COMMISSION STAFF WORKING DOCUMENT SUBSIDIARITY GRID Accompanying the document Proposal for 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
Date: 2023-12-12
Institutions: Directorate-General for Justice and Consumers, European Commission
Subjects: administrative transparency, decision-making, economic activity, interest group, provision of services, service, single market, third country, transparency in decision-making

EN 

  EN 

   EUROPEAN COMMISSION  Strasbourg, 12.12.2023  SWD(2023) 660 final  COMMISSION STAFF WORKING DOCUMENT SUBSIDIARITY GRID Accompanying the document Proposal for 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 {COM(2023) 637 final} - {SEC(2023) 637 final} - {SWD(2023) 663 final} - {SWD(2023) 664 final}  
 
 
Subsidiarity Grid 

1.  Can the Union act? What is the legal basis and competence of the Unions’ intended action? 

1.1 Which article(s) of the Treaty are used to support the legislative proposal or policy initiative? 

The proposal aims first and foremost to contribute to the proper functioning of the internal market 
for interest representation on behalf of third countries by laying down harmonised rules for a high 
level of transparency of such activities when carried out in the internal market. 

The legal basis for the proposal is Article 114 of the Treaty on the Functioning of the European Union 
(‘TFEU’), which provides for the adoption of measures to ensure the establishment and functioning of 
the  internal  market.  This  provision  enables  measures  for  the  approximation  of  the  provisions  laid 
down by law, regulation or administrative action in the Member States which have as their object the 
establishment  and  functioning  of  the  internal  market.  It  is  the  appropriate  legal  basis  for  an 
intervention  covering  service  providers  in  the  internal  market  and  addressing  differences  between 
Member States’ provisions which obstruct the fundamental freedoms and have a direct effect on the 
functioning of the internal market. 

This proposal also aims to 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  by 
improving the knowledge about the magnitude, trends and actors of interest representation carried 
out on behalf of third countries. 

1.2 Is the Union competence represented by this Treaty article exclusive, shared or supporting in 
nature? 

In the case of internal market policy, the Union’s competence is shared according to Article 4 TFEU. 

Subsidiarity does not apply for policy areas where the Union has exclusive competence as defined in 
Article 3 TFEU1. It is the specific legal basis which determines whether the proposal falls under the 
subsidiarity control mechanism. Article 4 TFEU2 sets out the areas where competence is shared 
between the Union and the Member States. Article 6 TFEU3 sets out the areas for which the Unions 
has competence only to support the actions of the Member States. 

2.  Subsidiarity Principle: Why should the EU act? 

2.1 Does the proposal fulfil the procedural requirements of Protocol No. 24: 

-  Has there been a wide consultation before proposing the act? 
- 

Is there a detailed statement with qualitative and, where possible, quantitative indicators 
allowing an appraisal of whether the action can best be achieved at Union level? 

The following consultation strategy has been undertaken to support the preparation of the proposal:  

- 

- 

an ad hoc scoping study;  

a  study  “to  support  the  preparation  of  an  EU  instrument  on  how  to  help  improve  the 
resilience  of  our  democracies  and  address  activities  that  may  impact  public  opinion  or 

1 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12008E003&from=EN  
2 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12008E004&from=EN  
3 https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E006:EN:HTML  
4 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12016E/PRO/02&from=EN  

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- 

- 

- 

- 

democratic sphere funded by third countries”;  

a call for evidence and a public consultation; 

targeted  consultations  of  stakeholders,  including  through  focus  group  meetings,  such  as: 
representative  organisations  of  the  business  community  (e.g.  lobbying  and  PR  firms),  civil 
society, relevant professional and industry organisations, educational institutions, experts in 
relevant  fields,  relevant  national  authorities,  and  relevant  international  organisations  and 
standard setting bodies.; 

the 
inclusion  of  relevant  questions 
Democracy, and Democracy and Rule of Law; 

in  two  Eurobarometer  surveys:  Citizenship  and 

additional questionnaires on potential policy options sent out to Member States authorities, 
commercial entities and civil society organisations. 

