COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT Accompanying the document Proposal for a Directive of the European Parliament and of the Council establishing harmonised requirements in the internal market on transparency of interest representation carried out on behalf of third countries and amending Directive (EU) 2019/1937 and Proposal for a Regulation of the European Parliament and of the Council amending Regulations (EU) No 1024/2012 and (EU) 2018/1724 as regards certain requirements laid down by Directive (EU) XXXX/XXXX
Date: 2023-12-12
Institutions: Directorate-General for Justice and Consumers, European Commission
Subjects: access to information, administrative cooperation, administrative transparency, decision-making, economic activity, exchange of information, information system, interest group, single market, third country, transparency in decision-making

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   EUROPEAN COMMISSION  Strasbourg, 12.12.2023  SWD(2023) 664 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT  Accompanying the document Proposal for a Directive of the European Parliament and of the Council establishing harmonised requirements in the internal market on transparency of interest representation carried out on behalf of third countries and amending Directive (EU) 2019/1937    and    Proposal for a Regulation of the European Parliament and of the Council    amending Regulations (EU) No 1024/2012 and (EU) 2018/1724 as regards certain requirements laid down by Directive (EU) XXXX/XXXX {COM(2023) 637 final} - {SEC(2023) 637 final} - {SWD(2023) 660 final} - {SWD(2023) 663 final}  
 
 
Executive Summary Sheet 

Impact  assessment  on  a  Proposal  for  a  Directive  establishing  harmonised  requirements  in  the 
internal market on transparency of interest representation carried out on behalf of third countries. 

A. Need for action 

What is the problem and why is it a problem at EU level?  

in 

the  Union  via 

interest  representation  activities.  Currently, 

Governments of third countries increasingly promote their policy objectives and influence decision 
making  processes 
interest 
representation  activities  carried  out  on  behalf  of  third  countries  are  regulated  together  with  other 
interest  representation  activities.  Some  Member  States  are  seeking  to  regulate  specifically  interest 
representation  on  behalf  of  third  countries.  The  regulatory  framework  is  highly  fragmented 
among the 15 Member States that have introduced a transparency register on interest representation 
activities,  and  12  Member  States  do  not  regulate  this  market  at  all.  This  fragmentation  causes 
several obstacles in the internal market for interest representation activities carried out on behalf 
of third countries that undermine the proper functioning of the internal market: 1) uneven playing 
field  since  diverging  requirements  at  Member  State  level  impact  different  interest  representation 
providers in different ways; 2) unnecessary costs for entities that wish to operate across borders 
in  the  internal  market.  As  a  consequence,  there  is  a  risk  of  forum  shopping  and  regulatory 
arbitrage redirecting interest representation activities to less regulated Member States.  

Secondly, the scale of interest representation activities carried out on behalf of third countries in the 
Member states is largely unknown. Member States do not consistently collect or systematically share 
information on these activities which leads to a lack of information about the magnitude, trends, 
and  actors  of  interest  representation  carried  out  on  behalf  of  third  countries.  This  lack  of 
transparency undermines democratic processes and impacts Union citizens’ trust in the integrity of 
public decision-making process as citizens are concerned about the impacts of foreign government 
meddling with decision-making processes in the Union.  

What should be achieved? 

General  objectives  are  to:  (1)  ensure  the  proper  functioning  of  the  internal  market  for  interest 
representation  activities  carried  out  on  behalf  of  third  countries,  and  (2)  contribute  to  the 
transparency, integrity of, and public trust in, Union and Member State decision making processes, 
with regards to the influence of third countries. Specific objectives are to: (a) facilitate cross-border 
interest representation activities carried out on behalf of third countries when done transparently, and 
(b) improve knowledge about the magnitude, trends and actors of interest representation carried out 
on behalf of third countries. 
What is the value added of action at the EU level (subsidiarity)?  

Member States’ rules on transparency of interest representation diverge in their scope, content and 
effect.  The  current  situation  undermines  the  internal  market,  especially  when  it  comes  to  interest 
representation activities carried out on behalf of third countries. Only intervention at Union level can 
solve  the  problems  identified,  as  regulation  at  national  level  already  results  in  the  creation  of 
obstacles to cross-border interest representation activities in the internal market. 

