# EUR-Lex - 52014DC0368 - EN

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# 52014DC0368

**COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Regulatory Fitness and Performance Programme (REFIT): State of Play and Outlook /* COM/2014/0368 final */**

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Communication from the Commission to the European
Parliament, the Council, the European Social and Economic Committee and the
Committee of the Regions

Regulatory Fitness and Performance Programme (REFIT):
State of Play and Outlook

I. 
Introduction

European
Union regulation plays a key role underpinning growth and jobs. Businesses need
the EU to ensure a level playing field and facilitate competitiveness. The
public looks to the European level to protect their interests, whether in regard to health and safety, the quality of the
environment, the right to privacy and so on. One
common rule to apply in all Member States can be much simpler and more
efficient than a complex web of varying rules on the same subject-matter at
national and regional level. The challenge is to keep this legislation simple -
not to go beyond what is strictly necessary to achieve policy goals and to
avoid overlapping layers of regulation.

The
European Commission is meeting this challenge through
its Regulatory Fitness and Performance Programme (REFIT) which
commits to a simple, clear and predictable
regulatory framework for business workers and citizens.[1]
This programme aims to cut red tape, remove regulatory
burdens, simplify and improve the design and
quality of legislation so that the policy objectives are achieved and the benefits of EU
legislation are enjoyed at lowest cost and with a minimum of administrative burden, in full respect of the
Treaties, particularly subsidiarity
and proportionality. Under REFIT, the Commission is screening the entire stock
of EU legislation on an ongoing and systematic basis to identify burdens,
inconsistencies and ineffective measures and identified corrective actions.

In the October
2013 Communication on REFIT[2], the Commission set out
an ambitious agenda.  It
identified areas where initiatives foreseen would not be taken forward. It
withdrew a number of proposals that had been long blocked in the legislature
and repealed a number of pieces of legislation. In total, over 100 actions were identified, half of which were new proposals
aimed to simplify and
reduce regulatory burden
in existing legislation. The other actions are Fitness Checks and evaluations designed
to assess the efficiency and effectiveness of EU regulation and prepare future
burden reduction
initiatives.

The Commission
has delivered on these commitments. This Communication reports on the state of play in implementing
the REFIT programme and identifies new actions. It indicates how the Commission is further strengthening
its horizontal regulatory tools - impact assessment, evaluation and stakeholder
consultations. It also looks at how EU institutions, Member States and
stakeholders in business and civil society are playing their part in exercising this
shared responsibility for Regulatory Fitness. REFIT actions - withdrawals, amendments and repeals
- reinforce the broader benefits that regulating at EU level can bring by
replacing 28 different national measures by one EU measure, leading to a
simpler regulatory environment for businesses and citizens across Europe.

The
Communication is accompanied
by a detailed scoreboard setting out the state of play in the implementation of
each individual REFIT initiative and an indication of further action. The
scope for new action is influenced by the timing of this report. New
commitments will carry-over into the next
mandate and have been
considered carefully in this context.

II. 
Implementation
of the Regulatory Fitness and Performance Programme (REFIT)

The
swift and thorough implementation of REFIT is a priority for the Commission and
considerable progress has been made in the preparation of proposals, their
adoption by the European Parliament and the Council and their implementation by
Member States. The following takes stock of these actions.

· 
Action taken by
the Commission

Most of the legislative
proposals for simplification and burden reduction identified in last October's
REFIT Communication are planned for adoption this year.[3]
Important simplification proposals for business, such as the introduction of a
standard EU VAT declaration[4] and the improvement of
the European small claims procedure[5] have already been tabled by the Commission and are awaiting
decision of the legislator.

The
Commission formally approved 53 withdrawals of pending proposals after
consultation of Parliament and Council, including all nine REFIT initiatives,
including those on simplification of VAT obligations, the statute of a European private
company[6] and on the protection of soil.[7] The Commission decided not to present a number of proposals
during its current mandate on which it had been working[8]
and is preparing repeals as foreseen[9].

Work
has started on the Fitness Checks in the legislative areas of waste, the
protection of birds and habitats (Natura 2000),
passenger ship safety
and the General Food Law. They will provide the basis for further initiatives
for simplification and regulatory burden reduction in the respective areas,
including the reduction and streamlining of reporting obligations.

Fitness Check on the General Food Law: The FC will examine the key principles of the
framework regulation as well as its implementation through subsequent
regulations and administrative action. It will focus on relevance, EU value
added, effectiveness, efficiency and coherence. Aspects of food security will
also be covered. The Fitness Check is e
an example of
joint evaluation work between the Commission and Member States.[10]

The
Commission applies the Think Small First principle[11] and
has also taken action to apply lighter regimes for SMEs and exemptions for
micro-companies wherever appropriate. Seventeen REFIT actions in the scoreboard
contain exemptions for micro-companies and lighter regimes for SMEs. In
addition, fees for micro-companies for registration and authorization were
reduced in the areas of chemicals, health and consumer protection.

The
REFIT Communication of October 2013 recognised that, given the length of the
legislative process, all efforts should be made to provide immediate relief of
burden within the existing regulatory framework, with a particular focus on supporting SMEs. This is
being done in the area of food information to consumers[12],
for example, where food
business operators and in particular SMEs have difficulties to identify which
rules (EU and/or national; general or food category specific) apply to their particular
situation. The Commission has published guidance documents and is working on a database on EU and national labelling
requirements.[13] This should help food business operators to quickly identify which requirements
are applicable to them.

