REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on cooperation between regulatory bodies under Article 63(2) of Directive 2012/34/EU
Date: 2015-03-25
Institutions: European Commission
Subjects: carriage of goods, cross-border cooperation, exchange of information, international transport, market supervision, rail transport, transport infrastructure













EUR-Lex - 52015DC0140 - EN











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52015DC0140

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on cooperation between regulatory bodies under Article 63(2) of Directive 2012/34/EU /* COM/2015/0140 final */









REPORT FROM THE
COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND
SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS
on cooperation
between regulatory bodies under Article 63(2) of Directive 2012/34/EU
1.      INTRODUCTION
On
21 November 2012, the European Parliament and the Council adopted Directive
2012/34/EU establishing a single European railway area (recast)[1]. 
Directive
2012/34/EU has taken over from Directive 2001/14/EC[2] the
obligation for Member States to establish regulatory bodies responsible for
monitoring the competitive situation in the rail services market, with a view
to preventing discrimination against applicants and ensuring the proper
functioning of the single European railway area.
Articles 55 and
56 of Directive 2012/34/EU have further strengthened the independence
requirements for regulatory bodies and extended their responsibilities and
powers. Article 57 has defined structures and rules for cooperation
between regulatory bodies and with the Commission at European level, to
increase coherence
in decision making across the EU. 
Directive
2012/34/EU has created a European network of rail regulatory
bodies (the network) that convenes at regular intervals. The network
provides a platform for regulatory bodies to exchange
information about their work, decision-making principles and practices, the
main issues of procedures and problems of interpreting transposed Union railway
law. The network’s activities should also serve as a basis for adoption of a
number of implementing acts under this Directive[3].
The network
provides a formalized structure for cooperation on a wide range of activities,
and replaces the working group of regulatory bodies that had previously been
set up to ensure cooperation between regulators. Under Article 57(1) of
Directive 2012/34/EU, the Commission is a member of the network, and
coordinates and supports its work. 
In addition to
cooperation within the network, Article 57(2) of Directive 2012/34/EU requires
regulatory bodies to assist each other in market monitoring tasks and to
cooperate on handling complaints and investigations, including by setting up
specific working arrangements. To ensure such cooperation, Article 57(3)
requires that a regulatory body that is handling a case concerning access to or
charging for international train paths consults the regulatory bodies of all
Member States through which the train path runs, and requests all information
it needs before making a decision on the case. At the same time, Article 57(4)
requires all regulatory bodies consulted to provide the information requested.
Moreover, to
ensure effective enforcement, Directive 2012/34/EU requires regulatory bodies
to transfer information on complaints received and on own initiative
investigations to the regulatory body responsible for taking measures regarding
the parties concerned (Article 57(5)).
Regulatory
bodies may request that the Commission participates in all cooperation
activities and facilitates them (Article 57(7)).
Regulation
2010/913/EU establishing a European rail network for competitive freight[4] (the
Corridor Regulation) sets out specific cooperation requirements for regulatory
bodies with regard to monitoring competition in rail freight corridors.
Similarly to the provisions on cooperation between regulatory bodies set out
under Directive 2012/34/EU, Article 20 of the Corridor Regulation also includes
mandatory consultation mechanisms and rules on the provision and transfer of
information on cases concerning rail freight corridors. These rules are of particular
importance in the context of monitoring the activities of the Corridor One-Stop
Shop[5] (e.g.
the allocation of international pre-arranged train paths).
In
addition to the cooperation mechanisms described above, Directive 2012/34/EU
includes a specific obligation for the Commission to support the exchange of
information between members of the network of regulatory bodies. The Commission
may develop electronic tools to do this (Article 57(1)).
Article
57(8) of Directive 2012/34/EU requires regulatory bodies to develop common
decision-making principles and practices and makes it possible for the
Commission to adopt implementing acts setting out such common principles and
practices. 
The
obligation to set up a regulatory body and to participate in the cooperation
activities of regulatory bodies does not apply to Cyprus and Malta, as long as
there is no railway system within their territory (Article 64(2)). 