The issue is best addressed at Union level in order to provide harmonised transparency measures that 
allow to create an even playing field, reduce existing compliance costs and regulatory arbitrage as 
well  as  the  emergence  of  additional  obstacles  in  the  internal  market  for  interest  representation 
activities carried out on behalf of third countries. In contrast, the effects of any action taken under 
national law would be limited to a single Member State and risks being circumvented or be difficult 
to oversee in relation to entities carrying out interest representation on behalf of third countries from 

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other  Member  States.  This  would  not  address  the  EU-wide  problems  identified  and  would 
exacerbate  the  obstacles  within  the  internal  market  caused  by  fragmentation.  Introducing  common 
and proportionate standards for transparency of interest representation carried out on behalf of third 
countries at Union level is essential to ensure that such measures are established consistently across 
all Member States with respect to all fundamental rights and in particular subject to comprehensive 
safeguards including access to the courts. 

Furthermore,  interest  representation  activities  carried  out  on  behalf  of  third  countries  is  a 
transnational  issue  with  cross-border  implications.  Influencing  policy  decisions  and  political 
processes  in  a  Member  State  can  have  an  impact  beyond  that  Member  State’s  borders,  in  another 
Member  State  or  at  the  Union  level.  It  seems  unlikely  that  Member  States  would  converge  on 
aligned standards on how to collect comparable data on interest representation activities carried out 
on  behalf  of  third  countries  or  establish  a  systematic  Union  wide  cooperation  mechanism  to 
exchange  information  with  each  other  and  the  Commission.  Union  action  will  thus  contribute  to 
improving  the  knowledge  at  Union  level  on  the  magnitude,  trends  and  actors  of  interest 
representation activities carried out on behalf of third countries. 

B. Solutions 

What are the various options to achieve the objectives? Is there a preferred option or not? If 
not, why? 

There are three policy options:  

PO1: Non-legislative intervention recommending to Member States a set of measures to be applied 
to interest representation activities carried out on behalf of third countries.  

PO2.1:  Legislative  intervention  with  targeted  requirements  to  harmonise  transparency 
requirements for interest representation activities carried out on behalf of third countries on the basis 
of  Article  114  TFEU.  This  option  would  address  interest  representation  activities  carried  out  on 
behalf  of  governments  and  affiliated  entities  from  all  third  countries.  It  would  establish  specific 
safeguards in order to address potential risks for actors like Civil Society Organisations (CSOs) and 
it  would  impose  targeted  requirements  on  entities  (record-keeping,  registration  of  information, 
transparency obligations applicable to interactions with public officials, sanctions). 

PO2.2: Legislative intervention with extended requirements. This latter option would build upon 
PO2.1,  but  it  would  go  beyond  the  targeted  requirements  by  imposing  extended  requirements  on 
entities,  notably  by  introducing  a  prior  authorisation  mechanism  in  order  to  engage  in  interest 
representation activities on behalf of third countries.   

The preferred policy option is PO2.1.  

What are different stakeholders' views? Who supports which option?  

•  There  is  a  general  demand  for  Union  action  regarding  interest  representation  activities 

carried out on behalf of third countries.  

•  Only 5 Member States out of 15 participating in a questionnaire, 1 CSO out of 11 and none 
of  the  3  industry  associations  prefer  PO1.  6  CSOs  have  expressed  concerns  that  such 
recommendation could be misused.  

•  Harmonised transparency requirements, notably under PO2.1, are the preferred option for 9 

Member States, all 3 industry associations, and 2 CSOs. 

•  Extended  requirements  including  a  prior  authorisation/licensing  system  as  proposed  under 
PO2.2 are only supported by 4 Member States and 1 CSO. 6 Member States, 5 CSOs and 1 
industry representatives have expressed opposition to such a mechanism. 

•  Stakeholders  support  the  idea  to  establish  specific  safeguards  in  order  to  address  potential 

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risks  for  the  protection  of  fundamental  rights.  Only  4  CSOs  argue  in  favour  of  exempting 
some entities from transparency requirements. 

C. Impacts of the preferred option 

What are the benefits of the preferred option (if any, otherwise of main ones)?                                     

Option 2.1, found to  perform best  across comparison  criteria,  is expected to  have a  positive effect 
over the baseline on the internal market by:  

• 

• 

increasing  the  legal  certainty  and  providing  a  level  playing  field  necessary  to  remove  the 
obstacles identified in the internal market;  
limiting  the  costs  on  economic  actors  linked  to  multiple  registration  in  different  Member 
States and facilitating interest representation activities across borders; 

•  providing sufficient information to improve knowledge about the magnitude, trends and costs 

of interest representation carried out on behalf of third countries; 
increase  transparency,  integrity  of,  and  public  trust  in,  Union  and  Member  State  decision 
making processes, with regards to the influence of third countries while being less intrusive 
in  terms  of  impacts  on  fundamental  rights,  in  particular  with  regards  to  the  freedom  of 
association and the freedom of the arts and sciences, compared to other policy options; 
facilitating cross-border cooperation between national authorities.  