Additional
initiatives are being taken to better use the internet to simplify and improve the
implementation of regulatory requirements to the benefit of administrations,
businesses and consumers alike. Building on the experience with energy
labelling which is now uniformly presented in online sales a similar approach
is being explored in the field of food information to consumers, for example.

Finally,
legislation on food information to consumers includes exemptions, lighter
regimes for small quantities and retailers[14]
and flexibility provisions which allow Member States to adapt labelling
provisions to the specific needs of SMEs.[15]
The legislation also foresees one standard application date for new measures in
every calendar year and generous transition measures. All of these efforts
should facilitate improved implementation within the existing legal framework.

• 
Action taken by
the Legislator

Since
October 2013, the legislator (Parliament and Council) has adopted a number of
important proposals for simplification and burden reduction: The amended
Directive on recognition of professional qualifications will simplify
recognition procedures and facilitate the access to information[16]; the new legal framework for public procurement
contains measures to make procurement easier and administratively less
burdensome and promotes electronic procurement. The new regulation on tachographs reduces administrative burden and improves
enforcement through the introduction of "digital tachographs" linked to satellite navigation
systems and control authorities. To accommodate the specific situation of
craftsmen, vehicles of less than 7.5 tons driving
within a limited range of 100 km from the craftsmen's base of activity were
taken out of the scope of the social and tachograph rules.

These proposals should
bring substantial cost savings to SMEs. The Regulation on the simplification of
prospectus and disclosure requirements in relation to the Internal Market of
securities[17], for example would
save 20% or between 20.000
and 60.000 EUR per prospectus. The legislation on the digital tachograph[18] would
entail a cost reduction of
20% or 415 million EUR in total.

Public Procurement: New public procurement Directives were adopted in
February this year and enter into application from April 2016. They encourage
increased use of e-procurement and further measures to reduce regulatory burden
and simplify access of SMEs through reduced requirements for the provision of
authentic documents and promotion of smaller procurement parcels. For example, the Commission estimates that increasing the use of
self-certifications could reduce administrative burden on firms by €169 million[19], the overall savings through e-procurement could amount to
between 5% and 20% of procurement costs.[20]

At the same
time, there are also cases where cost savings projected at the stage of impact
assessment could not be delivered due to amendments in the legislative process,
such as regarding producer registration in the context of waste of electrical
and electronic equipment.[21] Simplifications in environment proposals on waste
shipment and environmental impact assessment were not supported by the
legislator.[22] Combating late payments in
commercial transactions, company accounting requirements, collection of statistics[23], co-ordination on VAT
and simplification of VAT obligations are also areas where Member States have been
reluctant to reduce burdens, citing subsidiarity or additional national policy
justifications.

Furthermore, a
number of important simplification proposals with significant savings are still
pending adoption by the legislator: for instance the Commission proposal for a
common set of rules to calculate the corporate tax base which would
considerably reduce tax compliance costs of businesses operating in the Single
Market.[24] There are also other cases where current discussion
in the legislative process could result in a reduction of estimated savings.  For
example, savings to business estimated at 15 billion EUR per year, included in
the Commission's proposal for an EU standard VAT declaration
risk being substantially diminished if certain changes discussed in Council are adopted.

• 
Action taken by Member States

Member States
have the important
responsibility of the timely implementation and
full application of EU Law. In that regard, it is up to Member States
authorities to use simplification options offered by
EU legislation and ensure that EU laws are applied
on the national, regional and local level as effectively and efficiently as possible.
It is estimated that up to one-third of administrative burden linked to EU
legislation stems from national implementing measures.[25]

An example
of significant variations in Member State practice is the area of public
procurement where a recent evaluation found that the typical duration of a
procurement procedure varied between 11 and 34 weeks, while the average cost in
person days of work varied by a factor of four between different Member States.[26]
Another example concerns the environmental impact assessment process, where the
average duration of the process in the Member States varies between less than 5
and 27 months, and the average direct cost to developers varies between less
than 4,000 and 200,000 EUR per project.

Several
Simplification proposals in the areas of customs enforcement of intellectual
property rights (IPR) and take-back of electronic waste (WEEE) have entered
into force in early 2014. The IPR Regulation[27]
will reduce administrative burdens and costs, enable better risk management and
improve the enforcement of intellectual property rights. The WEEE Directive[28]
provides an exemption of small retailers from the take-back obligation for
electric and electronic waste. It is important that all Member States fully
implement and take advantage of the simplification and burden reduction provisions
in these proposals.

There are however significant examples where Member States do not use
simplification options offered by EU legislation or burden is added through
national regulation in areas not directly covered by EU rules. This is the
case, for instance, in the area of food safety, where optional lighter regimes for small
establishments are not always used,[29] in the area of road freight
transport, where some
national requirements for recording of driving time for light commercial
vehicles in areas not covered by EU law add regulatory burden for small
companies,[30] and in company accounting requirements[31].
Significant benefits can also be brought for SMEs through full use by Member
States of the flexibility allowed under the regulation on how food information
is provided to consumers. The Commission will monitor the implementation
practice by Member States of these and all other REFIT actions and include the
state of play in the next edition of its scoreboard planned for 2015.[32]

While the
Commission works closely with Member States on implementation across all sectors
of the acquis, monitoring horizontal regulatory impacts has developed alongside
the increasing focus on regulatory fitness. It has started, for example, under
the Administrative Burden Reduction Plus Programme (ABR+)under which the Commission
is following up on the implementation choices of Member States regarding the 12
most advanced priority measures[33] taken within the Administrative Burden Reduction
Programme between 2007 and 2012.[34] The purpose of this exercise is to share best
practice in implementation and to verify whether the estimated reduction in
administrative burdens have been achieved on the ground. Initial findings indicate
that estimations of savings can be confirmed in some Member States in the areas
of Intrastat, the Industrial Production Survey and the Digital Tachograph. However,
difficulties have been encountered in obtaining sufficient and consistent quantitative
data and statistics, and relatively few examples of best-practice in
implementation and opportunities for further simplification at national level
have been received. Strong support has been expressed in the Group of High
Level National Regulatory Experts for this collaborative follow-up between
Commission and Member States on the practical impact of EU regulation
on-the-ground. The Commission continues to work with Member States and stakeholders to produce more sound information on the impacts of EU regulation. The
results of this work will feed into the next REFIT scoreboard.

