COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on the protection of the Union and its Member States from economic coercion by third countries
Date: 2021-12-08
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: EU Member State, EU restrictive measure, economic sanctions, international sanctions, international trade, investment, legal person, natural person, third country, trade restriction

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  EN 

   EUROPEAN COMMISSION  Brussels, 8.12.2021  SWD(2021) 372 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT  Accompanying the document Proposal for a Regulation of the European Parliament and of the Council  on the protection of the Union and its Member States from economic coercion by third countries    {COM(2021) 775 final} - {SEC(2021) 418 final} - {SWD(2021) 371 final}  
 
 
A.  Need for action 

What is the problem and why is it a problem at EU level? 
This initiative addresses economic coercion, which is defined as pressure exercised by non-
EU  countries  through  measures  affecting  trade  or  investment  in  order  to  attain  a  specific 
outcome falling  within the legitimate policymaking space of the EU or its Member States. 
Non-EU  countries’  coercive  measures  restrict  the  EU’s  or  a  Member  State’s  legitimate 
policy space or impose costs on its use. The EU and its Member States have been targeted by 
economic  coercion  and  are  continuously  at  risk.  Such  coercion  is  unlikely  to  disappear  or 
recede. 
What should be achieved? 
The specific objectives are to deter coercion in general, de-escalate and bring about the end 
of  coercive  measures  in  place,  and,  as  a  last  resort,  counteract  coercive  measures.  More 
generally,  the  aim  is  to  preserve  the  legitimate  policymaking  space  of  the  EU  and  the 
Member States. 
What is the added value of action at EU level (subsidiarity)? 
The envisaged EU response falls under the common commercial policy. In any event, action 
at  EU  level  results  in  benefits,  e.g.  deterrence  and  counteraction  against  coercion,  which 
cannot be achieved sufficiently, if at all, at Member State level. 

B.  Solutions 

What are the various options to achieve the objectives? Is there a preferred option? 
The preferred option is a framework regulation of the European Parliament and the Council 
allowing EU action, in compliance with public international law and based on the following 

-  A two-step EU response: the first step involves non-interventionist measures, such as 
formally  identifying  if  a  coercive  measure  falls  within  the  regulation’s  scope  and 
efforts to engage with the non-EU country, encouraging it to end its measures. If not 
successful, a broad range of possible EU countermeasures would become available in 
a possible second step, as a last resort. 

-  The  instrument  applies  to  a  broad  range  of  coercive  measures,  including  those 
involving  explicit,  disguised  and  silent  coercion  and  their  variations.  A  qualitative 
threshold for action would apply. 

-  The  decision-making  process  falls  under  the  standard  framework  of  delegated  and 
implementing  acts,  with  means  for  swift  action.  Stakeholders  should  be  able  to 
participate in any process involving the use of the instrument. 

What are different stakeholders’ views? 
All categories of stakeholders broadly support the creation of a new legal instrument. There 
is solid convergence on: 

- 

the main choices for its design, notably, the need for a broad scope of possibilities for 
EU action against coercion, with countermeasures only as a last resort; 
the broad coverage of possible coercive measures to trigger the instrument; 
the ability of stakeholders to participate in the use of the instrument; and 

- 
- 
-  particular attention being paid to risks of collateral damage. 
C.  Impact of the preferred option 

What are the benefits of the preferred option? 
Benefits  would  arise  from  the  broad  range  of  coercion  measures  captured  within  the 
instrument’s scope of  application, and from  the range of response measures allowing  for a 
tailored and effective response, as both of these would have the effect of deterring coercion. 
Benefits would also arise from prioritising solutions not involving countermeasures and the 
EU’s openness to engage with the non-EU country concerned. The broad range of possible 
countermeasures,  as  a  last  resort,  allows  the  EU  to  be  assertive  where  needed  and  the 
response to be appropriately calibrated. 

 
 
What are the costs of the preferred option? 
No significant costs would arise from the instrument’s existence. Potential varying costs may 
arise  from  its  use.  Depending  on  the  deployed  measures,  costs  may  arise  for  specific  EU 
economic  operators  with  trade  or  investment  links  with  the  non-EU  country  concerned. 
These costs would be taken into account when the particular measure is being designed. 
What are the impacts on SMEs and competitiveness? 
No  costs  would  arise  from  instrument’s  existence.  Potential  varying  costs  for  SMEs  may 
arise from the instrument’s use, as mentioned above. 
Will there be significant impacts on national budgets and administrations? 
No significant impact. 
Will there be other significant impacts? 
The deterrence effect built into the preferred option may result in no or limited use of the 
instrument, in the best-case scenario. 
Proportionality 
The preferred option limits the EU’s response to what is proportionate regarding the 
magnitude of the problem of economic coercion, but allows for an assertive (counter)action 
if necessary. 

D.  Follow up 

When will the policy be reviewed? 
A review of the instrument will follow within a reasonable period after adoption.