Commission must, before taki ng a decision, consult the Advisory Committee on 
Restrictive Practices and Dominant Positions, whic h is made up of representatives of Member States’ 
competition authorities.  
(c) Major recent developments 
221. With regard to substantive aspects of policy im plementation, a major development in the EU 
since the 1990s has been the progressive implemen tation of a "more economics-based approach" in 
the enforcement of all aspects of competition law.  While this focused initially on cases and 
                                                      
243 EU online information, "Joint Statement of the Council and the Commission on the Functioning of 
the Network of Competition Authorities". Viewed at:  http://ec.europa.eu/competition/ecn/joint_statement_ 
en.pdf. 
244 European Commission document SEC(2009) 574 final, chapter 5, 29 April 2009.  Viewed at:  
http://eur-lex.europa.eu/LexUriServ/LexUri Serv.do?uri=SEC:2009:0574:FIN:EN:PDF. European Union WT/TPR/S/248 
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enforcement methodologies relating to Article 101 and mergers and acquisitions, it has now been 
extended to the area of dominant conduct, with th e issuance of the Commi ssion's Guidance paper on 
the enforcement of Article 102 in 2009.245  An insistence on substantive analysis is now pervasive in 
most, if not all, aspects of the Commission's antitrust work.  Courts adjudicating competition law 
cases in the EU are also moving away from formalistic  applications even with  respect to the market 
integration standard.  An important consequence of th is trend has been to move the EU closer to the 
substantive approaches to antitrust enforcement of some of its major trading partners, potentially 
reducing the scope for inter-jurisdic tional conflicts in this policy area .246  
222. The EU's competition policy regime also covers state aid, which, by favouring certain firms 
over their competitors, may distort competition (section (3)(ii)).   
223. During the period of the global financial cris is, measures taken by a number of the EU 
member States have limited the application of co mpetition policy in the financial services sector 
(Chapter IV(1)(ii).   These measures have been criticized by some  in that they may perpetuate rather 
than relieve the underlying sources of instability, or have other undesirable effects. 247  It has also been 
argued that much experience shows the health of fi nancial and other markets is unlikely to be well 
served by the suspension, in times of economic dist ress, of basic rules to prevent anti-competitive 
practices.248  The Commission agreed with these comments. 
224. An important focus of the Commission's enforc ement efforts in recent times has been on the 
pharmaceutical industry, which relies heavily on intell ectual property rights.  In January 2008, the EU 
launched a major inquiry to examine why fewer ne w medicines were being brought to market and 
why generic entry seemed to be delayed in some cas es.  The inquiry found that citizens waited more 
than seven months after patent expiry for cheaper  generic medicines, costing them 20% extra in 
spending.  The delayed market entry of generic medi cines could be attributed to both the regulatory 
framework,249 and certain companies' behaviours.  The inquiry showed that originator companies used 
a variety of instruments to protect the commercia l life of their products without generic entry.250  In 
particular, 22% of the patent settlements were pot entially problematic, relating to medicines worth 
more than €200 million.  The EU considered that these instruments, although can be fully legitimate, 
may under certain circumstances violate the Eur opean competition law.  In 2010, the Commission 
                                                      
245 EU online information, "Communications from the Commission – Guidance on the Commission's 
enforcement priorities in applying Article 82 of the EC  Treaty to abusive exclusionary conduct by dominant 
undertakings (2009/C45/02)". Viewed at: http://e ur-lex.europa.eu/LexUriServ/LexUriServ.do?uri= 
CELEX:52009XC02 24(01):EN:NOT. 
246 Anderson (2011, forthcoming). 
247 Jenny (2009). 
248 OECD online information, "Staying the course:  Pres erving competition in a time of crisis".  Viewed 
at:  http://www.oecd.org/document/27/0,3746,en_2649_33725_42211291_1_1_1_1,00.html. 
249 On regulatory issues, the inquiry confirmed that there was an urgent need to establish a single 
European Patent and a unified specialized patent litigation system in Europe, so as to reduce administrative 
burdens and uncertainty for companies:   30% of court cases were conducted in parallel in several member 
States, and in 11% of cases national courts reached conflicting judgements (section (vi)). 
250 Typical company behaviours include:  (i) patent clusters, where the origin ator company filed for a 
large number of EU-wide patents for a single medicine;  (ii) patent litigations between originator companies and 
generic companies, which on average lasted nearly 3 y ears;  (iii) settlement agreements, where originator 
companies and generic companies agree on the terms for ending an ongoing litigation or dispute. In 
approximately 50% of these settlement agreements, generic entry was restricted. In addition, the inquiry also found that originator companies intervened in national procedures for the approval of generic medicines in a 
significant number of cases, which on average led to four months delay of the generic medicine.  EU online 
information.  Viewed at:  http://europa.eu/rapid/p ressReleasesAction.do?reference=MEMO/09/ 321&format= 
HTML&aged=0&language=EN&guiLanguage=en. WT/TPR/S/248 Trade Policy Review 
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carried out a monitoring exercise, focusing on pate nt settlements concluded in the pharmaceutical 
sector.  This exercise found that compared with 2008, the number of settle ments increased while the 
number of potentially problematic patent settleme nts decreased (down to 10% and the amount of 
money covered by these settlements was down to € 1 million).251  The decrease of the latter indicates 
an increased awareness of  the industry that settlement agreemen ts may attract the scrutiny of the 
competition law.  
(d) International cooperation 
225. Apart from the above-noted internal cooperati on mechanisms (e.g. the ECN), the European 
Union is also a leading player in inter-jurisdicti onal cooperation on competiti on law in important fora 
including:  the International Competition Networ k (ICN);  the UNCTAD Intergovernmental Group of 
Experts on Competition Policy;  and the OECD Co mpetition Committee.  The EU considered that 
these multilateral fora provide important platfo rms to advocate principles of sound competition 
enforcement and to develop a competition culture gl obally.  This will enable competition authorities 
worldwide to respond more efficiently to cases involving multiple jurisdiction. 
226. The EU includes competition policy in a number of  bilateral agreements.  Since 2008, the EU 
has signed bilateral trade agreement with Colombia and Peru, idem with the Andean countries, and an 
EPA with Caribbean that contain a chapter on comp etition.  Regarding the EPA with Central Africa, 
only Cameroon signed it and a full EPA is still unde r negotiation;  negotiations on a competition 
chapter started in 2008;  however, there have not  been any discussions on this topic since then. 
(vi) Intellectual property rights 
227. Since its previous Trade Policy Review in 2009,  the EU has continued to develop its IPR 
protection in response to the changing economic and t echnical environment, particularly in the areas 
of copyright, patent, trademarks, geographical indicati ons (GIs), and enforcement.  During the period 
under review, major reforms on patent s were under way, and the EU lowered the registration cost for 
Community trademarks, strengthened IPR enforcement by setting up an EU Observatory on Counterfeiting and Piracy, and initiated a review of  its Customs Regulations on IPR enforcement.  
Creative industries in the EU contribute 3.3% of its  GDP (2006) and 3% of total employment (2008).  
In 2008, 6.7 million people worked in the crea tive industries in the EU-27, and creative goods 
accounted for 4.3% of extra-EU exports.
252 
228. The adoption of the Lisbon Treaty marked an important step forward for the further 
development of a truly EU-wide IPR regime.  It inserts an IP-specific provision.  Article 118 of the 
Treaty on the Functioning of the European Union (TFEU ) stipulates that measures shall be established 
"for the creation of European intellectual property rights to provide uniform protection of intellectual 
property rights throughout the Union and for the set ting up of centralised Union-wide authorisation, 
coordination and superv ision arrangements". 
229. The IPR regime in the EU is governed both by  EU legislation and legislation in member 
States.  The EU has an extensive body of intellect ual property legislation (T able AIII.2).  Member 
States' legislation implements and complements, where appropriate, EU legislation and commitments 
                                                      