III. 
Future
REFIT initiatives

Keeping
EU legislation 'fit for purpose' requires continuous efforts. For this reason,
the Commission implements REFIT as a rolling programme and recently
updated the mapping and
screening exercise of the EU's legislative stock which was first carried out
under REFIT in 2013. The comments and suggestions by various stakeholders to
the Commission's REFIT agenda received since October 2013 were also
taken into consideration.[35]

On
the basis of this analysis, the Commission considers that new initiatives for
simplification and burden reduction are warranted in several areas. These
initiatives include the simplification of EU legislation on identity and travel
documents, the development of a new comprehensive architecture for business
statistics (see below), the extension of the one-stop-shop in the area of VAT
to all business to consumer supplies[36]
together with the development of an EU VAT Web portal to inform businesses
about national and EU VAT rules and
the codification of legislation on third country listings for visa requirements[37].

A new Architecture for EU Business Statistics: The Commission is working to streamline
the reference framework and simplify data collection for business statistics. In response
to business complaints, a project on intra-EU trade statistics (SIMSTAT) has
been launched.  It will test new data
collection techniques which should facilitate better use of statistical data
which has been collected, thereby simplifying and reducing reporting
obligations for business.  This cost-effective approach has the potential to be
implemented in other statistical domains (e.g. statistics on multinationals,
international trade in services and foreign direct investments) and will be
rolled out, if tests are positive within the broader Framework Regulation Integrating Business
Statistics (FRIBS).

The
Commission will prepare repeals of legislation in further areas: energy
labelling,[38] transport rates and conditions,[39] the Common Agricultural Policy and in relation to standardized
reporting in the area of environment. In addition, the
Commission is also screening the acquis in respect of police cooperation and
judicial cooperation in criminal matters to identify acts which could be
repealed in the context of the expiry of the transitional period set out in the
Treaties.[40]

The
Commission considers it good legislative management to withdraw proposals that
do not advance in the legislative process, in order to allow for a fresh start or for
alternative ways to achieve the intended legislative purpose. A close scrutiny
of all pending proposals before the legislator has resulted in the
identification of further proposals which are either outdated or without support
by the legislator and should therefore be suggested for withdrawal. These
include proposals on investor compensation schemes, aviation security charges,
pregnant workers[41], a compensation fund for
oil pollution damage and exempting micro companies from certain food hygiene
provisions, even though the latter would have brought significant benefits for
smaller businesses.[42]

Given
timing considerations relative to the new legislature, the
current Commission will
focus on key items in 2014. The Commission has screened its planning agenda and
decided to retain only the most essential items.

Finally,
the Commission envisages launching over the medium
term several new
evaluations and Fitness Checks of the performance of existing EU regulations
and the application of Treaty law, including on consumer protection on
timeshares, late payments, the legal framework for pre-packaging, the design
system in the EU, the Directives on Prospectus, the application of the mutual
recognition principle in view of improving its functioning in the internal
market[43],  carbon capture and
storage and CO2 emissions
of light commercial vehicles and passenger cars, telecoms,  and legislation on
unauthorized entry, transit and residence[44].

In other
key areas where wider policy reviews are in preparation such as the Digital
Single Market, it will be important to identify the remaining barriers and
assess the regulatory framework for costs and simplification potential.[45]
There is a clear REFIT aspect to these types of exercises.

All
new initiatives are set-out indicatively in the Staff Working Document and are
subject to confirmation in the Commission Work Programme for 2015.

Chemicals Legislation: The Commission considers that a continued effort is needed
at EU, Member State and stakeholder levels to further facilitate the
implementation of legislation on chemicals, notably REACH, and to reflect on
specific areas where rules can be simplified and burdens reduced. This
needs to be done in such a way as to achieve a high level of protection of
health and of the environment, while at the same time maintaining the
competitiveness and innovation of European industry in this area, as well as the free circulation of goods in the
Internal Market. The Commission review of REACH[46] in 2013 identified some needs for adjustments, but concluded positively on the functioning of this
legislation and that it need not be amended at this point. However, the
Commission recognises the need to reduce the financial and administrative
burden of REACH on SMEs and to improve its
implementation
at all levels.

A number of corrective actions have already been implemented for
this purpose including a substantial reduction of fees.
New measures are
being taken in 2014: specific assistance to SMEs to meet the 2018 registration
deadline for small production volumes; identification of more efficient ways of
managing substances of very high concern and of identifying alternatives to
hazardous chemicals; improving communication with SMEs; and analysis of impacts of REACH on SMEs and on competitiveness
and innovation. In the medium term, other measures are being considered to
improve the authorization process of chemical substances to make it more
predictable for business. These measures include for example, reducing the frequency
of amendments of the list of substances
subject to authorization,
simplifying the authorisation process for some specific low-risk cases and a
stronger consideration of socio-economic impacts when including new substances
in the authorisation list.[47]

It is important that industry and Member States play their active
roles in implementing REACH. This could include, for instance, increasing the
capacity of national helpdesks and/or chambers of commerce advising on REACH
implementation as well as ensuring a better level of coordination between and
within Member States.

