# EUR-Lex - 52013DC0446 - EN

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# 52013DC0446

**COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Commission follow-up to the "TOP TEN" Consultation of SMEs on EU Regulation /* COM/2013/0446 final */**

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Commission Follow-up to the 'Top Ten' consultation of
SMEs on EU regulation

1.
Introduction

Small and
medium-sized enterprises are essential to economic growth and job creation.[1] The
Commission has taken a range of actions over the years to support them and
continues to strengthen its actions.

This includes
the decision of November 2011 to make a concerted effort to lighten the
regulatory load on SMEs[2]. As part of
this effort, the Commission asked SMEs throughout 2012 through conferences and
consultations to identify the EU laws and areas of legislation that they
consider most burdensome.  They contributed actively.[3] Based on these
responses, the Commission produced a list of EU legislative acts considered by SMEs
and stakeholder organisations to be the most burdensome.[4]

The results
of this initiative, called the 'Top Ten', together with a number of other
actions being taken by the Commission, were announced in the March
Communication on "Smart Regulation – Responding
to small and medium-sized enterprises"[5] Member States
were also informed of the results via the SME Envoy network. The
Commission committed to a direct and immediate follow up to SME concerns. The
European Council welcomed this initiative and invited the Commission to report
back by June.[6] This report indicates
the follow-up actions on the main results of the consultation, in response to
that request.

The success
of the 'Top Ten' initiative requires that the co-legislators and Member States
join the effort. Many Commission actions are contained in legislative proposals
that the co-legislators are now examining.  The Council and the European
Parliament need to ensure that the SME friendly provisions in these proposals
are maintained and that unnecessary burdens are not inadvertently added in the
decision making process.

This is not a
one-off effort. It forms part of the larger REFIT exercise announced in the
Commission Communication on EU Regulatory Fitness of 12 December 2012.[7] Through
Refit the Commission will continue to act to lighten regulatory burden and
simplify legislation across the board, taking a broad range of stakeholder
input into consideration.

2.
TOP-10 results and follow-up

For
each of the main 'Top Ten' legislative measures, the Commission has already
taken action.  Where possible, the Commission has itself acted directly to deal
with the issue. In other areas, where legislative change is needed, the
Commission has made proposals to the co-legislator. Just over half of the
actions outlined below are items on which the European Parliament and the
Council need to take action. The Commission has also either already started to
review the legislation in question or plans a review to identify the right
course of action.

The
concerns of SMEs that did not make it into the main 'Top Ten' list will be
examined in the broader programme of regulatory burden reduction, the REFIT
programme. A report on progress will be forthcoming in the autumn.

2.1       Action already
completed by the Commission under its own authority

Chemicals

Regulation (EC) No
1907/2006 concerning
the Registration, Evaluation, Authorisation and Restriction of Chemicals
(REACH)

SMEs tell us that:

They have concerns about
the complexity and cost of information obligations, inconsistent application by
Member States and a lack of coherence with specific chemicals legislation such
as Restrictions of Hazardous Substances (RoHS), biocides, endocrine disruptors
and Toy Safety.

Commission response:

The Commission has
carried out a comprehensive review of REACH which included an analysis of links
and possible overlaps with other EU legislation affecting chemicals, as well as
particular difficulties for SMEs. In March 2013 the Commission adopted a Commission
implementing regulation[8]
providing reduced fees for SMEs - 35% reduction for medium companies, 65% for
small companies and 95% for micro-companies for registration. In addition,
further implementation guidance is being prepared and the European Chemicals
Agency (ECHA) has appointed an SME Ambassador at the request of the Commission
to integrate the specific needs of SMEs across its activities and to provide an
interlocutor for stakeholders. In order to improve the consistency between
REACH and other chemicals legislation for those cases where potential overlaps
have been identified, the Commission will strive to minimise or avoid them by
inviting ECHA to issue guidance, if appropriate, and preparing implementing
legislation, in particular when considering future restrictions and substances
subject to authorisation. As
implementation of REACH has not yet been fully completed, in the interests of
legal stability and in agreement with many business organisations, the
Commission does not consider further legal amendments to REACH useful at the
moment.