251 European Commission press release IP/10/887,  "Antitrust: Commission welcomes decrease of 
potentially problematic patent settlements in EU pharma sector", 5 July 2010.  Viewed at: http://europa.eu/rapid/pressReleasesAction.do?refer ence=IP/10/887&format=HTM L&aged=0&language=EN&
guiLanguage=en. 
252 European Commission document SEC(2010) 1276 final, 28 October 2010.  Viewed at:  
http://ec.europa.eu/enterprise/ newsroom/cf/_getdocument.cfm?doc_id=6222. European Union WT/TPR/S/248 
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under international agreements.  The EU is an  observer to the World Intellectual Property 
Organization (WIPO), while its member States are WIPO members.  In December 2009, the EU ratified the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty.  
230. The EU has a regime of regional exhausti on, under which parallel imports from third 
countries are not allowed, while parallel imports within the EU are permitted.  
(a) Copyright and related rights  
231. Copyright-dependent industries play an important  role in the EU economy.  A WIPO study on 
the contribution of copyright industries to GDP and employment in a number of countries, including some EU member States, found that these industries represent a dynamic sector that, on average, 
grows faster than the rest of the economy (Table III.12).
253  Some other studies found that in the EU 
and some EU member States, the contribution of copyright industries to GDP varies from 2.6% to 
6.9%, and the contribution to employment varies from 3% to 6.5%.254  However, as the methodologies 
of the studies vary, their results are not comparable. 
232. Following an impact assessment study, in July  2008, the Commission adopted a proposal to 
amend Directive 2006/116/EC, i.e., to extend the te rm of protection for performers and producers of 
sound recordings, from 50 years to 95 years.  According to the EU, this extension would bring 
performers’ protection closer to that given to auth ors (life plus 70 years), and this would not have a 
negative impact on prices.255  The EU provided that the proposal is still pending before the Council, 
but may be adopted in 2011. 
Table III.12   
Copyright-dependent industries’ contributio n to GDP and employment, various years 
 Year of study Contribution of copyright-dependent 
industries to GDP (%) Contribution of copyright-dependent 
industries to employment (%) 
Bulgaria 2005 2.8 4.3 
Hungary 2002 6.7 7.1 
Latvia 2000 5.1 5.6 
Romania 2005 5.6 4.2 
Netherlands 2005 5.9 8.8 
Sloveniaa 2007 5.1 6.8 
a Data subject to revision. 
Source: WIPO online information.  Viewed at: http://www.wi po.int/export/sites/www/ip-d evelopment/en/creative_ 
industry/pdf/eco_table.pdf. 
233. Some studies have been critical of the proposed  extension of the term of protection.  For 
example, the Gowers Report argued that, as IP rights are a trade-off between incentives and access, if 
the exclusive rights granted by copyright (or any othe r form of IP right) lasts longer than it needs to, 
unnecessary costs would be imposed on consumers.256  It found that the extension of the term of 
protection would bring minimal economic benefit to  performers.  Another study commissioned by DG 
                                                      
