COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL,THE ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Consumer Policy Strategy 2002-2006

TABLE OF CONTENTS

1. Introduction

1.1. Content

1.2. Scope

2. The rationale of the new Consumer Policy Strategy

2.1. The scope of EU Consumer Policy

2.2. The process of the new strategy

2.2.1. Impact assessment

2.2.2. A knowledge-based policy

2.3. Key Factors underlying the new strategy

2.3.1. The euro

2.3.2. Social, economic and technological changes

2.3.3. Reaping the full benefits of the internal market

2.3.4. Implementing governance reform

2.3.5. Preparing for enlargement

2.4. The structure of the new Consumer Policy Strategy

3. The policy objectives of the new Consumer Policy Strategy

3.1. Mid-term objective 1: "A high common level of consumer protection across the EU"

3.1.1. Safety of consumer goods and services

3.1.2. Legislation on consumer economic interests

3.1.2.1. Commercial practices

3.1.2.2. Review of existing Community legislation relating to consumer protection

3.1.2.3. Law governing consumer contracts

3.1.3. Financial Services

3.1.4. Electronic commerce

3.1.5. Services of general interest (SGI):

3.1.5.1. SGI - Transport

3.1.5.2. SGI - Energy

3.1.6. International trade,standardisation and labelling issues

3.2. Mid-term objective 2: Effective enforcement of consumer protection rules

3.2.1. Enforcement co-operation between Member States

3.2.1.1. The International Marketing Supervision Network (IMSN)

3.2.1.2. The CLAB - "unfair contract terms" - database

3.2.2. Information and data on the safety of goods and services

3.2.3. Redress

3.2.3.1. Alternative dispute resolution

3.2.3.2. European Consumer Centres (Euroguichets)

3.2.3.3. Judicial cooperation in civil matters

3.2.4. Support to consumer associations

3.3. Mid-term objective 3: Proper involvement of consumer organisations in EU policies

3.3.1. Reviewing mechanisms for participation of consumer organisations in EU policy making

3.3.1.1. Consultation requirements

3.3.1.2. Participation in consultation bodies and working groups

3.3.1.3. Standardisation work

3.3.1.4. Consumer participation in the work of other EU institutions

3.3.2. Consumer information and education

3.3.2.1. Information

3.3.2.2. Education

3.3.3. Support and capacity building of consumer organisations

3.3.3.1. Training program for staff members from consumer organisations

3.3.3.2. Review of the legal instrument establishing a general framework for Community activities in favour of consumers

4. Conclusion

Annex

Rolling programme for Consumer Policy (2002-2006)

Indicative list of actions

Objective 1: A high common level of consumer protection

Objective 2: Effective enforcement of consumer protection rules

Objective 3: Proper involvment of consumer organisations in EU policies

Actions to improve the quality of Consumer Policies

FINANCIAL STATEMENT

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL,THE ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS

Consumer Policy Strategy 2002-2006

1. Introduction

1.1. Content

This Communication sets out the Commission's strategy for consumer policy at European level over the next five years (2002-2006). Last year, the Commission issued an interim report [1] on progress made under the past action plan (1999-2001) in order to prepare this new strategy. It sets out three mid-term objectives, implemented through actions included in a short-term rolling programme, which will be regularly reviewed through a working document of the services of the Commission. The three objectives are:

[1] COM (2001) 486 final

* A high common level of consumer protection;

* Effective enforcement of consumer protection rules;

* Involvement of consumer organisations in EU policies.

These three objectives are designed to help achieving integration of consumer concerns into all other EU policies, to maximise the benefits of the single market for consumers and to prepare for enlargement.

Under the first objective "A high common level of consumer protection", the chief actions are initiatives on follow-up to commercial practices issues addressed by the Green Paper on EU Consumer Protection [2] and on the safety of services. The priority actions, under the second objective "Effective enforcement of consumer protection rules", are the development of an administrative co-operation framework between Member States and of redress mechanisms for consumers. And to achieve the third objective "Involvement of consumer organisations in EU policies", the main actions consist in the review of mechanisms for participation of consumer organisations in EU policy making and in the setting up of education and capacity-building projects.

[2] COM(2001) 531 final of 2 October 2001

European consumer policy is central to one of the Commission's strategic objectives, that of contributing to a better quality of life for all [3]. It is also an essential element of the Commission's strategic objective of creating new economic dynamism and modernising the European economy. The creation of a Directorate General for Health and Consumer Protection in 1999 and a reorganisation of scientific and regulatory work in order to ensure independence, transparency and better protection of consumer interests, demonstrates the increased importance attached to consumer policy.

[3] Commission Communication COM (2000) 154 final of 9 February 2000; Strategic Objectives 2000-2005 "Shaping the New Europe"

This Communication invites the European Parliament, the Council, the Economic and Social Committee, the Committee of the Regionsand all interested parties to support the overall approach and the three objectives in particular. The Commission also invites them to foster the adoption of the key measures proposed and to support their implementation.

1.2. Scope

Consumer policy in this Communication covers safety, economic and legal issues relevant to consumers in the marketplace, consumer information and education, the promotion of consumer organisations and their contribution with other stakeholders to consumer policy development. The scope of this strategy does not cover food safety issues. Food issues are now dealt with separately and have their own legislative agenda. The White Paper on Food Safety adopted on 12 January 2000 [4] contains proposals for a major programme of legislative reform in this area.

[4] COM (1999) 719 final

2. The rationale of the new Consumer Policy Strategy

The development of consumer policy at EU level has been the essential corollary of the progressive establishment of the internal market. The free circulation of good and services has required the adoption of common, or at least convergent, rules to ensure at one and the same time sufficient protection of consumer interests and the elimination of regulatory obstacles and competitive distortions.

Measures have frequently sought to give consumers the means to protect their own interests by making autonomous, informed choices. This typically ensures that consumers will have sufficient, correct information before engaging in transactions and certain legal rights in case the transaction does not deliver the required outcome. These measures seek to redress structural imbalances between individual consumers and business flowing from limits on the formers' access to information and legal expertise as well as on their economic resources.

However, in some situations, providing a basis for informed choice and legal redress has been regarded as insufficient, notably as regards protection of physical health and safety. In such situations, harmonised rules are considered necessary to guarantee an adequate level of protection to all consumers quite independently of their ability to protect themselves by making informed choices. The decision to adopt such a measure depends to a large extent on a political assessment of the importance of the interest to be protected and the feasibility of consumers being able to protect themselves by informed choices in practice.

2.1. The scope of EU Consumer Policy

EU consumer policy should provide essential health and safety requirements and safeguard economic interests to ensure a high level of protection and meet the expectations of citizens throughout the EU. Products and services placed on the market should be safe and consumers should receive the relevant information to make appropriate choices. Consumers should also be protected from abusive practices. Much of the work in this domain concerns legislation and other actions having a direct impact on market behaviour, such as standardisation, codes of conduct or best practice.