A package of initiatives covering regulatory fitness of the
chemical sector will be launched in 2014, including a Cumulative Cost
Assessment and a Fitness Check of the most relevant chemicals legislation other
than REACH.

The conclusions of the various strands of this work including the
ongoing evaluation of the occupational health and safety legislation and the
results of the earlier REACH Review will provide a complete picture and an
outlook on any further possibilities to improve regulatory fitness in this
area. The Commission invites stakeholders and Member States to enter into a
joint reflection on these questions and feed into a stock-taking report foreseen
for 2016.

IV. 
Horizontal
actions

REFIT is part of
the Commission's wider smart regulation policy which also includes the regulatory
tools of impact assessment, stakeholder consultation and evaluation. The
Commission is committed to further strengthening these instruments and other
horizontal actions, including a stronger focus on the
assessment of costs and benefits of regulation and the reduction of administrative obligations, such
as reporting requirements.[48]

• 
Impact
Assessment

The Commission's
impact assessment (IA) system operates at an early stage of the policy cycle,
when new proposals are being developed to establish an evidence-base for
informed policy making and to ensure that Commission proposals comply with the
principles of subsidiarity and proportionality. The system has undergone continuous
strengthening and improvement
since it was set up in 2002 such as the publication of revised guidelines in 2009 and
complementary guidance in various areas (competitiveness and micro-enterprises, fundamental
rights, social and territorial impacts). The evidence-base –
better data and scientific advice – is being
continuously strengthened in the IA process. To facilitate the quick identification of IA results,
including benefits and costs, the Commission introduced a standard two-page
summary sheet in its impact assessment reports in 2013. Building on experience
gained (over 350 impact assessments since 2010), the Commission has committed
to update its IA guidelines and will seek stakeholders' views through a public
consultation which will be launched in June 2014.

• 
Ex-Post Evaluation

Systematic
ex-post evaluation of EU regulation verifies whether the expected results and
impacts of EU regulation have been achieved. Evaluation planning has been
improved with the planning of evaluations being published on Europa.[49] In order to further strengthen evaluation policy and
practice, the Commission carried out a public consultation of its new
evaluation guidelines between November 2013 and February 2014. The results will
feed into the upcoming revision of the evaluation guidelines.[50] These will include reference to Fitness Checks which
were introduced in 2010 as comprehensive policy evaluations assessing coherence
and consistency between and within regulatory areas and whether a larger
regulatory framework for an entire policy sector is fit for purpose. Fitness
Checks have since been completed in several policy areas, such as environment
(EU Freshwater Policy), employment and social policy (Information and
Consultation of Workers), industrial policy (Type-approval of Motor Vehicles)
and transport (Internal Aviation Market)[51] and can lead to the preparation of several
legislative proposals for simplification and burden reduction.[52]

• 
Stakeholder
consultation

Dialogue with citizens, social partners and other
stakeholders in business and civil society helps to make sure that EU law
making is transparent, well targeted and coherent. The consultation of social
partners and other stakeholders is enshrined in the Treaties and is
particularly important in relation to detecting issues of proportionality and subsidiarity.[53] The Commission carries out consultations at each
stage of the policy cycle. In order to further strengthen the quality, scope
and targeting of consultations, the Commission will continue to improve its
planning of consultations through the preparation of consultation strategies at
the policy preparation stage and continued publication of its evaluation
planning. It will issue internal guidelines to advise and support Commission
staff carrying out consultations with stakeholders outside the EU institutions
with a view to enhance the quality of consultations. These guidelines will be
put out for public consultation before adoption by the Commission. The
Commission will also continue its efforts to extend the reach of its
consultations through wider language accessibility, within budgetary limits. The
Commission will strengthen the use of consultations in evaluations and Fitness
Checks by applying minimum standards of consultation as it is currently done
for impact assessments.[54] The Commission will
recommend that agencies apply the minimum standards when running consultations.
The Commission is also
considering how to improve public consultations on implementing and delegated
acts.

The Commission will take steps to improve feedback.
Stakeholders can already
react on both the consultation planning on Your Voice in Europe[55] and on roadmaps which are published by the Commission
as early indications on its legislative intentions. An electronic alert system
has recently been introduced.[56] Efforts will be made to
improve the web sites to facilitate those comments and feedback. Individual
replies received from stakeholders will normally be published within 15 working
days of the closure of the
consultation and a summary report will be published at the latest with the
adoption of the proposal by the Commission.
Some Member States are also systematically
collecting comments and suggestions from stakeholders which can provide
valuable inputs to the Commissions efforts for regulatory fitness at the
European level.

The
Commission also plans to bring forward suggestions to extend its outreach to social
partners and stakeholders, particularly small and medium-sized enterprises
(SMEs) through direct contact at conferences in
Member States, and through consultation via European and national SME
associations and the Enterprise Europe
Network.

• 
Measurement of
Regulatory Costs and Benefits

The measurement
of costs and benefits is an important aspect of Smart Regulation.
The Commission has recently
published the results of an external study on methods of assessing
the costs
and benefits of regulation
which will provide
an input to updating the
impact assessment guidelines.[57] The measurement of regulatory costs
and benefits is also a focus
in fitness checks and ex-post evaluations.

