EUROPEAN COMMISSION Brussels, 2.5.2017 COM(2017) 255 final COMPLIANCE PACKAGE COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Action plan on the Reinforcement of SOLVIT: Bringing the benefits of the Single Market to citizens and businesses {SWD(2017) 210 final}



INTRODUCTION The Single Market is one of Europe's great achievements. It is at the heart of the European project, but its benefits do not always materialise because Single Market rules are not always known or implemented correctly. At a time when European citizens and businesses expect a Europe that protects, empowers and defends, the Single Market is one of Europe's best assets to address the challenges of increased globalisation and build a stronger and fairer European economy. In its Single Market Strategy the Commission endeavoured to achieve a deeper and fairer Single Market, one of the ten priorities of the Juncker Commission. To that end, the Strategy proposed improving opportunities to access markets across borders; making life easier for consumers, businesses and public administrations; and bringing the Single Market’s practical benefits to citizens and businesses. Supporting all this, the Commission announced it will work hand in hand with Member States to create a real culture of compliance for Single Market rules, with a particular emphasis on the reinforcement of existing tools such as SOLVIT. To deliver on this, in the Joint Declaration on the EU’s legislative priorities for 2017, released on 13 December 2016, the European Parliament, the Council and the Commission reiterated their commitment to promoting the proper implementation and enforcement of existing legislation. On the same day, the Commission adopted its Communication on EU law: Better results through better application, which sets out how the Commission will step up efforts to ensure that EU law is applied, implemented and enforced for the benefit of all. SOLVIT is a free of charge service provided since 2002 by the national administration in each EU Member State and in Iceland, Liechtenstein and Norway. It works under short deadlines and provides pragmatic solutions to EU/EEA citizens and businesses when they are experiencing difficulties with their EU rights being recognized by public authorities in particular while moving or doing business cross-border in the EU. SOLVIT deals with all cross-border problems relating to the four freedoms of movement (persons, goods, services and capital) including policies closely linked to them (such as taxation, employment, social policy and transport). The network is coordinated by the European Commission. Since its launch in 2002, SOLVIT has grown to become a very important means of helping EU/EEA citizens and businesses claim their place at the heart of the Single Market. Building on 15 years’ experience, SOLVIT's case load has increased from 5 to 200 cases a month. In 2016, SOLVIT dealt with 2 414 cases. Its centres took an average of 59 days to handle a case and resolved 89% of the cases. SOLVIT's achievements are built on many success stories – a few examples: A French company requested a VAT refund from the German authorities – but the request remained unanswered for 10 months. Thanks to SOLVIT's intervention, within 6 weeks the procedure was speeded up and the company received the amount it had asked for. Three Portuguese nurses applied to have their professional qualifications recognised in Spain. Under EU law, the authorities have to respond to the application within three months. The deadline passed but thanks to SOLVIT's intervention, within two weeks their qualifications were recognised in time. An Austrian artist wanted to register as a resident in Luxembourg. He handed in all the necessary papers to the local authorities but they refused to register him unless he presented a statement of support from a resident in Luxembourg. SOLVIT pointed out that this additional requirement was not in line with EU law. The local authority revised its position and issued the registration certificate. Thanks to SOLVIT's intervention, the case was solved within one week. A Dutch national was prevented from importing a trailer into Bulgaria after moving there. As trailers lighter than 750 kg do not have to be registered in the Netherlands, the importer had no registration document – so the Bulgarian authorities refused to register the trailer. Thanks to SOLVIT's intervention, the case was solved within 13 weeks. Qualified physiotherapists from Romania used to suffer long delays getting recognised to practice in France. SOLVIT intervened within 7 weeks and recognition was promptly granted. French aviation authorities had been blocking a Norwegian aviation company from operating domestic flights in France. SOLVIT intervened and solved the problem in 10 weeks. Whilst SOLVIT was able to solve many problems for citizens and businesses, the increased scale of the service has amplified the challenges. More needs to be done for the system to reap its full potential as a problem-solving tool. Member States have been calling for and supporting a strengthened SOLVIT that works to the full for citizens and businesses. Back in February 2016 the Competitiveness Council called on the Commission to take urgent action on this matter. Likewise, the European Parliament has repeatedly called for SOLVIT to be bolstered. In this context and in line with its political priorities, the Commission is committed to taking, together with Member States, further steps to strengthen SOLVIT’s strategic role to make the Single Market work better in practice for citizens and businesses. This can materialize only if Member States provide their SOLVIT centres with adequate staffing and recognition within their national administration. The weakest link impacts the performance of the network as a whole. In achieving this objective, the Commission is building on its assessment of the current functioning of SOLVIT, accompanying this Communication. The assessment has highlighted shortcomings requiring improvements, notably as regards the administrative capacity at SOLVIT centres; meeting the quality criteria set out in the 2013 SOLVIT Recommendation; awareness of SOLVIT as a problem-solving tool, especially among start-ups, SMEs and other businesses; and its role in EU law enforcement. The Action Plan outlined in this Communication will work alongside the other Commission initiatives included in the compliance package, in particular the Single Digital Gateway, which will provide citizens and businesses with a single access point to Single Market-related information, assistance, advice, problem-solving services and e-procedures. It tallies with the Commission Communication 'Europe’s next leaders: the Start-up and Scale-up Initiative', as it aims to further remove barriers for start-ups wanting to operate across borders. Lastly, it complements the aims of the 'European pillar of social rights' and related initiatives, reflecting this Commission’s priority of promoting social fairness and opportunities in the EU.