EU consumer policy should also empower consumers to understand policies that affect them and to make an input into these policies. Consumers should have the capacity to promote their interests in order to be on the same footing as other civil society stakeholders represented at the EU level.

It is also important that consumers have comparable opportunities to benefit fully from the potential of the internal market in terms of greater choice, lower prices, and the affordability and availability of essential services. Barriers to cross-border trade should therefore be overcome in order that the consumer dimension of the internal market can develop in parallel with its business dimension. EU consumer policy therefore aims at setting a coherent and common environment ensuring that consumers are confident in shopping across borders throughout the EU.

As well as specific consumer protection rules, consumers are also affected by other important EU policies such as the internal market, environment and sustainable development, transport, financial services, competition, agriculture, external trade and more. Consumer policy as such cannot be developed in isolation without taking into account other areas that have an impact on consumers. Systematic integration of consumer concerns into all relevant EU policy areas is essential. In recent years significant progress has been made toward achieving this. The aim for the future should be to build on these achievements in order to make integration of consumer interests into other policies more systematic.

Similarly consumer policy must take into account concerns of other areas to ensure a coherent approach to Community policy as a whole. Also, consumers' choices are very important for these other areas, e.g. sustainable development in its social, environmental and economic dimensions.

Consumer policy is an area where the EU can add value. It is a shared responsibility between the EU and national public authorities. EU rules are enforced at the national level. Integration of consumer interests into all policies can only be effective if there is a similar approach at national level. This means that consumer policy is a collective endeavour of all European Union policy sectors and at all levels, regional, national and European.

The principles outlined above are enshrined in articles 153 and 95 of the Treaty establishing the European Community.

2.2. The process of the new strategy

2.2.1. Impact assessment

The success of a consumer policy strategy can only be measured by the impact it has for consumers in Europe. It is therefore essential that the rationale for the strategy is clearly set out in advance, that progress on the strategy is regularly monitored and that the success of individual actions is clearly evaluated and lessons learned for the future. This would allow lessons to be drawn and suggest any necessary policy adaptation.

2.2.2. A knowledge-based policy

Consumer policy needs to be backed by relevant information and data in order to adjust policies and prioritise in the most appropriate ways. A more comprehensive, systematic and continuous effort is needed to develop a suitable knowledge base as an essential tool for policy makers. There is also a need for information and data for the general public, especially since the introduction of the euro, which increases price transparency across the euro area. . Consumers also require accurate data on the safety of goods and services to make informed decisions, and many consumers desire information on other aspects of products, such as the environmental effects associated with them. The Commission will continue to provide detailed information on relevant issues for consumers through its Dialogue with Citizens publications and website (http://europa.eu.int/citizens).

Due to the diversity of consumer issues, comprehensive consumer-related information and data has to include general quantitative data (such as on consumption, living conditions and other socio-economic aspects), data linked to consumer activities (such as on the participation to consumer associations) and consumer economic interests (such as on prices). Policy-makers need to complement quantitative data available with qualitative data, which can be provided by opinion surveys on consumer attitudes, knowledge and satisfaction. Monitoring of consumer complaints and their handling is also a key issue for better information about consumers' interests and market responses.

The Commission will continue to develop its "knowledge-base" on information and data on consumers and the market. It intends to continue the publication "Consumers in Europe - facts and figures", surveys on consumer prices, Eurobarometer and focus group surveys on services of general interest. The Commission will also carry out Eurobarometer surveys on cross-border consumer problems and consumer information and representation. It also intends to develop indicators on consumer satisfaction, and will make use of the interactive policy-making initiative which uses internet-based mechanisms to gather feedback and to conduct consultations. The Commission will also make use of scientific research where relevant, in particular through the Framework Programmes for research and technological development.

2.3. Key Factors underlying the new strategy

Five key factors have been taken into account in developing this new strategy.

2.3.1. The euro

The long awaited arrival of the euro in consumer pockets is beginning to fundamentally change business and consumer attitudes. The introduction of the euro has removed an important psychological barrier to consumers shopping in other Member States and has made it easier to compare prices. Cross-border opportunities should, therefore, become more evident for consumers.

2.3.2. Social, economic and technological changes

Internet use and its household penetration rates are increasing. In November 2001, almost 50% of the population (over 15 years) used the internet either at home, at work, at school, in public access places or on the move. Internet penetration in EU households increased from 18% in March 2000 to 38% in December 2001 [5]. These trends will raise awareness amongst a growing number of consumers of the possibilities of electronic commerce.

[5] e-Europe benchmarking report, 5 February 2002, COM (2002) 62 final

E-commerce and the information society reduce the relevance of distance in advertising, marketing and retailing for many products but above all, for services.

Consumption patterns are also changing. The service sector is growing. In the EU, it is now at least double the size of the manufacturing sector in terms of GDP; three times the size if social and public services are included [6]. This means that services, including their safety aspects, will have to be increasingly taken into account in EU consumer policy.

[6] Source: Eurostat

2.3.3. Reaping the full benefits of the internal market

With these changes, cross-border trade is now a more realistic proposition. However, obstacles to realising the full potential of the retail internal market still remain.

Surveys show that there are still wide differences in price for many consumer goods and services across the EU, of which consumers would be able to take advantage if they were able to have more confidence in shopping across borders. In addition, prices might be reduced if companies could sell across border without having to establish specific arrangements for different countries.

Wide divergences in prices

The last Commission report [7] on the functioning of product and capital markets shows that the retail prices of food and consumer goods continue to vary widely between Member States and that the narrowing of such price variations has slowed down considerably in recent years. In general, prices vary three to five times more across the EU than inside a country. The report concludes that different national regulations, company behaviour and competition problems may be combining to keep prices apart across the Community.

[7] COM (2001) 736

Different consumer protection rules apply in different Member States. Unsure of what protection they do or do not have when they shop abroad, consumers restrict their choices to the products and services available in their own Member State.

Lack of consumer confidence in buying across border

Across the EU, consumers have significantly less confidence about shopping cross-border than in their own countries - only 31% of consumers think they would be well protected in a cross-border dispute with a supplier, against an average of 56% who would feel well protected regarding a similar dispute within their own country [8].

[8] EOS GALLUP EUROPE "Consumers survey", January 2002, the overall report of the survey is available on: http://europa.eu.int/comm/dgs/health_consumer/events/event42_en.html

Likewise businesses are frequently unclear about what practices they should follow if they sell to consumers in other Member States. It is therefore essential for the European Union to ensure that internal market rules and practices promote consumer confidence in cross-border transactions. This implies simpler and more common rules, a similar level of enforcement across the EU, more accessible consumer information and education and effective redress mechanisms.