According
to Article 63(2) of Directive 2012/34/EU, in the light of the experience
acquired through the network of regulatory bodies, the Commission is required
to submit to the European Parliament, the Council, the European Economic and
Social Committee and the Committee of Regions a report on cooperation between
regulatory bodies. According to the same provision, the Commission should, if
appropriate, propose complementary measures to ensure a more integrated
regulatory oversight of the European rail market, in particular for
international services. To this end, legislative measures should also be considered,
if appropriate. 
The
Commission hereby submits its report to the Institutions and bodies mentioned
in order to fulfil this obligation.
The
present report shows that there has been regular cooperation between regulatory
bodies since the entry into force of the recast, mainly as regards exchanging
information on decision-making practices and market monitoring. However,
cooperation on concrete cases has remained limited with only a small number of
cases concerning international services and requiring consultation and exchange
of information between regulators having been brought to the attention of
regulatory bodies so far. The report assesses these developments and identifies
areas in which cooperation between regulators should be improved. 
2.      COOPERATION BETWEEN
REGULATORY BODIES 
Although
Directive 2012/34/EU, including its provisions on the responsibilities and
organisational set-up of regulatory bodies, is to be transposed only by 16 June
2015, the provisions on cooperation between regulatory bodies, which do not
require transposition, were implemented immediately after the Directive’s entry
into force. 
Network
of regulatory bodies
The first
meeting of the European network of rail regulatory bodies took place on 13 and
14 March 2013 in Brussels. Since its creation, the network has met on a
regular basis, i.e. three times a year, with two meetings taking place in
Brussels and one in a Member State. The meetings in March and November 2013 and
2014 were held in Brussels. The meeting in July 2013 was hosted by the
French regulatory body in Le Mans and the meeting in July 2014 by the
German regulatory body in Bonn. 
With the
exception of Lithuania and Ireland,[6]
the regulatory bodies of all Member States obliged to establish independent
regulators have regularly participated in the network’s meetings. Moreover,
regulatory bodies from Switzerland, Norway and the former
Yugoslav Republic of Macedonia have attended the meetings as
observers. 
General
observations
The exchange of
information between the regulatory bodies in the network has shown that
regulators’ level of activity remains very diverse and depends on a number of
factors, including the size of the country, the number of cases handled and the
regulatory body’s experience, administrative capacity and degree of
independence. Some regulators already have substantial experience (e.g.
Austria, Denmark, France, Germany, Netherlands, United Kingdom) while others
have only handled a few or no cases (e.g. Finland, Greece, Lithuania,
Luxemburg). In some Member States, this is the result of a low degree of
competition in national markets, the existence of only a few or no potential
complainants, or regulators not being well staffed or sufficiently independent
in their decision-making yet. 
In addition, the scope
of responsibilities entrusted to regulatory bodies still varies across the EU,
in some Member States covering already a wide range of areas and enforcement
powers as envisaged under Directive 2012/34/EU, while remaining restricted in
other Member States.
Despite these
remaining differences, the sharing of best practices and discussions within the
network has encouraged less-experienced regulatory bodies to make increasing
use of their powers both in handling complaints and monitoring the competitive
situation of the market on own initiative.
Main
issues discussed in the network
Regulatory bodies mostly exchanged information
about their functions, experience in decision making and enforcement, market
developments, market monitoring activities and implementation of EU law in
their respective Member States. Topics discussed included investigations and decisions
concerning in particular access to railway infrastructure, service facilities
and rail-related services and charging.
Discussions in the
network made it possible to identify the areas in which regulatory bodies have
faced challenges in interpreting and applying Directive 2012/34/EU. This
particularly concerns areas in which Directive 2012/34/EU has modified or
complemented the existing regulatory framework or provided the Commission with
a mandate to adopt implementing acts to harmonise the implementation. These
include verification of charges for use of infrastructure, in particular
calculation of direct costs for the minimum access package (Article 31(3)) and
application of mark-ups, or questions related to rights of access and charging
for use of service facilities (in particular station charges) and rail-related
services. 
