Source: EURLEX
Language: en
Format: md

##### **COMMISSION OF THE EUROPEAN COMMUNITIES**

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                                 C0M(93) 632 final

                                 Brussels, 22 December 1993

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               COMMUNICATION FROM THE COMMISSION TO THE COUNCIL

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**"MAKING** **THE** **MOST** **OF THE INTERNAL MARKET":**

**STRATEGIC PROGRAMME**

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**COMMISSION COMMUNICATION TO THE COUNCIL**

**"MAKING THE MOST OF THE INTERNAL MARKET":**

**STRATEGIC PROGRAMME**

**The Internal Market is not** **yesterday's** **issue. A single open market provides the**
**essential basis for economic recovery and future economic growth in the Community.**
**Its** **completion and its efficient operation remain a** **priority.**

**The Commission has therefore decided that it is necessary to prepare a Strategic**
**Programme for the completion, the management and the future development of the**
**Internal market which can serve as a guide to the main priorities of the Community in**
**this area and as a means of measuring the progress of the Community towards its**
**objectives. The Strategic Programme is attached to this Communication.**

**The content of this programme has been the subject of considerable debate both**
**within and outside the Commission for some months, following the issuing of the**
**Commission Communication** **"Reinforcing** **the effectiveness of the Internal** **Market"** **on**
**2** **June 1993, which was accompanied by a 55-page Working Document entitled**
**Towards a Strategic Programme for the Internal Market". These documents were**
**discussed by the European Parliament, the Economic and Social Committee and the**
**Council of Ministers between June and September.** **In** **addition, a large number of**
**organisations representing industrial and economic interests responded to the**
**Commission's invitation to send in comments on the Working Document. All of these**
**reactions have been considered in the preparation of the definitive Strategic**
**Programme.**

**The consultation process has confirmed the Commission's view that an overall plan**
**for the implementation and development of the Internal Market is desirable. The**
**overwheming majority of comments supported the initiative although there was some**
**divergence of view as to priorities. The Commission considers that the final version of**
**the Strategic Programme represents a reasonable and balanced set of new objectives**
**for the Community, which puts considerable weight on management issues but which**
**also contains proposals for the further development of Community legislation in some**
**areas where that is deemed to be necessary for** **full** **exploitation of the Internal Market.**
**The Commission has also put more emphasis on the contribution of other policies,**
**such as competition or environmental policy, to the successful operation of the**
**Internal Market.**

**The Commission now presents the Strategic Programme to the Council and**
**Parliament as a guide for future policy both at Community and national level. In its**
**conclusions the Commission proposes that the Strategic Programme be launched on**
**the following basis:**

**• an endorsement by the Council of the general orientation provided in the Strategic**
**Programme;**

**• a firm undertaking by the Council to accelerate discussion on the seventeen**
**legislative proposals from the 1985 White Paper that are still before it, with a view**
**to their final adoption before the end of** **1994.**

**Progress in respect of the implementation of the Strategic Programme will be regularly**
**reviewed in the Commission's Annual Report on the Internal Market.**

### **European Commission**

# **MAKING THE MOST** **OF THE INTERNAL MARKET**

## **STRATEGIC PROGRAMME**

##### **Contents**

**EXECUTIVE SUMMARY** **i**

**INTRODUCTION** **1**

**SECTION A - COMPLETION OF** **THE BASIC LEGAL FRAMEWORK** **5**

**I.** **Outstanding White Paper measures** **5**

**II.** **Free movement of persons** **6**

**III.** **Other measures before the Council** **6**

**IV. Introducing competition into regulated sectors** **8**

**V. Measures to be withdrawn** **9**

**SECTION** **B - MANAGING THE SINGLE** **MARKET** **10**

**I.** **Ensuring conformity and transparency in the transposition of** **10**
**Community directives into national law**

**II.** **Ensuring quality in enforcement** **12**

**1.** **Administrative cooperation** **12**
**2.** **Preventing the emergence of new barriers** **15**
**3. Sanctioning against infringements by Member** **States** **16**

**III.** **Redress: Access to justice** **and** **judicial cooperation** **16**

**IV. Evaluating Community rules** **18**

**1.** **Evaluating the practical performance of Internal Market legislation** **18**
**2.** **Evaluating the broader business and economic impact** **19**
**3. Strengthening the** **INTRASTAT** **statistics collection system** **20**

**V. Resources** **22**

**SECTION** **C** **- DEVELOPING THE SINGLE MARKET** **23**

**I.** **Transparency and proportionality of new Community measures;** **24**
**transparency of** **procedures;** **communication and information**

**1.** **Transparency and proportionality** **in** **preparing new Community** **25**
**legislation**

**2.** **Communication and information measures** **26**

**II.** **Further improving the environment for business** **28**

**1.** **Competition policy** **30**

**2.** **Improving cross-border payments** **30**
**3. Transport** **31**
**4. Intellectual and industrial property** **32**

-B

5. Company law 33
6. The creation of a favourable tax regime for businesses _34_
_a)_ _Indirect taxation_ _34_
_b)_ _Direct taxation_ _35_
7. Upgrading European standardization, conformity assessment and 36
quality
_a)_ _European standardization_ _36_
_b)_ _Conformity assessment_ _and_ _quality_ 37
8. Catering for SMEs 38

9. Commercial communication and media 39

10. Commerce and distribution 40

11. Energy 41

III. Further improving the environment for the consumer 41

IV.The relationship between sustainable development **and the** 42
Internal Market

V. Establishing trans-European networks 43

1. Promotion of a convergence of interests and coordination 44
2. Stimulating private investment 45
3. Ensuring technical interoperability 46
4. Early development of telematic networks between administrations 4 7

SECTION D - A DYNAMIC AND OPEN EXTERNAL POLICY 49

I. Management of the Union's external frontier 49

II. Completion of the common commercial policy in **the** context of 50
the Internal Market

SECTION E - REVIEWING AND ADAPTING THE STRATEGIC PROGRAMME 52

CONCLUSIONS 53

ANNEXES 54

##### **Executive summary**

**Section A - Completion of the basic legal framework**

**Section A** of the programme calls for the adoption of **the legislative proposals that**
**still have to be agreed** in order to establish the basic legal framework for the single
market and identifies **steps to be taken to introduce competition into regulated**
**sectors.**

More specifically these measures include:

- **adoption of** **the** **outstanding measures from the** **1985** **White Paper,** mainly in the
areas of company law, taxation, and intellectual and industrial property;

- **action to ensure the free movement of persons,** including **the** adoption of
proposals put forward by the Commission on **the** basis of **its new** right of initiative
under the Treaty on European Union;

- **other measures before the** Council, including **a** number of **measures arising**
**from the removal of frontier controls;** proposals on **the** export of **dual-use**
**goods;** the harmonization of **technical rules and the** strengthening of the
notification procedure for new rules at national level (Directive 83/189/EEC); further
proposals regarding **intellectual and industrial property; a** draft framework
directive for the **protection of personal data; and proposals in the area** of
**financial services;**

**• measures to introduce competition into the regulated sectors of energy,**
**telecommunications** and **postal services.**

This section also draws attention to the Commissions recent decision on the
**measures to be withdrawn** following discussion at the European Councils of Lisbon,
Birmingham and Edinburgh.

**Section B** **-** **Managing the Single Market**

Section B of the programme addresses the task of **managing the Single Market.**

The actions included cover the following areas:

 - **The** need **to ensure** conformity **and** transparency **in the transposition** of

Community directives into national law - A communication will be presented on the
means of resolving problems in this area and a series of measures will be
undertaken to make national measures transposing Internal Market law more
readily accessible.

 **The need to ensure quality in enforcement,** principally through developing closer
**administrative cooperation** between Member State administrations and between
them and the Commission - **Two communications are** being presented at the **end**
**of 1993,** one on a general framework for administrative cooperation and another
on urgency procedures. The first of these will contain proposals on guiding

**(2)**

**- I I -**

principles for administative cooperation, and both will form the basis for a further
work programme. A series of measures will be introduced **to support**
administrative cooperation, including proposals on the development of a
communication and data exchange network for Union administration. The
existing channels for dialogue with the Member States on problems which are the
subject of litigation initiated by the Commission will be reinforced. Instruments to
**prevent the** emergence of **new barriers** will include the extension of the coverage
of the notification procedure on national legislation which could affect the free
movement of goods (see Section A) and consideration of the need for similar
procedures with regard to some services. The Commission will also clarify the way
in which it will make use of the power to propose **sanctions** to the Court under
Article 171 of the Treaty.

Redress: Access to justice **and** judicial cooperation - Actions will be developed,
in partnership with the Member States, to improve **access to Community**
**legislation,** to facilitate **recourse to the national courts,** to reinforce the **free**
movement of judgements and to examine the approach to the **conflict of laws** in
the context of the Single Market.
The importance of evaluating Community rules is emphasised. This will be
approached from the point of view of the **practical performance of the legislation**
as well as that of the **broader** business **and economic impact.** The **Economic**
**and** Social Committee has an important role to play here. Use will also be made of
various existing networks, while **a major** study **on the economic effects of the**
**Internal Market** will be launched in 1994 with a view to publication in 1996. To
improve the statistical information which will contribute to evaluation, improvements
to the INTRASTAT system are envisaged.

Attention is drawn to the need for adequate resources for the management of the
Internal Market

**Section C - Developing the Single Market**

**Section** C of the programme is concemed with **developing the single market,** that is,
defining a more dynamic view of market regulation and identifying means by which the
Community can make available to those who are active in the single market the full
use of its potential.

It spells out action to be taken in the following areas:

- Ensuring transparency and applying **the** principle of proportionality in
preparing new Community legislation - Although only a limited number of new
legislative initiatives are envisaged, the Commission proposes to develop
guidelines for the evaluation of **the** need for such initiatives in the Internal Market
area, to improve internal coordination in the Commission and to establish new
procedures for the publication of legislative intentions in relation to the Internal
Market at an early stage in the preparation process.

- Communication and information measures are essential if individuals and firms
are to benefit fully from the Internal Market. The Commission will develop a
coherent strategy involving Community institutions, national administrations and
non-governmental organizations in a systematic and coordinated way.

- Further improving the environment for business - Action is needed in a number
of key areas in order to make further improvements in the environment within which

**- I I I -**

business operates. These include the **application of competition policy** .tackling
the problem of **improving cross border payments,** further proposals on
**transport,** action to promote Union-wide protection **of intellectual and industrial**
**property,** improvements in the area of **company law,** the creation of **a** favourable
**tax regime** for business, covering action on both **direct and** indirect **taxation, the**
upgrading of **European standardization, conformity assessment and quality**
**systems,** consultation and evaluation of the need for action in **the areas of**
**commercial** **communication** (advertising, sponsorship, direct marketing,
promotions etc.) and the **media,** actions to promote efficient and competitive
systems in the area of **commerce and distribution, and** measures **to increase**
competition and business opportunities in the **energy sector.**

**Further improving the environment for the consumer**  - Action **to promote**
**consumer** participation in the Intemal Market is essential to its functioning.
Particular priority will be given to the areas of **legal and commercial guarantees**
**and financial services,** as well as to information for consumers.

**The relationship between sustainable development and the Intemal Market**  The Treaty objectives of the Intemal Market and of sustainable and non-inflationary
growth respecting the environment should be mutually supportive. **Action** is
envisaged to help ensure that this is the case and that potential conflicts are
avoided or resolved on the basis of a coherent approach.
**Establishing trans-European networks** is **a** key **to** the better functioning **of the**
Intemal Market as well as to growth and cohesion. The Strategic Programme, as a
complement to the White Paper on growth, competitiveness, **and** **employment,**
outlines measures to promote the **convergence of interests and coordination,**
action designed to **stimulate private investment and to** ensure **technical**
interoperability, and, finally, proposals on the **early development of** **telematic**
**networks** between administrations.

**Section P - A dynamic and open external policy**

**Section D of** the programme deals with **external implications of the Intemal Market.**

**• Management of the Union's external frontier** requires action **to ensure that**
national customs services are equipped to deal with the important role **that they**
play on behalf of the Union as a whole. This is **the** aim **of the Customs 2000**
initiative which is now being finalised. In this context also, action will be taken to
combat **customs and tax fraud** as well as **trade in illegal drugs.**

**• Completion of the common commercial policy in the context of the Intemal**
**Market**  - The finalization of a common import and export regime for goods and
services vis-a-vis the rest of the world is a precondition **for an equivalent level of**
competition within the Internal Market. Several issues of relevance in this **regard**
will be addressed by the Commission in the coming years.

**IV**

**Section E - Reviewing and adapting the Strategic Programme**

**Section E** highlights the need to maintain an ongoing process of **evaluation of the**
**Strategic Programme** leading to its adaptation in the light of developments. The
Annual Report on the operation of the Intemal Market will provide an appropriate
occasion for such regular evaluation.

**Conclusions**

In its **conclusions** the Commission proposes that the Strategic Programme be
launched on the following basis:

- an endorsement by the Council of the general orientation provided in the Strategic
Programme;

- a firm undertaking by the Council to accelerate discussion on the seventeen
legislative proposals from the 1985 White Paper that are still before it, with a view
to their final adoption before the end of 1994.

##### **Introduction**

**1.** **The Intemal Market is working** **-** **but it can and must be improved in order to fulfill**
**its promise. The immediate task of the Union is to ensure that a properly-functioning**
**single market contributes to economic growth, industrial competitiveness and higher**
**employment. This Strategic Programme provides a complete view of the priority**
**actions which the Union must pursue to this end.**

**2.** **The content of the Strategic Programme has been the subject of wide-ranging**
**debate over the past six months, following the issue in June of the Commission**
**Communication** _**"Reinforcing**_ _**the**_ _**Effectiveness**_ _**of the Intemal**_ _**Marker,**_ **accompanied**
**by a Working document** _**"Towards**_ _**a**_ _**Strategic Programme for**_ _**the Intemal**_ _**Market*.**_ **All**
**the Community institutions responded to the invitation to examine and comment on**
**the working document, as well as individual Member States and a significant number**
**of industrial and other economic interests. There is consensus on the need for an**
**overall sense of direction in the management of the Internal Market.**

**3.** **The Union can be proud of the success of its Single Market Legislative**
**Programme, most of which is now in place. The evidence available to the Commission**
**suggests that goods, services and capital are moving freely within the Union, and that**
**any problems are exceptional and temporary. The one outstanding** **problem,** **the free**
**movement of people, is now the subject of new initiatives in the context of the**
**provisions of the Union Treaty.**

**4.** **But the establishment of a genuine single market is not just a matter of adopting**
**Community-level legislation within a deadline.** **It** **is a continual process of ensuring that**
**this common legal framework is applied, widely-understood, enforced and, where**
**necessary, developed in a coherent way to meet new needs. In that sense, the Union**
**is at the beginning, not at the end, of its task.**

**5.** **Ensuring that the Union area without internal frontiers becomes a practical as**
**opposed to a legal reality will be a major challenge for the years ahead. It will demand**
**further action not only at Union but even more importantly at national level. It will**
**involve a variety of policy instruments, in which additional legislation will play only a**
**minor part. This process will have to be based on dialogue between public authorities**
**and the society they serve and on partnership between the Member States and the**
**Commission. Making the most of the opportunities offered by the Intemal Market will**
**take some time; the purpose of this Strategic programme is to provide a** **"road-map"**
**which may make the journey clearer and perhaps shorter.**

**6.** **The debate which was launched with the publication of the communication and**
**working document in June showed that there is wide support for the global approach**
**outlined in the communication and working document of June 1993, and many**
**comments favoured a strengthening of the emphasis on the links between the Intemal**
**Market and other Union policies. The Strategic Programme therefore emphasises the**
**part played in ensuring the effective operation of the Intemal Market by competition**
**policy, consumer policy and policy in favour of small and** **medium-sized** **enterprises.**
**Competition policy must ensure that the freedoms established under the Internal**
**Market programme are not eroded by state aids,** **anti-competitive** **agreements or**
**mergers or the abuse of dominant positions: it also has the potential to contribute to**

**COM(93) 256 final** **of 2.6.93**

                             - 2 

the opening up the Intemal Market in areas which were not covered by the "1992"
programme. Consumer policy protects the interests of consumers and empowers
them to make the Single Market work for them, so that they benefit from **the**
improvements which flow from Internal Market completion. Policies to stimulate and
support enterprises, particularly the creation and development of **SMEs** will also
enable them to take advantage of the opportunities and to respond to the challenges
inherent in the Intemal Market.

The Programme also gives increased emphasis to other policy areas which are
closely linked with the attainment of Internal Market objectives:

    the effective **management of the** Union's **external frontiers** and progress in
relation to aspects of commercial policy are essential for individuals and
firms, both in the Union and in third countries, to reap the full benefits of the
Intemal Market, while avoiding the risks of illicit or distortive practices;

    **environment policy** and **Internal Market policy must be** integrated **so that**
the objectives of sustainable economic development and of guaranteeing **the**
"four freedoms" are met and so that potential conflicts are resolved on the
basis of a coherent approach;

    the freedoms which embody the principles of the Intemal Market must also be
exercised within a framework which gives due weight to **the** requirement **for**
**economic and** social cohesion.

7. This programme is intended to be a guide to the next steps to be taken in **order**
that the Union's ambitions for the Intemal Market are achieved and yield their full
economic benefits. It is above all an action-oriented document, which concentrates on
describing the measures that are judged to be necessary for the Internal Market in
each policy area. The action points are highlighted in the framed areas of the text

**8.** The **first part** of the programme identifies the **legislative proposals that still**
**have to** **be** **agreed** in order to establish the basic legal framework for the single
market. It includes outstanding measures from the original 1985 White Paper,
additional proposals that have been put to the Council since **then,** **new proposals that**
have just been presented concerning the free movement of people, and measures to
introduce competition into certain regulated sectors, such **as** **energy,**
telecommunications and postal services. Some proposals which the Commission
considers no longer essential for the creation of a single market have been withdrawn.

**9.** The **second part** of the programme addresses the new task of **managing the**
**Union area,** that is, making sure that Community legislation is properly and evenly
enforced and regularly evaluated so that individuals and companies can take
advantage of the Intemal Market. This is not a bureaucratic exercise - it is a necessary
condition for fair competition, for avoiding unnecessary costs resulting from inefficient
administration for business and the consumer, and for developing the confidence that
must accompany sustained economic recovery. It will require a sustained effort, at **the**
national as well as Union level, to make those concemed familiar with Community
rules and fully-equipped to apply them. It will also be necessary to avoid that national
regulations create new barriers to the operation of the single market just as the old
ones have been removed. Assistance must also be given to citizens or companies
that wish to avail themselves of their rights under the law. This part of the programme
addresses itself more to the Member States than to the Community institutions, since
this task will require the development of awareness of the reality of the Single Market
within all branches of national administrations and within society as a whole.

                             - 3 

10. The Commission draws particular attention under this heading to the need for
the provision of adequate resources both at Union and national level if the Union is to
be able to fulfil expectations concerning effective management of the Single Market.
The current resources of the Commission are a serious constraint, and its proposals
for the 1995 budget will be developed to take account of this.

11. In line with the results of the consultation procedure on the Commission's
working document, the guiding principles for the development of the single market
must be a commitment to competition, the need to take account of the broadening of
the Union's policy objectives under the Treaty on European Union and exploitation of
the full economic benefit of the single market.

The **third part** of the programme is concemed with developing **the** single **market,**
that is, defining a more dynamic view of market regulation and identifying means by
which the Union can encourage those who are active in the Single Market to make full
use of its potential. Apart from a limited number of new legislative initiatives aimed at
completing the basic framework of Community rules for the Intemal Market, other
policy instruments will be used to promote the coordinated development of transEuropean networks, the stimulation of European standards and quality policy and
compatibility between sustainable development and the objectives of the Intemal
Market Particular measures will also be taken, in line with the multiannual programme
for SMEs for the years 1993-96 which was recently adopted by the Council, to assist
smaller enterprises to adjust to a more competitive environment.

12. Taken together, this package of measures represents a "second phase" in the
development of the Single Market, in which most of the basic rules are already in
place but where additional action is still needed to give value-added to what exists.
The Commission wishes to underline that any further initiatives in this area will be
based, like the Strategic Programme itself, on the widest possible consultation of
interested parties and will take into account the principle of proportionality. The fact
that the principle of subsidiarity has been enshrined in the Treaty on European Union
is intended to see to it that decisions are taken as close as possible to the citizen, a
constant watch being kept to ensure that action taken at Community level is justified in
the light of the means available to national, regional or local authorities. The practical
effect of the Maastricht Treaty is to require the Community to demonstrate that there
is a legitimate need for each new initiative. Nevertheless, this principle cannot be a
pretext for putting into question actions for which the Commission has received a
precise and indisputable obligation to act in certain areas such as the Internal market.

The single market belongs to the citizens and enterprises of the Union and they must
have a say in its further development. The role of the Union is to limit its intervention
to what is necessary in order to allow those in the market to operate within it
effectively on a continental scale.

13. The fourth part of the programme outlines the objectives of the Union's
external policy in terms of management of the external frontier and completion of the
common commercial policy. The fifth part recalls that the Strategic Programme must
itself be dynamic and capable of adjusting to change. What follows represents the
Commission's view today of what has to be done to make the most of the Intemal
Market, but this programme will have to be renewed and adapted periodically to take
account of new developments and needs. In its future Annual Reports on the Intemal
Market, the first of which will appear shortly, the Commission intends to review
progress towards the objectives set out in this programme and will make changes to
the programme when necessary. The Strategic Programme will therefore become a
permanent means of indicating the priorities for Union action in this area.

**- 4 -**

**14.** **In its conclusions the Commission proposes that the Strategic Programme be**
**launched on the following basis:**

**- an endorsement by the Council of the general orientation provided in the**
**Strategic Programme;**

**- a firm undertaking by the Council to accelerate discussion on the seventeen**
**legislative proposals from the** **1985** **White Paper that are still before it, with a**
**view to their** **final** **adoption before the end of** **1994.**

**- 5 -**

**Section A - Completion of the basic legal framework**

**The date of 1 January** **1993** **marked the start of the Single Market. The objective set**
**out in Article 7 A of the Treaty has largely been achieved, except for the removal of**
**identity controls on persons at the internal borders. Ninety-five per cent of the basic**
**legislative programme foreseen in the Commission's 1985 White Paper Programme**
**has been adopted by the Council. Furthermore, the Council has adopted a wide range**
**of additional measures to complement the original 1985 Programme and others are**
**under discussion.**

**I.** **Outstanding White Paper Measures**

**The White Paper requested decisions in all areas of economic activity. The basic**
**legislation has been adopted concerning in particular the removal of veterinary and**
**phytosanitary controls, public procurement, excise duties, removal of technical**
**barriers, freedom of movement of capital, financial and other services and direct and**
**indirect taxation. The recent adoption of the proposal on the liberalization of cabotage**
**for the road transport of goods as from 1 July** **1998** **was a significant break through for**
**the free provision of services.**

**One of the justifications of the Intemal Market is to enable enterprises to allocate**
**resources more efficiently. Increased competition in a larger market will lead to**
**corporate restructuring and the restructuring of business strategies. Consequently, the**
**proposals on company law, company taxation and intellectual and industrial property**
**formed an integral part of the Programme. Therefore, the priority is now for the**
**Council to adopt the remaining seventeen White Paper proposals.**

**•** **The incomplete coordination of** **national** **company taw bat so far** **been** **an obstacle** **for** **the mobility of**
**companies 'within the internal** **Market***

**•** **important decisions** **on the structure** **of** **publie** **tfmtted** **companies** **and the crossborder** **merger of** **such**
**companies nave been blocked pending the outcome of** **the** **discussion on the** **European** **Company**
**statute.**

**» Also stifi before the Council** **are** **two proposals to** **eliminate trouble** **taxation»** **The** **first** **proposal** **aims** **at**
**the** **abolition** **of** **wtthotding taxes on** **interest** **and royalty payments.made between** **subsidiaries and**
**parent companies of different Member** **States.** **The** **second deats with the** **possibility for enterprises to**
**take** **into** **account** **losses Incurred** **by** **their** **permanent establishments** **and subslojarîes in** **other Member**
**States.** **Apart from these proposals the Arbitration** **Convention*** **on the establishment of an**
**arbitration procedure tor** **Intra** **Union transfer pricing cases»** **Is** **awaiting** **ratification** **by four Member**
**States***

***** **In** **the** **field** **of Intellectual** **and** **Industrial property, decisions are outstanding concerning the legal**
**protection of** **biotechnlcai** **Inventions and plant breeders lights. With regard to the** **Regulation** **on the**
**Community trade mark, on** **28** **October** **1993** **the** **European** **Council** **paved** **the way for a solution with**
**its** **decision to** **establish the** **Community Trade** **Mark** **Office** **In** **Spain.**

**(3)**

**- 6 -**

**II.** **Free movement of persons**

**The delays in the adoption of the few outstanding White Paper measures have not**
**affected the achievement of the objective of the abolition of intemal border controls on**
**goods,** **services and capital. These controls, including customs controls on persons**
**disappeared on 1 January 1993. But the continuation of identity controls on persons**
**has raised broad** **criticism** **from the public and the European Parliament.**

**Having noted that the objective of the free movement of people had not been fully**
**achieved by the date of** **1** **January** **1993,** **the Commission redoubled its efforts in order**
**to achieve this objective, without further delay, which constitutes an essential element**
**of the building of Europe.**

**In** **order to achieve this objective, it approved for** **1993** **a phased approach:**

**• in a first phase, the Commission would continue to take political initiatives and**
**exercise constant pressure so that the progress announced by the Member States**
**for** **1993** **should effectively be realised;**

**• in a second phase, the Commission would take stock of the initiatives undertaken**
**and decide, without relaxing its political pressure, on possible further measures to**
**take,** **particularly of a legislative nature.**

**Two recent developments can facilitate the action which the Commission intends to**
**take in the second phase of its strategy:**