The explanatory memorandum of the proposal5 and its accompanying impact assessment6 contain a 
section on the principle of subsidiarity.  

2.2 Does the explanatory memorandum (and any impact assessment) accompanying the 

Commission’s proposal contain an adequate justification regarding the conformity with the 
principle of subsidiarity? 

The explanatory memorandum contains the following text:  

“According to the principle of subsidiarity (Article 5(3) TEU), action at Union level should be taken only 
when the aims envisaged cannot be achieved sufficiently by Member States alone and can therefore, 
by reason of the scale or effects, be better achieved by the Union.  

As Member States’ rules affecting interest representation on behalf of third countries diverge in their 
scope,  content  and  effect,  a  patchy  framework  of  national  rules  is  appearing  and  risks  to  increase, 
especially when it comes to interest representation activities carried out on behalf of third countries. 
It  undermines  the  internal  market  by  creating  an  uneven  playing  field  and  unnecessary  costs  for 
entities  that  seek  to  carry  out  cross-border  interest  representation  activities  on  behalf  of  third 
countries.  It  invites  regulatory  arbitrage  to  avoid  transparency  measures  which  in  turn  impacts  the 
citizens’ confidence and trust in the effectiveness of regulation.  

Only  intervention  at  Union  level  can  solve  these  problems,  as  regulation  at  national  level  already 
results  in  the  creation  of  obstacles  to  cross-border  interest  representation  activities  in  the  internal 
market. In contrast, the effects of any action taken under national law would be limited to a single 
Member State and risk being circumvented or be difficult to oversee in relation to entities carrying out 
interest  representation  on  behalf  of  third  countries  from  other  Member  States.  Furthermore,  some 
Member  States  are  currently  considering  legislative  initiatives  in  the  field  of  foreign  influence  that 
might  not  align with the  proportionate  and  targeted  approach  of  this  initiative  and  that  might  not 
provide  with  a  comprehensive  system  of  safeguards.  Only  action  at  Union  level  can  address  this 
consistently  across  the  internal  market.  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.  

Finally,  interest  representation  activities  carried  out  on  behalf  of  third  countries  is  a  transnational 

5 COM(2023) 637 final. 
6 SWD(2023) 663 final. 

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issue  with  cross-border  implications  that  need  to  be  addressed  at  Union  level.  Influencing  policy 
decisions  and  political  processes  in  one  Member  State  can  have  an  impact  beyond  that  Member 
State’s borders, in another Member State or at the European level. The absence of Union-level action 
may  result  in  some  Member  States  being  less  aware  than  others  about  interest  representation 
activities  carried  out  on  behalf  of  third  countries.  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.” 

2.3 Based on the answers to the questions below, can the objectives of the proposed action be 

achieved sufficiently by the Member States acting alone (necessity for EU action)? 

As  regulation  at  national  level  already  results  in  the  creation  of  obstacles  to  cross-border  interest 
representation activities in the internal market, which is one of the main problems, Union action is 
necessary to prevent the increase of the existing obstacles in the internal market. 

The absence of Union-level action may result in some Member States being less aware than others 
about interest representation activities carried out on behalf of third countries. 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.  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  other  Member  States.  This  would  not  address  the  Union-wide  problems  identified 
and would exacerbate the obstacles within the internal market caused by fragmentation. 

A Union-level intervention is necessary to address the existing and potentially increasing obstacles to 
the  provision  of  those  services  which  may  result  from  divergent  regulatory  environments  across 
Member States, and to provide legal certainty to market operators. This, in turns, would promote fair 
competition and a level playing field throughout the internal market.  

(a)  Are there significant/appreciable transnational/cross-border aspects to the problems being 

tackled? Have these been quantified? 

