EUROPEAN COMMISSION Strasbourg, 19.5.2015 COM(2015) 215 final COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Better regulation for better results - An EU agenda {SWD(2015) 110 final}

{SWD(2015) 111 final}



COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Better regulation for better results - An EU agenda 1.Delivering Better Results: Changing How we Work at European Level The European Commission is determined to change both what the European Union (EU) does, and how it does it. The EU, its institutions, and its body of law, are there to serve citizens and businesses who must see this in their daily lives and operations. We must restore their confidence in our ability to deliver. The Juncker Commission represents a new start. Our priority is to deliver solutions to the big issues that cannot be addressed by the Member States alone: an investment plan to leverage €315 billion to boost jobs and growth; an energy union to deliver secure, affordable and sustainable energy; an internal security agenda to tackle common threats like terrorism and organised crime; a digital single market to unlock online opportunities; and a migration agenda. Our new initiatives flow from genuine political priorities. The Commission cannot, and should not, be involved in every issue in the EU. The Commission's first work programme reflects this change of approach. It includes just 23 major new initiatives all closely aligned with the agreed political priorities. The additional and routine actions that follow during the year will also reflect the same sense of focus and purpose. The 'EU Budget focused on results' initiative will also aim to demonstrate the added value of the EU budget for EU citizens. Political priorities drive Commission action on the challenges that the EU faces today. Better regulation is a tool to provide a basis for timely and sound policy decisions – but it can never replace political decisions. Today we outline further measures to deliver better rules for better results. We will further open up policy-making and listen and interact better with those who implement and benefit from EU legislation. We will take a fresh look across all policy areas to see where existing measures need to be improved. We will continue as we have started: focusing on the things that really do need to be done by the EU and making sure they are done well. Applying the principles of better regulation will ensure that measures are evidence-based, well designed and deliver tangible and sustainable benefits for citizens, business and society as a whole. This applies both to new and the large body of existing EU legislation. This legislation is essential for sustainable development, for the single market that drives our economy and for unlocking the investments needed to support jobs and growth. It underpins the European social model and gives meaning to the rights and freedoms that citizens cherish, including their security and right to justice. It also helps us respond to common challenges such as energy security and protecting the environment and the climate. In many cases, one set of EU rules replaces a patchwork of 28 different national rules, so making life easier for citizens and businesses, simplifying the legal framework, reducing regulatory burdens across the single market and increasing regulatory predictability. The body of EU law is not only necessary, it is our great strength - it makes the EU qualitatively different from any other model of collective governance in the world. That is why it is so important that every single measure in the EU's rulebook is fit for purpose, modern, effective, proportionate, operational and as simple as possible. Legislation should do what it is intended to do, it should be easy to implement, provide certainty and predictability and it should avoid any unnecessary burden. Sensible, realistic rules, properly implemented and enforced across the EU. Rules that do their job to meet our common objectives - no more, no less. Better regulation is not about "more" or "less" EU legislation; nor is it about deregulating or deprioritising certain policy areas or compromising the values that we hold dear: social and environmental protection, and fundamental rights including health - to name just a few examples. Better regulation is about making sure we actually deliver on the ambitious policy goals we have set ourselves. Over the last decade, the EU has introduced a comprehensive set of better regulation tools and procedures to ensure this. These important changes are already delivering results but this Commission has decided to go further. Our commitment to better regulation must apply across the board building on the progress already made with impact assessment and the Regulatory Fitness Programme (REFIT). We should not impose policies but prepare them inclusively, based on full transparency and engagement, listening to the views of those affected by legislation so that it is easy to implement. We are open to external feedback and external scrutiny to ensure we get it right. EU policies should also be reviewed regularly: we should be transparent and accountable about whether we are meeting our policy objectives, about what has worked well and what needs to change. Better regulation is not a bureaucratic exercise. Citizens, businesses and other stakeholders judge the EU on the impacts of its actions: not just new initiatives, but, even more importantly, the rules already in force. The Commission commits to taking political responsibility for applying better regulation principles and processes in its work and calls on the other EU institutions and the Member States to do likewise. 2.Openness and Transparency 2.1.Consulting more, listening better Opening up policy-making can make the EU more transparent and accountable, but it also ensures that policies are based on the best available evidence and makes them more effective. At all levels – local, regional, national and at Union level – those affected by legislation understand best the impact that legislation will have, and can provide the evidence needed to improve it. The Commission intends to listen more closely to citizens and stakeholders, and be open to their feedback, at every stage of the process – from the first idea, to when the Commission makes a proposal, through to the adoption of legislation and its evaluation. The Commission intends to establish a web portal where each initiative can be tracked. Building on the existing minimum standards for consultations, the Commission's new Better Regulation Guidelines strengthen our commitment to consultations that are of a high quality and transparent, reach all relevant stakeholders and target the evidence needed to make sound decisions. This will be done in two key ways.