253 WIPO online information.  Viewed at:  http://www.wipo.int/ip-development/en/creative_industry/ 
economic_contribution.html. 
254 These studies include:   Picard, Toivonen and Grönlund (2003);   KEA (2006);  PIM (2009);  TERA 
Consultants (2010);  and European Commission document SEC(2010) 1276 final 28 October 2010.  Viewed at:  http://ec.europa.eu/enterprise/newsroom/cf/_getdocument. cfm?doc_id=6222. 
255 EU online information.  Viewed at:  http://europa.eu/rapid/pressReleasesAction. 
do?reference=MEMO/08/508& format=HTML& aged=0&language=EN &guiLanguage=en. 
256 HM Treasury (2006). WT/TPR/S/248 Trade Policy Review 
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Internal Market and Services found that 50 years of protection was substantially  longer than the terms 
that previously existed in many member States.257   
234. The Commission disagreed with the findings of these studies, considering that certain 
results/statements in the studies were unfounded.  According to the Commission, the extended term 
would enable performers to earn money for a longe r period, and benefit record producers who would 
generate additional revenues from the sale of records,  thus helping them to maintain their investment 
levels in new talent.  The Commission considered that accompanying measures contained in the proposal ensure that performers would benefit.  Th e 'use it or lose it' clauses in the contracts linking 
performers to their record companies would allow pe rformers to claim back their rights if the record 
producer does not market the soun d recording during the extended period.  In addition, record 
companies would be required to set up a fund in to which they would have to pay 20% of their 
revenues earned during the extended period.  The m oney from this fund would be destined to help 
session musicians.
258 
235. Although copyright holders have the exclusive ri ght to reproduce their works, EU legislation 
allows member States to limit this right by permitting private copying on condition that the right 
holders receive "fair compensation".  Nonetheless, there are questions regarding the amount of the 
compensation, and the collection system.259  In Case C-467/08 (Padawan v SGAE) the European 
Court of Justice (ECJ) ruled that "fair compensati on" is an autonomous concept of European Union 
law, and should compensate for the harm suffere d by the right holder as a result of the unauthorized 
reproduction of his work.  Given the practical di fficulties in identifying private users, the ECJ 
considered private copying levies to be a valid form  of providing for fair compensation.  The ECJ also 
stated, however, that private copying levies must not be applied to digital reproduction equipment, 
devices, and media purchased for purposes clearly un related to private copying (e.g. for professional 
use by professional users).  National legislation th at provides for the indiscriminate application of 
private copying levies, regardless of the distinction made by the ECJ in case C-467/08, is incompatible with Directive 2001/29/EC. 
236. Challenges for copyright protection also ari se from the popular use of the internet.  
In December 2009, the EU ratified the WIPO Copy right Treaty (WCT) and the WIPO Performances 
and Phonograms Treaty (WPPT), the "internet treaties".
260  The provisions of these two treaties were 
previously implemented in Directive 2001/29/EC on copy right in the information society.  In order to 
continue to meet the challenges of the internet -based knowledge economy, the EU began a number of 
projects.  A key EU priority is to digitize and disse minate Europe's cultural he ritage by creating digital 
libraries, which can be accessed by researchers and consumers across Europe.261  In 2011, two 
proposals were made with respect to digital libra ries and archives:  one was made to enable the 
digitisation and online accessibility of "orphan works" , the other was to set up collective licensing 
                                                      
257 Institute for Information Law of the University of Amsterdam (2006). 
258 Europa online information.  Viewed at:  http://ec.europa.eu/internal_market/copyright/term-
protection/term-protection_en.htm. 
259 European Commission Press Release No 106/10, 21 October 2010.  Viewed at:  
http://europa.eu/rapid/pressReleasesAction.do?ref erence=CJE/10/106&format=HTML&aged=0&language= 
EN&guiLanguage=en. 
260 European Commission Press Release IP/09/191, "Second EU translation contest winners 
announced".  Viewed at: http://europa.eu/rapid/ pressReleasesAction. do?reference=IP/09/191. 
261 European Commission document COM(2009) 532 final, 19 October 2009. Viewed at:  
http://ec.europa.eu/internal_market/copyright/docs/copyright-infso/20091019_532_en.pdf.  European 
Commission document COM(2010) 245 final/2, 26 August  2010.  Viewed at:  http://eur-lex.europa.eu/ 
LexUriServ/LexUriServ.do?uri=com:2010:0245:fin:en:pdf ;  and Europa online information.  Viewed at:  
http://ec.europa.eu/internal_market/copyrigh t/copyright-infso/copyright-infso_en.htm. European Union WT/TPR/S/248 
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schemes for "out-of-commerce" works.262  The EU has also been activ e in improving the distribution 
and availability of works for persons with a visual impairment.263 
237. Online enforcement and data protection are im portant components of copyright protection. 
The EU has several Directives containing rules applicab le to the online enforcement of IP rights, such 
as Directive 2004/48 (the Enforcement Directive) , which establishes general applicable rules 
regarding IPR enforcement, and Directive 2000/31  (the Ecommerce Directive), which establishes 
minimum applicable rules regarding the conditio nal exemption of liability for internet service 
providers.  However, certain flexibilities are left to member States in implementing these provisions.
264  For example, in many member States, ISPs (internet service providers) cannot store IP 
addresses for the specific purpose of online copy right enforcement; exceptions include France.  
238. In October 2009, the Constitutional Council of  France approved a revised version of its 
"Hadopi Law", (Loi No. 2009-669 of 12 June 2009 fa vorisant la Diffusion et la Protection de la 
Création sur Internet), which led to the creation of HADOPI (Haute Autorité pour la diffusion des 
oeuvres et la protection des droits sur internet).265  Under the Law, individual internet subscribers 
must verify that their access does not infringe copyri ght legislation.  In case of infringement, the 
HADOPI may start its "3-strike" procedure:  (i) an em ail is sent to the connection owner, the ISP is to 
survey the internet connection, and the connection owner is encouraged to install a filter on his/her 
own connection;  (ii) in the 6 months following the fi rst step, if a repeated o ffence is suspected (by the 
copyright holders, their representatives, the ISP or  the HADOPI), a certified letter is sent to the 
connection owner;  (iii) in the year following the reception of the certified letter, if the connection 
owner fails to comply, or if copyright holders,  their representatives, the ISP or the HADOPI suspect 
repeated offences, the ISP is required to suspend service for a period of 2 months to 1 year.  The 
connection owner is blacklisted and third-party ISPs  are prevented from providing him/her an internet 
connection.  Before the last step, a judicial review may be conducted.  
(b) Industrial property 
Patents 
239. Currently, there are three different avenues for patent applications:  a national procedure is 
provided by the competent authority of each member St ate;  a centralized procedure is available at the 
European Patent Office (EPO);  and an intern ational procedure is available under the Patent 
Cooperation Treaty (PCT) administered by the WIPO.   
240. The European patent system under the EPO is considered as "incomplete", "fragmented", and 
costly.266  For a European patent to take effect in member States, the patent owner must request 
validation at national level.  This involves tran slation, local representation, and administration 
requirements.  A European patent validated for example in 13 member States costs around €20,000, of 
which nearly €14,000 for translation.  This is more than ten times the cost of obtaining a patent in the 
                                                      