Cross-border shopping will not replace routine shopping, except for those who live very near borders. But even just making cross-border shopping a realistic possibility can itself have a major knock-on impact on competition in local markets. Even if a small percentage of consumers shop abroad, it will have an effect on the prices in each Member State's overall market. This impact has already been seen for example in the UK car sector [9].

[9] http://europa.eu.int/comm/competition/car_sector/price_diffs

2.3.4. Implementing governance reform

The Lisbon European Council, the White Paper on Governance adopted in July 2001 [10] and the Better Regulation Action Plan to be presented shortly to the Commission, together represent a dynamic expression of political will to reform. These initiatives opened an important debate to improve the quality, effectiveness and simplicity of regulatory acts and to better consult and involve civil society in the EU decision-making process.

[10] COM (2001) 428 final

Consumers have high expectations of the European Union, its ability to ensure their safety, to protect their interests and to enable them to realise directly some of the benefits of European integration. But alongside that, citizens also feel increasingly alienated from the EU and its processes and institutions. This means that future EU consumer protection policy should both produce concrete benefits for citizens in their daily life, and engage consumers in the development and implementation of that policy. The five principles for good governance of openness, participation, accountability, effectiveness and coherence are directly relevant to consumer policy and should form an integral part of the future strategy.

2.3.5. Preparing for enlargement

Accession of the candidate countries to the EU will have an important impact on the functioning of the internal market. This is particularly true in the area of consumer protection, where citizens, in their capacity as consumers, will directly experience the effects of an enlarged market. The EU will be faced with new regulatory and enforcement structures and, more generally, with new attitudes towards consumer protection.

Many consumer protection rules are currently covered by national law rather than European legislation. Though the detail of these provisions varies across the current Member States, their fundamentals are broadly similar. However, with the accession of the current candidate countries the heterogeneity of national provisions will significantly increase. Enforcement structures are not always as strong in the candidate countries and the experience and expectations of their consumers are also very different. The consumer movement of the candidate countries has still a long way to develop in order to play its full role of informing consumers, representing them and playing their full role in market surveillance.

The challenge will be to meet the legitimate expectations of new members while safeguarding and improving the present level of consumer protection both in terms of safety and legal and economic rights of consumers. Enlargement issues are therefore taken into account throughout this strategy, and the Commission will continue to make every effort to help consumers, their representatives and national authorities from the candidate countries prepare for accession.

2.4. The structure of the new Consumer Policy Strategy

This Communication provides the Commission's strategy for consumer policy at the European level over the next five years (2002-2006). It sets out three mid-term objectives, implemented through actions included in a short-term rolling programme, which will be reviewed regularly. The regular update of the rolling programme will be carried out through a working document of the services of the Commission. The medium-term strategy will provide a consistent orientation, while the short-term plan can be more quickly adapted to changing circumstances.

The Commission also plans to better integrate the preparation of the policy strategy with the financial instrument for consumer protection actions [11], which currently runs to a different timetable.

[11] Decision No 283/1999/EC of the European Parliament and of the Council of 25 January 1999 establishing a general framework for Community activities in favour of consumers, (OJ L 34/1 of 9.2.1999)

3. The policy objectives of the new Consumer Policy Strategy

The key factors outlined above have led us to identify three mid-term objectives:

Objective 1: "A high common level of consumer protection". We must go further to enable consumers and business to realise the benefits of the internal market. Central to this is the establishment of common consumer protection rules and practices across Europe. This means moving away from the present situation of different sets of rules in each Member State towards a more consistent environment for consumer protection across the EU.

Objective 2: "Effective enforcement of consumer protection rules". There is no good law if it is not properly enforced. As the degree of economic integration in the internal market steadily increases and more opportunities are open for consumers, consumers should be given in practice the same protection throughout the EU, and even more so in an enlarged EU. Business has also a keen interest in a more uniform application of rules. Public authorities should have practical and effective means of co-operating to that end.

Objective 3: "Involvement of consumer organisations in EU policies". The input of consumer organisations into policies is essential both in terms of content and in terms of process.

These objectives are mutually reinforcing. Enforcement of EU policies is easier if a high common level of consumer protection is achieved; but common EU rules, which are not uniformly enforced creates uncertainty and reduces benefits for consumers. The benefits of a common level of protection can not be reaped fully if consumer organisations are not strong enough to play their role by providing policy makers with policy input, evidence of problems and by helping to enforce rules through market surveillance.

Priority has been given in the strategy to actions which complement each other and which, together, form a critical mass of actions, which reinforces their leverage effect. These priority actions address mainly cross-border issues. They are chosen to maximise impact at EU level. Some of these actions propose pooling scarce resources, from EU or national level. They often serve more than one objective. Particular prominence is given to actions promoting integration of consumer concerns into other policies and preparing for enlargement.

3.1. Mid-term objective 1: "A high common level of consumer protection across the EU"

This objective does not mean regulating all consumer protection in detail at European level. That would be neither desirable nor practical. It means harmonising, by whatever means is most appropriate (framework directive, standards, best practices), not just the safety of goods and services, but also those aspects of consumer economic interests that give consumers the confidence necessary to conduct transactions anywhere in the internal market. It could mean setting in place a common set of simple and clear EU rules and safety requirements, on commercial practices and on consumer contractual rights. It could also mean filling gaps between existing EU rules, which will require reform of existing directives. In line with the governance initiative, it would mean reinforcing business and consumer responsibility through making better use of alternative forms of regulation, such as self-regulation and co-regulation, standardisation. A high common level of consumer protection also requires incorporating the integration principle by ensuring that other EU policies, such as internal market, financial services, transport, energy, environment, competition, agriculture, external trade and more, systematically and specifically address consumer interests. Provisions, which are essential to consumers and which ensure a high level of protection across the EU, should be fully taken into account in the definition of all EU policies. Likewise, consumer policy initiatives should also of course take into account their impact on business and other interested parties. The Commission is also developing an integrated approach to assessing the impact of initiatives across the full range of policies and groups affected by them.

A high level of consumer protection is required. This will be fully taken into account into the definition of other policies.

This objective requires actions in the following policy areas:

3.1.1. Safety of consumer goods and services

Community action has been successful in ensuring free circulation of consumer products within the EU and a strategy for achieving similar results in the case of services is being pursued. However, it is still necessary to reinforce Community action intended to ensure that a high and consistent level of protection in relation to consumer goods is guaranteed through the EU. In the case of services, Community initiatives to contribute to consumer safety have been limited so far to a few areas, notably transport. It is therefore necessary to examine the needs for further Community action in this respect and launch the appropriate initiatives.

The priorities in this policy area include the implementation of the revised Directive on General Product Safety [12], in particular the development of standards under this new Directive, the appropriate initiatives in the area of the safety of services provided to consumers and tackling specific safety problems as they arise. The preparation of new legislation on chemicals will provide for adequate risk reduction measures and will increase the level of consumer safety.