First, stakeholders will be able to express their views over the entire lifecycle of a policy. "Roadmaps" and "inception impact assessments" will give stakeholders the chance to provide feedback and prompt them for relevant information, right from the very start of work on a new initiative. There will also be twelve-week public consultations when preparing new proposals and when we evaluate and carry out "fitness checks" of existing legislation. After the Commission has adopted a proposal, national parliaments have the opportunity to provide reasoned opinions on subsidiarity. In addition, the Commission will invite citizens or stakeholders to provide feedback within eight weeks: to feed these views into the legislative debate, the Commission will collect them and and present them to the European Parliament and the Council. Second, all stakeholders will be able to provide feedback on acts setting out technical or specific elements that are needed to implement the legislation adopted by the European Parliament and the Council. For the first time the draft texts of delegated acts will be open to the public at large on the Commission's website for four weeks in parallel to the consultation of experts in the Member States. Important implementing acts which are subject to Committee opinion will also be made public for four weeks, allowing stakeholders to submit comments before any vote by Member States in the relevant Committee . The Commission will publish an indicative list online of any such acts in the pipeline, so stakeholders can plan ahead. Proportionate impact assessments will also be necessary whenever impacts are likely to be significant. Given the role and autonomy of social partners, specific arrangements will apply to the Commission's consultations under art. 154 TFEU and to its proposals under art. 155 TFEU. 2.2.Explaining better what we are doing, and why In every case, we need to explain better why we are acting, what results we hope to achieve, and what the impacts might be. An improved explanatory memorandum will accompany each Commission proposal. In addition to explaining the purpose of the proposed measure, it will explain how better regulation principles have been applied: why the initiative is needed, why it is the best tool for the EU to use, what stakeholders think and what the likely environmental, social and economic impacts are, particularly those on competitiveness and small and medium-sized enterprises (SMEs). It will also include a more thorough explanation of how the initiative meets the twin tests of subsidiarity (why the goal cannot be achieved by the Member States alone) and proportionality (why the measure proposed does not go further than what is needed to meet its goal). This is essential to promote accountability. 2.3.How EU law affects people, businesses and society as a whole – everyone's chance to have their say The Commission wants stakeholders to be able to provide feedback – not just at fixed "checkpoints" as a particular policy is developed – but on any aspect of EU policy and legislation, at any time. We want to know how EU law affects people and businesses, and how we can make it work better. A new "Lighten the Load – Have Your Say" feature on the Commission's better regulation website will give everyone a chance to air their views and make comments on existing EU laws and initiatives in addition to the formal consultations the Commission undertakes. We want to hear what people find irritating, burdensome, or in need of improvement. We will respond by following up directly, or sending the comment for further consideration by the new stakeholder platform described below. This will give European citizens, social partners and individual companies a direct mean to understand and influence EU policy, using interactive tools fit for the digital age. 3.Doing It Better: Better Tools for Better Policies 3.1.Achieving our objectives: better regulation as a balanced agenda Better regulation is not about favouring certain policies or objectives over others. It is about being clear on the objectives, whatever they are. It is about ensuring that the policy solution is the best and least burdensome way to reach those objectives and it is about being honest about how well solutions are working. All significant impacts – whether positive or negative, quantifiable or not – should be analysed and considered. New, integrated Guidelines on Better Regulation will apply to the Commission's work from today. They will ensure that economic, social and environmental impacts continue to be considered alongside each other in all of the Commission's analytical work together with fundamental rights. They re-commit the Commission to use the best available evidence and science and reinforce the commitment to put in place clear monitoring and implementation plans before measures are adopted. They will also ensure that keeping the EU competitive and the EU's development sustainable remains a priority in all we do. When considering policy solutions, we will consider both regulatory and well-designed non-regulatory means as well as improvements in the implementation and enforcement of existing legislation. We will ensure solutions that take advantage of all the opportunities that digital and other technologies can offer today and might offer tomorrow, without constraining innovation and operating effectively both in the digital and the physical worlds. We are paying particular attention to the rules that affect SMEs, which too often feel held back by red tape. However, not all of these rules come from Brussels. And, many EU rules are as pertinent for smaller businesses as they are for larger companies: a worker in a small business making artisan products has the same right to health and safety protection as someone on the shop floor in a huge factory. But if the legislative framework is too complicated, too burdensome, or too bureaucratic, the risk is that smaller business are simply not able to follow it – so workers are not protected, or scarce company resources are spent just applying the rules, rather than growing the business and creating jobs. We will apply the "Think Small First" principle more thoroughly when preparing initiatives: taking