Third  countries  influencing  decision-making  processes  via  interest  representation  activities  is  a 
transnational  issue  with  cross-border  implications  that  can  affect  the  policy  decisions  and  political 
processes of other countries. It may be difficult to quantify the extent of these transnational/cross-
border aspects of interest representation on behalf of third countries, as the impact of such activities 
can be difficult to measure. Nonetheless, this initiative will introduce harmonised requirements for 
the performance of interest representation activities on behalf third countries in the internal market, 
which will increase the knowledge of the cross-border dimension of such activities. At present, the 
regulatory  landscape  is  extremely  fragmented  with  regards  to  interest  representation  activities,  as 
evidenced  by  the  consultations  conducted  by  the  Commission  as  well  as  the  regulatory  mapping 
undertaken  during  the  study  supporting  the  initiative.  The  introduction  of  these  requirements  will 
provide  additional  legal certainty to the entities  falling under  the scope of the initiative,  leading to 
fairer competition and a level-playing field across the internal market.  

(b)  Would national action or the absence of the EU level action conflict with core objectives of 

the Treaty7 or significantly damage the interests of other Member States? 

7 https://europa.eu/european-union/about-eu/eu-in-brief_en  

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If national action is taken instead of Union-level action, there is a risk that the regulatory approach 
will  keep  on  diverging,  leading  to  different  regulatory  requirements  across  Member  States, 
negatively affecting the functioning of the single market. Furthermore, any interventions at Member 
State level would not necessarily be equipped with the robust safeguards envisaged by the initiative 
and may be disproportionate. 

Moreover, a lack of Union-level intervention would also fail to systematically address actions by third 
countries that seek to covertly influence  decision-making in the Union. The absence of  Union-level 
action  may  result  in  some  Member  States  being  more  vulnerable  to  foreign  interference,  while 
others be better equipped to prevent and address such interference, leading to a situation where the 
Union’s security and democracy are jeopardized by the weaknesses of its weakest link.   

(c)  To what extent do Member States have the ability or possibility to enact appropriate 

measures? 

By  imposing  full  harmonisation  of  the  transparency  and  accountability  requirements,  the  initiative 
would prevent Member States from laying down more extensive transparency requirements within 
the framework of the harmonised rules.  

However, the possibility for Member States to establish rules, in full respect of Union law, for aspects 
not  covered  by the  harmonised  rules  would  not  be affected  (e.g.  to establish rules  for their  public 
officials  in  contact  with  entities  carrying  out  interest  representation  activities  on  behalf  of  third 
countries). 

Within the limits of the harmonised framework, Member States would have the ability and possibility 
to enact appropriate measures to tackle the issues at hand. For example, Member State authorities 
would  be  required  to  ensure  that  publicly  available  national  transparency  registers  concerning 
interest  representation  activities  on  behalf  of  third  countries  are  in  place  and  that  they  cover  the 
information and reporting requirements included in the initiative, while being free to decide whether 
to  do  so  by  amending  any  pre-existing  transparency  registers  or  establishing  new  ones.  Member 
States would also be responsible for deciding how to establish governance, supervision and sanctions 
regimes associated with their transparency register(s), as long as they comply with the requirements 
laid down in the initiative (e.g. only administrative fines). 

(d)  How does the problem and its causes (e.g. negative externalities, spill-over effects) vary 

across the national, regional and local levels of the EU? 

The identified problems do not vary across national, regional and local levels across the Union. The 
phenomenon,  that  is,  obstacles  in  the  internal  market  to  the  cross-border  provision  of  interest 
representation  activities  on  behalf  of  third  countries,  can  be  observed  across  the  whole  Union. 
Similarly, the unknown magnitude, trend and actors in the area of interest representation activities 
carried out on behalf of third countries do not vary between the different levels mentioned. 

(e)  Is the problem widespread across the EU or limited to a few Member States? 

The main problems the proposal aims to address are widespread across the Union. Indeed, the level 
of  obstacles  to  the  internal  market  for  the  provision  of  interest  representation  services  in  general 
and for third countries in particular is high and will become higher in the absence of an intervention 
at Union level.  

(f)  Are Member States overstretched in achieving the objectives of the planned measure? 

4 

 
 
The  consultations  and  the  study  performed  in  the  preparation of the  initiative  revealed  that  some 
Member  States  expressed  concerns  over  potential  lack  of  resources  to  perform  some  of  the 
supervisory  and  enforcement  activities  foreseen.  In  particular,  it  is  necessary  to  facilitate  the 
administrative  cooperation,  that  is,  exchange  of  information,  between  the  different  national 
authorities,  as  well  as  the  Commission.  This  is  achieved  by  making  use  of  the  Internal  Market 
Information System (IMI system).  