**• the entry into force of the Treaty on European Union offers new possibilities to the**
**Commission in the context of Title VI of this Treaty in areas until now covered**
**simply by inter-governmental cooperation;**

**• the countries of the Schengen Group have reaffirmed their commitment to**
**achieving between them the free movement of persons by 1 February 1994;**
**although this result once achieved, will not be sufficient to result in the free**
**movement of persons over the whole of the Union territory, it will constitute a**
**considerable step forward.**

**Taken together these two developments will provide a springboard from which the**
**Commission will be able to increase the pressure through a combination of initiatives,**
**both in the Community domain and in in the context of the Third Pillar of the Treaty on**
**European Union.**

**The Commission has** **adopted a** **proposal** **for a Council** **Decision** **establishing the** **Convention regarding**
**the control** **of** **persons on crossing the** **externat** **frontière** **of** **l^e** **Union,** **together** **with a proposal for a**
**Regulation based on** **Article 100 C determining the countries** **whose,** **nationals must carry** **# via * on**
**crossing** **the** **external frontiers** **of** **the Member** **States,** **These proposals** **will** **be very** **soon followed** **by »**
**proposal on the basis** **of** **Article 100 C {3} aimed** **at** **establishing a uniform model** **of** **«Isa.**
**These** **measures,** **Identified as essential from the point** **of** **view** **of** **the abotftion** **of border** **controls,** **should**
**be** _**se$ft**_ **as part of a general and** **coherent approach** **to the Implementation** **of** **Articte** **7A** **whJoh*** **to** **order to**
**be pursued» calls for the presentation** **at** **the appropriate moment** **of** **other** **proposals.**

**I.** **Other measures before the Council**

**Although the legislative activities of the Community will substantially decrease after**
**the completion of the White Paper programme, the dynamic process of establishing**

**- 7 -**

**the Internal Market still requires a certain amount of legislative measures to cover**
**present developments.**

**In** **the field of Indirect** **taxation,** **measures need to be taken** **relating** **to VAT harmonization provisions**
**on** **second-hand** **goods, works of** **art,** **antiques and collectors** **items,** **gold transactions and transport of**
**passengers;**
**The Community has presented proposals on prohibiting the release for free circulation, export or**
**transit of counterfeit and pirated goods and measures combating fraud In the area of commercial**
**and agricultural trade** **to** **avoid the removal of frontier** **checks** **resulting in fraud or in difficulties for**

**consumers.**

**The objective of the proposal for a Council Regulation on the export of certain** **duaJ-use goods** **is to**
**create the conditions under which** **intrs-Unlon** **controls could be** **eliminated,** **by ensuring that all**
**Member States apply effective export** **controls,** **based on common** **standards.** **Discussions on** **this**
**proposal are being pursued** **m** **the Council.**

**Although the harmonization of technical rules,** **foreseen In** **the White** _**P*p«r,**_ **has been completed,**
**covering entire sectors such as agricultural and** **fbotf** **products,** **pbarmeceuticel** **products and**
**passenger cars,** **in** **this field there** **Is** **a certain tendency to create new barriers to trade In the form of**
**new national** **measures,** **A common position has** _**been**_ **reached on a proposal fo extend the scope of**
**the notification procedure for new technical Regulations (Directive** **83/189/EEC) to** **facilitate the**
**monitoring of developments at national level. Other proposals concern the outstanding technical**
**harmonization of** **lifts,** **pleasure** **boats,** **pressure** **equipment,** **motor vehicles other than passenger cars,**
**precious metals and food law,**

**The approximation of** **Intellectual and** **industrial property provisions** **Is** **an important** **contribubon** **for**
**the effective functioning of the Single Market For** **Instance,** **the Directive on the term of copyright**
**protection has recently been** **adopted,** **Apart from the** **stUI** **outstanding ratification of the Agreement**
**relating to Community** **Patents,** **other Important proposals are currently under** **discussion»** **Proposais**
**concern the legal protection of data bases or the recently presented** **proposais** **on a Regulation** **on**
**legal protection of design** **and industrial** **models and a Directive on the approximation of national**
**design protection laws which aims** **at** **a Internal Market for design products.**

**In** **the area of the protection of personal** **data,** **the Commission** **Is heprçg.for Jhe** **adoption of** **a**
**common position on the draft framework** **Dfrecbve** **In** **1094,** **Tne** **adoption** **pf^is** **Direct***** **is a** **ptforfly,**
**In view** **of the increase** **In** **the Hows of personal data ft» the private and** **jrçjbîic** **sector»,** **Vfhlch Is** **•**
**consequence of the effective exercise of the freedoms of the internal Market and the abolition of**
**Internal** **borders.**

**The opening up of financial** **markets** **was one of the** **most** **significant achievements of the Single**
**Market, With regard to a more effective protection of consumers a proposal amending the ftnandal**
**Services Directives, has been made to reinforce the prudential** **supervision** **of credit institutions,**
**non-life** **insurance,** **life insurance and investment** **firms.** **The same objective applies to** **the** **proposai**
**modifying the** **1985** **Directive on undertakings for** **collective** **investments** **In** **transferable securities**
**(UCÎTS).** **Funds investing in money market instruments can be included in the scope** **Of** **this Directive.**
**A common position was** **recently** **adopted on a bank deposit guarantee** **scheme,** **which** **Is a** **parallel**
**instrument to the recently presented Investor compensation** **schemes»** **designed to underpin the**
**European passport** **approach,** **Various proposals envisage measures to facilitate financial operations.**
**The Directive relating to funds held by institutions for retirement provision alms at ensuring the**
**freedom of** **mangement** **and investment of pension fund assets. The modification to the Directive on**
**listing prospectuses** **Is** **designed to enhance the ease with which large companies can be traded on**
**several European stock exchanges.**

**in the energy** **sector,** **just as** _**\n**_ **any other** **sector,** **companies,** **products,** **investments and services** _**V9**_
**subject to all the Treaty provisions.** **Nevertheless,** **given the particular nature of the energy related**
**products, the regional and local constraints and the necessity to preserve the missions of public**
**service** **attributed** **to the relevant utilities, a gradual approach has been followed in order fo introduce**
**transparency** **in** **the functioning of the market and to proceed towards the adaptation of the functioning**
**rules of gas and electricity grids to the Treaty principles and** **provisions.**
**The main elements of transparency have been already introduced with regard to both** **investments** **and**
**prices.** **These elements provide ad the operators with an** **instrument** **of information and market**
**monitoring***
**A draft Directive on granting of hydrocarbon extraction licences** **Is** **under discussion within the Council**
**and the Parliament. This Directive would represent an additional** **instrument** **and supplement the**
**existing Directive on public procurement**

**- 8 -**

**in order to** **strengthen** **the compatibility of the** **gas and** **electricity** **secte»,** **as well es** **to facilitate** **intra-**
**Union** **trade** **and exchanges taking into** **account** **the** **specificities of** **these** **sectors,** **a first** _**^Ibap**_ **has** **been**
**taken with the** **two** **Directives** **on** **the transit** **of** **electricity** **and** **the transit of** **natural** **gas.**
**The proposals for the next** **sf epv** **which aims to** **introduce,** **among other** **things,** **the concept of** **third**
**party** **access,** **are under** **discussion within the Council and the Parliament**

**IV. Introducing competition into regulated sectors**

**The Intemal Market is far from being a reality in certain sectors where national**
**legislation and the granting of exclusive rights (monopolies) deny access to the**
**market and prevent direct competition. The definition of an adequate legal framework**
**which takes into account the requirements of public interest and the objective of**
**economic and social cohesion is therefore a precondition for the introduction of**
**competition into sectors which are of primordial importance for consumers and for the**
**competitiveness of European industry.**

**In** **a number of sectors, the Commission and the Member States are considering how**
**to achieve the liberalization of certain regulated sectors in ways which promote intra-**
**Union competition while ensuring that public policy objectives (e.g** **"universal $60/106")**
**are fully realised. Different approaches have been proposed, with varying degrees of**
**success in the fields of energy, telecommunications, and postal services. Further**
**action is being prepared in the field of air transport.**

**In the** **energy** **sector,** **the** **Commission** **has proposed two Directives, based on articles** **$7(2$,** **60** **and**
**100** **A.** **establishing common rules** **In** **the gas and electricity** **sectors*.** **In** **the** **meanbme,** **lite**
**Commission will persevere** **with** **article** **169** **Infringement proceedings «gainst Member** **States which**
**Impose restrictions** **on** **the Import and export of** **gas** **and** **electricity.** **It wll** **also** **continue** **to press** **for**
**harmonization of licensing rules for** **prospecting*** **exploration,** **and extraction of natural gas and oil**
**where a** **common** **position** **Is expected fo be adopted** **by the** **Council In the** **near** **future.**

**In** **telecommunications,** **the Council has endorsed the** **Commission's proposal** **to liberalise**
**competition In** **voice telephony by** **1** **January** **1Ô9Ô***

**In** **June** **1982.** **the Commission adopted a green paper launching** **a** **consultation process on** **I N**
**development of a Single Market in postal** **«ervlces** **[4]** **.** **In** **the** **Bght** **of** **findings** **from** **this** **consultation**
**process,** **thë Commission** **may envisage a number of options for** **barrnon^ation** **and liberalization**
**concerning among others express** **deliveries,** **mailing of** **publications,** **mail advertising and** **cross-**
**border** **maif^**

**In** **the field of** **air transport I N** **Commission is preparing a proposal for the** **liberalisation** **of** **ground**
**Nnoling facilities** **at** **Union** **airports.**

**It** **should be stressed that adoption of the legal framework is a necessary, but not a**
**sufficient condition for the liberalization of intra-Union trade and competition in these**
**sectors. The true functioning of an intemal market requires that these rules be**
**stringently** **upheld in such a way that economic operators have sufficient confidence in**
**the legal framework as to take full commercial advantage of it.**

**OJC 65** **of 14.03.92**

**Council Resolution of** **22.07.93,** **OJ C** **213 of** **06.08.93**

**COM (91)** **476 final**

**- 9 -**

**V.** **Measures to be withdrawn**

**Following on the discussion at the European Councils of Lisbon, Birmingham and**
**Edinburgh, the Commission has proceeded to examine the entire body of Community**
**legislation in order to give greater effect to the principle of subsidiarity. The**
**conclusions of this review process have been presented to the European Council held**
**at Brussels in December** **1993.** **This review is designed to identify items of Community**
**legislation which may be usefully rescinded, overhauled or simplified, either because**
**the justification for those measures has been found wanting (necessity), because their**
**effectiveness is open to question (criterion of effectiveness), or because the proposed**
**measures are excessively restrictive (criterion of proportionality). The Commission has**
**now reached conclusions concerning the withdrawal of a number of legislative**
**measures, including several relating to the Intemal Market field, as indicated in its**
**Report to the European Council on the adaptation of Community legislation to the**
**subsidiarity principle (COM (93) 545,** **24.11.1993).**

10
###### **Section B - Managing the Single Market**

The Single Market Programme was designed to put into place a legislative framework
for a frontier-free Union. This phase of major legislative effort has now ended, and the
emphasis must now be placed on ensuring that the rules of the Single Market operate
effectively in practice. This means that the legislation adopted by the Community must
be correctly transposed into national law, that the rules, once in place, must be strictly
and evenly enforced, and that there must be effective means of redress for natural
and legal persons adversely affected by breaches of Intemal Market rules.

Ensuring effective **transposition** of Community law is primarily the task of the
Member States. While about 85% of the necessary measures have been **adopted, the**
Member States must speed up the process of completing the process for the
measures which have entered into force. It is clear that people are looking to the
Commission to ensure not only that this job is done, but that it is done property. The
Commission can contribute to a homogeneous interpretation of Community legislation.
The Commission is also responsible for ensuring that the Member States fulfil their
obligations with respect to transposition, and for a _posteriori_ verification of the
conformity of the national legislation, a major task for which the Commission does not
at present have adequate resources. Where Member States fail in their
responsibilities to ensure transposition or where transposition is incomplete or
incorrect, the Commission will not hesitate to take the appropriate action under Article
169 of the Treaty. This may now include recourse to the provisions of Article 171 of
the Treaty regarding the imposition of sanctions.

**Enforcement** is normally the responsibility of the Member State authorities, the
Commission being responsible for ensuring that each Member State has provided for
enforcement and that the system in place is adequate to the task. In a frontier-free
Union, however, enforcement must be carried out on the basis of close co-operation
and mutual assistance between the Member State authorities and between them and
the Commission. A major effort is needed to ensure that this happens across the
board in all areas of the Intemal Market.

In a single market, individuals and firms need to know that there are adequate means
of **redress** available if they need them. The Commission and the Member States must
act, within their respective areas of competence, to help ensure that this is the case.
The provisions in the Treaty on European Union on judicial co-operation provide a
valuable framework in this regard.

It is an essential part of managing the Intemal Market to evaluate the functioning of
the rules, both in terms of practical performance and broader business and economic
impact.

**I.** **Ensuring conformity and transparency in the transposition of**
**Community Directives into national law**

Community legislation governing the operation of the Internal Market is largely in the
form of Directives, an instrument which requires each Member State to adapt its
national legislation by enacting "transposition" measures to give effect to the Directive.
This has the advantage of allowing a degree of flexibility to Member States as to the

**- 1 1 -**

**form** **of the legislation, taking account of their different legislative techniques.**
**However, it also imposes the need for the Commission to ensure that the**
**transposition measures are adopted and that they really correspond to the**
**requirements of the Directives.**

**This task is a demanding and complex one due to the volume of legislation involved**
**(for example, over 300 Directives in the area of agriculture), the fact that many**
**Member States transpose the requirements of a single Directive by adopting several**
**pieces of national legislation (sometimes ten or more) and the technical complexity of**
**the subject matter in many areas.**

**The Commission will continue to use a combination of methods to ensure that**
**transposition legislation is complete and in conformity with Community Directives.**
**These include:**

**• comprehensive monitoring of texts bv Commission staff: this approach is adequate**
**only in areas to which a relatively small body of Community legislation applies; in**
**other areas, existing resources do not permit the Commission to complete the task**
**by using this approach;**

**• use of external consultants: to overcome the problem of limited staff resources, the**
**Commission has recourse to outside consultants to examine transposition**
**legislation in some sectors; experience shows that this approach has limitations;**

**• multilateral and bilateral meetings with Member State officials: discussions with**
**Member State representatives can assist in the interpretation of Directives and in**
**identifying areas of difficulty; regular bilateral meetings are also held for the specific**
**purpose of discussing transposition (see below);**

**• direct contact with economic operators in the sectors concemed: the various**
**networks through which the Commission maintains contact with economic**
**operators in the different sectors can be a useful source of information on**
**problems with transposition measures;**

**• complaints as a means of identifying problem areas: this** **"passive"** **approach**
**depends on individuals and businesses being aware of their rights under**
**Community law and drawing attention to the problems they encounter with the**
**legislation of Member States.**

**A preliminary review of the methods used and the problems encountered in**
**monitoring transposition in a number of areas of Intemal Market legislation is given in**
**Annex 1.** **In** **many sectors, the resources available are clearly insufficient The scale**
**of the problem is such that it merits a more detailed examination in order to identify**
**the most efficient approaches to the task, the precise resource requirements, and**
**possible ways of reducing the need for transposition measures.**

**The Member States have the main responsibility for making their transposition**
**measures more widely known; however the Commission can assist in making them**
**more visible and actions in this respect are indicated below.**

**1.** **Monitoring** **the** **conformity of transposition measures**
**The Commission oonslders that it is necessary to examine further** **the** **most** **cost-effective** **way of**
**ensuring the conformity** **of** **transposition** **In** **view of** **the** **resource problems Identified above and in**
**Annex** **1.** **enlargement** **of** **the Union wîtl Inevitably accentuate the probtemsln this regard both In terms of**
**the volume of legislation and the number of** **languages,** **The moat effective ways of organizing**
**partnership with the** **Member** **States with regard to this task should be** **reviewed*** **This examination should**
**be linked with** **the examination of** **an Issue on which there has proved** **to be a** **wide** **diversity of** **views,**
**namely»** **the possibilities for** **using regulations rather than Directives In** **certain** **circumstances,** **thereby**
**limiting the need** **for** **transposition.** **A communication** **on these subjects wilt be prepared for** **September**
**1994.**

**- 1 2 -**

**ln order both to assist the Commission** **In Its** **task of monitoring the quality of** **transposition** **and to**
**Improve** **transparency, future** **Internal Market** **Directives** **Will** **continue to** **require** **Member States to refer** **In**
**their transposition legislation** **to** **the Community Directives to which they relate,** **and,** **In** **addition,** **to**
**provide transposition** **table*** **Showing** **the correspondence between the Community and national**
**measures. This procedure has proved** **Its** **value, for example in the financial services** **sector.** **Member**
**States** **witt** **also be encouraged to provide transposition tables** **for** **existing legislation.**

**In** **those areas of** **Internal Market** **legislation** **In which** **the Commission relies** **heavtty on** **complaint»** **ae** **a**
**means of detecting** **problems,** **steps** **villi be taken to make economic** **operators** **and** **the relevant networks**
**more aware of the methods for drawing attention to difficulties they may encounter, If necessary by**
**means of formal** **complaints.**
**The regular** **bilateral** **meetings which are already held** **with** **some Member States to discuss**
**transposition** **will** **be** **widened** **to** **all** **Member States and emphasis on the conformity of transposition**
**measures** **will** **be increased.**

**2*** **Proyjdinq access to** **up^o^afeMftrffî^non,** **national** **trar»»P0f^Q^** **N W f t f t**
**Firms** **or** **their** **advisers** **need to** **know where** **to look for Information on immunity legislationend** **national**
**transposition** **measures** **relevant to** **tiieif** **sector.** **With tfcfs in** **mind,**
_*****_ **ail** **existing sources** **which give** **references to** **these,** **or where** **their full** **text** **can be** **found,** **both** **within** **the**
**Member States** **and** **at Community** **level,** **will** **Delisted;**

**• promotion of** **printed** **material and databases produced** **by the** **Commission** **and the** **Office for Official**
**Publications** **which provide refefencet will be** **stepped** **tip;**
**« « survey** **will** **be** **mede** **of user requirements** **in this** **regard,** **end,** **depending** **on the** **results of** **this** **survey**
**the** **existing** **INFO** **$*** **database** **(and/or the booklets denVed from it) will** **be adapted by end** **1*84;**
**« the** **CEIHX** **database,** **managed by** **the** **Office** **for** **Official Publication*, will be** **adapted so** **that** **It** **can be**
**searched** **by** **a more** **user-friendly,** **form-filling** **technique,** **and** **Its** **coverage of references** **to** **national**
**transposition** **measures,** **including** **those concerning the Internal** **Market,** **wSH** **be** **brought** **up to date**
**in** **1994;**

*** a** **tendering** **procedure** **Is In** **progress** **for the** **creation of** **an entirety** **new version of** **CELEX** **by the** _**^nà**_
**of** **1995;**

**• the Commission** **will** **examine,** **in** **conjunction** **with Member** **States** **end with private** **publishers,** **cost-**
**effective ways of making the** **references** **or texts of national transposition measures more**
**readily available;**

**II.** **Ensuring quality In enforcement**

**The main instrument for** **ensuring** **the effective and even-handed enforcement of**
**Community law throughout the Union must be an adequate and properly functioning**
**system of cooperation between the authorities in each Member State responsible for**
**enforcement and between them and the Commission. This should result in the ready**
**resolution of many problems, but, where the Commission considers that a Member**
**State has failed in its responsibilities and takes action against the Member State**
**concerned, it is appropriate to maintain a channel for dialogue, so that, even at this**
**stage, solutions are reached on the basis of mutual agreement whenever possible.**
**Finally, mechanisms are required to ensure that new barriers are not created, for**
**example through legislative measures at national level which affect the operation of**
**the Intemal Market.**

**1.** **Administrative cooperation**

**The removal of barriers between Member States gives rise to a new situation in which**
**Community law, and the way in which it is applied in other Member States, takes on**
**greater importance for people and business in the Union. They need to feel confident**
**that administration of the law is as reliable and effective as it is for their own national**

**- 1 3 -**

**Regulations.** **For public expectations in this regard to be fulfilled, it is essential that the**
**authorities responsible for enforcing Internal Market measures maintain a high degree**
**of cooperation and that they keep one another informed. This is particularly true**
**where potentially serious consumer problems impose an urgent response, but should**
**not be limited to cases where** **consumers'** **health is at risk. Naturally, enforcement falls**
**within the competence of the Member States, and in many cases such cooperation is**
**already a matter of course. In some sectors, such as animal and plant health controls,**
**customs and taxation, and social security, it is already coordinated to a considerable**
**degree at Community level, but in others enforcement is very uneven from one State**
**to another. Existing** **co-operation,** **such as that which has existed in the field of social**
**security since 1959, needs to be supported by specific measures, particularly the**
**development** **of** **a** **communication** **and** **data-exchange** **network** **between**
**administrations.**

**1.** **A framework for administrative cooperation**

**With this** **in** **mind,** **the** **Commission** **Is** **transmitting** **a** **parallel Communication** **to the** **Council,** **for its**
**consideration** **in** **December** **1993,** **seeking** **to** **initiate** **a** **work programme** **to** **facilitate administrative**
**cooperation,** **based on:**
**a)** **an** **endorsement** **by the Council** **of a** **number** **of** **guiding** **principles** **for cooperation,**

**b)** **a** **commitment** **by the** **Commission** **to** **carry out** **a** **survey** **of** **existing cooperation** **In** **Internat Market**
**sectors» In** **particular** **In** **those areas where Community legislation does not already provide details** **on**
**the enforcement** **of** **Its** **guiding** **principles,** **with the** **aim** **of setting up or strengthening cooperation where**

**necessary;**

**c) supportive measures to be provided** **by** **the Commission**
**in** **another Communication,** **to** **appear by** **the end** **of** **1983,** **the Commission** **examines** **the rapid response**
**systems which have been** **set up to** **handle urgent cases** **arising** **out of** **the operation** **of** **the** **Internat**
**Market and recommends some measures** **for tightening** **up procedures and further** **coordination.,**
**The Commission** **is** **also preparing** **a** **Communication** **on** **coopération** **between** **the** **Commission** **and**
**national authorities** **in charge of the appllcatkm** **of** **competition** **rules.**

**In** **view of the considerable success** **of** **package** **meetings,** **en** **Instrument** **of** **partnership between** **the**
**Commission and the Member States which** **Is** **designed fo arrive at** **non-contentious solutions** **to existing**
**litigation concerning national compliance with Community** **law, the** **Commission** **will,** **as** **appropriate,**
**extend** **them f** **o all Member States and** **Increase** **their** **frequency**

**2.** **Support for administrative** **coopération**

**The** **Commission,** **within the limits** **of** **its** **competence and** **Its** **resources*** **wiH** **undertake** _**m**_ **programme** **of**
**supportive measures, which will depend** **on** **the sector** **concerned,** **but** **will Include;**

**a)** **the development** **of a** **communication and data exchange network for Union administrations**
**The growing need for administrative** **co-operation** **requires the establishment of an efficient reliable** _**m<$**_
**useMriendly** **system** **of** **communication** **and** **data exchange between administrations,** **In** **particular**
**electronic** **mail.** **Electronic mal)** **on** **the basis** **of** **the X400** **series** **of** **standards can provide the capabilities**
**required** **for a** **large number** **of** **different types** **of** **Information exchange, under** **the** **condition** **diet** **the**
**components of such** **a** **network** **all** **comply** **with** **the same interoperability** **requirements.** **Such** _**m**_ **electronic**
**mail network can** **only** **be considered genuinely operational** **If a** **sufficient number** **of** **systems** **is** **connected**
**to** **and** **interconnected** **via an** **operational electronic** **mafl** **service ensuring communications** **with** **all**
**administrations concerned. Administrative** **co-operation will** **only benefit ftom** **this** **communication facility**
**If It is** **generally available;** **It** **must reach** **a** **certain critical mass** **of** **compatible end-user systems** **and**
**corresponding network facilities. What** **is** **called** **for Is**
**-** **an accelerated and** **wide-ranging** **Introduction of an** **e-mail** **network** **(EUROMÀII),**
**«*** **combined with** **a** **high degree of** **co-ordination** **between the thirteen** **administrations** **Involved**
**-** **a** **series of flanking measures** **In** **order to facilitate the operational use and further development of the**
**network.**

**The Commission proposes that this initiative to** **be** **taken by Union public authorities quickly** **in** **order** **to**
**achieve with minimum delay** **a** **priority objective** **-** **the effective management** **of** **the intemal Market** **-while**
**at** **the** **same time contributing directly** **to** **reduced costs for business** **and the** **citizen.** **To** **this effect,** **the**
**Commission aims** **for**

**(4)**

**-14-**

**-** **an early decision by the** **Council,** **to adopt** **a** **single technology** **(X400)** **as the basis for electronic mail in**
**all administrations concerned with the management** **of** **the Single Market and** **to lay** **down conditions**
**for coordinated implementation and Community financing;**
**-** **the** **progressive** **Installation** **of** **the necessary systems by the thirteen administrations** **concerned»** **le.**
**both at Community and national level,** **In** **the departments** **Involved In** **the management** **of** **the internal**
**Market** **and the** **decision-making** **process** **of the** **Union,** **on the** **basis** **of the** **commonly agreed**
**interoperability** **requirements»** **and their** **interconnection with** **the purpose** **of** **establishing** **an** **electronic**
**mall** **service,** **a** **process which should be completed by** **the** **end of** **1996;**
**~** **the** **establishment** **of** **mechanisms** **for** **Community financial support** **In** **particular** **via** **TNA/IDA,** **for**
**implementation** **of** **EUROMAIL** **on the** **basis** **of** **commonly agreed principles** **and** **transparent**
**procedures;**
**-** **a** **series** **of** **flanking measures related** **to the** **operational** **use** **and** **further development** **of** **the**
**EUROMAIL** **network,** **such as** **a** **planning process to provide** **a** **comprehensive** **view** **of needs, common**
**security rules** **and** **procedures;** **harmonised** **data protection** **rules:** **information** **exchange** **on**
**administrative** **procedures.**
**During** **the** **survey** **on** **administrative** **co-operation** **particular attention** **will** **be** **given** **io the** **needs** **of** **the**
**administrations io exchange** **information** **in order to identify additional** **demand,** **bottle-necks end** **missing**
**networks,** **as** **well** **as** **priorities** **for** **implementation.** **The** **results** **of the** **survey** **w $** **be** **used** **Within** **the**
**proposed** **IDA** **programme** **(Interchange** **of** **Data between Administrations)** **to** **support** **the** **coordinated**
**implementation** **of** **projects** **of** **common** **Interest** **and to** **ensure** **Interoperability** **between networks** **and**
**network** **components.**