This Communication is setting out measures to strengthen SOLVIT with timelines to be implemented both at the EU and Member States level. Strengthening SOLVIT will be an ongoing process and the timelines will allow monitoring of the implementation of the necessary measures. They aim to promote SOLVIT by (I) further improving its quality, (II) further increasing awareness-raising activities and (III) upgrading its role in EU law enforcement. I.promoting SOLVIT by further improving its quality Minimum operational and quality standards are outlined in the 2013 SOLVIT Recommendation. Respect for these standards throughout the network is important for the applicants and the cooperation between the centres. The application of these standards varies across the network as explained in the assessment accompanying this Communication. Action is therefore needed to improve the overall quality of SOLVIT notably in terms of administrative capacity, handling of complex and sensitive cases and legal expertise. A precondition for this is that Member States ensure that SOLVIT centres are well resourced and positioned with adequate and stable staffing and with the necessary legal expertise. For its part, the Commission will continue to draw on means such as the yearly reporting on the performance of SOLVIT in monitoring adequate staffing of SOLVIT centres, and will use the Single Market Scoreboard to report on the outcome. The Commission will also use all available EU funding opportunities to offer Member States tailored support in boosting their administrative capacity and in making their SOLVIT centres operate more effectively. In particular, an advanced training course for staff in the national SOLVIT centres, focusing on specific legal issues of particular importance for the business community is foreseen to be funded through the COSME 2018 programme. The new Structural Reform Support programme also, envisages support for Member States' administrative capacity (amongst other exchanges of experts and technical assistance). In addition, a better handling of complex and sensitive cases between the Commission and Member States should be ensured. For that purpose, more efficient knowledge sharing for example by using interactive tools complementing face-to-face trainings, will be promoted. This is essential taking into account the variety of legal areas covered by SOLVIT as shown in figure 1. Figure 1: Legal areas SOLVIT 2002-2016 (source SOLVIT database) In addition, further specific legal expertise could be provided by SOLVIT branches ('antennas') set up to respond to particular needs in a certain sector or area where national policy experts will be involved in handling complex cases directly. To avoid confusion and duplication of efforts, the Commission is striving to avoid a proliferation of problem solving tools similar to SOLVIT in specific areas of Single Market legislation. The mutual recognition of non-harmonised goods is potentially a good case in point. Here, if SOLVIT’s informal approach fails, the Commission will look at the possibility of introducing an appeal procedure for businesses, as part of the review of enforcement of the mutual recognition principle. Another area identified is problems related to tax rules such as tax discrimination citizens may be facing in cross-border situations. Moreover, the Commission will provide more effective legal support to the network by opening the SOLVIT application for direct communication between Commission experts and SOLVIT centres. It will also further improve the management of divergent views between the two SOLVIT centres involved in the assessment and handling of a case. The Commission will follow a more structured arbitration procedure, with more systematic monitoring of SOLVIT cases to identify controversial issues and discussions with the network. Using ‘peer review’ in workshops will help identify best practice and common rules. In addition, the Commission will monitor the quality of the case handling more closely. Here, feedback from applicants is important to improve procedures, pinpoint best practice and therefore enhance quality of service. Thus, a comprehensive user survey system will be developed in consultation with the SOLVIT centres. II.promoting SOLVIT by increasing awareness- raising activities Although it is not possible to assess the exact size of the cross border dispute resolution 'market' where SOLVIT is potentially active, a Single Market of 500 million citizens and businesses would imply that there is a greater need for SOLVIT than its current 2 500 cases would indicate. Figure 2 shows the number of cases submitted to the network by the SOLVIT home centres. These are the centres from the EU/EEA Member State where the applicant is originally from (nationality), is residing, is established or derives rights from. Although the difference in the case load can to some extent be explained by the differences in size and cross-border mobility, there is room for targeted awareness raising activities in all EEA/EU Member States. These activities will focus on making sure citizens and businesses are directed to SOLVIT the moment they seek redress for a problem within SOLVIT’s remit according to the needs of each EEA/EU Member State. Figure 2: Cases per home SOLVIT centre 2002-2016 (source SOLVIT database). To increase the overall 'findability' of SOLVIT, the Commission will further improve SOLVIT’s overall visibility on the Your Europe web portal (the main current access point).