the interests of small- and medium-sized businesses into account when designing and evaluating policies, and envisaging a lighter regime for them including an outright exemption for micro-businesses wherever it is possible and makes sense. Where either is not possible, for instance because it would not allow an effective achievement of the social, environmental and economic objectives of the proposed legislation, the Commission will explain why. 3.2.A Commission that is open to scrutiny The above commitments are an ambitious change to how we operate. Scrutiny can help us stick to our better regulation principles, ensuring proposals are based on the best available evidence and analysis. Since 2006, the Impact Assessment Board has fulfilled this scrutiny role. It has ensured the quality of the impact assessment work the Commission undertakes ahead of its decisions on new initiatives. As announced in December 2014, a new Regulatory Scrutiny Board will take the place of the existing Board and will have a strengthened role. The new Board will assess the quality of the impact assessments which inform political decision-making. Should the Commission decide to take action in the absence of an adequate supporting impact assessment, it will publicly explain why. Contrary to the past, the Board will also check major evaluations and "fitness checks" of existing legislation. The composition of the Board will allow it to deliver an impartial opinion on the basis of comprehensive know-how of the relevant analytical methods. Accordingly, the new Board will have a chairperson plus six members who, for the first time, will work full time and be free of any policy responsibilities within the Commission. In addition, three of these members will be recruited for fixed, non-renewable terms from outside the EU Institutions. All members will be selected via rigorous and objective selection procedures on the basis of their expertise.

3.3.A shared commitment from EU Institutions Commission proposals are just that— proposals. They are for consideration and adoption by the co-legislators. Proposals rarely emerge from the legislative process unchanged: amendments are made by the European Parliament and the Council. Once agreed, the act is transposed nationally or regionally by the Member States. This can affect the benefits and the cost it brings – for better or for worse. Although the Commission has a key role in better regulation, it cannot deliver it alone. As part of the democratic process, the right to amend legislation naturally lies with the European Parliament and the Council – but so does the responsibility to take account of the impacts of their amendments. The European Parliament and the Council should, therefore, mirror the Commission's commitment to better regulation, as should Member States when transposing and implementing EU law. The 2003 Inter-institutional Agreement on better law-making sets out how the European Parliament, the Council and European Commission should cooperate to ensure the best possible preparation of EU legislation. However, these good intentions have not been implemented consistently. For example, between 2007 and 2014, the Commission produced over 700 impact assessments; in the same period, the European Parliament assessed the impact of around 20 of its amendments, while the Council assessed none. Only rarely do the co-legislators begin their consideration of a proposal with a proper review of the Commission's impact assessment. And particularly in the final stages of negotiations, deals are found without taking full account of the direct and indirect impacts that compromise amendments may trigger. In the past, the European Parliament and the Council have at times been hesitant to agree to measures that would reduce administrative burdens. For example, a proposal for a standard VAT declaration has been diluted and blocked by the Member States in the Council – putting at risk € 15 billion in savings. Member States also often go beyond what is strictly required by EU legislation when they implement it at national level ("gold-plating"). This may enhance the benefits but can also add unnecessary costs for businesses and public authorities which are mistakenly associated with EU legislation. However, the Commission recognises that a new political mood in both the European Parliament and Council provides the opportunity for all - not just to commit to the principles of better regulation – but to make those principles stick. Real change will only happen through a commitment shared between all EU institutions, and each and every Member State. The Commission is proposing a new agreement with the European Parliament and the Council. The aim is that all parties commit to legislate better and to work together better so that citizens, businesses and society as a whole can see the benefits of the EU in their daily lives. We see better regulation as a major political priority – for new proposals, and for existing legislation. Given our shared responsibility to the EU public at large, we call upon the other institutions to do likewise, and work together with us to achieve it. In particular, we are calling on the European Parliament and the Council to: Prioritise initiatives that would simplify or improve existing laws such as those initiatives identified in the Commission's REFIT programme – to deliver the intended benefits more quickly; Carry out an impact assessment on any substantial amendments that the European Parliament or the Council propose during the legislative process. Where the European Parliament and the Council find an agreement significantly different from the initial Commission proposal, they should assess the likely economic, social and environmental impact and regulatory burden before any final decision is taken; Agree that legislation should be comprehensible and clear, allow parties to easily understand their rights and obligations include appropriate reporting, monitoring and evaluation requirements, avoid disproportionate costs, and be practical to implement; Agree that each institution may call for an independent panel to carry out an assessment of these factors following any substantial amendment to the Commission proposal. Such