Role
of the Commission
The Commission
has facilitated cooperation between regulatory bodies by organising and
chairing network meetings. During these meetings, Commission representatives
have explained
Commission policy proposals, presented judgments of the European Court of
Justice concerning transposition and implementation of the first railway
package, and provided recommendations on how to apply Directive 2012/34/EU. 
To
take account of the views of the regulatory bodies, the Commission also
informed the network about various implementing measures under Directive
2012/34/EU, including on:
·        
new
rail passenger services (test on principal purpose under Article 10(3) and
economic equilibrium of public service contracts under Article 11(2));
·        
modalities
for calculation of the cost that is directly incurred as a result of operating
the train service (Article 31(3)); 
·        
procedure
and criteria concerning framework agreements (Article 42(8)); 
·        
rail
market monitoring (Article 15(6)); 
·        
differentiation
of infrastructure charges to give incentives to equip trains with the European
Train Control System (Article 32(4));
·        
modalities
for the application of the charging for the cost of noise effects (Article
31(5)); 
·        
criteria
for applicants for rail infrastructure capacity (Article 41(3)); 
·        
certain
aspects of the procedure on licensing of railway undertakings (Article 17(5)); 
·        
procedure
and criteria for rail-related services (Article 13(9)).  
In
addition, the Commission organised specific subgroup meetings of the
network and joint working group meetings between the network and the Committee
set up under Article 62 of Directive 2012/34/EU (SERAC), to discuss the content
of certain implementing measures with regulatory bodies in detail. 
The Commission has
also set up a mechanism to support the members of the network in exchanging
detailed information about their work, decision-making principles and
practices, and issues related to procedures and problems in interpreting
transposed EU law. Each regulatory body completes a questionnaire three times a
year, ahead of the network meetings. These questionnaires are shared among all
regulatory bodies and main issues reported in the questionnaire are discussed
in the network meetings.
Cooperation
in the context of Rail freight corridors
In
the context of establishing rail freight corridors, regulatory bodies have
worked together to develop systems and working arrangements for handling cases
referring to corridor issues, in particular complaints concerning international
pre-arranged paths allocated by the corridor one-stop shop under Article 13 of
the Corridor Regulation. 
Cooperation
agreements concluded by regulatory bodies along a rail freight corridor to meet
the cooperation requirements under Article 20 of the Corridor Regulation define
a single regulatory body responsible for handling complaints against decisions
made by the corridor one-stop shop. The agreements also include arrangements
for exchanging information and mutual assistance in decision-making on
corridor-related cases. 
For
the ‘Rhine-Alpine’, ‘North Sea-Mediterranean’, ‘Atlantic’, ‘Mediterranean’ and
‘Orient/East-Med’ rail freight corridors, which became operational in November
2013, regulatory bodies have already signed such cooperation agreements[7].
Agreements for the ‘Scandinavian-Mediterranean’, ‘Baltic-Adriatic’ and ‘North
Sea-Baltic’ corridors, which will only become operational in November 2015, are
being prepared. 
Many
regulatory bodies are in regular contact with their counterparts along the
corridor to exchange information and discuss questions related to corridors
issues, including monitoring of the corridor one-stop shop, the framework for
capacity allocation, and the corridor information document, or to jointly
investigate applications for international pre-arranged paths handled by the
corridor one-stop shop. 
In
order to address cross-corridor cooperation needs and topics of common interest
for the regulatory bodies of different corridors, regular discussions are held
during meetings of the network of regulatory bodies and in the SERAC working
group meetings on rail freight corridors, which are organised twice a year and
bring together representatives of regulatory bodies, Member States,
infrastructure managers and other stakeholders. Issues discussed include:
questions concerning the offer of pre-arranged paths (e.g. the possibility to
include terminal capacity or to define flexible pre-arranged paths);
development of a common framework for capacity allocation for all corridors;
performance monitoring; implementation plans; distribution of responsibilities
between the corridor one-stop shop and national infrastructure managers; and
the responsibilities of regulatory bodies.
Bilateral
cooperation and consultation
There
have only been a few cases in which regulatory bodies have worked together on
handling complaints and own-initiative investigations and exchanged information
as envisaged under Article 57(3), (4) and (5) of Directive 2012/34/EU so far. 