**Other measures**

**b)the** **development** **of** **interpretative^** **guide»** **to** **legislation** **and the** **pubficaHon** **of** **interpretative**
**communications by the** **Commission,** **to assist** **with consistent** **enforcement such as for** **example;**

**•**
**Interpretative guides**

**- in the** **public procurement** **sector,** **interpretative guides** **1er** **supplies, works and** **services** **(Including**
**water,** **transport, energy and** **teiecommunications)** **and** **a** **guide,** **for** **each Member** **state,** **on** **the national**
**rules applicable to public procurement;**

_*****_ **Interpretative** **communications**
**-** **revision** **of** **interpretative communications on parallel importe** **of** **pharmaceutical products and** **on**
**procedures** **tor** **the** **reception** **and** **registration** **of** **motor vehicles** **(19S4);**
**~** **adoption** **of** **interpretative communications** **on** **sectors where** **examination** **of** **the situation** **in** **Member**
**States shows** **the** **need** **to** **ensure the freedom** **of** **movement quality** **labels,** **faire** **s/Ht** **exhibition*,**
**personal importations** **of** **medicines,** **distribution** **of** **newspapers** **and** **magazines,** **and** **certain**
**forms** **of** **sales** **promotion** **(1994-95);**
**-** **adoption** **of** _**an**_ **interpretative communication** **on the** **application** **of the** **principle** **of** **mutual**
**recognition** **to** **trade in** **Industrial** **products.**
**Such guides and communications** **wiii** **of** **course** **be of assistance not only to enforcement** **authorities** **but**
**also** **to** **the** **economic operators concerned.**
**c) pursuit of the existing schemes for** **exchangee** **of** **officials between the Member** **States,** **such** **as thé**
**KAROLUS** **programme** **and** **the** **MATTHAEUS** **programme for** **customs** **officials;**

**d)** **the** **organization of ad hoc meetings» seminars and conferences on enforcement issues;**

**e)** **the** **collection, translation and circulation** **of** **information** **on** **National** **enforcement structures** **and**
**practice:**

**f)** **On the basis** **of** **the sectoral review referred to under 1b) above, evaluation** **of** **the possible need** **for**
**Community aid to strengthen administrative infrastructures.**

**In** **areas where cooperation based** **on** **Community Directives** **Is** **Just starting, such** **as** **scientific**
**cooperation In** **the** **area** **of** **official** **control** **of** **foodstuffs,** **adequate** **means should** **be** **provided** **in** **order** **to**
**ensure the effectiveness of this cooperation.**

**In** **areas where cooperation** **Is** **already** **strong,** **It** **can be expected that existing structures** **wH(** **continue** **as**
**before,** **or** **be further** **developed,** **as** **In** **the recent proposal for customs** _**and**_ **agriculture** **[5]** **,**

Amended proposal for a Council Regulation (EEC) on mutual assistance between the administrative authorities of **the**
Member States and cooperation between the latter and the Commission to ensure the correct application of **the law** on
customs or agricultural matters - COM(93) 350 final, 1.9.93

**- 1 5 -**

**2.** **Preventing the emergence of new barriers**

**There would be little point in implementing the Single Market programme to eliminate**
**obstacles to free movement if this freedom were allowed to be eroded through**
**piecemeal legislative change by Member States.**

**The Commission wishes to underline that Member States should examine whether**
**intended national legislation may unduly put a risk the free circulation of goods,**
**persons, services and capital as provided for under Article 7 A.**

**While the Commission intends to have due regard to the principle of proportionality in**
**respect of future Community legislation for the operation of the Intemal Market, it is**
**also up to the Member States to exercise restraint in the development of national**
**legislation, the adverse effects of which on the operation of the single market may be**
**disproportionate to the benefits at national level.**

**The potential negative impact of national regulatory activities should not be**
**underestimated in areas where, in keeping with the principle of subsidiarity, the**
**Community intends to develop common actions based on the use of voluntary and**
**consensual instruments (standardization,** **intra-professional** **agreements etc.).**

**A notable example of an instrument which enables the Union to avoid the introduction**
**of new barriers by means of a procedure which ensures transparency is Directive**
**83/189/EEC** **which requires the notification of legislation or standards which could**
**have implications for the free movement of goods. A proposal to amend the directive**
**in order to fill gaps in its coverage has reached a common position in the Council. As**
**regards financial services, notification requirements for cases of refusal of mutual**
**recognition of credit institutions, insurance undertakings and investment firms, (and**
**also for cases where sanctions are applied) are provided for in the relevant**
**Directives** **[6]** **. Member States must inform the Commission of the cases in which they**
**refuse to allow institutions to set up branch establishments in another Member State,**
**and the Commission reports every two years.**

**The actions described below are designed to extend such procedures in the interests**
**of the proper operation of the Intemal Market.**

**1.** **Mutual information on national rules derogating from the princlpfe of the free movement of**
**goods**
**Now that we have** **a single market** **in which** **priority** **is** **to be** **given to mutual recognition in cases where**
**national** **rules have not been** **harmonized,** **steps must be taken io** **ensure that** **where** **a Member** **State,** **tn**
**order to satisfy a mandatory requirement or** **one** **of** **the grounds** **specified in Article 36 of the** **Treaty***
**makes en exception to the principle** **of** **the acceptance of goods coming from other Member** **States,** **this Is**
**immediately brought to the attention** **of** **[ k]** **the Commission and** **the** **other Member** **States.**
**Only transparency** **can enable** **barriers** **to the free movement** **of goods to be dealt** **with** **swiftly**

**- either,** **and** **preferably** **on a** **voluntary** **basis between the Member States** **concemed,**

**-**
**or, if** **necessary*** **at Community level before such problems produce all their adverse effects on**
**businesses*** **consumers** **and,** **more** **generally,** **Union** **citizens.**
**Following** **its communication to the Council and Pariiament on** **management of** **the mutual recognition** **of**
**national rules after** **1092,** **the Commission** **will** **propose** **before the** _**mi**_ **of** **1383** **the establishment of a**
**Simple** **procedure for the exchange of information between Member State» and** **with** **the**
**Commission that will enable the Community to monitor the mutual recognition of national**
**provisions** **Which have not been harmonized at Community** **level.**

**Directive** **89/646/EEC,** **Article** **21 directive** **92/49/EEC,** **Article** **40;** **Directive** **93/22/EEC,** **Article 19**

**- 1 6 -**

**3.** **Notification procedures in the field of services**
**The Commission is considering whether,** **in** **the** **non-harmonized** **area, more formal notification**
**procedures for new legislation affecting services may be** **necessary,** **at least** **in** **some** **sectors.** **The**
**first example** **will** **be** **In** **the Green Paper which is being** **prepared** **on Commercial Communication** **In** **the**
**internal Market which will envisage the introduction of a system of prior notification of draft national**
**législation in this** **area.**

**3.** **Sanctions against infringements** **by** **Member States**

**The new Article** **171** **of the Treaty allows the Commission to bring the case of a**
**Member State which has failed to comply with a ruling of the Court of Justice before**
**the Court to specify the amount of the lump sum to be paid by the Member State**
**concemed. If the Court finds that the Member State has indeed failed to comply with**
**its** **judgement, it may impose a lump sum or penalty payment.**

**It** **is necessary for the Commission to** **clarify** **the ways in which it will make use this**
**new power, as well as certain existing powers.**

**The** **Commission,** **in** **the** **light** **of** **whatever** **cases** **arise,** **win** **consider** **what line to** **take** **and what** **criteria**
**it** **intends to** **apply In** **the context of Article 171 of the** **Treaty,**

**III.** **Redress: Access to justice and judicial cooperation**

**Management of the Union area implies that national and Community institutions have**
**the necessary means, where Community law is violated, to ensure that it is respected:**
**this is a fundamental requirement of any legal system. The situation in the Union is a**
**unique one, in that the application of Community law depends, by and large, on the**
**separate jurisdictions of the Member States. The coming into operation of the Intemal**
**Market** **will** **inevitably result in an increase in the number of cases in which residents of**
**one** **Member** **State will need to claim their rights in another conversely, doubts about**
**the possibility or the facility of doing so represent a significant obstacle to cross-border**
**transactions, and therefore to the proper operation of the Single Market.**

**It** **is not for the Community to seek a harmonization which would eliminate the**
**distinctive features of national jurisdictions. However, both Member States and the**
**Commission have a duty to take the necessary steps to remove the kind of doubts**
**referred to above so that the Single Market is not impeded. At a basic level, this**
**means improving knowledge of Community law, so that, without prejudice to the**
**jurisdiction of the European Court of Justice under the EC Treaty, the capacity of**
**national courts to apply Community law is optimised: this requires action with regard to**
**information,** **including improvements to the transparency of Community legal texts,**
**and with regard to training in Community law. Wider issues, such as facilitating**
**access to the courts also require consideration. The** **inter-governmental**
**conventions of Brussels and Rome are of particular importance to the Internal**
**Market: their ratification by the Member States must be completed, and possible**
**improvements must be examined.**

**Greater transparency is necessary with regard to the sanctions applicable to breaches**
**of Internal Market law. The Member States have recognized, in a declaration annexed**
**to the Treaty on European Union, that measures taken by the different Member States**

**- 1 7 -**

**should resuit** **in Community law being applied with the same effectiveness and rigour**
**as in the application of national law.**

**The coming into operation of the Treaty on European Union, and particularly the** **"third**
**pillar"** **concerning cooperation in the fields of justice and home affairs, provides a new**
**context for advancing in this area. The Commission will strive to promote actions**
**designed to encourage coordination and cooperation in the judicial field between**
**Member States and the Commission. Specific forms of cooperation may also be**
**envisaged with the Court of Justice of the European Communities, particularly in**
**promoting wider knowledge of the jurisprudence of the Court.**

**The following action programme will be developed over the years** **1994-1996.**

**1.** **Improving access to** **législation**

**Adoption by the** **Council** **in** **1994/95** **of a Partnership Plan for Dissemination** **(PPD)** **to ensure wider**
**dissemination of knowledge of Community law** **In** **legal circles. The competent national authorities**
**and the professional circles concemed {magistrates, judges,** **lawyers,** **legal advisers, solicitors, court**
**clerks** **etc,)** **will be** **consulted** **starting** **m** **early** **1994,** **The** **plan should coven**
**»** **specific** **actions to** **improve the** **presentation,** **the** **media,** _**and**_ **the** **effectiveness of the** **meant** **of access**

**to Community legislation; these actions will build on initiatives already under** **way:** **the legislative**
**consolidation of internal Market law** **In** **accordance** **with** **the needs Identified by the Commission;**
**provision of** **informally** **consolidated texts and improvements to the** **INPO** _**QZ**_ **database end to**
**CELEX (see also section on** **information** **and** **communication);**

**• adoption of an** **Interpretative** **communication on the liability of the State following a** **violation** **of**
**Community law** **(Francovitch** **and** **Bonifacf** **ruling) in** **1994/95,** **once the Court has ruled** **on** **two**
**pending cases in this area** **;**

*** adoption of** **an Interpretative** **communication** **on** **the free movement of** **services,** **followed by one on**
**the right of** **establishment;** **more** **specific** **sectoral** **communications** **Will be prepared as** **required.**
**« improving the transparency of national sanctions by** **requiring** **that they be systematically notified**
**with** **transposition** **measures;** **appropriate** **provisions** **wilt be written into future** **legislative proposals in**
**the Internal Market area and Member States will** **be asked** **to communicate information in** **relation** **to**
**existing legislation.**

**2.** **Encouraging recourse** **to** **the national courts**

**National courts must** **be in** **a** **position** **to** **resolve** **a larger** **proportion** **of** **cases concerning** **the conformity of**
**rules or behaviour** **with** **Community law** **-** **the number of** **which can be expected** **to Increase** ***ubstant!a%**
**in the context of the Single Market** **» if** **the the Commission and the Court of Justice are not to be**
**Inundated.** **Two** **Initiatives** **are envisaged** **In this** **regard:**

_**m**_ **A Partnership Plan for** **Training** **(PPT) aimed at improving the awareness of and training In**
**Community law of the legal profession. Simple solutions, avoiding the creation Of** **unnecessary**
**structures, will be favoured, including better exploiting existing possibilities in the framework** **of** **fte**
**activities of** **European** **institutes** **receiving** **support** **from the** **Community,** **such as those** **of** **Maastricht,**
**Trier,** **Bruges** **and** **Florence,** **and the approaches** **proposed will** **take** **account** **of the heavy demands on**
**the time of magistrates** **end** **judges, A Recommendation encouraging Member States to ensure a**
**greater emphasis on Community law in the training of young lawyers** **will** **be** **an** **integral part** **Of**
**the** **Plan,** **which should** **be** **adopted in** **109$,**
**«** **The Commission will** **publish*** **In** **late 1993, a Green Paper on** **"Access** **to justice for** **consumer»**
**and the resolution of consumer disputes** **In** **the Single** **Marker*,** **it** **examines the national**
**procedures,** **both judicial** **and** **extrajudicial,** **for consumer disputes, and the pilot** **prefects which** **the**
**Community has financed in this** **area,** **and indicates the difficulties** **in** **applying them in the case of**
**cross-border** **disputes.** **The** **solutions** **proposed will be the** **subject of wide consultation.**

**3. Reinforcing the mutual** **recognition;** **of** **Judgements**

**The Brussels Convention** **is** **designed io ensure that a commercial judgement once obtained** **In** **a**
**Member State, is recognised and enforced** _**\n**_ **other Member** **States with** **a minimum of formalities. This**
**convention is a key element** **in** **the framework** **of the Internal** **Market**
**Ratification of the extension of the Convention to Spain and Portugal should be completed by**
**Belgium,** **Denmark,** **and** **Germany.**

**- 1 8 -**

**ln the context of Judicial Cooperation, an analysis is under way of the effectiveness of the**
**Convention,** **The Commission witi play its part and take any action that may be required on** **completion**
**of** **this analysis and will report on progress at the end** **of** **1994.**

**4.** **The Internal** **Market** **and** **conflicts of laws**

**Action is required by all Member States except the Netherlands to complete** **ratification of the extension**
**to Spain and Portugal** **of** **the Convention** **of** **Rome on the law** **applicable** **to contractual** **obligations.**
**As the traditional approaches to the conflict** **of** **laws In the context** **of** **international private taw do not** **take**
**account of the requirements for** **mtra-Union coopération** **in a** **Single** **Market** **an analyste will** **be**
**undertaken of the effectiveness of the** **Convention-** **This will commence with a survey among**
**Member States and interested** **parties** **which could form the basis** **for** **proposals to** **improve the appiicetion**
**or widen the** **scope** **of** **the** **Convention,**

**IV. Evaluating Community rules**

**Systematic evaluation of the effectiveness of Intemal Market legislation and related**
**policy actions is indispensable if shortcomings in the new framework are to be swiftly**
**rectified,** **and if the potential economic and social improvements flowing from the**
**Programme are to be maximised. Business, consumers, local and national** **authorities**
**and Community institutions have a shared interest in detailed and accurate**
**assessment of the impact of the Intemal Market The strategic objective for the**
**Commission is to develop a network of contacts which will allow the monitoring**
**activities undertaken by the various parties concemed to be** **harnessed** **for this**
**purpose. By facilitating communication and the exchange of ideas and findings**
**between the various parties, such a network could allow the Intemal Market**
**framework to be fine-tuned and improved upon.**

**1.** **Evaluating the practical performance of** **Internal** **Market legislation**

**This process of evaluation should have a** **two-fold** **focus. The first involves monitoring**
**the performance of** **Internal** **Market measures in eliminating the relevant trade barriers**
**and highlighting areas where they may have to be further developed in order to**
**realise fully their objectives.**

**For example, the removal, for over a year, of veterinary and phytosanitary controls at**
**the Union's intemal borders makes it necessary to evaluate the European legislation**
**adopted in the animal health sector for the implementation of the single market Many**
**problems have arisen in the light of this experience. It is therefore appropriate to draw**
**conclusions and to take the necessary measures for adaptation. Freedom of**
**movement remains the basic objective of the legislation and every measure should be**
**limited to scientific and veterinary requirements. To be effective, measures to combat**
**diseases should be adapted to the epidemiological situation and the regulatory**
**measures should be sufficiently flexible to permit adaptations both as regards the**
**veterinary situation and the regions concerned. Mutual confidence must be**
**strengthened, the identification of animals traded in the Intemal Market must become**
**a reality on the ground. Finally, the agreed control posts at external frontiers must**
**strictly respect the norms which have been laid down.**

**The Commission will increase its cooperation with the Economic and Social**
**Committee in pinpointing areas for further action based on information provided by the**
**ESC,** **including information gathered within the context of ESC hearings to which a**

**- 1 9 -**

**number** **of representative organizations will be invited to present their experiences in**
**the operation of Intemal Market legislation.**

**It will also develop its use of advisory and monitoring committees in the fields of**
**technical legislation for industrial and foodstuffs sectors, transport, environmental**
**legislation, financial services, public procurement, customs legislation, and commerce**
**and distribution, and will extend this practice to other areas where appropriate.**

**The Commission** **will** **develop** **Its contacts with bodies having day-to-day** **experience** **in the** **application of**

**Internal** **Market measures** **and** **the** **operation** **of** **mutual recognition** **regimes,** **and** **other organizations** **with**
**specialist knowledge** **through;**
**« A** **two-way** **exchange of** **information with** **the** **Commission*** **network of** **Euro-Info** **Centres** ***** **The** **Euro-**
**Info** **Centres,** **and their host structures «re already proving tneir worth as** **a** **source of feedback on**
**progress in removing trade** **barriers;** **The Commission proposes to** **request Euro-Info Centrée** **to**
**submit regular reporta on the experience of** **SMÊ'S** **with** **respect io «he Impact of Internal**
**Market** **legislation,**

**•** **A series of studies** **In** **transfrontier regions to be launched** **In** **1994** **• in** **transfrontier regions,**
**companies are confronted on a daily basis with differing administrative and legal regimes and**
**practices.** **These regions could be used as** **test-cases** **to** **establish** **whether internal Market** **Initiatives**
**have** **led** **to Improvements for economic** **operators,** **and in identifying further areas** **for** **action,**
**« Hie** **organization of sectoral workshops** ***** **Should the volume of complaints transmitted to the**
**Commission suggest** **that** **the application of** **Internal** **Market measures** **In certain** **sectors is bedevilled**
**by** **problems,** **sectoral workshops to study these problems** **WiB be** **organised by the Commission**
**services** **concerned in** **collaboration** **with** **the relevant** **professional** **organirations.**

*****
**The development of sectoral monitoring toots** **-** **A prime example of** **this** **type of action is the**
**setting** **up,** **within the public procurement Consultative** **Committee,** **of** **an observatory by the end of**
**1$93,** **in the financial** **services** **field*** **the Commission** **will** **present studies on** **She** **application:** **and** **impact**
**of** **Internal** **Market** **legislation to the Council** **or relevant committees of** **the financial services** **eector.** **For**
**example,** **the Commission** **Is required to** **submit a** **series** **of 14** **reports** **on specific** **issues** **regulated by**
**Directives,** **e.g+** **a report on the functioning of the directive relating fo the Type Approval of motor**
**vehicles,** **which** **is due** **at** **the** **end** **of** **1894,** **The Commission** **win** **also organise special** **studies** **on Open**
**Network Provision (ON?) and mutual recognition** **of** **terminal** **equipment**

**2.** **Evaluating the broader business and economic impact**

**The second focus for evaluation involves the broad assessment of the business and**

**economic impact of the Single Market. This will allow Community and national policies**
**to be adapted in the light of structural effects generated by Single Market completion.**
**For example, feedback on the practical impact of Intemal Market legislation and**
**mutual recognition regimes could reveal cases where the removal of physical, legal**
**and technical obstacles to intra-Union trade and competition may need to be**
**supplemented by application of competition policy safeguards if the** **pro-competitive**
**potential of the Intemal Market is to be realised. Complementary actions, such as in**
**the** **field** **of training, may be required to help enterprises or workers adjust to new**
**economic circumstances.**

**The Commission** **will** **give greater attention to analysis of the impact of the Internal Market on business**
**dynamics** **end** **strategies** **and** **market structures** **through;**

**•** **The development of statistical tools for evaluating the effect of the** **Internal** **Market Discussion**
**between Commission** **services** **concerned have begun with** **a** **view** **to** **collection** **of data** **in** **1994.**
**.** **Specialised statistical tools** **In** **specific** **Internal** **Market fields* Statistics** **forwarded** **by the Member**
**States to the Commission** **in** **compliance with Community** **PiibHc Procurement Ojroctrves wW** **be**
**exploited through the development of an** **"Executive** **Information** **System*** **This** **system** **will deliver**
**user-friendly statistical performance indicators and reports Illustrating** **progress:** **in the liberalization of**
**public procurement Specific information and data** **gathering** **networks are being developed** **in** **the**
**transport** **field** **under the aegis of the** **GURÊT** **programme**

**- 2 0 -**

**Finali2ation** **of a framework** **regulation on** **business statistics,** **replacing the current annual** **survey**
**on** **industrial structure** **and extending the** **scope** **Into the services** **sectors,** **to** **Improve** **availability and**
**comparability of** **high-quality** **statistical Information** **needed for the** **evaluation of** **economic activity m**
**general and the follow-up** **of** **the effects of the internal Market in** **particular,**
**Specific coverage of** **the Impact** **of** **Internal** **Market** **on** **individual sectors In** **future editions** **of** **the**
**Panorama of EC** **induatry (1995** **edition), and more detailed treatment of** **Internal** **Market related**
**aspects in future editions of** **the annual** **report** **of** **the 5ME** **Observatory.**
**Building a network of** **research centres with** **a proven background In Internal Market analysis**
**(deadline end** **94),**
**Drawing on the** **results of** **studies undertaken** **by the Member** **States.**
**The** **launching in** **1994 of** **a wide-ranging study on** **the** **business end** **economic** **Implications of**
**the internal** **Market** **-The Commission alms to publish the terms** **of** **reference for** **this study** **which wiB**
**Say down** **the parameters and get the** **analysis** **under way** **In its** **Resolution of** _**7**_ **December** **1992**
**inviting** **the** **Commission io** **undertake** **such an** **analysis*** **the Council has asked that this study examine**
**the impact** **of the** **Internai Market on a broad range of factors Including economic and social** **cohesion,**

**and Its contribution to sustainable non-inflationary** **g/ov^** **respecting the** **environment.**

**3.** **Strengthening the INTRASTAT statistics collection system**

**The cessation of customs formalities** **on** **1. January 1993 has led to the setting up of a**
**system for the compilation of statistical information on the flow of goods between**
**member states, this information being supplied directly by enterprises. (INTRASTAT)**

**The changes induced by this new system are of such a magnitude that national**
**administrations, who only had a limited amount of time to take them into** **account,** **are**
**still being confronted by major problems both at the level of compilation and analysis**
**of the information.**

**The experience gained in this instance and the analysis of the first published results**
**invite caution. Nevertheless, the Member States and the Commission have wasted no**
**time in either taking or envisaging measures which would improve the system in an**
**appreciable and rapid manner.**

**The principal difficulties to be overcome are as follows:**

**• The level of response from enterprises -** **It** **is not easy to gauge this level. There**
**exists no past information for enterprises in all the Member States taken together**
**and a systematic comparison of the results with those gleaned from a fiscal source**
**has not yet been possible. Nevertheless the level of non-response has been**
**estimated as between 10 and 25% of the number of operators, according to**
**Member State, being 5 to 10% of the total by value. This phenomenon, which**
**seems particularly to** **concern** **small enterprises, will necessitate a significant**
**mobilisation of resources to improve the level of coverage. Following action on**
**reminders taken in most Member States, the situation seems to be improving.**

**• The delay in the transmission of declarations - Despite the intensive information**
**campaign carried out by national administrations with the support of the**
**Commission, the late publication of regulations has not always enabled enterprises**
**to adapt their administrative organisation in time. There have ensued from this**
**important** **delays in the transmission of declarations, which are being progressively**
**reduced.**

**• The classification of goods - The level of detail of the combined nomenclature has**
**resulted,** **principally for those** **SME's** **without computer systems, in a complexity and**
**multiplication of the number of lines to be declared. This last effect has been**
**accentuated by the absence of a threshold for each transaction, the thresholds**

**21-**

**being fixed in the new system by enterprises as a function of their importance in**
**intra-community trade. The supply of certain information, according to its position in**
**the combined nomenclature (notably net mass) has on occasion posed a problem.**

**• The link with taxation - This is one of the major characteristics of the INTRASTAT**
**system.** **The constraints which it imposes on the level of the statistical declaration**
**to determine the reference period or for the treatment of certain movements of**
**goods(contract work for example) complicate to some extent the economic**
**significance of the statistics and the comparison of the two sources.**

**• The treatment of the information - The lack of time for the adaptation of the**
**computer systems of national administrations has had negative repercussions for**
**the treatment of information, which has led to delays not only in the pooling of intra**
**community information but also on trade with third countries. The statistical**
**services have also had to come to terms with the considerable increase in the**
**number of line of declaration with which they must deal. The application of**
**thresholds has had a certain simplifying effect for the vast majority of enterprises**
**but has resulted in a degree of complexity for national administrations in handling**
**the data.**