an assessment should be finalised and made public within a reasonable amount of time and take into account any existing impact assessment work. Each institution would appoint to the panel a member who would demonstrably have the specific expertise needed, no conflict of interest and who would act independently from the appointing authority; Agree that legislation already in force should have been properly evaluated, to see whether existing tools could be used to do the job – before considering new initiatives; Include systematically in every new act provisions to allow monitoring and future evaluation; Urge Member States to avoid unjustified "gold plating" of EU rules when transposing them into national law. While this may help achieving the legislation's objectives in the local context or aim to deliver greater benefits, it may also impose significant extra burdens. Member States should be invited to explain the reasons for any such gold-plating; Agree to a revised common understanding on delegated acts, including criteria to delineate between delegated acts and implementing acts; Be more transparent and participative; Commit to better legal drafting so that EU laws are correct, comprehensible, clear, and consistent - so that everyone understands their rights and obligations easily and with certainty; Promote "recast" legislation, so that laws remain clear and well-structured even after being amended; and Make EU legislation as accessible as possible: so everyone can see the legislation that affects them— online, up-to-date, reliable, complete and consolidated.

The Commission's proposal for a new interinstitutional agreement provides a solid foundation for negotiations and the Commission hopes the three Institutions can finalise a new agreement by the end of this year. 4.Refreshing the Existing Stock of Legislation Looking at benefits and costs should be more than just a "snapshot" taken at the birth of a policy: assessment and evaluation should continue over a policy's lifetime to ensure it stays fit for purpose. This means looking back, after a policy has been implemented, at the impact the policy actually had on specific sectors, and suggesting ways to lighten the load without reducing the policy ambition. Such an evaluation will generally involve an open public consultation. We should be clear about where there have been disappointing results and unintended consequences, whether economic, social or environmental. We should be prepared to reconsider and improve it where needed. We also need to find new ways to discuss and agree with the European Parliament and the Council about what has worked and what has not. Without this, there can be no meaningful attempt to cut red tape or make the necessary changes to legislation. The natural tendency of politicians is to focus on new initiatives. However, the EU is judged not just on new political initiatives, but on the benefits and the burden of existing EU legislation. As such, actively managing existing EU legislation is just as important politically as preparing new initiatives. Over time, even well-designed legislation may become out of date, more burdensome than it needs to be, or ceases to achieve its objectives. For example, changes in the market may mean a law is no longer useful, relevant, or serving its purpose. Changing technology may offer the opportunity to deliver the policy goal in a better way – for example, allowing a form to be submitted online. Lessons learned from implementing a policy through better monitoring and evaluation may also provide fresh evidence about which policy solution is the best. 4.1.The REFIT programme – keeping EU Law fit for purpose The Regulatory Fitness and Performance Programme (REFIT) is the Commission's programme for ensuring that EU legislation remains fit for purpose and delivers the results intended by EU law makers. REFIT is not about deregulation but rather about regulating better. It aims to unlock the benefits of EU law for citizens, businesses and society as a whole in the most efficient and effective way, while removing red tape and lowering costs without compromising policy objectives. REFIT is not a one-off review: it is a lasting commitment to keeping the body of EU law lean and healthy. REFIT and ambitious policy-making go hand-in-hand. Candid assessments of existing legislation will often serve to highlight ways of lightening the regulatory load to improve implementation and raise standards. They can also identify new policy challenges emerging in a fast-changing world that older legislation is ill-equipped to address. Since its launch in 2012, REFIT has already brought into much sharper focus the day-to-day challenges the existing stock of legislation brings for citizens and businesses. Progress is monitored using the REFIT scoreboard: the latest version is published today. Building on this momentum, the Commission intends to strengthen REFIT so as to achieve better, more tangible results. REFIT will be more: Targeted – by focusing on the most serious sources of inefficiency and unnecessary burden; Quantitative – estimates of the potential benefits and cost savings will accompany each REFIT proposal; an update of the estimates will be published following adoption of the legislation; and the Commission will work together with Member States and stakeholders to check whether this potential is being translated into real impacts on the ground; Inclusive – the new REFIT Platform will be an invaluable source of suggestions to improve EU laws; Embedded in political decision-making – REFIT will feature prominently in each year's work programme and in the Commission's political dialogue with the other EU institutions before and after the adoption of the work programme. REFIT is a shared responsibility. The Commission calls on the European Parliament and Council to give strong backing to initiatives designed to improve the effectiveness and efficiency of the existing stock of legislation. 4.2.REFIT in action All future REFIT initiatives will reflect this new strengthened approach, drawing on the work of the new REFIT Platform and the results of ongoing evaluations, in particular those evaluations and Fitness Checks identified as priorities under REFIT.