(g)  How do the views/preferred courses of action of national, regional and local authorities 

differ across the EU? 

The consultations undertaken for the preparation of the initiative have shown that there is a general 
demand  for  Union  action regarding  interest  representation  activities  carried out  on  behalf of third 
countries.  Harmonised  targeted  transparency  requirements  are  the  preferred  option  for  most 
Member  States  consulted.  Only  a  minority of Member  States  would  prefer  a  recommendation.  No 
divergence was found between the position of national and regional or local authorities.  

2.4 Based on the answer to the questions below, can the objectives of the proposed action be 

better achieved at Union level by reason of scale or effects of that action (EU added value)? 

Overall, the functioning of the internal market can be improved through Union-level action to tackle 
the issues related to the  uneven playing field, the risk  of regulatory arbitrage  and the unnecessary 
costs for entities carrying out interest representation activities on behalf of third countries that wish 
to operate across Member States. 

The  harmonisation  of  measures  regarding  interest  representation  activities  on  behalf  of  third 
countries would improve  the  free movement of services across the  EU. Because  a uniform level of 
transparency would be provided and following an internal market logic, entities carrying out interest 
representation on behalf of third countries in more than one Member State they would be able to 
register  solely  in  their  Member  State  of  establishment  and  use  that  registration  throughout  the 
internal  market.  Furthermore,  a  Union-level  intervention  would  also  help  competent  authorities  in 
their  oversight  functions  since  sharing  information  and  best  practices  can  help  all  Member  States 
improve their ability to detect and respond to foreign interference. 

(a)  Are there clear benefits from EU level action?  

The  functioning  of  the  internal  market  will  be  improved  by  Union-level  action  because  the 
establishment  of  harmonised  rules  for  the  provision  of  interest  representation  services  for  third 
countries  would  result  in  the  creation  of  a  level  playing  field  and  fairer  competition  for  economic 
operators. This intervention would also enhance the integrity of, and public trust in, the  Union and 
Member  State  democratic  institutions  by  ensuring  the  transparency  of  interest  representation 
activities carried out on behalf of third countries, and by improving the knowledge of the magnitude 
and trends and actors of interest representation activities carried out on behalf of third countries. 

(b)  Are there economies of scale? Can the objectives be met more efficiently at EU level (larger 

benefits per unit cost)? Will the functioning of the internal market be improved? 

Common  rules  on  the  provision  of  interest  representation  activities  carried  out  on  behalf  of  third 
countries would allow economies of scale for economic operators, which will more easily be able to 
provide services across the internal market, in particular thanks to the harmonisation of transparency 
and record keeping requirements. For Member States authorities, a Union intervention will provide 
economies  of  scale  for  the  performance  of  their  administrative  cooperation  tasks  thanks  to  the 
creation of a dedicated information exchange mechanism through the IMI system.  

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(c)  What are the benefits in replacing different national policies and rules with a more 

homogenous policy approach? 

According  to  the  evidence  collected  and  analysed  during  the  proposal,  in  the  absence  of  a  Union 
intervention, current trends identified in the previous chapters are expected to continue on the same 
trajectory.  There  is  an  increased  risk  awareness  on  foreign  influence  in  the  Member  States,  in 
particular as regards activities carried out on behalf of a third country, and increasing national plans 
for intervention, which risks further deepening the market fragmentation currently observed. A more 
homogenous policy approach at Union level would be necessary to address this fragmentation.  

(d)  Do the benefits of EU-level action outweigh the loss of competence of the Member States 
and the local and regional authorities (beyond the costs and benefits of acting at national, 
regional and local levels)? 

By  imposing  full  harmonisation  of  the  transparency  and  accountability  requirements,  the  initiative 
would  prevent  Member  States  from,  within  the  framework  of  the  harmonised  rules,  laying  down 
more  extensive  transparency  requirements.  However,  the  competence  of  Member  States  to 
establish  rules,  in  full  respect  of  Union  law,  for  the  aspects  not  covered  by  the  harmonised  rules 
would not be affected (e.g. to establish rules for their public officials contacting entities carrying out 
interest  representation  activities  on  behalf  of  third  countries).  Therefore,  the  proposed  new  rules 
would result in a minimal loss of competence for Member States and their competent authorities. 

