Report from the Commission to the Council and the European Parliament on the results of the second phase of SLIM and the follow-up of the implementation of the first phase recommendations
Date: 1997-11-24
Institutions: European Commission
Subjects: EU law, administrative formalities, application of the law, national law, single market

COMMISSIOI ' OF THE EUROPEAN  COMMUNITIES 

Brussels, 24.11.1997 
COM(97) 618 final 

REPORT FROM THE COMMISSION TO THE COUNCIL AND THE 
EUROPEAN PARLIAMENT ON THE RESULTS OF THE SECOND 
PHASE OF SLIM AND THE FOLLOW-UP OF THE 
IMPLEMENTATION OF THE FIRST PHASE RECOMMENDATIONS 

SUMMARY 

1.  The Dublin European  Council  in December  1996 reiterated the importance  of regulatory 
simplification  and  requested,  in  this  context,  the  extension  of  the  SLIM  initiative.  This 
confirmed  the favourable reception by the Internal Market Council on 26 November  1996 
of  the  Commission's  report  on  the  first  phase  of  the  project.  Finally,  the  European 
Parliament, through the Crowley Report, manifested  its strong  support  for  SLIM and the 
efforts  undertaken by the Commission in the simplification  of legislation. 

2.  SLIM  is  not  to  be  seen  as  an  isolated  simplification  exercise.  The  Action  Plan  for  the 
Single Market, endorsed by the Amsterdam European Council in June  1997, proposes that 
the Commission adopt a broader approach to simplification  covering not only Community 
legislation  but  also  national  measures  related  to  the  Single  Market.  This  "rolling 
programme  of  simplification"  should  encompass  the  SLIM  methodology  and  other 
simplification  exercises.  The  "Better  Law  Making"  Report  to  be  presented  by  the 
Commission  at the European Council in Luxembourg  in December will also provide and 
overview  and emphasise Community  action on simplification,  including  SLIM and other 
initiatives such as B.E.S.T.. 

3.  This  Communication  intends to summarise the recommendations  of the  SLIM teams  for 
the four areas discussed  in this second phase, VAT obligations, Combined  Nomenclature 
for External Trade, banking services and fertilizers;  as well as the Commission's  position 
towards  these  recommendations.  Furthermore,  it  intends  to  inform  the  Council  and  the 
European  Parliament  on  the  progress  being  made  in  the  implementation  of  the  SLIM 
teams' recommendations from the previous phase. 

4.  Concerning the implementation of the recommendations from the first phase, it has to be 
underlined  that  the  problems  that  have  arisen  in  the  implementation  of  the  Intrastat 
recommendations  (see below)  show that there is a certain contradiction  between, on one 
hand, the political determination to simplify,  repeatedly  expressed by the Internal  Market 
Ministers, and the reluctance to adopt simpler data collection procedures and a  simplified 
nomenclature for internal trade, on the other. 

5.  The  SLIM  teams  comprised  five  experts  from  national  administrations  and  five 
representatives  of  users  of  the  legislation.  They  started  their  work  in  June  1997  and 
submitted their reports at the end of October  1997. Each team was chaired by a Chairman 
nominated  by  the  Commissioner  responsible  for  the  legislation.  One  of  the  biggest 
concerns  in  this  exercise  was  to  increase  transparency  in  the  working  of  the  teams.  A 
particular  effort  was  made  to  obtain  the  views  of  those  Member  States  and  parties 
concerned not participating directly in the teams. 

The  Simpler  Legislation  for  the  Single  Market  (SLIM)  initiative  was  launched  by  the 
Commission  in  May  1996  with  strong  encouragement  and  support  from  Internal  Market 
Ministers.  It  was  aimed  at  identifying  ways  in  which  Single  Market  legislation  could  be 
simplified.  It  was  also  part  of  the  Commission's  Confidence  Pact  for  Employment 
Simplifying 
legislation  should  contribute  to  the  Pact's  objectives  of  enhancing  the 
competitiveness and employment potential of European business. It should also help to make 
the  workings  of  the  Union  more  transparent  and  effective,  without  decreasing  the  level  of 
protection for citizens, workers or the environment. 

The  European  Council  in Dublin  in December  1996 reiterated  the  importance  of  regulatory 
simplification  and  requested,  in  this  context,  the  extension  of  the  SLIM  initiative.  This 
confirmed  the favourable  reception by the Internal Market Council  on 26 November  1996 of 
the Commission's  report on the first phase  of the project.  Finally,  the European  Parliament, 
through  the  Crowley  Report1,  manifested  its  strong  support  for  SLIM  and  the  efforts 
undertaken  by  the  Commission  in  the  simplification  of  legislation.  The  Commission 
announced2  in  May  1997, the  launch  of  a  second  phase  of  SLIM:  it  would  examine  VAT 
obligations,  the  Combined  Nomenclature  for  External  Trade,  fertilisers  and  banking 
legislation,  taking  into  account  the  suggestions  made  by  the  Member  States,  the  European 
Parliament, the Economic and Social Committee and business representatives. 

The Commission took into account the following  factors  in choosing the areas for the second 
phase of SLIM: 

-  evidence  that  the  legislation  concerned  imposed  an  excessive  administrative  burden  on 

business as a result of its over-complexity; 

- 

- 

- 

- 

the need to ensure that the use of the SLIM methodology would bring added value; 

the need to achieve a balance between the objectives  for  each of the areas  concerned  and 
the operational capacities of the SLIM method (small teams working during a short period 
of time); 

the availability of sufficient  resources within the Commission services; 

the  desire  not  to  interfere  with  exercises  of  legislative  revision  or  consolidation  already 
underway. 

SLIM is not to be seen as an isolated  simplification  exercise. The Action Plan for  the  Single 
Market3, endorsed by the Amsterdam European Council, proposes that the Commission  adopt 
a  broader  approach  to  simplification  covering  not  only  Community  legislation  but  also 
national  measures  related to  the  Single  Market.  Such  an  approach  should  avoid  any  danger 
that  SLIM  might  become  an  isolated  initiative  trying  to  cope  with  the  problems  stemming 
from over-complex legislation and, hence, have a limited impact. This  "rolling programme  of 
simplification" should encompass the SLIM methodology  and other  simplification  exercises. 
With  a view  to  maintaining  the  momentum  of  simplification,  the  Action  Plan  provides  for 
two new phases of SLIM beginning  in January  and May  1998 respectively.  The "Better  Law 
Making" Report to be presented by the Commission at the European Council in  Luxembourg 

1 Crowley report A4-0108/97 adopted on 9.4.97 
2 Commission's Working Document SEC(97)951 of  14.5.97 
Communication of the Commission to the European Council, CSE(97)1 final of 4.6.97 

in  December  will  also  provide  and  overview  and  emphasise  Community  action  on 
simplification,  including SLIM and other initiatives such as B.E.S.T.. 