[12] Directive 2001/95/EC of the European Parliament and of the Council of 3 December 2001 on general product safety, (OJ L 11, 15.1.2002, p.4)

3.1.2. Legislation on consumer economic interests

3.1.2.1. Commercial practices

The Green Paper on Consumer Protection [13] set out options for the further harmonisation of rules on commercial practices, either on a case-by-case basis or supplementing this through framework legislation. There is also a need to review and reform existing EU consumer protection directives, to bring them up to date and progressively adapt them from minimum harmonisation to 'full harmonisation' measures. The Green Paper and the Commission's Strategy on Services [14] make it clear that the simple application of mutual recognition, without harmonisation, is not likely to be appropriate for such consumer protection issues. However, provided a sufficient degree of harmonisation is achieved, the country of origin approach could be applied to remaining questions.

[13] COM (2001) 531 final

[14] COM (2000) 888

The Commission will present a follow-up communication to the Green Paper on Consumer Protection in 2002, which will further clarify its intentions in relation to new and existing initiatives regarding commercial practices and provide for further consultation.

3.1.2.2. Review of existing Community legislation relating to consumer protection

The Commission's Reports [15] on the Directives on timeshare [16] and on package travel [17] indicated a number of shortcomings and further evidence has come to light in the form of complaints to the European Parliament and to the Commission. These two Directives provide for a mixture of contract law remedies and rules on commercial practices (e.g. selling techniques). Reform of the latter could be partially completed under any initiative subsequent to the Green paper on EU Consumer Protection. For these directives, one of the key priorities for the Commission would be to propose full harmonisation in order to minimise variations in consumer protection rules across the EU that create fragmentation of the internal market to the detriment of consumers and business.

[15] SEC (1999) 1795 final and SEC (1999) 1800 final

[16] Directive 94/47/EC of the European Parliament and Council , (OJ 1994 L 280/83)

[17] Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours (OJ L 158, 23.6.1990)

Moreover, the Commission will report on the implementation of several of the existing directives, which require it. These reports could be accompanied by proposals for amendment, if appropriate.

The Commission will review the existing Directives on timeshare, package travel and indication of prices.

3.1.2.3. Law governing consumer contracts

In 2001, the Commission adopted a Communication on European Contract Law [18], which launched a consultation process on potential problems for the internal market and the uniform application of Community law resulting from the divergence of national contract laws. Consumer contract law represents an important part of the EC contract law. The Council has invited the Commission to communicate the results of the consultation and its observations and recommendations if necessary in the form of a Green or a White Paper at the end of 2002. The European Parliament has called on the Commission to draw up an action plan.

[18] COM 398 (2001) final

The follow-up to the Communication will respond to the requests of the Council and of the European Parliament. It could suggest a mix of regulatory and non-regulatory measures. Among the non-regulatory measures it could propose co-ordination of research activities. These activities could lead to the elaboration of a general frame of reference, establishing common principles and terminology. Furthermore it could explain which measures would be taken to ensure coherence of the existing and future acquis, taking into account the general frame of reference. In this context, a review of existing consumer contract law in order to remove existing inconsistencies, to fill gaps and to simplify could be envisaged. Harmonisation of the cooling-off periods of several Directives [19] would also be part of this review.

[19] Directive 94/47/EC of the European Parliament and Council on the protection of purchasers in respect of certain aspects of contracts relating to the purchase of the right to use immovable properties on a timeshare basis, (OJ L 280, 29.10.94, p.83), Directive 97/7 of the European Parliament and Council on the protection of consumers in respect of distance contracts, OJ L 144, Council Directive 85/577/EEC of 20 December 1985 to protect the consumer in respect of contracts negotiated away from business premises

3.1.3. Financial Services

The Financial Service Action Plan [20] sets out a programme of initiatives designed to complete the internal market in retail financial services. Much has already been done, such as the Regulation on cross-border payments in euro [21] which will greatly benefit consumers and contribute to enhancing cross-border trade by aligning bank charges for cross-border and national transactions. However, more is needed, as the action plan sets out. This includes both actions to facilitate the cross-border provision of financial services and measures to ensure the proper protection of consumers, wherever they are in the EU and to increase their confidence in cross-border transactions. The Commission will reinforce a regulatory approach in the field of financial services based on early, broad and systematic consultation of all interested parties, including consumers and end-users.

[20] COM (1999) 232 final

[21] Regulation 2560/2001 of 19 December 2001, OJ L 344/13, 28.12.2001

To these ends, the Commission will, in particular, propose to revise and update the Directive on consumer credit [22].

[22] Council Directive 87/102/EEC of 22 December 1986 for the approximation of the laws, regulations and administrative provisions of the Member States concerning consumer credit amended by Council Directive 90/88/EEC of 22 February 1990; European Parliament and Council Directive 98/7/EC of 16 February 1998, (OJ L 42, 12.2.1987, OJ L 61, 10.3.1990, OJ L 101, 01.04.1998)

The Commission will make a proposal for a comprehensive legal framework for payments in the internal market. The forms that money and payments take are changing rapidly: plastic money, electronic money. The introduction of the euro is speeding up this development. Efficient and secure payment instruments and networks are indispensable in a well functioning internal market. The legislator will have to address the developments in the areas of prices, time periods and the relationships between the issuers and holders of these new forms of payments. Existing legislation will also have to be reviewed.

In the securities field, the Commission has adopted proposals for directives on market abuse [23] and prospectus [24] that have a high level of consumer protection. The revision of the directive on investment services will lead to harmonisation of the conduct of business rules. The Commission intends to also make a proposal on the transparency obligations of quoted companies. These proposals would all benefit consumers by creating a fairer and more transparent internal market for financial services.

[23] COM (2001) 281 final

[24] COM (2001) 280 final

3.1.4. Electronic commerce

Consumers are still wary of shopping online, with less than 2% of retail sales being made online. In the context of the eEurope Action Plan adopted in 2000 [25], the Commission has developed a strategy to build consumer confidence online, made up of four elements: high quality e-commerce codes; quality alternative dispute resolutions (ADRs); clear and consistent laws and effective enforcement.

[25] http://europa.eu.int/information_society/eeurope/action_plan/index_en.htm

Whilst there are many codes, trustmarks and other schemes, their sheer number and variety make it difficult for consumers to decide whether they can be confident about dealing with any particular site. The Commission's e-confidence initiative was launched in May 2000. This brought together a wide range of stakeholders, including consumer and business representatives, in an effort to reach agreement on common requirements of good practice. In December 2001, stakeholders presented a broad agreement to the Commission proposing European trustmark requirements and a structure to monitor their implementation in practice.