• 

• 

What are the costs of the preferred option (if any, otherwise of main ones)?                                    

Economic actors – compliance costs to implement obligations on transparency. These will include 
one-off  costs  for  the  familiarisation  with  the  new  regulatory  framework  and  registration  costs,  as 
well  as  recurrent  costs  linked  to  record-keeping  and  maintaining  up-to-date  information  in  the 
register.  But  overall  costs  should  be  lower  than  in  the  baseline,  as  reduced  fragmentation  yields 
efficiency gains.  

Public  authorities  –  one-off  familiarisation  costs  for  all  Member  States,  costs  to  establish  new 
registers and establish new or amend existing regimes in the 12 Member States that do not currently 
have registers in place, costs to amend existing regimes and registers for the 15 Members States that 
have a transparency register, and recurrent costs for all Member States to maintain the registers as 
well  as  appropriate  management,  monitoring  and  enforcement  mechanisms.  These  costs  are 
expected  to  be  partially  offset  against  the  efficiency  savings  expected  from  the  harmonised 
obligations and streamlined and strengthened oversight process. 

What are the impacts on SMEs and competitiveness?  

Legislative measures will reduce legal uncertainty and fragmentation and avoid that companies have 
to register multiple times. Hence, the new requirements will help SMEs scale up their operations and 
stimulate  the  development  of  new  services  offered  at  Union  level.  Proportionate  transparency 
requirements will not have a negative impact on the capacity to innovate  and compliance costs are 
expected to be compensated by the application of more consistent rules across the EU.  

Will there be significant impacts on national budgets and administrations?  

Increased  one-off  costs  for  training  staff  and  establishing  new  registers  for  the  12  Member  States 
that do not currently have one and amending the existing ones in the 15 other Member States,  and 
recurrent  costs for  maintenance of the IT tool for the register and  monitoring compliance  with  the 
transparency  requirements  for  all  Member  States  should  be  offset  to  some  extent  by  efficiency 
savings from harmonised obligations and the introduction of a governance cooperation mechanism 
at Union level which could be supported by existing IT tools. Net saving is unlikely. 

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Will there be other significant impacts?  

The  increased  transparency  of  interest  representation  activities  on  behalf  of  third  countries  will 
strongly  improve  the  knowledge  about  the  magnitude,  trends,  and  actors  of  interest  representation 
activities  helping  to  strengthen  the  quality  of  information  available  on  this  subject,  and  thereby 
enrich  the  political  debate  and  inform  future  policy  making.  Regulatory  coordination  among 
competent authorities will be improved and covert interest representation on behalf of third countries 
will be prevented. The proposal would positively contribute to the right of individuals to receive and 
impart information and ideas without interference by public authority and to the freedom to conduct 
business.  Transparency  requirements  might  have  a  limited  impact  on  the  right  to  freedom  of 
associations, the right to freedom of expression and the freedom of the arts and the sciences, but the 
preferred policy option 2.1 foresees suitable safeguards including against stigmatisation and is less 
intrusive  than  PO2.2.  There  might  be  limited  geopolitical  implications,  notably  the  risk  of  third 
countries  using  the  Union’s  policy  as  a  pretext  to  adopt  further-reaching  laws  on  foreign 
interference.  These  geopolitical  implications  can  be  mitigated  by  communication  and  diplomatic 
efforts. 

Proportionality?  

The  measures  proposed  by  the  preferred  option  are  proportionate  to  the  objectives  defined. 
Restrictions of fundamental rights, in particular with regards to the freedom of association and the 
freedom of the arts and sciences, are proportionate and limited to the minimum necessary.  

D. Follow up 

When will the policy be reviewed?  

A  report  on  the  implementation  of  the  legislative  measures  contained  in  the  preferred  option  will 
take  place  at  the  latest  by  12  months  after  the  transposition  deadline  if  a  Directive  is  chosen.  The 
Commission will also carry out an evaluation report of those legislative measures at the latest by 4 
years after the implementation deadline.  

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