II.  The SLIM working method 

The  work  of  the  SLIM  teams  has  proved  to  be  very  fruitful  in  terms  of  proposals  for 
simplification  in the different  areas. The small size of the groups has encouraged open debate 

leading  to  the  identification  of  problems  and  solutions.  However,  the  crucial  yardstick  for 
measuring the success of the SLIM methodology is the speed and ease with which proposals, 
stemming  from  the  teams'  recommendations  are  acted  on,  first  by  the  Commission  in 
preparing specific  legislative proposals and actions; and subsequently by the Council and the 
European Parliament. 

The problems  that have  arisen  in the  implementation  of the Intrastat  recommendations  (see 
below)  show  that  there  is  a  certain  contradiction  between,  on  one  hand,  the  political 
determination  to  simplify,  repeatedly  expressed  by  the  Internal  Market  Ministers,  and  the 
reluctance  to  adopt  simpler  data  collection  procedures  and  a  simplified  nomenclature  for 
internal trade, on the other. 

teams  comprised  five  experts  from  national  administrations  and  five 
The  SLIM 
representatives of users of the legislation. They started their work in June  1997 and submitted 
their reports at the end of October  1997. Each team was chaired by a Chairman nominated by 
the Commissioner responsible for the legislation. 

Following  the  comments  made  after  the  conclusion  of the first phase, the  Commission  has 
paid  particular  attention  to  improving  transparency  in  the  work  of  the  teams.  This  was  not 
easy  task,  particularly  given  the  time  constraints  imposed  on  the  work,  but  the  teams' 
secretariats circulated meeting reports, written submissions and working papers, as quickly as 
possible. The teams also sent questionnaires to all Member States and other interested parties 
on  the  main  issues  to  be  discussed.  It  should  be  emphasised  that  all  the  teams, .to  varying 
degrees,  received  written  contributions  from  Member  States  and  user's  representatives  not 
represented  in the  teams.  These  contributions  were  closely  examined  and  incorporated  into 
the final discussions. 

III.  Follow-up of the SLIM Pilot Phase 

A. 

Intrastat 

I.  Background 

As regards the  short term  simplification  measures  implementing  the recommendation  of  the 
SLIM/Intrastat  team,  the  Commission  has  already  adopted  two  regulations  simplifying  the 
declaration  of  net  mass4  and  statistical  value5.  Two  draft  EP/Council  regulations6 
concerning  the  reduction  of  the  data  elements  collected  and  a  simplified  nomenclature 
have been submitted and discussed by the Economic Questions Council Group at its meetings 
of 15 July and  1  October 1997. 

4 Commission Regulation (EC) 2385/96 of 16.12.96, O.J. L326 of  17.12.96 
5 Commission Regulation (EC) 860/97 of  14.5.97, O.J. L123 of 15.5.97 
6 Com(97)252 final of 30.5.97 and Com(97)275 final of 4.6.97 

Other  simplification  measures  envisaged  for  the  medium  and  longer-term, cover  stedies  on 
alternative  collection  methods  including  sampling,  a  two-tier  system,  and  the  one  flow 
system.  Accompanying  measures  such as  information  campaigns  and  the  extensive  use of 
computer  systems,  to  complement  the  short,  medium  and  long-term  measures  are  also 
planned. 

2. Progress made 

The  net  mass  regulation  entered  into  force  on  1  January  1997,  while  the  regulation  on 
statistical value will come into force on 1  January  1998. 

As far  as the  reduction  of the  data  elements  collected  is concerned,  Member  States  have 
shown  strong  opposition  to  the  initial  proposal  presented  by  the  Commission.  However,  a 
compromise  tabled  by  the  Presidency  has  been  positively  received,  although  no  final 
agreement  has  been  reached  yet.  The  Commission  has  so  far  reserved  its  position  on  this 
compromise proposal,  given that  it implies more  limited  scope  for  simplification,  especially 
for  SMEs,  than  the  initial  Commission  proposal.  Regarding  the  Commission's  proposal 
providing  the  introduction  of  a  simplified  nomenclature, the  Presidency  has  taken  note  of 
the strong opposition from Member States, and no further progress has been made. 

As  regards  simplification  measures  for  the  medium  and  long  term,  the  Commission  has 
launched  a large number of studies in co-operation Member States aiming at assessing the 
impact  on business, and  especially  on  SMEs, of  introducing  alternative  collection  methods; 
such as sampling, a two tier system and a one flow system. The results and the evaluation  of 
the studies are expected during the second half of 1998. 

The accompanying measures mainly covered by the EDICOM programme have  contributed 
to  the  improvement  and  modernisation  of  INTRASTAT,  and  have  been  supported  by  all 
parties.  The  EDICOM  Council  Decision7  covers  this  programme  until  December  1999. 
Taking  into account  that  most  likely  the expected  results  of the  studies will  call  for  farther 
revisions  of the INTRASTAT  system  in the coming years, a high priority  must  be  given  to 
the enlargement and prolongation of this EDICOM programme. 

B.  Recognition of diplomas 
In its Communication to the Council on the SLIM Pilot Project8, the Commission  announced 
its  intention  to  come  forward  with  proposals  to  streamline  the  functioning  of  the  Advisory 
Committees  for  diplomas  and  to  simplify  the  updating  of  the  lists  of  diplomas  eligible  for 
automatic  recognition,  before  the  end  of  1997.  In  order  to  fulfil  this  objective,  the 
Commission  is  currently  finalising  a proposal  for  a  European  Parliament/Council  directive 
with a view to its adoption and transmission to the Council before the end of the year. 

the  same  document, 

the  Commission  announced 

In 
the 
recommendation  to introduce a more output-oriented  approach to the definition  of  education 
and  training  requirements  in  the  context  of  a  review  of  those  requirements  for  the  nurses' 
directive.  The  Commission  services  are  examining  this  suggestion  with  the  Advisory 
Committee for Training of Nurses 

to  pursue 

intention 

its 

7 Council Decision 96/715/EC of 9.12.96, O.J. L327 of  18.12.96 
8 Com(96)559 final of 6.11.96 

C.  Ornamental plants 

In its' Communication to the Council on the SLIM Pilot Project the Commission  indicated  its 
intention  to come  forward  with proposals based  on a thorough  examination  of  the  different 
options  put  forward  by  the  SLIM  Team.  As  a  result  of  this  examination,  the  Commission 
intends  to  make  a  proposal  to  the  Council  before  the  end  of  1997  for  a  major  revision  of 
Directive 91/682/EEC.The aim of the proposal will be to simplify  the existing legislation and 
enhance 
the  competitiveness  and  employment-creating  potential  of  business.  For 
transparency's  sake  the  proposal  will  probably  take  the  form  of  a  recasting  of  the  directive 
and will deal in particular with the main problem areas identified by the SLIM Team. 