262  Out-of-commerce works differ from orphan works to the extent that their authors or publishers are 
known, but the book is not available in traditional or in the new electronic channels of  trade. Orphan works are 
works where the author is not known or, even if known, cannot be located. 
263  Europa online information.  Viewed at: http://ec.europa.eu/internal_market/copyright/copyright-
infso/copyright-infso_en.htm#otherdocs. 
264 Hunton & Williams (2009)  and (2010). 
265 Legifrance online information.  View ed at:  http://www.legifrance.gouv.fr 
266 Harhoff (2009). WT/TPR/S/248 Trade Policy Review 
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United States (on average €1,850).267  Because of the costs, most inventors seek patent protection in a 
limited number of member States (on average five).  Low validation entails a fragmented system for patent protection in the EU, with negative effects on the commercial value of patented inventions.
268  
Further, in legal disputes, innovators wishing to protect their inventions may have to litigate in 
parallel in several countries.  This implies high costs, complicated system, and the risk of 
contradictory court decisions in different member States.  For example, an inquiry in the pharmaceutical sector found that 30% of court cases we re conducted in parallel in several member 
States, and in 11% of cases national courts r eached conflicting judgements (section (v)).  
241. In December 2009, the Competitiveness Counc il adopted Council Conclusions on an 
enhanced patent system in Europe.  Two key featur es were the creation of a single EU patent, and the 
establishment of a court with jurisdiction both for Eur opean patents and for future EU patents.  Some 
researchers expected total private savings through  access to a unified patent court to be between 
€148 million and €289 million in the four years following its creation.
269  The unified patent court is 
to be established by the conclusion of an intern ational agreement involving the EU, its Member 
States, and other states of the European Patent Convention (EPC).270  In June 2009, the Council 
submitted a request for an opinion of the European Court of Justice on the compatibility of a draft 
agreement establishing a unified patent court with th e EU Treaties.  On 8 March 2011 the Court ruled 
that certain features of the draft agreement were in consistent with the Treaties.  The Commission is 
now working on identifying appropriate alternatives  on the way forward for the patent litigation 
system.   
242. The Commission first proposed the creation of a unitary EU patent in 2000.  However, no 
agreement could be reached on the translation a rrangements, and the Council concluded that the 
objective of a single EU patent could not be achieved. Subsequently, the Commission responded 
favourably to the request of 25 member States for the creation of unitary patent protection in the framework of enhanced cooperation.
271  The European Parliament and the Competitiveness Council 
gave their consent to enhanced cooperation in ear ly 2011.  The implementation of the authorising 
Council decision requires the adoption of two regulati ons;  first, on the creation of unitary patent 
protection, and second, on the applicable translation arrangements.  On 13 April 2011, the Commission adopted the proposals for the implementing regulations. 
243. In recent years, the number of applications fo r renewable-energy patents has been increasing 
rapidly.  In 2009, the EPO received 1,259 renewa ble-energy patent appli cations, up 27% from 2008.  
However, patents are scattered across many databases and in different formats, which results in a lack 
of clarity.  The EPO developed a unified datab ase for clean-energy patents in June 2009;  clean-
energy patents are classified in 160 categories, so th at they can be identified more easily.  Reportedly, 
                                                      
