COMMISSIOI ' OF THE EUROPEAN COMMUNITIES 
Brussels, 24.11.1997 
COM(97) 618 final 
REPORT FROM THE COMMISSION TO THE COUNCIL AND THE 
EUROPEAN PARLIAMENT ON THE RESULTS OF THE SECOND 
PHASE OF SLIM AND THE FOLLOW-UP OF THE 
IMPLEMENTATION OF THE FIRST PHASE RECOMMENDATIONS 

SUMMARY 
1. The Dublin European Council in December 1996 reiterated the importance of regulatory 
simplification and requested, in this context, the extension of the SLIM initiative. This 
confirmed the favourable reception by the Internal Market Council on 26 November 1996 
of the Commission's report on the first phase of the project. Finally, the European 
Parliament, through the Crowley Report, manifested its strong support for SLIM and the 
efforts undertaken by the Commission in the simplification of legislation. 
2. SLIM is not to be seen as an isolated simplification exercise. The Action Plan for the 
Single Market, endorsed by the Amsterdam European Council in June 1997, proposes that 
the Commission adopt a broader approach to simplification covering not only Community 
legislation but also national measures related to the Single Market. This "rolling 
programme of simplification" should encompass the SLIM methodology and other 
simplification exercises. The "Better Law Making" Report to be presented by the 
Commission at the European Council in Luxembourg in December will also provide and 
overview and emphasise Community action on simplification, including SLIM and other 
initiatives such as B.E.S.T.. 
3. This Communication intends to summarise the recommendations of the SLIM teams for 
the four areas discussed in this second phase, VAT obligations, Combined Nomenclature 
for External Trade, banking services and fertilizers; as well as the Commission's position 
towards these recommendations. Furthermore, it intends to inform the Council and the 
European Parliament on the progress being made in the implementation of the SLIM 
teams' recommendations from the previous phase. 
4. Concerning the implementation of the recommendations from the first phase, it has to be 
underlined that the problems that have arisen in the implementation of the Intrastat 
recommendations (see below) show that there is a certain contradiction between, on one 
hand, the political determination to simplify, repeatedly expressed by the Internal Market 
Ministers, and the reluctance to adopt simpler data collection procedures and a simplified 
nomenclature for internal trade, on the other. 
5. The SLIM teams comprised five experts from national administrations and five 
representatives of users of the legislation. They started their work in June 1997 and 
submitted their reports at the end of October 1997. Each team was chaired by a Chairman 
nominated by the Commissioner responsible for the legislation. One of the biggest 
concerns in this exercise was to increase transparency in the working of the teams. A 
particular effort was made to obtain the views of those Member States and parties 
concerned not participating directly in the teams. 
The Simpler Legislation for the Single Market (SLIM) initiative was launched by the 
Commission in May 1996 with strong encouragement and support from Internal Market 
Ministers. It was aimed at identifying ways in which Single Market legislation could be 
simplified. It was also part of the Commission's Confidence Pact for Employment 
Simplifying legislation should contribute to the Pact's objectives of enhancing the 
competitiveness and employment potential of European business. It should also help to make 
the workings of the Union more transparent and effective, without decreasing the level of 
protection for citizens, workers or the environment. 
The European Council in Dublin in December 1996 reiterated the importance of regulatory 
simplification and requested, in this context, the extension of the SLIM initiative. This 
confirmed the favourable reception by the Internal Market Council on 26 November 1996 of 
the Commission's report on the first phase of the project. Finally, the European Parliament, 
through the Crowley Report1, manifested its strong support for SLIM and the efforts 
undertaken by the Commission in the simplification of legislation. The Commission 
announced2 in May 1997, the launch of a second phase of SLIM: it would examine VAT 
obligations, the Combined Nomenclature for External Trade, fertilisers and banking 
legislation, taking into account the suggestions made by the Member States, the European 
Parliament, the Economic and Social Committee and business representatives. 
The Commission took into account the following factors in choosing the areas for the second 
phase of SLIM: 
- evidence that the legislation concerned imposed an excessive administrative burden on 
business as a result of its over-complexity; 
- the need to ensure that the use of the SLIM methodology would bring added value; 
- the need to achieve a balance between the objectives for each of the areas concerned and 
the operational capacities of the SLIM method (small teams working during a short period 
of time); 
- the availability of sufficient resources within the Commission services; 
- the desire not to interfere with exercises of legislative revision or consolidation already 
underway. 
SLIM is not to be seen as an isolated simplification exercise. The Action Plan for the Single 
Market3, endorsed by the Amsterdam European Council, proposes that the Commission adopt 
a broader approach to simplification covering not only Community legislation but also 
national measures related to the Single Market. Such an approach should avoid any danger 
that SLIM might become an isolated initiative trying to cope with the problems stemming 
from over-complex legislation and, hence, have a limited impact. This "rolling programme of 
simplification" should encompass the SLIM methodology and other simplification exercises. 
With a view to maintaining the momentum of simplification, the Action Plan provides for 
two new phases of SLIM beginning in January and May 1998 respectively. The "Better Law 
Making" Report to be presented by the Commission at the European Council in Luxembourg 
1 Crowley report A4-0108/97 adopted on 9.4.97 
2 Commission's Working Document SEC(97)951 of 14.5.97 
Communication of the Commission to the European Council, CSE(97)1 final of 4.6.97 
in December will also provide and overview and emphasise Community action on 
simplification, including SLIM and other initiatives such as B.E.S.T.. 