D.  Construction products 

In order to simplify  the Construction  Product Directive (CPD) in accordance with the  SLIM 
recommendations, efforts  have focused on rendering the process of preparing standards in this 
field more  efficient. 

1.  Adoption of decisions and mandates in an improved process 

The  Commission  accelerated  the  elaboration  of mandates  for  CEN,  including  the  necessary 
underlying  and  accompanying  decision.  The  immediate  result  after  the  SLIM  exercise  was 
the  successful  preparation  of  four  mandates9.  All  have  received  a  positive  opinion  of  the 
Regulatory  Committee  on  Construction  and  have  been  passed  on  to  CEN  which  has  to 
respond  with  a  work  programme.  Following  the  timetable  of  the  ten  working  programmes 
which have been transferred from CEN to the Commission, a harmonised standard for several 
construction products is to be expected in 1998. 

The  Commission  also prepared  mandates  for  establishing  guidelines  for  European  technical 
approval in a number of areas10. With regard to metal anchors in concrete the first CE marking 
according to the CPD will become a reality during the first half of 1998. 

The  harmonisation  of  most  construction  products  presupposes  harmonised  norms  for  fire 
testing.  With  financial  and  administrative  assistance  from  the  Commission  it  has  been 
possible to resolve these issues at last11. Harmonised norms for fire testing will be available in 
1999. 

The Commission intends to present the most important remaining decisions and mandates to 
the  Regulatory  Committee  by  mid-1998.  This  means  that  80%-85%  of  all  construction 
products envisaged to fall under the harmonised scheme of the CPD will have been treated by 
the Commission.  At the same time this covers the economically  most  important products  or 
product families for the construction sector. 

2.  Amending the Construction Products Directive 

Although  preparatory  work  to  establish  harmonised  technical  specifications  has  been 
completed  successfully  in  some  areas  and  will  be  completed  soon  in  others,  it  remains 
difficult  to  make  progress  for  many  construction  products, and  that,  as a result,  the  Interna! 
Market does not function  to its full  capacity. It therefore  seems necessary  to adapt the (CPD) 

9 "Cement,  Building Limes and Hydraulic Binders ",  "Reinforcing and Pre-stressing Steel for  concrete ", 
"Masonry products " and  " V/ood based Panels and related products " 
10 External Thermal Insulation Composite Systems (ETÎCS) and Plastic anchors for use in concrete and masonry 
11 Decision 94/611/EEC on Euroclasses, mandate for reaction to fire, Decision  on class A without testing 
96/603/EEC, mandate for resistance to fire and Decision on the SBI configuration. 

in order to remedy this situation, In accordance with the recommendation  of the SLIM team 
reiterated  in the  Action  Plan  for  the Internal  Market12 and detailed  in the  Communication  o 
,-f 
the  Commission  on  the  Competitiveness  of  the  Construction  Industry13; 
the  Commission 
intends to amend the CPD in order to bring it into line with other New Approach Directives. 
Those amendments  would  be aimed at making possible for manufacturers  to apply  for  a  CE 
marking,  even  in  the  absence  of  harmonised  technical  specifications,  provided  that  the 
producer  can  demonstrate  conformity  of  the  product  with  the  essential  requirements  of  the 
directive.  The  proposed  amendments  would  affect  Article  4  and  related  provisions  of  the 
Directive. 

IV.  Recommendations of the  SLIM teams m pfea.se II. 

A. 

VAT 

1. Background 

The current VAT system imposes excessive costs and constraints on business and discourages 
trade  between  Member  States  due  to  over-complexity  of  existing  rules.  Moreover, 
divergences in the application of national legislation distort fair competition within the Single 
Market. 

The proper functioning  of the Single Market, therefore, requires a reassessment of the current 
VAT system. With this aim, the Commission has adopted a working programme with a view 
to introducing  a common VAT system14, based on the principle  of a single place  of  taxation 
and  allowing  the  establishment  of  a  real  Community  fiscal  area.  Nevertheless,  the 
implementation  of such a programme, which consists of several stages, has to form  part of a 
long-term  strategy.  For this  reason the  Commission  has  considered  it  necessary  to  consider 
right  away  complementary  simplification  measures  that  would  reduce  burdens  for  business 
while preparing the introduction of the new VAT system. 

The SLIM team has examined  a set of basic obligations related  to the VAT, and  particularly 
those  imposed  to  operators  in  the  framework  of  the  6th  VAT  Directive15,  and  the 
corresponding  national  application  measures.  Nevertheless,  the  SLIM  exercise  has  not 
necessarily  proposed  a  solution  to  all  the  problems  that  have  been  identified,  since  the 
examination  of  certain  questions  has  shown  that  a  solution  can  only  be  found  in  the 
implementation  of  the  working  programme  or  in  the  context  of  the  work  of  several 
committees. 

2.  Recommendations 

The recommendations of the SLIM teams focus on the following issues: 

•  modifying the rules applicable to tax representation; 

• 

improving and reinforcing the system of mutual assistance on recovery; 

n  See above 
13 Com(97)539  final 
14 Com(96)328 du 22.07.1996 
,s77/388/CEE du 17.05.1977 

•  harmonising  the  registration  formalities  among  Member  States,  establishing  single 
"contact points", a single registration form and a single identification  system for each firm 
in each Member State, 

• 

studying:  1) the details considered necessary for drawing up an invoice for VAT purposes 
and  the  legal  and  technical  requirements  for  electronic  invoicing,  2)  the  possibility  of 
creating  a  basic  common  VAT  return  and  the  usefulness  of  the  various  statements 
required  by  Member  States,  3)  the  time  allowed  for  refunding  VAT  by  national 
administrations,  4)  the  possibilities  and  the  different  ways  of  reforming  the  tax-refund 
procedures  laid  down  by  the  8  VAT  Directive16  in  order  to  make  it  equally  easy  to 
recover tax paid within the country and tax paid in another Member State; 

• 

improving  the  reliability  of  the  information  included  in  the  common  system  of  data 
exchange  (VIES)17  and  facilitating  access  for  traders,  examining  the  possibility  of 
reducing  the  administrative  burden  imposed  by  the  VIES  system  on  SMEs  and  those 
firms with a low volume of intra-community trade; 

•  Taking into account the advantages of systematic registration of all firms subject to VAT, 
while  studying  the  possibility  of  establishing  bands  of  thresholds  for  taxation  and  the 
submission of returns by SMEs; 

•  Avoiding imposing superfluous  supplementary obligations on traders. 