**•** **Computerised and** **telematic** **methods - The products developed in the ambit of the**
**EDICOM project, whether for alleviating the burden of declaration for Member**
**States,** **or those designed to automate the processing operations of national**
**administrations, are now very useful but had a difficult beginning due to their late**
**arrival on the market and the time required to set them up**

**In the face of these difficulties, national administrations and the Commission have**
**wasted no time in reacting and in either making or proposing appropriate**

**measures.**

**The** **measures are aimed at curtailing the level of** **non-fèSponse;** **information campaigns** **and** **campaigns**
**to remind** **enterprises,** **as** **to their obligations of declaration have been conducted in the majority of**
**Member States in the course of** **the** **first** **semester** **and are** **now** **beginning to** **bear fruit.**
**To complement those measures taken by the Member States** **(reminders,** **correcting information.**
**enquiries.** **Improvement** **of** **registers..*)*** **the Commission has proposed** **« package of** **actions** **now** **In** **the**
**course** **of** **being** **Implemented:**
**»** **setting** **up** **of a** **working** **group on the** **definition** **of** **methods** **of adjustment and estimation for data**
**collected.**
**« proposal for** **a** **draft regulation to be proposed by the** **Commission** **with a view to simplifying the** **task of**
**those liable to make** **returns,** **notably** **as to the classification of certain types of** **goods,** **to the** **provision**
**of net mass** **for certain** **products and to the declaration of** **low value transactions.**

**•** **the development of** **end** **adaptation to needs of** **each** **Member State of** **computerised** **and telematic**
**methods.**
**« proposal for** **a** **draft Commission** **regulation** **with a view to obtaining within a reasonable time** **limit and**

**in a** **regular manner** **the results from the Member** **States,**
**» installation of** **a system** **for** **the** **exchange** **of** **provisional** **results,** **at** **an aggregate** **level,** **to precede the**

**provision of more detailed** **information.**

**To conclude, it is advisable to underline first of all that the situation has improved**
**considerably in the course of the year, but still varies considerably by Member State.**
**The countries who have opted for a single declaration for both statistical and fiscal**
**purposes (France, Italy) or for two declarations but made concomitantly (Greece) have**
**been able to provide detailed statistics within a satisfactory time limit.**

**For the others, the delays observed in the making available of the results are**
**decreasing. However, to return to a normal situation will require considerable effort, in**
**particular as regards improvement in the quality of the content of the information.**

**(5)**

**- 2 2 -**

**At this stage the majority of Member States do not consider that there is a need to**
**carry out fundamental revisions to the INTRASTAT system, and that it is advisable at**
**the outset to assure the effectiveness of the proposed measures for improvement**

**V.** **Resources**

**Management of the Intemal Market will involve a fundamental change in the tasks of**
**both the Commission, which will have to assume new responsibilities for the**
**supervision of the application and enforcement of Community legislation, and the**
**Member States, which will have to cooperate more intensively than ever before.**
**These changes also have implications for the total level of resources devoted at**
**national and Community level to making the Intemal Market work.**

**To some extent existing resources may be sufficient provided that they are used in**
**new ways. Thus it may be possible for certain Commission departments to devote**
**more manpower to checking the quality of national transposition of Community law, to**
**handling complaints from the public or to questions of interpretation of existing**
**directives, insofar as they are no longer heavily involved in the development and**
**negotiation of new Community legislation. There are, however, limits to this approach,**
**some of which have already been illustrated in earlier sections of this document the**
**volume of national legislation to be examined may be very great, complaints or**
**questions of interpretation may be complex, the same department may still be actively**
**involved in proposing new legislation including some of the large number of**
**implementation measures required under existing legislation. For some tasks it is**
**already clear that existing resources cannot be stretched further.**

**The Commission believes that the effective management of** **Community** **legislation for**
**the Intemal Market will be a more** **resource-intensive** **task than its preparation. The**
**Commission's current resources, expressed in terms of manpower or budgetary**
**appropriations, are remarkably modest compared to those of national administrations**
**for the same purpose and to general expectations as to the Commission's**
**responsibilities. Without more resources in some areas the Commission will not**
**properly be able to exercise its responsibilities.**

**The Commission will therefore consider in its preparation of proposals for the 1995**
**budget to what extent its priorities need to be revised in order to take more account of**
**the costs of managing the Internal Market. Some of the actions foreseen in this**
**programme, such as the survey of** **administative** **cooperation mechanisms will provide**
**additional information on which to base additional budgetary requirements.** **The**
**Commission assumes that it can count on the support of the Council and the**
**European Parliament in this exercise.**

**- 2 3 -**

###### **Section C - Developing the Single Market**

**The completion of the basic legal framework foreseen in the 1985 White Paper and**
**action to ensure that Community legislation is effectively and evenly applied, as**
**described in the preceding parts of this programme, already represent a significant**
**contribution to the proper functioning of the** **Internal** **market The freedom of**
**movement for** **goods,** **services, persons and capital, the original objective of the White**
**Paper, will provide the necessary basis for economic recovery and the future**
**competitiveness of the Community economy.**

**But such a static view of the single market, in which the management of existing**
**legislation is judged to be sufficient, will fail to deliver the full economic and practical**
**benefits of a single market** **In its June 1993 working document the Commission**
**included a number of additional measures, some but by no means all involving**
**legislative initiatives, which were put forward as a means of providing added value to**
**the existing Community legislative framework by addressing problems that were not**
**necessarily foreseen in the White paper and which reflected the preoccupations and**
**priorities of those operating in the market.**

**The response from the market was loud and clear. The view that there is still**
**unfinished business for the Community in this field was largely supported by the**
**reactions to the Commission consultation on the basis of the working paper.**
**Organizations representing industry and business interests strongly supported**
**continued harmonization of legislation in a limited number of fields, such as direct**
**taxation and the protection of intellectual property, and small business pressed for**
**additional measures which would help them to participate more in the opportunities**
**opened up by the creation of a single market Consumer organizations, while**
**welcoming the Commission's commitment to protect the consumer interest, urged a**
**far more ambitious approach. A large number of respondents, including the European**
**Parliament and some national governments, insisted that more needed to be said**
**about the role of competition policy in the operation of the intemal market Others**
**raised the issue of ensuring compatibility between the management of the intemal**
**market and the Community's commitment to sustainable development and the**
**protection of the environment.**

**The other Community institutions also supported the inclusion of a dynamic**
**component in the Strategic Programme. The European Parliament declared that the**
**Community should reject a** **"wait** **and** **see"** **attitude and should pursue further action in**
**the intemal market field with a view to promoting economic** **growth.** **The Economic and**
**Social Committee expressed broad agreement with the Commission's views**
**concerning the development of the internal market, putting emphasis on the need for**
**interaction with other Community policies and the need for a more integrated**
**approach to trans-European networks. The Presidency conclusions of the Intemal**
**Market Council of 27 September support the political appropriateness of a programme**
**to include, where and to the extent necessary, the dynamic development of a single**
**market at the service of the citizen.**

**The Commission is therefore bringing forward a package of measures which**
**constitute a** **"second** **phase"** **in the development of the intemal market. These**
**measures have been selected on the basis of a number of guiding principles which**
**take account of the new circumstances in which the Union now finds itself.**

-24

- First, there is an overriding need to **promote greater competition within** the
**single market.** The legislative barriers to market entry that have now been
removed must not be replaced by anti-competitive behaviour by market operators.
Increased vigilance by public authorities will be necessary to make sure that the
single market is indeed open to all on equal terms.

- The development of the intemal market must **take account of the broadening of**
**the Community's policy objectives** under the Treaty on European Union, the
entry into force of which constitutes a new point of departure for all Union policies.
The confirmation of the importance of environmental, industrial or consumer
protection policy, as well as the need for trans-European networks, must lead to a
re-appraisal of existing policy in the intemal market field.

- **The full economic benefit of the single market must be exploited** in order that
the expected improvement in European competitiveness and economic
performance can be accelerated. This will require a new flexibility in the choice **of**
policy instruments. In some cases it will be necessary to rely on voluntary
instruments or organizations, assisted and promoted where appropriate by public
authorities, such as in the standardization and quality field. In others, such as
company law, taxation or intellectual property protection, for example, it will be
necessary to provide a more favourable legal environment in order to encourage
companies to operate on a continental scale. The putting into place of large-scale
physical infrastructure, in the form of trans-European networks, is also clearly
aimed at this objective.

- Finally, the changing political context within the Union requires new working
methods for the development of intemal market policy. All major Community
initiatives in this area must be based on **transparency** and **regular assessment of**
the appropriateness of policy. The public is becoming more demanding in terms of
information; citizens must be kept efficiently and systematically informed about the
rights and advantages which they obtain from the intemal market

The following section therefore presents a broad mix of policy instruments, in which
new legislation plays a relatively small part. A large proportion of this part of the
programme concerns the promotion or use of a voluntary approach to achieve the
Community's objectives. Where, however, additional legislation is thought **to** be
necessary for the internal market, it will be developed on the basis of proportionality
.transparency and close consultation, as this Strategic Programme itself has been.
The Commission intends where appropriate to publish its major legislative intentions
at an early stage so as to permit interested parties to make their views known as to
whether legislation is needed and what form it should take. The indication of the areas
where legislative initiatives may be needed which follows is the first step in the
process; each proposal will be the subject of further consultation.

As is indicated in Section E below, this part of the programme will be regularly
evaluated in the light of the Commission's Annual Report on the operation of the
Intemal Market.

**I.** **Transparency and proportionality of new Community measures;**
**transparency of procedures; communication and information**

Transparency, as regards the Community legislative process, legislative texts, their
application and their implications for individuals and firms, is a key to bringing the
Union closer to its citizens. In order both to appreciate the possibilities offered by the

**- 2 5 -**

**Intemal** **Market and to be able to make use of those possibilities, people throughout**
**the Union need information about the laws that apply to them. They also need the**
**assurance that new laws are introduced only where they are needed, that they**
**minimise compliance costs, and that they are coherent, both in themselves and** **vis-a-**
**vis existing laws. The actions outlined here are designed to contribute to these**
**objectives; however, the other Community institutions and the Member States must**
**also play their part.**

**1.** **Transparency and proportionality in preparing new Community legislation**

**In** **order to ensure that Community legislation for the Intemal Market is fully coherent**
**each new legislative initiative should be evaluated in accordance with an analytical**
**framework serving as a guide for the Commission from the earliest stage of**
**preparatory work to the adoption of the measure.**

**Evaluation of the need for legislation is a task that the Commission cannot undertake**
**without consulting those who would be affected by it. A procedure for the publication**
**of legislative intentions by the Commission at an early stage in the preparation of**
**proposals for Community measures will ensure that interested parties become aware**
**of the intention to legislate and will also contribute to the development of legislative**
**proposals.**

**The principle of proportionality helps to maintain coherence, by ensuring that each**
**intervention has a degree of regulatory intensity that is in proportion to the real needs**
**and the effectiveness necessary to the attainment of its objectives.**

**Transparency.** **prqportiona,|ity** **t** **and oofrerenfie |n** **legislation**

**The Commission will** **prepare,** **by** **mid-1994,** **on the basis** **of** **an initial examination already undertaken in**
**the context of the** **follow-up** **to the** **Sutherland** **Report,** **systematic guidelines for the evaluation** **Of** **the**
**need for internal Market** **legislation,** **the form** **It** **should take and** **its Internal** **and external**
**coherence. This method will take account of**

**-** **the origin of the demand for** **Intervention;** **the identification of** **the** **Community objectives** **concerned;**

**-** **the Identification of an obstacle to free movement justified in terms of Articles 36 or** **$6** **of** **the**
**Treaty or of the jurisprudence of the Court or necessary to legal security or the proper functioning of**
**the market where the operation of mutual recognition poses practical problems;**

**- the economic** **Impact** **of the proposed legislation: advantages for the economy as a whole (rather**
**than simply for the sector directly concerned) end additional costs to which** **it wilt** **give rise;** **the**
**Commission** **will** **examine the methodology which would enable such analysis to be** **undertaken,** **in**
**conjunction with** **Its** **commitment to improve and strengthen the business impact assessment system**
**and to consider the use of detailed cost benefit analysis when making proposals for Community**
**legislation;**

**-** **the application of the principle of proportionality** _**to**_ **determine how harmonization should be**
**achieved, in terms of the type of instrument (legal or voluntary) and its** **content,** _**io**_ **ensure that the**
**action does not exceed what** **Is** **necessary** _**to**_ **secure the objectives of the** **Treaty;** **techniques of**
**harmonization will be considered on a scale ranging from the promotion of voluntary instruments,**
**through optional** **harmonization,** **and minimum harmonization to full harmonization;**

**w** **coherence will** **also** **be ensured by Improving the Commission's internal consultation** **procedures.**

**The Commission approved, on 2 December 1992, a communication entitled** _**'Gmoter transparency in**_ **foe**
_**work oft fie**_ _**Commission",**_ _**m**_ **which a procedure is provided for particularly concerning** **notification.** **This**
**involves publication by the** **Commission,** **in certain cases, in the Official Journal (C Series), of a brief**
**summary of the initiative envisaged, together with information on the Way to obtain copies** **Of** **the**
**document. The Commission wilt endeavour to ensure that** **this** **method is effectively put into practice.**

**- 2 6 -**

**The «se of Oreen** **Papers,** **In** **particular,** **should be** **encouraged,** **In order to promote** **greater participation**
**by** **the parties** **concerned,**

**2.** **Communication and information measures**

**For people and businesses in the Union to enjoy the advantages of a large, frontier-**
**free market, they need to be informed on the possibilities it offers and have channels**
**open through which to communicate their needs. This need is significant for several**
**aspects of Internal Market policy, such as access to justice, administrative**
**cooperation, and further aid to business, especially for organizations providing advice**
**for small business, and is also referred to in the sections of this Programme which**
**deal with these aspects.**

**The Commission is developing a communication strategy involving all the Community**
**institutions, national administrations and non-governmental organizations, in a**
**systematic and coordinated way. In this regard, it adopted, on 30 June 1993 the**
**communication** _**"The Information and**_ _**Communication**_ _**policy of the Commission**_ **- a**
_**new**_ _**approach".**_ **Furthermore, a first Commission Decision had already been made on**
**5 May** **1993** **outlining the strengthening of information and communication for the**
**Single Market. The identification of key audiences has established that the general**
**public, youth, the consumer, industry and business, information officials in national**
**administrations are** **priority** **audiences for 1994. This strengthening will continue by the**
**setting of key objectives (starting with those areas where the lack of information is the**
**greatest) and organize the resources which are available at Community and national**
**level,** **on the basis of a partnership with the Member States.**

**So far as its direct provision of information is concerned, the Commission will**
**increasingly have recourse to media specialists to provide, in a more professional and**
**targeted way, information on the operation of the Internal Market**

**The Member States are well placed to conduct publicity campaigns, due to their**
**existing systems, greater resources and knowledge of specific local factors. The**
**Commission will strive to coordinate more closely** **with** **them, for instance by publishing**
**a complete list of national and Community-level information campaigns, and in**
**providing them with the necessary publications and access to Community databases.**

**Professional and Trade Associations also have a role to play, both on their own**
**account and as intermediaries for the Commission (for instance through the** **EIC** **and**
**the Office network) and by expressing the information needs of their sectors. For**
**example, regular meetings** **with** **organizations representing SMEs can be developed**
**with a view to improving the flow of information to these organizations concerning**
**relevant Community activities.**

**a) Information provided** **by** **the** **Commission;** **:**

**•" Annual Report on the operation** **of** **the infernal Market**

**- This will be published at the end** **of** **each year in order to improve traraparegey** **of** **legislation end** **Its**

**implementation, extending the coverage** **already provided by** **various reports** **[7]** **on** **the** **Implementation**
**of** **the 1ÔÔ5 White** **Paper** **to** **the** **whole operation** **of** **the intemal** **Market**

**Communication of 2 December 1992 on the Operation of the** **Community's** **Internal Market after 1992 - Follow-up to the**
**Sutherland Report (SEC(92)2277 final); Commission Communication of 2 June** **1993,** **on Reinforcing the Effectiveness**
**of the Intemal Market and Working Document of the Commission on a Strategic Programme on the Intemal Market**
**(COM (93) 256 final).**

**-27-**

**- The annual report will come in** **two** **parts.** **The first part has a political orientation and includes a**
**summary** **of the** **report and the main points arising in the** **past** **year,** **The** **second** **part includes the** **most**
**relevant** **information** **on the operation of** **the** **internal** **Market and** **assesses** **the** **measures** **taken In** **the**
**various** **sectors. Thus it** **covers** **legislation which** **existed** **before** **198$,** **the new developments in the**
_**acquis communautaire**_ **and** **policies** **which were not in the** **White Paper proposals.**

***** **Databases**

**-** **The** **principal** **database** **which provides information on** **the intemal** **Market Is WP0** **92,** **which** **has** _**bem**_
**progressively incorporating informative** **^consolidated** **versions*** **of** **internal** **Market legislation in all**
**nine** **official Union** **languages!** **In** **addition to** **its** **coverage on Community** **législation** **and preparatory**
**acts** **and references** **to** **naiflorialtra*^**
**and a section** **on** **social** **policy.** **The** **consolidated legislation** **to appear** **so far** **covers** **pharmaceuticals,**
**foodstuffs and company law. For the general** **public,** **a new** **section** **answering key** **Questions** **on**
_**&JROPB**_ **WITHOUT FRONTIERS** **is** **being established** **This** **response to** **fie** **needs of** **the general**
**puoBc and its** **development** **wilt be** **pursued vigorously** **in tôôAThe** **way** **in which all this** **information is**
**distributed most evolve to reflect needs** **pe*t«ld82t and as Indicated** **above under** **TrovkBng** **access to**
**up-to-date** **information** **on natfonal** **transposition** **legislation**** **a survey** **wife*** **be** **carried** **out** **in** _**ttity**_ **19K**
**and** **any changes** **made will** **be based on** **the results** **of that The** **obtusion** **of the** **INFO 62 database wilt**
**be** **Improved by making it** **available** **on** **the** **wider public European networks»**
**-** **CEkEJC*** **now ran** _**by**_ **the** **Office** _**for**_ **Officiai** **ItyWieawons*** **remains the ohief source of fuSMext data** **on**
**legislation** **and** **case** **Saw,** **including** **that concerning the Internal Market** **TÎ^ComrnJssion w»** **maintain**
**dose liaison with** **the** **Office,** **In order** **to ensure** **that** **the process** **of medemisetion which** **te** **under** **way**
**permits** **the acceleration of** **the introduction** **of** **texts end thereby** **increases** **its** **efficlency** **+**
**-** **TED,** **the Tenders** **Electronic** **Daily database far public procurement** **contracts,** **toil!** **be the subject of**
**proposals** **for** **it** **to** **be made rrrore** **accessible** **and user** **friendly.**

_*****_ **Printed** **information**
**»** **A** **new brochure on** **the intemal** **Market m the ^Europe on** **the move* series** **wffl be** **published** **Ineady**
**1994*** **to** **be updated** **later In** **the year to include this Strategic** **Programme.** **'Most** **of the contents** **of**
**iNFO 8&** **«re also available** **in** **printed** **form,** _**and**_ **this** **coverage** **wilt** **be extended** **oaring 1ÔÔ4 to Include**
**the EUROPE** **WITHOUT** **FRONTIERS** **questions** **and answers and consolidated Community**
**legislation,** **in** **the latter case starting with the pharmaceutical** **sector*** **in a compSaSon which includes**
**the original and amending texts.**

*** The** **Commission is** **studying the** **feasibility of** **a** **periodical** **covering its dbcumeritafion** **end databases,**
**which would also serve as a contact point** **w^it^naiedmWstrafions\**

**- The** **Commission wilt enoourage the** **produ^**

**- A** **European Ouide for Consumers In** **the Intemal** **Market wtë** **be** **puofished.** **The** **Oukte Is intended** **to**
**give** **consumers** **in the Union** **«** **simple and practical overview** **of** **what Coinmuniry consanwpoNcy** **has**
**provided***
**~** **The Commission will improve the** **quality** **and distribution of its newsletter on the internat** **Market,**
**which** **will be published atleast tour** **times annually from 1994.**
**-** **The existing guides to the different** **national social** **security systems for migrant workers** **will** **be**
**updated,** **end the** **possibility** **of** **providing information** **on other supports, e.g. videotapes** **or** **telematic**
**services,** **wilt** **be** **explored.**

***** **Faire and** **exhibitions**

**A decision** **will** **be taken at the beginning of each year concerning Commission participation** **in** **fairs**
**and** **exhibitions which are** **concerned** **with the** **development of the internal Market** **in** **the Commission**
**participation,** **not** **only will** **a sectoral approach be** **pursued,** **but the** **needs of** **the** **general** **publie will** **be**
**primary** **objectives.**

**b)The neeof intermediaries In information** **policy**
**» The network of** **EICs,** **which** **is** **covered in the section** _**on**_ **further improving the** **environment** **for**
**business,** **is a key contact point** **with** **smaller** **businesses,** **and the Commission will plan training**
**sessions** **on** **Infernal Market** **questions.**

_**4**_ **In** **addition to** **these,** **other** **intermediaries,** **close to firms** **and** **consumers,** **will be** **identified;** **these could**
**include:**

**- professional** **and** **trade associations;**
**-** **trade** **unions;**
**-** **chambers** **of** **commerce.**

**- 2 8 -**

**where these** **are not** **already** **hosts** **to** **BCs.**
***** **Once** **identified,** **the** **intermediaries wlil** **be asked to set out their** **information** **requirements.**

***** **Efforts will be made for Commission** **staff,** **or** **if** **necessary external agencies such as Team Europe*** **Io**
**be present** **at** **seminars*** **meetings or workshops with these intermediaries to explain what** **Is** **available**
**under the Internal Market** **programme,**
**«** **Commission financial contributions** **couid** **be** _**ma<$^**_ **to some** **intermediaries,**
**.** **The** **annual** **selection of "success** **cases"** **foundthrou$htheEiCswl8bepubftshed.**

**«** **The** **Commission** **supports,** **on «** **pilot scheme basis,** **the ten** **Transfrontier Consumer information**
**Centres,** **created with the** **aim** **of enhancing shopping** **In** **another Member State and** **of** **helping citizens**
**to** **solve** **problems they may encounter with transfrontier purchases.**

***** **The** **Commission** **has** **promoted** **the** **setting** **up of** **databases** **In** **consumer centres** **In** **four Member**
**States.** **These** **databases,** **which** **are** **interconnected,** **aim** **to** **provide consumers with ready access** **to**
**information** **on the** **consumer legislation governing transactions** **in** **which they** **are** **involved. This**
**network wilt be extended** **to aft** **Member States** **by** **the end** **of** **16$4<**

_**$**_ **f^^Pershrp.wtth^e** **^ern.ber^atee**
***** **The Commission** **will** **draft texts on particular** **themes** **associated with the** **internai** **Market,** **such as the**
**mutual recognition** **of** **qualifications, then invite the Member States** **to** **provide their own contributions**
**reflecting their specific** **"national"** **situations,** **with** **a** **view** **to** **publishing** **a** **différent** **version** **in** **each**
**Member** **State,** **either:**
**-** **on** **CD-ROM,** **or**

**-**
**in conventional paper form**
***** **in** **response to** **numerous:** **texjuests** **from various organizations in the Member** **States,** **the Commission**
**win** **examine** _**the**_ **possibilities** **for** **the joint production** **of** **materials,** **on,** **for example, public** **procurement**
**foodstuffs,** **pharmaceuticals,** **consolidated legislation** **or** **explanatory** **guides.** **An** **invitation** **Will** **be**
**published** **in the** **Officiai Journal** **for** **interested parses** **to** **submit proposals** **for** **publication** **(on**
**conventional** **or** **electronic media)** **or** **publications already** **completed,** **with** **a** **view to** **receiving** **either**
**financial** **support from the Commission or** **permission** **to** **use** **tha Community** **logo,**

***** **in** **order** **to** **ensure more effective coordination** **the** **Commission will compile** **e** **list** **of** **national** **and**
**Community-ievei** **information sources on an annual** **oasis.**

*** The** **European Statistical** **Office,** **EUROSTAT,** **I s** **considering** **estabRshlng** **a** **network** **for the**
**dissemination** **of** **Community statistics** **in** **collaboration** **with** **the** **national statistical offices, thus**
**effectively linking up** **EUROSTAT** **with the** **statistical** **departments of the Member** **States,** **The** **aim** **is** **to**
**provided the end** **user with** **the information required to function effectively** **tn** **the** **Internat** **Market,** **locally**
**and in his own** **language»**

**dl** **Management of** **information** **policy**

**While** **the** **Commission has** **a** **budgetary allocation for Information** **on the** **internal Market there** **are**
**limited** **staff** **resources*** **and** **it wilt** **be advisable to** **haverecourse to specialists** **when** **appropriate.**
**The information actions should pursue four** **aims'**
**-** **the definition** **of** **key messages and themes;**
**-** **partnership** **with** **the Member** **States;**
**«** **providing specialised information;**
**-** **making the best use of existing resources (such** **as** **the database** **INFO** **92).**
**In** **information aimed** **at the** **general** **public,** **specific actions such** **as the** **installation** **of** **telephone**
**answer lines** **witi** **be** **pursued.** **In** **the specific approaches, recourse** **to** **the** **Commission's** **Êurobarometer**
**for** _**pre**_ **and** **post-testing win** **be** **made.**

**II.** **Further Improving the environment for business**

**The Intemal Market programme** **was** **originally conceived** **of as a** **means** **of** **improving**
**the framework** **in** **which Union business operates.** **The** **completion** **of the** **intemal**
**Market opens** **the** **door** **for** **individual companies** **to** **take advantage** **of new** **commercial**
**opportunities** **on** **partner country markets,** **and** **thereby paves** **the way for a** **profitable**
**expansion** **of** **enterprising firms.** **The** **White Paper programme** **of 1985** **constituted** **a**
**giant step towards realising this goal.** **Now** **that** **the** **legislative** **steeple-chase** **has** **been**