267 Europa Press Release, "Patents: Commission pr oposes translation arrangements for future EU 
Patent", IP/10/870, Brussels, 1 July 2010.  View ed at:  http://europa.eu/rapid/ pressReleasesAction. 
do?reference=IP/10/870&format=HTML&aged=0&language=EN&guiLanguage=en. 
268 European Commission document SEC(2010)797, 30 June 2010.  Viewed at: 
http://ec.europa.eu/governance/impact/ia_carried_out/docs/ia_2010/sec_2010_0797_en.pdf. 
269 Harhoff (2009). 
270 The EPC currently has 38 contracting states:  the 27 EU member States plus Albania, Croatia, 
Former Yugoslav Republic of M acedonia, Iceland, Liechtenstein, Mo naco, Norway, San Marino, Serbia, 
Switzerland, and Turkey.  Vi ewed at:  http://www.epo.org/about-us/ep o/member-states/by-accession-date.html. 
271 European Commission document COM(2010) 790 final, 14 December 2010.  Viewed at:  
http://ec.europa.eu/internal_market/indprop/docs/paten t/COM(2010) 790-final_en.pdf.  The framework of 
enhanced cooperation allows a group of willing member St ates to go ahead with legislation in a given area, 
while others may join at any time in the future. European Union WT/TPR/S/248 
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the EPO plans to create similar da tabases for clean technol ogy in the areas of transport, buildings, and 
agriculture.272 
244. Some member States are creating similar databases.  For example, in June 2010, the 
Intellectual Property Office in the UK (UKIPO) launch ed a green technology database to facilitate the 
development of environm ent-friendly technology.  This database contains patent applications 
processed under the UKIPO's "Green Channel" in itiative launched in 2009.   The Green Channel 
provides a fast-track service for patent applications  for inventions with e nvironmental benefits:  
patents may be granted in nine months compared wi th a current average time of two to three years.273  
Apparently, the databases run by the EPO and the UKIPO are separate;  and the UKIPO database is 
much smaller.  
Trade marks 
245. The EU has the Community trade mark system, a nd national trade mark systems.  Substantive 
provisions of the latter are harmonized by means of Directive 2008/95/EC so that the same protection 
applies throughout all member States.   
246. The EU legislation relating to Community trade marks does not replace the laws of its 
member States.  Also, the two regimes have differe nt coverage and application requirements.  A link 
is established through the concept of seniority, i.e ., the possibility of claiming, in applying for the 
Community trade mark, the seniority of the earlier trad e mark in the member State in or for which it 
was registered, preserving prior rights even if the ear lier trade mark is not renewed.  Another link is 
the concept of conversion, i.e., the possibility of converting a Community trade mark application that 
was refused, or declared invalid or revoked, into  a national trade mark application in all member 
States in which the ground for refusal does not appl y.  The ensuing national trade mark applications 
will retain the filing date of the Co mmunity trade mark application.  
247. Businesses can register a trade mark in each of  the 27 EU member States, and at the same 
time a Community trade mark.  Opposition against a national trade mark application can be filed 
based on a prior Community trade mark.  Register ing a Community trade mark may thus prevent a 
specific mark from being registered as a national trade mark by third parties.  If, on the other hand, a company chooses to register a trade mark at nati onal level and not as a Community trade mark, the 
same sign could be registered by another company in another member State.  Trade mark 
infringement is dealt with by specialized national courts of first and second instance, or "Community 
trade mark courts", based on the Comm unity Trade Mark Re gulation 207/2009. 
248. The Community trade mark has effect throughout the EU, and is registered and administered 
by the Office for Harmonization in the Internal  Market (OHIM).  In May 2009, OHIM fees were 
lowered and the procedures for the registration of a Community trade mark were simplified.  The 
registration fee was eliminated so that businesses pa y €1,050 instead of €1,750 for the application and 
registration of a Community trade mark, and the e-registration of a trade mark was reduced, from 
€1,600 to €900.  It was estimated that these measures could save businesses some € 60 million a 
                                                      
272 "Green Patents Corralled – Intellectual property database could ease technology transfer", 
Nature  465, 21, 4 May 2010.  Viewed at:  http://www .nature.com/news/2010/100504/full/465021a.html. 
273 IPO online information, "Green Patent Databa se Launched", 4 June 2010.  Viewed at:  
http://www.ipo.gov.uk/about/press/press-release/pr ess-release-2010/press-release-20100604.htm. WT/TPR/S/248 Trade Policy Review 
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year.274  The processing time for the registration of a "straightforward" (without opposition 
procedures) Community trade mark was reduced from 8 months to about 7 months.275   
249. Given the time that elapsed between the harm onization of trade mark legislation and the 
creation of the Community trade mark, as well as the increasing demands of stakeholders, the 
European Commission carried out an evaluation of th e overall functioning of the trade mark system in 
Europe.  This included the commissioning of a co mprehensive study whose final report was published 
in March 2011.276  
250. On the basis of an impact assessment yet to be carried out, the Commission envisages 
presenting a package proposal to revise both the Community Trade Mark Regulation and the Trade 
Mark Directive in October 2011.  The objective is to  modernize the trade mark system both at the EU 
and national levels by making it mo re effective, efficient and consistent as a whole, including 
enhancing the complementarity between the EU and national systems by facilitating cooperation 
between the OHIM and national trade mark offices. 
Geographical indications  
251. At the EU level, there are three approach es for registering and protecting geographical 
indications: as protected designations of origin (P DOs) or protected geographical indications (PGIs) 
for wine, spirits, and agricultural and foodstuff products;277 as collective Community trademarks;  and 
through national appellation systems at member State level.   
252. GIs are protected mainly under Regulations No s. 1234/2007 (for wine), 110/2008 (for spirits), 
and 510/2006 (for agricultural and foodstuff products ), in the form of PDOs or PGIs.  In December 
2010, the Commission submitted a proposal for a Regulation on agricultural product quality 
schemes.278  Among others, it suggested that the GI regi me be reformed by refining the eligibility 
criteria, shortening the application process, a nd inviting producer groups  to take on a bigger 
administrative role.  Also, a study was commissi oned by the DG Trade on the protection of GIs for 
non-agricultural products.279  The study found that, although it is difficult to conclude on the 
effectiveness of legal instruments on GI protection for non-agricultural products, many producers see 
the existing EU legal framework for PDOs  and PGIs as an interesting route.  
253. Applications for GIs of products originating fro m a geographic area in the EU are sent to the 
relevant member State; if the member State consid ers that the application meets the requirements for 
registration, it transmits it to the European Commiss ion.  Member States may charge a fee to cover 
their costs.  The Commission verifies whether the conditions are met.  If the Commission is satisfied 
                                                      