3.  Commission's position 

The Commission intends to  propose  before  the  end  of  1998  a  reinforcement of mutual 
assistance on recovery, a legislative reform aiming at easing the tax representation,  as well 
as  undertaking  a  reflection on  a  more radical  reform of  the  returns procedures  to non-
estahlished subjects, of the tax paid  in another Member State. Furthermore,  a study will be 
undertaken  in 1998 on electronic invoicing.  The Commission is also disposed to  examining 
the time needed for  refund of the tax within the Community.  The Commission will present 
shortly  within the framework  of  its  VAT strategic programme  a proposal  relating  to  the 
harmonisation of deductibility rights, and a study on the system applicable to SMEs. On this 
last  point,  the  Commission has  already  invited  Member  States  to  grant  SMEs  longer 
deadlines to present  their VAT declarations^.  Concerning the  VIES system, this has already 
been subject to several improvements since its creation in 1993, and it is difficult to achieve 
further  progress  in  the framework  of  the  current  VAT system.  Nevertheless,  the  SCAC 
Committee will  in 1998 examine  to  what extent the burden on SMEs and firms  with a  low 
volume of  intra-Community  trade  can  be  reduced. Finally,  the  Commission has  already 
recommended in 1997 the creation of "single contact points"  in each Member State". 

16 79/1072/CEE du  6.12.1979 
17 Regulation (CEE) n°218/92 of 27.02.1992 
18 Recommendation n°97/344/CE of 22.04.1997 
19 idem 

B.  Fertilisers 

1.  Background 

The existing legislation on the marketing on fertilisers  was selected to be examined under the 
SLIM because it presents several possibilities for improvement, such as simplification  of the 
presentation  of  the  legislation  (cun-ently  16  Directives),  clarification  of  the  scope  of 
harmonised rules and streamlining the approval process and  enforcement. 

2.  Recommendations 

The  SLIM  team  concluded  that  the  fertiliser  legislation  in  its  present  form  works  well  in 
many  respects.  Its  conclusions  target  all  five  possibilities  for  improvement  and  the  team 
makes  by  unanimity  the  following  broad  proposals  (See  Annex  2  for  more  detailed 
description): 

• 

that  a single recasting  Directive  on  fertilisers  replaces the existing  Directives,  clarifying 
and modernising the legislative approach; 

•  definitions for fertiliser  and for "EC Fertiliser" and delineates the scope of the harmonised 
rules, providing, inter alia, for future  coverage of organic and organo-mineïal  fertilisers. 

• 

• 

• 

a whole series of simplifications  for the addition of new fertilisers. 

a  uniform  system  of  enforcement  control  and  reporting  by  accredited  laboratories,  in 
keeping with the Action Plan for the Single Market20; 

that the submission of Commission's  proposals to add new fertilisers  and new groups  of 
fertilisers be preceded by an appropriate Scientific Committee examination. 

3  Commission's position 

The Commission endorses all  the above recommendations and intends to make the relevant 
proposals  with  a  view  to  their  implementation.  The  specific  recommendation  to  continue 
studying the problem of cadmium in fertilisers  is already taken up and this work is in hand. 

C.  Combined Nomenclature for  External  Trade 

1. Background 

It was considered  advisable to undertake  a  SLIM  exercise  for  this  area,  in order  to  simplify 
the Combined Nomenclature used in external trade (CN) in a way which was compatible with 
the actions already proposed by the SLIM/Intrastat team. 

The aim of the CN SLIM team was initially to target the elimination of CN subdivisions (CN 
codes)  which  have  become  obsolete  in  economic  and  trade  terms,  taking  into  account  the 
proposals made by SLIM/Intrastat. However, in fulfilling  its task the CN SLIM team decided 
to look at the future  requirements  for  a CN  used  in  external  trade  and to consider  specific 
actions in order to reduce burdens on business. It also evaluated proposals to stop the growth 
and eventually reduce the size of the CN, which together with other proposals, would  lead to 
a modernisation of the CN. 

20 See above 

2. Recommendations 

In view of the time-scale and the need for co-ordination with SLIM Intrastat exercise the CN 
SLIM  team  found  it  inappropriate  to  present  detailed  proposals  which  would  require 
immediate action. Due to the time constraints, the team also considered it inappropriate to lay 
down  a  detailed  schedule  for  the  implementation  of  the  actions  resulting  from  its 
recommendations.  However,  it  recommended  that  such  actions  be  implemented  as  soon  as 
possible  within  reasonable  timeframes  and  that,  as  a  result  a  continuous  process  of 
simplification  and  facilitation  should  be  undertaken.  The  team  decided  to  present  11 
recommendations, in particular by agreeing to establish a "Code of Conduct for maintaining, 
creating  and  deleting  CN  subdivisions  to  the  HS  nomenclature",  which  should  result  in  an 
important reduction in the number of 8-digit CN subdivisions in the forthcoming years. 

3.  Commission's position 

The Commission endorses the findings  of the CN SLIM team; in particular setting up a 'Code 
of  Conduct',  targeting  specific  areas for  simplification  and  providing  tools  to  facilitate 
reporting of data. A  cleaning-up exercise should start as soon as possible,  in order to enable 
changes  in  the  CN  to  be  applied  from  1.1.1999, and  all  headings  in  the  CN  should  be 
validated (over a period of time). 

These steps can be taken, initially, within the existing legal framework established by Council 
Regulation  (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common 
Customs  Tariff  (CCT)21. In  some  cases  the  successful  outcome  depends  not  only  on  the 
Commission, Member States and trade but also on the reactions ofnon-EU  interested parties. 

Regarding the first recommendation of the report on the use of one single nomenclature for 
intra  and  extra  trade  the  Commission  considers  that  this  principle  is  compatible  with 
measures  proposed  to  simplify  the  nomenclature  in  the  field  of  intra-Community trade 
statistics.  These measures  were submitted  by  the  Commission to  the  European Parliament 
and Council in June  1997 following  the SLIM/INTRASTAT phase I recommendations and are 
still under discussion (see above). 

D.  Banking services 

1. Background 

Banking  directives  are often  described  as technical  and complex. The objective  of the SLIM 
exercise  was  to  examine  whether  this  set  of  legislation  could  be  simplified  or  improved, 
bearing in mind that some of these directives have been in place ten -and even twenty- years. 

Given the time constraints, the team had to focus on the most important banking directives. It 
reached  the  overall  conclusion  that  these  banking  directives  could  not  be  substantially 
simplified  since  the  complexity  of  the  directives  corresponds  to  the  complexity  of  the 
situations  they  address  and  often  reflects  the  outcome  of  delicate  negotiations  at  Council 
level.  Furthermore, they  constitute  a coherent  set of  legislation  reflecting  close  co-operation 
between the Commission and Member States. 