**- 2 9 -**

**almost** **completed, attention can be focussed on the complementary actions which will**
**help business to exploit the potential of the single market effectively.**

**One of the guiding principles of the Strategic Programme is that legislative overload**
**should be avoided. There is a danger that binding measures which look wholly**
**justified in isolation can, when taken in conjunction with other rules, regulations and**
**administrative provisions, create such a cumulative burden on economic operators,**
**particularly smaller firms, that they curb activity,** **enterprise** **and employment. For the**
**most part, the actions which are proposed below aim to complement core Intemal**
**Market legislation with optional structures and mechanisms which will help business to**
**make the most of the new opportunities. In some cases, however, the Commission**
**considers that new legislative action is necessary if the proper functioning of the**
**Internal Market is to be guaranteed. Furthermore, it must be recognized that the legal,**
**fiscal and technical environment within which Community firms must evolve does not**
**sufficiently reflect the dimension and the dynamics of the intemal Market. A reflection**
**on this entire framework is urgently required.**

**A strategic policy which aims to further improve the business environment comprises**
**the following strands:**

**•** **A strong and effective competition policy, to be implemented in conjunction by**
**Community and national authorities. Such a policy is an essential adjunct to the**
**Internal Market Programme if the anticipated reinvigoration of competition**
**engendered is not to be stifled by restrictive agreements or practices, excessive**
**concentration of markets, or a proliferation of state aids. In the absence of an**
**effective** **comptetion** **policy, the Intemal Market will not deliver its full benefits in**
**terms of improved capacity of Community business to compete internationally, or**
**increased consumer choice and lower prices.**

**• Finalising the legislative and administrative framework required to make the**
**Internal Market operate more effectively - Without prejudging the results of of the**
**overall reflection referred to above, further legislative action is needed in the fields**
**of company taxation, protection of intellectual property rights, and cross-border**
**payments to iron out remaining obstacles to intra-Union transactions and business.**
**A review and simplification of existing and proposed legislation and procedures will**
**also serve to eliminate any unnecessary regulatory burden on business. Further**
**progress in the key areas of transport and energy are essential if the benefits of**
**the Single Market are to be fully realised. Consideration should also be given to the**
**legislative (and technical) situation regarding commercial communication in the**
**Single Market context.**

**• Creating and developing a non-legislative infrastructure which offers ancillary**
**support to companies** **engaging** **in cross-frontier activities - The Union should**
**actively promote the strengthening of the European standardization and conformity**
**assessment infrastructure, and encourage the convergence of quality management**
**instruments. The Union should also introduce optional legal structures for**
**companies established in more than one Member State. Access to distribution**
**networks and a competitive commercial sector are also important elements in**
**enabling business to participate in the** **Internal** **Market.**

**• Catering for the needs of SMEs - Action must be taken, in line with the**
**Commission's** **multiannual** **programme for SMEs for** **1993-96,** **in accordance with**
**the resolution of the Council of 11 November to ensure that these companies**
**participate fully in the benefits generated by the Internal Market.**

**• Developing an industrial policy as a complement to the inherent benefits of the**
**Internal** **Market in terms of competition by focusing on improvements in basic and**
**applied research, better links between research and industry and thus an**

**- 3 0 -**

**environment** **favouring the process of commercialisation, an intensified diffusion of**
**available knowledge and better education and skills in the work force on all levels,**
**and** **infrastructural** **investment**

**1.** **Competition policy**

**The speedy and uncompromising application of competition safeguards is an**
**indispensable complement to efforts to remove legal and administrative obstacles to**
**intra-Union trade. Otherwise,** **anti-competitive** **practices on the part of companies or**
**national authorities may choke off the competitive dynamics which are** **trie** **driving**
**force for the economic benefits which are expected to flow from the completion of a**
**Single Market. A strong competition policy will protect firms which try to capitalize on**
**openings generated by the Intemal Market** **from** **being undermined by such practices.**

**Looking to the future, the Commission intends to develop its** **rapid-response** **capability**
**which will enable it to react effectively where the functioning of the Intemal Market is**
**obstructed by behaviour which is in breach of Union competition rules. To this end**
**concerns relating to anticompetitive practices or abuses of dominant positions which**
**come to light during monitoring and evaluation of the operation of the Intemal Market**
**will be systematically relayed to Commission competition policy services. On the basis**
**of such information, the competition policy authorities will make greater use of own-**
**initiative investigations to establish whether competition rules have been infringed,**
**should the problem seem to warrant further attention.**

**The following checklist indicates areas which will be resolved by the application of**
**competition policy rules over the coming year.**

**1.** **Application of competition** **safeouards** **priorities**

**The** **Commission wl»** **give priority to the following measures;**

_**•**_ **preparing a code of conduct end a block exemption regulation on computerised reservation services**
**for air passenger** **transport;**
**« a block exemption regulation for maritime consortia;**

**•** **widening the scope of the existing block exemption regulation for technology transfer.**

**2.** **Simplification and effective application of competition procedures**

**The Commission** **witi** **continue to streamline and simplify systems and procedures with a view to**
**accelerating decisions on** **the** **application of Community competition** **law.** **In** **particular,** **the Commission**
**intends to adapt provisions relating to the form, content and other details of applications and notifications**
**which are laid down in Regulation (EEC) No** **27/62** **to render them more** **user-toendly.**

**3.** **Interpretative communications planned**

**« Guidance statements on legal and technical aspects of the merger regulation** **(e;g;,** **turnover**
**calculation,** **definition** **of a concentration)**

**• Communication on concentrative and cooperative** **joint** **ventures**

**•** **Communication on the assessment of commercial agents contracts with regard to Article 86 of the**
**Treaty**

**• Revision of** **the** **Notice** **on** **agreements of minor importance**

**2.** **Improving cross-border payments**

**Firms and individual consumers who engage in cross-border payments are penalised**
**by the high costs of the systems used to make these transfers, as well as by**
**excessive delays for execution and the incidence of double charging. Following the**

**- 3 1 -**

**adoption** **of** **its working document** **in** **March 1992** **on** **problems related** **to** **cross-border**
**payments** **[8]** **,** **the** **Commission commited itself** **to** **take appropriate action, including**
**legislative action,** **in** **the event that financial institutions do not take adequate steps** **to**
**introduce more transparent** **and** **more efficient** **cross-border** **payments services.** **In**
**response** **to** **this pressure,** **the** **European Credit Sector Associations elaborated** **a set**
**of** _**Industry Guidelines**_ _**for**_ _**Customer**_ _**Information**_ _**on**_ _**Cross-border**_ _**remote payment**_
**which were** **to be** **implemented** **by 31** **December** **92.** **Nevertheless,** **a** **Commission**
**study, conducted** **in** **early** **1993, has** **found that there** **has** **been little practical**
**improvement with respect** **to the** **level** **of** **transparency, cost, time delays, and double**
**charging of cross-border payment services.**

**The Commission will shortly draw conclusions from this consultation -,** **Whatever** **the option** **chosen,** _**Ow**_
**possibility** **of a** **legislative initiative within** **a** **very short time cannot** **be** **excluded** **If** **the** **existing**
**arrangements** **in** **the voluntary** **framework,** **which the Commission wilt** **in any** **case** **support,** **prove**
**insufficient** **to achieve concrete progress with regard to the** **transparency of** **information,** **the prevention** **of**
**double charging and delays in execution.**

**3.** **Transport**

**The various modes** **of** **transport have** **a** **vital role** **to** **play** **in the** **development** **of the**
**Intemal Market** **in** **that they** **are the** **channels through which** **two of the** **four**
**fundamental freedoms** **- the** **free movement** **of** **persons** **and of** **merchandise** **- are**
**exercised. The future strategy** **for** **the implementation** **of** **the common transport policy**
**is laid down** **in the** **White Paper** **of** **1992. This document details** **the** **measures which**
**will** **be** **taken** **to** **establish** **a** **Community framework which guarantees sustainable**
**mobility.** **It is** **only through** **the** **realisation** **of** **sustainable mobility that** **the** **proper**
**functioning of the intemal market can be attained.**

**The programme aims, inter alia,** **"to** **abolish restrictions** **to the** **supply** **of** **transport**
**services** **in** **order that the elimination** **of** **administrative, technical, fiscal, customs** **and**
**other barriers** **can** **generate** **its** **full** **effect."** **The** **principal challenges confronting** **the**
**European transport sector require** **the** **adoption** **of a** **farreaching** **and** **global strategy.**
**The apporach which** **has** **been elaborated responds** **to** **economic** **and** **social**
**requirements and integrates:**

**• an upgrading and** **a** **more rational use** **of** **infrastructures:**

**• increased security for users of** **these** **infrasturctures:**

**• more** **equitable** **working conditions for those employed in the transport sector**

**• improved environmental protection:**

**• reinforcement of the external dimension of the internal market.**

**The future strategy provides** **for** **the development** **of an** **infrastructure and equipment**
**policy** **to** **allow, amongst other things,** **the** **less favoured peripheral regions** **of the**
**Community to take full advantage** **of** **the opportunities which stem from the completion**
**of the internal market.**

**To ensure** **the** **proper functioning** **of** **the internal market,** **it is** **particularly important** **to**
**apply Community rules** **on** **concentrations** **and** **dominant positions,** **and** **effective**
**disciplines on state aids to the transport sector. This need** **is** **particularly compelling** **in**
**areas subject** **to** **national monoplies (often public)** **or** **oligopolies, such** **as** **rail** **and air**
**transport, which have traditionally been sheltered from domestic and** **intra-Community**

**SEC (92)** **621** **final:** _**Easier cross-border**_ _**payments:**_ _**breaking down the barriers**_

**- 3 2 -**

**competition.** **The dismantling of baniers between markets which have traditionally**
**been segmented will pave the way for new cross-border developments.**

**Action points:**
**»** **in the field** **of international rait transport** **the** **Commission will formulate the further legislative measures**
**which** **are** **provided for in Council** **Directive 91/440.**
**» As regards** **navigation** **of** **inland** **waterways,** **the Commission** **will examine** **the system of tour de** **role**
**(queuing** **by** **barges for freight shipments)** **and its** **consequences for the** **organisation** **of the market**

***** **Reliable** **and** **comparable** **statistical** **systems** **wilt be established** **for** **a»** **transport modes.**

**• The Commission** **is** **also** **preparing proposal** **tor Community** **action** **on**

**- hire** **of motor** **vehicles-early** **1ÔÔ4.**

**- technical inspections** **of** **speed** **limitera for heavy vehicles,** **coaches and open-top buses * end of** **1994.**

**- adaptation** **of** **tachographs to take account of technical progress •early 1994**

**- harmonisation of** **national** **certificates** **for** **the** **piloting** **of** **boats** **for** **inland** **navigation** **-** **early 1994**

**See also the section below on Trans-European Networks.**

**4.** **intellectual** **and industrial property**

**Policy in this domain must evolve constantly to take account of relevant technological**
**developments.** **International** **aspects** **of** **intellectual** **property** **protection** **are**
**increasingly the** **subject of discussion within GATT** **and within the** **WIPO.**
**Nevertheless, the degree of integration already achieved within the Intemal Market**
**requires more structured solutions. The overriding aim of Community action in the field**
**of intellectual property is to achieve free circulation of goods which are covered by**
**intellectual or industrial property rights. In eliminating obstacles to Union-wide**
**protection of intellectual and industrial property and in ensuring a high level of**
**protection, Community action can help to promote the competitiveness of business,**
**and to stimulate research and innovation within the Union. In the field of intellectual**

**and industrial property protection, the Commission will continue its established**
**practice of undertaking consultations with interested parties before drawing up**
**proposals for Community action.**

**Action points**

**• To provide a further option for the protection of technical inventions in addition to the existing**
**Patent** **Systems*** **the Commission** **will** **examine the necessity** **for** **the harmonization of** **national** **systems**
**of** _**utMy**_ _**models.**_ **This form of** **intellectual** **property protection** **is** **well-tailored to enhance innovation**
**activities and to meet the intellectual property protection needs of** **SMEs,** **The Commission plans to**
**publish a** _**Green**_ _**Paper**_ _**on UtMy models**_ **by** **September 1994.**
**. Following two rounds of consultation on the subject of private** **copying** **of Sound and audiovisual**
**recordings with interested** **parties»** **the first in** **1988** **and the** **second** **to be completed by the end of**
**1993,** **the** **Commission will** **consider whether** **action ts** **appropriate,.**

**• Copyright and neighbouring rights:** **On** **the** **basis** **of consultations** **with** **interested parties in the fields**
**of** _**artists***_ _**resale rights and**_ _**reprography,**_ **the Commission will consider the usefulness and need for**
**harmonising** **legislation.** **An examination will also be** **undertaken** **of the** **Intemal** **Market implications of**
**the doctrine of** **exhaustion** **of copyright**
**. To counter the** **probiem** **of erosion of effective patent-life protection for** **niant** **protection** **products,** **the**
**Commission will draw up a proposal for the introduction of a supplementary protection certificate**
**for plant protection products.**
**. The Commission will proceed to an evaluation of** **the** **implications of the recent** **ruling** **handed** **down** **by**
**the Court of Justice on the interpretation of Article** **6** **of the EC Treaty for Community action in the**

**- 3 3 -**

**fieids of intellectual and industrial** **property** **[9]** **.** **On the basis** **of** **its** **findings,** **the Commission will take the**
**necessary actions to ensure that the legal principles enunciated by the Court are given full effect**

**5.** **Company law**

**Company law represents an area in which insufficient progress has been made at a**
**Community level. Nevertheless, more than ever, the objectives pursued by the**
**Community through its efforts at harmonization in the area of company law and**
**accounting remain valid - these objectives are the mobility of firms in order to allow**
**them to benefit from the advantages of a unified market, the equality of the conditions**
**of competition between firms established in different Member States, the promotion of**
**commercial links between the Member States, the stimulation of cooperation between**
**firms across frontiers and the facilitation** **of cross-border** **mergers and acquisitions.**
**Appropriate Community measures are needed to provide for legal structures which**
**facilitate cross-border establishment and investment, and to smooth discrepancies**
**between national systems of company law which discourage or penalise these**
**activities. Particular attention needs to be paid to improving financial reporting**
**requirements within the Union, which could also increase the Union's influence in the**
**international accounting harmonization debate.**

**The legislative framework in the area of company law has undergone important**
**developments during the seventies and eighties. Nevertheless, certain proposals are**
**still blocked in the Council, even in the Pariiament (proposals for a 5th Directive, a**
**10th Directive, a 13th Directive). Some of these difficulties, particularly linked to the**
**transfer of headquarters and mergers between firms, which are decisive for the**
**mobility of firms within a unified market, are the subject of the proposal for a European**
**company statute. This would be a flexible vehicle at the disposal of** **firms,** **which would**
**facilitate their mobility. The efforts to have this statute adopted should continue. Also,**
**on the basis of the wide consultation to which it is proceeding with the Member States,**
**the Commission must consider whether its proposal for a** **13th** **Directive on takeover**
**bids corresponds to the needs of businesses and whether takeover bids, as an**
**instrument for the redeployment of firms on a single market, should be the subject of**
**more or less detailed regulation at Community level.**

**Action points**

***** **Besides pursuing** **its** **efforts designed** **to** **provide firms with instruments which should facilitate their**
**deployment** **in** **the** **internal** **Market,** **the Commission intends to initiate** **a** **fundamental reflection** **on the**
**iegai framework** **for** **firms** **in a** **single** **market,** **in** **order** **to** **determine the optimum conditions for their**
**évolution** **in** **this market** **and the** **necessary means** **to be** **applied** **to** **achieve these conditions; this**
**reflection will result in** **the** **course** **of** **1994** **in a** **communication, possibly accompanied with proposals**
**for** **action,** **with a view to consultation of the Member States and of interested circles.**

**»** **A** **number** **of** **accounting problems have not** **yet** **been dealt** **with** **explicitly in the present Accounting**
**Directives. Amending those directives in order to provide solutions for these problems and** **to** **improve**
**the comparability** **of** **accounts poses difficulties and** **is** **not likely** **to** **result** **in** **concrete achievements**
**within** **an** **acceptable time** **scale,** **instead** **the** **Commission will urgently explore** **other** **ways** **of**
**encouraging convergence** **in** **cooperation with national accounting** **standard** **setting bodies, Member**
**States and other interested parties. These discussions will** **be** **based upon** **the** **principles included** **in**
**the existing Accounting** **Directives.** **They will also take account** **of** **and seek** **to** **influence international**
**developments.**

9 Ruling of October 201993: cases C-92/92 **AND** C-326/92. This ruling **has** not yet **been published**

**- 3 4 -**

**• The Commission witi launch a reflection process on possible actions to** **improve** **the** **comparability of**
**financial** **Information published by** **companies.** **Such a step could help to facilitate cross-border** **trade**
**and** **investment,** **and stimulate the development of a European capital** **market**
**«** **Efforts will also be** **made to** **clarify the** **rote,** **position and responsibility of the statutory auditor,**
**including a definition of liability towards the company and third** **parties.** **This action** **will** **serve to**
**improve the reliability** **of published financial** **information.**
**« The Commission** **will** **reflect** **on** **how the implementation of national law can be organised to take**
**account of affiliations between subsidiaries and parent companies established** **in** **different**
**Member States. The** **objective** **of** **this** **simplification would** **be to** **ensure** **that appropriate obQgations**
**are** **imposed on** **parent companies** **when** **the activities** _**in**_ **question are exercised** **at** **this** **level,** **and Io**
**modify obligations in the tight of group needs** **(eg.** **cooperation agreements with** **certain** **legal**
**guarantees)!.**

**6.** **The creation of a favourable tax regime for business**

**a)** **Indirect taxation**

**Apart from the inevitable difficulties involved in the setting up of the new system,**
**which have been rapidly overcome, the general regime has functioned** **well,** **so**
**permitting the free circulation of goods. However, economic operators have confirmed**
**certain rigidities in the mechanisms already adopted, notably in the case of VAT, as**
**regards taxable transfers, contract** **work,** **certain services and work relating to movable**
**tangible goods, chain transactions, and triangular operations.**

**These difficulties, examined within the scope of the** **"Comité** **d'écoute"** **for enterprises**
**have** **either been found** **practical solutions in collaboration with** **national**
**administrations, or have been, or soon will be, made the subject of legislative**
**initiatives on the part of the Commission. The directive of the 14 December 92 has**
**considerably simplified triangular operations. Other measures for simplification will be**
**the subject of new proposals by the Commission before the end of February 94 .**

**The approximation of rates of VAT (a common minimum rate of** **15%** **for normal rates**
**of VAT) and of excise duties in force since 1 January 1993 has ensured the**
**realisation of one of the fundamental principles of the single market: the freedom for**
**the European consumer to go and purchase whatever he desires, tax paid, in the**
**Member State of his choice, whatever his country of residence.**

**Particular difficulties have manifested themselves in the operation of the specialised**
**regimes for sales of goods to final consumers (mail order and sales of new private**
**vehicles), by virtue of the complexity of the mechanisms put in place and of the**
**obligations which these impose on the operators.**

**The only satisfactory solution to this problem would be the moving over to a definitive**
**system characterised by the payment of VAT in the country of origin.**

**In any case, the treatment of intra-community exchanges will be reviewed in the light**
**of the acquired experience, and with the goal of the approximation of tax rates for**
**operations within a member state itself, an issue on which the Commission shall**
**propose a directive re a definitive VAT regime before the end of 94.**

**Although the functioning of the new general excise regime has posed no major**
**difficulties, the Commission will present in 1994 a proposal for a simplifying directive**
**to overcome** **certain** **problems, both for operators as for national administrations,**
**linked to the application of certain particular dispositions such as distance selling.**
**Moreover, the Commission will have to reexamine levels of excise tax in the light of**

**- 3 5 -**

**the experience** **acquired** **and** **various other** **policies** **reccommended** **by** **the**
**Commission, such as its environmental policy, health policy and energy policy.**

**The Commission's actions in the field of indirect taxation will** **concern,** **inter** **alia:**

**.** **following up** **Its efforts.in** **the field of VAT as well as excise duties, and in collaboration with the tax**
**administrations, by making proposals** **for** **a directive in order to facilitate the functioning of the**
**regimes.**

**•** **In** **the matter of administrative** **cooperation,** **the** **ad** **hoc committees** **presided** **over by the Commission**
**win** **continue their coordinating work** **in** **$4** **and** **the** **Commission will** **present a** **report on** **the** **functioning**
**of the** **VIES system and** **experience** **with this** **system.**

**«** **the report** **on** **and the proposal for** **the** **passage of a definitive VAT regime, which** **wiil** **be presented**
**before** **31.12,04.**

**b)** **Direct taxation**

**The guiding principle of Community policy in the field of direct taxation is to eliminate**
**the doubie taxation of cross-border activities whilst ensuring taxation at least once.**
**Concrete measures, such as the proposed Directives for interest and royalties, the**
**offsetting of losses, and the proposed extension of the parent-subsidiary and merger**
**Directive have already been tabled before the Council of Ministers. All of these**
**measures enjoy the full support of economic operators and would make a significant**
**contribution to improving the tax environment in which** **cross-border** **activities are**
**planned and executed.**

**However, adoption of these measures would only go part of the way towards resolving**
**the problem of double taxation. The guidelines laid down in the Commission**
**communication to the Council and Parliament in response to the Ruding** **[10]** **report**
**provide a detailed blueprint for further Community action in this field.**

**ffmmpmwwfmm**
**a)** **Oou We taxation** **of enterprises**
**#** **On the basis** **Of** **guidelines laid down in response to the Rudtng** **report,** **the Commission** **will** **come**
**forward with** **proposals for further** **action** **to eliminate double** **taxation.** **These** **measures would** **take the**
**form of either a general obligation to** **abolish aR cross-border** **doubie taxation or a phased approach**
**the** **priorities** **for** **which Would have been Set** **by mutual agreement** **with** **the Member** **States;**
**« increased fiscal competition can** **influence** **the allocation** **of** **resources in** **the internal Market Solutions**
**can** **be envisaged to resolve two series of problems:**
**~** **the** **first** **element is represented by the use of** **fiscal** **measures to attract very mobile factors** **such** **as**
**financial** **services;**
**-** **the** **second** **consists in the differences** _**\n**_ **the conventions concluded** **on** **the subject of double taxation**
**between** **Member** **States and third countries**
**« The Commission wiil press for greater coordination of the approach to double taxation agreements**
**between Member States and third countries. Large discrepancies between Member States lead to**
**financial distortions as capital flows with the rest of the world are diverted through Member States**
**providing the** **most advantageous tax treatment** **with** **the third country** **concemed,**
**»** **Ongoing discussions, at regular** **intervals,** **between** **the** **heads of the national direct taxation**
**administrations** **wilt** **be stepped** **up** **with a view** _**to**_ **implementation of** **the** **policy guidelines defined in**
**response to the Ruding Committee report These** **wilt** **include increased cooperation in the field of**
**mutual** **assistance»** **and the development of mutually compatible policies where differing systems**
**interact adversely.**
**» The Commission** **win** **simplify procedures for** **the application** **of Community** **legislation** **and of bilateral**
**taxation agreements** **which provide** **for** **the reduction** **or** **elimination** **of** **withholding** **taxes.**

**SEC (92) 1118 final: Commission communication to the Council and Pariiament subsequent to the conclusions of the**
**Ruding Committee indicating guidelines on company taxation linked to the further development of the Intemal Market.**
**June 261992**

**-36-**

**« Action is** **needed** **to ensure** **equal** **treatment of crossborder investment by financial service providers,**
**where the managing funds do not enjoy the same treatment under the** **different bilateral** **doubie**
**taxation agreements** **between** **Member States.**

**b) Small and Medium sized entreprises**

*****
**Reinforcing** _**Xhej&etf-ftnancing capacity**_ _**of**_ _**non-incorporated enterprises**_ **-** **In** **most Member** **States,** **re-**
**investment of profits by** **non-incorporated** **enterprises is taxed at the marginal rate of income tax,**
**which is** **generaliyjiigher than** **the rate of corporate tax** **which** **is** **applied** **to reinvestment of profits by**
**incorporated** **entities.** **Consequent^** **investments made by unincorporated firms** **through setf-financing**
**is penalised. A solution to this problem might** **be** **to tax the reinvested profits of** **non-incorprorated**
**enterprises at the rate of corporate tax** **which** **is** **levied on** **incorporated** **enterprises.** **A** **proposal win** **be**
**made** **shortly.**
***** _**Transfer**_ _**of**_ _**enterprises »**_ **In many** **Member** **States,** **the** **transfer of a** **non-incorporated** **enterprise** **in** **the**
**event of the owners death often results in heavy taxation which may Jeopardise the survival of** **Hie**
**firm,** **A** **second** **problem for** **firms** **having assets** **in** **several Member** **States concerns** **succession duties.**
**Of** **the** **66 possible** **bilateral** **relations** **between** **the Member** **States,** **only 12 are covered by conventions**
**on the prevention of double taxation** **In** **the field of succession** **duties.** **There** **Is** **therefore a risk of**
**doubie taxation In** **the event of** **transferor ownership** **of an enterprise** **which** **the Commission** **intends** **to**
**eliminate. The Commission will submit a proposal for a Recommendation on problem» relating**
**to the transfer of entreprises** **to** **the Council in the first halt of** **1994.**
***** **Reduction of the administrative constraints on SMEs** **- SMFs often** **reject** **expansion** **of their activities**
**in other Member States by means of permanent** **establishments,** **fearing an excess** **of administratives**
**burdens** **linked** **to the necessity of** **conforming** **to another** **code** **of** **fiscal** **legislation.** **The Commission is**
**therefore examining the possibility of submitting permanent establishments** **in** **other Member** **States,** **in**
**the** **start-up** **phase,** **to** **the** **tax legislation of the Member State where** **the firm** _**ha^**_ **its** **headquarters^**
***** _**Venture**_ _**capital**_ **~** **The Commission** **will** **also make proposals to abolish tax obstacles to the use**
**of venture Capital by** **SMEs,** **Venture** **capital funds** **often suffer from doubie taxation of the income**
**generated,** **firstly at the level of** **the fund** **and** **secondly,** **once income** **is distributed to the** **investor.** **This**
**difficulty** **is** **magnified if the same** **fund wishes** **to invest** **in more than one** **Member** **State.**

