WRITTEN QUESTION P-1973/99

by John Purvis (PPE-DE) to the Commission

(19 October 1999)

Subject: Financial services

The Commission's Framework for Action in Financial Services sets out the general framework for measures in this field in the next five years. These measures are relevant to ensuring the competitiveness of the Union's financial services sector and industry whilst safeguarding consumer interests.

Financial services measures so far adopted at the European level have not been applied in the same manner in all the Member States.

1. Could the Commission please provide a list of measures in the respective countries which are not being applied uniformly in the EU?

2. What measures do the Commission propose to take to ensure uniform implementation of these already existing measures in the EU?

Answer given by Mr Bolkestein on behalf of the Commission

(25 November 1999)

The Commission actively fulfils its role as guardian of the Treaty by verifying that Member States comply with their requirements to implement legislation within the required time-frame agreed on the occasion of adoption; that national measures achieve the results set out in the legislation in a manner which is clear and can be relied upon by individuals (this requires an assessment which focuses on the legal and practical effect of national provisions rather than the detailed wording) and that Member States respect the basic principles contained in the Treaty, notably the principles of freedom of establishment, free movement of capital, and free provision of services.

The Commission's overall assessment is that the current state of implementation is satisfactory with nearly 100 % implementation in all Member States for all families of financial services legislation. All Member States have fully implemented insurance legislation. Over 99 % of national measures required to implement banking and company law legislation have been adopted. 97 % of national measures required to implement securities legislation have been adopted. Any shortfalls now concern legislation which has recently entered into force. Even here, Member States have made progress in accelerating the implementation process. For example, less than two months after the entry into force of Directive 97/5/EC of the Parliament and of the Council of 27 January 1997 on cross-border credit transfers(1), 11 Member States have taken steps to implement this measure. Infringement procedures are in the pipeline in relation to the remaining four.

In addition to checking whether national implementing measures have been notified, the Commission verifies the quality of implementation. To this end, it systematically commissions detailed reviews of the conformity of national measures with the corresponding Community financial services legislation. Where Member States are unable to satisfy the Commission that legislation has been correctly implemented, the Commission opens infringement proceedings. At the beginning of 1999, some 26 infringement proceedings were open against different Member States for non-respect of Community law in the financial services markets(2).

Turning to the assessment of the application of financial services legislation in various sectors, all credit institutions directives have been implemented correctly with the exception of European Parliament and Council Directive 95/26/EC of 29 June 1995 amending Directives 77/780/EEC and 89/646/EEC in the field of credit institutions, Directives 73/239/EEC and 92/49/EEC in the field of non-life insurance, Directives 79/267/EEC and 92/96/EEC in the field of life inssurance, Directive 93/22/EEC in the field of investment firms and Directive 85/611/EEC in the field of undertakings for collective investment in transferable securities (UCITS), with a view to reinforcing prudential supervision(3) which has not been implemented by one Member State and has only partially been implemented by another Member State. Both matters have been brought before the Court of justice.

Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the financial system for the purpose of money laundering(4) has been implemented by all Member States, but one Member State has been brought before the Court of justice for incorrect implementation.

All Member States have communicated national implementation measures with regard to the third generation life and non-life insurance directives. In several cases, the Commission considers that the way in which national implementation has been undertaken does not fully conform with the directives, and a number of proceedings for non-conformity are under way. In motor insurance, the Commission has started discussions with four Member States to assess conformity of their legislation relating to the financing of guarantee funds with Council Directive 90/618/EEC of 8 November 1990 amending, particularly as regards motor vehicle liability insurance, Directive 73/239/EEC and Directive 88/357/EEC which concern the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance(5).

In the securities sector there are infringements for non implementation of Directive 97/9/EC of the Parliament and of the Council of 3 March 1997 on investor-compensation schemes(6). Other infringement cases in this sector relate to breach of provisions of the Treaty, in particular relating to the use of tax advantages to divert securities-related business to local stock exchanges.

To complement infringement proceedings, the Commission has developed a number of upstream mechanisms to remedy national actions that might hamper the operation of the single financial market. For example, it uses advisory committees such as the Banking advisory committee or the Insurance committee to help resolve any potential problems of interpretation of elements of a directive, as well as defining a collective approach to issues of implementation and peer review. These committee structures are reinforced by the recent creation of the Financial services policy group. This high-level forum will enable the Commission and Member States to identify recurrent problems and determine appropriate course of action.

(1) OJ L 43, 14.2.1997.

(2) Sixteenth annual report on monitoring the application of Community law (1998) COM(1999) 301 final.

(3) OJ L 168, 18.7.1995.

(4) OJ L 166, 28.6.1991.

(5) OJ L 330, 29.11.1990.

(6) OJ L 84, 26.3.1997.