On the basis of this agreement, the Commission intends to adopt a Recommendation on consumer confidence in electronic commerce and will work with stakeholders to monitor the implementation of their agreement.

Secure networks, secure access and the protection of privacy are also vital elements in building consumer confidence in electronic commerce. The 2002 eEurope Benchmarking Report [26] states that progress to improve protection against security threats is still slow despite several initiatives initiated by the public and private sectors such as the adoption of the electronic signature Directive [27]. In the last two years, there has been an increase in threats and security incidents, for example virus attacks. Against this background, the e-Europe security approach has evolved towards a more comprehensive approach of network and information security.

[26] e-Europe Benchmarking Report, 5 February 2002, COM (2002) 62 final

[27] Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999 on a Community framework for electronic signatures (OJ L 013 , 19/01/2000, 12-20), entry into force 19.07.2001

The Commission and Member States will take a series of measures to improve electronic commerce security encompassing awareness-raising, technological support, regulation and international co-ordination [28].

[28] Commission Communication, COM (2001) 298 of 6 June 2001; Council Resolution 14378/01 of 6 December 2001

3.1.5. Services of general interest (SGI):

Services of general interest are defined in the Commission Communication on "Services of general interest in Europe" [29] as being services which the public authorities class as being of general interest and subject to specific public service obligations. They cover such areas as transport, energy (electricity, gas),telecommunications [30] and postal services [31]. A guarantee of universal access, high quality and affordability of these services constitutes the basis of the consumer needs as well as other obligations to accompany the liberalisation process. The Commission report on Services of General Interest to the Laeken European Council [32] announced the Commissions' intention to produce a regular series of reports monitoring market performance in this field. The first such report has been produced and it has identified the quality of services as a big challenge for the future.

[29] COM (2000) 580 of 20 September 2000

[30] Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002, "Universal Service Directive", JO L 108 of 24 April 2002, p.51

[31] However, not all activities in these sectors are subject to public service obligations and some operate under normal market conditions, for example in the sectors of transport and energy, though some consumer protection measures apply across these sectors.

[32] COM (2001) 598 of 17 October 2001

There is currently a lack of quality indicators sufficiently developed to conduct an evaluation of these services. The Commission intends to produce a Communication defining a methodology to conduct horizontal evaluations of services of general interest. This methodology will pay special attention to consumers' views on the performance of these services.

3.1.5.1. SGI - Transport

In the transport area, certain services have given rise to a high level of consumer dissatisfaction as expressed in Eurobarometer [33] and qualitative focus group surveys. Considerable progress is being made as regards passenger rights in air transport. There is, however, a need to extend this progress to other modes of transport.

[33] Eurobarometer on SGI, September 2000, available at: http://europa.eu.int/comm/dgs/health_consumer/library/surveys/facts_euro53_en.pdf

The Commission White Paper "European transport policy for 2010: time to decide" [34] states the Commission's intention by 2004 and as far as possible to extend consumer protection measures for air transport to other modes of transport, and in particular the railways, maritime transport and as far as possible, urban transport services.

[34] COM (2001) 370 of 12 September 2001

3.1.5.2. SGI - Energy

In the energy sector, the Commission has made proposals [35] to further open-up to competition the electricity and gas markets. These proposals foresee that all customers would be free to choose their supplier by 1 January 2005.

[35] Proposed Directive amending Directives 96/92/EC and 98/30/EC concerning common rules for the internal market in electricity and natural gas - Commission Communication COM(2001) 125 of 13 March 2001

The proposals contain a detailed set of consumer basic rights including, in the case of electricity, a right to a universal service. They also provide for a minimum set of conditions in contracts, transparency of information on applicable prices and tariffs, measures to protect vulnerable customers and the availability of low-cost and transparent complaint handling and dispute settlement mechanisms.

The Commission will continue to monitor the implementation of the internal electricity and gas market rules, in particular regarding their effect on consumers, and to continue research on a wide range of energy options for the future.

3.1.6. International trade,standardisation and labelling issues

The world trading system is governed by the World Trade Organisation agreements. Apart from trade liberalisation itself, various aspects of these agreements are relevant for consumers.

A new round of WTO trade negotiations was launched in Doha in November 2001 comprising both further trade liberalisation and new rule making. Many aspects of these negotiations are relevant to consumers, including, for example: WTO negotiations on services, including financial services, discussions on labelling, on product safety and on deceptive practices in the context of the TBT [36] agreement, the use of precaution and intellectual property issues.

[36] WTO Agreement on Technical barriers to trade

In addition to the WTO the EC has negotiated or is in the process of negotiating trade agreements with several countries and regions, which are also relevant to consumers' interests.

International standards, in particular those established by ISO [37], have an important status under the TBT agreement and may influence the safety or interests of European consumers. It is therefore important to ensure transparency and adequate representation of consumer interests in the international standardisation process.

[37] International Standards Organisation

Private schemes, such as codes of conduct, guidelines and private, voluntary labelling, that aim at informing consumers about the origin, production and potential impact of the product in question can complement public policy measures, in view of promoting sustainable development.

The Commission will promote and protect consumer interests in the WTO as well as in the context of bilateral trade relations and in other fora. The Commission will maintain a dialogue with consumer organisations to this end. It will also promote consumer participation in international standardisation.

3.2. Mid-term objective 2: Effective enforcement of consumer protection rules

Effective co-operation on enforcing consumer protection rules is the second objective of this strategy. There are both legal and practical obstacles to enforcement co-operation at the moment, which need to be overcome if consumer protection principles are to be effectively applied in practice. While there is a co-ordination role at EU level, enforcement remains principally a national, regional or local competence. Actions in the following areas should be considered to achieve this mid-term objective:

3.2.1. Enforcement co-operation between Member States

Co-operation between the public authorities responsible for the enforcement of rules on commercial practices and product safety is key to the functioning of the internal market. The ability of rogue traders to act cross-border unimpeded would have a detrimental effect on consumer and business confidence. The Green Paper on EU Consumer Protection [38] outlined the case for a legal instrument, similar to what exists in other EU policies, to formalise this co-operation. Such a legal instrument could also provide the basis for co-operation agreements with third countries. The ideas in the Green paper on these issues were the subject of a very large consensus.

[38] COM (2001) 531 final

Reinforced structures for enforcement co-operation on product safety, such as the Consumer product Safety Network have already been foreseen in the revised Directive on General Product Safety.

The Commission intends to propose a legislative framework for enforcement co-operation on consumer protection between Member States, including the setting-up of a committee of representatives of national enforcement bodies.