**c) Taxation of frontier workers**

*** The Commission** **will soon** **envisage** **issuing dear** **guidelines for** **resolving** **tax problems affecting Union**
**residents working in a** **Member** **State** **other than their State of** **residence.** **In** **particular, these guidelines**
**will aim** **to ensure** **thai** **tax relief is** **granted In** **a** **non-discriminatory** **fashion.**
**d)** **Ufa** **assurance and pension funds***

**»** **The different tax treatment of** **insurance** **products presents major difficulties for the proper functioning**
**of the single market** **in** **insurance** **products,** **The** **decision** **of the Court of** **Justice in** **the** **Bachmaiw** **case**
**is of importance** **in** **this respect This ruling acknowledges** **that,** **under** **certain** **circumstances,** **Member**
**States may be justified in not granting tax relief for life assurance contracts which have been**
**concluded with** **insurance** **undertakings which are not established** **in** **that country as a means of**
**safeguarding the coherence of the** **national** **tax** **system.**

**7.** **Upgrading European** **standardization,** **conformity assessment and quality**

**a)** **European standardization**

**The** **"new** **approach to technical** **harmonization"** **has brought European standardization**
**and conformity assessment to the forefront of the campaign to eliminate technical**
**trade barriers to** **intra-Un** **ion trade. Barriers stemming from differences between**
**national standards and certification requirements persist. The Community, therefore,**
**has** **a** **strong** **interest** **in supporting further development** **of** **the** **European**
**standardization, conformity assessment and quality infrastructures in order to ensure**
**that the elimination of remaining technical trade barriers proceeds as swiftly and as**
**effectively as possible.** **In** **addition, European standardization and** **conformity**
**assessment instruments are an invaluable tool in the implementation of other policies**
**(e.g.** **environment, energy, food quality, safety at the workplace,** **and** **Trans-European**
**Networks). On the basis of in-depth interservice discussions, the Commission will**

**- 3 7 -**

**come** **forward with a report highlighting the potential role of European standards in**
**these policy areas by** **early** **1994.**

**in** **order** **to** **exploit fully the potential contribution of** **European Standardization** **to the effective functioning**
**of** **the internal** **Market,** **the Commission proposes the** **following** **directions for** **action'**
**»** **Financing** **Of** **European Standardization - in** **1934,** **the Commission Will undertake a review Of the**
**way** **In** **which European standardization could be financed over the medium term.** **This** **review**
**will** **aim to** **identity ways in which** **the resources** **which** **are invested by Member** **States,** **the Community**
**and private** **sector** **in national and European** **standardization** **can be best harnessed for the** **purposes of**
**developing** **a standardization** **system which** **meets the requirements of** **European** **Integration,**
***** **Maximising the benefits from European standardization** *** It Is** **essential that the work programmes of**
**the** **European** **Standards bodies are closely** **attuned** **to the** **needs** _**mû**_ **priorities of** **the single** **market.**
**The** **commission** **will see to it that the Community contribution to standardization goes to standards**
**projects which generate the greatest** **value-added** **in terms of market Integration and realization of**
**other Union** **policies.**
_*****_ **Increasing** **transparency -** **Steps will** **be** **taken** **to improve the visibility of** **standards,** **render** **the** **process**
**and** **results of European** **standards-making** **more accessible and comprehensible fo economic**
**operators.** **The Commission** **will** **enter** **into** **discussions with European standardization bodies with a**
**view** **to ensuring that a wide** **ranging** **public enquiry** **takes place on the** **technical merit of** **proposals** **for**
**European standards. This consultation should specifically** **focus on the** **adaptations that** **switchover** **to**
**the new** **standard** **might imply for** **enterprises,** **and** _**m**_ **particular for** **SMEs,** **In** **addition,** **the Commission**
**wiS** **compile annual progress** **reports,** **monitoring the use of standards** **In** **Community policy** _***.&&**_
**headway** **in the writing** **of** **European standards which** **have** **been** **mandated** _**by**_ **the** **Commission.**

*****
**Proper coordination of European standardization activities** **-** **Coherence between the activities and**
**products of the** **European** **Standardization bodies** **must** **be** **developed,** **through measures** **such** **es the**
**development of mutually agreed work** **programmes.**
_**4**_ **Standards and research - The** **links between standardization** _**»M**_ **research wilt be developed** **through**
**the promotion of effective** **and** **timely** **transfer of** **research results to** **standardization,** **and particularly by**
**Community support for research which is targeted on providing scientific data which is required for**
**Standardization** **activities. The Commission wiil devote increased attention to capitalising on** **thé**
**results of Community expenditure On** _**R&D**_ **linked with** **standardization,** **measurement and testing**
**undertaken within the context of the Fourth Framework Programme on Research and Development**
**(Commission** **proposed** **expenditure under this** **heading amounts to 188-250 mio** **Ecu),**
**«** **Ensuring the effectiveness of European Telecommunications** ***** **European Telecommunications**
**Standards** **<ETS)** **drafted by** **ETSl** **are not quickly transposed or referenced** **Into** **the list of national**
**standards and remain too often ignored by network operators or telecommunication administrations.**
**The Commission wiil propose that an** **increasing** **number of ETS be accorded the** **statue** **of**
**harmonised** **standards.**

**b)** **Conformity assessment and quality**

**The objective of this policy will be to promote the development of a common "quality**
**environment"** **which will allow operators to develop and market products, services, and**
**production processes on a Union-wide basis through reference to mutually recognised**
**quality benchmarks and concepts. Given that quality is market-driven and that quality**
**constitutes an important dimension of company competitiveness, any attempt to**
**impose the use of particular quality instruments on the marketplace through regulation**
**would be misconceived and have serious potential risks. Instead, the Union wiil aim to**
**promote a voluntary shift towards quality tools which ensure that products or services**
**delivered in conformity with this framework enjoy Union-wide acceptance with respect**
**to both regulatory and market requirements.**

**The** **"new** **approach to technical** **harmonization"** **and the "Global Approach to**
**Conformity Assessment" have extended the boundaries of public policy in the field of**
**technical specifications beyond the imposition of binding technical regulations. The**
**Community and national authorities now realise that standardization, conformity**
**assessment and other tools which may be used for the purposes of quality**
**management by firms are important features of the business landscape and can**

**- 3 8 -**

**contribute to the successful development of Union enterprise. Public authorities have**
**a role to play in fostering improved quality through the introduction of appropriate**
**incentives and structures, and the incorporation of quality issues when implementing**
**other policies. The Commission is beginning work on the formulation of a Union**
**quality policy which is due to be finalised by the end of 1994.**

**The elements of a quality policy** **wilt be as** **Mows:**
_**4**_ **Supporting** **the integration of quality considerations and a commitment to excellence** **on the** **part** **Of**
**companies** **at** **ail** **stages in** **the quality** **chain** **{design,** **production,** **after-sales** **services** **etc).**
**»** **Encouraging mutual** **recognition** **of** **results and** **certificates between conformity assessment** **bodies** **and**
**quality certification** **institutes** **through accreditation to common standards (EN** **45000K end**
**participation** **in European** **networks** **and** **infrastructures** **linked** **to the European Organization for Testing**
**and Certification** **{ECTC),** _**'&***_ _**&>%&****_
**« Appropriate** **European** **standards** **and** **conformity assessment** **procedures will have an** **important** **role** **to**
**play** **in** **Community quality** **policy.** **For certain products and** **services,** **compliance,*d6\** **recognised**
**standards and certification will represent** **«** **means of embodying given** **quality** **performance**
**characteristics.** **The greater emphasis on building a coordinated approach** **Io** **quality will** _**tort**_ **to**
**increased market** **pressure** **for** **a** **closer alignment of** **quality** **tools.**

*** Ensuring the** **effective** **coordination** _**M$d**_ **orchestration** **of** **national actions in** **the** **field** **of quality** **policy.**

*** integrating quality** **policy objectives into other Community** **policies** **(e.g.** **regional** **policy,** **measure*** **to**
**support** **SMEs,** **actions to assist** **industry** **restructuring).**
**«** **Establishment** **of** **an Observatory** **on** **quality,**

*** Promotion** **of the use of appropriate quality** **techniques** **In** **service** **industries»**
***** **The development of ait aspects of quality** **In** **the agricultural and food** **sectors»** **both through**
**instruments specific to the different agricultural products and through horizontal measures such as**
**those** **In** **favour of organic** **farming and** **other environmentally friendly** **techniques.**

**8.** **Catering for SMEs**

**SMEs form the bedrock of the Union economy, accounting for 99% of the population**
**of Union entreprises and generating 70% of** **private-sector** **employment It would**
**therefore be misleading to treat SMEs as a homogeneous group, confronted with**
**identical challenges and opportunities. The Commission, for its pari will continue to**
**ensure that relevant Community policies are tailored to the requirements of small and**
**medium-sized enterprises. Through the structural funds, for example, the Community**
**contributes substantially to the cofinancing of measures aimed at** **SME's.** **In**
**recognition of the fact that SMEs have the potential to act as the motor for**
**employment and wealth creation in the Union, the Council has approved a**
**Commission** **multiannual** **programme for 1993-96 which is designed to stimulate the**
**development of SMEs.** **In** **this context, the Commission has a key role to play in**
**improving awareness on** **the** **part of SMEs** **of relevant policy and** **market**
**developments. Existing channels for the provision of information and advice will be**
**reinforced and upgraded, and the Commission will pursue an active role in**
**disseminating** **[ N]** **best-practices** **[H]** **and innovative solutions to problems confronting SMEs.**
**In** **addition, the Commission intends to launch a number of horizontal actions**
**designed to tackle constraints which impede SMEs from reaping the full advantages**
**of the single market. The following issues will be targeted for action in line with the**
**conclusions of the SME Council on** **11** **November 93.**

**-39-**

*** Financial** **problème** **experienced by SMEs** **»** **Many SMEs** _**ma**_ **undercapitalised and encounter**
**difficulties in gaining access to adequate finance because of** **an** **inability to provide** **collateral.** **There**
**must be a rapid** **follow-up** **to the measures** **foreseen** **by the European Councils of Edinburgh and**
**Copenhagen which represent the first response at Community level to these** **problems.** **Particular**
**attention should be paid to the development of operational** **mechanisms.** **The advantages** **in** **their**
**entirety** **should** **be** **destined** **for the final** **beneficiaries,** **the SME's. Other measures must be found to**
**improve the** **access of** **SME's** **to credit and finance. A particular aspect of these problems** **Is** **that of**
**payment** **terms** **-** _**in**_ **the wake of the the Commission** working document end the subsequent**
**consultation process on the problem of delays relating to commercial** **transactions,** **proposals to**
**alleviate** **these** **problems** **will** **be** **examined in** **the** **first** **naif** **of** **1994,**

**. Helping SMEs to adapt to** **standardization,** **certification» and quality assurance procedures** **- Ail**
**SMEs** **should** **have access to** **detailed infromation on existing and** **draft** **European** **Standards,** **and** **their**
**interests should be taken on board in the process** **of** **standàfds-wraing.** **Even those** **SMEs** **which** **do not**
**contemplate** **trading** **across frontiers may** _**$nd**_ **themselves** **confronted wfth** **chages in** **standardfeation**
**and conformity assessment arrangements** **ai a** **ioc^** **level Which are driven by European**
**standardization** **and** **conformity assessment** **This** **wider audience of SMEs must** **be** **kept fully informed**
**of any** **new** **developments of relevance to** **them,** **proposals** **for practical measures to disseminate**
**"best-practices"** **and measures to** **help** **SMEs to adapt to changing standardization end**
**conformity assessment** **requirements** **will** **be** _**4r»m**_ **up on the** _**basts**_ **of** **a** **review of current action**
**Within** **the** **EUROMANAGEMENT** **programme.**

**The Commission** **will** **devote** **attention to ways in Which** **trade associations representing SMEs can**
**be** **more actively** **integrated in** **the processes of** **European standardization**
***** **Opening** **up public** **procurement** **16** **SMEs** *** SMEs** **find** _**ft**_ **difficult to compete effectively** **for** **contracts**
**because of** **onerous** **administrative requirements** _**a.n4**_ **the** **need tor** **paifaership with** **reliable** **partners in**
**the Member State where contracts are being** **awarded.** **The Commission will publish a**
**comprehensive explanatory guide fo clarify the steps which** **a company** **needs to fake before**
**submitting a bid for a public procurement contract** **In** **another Member State** **fn** **the** **second** **half**
**of 1994.**

**The Commission will also table** **a** **list** **of concrete measures to improve access** **by** **SMEs to public**
**procurement markets** **in** **other Member States** **for** **consideration by the** **Council** **during the first**
**half of** **1994.** **Amongst others» these** **measures** **win suggest ways In** **which:** **-**
**-** **the** **BC-NET** **and SRE networks can be used to create inter-firm partnerships for the purposes of**
**competing** **directly ores** **sub-contractors** **for public procurement** **bids;**
**to** **adapt training** **programmes for public procurement** **markets to** **the specific** **needs** **of** **SMEs;**
**the quality of advice available on public procurement matters from public** _**and**_ **private** **organizations**
**can** **be** **upgraded,** **particularly** **in less-favoured** **regions;**
**information support** **can be provided** **to improve** **access to** **subcontracting opportunities;**
**the Tenders Electronic Daily (TED) information system can be rendered more accessible and** **user-**
**friendly;** **an important pilot project on an information system for public procurement** **(SIMAP)** **will be**
**launched at** **the beginning of 1994.**

**Administrative simplification** **«The** **Commission will continue to develop its Business** **Impact**
**Assessment system which is intended to highlight any administrative difficulties for SMEs in**
**complying witi)** **or benefiting** **from** **a proposed Community** **initiative.** **The Business** **Impact** **Assessment**
**will be reinforced** **by the** **use** **of** **cost-benefit** **analyses,** **where feasible** **and** **appropriate.**

**Transfer** **of enterprises - The transfer of businesses touches all enterprises but** **is** **a particular**
**problem** **for** **small** **and** **family** **owned** **businesses,** **A** **growing** **number of** **businesses** **are unable to solve**
**the problems** _**oi**_ **transfer and have to close** **down.** **The Commission** **wifl** **therefore be issuing a**
**Recommendation to the Council covering the problems** **relating** **to the transfer of business (see also**
**"direct** **taxation*}***

**9.** **Commercial communication and media**

**The Commission wiil adopt a Green Paper on commercial communication in order to**
**ensure the coherence and transparency of Community policy in this field, as well as to**
**prevent possible new obstacles to the free drculation of commercial communication**

**- 4 0 -**

**services (advertising, sponsorship, direct marketing, promotions etc). The main**
**elements of this Green Paper are summarised below.**

**1.** **Green paper** **on commercial cornrnunicatJoq**

**The Commission** **will** **publish a Green** _**Paper on**_ _**commercial communication**_ **in mid-1094** **which** **will**
**examine the nature and extent of legislative and** **technology-based** **obstacles which interfere with** **ail**
**forms of commercial communication including advertising, sponsorship, direct** **marketing,** **promotions,**
**and packaging.** **This initiative** **represents the first comprehensive** **and thorough** **attempt** **on** **the part of the**
**Commission to address these** **issues.** **Furthermore,** **the** _**Green**_ **Paper** **will** **be based on** **wide-ranging**
**consultation and contacts** **with** **all interested parties,** **including** **business,** **communication service**
**providers,** **and consumer** **associations.** **The results of** **this** **consultation process and the findings of a**
**survey of parties involved in Commercial communication will be published in late** **February** **1994.** **The**
**subsequent Green Paper will outline possible role for the Commission in facilitating** **cross-border**
**commercial** **communication.** **Three** **broad areas** **for** **Community involvement Witt** **be** **envisaged:**

**« The Commission can act as** **a** **coordinator and** **contact-point,** **disseminating information on the**
**development of** **the** **market** **and** **undertaking** **impact analyses** **of specific measures**
**«** **The Commission can fulfil a** **"market** **monitoring"** **function and attempt to preempt the emergence of**
**new difficulties stemming** **from** **insufficient** **coordination** **of national legislative** **measures,** **and uneven**
**implementation** **of new technologies**
***** **The** **Commission** **can organise a** **country-by-country** **review of national systems of legislation**
**governing commercial** **communication.**

**2.** **Media services**

**In** **the field of media** **services,** **there are a number of problems which interfere** **with aie** **freedom of**
**establishment** **and** **free circulation of** **related goods and** **media** **services.** **In response** **to** **some** **of the most**
**pressing** **problems,** **the** **Commission will** **take** **action on the following** **two** **fronts;**
**#** **Evaluate the need for community action on the basis of the** _**Green Paper**_ **on** _**"Pturatism**_ _**and**_
_**concentration in the media in the**_ _**internat**_ _**market***_ **In** **particular,** **the Commission** **will** **take a decision** **in**
**early 1694** **on** **the** _**need**_ **for an action on the** **issue of media** **ownership.**
**»** **A reflection document** **will** **also be drawn up on the question of** _**the protection**_ _**of**_ _**coded signals**_ _**for**_
_**televisual and audio**_ _**broadcasting.**_ **This document** **will** **examine the issue of whether new Community**
**measures, incorporating recent technological advances, could play a role in removing technical**
**barriers to trade in signal** **decoders.** **This measure will address the need for effective protection of**
**coded signals against illegal** **pirating.**

**10.** **Commerce and distribution**

**Efficient and competitive commerce and distribution systems, which allow products**
**manufactured in one Member State to be effectively marketed and distributed in**
**another Member State under commercially attractive conditions are required if the**
**benefits of the Internal Market are to be maximised. This requires that attention be**
**given to improving access to distribution networks and the fostering of links between**
**firms in developed and less-developed regions, between large and small firms, and**
**between firms in different Member States. To this end the Commission will continue**

**close consultation with representatives of the commerce and distribution sectors**
**within the forum of the Commerce and Distribution Committee, and with Member**
**States through regular meetings with officials, Director-Generals of Commerce, and**
**experts. In addition, the Commission will take action along the following lines.**

**The** **setting up, in collaboration with the Member States, of an integrated system for the collection,**
**processing and distribution of homogeneous statistics on commerce and distribution at the**
**Community level. The** **gathering** **of reliable and detailed data is a** **prerequstte** **for the** **formulation** **of**
**further Community policies** **in this** **field.**

**The second phase of the "COMMERCE** **2000"** **initiative,** **designed to encourage the integration of new**
**technologies for improving internal** **communications,** **inventory** **management,** **logistics and distribution,**

**- 4 1 -**

**is** **in the** **pipeline. Greater emphasis shall** **be** **given** **to** **developing** **cross-border** **nature** **of** **projects**
**supported under this second phase.**

**The Commission shall give further support** **to** **self regulatory** **measures,** **such** **as** **voluntary codes** **of**
**conduct** **in the** **areas** **of** **means** **of** **payment,** **franchise arrangements** **and** **mall-order** **sales,** **as one**
**means of developing market-led solutions to pan-European problems** **In** **commerce and distribution.**
**Publication** **of** **brochures by the end** **of** **1994** **explaining Community and national regulations relevant** **to**
**the retail** **and** **distribution sector concerning freedom** **of** **establishment, competition** **law,** **consumer**
**protection and urban planning.**

**11.** **Energy**

**The achievement of the Internal Market for energy aims to provide consumers with an**
**easier access to the different sources of energy, in the framework of a more**
**competitive market which will put energy supply on a wider basis and thus improve**
**security of supply.**

**In order to provide for effectively increased competition and business opportunities in**
**the energy sector, a series of measures, initiatives and orientations exist, with regard**
**to both the internal and the international dimension.**

**1.** **Memaldimejiiicji**

**« Energy** **policy accompanying measures have** **a** **great role** **fo** **play.** **In** **this context,** **the** **Commission**
**energy policy aims** **to** **reduce disparities within** **the** **Union regions** **as** **regards access** **fo** **energy**
**resources, energy** **dependence,** **structure** **and** **security** **of** **supply. Actions** **are** **undertaken** **in the**
**framework** **of** **the regional and urban energy planning and** **die** **structural** **funds,**

*** Development and strengthening** **of** **trans-European** **energy networks** **are paramount** **The Commission**
**is** **engaged in the preparation** **of** **Community** **"guidelines".** **These networks can ensure** **a** **diversification**
**of energy resources, and consequently increase supply links also with areas outside the** **Community.**
**«** **A** **co-ordinated** **energy policy on reserve stocks and crisis measures** **rematnes** **another key issue.**

**2.** **International dimension**

***** **The Energy Charter wiil provide a legal framework for** **energy** **trade, investment and co-operation with**
**the former planned economies. That means more opportunities** **for** **business,** **diversification** **and**
**security of** **supply,**

**«** **Bilateral technical assistance programmes for the Republics** **of** **the former Soviet Union** **and for the**
**countries** **of** **Eastern and** **Central** **Europe, combined with association agreements** _**and**_ **other links** **and**
**programmes, although designed** **to** **assist economic development and general stability, contribute** **to**
**the long term security** **of** **energy** **supplies.**

*** in the same context, the strengthening and deepening** **of** **the** **producer-consumer** **dialogue, particularly**
**with North Africa and the Mediterranean** **countries,** **remain essential.**

**III.** **Further improving the environment for the Consumer**

**The Intemal Market has not been created for business alone and it will not operate**
**properly** **without strong and effective consumer participation. The citizen as consumer**
**is entitled to benefit from greater competition and a greater choice of goods and**
**services, while being assured that his safety and other essential interests are**
**adequately protected. At the same time well-informed consumers exercising market**
**choices can accelerate the positive economic effects of an integrated market. The**
**consumer** **therefore has a critical role to play in forwarding the objectives of the**
**Internal Market Programme.**

**- 4 2 -**

**Besides the measures mentioned in other parts of this programme which wiil clearly**
**be of benefit to consumers, such as greater transparency of Community legislation**
**and specific information activity aimed at consumers, the Commission believes that**
**other legislative measures may be necessary in order to ensure that the consumer**
**can treat the Union as a genuine single market. The priority areas concemed are legal**
**and commercial guarantees and financial services.**

**The Commission therefore proposes the following actions:**

**On the basis of public reactions to its October 1992 Green** _**Book**_ **on guarantees and** **after-sales**
**services, to be given by April** **1994,** **the Commission will come forward** **with** **appropriate proposals**
**during the second** **half of** **1994.**
**With** **respect to financial** **services,** **the** **Commission intends to address the following** **issues:**
**Work** **will start to examine** **to** **what exterrt the rules** **for** **transparency for** **other** **forms** **of consumer credit,**
**such** **as those provided** **for** **in Directives** **87/102/EEC** **and** **90/88/EEC,** **can be applied to mortgage**
**credit A** **draft proposal wiM be submitted in early** **1995.**
**The** **1988** **Recommendation in respect of payment** **systems,** **including credit card** **systems»** **will be**
**reviewed** **and** **may** **be** **transformed** **into** **a** **binding** **instrument A** **decision will be taken by the end** **of**

**1994.**
**The action already mentioned above in respect** **of** **facilitating transnational** **payments** **will also be to the**
**benefit of individual** **consumers.**
**The Commission will reflect** **on the possible form and content jof** **measures to** **improve the** **safety of**
**some services** **which,** **with** **the advent of** **the Single** **Market,** **take on a** **greater** **cross-border** **dimension.**

IV. The relationship between sustainable development **and the**
Internal Market

**There is no inherent conflict between the completion of the Intemal Market and the**
**fight against environmental degradation. They are and should be mutually supportive.**
**This special relationship is already recognised in the Single European Act and is**
**reinforced by Article 2 of the Treaty where it is clearly indicated that the completion of**
**the Intemal Market will be an important means to reach, inter alia, "a sustainable and**
**non-inflationary growth respecting the environment".**

**Short term economic gains at the expense of economic partners and of the**
**environment should be replaced by an attitude which constitutes the basis for greater**
**efficiency and competitiveness, both at a Union level and internationally, for a more**
**sustainable economic** **pattern,** **in the long run. At an international level, the**
**Commission will support efforts to develop an international framework to resolve trade**
**conflicts arising from application of national or regional measures designed to protect**
**the environment. In addition, the Commission will support future efforts to strengthen**
**the rules and safeguards contained in the GATT Code on Technical Barriers to Trade**
**in order to ensure that environmental Regulations are not abused for the purposes of**
**artificially restricting trade.**

**Union environment policy is at a very important juncture. Following the UNCED**
**agreements, and in accordance with the Treaty on European Union and the Fifth EC**
**Environment Action Plan, an integrated approach is being developed in order to**
**ensure that the most effective policy is applied to enable a move towards a more**
**sustainable path of social and economic development. This is not only vital for the**
**environment itself but also for the long-term success of the Intemal Market. Its**
**success is dependent on the sustainability of the policies pursued in the fields of**

**- 4 3 -**

**industry,** **energy, transport, agriculture and tourism, which are in turn dependent on**
**the capacity of the environment to sustain them. Many environmental issues such as**
**climate change, acidification and waste management can only be tackled by an**
**interplay between the main economic actors and sectors, not only through the use of**
**legislation but also by using an extended and integrated mix of other instruments,**
**such as standards and/or certification systems, voluntary schemes or economic**
**instruments. This interplay can best be achieved within a Community framework,**
**without which there is a risk that actions taken will fail to have their full impact or that**
**the integrity of the Intemal Market will be jeopardised. This framework, however,**
**should not be designed or felt to be a** **straitjacket.** **It should be flexible enough to**
**encourage all concemed to accept their responsibilities and to develop and apply an**
**optimal mix of instruments tailored to their local and regional circumstances but**
**without creating unnecessary and unjustified distortions.**