2.2       Commission
proposals on which the EU legislator needs to act

Data protection

Directive 95/46/EC on
the protection of personal data (revision[9]
in legislative procedure awaiting EP first reading)

SMEs tell us that:

The new proposal for a
general data protection regulation is excessively detailed in obligations it
imposes on those processing personal data. The proposed reform includes
exceptions in the obligations for SMEs which should be maintained in the
co-decision process. The main economic benefits of this reform will accrue only
to companies trading across borders, as they will benefit more from
harmonisation, whilst companies trading only domestically will have to bear the
burden of the additional obligations.

Commission response:

The Commission is
working closely with the European Parliament and the Council in order to
maintain the exceptions for SMEs in those cases where their processing of
personal data does not present specific risks to the fundamental rights and
freedoms of citizens. The Commission will also work with the EU legislator to
further develop the existing elements of a risk-based approach. This work will
focus on calibrating the obligations of data controllers in order further to
simplify the regulatory environment and minimise undue administrative burden,
whilst maintaining a high level of protection for personal data and the clarity
of the legal obligations for data controllers.

Employment

Directive 96/71/EC
concerning the posting of workers in the framework of the provision of services
(Additional measure[10]
in legislative procedure awaiting EP first reading)

SMEs tell us that:

They support clarification
of enforcement, with the objective of fighting fraud and unfair competition.
For this purpose, they suggest the introduction of a system of prior
notification of detachments to Member States and reconsideration of joint and
several liability for SMEs. They argue that liability will impact SMEs disproportionally
as they have far less capacity to monitor all their subcontractors' compliance
with relevant legislation. They also argue that joint and several liability may
constitute a barrier to SMEs entering new markets.

Commission response:

The proposal for an enforcement
directive being discussed in the legislative procedure already contains
positive elements for SMEs and micro-enterprises such as risk-based inspections,
increased obligations of host Member States to make legal information readily
available and  enhanced legal certainty through a limited set of control
measures and administrative requirements that can be applied by the Member
States. Joint and several liability is an important measure, already applied in
several Member States, to provide protection against abuse and exploitation of
vulnerable workers. The Commission is supporting the efforts to reach an agreement
in the legislative process, in particular on the two main contentious issues
(list of control measures and joint and several liability).

Product safety

Directive 2001/95/EC on
general product safety (revision[11]
in legislative procedure awaiting EP first reading)

SMEs tell us that:

Member States apply
product safety rules and controls in different ways. Producer responsibility is
considered a heavy burden for smaller companies and the provisions on product
withdrawal from the market allow for wide interpretation. The system is
expensive for SMEs and does not offer proper information and protection to
consumers.

Commission response:

In February 2013, the
Commission proposed to replace the General Product Safety Directive by a directly
applicable Regulation on Consumer Product Safety to ensure more uniform
application. This proposal addresses many of the TOP Ten comments, reducing
divergences between Member States including a simpler set of more common
requirements and an exemption from notification obligations for products which
present risks only in isolated cases under the responsibility of the economic
operator. The proposed Market Surveillance Regulation establishes a uniform
framework, avoiding double checks of products and improving cooperation between
authorities and economic operators. Better market surveillance will also help
protect responsible SMEs from unfair competition from non-compliant products.
The proposals take account of the needs of small businesses envisaging guidance
and assistance for SMEs. The Commission will establish a framework for regular
consultation with business on implementation, including through the Market
Surveillance Forum.  The Commission will also press for maximum clarity on
product withdrawal in the legislative procedure and issue guidelines to assist
business before the regulations are applied.

Public procurement

Directive 2004/18/EC on
the coordination of procedures for the award of public works contracts, public
supply contracts and public service contracts (revision[12] in
legislative procedure awaiting European Parliament first reading)

SMEs tell us that:

EU Directives on public
procurements include onerous requirements regarding the economic standing of
SMEs, inappropriate use of quality criteria by contracting authorities to
establish the most economically advantageous tender and difficulty stemming
from the application of different procedures or practices in different Member
States despite harmonisation. Red-tape and administrative burden linked to the
preparation of offers act as a barrier for small businesses to participate in
public tenders.

Commission response:

The Commission proposed
a revision of the public procurement regime in December 2011. Some of the
proposed modifications will have a direct impact on the access of SMEs to
public procurement, including concessions.

The revision includes
provisions to require the acceptance of self-declarations for selection
purposes (only the winning bidder will have to submit complete evidence) and a
provision that the list of selection criteria will be made exhaustive. A
limitation is introduced in the maximum turnover cap required to participate in
procurement procedure, which cannot exceed three times the estimated value of
the contract

Furthermore contracting
authorities will be encouraged to split contracts into lots allowing for the
participation of more bidders, particularly SMEs, and will have to explain to
bidders when not doing so (application of the "comply or explain"
principle).

