COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS - Effective Problem Solving in the Internal Market ("SOLVIT")

Executive Summary

The SOLVIT Network has been set up to help citizens and businesses when they run into a problem resulting from possible misapplication of Internal Market rules by public administrations in another Member State. It builds on an existing network of Co-ordination Centres, one for each Member State, which have been established in 1997 to deal with such problem cases. This network, however, has certain shortcomings which need to be tackled.

The Communication therefore proposes four steps forward:

- To set-up an EU-wide online database by June 2002 which is user-friendly, enhances transparency and by creating peer pressure should encourage Member States to achieve better results.

- To provide clear principles for Co-ordination Centres to follow when dealing with cases within the SOLVIT network. These principles will be set out in a Commission Recommendation to which the Council is invited to commit itself.

- To promote the SOLVIT network widely once it is established. Targeted information campaigns aimed at "European intermediaries" could complement national actions.

- To undertake preventive action by seeking to remove the causes of recurring problems.

// 1. Introduction

The Internal Market offers many opportunities for citizens and businesses ... // Every day, thousands of European citizens and businesses exploit the many exciting opportunities offered by the Internal Market. Some wish to move to another Member State, so they apply for a residence permit. They may want to work as a doctor, nurse or engineer, so they ask to have their professional qualifications recognised. Companies sell their products across the Internal Market, or set up local establishments in their main EU markets. They subsequently have to comply with conformity assessments, CE marks and other requirements. This is what the Internal Market is all about - an area where people are free to achieve their aspirations, where businesses can flourish, and where initiative is rewarded. Internal Market rules are intended to make all this possible, not to get in the way.

...but sometimes the law is misapplied and benefits denied. // Yet, however carefully the Internal Market's legal framework is designed, there will inevitably be mistakes, misunderstandings and disagreements, if only because of the innumerable cross-border movements and transactions that take place. A local authority takes too much time in issuing a residence permit. A valid diploma is not recognised. Someone has difficulty in getting a car registered. A national authority prevents the marketing of a special type of equipment, even though the product has been approved for sale in the Member State of origin. These are some of the kinds of Internal Market problems that people can run into.

When this happens, speedy redress needs to be available. // Resolving such practical problems is critical to the credibility of the Internal Market in the eyes of citizens and economic operators, particularly small and medium-sized businesses. We know from experience, however, that resolving problems can take a long time: sometimes many months or even several years. Indeed, some problems never get resolved. Faced with long delays or not knowing where to go, many people do not bother to complain in the first place, or simply give up. This prevents a lot of people from doing what they are entitled to by Community law. When this happens, confidence in the European Union is eroded.

Court cases often take years to resolve. // In some cases, legal action to enforce one's rights is necessary: it interprets the law, sets important precedents, and serves as a deterrent to future wrongdoing. It falls to the Commission to ensure full respect of Community law by Member States, particularly in cases of non-transposition of Community provisions and when national law is believed to be incompatible with Community law. But it can take years to resolve disputes [1], which is often too long for the original complainant to benefit. When problems stem from misapplication of the law, however, one should be able to find redress quickly and without legal action.

[1] See Single Market Scoreboard of May 2001

Pragmatic solutions need to be found. // Good progress has been made in fostering alternative dispute resolution (ADR), which involve the intervention of a neutral third party, in order to enhance consumer confidence in the private sector. [2] ADR can save time and money and generate less ill will than legal action. For example, FIN-NET [3] enables aggrieved consumers to obtain speedy resolution of problems resulting from the purchase of a cross-border financial service. The European Extra-Judicial Network [4] for resolving consumer disputes is another example. Progress is also well underway in establishing online ADR [5]. While these mechanisms focus primarily on consumer-to-business (or C2B) transactions, this Communication deals with citizens' or businesses' problems deriving from a misapplication of Internal Market rules [6] by public administrations (or C2A and B2A). In most cases, such problems are caused by ignorance or a simple administrative oversight.

[2] The Commission will shortly publish a Green Paper on ADR in the private sector.

[3] See http://europa.eu.int/comm/internal_market/en/finances/consumer/adr.htm

[4] SEC(2000)405and http://europa.eu.int/comm/consumers/policy/developments/acce_just/acce_just07_workdoc_en.pdf

[5] The Commission will shortly publish a Communication on Promoting Online Dispute Resolution (ODR) services in the Information Society. More details on ODR activities can be found at http://econfidence.jrc.it

[6] Internal Market rules concern provisions governing the functioning of the Internal Market in the meaning of Article 14 (2) EC Treaty.

A one-stop shop for cross-border problems

Different mechanisms to assist citizens and businesses must also be better co-ordinated. // The world looks different through the eyes of a citizen or business than through the eyes of the public sector. When citizens have a problem in the Internal Market, whether it relates to a bad experience when buying goods across borders or when trying to exercise their civil liberties, they do not wish to wander around looking for a helping hand. They want one door to knock on: A one-stop access to clear information about their rights, advice and a remedy. The same is true for business.