**Although progress has been made since the adoption of the Single European Act, a**
**number of issues remain to be resolved if the implementation of the Fifth Action**
**Programme and the functioning of the Internal Market are to be fully reconciled.**
**During** **1994,** **further reflection will be undertaken concerning the link between the**
**Intemal Market and sustainable development.**

**Action poynft**
**«** **Environment** **and competitiveness » In** **its Communication of** **10 *iovember** **1992** **[1]** **%** **the Commission**
**stresses the potential benefits of the integration of environmental considerations Wo product and**
**service development and** **production processes in terms of** **bolstering** **competitiveness** _**on**_ **Union** **and**
**world** **markets,** **in** **particular,** **effective action on this front could provide Union firms with** **a** **first-mover**
**advantage** **on** **international** **markets*** **Community actions** **such** **as** **6co-labeIling** **and** **Eco-euditing,** **as**
**welt as appropriate fiscal** **incentives*** **could** **be** **used to support die** **development** **of these strategies by**
**Union** **firms.**
**«** **Waste » The Commission will elaborate proposals for reconciling the principle** **of** **the free circulation** **of**
**products with the** **special** **waste** **regime.**
**« Vetting** **of** **proposed national** **environmental measures to** **ensure their compatibility with** **the internal**
**Market** **»** **The current proposal to widen the scope of Directive** **83/1S9/EEC** **to include voluntary**
**agreements or economic instruments** **designed** **to** **achieve,** **inter** **alia,** **environmental objectives, will**
**provide a means for making progress on this** **front**

**V.** **Establishing trans-European networks**

**The Commission's working document of June 1993 has put the emphasis on the need**
**for a coordinated and coherent approach in the development of networks. This**
**approach should integrate aspects of interconnection, interoperability and access to**
**networks. Indeed the development of networks has to be demand driven and**
**submitted to the rules of the market. The White Paper on growth, competitiveness and**
**employment emphasised the need to realise projects judged to rank as a priority,**
**whilst proposing a strategy to accelerate their implementation. However, in order that**
**networks policy may make a contribution to economic growth, which goes beyond the**
**projects themselves, there is a need to undertake certain horizontal actions in order to**
**facilitate the emergence of trans-European networks.**

**1** **Communication of the Commission to the Council and to the European Parliament:** _**Industrial Competitiveness**_ _**and the**_
_**protection of**_ _**the**_ _**environment.**_ **SEC(92)** **1986,** **November** **1992.**

**- 4 4 -**

**The proposals made in the Strategic Programme complement the proposals of the**
**White paper. Whilst respecting the specific characteristics of each sector, they must**
**contribute in a positive manner to the implementation of Title XII of the Treaty on**
**European Union and to the creation of confidence, whether of public authorities,**
**industrialists, bankers or operators of the networks. These proposals sketch the**
**measures necessary to ensure the coordination of networks policy at the Community**
**level,** **stimulate the participation of the private sector in their financing and to ensure**
**their interoperability.** **In addition, it should be recalled that the various Community**
**financial instruments contribute to the** **cofmancing** **of a significant number of projects**
**forming part of the trans-European networks.**

**1.** **Promotion of a convergence of interests and coordination**

**The difficulties in establishing priorities and projects of common interest are as well**
**known as the reasons for these: divergence of interest and priorities at the national**
**level,** **the absence of a forward looking European vision and a poorly adapted legal**
**and administrative framework. In the perspective of an increased integration of**
**European infrastructures for transport, telecommunications and energy, it will be**
**necessary to reinforce coordination at the Community level, in order to progressively**
**integrate the European interest into the national dimension of networks and to**
**optimise the use of the available resources while respecting the principle of**
**subsidiarity.**

**Action** **points**

***** **The adoption** **by** **the Council of network** **plans,** **Identifying** **possible guidelines lor the development of**
**networks in the medium** **term,** **constitutes the first step in this sense. These plans are based on e**
**dialogue at the** **European** **level that** **it** **would be advisable to deepen, and play** **an** **essential rote tn**
**directing some Community** **Instrumentsjowards** **those projects** **which** **are** **judged** **to rank as priorities**
**in eligibie** **Member** **States** **and regions. The work** **undertaken** **by the Commission** **has** **already resulted**
**In** **the adoption by the Council of four** **masterplans** **in the field of transport Other network plans are**
**still being discussed** **in** **the** **Council** **and at the** **Parliament,** **whilst the Commission intends to present**
**new proposals** **In** **the immediate future** **(see** **table** **in** **annex** **2).** **Work** **is** **under way to**

**-**
**have the plans already proposed adopted** **by the Council and** **the Pariiament ;**

**-**
**present to Council, the Parliament, the ESC, and the new Committee of the Regions the**
**supplementary proposais currently** **being** **prepared;**

**- promote the integration of networks in space and between different nodes and in particular in the**
**transport** **area** **where a multimodal** **plan** **is** **being** **elaborated;**

**~**
**identify the areas which are directly connected to the efficiency of networks Such as the quality of**
**service offered** **and** **the different conditions necessary to ensure efficiency** **and** **to make the appropriate**
**proposals.**

**«** **The reinforcement of strategic and operational coherence is the second step. The master plans are**
**necessary instruments to implement the** **TEN** **policy** **but** **without further** **coordination** **these could result**
**in an assembly of complex and fragmented** **activities,** **in maintaining a comprehensive strategy for**
**TEN'S,** **which has proved to be successful in the establishment of the intemal Market itself.** **It** **will be**
**necessary to** **co-ordinate** **the various instruments,** **assign** **the required resources between sectors and**
**monitor the progress achieved. A** **decision** **therefore,** **is needed** **on** **the** **institution** **of** **an** **appropriate** **co-**
**ordination mechanism to reinforce coherence for the implementation of the TEN policy. The**
**Commission will make specific proposals shortly.**

**• An improvement of statistics is necessary to improve the diagnosis of** **needs.** **The lack of comparable**
**and reliable statistical information** **at** **the Community level** **In** **the** **Held** **of infrastructures has often been**
**raised.** **This can only be corrected** **with** **the active support of the Member States. The Union must**
**equip itself** **with** **adequate means of observation** **in** **terms of** **methods,** **standardization** **and** **instruments**
**of measurement The** **Community's** **Statistical Office will be making appropriate proposals in the**
**course of the first half of** **1904< In** **the sphere of telecommunications, this will involve providing the**
**means of** **conducting** **an in-depth analysis of the market for services.**

**- 4 5 -**

**An** **in»depth** **examination of the pivotal role that** **European** **towns** **«re** **intended to play** **In** **the**
**development of energy and transport networks and in parallel to** **this,** **of the contribution that** **trans-**
**European telecommunication networks can make towards** **the** **harmonious** **development** _**o^t**_ **these**
**towns.** **In** **the definition of a new** **européen** **approach to Infrastructures the nodes and arteries of**
**communication must be treated simultaneously. The Commission** **la considering** **work** **In** **order to**
**study** **the** **Impact of** **trans-European** **networks** **on** **the development** **of the urban** **fabric.** **With** **the results**
**of** **these analyses the** **Commission** **will be able** **to** **make** **appropriate proposait** **In 199&**

**The development of a prospective** **vision,** **the exchange of data and reflections** **et** **a Community level**
**on** **the future development of infrastructures must be** **promoted;** **The Commission** **intends** **to support**
**public or private efforts with** *** view** **to stimulating** **Community** **reflection and** **dialogue** **between the**
**Interested** **parties (promoters of** **projects,** **operators of** **networks,** **industrialists,** **universities, national**
**regional end local** **authorities).** **A first private initiative supported by** **the** **Commission concerns the**
**establishment of** **a European** **Centre** **for** **the Study of** **Infrastructures launched** **by** **the European** **Round**
**Table,**

**2.** **Stimulating private investment**

**Pressure on constrained national budgets and wider competition makes the funding of**
**trans-European** **networks increasingly problematical. More needs to be done to**
**stimulate private investment in major infrastructure projects and overcome any**
**obstacles that may inhibit it.**

**Stimulating the participation of private finance in TEN projects would have a direct**
**effect on growth, competitiveness and employment in the Union in the medium term**
**by bringing forward infrastructure projects that would not otherwise take place or**
**would be considerably delayed.**

**Although the financing of specific projects should be decided on a case-by-case basis**
**(see specific proposals contained in the White paper), market conditions could be**
**generally improved in order to minimise the risks under the control of public**
**authorities and to offer an appropriate return for the risks undertaken by the private**
**sector. The Community should play a more active role in** **"unlocking"** **private**
**investment.**

**Action points**

**a) Putting in place a legal framework that encourages greater private sector** **Involvement**

**While** **it Is** **necessary to keep a balance between the** **profitability** **of** **investments** **and the social rote of**
**major infrastructure** **projects*** **convergence of conditions for private Investment** **should** **be encouraged** **in**
**order to stimulate** **such Investment** **in** **networks** **throughout the** **internal** **market Competition policy has an**
**Important roie** **to play** **in** **opening up national** **markets {see Section AIV** **above).** **In** **many** **Instances,** **the**
**regulatory environment requires careful adjustments** **In** **order to provide «** **flexible** **framework** **for the**
**development of transborder network** **projects.** **A** **detailed** **analysts,** **is** **necessary,** **however,** **of existing legal**
**and regulatory** **barriers** **that may impede** **private seder Involvement In** **networks:** **Specific proposals may**
**be made** **once** **the** **results** **of such** **studies** **are** **made** **available** **{end** **of** **1ÔÔ4),**

_**b)**_ **improving administrative procedures** **In** **order to accelerate the planning of infrastructure**
**Investment**

**An important element for the development of networks consists** **in** **simplifying administrative procedures**
**and** **reducing** **delays** **in the planning** **process. Multiple administrative** **layers and** **complex consultation and**
**decisionmaking** **procedures** **prolong** **the** **planning process** **for infrastructure projects** **and** **thereby frustrate**
**investors and users while increasing the costs and risks** **of** **infrastructure** **projects.**
**»** **Member** **States should** **review their current practice** **concerning the** **treatment of** **planning** **applications,**
**with** **a** **view** **to simplifying procedures** **and** **accelerating the** **planning** **of** **infrastructures.** **The elaboration**
**of** **a** **handbook of** **best practice in the Union** **is being considered** **by the** **Commission** **in** **order to provide**
**a yardstick for** **public** **authorities.**

**-46-**

**.** **As part of the Commission's efforts to enhance the** **rote** **of** **the** **Declaration of** **European** **interest,** **clear**
**guidelines and other** **advice w»** **be** **issued** **to Interested parties by** **mkM9ft4 on** **the policy** **«specfe** **In**
**which the Commission has** _**un**_ **Interest,** **in particular in the fields of** **environmental,** **competition and**
**public procurement policy.**

**c)** **Attracting institutional** **and** **retail investors in Union** **financial** **markets for** **financing** **J>rojecte In**
**trans-European** **networks**
**Some** **trans-€uropean** **network projects are** **financially** **viable in the private sector in their** **own** **right** **in**
**these** **cases»** **the public** **sector's roie** **may be restricted to providing an appropriate legislative and**
**regulatory** **framework,** **tn** **addition,** **the** **Declaration** **of** **European Interest** **could Stimulate** **the** **Interest** **Of»»**
**private sector by facilitating the access** **io** **Community financial Instruments and accelerating certain**
**administrative procedures (see proposals** **below).**

**In** **the case of projects indispensable** **lor** **the functioning of the network but** **not generating** **sufficient**
**revenue to attract private** **Investors** **a public financial** **contraction should** **be** **considered.** **The usual** **form**
**Is** **a grant but alternatives** **exist,** **such as** **Interest** **rate** **subsidies,** **tax** **Incentives** **or** **credit** **guarantees,** **The**
**possibility of developing such instruments at Community level** **is being** **studied,** **In** **particular** **with** **regard**
**to attracting Institutional and retail** **investors.** **Among the proposals being considered are** **en** **innovative**
**approach to guarantees** **and** **insurance** **In connection with** **the** **EF,** **provision of** **interest** **rate subsidies** **m**
**conjunction** **with** **Community or ElB** **loans,** **tax incentives to attract** **long** **term** **capital** **or the** **provision** **of**
**some equity** **capital through** **the** **EIF** **for new infrastructure** **projects,** **A communication** **containing** **detailed**
**proposais** **will be made in** **the** **second** **half of** **1894,**

**d) The Declaration of European interest to serve** _**a»**_ **a catalyst for stimulating** **Investor Interest** **lor**
**trans-European network** **projects.**

**The principal features of the** **enhanced** **DEI** **could** **be** **summarised as** **follows:**
**»** **The Declaration of European interest could be used as a badge** **Showing** **the intention** **of** **the**

**Community fo address any administrative** **and legal problems with** **minimal delay** **in** **order to allow the**
**project** **to** **proceed.**
**« Specific follow-up actions** **in** **connection with the granting of DEI could be decided** **in** **order to help**

**mobilise private** **capital^** **such** **as:**
**~** **reimbursement for** **successful** **DEI** **projects** **of** **costs related** **io preparatory** **studies;**
***** **priority consideration for credit enhancement** **by** **the European** **investment** _**fund,**_ **once the** **EIF is** **In**
**place;**
***** **active Commission** **"sponsorship'*** **of** **successful** **projects** **In Union financial** **martlets;**
***** **eligibility for equity participation** **by the** **EIF*** **once EIF rules so** **allow;**
***** **tax incentives for** **bond Issues** **related to DEI projects.**

**3.** **Ensuring** **interoperability**

**Differing regulatory requirements and technical specifications and the multiplicity and**
**diversity of administrative structures and management rules result in absence of**
**cross-border** **interoperability and market fragmentation. With a few exceptions,**
**interoperability of trans-European networks has not been addressed in a systematic**
**way. Community mandates to the European standardization organizations have**
**concentrated on the implementation of Community policies, in particular technical**
**legislation, public procurement and the development of information technology and**
**telecommunications.**

**The Community should adopt an approach which allows for the full participation of the**
**parties concerned in the research of networks interoperability. This is an area where**
**national public authorities traditionally exercise an important regulatory role and, at**
**least in part, interoperability cannot be achieved without recourse to obligatory**
**technical specifications. The emphasis however, should be laid on specifications**
**agreed by network and market operators themselves.**

**-47**

**« in** **a general** **manner,** _**an**_ **Inventory will** **be** **drawn** **up during the course of** **the** **first half of 1994 of the**
**areas** **in which actions must be envisaged to improve** **solutions** **to the problems** **of interoperability.**
***** **For** **each** **area** **the** **procedures** **requiring** **harmonization actions** **wiil be** **Identified,** **whilst making as clear**
**a separation** **as** **possible** **between:**

**- the regulatory procedures which come under the Member States* administrations because they**
**Involve a Collective Interest** **and** **are traditionally** **reserved** **for** **public authorities;**

**- the regulatory procedures** **which** **are generally delegated** **to** **the** **operators** **of the networks and which** **in**
**the administrative and technical domains represent obstacles to the** **irtferopenability** **of systems or**
**simply** **to** **the flutdrh/of exchange** **flows;**
**-** **the technical specifications which require the participation of the** **actors** **directly associated with the**
**establishment of infrastructures or** **with the provision** **of** **equip*rwrt** **for** **networks.**
**«** **On the basis of these results the Commission** **win** **propose sciions** **in 1999** **to** **determine** **the most**

**appropriate legal Instruments to resolve the problems of regulation and envisages being able to**
**entrust**
**~ to competent** **bodies those** **tasks** **which correspond** **traditionally to the work of a regulatory** **body In** **a**

**country** **of the** **Union;**
**«•** **to. the European standardization bodies those tasks which normally fell within the ambit of**

**standardization,** **having made** **sure** **that these bodies are in a position to manage** **tasks** **which** **will** **be**
**appreciably different** **from** **those of** **traditional** **programmes.**
**»** _**A**_ **proposal for a directive** **on** **the interoperability of** **high** _**tpeed**_ **trains wffi** **shortly be** **presented** **to the**

**Council.** **The** **proposal would** **envisage** **the elaboration** **of** **technical** **specifications of interoperability, the**
**respect** **of which Will** **be** **compulsory,** **and of** **European** **standards,** **for** **which mandates Win** **be** **given** **to**
**CEN/CENELEC/ETSÎ.**
**» Action should be taken** **by the Commission** **and** **Member** **States** **to promote the** **r^articipation** **of network**
**operators** **and** **Industry** **in** **the elaboration** **and** **application of** **European** **standards both within the Union**
**and witi) Its** **neighbours,**

*** Where necessary** **common** **technical specifications on essential elements** **lor** **interoperability** **will** **be**
**made** **obligatory.**

**4.** **Early development of telematic networks between administrations**

**Within the scope of the Commission's policy on trans-European networks there have**
**been established a certain number of computerised networks for the exchange of**
**information between the national administrations of the Member States dealing with**
**tax and customs matters on the one part and between the Member States and the**
**services of the Commission on the other** **part** **The Commission will proceed with a**
**feasibility study in the coming months whose goal will be to initiate the creation of a**
**truly common network of communication for customs and indirect taxation, which will**
**act as a medium for all existing or future applications.**

**Concerning applications, the customs systems must be concemed with** **the**
**development of an integrated Community Tariff, which will allow the Commission to**
**communicate information relative to customs duties and agricultural levies** **(TARIC**
**system ), to decisions re the classification of goods** **("Information** **on restricting** **tariffs"),**
**and to ceilings and quotas (QUOTA). These systems will contribute to the**
**effectiveness of customs administrations, who will be able to make decisions quickly**
**on the basis of reliable information updated daily, and therefore represent a**
**considerable benefit at the level of the economic operators.**

**The fiscal systems concerning the exchange of information relevant to the levying of**
**VAT on intra-community flows of goods (VIES system ) and the exchange of**
**information relevant to excise duties (being developed). These systems permit**
**Member States to develop** **régimes** **for indirect taxation in intra-community exchanges**
**following the abolition of fiscal barriers.**

**- 4 8 -**

**More generally, the establishment and operation of an** **efficient,** **reliable and user-**
**friendly system of communication and data exchange infrastructure between the**
**thirteen administrations, as proposed in the earlier section on administrative** **co-**
**operation, will provide a motive force for implementation of the priorities and main**
**lines of action defined in the proposed guidelines for telematic networks now before**
**the Council, particularly for the proposed IDA programme (Interchange of Data**
**between Administrations).** **It** **has close affinity with the growth initiative in that it incites**
**investment decisions, results in a more favourable economic climate through**
**improved efficiency, and strengthens industrial structure.**

**Quite apart from its relevance to the effectiveness of administrations of the Intemal**
**Market, this network will demonstrate a significant industrial policy potential. It could**
**contribute to the dynamics of the European industry by providing industry (hardware**
**and software suppliers, system integrators, network operators, service providers) in a**
**structured and co-ordinated way with indications of where the users in public**
**administrations intend to go in the longer term.** **Its** **activities will produce a common**
**denominator in the e-mail systems and services used by the public administrations,**
**which will influence other users as** **well.** **Consequently, industry will be faced with an**
**increasingly converging set of requirements which enables industry to provide inter**
**working solutions for a Europe-wide market without loosing its innovative capabilities**
**and its freedom for product differentiation. Wider implementation of e-mail in the**
**administrations will provide industry, thanks to the public procurement policy of the**
**Community, with an opportunity to sell homogeneous products within a significant**
**home market, which in turn should exert a significant pressure for quality improvement**
**and bring prices down.**

**Although electronic mail will be able to provide satisfactory solutions for many**
**information exchanges, there are certainly requirements which can be met more**
**adequately by adding either supplementary capabilities or applications using the**
**underlying infrastructure (e.g. EDI) or else using completely different technologies.**
**The proposed** **IDA** **programme, which aims to provide Community support to the**
**implemention** **of the trans-European communication and data-exchange networks,**
**aims to be the main instrument in this area, through its ability to support the**
**implementation of projects of common interest and its concern for interoperability**
**between networks and applications. Action should build on existing networks and take**
**into account developments in cooperation between administrations which go beyond**
**the Union scale.**

**- 4 9 -**

###### **Section D - A dynamic and open external policy**

**The effective management of the Union's external frontiers and a dynamic commercial**
**policy are essential if individuals and firms, of both Union and third country origin, are**
**to reap the full benefits of the intemal market Actions on both fronts are needed to**
**stamp out illicit or distortive practices which could undermine the competitive**
**functioning of Union markets.**

**I.** **Management of** **the** **Union's external frontier**

**The completion of the intemal market, in conjunction with the entry into force of the**
**Maastricht Treaty and the imminent enlargement of the Union, have pushed issues**
**related to customs administration at the Union's external borders to** **centre-stage.** **The**
**Member States, in cooperation with the Commission, have been busily reviewing the**
**manner in which customs activities are accomplished within the framework of the**
**"Customs** **2000"** **initiative. Measures needed to achieve the objectives of the** **"Customs**
**2000"** **document will be finalised in early** **1994.** **The main elements of this programme**
**are indicated below.**

**a) Controls** **at** **external** **frontiers:**

**»** **The primary objective** **is to** **ensure** **a** **high quality** **of** **control** **at** **the external** **frontier,** **which facilitates**
**the** **free flow** **of** **traffic** **white** **being applied** **in an** **effective,** **efficient** **and** **homogeneous manner.**
**Equivalent** _**retuK*»**_ **both** **in** **terms** **of** **control** **and** **trade** **facilitation,** **must be achieved by the customs**
**services at the external frontier** **If** **confidence** **is** **to be maintained** **(n** **the operation of the Customs Union**
**and the** **internal** **market.** **This will avoid trade deflection and distortion** **of** **commercial flows with** **the**
**rest of** **the** **world.**

**«** **The** **national customs** **services,** **in** **cooperation** **with** **the** **Commission,** **Wiil** **submit** **a** **report** **in** **1994** **on**
**the** **question** **of** **whether differences between administrative sanctions applied by Member** **States** **in**
**the event** **of** **breaches** **of** **customs rules** **give** **rise to trade** **olsjpriions,** **and on whether there** **is** **a** **need**
**for** **some approximation of** **penalties.** **.** **'** **[e ]**

**»** **Close cooperation between national administrations, organised** **by** **the** **Commission,** **is** **needed** **to**
**prevent** **Infringements** **of customs rules and other conditions for access to the Union market Priority**
**areas include fraud prevention, protection** **of** **intellectual property rights** **-** **particularly trade marks,**
**designs and copyright** **»** **and measures to combat** **counterfeiting.**

**b) Facilitation and control;**
_*****_ **A** **delicate balance needs** **to be** **struck** **by the** **customs Services between deterring** **and** **detecting**
**evasion On** **the one** **hand,** **and the** **need** **to** **ensure minimum disruption** **to** **legitimate trade** **and** **free**
**drculation** **of** **persons end minimisation of compliance costs on the other. The Union has** **a** **role to play**
**in disseminating best practices based** **on** **new** **technology»** **and** **in extending** **the Use** **of** **simplified**
**procedures and risk analysis techniques.**

_**t\**_ **Resources and efficiency:**

**«** **A** **planned approach** **is** **needed** **to** **Identify objectives** **and** **allocate resources according** **to**
**priorities. The Commission can act as** **a** **mediator in order to ensure that** **an** **agreed framework** **is put**
**in** **place** **Which** **takes into account the needs** **of the** **Union as** **a** **Whole.**
_*****_ **Customs recruitment and training should be modified to enable customs officials to adapt** **to** **more**
**flexible working practices** **and new** **work techniques (risk** **analysis,** **audit-based controls,**
**computerisation of routine tasks etc).**
***** **Computerisation** **of** **customs procedures wiil proceed apace** **to** **allow computerised clearance** **of**
**goods by** **traders.** **Progress on this front** **will** **take into account the possibility of** **using** **traders' computer**

**- 5 0 -**

**systems to meet customs** **requirements,** **the** **need to** **develop** **links between national** **systems,** **and** **the**
**facilitation of** **customs operations across Member** **States,** **using computer control** **mechanisms.**
**An examination of approaches needed to ensure the adequate provision of resources** **wiH** **be**
**undertaken In** **1994,** **This review wiil take into** **account possibilities** **such as resources** **available under**
**Community** **funding instruments, sharing or pooling of equipment,** **Joint** **operations and similar**
**arrangements.**

**The completion of the Intemal Market calls for a strengthening of administrative**
**cooperation and mutual assistance between Member States, and between the latter**
**and the Commission to tackle the problem of customs and tax fraud. Since the**
**adoption of Regulation** **1468/81,** **the national and Commission investigation services**
**have intensified cooperation and carry out joint investigations in third** **countries** **in**
**order to ensure the correct application of customs and agricultural legislation. A**
**proposal for a modification of this Regulation, which would have the effect of**
**significantly improving its operation, has now been presented to the** **Council.**

**The Commission is also, in collaboration with the Member States, examining the**
**possibility of upgrading cooperation in combating drugs. Following the adoption of a**
**single framework for trade with third countries in drug-precursors** **[12]** **, several sensitive**
**third countries have undertaken to control trade in these goods on the basis of a**
**regime for reciprocal cooperation. Although Community competencies in the field of**
**drugs trafficking are currently in** **flux,** **the Member States have pressed for increased**
**cooperation at Community level. To this end, a number of mechanisms for**
**cooperation have been developed which will henceforth be administered by a customs**
**working group which has been set up on the basis of Article K 4 of the Treaty on**
**European Union.**

**II.** **Completion of the common commercial policy in the context of**
**the internal Market**

**Since the** **Community's** **inception in** **1957,** **significant progress has been made towards**
**the realisation of a common commercial policy for goods and, more recently, services.**
**The finalisation of a common import and export regime for goods and services vis-à-**
**vis the rest of the world is a precondition for an equivalent level of competition on**
**Member State markets, and will facilitate the dismantling of customs formalities on the**
**shipment of goods between Member States. Although the main elements of a**
**common commercial framework are now in place, a number of loopholes remain.**
**Apart from the completion of the common commercial policy, there are a number of**
**areas in which further progress at a multilateral level can reinforce the benefits which**
**flow from the operation of the internal market. The Commission will take steps over**
**the coming years to address the points outlined** **beiow.**