The Commission proposal
foresees a gradual transition to e-procurement. Companies would be able to
consult tender opportunities online and submit their offers electronically,
which will simplify the process and increase transparency.

Finally, the Commission
draws attention to the SME concerns at the continuing complexity of public procurement
procedures and practices among Member States contributing to administrative
burdens.

Recognition of
professional qualifications

Directive 2005/36/EC on
the recognition of professional qualifications (revision[13] in
legislative procedure awaiting European Parliament first reading)

SMEs tell us that:

The provisions of this
directive overlap with those of the Services Directive, and it is not easy for
an SME to differentiate between obligations stemming from both regulations. Whilst
certain SMEs expressed satisfaction with some of the provisions proposed in the
amendment being currently discussed in legislative procedure, especially the
introduction of the European Professional Card and the generalisation of the Internal
Market Information (IMI) System[14],
some other new proposals are questioned, like the partial access open to
professions with a larger scope of activities in the host Member State, or the
tacit recognition of qualifications for professions linked to health and safety.

Commission response:

The revision ensures
consistency with the Services Directive, notably by ensuring that all
information and procedures related to the recognition of qualifications are
available with the Points of Single Contact for all professions. The rules on
temporary mobility will be modernised so that provision of services becomes
easier.

The proposal includes
the introduction of the European Professional Card (EPC), based on enhanced
on-line cooperation between Member State authorities in the verification of
qualifications and on the introduction of the concept of 'tacit recognition'
once the deadline for a recognition decision has passed. Tacit recognition will
apply to all professions using the EPC, but the host Member State will have the
possibility to extend the deadline where necessary, in particular for reasons
related to public health and safety. This will ensure a quicker processing of
the requests for recognition and allow the professionals to start their activities
without delay.

Partial access will be
used on a case-by-case basis to avoid that differences in the scope of
activities reserved to certain professions in the host Member State prevent
professionals from home Member States from establishing in the host Member
State. Host Member State competent authorities will have the possibility to
reject partial access for reasons of general interest.

Road transport

Regulation (EEC) No
3821/85 on recording equipment in road transport (revision[15] close
to adoption in legislative procedure)

SMEs tell us that:

The obligation to
install a tachograph generates costs, and compliance with the current
regulation is heavy in terms of administrative burden. Vehicles that do not
travel far from their base should be exempted from the requirement of this
regulation.

Commission response:

A revision of the
tachograph legislation was tabled following inter alia a recommendation of the
High Level Group on Administrative Burdens. The Commission's proposal foresaw that
current optional exemptions provided by Regulation 561/2006 for certain
categories of vehicles would apply within a uniform radius of 100 km,
calculated from the base of the transport undertaking (up from 50 km). The
final stages of the legislative procedure have been reached and the issue of
the exemptions has been subject to intensive discussion as one of the final
points for agreement between Parliament and Council.

The final outcome, yet
to be adopted, is likely to be in line with the Commission's proposal, with the
exception of the so-called "craftsmen" exemption (Article 13 (1)
letter d), which will  no longer be optional, in contrast with the other
exemptions. This should improve legal certainty across the Union and avoid
administrative burden and complexity for stakeholders and Member States.

2.3       Commission
evaluations already under way or programmed

Employment

Council Directive
89/391/EEC on the
introduction of measures to encourage improvements in the safety and health of
workers at work

SMEs tell us that:

The general obligation
for documenting risk assessments is too burdensome. For low risk activities,
risk analysis could be performed without being documented. Exemptions and
lighter requirements should be applied in case of temporary employment and for
micro companies. In cases where several legislative measures overlap, risk
assessments and (double) documentation of risk assessments should be abolished.

Commission response:

The Occupational Health
and Safety Directives largely take into account the specificities of SMEs. For
example, Framework Directive 89/391/EEC allows Members States to adapt the risk
assessment documentation obligations in the light of the nature of activities
and the size of undertakings. The entire acquis on Occupational Health and
Safety (Directive 89/391/EEC and its 23 related directives) is currently undergoing
to a full evaluation (a REFIT Fitness Check) and will include specific
consultation of SMEs. The conclusions of this ex-post evaluation will be
available before the end of 2015. Member States will feed into this evaluation
with implementation reports by December 2013. They should take the concerns of SMEs
into account in their submissions and report on measures to facilitate
implementation by SMEs.