274 Europa Press Release, "Trade Mark Protection in th e EU Gets Much Cheaper a nd Easier to Obtain",  
IP/09/506, Brussels, 31 March 2009.  Viewed a t:  http://europa.eu/rapid/ pressReleasesAction. 
do?reference=IP/09/506. 
275 OHIM (2010). 
276 Max Planck Institute for Intellectual Property and Competition Law, Munich (2011). 
277 A PDO is a name covering agricultural products and foodstuffs that are produced, processed, and 
prepared in a given geographical area using recognized know-how.  A PGI is a name covering the same type of products that are closely linked to a ge ographical area where at least one of the stages of production, processing 
or preparation takes place.
  A TSG (traditional speciality guaranteed) is  not a GI as it highlights traditional 
characters in terms of composition and/or method of production; when the distinguishing feature is geographical origin rather than composition or method of  production, a TSG ca nnot be granted. 
278 European Commission document COM(2010) 733 final, 10 December 2010.  Viewed at:  http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0733:FIN:en:PDF. 
279 European Commission (2009c). European Union WT/TPR/S/248 
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with the application, it publish es its positive conclusions in the Official Journal , and if no objections 
are raised within six months, the product is registered.    
254. The registration system for and protection of GIs is also available for products from third 
countries. For GIs of products of non-EU origin , the application may be sent directly to the 
Commission, or to the authorities of the country  where the geographical area is located, which 
transmits the application to the European Commission.  No  fees are requested for applications from 
third countries.280  The authorities note that, the average registration time for foreign GIs and for 
European GIs is three years. 
255. According to the Database of Origin and Registration (DOOR) online database (for 
agricultural products and foodstuffs), there ar e two third-country names among the 970 GIs (505 
PDOs, 465 PGIs (Café de Colombia and Longkou Fensi (vermicelli)).281  The wine register contains 
1,923 names (1,336 PDOs and 587 PGIs),282 of which, there are two third-country names (Vale dos 
Vinhedos (Brazil), and Napa Valley (the United States)).   The spirits register contains 330 names, of 
which, two third-country name (Ron de Guatemala (Guatemala), and Pisco (Peru)), although neither 
has GI status at present.283  One foreign GI has been registered since 2009 :  the Commission noted 
that is only a few applications from third countries have been received, and none has been rejected.284  
There were no application from third countries for wines or spirits during the review period.   
256. A large number of third-country GIs are protected  through bilateral agreements that the EU 
has signed with its trading partners.285  In July 2010, the EU and Switzerland concluded negotiations 
on an agreement, covering GIs for agricultural pr oducts and foodstuffs (800 EU GIs and 22 Swiss 
GIs) registered before 15 September 2009; GIs fo r wine and spirits have been protected since 2002 
under the agricultural trade agreement.  The agreement is waiting to be ratified by both sides.  The EU 
and China are also moving towards more GI protec tion.  A "ten plus ten project" was initiated in 
2007, under which, ten EU GIs are to be protected on the Chinese market, and ten Chinese GIs are to be protected on the EU market.  EU-Chi na bilateral negotiation on GIs are ongoing.
286  
257. Under the Community Trade Mark Regulation, GIs can be protected as Community collective 
trade mark.287  Marks that identify the geographic origin of a product may be registered, as long as 
they have not become generic in the trade concerne d.  A collective trade mark may be applied for by 
associations of manufacturers, producers, suppliers of services, or traders, and may be used only by members of such associations.  Community trad e marks do not serve to identify the quality of a 
product. 
                                                      
280 WTO document WT/TPR/M/214/Add.1, 2 July 2009. 
281  DOOR online information. Viewed at: http ://ec.europa.eu/agriculture/quality/door/list. 
html;jsessionid=2Wg7M46QnnBr6S1xFpp2zpX1syFmrcBQQhSp7ck0T53DWT8BTLpM!461975886. 
282 European Commission online information.  Viewed at:  http://ec.europa.eu/agriculture/markets/ 
wine/ e-bacchus/index.cfm?even t=statistics&language=EN. 
283 European Commission online information.  Viewed at:  http://ec.europa.eu/agriculture/spirits/. 
284 WTO document WT/TPR/M/214/Add.1, 2 July 2009. 
285 These are agreements with Albania (wine and spirits, 2006), Australia (wine, signed in 2008 and 
entered into force in 2010), Bosnia and Herzegovina (w ine, spirits and foodstuffs, 2008), Canada (wine and 
spirits, signed in 2003 and entered into force in June 2004), Chile (wine and spirits, 2002), Croatia (wine and 
spirits, 2001), former Yugoslav Republic of Macedonia (wine and spirits, 2001), Mexico (spirits, 1997), 
Montenegro (wine, spirits and foodstuffs, 2008), Serb ia (wine, spirits and foodstuffs: Interim Agreement on 
Trade and Trade Related Matters in fo rce since 2010), South Africa (wine and spirits, 2002), and South Korea 
(wines, spirits, foodstuffs, signed in October 2010 and entered into force in July 2011).  
286 See Agra-net.com online news, 22 March 2011, "EU and China move GI protection forward". 
287 WTO document WT/TPR/M/214/Add.1, p. 142, 2 July 2009. WT/TPR/S/248 Trade Policy Review 
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258. GIs may also be protected and enforced through labelling rules, unfair competition law, 
Customs law, trading standards, and other IPR system s applied in the EU and at national level in the 
member States.  Some member St ates operate specific GI systems covering products that the EU 
system does not cover (such as handicrafts), and ag ricultural product GIs that are pending registration 
in the EU register.  For the latter, Member Stat es provide temporary protection within their national 
territory. Once the agricultural pr oduct GI is entered in the EU register, only the EU system gives 
legal protection to the name.  Among others, the Eur opean Court of Justice confirmed the exclusivity 
of the EU system to provide legal GI protection fo r registered names in its ruling of 8.9.2009 in case 
C-478-07 ( Budějovický Budvar National Corpor ation v Rudolf Ammersin GmbH , OJ C 22, 
26.1.2008).  The EU has taken steps to increase the visibility of the EU scheme by requiring the EU 
logos or scheme name to appear on labelling.   These provisions are optional for third-country GIs 
registered in the EU. 
(c) Enforcement 
259. Enforcement of IPRs in the EU is based on the 2004/48 IPR Enforcement Directive and the 
2001/29 Copyright Directive, and as regards enforcem ent at the EU borders, Council Regulation (EC) 
No. 1383/2003 and implementing Commission Regula tion (EC) No. 1891/2004 (Table AIII.2).  Law 
enforcement authorities other than the Customs are assigned to conduct internal control on IPR 
enforcement within member States' territories.  
Customs 
260. At the external border of the EU, Customs au thorities 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:  applications have been growing over the years, 
and in 2009, less than 10% of cases were initiated ex-officio.288  However, Customs may also act ex-
officio if they have sufficient grounds for suspecting that goods infringe an IPR.  The Customs authorities then notify the detention/suspension to the importer and the right holder.  The right holder must submit an application for action within three working days of receiving the notification.  If no 
application is submitted within this  period, the goods are released.
289   
261. In 2009, there were over 43,500 cases of goods being detained by Customs, totalling 118 
million articles (Table III.13).  In almost half  of these detentions, the goods were destroyed 
immediately and in around a quarter of cases, a c ourt case was initiated to determine the infringement.  
In 12% of the court cases initiated, the goods we re released because they appeared to be non-
infringing original goods, or because no action was take n by the right holder after notification by the 
Customs authorities.  In 85% of the cases, Cu stoms action began while the goods were under an 
import procedure;  in 9%, goods were discovered while in  transit to the EU, and in 3.5% in transit to a 
declared destination outside the EU.   
262. In May 2010, Brazil and India both requested c onsultations with the EU and the Netherlands 
regarding the Customs treatment of medicines in transit through EU ports, produced in India and 
destined for developing countries.  The suspension of release by certain EU Member States' Customs 
authorities was based on grounds of alleged infringement of intellectual property rights in the transit 
                                                      