**The Community has an array of trade policy instruments (Article** **113,** **anti-dumping,**
**countervailing duty regulations and the New Commercial Policy Instrument). The**
**Commission has proposed to the Council improvements designed to speed up and**
**streamline** **the procedures for deciding how and when to apply these instruments. It**
**has also made it** **dear** **to the Council that more resources will be needed to make**
**these instruments more efficient and effective. In the process of implementing the**
**results of the Uruguay Round it will be important to ensure that the Community means**
**remain adequate.**

**1 2** **Regulation** **3677/92,13.12.90.** **as modified by regulation 900/92 of** **31.03.92.**

**-51**

***** **Action will be taken to ensure that all Member States apply effective export controls,** _**baaed**_ **OH**
**common** **standards,** **for** **dual-use** **goods** _**and**_ **technologies,**
**»** **The Commission** **Will** **undertake action** **in** **the** **field** **of export credit** **insurance.**
**» The Commission** **will** **continue to press for the abolition of most remaining national quotas, or the**
**"Communrtisation"** **of selected quotas on trade with** **State-trading** **countries.**
**«** **in** **the field of the common transport** **policy,** **the Commission shall take the necessary steps to**
**increase the consistency of national relations with third countries** **in** **the field of transport** **services,** **This**
**work** **wiH** **require the progressive transformation of existing bilateral arrangements in the fields of road**
**haulage, air transport and maritime transport with appropriate Community agreements** **end**
**procedures,** **in** **addition,** **the Community will step** _**up**_ **its participation** **m** **international** **fore** **relating to**
**transport** **issues.** **To this** **end,** **greater attention should be given to direct** **participation** **of the**
**Community** **in these** **lore.**
_**4**_ **Financial services** **-** **Successful conclusion of the GATS** **wffl** **provide greater** **access** **for** **Union**
**intermediaries to third country markets, given that the** **Union** **is already open to competition on this**
**sector.** **The Union wilt** **work for** **further** **liberalisation** **of these sectors at a bilateral and** **multilateral** **level.**

_*****_ **Compétition** **policy - The Commission** **will** **promote respect for the principle** **of "positive** **comity" of**
**competition policy at an international level, by seeking to ensure its application in bilateral and**
**multilateral** **fora.** **Respect for** **this** **principle requires the Union and its international partners to apply**
**domestic competition policy provisions to practices in breach of these rules which create obstacles to**
**international** **trade.**

*** Internationa! standardisation** **-** **The Commission and the European standards** **Oiganisationa will**
**continue** **fo support the activities of** **international** **standardisation, and the strengthening** **of multilateral**
**frameworfcs** **for reducing technical trade baniers** **(notably,** **the GATT Code on Technical Baniers to**
**Trade).**
**,** **Mutual recognition agreements - At present Mutual Recognition Agreements** **(MRAs),** **which**
**constitute a potentially useful** **tool** **for facilitating trade with third countries,** _**ere**_ **used almost exclusively**
**in** **the** **areas** **of** **conformity assessment and Good Laboratory Practice.** **The** **Commission** **will** **extend the**
**Use of Mutual Recognition Agreements to other** **areas.**

**52**

###### **Section E - Reviewing and adapting the Strategic Program-** **me**

**This programme represents the requirements for consolidating and developing the**
**Intemal Market as seen by the Commission, following wide consultation, at the end of**
**1993.**

**As the Intemal Market itself is subject to an ongoing process of development and**
**change, the programme will need to be reviewed and adapted on a regular basis to**
**take account of developments.**

**The Commission's Annual Report on the Intemal Market will include a review of**
**progress with the implementation of the programme, and it can be used by the**
**Commission to indicate any necessary adjustments.**

**Interested parties, particularly those who contributed their views on the Commission's**
**working document conceming the programme, are invited to develop their own**
**systems for its regular** **re-evaluation** **in order to propose adaptations to the**
**Commission.**

**53-**

###### **Conclusions**

**The Strategic Programme represents a complex package of measures, each of which**
**will require detailed consideration in its own** **rights** **on the basis of individual proposals.**
**Nevertheless the Commission considers it essential that the Council consider, as a**
**matter of urgency, the priorities identified in the programme, particularly where**
**proposals have already been made. The Commission invites the Council to send a**
**clear political message that the** **completion** **and development of the Intemal Market**
**remains one of its highest priorities. To give substance to this decision, the**
**Commission proposes that the Strategic Programme be launched on the following**
**basis:**

**• an endorsement by the Council of the general orientation provided in the Strategic**
**Programme;**

**• a firm undertaking by the Council to accelerate discussion on the seventeen**
**legislative proposals from the** **1985** **White Paper that are still before it, with a view**
**to their final adoption before the end of** **1994.**

**-54**

###### **Annex 1 - Approaches to the monitoring of the quality of** **transposition measures in certain sectors**

**Foodstuffs - Although few complaints have been received with regard to**
**transposition, this may reflect a lack of widespread knowledge of the measures as**
**easily as a lack of problems. It has therefore been decided to call on specialist legal**
**consultants to examine the transposition measures relating to the bulk of the**
**foodstuffs directives.**

**Financial services - Contacts with market participants to identify problems;**
**discussion on transposition and interpretation in Banking Advisory Committee and**
**Insurance Committee; use of external consultants. Transparency is assisted by**
**requirement to include reference to relevant Community directive in transposition**
**measures and by requiring Member States to forward transposition tables showing the**
**correspondence between Community and national measures.**

**Recognition of diplomas - Transposition is prepared by a** **"pre-group"** **of national**
**coordinators who exchange drafts and discuss difficulties of interpretation; external**
**consultants also used.**

**Intellectual property - Technical meetings with Member State experts; use of external**
**consultants to examine the jurisprudence of national courts.**

**Veterinary and Phvtosanitarv legislation - As resources are extremely limited in**
**relation to the scale of the task, it is necessary to concentrate on problems identified**
**through the experience of operators or of national or Commission authorities. This**
**task is facilitated by the existence of the regulatory committees in the veterinary and**
**phytosanitary areas.**

**A more systematic approach to monitoring transposition, while desirable, would**
**require substantial additional staff resources. However, other avenues for improving**
**the situation will also be explored, particularly by reinforcing the information networks**
**through which problems can be identified.**

**55**

###### **Annex 2 - Trans-European networks (indicative time-table** **of adoption of network plans)**

Commission Council Parliament

**TRANSPORTS**

Adopted 15.5.92

Adopted 26.10.93

Adopted 26.10.93

Adopted 26.10.93

1st semester 1995

High Speed Trains

Combined transport

Roads

Inland waterways

Multimodal plan:

 - Rail conventionnel

- Advanced Road
telematics

-Ports

-VTS
-Airports
-Air traffic

Update in the
multimodal plan

Update in the
multimodal plan

Update in the
multimodal plan!

Update in the
multimodal plan

June **1994**

Favorably-received
17.12.90 without
formal adoption

Adopted 29.10.93

Adopted 29.10.93

Adopted 29.10.93

1st semester **1995**

Elaboration in the framework of the multimodal plan
idem

idem

idem

idem

idem

**TELECOMMUNICATIONS**

Telematics between
administrations

ISDN

IBC

**ENERGY**

Electricity

Natural gaz

Adopted 12.3.93

Adopted 1.9.93

Elaboration

Finalization

Finalization

1st semester **1994**

1st semester **1994**

1er semester 1995

2nd semester **1994**

2nd semester **1994**

1st semester **1994**

1st semester **1994**

1er semester 1995

2nd semester **1994**

2nd semester **1994**

**FINANCIAL MEMORANDUM**

**THE STRATEGIC PROGRAMME FOR THE INTERNAL MARKET**

**credits authorised in 1993**

**credits sought in 1994**

variation in %

Commitments

5

  - 12.00%

Payments

6

Commitments

1

483.947.000

Payments

2

Commitments

3

**544.970.000**

Payments

**4**

**1.** **Title of operation**

**The strategic programme for the Intemal Market**

**2.** **Budget heading involved**

**cf.point 7.2 below**

**3.** **Legal basis**

**Treaty establishing the European Economic Community and, in particular. Articles**
**8A.30-36,** **59.100A** **and 100B.**

**Treaty on European Union, and, in particular, Articles 129 A-D, and Chapter VI**

**4.** **Description of operation**

**4.1.** **General objective**

**• Completion of the** **basic** **legal framework;**

**• Management of the Community Area through ensuring quality and**
**transparency of community rules transposed in national** **law;** **ensuring quality**
**in enforcement;**

**• Setting in place a coherent system of administrative cooperation between the**
**Member States, and between these and the Commission to ensure the**
**effective application of community legisaltion;**

**• Assuring redress by access to justice and the improvement of judicial**
**cooperation; evaluation of the impact of community rules;**

**• Development of the Internal market: to improve the environment for business**
**and reinforce consumer protection; ensure proportionality and transparency**
**in new community rules; developing communication and better targeting**
**information; maintaining a dynamic and open external policy;**

                             - 2 

Facilitating the development of trans-European networks in key sectors;
stimulating private investment and facilitating the setting up of telematic
networks between national administrations and their European counterparts.

The actions proposed are based on the following communications **and**
resolutions:

_a)_ _Communications_

   - Communication from the Commission of 2 December 1992, The functioning
of the Intemal Market after 1992 - Follow-up to the Sutherland Report"
(SEC(92)2277 final).

   - Communication from the Commission of 2 June 1993, "Reinforcing the
Effectiveness of the Intemal Market - Towards a Strategic Programme for the
Internal Marker (COM (93) 256 final).

_b)_ _Resolutions_

   - Council Resolution of 7 December 1992, on the means to ensure the
effective functioning of the Intemal Market (OJ n°C334 18.12.1992, p.1).

4.2. Duration

Permanent action reaching beyond the 1993 deadline set down in Article 8A of the
EEC Treaty, with a view to ensuring the proper functioning of the Internal Market and
progress towards economic and monetary union.

4.3. Population affected bv the action

National administrations, commercial and industrial circles, judicial bodies, citizens
and consumers.

5. Classification of the expenditure

5.1. Non-compulsory expenditure

5.2. Differentiated appropriations

5.3. n.a.

6. Type of expenditure

The operational expenditure essentially comprises:

**•**

financial contributions and subventions (particularly those destined for
European bodies with the task of administrative cooperation and advisory
and managerial scientific instances responsible for monitoring of community
rules);
financial obligations stemming from contracts for preparatory, feasability or
evaluation studies which contribute towards the functioning of the Intemal
market, (particularly in the frame of the establishment of telematic networks
between administrations) and to the achievement of allied political objectives;

**-3**

**• subventions destined for the support of projects of community interest**
**undertaken by external bodies;**

**• the financing of the exchange of national officials, training, and information**
**and communication programmes.**

**7.** **Financial impact**

**7.1** **Method of calculating total cost**

**Going beyond the 1993 deadline, where the accent had been placed on the**
**achievement of the legislative objectives of the White paper, implied a significant**
**revision of the headings of the intemal Market line for the preparation of the 1994**
**draft budget. This revision centerd on a modification of the normal actions in line with**
**the political orientations contained in the Communications from the Commission to the**
**Council and the Pariiament, of 2 December 1992 The functioning of the Intemal**
**market after 1992 - Follow -up to the Sutherland** **report"** **(SEC (92)2277 final) and**
**2** **June 1993** **"Reinforcing** **the effectiveness of the Intemal Market - Towards a**
**strategic programme for the Intemal market (COM (92)256 final). The draft**
**programme aims to develop these modified type actions in view of the qualitative**
**changes in the nature of the work of the services responsible for monitoring the**
**implementation of community legislation in the framework of reinforced administrative**
**cooperation with the Member States.**

**It** **is obvious that to a certain extent existing resources can be redeployed to face this**
**new challenge. A detailed examination of current allocations will however be required**
**to determine where such redeployment is possible. Furthermore it is clear that for**
**certain tasks existing resources will be insufficient** **In** **other cases** **K** **is equally**
**apparent that the implications in terms of resources cannot be calculated until the**
**complementary tasks described in the programme have achieved, allowing for a**
**precise estimate of requirements. The other services concemed have been asked to**
**furnish all relevant information in this respect. By way of example,as far as headings**
**Bll,** **OUI and D are concerned, DG XXI has signalled the development of actions**
**already envisaged in** **1994** **which will give rise to additional calls on resources in** **1995:**

**• "Monitoring groups" (representatives of administrations and industry to**
**ensure that the Intemal Market keeps in step) - 4 Mio Ecus in 1995;**

**• "A citizen's Europe" (to identify possible difficulties arising from the Intemal**
**Market and to advise citizens) - 3MioEcus in** **1995;**

**• "Pilot projects" (adaptation of traditional mechanisms of control to ensure a**
**better protection of the external frontiers) - 7 MioEcus in** **1995.**

**This having been said, this financial** **statement,** **as a first step, attempts to schedule**
**those budget lines associated with Intemal Market policies and to establish the order**
**of magnitude of the sums devoted to the achievement of those policies. The** **"pro-**
**memorias"** **may indicate where additional resources will be required.**

**7.2** **Itemised breakdown of costs**

**The figures appearing hereafter represent the situation as it is appears in the**
**preliminary draft budget for 1994;**

Budget 1993

**cf** **B.** **beiow**

**p.m.**
**17.800.000**

**7.000.000**

**34.000.000**

**14.000.000**

**4.000.000**
**30.000.000**

**1.000.000**

**p.m.**
**2.427.000**

**p.m.**

**2.100.000**

**22.900.000**

**Budget** **1993**

**cf** **B** **above**
**6.800.000**
**28.000.000**
**8.000.000**
**10.000.000**

**cf** **B.** **above**

**500.000**
**24.800.000**

**650.000**
**6.000.000**
**3.500.000**

**12.770.000**
**185.000.000**

**7.000.000**
**17.000.000**

**9.800.000**
**2.000.000**

**3.300.000**
**22.900.000**

**700.000**

**483.947.000**

APB1994

**cf** **B.** **below**

**750.000**
**18.100.000**

**5.000.000**

**40.750.000**

**19.000.000**
**4.000.000**

**p.m.**
**1.000.000**
**2.900.000**
**7.500.000**

**2.400.000**

**p.m.**

**23.700.000**

**APB1994**

**cf** **B.** **above**
**7.820.000**
**39.000.000**
**10.000.000**
**11.200.000**

**cf** **B** **above**

**700.000**
**26.800.000**

**650.000**
**6.700.000**
**3.500.000**

**13.000.000**
**200.000.000**
**20.000.000**
**26.200.000**
**10.000.000**
**12.900.000**
**2.000.000**

**4.800.000**
**23.700.000**

**900.000**

**544.370.000**

Breakdown by broad lines
of the programme

 - (indicate* that the heading can also include
new operations)

_A._ _Completing the basic legal_ _frame-_
_work_

_B. Managing the community_ _area_

1. Quality and transparency in transposition

II. Quality in implementation

  - administrative cooperation*

  - monitoring implementation*

  - preventing new barriers*

  - sanctions*

III. Redress*

Access to justice and judicial cooperation*
IV. Evaluation of the impact of community rules*
C. _Developing the single_ _market*_

1. Proportionnality and transparency
of new rules -communication and
information policy*

II. Improving the environment for business*

III. Improving the environment for
consumers*

IV. Trans-European networks*

_D. External policy -managing the_
_frontiers*_

TOTALS

**-4**

Budget lines
involved
(in whole or in part)

**B5-3000**
**B5-301**
**B5-4020**
**B5-4023**

**B5-3000**

**of** **A.** **B and C)**

**B2-5101**
**B2-5102**
**B3-4015**
**B5-108**
**B6-302**
**B6-3051**
**B5-306**

**B5-100**
**B5-800**

**B5-600**

**B5-300**
**B3-303**
**B5-304**
**B5-401**
**B5-500**

**B5-300**
**B5-303**
**B5-320**

**B3-4111**
**B5-102**
**B5-105**

**B2-702** **to** **B2-706**
**B5-700**
**B5-720**
**B5-7210**
**B6-7211**
**B5-7212**
**B5-7213**

**B3-440**
**B5-600**
**B5-7214**

*** (indicates that** **the** **heading can also contain new operations).**

**8.** **Fraud prevention measures**

**The verification of subventions and the acceptance of services and the results of**
**preparatory, feasability or evaluation studies requested is** **carried** **out by the**
**Commission services before payments are effected, taking into account contractual**

**- 5 -**

**obligations** **and the principles of economy and sound financial management; fraud**
**prevention measures (surveillance, regular reports etc.) are included in all agreements**
**or contracts concluded between the Commission and the beneficiaries of payments.**

**The framework contract concluded in 1992 between the Commission and the**
**European standardisation orgainsations provides, for example, a very clear**
**presentation of the costs associated with the preparation of mandated European**
**standards which allows for effective control of actual expenditure.**

**In** **a general manner, all permanent actions are subject to regular follow-up by the**
**services concemed, and for** **once-off** **actions there is an evaluation ex-post** **facto.**
**Statistical and other information assists in the evaluation of the progress of**
**Community actions and thus contributes to the consolidation of fraud prevention**
**operations.**

**In** **many regulations, specific measures are envisaged and intemal control measures**
**are based on the verification by the responsible heads of unit that progress in relation**
**to individual projects or programmes is in conformity with the facts.**

**9.** **Elements of cost effectiveness analysis**

**9.1.** **Specific and quantifiable objectives**

**The specific objectives of this action relating to the strategic programme for the**
**Intemal Market are set out hereafter.**

_**A.**_ _**Completion**_ _**of the**_ _**basic**_ _**legal**_ _**framework**_

**The legislative programme set out in the White paper in 1985 has been realised by**
**more than 95%, except for identity controls on persons at the intemal frontiers. There**
**are,** **however, still a number of proposals from this programme where the Council has**
**yet to reach a decision and other complementary proposals have been introduced**
**since 1985. Furthermore, additional proposals have just been presented to the**
**Council relating to the free movement of persons. These matters concern, in particular**
**the following dossiers:**

**coordination in company law;**

**proposals relating to double taxation;**

**intellectual property - biotechnological inventions;**

**indirect taxation;**

**precious metals;**

**counterfeit goods;**

**exports of dual-use goods;**

**personal data protection;**

**deposit guarantee systems; etc.**

**Also envisaged are actions having a significant competition aspect, in the regulated**
**sectors of energy, telecommunications and the postal services.**

**S.** _**Management of the**_ _**Community**_ _**area**_

**Involved here is the management of the application of community legislation which is**
**achieved through:**

**• monitoring of Member** **States'** **respect of their community obligations through**
**checking the quality of transposition into national law, and updating of**
**information in** **realation** **to this legislation;**

**• ensuring the quality of implementation through a coherent framework for**
**administrative cooperation with the necessary technical support, surveillance**
**of the implementation of community rules and the means of resolving**
**difficulties in this implementation, preventing the emergence of new barriers**
**through transparency in national derogations, the notification procedure in**
**the domain of services, the definitive harmonisation of tax** **régimes,** **and**
**sanctions against Member states for infringements;**

**• facilitating redress, improving access to justice and judicial cooperation,**
**improving access to legislation, facilitating recourse to national courts,**
**reinforcing the free movement of judgements (Brussels Convention),**
**analysing the conflict of laws in the frame of private international law and the**
**Intemal Market and modification of the Rome Convention;**

**• evaluation of the impact of community rules, the operation in practice of**
**community legislation in the intemal market and the economic impact on**
**business, reinforcement of the INTRASTAT system for statistics on**
**intracommunity** **trade.**

**C.** _**Development of the intemal**_ _**mahet**_

**The development of the single market supposes that the Commission puts at the**
**disposal of the Member States, business and consumers appropriate tools for the**
**achievement of this objective;**

**• proportionality and transparency in the preparation of new legislative**
**measures, management of a coherent communications and information**
**policy through the partnership with Member** **States,** **using where necessary as**
**intermediaries,** **particularly the** **EICs,** **the industrial federations** **and**
**professional organisations;**

**• improving the environment for business, ensuring coherence between**
**regional,** **national and community action relating to environmental protection,**
**improving cross-border payments, liberalisation of the markets in transport**
**services, elimination of obstacles to protection in the area of industrial and**
**intellectual property, coordination in company law questions, establishing**
**direct and indirect** **tax régimes** **that are favourable to business, strenghtening**
**European standardisation, certification systems and promoting quality policy,**
**treatment of the specific needs of small and medium sized enterprises, Green**
**Paper on commercial communication and distribution services, and the**
**follow-up of work in the domain of the media;**

**• improving the environment for the** **consumer;**

**• establishing trans-European networks, the promotion of a convergence of**
**interests and coordination, stimulation of private investments, ensuring**
**technical interoperability and the development of telematic networks between**
**administrations;**

**D.** _**A**_ _**Dynamic**_ _**and open**_ _**external policy**_

**The sound management of the external frontiers is indispensable to avoid trade**
**distortions and prevent illegal practices which can damage the functioning and**
**competitiveness of the single market:**

**- 7 -**

**• reinforcement of the controls at the external frontiers and revamping the**
**customs services in view of the objectives of** **"Customs** **2000";**

**• completion** **and** **development** **of** **the** **common** **commercial** **policy,**
**administrative cooperation to avoid infringements.**

**9.2.** **Grounds for the operation**

**The totality of this action springs from the principle of the attribution to the**
**Commission of the powers of execution of rules adopted by the Council in the**
**framework of the completion of the Intemal Market It should be be recalled that the**
**Council** **in** **its'** **Resolution of 7 December** **1992** **on the means to ensure the functioning**
**of the Intemal Market, invited the Member States and the Commission to examine the**
**necessity to reinforce cooperation in order to resolve any practical problems which**
**could arise. The Pariiament in its Resolution of 18 December 1992 also invited the**
**Commission to take the necessary measures to meet the challenge which the proper**
**functioning of the** **Internal** **Market represents. The Commission in responding to this**
**objective by its decision of 23 December 1992 set up an advisory committee in the**
**domain of the** **Internal** **Market.**

**For those actions underway there is truly no alternative to a community action, for**
**every oversight by the Commission in the area of the completion and functioning of**
**the** **Internal** **Market risks the emergence of divergent national policies.**

**The Commission, however, is permanently examining different possibilities to** **répond**
**to the exigencies of economy and efficiency.**

**In this respect in the domain of standardisation, the strategy, which was initially**
**founded on a detailed harmonisation of the national laws, currently pursues two**
**complementary orientations:**

**• mutual recognition of national rules;**

**• the limitation of the approximation of legislation at community level solely to**
**those cases where the objectives of the national laws are not equivalent.**

**Furthermore, the Commission, in the framework of the implementation of the Green**
**Paper on standardisation, introduced significant changes to the system of financing**
**European standardisation.**

**As concerns the programme for exchanges of national** **officails** **between the**
**administrations of the Member States, the contributions of administrations**
**participating has been fixed at 50% for the daily allowances payable. This programme**
**is complementary to the other exchange programmes adopted by the Council in**
**specific sectors, i.e. MATTHAEUS,** **MATTHAEUS-TAX** **and in the veterinary domain.**

**9.3. Monitoring and evaluation of the action**

**Performance indicators selected**

**a) percentage of proposals issued by the Commission on the basis of its work**
**programme, and percentage of decisions adopted by the Council.**

**b) number of texts codified per sector and adopted in this form by the Council.**

**c) number** **of** **exchanges** **carried** **through** **in the** **framework** **of** **the**
**KAROLUS,MATTHAEUS,MATTHAEUS-TAX** **and veterinary programmes.**

**d) number of standards adopted and remaining to be adopted.**

**e) establishment and functioning of** **telematic** **networks between administrations**
**responsible for the monitoring of the Intemal Market and between these latter**
**and the Commission.**

8

f) modification and ratification of international agreements on the application of
commercial law.

g) start-up of large infrastructure projects coming within the frame of
transeuropean network policies.

**Details and frequency of planned evaluations**

The evaluation of work relating to the functioning of the intemal market is done on an
annual basis through the action and intervention of the committee responsable for the
functioning of the Internal Market An annual report is foreseen **in** the Communication
of the Commission of 2 December 1992, " The functioning of the Intemal Market after
1992 - Follow-up to the Sutherland Report (SEC (92)2277 final).

As regards the KAROLUS programme, Article 18 of the Commission decision
(93/10/CEE) fixing the operational provisions for the programme, provides that the
Commission establish an annual fiancial report on the execution of the programme,
which is to be transmitted to the national coordinators to permit an evaluation of the
programmes' implementation.

**10.** **Administrative expenditure (Part A of** **the** **Budget)**

**Note:** It must be recalled here that significant sums are already included in part A
destined for specific surveillance tasks in certain sectors of the Intemal Market.

This is the case, in particular, for the following lines:

Line

A 3531 (SG, VI, XXI)
A 3532 (I.XXI)

Entitled

Fight against fraud
TAFI Fraud suppression in the textile sector

Budget 1993

4.341.000

500.000

APB 1994

4.145.000

500.000

10.1. Will the proposed operation involve an increase in the number of Commission
staff? If so. how many?

Yes. cf point 7.2 above. It is probable that the development of certain actions in the
frame of the strategic programme wiil generate additional administrative expenditure
and requests for increases in the numbers of staff. Although some partial and
preliminary evaluations have been furnished to DG XV by some services, at this
stage, and before analysing these requirements in detail, in collaboration, where
necessary with the Mmeber States, no reliable estimate is possible. The specific
actions stemming from the strategic programme will themselves be the subject of
financial memoranda when formally presented, giving all the elements necessary to
determine the resource implications.

It is clear that requests for additional statutory posts or recourse to external personnel
must be presented having regard to the financial perspectives and the agreed
envelopes for the budgetary exercises concerned.

10.2. indicate the amount of staff and administrative expenditure involved in the
proposed operation. Explain the method of calculation

cf points 7.2 and 10.1 above.

**ISSN 0254-1475**

#### **COM (93) 632 final**

# **DOCUMENTS**

### EN 10 Catalogue number : CB-CO-93-673-EN-C ISBN 92-77-62382-9

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