Directive 2008/104/EC on
temporary agency work

SMEs tell us that:

This directive has not
made it easier for companies to work across borders. Administrative burden is
high in particular due to Member State requirements. For example, companies
that wish to be active in several Member States may still have to register in
all these Member States separately. SMEs suggest
ensuring more proportionate requirements that facilitate cross-border services
and for temporary agency work to be brought under the Services Directive.

Commission response:

A report to be drawn up in consultation with Member States and
social partners, representing the interests of European workers and European
employers, is scheduled for December 2013. This report will take SME concerns
and regulatory burden aspects into account and will specifically examine how Member
States have complied with the requirement to identify and justify current
obstacles to the activity of temporary work agencies.. The Commission will consider including recommendations to
Member States in the country-specific measures for 2014 if the assessment by
the Commission of national systems identifies specific regulatory burden
aspects as obstacles to growth and competitiveness.

Directive 2003/88 concerning certain aspects of the
organisation of working time

SMEs tell us that:

The Directive is complex
and inflexible, in particular in the case of seasonal work or where businesses
face a sudden changing level of demand. Changes to the counting of on-call time
and extension of the reference period for the calculation of average weekly
working hours to 12 months would allow small businesses more flexibility. The
burden of working-time record-keeping should be shared between employer and
employee. The complexity of this directive makes it a quasi-obligation for SMEs
to seek specialised legal assistance which is costly.

Commission response:

A detailed Impact
Assessment is being prepared and will take special account of the concerns of
SMEs.

Value
added tax

Directive
2006/112/EC on the common system of value added tax

SMEs tell us that:

The system is very
complex, with different national procedural rules and the lack of a simple,
uniform VAT declaration. This discourages SMEs from trading across borders. VAT
identification numbers should be generalised. The obligation of companies
trading across borders to register in all Member States where they want to
export creates additional burden. The absence of an upper limit to VAT rates
adds to the complexity of the system. There is inadequate information and
guidance.

Commission response:

A proposal for a
standard VAT declaration facilitating compliance for businesses with activities
in several Member States is planned for end-2013. In addition, work has started
with Member States on the implementation of a "mini-one-stop-shop"
for e-services, broadcasting and telecom services. The introduction of the mini-one-stop-shop
in 2015 is timed to coincide with the introduction of the new rules on the
place of supply.  The Commission will work with Member States to ensure that it
provides good support to business from the start. The Commission supports
broadening the concept as already put forward in its 2004 proposal. Recent
Council conclusions on the future of VAT are, however, that this can only be
done after an assessment of the mini-one-stop-shop. Work on the development of
the EU VAT web portal, providing accurate, reliable and timely information on
the implementation of the EU VAT regime in the different Member States will be
intensified. This will be done in active consultation with Member States and
SMEs,  to better suit the needs of SMEs for practical solutions, including
proportionate arrangements for accessible language versions, building on the
detailed information in the existing website.

Directive 2008/9/EC laying down detailed rules for the refund
of value added tax

SMEs tell us that:

They are concerned by the
lack of Member State responses to requests for VAT refunds and delays in
receipt of refunds.

Commission response:

The Commission held a
conference in 2012 on the improved arrangements for refunds of VAT. According
to the information currently available to the Commission, the initial problems
with the VAT refund system have now been resolved. The Commission is ready to
ensure quick and effective follow-up should any further problems come to light.

Waste

Directive 2008/98 on
waste and Decision 2000/532/EC establishing lists of waste and hazardous waste

SMEs tell us that:

They are concerned about
some aspects of the Directive, for instance they are uncertain as to when waste
ceases to be waste. Some argue that the definition of by-products discourages
innovation. There are further problems of Member States adding unnecessary
requirements ('gold-plating') and lack of appropriate advice and guidance.
Exemptions or lighter regimes should be introduced, notably concerning reporting
and the requirement for waste transfer notes.

Commission response:

The Commission is carrying
out a review of EU waste policy and legislation under REFIT to be concluded in
2014 with a view to determining whether change to waste legislation is
necessary. The Commission will work with Member States and stakeholders on
hands-on guidance and advisory actions and further explore specific issues, for
instance in relation to the reduction of administrative burden from the
registration requirements for waste transporters stemming from Article 26 of
Directive 2008/98/EC. The Commission will also take action to increase the
participation of SMEs in the European Resource Efficiency Platform[16]. In the
beginning of 2014 the Commission will hold a workshop to discuss the concerns
that SMEs have expressed with respect to EU waste legislation.