In this context, the future Single Digital Gateway would provide citizens and businesses with easy access to comprehensive, high-quality information on the Single Market, to personalised advice, effective assistance and problemsolving services. It would link existing EU and national mechanisms, including SOLVIT, and thereby increasing its findability. The Commission will also work closely with Member States through the national SOLVIT centres, Commission representations in Member States and intermediary organisations (representing certain sectors, professions or interests, chambers of commerce etc.) and step up cooperation with other relevant networks to develop targeted awareness-raising activities (for example joint meetings and training courses, joint social media actions). Better enforcement benefits citizens and businesses alike. When their rights are breached, they should be easily able to identify and make use of the most appropriate redress mechanism available. As shown in figure 3, over the years, the proportion of citizens' in comparison to business cases submitted to SOLVIT has increased. On the one hand, this shows that SOLVIT has become increasingly important for mobile citizens in the EU/EEA. On the other hand, it has resulted in relatively fewer businesses benefitting from the services SOLVIT offers. The main legal areas for business cases in 2016 were taxation, free movement of services and free movement of goods. The resolution rate of business cases at 80% was lower than the network average (89%). It is nonetheless particularly good for the taxation field (where there are many cases of late VAT reimbursement) although less as far as the free movement of goods and services is concerned. Figure 3: Evolution of citizens' vis-à-vis business cases 2006-2016 (source SOLVIT database). SOLVIT should be geared towards handling more business-related cases. There is a strong need to promote a broader knowledge of the help SOLVIT can offer within the business community. It is equally important that similar activities are undertaken at the national level. Over the years the SOLVIT network has built up its cooperation with other relevant networks. To this end, the Commission will support moves to step up cooperation with these networks, which is particularly relevant to attracting more business cases. Of particular importance is the cooperation with the Enterprise Europe Network, which assists SMEs and start-ups that operate or plan to operate across borders. The Commission will make more regular contact with intermediary organisations to receive their input on possible improvements to SOLVIT and knowledge-sharing. It will also introduce new arrangements to allow intermediary organisations to submit and follow cases directly in SOLVIT. In general, more strategic awareness-raising activities about SOLVIT and the development of more structured cooperation with intermediary organisations and relevant networks, will enhance SOLVIT's role in providing useful feedback and evidence on how the Single Market is functioning in practice: with a larger ‘critical mass’ of cases, involving more businesses, there will be more relevant and significant input in terms of Single Market governance. This can be done for instance by using its evidence base in evaluations of possible changes in Single Market policies and adoption of EU legislation to address gaps of EU law, as was the case in the revision of the 2005/36/EC Directive on professional qualifications. Promoting quality and awareness of SOLVIT will contribute to a more significant role of SOLVIT in EU law enforcement.



III.Promoting SOLVIT by upgrading its role in EU law enforcement Many problems relating to the implementation of EU law are detected by the network. Figure 4 shows the number of cases submitted against the lead SOLVIT centre in each EEA/EU Member State. Figure 4: Cases per lead SOLVIT centre 2002-2016 (source SOLVIT database).