Lessons learned from these reviews will help shape the design of future legislative proposals. Where regulatory costs are found to be disproportionate to the goals pursued, alternative approaches to achieving the same goals will be explored. For instance, future reviews of the rules on the VAT special scheme for small businesses, the EU custom single window and the Ecological Focus Areas could lead to significant savings. New and ongoing initiatives to reduce burdens… A number of new initiatives will be announced as part of the Commission work programme later in the year. However, the Commission is already working actively to reduce burdens in areas such as: –Public procurement: The Commission will propose a standard data form to address the difficulties experienced by SMEs faced with the repeated need to fill in lengthy and complex public procurement documentation. –Business statistics: The Commission will measure and deliver cost-savings for business under a Framework Regulation Integrating Business Statistics (FRIBS) and Single Market Statistics (SIMSTAT). –Chemicals Legislation: EU chemicals legislation has brought considerable cost savings to businesses operating in the Single Market. However, small companies find it difficult and costly to comply with the associated administrative requirements. The Commission will tackle these concerns by simplifying the rules for substances used in small quantities and by delivering an action plan to help SMEs to meet the 1 June 2018 registration deadline for these quantities. Proposals to simplify the authorisation procedure, reduce the amount of information required and increase the predictability of the process will be made in 2015. Repealing outdated legislation… In addition, the Commission will continue to screen sectoral legislation to identify and propose the repeal of outdated legislation that no longer serves its purpose or is excessively burdensome. Twenty-three candidates for repeal have been identified in various policy areas . Annual exercises to identify obsolete acts are carried out in the areas of agriculture and fisheries. These best-practices will be extended across the Commission. Evaluations and Fitness Checks… In addition, reviews and comprehensive evaluations are underway and will prepare the ground for possible future action across a wide range of policies and legislation – for instance on late payments, pesticides; food nutrition and health claims; motor insurance; the EU Derivatives Regulation and the Capital Requirements Regulation. Other evaluation work in the REFIT pipeline is also nearing completion. In particular: –The Fitness Check of the General food law (Regulation 178/2002) will evaluate whether its fundamental principles and definitions have been implemented effectively and whether new responsibilities for operators are fit for purpose, taking into account the rules and standards established by the subsequent legislation, their implementation and the resulting cumulative effects and potential overlaps. –As a follow up to the comprehensive evaluation of Occupational Health and Safety set to conclude end 2015, the Commission will identify shortfalls that need to be addressed and develop specific measures to relieve the burdens for SMEs and to help them comply with EU requirements. Possible action to improve coherence and consistency between Occupational Health and Safety legislation and chemicals legislation (REACH) will be considered. –Similarly, the results of the Fitness Check on chemicals legislation outside of REACH (to be concluded in 2016) will identify possible further burden reduction actions. Improving implementation… Reducing administrative burden is not only about changing legislation. There are many other ways to help improve the way EU law is implemented. For example, the Commission will: –Launch a broad review of reporting requirements to see how burdens can be alleviated. This review will have a particularly strong focus on areas where stakeholders have recently indicated their concerns, such as agriculture, energy, environment and financial services. –Cooperate with Member States in examining the best ways to ensure compliance with EU law at national level, including those that have initiated a review of how well EU and Member State regulation combines to help protect the environment (as in the 'Make It Work' initiative). The objective is to identify solutions to enhance the efficient application of EU law at national and local level by reducing its complexity while maintaining its level of protection. –Finalise work on a database to provide a comprehensive and reliable overview of EU and Member State requirements for food labelling to assist SMEs in particular. –Continue to carefully monitor that EU Directives are transposed in a clear, correct and timely manner and that EU rules are properly implemented and enforced in all Member States, bringing legal certainty and allowing citizens and businesses to benefit from the opportunities of the single market.