In  any  event,  the  benefits  of  this  initiative  will  outweigh  this  cost.  These  benefits  include,  first,  an 
increased knowledge and understanding of the market for third country interest representation due 
to increased transparency. Second, Member States will benefit from a higher degree of awareness of 
the issues related to covert  interest representation and attempts by third countries to  influence  in 
European  democracies  or  impact  public  opinion  across  the  Union.  Third,  the  establishment  of  a 
governance  structure  at  Union  level  could  facilitate  cooperation  between  Member  States  and 
improve  coordination  in  addressing  certain  problems  related  to  interest  representation.  Lastly, 
Member  States  will  benefit  from  the  fact  that  the  initiative  will  facilitate  effective  citizens’ 
participation  in  democratic  processes,  which  could  enhance  public  trust  in  democratic  processes, 
increase  voter  turnout  in  elections,  strengthen  the  legitimacy  of  elected  officials,  and  potentially 
reduce the risk of political polarization. 

(e)  Will there be improved legal clarity for those having to implement the legislation? 

Yes.  From  the  perspective  of  private  entities  falling  under  the  scope  of  the  proposal,  the 
establishment  of  clear  and  harmonised  requirements  for  the  provision  of  interest  representation 
services  on  behalf  of  third  countries  would  facilitate  the  provision  of  services  across  the  internal 
market  thanks  to  a  higher  level  of  legal  certainty.  From  the  perspective  of  the  Member  States’ 
authorities  in  charge  of  the  supervision  and  enforcement  of  those  rules,  the  harmonisation  of 
requirements would facilitate administrative cooperation.  

3. Proportionality: How the EU should act 

3.1  Does the explanatory memorandum (and any impact assessment) accompanying the 

Commission’s proposal contain an adequate justification regarding the proportionality of the 
proposal and a statement allowing appraisal of the compliance of the proposal with the 
principle of proportionality? 

The explanatory memorandum of the proposal contains the following text on the proportionality of 
the legislative proposal: 

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“Regarding  proportionality,  the  content  and  form  of  the  proposed  action  does  not  exceed  what  is 
necessary to achieve the goal of ensuring the proper functioning of the internal market.  

The  proposal  builds  on  existing  Union  legislation  and  is  proportionate  and  necessary  to  achieve  its 
objectives.  The  envisaged  measures  are  limited  to  what  is  necessary  to  tackle  the  current  and 
expected fragmentation of the relevant regulatory framework.  

The proposal is limited to transparency requirements addressed only to entities that are carrying out 
interest representation services on behalf of third countries. The proportionality of the transparency 
obligations has been carefully considered and is reflected in the limited requirements imposed (clearly 
limited information requirements, limited obligations in terms of record keeping, etc.). The proposal 
does  not  aim  to restrict  the  provision  of  interest  representation services,  but  rather to  improve the 
functioning  of  the  internal  market  and  facilitate  their  provision  cross-border  by  making  them  more 
transparent in a coherent manner across the Union. 

The  proposal  includes  necessary  safeguards  aimed  at  ensuring  a  proportionate  transposition  and 
enforcement  and  avoiding  risks  of  stigmatisation.  The  proposal  does  not  seek  to  prevent  third 
countries from promoting their views but aims to ensure that this is taking place in a transparent and 
accountable  manner.  It  does  not  impose  requirements  on  entities  merely  because  they  receive 
funding  from  abroad,  but  instead  focuses  on  ensuring  increased  transparency  when  they  carry  out 
interest representation activities on behalf of third countries that seek to influence the development, 
formulation  or  implementation  of  policy  or  legislation,  or  of  public  decision-making  process  in  the 
Union.  For  this  reason,  contributions  to  the  core  funding  of  an  organisation  or  similar  financial 
support, for example provided under a third country donor grant scheme to a non-profit organisation, 
should  not  be  considered  as  remuneration  for  an  interest  representation  service  where  they  are 
unrelated to an interest representation activity, that is, where the entity would receive such funding 
regardless  of  whether  it  carries  out  specific  interest  representation  activities  for  the  third  country 
providing such a funding. 