In order to assess the variety of regulatory costs incurred
by specific industrial sectors, the Commission undertakes Cumulative Cost
Assessments (CCAs). Two CCAs on the steel and aluminium industries have already been completed,[58] a CCA has started on the chemical industry and more
work is planned for the forest based
industries, the ceramics
and glass industry and the construction sector.
CCAs provide industry-wide assessments of a variety of key cost factors. Given their limited scope and the focus on regulatory costs
rather than benefits, CCAs cannot be the sole basis for policy recommendations.
Their results will feed into evaluations, Fitness Checks and impact assessments.

Measuring
regulatory costs at EU level presents particular challenges as the estimated
costs of legislative proposals by the Commission are often modified through
amendments in the legislative process and depend on implementation choices by
Member States. This implies that the assessment of costs and benefits must be
updated by Parliament and Council if proposals are changed in the legislative
cycle.[59] In addition, the
accuracy of cost and
benefit measurement in impact assessments and ex-post
evaluations depends on the quality of data provided by Member States , social
partners and stakeholders.

The ex-post
assessment of actual costs can show significant variation from the ex-ante
estimate. Costs can be overestimated as can cost savings.[60] In its ex-post evaluation work the Commission is increasingly
looking into the extent to which real costs and benefits match estimates made
in earlier impact assessments.

• 
Reporting
requirements

Reduction
of regulatory burden can be achieved by improving efficiency,
coherence and consistency as
well as reducing reporting requirements.[61] When making new proposals, the Commission strives to
minimise reporting requirements and seeks alignment of different requirements. Actions
to streamline and consolidate reporting requirements should engage the
cooperation of Parliament and Council, as reporting requirements are often
added in the legislative process.[62] Reviews should also be carried out at national,
regional and local levels in order to identify obligations exceeding the
requirements set in EU legislation.

With
regard to reporting to and by the Commission, the Commission has carried out
reviews in the areas of environment[63] and health and safety at
work.[64]
Areas where reporting requirements have been
streamlined include cohesion policy and energy[65].
This work can be extended into other areas in 2015.

V. 
Regulatory Fitness: A Shared Goal

The Commission
welcomes the interest in REFIT by Member States and stakeholders and in
particular the support by the European Council and the European Parliament.[66]

Since the
publication of the Commission's REFIT agenda last October, a large number of
comments, suggestions and contributions have been received by Member States[67] and stakeholders. They have been considered during
the update of the regulatory screening performed under REFIT in 2014 and are
published on the Commission's smart regulation website to inform further joint
reflection, discussion and action.[68]

The Commission
also welcomes the confirmation by stakeholders in business and civil society
that regulatory fitness is necessary and important. As
a response to the concerns expressed by some stakeholders, the Commission reconfirms
that REFIT does not question established policy objectives or come at the
expense of the health and safety of citizens, consumers, workers or of the
environment. It is important to raise awareness so that all stakeholders can
see benefits arising from REFIT, namely that the Commission is trying to make
sure that EU legislative action is taken in an effective and efficient way and
at the right level, with EU added value clearly demonstrated.

Experience in
implementing REFIT has shown that regulatory fitness can only be achieved
jointly by European Institutions, Member States (national, regional and local
level) and stakeholders in business and civil society.  Regulatory fitness
should be given priority and all EU institutions should assess the impacts of
their policy choices whether at the preparation stage or in the legislative
process.  Cooperation with Member States is essential to gather data and assess
whether EU legislation has had expected effects. National Parliaments also have
their role to play in providing input to the Commission at an early stage of
the policy-making cycle and in scrutinising Commission proposals under the
subsidiarity control mechanism.[69] Input from social
partners, stakeholders, NGOs and the general public are also essential to the
maintain momentum on Smart Regulation.

This joint
effort has been supported over recent years from contributions to the Smart
Regulation agenda from two High Level Groups on Better Regulation and
Administrative Burdens. The Commission considers that this support and
expertise can most usefully be combined in one single group, with a revised
mandate to assess the impact of EU regulation on the ground in Member States,
contributing to the results announced annually through the REFIT Scoreboard.
This work could also contribute to the identification of areas of regulation
ripe for evaluation, as well as contributing to evaluations and fitness checks
on selected key issues. A proposal for creating a new High Level group to
accompany future work will be made in the coming months.

VI. 
Conclusions
and Outlook

The Commission
has acted on its Regulatory Fitness commitments since December
2012. This Communication shows the results achieved under REFIT and points to
areas where future efforts should be focused.

Several lessons can be drawn from the experience in implementing REFIT
thus far.

First, smart regulation and regulatory fitness require a firm
political commitment and related adjustment of policies and processes at all
levels - within the Commission, between the European institutions and within
the Member States. Regulatory fitness is not a one-off 'quick fix', or a box
ticking exercise. It demands that administrations be given the mandate and be
equipped to deliver evidence based policy making, with the active involvement
of social partners and stakeholders at all stages of the policy cycle – from
impact assessment to ex-post evaluation.

Second, there is a need for scrutiny of the regulatory processes.
The Impact Assessment Board has provided an essential quality control function.
It has been supported with procedural rules which have ensured that only those
proposals accompanied by a sound impact assessment can be tabled for
consideration by the College. The European Parliament and increasingly the
Council provide another level of scrutiny, assessing the soundness of the
Commission's impact assessment. This is a unique situation – few regulators or
administrations themselves apply or are subject to the same levels of quality
control and scrutiny as the European Commission.  Some suggest that an
additional external quality control entity should be established.  The Commission
does not support this idea since it would interfere with its policy making and legislative
role – for the Commission to make good, well balanced proposals it must carry
out its own impact assessments. Once the Commission has published its
assessments they are available for full public scrutiny and comment.