These
include cases of consultation in the context of performance of an economic
equilibrium and principle purpose test concerning a path request for an
international passenger service and joint investigations on
allocation of international train paths performed by regulatory bodies of
neighboring Member States.
Irrespective
of the cooperation needs in specific cases, some regulatory
bodies organised bilateral meetings to discuss questions concerning the
implementation of Directive 2012/34/EU, organisation, the financing and powers
of regulatory bodies, and to exchange experiences in decision making. 
Other
forms of cooperation 
In
addition to the different forms of cooperation envisaged under Directive
2012/34/EU, the regulatory bodies of 21 Member States and four third countries
are currently also working together in the framework of IRG-Rail (‘Independent
Regulators’ Group – Rail’), which is a private initiative of regulators that
does not have any official role under the Directive. 
Members
of the group have exchanged on certain aspects related to their
responsibilities and published a number of documents, including a review of
charging practices and market monitoring reports comparing the competitive
situation in rail markets in different Member States. They also developed a set of common indicators to harmonise market-monitoring
activities[8].

3.      FURTHER DEVELOPMENTS
The analysis in this report shows that regulatory
bodies have worked closely together in certain areas, such as the exchange of
best practices and information on decision-making experience through the
network (as envisaged under Article 57(1) of Directive 2012/34/EU). However,
cooperation on specific cases as required under Article 57(2) to (6) has only
taken place in a small number of cases. 
One of the reasons for this is that very few cases
with a cross-border dimension, such as complaints concerning international
train paths, have been brought to the attention of regulatory bodies. This is
related to the number of operators requesting international train paths
remaining limited, given that a considerable number of international train
services are still being operated in cooperation of national railway
undertakings. An increase in cases with a cross-border dimension and requiring
stronger cooperation between regulatory bodies is expected as a result of the
establishment of rail freight corridors, which became operational at the end of
2013 with allocation of international pre-arranged paths being performed by the
corridor one-stop shops for the first time in 2014, and further development of
the single European railway area.
Recent developments at rail
freight corridor-level show that applicants are increasingly requesting
capacity on different corridors; this development indicates that there is a
growing need for regulators to cooperate not only along one corridor, but also
across different corridors in e.g. monitoring path allocation decisions by
corridor one-stop shops of different corridors. 
When analysing the
level of cooperation between regulatory bodies and the effectiveness of related
provisions under Directive 2012/34/EU, consideration also needs to be given to
the fact that during the period of transposition of this Directive (deadline:
16 June 2015), the legal framework in Member States has remained diverse as
regards the scope of regulatory bodies’ responsibilities and progress in
implementing EU law in areas such as e.g. charging or access to service
facilities.
After Directive
2012/34/EU is transposed and all regulatory bodies are entrusted with the
comprehensive range of responsibilities defined under Article 56, the level of
activity is expected to increase for many regulatory bodies . Implementing acts
(to be) adopted under this Directive will create harmonised rules in key areas
in which difficulties in implementing the Directive were identified also at the
level of the network of regulatory bodies. 
More harmonisation in
the legal framework across Member States and in the scope of regulatory bodies’
responsibilities should also facilitate the development of regulatory bodies’
common decision-making principles and practices, as required under Article
57(8) of Directive 2012/34/EU. Implementing acts setting out such common
principles and practices should contribute to further harmonise the
implementation of this Directive across Member States and to ensure coherence
in regulatory bodies’ decision making in areas such as issues of charging other
than the modalities for calculation of direct cost that apply to the minimum
access package.
The Commission is
currently developing an application (‘electronic tool’) that will enable
regulators to share information on decisions, pending cases and other questions
related to their functions in an electronic forum and make coordination easier
(as envisaged under Article 57(1) of Directive 2012/34/EU). This
application should be made available to regulators in 2015.
Regular cooperation
and exchange of best practices within the network of regulatory bodies is also
expected to contribute to the development of frameworks for information sharing
and cooperation with national safety and licensing authorities, which is
mandatory for all regulatory bodies under Article 56(3) of Directive
2012/34/EU.