Existing ad hoc and informal co-operation instruments, such as IMSN or CLAB have pioneered this form of co-operation and will continue to be important:

3.2.1.1. The International Marketing Supervision Network (IMSN)

The IMSN is an organisation consisting of the law enforcement authorities of twenty-nine countries. In principle these authorities are members of the Organisation for Economic Co-operation and Development (OECD). The mandate of the Network is to share information about cross-border commercial activities that may affect consumer interests, and to encourage international co-operation among law enforcement agencies. The European Commission participates as observer to the bi-annual IMSN conferences. The European sub-group "International Marketing Supervision Network - Europe" (IMSN-Europe) is a network of governmental authorities involved in the enforcement of fair trade practice laws and other consumer protection activities from the European Economic Area countries.

To ensure a permanent and systematic exchange of information between the members of IMSN-Europe, the Commission intends to develop its existing website for information exchange purposes and the database, which registers enforcement related information.

3.2.1.2. The CLAB [39] - "unfair contract terms" - database

[39] CLAB refers to the French term "clauses abusives", i.e. unfair contract terms

The Unfair Contract terms Directive [40]was adopted to eliminate unfair terms from contracts drawn up between a professional and a consumer. The Commission launched the CLAB database to create an instrument for monitoring the practical enforcement of the Directive in the form of a database on "national jurisprudence" governing unfair terms. "Jurisprudence" as understood by CLAB covers not only court judgements but also decisions by administrative bodies, voluntary agreements, out-of-court settlements and arbitration awards.

[40] Directive 93/13/EEC, (OJ, L 95, 21.04.1993)

The Commission intends to complete and improve the CLAB database in the next years.

3.2.2. Information and data on the safety of goods and services

The effectiveness of the systems in place in the EU for ensuring a high level of consumer health and safety protection should be monitored closely in order to identify any weaknesses, determine the priorities for reinforcing or completing the safety provisions applicable, intervene rapidly in case of emergencies and assist the decision makers in defining new policy orientations. This involves, in particular, collecting and assessing information and data on dangerous consumer products, the risks posed by certain services, the accidents related to consumer products and services.

Collecting and exchanging at EU level such information is also important in order to contribute to ensuring a consistent enforcement of Community provisions on product and service safety.

The "rapid alert system" (RAPEX) and the programmes to collect and exchange data on product-related injuries should be developed further. A reinforcement of RAPEX will be part of the implementation of the revised General Product Safety Directive [41]. The development of a scheme to collect, assess and exchange data and information on service safety and on the accidents in certain service sectors may be considered as part of the initiative on the safety of services. Moreover, the existing scheme to collect and assess data on product-related injuries under the Injury Prevention Programme [42], will be continued as part of the new Health Programme, and reinforced if necessary by appropriate specific initiatives.

[41] Directive 2001/95/EC of the European Parliament and of the Council of 3 December 2001 on general product safety, (OJ L 11, 15.1.2002, p.4)

[42] http://europa.eu.int/comm/health/ph/programmes/injury/index_en.htm

Enlargement will add the challenge of integrating in the Community system weaker enforcement mechanisms. In order to facilitate such integration, the Commission is assisting candidate countries in the difficult task of steadily putting in place adequate administrative structures and enforcement powers to implement and monitor the consumer protection acquis.

Candidate countries will be involved in the implementation of the revised general product safety directive, in particular through their participation in the reinforced "rapid alert system" (RAPEX).

3.2.3. Redress

If consumers are to have sufficient confidence in shopping outside their own Member State and take advantage of the Internal Market, they need assurance that if things go wrong they have effective mechanisms to seek redress. Better and easier access to courts and out-of-court mechanisms for resolving cross border disputes are therefore necessary to facilitate more effective access to justice for consumers.

3.2.3.1. Alternative dispute resolution

Where cross-border disputes arise, resorting to traditional litigation is not always practical nor cost effective for consumers and business alike. The Commission has responded with a number of initiatives aimed at promoting simple, low cost and effective means of resolving cross border disputes such as alternative dispute resolutions [43] (ADRs).

[43] The Commission has adopted two Recommendations on the principles applicable to the bodies responsible for the out-of-court settlement of consumer disputes (98/257/EC, OJ L 115, 17.4.1998, p.31) and on the principles for out-of-court bodies involved in the consensual resolution of consumer disputes (2001/310/EC, OJ L 109, 19.4.2001, p.56).

In order to co-ordinate out-of-court-settlement procedures throughout Europe, the European extra-judicial network (EEJ-Net) has been launched in October 2001. The EEJ-Net provides a communication and support structure made up of national contact points (or 'Clearing Houses') established by each Member State. The clearinghouse will help the consumer with information and support in making a claim to an appropriate out-of-court alternative dispute resolution system. The EEJ-Net is complemented by FIN-NET; the EU-wide out-of-court network dealing with cross-border complaints related to financial services set up in February 2001.

The Commission will develop the EEJ-Net with Member States. It will ensure minimum guarantees for ADRs by encouraging the application of the principles under the 1998 and 2001 Commission Recommendations. The Commission will further develop and improve FIN-NET and will promote the development of EU wide ADR schemes, particularly on-line schemes. The Commission also adopted a Green Paper on Alternative Dispute Resolution [44] to take stock of the existing situation with a view to setting future priorities, and will propose a Communication on Online Dispute Resolution.

[44] COM(2002) 196 final

3.2.3.2. European Consumer Centres (Euroguichets)

The European Consumer Centres Network (ECC-network) acts as an interface between the Commission and European consumers to support better use of the Internal Market and to give feedback to the Commission on market problems. The ECCs provide information on legislation and on case law both at the European and at the Member State level. The ECCs also give assistance and advice on mediation, information concerning the procedures, first legal aid and orientation towards other authorities. The ECCs co-operate closely within their network and with other European networks such as EEJ-net and FIN-NET. The Commission would like to see one European Consumer Centre in every Member State and, as soon as possible, also in the candidate countries.

The Commission will continue to build up the ECCs' network within the EU Member States and the candidate countries. In order to help the Commission to better identify consumer needs, the ECCs will participate to the Commission initiative "Interactive Policy Making", which is a new feedback mechanism to deliver valuable information from the market place.

3.2.3.3. Judicial cooperation in civil matters

The main objective of co-operation in civil law is to establish better collaboration between Member States in order to encourage free movement of citizens. The European Council of Tampere (15 and 16 October 1999) established a map for the effective implementation, among others, of the civil co-operation provisions introduced by the Amsterdam Treaty. The three priorities in this field are better access to justice, mutual recognition of judicial decisions, and increased convergence in the field of procedural law.

The Commission will pursue the targets set for the effective implementation of the civil co-operation provisions introduced by the Amsterdam Treaty and developed by the conclusions of the European Council of Tampere. The Commission will continue to update, at regular intervals, a "Scoreboard", to monitor the progress in the adoption and implementation of the range of measures needed to meet these targets.