II. The SLIM working method 
The work of the SLIM teams has proved to be very fruitful in terms of proposals for 
simplification in the different areas. The small size of the groups has encouraged open debate 
leading to the identification of problems and solutions. However, the crucial yardstick for 
measuring the success of the SLIM methodology is the speed and ease with which proposals, 
stemming from the teams' recommendations are acted on, first by the Commission in 
preparing specific legislative proposals and actions; and subsequently by the Council and the 
European Parliament. 
The problems that have arisen in the implementation of the Intrastat recommendations (see 
below) show that there is a certain contradiction between, on one hand, the political 
determination to simplify, repeatedly expressed by the Internal Market Ministers, and the 
reluctance to adopt simpler data collection procedures and a simplified nomenclature for 
internal trade, on the other. 
The SLIM teams comprised five experts from national administrations and five 
representatives of users of the legislation. They started their work in June 1997 and submitted 
their reports at the end of October 1997. Each team was chaired by a Chairman nominated by 
the Commissioner responsible for the legislation. 
Following the comments made after the conclusion of the first phase, the Commission has 
paid particular attention to improving transparency in the work of the teams. This was not 
easy task, particularly given the time constraints imposed on the work, but the teams' 
secretariats circulated meeting reports, written submissions and working papers, as quickly as 
possible. The teams also sent questionnaires to all Member States and other interested parties 
on the main issues to be discussed. It should be emphasised that all the teams, .to varying 
degrees, received written contributions from Member States and user's representatives not 
represented in the teams. These contributions were closely examined and incorporated into 
the final discussions. 
III. Follow-up of the SLIM Pilot Phase 
A. Intrastat 
I. Background 
As regards the short term simplification measures implementing the recommendation of the 
SLIM/Intrastat team, the Commission has already adopted two regulations simplifying the 
declaration of net mass4 and statistical value5. Two draft EP/Council regulations6 
concerning the reduction of the data elements collected and a simplified nomenclature 
have been submitted and discussed by the Economic Questions Council Group at its meetings 
of 15 July and 1 October 1997. 
4 Commission Regulation (EC) 2385/96 of 16.12.96, O.J. L326 of 17.12.96 
5 Commission Regulation (EC) 860/97 of 14.5.97, O.J. L123 of 15.5.97 
6 Com(97)252 final of 30.5.97 and Com(97)275 final of 4.6.97 
Other simplification measures envisaged for the medium and longer-term, cover stedies on 
alternative collection methods including sampling, a two-tier system, and the one flow 
system. Accompanying measures such as information campaigns and the extensive use of 
computer systems, to complement the short, medium and long-term measures are also 
planned. 
2. Progress made 
The net mass regulation entered into force on 1 January 1997, while the regulation on 
statistical value will come into force on 1 January 1998. 
As far as the reduction of the data elements collected is concerned, Member States have 
shown strong opposition to the initial proposal presented by the Commission. However, a 
compromise tabled by the Presidency has been positively received, although no final 
agreement has been reached yet. The Commission has so far reserved its position on this 
compromise proposal, given that it implies more limited scope for simplification, especially 
for SMEs, than the initial Commission proposal. Regarding the Commission's proposal 
providing the introduction of a simplified nomenclature, the Presidency has taken note of 
the strong opposition from Member States, and no further progress has been made. 
As regards simplification measures for the medium and long term, the Commission has 
launched a large number of studies in co-operation Member States aiming at assessing the 
impact on business, and especially on SMEs, of introducing alternative collection methods; 
such as sampling, a two tier system and a one flow system. The results and the evaluation of 
the studies are expected during the second half of 1998. 
The accompanying measures mainly covered by the EDICOM programme have contributed 
to the improvement and modernisation of INTRASTAT, and have been supported by all 
parties. The EDICOM Council Decision7 covers this programme until December 1999. 
Taking into account that most likely the expected results of the studies will call for farther 
revisions of the INTRASTAT system in the coming years, a high priority must be given to 
the enlargement and prolongation of this EDICOM programme. 
B. Recognition of diplomas 
In its Communication to the Council on the SLIM Pilot Project8, the Commission announced 
its intention to come forward with proposals to streamline the functioning of the Advisory 
Committees for diplomas and to simplify the updating of the lists of diplomas eligible for 
automatic recognition, before the end of 1997. In order to fulfil this objective, the 
Commission is currently finalising a proposal for a European Parliament/Council directive 
with a view to its adoption and transmission to the Council before the end of the year. 
In the same document, the Commission announced its intention to pursue the 
recommendation to introduce a more output-oriented approach to the definition of education 
and training requirements in the context of a review of those requirements for the nurses' 
directive. The Commission services are examining this suggestion with the Advisory 
Committee for Training of Nurses 
7 Council Decision 96/715/EC of 9.12.96, O.J. L327 of 18.12.96 
8 Com(96)559 final of 6.11.96 
C. Ornamental plants 
In its' Communication to the Council on the SLIM Pilot Project the Commission indicated its 
intention to come forward with proposals based on a thorough examination of the different 
options put forward by the SLIM Team. As a result of this examination, the Commission 
intends to make a proposal to the Council before the end of 1997 for a major revision of 
Directive 91/682/EEC.The aim of the proposal will be to simplify the existing legislation and 
enhance the competitiveness and employment-creating potential of business. For 
transparency's sake the proposal will probably take the form of a recasting of the directive 
and will deal in particular with the main problem areas identified by the SLIM Team. 
D. Construction products 
In order to simplify the Construction Product Directive (CPD) in accordance with the SLIM 
recommendations, efforts have focused on rendering the process of preparing standards in this 
field more efficient. 