The team concluded that most difficulties  originating from the application of the EU banking 
directives  were  not  the  result  of  excessive  complexity.  Their  origins  were  technical  (the 
difficulty  in  applying  the  same  rules  to  very  different  categories  of  credit  institutions), 

21 OJ No L 256 of 7.9.1987, p. 1 

10 

The team concluded that most difficulties  originating from  the application of the EU banking 
directives  were  not  the  result  of  excessive  complexity.  Their  origins  were  technical  (the 
difficulty  in  applying  the  same  rales  to  very  different  categories  of  credit  institutions), 
procedural  (the difficulty,  inherent  in the Union .decision-making process,  of  legislating  at a 
pace  which  corresponds  to  the  rapid  evolution  of  financial  services  and  international 
standards),  and  political  (divergence  of  views  between  Member  States  sometimes  produce 
unsatisfactory  compromises in the directives). 

2  Recommendations 

The SLIM team recommended by unanimously that: 

®  all  relevant  national,  European  and  international  institutions  co-ordinate  their  action  in 

order avoid double reporting requirements. 

®  steps  are  taken  to  ensure  that  measures  of  a  purely  technical  nature  or  that  have  been 
subjects  of  lengthy  discussions  at  international  level  benefit  from  a  fast-track  adoption 
procedure. 

• 

• 

inconsistencies  or discrepancies  between directives, which are revealed  in the process  of 
codification,  are rapidly examined. 

the  consequences  of  the  abolition  of the  deadline  laid  down  in  Article  2 §4  of  the  First 
Banking  Directive  (FBD)  should  be assessed  with a view to  deciding  whether  to  extend 
the benefit  of the derogatory regime to institutions other than those existing at the time of 
the adoption of the FBD. 

A  majority  of  members  recommended  the  abolition  of  Article  20  of  the  Second  Banking 
Directive, which provides  for  a prior notification  of cross-border  services, and that  Member 
States channel the transmission of supervisory data via a "single focus point". Some members 
of  the  team  recommended  that  the  Commission  launch  a  study  in  order  to  drawing  an 
inventory  of  the  various  existing  reporting  requirements  imposed  on  EU  credit  institutions 
and,  if  necessary,  to  suggest  solutions  for  improving  the  situation.  A  minority  of  members 
also recommended that Member  States draw up lists of those measures they consider to be of 
general  good.  These  lists  would  then  have  to  be  transmitted  to  banks  before  they  start 
carrying out their activities in the host country. 

3  Commission's position 

The  Commission can  endorse  most  of  these Recommendations and  invites  all  authorities, 
imposing  reporting  requirements  to  avoid  duplication.  The  Commission  will  examine  the 
functioning  of the whole comitology procedure in the course of  1998. The Commission will 
shortly  raise  the  various problems  identified during  the  codification  exercise  in  the  the 
Banking Directives Interpretation Group.  The Commission will  take  appropriate  action  to 
meet the Recommendation on Article 2§4 of the FBD. 

Concerning the Recommendations made only by a part of the team, the Commission supports 
the abolition of Article 20 of the Second Banking Directive and will take all necessary steps 
to  implement this recommendation. It welcomes the  idea, in principle,  of a  "single national 
focus  point"  for  reporting requirements, while recognising that  it would be very difficult to 
make it operational in practise, and the idea of a study on reporting requirements, although it 
considers that  the banking industry itself is better placed  to  undertake this survey. Finally, 
the  Commission  is  sceptical  about  the possibility  of  drawing  up  lists  of  "general  good" 

measures.  Nevertheless,  it will examine  the possibility  to extend the information procedure, 
which currently prevails for  cross-border branching to cross-border services. 

12 

ANNEX 1 

The SLIM exercise on VAT 

1.  Changing  roles  governing  the  legislation  on  tax  representation  and  on  mutual 

assistance on  recovery. 

The  difficulties  deriving  from  tax  representation  were  already  identified 
in  the 
Commission  report  on  arrangements  for  taxing  transactions  carried  out  by  non-
established  taxable persons. The recommendations  contained  in this document  were  not 
implemented to a sufficient  extent by the Member States on account of the complexity of 
the problem and the fact that it is closely linked up with the level of mutual assistance in 
recovery. 

2.  Harmonisation  of registration  procedures in the Member  States 

The Team wishes to see in particular: 

simplification  of the  formalities  which have to  be carried  out  by  firms,  especially  at 
the  start-up  stage, by  setting  up  single  "contact  points" responsible  in  each  Member 
State  for  centralising  the  information  contained  in  registration  applications  and 
transmitting them to all the other administrative departments; 

_  introduction of a single form for the registration of firms; 

_  providing  for  the  establishment  of  an  identification  system  whereby  firms  may  use 
one number in all their contacts with the different  administrations within the country. 

3. 

Introduction of modern invoicing instruments. 

This covers the content as well as the support of the invoice. The  SLIM Team  considers 
it necessary, therefore, to: 

_  establish  what  details  are essential  for  drawing  up an invoice  for  VAT purposes  and 

determine the order in which they should appear; 

_  determine the legal and technical requirements for electronic invoicing at Community 
level in order to guarantee a level of security at least comparable to that of traditional 
invoicing. 

4.  Study the possibility of creating a basic common VAT return 

The  Team thinks that  many  Member  States  could  still  do  much  to  simplify  their  VAT 
returns. 

Though  the  Team  does  not  consider  that  a  harmonisation  of  returns  can  yet  be 
considered,  it  thinks  that  it  would  already  represent  great  progress  if  a  basic  common 
return  could  be  devised  which  nevertheless  left  Member  States  free  to  require  other 
details to be declared if necessary. 

Finally, the usefulness  of the various statements which Member  States require traders to 
draw up in addition to returns, and the use which they make of them must be examined. 

13 

5.  Studying the delays for refunding VAT by national administrations. 

6.  Study the possibilities  and the different  ways of radically  reforming  the procedures 

for refunding VAT to non-established taxable persons. 

The tax-refund  procedures laid down by the Eighth Directive must be thoroughly  revised 
in order  to make  it equally  easy to  recover tax paid  within the  country  and  tax  paid  in 
another  Member  State.  To  that  end,  consideration  could  be  given  to  the  possibility  of 
obtaining direct in the Member State of establishment a refund  of the tax paid in another 
Member State, subject to the necessary flanking measures being introduced. 

This reform  must at one and the same time represent  genuine  simplification  for  traders, 
make  it  possible  to  improve  the  control  of  taxable  persons  by  administrations  and 
guarantee  Member  States  their  VAT  revenue.  It  must  also  be  accompanied  by 
harmonisation of the rules on the right to deduct input tax. 