In  addition,  the  proposal  includes  a  specific  requirement  that  the  information  in  Member  States’ 
national  registers  is  presented  in  a  neutral  manner  and  in  such  a  way  that  it  does  not  lead  to 
stigmatisation  of  registered  entities.  In  particular,  the  publication  should  not  be  presented  with  or 
accompanied by statements or provisions  that  could create a climate of distrust with regard to the 
registered entities, apt to deter natural or legal persons from Member States or third countries from 
engaging with them or providing them with financial support.  

The  powers  of  supervisory  authorities  to  ask  for  information  from  entities  within  the  scope  of  the 
initiative are carefully framed to ensure that the concerned entities are not subject to unnecessary or 
excessive  requests.  That  framing  is  twofold:  supervisory  authorities  may  only  require  limited 
information additional to what is included in the national register and only in limited circumstances.  

In  order  to  ensure  the  proportionality  of  the  sanctions,  the  proposal  provides  that  supervisory 
authorities  may  only  impose  sanctions  limited  to  administrative  fines  and  below  a  certain  ceiling 
based on the entity’s economic capacity for breaches of the proposed obligations. Criminal sanctions 
are explicitly excluded. Member States are responsible for ensuring that it is prohibited to participate 
in activities that circumvent the provisions of the Directive.” 

3.2 Based on the answers to the questions below and information available from any impact 
assessment, the explanatory memorandum or other sources, is the proposed action an 
appropriate way to achieve the intended objectives? 

The  proposal  addresses  the  identified  issues  in  the  most  appropriate  and  proportionate  way.  The 
proposal would impose harmonised requirements for the provision of interest representation carried 
out on behalf of third countries throughout the internal market, while limiting those requirements to 

7 

 
 
what is necessary to achieve the intended objectives, thereby contributing to a level playing field in 
the internal market.  

(a)  Is the initiative limited to those aspects that Member States cannot achieve satisfactorily on 

their own, and where the Union can do better? 

The requirements provided for in the proposal would fully harmonise the areas they cover, including 
in  terms  of  registration  requirements,  record  keeping  requirements,  supervisory  powers  of 
competent authorities and sanctions. This is essential to establish a level playing field in the provision 
of  interest  representation  services  for  third  countries  across  the  internal  market,  something  the 
Member States cannot achieve satisfactorily on their own.  

(b)  Is the form of Union action (choice of instrument) justified, as simple as possible, and 

coherent with the satisfactory achievement of, and ensuring compliance with the objectives 
pursued (e.g. choice between regulation, (framework) directive, recommendation, or 
alternative regulatory methods such as co-legislation, etc.)? 

A Directive providing for full harmonisation of the transparency requirements applicable to entities 
carrying  out  interest  representation  on  behalf  of  third  countries  conducted  with  the  objective  of 
influencing  the  development,  formulation  or  implementation  of  policy  or  legislation,  or  public 
decision-making  processes  in  the  internal  market  is  the  appropriate  legal  instrument.  It  would  set 
legally binding standards to be met in all Member States while leaving some flexibility, in particular 
regarding the articulation with existing transparency registers. 

(c)  Does the Union action leave as much scope for national decision as possible while achieving 
satisfactorily the objectives set? (e.g. is it possible to limit the European action to minimum 
standards or use a less stringent policy instrument or approach?) 

The proposal strikes a balance between the regulatory autonomy of Member States and the need to 
tackle the problems identified. 

Member States would maintain limited discretion within the scope of the fully harmonised measures, 
as  expressly  framed  by the  initiative.  Notably, Member  States  would  be  free  to  provide  for one  or 
multiple  national  registers  and  supervisory  authorities  in  their  territory,  in  full  respect  of  their 
procedural autonomy (e.g. authorities responsible for different regional entities). 