Third, experience shows that quantification – looking at costs and
benefits - is a necessary part of regulatory assessment. However, the limits of
quantification also need to be recognised. The Commission systematically
examines costs and benefits in its impact assessments which cover economic,
social and environmental impacts in an integrated manner. It quantifies these
when possible. Neither cost nor benefit calculation is an exact science. Often,
needed data is not available. The expected costs and benefits of the preferred option emerging from the impact assessment will go up or down depending
on the choices made by the European Parliament and the Council in the
legislative process and by the Member States in implementation. Actual costs
can only be calculated ex-post. As a consequence, one focus in REFIT should be
on quantifying costs and benefits to the extent possible throughout the
regulatory cycle through the application of sound monitoring and evaluation frameworks,
reviewed and adjusted with each significant revision of the legislation, which
will ensure availability of the necessary data when it comes to assessing real
costs and benefits.

Fourth, the need for legal certainty and predictability combined
with the length of time it takes to change legislation at EU level argue
against quick fixes and catchy schemes for legislative reduction.  Every change
has a cost and the transitional cost of change is not always sufficiently taken
into account. Transition costs have to be carefully weighed against the costs
of inaction.

Fifth, the detection of unnecessary burden and cost by those
directly affected by legislation can be an important complement to quantitative
assessment. Consultation and debate are therefore essential.

Taking these observations
into account, and looking to the future, the Commission will continue to give priority to and
keep up the momentum on regulatory fitness. It will continue to focus on areas
of significant EU value added respecting the principles of subsidiarity and
proportionality. It will complete the preparations for the revision of its
guidelines on impact assessment, stakeholder consultation and evaluation in the
coming months. It will firmly anchor REFIT in the Commission's procedures and
practices.

The Commission will continue to work closely with Parliament and
Council to ensure that benefits in simplification and burden reduction are
confirmed in the legislative process and calls upon the legislator and upon all
Member States to develop sufficient capacity to contribute to these efforts in their
respective areas and to carry-out ex-ante impact assessments of significant
amendments to Commission proposals in the legislative process.[70]

The Commission
will also continue to work with Member States and stakeholders, notably within
the ABR+ Programme, to confirm estimated cost savings, to identify best practice in implementation
and to improve the quality and collection of data on regulatory costs and
benefits needed for assessing impacts of EU regulation on-the-ground.[71]

Cooperation
between the European Commission and the Member States on evaluation and
assessment of regulatory costs and benefits should be strengthened. Collaborative
efforts in assessing implementation of EU legislation at national, regional and
local levels should be launched.

The new mandates
for Parliament
and Commission starting this year offer an opportunity for all EU institutions
to strengthen their commitment to smart regulation and regulatory fitness.

The Commission
invites input, data and evidence from social partners and stakeholders on the
state of play and outlook on REFIT presented in this Communication and in the
accompanying staff working document.

[1] SWD(2013)401final of 1 August 2013

[2] COM(2013)685final of 2 October 2013.

[3] Out of a total of 23 proposals the Commission committed to make in
order to simplify and reduce regulatory burden, 2 were adopted in 2013 and 15
more are planned for adoption in 2014.

[4] COM(2013)721

[5] COM(2013)794.

[6] The proposal for a Single-Member Company adopted on 9 April 2014
takes up substantial elements of this earlier proposal.

[7] Other proposals withdrawn under REFIT
included proposals regarding information to the general public on medicinal
products, for a regulation on European statistics on safety from crime, on the
legal protection of designs, the Community patent (proposal converted into
enhanced cooperation) and on driving licenses with the functionality of a
driver card.

[8] This concerned the areas of occupational safety and health for
hairdressers, muscular skeletal disorders, environmental tobacco smoke and
carcinogens and mutagens.

[9] This includes legislation on the classification, packaging and
labelling of dangerous preparations, the scientific cooperation on questions
relating to food, steel statistics, the cooperation between Financial
Intelligence Units and retrofitting of mirrors to heavy goods vehicles.

[10] This work is followed by the High Level Group on Better Regulation
containing national regulatory experts. This group works with the Commission to
review and develop the Smart Regulation agenda at the EU and national level.

[11] http://ec.europa.eu/enterprise/policies/sme/small-business-act/think-small-first/

[12] Regulation 1169/2011 in application from December 2014 with the exception
of mandatory nutrition labelling which will start to apply from December 2016.

[13] http://ec.europa.eu/food/food/labellingnutrition/foodlabelling/proposed_legislation_en.htm

[14] Exemptions cover i.e. food sold directly from the farm or small
local retailers. Lighter regimes are applied in other cases relevant to SMEs,
i.e. nutrition information can be based on calculation from generally
established and accepted data avoiding costly laboratory analysis.

[15] These provisions allow Member States for
instance to require that information concerning allergens or regarding
intolerances in non-packed food and in restaurants is only provided orally or
on request.

[16] Directive 2013/55/EU published on 28 December 2013 (OJ-L354).

[17] Commission Delegated Regulation 862/2012

[18] Regulation (EU) No 165/2014 of the European Parliament and of the
Council of 4 February 2014 on tachographs in road transport, repealing
Council Regulation (EEC) No 3821/85 on recording equipment in road
transport and amending Regulation (EC) No 561/2006 of the European
Parliament and of the Council on the harmonisation of certain social legislation
relating to road transport.