In the area of market monitoring there
is some overlap between Commission reporting obligations under the Directive
and regulatory bodies’ monitoring activities, in particular in the framework of
IRG Rail. Increased cooperation between regulatory bodies and the Commission in
this field may help to converge approaches and facilitate harmonisation of
reporting and monitoring activities. This includes work on aligned definitions,
common indicators and cooperation on data collection.
4.      CONCLUSION
Article 63(2) of Directive 2012/34/EU
requires the Commission to propose, if appropriate, complementary measures to
ensure a more integrated oversight of the European rail market, in particular
for international services.
In its legislative
resolution of 26 February 2014 on the proposal for a directive of the European
Parliament and of the Council amending Directive 2012/34/EU[9], the
European Parliament adopted an amendment to Article 57 of the Directive,
requiring the Commission to adopt a legislative proposal to replace the network
of regulatory bodies by a European regulatory body dealing with cross-border
issues and appeals against decisions of national regulatory bodies by 31
December 2019. 
The analysis in this report shows that
regulatory bodies have worked closely together on sharing information about
their work, best practices and decision making, in particular in the context of
the European network of rail regulatory bodies, and in certain cases on their
own initiative. At the same time, there is a number of areas in which
coordination between regulatory bodies needs to be further improved. The
existing legal framework provides for a range of possibilities for improvement,
such as the adoption of implementing acts setting out common decision-making
principles and practices or the development of an electronic tool for
exchanging information and discussion on cases handled by regulatory bodies.
Since only a limited number of cases
with a cross-border dimension have been brought to the attention of regulatory
bodies so far, there is not yet sufficient evidence for the effectiveness of
existing cooperation arrangements set up by regulatory bodies and the rules of
Article 57 of Directive 2012/34/EU. However, recent developments, in particular
at corridor level where more and more paths are crossing several corridors,
indicate that more integrated and effective regulatory oversight may be
required as the implementation of rail freight corridors and development of the
single European Railway area progress further.  The
Commission will therefore continue to monitor the developments as regards
cooperation between regulatory bodies and, where appropriate, assess the need
for measures to reinforce integrated regulatory oversight.
[1] OJ L
343, 14.12.2012, p. 32.
[2] Directive 2001/14/EC of the
European Parliament and of the Council of 26 February 2001 on the allocation of
railway infrastructure capacity and the levying of charges for the use of
railway infrastructure and safety certification, OJ L 75,
15.3.2001, p. 29.
[3] Articles
11(4), 12(5), 13(9) and 42(8) of Directive 2012/34/EU require implementing acts
to be based on the experience of regulatory bodies and the activities of the
network.
[4] Regulation 2010/913/EU of
the European Parliament and of the Council of 22 September 2010 concerning a
European rail network for competitive freight, OJ L 276,
20.10.2010, p. 22.
[5] Article
13 of Regulation 2010/913/EU requires that for each rail freight corridor a
joint body should be designated or set up for applicants to request and receive
answers, in a single place and single operation, regarding the infrastructure
capacity for freight trains crossing at least one border and the freight
corridor. This body is called ‘one-stop shop’.
[6]              Ireland
was granted an exemption from the obligation to establish an independent
regulatory body until 15 March 2013 under Article 59(1)(b) of Directive
2012/34/EU. Despite the derogation not having been renewed, Ireland has not yet
participated in cooperation between regulatory bodies as is required under
Article 57 of Directive 2012/34/EU.
[7]
These cooperation agreements have been published under the following addresses http://bit.ly/1vX0wSH  (RFC Rhine-Alpine), http://bit.ly/1Lbkqec
(RFC North Sea-Med.), http://bit.ly/17gsg9p (RFC Atlantic), http://bit.ly/1AFQyXK
(RFC Mediterranean) and http://bit.ly/1AQOBYF
(RFC Orient/East-Med).
[8]
Further information on these documents can be found at http://www.irg-rail.eu/public-documents/.
[9] European
Parliament legislative resolution of 26 February 2014 on the proposal
for a directive of the European Parliament and of the Council amending
Directive 2012/34/EU of the European Parliament and of the Council of 21
November 2012 establishing a single European railway area, as regards the
opening of the market for domestic passenger transport services by rail and the
governance of the railway infrastructure (COM(2013)0029).