An EU Regulation on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters [45], which has entered into force on 1 March 2002, provides for a new set of rules of immediate consumer relevance. New rules for the applicable law on contractual and non-contractual obligations are also about to be established [46].

[45] Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters (OJ L 12 , 16/01/2001, p.1-23)

[46] Revision of the 1980 Rome Convention on the law applicable to contractual obligations ('ROME I') and completion by a new instrument governing conflict of laws rules for non-contractual aspects of commercial transactions ('ROME II')

The Commission will take into account the consumer's interest when Community rules on international private law are established.

3.2.4. Support to consumer associations

Consumer associations can make an important contribution to the proper enforcement of consumer policy measures both through their use of injunctions and their general market surveillance role. They are able to identify consumer products and services that are, for example, unsafe or of unacceptably poor quality. In this way they complement the enforcement and market surveillance role of the public authorities. This is resource intensive work that frequently requires a high level of expertise.

Many of the actions envisaged in support of Objective 3, such as the training programme for consumer associations professionals or the on-line education platform, will serve to strengthen the ability of consumer associations and of individual consumers themselves to contribute to market surveillance. In addition, the Commission will undertake some specialised initiatives relating to general product safety.

The Commission will organise in 2003 a special training course for consumer associations relating to market surveillance in the context of the revised General Product Safety Directive. It will also explore the possibility of launching further co-ordinated initiatives with Member States when the Directive comes into force.

3.3. Mid-term objective 3: Proper involvement of consumer organisations in EU policies

In order for consumer protection policies to be effective, consumers themselves must have an opportunity to provide an input into the development of policies that affect them. This goes beyond the immediate scope of consumer policy as such and is essential to achieve the integration of consumer protection requirements into all other EU policies. For example, the variety of public services and other services of general interest which are provided through some form of market structure is steadily increasing, and consumer interests should be taken into account in those areas. Involving consumer organisations also acts as a valuable 'reality check' on what is being proposed. Specific actions should be developed in the following areas:

3.3.1. Reviewing mechanisms for participation of consumer organisations in EU policy making

3.3.1.1. Consultation requirements

To achieve more effective and transparent legislation at the EU level, the White Paper on Governance [47] proposes that the consultation process, as a whole, should take place in accordance with commonly agreed standards. The White Paper also recognises the impact this process will have on the resources of civil society and that this will have to be taken into account in the future by all public authorities concerned.

[47] COM (2001) 428 final

Consumer organisations have a forum, the Consumer Committee, for inputting into consumer policy as such. The Consumer Committee is an advisory committee composed of consumer representatives from all Member States and of European-wide organisations. The current challenge for consumer organisations is to have the opportunity and the capacity to make an input into wider EU initiatives, which have a consumer dimension, at all stages of the EU decision-making process.

A Communication establishing minimum requirements for the conduct of the Commission's consultation processes will be presented shortly to the Commission.

3.3.1.2. Participation in consultation bodies and working groups

Consumer participation within consultative bodies and working groups will also help to ensure integration of consumer concerns in all EU policies. Most of these consultative bodies are in the agricultural field. New consultative bodies have also been set up in certain fields such as transport, energy, telecommunications or fisheries. Throughout the years, consumer representation in such bodies has increased haphazardly, without a general co-ordinated approach.

The Commission is working towards greater transparency as regards the activities of the different advisory bodies. In this context, the Commission will examine whether consumer organisations are properly represented across the spectrum of policies which concern them.

3.3.1.3. Standardisation work

Voluntary standards, established by the European standardisation bodies, play an important part in the concrete application of many Community measures related to consumer protection. The use of standards for achieving public policy objectives gains legitimacy through the transparency of the standardisation process and through the full and effective involvement of all stakeholders, including consumers. The participation of consumers in the European standardisation is still insufficient and does not match the dominant position of producers and other economic interests.

The Commission will examine how it can ensure better consumer participation in the work of standards-setting bodies. European standardisation involves activities both at EU level and in the national standardisation committees. Therefore, the Commission and the Member States should co-operate to ensure that the EU level activities are properly co-ordinated and that consumer representatives are properly involved at national level.

3.3.1.4. Consumer participation in the work of other EU institutions

The proper involvement of consumer organisations in EU policies concerns all EU institutions. Consultation of European and national consumer organisations already takes place with the Parliament and the Council. The Nice Treaty specifically adds "consumers" to the list of civil society representatives in the Economic and Social Committee [48]. However, consumer participation could be more systematic.

[48] Article 257 TEC

The Commission urges other EU institutions to examine how to improve the involvement of consumers in policy making.

3.3.2. Consumer information and education

Subsidiarity implies that much of the responsibility for consumer information and education rests with the national, regional and local authorities.

3.3.2.1. Information

The growing expectations of citizens to have full and easy access to information on European affairs call for a modern, efficient and reliable information policy taking into account the latest developments in research and knowledge. This is an ongoing challenge for the Commission and for other EU institutions, which are committed to a policy of openness and accountability. This is particularly true for consumers as EU consumer protection policies and activities have a direct impact on their lives. Over the last few years, the Commission has developed various information tools, which are aimed at the general public, at consumers or at specific target groups. These include its website, the Consumer Voice newsletter and information campaigns. The European Consumer Centres Network (Euroguichets) plays an important role by directly informing consumers about EU initiatives.

The Commission will pursue its efforts to improve its information policy towards consumers. Future actions will include information campaigns on tobacco prevention for young people.

3.3.2.2. Education

In recent years, particularly in the context of the single market, it has become increasingly evident that more attention should be given to the education of consumers so that they can shop with confidence in the full knowledge of their rights. Action at EU level should address specific problems related to cross-border transactions, the European dimension of consumer rights and the exchange of experience and good practice between Member States. Enlargement reinforces the necessity of this type of actions.

The Commission will develop on-line inter-active education tools that can be used by consumer associations for further training of their own staff in specific aspects of cross-border transactions, for example financial services, and of the EU consumer rights in the Internal Market. To this end, the Commission will make full use of best practices developed by Member States and consumer organisations.

3.3.3. Support and capacity building of consumer organisations

3.3.3.1. Training program for staff members from consumer organisations

The consumer movement varies substantially across the EU, both in terms of strength, structure and capacity. The Commission will concentrate its own efforts on capacity building (management, lobbying, consumer law) and will encourage the Member States to do likewise.

An ambitious training program for consumer professionals has been launched and will be developed over the coming years. This should help the consumer organisation professionals to make an effective input into the elaboration of EU policies in the main area of consumer interest. This effort will be combined with already existing measures to provide support to consumer organisations.

3.3.3.2. Review of the legal instrument establishing a general framework for Community activities in favour of consumers

At EU level, the Decision of the European Parliament and the Council establishing a general framework for Community activities in favour of consumers [49] provides the financial legal basis for initiatives to support and strengthen consumer organisations. This Decision will expire at the end of 2003. The new general framework will reflect and support the objectives outlined in this strategy.