[19] Directives 2014/24/EU and 2014/25/EU: The adoption of
self-declarations as preliminary evidence and the 'winning bidder' approach to
documentary evidence would reduce administrative burdens associated with public
tenders by 80%. See also the impact assessment: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52011SC1585&from=EN.

[20] Contracting authorities and entities that have already made the
transition to e-procurement commonly report savings between 5 and 20%;
experience also shows that investment costs can be rapidly recouped. Given the
size of the total procurement market in the EU, each 5% saved could return
around €100 billion to the public purse. (E-procurement strategy –
COM(2012)179final)

[21] Directive 2012/19/EU: The proposed interoperability and
data-transfer between national producer registers was expected to lead to cost
savings to producers of about 66 million EUR/ year. This aspect of the
Commission proposal was not adopted by the legislator.

[22] A mandatory one-stop shop to coordinate and integrate assessment
procedures and measures to accelerate decision–making under the Environmental
Impact Assessment Directive (2011/92/EU) were opposed by the legislator
limiting efficiency benefits to business. A mandatory electronic data exchange
within the area of waste shipment with estimated yearly savings to business of
44 MEUR was equally opposed by the legislator.

[23] See section III below: A new architecture for EU business
statistics.

[24] The Commission proposal for a Common Consolidated Corporate Tax Base (CCTB) – COM(2011)121 – is pending in legislative procedure since March 2011

[25] COM(2009)544: 'Action Programme for Reducing Administrative Burdens
in the European Union – Sectoral Reduction Plans and 2009 actions'

[26] http://ec.europa.eu/internal_market/publicprocurement/docs/modernising_rules/executive-summary_en.pdf

[27] Regulation 608/2013.

[28] Directive 2012/19/EU.

[29] EU Food Safety legislation allows Member States authorities to
adopt lighter regimes concerning certain investments for small business in the
meat processing sector.

[30] EU law requires recording of driving time for light commercial
vehicles from 3.5 tons and exempts craftsmen on local trips in vehicles up to
7.5 tons while some national rules require the recording of driving time from
2.8 tons up.

[31] Directive
2006/46/EC.

[32] The first edition of the REFIT scoreboard presented in conjunction
with this Communication does not yet include information on Member States'
implementation.

[33] (1) Allowing more SMEs to benefit from simplified accounting/auditing
regimes - Directive 2006/46/EC of 14 June 2006; (2) Allowing Member States to
exempt micro enterprises from certain provisions of the accounting directives -
Directive 2012/6/EU of 14 March 2012; (3) Simplifying and streamlining the
notification system for shipments of waste - Commission letter of
recommendation to Member States of July 2010; (4) Only the winning enterprise
needs to submit the documents demonstrating suitability as a tenderer in a
procurement procedure – COM (2011) 896; (5) Reducing the number of
respondents when compiling statistics on intra-EU trade - Regulation 638/2004
of 31 March 2004; (6) Reducing reporting requirements on industrial production
in the EU – Council Regulation 3924/91 of 19 December
1991 and Commission Regulation 36/2009 of 11 July 2008; (7) Suppressing
additional requirements on invoices and enabling wider use of electronic
invoicing - Council Directive 2010/45/EU of 13 July 2010; (8) Suppressing in
the VAT refund procedure the obligation to fill out paper forms in the language
of the Member State of refund – Council Directive 2008/9/EC of 12 February
2008; (9) Digital Tachograph (in particular introduction of digital tachographs
and simplifying the use of digital tachographs, keeping in mind the future
widening of the exemption of small craft business from tachograph requirements
and further simplifications - Regulation 3821/85 of 19 July 2011; (10)
Abolishing the notification of transport tariffs/alleviating the obligation to
keep documentary evidence on board – Council Regulation 569/2008 (amending Regulation 11/60) of 12 July
2008; (11) Simplifying obligations for road haulage and road passenger
transport - Regulation 1071/2009 of 21/10/2009 and Regulation 1072/2009 of
21/10/2009 and (12) Simplifying egg labelling – Regulation (EU) No 1308/2013 of the European
Parliament and of the Council of 17 December 2013.

[34] See the Final report of the Administrative Burden Reduction
Programme (ABR) in SWD(2012)423final.

[35] The Commission has received comments and suggestions from Member
States authorities (FI, DE, NL, UK) from business stakeholders, trade unions
and other organizations of civil society. The submissions can be consulted at
the Commission's Smart Regulation Website: http://ec.europa.eu/smart-regulation/refit/index_en.htm

[36] The objective of the initiative is to
reduce obstacles to cross border trade and safeguard Member States’ VAT revenues by making the EU VAT system simpler, neutral and more
robust.

[37] Other initiatives include the review of legislation on nuclear issues,
a proposal in the area of emergency travel documents and the review of
Regulations on the import of textile products and of dual-use items.

[38] Energy labelling of fridges (Directive 2003/66), household
dishwashers (Directive 1999/9) and washing machines (Directive 1995/12)
following the adoption of new implementing measures.

[39] Council
Regulation No 11 concerning the abolition of discrimination in transport rates
and conditions, in implementation of Article 79 (3) of the Treaty establishing
the European Economic Community of 16 August 1960.

[40] Protocol 36 on transitional provisions, Article 10

[41] COM(2008)600/4

[42] COM(2007)90 final

[43] Following an invitation by Council in December 2013 to report on
the application of the principle of mutual recognition by mid-2015 (see: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/intm/139846.pdf).