288 European Commission (2010c). 
289 WTO document WT/TPR/M/241/Add.1, p. 421;  and Council Regulation (EC) No 1383/2003 of 
22 July 2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights
. European Union WT/TPR/S/248 
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country, which is provided for under Council Regula tion (EC) No. 1383/2003 and the national law of 
the Member States concerned (Chapter II(3)).290 
263. Under the EU Customs Action Plan to combat IPR infringements for 2009-2012, a priority of 
the Commission and member States is to strengthen Customs enforcement.291  I n  t h i s  c o n t e x t ,  i n  
March 2010, the Commission opened a consultati on process to review Council Regulation (EC) 
No. 1383/2003, 22 July 2003.  The Commission intends to submit a proposal for a revised Regulation 
in 2011.292  The draft Regulation aims to strengthen Cu stoms enforcement of IPRs, while ensuring 
streamlining of procedures.  In December 2010,  the Commission also submitted a report on the 
application of Directive 2004/48/EC.  The report c oncluded that the Directive provided a solid basis 
for the enforcement of IPRs in the internal mark et, and led to considerab le improvement of the 
national legal framework.  However, the same report  also called for further clarifications of its 
provisions, because member States (and the courts) have different interpretations.293  In January 2011, 
the Commission launched a consultation on the Commi ssion report on the enforcement of intellectual 
property rights, aimed at identifying additional issues that should be addressed in the context of a 
possible review of the Directive.294 
Table III.13   
Enforcement of intellectual property rights, 2007-09  
 2007 2008 2009 
Customs actions    
  Applications by right holders 10,260 12,866 14,797 
Number of cases 43,671 49,381 43,572 
Number of articles  79,076,458 178,908,278 117,959,298 
                                                                                                              Breakdown of case s in 2009             (%)  
IP right in relation to detained articles Trade mark 90.05 
Patent 4.99 
Copyright/related right 3.57 
Design and model right 1.32 
Plant variety right 0.05 
 Protected designation of origin 0.00 
Results Destruction of goods 47.44 
Court case initiated 23.22 
No action undertaken 6.11 
Pending case 5.05 
Original goods 4.34 
Settlement out of court 0.07 
Data not available  13.78 
Table III.13 (cont'd) 
                                                      
290 WTO documents WT/DS408/1, and WT/DS409/1, 19 May 2010. 
291 OJ C 71/1, 25 March 2009. 
292 European Commission (2010a). 
293 European Commission document COM(2010) 779 final, 22 December 2010.  Viewed at:  http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0779:FIN:EN:PDF. 
294  Europa online information. Viewed at:  http://ec.europa.eu/internal_market/consultations/ 
2011/intellectual_property_rights_en.htm. WT/TPR/S/248 Trade Policy Review 
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Breakdown of cases in 2009             (%)  
Cases per procedure Imports 85.43 
Transit EU 8.98 
Transit 3.49 
Smuggling 0.82 
Warehouse 0.64 
Transhipment 0.33 
Export 0.31 
Re-export 0.01 
Top 4 categories of products  Cigarettes 19 
Other tobacco products 16 
Labels, tags, and emblems  13 
Medicines and other products 10 
.. Not available. 
Source:   EU (2010), "Report on EU Customs Enforcement of Inte llectual Property Rights:  Re sults at the EU Border – 
2009". Viewed at:  http://e c.europa.eu/taxation_customs/resources /documents/customs/customs_controls/ 
counterfeit_piracy/stati stics/index_en.htm. 
EU Observatory on Counterfeiting and Piracy 
264. Although all goods entering or leaving the EU are potentially subject to examination, 
Customs may only examine a small part.  Therefore,  Customs has to rely on information given by 
right holders to identify infringing goods.  Information on production, transport, and physical 
characteristics of the original goods is also important.295  Thus, IPR enforcement requires coordination 
between public administrations and businesses. For this reason, the European Observatory on 
Counterfeiting and Piracy was set up as a platform to exchange information. 
265. The Observatory was officially launched in 2009,  as a pan-European platform to help combat 
counterfeiting and piracy with European and na tional representative associations from the main 
sectors affected by and most active in fighting c ounterfeiting and piracy.  Currently, the Observatory 
comprises representatives from over 40 private stakeholders, 27 member States, and the Commission.  
Its role was agreed by its private sector stakehol ders and the member States and is based on the 2008 
Council Resolution296, the Commission's Communication on enhancing the enforcement of 
intellectual property rights in the internal market297, and the subsequent Council Resolution of 
1 March 2010 on the enforcement of IPR in the internal market.298 
266. A 2010 study on rapid information exchange systems for enforcement provides a comparative 
assessment of e-government initiatives at national and Eu ropean levels and an assessment of needs for 
administrative cooperation and information shari ng on counterfeiting and piracy.  The Commission 
also published a Study on Online Copyright Enforc ement and Data Protection in Selected Member 
                                                      