7.  Improving  the VIES  system  and finding Ways to reduce the  administrative  burden 

that this places on the small business 

Member  States must ensure that national databases are updated  as swiftly  as possible  in 
order to guarantee the reliability of the system. In addition, they must provide the means 
to make consultation as easy as possible for traders. 

The  SLIM  Team  recommend  that  the  Committee  responsible  for  the  exchange  of 
information  should undertake the task of examining to what extent  it would  be possible 
to  reduce  the  burden  borne,  as  a  result  of  their  obligations  under  the  VIES,  by  small 
traders and firms with a low volume of intra-Community trade. 

8.  Take into account the special situation of small businesses 

The  Team  considers  that  there  is  a  strong  case  for  systematic  registration  of  all  firms 
subject to VAT, irrespective of their turnover. 

The  Team  notes  that  the  administrative  burden  on  small  businesses  varies  very  widely 
from one Member State to another and is sometimes disproportionate to their turnover. 

The thresholds for taxation and the submission of returns must be revised. A study must 
be  carried  out  to  establish  bands  for  such  thresholds,  which  would  apply  to  all  small 
businesses within the Union. 

9.  Limit superfluous  obligations 

Member States must ensure that they do not impose on traders obligations which are not 
indispensable from a VAT point of view. 

14 

ANNEX 2 

The SLIM exercise on Fertilizers 

SLIM Recommendation 

Commission's Position 

1.  A recasting Directive on fertilizers, based on the 
Old  Approach,  should  be  proposed  to  Council 
and Parliament as soon as possible. 

Accept. 
This will  be  the  vehicle  to  consolidate  the  existing 
the 
legislation  and  to  modernise  and  simplify 
legislative approach. 

2.  The  recasting  Directive  should  provide  for  the 
following  simplifications  to  the  Dossier  System 
for  adding  New  Fertilizers  to  the  Groups  of 
fertilizers  already included in the legislation: 

•  The establishment of a small ad-hoc group to 
in  preparing 

the  Commission 

advise 
proposals. 

Accept. 
This will speed up the examination  of dossiers. The 
details  of  the  Composition  and  functioning  of  this 
group  will  be  worked  out  when  drafting 
the 
recasting. 

Stipulation  that  the  criteria  for  deciding 
addition  should  be  safety,  protection  of 
health/environment  and  efficacy  under  the 
intended conditions of use. 

Accept. 
Efficacy  would  assured 
large  measure  by 
specifications  of minimum nutrient content  for  each 
fertilizer group. 

in 

A  requirement  that  the  rapporteur  provide 
validated  test  methods  (preferably  existing 
ones)  and  tolerances  for  proposals  to  add 
fertilizers to groups already in the legislation. 

Accept. 
This will both speed up the examination  of  dossiers 
and facilitate  enforcement. 

Provision  be made  for  addition  of groups  of 
new  fertilizers  based  on  mixtures  of  existing 
EC fertilizers  of the same nutrient type to the 
Annexes subject to appropriate conditions 

Accept. 
This  will  speed  up  the  addition  of  fertilizers.  The 
details of mixtures to be excluded for  safety  reasons 
will be decided when drafting the recasting. 

that  reports 

Provision 
in  support  of  a 
proposal  for  addition  of  new  fertilizers  be 
peer-reviewed  by  Scientific  Committees  in 
cases where there are health and environment 
concerns. 

to 

Accept. 
This  will  ensure  that  proposals  on  new  fertilizers 
conform 
the  Commissions  new  policy  on 
Scientific  Committees.  The  choice  of  Scientific 
Committees  would  be  the  responsibility  of  the 
Scientific  Steering  Committee  and  would  typically 
include  the  Scientific  Committee  on  Toxicity, 
Ecotoxicity  and  Environment  and  the  Scientific 
Committee on plants though  it could include others. 

15 

SLIM Recommendation 

Commission's Position 

3.  The  recastBig  Directive  should  mchtde  the 
following  particular  conditions  for  adding  new 
fertilizer groups to the legislation. 

•  An 

intermediate  period  during  which 
proposals  would  be  made  on  specifications 
and  marketing  conditions  of  fertilizers  in 
these  groups  and  the  proposals  would  be 
subjected to rigorous independent checks. 

Accept. 
This  will  ensure  that  proposals  to  add  new  groups 
of  fertilizers  conform  to  the  Commission's  new 
policies  on  Scientific  Committees.  The  choice  of 
Scientific  Committees  would  be  the  responsibility 
of  the  Scientific  Steering  Committee  and  could 
include  in  addition  to  the  Tox/Ecotox  et  Plants 
Committees,  other  Committees  e.g.  on  Food,  the 
BSE, Subgroup etc. 

New Groups to be added only after  adoption 
of  appropriate  test methods, either by  an ad-
hoc working group of the Commission  or by 
CEN. 

Accept. 
This  will  facilitate  enforcement  in  the  spirit  of  the 
New Approach. The details of how methods should 
be  developed  and  by  whom  will  be  decided  in 
drafting the recasting. 

The  recasting  Directive  should  provide  for  the 
following controls on  enforcement. 

•  Controls  to  be  attributed  to  a  network  of 

accredited laboratories. 

Accept. 
This  will  harmonise  enforcement  according  to  the 
New Approach. 

•  Reports  on  controls  to  be  established  in 
keeping  with  the  Action  Plan  for  a  Single 
Market 

Accept. 
This  will  verify  that  enforcement 
practised. 

is  uniformly 

5. 

An  Expert  Scientific  Group 
should  be 
established  to  study  further  the  problem  of 
cadmium in fertilizers at EU level. 

Already undertaken. 
This  problem  is  already  studied  by  the  Working 
Group on Fertilizers, assisted  by the  Commission's 
consultant  (ERM).  DG  III  will  refer  the  results  of 
all  current  work  to  the  appropriate  Scientific 
Committees  for  peer-review  and  this  could  in turn 
lead to further  work. 

6  The  recasting  Directive  to  provide  for  labelling 
indicating  the  physical  form  of  fertilizers  e.g. 
blended  fertilizers  to  be  labelled  "Blended"  and 
this to  be  supplemented  by  appropriate  codes of 
practice. 

Accept. 
This  will  deal  in  a  simple  non-discriminatory  way 
with  problems  potentially  associated  with  blended 
fertilizers. 

7.  Organic  and  Organo-mineral  fertilizers  should 

be added after  intermediate periods. 

Accept. 
This  will  complete  the  Internal  Market  for  these 
groups whilst ensuring a high  level  of protection  to 
health, safety and the environment. 

16 

ANNEX 3 

The SLIM exercise on Combined Nomenclature for External Trade 

1. 