[44] Other areas include marketing standards for veal, labelling rules
for beef, the programme for outermost regions, the Fuel Quality Directive (once
transposed and fully implemented), oil stocks, the Fisheries Control Regulation,
nuclear safety, standardization, asbestos pollution,  animal testing, strategic
environmental assessment, flood risks, volatile organic compounds, insurance
(once sufficient experience is gained with the implementation), training,
qualification and licenses in road transport, maritime transport and safety,
port reception for ship generated waste, VAT e-invoicing and the mini one-stop
shop as well as the industrial sectors of construction and glass and ceramics.

[45] This will include the examination of legislation on online-services
- Directive 98/84/EC on the legal protection of services based on, or
consisting of conditional access and Directive 2000/31/EC
on certain legal aspects of information society
services, in particular electronic commerce, in the Internal Market.

[46] COM(2013)49 accompanied by SWD(2013)25.

[47] See the accompanying Staff Working Documents for further details.

[48] See COM(2012)746

[49] See the Commission's Smart Regulation Website: http://ec.europa.eu/smart-regulation/evaluation/index_en.htm

[50] 53
responses have been received from public authorities, stakeholders and citizens
in the context of this public consultation. They will be published together
with a summary report on the Commission's Smart Regulation website:
http://ec.europa.eu/smart-regulation/index_en.htm

[51] Final reports available at http://ec.europa.eu/smart-regulation/evaluation/documents_en.htm

[52] I.e. the Fitness Check on information and consultation of workers
could lead to the consolidation of 3 Directives, taking into account the
results of the consultation of the Social Partners, the
Fitness Check on type approval of motor vehicles will be followed by a revision
of the Framework Directive 2007/46/EC,  see complete
indications in the REFIT scoreboard.

[53] Consultation is laid down in Article 11 / TEU and in protocol nr. 2
on the application of the principles of subsidiarity and proportionality.
Consultation of social partners in the context of social policy is laid down in articles 153, 154, and 155 TFEU
also providing opportunities for their involvement in REFIT.

[54] Specific consultation frameworks which are set out in the Treaties,
other EU legislation or international agreements (e.g. social partner
consultations) are excluded.

[55] http://ec.europa.eu/yourvoice/index_en.htm

[56] Subscriptions can be made at: https://webgate.ec.europa.eu/notifications/homePage.do?locale=en

[57] Consult the study 'Assessing the costs and benefits of regulation'
at http://ec.europa.eu/smart-regulation/impact/commission_guidelines/docs/131210_cba_study_sg_final.pdf

[58] See: http://ec.europa.eu/enterprise/sectors/metals-minerals/files/steel-cum-cost-imp_en.pdf and: http://ec.europa.eu/enterprise/newsroom/cf/itemdetail.cfm?item_id=7124&lang=en&title=Final-report

[59] One example where this may be warranted are rules for importing
plants and plant products into the EU where amendments to the Commission proposal
currently under discussion in legislative procedure risk increasing costs to
business (COM(2013)267 - Commission Proposal
for a Regulation on protective measures against pests of plants, see also the
accompanying scoreboard).

[60] Real costs established
ex-post can differ from ex-ante estimations due to technological advance and
business innovation and efficiency. In the area of steel, for instance, the
costs of environmental protection per ton of product have remained stable or
declined over the last 20 or so
years despite the sector's improving environmental performance. (Cumulative
Cost Assessment for the Steel Industry: http://ec.europa.eu/enterprise/sectors/metals-minerals/files/steel-cum-cost-imp_en.pdf)

[61] Reporting
requirements are often linked, so that for instance a requirement for the
Commission to report to Council or Parliament can bring additional reporting
obligations to Member States' authorities, stakeholders and business.

[62] The Regulation on Common Provisions for
Cohesion Policy lists 28 individual reporting requirements in 11 areas; six of
them require regular reporting. The final Directive on
enforcement on posting of workers contains additional reporting requirements
for Member states added in the legislative process (see REFIT scoreboard).

[63] Significant advances have
been made in the streamlining of previously unlinked reporting streams in the
field of water (between the Marine Strategy Directive, the Water Framework
Directive and the Habitats and Birds Directives), such that data and
information need only be reported once to meet the requirements set out under
the various Directives, significantly reducing administrative burden. The
results of a separate pilot exercise to reduce reporting requirements in the
area of urban waste water will lead to simpler and more effective reporting
requirements.

[64] Since
2007 Member States submit a single report to the Commission instead of separate
reports on the practical implementation of 24 Directives in the area of health
and safety at work (Directive 2007/30/EC amending the Framework Directive
89/391/EEC).

[65] In 2013,
the Commission carried out a screening exercise on reporting obligations in the
areas of energy and cohesion policy in order to simplify and streamline
requirements. In the area of energy alone, this exercise allowed 43 reporting
obligations to be merged into 14.

[66] See the Conclusions of the European Council of 24-25 October 2013,
Conclusions of the Competitiveness Council of December 2013 and the European
Parliament Resolution of 17 April 2014 on the 'top ten' consultation process
and lightening the burden of EU regulation on SMEs.

[67] Contributions have notably been received by Finland, Germany, the Netherlands and the United Kingdom.

[68] http://ec.europa.eu/smart-regulation/refit/index_en.htm (needs to
be verified)

[69] Foreseen by protocol no. 2 of the treaties.

[70] See also the analysis of modifications in the legislative process
of simplification and burden reduction proposals in the REFIT scoreboard
accompanying his Communication.

[71] According to estimations, one-third of
regulatory burden of EU legislation is connected to national implementation.