Much progress has been made to provide information to citizens and businesses about their rights and help if they have a problem. [7] The Dialogue with Citizens and Business provides a wealth of useful information and its Citizens Signpost Service, soon to be re-launched, provides personalised advice and assistance on how to resolve practical difficulties. The other initiatives set out in Figure 1 are also key elements of the service to citizens and business. Nonetheless, it is clear that further work is needed to integrate these existing initiatives so that Europeans have access to a seamless service. As part of the e-Commission initiative, [8] the use of portal sites will enable citizens and businesses users to access all information, advice and problem solving services easily as from early next year, without the need for familiarity with EU administrative structures. Also starting early next year the Commission will bring together those responsible for information, advice and problem solving services with a view to exchanging information and developing a strategy to achieve coherence between them.

[7] See information in Annex 1 - including Internet addresses

[8] See SEC(2001)924 and http://www.cc.cec/di/e-commission/docs/sec_2001_0924_en.pdf. and the Communication "Towards the e-Commission - EUROPA 2nd Generation" available under: http://www.europa.eu.int/comm/dgs/press_communication/pdf/e2g_en.pdf

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// The Commission calls on:

- The European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions to confirm their political intention to strengthen the means of resolving problems within the Internal Market by endorsing the overall approach set out in this Communication;

- The Council and the European Parliament to endorse the Commission Recommendation, which sets out principles for the use of the SOLVIT network;

- The Council to adopt a Resolution confirming its political commitment to implement these principles together with a pledge by each Member State to provide adequate human and budgetary resources for this initiative;

- The Member States to undertake the necessary promotional activities to bring the SOLVIT network to the attention of all potential beneficiaries, i.e. citizens or businesses.

ANNE|X| 1 Addresses of mechanisms to provide information to citizens and businesses

Information and advice

Citizens and Business Dialogue

http://europa.eu.int/comm/internal_market/en/update/citizen/ and

http://citizens.eu.int/

Euro Info Centres

http://europa.eu.int/comm/enterprise/networks/eic/eic.html

Euroguichets

http://europa.eu.int/comm/consumers/policy/euroguichets/index_en.html

Europe Direct Telephone Service

http://europa.eu.int/europedirect/en/about_en.html and http://europa.eu.int/europedirect/index.html

Alternative Dispute Resolution

FIN-NET

http://europa.eu.int/comm/interanl_market/en/finances/consumer/adr

European Extra-Judicial Network

http://europa.eu.int/comm/consumers/policy/developments/acce_just/acce_just07_workdoc_en.pdf

Online ADR

http://econfidence.jrc.it

FINANCIAL STATEMENT

1. TITLE OF ACTION : COMMUNICATION ON EFFECTIVE PROBLEM SOLVING IN THE INTERNAL MARKET (SOLVIT)

2. BUDGET LINE(S) + HEADING(S) : Different operational budget lines - overall figures

2.1. Total allocation for action (Part B): EUR million for commitment: 1.235

2.2. Period of application: 2001-2003. The action will be revised in 2003

2.3. Overall multi-annual estimate on expenditure:

a) Schedule of commitment appropriations/payment appropriations (financial intervention) (see point 6.1.1)

EUR million (to 3rd decimal place)

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b) Technical and administrative assistance and support expenditure (see point 6.1.2)

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c) Overall financial impact of human resources and other administrative expenditure (see points 7.2 and 7.3)

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2.4. Compatibility with the financial programming and the financial perspective

|X| Proposal compatible with the existing financial programming

| | This proposal will entail reprogramming of the relevant heading in the financial perspective

| | This may entail application of the provisions of the Interinstitutional Agreement.

2.5. Financial impact on revenue:

|X| No financial implications (involves technical aspects regarding implementation of a measure)

OR

| | Financial impact - the effect on revenue is as follows:

N.A.

3. BUDGET CHARACTERISTICS

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4. LEGAL BASIS

Article 95 EC Treaty

5. DESCRIPTION AND GROUNDS

5.1. Need for Community intervention

5.1.1. Objectives pursued

Under the Single Market Action Plan of 1997 Member States set up Contact Points for business, Contact Points for citizens and national Co-ordination Centres. The Co-ordination Centres act as channels of communication between Member States in order to find swift and pragmatic solutions to problems which citizens and businesses encounter in exercising their rights under the Internal Market rules.

The purpose of the Communication is to improve the existing network between national administrations by an integrated approach, which is called "SOLVIT". An online inter-active database should be set up by June 2002. This new database will give Member States a working tool which is user-friendly, uses modern technology, enhances transparency and will create some peer pressure to speed up the problem resolution.

A Commission Recommendation will give some clear guidance to the Co-ordination Centres when they are handling cases within the network. These principles will complement the online database and will give Member States the instruments to develop the full potential of the network.