[49] Decision No 283/1999/EC of the European Parliament and of the Council of 25 January 1999 establishing a general framework for Community activities in favour of consumers, (OJ L 34/1 of 9.2.1999)

The Commission intends to adopt a proposal establishing a new general framework for Community activities in favour of consumers in 2002. This proposal will also provide for the possibility of candidate countries participating in these activities, in conformity with the general rules of participation of candidate countries to EC programmes.

4. Conclusion

EU Consumer Policy is at a critical juncture. During the coming years, consumers should reap tangible benefits from the single market and the euro. They should see the concrete results of integration of consumer interests into all EU policies. And consumers in the enlarged European Union of 470 million citizens should all benefit from the same high level of protection.

This Commission Strategy for Consumer Policy at EU level will provide a consistent orientation for the next five years. The objectives are mutually reinforcing and will be implemented through a short-term rolling programme, which will be reviewed regularly. Each review will assess the actions achieved on the basis of new data and of progress indicators in order to adjust ongoing actions, as appropriate, and to identify new ones.

The Commission invites the European Parliament, the Council, the Economic and Social Committee,the Committee of the Regions and all interested parties to support the overall approach and the three objectives in particular. The Commission also invites them to foster the adoption of the measures proposed and to support their implementation.

Annex

Rolling programme for Consumer Policy (2002-2006)

Indicative list of actions

Objective 1: A high common level of consumer protection

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Objective 2: Effective enforcement of consumer protection rules

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Objective 3: Proper involvment of consumer organisations in EU policies

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1.

Actions to improve the quality of Consumer Policies

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FINANCIAL STATEMENT

1. Title of operation

Consumer Policy Strategy 2002-2006

2. Budget heading(s) involved

B5-100

B5-100A

3. Legal basis

Legal basis for the consumer policy strategy: Article 153 and Article 211 TEC

Legal basis for programme expenditure: Decision 283/1999/EC of the European Parliament and of the Council of 25 January 1999 establishing a general framework for Community activities in favour of consumers 1999-2003. Expenditure from 2004 onwards will be within a framework established by a new proposal from the Commission to be made during 2002.

4. Description of operation

4.1 General objective

This Communication sets out the Commission's strategy for consumer policy at European level over the next five years (2002-2006). It sets out three mid-term objectives: a high common level of consumer protection, effective enforcement of consumer protection rules, and involvement of consumer organisations in EU policies. These three objectives are designed to maximise the benefits of the single market for consumers, to help achieving integration of consumer concerns into all other EU policies, and to prepare for enlargement.

4.2 Period covered and arrangements for renewal

The new consumer policy strategy provides overall orientations covering the period 2002 - 2006, with specific actions set out in a Commission services working document that will be regularly reviewed throughout that period. However, this financial statement covers only expenditure from 2002 to 2003, being the period covered by the current legal base (Decision 283/1999/EC). The Commission will make a proposal for a new framework for Community activities in favour of consumers during 2002. This will follow on from Decision 283/1999/EC and will be based on the policy orientations set out in the new consumer policy strategy. Expenditure after 2003 will therefore be covered by the financial statement included with that new proposal.

5. Classification of expenditure or revenue

5.1 Compulsory/Non-compulsory expenditure

Non-compulsory.

5.2 Differentiated/Non-differentiated appropriations

Differentiated appropriations.

5.3 Type of revenue involved

None.

6. Type of expenditure or revenue

The types of expenditure involved under the new strategy will depend on the specific actions involved. Each action will be covered by specific proposals which will include details of the accompanying expenditure, including notably the proposal for a new framework for Community activities in favour of consumers (Decision 283/1999/EC) which will provide an overall framework for financial expenditure linked to the implementation of the new consumer policy strategy.

7. Financial impact

7.1 Method of calculating total cost of operation (relation between individual and total costs)

7.2 Itemised breakdown of cost

Commitment appropriations EUR million (at current prices)

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7.3 Operational expenditure for studies, experts etc. included in Part B of the budget

Commitment appropriations EUR million (at current prices)

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7.4 Schedule of commitment and payment appropriations

EUR million

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8. Fraud prevention measures

Verification of grants or receipt of services and studies is carried out by the services of the Commission before payment, taking account of contractual obligations and the principles of economy and of good financial and general management. Anti-fraud measures (e.g.: checks, reporting) are included in all the agreements and contracts concluded between the Commission and beneficiaries of payments.

9. Elements of cost-effectiveness analysis

9.1 Specific and quantified objectives; target population

This strategy is focused on three mid-term objectives: a high common level of consumer protection, effective enforcement of consumer protection rules, and involvement of consumer organisations in EU policies. Specific actions are set out in a Commission services working document that will be regularly reviewed throughout that period. The overall beneficiaries of the strategy will be consumers across Europe. However, the target populations of the elements of the strategy vary according to the actions planned and focus on the actors who can contribute to achieving the right impacts for consumers - principally national regulators, enforcement authorities, businesses and consumer representatives.

9.2 Grounds for the operation

The fundamental basis for this strategy is set out in Article 153 of the Treaty establishing the European Community (TEC):

1.In order to promote the interests of consumers and to ensure a high level of consumer protection, the Community shall contribute to protecting the health, safety and economic interests of consumers, as well as to promoting their right to information, education and to organise themselves in order to safeguard their interests

...

3.The Community shall contribute to the attainment of the objectives referred to in paragraph 1 through:

(a) Measures adopted pursuant to Article 95 in the context of the completion of the internal market;

(b) Measures which support, supplement and monitor the policy pursued by the Member States.

This document sets on the Commission's medium-term strategy for achieving these aims over the period 2002-2006. Specific actions within that overall strategy will be the subject of individual proposals.

9.3 Monitoring and evaluation of the operation

The monitoring and evaluation of the strategy is central to the new strategic approach built around the three objectives of a high common level of consumer protection, effective enforcement of consumer protection rules, and involvement of consumer organisations in EU policies. A series of 18 possible impact and effectiveness indicators for the consumer policy strategy have been developed as part of an ex-ante impact assessment of the strategy. The most practicable of these indicators will be taken as a basis for further monitoring and evaluation.

10. Administrative expenditure (Section III, Part A of the budget)

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 budgetary authority.

10.1 Effect on the number of posts

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If additional resources are required, indicate the pace at which they will have to be made available.

10.2 Overall financial impact of additional human resources

EUR

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The amounts given must express the total cost of additional posts for the entire duration of the operation, if this duration is predetermined, or for 12 months if it is indefinite.

10.3 Increase in other administrative expenditure as a result of the operation

EUR

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The amounts given must correspond to total expenditure arising from the operation if its duration is predetermined or expenditure for 12 months if it is indefinite.