Furthermore,  it  is  left  for  Member  States  to  establish  rules  for  the  aspects  not  covered  by  the 
Directive.  For  example,  it  is  left  to  Member  States  to  decide  whether  to  establish  rules  for  their 
public  officials  when  it  comes  to  their  contacts  with  entities  carrying  out  interest  representation 
activities on behalf of third countries. 

(d)  Does the initiative create financial or administrative cost for the Union, national 

governments, regional or local authorities, economic operators or citizens? Are these costs 
commensurate with the objective to be achieved? 

The expected results and impact of the proposal are a more homogenous policy approach across the 
Union regarding interest representation activities carried out on behalf of third countries. These will 
provide  greater  clarity  and  predictability  for  businesses,  citizens,  and  other  stakeholders,  and 
facilitate the functioning of the internal market.  

Costs for Member States 

Member  State  authorities  would  need  to  ensure  that  national  transparency  registers  for  interest 

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representation activities carried out on behalf of  third countries exist and cover all activities within 
the scope  of the  legislation.  Updated  or newly established registers will need to support  an online 
public interface. They would also need to publish an annual report based on the information entered 
in the register. Member States authorities would also participate in a  Union-level advisory group or 
network  of  authorities  and  share  information  with  the  authorities  of  other  Member  States.  The 
expected costs are outlined in the proposal as well as the accompanying impact assessment.  

Costs for private entities  

Many  commercial  interest  representation  service  providers  already  conduct  certain  activities  that 
could constitute record-keeping, but these activities are often informal in nature. The record-keeping 
obligations  of  the  proposal  would  require  the  formalisation  of  existing  record-keeping  activities  in 
the context of activities carried out on behalf of third countries and therefore would only constitute 
business-as-usual costs.  

Entities  that  carry  out  interest  representation  on  behalf  of  third  countries  in  the  internal  market 
would  also  need  to  abide  by  information  disclosure  and  reporting  obligations  established  in  the 
Member  States  in  which  they  operate.  This  would  require  the  disclosure  of  information  upon 
registration,  with  periodic  updates  required  on  certain  information.  They  would  be  required  to 
ensure  the  collection,  reporting  and  accuracy  of  the  disclosed  information.  They  may  also  be 
required to respond in an ad hoc manner to requests for clarification from Member State monitoring 
and  enforcement  authorities  on  the  information  disclosed.  Non-compliance  in  this  regard  could 
result  in  administrative  sanctions.  Through  the  implementation  of  these  compliance  activities, 
interest representation service providers will bear a range of costs but will also benefit from positive 
organisational  impacts.  However,  it  is  not  possible  to  precisely  quantify  these  costs  due  to  lack  of 
information  on  their  likely  nature  and  scale.  In  specific  cases,  these  entities  might  be  required  to 
provide more information. 

Familiarisation costs with the new framework are also to be expected. Such costs would mainly be 
one-off  and  borne  in  the  first  year  of  the  entry  into  application  of  the  framework.  Administrative 
costs  would  include  initial  registration  costs,  initial  information  update  costs,  and  ongoing 
information disclosure costs. Initial registration costs will be borne in the first year of the entry into 
application of the legislative intervention by entities that carry out interest representation on behalf 
of third countries in Member States that currently do not have existing registers. For record keeping 
activities, feedback gathered suggests that the costs related to these activities could be characterised 
as business-as-usual costs, thereby adding no incremental costs to the intervention. 

The expected costs are outlined in the proposal as well as the accompanying impact assessment.  

Costs for the Commission 

The  proposal  has  implications  in  terms  of  costs  and  administrative  burden  for  the  Commission 
relating to two expenditure categories. These costs concern administrative expenditure and costs for 
the  necessary  extension  of  the  IMI  system.  The  financial  and  budgetary  impacts  are  explained  in 
detail in the legislative financial statement annexed to the proposal. 

(e)  While respecting the Union law, have special circumstances applying in individual Member 

States been taken into account? 

No  special  national  circumstances  requiring  a  specific  treatment  of  individual  Member  States  have 
been  identified  during  the  preparation  of  the  proposal  or  during  the  consultations  undertaken  to 
prepare the accompanying impact assessment. 

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