295 WTO document WT/TPR/M/241/Add.1, 2 July 2009, p. 423. 
296 "Council Resolution of 25 September 2008 on a comprehensive European anti-counterfeiting and 
anti-piracy plan", 4 October 2008. Viewed at:  http://eur-lex.europa.eu/LexUriServ/LexUriServ. 
do?uri=OJ:C:2008:253:0001:0002:en:pdf. 
297 European Commission document COM(2009)467 final, 11 September 2009.  Viewed at:  http://eur-
lex.europa.eu/lexuriserv/lexuriserv.do?uri=com:2009:0467:fin:en:pdf. 
298 "Council Resolution, On the Enforcement of the Intellectual Property Rights in the Internal market", 
6 March 2010. Viewed at:  http://eur-lex.europ a.eu/LexUriServ/LexUriSe rv.do?uri=OJ:C:2010:056: 
0001:0004:en:pdf. European Union WT/TPR/S/248 
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States.  In addition, the Directorate General for the Internal Market launched a tender for a compre-
hensive study that, through defining a methodology,  would quantify the scope, scale and impact of 
counterfeiting and piracy on European internal market .  This study will be the first stage aiming to 
develop evidence-based policies in the area of intellectual property rights.299  The study is due for 
completion at the end of 2011. 
267. The Commission is expected to adopt a revised strategy for the protection and enforcement 
of IP rights in third countries, by the end of 2011, based on a recent study300 assessing the 
implementation of the initial (2004) strategy301, and on additional inputs including a public 
consultation. 
International cooperation in IPR enforcement 
268. The EU continues to fight against counterfe iting and piracy, both unilaterally, and through 
bilateral, regional, and multilateral agreements. Detailed IPR clauses, particularly on enforcement and 
border measures, are included in several trade agreements concluded or  negotiated by the EU. 
269. The EU has signed free-trade agreements (FTAs)  with Chile, Mexico, and South Africa, and 
since 2007 the Commission has proposed a new generation of FTAs with detailed provisions for IPR enforcement.  The first of the new generation of FTAs, with South Korea
302, was completed and 
signed in 2010.  The EU also concluded FTAs wi th Central America, Colombia, and Peru, which 
include detailed provisions on effective protection and enforcement of IP rights.  A similar approach 
is being followed in on-going FTA negotiations w ith India, MERCOSUR, and Singapore and in non-
preferential cooperation agreements with China and Russia. 
270. The EU also signed Economic Partnership Agreem ents (EPAs) with the African, Caribbean, 
and Pacific (ACP) group of countries.  However,  in 2009, only one full EPA (EU-CARIFORUM) and 
a few interim EPAs had entered into force (Chapter  II (4)).  Negotiations are ongoing for most other 
EPAs.  Nine Partnership and Cooperation Agreemen ts (PCAs) were concluded during 1997-99 with 
countries from Eastern Europe, the So uthern Caucuses and Central Asia.   However, it remains unclear 
to the Secretariat to what extent these ag reements cover IPRs and IPR protection.  
271. In parallel, enforcement and cooperation activities are being reinforced bilaterally, for 
example with Argentina, Brazil, China, Russia, Tha iland, and Ukraine, to tackle problems raised by 
EU right holders.  These activities include structured IP dialogues, as well as dedicated action plan with China focused on enhancing Customs cooperati on in IPR enforcement, to reduce the amount of 
counterfeit and pirated goods traded bilaterally. 
272. The EU is also a major participant in the ne gotiations for a plurilateral agreement: the Anti-
Counterfeiting Trade Agreement (ACTA).  Discussi ons on this agreement began in 2007 and formal 
negotiations were launched in June  2008.  On 3 December 2010, the final text of the agreement was 
                                                      
299 EU online information.  Viewed at:  http://ec.europa.eu/internal_market/iprenforcement/ 
observatory/ index_en.htm. 
300 ADE (2010). 
301 OJ C 129/3, "Strategy for the en forcement of intellectual property rights in third countries", 
26 May 2005.  Viewed at:  http://trade.ec.europa .eu/doclib/docs/2010/december/tradoc_147070.pdf. 
302 European Commission Press Release, "EU-Korea Free Trade Agreement on line".  Viewed at:  
http://trade.ec.europa.eu/doclib/press/i ndex.cfm?id=443&serie=273&langId=en. WT/TPR/S/248 Trade Policy Review 
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submitted for signature by each party.303  According to the EU, th e ACTA aims to "improve 
international standards on the actions ag ainst large-scale infringements of IPR".304  Its goal is pursued 
through three primary components:  (i) internationa l cooperation;  (ii) enforcement practices;  (iii) 
legal framework for enforcement of IPR.  The EU nego tiators stated that the ACTA is entirely in line 
with the EU acquis  and does not therefore require any changes to EU legislation. 
                                                      
303 European Commission online information, "The An ti-Counterfeiting Trade Agreement".  Viewed at:  
http://trade.ec.europa.eu/ doclib/docs/ 2010/decem ber/tradoc_147079.pdf. 
304 WTO document WT/TPR/M/214/Add.1, 2 July 2009.