Once the new network is up and running, it should be more widely advertised. In addition to national campaigns, the Commission might think of some support in this respect. Finally, remedial action should target those areas where most cases happen. The objective should be to remove their underlying causes in order to prevent problems from re-occurring.

Measurable objectives pursued by the Communication are:

a) to improve the success rate, that is to resolve problems within short deadlines (10 - 14 weeks);

b) to increase the amount of cases the network is dealing with.

5.1.2. Measures taken in connection with ex ante evaluation

The Commission, together with the Member States, assessed the functioning of the existing network and concluded that the current network had to be improved.

Main weaknesses identified were:

- slowness on the part of other Member States to respond to inquiries;

- lack of knowledge on whom to contact in the other Member State;

- time-consuming and costly translation of documents;

- lack of awareness amongst citizens and businesses;

- limited resources devoted to problem solving.

The measures indicated in the Communication will address these weaknesses.

5.1.3. Measures taken following ex post evaluation

Not applicable

5.2. Actions envisaged and arrangements for budget intervention

The ultimate aim of the Communication is to simplify the life of Europe's citizens and businesses by finding swift and informal solutions to their problems. All persons and companies engaging in cross-border activities are potential beneficiaries of the Communication, as a result both of the better functioning of the problem solving network between national administrations and of the actions designed to prevent problems from re-occurring.

The Communication aims to put in place some elements enabling these general objectives to be attained. These elements are:

- establishment of a database together with a limited-access telecommunications system to allow efficient communication within the network and provide access to information needed for the performance of its functions;

- establishment of principles for handling cases within the network;

- meetings of members of Co-ordination Centres providing them with training on the database and a forum for discussion of questions related to the functioning of the network;

- developing of national information strategies to raise the target population's awareness about the network complemented by promotion activities at European level;

- specific prevention actions targeted to a or some Member State(s) consisting of training seminars, short term visits, guidelines, etc.;

- establishment of criteria measuring the performance by the Co-ordination Centres.

5.3. Methods of implementation

Action 1: Creation and maintenance of a database, equipped with a secure access system, and regular training sessions for Member States Co-ordination Centres, providing them with the necessary tool to resolve problems.

Resource requirements: 0.080 million EUR on the 2001 budget, 0.188 million EUR on the 2002 budget, 0.088 million EUR on the 2003 budget.

Action 2: Preparation of information material, guidelines and other documents.

Resource requirements: 0.036 million EUR on the 2002 budget and 0.1 million EUR on the 2003 budget.

Action 3: Preparation of a conference of half-day thereby raising the awareness at the European level about the existing of the SOLVIT network.

Resource requirements: 0.02 million EUR on the 2002 budget.

Action 4: Creation, construction and maintenance of a Website dedicated to the SOLVIT network, to be installed on the Commission's site.

Resource requirements: 0.125 million EUR on the 2002 budget.

Action 5: Subventions to Member States allowing them to organise awareness raising events.

Resource requirements: 0.15 million EUR on the 2002 budget.

Action 6: Organisation of training seminars and short term visits for Member States administrations.

Resource requirements: 0.468 million EUR on the 2003 budget.

A new auxiliary post (B category) will be needed in order to co-ordinate and manage on a daily basis Actions 3, 5 and 6.

Action 7: Technical assistance for establishing guidelines or other documents.

Resource requirements: 0.015 million EUR on the 2003 budget.

Action 8: Visit of capitals for follow-up of the application by Member States.

Resource requirements: 0.091 million EUR on the 2002 budget.

FINANCIAL IMPACT

6.1. Total financial impact on Part B - (over the entire programming period)

6.1.1. Financial intervention

Commitments in EUR million (to the 3rd decimal place)

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6.2. Calculation of costs by measure envisaged in Part B (over the entire programming period)

Commitments in EUR million (to the 3rd decimal place)

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7. IMPACT ON STAFF AND ADMINISTRATIVE E|X|PENDITURE

7.1. Impact on human resources

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7.2. Overall financial impact of human resources

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The amounts are total expenditure for twelve months.

7.3. Other administrative expenditure deriving from the action

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The amounts are total expenditure for twelve months. Actual mobilisation of the necessary administrative resources will depend on the Commission's annual decision on the allocation of resources, taking into account the number of staff and additional amounts authorised by the budget authority.

8. FOLLOW-UP AND EVALUATION

8.1. Follow-up arrangements

The revised network will be monitored on regular basis with the help of pre-defined criteria measuring its effectiveness. The results will be made public as from November 2003 in the Internal Market Scoreboard.

8.2. Arrangements and schedule for the planned evaluation

The results published in November 2003 will be used as a basis to measure the effect of the action and its effective implementation. They will constitute the main element for any decision on the further continuation of the action.

9. ANTI-FRAUD MEASURES

The rules and procedure governing procurement of goods and services for the Communities will be strictly complied with, in accordance with the financial regulation applicable to the general budget of the European Communities, the regulation on modalities for the implementation of the financial regulation and internal rules.

Features of the Online Inter-Active Database

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