In the first  phase of SLIM one of the sectors selected was the Intrastat  system, for  intra-
community trade statistics. In a working document  dated  14 May  1997 the  Commission 
also announced the opening of a second phase which included setting up a team,  referred 
to as the CN SLIM team, to look at the combined nomenclature used in external trade. 

2.  The aim of the CN SLIM team was to target for elimination CN subdivisions (CN codes) 
which have become obsolete in economic and trade terms, taking into account  proposals 
made in respect of the Intrastat system. 

3 

In fulfilling  its task the CN SLIM Team looked at the future  requirements for  a CN used 
in external trade and considered  specific  actions in order to reduce burdens  on business. 
Proposals to stop the growth and eventually reduce the size of the CN were evaluated  by 
the team together with other proposals which would lead to a modernisation of the CN. 

4.  As  a  result  of  its  work  the  CN  SLIM  team  has  put  forward 

the  following 

recommendations : 

_ 

that  one  single  nomenclature  be  used  for  intra-Community  trade  as  well  as  for 
external trade 

_ 

_ 

_ 

_ 

_ 

_ 

that  the current  basic  coding  structure  of  the  CN  be  maintained,  thus  serving  both 
tariff and statistical needs 

that the Commission  should  refrain  from  fixing,  in an arbitrary  way,  a threshold  of 
the  maximum  number  of  CN codes  in  a  simplified  CN but  should  aim  towards  an 
important reduction  of the total number  of  8 digit  CN codes  starting  from  1.1.1999 
and onwards 

that a "Code of Conduct" be established for the management of the CN (for  example 
with regard to the process for maintaining, creating and deleting CN codes) 

that  a  co-ordinated  and  balanced  approach  be  sought  in  simplifying  the  CN  by 
inviting  providers  and  users  of  CN  related  information,  on  a  sector  basis,  to 
participate in the process of simplifying  the CN 

that  the  Commission  services, together  with  Member  States  and  industry,  examine 
specific  areas of the CN, some of which are described  in detail below, and  establish 
a time-scale for the implementation thereof 

that a validation process be carried out with regard to all CN codes 

that,  if  the  economic  consequences  are  considered  insignificant  for  a  sector  and  if 
appropriate,  proposals  should  be  made  to  the  Council  which  will  enable  the 
Commission  by  means  of  autonomous  tariff  measure  to  eliminate  CN  codes  of  a 
tariff nature 

that  the  Commission  in  the  HS  Committee  (meeting  within  the  auspices  of  the 
World Customs Organisation  (WCO)) advocate the need for  maintaining  the  degree 
of simplicity appropriate to sectorial needs 

17 

_ 

_ 

that the Commission in trade negotiations should continue to take into  consideration 
the need to simplify  and facilitate the use of the EU tariff 

that the  Commission  services  in collaboration  with Member  States  should  continue 
to  develop  tools  in  order  to  facilitate  the  tasks  for  providers  of  CN  related 
information 

5. 

In view of the time scale and the need for co-ordination with the SLIM Intrastat  exercise 
the  CN  SLIM  team  found  it  inappropriate  to  present  more  detailed  recommendations 
including proposals which would require immediate action. 

6.  Some  of  the  actions  to  be  taken,  if  the  recommendations  are  endorsed,  will  require 
amending  the  CN  Regulation  whilst  others  can  be  carried  out  within  the  existing  legal 
framework.  In some cases the successful  outcome depends not only on the  Commission, 
Member  States  and  trade  but  also  on the  reactions  of  non-EU  interested  parties.  Some 
actions may require the provision - on a temporary basis - of external resources. 

7.  The  CN  SLIM  team  found  it  inappropriate  to  lay  down  a  detailed  schedule  for  the 
implementation  of  the  proposed  actions.  Nevertheless,  the  CN  SLIM  team  anticipates 
that  such  actions  have to be  carried  out  as  soon  as possible  but  within  reasonable  time 
frames  for their implementation. It also considers that the CN SLIM exercise will lead to 
a  continuous  process  of  simplification  and  facilitation  which  may  have  repercussions 
beyond the CN itself (for example on the EU's TARIC system). 

8.  As a result of these recommendations,  in particular  by establishing  a "Code  of  Conduct 
for maintaining, creating and deleting CN subdivisions to the HS nomenclature", the CN 
SLIM team envisages an important reduction in the number of 8 digit CN subdivisions in 
the forthcoming years. 

18 

ANNEX 4 

Reporting  requirements 

The SLIM exercise on banking services 

Background: According to some members of the SLIM team, banks are presently faced with a growing number 
of reporting requirements  both  at the prudential  level and for  statistical  and monetary  purposes. This  allegedly 
represents a considerable  administrative burden and, in addition, the costs of such requirements  are  considered 
to be very high. 

Recommendations: 

n°l:  The  SLIM team  recommends that all relevant  national, European  and  international  institutions  strive  to 
co-ordinate their action in order to make sure that duplicative reporting requirements are avoided. 

n°2:  The  majority  of  the  SLIM  team  recommends  that,  where  supervisory  data  is  required,  in  the  same 
Member  State, by  more  than  one  authority,  these  authorities  examine  the  possibility  to  create,  without 
prejudice  to the rules concerning  professional  secrecy,  a system  whereby  data  submitted  by  institutions 
under their supervision are channelled via a single focus point. 

n°3:  Half of the team recommends that a study be launched by the Commission  in order to draw an  inventory 
of  the  various  existing  reporting  requirements  imposed  on  EU  credit  institutions  and,  if  necessary,  to 
suggest some solutions to improve the situation; that a working group be created  in order to prepare the 
Terms of Reference  of this study. 

Commission  position:  The  Commission  supports  Recommendations  n°  1  and  2  and  invites  airy  competent 
authority  concerned to take them  into account, even  if it considers that the idea of a "single  focus  point"  would 
be  very  difficult  to  operate  in  practice.  The  Commission,  not  being  a  supervisor}  body,  does  not  (with  some 
limited  exceptions)  impose  reporting  requirements  or  collect  any  data  and  cannot  therefore  apply  the 
Recommendation  to  itself.  As  far  as  Recommendation  n°  3  is  concerned,  the  Commission  considers  that  the 
study should be carried out by the banking industry, which is best placed to collect all the information  necessary 
to  make  this  inventory.  The  Commission  would  be  prepared  to  examine  the  study  and  take  any  appropriate 
measure within the limits of its competence. 

Decision making  process 

Background:  All  members  deplored  the  fact  that  existing  procedures  did  not  permit  the  quick  adoption  or 
modification  of  EU  banking  rules,  for  example  to  adapt  relevant  EU  legislation  to  the  new  developments  in 
financial markets or in international supervisory fora (e.g. BIS). 