1. Adoption of decisions and mandates in an improved process 
The Commission accelerated the elaboration of mandates for CEN, including the necessary 
underlying and accompanying decision. The immediate result after the SLIM exercise was 
the successful preparation of four mandates9. All have received a positive opinion of the 
Regulatory Committee on Construction and have been passed on to CEN which has to 
respond with a work programme. Following the timetable of the ten working programmes 
which have been transferred from CEN to the Commission, a harmonised standard for several 
construction products is to be expected in 1998. 
The Commission also prepared mandates for establishing guidelines for European technical 
approval in a number of areas10. With regard to metal anchors in concrete the first CE marking 
according to the CPD will become a reality during the first half of 1998. 
The harmonisation of most construction products presupposes harmonised norms for fire 
testing. With financial and administrative assistance from the Commission it has been 
possible to resolve these issues at last11. Harmonised norms for fire testing will be available in 
1999. 
The Commission intends to present the most important remaining decisions and mandates to 
the Regulatory Committee by mid-1998. This means that 80%-85% of all construction 
products envisaged to fall under the harmonised scheme of the CPD will have been treated by 
the Commission. At the same time this covers the economically most important products or 
product families for the construction sector. 
2. Amending the Construction Products Directive 
Although preparatory work to establish harmonised technical specifications has been 
completed successfully in some areas and will be completed soon in others, it remains 
difficult to make progress for many construction products, and that, as a result, the Interna! 
Market does not function to its full capacity. It therefore seems necessary to adapt the (CPD) 
9 "Cement, Building Limes and Hydraulic Binders ", "Reinforcing and Pre-stressing Steel for concrete ", 
"Masonry products " and " V/ood based Panels and related products " 
10 External Thermal Insulation Composite Systems (ETÎCS) and Plastic anchors for use in concrete and masonry 
11 Decision 94/611/EEC on Euroclasses, mandate for reaction to fire, Decision on class A without testing 
96/603/EEC, mandate for resistance to fire and Decision on the SBI configuration. 
,-f in order to remedy this situation, In accordance with the recommendation of the SLIM team 
reiterated in the Action Plan for the Internal Market12 and detailed in the Communication o 
the Commission on the Competitiveness of the Construction Industry13; the Commission 
intends to amend the CPD in order to bring it into line with other New Approach Directives. 
Those amendments would be aimed at making possible for manufacturers to apply for a CE 
marking, even in the absence of harmonised technical specifications, provided that the 
producer can demonstrate conformity of the product with the essential requirements of the 
directive. The proposed amendments would affect Article 4 and related provisions of the 
Directive. 
IV. Recommendations of the SLIM teams m pfea.se II. 
A. VAT 
1. Background 
The current VAT system imposes excessive costs and constraints on business and discourages 
trade between Member States due to over-complexity of existing rules. Moreover, 
divergences in the application of national legislation distort fair competition within the Single 
Market. 
The proper functioning of the Single Market, therefore, requires a reassessment of the current 
VAT system. With this aim, the Commission has adopted a working programme with a view 
to introducing a common VAT system14, based on the principle of a single place of taxation 
and allowing the establishment of a real Community fiscal area. Nevertheless, the 
implementation of such a programme, which consists of several stages, has to form part of a 
long-term strategy. For this reason the Commission has considered it necessary to consider 
right away complementary simplification measures that would reduce burdens for business 
while preparing the introduction of the new VAT system. 
The SLIM team has examined a set of basic obligations related to the VAT, and particularly 
those imposed to operators in the framework of the 6th VAT Directive15, and the 
corresponding national application measures. Nevertheless, the SLIM exercise has not 
necessarily proposed a solution to all the problems that have been identified, since the 
examination of certain questions has shown that a solution can only be found in the 
implementation of the working programme or in the context of the work of several 
committees. 
2. Recommendations 
The recommendations of the SLIM teams focus on the following issues: 
• modifying the rules applicable to tax representation; 
• improving and reinforcing the system of mutual assistance on recovery; 
n See above 
13 Com(97)539 final 
14 Com(96)328 du 22.07.1996 
,s77/388/CEE du 17.05.1977 
• harmonising the registration formalities among Member States, establishing single 
"contact points", a single registration form and a single identification system for each firm 
in each Member State, 
• studying: 1) the details considered necessary for drawing up an invoice for VAT purposes 
and the legal and technical requirements for electronic invoicing, 2) the possibility of 
creating a basic common VAT return and the usefulness of the various statements 
required by Member States, 3) the time allowed for refunding VAT by national 
administrations, 4) the possibilities and the different ways of reforming the tax-refund 
procedures laid down by the 8 VAT Directive16 in order to make it equally easy to 
recover tax paid within the country and tax paid in another Member State; 
• improving the reliability of the information included in the common system of data 
exchange (VIES)17 and facilitating access for traders, examining the possibility of 
reducing the administrative burden imposed by the VIES system on SMEs and those 
firms with a low volume of intra-community trade; 
• Taking into account the advantages of systematic registration of all firms subject to VAT, 
while studying the possibility of establishing bands of thresholds for taxation and the 
submission of returns by SMEs; 
• Avoiding imposing superfluous supplementary obligations on traders. 
3. Commission's position 
The Commission intends to propose before the end of 1998 a reinforcement of mutual 
assistance on recovery, a legislative reform aiming at easing the tax representation, as well 
as undertaking a reflection on a more radical reform of the returns procedures to non-
estahlished subjects, of the tax paid in another Member State. Furthermore, a study will be 
undertaken in 1998 on electronic invoicing. The Commission is also disposed to examining 
the time needed for refund of the tax within the Community. The Commission will present 
shortly within the framework of its VAT strategic programme a proposal relating to the 
harmonisation of deductibility rights, and a study on the system applicable to SMEs. On this 
last point, the Commission has already invited Member States to grant SMEs longer 
deadlines to present their VAT declarations^. Concerning the VIES system, this has already 
been subject to several improvements since its creation in 1993, and it is difficult to achieve 
further progress in the framework of the current VAT system. Nevertheless, the SCAC 
Committee will in 1998 examine to what extent the burden on SMEs and firms with a low 
volume of intra-Community trade can be reduced. Finally, the Commission has already 
recommended in 1997 the creation of "single contact points" in each Member State". 
16 79/1072/CEE du 6.12.1979 
17 Regulation (CEE) n°218/92 of 27.02.1992 
18 Recommendation n°97/344/CE of 22.04.1997 
19 idem 
B. Fertilisers 
1. Background 
The existing legislation on the marketing on fertilisers was selected to be examined under the 
SLIM because it presents several possibilities for improvement, such as simplification of the 
presentation of the legislation (cun-ently 16 Directives), clarification of the scope of 
harmonised rules and streamlining the approval process and enforcement. 
2. Recommendations 
The SLIM team concluded that the fertiliser legislation in its present form works well in 
many respects. Its conclusions target all five possibilities for improvement and the team 
makes by unanimity the following broad proposals (See Annex 2 for more detailed 
description): 
• that a single recasting Directive on fertilisers replaces the existing Directives, clarifying 
and modernising the legislative approach; 
• definitions for fertiliser and for "EC Fertiliser" and delineates the scope of the harmonised 
rules, providing, inter alia, for future coverage of organic and organo-mineïal fertilisers. 
• a whole series of simplifications for the addition of new fertilisers. 
• a uniform system of enforcement control and reporting by accredited laboratories, in 
keeping with the Action Plan for the Single Market20; 
• that the submission of Commission's proposals to add new fertilisers and new groups of 
fertilisers be preceded by an appropriate Scientific Committee examination. 
3 Commission's position 
The Commission endorses all the above recommendations and intends to make the relevant 
proposals with a view to their implementation. The specific recommendation to continue 
studying the problem of cadmium in fertilisers is already taken up and this work is in hand. 
C. Combined Nomenclature for External Trade 
1. Background 
It was considered advisable to undertake a SLIM exercise for this area, in order to simplify 
the Combined Nomenclature used in external trade (CN) in a way which was compatible with 
the actions already proposed by the SLIM/Intrastat team. 
The aim of the CN SLIM team was initially to target the elimination of CN subdivisions (CN 
codes) which have become obsolete in economic and trade terms, taking into account the 
proposals made by SLIM/Intrastat. However, in fulfilling its task the CN SLIM team decided 
to look at the future requirements for a CN used in external trade and to consider specific 
actions in order to reduce burdens on business. It also evaluated proposals to stop the growth 
and eventually reduce the size of the CN, which together with other proposals, would lead to 
a modernisation of the CN. 
20 See above 
2. Recommendations 
In view of the time-scale and the need for co-ordination with SLIM Intrastat exercise the CN 
SLIM team found it inappropriate to present detailed proposals which would require 
immediate action. Due to the time constraints, the team also considered it inappropriate to lay 
down a detailed schedule for the implementation of the actions resulting from its 
recommendations. However, it recommended that such actions be implemented as soon as 
possible within reasonable timeframes and that, as a result a continuous process of 
simplification and facilitation should be undertaken. The team decided to present 11 
recommendations, in particular by agreeing to establish a "Code of Conduct for maintaining, 
creating and deleting CN subdivisions to the HS nomenclature", which should result in an 
important reduction in the number of 8-digit CN subdivisions in the forthcoming years. 
3. Commission's position 
The Commission endorses the findings of the CN SLIM team; in particular setting up a 'Code 
of Conduct', targeting specific areas for simplification and providing tools to facilitate 
reporting of data. A cleaning-up exercise should start as soon as possible, in order to enable 
changes in the CN to be applied from 1.1.1999, and all headings in the CN should be 
validated (over a period of time). 
These steps can be taken, initially, within the existing legal framework established by Council 
Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common 
Customs Tariff (CCT)21. In some cases the successful outcome depends not only on the 
Commission, Member States and trade but also on the reactions ofnon-EU interested parties. 
Regarding the first recommendation of the report on the use of one single nomenclature for 
intra and extra trade the Commission considers that this principle is compatible with 
measures proposed to simplify the nomenclature in the field of intra-Community trade 
statistics. These measures were submitted by the Commission to the European Parliament 
and Council in June 1997 following the SLIM/INTRASTAT phase I recommendations and are 
still under discussion (see above). 
D. Banking services 
1. Background 
Banking directives are often described as technical and complex. The objective of the SLIM 
exercise was to examine whether this set of legislation could be simplified or improved, 
bearing in mind that some of these directives have been in place ten -and even twenty- years. 
Given the time constraints, the team had to focus on the most important banking directives. It 
reached the overall conclusion that these banking directives could not be substantially 
simplified since the complexity of the directives corresponds to the complexity of the 
situations they address and often reflects the outcome of delicate negotiations at Council 
level. Furthermore, they constitute a coherent set of legislation reflecting close co-operation 
between the Commission and Member States. 
The team concluded that most difficulties originating from the application of the EU banking 
directives were not the result of excessive complexity. Their origins were technical (the 
difficulty in applying the same rules to very different categories of credit institutions), 
21 OJ No L 256 of 7.9.1987, p. 1 
10 
The team concluded that most difficulties originating from the application of the EU banking 
directives were not the result of excessive complexity. Their origins were technical (the 
difficulty in applying the same rales to very different categories of credit institutions), 
procedural (the difficulty, inherent in the Union .decision-making process, of legislating at a 
pace which corresponds to the rapid evolution of financial services and international 
standards), and political (divergence of views between Member States sometimes produce 
unsatisfactory compromises in the directives). 
2 Recommendations 
The SLIM team recommended by unanimously that: 
® all relevant national, European and international institutions co-ordinate their action in 
order avoid double reporting requirements. 
® steps are taken to ensure that measures of a purely technical nature or that have been 
subjects of lengthy discussions at international level benefit from a fast-track adoption 
procedure. 
• inconsistencies or discrepancies between directives, which are revealed in the process of 
codification, are rapidly examined. 
• the consequences of the abolition of the deadline laid down in Article 2 §4 of the First 
Banking Directive (FBD) should be assessed with a view to deciding whether to extend 
the benefit of the derogatory regime to institutions other than those existing at the time of 
the adoption of the FBD. 
A majority of members recommended the abolition of Article 20 of the Second Banking 
Directive, which provides for a prior notification of cross-border services, and that Member 
States channel the transmission of supervisory data via a "single focus point". Some members 
of the team recommended that the Commission launch a study in order to drawing an 
inventory of the various existing reporting requirements imposed on EU credit institutions 
and, if necessary, to suggest solutions for improving the situation. A minority of members 
also recommended that Member States draw up lists of those measures they consider to be of 
general good. These lists would then have to be transmitted to banks before they start 
carrying out their activities in the host country. 
3 Commission's position 
The Commission can endorse most of these Recommendations and invites all authorities, 
imposing reporting requirements to avoid duplication. The Commission will examine the 
functioning of the whole comitology procedure in the course of 1998. The Commission will 
shortly raise the various problems identified during the codification exercise in the the 
Banking Directives Interpretation Group. The Commission will take appropriate action to 
meet the Recommendation on Article 2§4 of the FBD. 
Concerning the Recommendations made only by a part of the team, the Commission supports 
the abolition of Article 20 of the Second Banking Directive and will take all necessary steps 
to implement this recommendation. It welcomes the idea, in principle, of a "single national 
focus point" for reporting requirements, while recognising that it would be very difficult to 
make it operational in practise, and the idea of a study on reporting requirements, although it 
considers that the banking industry itself is better placed to undertake this survey. Finally, 
the Commission is sceptical about the possibility of drawing up lists of "general good" 
measures. Nevertheless, it will examine the possibility to extend the information procedure, 
which currently prevails for cross-border branching to cross-border services. 
12 
ANNEX 1 
The SLIM exercise on VAT 
1. Changing roles governing the legislation on tax representation and on mutual 
assistance on recovery. 
The difficulties deriving from tax representation were already identified in the 
Commission report on arrangements for taxing transactions carried out by non-
established taxable persons. The recommendations contained in this document were not 
implemented to a sufficient extent by the Member States on account of the complexity of 
the problem and the fact that it is closely linked up with the level of mutual assistance in 
recovery. 
2. Harmonisation of registration procedures in the Member States 
The Team wishes to see in particular: 
simplification of the formalities which have to be carried out by firms, especially at 
the start-up stage, by setting up single "contact points" responsible in each Member 
State for centralising the information contained in registration applications and 
transmitting them to all the other administrative departments; 
_ introduction of a single form for the registration of firms; 
_ providing for the establishment of an identification system whereby firms may use 
one number in all their contacts with the different administrations within the country. 
3. Introduction of modern invoicing instruments. 
This covers the content as well as the support of the invoice. The SLIM Team considers 
it necessary, therefore, to: 
_ establish what details are essential for drawing up an invoice for VAT purposes and 
determine the order in which they should appear; 
_ determine the legal and technical requirements for electronic invoicing at Community 
level in order to guarantee a level of security at least comparable to that of traditional 
invoicing. 
4. Study the possibility of creating a basic common VAT return 
The Team thinks that many Member States could still do much to simplify their VAT 
returns. 
Though the Team does not consider that a harmonisation of returns can yet be 
considered, it thinks that it would already represent great progress if a basic common 
return could be devised which nevertheless left Member States free to require other 
details to be declared if necessary. 
Finally, the usefulness of the various statements which Member States require traders to 
draw up in addition to returns, and the use which they make of them must be examined. 
13 
5. Studying the delays for refunding VAT by national administrations. 
6. Study the possibilities and the different ways of radically reforming the procedures 
for refunding VAT to non-established taxable persons. 
The tax-refund procedures laid down by the Eighth Directive must be thoroughly revised 
in order to make it equally easy to recover tax paid within the country and tax paid in 
another Member State. To that end, consideration could be given to the possibility of 
obtaining direct in the Member State of establishment a refund of the tax paid in another 
Member State, subject to the necessary flanking measures being introduced. 
This reform must at one and the same time represent genuine simplification for traders, 
make it possible to improve the control of taxable persons by administrations and 
guarantee Member States their VAT revenue. It must also be accompanied by 
harmonisation of the rules on the right to deduct input tax. 
7. Improving the VIES system and finding Ways to reduce the administrative burden 
that this places on the small business 
Member States must ensure that national databases are updated as swiftly as possible in 
order to guarantee the reliability of the system. In addition, they must provide the means 
to make consultation as easy as possible for traders. 
The SLIM Team recommend that the Committee responsible for the exchange of 
information should undertake the task of examining to what extent it would be possible 
to reduce the burden borne, as a result of their obligations under the VIES, by small 
traders and firms with a low volume of intra-Community trade. 
8. Take into account the special situation of small businesses 
The Team considers that there is a strong case for systematic registration of all firms 
subject to VAT, irrespective of their turnover. 
The Team notes that the administrative burden on small businesses varies very widely 
from one Member State to another and is sometimes disproportionate to their turnover. 
The thresholds for taxation and the submission of returns must be revised. A study must 
be carried out to establish bands for such thresholds, which would apply to all small 
businesses within the Union. 
9. Limit superfluous obligations 
Member States must ensure that they do not impose on traders obligations which are not 
indispensable from a VAT point of view. 
14 
ANNEX 2 
The SLIM exercise on Fertilizers 
SLIM Recommendation 
1. A recasting Directive on fertilizers, based on the 
Old Approach, should be proposed to Council 
and Parliament as soon as possible. 
2. The recasting Directive should provide for the 
following simplifications to the Dossier System 
for adding New Fertilizers to the Groups of 
fertilizers already included in the legislation: 
• The establishment of a small ad-hoc group to 
advise the Commission in preparing 
proposals. 
Stipulation that the criteria for deciding 
addition should be safety, protection of 
health/environment and efficacy under the 
intended conditions of use. 
A requirement that the rapporteur provide 
validated test methods (preferably existing 
ones) and tolerances for proposals to add 
fertilizers to groups already in the legislation. 
Provision be made for addition of groups of 
new fertilizers based on mixtures of existing 
EC fertilizers of the same nutrient type to the 
Annexes subject to appropriate conditions 
Provision that reports in support of a 
proposal for addition of new fertilizers be 
peer-reviewed by Scientific Committees in 
cases where there are health and environment 
concerns. Commission's Position 
Accept. 
This will be the vehicle to consolidate the existing 
legislation and to modernise and simplify the 
legislative approach. 
Accept. 
This will speed up the examination of dossiers. The 
details of the Composition and functioning of this 
group will be worked out when drafting the 
recasting. 
Accept. 
Efficacy would assured in large measure by 
specifications of minimum nutrient content for each 
fertilizer group. 
Accept. 
This will both speed up the examination of dossiers 
and facilitate enforcement. 
Accept. 
This will speed up the addition of fertilizers. The 
details of mixtures to be excluded for safety reasons 
will be decided when drafting the recasting. 
Accept. 
This will ensure that proposals on new fertilizers 
conform to the Commissions new policy on 
Scientific Committees. The choice of Scientific 
Committees would be the responsibility of the 
Scientific Steering Committee and would typically 
include the Scientific Committee on Toxicity, 
Ecotoxicity and Environment and the Scientific 
Committee on plants though it could include others. 
15 
SLIM Recommendation Commission's Position 
3. The recastBig Directive should mchtde the 
following particular conditions for adding new 
fertilizer groups to the legislation. 
• An intermediate period during which 
proposals would be made on specifications 
and marketing conditions of fertilizers in 
these groups and the proposals would be 
subjected to rigorous independent checks. 
5. New Groups to be added only after adoption 
of appropriate test methods, either by an ad-
hoc working group of the Commission or by 
CEN. 
The recasting Directive should provide for the 
following controls on enforcement. 
• Controls to be attributed to a network of 
accredited laboratories. 
• Reports on controls to be established in 
keeping with the Action Plan for a Single 
Market 
An Expert Scientific Group should be 
established to study further the problem of 
cadmium in fertilizers at EU level. 
6 The recasting Directive to provide for labelling 
indicating the physical form of fertilizers e.g. 
blended fertilizers to be labelled "Blended" and 
this to be supplemented by appropriate codes of 
practice. 
7. Organic and Organo-mineral fertilizers should 
be added after intermediate periods. Accept. 
This will ensure that proposals to add new groups 
of fertilizers conform to the Commission's new 
policies on Scientific Committees. The choice of 
Scientific Committees would be the responsibility 
of the Scientific Steering Committee and could 
include in addition to the Tox/Ecotox et Plants 
Committees, other Committees e.g. on Food, the 
BSE, Subgroup etc. 
Accept. 
This will facilitate enforcement in the spirit of the 
New Approach. The details of how methods should 
be developed and by whom will be decided in 
drafting the recasting. 
Accept. 
This will harmonise enforcement according to the 
New Approach. 
Accept. 
This will verify that enforcement is uniformly 
practised. 
Already undertaken. 
This problem is already studied by the Working 
Group on Fertilizers, assisted by the Commission's 
consultant (ERM). DG III will refer the results of 
all current work to the appropriate Scientific 
Committees for peer-review and this could in turn 
lead to further work. 
Accept. 
This will deal in a simple non-discriminatory way 
with problems potentially associated with blended 
fertilizers. 
Accept. 
This will complete the Internal Market for these 
groups whilst ensuring a high level of protection to 
health, safety and the environment. 
16 
ANNEX 3 
The SLIM exercise on Combined Nomenclature for External Trade 
1. In the first phase of SLIM one of the sectors selected was the Intrastat system, for intra-
community trade statistics. In a working document dated 14 May 1997 the Commission 
also announced the opening of a second phase which included setting up a team, referred 
to as the CN SLIM team, to look at the combined nomenclature used in external trade. 
2. The aim of the CN SLIM team was to target for elimination CN subdivisions (CN codes) 
which have become obsolete in economic and trade terms, taking into account proposals 
made in respect of the Intrastat system. 
3 In fulfilling its task the CN SLIM Team looked at the future requirements for a CN used 
in external trade and considered specific actions in order to reduce burdens on business. 
Proposals to stop the growth and eventually reduce the size of the CN were evaluated by 
the team together with other proposals which would lead to a modernisation of the CN. 
4. As a result of its work the CN SLIM team has put forward the following 
recommendations : 
_ that one single nomenclature be used for intra-Community trade as well as for 
external trade 
that the current basic coding structure of the CN be maintained, thus serving both 
tariff and statistical needs 
_ that the Commission should refrain from fixing, in an arbitrary way, a threshold of 
the maximum number of CN codes in a simplified CN but should aim towards an 
important reduction of the total number of 8 digit CN codes starting from 1.1.1999 
and onwards 
_ that a "Code of Conduct" be established for the management of the CN (for example 
with regard to the process for maintaining, creating and deleting CN codes) 
_ that a co-ordinated and balanced approach be sought in simplifying the CN by 
inviting providers and users of CN related information, on a sector basis, to 
participate in the process of simplifying the CN 
_ that the Commission services, together with Member States and industry, examine 
specific areas of the CN, some of which are described in detail below, and establish 
a time-scale for the implementation thereof 
_ that a validation process be carried out with regard to all CN codes 
_ that, if the economic consequences are considered insignificant for a sector and if 
appropriate, proposals should be made to the Council which will enable the 
Commission by means of autonomous tariff measure to eliminate CN codes of a 
tariff nature 
that the Commission in the HS Committee (meeting within the auspices of the 
World Customs Organisation (WCO)) advocate the need for maintaining the degree 
of simplicity appropriate to sectorial needs 
17 
_ that the Commission in trade negotiations should continue to take into consideration 
the need to simplify and facilitate the use of the EU tariff 
_ that the Commission services in collaboration with Member States should continue 
to develop tools in order to facilitate the tasks for providers of CN related 
information 
5. In view of the time scale and the need for co-ordination with the SLIM Intrastat exercise 
the CN SLIM team found it inappropriate to present more detailed recommendations 
including proposals which would require immediate action. 
6. Some of the actions to be taken, if the recommendations are endorsed, will require 
amending the CN Regulation whilst others can be carried out within the existing legal 
framework. In some cases the successful outcome depends not only on the Commission, 
Member States and trade but also on the reactions of non-EU interested parties. Some 
actions may require the provision - on a temporary basis - of external resources. 
7. The CN SLIM team found it inappropriate to lay down a detailed schedule for the 
implementation of the proposed actions. Nevertheless, the CN SLIM team anticipates 
that such actions have to be carried out as soon as possible but within reasonable time 
frames for their implementation. It also considers that the CN SLIM exercise will lead to 
a continuous process of simplification and facilitation which may have repercussions 
beyond the CN itself (for example on the EU's TARIC system). 
8. As a result of these recommendations, in particular by establishing a "Code of Conduct 
for maintaining, creating and deleting CN subdivisions to the HS nomenclature", the CN 
SLIM team envisages an important reduction in the number of 8 digit CN subdivisions in 
the forthcoming years. 
18 
ANNEX 4 
The SLIM exercise on banking services 
Reporting requirements 
Background: According to some members of the SLIM team, banks are presently faced with a growing number 
of reporting requirements both at the prudential level and for statistical and monetary purposes. This allegedly 
represents a considerable administrative burden and, in addition, the costs of such requirements are considered 
to be very high. 
Recommendations: 
n°l: The SLIM team recommends that all relevant national, European and international institutions strive to 
co-ordinate their action in order to make sure that duplicative reporting requirements are avoided. 
n°2: The majority of the SLIM team recommends that, where supervisory data is required, in the same 
Member State, by more than one authority, these authorities examine the possibility to create, without 
prejudice to the rules concerning professional secrecy, a system whereby data submitted by institutions 
under their supervision are channelled via a single focus point. 
n°3: Half of the team recommends that a study be launched by the Commission in order to draw an inventory 
of the various existing reporting requirements imposed on EU credit institutions and, if necessary, to 
suggest some solutions to improve the situation; that a working group be created in order to prepare the 
Terms of Reference of this study. 
Commission position: The Commission supports Recommendations n° 1 and 2 and invites airy competent 
authority concerned to take them into account, even if it considers that the idea of a "single focus point" would 
be very difficult to operate in practice. The Commission, not being a supervisor} body, does not (with some 
limited exceptions) impose reporting requirements or collect any data and cannot therefore apply the 
Recommendation to itself. As far as Recommendation n° 3 is concerned, the Commission considers that the 
study should be carried out by the banking industry, which is best placed to collect all the information necessary 
to make this inventory. The Commission would be prepared to examine the study and take any appropriate 
measure within the limits of its competence. 
Decision making process 
Background: All members deplored the fact that existing procedures did not permit the quick adoption or 
modification of EU banking rules, for example to adapt relevant EU legislation to the new developments in 
financial markets or in international supervisory fora (e.g. BIS). 
Recommendation: The SLIM team recommends that the Council, the European Parliament and the Commission 
take all necessary measures to ensure that measures which are eitlier of a purely teclmical nature or which have 
already be discussed at length at international level, benefit from a fast-track procedure. 
Commission's position: The Commission supports this Recommendation. Following the Amsterdam 
Declaration, it has undertaken to examine the functioning of the Comitology procedure in the course of 1998. 
Codification 
Background: The codification exercise revealed inconsistencies or discrepancies between various directives. 
These problems could however not be addressed in the framework of the codification. 
Recommendation: The SLIM team stresses the importance of the codification and recommends that the 
inconsistencies or discrepancies which are unveiled in the framework of the codification be rapidly examined 
by a working party composed of national experts and the Commission, with a view to submitting to the Council 
a proposal amending the codified text if deemed necessary. 
Commission position: The Commission supports this Recommendation. Work will soon start on these 
discrepancies in the "Groupe Technique d'Interprétation des Directives Bancaires". 
19 
Smaller credit institutions 
Background: Members discussed whether complex and sophisticated rules designed for large institutions or for 
institutions with an international dimension (rules of the Capital Adequacy Directive -CAD- for example), 
should apply in the same manner to small banks or to banks operating within a local or regional radius. 
Recommendation: The SLIM team recommends that, in future EU legislation, attention should continue to be 
paid to the specific situation of smaller credit institutions. 
Commission position: The Commission supports this Recommendation and will, as far as possible, respect it in 
future proposals. It invites any other institution involved in the decision making process to take it into account. 
General good rules 
Background: The issue is whether the fact that Member States are not obliged to inform banks planning to carry 
out services within their territory about their national general good rules, is an obstacle to the freedoms to 
establish branches and to provide cross-border services. 
Recommendation: Some members of the team (not representing the majority of its members) recommend that, 
for the sake of transparency, Member States should be required to draw up lists of their measures which they 
consider to be of general good. These lists would then have to be transmitted to incoming banks, applicable to 
banking activities, before they start carrying out their activities in the host country. 
Commission position: The Commission has, in the past, tried to establish such lists in the framework of the 
Banking Directives Interpretation Group. This exercise failed, given the amount of measures potentially 
concerned and the uncertainties about the limits of the notion of general good. The Commission could however 
examine to what extent the "triangular" procedure laid down in article 19§4 of the Second Banking Directive 
for branches, could be extended to cross-border services. 
Notification 
Background: The issue is whether the prior notification procedure for the provision of cross-border services is 
an obstacle which should be abolished or, on the contrary, is a useful tool to secure consumer protection. 
Recommendation: With the exception of two of its members, the SLIM team recommends the abolition of 
article 20 of the Second Banking Directive. 
Commission position: The Commission supports this Recommendation. It considers that the situation of the 
Investment Services Directive, which contains a similar procedure, should also be examined. 
Observation ratios 
Background: Whilst recognising the merits of these ratios, members considered that, the way it is organised 
now, this collection of data for the calculation of all ratios mentioned in article 6 of the First banking directive 
(liquidity, solvency and profitability) is burdensome. 
Recommendation: Considering that most of its members are in favour of the abolition of article 6 of the 
directive, the SLIM team recommends that the Groupe de Contact and the BAC be invited to determine the 
value of the exercise, and consider amending the data collection procedure and its frequency. 
Commission position: The Commission supports this Recommendation and will raise this issue with the two 
bodies mentioned. 
List of credit institutions 
Background: The directive requires that the Commission publishes in the Official Journal an up-to-date list of 
all credit institutions authorised in the Union. All members agreed that, in its current format and periodicity, the 
list dues not serve its intended purpose. 
Recommendation: The SLIM team recommends that the list should be published either in the OJ or by any other 
medium available and recommends that the Commission be invited to submit proposals to that effect before the 
end of 1998. 
Commission position: The Commission supports this Recommendation. Work is already underway. Proposals 
will, as recommended, be submitted before the end of 1998. 
20 
Article 2§4 of the First Banking Directive 
Background: The team discussed the possibility to extend the scope of article 2§4 of FBD (which allows banks 
which were, at the time of notification of the FBD, affiliated to a central body which supervises them to be 
exempted from certain requirements) to banks created after the notification of the FBD. 
Recommendation: The SLIM team recommends that the consequences of the abolition of the deadline kid down 
in article 2§4 of the First Banking Directive be assessed with a view to deciding whether to extend the benefit of 
the derogatory regime to institutions other than those existing at the time of the adoption of the ?BD. In 
particular, it should be examined if such an extension could lead to competitive distortions. The SLIM team 
recommends that the Commission take all necessary steps to perform this evaluation and, if necessary, presents 
the necessary proposals to the Council. 
Commission position: The Commission supports this Recommendation and will take any appropriate action. 
Article 4§6 of the Capital Adequacy Directive 
Background: Members discussed whether the thresholds of 5% and ECU 15 million under v/hich some 
institutions can calculate their market risks in accordance with the solvency ratio directive and not with the 
CAD were too low and should be revised. 
Recommendation: The SLIM team recommends that those who consider that the thresholds mentioned in article 
4§6 of the capital adequacy directive should be revised introduce a well argued request to the Commission to 
that effect. The Commission would then have the possibility to propose to the Council the revision of the 
thresholds pursuant to the procedure laid down in article 10 of the CAD. 
Commission position: The Commission will carefully examine any well evidenced request put to it and, if 
appropriate, present a proposal aiming at revising the thresholds. 
21 

ISSN 0254-1475 
COM(97) 618 final 
DOCUMENTS 
EN 06 10 09 
Catalogue number : CB-CO-97-645-EN-C 
ISBN 92-78-28202-2 
Office for Official Publications of the European Communities 
L-2985 Luxembourg