Regulation1013/2006 on
shipments of waste

SMEs tell us that:

Due to differences in
implementation and interpretation across Member States, the Regulation has not
led to the creation of a common market for waste utilisation and recycling. More
should be done to ensure uniform implementation of the regulation with more
focus on hazardous waste and less on unproblematic waste. There should be
further simplification of procedures to move waste between Member States,
leaving the inspection and evaluation of waste treatment facilities to the
authorities of the receiving Member State.

Commission response:

To further promote a
common market for waste utilisation and recycling the Commission has taken a
number of initiatives such as the development of end-of-waste criteria removing
specific waste streams (e.g. metals, glass, copper) from the scope of EU waste
legislation (including the Waste Shipment Regulation). In response to a
specific recommendation by the High level Group on Administrative Burdens, the
Commission has actively encouraged the use of electronic systems for exchange
of waste shipment data between Member States and has recently launched a
feasibility study on a possible EU-wide electronic data exchange system.

To help ensure more
uniform implementation of the Regulation with a focus on problematic waste
streams, a Commission proposal to strengthen waste shipments inspections is planned
for mid‑2013. Wide support was expressed by stakeholders for this proposal
during the public consultation carried out on the proposal in 2011. The
Commission has taken the concerns of SMEs into account in preparing the
proposal and is ready to explain how this has been done once the proposal is
adopted.

3.         Conclusions

The Commission is
responding directly to the concerns of SMEs. The goal is to lighten the
regulatory load where possible while continuing to respect policy goals and
maintain legal stability. The Commission calls on the EU legislator in
adopting, and Member States in implementing, EU regulation to ensure that legislation
is adapted to the needs of SMEs, with particular reference to the proposals
already tabled by the Commission in areas of regulation identified as
particularly burdensome through the TOP10 consultation. The Commission will
maintain the momentum in burden reduction and simplification in its Refit
programme on which it will report in the autumn. It will monitor progress
through its annual scoreboard.

[1] 20,7 million SMEs account for
over 65 % of private sector employment. SMEs are amongst the most innovative
businesses, leading the creation of jobs and growth. Apart from access to
financing and markets, regulatory burden represents one of the heaviest
barriers to the start-up and development of small businesses. Com(2008)394

[2] Com(2011)803

[3]  This consultation attracted 1000 responses, out of which 779 came
from enterprises and 154 from their representative organisations Com(2013)122,
SWD(2013)60

[4] The list was drawn up by combining the lists of the 20 legislative
measures most quoted respectively by enterprises and their representatives
organisations. The measures most often quoted from both lists were put into a
list of 14 legislative measures. - Com(2013)122, SWD(2013)60

[5] Com(2013)122

[6] European Council
Conclusions – 14 March 2013 EUCO 23/13

[7] Com(2012)746

[8]
Commission Implementing Regulation (EU) No 254/2013 of 20 March 2013 amending
Regulation (EC) No 340/2008 on the fees and charges payable to the European
Chemicals Agency pursuant to Regulation (EC) No 1907/2006 of the European
Parliament and of the Council on the Registration, Evaluation, Authorisation
and Restriction of Chemicals (REACH)

[9] COM(2012)11 - Proposal for a Regulation of the European Parliament
and of the Council on the protection of individuals with regard to the
processing of personal data and of the free movement of such data

[10] COM(2012)13
- Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the
enforcement of Directive 96/71/EC concerning the posting of workers in the
framework of the provision of services

[11] COM(2013)78
- Proposal for a Regulation of the European Parliament and of the Council on
consumer product safety and repealing Council Directive 87/357/EEC and
Directive 2001/95/EC

[12] COM(2011)896
- Proposal for a Directive of the European Parliament and of the Council on
public procurement

[13] COM(2011)883
- Proposal for a Directive of the European Parliament and of the Council
amending Directive 2005/36/EC on the recognition of professional qualifications
and Regulation on administrative cooperation through the Internal Market
Information System

[14] http://ec.europa.eu/internal_market/imi-net/index_en.html

[15] COM(2011)451
- Proposal for a Regulation of the European Parliament and of the Council
amending Council Regulation (EEC) No 3821/85 on recording equipment in road
transport and amending Regulation (EC) No 561/2006 of the European Parliament
and the Council

[16] http://ec.europa.eu/environment/resource_efficiency/re_platform/