Recommendation: The SLIM team recommends that the Council, the European Parliament and the  Commission 
take all necessary measures to ensure that measures which are eitlier of a purely teclmical nature or which  have 
already be discussed at length at international level, benefit from a fast-track  procedure. 

Commission's  position:  The  Commission  supports 
Declaration, it has undertaken to examine the functioning  of the Comitology procedure in the course of  1998. 

this  Recommendation.  Following 

the  Amsterdam 

Codification 

Background: The  codification  exercise  revealed  inconsistencies  or  discrepancies  between  various  directives. 
These problems could however not be addressed  in the framework  of the  codification. 

Recommendation:  The  SLIM  team  stresses  the  importance  of  the  codification  and  recommends  that  the 
inconsistencies  or discrepancies  which  are unveiled  in the  framework  of the  codification  be  rapidly  examined 
by a working party composed of national experts and the Commission, with a view to submitting to the Council 
a proposal amending the codified  text if deemed necessary. 

Commission  position:  The  Commission  supports  this  Recommendation.  Work  will  soon  start  on  these 
discrepancies in the "Groupe Technique d'Interprétation des Directives Bancaires". 

19 

Smaller credit institutions 

Background: Members discussed whether complex and sophisticated rules designed for  large institutions  or  for 
institutions  with  an  international  dimension  (rules  of  the  Capital  Adequacy  Directive  -CAD-  for  example), 
should apply in the same manner to small banks or to banks operating within a local or regional radius. 

Recommendation: The  SLIM team  recommends that,  in  future  EU  legislation,  attention  should  continue  to  be 
paid to the specific situation of smaller credit institutions. 

Commission position: The Commission  supports this Recommendation  and will, as far  as possible, respect  it in 
future  proposals. It invites any other institution involved in the decision making process to take it into account. 

General good rules 

Background: The issue is whether the fact that Member States are not obliged to inform  banks planning to carry 
out  services  within  their  territory  about  their  national  general  good  rules,  is  an  obstacle  to  the  freedoms  to 
establish branches and to provide cross-border services. 

Recommendation: Some members of the team (not representing the majority  of  its members) recommend  that, 
for  the  sake  of transparency,  Member  States  should  be required  to draw up  lists of their  measures  which  they 
consider to be of general good. These  lists would then have to be transmitted to incoming banks, applicable to 
banking activities, before they start carrying out their activities in the host country. 

Commission position: The  Commission  has,  in the  past,  tried  to  establish  such  lists  in  the  framework  of  the 
Banking  Directives  Interpretation  Group.  This  exercise  failed,  given  the  amount  of  measures  potentially 
concerned and the uncertainties about the limits of the notion of general good. The Commission could however 
examine  to what  extent the "triangular"  procedure  laid  down  in article  19§4 of the  Second  Banking  Directive 
for branches, could be extended to cross-border services. 

Notification 

Background: The  issue  is whether the prior notification  procedure  for  the provision  of cross-border  services  is 
an obstacle which should be abolished or, on the contrary, is a useful  tool to secure consumer protection. 

Recommendation: With  the  exception  of  two  of  its  members,  the  SLIM  team  recommends  the  abolition  of 
article 20 of the Second Banking Directive. 

Commission position: The  Commission  supports  this  Recommendation.  It  considers  that  the  situation  of  the 
Investment Services Directive, which contains a similar procedure, should also be examined. 

Observation ratios 

Background: Whilst  recognising  the  merits  of  these  ratios,  members  considered  that,  the  way  it  is  organised 
now, this collection  of data for the calculation of all ratios mentioned  in article 6 of the First banking  directive 
(liquidity, solvency and profitability)  is burdensome. 

Recommendation: Considering  that  most  of  its  members  are  in  favour  of  the  abolition  of  article  6  of  the 
directive, the  SLIM team  recommends  that  the  Groupe  de  Contact  and  the  BAC  be  invited  to  determine  the 
value of the exercise, and consider amending the data collection procedure and its  frequency. 

Commission position: The  Commission  supports  this  Recommendation  and  will  raise  this  issue  with  the  two 
bodies mentioned. 

List of credit institutions 

Background: The directive  requires that the Commission  publishes  in the Official  Journal  an  up-to-date  list of 
all credit institutions authorised  in the Union. All members agreed that, in its current format  and periodicity, the 
list dues not serve its intended purpose. 

Recommendation: The SLIM team recommends that the list should be published either in the OJ or by any other 
medium  available and recommends that the Commission be invited to submit proposals to that effect  before  the 
end of  1998. 

Commission position: The Commission  supports this  Recommendation.  Work  is already  underway.  Proposals 
will, as recommended, be submitted before the end of 1998. 

20 

Article 2§4 of the First Banking  Directive 

Background: The team discussed the possibility to extend the scope of article 2§4 of FBD (which  allows banks 
which  were,  at the  time  of  notification  of the  FBD,  affiliated  to  a  central  body  which  supervises  them  to  be 
exempted from  certain requirements) to banks created after the notification  of the FBD. 

Recommendation: The SLIM team recommends that the consequences of the abolition of the deadline  kid  down 
in article 2§4 of the First Banking Directive be assessed with a view to deciding whether to extend the benefit  of 
the  derogatory  regime  to  institutions  other  than  those  existing  at  the  time  of  the  adoption  of  the  ?BD.  In 
particular,  it  should  be  examined  if  such  an  extension  could  lead  to  competitive  distortions.  The  SLIM  team 
recommends that the Commission  take all necessary  steps to perform  this evaluation  and, if necessary,  presents 
the necessary proposals to the Council. 

Commission position: The Commission supports this Recommendation  and will take any appropriate action. 

Article 4§6 of the Capital Adequacy Directive 

Background:  Members  discussed  whether  the  thresholds  of  5%  and  ECU  15  million  under  v/hich  some 
institutions  can  calculate  their  market  risks  in  accordance  with  the  solvency  ratio  directive  and  not  with  the 
CAD were too low and should be revised. 

Recommendation:  The SLIM team recommends that those who consider that the thresholds mentioned  in article 
4§6 of the capital  adequacy  directive  should be revised  introduce  a well  argued  request to the  Commission  to 
that  effect.  The  Commission  would  then  have  the  possibility  to  propose  to  the  Council  the  revision  of  the 
thresholds pursuant to the procedure laid down in article  10 of the CAD. 

Commission position:  The  Commission  will  carefully  examine  any  well  evidenced  request  put  to  it  and,  if 
appropriate, present a proposal aiming at revising the thresholds. 

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ISSN 0254-1475 

COM(97) 618 final 

DOCUMENTS 

EN 

06  10  09 

Catalogue number  :  CB-CO-97-645-EN-C 

ISBN 92-78-28202-2 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg