Source: EURLEX
Language: en
Format: md

*|*

# 52011SC1093

**COMMISSION STAFF WORKING PAPER SITUATION IN THE DIFFERENT SECTORS /\* SEC/2011/1093 final \*/**

  

1........... ENTERPRISE and INDUSTRY.. 2

1.1........ General introduction. 2

1.2........ Automotive Industry. 4

1.3........ Chemicals. 10

1.3.1..... REACH.. 10

1.3.2..... Other chemicals legislation. 14

1.4........ The Transparency Directive. 21

1.5........ Mechanical, electrical and telecommunications equipment 23

1.6........ Gas appliances, pressure equipment and legal metrology. 24

1.6.1..... Gas appliances. 24

1.6.2..... Pressure equipment 26

1.6.3..... Legal metrology. 28

1.7........ Construction products. 30

1.8........ Textiles/clothing, footwear and wood. 31

1.9........ Toys. 32

1.10...... Food industry. 32

1.11...... Cultural goods. 34

1.12...... Weapons. 34

1.13...... Product liability. 34

1.14...... Defence goods. 35

1.15...... Non-harmonised area. 35

1.16...... Preventive rules of Directive 98/34/EC.. 38

2........... COMPETITION.. 38

2.1........ Current Position. 38

2.2........ Evaluation Based on the Current Situation. 41

2.3........ Evaluation Results - Priorities and Planned Action. 42

3........... EMPLOYMENT, SOCIAL AFFAIRS and INCLUSION.. 42

3.1........ Free movement of workers and coordination of social security systems. 42

3.1.1..... Current Position. 42

3.1.2..... Evaluation of the current situation. 47

3.1.3..... Evaluation results. 50

3.1.4..... Summary. 51

3.2........ Labour Law.. 52

3.2.1..... Current position. 52

3.2.2..... Evaluation based on the current situation. 55

3.2.3..... Evaluation results. 56

3.2.4..... Summary. 57

3.3........ Health and safety at work. 58

3.3.1..... Current position. 58

3.3.2..... Evaluation based on the current situation. 61

3.3.3..... Evaluation results. 61

3.3.4..... Summary. 62

4........... AGRICULTURE AND RURAL DEVELOPMENT.. 63

4.1........ Current position. 63

4.1.1..... General introduction. 63

4.1.2..... Report of work done in 2010. 65

4.2........ Evaluation. 80

4.2.1..... General evaluation. 80

4.2.2..... Sector based remarks. 80

4.3........ Evaluation results
- Priorities and actions planed 2011. 83

4.4........ Summary. 87

5........... ENERGY.. 88

5.1........ ENERGY - Internal electricity and gas market.. 89

5.1.1..... Current position. 89

5.1.2..... Evaluation of the current position. 91

5.1.3..... Evaluation results. 92

5.1.4..... Sector summary. 92

5.2........ ENERGY – Coal and oil 93

5.2.1..... Current position. 93

5.2.2..... Evaluation of the current position. 94

5.2.3..... Evaluation results. 95

5.2.4..... Sector summary. 96

5.3........ ENERGY - Renewable energy sources. 97

5.3.1..... Current position. 97

5.3.2..... Evaluation of the current position. 98

5.3.3..... Evaluation results. 98

5.3.4..... Sector summary. 99

5.4........ ENERGY – Energy efficiency.. 99

5.4.1..... Energy performance of buildings. 99

5.4.2..... Energy efficiency of products. 101

5.4.3..... Energy end-use efficiency and energy
services. 103

5.4.4..... Combined heat and power generation (CHP, cogeneration) 105

5.5........ ENERGY - Nuclear Energy.. 107

5.5.1..... Current position. 107

5.5.2..... Evaluation of the current situation. 112

5.5.3..... Evaluation Results. 113

5.5.4..... Sector summary. 113

6........... MOBILITY and TRANSPORT.. 113

6.1........ Passenger rights. 113

6.1.1..... Current position. 113

6.1.2..... Report on the work done. 114

6.1.3..... Evaluation of the current position. 116

6.1.4..... Evaluation results. 116

6.1.5..... Sector summary. 116

6.2........ Inland Waterway Transport 117

6.2.1..... Current position. 117

6.2.2..... Evaluation of the current position. 118

6.2.3..... Evaluation results. 118

6.2.4..... Sector summary. 119

6.3........ Maritime Transport - Internal market 119

6.3.1..... Current position. 119

6.3.2..... Evaluation of the current position. 120

6.3.3..... Evaluation results. 120

6.3.4..... Sector summary. 120

6.4........ Maritime Safety. 121

6.4.1..... Current position. 121

6.4.2..... Evaluation of the current position. 123

6.4.3..... Evaluation results. 124

6.4.4..... Sector summary. 124

6.5........ Maritime Security. 124

6.5.1..... Current position. 124

6.5.2..... Evaluation of the current position. 126

6.5.3..... Evaluation results. 127

6.5.4..... Sector summary. 127

6.6........ Inland Transport 128

6.6.1..... Current position. 128

6.6.2..... Evaluation. 131

6.6.3..... Evaluation results. 133

6.6.4..... Sector summary. 135

6.7........ Sector: Air Transport 136

6.7.1..... Current position. 136

6.7.2..... Evaluation of the current position. 143

6.7.3..... Evaluation results. 146

6.7.4..... Sector summary. 149

7........... CLIMATE ACTION.. 150

7.1........ Emission Trading Scheme (ETS Directive) 150

7.1.1..... Report of work done in 2010. 150

7.1.2..... Evaluation based on the current situation. 155

7.1.3..... Perspectives. 156

7.2........ Monitoring and Reporting. 158

7.2.1..... Introduction. 158

7.2.2..... Report of work done in 2010. 158

7.2.3..... Perspectives. 159

7.3........ Ozone depleting substances and Fluorinated Gases. 161

7.3.1..... Introduction. 161

7.3.2..... Report of work done in 2010. 161

7.4........ Transport related emissions. 162

7.4.1..... Introduction. 162

7.4.2..... Report of work done in 2010. 163

7.5........ Other climate related legislation. 165

7.5.1..... Carbon Capture and Storage (CCS) 165

7.5.2..... EU Effort Sharing Decision (ESD) 166

7.5.3..... Land use, land-use change and forestry (LULUCF) 166

8........... ENVIRONMENT.. 167

8.1........ Nature Conservation. 167

8.1.1..... Current position. 167

8.1.2..... Evaluation based on the current situation. 171

8.1.3..... Evaluation results. 171

8.1.4..... Sector summary. 173

8.2........ Waste Management 174

8.2.1..... Current position. 174

8.2.2..... Evaluation based on the current situation. 183

8.2.3..... Evaluation results. 184

8.2.4..... Sector summary. 185

8.3........ Environmental Assessment of Plans, Programmes and Projects. 185

8.3.1..... Current position. 185

8.3.2..... Evaluation based on the current situation. 191

8.3.3..... Evaluation results. 192

8.3.4..... Sector summary. 193

8.4........ Protecting Water and Marine Resources. 193

8.4.1..... Current position. 193

8.4.2..... Evaluation based on the current situation. 200

8.4.3..... Evaluation results. 202

8.4.4..... Sector summary. 204

8.5........ Air quality and environmental noise. 205

8.5.1..... Current position. 205

8.5.2..... Evaluation based on the current situation. 208

8.5.3..... Evaluation results. 209

8.5.4..... Sector summary. 210

8.6........ Industrial installations. 211

8.6.1..... Current position. 211

8.6.2..... Evaluation based on the current situation. 214

8.6.3..... Evaluation results. 215

8.6.4..... Sector summary. 217

8.7........ Chemicals and Biocides. 217

8.7.1..... Current position. 217

8.7.2..... Evaluation based on the current situation. 223

8.7.3..... Evaluation results. 224

8.7.4..... Sector summary. 226

8.8........ Governance. 227

8.8.1..... Current position. 227

8.8.2..... Evaluation based on the current situation. 231

8.8.3..... Evaluation results. 232

8.8.4..... Sector summary. 234

8.9........ Environmental Liability. 234

8.9.1..... Current position. 234

8.9.2..... Evaluation based on the current situation. 236

8.9.3..... Evaluation results. 237

8.9.4..... Sector summary. 237

9........... INFORMATION SOCIETY and MEDIA.. 237

9.1........ General Overview.. 237

9.2........ Electronic communications. 238

9.2.1..... Current position. 238

9.2.2..... Evaluation based on the current situation. 245

9.2.3..... Evaluation results: priorities and planned action (2011 and beyond) 245

9.3........ The Audiovisual and Media. 246

9.3.1..... Current position. 246

9.3.2..... Evaluation based on the current situation. 248

9.3.3..... Evaluation results: priorities and planned action (2011 and beyond) 248

9.4........ Public Sector Information. 248

9.4.1..... Current Position. 248

9.4.2..... Evaluation based on the current situation. 250

9.4.3..... Evaluation results. 250

9.4.4..... Sector summary. 250

9.5........ Electronic Signatures. 251

9.5.1..... Current Position. 251

9.5.2..... Evaluation based on the current situation. 252

9.5.3..... Evaluation results: priorities and planned action (2011 and beyond) 252

10......... MARITIME AFFAIRS AND FISHERIES. 252

10.1...... General introduction. 252

10.2...... Report of work done in 2010. 253

10.3...... Evaluation based on the current situation. 254

10.4...... Evaluation results. 255

10.4.1... Priorities. 255

10.4.2... Planned action (for 2011 and beyond) 255

10.5...... Summary. 256

11......... INTERNAL MARKET AND SERVICES. 256

11.1...... Freedom to provide services and freedom of establishment (other than
financial services) 256

11.2...... Financial Services. 270

11.2.1... Banking. 270

11.2.2... Insurance and occupational pensions. 272

11.2.3... Securities. 275

11.2.4... Asset management 280

11.2.5... Payments and retail financial services. 283

11.3...... Free movement of capital (Articles 63 et seq. TFEU) 286

11.4...... Public procurement 291

11.5...... Professional
qualifications. 296

11.6...... Company law, corporate governance and anti-money laundering. 300

11.7...... Auditing – statutory audits. 304

11.8...... Accounting. 307

11.9...... Protection of rights. 308

12......... REGIONAL POLICY.. 311

12.1...... Current situation. 311

12.1.1... General introduction. 311

12.1.2... Report of work done in 2010. 313

12.2...... Evaluation based on the current situation. 315

12.2.1... Assessment of the current situation (satisfactory or problematic
nature of the current situation) 315

12.2.2... Importance of the impact of the identified problems on the
objectives of the acquis. 316

12.2.3... Underlying reasons for problematic areas. 316

12.2.4... Responsibility for the problems and their correction. 316

12.2.5... Corrective action required (priority character, timing and scale) 317

12.3...... Evaluation results. 317

12.3.1... Priorities. 317

12.3.2... Planned action (2011 and beyond) 317

13......... TAXATION and CUSTOMS UNION.. 319

13.1...... Situation in the sector of CUSTOMS. 319

13.1.1... Current position. 319

13.1.2... Evaluation based on the current situation. 320

13.1.3... Evaluation results. 321

13.1.4... Sector summary. 321

13.2...... Situation in the sector of INDIRECT TAXATION.. 321

13.2.1... Current position. 321

13.2.2... Evaluation based on the current situation. 331

13.2.3... Evaluation results. 332

13.2.4... Sector summary. 333

13.3...... Situation in the sector of DIRECT TAXATION.. 333

13.3.1... Current position. 333

13.3.2... Evaluation based on current situation. 337

13.3.3... Evaluation results. 337

13.3.4... Sector summary. 339

14......... EDUCATION AND CULTURE.. 339

14.1...... Current position. 339

14.1.1... General introduction. 339

14.1.2... Report of work done in 2010. 344

14.2...... Evaluation based on the current situation. 345

14.2.1... Education and training. 345

14.2.2... Sport 345

14.3...... Evaluation results. 346

14.3.1... Priorities. 346

14.3.2... Planned action (2011 and beyond) 346

15......... HEALTH AND CONSUMERS. 347

15.1...... Introduction. 347

15.2...... Public health. 348

15.2.1... Blood and tissues. 348

15.2.2... Tobacco. 350

15.2.3... Pharmaceuticals. 351

15.2.4... Medical devices. 353

15.3...... Consumers. 358

15.3.1... Report of work done in 2010. 358

15.3.2... Evaluation, Priorities & Perspectives. 365

15.3.3... Summary of the Consumer activities' field. 366

15.4...... Food safety and animal health and welfare. 367

15.4.1... General Introduction. 367

15.4.2... Enforcement of the rules applicable to the food chain. 369

15.4.3... GMO Food and Feed. 370

15.4.4... Transmissible spongiform encephalopathies. 377

15.4.5... Food additives. 377

15.4.6... Food enzymes. 379

15.4.7... Food flavourings. 381

15.4.8... Residues of veterinary medicinal products. 383

15.4.9... Contaminants in food. 385

15.4.10. Plant Protection Products – Pesticide Residues. 388

15.4.11. Extraction Solvents. 391

15.4.12. Food Labelling. 391

15.4.13. Nutrition and Health Claims. 394

15.4.14. Dietetic foods. 396

15.4.15. Novel foods. 399

15.4.16. Food contact materials. 401

15.4.17. Plant Health. 404

15.4.18. Plant reproductive material – Plant Variety Rights – Plant Genetic
Resources. 406

15.4.19. Animal Health – including non food-borne zoonotic diseases. 408

15.4.20. Zootechnics. 412

15.4.21. Animal by-products. 413

15.4.22. Feed. 414

15.4.23. Import controls on live animals and food from animal origin. 418

15.4.24. Animal welfare. 420

15.5...... Overall evaluation. 425

15.5.1... Better application of the health and consumer acquis is everyone's
concern. 425

15.5.2... Prevention. 426

15.5.3... Regular review of legislation. 427

15.5.4... Audits, Inspections and market surveillance. 428

16......... HOME AFFAIRS. 429

16.1...... Immigration and integration. 429

16.1.1... Current position: General introduction. 429

16.1.2... Current position: Report on work done in 2010. 430

16.1.3... Evaluation based on the current situation. 431

16.1.4... Evaluation results: Priorities. 432

16.1.5... Evaluation results: Planned action (2011 and beyond) 432

16.1.6... Summary. 433

16.2...... Asylum.. 433

16.2.1... Current position: General introduction. 433

16.2.2... Current position: Report on work done in 2010. 434

16.2.3... Evaluation based on the current situation. 434

16.2.4... Evaluation results: Priorities and planned action (2011 and beyond) 435

16.2.5... Summary. 436

16.3...... European visa policy. 436

16.3.1... Current situation: Report on work done in 2010. 436

16.3.2... Evaluation based on the current situation. 436

16.3.3... Evaluation results: Priorities and planned action (2011 and beyond) 437

16.4...... Document Security (European passport and residence permits) 437

16.4.1... Current situation: Report on work done in 2010. 437

16.4.2... Evaluation results: Priorities and planned action (2011 and beyond) 437

16.5...... Border management and return policy. 438

16.5.1... Current position: General introduction. 438

16.5.2... Current position: Report on work done in 2010. 438

16.5.3... Evaluation based on the current situation. 439

16.5.4... Evaluation results: Priorities. 440

16.5.5... Evaluation results: Planned action (2011 and beyond) 440

16.6...... Security. 441

16.6.1... Data Retention Directive. 441

16.6.2... European Programme for Critical Infrastructure Protection. 442

16.6.3... Directive on preventing and combating trafficking in human beings,
and protecting victims, replacing Framework Decision 2002/629/JHA.. 443

16.6.4... Third pillar instruments. 443

17......... JUSTICE.. 445

17.1...... Free movement of persons. 445

17.1.1... Current Position. 445

17.1.2... Evaluation based on the current situation. 446

17.1.3... Evaluation results. 447

17.1.4... Summary. 448

17.2...... Citizenship. 448

17.2.1... Current position. 448

17.2.2... Evaluation based on the current situation. 449

17.2.3... Evaluation results. 449

17.2.4... Summary. 450

17.3...... Fundamental rights. 450

17.3.1... Current Position. 450

17.3.2... Evaluation based on the current situation. 451

17.3.3... Evaluation results. 452

17.3.4... Summary. 452

17.4...... Protection of personal data. 452

17.4.1... Current position. 452

17.4.2... Evaluation based on the current situation. 453

17.4.3... Evaluation results. 453

17.4.4... Summary. 454

17.5...... Judicial cooperation in civil matters. 454

17.5.1... Current position. 454

17.5.2... Evaluation based on the current situation. 456

17.5.3... Evaluation results. 458

17.5.4... Summary. 458

17.6...... Consumer and marketing law.. 459

17.6.1... Current position. 459

17.6.2... Evaluation based on the current situation. 462

17.6.3... Evaluation results. 463

17.6.4... Summary. 464

17.7...... Judicial cooperation in criminal matters. 464

17.7.1... Current position. 464

17.7.2... Evaluation based on the current situation. 466

17.7.3... Evaluation results. 466

17.7.4... Summary. 467

17.8...... Antidiscrimination and gender equality. 468

17.8.1... Current position. 468

17.8.2... Evaluation based on the current situation. 471

17.8.3... Evaluation results. 471

17.8.4... Summary. 472

18......... TRADE.. 472

19......... ENLARGEMENT.. 473

19.1...... Current position – Most important legal instruments and related work
and reporting on 2010  473

19.2...... Evaluation based on the current situation. 473

19.3...... Evaluation results. 474

19.4...... Summary. 474

20......... EUROSTAT.. 474

20.1...... General introduction. 474

20.2...... Report of work done in 2010. 475

21......... HUMAN RESOURCES and SECURITY.. 475

21.1...... Current position – Most important legal instruments and related work
and reporting on 2010  475

21.1.1... General introduction. 475

21.1.2... Report of work done in 2010. 476

21.2...... Evaluation based on the current situation. 476

21.3...... Evaluation results. 477

21.3.1... Priorities. 477

21.3.2... Planned action. 477

22......... BUDGET.. 477

22.1...... Current situation. 477

22.1.1... General introduction. 477

22.1.2... Report of work done in 2010. 478

22.2...... Evaluation. 478

22.3...... Evaluation results. 478

22.4...... Summary. 479

23......... Annex I - List of measures in force and other relevant instruments
referred to in the text of the document 479

I............ ENTERPRISE AND INDUSTRY.. 479

I.1......... REACH.. 479

I.2 Classification,
labelling and packaging: 479

I.3 Pyrotechnic
Articles and Explosives. 479

I.4 Drug precursors. 479

I.5 Detergents. 480

I.6 Fertilisers. 480

I.7
Textiles/clothing, footwear and wood. 480

I.8 Non-harmonised
area. 480

II.......... EMPLOYMENT, SOCIAL AFFAIRS AND INCLUSION.. 480

II.1....... Free movement of workers and coordination of social security schemes. 481

II.1.1..... Free movement of workers. 481

II.1.2..... Social
Security. 481

II.2....... Labour Law.. 482

II.2.1..... Working conditions. 482

II.2.2..... Information and consultation of workers. 482

II.2.3..... Protection of workers. 483

II.3........ Health and safety at work. 484

III ........ ENERGY.. 486

III.1....... Legislation in force. 486

III.2....... Legislation adopted in 2010. 488

III.3....... New measures proposed or in preparation in 2010. 490

IV ........ MOBILITY and TRANSPORT.. 491

V........... TAXATION and CUSTOMS UNION.. 492

V.1 ....... Situation in the sector of CUSTOMS. 492

V.2 ....... INDIRECT TAXATION.. 493

V.3........ DIRECT TAXATION.. 495

VI......... EDUCATION AND CULTURE.. 496

VII........ HEALTH AND CONSUMERS. 496

VII.1..... Public Health. 496

VII.2..... Consumers. 499

VII.3..... Food Safety. 501

GMO.. .. 501

FOOD HYGIENE.. 503

FOOD.. .. 505

PLANT HEALTH.. 510

SEEDS – PLANT
VARIETY. 511

ANIMAL HEALTH.. 515

FEED.. .. 519

ANIMAL WELFARE.. 521

VIII...... BUDGET.. 521

1.
ENTERPRISE and INDUSTRY
1.1.
General introduction

Responsibility for ensuring the free
movement of goods within the Single Market is entrusted to the Directorate-General
for Enterprise and Industry which manages a large part of the European Union
(EU) acquis consisting of Articles 34 to 36 TFEU in the non-harmonised
area and a large quantity of subordinate EU legislation (regulations,
directives and decisions) in the harmonised area. The acquis of the EU
under the management of Directorate-General for Enterprise and Industry” (the
latest version of the “Pink Book”) is listed on the internet at the following
address:

http://ec.europa.eu/enterprise/policies/single-market-goods/files/pink-book\_en.pdf

As ‘harmonising’ rules are adopted in more
and more sectors of the Single Market, the non-harmonised area is gradually
shrinking. But some 25% of the market is still not subject to harmonised rules
and, here, Articles 34-36 TFEU ensure the easy cross-border exchange of goods.

Generally speaking, the EU acquis governing
the free movement of goods is stable and effective, although the highly
technical nature of much of the legislation means that there is always
considerable activity adapting it to technological progress.

The Commission's legislative activity in
the "Enterprise and Industry" sector is fully in accordance with
Better Regulation principles with preference being given to regulations which
require less effort in relation to their transposition. This sector also
regards the simplification and codification of existing legislation as
important tools in achieving better implementation of EU law.

The New Legislative Framework (NLF) adopted in 2008 consists of two
complementary instruments, Regulation (EC) No 765/2008 on accreditation and
market surveillance relating to the marketing of products and Decision
768/2008/EC on a common framework for the marketing of products. The Regulation
has been in force since 1 January 2010. It sets out the provisions for the
European policy on accreditation (control of the competence of laboratories and
certification/inspection bodies for the mutual recognition of certificates in
the EU) and for the policy in the field of market surveillance and controls of
products from third countries (for safe products whatever their origin)

The Decision contains elements of product legislation which are commonly
used throughout directives and provides a horizontal harmonised framework for
that legislation. The systematic use of the Decision
will make the regulatory framework more coherent and user-friendly for economic
operators and national authorities. It is a tool of the Commission’s Better
Regulation policy, eliminating unnecessary disparities in product legislation.

Existing
legislation is being aligned with the NLF both as when it comes up for revision
(e.g. the toys directive, the Restriction of the
use of certain Hazardous Substances in electrical and electronic equipment (RoHS)
Directive and the Radio and telecommunications terminal equipment (R&TTE)
Directive) and as part of an alignment package involving ten new approach directives[1].

Alignment with the NLF Decision concerns
the following elements of the directives:

§
Horizontal definitions (e.g. placing on the
market)

§
Obligations of economic operators and
traceability requirements

§
Conformity assessment and CE marking

§
Rules on notified bodies and notification
process

§
Safeguard mechanisms (Common procedures to deal
with non-compliant products)

The NLF also strengthens market
surveillance to protect consumers from unsafe products, and shelter businesses
from unfair competition (from operators not complying with EU law). A
multi-annual action plan on market surveillance, forming part of both the
Single Market Act and the Commission’s industrial policy, is under preparation.

Directive
2009/43/EC of the Council and the European Parliament simplifying intra-EU
transfers of defence-related products is the first internal market instrument on
these products and will enable operators to benefit from smoother and more
predictable supply chains while improving security of supply for EU armed
forces relying on cross-border deliveries. The transposition deadline was set
for 30 June 2011 and will fully apply from 30 June 2012.

The Directorate-General
for Enterprise and Industry also manages EU regulation under the Common
agricultural policy and the common commercial policy (Articles 43 and 207 TFEU)
in relation to trade in certain goods resulting from the processing of
agricultural products.

The Commission
provides guidance and other assistance to help Member States transposing and
implementing new directives on time. Assistance is given using a variety of
different tools (e.g. interpretative documents, bilateral meetings and
Committee meetings).

A very valuable
tool for dealing in advance with possible technical barriers to the free
movement of goods in the non-harmonised area is Directive 98/34/EC, which
requires the 27 Member States, the EFTA countries and Turkey to notify all national technical regulations concerning products and Information Society Services
at the draft stage. The steady high number of notifications (843
in 2010) and reactions from the Commission (124) and the Member States (220) underlines the importance of Directive 98/34/EC in preventing barriers to intra-EU
trade - and also in promoting better regulation since it provides a forum for
making suggestions to improve the quality of national legislation. It often
means that infringement procedures can be avoided.

The Directorate-General for Enterprise and Industry monitors the correct application of the acquis under its
responsibility and opens infringement procedures against Member States if
necessary. However, great importance is attached to resolving problems as
quickly as possible using methods other than infringement proceedings. The most
significant of these is the EU Pilot project, designed to clarify and solve
problems concerning the application of EU law in cooperation with the
participating Member States. It has significantly contributed to reducing the
number of formal infringement proceedings for those Member States which
participate in the project.

Other methods include “package meetings”
and bilateral meetings with the Member States to provide advice to national
authorities to help ensure the correct application of EU law.

In the context of infringement proceedings,
non-communication cases and article 260 TFEU cases are dealt with as quickly as
possible, given their priority status under the 2007 Communication. In
accordance with the other criteria set out in the Communication, since 2009 priority
status in this sector has been given to the following cases:

Non-harmonised area

• The failure by a Member State to notify
national technical rules in draft form under Directive 98/34/EC. Such failure
renders the rules liable to be declared null and void.

• Breaches of Articles 34-36 TFEU raising
horizontal questions about the functioning of the market (e.g. the registration
of vehicles).

Harmonised area

Breaches of key directives, in particular
new legislation, which is adopted in response to a clearly identified need to
correct/enhance market performance and should be enforced in a manner
commensurate with the risk of failing to achieve that aim.

The significant part of the EU acquis
dealt with by the Commission services responsible for the "Enterprise and Industry" sector covers a wide variety of product domains, in relation
to each of which are set out below:

- a description of the current state of the
legislation in force;

- an evaluation of the effectiveness of
regulatory framework in the domain concerned; and

- an indication of plans for the future.

Information is also provided about
infringement proceedings pursued in each product domain.

1.2.
Automotive Industry

Current position

General introduction

The harmonised legislative framework in the
automotive sector covers three categories of vehicles: motor vehicles
and their trailers, motorcycles (two and three-wheelers as well as certain
quadricycles), and agricultural or forestry tractors. This legislation lays
down common requirements designed to achieve environmental and safety
objectives. It is based on a system of whole-vehicle type-approval which allows
manufacturers to have a vehicle "type" approved in one EU Member
State and then to market vehicles of that type in all other EU Member States
without further tests. It deals with a multitude of detailed technical specifications for
different vehicle systems and components which are frequently modified to adapt
them to technical progress while reducing the regulatory burden on industry.

There are three main framework instruments
in relation to type-approval of new vehicles:

o
Directive 2007/46/EC establishing a framework
for the approval of motor vehicles and their trailers, and of systems,
components and separate technical units intended for such vehicles;

o
Directive 2002/24/EC relating to the type-approval
of two-or three-wheel motor vehicles; (to be replaced by a Regulation on the
approval and market surveillance of two- or three-wheel vehicles and
quadricycles which is currently being discussed in the Council and the European
Parliament); and

o
Directive 2003/37/EC relating to the type-approval of agricultural or forestry tractors, their trailers and
interchangeable towed machinery, together with their systems, components and
separate technical units (to be replaced by a Regulation
on the approval of agricultural or forestry vehicles which is also currently
under discussion in the Council and the European Parliament).

The above legislation provides for the
obligatory EU whole vehicle type-approval but, in certain cases, a national
approval system for certain vehicle categories remains in parallel. In addition
to these framework instruments, separate legislative acts lay down harmonised
technical requirements for the type-approval of individual parts and
characteristics of a vehicle.

In line with better regulation and
simplification policies and to increase the competitiveness of EU industry on
the global market, as a result of the CARS 21 exercise the regulatory framework
in the automotive sector has been and continues to be reformed along the
following lines: (i) the introduction of the split-level approach: (a
"framework" act adopted under the ordinary legislative procedure
lays down fundamental provisions while technical specifications are set out using
the comitology procedure); (ii) the adoption of Regulations instead of
Directives; and (iii) international harmonisation (whenever possible, EU acts
are replaced by UNECE Regulations compliance with which is made mandatory).[2]

Work done in 2010

Various steps were taken in 2010 to
implement, simplify and update the technical legislation in the sector.

A proposal for a Regulation revising the
regulatory framework on the approval of agricultural or forestry vehicles was
adopted by the Commission on 23 July 2010[3] and a proposal
for a Regulation revising the regulatory framework for the approval of two and
three-wheel vehicles and quadricycles was adopted on 4 October 2010[4].
These proposals were subsequently discussed - under the ordinary legislative
procedure - with the European Parliament and the Council.

The first half of 2010 also saw the adoption
of a Directive on spray-suppression systems of certain categories of motor
vehicles[5] and two Regulations, one
amending several Annexes to Framework Directive 2007/46/EC[6]
and the other on type-approval of hydrogen-powered motor vehicles[7]. 
This was followed in July by the first measure implementing Regulation (EC) No
661/2009 on the general safety of motor vehicles (“the GSR”)[8],
namely a Regulation on windscreen defrosting and demisting systems[9].
Then, in November, the Commission adopted four more regulations implementing
the GSR, concerning rear registration plates[10], towing
devices[11], windscreen washers and
wipers[12] and wheel guards[13].
Later, two Regulations on spray suppression systems and statutory plates were
adopted by the Technical Committee – Motor Vehicles.

By virtue of the GSR, UNECE Regulations
adopted in accordance with the 1958 UNECE Agreement will become compulsory for
the majority of items currently subject to EU type-approval requirements,
thereby contributing significantly to the simplification of the EU regulatory
system. Against this background, preparatory work began on a Regulation
implementing the GSR and listing 62 compulsory UNECE Regulations[14]
– among them, UNECE Regulation No 100 on electrical safety - particularly
important in view of the development of electric vehicles. This required very careful
translation of numerous UNECE regulations into all EU languages with the aim of
publishing them all in the OJ. Work on other measures implementing the GSR
(tyre installation, gear shift indicators, masses and dimensions, lane warning
departure systems and advanced emergency braking systems) was also carried out.

A Regulation on Individual Vehicle Approval
was endorsed by the Technical Committee – Motor Vehicles on 17 September 2010[15].
The impact assessment for a new proposal replacing Directive 70/157/EEC on
motor vehicle noise was finalised in December 2010. Finally, a proposal for a
Directive amending Directive 2000/25/EC as regards provisions for tractors
placed on the market under the flexibility scheme was adopted by the Commission
on 27 October 2010[16] and a proposal for a
Directive on emission from narrow tractors was finalised at the end of 2010[17].

The TAAEG (Type-Approval Authorities Expert
Group) – established by the Commission services in October 2009 in the form of
a consultative body composed of representatives of all national type-approval
authorities[18] – met on 12 April 2010 and
discussed the enhancement of market surveillance in the automotive sector, the
application of Directive 2006/40/EC relating to emissions from air-conditioning
systems in motor vehicles and the delivery of certificates of conformity of EU
type-approved vehicles (enforcement of Article 18 of Framework Directive
2007/46/EC).

As regards clean and energy efficient
vehicles, the Commission organised a public hearing on 11 March 2010 and
adopted a Communication on 28 April 2010[19]. This
document sets out a comprehensive strategy for encouraging the development and
uptake of clean and energy efficient ("green") heavy-duty (buses and
trucks) and light-duty vehicles (cars and vans) as well as two- and
three-wheelers and quadricycles.

In October 2010 the CARS 21 process (Competitive
Automotive Regulatory System for the 21st century) – initially
launched in 2005 - was re-launched. The re-launch was effected more formally
than the original launch, through a Commission Decision adopted on 14 October
2010[20]. CARS 21 aims to make recommendations
for the short-, medium-, and long-term public policy and regulatory framework
of the European automotive industry. This framework enhances global
competitiveness and employment, while sustaining further progress in safety and
environmental performance at a price affordable to the consumer. The CARS 21
High Level Group met for the first time on 10 November 2010. Further meetings are
planned throughout 2011.

Seven infringement cases were opened during
2010 in relation to EU legislation in this sector (compared to 32 cases in
2009) and 25 cases were closed. All of these cases were opened as a result of
late communication of national measures transposing EU Directives which
generally contained technical updates of the acquis. The Member States concerned
by these non-communication cases were Austria, Bulgaria (two proceedings), the Czech Republic, Hungary, Ireland and Portugal. Most of these cases were closed after national transposition
measures were communicated by the Member States concerned (but one 2009 case remains
open and is currently before the Court of Justice). In around 70% of cases
opened in 2010 and subsequently closed in the same year, national measures were
communicated before the reasoned opinion stage. However, in only 40% of all open
cases that were closed in 2010 did communication take place before that stage.

During 2010 the Commission services
continued to deal with a steady number of questions, complaints and queries in
relation to legislation in the automotive sector. Complaints or requests for
information were also periodically sent via the petition procedure. Most
inquiries were submitted by individuals or SMEs. In many cases, the issues
raised could be dealt with by giving guidance on the Commission service's
interpretation of the relevant EU legislation. Where the complaint turned out
to be unsubstantiated, the matter was closed and the reasons for doing so were
explained.

Evaluation

The current situation regarding compliance
by Member States with the EU acquis in the automotive sector is
generally satisfactory. Nevertheless, there are delays in the timely
transposition of certain Directives (for example, in the context of amendments
to framework Directive 2007/46/EC, where only 15 EU Member States communicated
national transposition measures prior to the expiry of the deadline – one case was
brought before the Court of Justice in 2010). In this regard, the constant
evolution of the technical legislation means that it is important to pay close
attention to timely transposition and effective enforcement to ensure that policy
objectives are met.

Through the CARS 21 process, the Commission
has developed a medium to long-term, coordinated and predictable policy
framework for the automotive industry based on continuous dialogue and
consultation with all main stakeholders. In this regard, in the preparation of
legislative proposals and policy initiatives, the Commission is assisted by two
types of advisory bodies: comitology committees and working groups. In the case
of technical amendments to legislation, the Commission acts in close
cooperation with EU Member States on implementation issues under the comitology
procedure. Likewise, the informal working groups, which may consist not only of
national experts but also experts or stakeholders from business, NGOs, trade
unions, academia, etc., provide expert advice to the Commission.

There is close cooperation between the
Commission and EU Member States, notably through the TAAM (Type-Approval
Authorities Meeting) forum, which met at the beginning of June 2010 in Sofia, Bulgaria and discusses questions regarding the interpretation of EU directives in
the automotive sector as well as the equivalent UNECE Regulations with a view
to ensuring their common and harmonised application.  As a result of this, significant
problems regarding conformity or incorrect application are relatively rare. Nevertheless, the complexity of the legislation in this
sector and the constant development of new technologies, for example on hybrid
and electric vehicles (and the corresponding adaption of legislation), means
that problems of interpretation are ever-present. On occasion, the Commission
has set out its interpretation of the legislation in order to maintain a
harmonised approach. It may still be that Member States take measures which could
potentially compromise the harmonised approach.

In many cases,
due to the technical nature of the legislation, EU Member States transpose
technical amendments by reference to EU acts. Where this is not the case, the use of correlation tables is very helpful.

Finally, the
approach taken regarding legislation harmonising vehicle standards under the ordinary
legislative procedure now tends towards the adoption of regulations rather than
directives (e.g. a proposal for framework Regulations on two and three wheel
vehicles and on tractors). One exception to this is framework Directive
2007/46/EC on type-approval of motor vehicles. No transposition of regulations is
required and this should increase overall efficiency by
significantly lowering the number of infringement cases based on non-communication
of national transposition measures.

Evaluation
results

(1)       Priorities

The main priority in the automotive sector remains the proper
implementation, management and enforcement of legislation. In particular, there
has to be long-term regulatory clarity as well as an accurate quantification of
the costs and benefits of legislative activity, notably by recourse to impact
assessments where appropriate. Given the impact of the
economic crisis, the Commission will continue to weigh up the costs and
benefits of new legislative initiatives and seek, as far as possible, to avoid
creating new economic burdens.

(2)       Planned
action (2011 and beyond)

A
significant proportion of the work in the automotive sector in 2011 and beyond
will focus on the recasting of the legislative framework (and its subsequent
completion) and the implementation of new technical legislation.

In particular, the revised regulatory
framework for type-approval legislation in relation to two and three-wheeled
vehicles and tractors will progress under the ordinary legislative procedure (this
revised legislation will update and replace the present framework Directives on
two and three-wheeled vehicles and on tractors and separate completing directives).
Delegated and implementing acts for the revised regulatory frameworks regarding
two and three-wheeled vehicles and tractors will be prepared.

The Commission will also work on various
proposals to complete framework Directive 2007/46/EC (e.g. notably to take into
account UNECE Regulations replacing EU Directives) as well as implementing
measures on type-approval of hydrogen vehicles, Euro VI, the GSR, the Strategy
of 2007 on CO2 and the strategy on clean and energy efficient vehicles. A proposal
replacing Directive 70/157/EEC on noise of motor vehicles is to be adopted by
the Commission in 2011 and submitted to the European Parliament and Council
under the ordinary legislative procedure. Finally, the Commission will
participate actively in activities relating to the ITS (Intelligent Transport
Systems) action plan including eCall.

1.3.
Chemicals
1.3.1.
REACH

Current position

General
introduction

Regulation
No 1907/2006 (REACH), most parts of which began to apply in June 2008,
constitutes the horizontal framework and cornerstone of the EU’s new chemicals
legislation. REACH includes four main processes - registration, evaluation,
authorisation and restriction of chemical substances. Registration of chemicals
with the European Chemicals Agency (“ECHA”) is designed to generate information
on manufactured and imported substances in order to ensure that industry
implements adequate measures to ensure their safe use. Subsequent evaluation by
ECHA includes compliance checks on registration dossiers and examination of
testing proposals. Certain substances may undergo ‘substance evaluation’, where
national authorities can request further information from industry about a
given substance on a risk basis and further regulatory measures may be
considered. Substances giving rise to very high concern may be required to
obtain Commission authorisation before being placed on the market or used under
stipulated conditions. Finally, the manufacture, import and use of substances
that pose unacceptable risks to human health or the environment may be partially
or totally restricted.

Work done in 2010

The main
goal of the Commission in 2010 was to contribute to the successful registration
by industry of the highest volume and most hazardous substances by 30 November
2010. To this end, in January 2010, a dedicated high-level Directors’ Contact
Group (DCG) was established, composed of the representatives of the Commission,
ECHA and several industry associations. The objectives of the DCG are to monitor the overall preparedness
of companies and to identify and resolve issues of priority concern in relation
to meeting registration obligations. Special attention is also paid to securing
the supply of high volume substances to downstream users. By the 30 November 2010 deadline,
ECHA had received nearly 25.000 registration files covering around 3.400
substances. Overall, the results are satisfactory.

Commission Regulation (EU) No
453/2010 was adopted with a view to adapting Annex II to REACH, which contains a
guide to the compilation of safety data sheets, to the new criteria for classification and
other relevant provisions laid down in Regulation (EC) No 1272/2008 and to the
rules for safety data sheets of the United Nations Globally Harmonised System
(GHS).

The Test Methods Regulation (Commission
Regulation (EU) No 1152/2010) was also adapted to technical progress by
including two new in-vitro test methods to reduce the number of animals used
for experimental purposes.

The Commission prepared amendments to Annex
XIII to REACH (criteria for the identification of persistent, bio-accumulative
and toxic substances and very persistent and very bio-accumulative substances)
and to Annex XIV (the first list of substances to be subject to Commission
authorisation).

The Commission adopted an amendment to REACH
to introduce into Annex XVII all restrictions adopted under the previous
legislation (Commission Regulation (EU) No 276/2010). The Commission also
prepared two new amendments to Annex XVII relating to transitional provisions.
These concern the use of acrylamide in grouting applications and the use of
cadmium in plastics, jewellery and brazing fillers. The Commission further
requested ECHA to prepare a file in accordance with Annex XV to restrict the
use of mercury in some measuring devices and to analyse whether, in the light
of new scientific information, the existing restrictions in Annex XVII
concerning phthalates need to be revised.

The REACH Regulation is complemented
by a comprehensive package of technical guidance published by ECHA to ensure
its uniform and consistent interpretation. Most of the guidance was already in
place by mid 2008. However, the existing guidance is constantly being updated
to address implementation needs. Throughout 2010, the Commission assisted ECHA
in developing new guidance (e.g. Guidance on authorisation applications) and
updating the existing guidance documents (notably those necessary to facilitate
compliance with the 2010 registration deadline).

Many implementation problems faced
by industry were resolved in collaboration with ECHA, which has developed
various tools to help operators to fulfil their REACH obligations (guidance package,
Navigator tool, helpdesk, FAQs etc.). National REACH helpdesks are also functioning
satisfactorily. The Commission actively participated in numerous meetings of
ECHA committees and in workshops.

The Commission called for a study,
which analysed and compared penalties for infringement of REACH in all Member
States with a view to assessing their effectiveness, proportionality and
dissuasiveness. As the study did not address how the penalties are implemented
in practice, it provides only an overview. As a follow-up to the study results,
the Commission held a workshop on national penalties for REACH enforcement.
Later in 2010, the Commission received reports from Member States under Article
117 on the operation of REACH containing information on enforcement, which is
currently under consideration.

The Commission actively
participated in, and contributed to the work of, the ECHA Forum for the Exchange
of Information on Enforcement which coordinates a network of national authorities responsible for
enforcement. The
Forum evaluated the first EU coordinated enforcement project (REACH-EN-FORCE 1) and
extended it for the rest of 2010 and beyond. The
project is an important step towards the harmonisation of enforcement
practices.

The Commission continued to hold
regular dialogues on various implementation issues with Member States’
competent authorities and other stakeholders via three meetings of its expert
group “Competent Authorities for the REACH and CLP Regulations (CARACAL)” and
its subgroups, notably the subgroup on nanomaterials.

In addition, the Commission worked
to clarify and smooth the transition of materials between different EU
regulatory regimes (e.g. the development of end-of-waste criteria and the
implications of REACH for these materials and the involvement of customs
authorities in REACH enforcement).

In 2010, the Commission received
two complaints regarding REACH compliance by Member
States' authorities
in the area of restrictions, which are currently under investigation.

Evaluation

REACH being a Regulation, directly
applicable in the Member States with no need for transposition, the role of the
Commission is limited to monitoring its consistent application and ensuring
that the Member States enforce it through a system of official controls and
other appropriate activities.

Given the early stages of its implementation,
the objectives of REACH will be realised in successive stages by 2020.
Different obligations will be phased-in successively during this period.  This
is relevant mainly for registration (where deadlines are set for 2010, 2013 and
2018). Authorisation requirements apply in accordance with transitional
arrangements specifically provided for each substance listed in Annex XIV (the
first “sunset date” is scheduled for the second half of 2014). Authorisation is
a gradual process, whereby additional substances of very high concern will be
included in Annex XIV over time, in accordance with the procedures laid down in
Articles 58 and 59 of REACH.

As the first deadline for
registration expired as recently as 1 December 2010, enforcement of this
obligation will begin in earnest in 2011. The Commission has not yet received
any complaints regarding the enforcement of the registration obligation.

Obligations on the provision of
information in the supply chain and to consumers already apply and should be
enforced by Member States. The Commission has not yet received any complaints
in this respect.

The enforcement of restriction obligations
came under the umbrella of REACH in the second half of 2009. The change from Directive
76/769/EEC to REACH allows more coherent implementation of the restrictions in
the Member States.

The Commission will study the
information received in the Member State
reports mid 2010 in order to prepare its own report in mid 2012 and any
necessary follow-up on penalties.

Evaluation
results

 (1)      Priorities

The priorities indicated in the
2009 Annual Report largely remain. The Commission monitors the effective and
consistent application of the obligations that are already applicable. The
highest priorities are the enforcement of registration and restriction
obligations. Launching the first review of certain aspects of REACH is a new
priority.

 (2)      Planned action (2011 and
beyond)

The Commission will begin its
first review of various aspects of REACH. The results of this review are due by
mid 2012. REACH specifically requires three reviews: a review of ECHA, a review
of the requirements for low tonnage substances and a review to assess whether
to amend the scope of REACH to avoid overlaps with other EU legislation. In
addition, the Commission will start the preparatory work for the first general
report on experience acquired with the operation of REACH, due in mid 2012. The
Commission has decided to carry out a larger review exercise covering some
additional elements of REACH (a report on the first lessons learned, paying
particular attention to costs, administrative burdens and other impacts on
innovation). The various reviews and reports will be presented as a package by
June 2012.

The Commission will continue to
prepare for one of its main tasks under REACH – granting authorisations for the
placing on the market and the use of substances of very high concern, listed in
Annex XIV. The first applications may be received by ECHA as soon as 2011. The
Commission will also prepare a new draft regulation with a view to adding more
substances to Annex XIV.

On
the basis of opinions from ECHA committees (the Committee for Risk Assessment
and the Committee for Socio-economic analysis) expected in 2011, the Commission
will prepare amendments to Annex XVII relating to restrictions of the following
substances: dimethylfumarate, mercury in measuring devices, phenylmercury
compounds and lead in jewellery.

The Commission will continue to monitor
how Member States enforce REACH in order to ensure transparency, impartiality
and consistency in enforcement throughout the EU. To this end, the Commission will
in particular continue to work closely with the ECHA Forum for the Exchange of
Information on Enforcement.
The Commission will also review the Member States reports and later on, the
ECHA report on the operation of REACH due by mid 2011.

The Commission will continue other
activities, including enhancing cooperation, coordination and exchange of
information with national authorities and ECHA, extending the mandate of the
existing DCG group, holding meetings with industry stakeholders, providing
assistance with interpretation problems and participating in workshops to
ensure timely implementation.

Summary

As the new horizontal regulatory
framework for chemicals, REACH has the long-term objectives of providing a high
level of protection of human health and the environment while ensuring the free
circulation of substances on the internal market and enhancing competitiveness
and innovation. The objectives of the acquis
should be largely attained by 2020. The correct implementation of REACH obligations will
be critical for the chemical industry sector in the coming years. It will only
be possible to evaluate to what extent these objectives are being met over time,
whereupon corrective action will be taken if necessary.

Links to legislation

REACH and its implementing legislation are available through the
following link:

http://ec.europa.eu/enterprise/sectors/chemicals/documents/reach/index\_en.htm

REACH and its links to previous legislation on restriction is
available here:

http://ec.europa.eu/enterprise/sectors/chemicals/documents/reach/archives/market-restrictions/index\_en.htm

1.3.2.
         Other chemicals legislation
1.3.2.1.
Classification, labelling and packaging

Current position

General introduction

Regulation (EC) No 1272/2008 on classification, labelling and
packaging of substances and mixtures (the CLP Regulation) aligns previous EU
legislation on this topic with the Globally Harmonised System of Classification
and Labelling of Chemicals (GHS). Its main objectives are to facilitate
international trade in chemicals and to maintain existing levels of protection
of human health and the environment. The GHS is a United Nations system designed
to identify hazardous chemicals and to inform users about these hazards through
standard symbols and phrases on packaging labels and through safety data
sheets.

The CLP Regulation
entered into force on 20 January 2009. According to the Regulation, substances
and mixtures must be classified, packaged and labelled according to its
provisions. After a transitional period, the CLP Regulation will replace
current rules on classification, labelling and packaging of substances
(Directive 67/548/EEC) and mixtures (Directive 1999/45/EC). From 1 December
2010 substance classification and labelling have to comply with the new rules,
whilst for mixtures the transitional period will end on 1 June 2015.

The 1st
Adaptation to Technical Progress (ATP) of the CLP Regulation came into force on
25 September 2009, inserting the harmonised classifications adopted in the 30th
and 31st ATPs of Directive 67/548/EEC into Annex VI to the CLP Regulation.

Report of work done in 2010

The main priority in 2010 was to contribute to the proper
implementation of the legislation, in particular the application by industry of
the new rules regarding the classification, labelling and packaging of
dangerous substances. For that purpose, the Commission has used the
communication structures already created under REACH to ensure constructive
dialogue with ECHA, national authorities and industry associations. The main
goal was to provide support to solve concerns related to meeting classification
and labelling obligations, and also notification obligations. All manufacturers
and importers of substances (whether as such or in mixtures) had to notify the
classification and labelling applicable from 1 December to the European
Chemicals Agency (ECHA) by 3 January 2011. ECHA has received 3.114.835 notifications for 107.067
substances.

To facilitate correct and uniform implementation of the CLP Regulation,
several technical guidance documents were published by ECHA. In 2010, the
Commission assisted ECHA in revising existing guidance documents and developing
new ones, providing information to reply to Frequently Asked Questions and
participating in ECHA committees and workshops related to the CLP Regulation,
including in particular meetings of the Risk Assessment Committee (RAC) when
proposals for the harmonised classification and labelling of dangerous substances were discussed.

The Commission prepared
the draft 2nd ATP, which will incorporate into the CLP Regulation
the changes introduced by the 3rd revision of the GHS.

The Commission has also
received information from Member States regarding the penalties adopted at
national level for non compliance with the obligations of the Regulation.
Although most Member States have implemented national provisions, some
notifications of the national measures are still missing.

The Commission has
continued to contribute to work done in the framework of the United Nations to
further revise the GHS.

In addition, Commission
Regulation (EU) No 440/2010 on the fees payable to the European Chemicals
Agency pursuant to the CLP Regulation (Articles 24(1) and 37(3)) entered into
force on 25 May 2010.

Evaluation

Since the deadlines for
applying the new classification and labelling provisions to substances and for
notification in the C&L Inventory only expired on 1 December 2010 and 3
January 2011 respectively, it is premature to conduct an evaluation. However,
the fact that more than 3 million notifications for over 107.000 substances
have been submitted is an indication that industry can successfully cope with
the new requirements.

Evaluation
results

(1)       Priorities

The Commission will
monitor enforcement and official controls reported by Member States. It will
also support the work of the national authorities responsible for market
surveillance in the framework of the Enforcement Forum coordinated by ECHA and
will follow-up information on the C&L Inventory managed by ECHA. The
Commission will assess the need to initiate infringement procedures for non
communication of national measures concerning penalties for those Member States
who have not yet notified their measures.

(2)       Planned action (2011
and beyond)

The Commission will
proceed with the final adoption and publication of the 2nd ATP to the
CLP Regulation and will continue to support ECHA, national authorities and
industry in various fora and in the development of information and guidance
documents that will be required by industry to ensure that mixtures comply with
the provisions of the CLP Regulation by June 2015.

The Commission will also assess
the opinions on the proposals for the harmonised classification and labelling
of certain substances submitted by ECHA to assess whether to include them in
the list of harmonised classification and labelling in Annex VI of the CLP
Regulation.

Discussions will start
with national experts and stakeholders on incorporating the 4th
revision of the GHS at EU level in a future ATP of the CLP Regulation.

 Summary

Given that the obligations of the legislation related to substances
became compulsory on 1 December 2010 and the provisions for mixtures will only
become compulsory in 2015 the CLP Regulation is in a very early stage of
implementation. A great deal of work in support of correct implementation has
been accomplished. Compliance with the deadline for submitting notifications of
classification and labelling information to ECHA by 3 January 2011 seems to have
been satisfactory. A more detailed analysis will take place in 2011.

Links to legislation

http://ec.europa.eu/enterprise/sectors/chemicals/documents/specific-chemicals/index\_en.htm

1.3.2.2.
Pyrotechnic Articles and
Explosives

Current position

General introduction

Directive
2007/23/EC protects consumers by requiring that pyrotechnic articles meet
essential safety requirements. It also creates an internal market for those
articles that meet these requirements. The Member States had to transpose the
Directive by early 2010. Directive 93/15/EEC regulates the placing on the
market and the supervision of intra-EU transfers of explosives for civil uses
and has been applied since January 1995.

Report of work done in 2010

On 19 June 2010, the
Commission adopted Decision 2010/347/EU amending Commission Decision
2004/388/EC of 15 April 2004 on an intra-EU transfer of explosives document.
The new Decision allows Member States to use an electronic system, which will
significantly reduce the time taken to grant transfer approvals to companies manufacturing
or trading explosives.

The Commission continued to follow
up the transposition of Directive 2008/43/EC, setting up a system for the unique
identification and full traceability of explosives for civil use from
manufacturing/import to final use in order to protect the general public from
illicit use. Of 10 infringement procedures launched at the tail end of 2009, 9 were
closed during 2010 after communication of the required national transposition measures.

CEN has delivered the necessary
standards for the correct implementation of Directive 2007/23/EC. However,
objections to a few very specific parts of the standard have been raised by two
Member States, which have been dealt with and appropriate solutions have been
found.

Evaluation

Overall, the situation is satisfactory with
regard to the Explosives Directive. However, the industry sector concerned has
signalled that more time will be required to fully implement Directive
2008/43/EC due to the need to develop complicated IT systems and because an
exemption for certain small articles will be necessary. The implementation of Directive
2007/23/EC is still at an early stage.

Evaluation
results

(1)       Priorities

Finding solutions to the request to postpone the taking effect of
Directive 2008/34/EC and defining articles for which an exemption could be
acceptable. Updating certain parts of the standards for pyrotechnic articles to
overcome the objections raised by some Member States.

(2)       Planned action

At the end of 2010 the Commission launched a study to assess whether
Directive 2007/23/EC on pyrotechnic articles has been correctly transposed by
all Member States and the outcome will be evaluated by the Commission in 2011.

Summary

Overall, the situation
with regard to the Directive on explosives is satisfactory; the Directive does
not require major modifications. The Directive on pyrotechnic articles is at an
early stage of implementation and finalising all required standards as well as
monitoring its correct implementation by the Member States will be important in
the near future.

Links to legislation

http://ec.europa.eu/enterprise/sectors/chemicals/documents/specific-chemicals/index\_en.htm

1.3.2.3.
Drug precursors

Current position

General introduction

Drug
precursors are chemicals with wide and varied legitimate uses, for example in
the production of plastics, pharmaceuticals, cosmetics, perfumes, detergents or
aromas. However, these chemicals may be diverted from legal trade for use in the
illicit manufacture of drugs such as cocaine, heroin, ecstasy or
methamphetamines. European drug precursor legislation establishes measures to
monitor trade in drug precursors, aiming at striking a balance between preventing
their diversion into drug manufacture and allowing their legitimate trade
without creating unnecessary administrative burdens.

Report of work done in 2010

The Commission has continued to support
better implementation of drug precursor legislation, for instance by organising
a best practice workshop with Member States and stakeholders in June 2010. The
Commission also presented a paper setting out possible changes to the existing
legal framework and collected information to prepare an impact assessment on
options for legislative amendments.

Work also continued on infringement
procedures against Member States for non- communication of national
implementing measures. Of 8 infringement cases begun in 2007, only one remained
open. In that case, the European Court of Justice ruled that the Member State in question had not met its obligations under drug precursor legislation by
failing to communicate national transposition measures.

Evaluation

On 7 January 2010, the European Commission
adopted a Report on the implementation and functioning of the EU legislation on
monitoring and controlling trade in drug precursors[21].
The report concludes that the legislation has functioned well overall, but also
identifies some weaknesses in the current system and sets out recommendations
for further improvement.

In reaction to the Commission's Report, the
Council adopted conclusions which recognise the importance of continuing active
co-operation between authorities and industry and improving the implementation
of existing legislation. The Council invited the Commission to set up a work
programme to address weaknesses identified in the legislation in co-operation
with Member States and to propose legislative amendments before the end of 2011
after carefully assessing their potential impact on national authorities and
economic operators.

Evaluation
results

(1)       Priorities

The Commission services are giving priority to addressing the
weaknesses identified in the above mentioned report, with the aim of preventing
diversion of drug precursors from legal trade to the production of illicit
drugs. This includes the exchange of best practices among Member States and the
preparation of a review of the existing legislation.

(2)       Planned action

One action the Commission services will take to address these
weaknesses is the preparation of an impact assessment in relation to different
options for the amendment of existing legislation with a view to presenting a
legislative proposal, if justified, by the end of 2011. In parallel, efforts to
support a better implementation of the existing legislation will continue.

Summary

Whilst the acquis
with regard to drug precursors overall functions rather well, an evaluation has
identified certain weaknesses, which might lead to some legislative
modifications if justified following an impact assessment on various options.

Links to legislation

http://ec.europa.eu/enterprise/sectors/chemicals/documents/specific-chemicals/index\_en.htm

1.3.2.4.
Detergents

Current position

General introduction

Regulation
(EC) No 648/2004 on detergents ensures that only detergents with surfactants
that are fully biodegradable are placed on the market and that detergents are
appropriately labelled to protect the health of consumers, especially against
allergies.

Report of work done in 2010

In
accordance with the requirements of Article 16(1) of the Regulation, the
Commission submitted a report to the Parliament and the Council on the use of
phosphates in detergents in 2007. Subsequently, a study was done to gather more
scientific evidence on the contribution of detergents to the eutrophication of
EU waters. The study was completed in 2009 and reviewed by the Scientific
Committee of Health and Environmental Risks (SCHER). In the course of 2010, the
Commission prepared an impact assessment for a range of policy options
regarding the use of phosphates in detergents. Based on the impact assessment,
a legislative proposal to restrict the use of phosphates and
phosphate-containing compounds in laundry detergents was adopted by the
Commission on 4 November 2010 (COM(2010) 597 final) and was forwarded to the European
Parliament and the Council for adoption under the ordinary legislative
procedure.

In accordance with Article 15(1) (safeguard
clause) of Regulation (EC) No 648/2004, the German Competent Authorities for
Detergents notified a national measure prohibiting the placing on the German
market of a specific lime-scale and rust remover containing up to 25% nitric
acid due to the risk to human health. Shortly thereafter, the Belgian
authorities notified a similar measure. The Commission consulted all Member States and other stakeholders and will prepare a Commission Decision in accordance
with Article 15(2).

An infringement proceeding opened against Luxembourg for the non-implementation of Regulation (EC) No 648/2004 on detergents was closed in
2010 after Luxembourg adopted penalties for non-compliance with the Regulation.

Evaluation

The situation
with regard to the Detergents Regulation and its implementation is satisfactory.

Evaluation
results

(1)       Priorities

Following delivery of all required reports in earlier years, the
main priority will be the effective and consistent application of the
Regulation.

(2)       Planned action

A Commission Decision under Article 15(2) is planned for the first
quarter of 2011 in response to the use of the safeguard clause by Germany.

Summary

The acquis with
regard to detergents is effective and does not require significant
modifications, except for additional measures to restrict the use of phosphates
and phosphate-containing compounds in laundry detergents.

Links to legislation

http://ec.europa.eu/enterprise/sectors/chemicals/documents/specific-chemicals/index\_en.htm

1.3.2.5.
Fertilisers

Current position

General introduction

The purpose of Regulation (EC) No
2003/2003 on mineral fertilisers is to allow the free circulation within the
internal market of ‘EC fertilisers’.

Report of work done in 2010

In 2010, the Commission prepared
the 5th adaptation to technical progress (ATP) to include new types
of fertilisers that can be marketed as ‘EC fertilisers’ and to introduce new
CEN test methods that will facilitate compliance with the provisions of the
Regulation. The draft Commission Regulation received a favourable opinion from
the relevant regulatory committee.

As recommended in the Risk Reduction Strategy
on cadmium established under Regulation (EC) No 793/93, the Commission continued
to assess the possibility of reducing the content of cadmium in phosphate
fertilisers. Meetings were organised with stakeholders and Competent
Authorities to understand the impact of potential measures and gather
information for the Impact Assessment required prior to action at EU level. Work
on the impact assessment progressed well throughout 2010.

Evaluation

An ex-post evaluation of
Regulation (EC) No 2003/2003 was carried out by an external consultant to
analyse the strengths and weaknesses of the current legislation and its
potential for improvement. The evaluation concluded that that Regulation
represents an important step towards the harmonisation of mineral fertilisers,
but that an important and growing part of the market is not covered. Mutual
recognition of 'national fertilisers' is perceived as problematic. For most
stakeholders, EU legislation needs to be broader in scope.

Evaluation results

(1)       Priorities

No change compared to earlier years: activity will continue to adapt
the Regulation to technical progress, notably to include new fertiliser types
in Annex I and simplify analytical methods in Annex IV. In parallel, the
necessary preparatory work for a fundamental review of the Regulation will
begin to extend its scope and achieve full harmonisation of the sector.

(2)       Planned action (2011 and beyond)

After adoption of the 5th ATP, work on a 6th ATP will
continue to include additional types of fertilisers and to replace some
national standards by common EU-wide standards. The aim is full harmonisation
of the fertiliser market.

In
preparation for full harmonisation of the fertiliser market, a study has been
commissioned by the Directorate-General for Enterprise and Industry to collect information about national regulatory frameworks on
fertilisers. Some policy options for the revision of fertilisers legislation
will be proposed having regard to their impact on the environment, human health
and the economy as a whole. The
results of the study will feed into an impact assessment report accompanying
the future legislative proposal.

Summary

The current fertiliser Regulation
has been effective in achieving its main objective, namely to simplify and
harmonise the regulatory framework in relation to mineral fertilisers. The
Regulation appears to be less effective in meeting two other objectives such as
the protection of the environment and the promotion of innovation. Mutual
recognition of national fertilisers is not well perceived by a majority of
Member States as industry is either unaware of it, or very sceptical about its
use. These legal uncertainties should be overcome in the future revision of the
fertiliser Regulation, which should significantly extend its scope to cover a
broader range of fertilising materials and related products (such as soil
improvers and growing media) and reduce administrative burdens for companies
and authorities.

Links to legislation

http://ec.europa.eu/enterprise/sectors/chemicals/documents/specific-chemicals/index\_en.htm

1.4.
The Transparency Directive

Current position

In accordance
with the Treaty, pharmaceutical pricing and reimbursement policies fall within
the responsibility of the Member States. However, Directive 89/105/EEC,
commonly referred to as the "Transparency Directive", lays down a
series of procedural requirements to ensure the transparency of national
pricing and reimbursement measures. Its provisions do not affect the capacity
of Member States to determine the organisation and financing of their
healthcare systems. In particular, each Member State is free to set the prices
of medicines and to decide on their reimbursement status in the framework of
national or regional health insurance schemes.

Report of
work done in 2010

In 2010, three infringement
proceedings related to the incompatibility of national legislation with the
requirements of the Directive were closed.

Discussions
with the Member States on the application and interpretation of the Directive
were also pursued in the framework of the Transparency Committee which was held
in March 2010.

Evaluation

Directive 89/105/EEC is a peculiar
instrument under EU law because it lies at the interface between EU competences
(free movement of goods within the internal market) and national
responsibilities (organisation of social security systems). The directive only
provides for partial harmonisation, based on the underlying principle of
minimum interference in the organisation by Member States of their domestic
social security policies. In other words, Member States are free to establish
their own regulatory framework, provided that the rules and procedures chosen
include certain guarantees of transparency. This has consequences for the
management of infringement proceedings: the investigations always require a
case-by-case analysis of complex national systems and the exercise is often
complicated by regular reforms or adjustments of social security schemes
introduced by many Member States to curb rising public health expenditure.
Where compliance issues arise, Member States must implement their own solutions
because they remain responsible for the organisation of their social security
system. In addition, pharmaceutical pricing and reimbursement is a politically
sensitive area in all Member States due to the impact of national measures on
healthcare budgets. Consequently, the resolution of problems always requires
dialogue and a sustained cooperation with the competent national authorities.

The Commission
has significantly stepped-up its efforts to ensure the enforcement of the
Directive in recent years. Indeed, after enlargement, it became apparent that
several Member States had adopted pricing and reimbursement measures at odds
with the principles of the Transparency Directive. Different issues relating to
compliance with the time-limits and other procedural obligations were
identified by the Commission on the basis of complaints from economic
operators. A majority of these issues were resolved through constructive
dialogue with the competent national authorities. This enabled the Commission
to put an end to infringement proceedings in a dozen cases between 2005 and
2009.

Evaluation
results

An impact assessment for the review of
Directive 89/105/EEC is currently being carried out. A review is included in
the Commission Legislative Work Programme 2011.

(http://ec.europa.eu/atwork/programmes/docs/cwp2011\_annex\_en.pdf).

One of the aims
of the review is to update the text of the Directive so as to incorporate the
case-law of the Court of Justice and tackle some ambiguous or out-of-date
wording in the Directive. This would provide a solution to various
interpretation and implementation issues which regularly arise.

Summary

Given the rapid evolution of health
insurance systems and the recent multiplication of cost-containment measures in
many Member States, the compatibility of national measures with Directive
89/105/EEC continues to require constant scrutiny. The Commission will
therefore continue to investigate complaints indicating potential
incompatibilities of national measures with the Directive. Priority will be
given to solve problems of insufficient or incorrect implementation of the
procedural requirements of the directive into national law which could entail
significant barriers to trade in medicinal products.

1.5.
Mechanical, electrical and telecommunications
equipment

Current position

General introduction

The Machinery Directive 2006/42/EC, published
on 9th June 2006, began to apply on 29 December 2009, replacing Directive
98/37/EC. The new Directive aims to consolidate previous achievements in terms
of free circulation and safety, while improving the application of the
legislation. The scope of the new Directive is wider, since construction-site
hoists and cartridge-operated fixing and other impact machinery are no longer
excluded. The new Directive has already been amended to
introduce environmental protection requirements for new machinery placed on the
market for use in the application of pesticides.

Report of work done in 2010

An infringement case brought under
Directive 98/37/EC had been referred to the Court in 2009. Following amendment
of the legislation by the Member State concerned to comply with the
requirements of the Directive, the case was closed in 2010. By the end of 2010,
all infringement proceedings for non-communication of national measures
implementing Directive 2006/42/EC were closed following receipt of the national
transposition measures.

In 2010, Commission Directive 2010/26/EC
was adopted, amending Directive 97/68/EC on the approximation of the laws of
the Member States relating to measures against the emission of gaseous and
particulate pollutants from internal combustion engines to be installed in
non-road mobile machinery. The amendment is an adaptation to technical progress
relating to type approval testing procedures for certain larger diesel
engines.

Finally, as concerns the lifts Directive (95/16/EC),
one infringement case was closed when the Member State introduced required
changes to national legislation following a reasoned opinion sent by the
Commission.

Evaluation

The existing acquis is well
established and is not expected to require substantial development.  Compliance
by Member States with the law in this sector is satisfactory. The situation is
stable, manageable and acceptable. The volume of problems arising is limited
and no specific corrective action is required.

Evaluation
results

(1)       Priorities

As in 2009, priorities were the
non-communication cases. In 2010, Directive 2006/42/EC was fully transposed and
no other non-communication cases remain open.

(2)       Planned
action

Following adoption of Decision No
768/2008/EC on a common framework for the marketing of products, and repealing
Council Decision 93/465/EEC, some existing directives must be revised, in
particular Directive 2006/95 relating to electrical equipment designed for use
within certain voltage limits, Directive 2004/108/EC on the approximation of
the laws of the Member States relating to electromagnetic compatibility, Directive
94/9/EC regarding equipment intended for use in potentially explosive
atmospheres and Directive 95/16/CE on lifts.  This revision process began in
2010.

An increase in work on the amendment of
existing legislation is therefore expected.

A Commission proposal for a Directive of
the European Parliament and Council amending Directive 97/68/EC on the
approximation of the laws of the Member States relating to measures against the
emission of gaseous and particulate pollutants from internal combustion engines
to be installed in non-road mobile machinery, as regards the provisions for
engines placed on the market under the “flexibility scheme” was adopted in
2010.  Negotiations with the European Parliament and the Council are underway.

Summary

Future work will include the revision of
some directives, to align them with Decision No 768/2008/EC on a common
framework for the marketing of products.  However, the acquis is
relatively well established and the situation is stable. The mechanical,
electrical and telecommunications equipment sectors all function smoothly.

1.6.
Gas appliances, pressure equipment and legal metrology

Gas appliances,
pressure equipment, and metrology are technically complex sectors that are regulated
by EU harmonisation legislation to a certain extent.

1.6.1.
Gas appliances

Current position

General introduction

The gas appliances sector is mainly regulated by Directive 2009/142/EC
relating to appliances burning gaseous fuels (a codified version of Directive
90/396/EEC). It aims to ensure the free movement of gas
appliances through technical harmonisation with regard to hazards due to gas and
to ensure a high level of safety and health protection by imposing mandatory essential
safety requirements and conformity assessment procedures.

Other EU harmonisation legislation,
covering other aspects, may also apply to gas appliances (or their parts).

Report of work done in 2010

Infringement proceedings and issues relating to the correct
implementation of the Directive 2009/142/EC were priority issues for the Commission services in
2010.  A case against Greece for incorrect implementation of the Directive with regard to gas appliances was resolved
following clarification by the Greek authorities.

Most inquires and complaints in the sector related to
problems with the installation and putting into service of gas appliances due
to their incompatibility with the gas supply conditions at the place of
installation (a non-harmonised aspect). The Commission intervened where
incorrect implementation of the Directive (harmonised aspects) was detected. Another
group of problems concerned the simultaneous application of other directives,
in particular Directive 89/105/EC on construction products, to exhaust gas
facilities placed on the market as integral parts of a gas appliance operating as
a complete system.

Concerns have also been raised about
measures taken by some Member States in relation to energy efficiency which
have the effect of restricting the free movement of certain types of gas
appliances. As this involves the application of other pieces of EU legislation,
in particular legislation on the promotion of renewable energies, the matter is
being examined by the Commission services involved.

Evaluation

Directive 2009/142/EC has been operational and functioning satisfactorily
for more than fifteen years. However, experience with its implementation, together
with technical progress and innovation, have made it necessary to revise the
Directive. Currently, the Commission services
together with the Member States Working Group on Gas Appliances and the sub
working group on Revision, are examining the different options for revision and
will prepare a working document with a proposal. The Gas Appliances
Expert Group met once this year mainly to discuss progress made on preparation
for the revision and the outcome of the work of the Working Group GAD Revision,
which met seven times.

The revision of the Directive was also the main topic in
the meetings of the Gas Appliances Directive Advisory Committee (GADAC) and the
Notified Bodies Gas Appliances (NBGA), both composed of representatives of
notified bodies.

Discussion centred on the possible
extension of the scope of the Directive to cover not appliances “burning
gaseous fuels” but appliances “using gaseous fuels” and to cover some
components for gas installations. The limitations of the harmonisation of the
gas appliances themselves are recognised, since gas types and supply pressures
(which are very important for the safe functioning of appliances) are not
harmonised. As consequence, a gas appliance must not only comply with the EU
harmonisation legislation but must also be suitable for gas supply conditions
at the place of installation. The alignment of Directive 2009/142/EC to
Decision 768/2008/EC on a common framework for the marketing of products will
be part of its revision.  A Commission legislative proposal is expected at the
end of 2012.

The ex-post evaluation of the Gas Appliances Directive is
under preparation. The study aims to assess whether the Directive has achieved
its objectives and whether it is cost-effective. The evaluation will greatly
assist the revision process, in particular by identifying possible needs for
further improvement of the framework conditions for products covered by the
Directive or for bringing new products within its scope.

Evaluation results

(1)       Priorities

The revision of Directive 2009/142/EC is a
priority for the Commission services.

(2)       Planned action (2011 and beyond)

The correct and effective implementation of
the Directive (including infringement proceedings and safeguard clauses) will
continue to be monitored in 2011.

Summary

Directive 2009/142/EC functions smoothly
and there are no major problems. In general, Member States apply the acquis
correctly and those problems that do arise tend to relate to non-harmonised
aspects, such as gas types and supply pressures. However, experience with its
implementation, together with technical progress and innovation, have made it
necessary to revise the Directive. The revision process is a priority for the
Commission.

1.6.2.
Pressure equipment

Current position

General introduction

The
pressure sector deals with protection of health and safety in relation to risks
presented by pressure equipment, covering an area ranging from the simple
pressure cooker to the largest chemical installation. EU harmonisation
legislation covers pressure equipment mainly through Directive 97/23/EC on
pressure equipment and Directive 2009/105/EC (a codified version of Directive
87/404/EEC) on simple pressure vessels. This legislation regulates the design,
manufacture and conformity assessment of the products defined as falling within
their scope. Directive 97/23/EC covers pressure equipment as regards pressure
hazards.

Directive 75/324/EEC on
aerosol dispensers lays down the safety and labelling requirements that aerosol
dispensers must satisfy in order to be placed on the market.

Other EU harmonisation legislation,
covering other aspects, may also apply to these products.

Finally, four old
directives on pressure vessels (framework directive
76/767/EEC and three specific instruments on gas cylinders, namely Directives
84/525/EEC, 84/526/EEC and 84/527/EEC), were repealed
by Directive 2010/35/EU on transportable pressure equipment.

Report of work done in 2010

 Management of infringement proceedings

Infringement proceedings and issues relating to the correct
implementation of the Directives were priority issues in
2010. Most infringement proceedings concerned the non-communication of national
transposition measures.

Directive 2008/47/EC of
8 April 2008[22], adapted
Directive 75/324/EEC to technical progress and has applied since 29 April 2010.
Following communication of the national transposition measures, 10 infringement
proceedings out of 13 were closed.

A case against Greece relating to obstacles
to the free circulation of steam boilers was closed following a reasoned
opinion, when the contested provisions were repealed.

Expert groups

Two regular meetings of the Working Group on
Pressure took place in 2010. Issues relating to the implementation of the directives
were discussed and guidelines are adopted in order to ensure, where necessary,
the coherent interpretation of the directives by all concerned parties. There
were also meetings of the Coordination Group of Notified Bodies to ensure that
conformity assessment procedures are correctly applied by all parties involved.

2010 saw improved cooperation
between Member States through the meetings of the ADCO Group (Administrative
Cooperation Group) which addressed matters such as the exchange and quality of
information on market surveillance issues, with a view to ensuring better
implementation of the Directives.

Evaluation

(a)        Directives 97/23/EC and 2009/105/EC need to be aligned
with Decision No 768/2008/EC of the European Parliament and of the Council of 9
July 2008 on a common framework for the marketing of products. A legislative
proposal to this regard is scheduled for 2011.

(b)       The repeal of Directive
67/548/EEC on the classification, labelling and packaging of dangerous substances
on 1 June 2015 by Regulation (EC) No 1272/2008
on classification, labelling and packaging of mixtures (CLP Regulation) affects
Directive 97/23/EC as the classification of pressure equipment is determined by
reference to that Directive. Therefore, an alignment of Directive 97/23/EC is
necessary to take into account (from 1 June 2015) the new classification of
dangerous substances introduced by the CLP Regulation. This is expected to take
place together with the alignment of this Directive with Decision No
768/2008/EC.

(c)        Furthermore, as the CLP Regulation also sets out labelling requirements for aerosol dispensers, it is
necessary to align Directive 75/324/EEC with these. At present, Directive
75/324/EEC contains references to Directive 67/548/EEC and takes up the flame
symbol and some safety phrases from that Directive. However, the flame symbol
has been changed and the safety phrases slightly modified. To avoid confusion
and ensure legal clarity and consistency, it is therefore necessary to do an ATP
for Directive 75/324/EEC. At the same time, some other technical adaptations
are necessary, mainly concerning plastic aerosol dispensers and the maximum
allowable pressure for aerosols using non-flammable propellants. A proposal is
scheduled for 2011.

Summary

The pressure equipment sector functions
smoothly and there are no major problems. In general, Member States apply the acquis
correctly and there are no particular problems with regard to the free
circulation of pressure equipment, simple pressure vessels and aerosol
dispensers. Infringement proceedings and issues
relating to the correct implementation of the Directives will continue to be
priority issues for the Commission services in the pressure sector in 2011, as
well as the alignment of Directives 97/23/EC and 2009/105/EC with Decision No
768/2008/EC and the CLP Regulation.

1.6.3.
Legal metrology

Current position

General introduction

Legal metrology covers units of measurement and the
metrological requirements that pre-packed products and measuring instruments
must satisfy in order to be legally placed on the market and put into service.

The main directives
relating to the design and manufacture of measuring instruments are Directive
2009/34/EC relating to common provisions for both measuring instruments and
methods of metrological control (a recast of Directive 71/316/EEC), Directive 2009/23/EC
(a codified version of Directive 90/384/EEC) on non-automatic weighing
instruments and Directive 2004/22/EC on measuring instruments.

Units of measurement
are harmonised at EU level by Directive 80/181/EEC on units of measurement
which creates a harmonised regulatory framework
throughout the EU with the aim of eliminating trade barriers between Member
States.

Report of work done in 2010

 The transposition of Commission Directive 2007/13/EC of 7 March
2007[23]
which modified Annex II to Directive 71/316/EEC to include drawings of the
distinguishing letters of some Member States used for the EEC initial
verification mark affixed on a measuring instrument and indicating that
the latter conforms to EEC requirements is complete. Four remaining infringement
proceedings for non-communication of national transposition measures were closed
in 2010 by the Commission following communication of the measures.
Directive 2007/45/EC
of the Council and the European Parliament of 5 September 2007, laying
down rules on nominal quantities for pre-packed products, repealing
Council Directives 75/106/EEC and 80/232/EEC and amending Council
Directive 76/211/EEC[24],
aims to liberalise nominal quantities of pre-packaged products within the
EU in line with ECJ jurisprudence, with the exemption of wine and spirits
for which nominal quantities will continue to be defined at EU level. All
Member States have now communicated their national transposition measures
and the last opened infringement proceeding has been closed in 2010.
Directive 80/181/EEC was
modified by Directive 2009/3/EC of the European Parliament and of the
Council of 11 March 2009, which. Member States should have transposed by
31 December 2009. Ten infringement cases relating to non communication of
national transposition measures were closed following communication of the
measures.
Directive 2009/137/EC
of 10 November 2009 amending Directive 2004/22/EC in respect of the
exploitation of the maximum permissible errors, as regards the
instrument-specific annexes MI-001 to MI-005 should have been transposed
by Member States by 1 December 2010. At the end of 2010, 18 Member States
had communicated national transposition measures.

Evaluation

(a)        Discussions in Council and in the
European Parliament continued on a Commission legislative proposal
(COM(2008)801) for a Directive of the European Parliament and of the Council
repealing 8 old metrology Directives[25] which were
adopted under old framework Directive 71/316/EEC and co-existed with national
provisions. Technical progress and innovation with regard to the measuring
instruments covered by these Directives was reflected either by the voluntary
application of international and European standards or by the application of
national provisions implementing such new specifications. It was felt that free
movement of these products within the internal market would be ensured by
Articles 34 to 36 TFEU and the mutual recognition principle. However, the new
legislative proposal explains that the existing Directive on Tyre Pressure
Gauges for Motor Vehicles (Directive 86/217/EEC) is virtually obsolete
technologically. In the absence of an up-to-date international standard, a
standardisation mandate in the field of type pressure gauges for motor vehicles
and tyre pressure management systems (measuring instruments) has been issued to
the European Standardisation Organisations. The European Parliament adopted the
proposal on first reading on 18 December 2010.

(b)       A report on the implementation of
Directive 2004/22/EC is being prepared in accordance with Article 25 of the
Directive (the revision clause) and will contain inter alia, conclusions as to
whether the Directive needs to be revised.

Evaluation results

(1)       Priorities

The transposition of the Directives will
continue to be the priority for 2011.

(2)       Planned action (2011 and beyond)

Following up cases
against the two remaining Member States (Portugal and Austria) who have not yet communication transposition measures for Directive 2009/3/EC, will be a
priority in 2011.
Following up
notifications of transposition measures for Directive 2009/137/EC and
launching infringement proceedings where such measures have not been
communicated will be a priority in 2011.

Summary

The measuring
instruments sector is operating smoothly and presents no major problems with regard to the free circulation of measuring instruments. In general, Member States apply the acquis properly. In 2011 priority will be given to the correct
implementation of the Directives and to the follow-up
of remaining transposition problems.

1.7.
Construction products

Current position

General introduction

Directive 89/106/EEC on construction
products (“the CPD”) has not been amended recently, which has allowed steady
development of its implementation within the Member States.

Report of work done in 2010

Harmonisation through European standards,
published in the OJ has proceeded and conditions for enterprises operating in
this sector, whether as manufacturers or users of construction products, have seen
stable progress during 2010. However, certain fundamental problems remain unresolved,
resulting in different transpositions among the Member States and consequent
inefficiencies in the harmonisation.

The revision of the CPD proceeded during
2010. The Council reached political agreement on its position in May and formally
adopted the first reading position in September. The second reading agreement
on the text was reached in December. The final adoption of the CPR is thus
expected during the spring of 2011 and it should be fully applicable from
mid-2013 onwards. In spite of certain delays in adoption and, consequently, entry
into force of the CPR, the outcome will be a simplified and clarified regulatory
structure for the future.

Progress with infringement proceedings has
been patchy, complicated by the fact that the new Regulation is designed to
address certain interpretative ambiguities with the CPD which are often at the
centre of the complaints leading to infringements. Nevertheless, during 2010,
one longstanding case against the UK was closed and another case against France was opened.

Evaluation results

Accelerating progress in the remaining open
infringement cases under the CPD is a priority for 2011.

Summary

Pending the introduction of the CPR, legal
uncertainties relating to the interpretation of the CPD will remain, making
enforcement difficult. However, the intention is to continue to reduce the
number of open infringement cases and to deal with any new cases more swiftly
and efficiently than before. Closer contacts with Member States, including in
the EU Pilot, will undoubtedly be of assistance in reaching these objectives.

1.8.
Textiles/clothing, footwear and wood

Current position

General introduction

Textiles and clothing are regulated by recast Directive 2008/121/EC on textile names,
adopted on 14 January 2009 and repealing Directive 96/74/EC. It incorporates
Commission Directives 97/37/EC, 2004/34/EC, 2006/3/EC and 2007/3/EC which
amended Directive 96/74/EC. Directive 2008/121/EC has been amended by
Commission Directive 2009/121/EC.

Other legislation in the textiles field is Directive
96/73/EC (adapted to technical progress by Commission Directives 2006/2/EC,
2007/4/EC and 2009/122/EC) and Directive 73/44/EEC specifying testing methods
for the sampling and analysis of fibre mixtures in order to determine the
conformity of information given on a label in accordance with Directive
96/74/EC. Due to the technical nature of the textiles directives, the Committee
for textile names and labelling (composed of experts from Member States and other interested parties) assists the Commission in adapting them to technical
progress.

In the footwear area,
legislation (Directive 94/11/EC on the labelling of materials used in consumer
footwear) is well-established and stable. Unlike the clothing and textile area,
it is not necessary to amend this legislation often in the light of technical
developments. There is no committee work in this area.

In the wood
sector, there is no legislation at EU level.

Report of work done in 2010

In the textiles
and clothing sector, eight letters of formal notice were sent to four Member
States in November 2010 in relation to the non-communication of national
measures transposing Directives 2009/121/EC and 2009/122/EC.

The Commission
Proposal for a Regulation on textile names and related labelling of textile
products [COM(2009) 31 final], adopted on 30 January 2009, followed the
ordinary legislation procedure in 2010.

The European
Economic and Social Committee having adopted a favourable opinion at the end of
2009, the European Parliament adopted its first reading opinion on 18 May 2010
and the Council adopted its common position on 6 December 2010.

Evaluation results

The major legislative work in the textiles sector will be
the continuation of the work on the proposal for a
Regulation on textile names and related labelling and the monitoring of its
implementation and application once in force.

The infringement cases opened for the
non-communication of national measures transposing Directives 2009/121/EC and
2009/122/EC will be followed-up in 2011.

Summary

The acquis is stable and poses few
enforcement difficulties.

Links to legislation

http://ec.europa.eu/enterprise/sectors/textiles/single-market/textiles-names-legislation/index\_en.htm

1.9.
Toys

Current position

General introduction

The new toy
safety directive, Directive 2009/48/EC, came into force on 20 July 2009. Member
States had to adopt and publish implementing provisions by 20 January 2011 and
must apply them from 20 July 2011. The later date of 20 July 2013 is laid down
for the application of chemical requirements.

The objective
of the new Directive is to ensure a high level of safety of toys, ensuring the
health and safety of children, whilst guaranteeing the functioning of the
internal market by setting harmonised safety requirements for toys and minimum
requirements for market surveillance. The Directive applies to products
designed or intended, whether or not exclusively, for use in play by children
under 14 years of age.

The main
changes to the current legal framework concern: enhanced requirements,
especially in relation to the use of chemicals in toys, mandatory safety
assessment prior to the marketing of toys and stringent obligations for
economic operators.

In July 2009,
the Commission issued a mandate to CEN (European Committee for Standardisation)
and CENELEC (European Committee for Electro-technical Standardisation) to
review the existing harmonised standards and adapt them to the requirements of
the new directive.

Report of work done in 2010

The process has
still been under way in 2010 and revised standards should be available before
Member States must begin applying the new provisions.

General and
specific guidance documents aimed at facilitating the application of the new
directive are currently being prepared and are available on the Commission
website.

1.10.
Food industry

Current position

General introduction

EU legislation
governing the trade regime for non-Annex I goods (commonly referred to as processed
agricultural products) devolves primarily from Council Regulation (EC) No
1216/2009 of 30 November 2009. This Regulation provides a general framework for
trade arrangements applicable to certain goods resulting from the processing of
agricultural products.

It can be divided
into trade arrangements governing imports from third countries and rules
governing the payments of export refunds on exports to third countries. :

Trade
arrangements on imports cover preferential import arrangements including
TRQs, methods of analysis and special Inward Processing arrangements.
Rules
governing the payment of export refunds on exports cover the determination
of quantities, refund rates, methods of analysis, statistics and special
rules for pasta.

The specific rules
governing trade in processed agricultural products are established in close
cooperation with the Management Committee on
processed agricultural products in which all Member States are represented.

(2)       Report of work done in 2010

a) Replacement of Regulation (EC) No
1043/2005 on the implementation of Council Regulation
(EC) No 1216/2009 as regards the system of granting export refunds for
certain agricultural products exported in the form of goods not covered by
Annex I to the Treaty, and the criteria for fixing the amount of such refunds.

b) Amendment of Regulations (EC) No
900/2008 and 904/2008 on the analysis of imported and exported processed
agricultural products respectively in order to replace the analysis method for
starch in imported and exported.

c) Screening of the EU acquis
and its simplification.

In the context of the ongoing
simplification of the acquis and the adaptation of the current acquis
to the Lisbon Treaty, a comprehensive screening of the acquis in
relation to processed agricultural products was undertaken and identified 3
Council acts and 59 Commission acts that are no longer relevant and can be
removed from the EU acquis.

Evaluation results

(1)       Priorities

The ongoing simplification of the acquis
and the adaptation of the EU acquis in the non-Annex I sector to the
Lisbon Treaty are the two main priorities. As regards the non-Annex I sector, the
priority will be to implement the important changes introduced by the Treaty on European Union (TEU) and the Treaty on the
Functioning of the European Union (TFEU) and in particular the extension of the ordinary legislative procedure to
the trade arrangements applicable to processed agricultural products and the
adoption of new rules on the Commission's delegated and implementing powers.
The TFEU contains two provisions (Articles 290 and 291 TFUE) which entail
modification of existing comitology procedures, which govern decisions in the
area of trade in processed agricultural products.

(2)       Planned action (2011 and beyond)

a) Ongoing simplification of the acquis

In 2011 as a result of the screening exercise:

- Two Council acts will be formally repealed
by a Council act or by an act of the Council and the Parliament, as
appropriate, while 43 Commission acts will be declared obsolete by the
Commission.

- In addition one Council act and 16 Commission acts modifying other
acts already repealed or to be declared obsolete will be withdrawn from the EU acquis.

b) Adaptation of
the EU acquis in the non-Annex I sector to the Lisbon Treaty

Pursuant to the adoption of the Commission
Communication of 09/12/2009 on the Implementation of Article 290 TFUE (COM
(2009) 673 final), the Commission will progressively align non-Annex I
legislation with the new mechanisms of delegated acts and implementing acts.

1.11.
Cultural goods

In 2010, the acquis in this area remained stable. It consists
of Directive 93/7/EEC on the return of cultural objects unlawfully removed from
the territory of a Member State, as modified by Directives 96/100/EC and
2001/38/EC.

In accordance with the conclusions of the third report reviewing the
application of Directive 93/7/EEC by the Member States (2009), the
"Return of cultural goods" working group was created, composed of
national authorities responsible for the Directive. During its mandate, the
working group evaluated the application of the Directive, identified the
main problems and suggested modifications with a view to the possible
revision of the Directive.

The responsible service intends to proceed with a revision of
Directive 93/7/EEC in 2012.

1.12.
Weapons

The report on
placing on the market of replica firearms, one of the tasks given to the
Commission under the Directive has been prepared (COM/2010/404). The second
meeting of the Contact Group of national experts on Firearms, set up by the
directive, took place on 8 March 2010, allowing a useful exchange of
information to take place on the implementation of the Directive.

Enforcement
action is ongoing in relation to several infringement proceedings for
non-communication of national transposition measures, due on 28 July 2010.

1.13.
Product liability

Directive
85/374/EEC on the approximation of the laws, regulations and administrative
provisions of the Member States concerning liability for defective products is
a consolidated tool that strikes a fair balance between citizens and producers,
assuring citizens of the safety of products put into circulation in the
internal market. In 2010, the Commission's services began the preparation of
the fourth report on the Directive by sending a questionnaire to Member States
and to the members of the advisory groups on liability for defective products.

The Commission plans
to submit the fourth report in 2011. The report will examine how the 27 EU
Member States implemented the Directive between 2006 and 2010.

1.14.
Defence goods

A working group
of Member States’ officials met several times to discuss common guidelines on
the certification of defence-related undertakings. The discussions of this
group led to the adoption on 11 January 2011 of Commission Recommendation 2011/24/EC
on the certification of defence undertakings under Article 9 of Directive
2009/43/EC of the European Parliament and of the Council simplifying terms and
conditions of transfers of defence-related products within the EU (OJ L11 of
15.1.2011, p. 62).

1.15.
Non-harmonised area

Current position

General
introduction

Articles 34-36 TFEU ensure the easy cross-border exchange
of goods within the Internal Market in areas that are not subject to
harmonisation by EU legislation. The Commission monitors the correct
application of these rules and related Regulations and opens infringement proceedings
against Member States when necessary.

Report of work done in 2010

In 2010, the Commission
managed a total of 52 infringement proceedings in the various non-harmonised
fields covered by Article 34-36 TFEU. This is a decline compared with the
figures of previous years: 67 in 2009 and 73 in 2008.

The main areas of
concern remain national rules on the registration of motor vehicles, obstacles
to the free movement of pharmaceutical products and medical devices (in
particular, parallel imports), obstacles to the free movement of food
supplements and problems with customs controls and the transportation of goods.

In 2010, several
infringement cases were closed after the Commission and the Member States found
solutions to the problems complained of:

Ø Belgium
amended its legislation in 2010 concerning the importation, exportation and
transit of certain species of wild birds, in order to provide for the mutual
recognition of markings permitted by other Member States.

Ø Poland
modified its legislation on the protection of antiquities of more than 55 years
of age, which required the production of a certificate showing that the
antiquity in question should not be subject to a previous authorisation
procedure.

Ø Spain
modified its legislation to remove obstacles to the importation and marketing
of structural concrete.

Ø New regulations entered into force in the UK in April 2010 increasing the maximum width for certain trailers from 2.3 metres to 2.55.

The Court of Justice of the European Union delivered a judgment
on 9 December 2010 in a preliminary ruling in case C-421/09 Human plasma, which
concerned the free movement of goods. The Court was asked about the
compatibility with Articles 34-36 TFEU of national rules prohibiting the
importation of blood products provided from donations which were not entirely
unpaid. The Court held that "Article 34 TFEU, read in conjunction with
Article 36 TFEU, must be interpreted as precluding national legislation which
provides that the importation of blood or blood components from another Member
State is permitted only on the condition, which is also applicable to national
products, that the donations of blood on which those products are based were
made not only without any payment being made to the donors but also without any
reimbursement of the costs incurred by them in connection with those
donations".

The hearing in case C-462/09 Stichting de Thuiskopie took
place on 15 December 2010. This case concerns several infringement cases
concerning copyright levies and the free movement of goods. In a case touching
upon copyright levies (C-467/08 SGAE), a Spanish court had asked the Court of
Justice for guidance on the interpretation of the Copyright Directive
2001/29/EC in relation to Spanish requirements on copyright levies. The
judgment of the Court of 21 October 2010 clarified several points relating to a
number of infringement cases on copyright levies, declaring that they should be
analyzed in the context of Directive 2001/29/EC.

The Commission continued to look for pro-active solutions
outside or in parallel with infringement proceedings under Article 258 TFEU
through the SOLVIT problem-solving network and the preventive mechanism of Directive
98/34/EC (whereby Member States are obliged to notify new national technical
rules to the Commission at the draft stage).

Regulation (EC) 764/2008 (the “Mutual Recognition
Regulation”) completed a full year of application in 2010 following its entry
into force on 13 May 2009. The Regulation sets out procedural requirements for Member
States that refuse to apply mutual recognition.  It defines the rights and
obligations of national authorities on the one hand and, on the other,
enterprises wishing to sell in one Member State products lawfully marketed in another,
when the competent authorities intend to take restrictive measures in relation
to the product.  Member States must notify to the Commission decisions
affecting the marketing of products already lawfully marketed in another Member State. During 2010, a total of 800 notifications were received from the Member
States.

The first annual reports of national authorities on the
application of the Regulation were analysed and discussed at the 2nd meeting of
the Advisory Committee on Mutual Recognition held on 19 November 2010. To date,
all Member States have submitted reports, a necessary step in preparing the
evaluation of the Regulation that is due to be presented by 13 May 2012.

In 2010, the area of free
movement of goods was the subject of 9 petitions to the European Parliament,
and 23 parliamentary questions.

Evaluation

Articles 34-36 TFEU remain the essential legal basis for
tackling obstacles to trade among Member States. As these provisions apply only
to the non-harmonised area, their ambit fluctuates in accordance with developments
in secondary EU legislation.

In 2010, the trend observed in previous years towards a
decrease in the number of open infringements against Member States continued. The
success rate for problem-solving in EU Pilot contributed significantly to this
reduction for those Member States which participated in this system. Other
reasons are a determined effort to address a backlog of old cases and the
pursuit, when possible, of alternative solutions through dialogue and cooperation
with the Member States outside the infringement procedure. Nevertheless, the volume
of complaints and enquiries received show that there is still a significant
degree of non-compliance with the principle of the free movement of goods and a
lack of understanding of the concept of mutual recognition, resulting in
practical barriers to cross-border trade in goods.

As regards mutual recognition, Regulation (EC) No 764/2008 is
helping to raise awareness of the principle both among economic operators and
national administrations in the Member States.

Evaluation results

(1)       Priorities

In the light of positive results observed so far, the
Commission is encouraged to engage in further dialogue with Member States with
a view to reaching quicker solutions to free movement of goods issues.

The updated version of the ‛Guide to the application of
Treaty provisions governing the free movement of goods’ was published in 2010 and distributed to a large external
audience. The Guide has become a useful tool to explain the fundamental
principle of free movement of goods and the latest interpretations handed down
by the Court of Justice of the European Union.

Summary

The continued arrival at the Commission of complaints and
requests for information confirms that monitoring the application of the free
movement of goods principle in the non harmonised area remains an important
task. The Treaty and related regulations are adequate tools to ensure that the
fundamental freedom of free movement of goods is safeguarded. While any breach
of this fundamental freedom must be pursued, priorities will continue to
reflect any grouping of cases (for example the registration of vehicles) and
areas having the greatest impact on intra-EU trade.

Legislation

Treaty provisions:

http://ec.europa.eu/enterprise/policies/single-market-goods/files/treaties/tfeu\_en.pdf#page=15

Regulation Mutual
recognition regulation:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:218:0021:0029:en:PDF

Guide to the
application of Treaty provisions governing the free movement of goods:

http://ec.europa.eu/enterprise/policies/single-market-goods/files/goods/docs/art34-36/new\_guide\_en.pdf

1.16.
Preventive rules of Directive 98/34/EC

Important preventive work continued under
Directive 98/34/EC with advice and guidance provided by the Commission and Member States on over 800 national draft technical regulations of the 27 Member States, the
EFTA countries and Turkey concerning non-harmonised products and information
society services. The Committee on Standards and Technical Regulations
established by the Directive met twice during 2010 to discuss its functioning
and a working group composed of representatives of Member States met three
times to evaluate the notification procedure and consider whether any
adjustments or amendments should be made.

2.
COMPETITION
2.1.
Current Position

(1)                       General
Introduction

During the course of 2010
Directorate-General for Competition dealt with around 30 active infringement
cases, with 23 remaining at the end of the year. Although these cases obviously
follow the standard infringement procedure (under Article 258 TFEU), cases in
this sector differ from other sectors in that many of these cases concern the
infringement of Commission decisions, rather than Directives or Regulations.
Where the decision in question concerns the non-recovery of State aids, cases
are based on Article 260 TFEU. These proceedings, which account for ca. 25% of
infringement cases in competition field, are initiated where a Member State does not comply with a Commission decision requiring the recovery of
incompatible State aid. They therefore serve the purpose of ensuring that an
infringement of the competition rules by a Member State is remedied, and that
the distortion of competition caused by the incompatible aid is removed. The
procedure in these cases differs to some extent from the standard infringement
procedure. In a first step, the Commission may refer the Member State directly to the Court under Article 108(2) TFEU, in derogation of Article 258 TFEU. If
the Member State still fails to recover the aid, although the Court has held
that this failure constitutes an infringement, the Commission may refer the Member State to the Court for the second time, this time pursuant to Article 260 TFEU. This
Annual Report only covers the last stage of the recovery proceedings, i.e.
from the sending of the Letter of Formal Notice under Article 260 TFEU onwards.

The majority of Article 258 cases have
their origin in a complaint submitted by undertakings or citizens that are
based on a breach of Article 106(1) TFEU in conjunction with Articles 101
and/or 102 TFEU by a Member State, with the remainder cases concerning the incorrect
transposition of directives or non communication of implementing measures.

The relatively low number of infringement
cases dealt with could be explained by the fact that the acquis in this
sector has been very stable, with no new Directives or implementation deadlines
in recent years. The two remaining cases on the implementation of the Financial
Transparency Directive in the field of State aid (80/723/EEC, as amended),
against the UK and Belgium, were referred to the Court. The current emphasis is
on the correct application of the Directive on Competition in the Markets for
Electronic Communications and Services (2002/77/EC)[26].

As regards complaints in 2010, Directorate-General
for Competition was the lead service for 94 files. However, 58 of these are
part of a group complaint concerning copyright collecting societies in Spain, and should therefore not be counted individually. It was decided to deal with all
these complaints jointly by publishing a full reply in the Official Journal[27].
The remaining 36 cases concern a broad range of issues and sectors.

(2)                       Report of Work
Done in 2010

The application of the competition rules plays
an important role in sectors which have been recently liberalised or are in the
process of liberalisation, such as energy or postal services, as well as in the
media and electronic communication sectors. This is reflected in the
infringement work carried out in 2010.

Postal Sector

The
infringement proceedings under Article 258 TFEU against the Slovak Republic for the non-implementation of the Commission Decision of 7 October 2008 remained
open[28]. Following the issue of a Reasoned Opinion on 29 October 2009[29], the Slovak
authorities remained in discussions with the Commission on the measures to
remedy the infringement as well as the proper implementation of the Third
Postal Directive. The aim is to fully liberalize the Slovak postal market as of
January 2012, i.e. one year ahead of the deadline imposed by the postal
directive. The Commission closely follows the developments on the draft
liberalisation law.

Energy Sector

On 31 January 2008, the European Commission
sent Spain a Letter of Formal Notice for failure to comply with a Commission
Decision of 5 December 2007, finding that Spain had breached Article 21 of the
Merger Regulation[30] by subjecting the approval decision of the acquisition of control
over Endesa by Enel and Acciona to a number of conditions, thereby unduly
interfering with the Commission's exclusive competence to decide on a
concentration with Community dimension. By withdrawing the contested conditions,
the Commission decided to close the infringement procedures against Spain in relation to Art. 21 of the Merger Regulation on 17 March 2010. With this decision,
the Spanish authorities finally complied with the Commission Decisions which
considered illegal the conditions imposed by Spain on the E.ON/Endesa and the
Enel/Acciona/Endesa mergers.

Electronic Communications Sector

The introduction of digital terrestrial
television broadcasting (DTT) is freeing substantial spectrum resources (the
‘digital dividend’) that can be used for authorizing further digital television
channels. Moreover the digital dividend represents a unique opportunity for the
re-use of a premium part of the radio frequency spectrum for new electronic
communications services such as broadband wireless telecommunication.

The DTT platform provides television
services to over 75 million households across Europe and is in many EU Member
States the pre-dominant television reception platform. The DTT platform is the
only platform throughout Europe that guarantees nearly all viewers access to a
broad range of both public service and commercial television services.

In the context of the transition to digital
broadcasting and the availability of spectrum for new electronic communications
services, several complaints have been received against Member States that have
assigned parts of the “digital dividend” to incumbent broadcasters under
procedures which do not appear, prima facie, to be based on transparent,
objective and non-discriminatory criteria. The broadcasting spectrum concerned is
assigned for periods of 15 to 20 years. Therefore, unless properly monitored,
the current procedures could fundamentally distort the competitive structure of
the EU media markets over the longer term.

In September 2010, under the ongoing
infringement procedure concerning the Italian broadcasting legislation, the
Italian Authority for Communications put forward a draft laying down criteria
and rules aimed at ensuring that a certain number of frequencies resulting from
the “digital dividend” are assigned to newcomers and smaller existing companies.
The tender for such frequencies should be launched in 2011.

In addition to the ongoing infringement
procedure against Italy, the Commission also investigated in 2010, as a
priority, several complaints under the Competition Directive relating to the
spectrum assignment procedures in other Member States.

In this context, the Commission sent in November
2010 a letter of formal notice to the French authorities regarding the 2007
French law granting to existing analogue TV broadcasters the possibility to
obtain an additional national TV channel in the digital switchover. In the
absence of convincing evidence that such possibility was granted to TV
broadcasters based on objective, transparent, non-discriminatory and proportionate
criteria, the Commission considered the French rules to be in breach of EU law.

Taking into account the importance of
ensuring undistorted competition in the framework of the digital switchover,
the Commission will continue to monitor the assignment procedures for
broadcasting spectrum as well as for spectrum for electronic communications
services other than, and in addition to, broadcasting services as a priority in
the course of 2011.

Article 260 TFEU Cases

On 31 January 2008, the Commission issued a
Reasoned Opinion against Italy for failure to comply with a judgment of the
Court[31], condemning Italy for non-execution of the Commission's recovery
decision of 11 May 1999 regarding employment aid.  As no sufficient progress
was made in the recovery of incompatible aid, on 25 June 2009, the Commission
decided to refer Italy for the second time to the Court and to propose the
imposition of financial penalties against Italy (Article 260 TFEU). The written
phase of the Court proceedings was concluded by the end of 2010.

In a similar case, which concerns the
non-recovery of aid granted to publicly-owned utility companies
(“municipalizzate”), the Commission sent a Reasoned Opinion to Italy on 1 February 2008. This was based on the fact that the Court had condemned Italy on 1 June 2006 for failure to comply with the obligations stemming from the
Commission's recovery decision of 5 June 2002[32]. Following the judgment, Italy had still not managed to implement
the recovery successfully. Considering these circumstances, on 23 October 2010 the
Commission took the decision to refer the matter to the Court of Justice for
the second time with financial penalties (Article 260 TFEU).

In a first series of six fiscal measures
implemented in the Basque provinces, more than 9 years after the adoption of
the Decisions and 4 years after the Court judgment, Spain had still not
completed the full recovery of the aid. A Reasoned Opinion against Spain had already been issued on 26 June 2008 (for failure to comply with the Court's judgment
of 14 December 2006). On 24 November 2010, the Commission therefore decided to refer
the matter to the Court of Justice for the second time with financial penalties
(Article 260 TFEU).

On 20 November 2009, the Commission sent a
Letter of Formal Notice pursuant to Article 260 TFEU to Spain for failure to comply with a judgment of the Court of July 2002[33] condemning Spain for non-execution of the Commission's recovery Decision
of 20 December 1989 as regards the four companies of the Magefesa Group. As the
incompatible aid was not recovered, on 30 September 2010 the Commission decided
to refer Spain to the Court for the second time with financial penalties
(Article 260 TFEU). The Court action was filed on 22 December 2010.

On 13 November 2008 the Court of Justice
condemned France for failure to implement within the prescribed period the
Commission's recovery decision of 16 December 2003 on the aid scheme
implemented by France for the takeover of firms in difficulty (Article
44septies CGI). Since following that judgment France still did not implement
the recovery decision, the Commission adopted on 7 May 2010 a letter of formal
notice against France for failure to comply with a judgment of the Court under
Article 260 TFEU.

It is worth mentioning that in the area of
recovery of incompatible state aid, the Commission has made significant
progress with respect to the execution of recovery decisions by Member States.
The amount of illegal and incompatible aid recovered has increased from EUR 2.3
billion in December 2004 to EUR 10.9 billion at 31 December 2010 (i.e.
86% of the total amount to be recovered). Accordingly, the percentage of
illegal and incompatible aid still to be recovered at the end of 2010 has
fallen from 75% to 14%. This is due to the efficient enforcement of recovery
decisions by the Commission prompting Member States to recover incompatible aid
from the beneficiaries.

2.2.
Evaluation Based on the Current Situation

Against the
background of the stable acquis in the competition law field and the
relatively constant if not decreasing number of pending infringement cases, the
situation can be described as stable and relatively satisfactory on the whole,
not indicating any particular problems that would require urgent attention or
the modification of priorities. Likewise, there are neither new measures due to
be adopted in the near future, nor relevant implementation plans, guidelines,
expert group meetings, transposition workshops or management networks.

In the area of
state aids, infringement cases will continue to be pursued on the basis of Article
260 TFEU to recover all incompatible state aid. This is necessary to ensure a
level playing field between competitors and a market of undistorted competition
– a requirement which becomes all the more important in the current economic
circumstances where companies struggle to stay on the market even in conditions
of undistorted competition. As already explained before, a very good track
record has been achieved in the recovery field. The enforcement action can therefore
focus on those instances where Member States have not yet shown the desired
results in their recovery efforts, mainly because of national legislation
creating obstacles to effective recovery.

The priorities for 2010 as set out in the
27th Annual Report – the improvement of the competitive conditions
in the liberalised markets – have been fully taken up in the infringement work.
There has been significant progress in some key infringement procedures in the
energy and postal sectors.

In the field of electronic communications
and the correct implementation of the Directive on Competition in the Markets
for Electronic Communications and Services (2002/77/EC), efforts are continued
to ensure effective competition, for example by actively monitoring changes to
the relevant provisions in the broadcasting market of Member States.

2.3.
Evaluation Results - Priorities and Planned
Action

In 2011,
focus will continue on sectors that have been recently liberalised or are in
the process of liberalisation, such as energy or postal services, as well as
the media sector.

Emphasis will
also be placed on the correct application of the Directive
on Competition in the Markets for Electronic Communications and Services.

Finally, long standing non-recovery cases
will continue to be referred to the Court pursuant to Article 260 TFEU with a
view to imposing a lump sum and daily penalty payments on the Member State concerned, to ensure effective recovery of the incompatible aid granted.

3.
EMPLOYMENT, SOCIAL AFFAIRS and
INCLUSION
3.1.
Free movement of workers and coordination of
social security systems
3.1.1.
Current Position
3.1.1.1.
Introduction

In the field of free movement of workers
and coordination of social security systems, the Commission deals with problems
linked to incorrect application of the relevant provisions of the Treaty on the
functioning of the European Union[34] and of secondary law
existing in that area. Over the years, problems have been brought to the
attention of the Commission through individual complaints, petitions of
citizens to the European Parliament and Parliamentary questions which has led
the Commission to increase its recourse to problem-solving mechanisms and it
intensifies communication to prevent problems.

3.1.1.2.
Report on progress made in 2010 regarding free
movement of workers

In 2010, the number of active long-lasting
infringement cases in the field of free movement of workers was significantly
reduced (5 out of 8 cases older than 3 years that were still open at the
beginning of 2010 were closed during the year). Along the lines set out by the
Commission in 2007, priority was given to the handling of the two procedures
under Article 260 TFEU that were ongoing and contacts with the two Member
States concerned were intensified.

The major issues dealt with in 2010 were
the following:

The Commission
carried out in the past years a systematic review of the legislation of all
Member States following two preliminary judgments of the CJ regarding the nationality
condition for posts of master and chief mate of ships where the prerogatives
of public authority are exercised by private sector workers. Out of 20
procedures opened on this issue in 2004, 2 were still ongoing in 2010. After
the Court of Justice confirmed its previous judgments also against Spain (in 2008)[35]
and Greece (in 2009)[36] the Commission started
the procedure to ensure compliance with those rulings (Article 260 TFEU). The
case against Spain was closed in 2010 as the Spanish authorities adopted new
rules that in the opinion of the Commission were in conformity with EU law on
free movement of workers. As regards the case against Greece, the Greek authorities announced a reform of the legislation, which is being closely
monitored by the Commission.

With a view to ensuring the correct
transposition of the provisions of Directive 2004/38/EC, the Commission
services kept monitoring the relevant national legislation and organised bilateral
contacts with Member States. In the situation of economic crisis, more and more
replies had to be provided concerning the rights of jobseekers and
people retaining the status of a worker and their family members – e.g. questions
on how long they are entitled to stay in the host Member State, or whether they
have access to social benefits and social assistance.

A recurring topic of queries was again the application
of transitional arrangements for workers from EU8 and EU2. There were
requests for information and complaints about the existence of restrictions as
such (by citizens) and calls to end them (parliamentary questions). On this
basis, the Commission services identified an incorrect application of
transitional arrangements concerning eligibility for benefits that is linked to
a wider problem of compatibility with EU law in the UK legislation. Employment
in the public sector represents in many Member States an important part
of the labour market. Therefore, the action of the Commission in this field has
a significant effect on the migrant workers' rights; in particular, there is a
lot of labour mobility in the public teaching and health sectors.

The Commission dealt in particular with the
following issues:

· Abolition of nationality conditions for access to posts in the
public sector in line with the jurisprudence of the Court on Article 45 (4) EC.
In 2010, two infringement procedures against Luxembourg were closed.

· The follow-up of the Burbaud-judgment[37]
led to the opening of the internal recruitment competition for many posts in
the French public sector to fully qualified migrant workers with a certain
length of work experience. The infringement against France regarding in
particular the teaching sector was closed in 2010 following the adoption of the
appropriate administrative rules.

· The issue of taking into account periods of employment acquired in
another Member State for the purposes of access to the public sector and for
determining working conditions (e.g. salary, grade) in the same way when comparable
experience is acquired in the host Member State.

· Other complaints regarding the public sector concerned:
discriminatory conditions of access to posts and discriminatory working
conditions (unrelated to the issue of recognition of professional experience), absence
of equal treatment in relation to the taking into account of foreign diplomas
for the purpose of access to the public sector (e.g. additional points awarded
in a recruitment procedure) and for determining working conditions,
disproportionate language requirements in access to posts.

Sport: for
many years the Commission has been dealing with the issues of EU law related to
free movement of professional sportsmen and sportswomen. On the basis of
several queries and complaints, the Commission services focused in particular on
the issue of the quotas on nationality applied in professional sport.

Residence conditions for access to employment and access to social advantages were also
the subject of queries and complaints in 2010. A case concerning the access to
social advantages in the Netherlands (study grants for children of migrant
workers) was still pending at the Court[38]. New
complaints on this issue were received in 2010.

Regarding the issue of equal treatment
of third country nationals, citizens from countries with which the European
Union has signed an international agreement containing an equal treatment
clause, the Commission ensured the follow-up of the case-law of the Court of
Justice, namely in the cases Pokrzeptowicz-Meyer[39],
Kolpak[40], and Simutenkov[41],
where the Court stated that non-discrimination as regards conditions of
employment and pay has direct effect and workers covered by such a clause in an
agreement, once legally employed in a Member State, have a right to equal
treatment as regards conditions of employment. An infringement against the United Kingdom on the discrimination of EU but also non-EU seafarers covered by such an equal
treatment clause in international agreements as regards pay was ongoing in
2010.

Citizens' complaints concerned also the violation
of their rights as migrant workers by private employers such as
discriminatory treatment in access to work or working conditions. However, as
in this case the Commission cannot intervene, it can only limit itself to
provide the information about the migrant's rights and advise them to seek
solutions through means available at the national level. The Commission notes
however that enforcement of these rights at a national level is often
problematic.

3.1.1.3.
Report on progress made in 2010 in the field of
social security coordination

In 2010, the Commission services have
received many queries and complaints concerning the application of Regulation
(EEC) No 1408/71 and its implementing Regulation, as well as Regulation (EC) No
883/2004 and its implementing Regulation, which entered into force on 1 May
2010. Most queries and complaints concerned social security rights of migrant
workers, e.g. which legislation applies to them, their entitlement to sickness
insurance benefits and family benefits, how to apply for a pension. Complaints
concerned also residence clauses in national legislation for various kind of
social security benefits, incorrect application of the principle of aggregation
of insurance periods, cumbersome or incorrect administration of cases involving
an EU element.

In
the area of applicable legislation, the queries mainly concerned persons
who took up a new activity in another Member State and who inquired which
legislation would be applicable according to the new rules on coordination of
social security systems. The Practical Guide on applicable legislation has been
developed by the Commission, in cooperation with the Member States, to be of
assistance to citizens in the area of posting and activities in two or more
Member States.

Major issues concerning sickness
insurance benefits in 2010 were the following.

As in the previous years, the Commission
services received many queries about the European Health Insurance Card (EHIC),
namely how to apply for it or how to use it. As regards the procedures for
issuing of the EHIC, at this stage, there is no common EU approach and it is up
to the issuing Member State to determine the rules for issuing the EHIC.
Similarly, institutions of the Member State determine the period of validity of
the cards they issue. The Member States agreed that the period of validity of
the EHIC should take into account the presumed duration of the insured person’s
entitlement. Currently, there is no automatic mechanism to verify the validity
of entitlement of a person. Moreover, some Member States issue cards with very
limited validity period. The Commission is aware of the effects of such short
validity periods of the EHIC for the persons concerned. An ongoing discussion
is taking place within the Administrative Commission for the coordination of
social security systems and the possible scenarios for addressing this
limitation will be examined within the framework of the system of the
Electronic Exchange of Social Security Information (EESSI), which is currently
under development. In addition, the Commission will further investigate
reported cases of refusal of valid EHIC by the medical professionals, cases of
disproportionate administrative procedures for issuing an EHIC and cases of
non-acceptance of EHIC as a sufficient document for providing access of insured
persons staying abroad to necessary healthcare and medicine under the same
conditions as to insured nationals.

In
the area of long-term care cash benefits, coordinated as sickness cash benefits
(therefore exportable), the Commission has pursued an infringement procedure
against the UK concerning export of benefits for disabled persons. In 2009, more
than 50 persons contacted the Commission services to signal the application of
a so called "past presence test" which in most cases prevents the
exportability of these benefits from the UK. The "past presence test"
is also subject of a preliminary ruling in front of the Court of Justice of the
EU (C-503/09), for which a judgment will be delivered in the course of 2011.

Another
sensitive issue dealt with by the Commission concerns the rules of access for
EU nationals to the French universal sickness benefits scheme (Couverture
Maladie Universelle – CMU). The rules for admission require the person to have
"regular and stable residence" in France. The Commission has been in
active contact with the French authorities to find a suitable solution, which
would be in line with the principle of equal treatment.

As regards the export of pensions, the
Commission received various complaints about the payment of pensions into the
beneficiary's bank account in his or her Member State of residence. It seems
that certain Member States have problems with such payments in another Member State. The SEPA (Single Euro Payment Area) should be the answer to this problem as
regards countries in the Eurozone. The Commission opened an infringement
procedure against Belgium, where national legislation does not allow the
payment of the pension directly to an account without having the foreign bank
guarantee that it will repay the amount, should payments have been wrongly
made. An infringement procedure was opened against Greece, where difficulties
were reported when pensions are exported, such as the obligation to open a bank
account at the Greek national Bank and to be obliged to pay higher bank fees
for payments outside Greece than within the country, which is in breach of EU
social security coordination rules and EU payment rules (Regulation (EC) No
924/2009).

With
regard to unemployment benefits, in view of the economic recession and
the rise of unemployment rates, the Commission services received a large number
of queries concerning the right of migrant workers to unemployment benefits
under Union law. Migrant workers were in particular asking in which State they
can claim unemployment benefits, method of calculation of the benefit's rate,
special regime for frontier workers and the possibility to have benefits
exported in case they were interested to look for work in other Member States.
Some of the migrants complained about the cumbersome and time-consuming
administration of cases involving an EU aspect.

In 2010, the
Commission follow-up on complaints received from EU citizens, mostly EU-10
nationals, who were previously employed or self-employed in the UK and who were not granted certain social security benefits. The Commission sent a
letter of formal notice to the UK authorities and encouraged the UK to eliminate this restriction to the access to the national benefits falling within the
scope of Regulation (EC) No 883/2004.

In the area of family benefits it
has been reported to the Commission that, if two Member States are competent
for providing family benefits, the determination of primary competent State and
possible payment of so called "differential supplement" from
secondary competent State takes a long time. This is due to the fact that the
national administrations need to exchange information concerning the
composition and situation of the family and the benefits provided in the
primary competent Member State. The situation can be mitigated by a better
cooperation of national administrations and, in the future, also the electronic
exchange of data. Also, in some Member State the understanding of "a
family member" is based on the national legislation and the situation
within one state only, without taking into account the specific situation of
migrant workers, where one parent may be often active in another Member State than the state of the family's residence.

Modernised regulatory framework for the
coordination of social security systems

In 2010, progress was made in view of the
entry into application of the new Regulations (EC) No 883/2004 and No 987/2009
(Implementing Regulation) on the 1 May 2010, which implied:

· adoption of the new Regulation (EC) No 1231/2010, which entered into
force on 1st January 2011 and extended the modernised social
security regulations, Regulation (EC) No 883/2004 and Regulation (EC) No
987/2009, to third country nationals not already covered by these regulations
and falling within the scope of the coordination rules. Regulation 1231/2010
replaces Regulation (EC) No 859/2003 for all Member States where it applied,
except the United Kingdom, which will continue to apply Regulation (EC) No
859/2003 (and by extension the rules in Regulation (EEC) No 1408/1971 and
Regulation (EEC) No 574/1972)[42].

The principles contained in Regulation (EC)
No 1231/2010 are in essence the same as those contained in Regulation (EC) No
859/2003. Regulation 1231/2010 is a "bridge" that allows the EU
coordination rules to apply to nationals of third countries who fall within its
scope.

Regulation 1231/2010, unlike Regulation (EC)
No 859/2003, does not contain derogations for Germany and Austria from the principle of equal treatment with regard to family benefits.

· intensive work to provide legal interpretation and guidance
accompanying the entry into force of the new Regulations; within the framework
of the Administrative Commission for the coordination of social security
systems (Article 71 of Regulation (EC) No 883/2004);

· adoption of three new interpretative decisions for the application
of the new Regulations;

· adoption of a Guide on Applicable Legislation, which should be
considered as a reference document by the national administrations when
interpreting the provisions of the new Regulations concerning posting and
activity in two or more Member States;

· adoption of the Portable Documents (replacing former E-forms) and
preparation of guidelines on Portable Documents for citizens.

The new coordination rules were designed
with an electronic exchange of social security information between the national
institutions. The Commission has been preparing a system of e-administration
(EESSI), which will enable 31 countries to exchange electronically social
security information among their administrations thereby fulfilling the
ultimate aim of strengthening the protection of mobile citizens' social
security rights. This will in turn facilitate and speed up the decision-making
process for the actual calculation and payment of benefits to citizens who move
around Europe.

3.1.2.
Evaluation of the current situation

· Complaints and inquiries

EU Regulations on the coordination of
social security systems do not harmonise, but only coordinate Member States'
social security system. This leads inherently to a high number of requests and
complaints from citizens about the application of these Regulations to 27 different
national social security systems.

In 2010, the entry into application of the
new regulatory framework, Regulations (EC) No 883/2004 and 987/2009, as from
the 1st of May 2010 lead to an increase of the number of queries due
to requests for clarification.

In the field of free movement, the nature
of the queries remains more or less identical than in previous years but takes
into account the entry into force of Directive 2004/38/EC and the development
of the economic crisis, followed by austerity measures in many Member States.

Therefore, a total of 239 cases were
registered in the new complaint handling system (CHAP) for both sectors.

A number of complaints where Member States requiring
further clarification or information about the national legislation or practice
have been dealt with through EU Pilot, prior to initiating an infringement
procedure. In the field of social security, the exchange though EU Pilot supplements
the system of cooperation with the Member States in the framework of
Administrative Commission put in place in 2005.

· Management of infringements

The infringement procedures dealt with by
the Commission services in relation to the EU rules on free movement of workers
concern the non-conformity of national legislation with article 45 TFEU,
Regulation (EEC) 1612/68 and Directive 2004/38/EC and the incorrect application
of these rules by national authorities. In relation to coordination of social
security, the infringements concern the incorrect application by the national
authorities of Article 48 TFEU and of existing Regulations in that area, namely
Regulations 883/2004 and 987/2009 on social security coordination.

In that context, the Commission services use
the work done by networks of academic experts, whose reports on the application
of Community law in the field of free movement of workers and coordination of
social security are published on a website[43].

In the field of free movement of workers,
the current infringement procedures deal mainly with problems linked to access
to posts (e.g. nationality and residence conditions, language requirements),
transitional arrangements, working conditions, access to social advantages
(e.g. study grants for children of migrant workers) and employment in the
public sector (e.g. taking into account of professional experience and
seniority for access to posts and for determining working conditions; taking
into account of professional qualifications).

In 2010, 7 infringement procedures were
closed, and 9 new cases were registered. Only a limited
number of complaints were dealt with successfully through EU Pilot without
initiating an infringement procedure.

In the field of social security
coordination, the infringement procedures deal with problems linked to
sickness insurance benefits, including the European Health Insurance Card,
residence clauses for eligibility for social security benefits, calculation and
payment of old-age pension, discriminatory practices for the payment of certain
social security benefits.

In 2010, 6 infringement procedures were closed,
while 9 new procedures were open.

At the end of 2010, the Commission services
were dealing with 51 infringement procedures (compared to 46 procedures at the
end of 2009): 18 in the field of free movement and 33 in the field of social
security coordination.

· Guidelines and information

In line with its obligation to promote good
practices and increased knowledge of EU rules on the ground and to step up the
dissemination of information to EU citizens about their rights, the Commission
undertook the following actions in 2010:

1.
In view of the very high number of queries,
substantial effort was made in terms to supplement monitoring with improved
communication tools to better inform the citizens about their rights as regards
free movement of workers and social security coordination.

2.
In the field of free movement, the Commission
adopted the Communication "Reaffirming the free movement of workers:
rights and major developments"[44], which provides an
overview of the rights that EU migrant workers enjoy and which updates the
previous Communication of the Commission from 2002 by taking into account the
legislative and the case-law developments in this field. The Communication was
supplemented by the Commission Staff Working Document "Free movement of
workers in the public sector"[45].

3.
In the field of social security, the website has
been redesigned and its content has been updated in order to fully reflect the
new regulatory framework[46]. Several brochures have
been updated and posted on the website: "The Community provisions on
social security brochures: "The EU provisions on social security - Your
rights when moving within the European Union - Update 2010)" and "Practical
guide - Part 1 & 2: The legislation that applies to workers in the EU, the
EEA and Switzerland".

4.
The Commission published on the website a set of
Explanatory notes, which give background and explanation of certain provisions
and key concepts in the new rules. The notes are being constantly updated and
complemented.

5.
For the first time in 2010, the Commission
published a call for proposals to financially support transnational actions,
promoting the administrative exchange of social
security information among EU countries, with a view to assisting them in their
implementation of Regulations (EC) No 883/2004 and 987/2009; promoting
transnational cooperation between institutions dealing with social security,
exchanges of experience, dissemination of best practices and training
initiatives developed at the national level; and raising awareness and
providing a better service to the public. As a result the
Commission has co-financed four transnational actions involving 12 different
Member States. The call will be renewed, with an increased budget, in 2011 and
will support, among others, also actions aiming to implement a new system of electronic exchange of data.

6.
The Commission has set up an information
campaign on the new social security coordination rules targeting on the one
hand the European citizens and on the other hand the social security
institutions of the Member States which have to apply the new provisions. The
campaign was launched in November 2010. As an intermediate assessment, it can
be said that the advertisement campaign in the media of seven target countries
was able to reach an estimated readership of 25 million (November/December
2010).

3.1.3.
Evaluation results

Priorities set up for 2010 have in general been
met. Many infringements procedures were successfully closed and many issues
resolved through problem-solving mechanisms. The forthcoming year should follow
the same trend with the positive impact of the preventive approach based on
administrative cooperation and on an increased communication towards citizens
and national authorities.

As stated in the 2010 EU Citizen's Report,
the Commission should further focus on improving information to citizens in
order to increase their awareness of their rights and in order to allow them to
enforce them better. Therefore, to supplement monitoring activities in 2011,
the Commission will put a strong emphasis and carry on improving information to
citizens in order to increase their awareness of their rights and in order to
allow them to enforce them better. The Commission will also further promote
Your Europe website and improve cooperation with Europe Direct.

The Commission will
also assess the possibilities of proposing a new legislative instrument that
would help EU citizens enforce the rights they enjoy according to EU law on
free movement of workers.

3.1.3.1.
Priorities regarding free movement of workers

In addition, the Commission sees all
infringement procedures concerning the transitional arrangements as a priority
and will pay particular attention to the question of access of EU migrant
workers and members of their family to study grants.

As regards the working methods, the current
tools will continue to be used. The expertise of the network of academic
experts in the field of free movement of workers will also be used in order to
obtain information about the national rules applicable.

3.1.3.2.
Priorities regarding social security
coordination

The objective in the area of social
security is to monitor the correct application of the new Regulations 883/2004
and 987/2009 which came into force on the 1st May 2010, by the
national institutions. In accordance with what is set out in the 2010 EU
Citizen's Report, the Commission will, in order to facilitate the free movement
of EU citizens, continue to act to ensure that the principle of
non-discrimination is strictly enforced for EU citizens and their family
members. This continues to be a point of particular importance in the social
security field.

As regards its working methods, the
Commission will better channel the individual cases though different ways of
contact with Member States, namely EU Pilot and the cooperation with the
Administrative Commission, to use the potential of both mechanisms. When
dealing with complaints it will carry on using the expertise of the network of
academic experts (trESS) in order to obtain information on national legislation
and context.

The Commission will continue to focus on
finalising the development of the system for electronic exchange of social
security information (EESSI) to enable the implementation of the new
coordination rules. The EESSI system will enable countries to exchange
electronically social security information between their administrations
thereby fulfilling the ultimate aim of strengthening the protection of mobile
citizens' social security rights.

During the first semester 2011, the
Commission plans to publish a Communication on the external dimension of the EU
social security coordination rules, which amongst other things will look at the
effect of the EU rules on the rights of migrants from third countries to
receive pensions from EU countries when they leave the territory of the EU.
Regulation (EC) No 1231/2010 (and its predecessor, Regulation (EC) No
859/2003), which extend the principle of equal treatment to third country
nationals within their scope, already have some effect in this respect. The
Commission will therefore work to ensure a better enforcement of these rights
for migrants from third countries.

The Commission will also release a Communication
on the social security protection of groups of workers with high levels of
intra-EU mobility (highly mobile workers). This communication will explain and
interpret the flexibility and limits of the EU rules on coordination of social
security schemes that determine the applicable social security legislation to
groups of workers with high levels of intra-EU mobility and describe tools and
initiatives to support, inform and guide on these issues.

3.1.4.
Summary

The new system for complaints handling
(CHAP) has demonstrated the high number of individual complaints and requests
for information in this field of EU law. Therefore, the Commission is putting a
strong emphasis and investments on improving information to citizens in order
to increase their awareness of their rights and in order to allow them to
enforce them better.

The forthcoming years should follow the
trend presented above with the positive impact of the preventive approach based
on administrative cooperation and on an increased communication towards
citizens and national authorities. The objective for 2011 is to monitor a
correct application of the new system of coordination by the Member States,
with a focus on the new aspects of the Regulations on social security
coordination.

3.2.
Labour Law
3.2.1.
Current position
3.2.1.1.
Introduction

The 23 Directives applicable in the area of
labour law cover a variety of issues and subjects, such as collective
redundancies, European Works Council, information and consultation of
employees, posting of workers in the context of the provision of services,
fixed term and part-time work, temporary agency work, transfer of undertakings,
employer insolvency, protection of young people at work, and working time. Some
of these Directives implement framework agreements concluded between general
cross-industry organisations at European level or organisations representing
management and labour in specific sectors.

At present, in the area of labour law, the
deadline for transposition has expired for all directives in force, with the
exception of the following three:

· Directive 2008/104/EC on temporary agency work[47],
for which the transposition deadline will expire by 5 December 2011;

· Council Directive 2009/13/EC implementing the Agreement concluded by
the European Community Shipowners' Associations (ECSA) and the European
Transport Workers' Federation (ETF) on the Maritime Labour Convention, 2006 and
amending Directive 1999/63/EC[48] for which the
transposition deadline will expire not later than 12 months after the date of
entry into force of the Maritime Labour Convention, 2006.

3.2.1.2.
Report of work done in 2010

Monitoring the application of labour law
implies different activities at various levels, such as the initiating and management
of infringement procedures, the management of complaints, the preparation of
monitoring and/or implementation reports and the involvement of various committees
and expert groups.

· Management of infringements

Increased efforts continued in order to
close a considerable number of open infringements for non communication and non
conformity: 20 out of the 59 outstanding infringements could be closed in 2010.

With regard to non communication cases,
the only outstanding infringement proceedings against Member States which failed
to notify the national measures concern Directive 2005/47/EC[49]
of 18 July 2005 on the Agreement between the Community of European Railways
(CER) and the European Transport Workers’ Federation (ETF) on certain aspects
of the working conditions of mobile workers engaged in interoperable
cross-border services in the railway sector, due to be transposed by 27 July
2008. 16 out of the 17 infringement proceedings for non communication initially
launched against Member States that had failed to take the necessary
transposition measures within the required time limit, could be closed
following the adoption of the necessary national measures in 2010.

As regards problems of non-conformity
of the national transposition measures of Directives in the area of labour law,
a number of proceedings in progress continued or could be closed. For example,
the case against Luxembourg for incorrect transposition of Directive 96/71/EC
('posting of workers') continued under Article 260 TFEU following the judgment
of the Court of Justice[50]: an Article 260 TFEU
letter of formal notice was sent and the case could finally be closed following
the adoption of the necessary measures. The cases against Spain concerning the non transposition of the working time Directive 2003/88/EC in respect of
non-civilian personnel in public authorities (Guardia civil) remained open
under article 260 TFEU following the judgment of the Court of Justice[51].

· Monitoring reports

In order to have a comprehensive picture
regarding labour law in Member States, a series of studies were commissioned,
with a view to taking stock of the state of play regarding the transposition
and application in the national legal orders of EU 10 member States of all
labour law directives and finalised in 2009.

The contents of these studies has been used
in the drafting of implementation reports required by Directives and the
analysis has enabled the Commission to identify a number of outstanding issues
where correct and full transposition of the Directive's requirements by Member
States may be at stake, necessitating further clarification or verification.
These issues raise either questions of interpretation of the Directive or
doubts as regards the compliance of implementing measures with the Directive.
On that basis, three implementation reports were prepared, submitted to Member
States social partners and adopted in 2010, on the implementation of Directive
94/33/EC (Young People at Work), of Directive 2001/86 (employee involvement
European company statute), as well as of Directive 2003/72/EC (Employee
Involvement in the European Cooperative Society).

As regards the working time Directive,
Commission's Report on the legal implementation of the working time Directive
in the Member States[52] and its accompanying Working Paper of the Commission services[53] completed in 2008, cross-checked against expert reports, and
provided to member states and social partners for comments in 2009, could
finally be adopted at the same time as the consultation paper launching the
second stage consultation of social partners at EU level[54]
in accordance with article 154 (3) TFEU, on the possible content of a
forthcoming EU action.

As a follow-up to a Staff Working Document[55]
examining the implementation of Article 8 (concerning old-age benefits under
supplementary company or inter-company pension schemes) and related provisions
of Directive 80/987/EC ('employer's insolvency'), the
Commission services finished in 2010 the investigation started in 2009[56].
A study was carried out and published relating to the protection of
supplementary occupational pensions for book reserve schemes and defined
benefit schemes. The Commission services also collected information directly
from Member States as to the protection of contributions to defined
contributions schemes. These two outputs will feed in the follow up of the
Green Paper on pensions[57].

· European network of legal experts in the field of labour law

To complete the horizontal analysis of
conformity of labour law, the European Network of Labour Law Experts created as
of 23.12.2007, produced quarterly flash-reports providing information on recent
key legal developments in the area of labour law, particularly in those areas
that are most relevant for the control of EU legislation. This systematic
reporting and monitoring of recent developments, carried out under Commission
supervision allowed the Commission services to identify problems encountered in
the national legislation, its application and administrative practice, if any. The
2010 thematic report and the Conference organised in November 2010 focussed on
trends, problems and challenges for labour law in time in crisis, restructuring
and transition under the headings 'protection, involvement and adaptation'.

· Strengthening pro-active co-operation: committee of experts

The four new expert groups created in 2009
continued their activities in 2010. Two are informal groups whose aim is to
assist Member States in the transposition and implementation of Directives
2009/38 (' European Works Councils') and 2008/104 ('temporary agency work').
Their official mandate will end in 2011. A report finalised in December
2010 comprises the results of the activities, working documents and discussions
of the Expert Group accompanying the transposition of the European Works
Councils' Directive. Another informal group was created with the aim of
discussing the issues raised by the conclusion and implementation of
transnational company agreements.

Moreover, as
regards the posting of workers, the formal expert committee set up by
the Commission in 2008 continued its activities in 2010 examining a large
number of questions and difficulties arising with respect to the
implementation, application and enforcement in practice of Directive 96/71/EC
concerning the posting of workers in the framework of the provision of services
on the basis of a rolling work programme. A sub-group was set up in particular
to carry out preliminary examinations in order to develop possible options for
a specific information exchange system in order to reinforce and enhance
administrative cooperation.

· "Fitness check"

As part of Work Programme 2010, the
Commission has started to review the body of EU legislation in selected policy
fields through so called "fitness checks". One of the
pilot exercises launched in 2010 concerns the area of employment and social
policy, covering in particular the area of information and consultation of
workers. The aim is to carry out a robust review of the following 'family'
of Directives in this area:

1.
Directive 98/59/EC on collective redundancies[58];

2.
Directive 2001/23/EC on transfers of
undertakings, focusing on Article 7[59];

3.
Directive 2002/14/EC establishing a general
framework relating to information and consultation of workers in the EC[60].

The review will rely on an evidence based
approach and integrate legal, economic and social effects of the existing
legislation. An extensive set of studies exists already in this area which will
be complemented, where necessary, by additional research and stakeholders'
consultations.

Thematic discussions involving stakeholders
are equally a very important element in the fitness check exercise. The first
event in this regard, i.e. a European Labour Law Network Seminar,
was held in The Hague on 11-12 November 2010. It brought together labour
lawyers and academics as well as Member States' and social partners'
representatives.

A second step is the setting up of an ad
hoc Working Group on ICW bringing together Member States' and Social
partners' representatives foreseen for 2011. This could meet 3 times in 2011
(first meeting: 17.02.2011). The Working Group would examine and discuss the
different studies on ICW and bring out the different national experiences with
the implementation of the Directives in line with a work programme.

3.2.2.
Evaluation based on the current situation

The importance of labour law for workers in
Member States, as well as its importance for the perception of the European
Union as a whole, has justified a horizontal analysis of the implementation of
the Directives in Member States. Thanks to that systematic, horizontal analysis
of the implementation of all labour law Directives, launched in 2005, and to
the contribution of the experts' network and other expert groups, the
Commission has a fairly good view of the legal situation in all Member States
as regards the implementation of those Directives. While, by and large, all
Directives are now transposed in all Member States, and the responsible Commission
services have continued to make visible progress in 2010 to prioritise and
accelerate the handling of open infringements (see above), there are still a
number of areas where the application of Community law is not yet satisfactory
and needs to be improved.

First and foremost, this is the case with
the Working Time directive, where the law or legal and administrative practice
in many Member States does not comply with jurisprudence or certain provisions
of the Directive 2003/88/EC (in particular as regards on-call time,
compensatory rest, multiple contracts, doctors in training, public sector
workers and the individual opt-out). Therefore, a very substantial action has
been undertaken in order to clarify the application of the Directive, to ensure
effective conformity across the EU and to provide a response to the numerous
complaints introduced by citizens or professional organisations.

Moreover, the implementation of Directive
96/71/EC concerning the posting of workers in the framework of cross-border
service provision has raised some critical issues, given the variety of
industrial relations systems, particularly in the light of recent case-law
(Viking-Line, Laval, Rûffert and Commission vs. Luxembourg) which will be
necessary to be closely followed.

The analysis of the implementation of Directives
99/70/EC on fixed-term work and 97/81/EC on part-time work, both resulting from
agreements between social partners, revealed a number of deficiencies which are
having being addressed via EU Pilot or administrative letters, had to be
pursued under an infringement procedure.

Finally, the current economic crisis has
put to a severe test those legal provisions which aim at providing protection
to workers in the event of major restructuring operations. This is the case in
particular of the Directives on information and consultation of workers,
collective dismissals, transfer of undertakings and the protection of employees
in the case of insolvency. It seems justified to inquire whether the objectives
of such provisions have been effectively reached in 2010. Analysis of these and
similar issues will be continued in 2011 either in the context of the 'fitness
check' and/or the envisaged consultation of social partners on the more
horizontal issue of restructuring.

3.2.3.
Evaluation results

Two reports are expected to be adopted in
spring 2011. One concerns Directive 91/383/EC (health and safety of a-typical
workers), the other on Article 25 of Directive 2003/88/EC (working time of
fishermen). Such reports may identify situations in Member States deserving
further examination and eventually may justify the launch of infringements.

The
Commission will equally continue its efforts to bring further clarity to the implementation,
application and enforcement in practice of Directive 96/71/EC on posting of
workers. Promoting exchange of information and debate on the implementation of
the Directive in the framework of the Expert Committee which was launched in
line with the Commission Decision of 19 December 2008, will continue in 2011:
The report of the sub-group providing recommendations with respect to the most
appropriate solution was approved by the Expert Committee and sent to the SQWP
of the Council. Following the adoption of Council Conclusions (foreseen during
the EPSCO Council in March 2011) a pilot project will be launched to further
develop a separate and specific module of the Internal Market Information (IMI)
system for the purpose of implementing the administrative cooperation
provisions in the posting of workers Directive. Commission services will
continue to provide the necessary support and assistance to the Member States
during the follow-up process.

Furthermore,
the first results of the ex-post evaluation studies on the application of the posting
of workers Directive in all Member States, including the social, economic
and legal aspects and impact focusing on sectors with high numbers of posted
workers launched in 2009 were received late 2010. These will be complemented by
a complementary legal study as well as an ex ante impact assessment in 2011 in
view of the preparation of a legislative initiative by the end of 2011.

Actions undertaken on the basis of the
contents of the implementation reports drafted following examination of the
legal situation in the Member States after the 2004 enlargement, follow-up
actions of clarification with respect to the fixed term work (Directive 99/70/EC),
as well as part time work (Directive 97/81/EC) will be continued in 2011 (through
bilateral contacts, via EU-PILOT or in the context of infringements). These
activities will be supplemented by an ex-post evaluation and assessment of the
impact of both Directives on the basis of a study to be launched in 2011. Specific reference will be given to the education and public sector
for the fixed term Directive and the scope of coverage of the part-time work
Directive.

Knowledge
by management and labour of their respective rights and obligations in the area
of information and consultation is an indispensable prerequisite for the full
and effective exercise of these rights in the workplace. Therefore the Commission
also intends to undertake action geared to awareness-raising, as well as to
promote exchange of best practices and to enhance capacity-building of all
stakeholders, by way of seminars, training courses, studies and financial
support for projects submitted by representatives of employers and employees.

In addition, the Commission services will finalise the report on the
implementation of certain provisions of the employer's insolvency Directive
which was submitted to consultation of Member States and social partners at the
end of 2010. The expert working group established to
discuss a number of outstanding issues regarding the application of the insolvency
Directive (Council Directive 80/987/EEC and its codified successor European
Parliament and Council Directive 2008/94/EC) in transnational situations contributed to this work and pursued its works for the enhancement
of administrative transnational cooperation.

The Commission services
will equally continue to provide technical assistance to the Member States in
the process of transposition and implementation of the recently adopted
Directive 2008/104/EC on temporary agency work. A group of governmental experts
has been set up for this purpose which should finalise its activities in 2011.

3.2.4.
Summary

With all the
ongoing initiatives, including the establishment and running of several expert
groups, the Commission has increased its capacity to analyse and identify
problematic issues, pursue its activities of control of European legislation as
well as to strengthen the range of preventive measures available.

Increased
emphasis has been given to obtaining extensive knowledge concerning the
implementation, control, enforcement and evaluation of the legislation either
via the launching of ex-post evaluation or in the context of the fitness check
of important parts of the acquis in the area of labour law.

This should
further improve the implementation, application and enforcement in practice of
the relevant acquis, with a special focus on the critical areas
identified above. However, the sensitive and often highly controversial nature
of the issues at stake may hamper achieving effective progress.

3.3.
Health and safety at work
3.3.1.
Current position
3.3.1.1.
General Introduction

Under Article 153 of the Treaty on the
Functioning of the European Union, the Union shall support
and complement the activities of the Member States in the field of improvement
of the working environment to protect workers' health and safety. To this end,
the European Parliament and the Council may adopt minimum requirements by means
of directives.

Health and safety at work is the most
developed corpus of legislation in the field of employment and social affairs,
with a multitude of directives (see Annex). Its application over the last 15
years contributed in particular to a substantial reduction of the accidents at
work and thus to an improvement of the quality of work.

3.3.1.2.
Report of work done in 2010

· Preparation of new legislation

In the framework of the preparation of a
proposal of the Commission amending Directive 2004/40/EC on the minimum health and safety
requirements regarding the exposure of workers to the risks arising from
physical agents (electromagnetic fields), a
comprehensive Impact Assessment related was prepared and submitted to the
Impact Assessment Board in December.

Work was also carried out on the minimum
health and safety requirements on ergonomics at work particularly to prevent
work-related musculoskeletal disorders and display screen vision
conditions to review Council Directive 90/269/EEC and Council Directive
90/270/EEC. More specifically, as a preliminary study completed in 2008 was not
satisfactory, new data collection was launched in 2010 through a Multiple
Framework Contract study, focussing on cost/benefit ratio of the options
considered.

The analysis and evaluation
of the health, social, economic and environmental impact of a possible EU
initiative on the protection of workers' health from risks related to exposure
to Environmental Tobacco Smoke (ETS) was undertaken.

On 10 May 2010, the Council adopted
Directive 2010/32/EU implementing the Framework Agreement on prevention from sharp
injuries in the hospital and healthcare sector concluded by HOSPEEM and
EPSU[61].

· Main actions being taken to control the correct application of the
law

EU legislation needs to be supplemented by
other policy tools and interventions designed to reinforce the impact of
regulatory provisions and to provide the suitable context for practical
application and enforcement. The adoption of practical guides
contributes extensively to this objective and in 2010 the correctness of the
different guides prepared as regards the relevant EU Directives was actively
checked.

The Advisory Committee on Safety and Health
at Work (ACSH) adopted the Guide to improve the application of Directive
92/57/EEC on "Construction", and the Guide to prevention and good
practice in the Healthcare Sector.

The Guidance for employers on OSH and REACH aspects for controlling risks from chemicals was published and the drafting
of the Guidance on nanomaterials and the potential risks to workers' health and
safety was undertaken.

Work continued as regards the non-binding
guide for the protection of workers in the agricultural and forestry sectors
and the non-binding guide for the protection of workers in the fishery sector
on board vessels less than 15 metres long, with the help of a contractor and in
close collaboration with the Advisory Committee on Safety and Health at Work.

In addition, on a request of the ACSH, a
working group was set up to examine the impact of existing guides to good
practice in different sectors of activity, to evaluate the possibility of
developing a blue-print to ensure uniformity and quality improvement in the
establishment and dissemination of these guides and to formulate proposals
concerning the priorities to be established for the development of future
guides, with an indicative schedule for action. A report was presented to the
ACSH during the June plenary meeting and endorsed by the Committee. This report
will serve as a basis for the preparation of future guides.

The monitoring of the progress made by the
EU candidate and potential candidate countries in transposing the EU acquis
on health and safety at work continued with particular emphasis on the
assessment of the national law of Croatia and the former Yugoslav Republic of
Macedonia where an external contractor submitted the results of the study in
this respect.

· Management of the acquis through committees and expert groups

The Committee of Senior Labour Inspectors
(SLIC) assists the Commission on problems relating to the enforcement of
Community law on health and safety, and encourages its effective enforcement,
notably by means of a closer cooperation between the national labour inspection
services.

One mechanism to fulfil its tasks is the rapid exchange of inspection-related problems and
solutions amongst the EU-27 Member States and EFTA countries. The Committee has
developed an instrument called KSS (Knowledge Sharing System), where questions
can be put to all the Labour Inspections participating.

The European information and risk awareness
raising campaigns launched under the initiative of the Senior Labour Inspectors
Committee (SLIC)[62] largely contribute to
better compliance with EU legislation. European
campaigns are indeed an effective means by which the labour inspection services
can cascade a common message to stakeholders. In 2010,
SLIC initiated a campaign designed to enhance risk management of dangerous
substances in small- and medium-sized enterprises. It concentrates on 4
workplace activities: motor vehicle repair, furniture making, bakeries and
cleaning, all widespread activities which, if not properly controlled, pose
risks of serious ill-health e.g. from respiratory and skin disorders.

· Enquiries, problems and complaints management

During 2010 progress was made as regards
the analysis of complaints for bad application mainly linked to Framework
Directive 89/391/EEC: one case could be closed against the Netherlands and the analysis of some complaints against Spain, Italy and Greece, raising complex
legal issues progressed. The analysis of some complaints resulted in the
opening of files in EU Pilot with a view to receiving information from the
Member States concerned and in one case, an infringements procedure had to be
launched.

Two EU Pilot cases concerning transposition of some
provisions of Directive 89/391 in Italy have been open and the replies of
Italian authorities are under examination by the service. One of these files is
likely to result in the launching of an infringement procedure against Italy.

It was also possible to progress with other
EU-Pilot files. For instance, regarding the transposition of Directive
93/103/EC (fishing vessels) into Italian law, the national authorities
communicated draft legislation which envisages certain amendments to the
existing legislation transposing the Directive. In a case involving the
transposition of Directive 92/29/EEC (medical assistance on board vessels) in
the Netherlands, a meeting was held and information was received that the
legislation would be brought in line with the Directive.

The management of
complaints continued. Some of the complaints revealed violations of Health and
safety EU law and therefore infringements procedures were launched. As regards
a complaint against Sweden in respect of the implementation of Directive 89/391/EEC, a reasoned opinion was notified in January
2010. Management of infringements

The monitoring of the conformity of
transposition of EU legislation focused on the non-communication of national
measures due to transpose one Directive as well as the analysis of the
conformity of the transposition measures of Directives in the highest risk
sectors.

·
Non-communication infringement cases:

As Directive 2006/25/EC[63]
of the European Parliament and of the Council of 5 April 2006 on the
minimum health and safety requirements regarding the exposure of workers to
risks arising from physical agents (artificial optical radiation) was due for
transposition on 27 April 2010, 14 cases were opened in 2010 and 11 of
these were closed during the year, further to the notification by the Member
States of the national measures implementing Directive 2006/25/EC. Reasoned
opinions were sent to Poland and the United Kingdom for the incomplete
transposition of this Directive and the case against Austria will also have to
be pursued.

·
Non-conformity infringement cases:

There are currently several non-conformity
infringement cases open, including several regarding Directive 92/57/EEC on construction
sites. Other cases concern the Framework Directive 89/391/EEC, Directive
93/103/EEC on fishing vessels and Directive 2003/18/EC on asbestos. In 2010,
two cases were closed further to a reasoned opinion under Article 260 TFEU,
when the necessary national measures were adopted in Italy and France and communicated to the Commission.

3.3.2.
Evaluation based on the current situation

It is essential that the European Union acquis
is implemented effectively in order to protect the lives and health of workers and
to ensure that the companies operating within the large European market are
placed on an equal footing.

Accidents at
work and work-related diseases are a heavy burden in social and economic terms,
and action to improve health and safety standards at work offers great
potential gains not only to employers, but also to individuals and society as a
whole.

The
implementation of the EU directives, in the field of health and safety at work,
is bearing fruit at European level. Between 2000 and 2007 a reduction trend of
32.6% in the incidence of fatal and 28.7% in non-fatal accidents at work in the
EU-15 was observed according to the harmonised data on accidents at work that
are collected in the framework of the European Statistics on Accidents at Work
(ESAW)[64]. However, the statistics
of 2007 show that around 3.8 million accidents at work resulting in more than
three days of absence from work occurred in the EU-15.

3.3.3.
Evaluation results
3.3.3.1.
Priorities

A major priority for 2010 was the follow-up
of the respect of the deadline for transposition of Directive 2006/25/EC
(artificial optical radiation) in April 2010 and the resulting
non-communication infringements. This priority will remain, as regards the 3
cases which are not yet closed.

Other
priorities for 2010 were the ongoing analysis of the conformity of The
Framework Directive 89/391/EEC and the 5 individual directives related to the
highest risk sectors: construction (directive 92/57/EEC), the maritime sector
(directives 92/29/EEC and 93/103/EC) and extractive industries (directives
92/91/EEC and 92/104/EEC), as well as further analysis of the transposition of
the Asbestos Directive 2003/18/EC as exposure to asbestos is still a major
concern for the protection of workers' health. These priorities remain.

Priorities set
for 2010 were largely met but it should be borne in mind that the work planning
has to be constantly adapted to new priorities introduced during the year which
has an impact on the priorities set regarding the control and monitoring of the
application of EU law.

While all
health and safety at work Directives, except one, are transposed in all Member States and the Commission has made visible progress in 2010 to accelerate the
handling of open infringements and to go further with the priorities set, major
efforts should still be deployed to progress with the priorities established.

3.3.3.2.
Planned action (2011 and beyond)

As previously
mentioned, the analysis of the conformity of all the health and safety at work
directives will continue to be a priority issue as an incorrect transposition
could be a source of occupational accidents or diseases, with particular
serious negative consequences in terms of human lives or physical integrity
and/or important economic impact for the society and the concerned enterprises.
Moreover, such analysis is also required due to the fact that often Member
States are legislating in the fields covered by these Directives and there is a
need to constantly follow-up the legislative developments that, sometimes, are
not notified to the Commission.

As the analysis
of the transposition of all provisions and annexes of the health and safety at
work directives is a highly time-consuming task requiring highly specialised
human resources (not only lawyers but also doctors, chemical engineers, mining
engineers, etc.), a prioritisation is essential and the development of
preventive actions is intensified such as the adoption of non-binding
guidelines. In this context, also with a view to avoiding court proceedings,
bilateral meetings with national authorities will be held where needed in 2011.

The analysis of
the conformity of the transposition of Framework directive 89/391/EEC, which
establishes the main principles of prevention of occupational risks that apply
to all sectors of activity, continues to be a major priority for 2011, in
particular as regards the correct transposition in the 12 new Member States.

In 2011, the
Commission will continue the analysis of the conformity of 5 individual
directives related to the highest risk sectors: construction (directive
92/57/EEC), the maritime sector (directives 92/29/EEC and 93/103/EC) and
extractive industries (directives 92/91/EEC and 92/104/EEC). In addition, it is
also the intention to further analyse the transposition of the Asbestos
Directive 2003/18/EC as an exposure to asbestos is still a major concern for
the protection of the workers' health.

These
priorities are in line with the main objectives of the Community Strategy
2007-2012 on Health and safety at Work[65] in particular
those of reducing occupational accidents and diseases and guaranteeing the
proper implementation of EU legislation.

The publication
of a practical non-binding guide on the construction sites Directive 92/57/EEC is
also foreseen, which will contribute decisively to the dissemination of good
practices, being an assistance tool for better application of the EU
legislation, with a view to improving application and consistency of the EU
Directive among Member States.

A major
priority mainly for 2012 will be the follow-up of the respect of the deadline
for transposition of Directive 2009/161/EU (third list of indicative
occupational exposure limit values) in December 2011 and the resulting
non-communication infringements.

In addition, as
regards the monitoring of the transposition of EU directives on health and
safety at work in the EU candidate countries, a call for tenders will be
launched, in 2011, to carry out a study on the transposition of the EU acquis
concerned into the Icelandic national law.

3.3.4.
Summary

The Commission
has continued to develop several initiatives to strengthen the preventive
measures with a view to significantly improving the level of effective and
complete implementation, application and enforcement of the EU health and
safety at work acquis. Therefore, successful results were, for example,
the closing of virtually all non-communication infringements or the reduction
trend in the accidents at work.

Further to the
Resolution of the European Parliament of 15 January 2008 on the Health and
Safety Strategy 2007-2012[66], which expressly
requests to the Commission to intensify its works on the monitoring of the
transposition of the health and safety at work directives, progress in this
area has been intensified and the prioritising approach above indicated as well
as the preventive initiatives undertaken, should allow to deal with a workload
which is constantly increasing and therefore requesting major efforts to
adequately manage it.

4.
AGRICULTURE AND RURAL DEVELOPMENT
4.1.
Current position
4.1.1.
 General introduction

Since 1962 the Common Agricultural Policy
(CAP) has established a comprehensive legal framework for European agriculture
aiming to achieve the objectives set out in TFEU. As a fully integrated common
policy it replaces a significant amount of national legislation. It has largely
accomplished its objectives while alleviating the social impact of agricultural
restructuring. As a corollary, farmers and administrations have to deal with a
complex set of rules and measures contained in 1436 acts of secondary law
currently in force. Most of those acts are Council or Commission Regulations
that are "binding in their entirety and directly applicable in all Member
States". Access to agricultural legislation has been improved by
developments in IT tools. All EU legislation is now freely available via the
EUR-Lex website. Consolidation and codification of legal texts both make the acquis
more accessible to citizens and improves legal certainty.

The CAP is unique
in the extent to which it is regulated and financed at EU level. Its common approach,
in particular, to the single market, makes it possible to guarantee the
functioning of an internal market of agricultural products. An EU framework
ensures that rural development programs are carried out under common rules
without creating unfair competitive advantages. Basic standards in the field,
for example, of organic farming and labelling are settled on a common basis.
This requires robust legislation, and effective financing and monitoring
mechanisms to protect the public interest and ensure accountability.

Taking into
account the significant volume of agricultural law and the more than 50 years
history of the CAP (Stresa Conference dated July 1958), it may be considered as
a quite stable acquis that, on the one hand, is subject to frequent technical
modifications under the Comitology procedure, and on the other hand, undergoes
on a regular basis, much more profound modifications. The last one of these,
the 2003 reform, brought about radical change to the CAP, especially its income
support policy. It established the single payment scheme and the single area
payment scheme where direct income support for farmers is largely decoupled
from production and introduced the cross-compliance system (see Council
Regulation (EC) No 1782/2003[67] repealed by Regulation
(EC) N° 73/2009). It also established comprehensive common rules for direct
support in most sectors. The effect of these reforms has been reviewed in the
"Health Check" 2008, on which basis the Council decided on
adjustments in policy and budgetary priorities by Regulations (EC) No 72/2009[68]
and 73/2009[69]. Agricultural policy
also contributed significantly to the regulatory simplification process notably
in 2007 - 2008 by the adoption of the Single Common Market Organisation Regulation.
A common market organisation (CMO) in the agricultural sector governs 21
sectors which until 2007 were individual CMOs. It provides
a single legal framework governing the domestic market, trade with third
countries and rules regarding competition[70].

The policy is divided into two pillars: the
first pillar consists of a framework for supporting the income of farmers
through the payment of direct aid and a system for managing and supporting
agricultural markets. The second pillar of the CAP provides a framework to support
the development of rural areas of the EU. The first pillar is 100% financed by
the EU budget, whereas the second pillar is co-financed by the EU budget and those
of the Member States. Beginning on 1 January 2007 the programmes for rural
development have been implemented on the basis of a new strategic planning
model based on an EU framework position and national strategic plans (see
Council Regulation (EC) No 1698/2005[71]).

To these two principal pillars could be
added another important element of the policy consisting of the quality policy:
notably four specific EU quality schemes have been
introduced to develop geographical indications, organic farming, traditional
specialities, and products from the outlying regions of the EU. These schemes
identify products having specific qualities resulting from a particular origin
and/or farming method.

Since the 2007 financial year the financing
of the CAP is regulated by Regulation (EC) No 1290/2005[72],
which introduced two distinct funds. The first pillar is now financed by the
European Agricultural Guarantee Fund (EAGF) and the second pillar (rural
development) is financed by the European Agricultural Fund for Rural
Development (EAFRD).

The implementation of the CAP is a joint
responsibility of Member States and the Commission, referred to as shared
management. While the Commission is responsible for the overall legal framework
and for implementation of the budget, under the shared management concept, the
responsibility for implementation at the level of final beneficiaries has been
delegated to the Member States. The extent of the responsibilities of the
Members States may in particular be considered very extensive as regards the
implementation of the measures of the second pillar for which a "bottom
up" approach has been followed that leaves to the Member States, regions
and Local Action Groups much more latitude in adjusting the programmes to local
needs.

As already
mentioned, the CAP has been the subject of a continuing and regular process of
reform. A new process of change has been launched in 2010. Indeed, the new financial framework for the EU and the "Europe
2020" strategy priorities of smart, sustainable and inclusive growth offer
an opportunity to define the vision for European agriculture by 2020 and to
prepare a reform path for the Common Agricultural Policy accordingly.

In this context, through its response to the
new economic, social, environmental, climate-related and technological
challenges facing our society, the CAP can contribute more to developing intelligent,
sustainable and inclusive growth. The CAP must also take greater account of the
wealth and diversity of agriculture in the EU’s 27 Member States. The Commission Communication of 18/11/2010 on the "Common
Agricultural Policy towards 2020. Meeting the food, natural resources and
territorial challenges of the future" (COM(2010)
672 final) already highlighted the key challenges and
the major policy issues regarding EU agriculture and rural areas and outlined
possible policy orientations and options for the future. A new reform of the
CAP has now to be decided.

4.1.2.
 Report of work done in 2010

(a) New legislation

2008 ended
with the successful outcome of the "Health check" reflection process on
how to improve the efficiency of the Common Agricultural Policy in the future.
2009 has been characterised by a very active legislative activity dedicated to
the formalisation of the political agreement reached at the end of 2008. In
2010, with the entry into force of the Treaty of Lisbon, the main legislative
task for the Commission consisted aligning of an important part of the existing
legislation to the new legal bases. Indeed, the Treaty on the Functioning of
the European union (TFEU) establishes a clear distinction between on the one
hand the competence delegated to the Commission in order to adopt non
legislative acts (delegated acts), which supplement or modify certain
non-essential elements of the legislative act as provided by Article 290 TFUE,
and, on the other, competence conferred to the Commission in order to adopt
implementing acts pursuing to Article 291. In fact, Member States are
responsible for the implementation of the legally binding acts of the European
Union but if the application of the legislative acts requires uniform
conditions for implementation, it is up to the Commission to adopt them by
means of implementing acts. Pursuing the adoption of the
Commission Communication of 09/12/2009 on the Implementation
of Article 290 TFUE (COM (2009) 673 final), the Commission has to align
progressively agricultural legislation with the new mechanisms of delegated
acts and implementing acts, including in particular Regulation (EC) N°
1234/2007 establishing a common organisation of agricultural markets and on
specific provisions for certain agricultural products (Single CMO Regulation).

Reform of specific market instruments

2010 saw
several legislative initiatives adopted regarding specific sectors or
horizontal rules. Concerning the latter, the single CMO
provides a sound basis for grouping similar market management procedures
applicable in different sectors in horizontal Commission Regulations. It offers
the opportunity to reconsider and harmonise the different variations in so far
as this is considered to be useful, thereby achieving a degree of simplification.

In 2010 this
resulted in replacing in the horizontal regulations on physical checks and on
export refunds the written control findings by standard numerical codes, and in
11 Regulations the Member States' notifications to the Commission were
standardised and transferred to the ISAMM electronic network. Besides simplification of CMO rules, the acquis concerning
several sectors was modified to a greater or lesser extent in 2010.

As far as the
food distribution programme to the most deprived persons of the European Union
is concerned, the Commission adopted a new amended proposal (COM (2010) 486
final) in line with new provisions enshrined in the Lisbon Treaty and that took
on board certain implementation adjustments requested by the EP such as the
possibility to grant a priority to food produced in the EU and the obligation
for distribution points to clearly display the participation of the EU.
Furthermore, in an attempt to make the implementing rules clearer, these rules
were codified through Commission Regulation (EU) N° 807/2010[73].

As for the
milk and milk sector, the Commission has adopted the proposal for the Council
and European Parliament on the contractual relations in the sector (COM (2010)
728final of 10.10.2010) in line with the conclusion of the Council Presidency
(27.09.2010) and following the first four recommendations of the High Level
Experts Group for Milk (delivered on June 15, 2010).

In the wine sector, legislation has been
clarified, simplified and sometimes solved specific problems linked to
particular situations (see notably Commission Regulation (EU) No 772/2010 of 1
September 2010 amending Regulation (EC) No 555/2008 laying down detailed rules
for implementing Council Regulation (EC) No 479/2008 on the common organisation
of the market in wine as regards support programmes, trade with third
countries, production potential and on controls in the wine sector). The
problem of illicit plantings addressed in the reform regulations is being dealt
with. Penalties on vine growers who do not regularise or grub-up illegal
vineyard plantings are provided for including possible sanctions on Member
States if they do not provide information in a timely fashion. As regards PDO (protected
designation of origin)/PGI (protected geographical indication), only a few
product specifications relating to existing wine names where received by the
Commission services, whereas, around 1800 files must be communicated to the
Commission by the end of 2011. This will represent an important workload for
the Commission in 2011. Furthermore, authorization of wine-making practices has
been simplified – in general taking over those recommended by the OIV and the
analytical methods of the OIV will likewise be used for analysis in the
European Union. As regards the German Alcohol Monopoly, a progressive
phasing-out of this State aid was decided by the Council and the European
Parliament. This measure will definitively cease in 2013 for small distilleries
and in 2017 for the others. For hops, in the absence of a new monitoring system to replace the present
system of collecting information regarding the contracts, it has not been
possible to eliminate the compulsory registration of contracts. Therefore
efforts to find a suitable solution and to achieve simplification will continue
in 2011.

In the tobacco sector, the 2004 reform
providing to completely decouple production and aid, and which was again
confirmed by the health check regulation in 2009, was implemented as foreseen
in January 2010.

In the fruit
and vegetable sector, the fruit juice Directive (2001/112/EC[74])
has been amended by Directive 2009/106/EC[75]. Adaptation
was needed to take account of technical progress and developments in relevant
international standards, in particular the Codex Standard for fruit juices and
nectars (Codex Stan 247-2005) which was adopted by the Codex Alimentarius
Commission during its 28th session on 4- 9 July 2005 and the Code of Practice
of the European Fruit juice Association (AUN).

A proposal for
a second amendment of this Directive has been adopted by the Commission in
September 2010 (COM (2010) 490 final).

Direct payments and cross compliance

In 2010 the legislative activity
concentrated on the alignment of the Commission powers included in Council
Regulation (EC) No 73/2009[76] to the differentiation
introduced by the TFUE between delegated and implementing powers. This sorting
out into the two categories of existing Commission powers was done on the basis
of a thorough screening of the Council basic act and the relevant Commission
implementing acts already in force (Commission Regulations (EC) No 1120/2009,
No 1121/2009 and No 1122/2009[77]). Their delegated or
implementing character was decided on the basis of objective legal criteria on
the basis of the definitions in Articles 290 and 291 of the TFEU.

The result of this work was the Commission
proposal amending Council Regulation (EC) No 73/2009 of 29 September 2009
(COM(2010)539 final) that was submitted to the European Parliament and the
Council at the end of September .

Delegated acts were used in all cases of
"quasi legislative acts" in the sense that they regulate non
essential elements of the legislative act, are of general application and amend
or complete the legislative act. Implementing acts were used for all acts of an
"executive" nature in the sense that Member States are responsible
for the implementation and there is a need for a uniform application.

In addition to the alignment exercise, the
proposal also includes some elements of simplification in the area of
cross-compliance. In particular, the possibility for the Member States not to
require the declaration of all the agricultural areas of their holding for
farmers with a total area of the holding lower than 1 hectare is provided for.

Rural development

During year 2010, the legal procedures to
align Council Regulation (EC) No 1698/2005 [78] on support
for rural development by the European Agricultural Fund for Rural Development to
the provisions of the Lisbon Treaty (TFEU) were launched. The proposal also
contains a number of simplification proposals.

Commission Regulation (EC) No 1975/2006[79],
which concerns control procedures and cross-compliance in rural development
operations, was recast as a follow-up of the Commission staff working document
on simplification. The main objective was to clarify a number of points and to
increase the transparency of the text. The new Regulation (EC) No 65/2011[80]
was adopted in January 2011.

Commission Regulation (EC) No 1974/2006[81]
laying down detailed rules for the application of Council Regulation (EC) No
1698/2005 on support for rural development by the European Agricultural Fund
for Rural Development (EAFRD) was amended to
include detailed implementation rules for payments related to the Water
Framework Directive[82].

During the year, significant effort was
also put into the development of the future Rural Development Policy and the
Commission Communication on the future of the CAP. The work continues in 2011.

Quality policy

Quality

Building on the strategic orientations for
a coherent and comprehensive food quality policy set out by Communication
(COM(2009)234) adopted in 2009, an impact assessment exercise (including the
establishment of an Impact Assessment Inter-Service Group) was carried out in
the first semester of 2010 in view of the adoption of appropriate legislative
proposals.

On 10 December 2010 the Commission adopted
the "Quality package" covering all facets of agricultural product
quality policy. The "Quality Package" includes: a) two legislative
proposals on agricultural product quality schemes and marketing standards,
respectively; b) two Communications one of which established voluntary
guidelines on labelling of foodstuffs with PDO-PGI ingredients (OJ C 341,
16.12.2010, p. 3) and on the other of which was on the best practice for voluntary
certification schemes for agricultural products and food stuffs (OJ C 341,
16.12.2010, p. 5).

In 2010 the "Standing Committee on
Protected Geographical Indications and Protected Designations of Origin"
(Art. 15 of Regulation (EC) No 510/2006[83]) and the
"Standing Committee on Traditional, Specialities Guaranteed" (Art. 18
of Regulation (EC) No 509/2006[84]) gave favourable
opinions respectively on a number of Draft Commission Regulations entering
names in the Register of PDOs-PGIs and of Draft Commission Regulations entering
names in the Register of TSGs (traditional speciality guaranteed). Favourable
opinions were also given on a number of cancellation of registration of names
in the register of PDOs-PGIs.

Organic

The Community organic farming legislation framework
is composed by Council Regulation (EC) No 834/2007 on organic production and
labelling of organic products[85] and by implementing
regulations (Regulations (EC) No 889/2008[86] on
production, labelling and control and Regulation (EC) No 1235/2008[87]
on import of organic products). It was further developed in 2010 with the
adoption of amending Regulation (EC) No 271/2010[88]
on the EU organic production logo, which became compulsory for pre-packaged
organic food produced in the EU as from 1st July 2010. In the area
of relations with 3rd countries, the Commission examined the
information submitted by Japan and decided to include it in the list of third
countries recognised as having standards equivalent to the EU organic farming
standards[89].

With a view to align the organic farming
legislation to the provisions of the Lisbon Treaty, the Commission adopted on
17 December 2010 a proposal to amend Council Regulation No 834/2007[90].

(b) Preventive measures and actions
taken to control the correct application of the law

In the field of prevention the Commission
continues to be active as the following actions demonstrate.

Meetings with the Member States in the
context of Comitology – Guidelines - Interpretations

In the agricultural
sector, preparatory working contacts between experts, review of problems
arising and multilateral and/or bilateral exchange of information all help to
ensure and promote correct implementation and identifying and addressing
potential problems as early as possible. Furthermore, the
Management and Regulatory Committees, which meet regularly, acts not only as a
body delivering its opinion on legal proposals for Commission regulations, but
also serves as a privileged forum for the exchange of information and best
practice between the Member States and the Commission, thus playing a key role
in preventing implementation problems.

Where needed, missions to Member States
capitals to get a global view of procedures and practices at national level
were also organised. “Bilaterals” with Member States provided the competent
services of the Commission with the opportunity to deal positively with some
recurrent problems encountered by Member States in the drafting of applications
as well as in the interpretation of a number of legislative provisions. The
Commission also provided practical suggestions to improve the quality of
applications, for instance in the quality sector, for registration and
amendments. This contributed to reducing time-consuming formal exchanges
concerning Commission requests for additional information, in particular in the
agricultural quality policy sector. The wine sector regularly reviews the acquis
in the Management Committee and where appropriate the Regulatory committee for
certain aspects of the PDO/PGI/TSG decisions and wine-making practices.
Stakeholders and the Commission services deal with issues in the Advisory Group
and the Expert Group on wine-making practices deals with technical questions.
All these measures provide a stable and clear legal framework for the sector
for the coming years. They will contribute to improving competitiveness,
increase subsidiarity by enabling Member States to select the measures in their
national support programmes most suited to their conditions. The gathering of
information to monitor the sector has also been adequately provided for to
ensure early detection of market movements and trends.

The Commission also
provides guidelines in order to ensure consistent implementation of the rules
throughout the EU and prevent deceptive and misleading practices, e.g. in the
wine, quality policy and organic farming sectors. For instance, guidelines
relating to Articles 9, 10 et al of Regulation (EC) No 110/2008[91]
of the European Parliament and of the Council on the definition, description,
presentation, labelling and the protection of geographical indications of
spirit drinks were provided to Member States in the Spirit Drinks Committee and
to the stakeholders in the Advisory Group on Spirit Drinks with a view in
particular to ensuring consistent implementation of the rules throughout the EU
and prevent deceptive and misleading practices.

Moreover, a register of
interpretative notes on agricultural law (called RIPAC) has existed for a long
time and new interpretative notes are regularly being created and put in that
register which is accessible for the Member States. The notes are usually drawn
up as a result of a written or oral question posed by a Member State.

Technical standards Directive
(Directive 98/34/EC)

Directive 98/34/EC of the European
Parliament and of the Council of 22 June 1998 laying down a procedure for the
provision of information in the field of technical standards and regulations
requires Member States and Members of the European Free Trade Association who
have signed the Agreement on the European Economic Area plus Switzerland and
Turkey to give each other and the Commission prior notification of all draft
rules containing technical standards or rules in order to avoid creating new
barriers to trade in the internal market. As such, this Directive can be
considered as an ideal preventive instrument enabling the filtering of any
national technical rule that could jeopardize the functioning of the internal
market.

In this context, in 2010 the relevant
departments of Directorate-General for Agriculture and Rural Development were
formally consulted on 106 notifications relating to the agricultural sector.
Examination of these draft texts subsequently led to the issuing of 2 comments,
2 detailed opinions and one blockage.

Simplification

The Commission strategy for simplifying the regulatory
environment [COM(2005) 535] set out an ongoing simplification programme of
measures to be adopted with a view to improving the quality and effectiveness
of the acquis. As far as the agricultural sector is concerned, the
Communication on Simplification and Better Regulation for the Common
Agricultural Policy [COM(2005)509] set out an ambitious
programme for a significant simplification of the CAP. The Communication: "A simplified CAP for Europe - a success for all (COM(2009)
128 final) takes stock and looks at what has been accomplished. It
highlights the activities that have been carried out since 2005, and gives
indications of the resulting reduction in the administrative burden for farmers
and administrations. The 2005 Communication led to
the creation of the rolling Common Agricultural Policy Simplification Action
Plan, which is used to identify, plan and monitor the implementation of
simplification projects within the agricultural sector. Launched at the end of
2006, it has evolved from 20 to around 62 projects; 55 projects have already
been implemented (as removal of the obligation to have a licence for beef
exports without export refunds, end of the obligation for a farmer to have a
plot of land at his disposal for at least 10 months in order to apply for
direct payments, for imports, licence requirements were reduced from 500 to 65
and for exports, only 43 licence requirements remain, etc). On technical
aspects, it is interesting to mention that in order
to increase the transparency of EU law, which is an essential element of the
better lawmaking strategy that the Institutions are implementing, Council
Regulations (EC) No 1128/2009[92] and 1139/2009[93]
repealed 33 Council acts that had become obsolete. At the end of 2010, the
Commission adopted two other legislative proposals looking to repeal another 45
obsolete Council acts. These proposals follow a
Commission Communication which declared more than 360 Commission acts obsolete. The adoption of the single CMO replaced 21 individual
common market organisations with one, reducing the number of articles from
around 1080 to around 350 and repealing 86 Council acts. At the end of
2009, the Commission's services presented a Staff Working Document SEC
(2009)1601, on the assessment of 39 simplification suggestions submitted at the
Agricultural Council of April 2009. The document provides an assessment of
every simplification suggestion and, where possible, presents a solution to the
problem raised. Most of the solutions have already been incorporated, for
example in the new implementing regulations for direct payments or in the
simplification package, which was adopted by the Commission at the end of
September 2010. The Commission has adopted in November a Communication
declaring a substantial number of Commission acts obsolete and on 20 December
two legislative proposals repealing a number of Council acts related to the
CAP. Together, these two exercises represent a considerable cleaning up and a
step forward in simplifying the agricultural acquis.

Sectoral preventive measures

The following examples illustrate
preventive actions taken in some agricultural sectors.

Quality

Controls of
obligations of Member States under Regulation (EC) No 510/2006 remained an
important issue in need of attention. The Commission services assessed the
Multi Annual National Control Plans (MANCP) presented pursuant to the
provisions of Regulation (EC) No 882/2004 and the annual reports submitted on
the implementation of these plans. The Commission services' analysis provided
the necessary feedback to the Member States on controls of PDOs and PGIs.

The Commission
services informed the Member States regarding the interpretative note (No 2010-01) on the use
in translation of a name registered under Regulation (EC) No 510/2006. The note
clarified the distinction between names as entered in the register and names in
translation.

In order to
contribute to the smooth application of the existing legislation on PDO/PGI and
TSG, bilateral meetings with Member States were organised in the margin of the
Committees meetings. Such “bilaterals” provided the Commission services with
the opportunity to continue the productive dialogue established in the last few
years and tackle effectively some problems encountered by Member States in the
drafting of applications.

A constructive
exchange of views on general improvements needed to the processes and
registration procedures for PDO, PGI and TSG applications took place also in
the Committees' meetings, exceptionally in the presence of the Commissioner.
Procedural questions were discussed with the Member States experts directly
responsible for the implementation of EU sectoral legislation at national
level.

The preparation
of a guide for applicants of PDO/PGI applications was started in 2010,
benefiting also from the contributions of Member States.

Organic farming legislation –
monitoring guidelines

Regarding the implementation of the EU
rules on organic products, discussions take place between the Commission and
the Member States in the framework of the Standing Committee on Organic Farming
(SCOF) and bilaterally. The legislative framework in place clearly delimitates
competences between the Commission and the Member States and makes provision
for a series of information and reports that are submitted regularly to the
Commission.

With regard to controls, the responsibility
lies with the Member States. Controls of the organic production are logically
placed under the responsibility of the Official Food and Feed Control (OFFC) set
up by Council Regulation (EC) No 882/2004[94]. To foster
more efficient control systems, the Commission developed a document on control
guidelines with a view to disseminate knowledge and appropriate guidance to the
competent authorities, and possibly the control bodies, clarifying the
relationship between the controls requirements deriving from the OFFC and those
deriving from the regulations in the organic sector. The document, which will
also help the Commission in its supervisory role, was finalised in December
2010 and is expected to be disseminated in the first quarter of 2011. In 2010,
the Commission sent one letter to a Member State requesting it to provide a
solution without delay to a deficiency in its control system. A solution was
provided by the competent authority of the Member State concerned within a
reasonable delay and the performance of its control system was subsequently
improved.

Concerning the introduction of the new EU
logo, a series of tools to assist operators were developed, namely a series of
Frequently Asked Questions, a user manual and a document describing the terms
and conditions for its use.

In the area of support to organic farmers a
study on "the use and efficiency of public support measures addressing
organic farming" was launched at the end of the year.

            Rural development
preventive measures

Preventing tasks under shared management
with the Member States are permanent core task of Commission Rural Development
services. Preventing tasks include regular monitoring through participation in
Annual Review meetings and Monitoring Committee meetings, as well as the
thorough analysis of Annual Progress Reports, Mid-Term Evaluation reports and
summary reports of National Strategic Plans. Furthermore, preventing tasks
include consultations regarding Rural Development Programme modifications, when
the Commission must assess the compliance of the modifications with EU law.
Moreover, numerous legal interpretations and guidelines were given to Member
States in the form of exchange of letters.

During the year, increased attention was
paid to policy implementation. Since 2010 was the mid-point of the programming
period 2007-2013, taking stock of the Rural Development programme achievements
so far was highlighted in the work of Member States and the Commission. The
Member States submitted strategic summary reports on the progress made in the
National Strategy Plan implementation to the Commission. Furthermore, the
Member States conducted mid-term evaluations of their Rural Development programmes
and submitted them to the Commission.

In September, a seminar on ensuring good
management of the Rural Development programmes was organised in Brussels. The focus of the seminar was on knowledge-sharing amongst the Member States and illustrating best practises. The seminar brought together the policy planning
and implementing authorities from the Member States, staff from the Commission
services and the European Court of Auditors.

            Clearance of accounts

EAGF and EAFRD expenditure is implemented under
shared management through a comprehensive
management and control system based on four levels consisting of[95]:

·
A compulsory administrative structure at the
level of the Member States: management and control of expenditure is entrusted
to dedicated paying agencies, which prior to their commencement of operations
must be accredited by the Member States on the basis of a comprehensive set of
accreditation criteria laid down in EU law;

·
Detailed systems for ex-ante controls and
dissuasive sanctions: These systems are to be applied by the paying agencies
and contain some common features and special rules tailored to the
specificities of each aid regime. The systems generally provide for exhaustive
ex-ante administrative controls of 100% of the aid applications, cross-checks with other databases where
this is considered appropriate as well as
pre-payment on-the-spot checks of a sample of transactions ranging
between 1% and 100%, depending on the risk associated with the
regime in question. If the on-the-spot checks reveal a high number of
irregularities, additional checks must be carried out. In
this context, by far the most important system is the IACS (Integrated Administration and Control System). To the extent possible, the IACS is also
used to manage and control rural development measures relating to parcels or
livestock.

·
Ex-post checks: in addition to the ex-ante
controls, all aid measures other than direct
payments covered by the IACS are subject to ex-post checks under either Council
Regulation (EC) No 485/2008 or,
for rural development measures, Commission Regulation (EC) No 1965/2011. Moreover, the paying agencies' annual accounts and the functioning of their
internal control procedures are verified and certified on an ex-post
basis by the certification bodies.

·
Clearance of accounts: the clearance of accounts
through the Commission consists of both an annual financial clearance and a
multi-annual conformity clearance.

Taken
together, these four levels are designed to ensure the legality and regularity
of transactions at the level of the
final beneficiaries. In the current context of the report on the application of
EU law, the conformity clearance mechanism is particularly worth mentioning as
it pertains to the correct application of the legislation establishing the
common agricultural policy.

Indeed, while the financial
clearance covers the integrality, accuracy and veracity of the paying agencies'
accounts, the conformity clearance relates to the legality and regularity of
the underlying transactions. It is designed to exclude from EU financing
expenditure which has not been executed in compliance with EU rules, thus
shielding the EU budget from expenditure that should not be charged to it (financial corrections). In contrast, it is not a
mechanism by which irregular payments to beneficiaries are recovered,
which according to the principle of shared management is the sole
responsibility of Member States. Financial corrections are determined on the basis of the nature and gravity of the
infringement and the financial damage caused to the EU. Where possible,
the amount is calculated on the basis of the loss actually caused or on the
basis of extrapolation. Where this is not possible, flat-rates are used which
take account of the severity of the deficiencies in the national monitoring
systems in order to reflect the financial risk for the EU. Where undue payments
can be identified as a result of the conformity clearance procedures, Member
States are required to follow them up by recovery actions against the final
beneficiaries. However, even where this is not possible because the financial
corrections only relate to deficiencies in
the Member States' management and monitoring systems, financial corrections are
an important means to improve these systems and, thus, to prevent or detect and
recover irregular payments to final beneficiaries. The conformity clearance
thereby contributes to the legality and regularity of the transactions at the
level of the final beneficiaries.

In 2010,
the Commission adopted three
conformity clearance decisions:

·
Ad hoc Decision 32: Commission decision No 2010/152/EU of 11/03/2010
excluding EUR 351.8 million from
EU financing.

·
Ad hoc Decision 33: Commission decision No 2010/399/EU of
15/07/2010 excluding EUR 271.9
million from EU financing.

·
Ad hoc Decision 34: Commission decision No 2010/668/EU of
4/11/2010 excluding EUR 579.2 million from EU financing.

Moreover, in 2010, the Commission carried out 156
on-the-spot missions in the Member States and launched 129 desk checks.

While the financial consequences will
only be determined at the end of the conformity clearance procedures, the results of the audits are already
known throughout the year in question. Most of the audits performed in 2010 have
not revealed any deficiencies in the monitoring systems which would suggest that those systems are ineffective
in determining the eligibility of claims or preventing irregularities[96].
However, as regards direct payments, serious deficiencies have been detected in
the IACS of 3 Member States. Those Member States have put in place
action plans which are being closely followed by the Commission services. In parallel, the Commission is protecting the EU financial
interests through conformity clearance procedures which are expected to result
in significant financial corrections.

In the rural development sector, following
the extensive audit program (37 audit missions of EAFRD financing in 2010) in
the Member States and their systematic follow-up in terms of recommendations on
controllability of measures or other weaknesses of the RD programmes, the
Member State have taken various actions. Until end of
October 2010 a total of 46 significant findings from audit reports relating to
the weaknesses in implementation of the RD programs, compliance issues and
controllability of measures were found. 24 of those cases have been closed from
the follow-up after problems have been solved either by changing the RDP or by
other means. The national rural development programs
have been modified in 9 cases and the national framework in one case, which led to modifications into most regional programs of that Member State. The geographical units are continuously following new
reports and taking new findings to the follow-up table when necessary. From the
ECA reports 12 findings have been followed-up. One has been closed. Furthermore, action has been taken in several cases to clarify
national implementing rules as well as to modify national legislation.

c) Management of the acquis
through committees and experts groups

In the legal context
prevailing in 2010, before the Commission adopts an act in the area of the
Common Agricultural Policy, based on powers conferred upon it by the Council,
it normally has to consult with Member State representatives and may also
consult within expert groups.

In the case of
consultation with the Member States representatives (Comitology), the
Commission proposes the draft measure to a committee established by Council
legislation and composed of representatives of the Member States. Committees
give their opinion to almost every implementing act drafted by the Commission.
In relation to the CAP, the management committee procedure is the type of
procedure that applies almost exclusively and only in very few cases is the
regulatory procedure applied with or without scrutiny by the European Parliament.
This process gives multiple possibilities for consultation on different
solutions for the implementation of agricultural law. It also has the effect
that Member States are reminded of their duty to comply with EU law. Comitology
has a long tradition in the agricultural sector, especially in the system of
the management of the agricultural markets but Comitology also applies to the
implementation of rural development and direct payments. It should however be
noted that as of 1 December 2009 (entry into force of the Lisbon Treaty) new
Treaty provisions are in force on the kind of competences which can be
conferred by the legislator upon the Commission. However, pending the necessary
adaptations of the existing Commission competences by the European Parliament
and the Council, they have not yet taken effect so far and will gradually be
introduced probably as of mid-2011. Meanwhile, the CAP continues to be
implemented in accordance with the old (existing) rules provided in the Council
Decision 1999/468/EC[97].

In 2010, 143 meetings of 14 management and regulatory committees
presented the opportunity to discuss the implementation of CAP legislation with
the representatives of the Member States. By securing the discussion of all
market management related issues in a single Committee, discussions have
benefited from cross-sectoral expertise and enhanced harmonisation and so the
resulting implementing rules are simpler for Member States to put into
practice.

The Commission therefore
cooperates with Member States in a sophisticated manner which presents the
opportunity to discuss and prepare the implementation of common rules and to
prevent or solve problems related to their application at an early stage.

In addition the Commission administrates around 70 expert groups (56
active), including Civil Society Dialogue groups, dedicated to agriculture
policies. These groups are not only composed of national administration experts
but also by agricultural organisations, academics and independent experts. A
major proportion of these groups are advisory groups where the Commission
consults on measures with stakeholders such as producers, exporters, importers,
wholesalers, retailers, nature preservation NGOs, consumers and other concerned
parties. Article 3(1) of Commission Decision 391 of 23 April 2004[98]
provides that all socio-economic organisations participating in the advisory
groups must be listed in the Commission's register of interest groups. In 2010
all socio-economic organisations have been registered.

In 2010 the Commission
was assisted by a number of advisory and working groups, as well as permanent
and temporary groups' meetings of experts (in total 138) with a view to better
adapting policies and implementing rules to the real situation. Above all,
these groups provide the Commission with agricultural markets data and current
production circumstances. A High Level Group of Experts in milk met ten times
from October 2009 to June 2010 and produced a report with policy
recommendations in June 2010. A dairy stakeholder conference was also held in
March 26, allowing a wider range of actors in the supply chain to express their
views.

d) Enquiries, problems and complaints
management

Complaints from citizens and businesses (77
files related to the agricultural sector registered in the CHAP database in
2010) and internally detected cases led the Commission to examine  cases of
potential breaches of EU law covering various fields of the Common Agricultural
Policy. In several cases the Commission referred questions relating to the
application of EU law to Member States using the EU Pilot system. In 2010, 61
cases were dealt in EU Pilot system and concerned different sectors of the CAP.

Particular attention was drawn to the
correct application of EU legislation in the field of direct payments, organic
production and quality policy.

e) Petitions

In 2010 the Commission received 6 Petitions related to
agriculture which covered a wide range of issues.

Four of them concerned
EU support (rural development and the use of EU funds in Doñana National Park in Romania, support for young farmers in Bulgaria, aid for yak cows). The other two concerned
legislation on the compulsory purchase of land and modernisation of a forest
track on the 'Valea Șardului' ecosystem.

f) Management of infringements

In the area of agriculture and rural
development, monitoring the application of EU law under the Article 258 TFEU
procedure focuses on two main objectives: removing barriers to the free
movement of agricultural products and ensuring that the more specific
mechanisms of agricultural regulations are applied effectively and correctly.

In 2009, the Commission had to intervene in
the context of the last objective by sending a reasoned opinion to the Czech
Republic for the use of the sales designation "Pomazánkové máslo" (in
English –  'butter spread') for a dairy product which does not comply with the
requirements laid down in the Annex XV to Council Regulation (EC) No 1234/2007.
Since no solution was found, the Commission decided to refer the case to the
Court of Justice in September 2010.

Moreover, specific attention continued to
be paid in 2010 to the application of the milk quota regime. Particular
attention was devoted to its application in new Member States and to the situation
prevailing in Italy regarding the recovery of levy due by milk producers.

Furthermore, the Commission intervened in
the wine sector in order to ensure the correct implementation of EU rules
regarding "protected geographical
indication" that limit to exceptional cases, the possibility for the names
of Member States to be protected as geographical indications (see Article
118(b) of Regulation (EC) No 1234/2007).

Particular
attention has also been paid to the treatment of instances of non-compliance
with Court judgments. In 2010, the Commission monitored the progress made by
Portugal to implement a judgment of the Court in which the Court declared that,
by levying charges on beneficiaries during the programming period 1994-1999
which were neither voluntary nor optional and which did not constitute
remuneration for services rendered by the administration, the Portuguese
Republic failed to fulfil its obligations under Council Regulation (EEC) No
4253/88, as amended by Council Regulation (EEC) No 2082/93[99].
Portugal presented a plan programming the reimbursement of the amounts
resulting from the charges illegally collected from the beneficiaries. The
execution of the plan should be ended in 2011 by the payment of interests on
the capital.

Furthermore
the Commission continued monitoring the application of the so-called
"Breakfast directives", which lay down particular compositional and
labelling requirements for products including honey, chocolate, jams and fruit
juices[100]. More specifically,
concerning chocolate (Directive 2000/36/EC[101]), the
Commission ensured the monitoring of the implementation by Italy of the judgement
of the Court of Justice in case C-47/09 where the Court took the view that, by
providing that the adjective ‘pure’ may be added to the sales name of chocolate
products which do not contain vegetable fats other than cocoa butter, the
Italian Republic had failed to fulfil its obligations under the Directive..

4.2.
 Evaluation
4.2.1.
 General evaluation

Taking into account the volume of EU law
currently in force in the agricultural sector, the acquis in the
agricultural sector may be considered as globally stable and manageable subject
to technical up-dating or clarification effected through Comitology (see
above). This updating is not generally expected to be controversial or
difficult to implement due to the well-established and well-understood
framework in which this will take place and in the light of previous experience
of the relatively smooth adoption and timely entry into effect of this type of
measure.

In the
agricultural sector it may be considered that preparatory working contacts
between experts, review of problems arising and multilateral and/or bilateral
exchange of information constitute proportionate and sufficient means to ensure
correct implementation. Furthermore, besides its role in the adoption of
implementing rules, the Management Committees, which meet regularly, are a
privileged forum for the exchange of information and best practise between Member States and the Commission.

In any case,
as already explained, the agricultural sector makes use of the clearance of
accounts mechanisms to monitor through its audits the application of secondary
agricultural legislation and in particular the management and control systems
thereof.

4.2.2.
 Sector based remarks

(a) Market instruments

As regards the functioning of this sector-based acquis,
no major problems were encountered in 2010 as regard the application of the
existing rules. The acquis can be considered as stable providing a
generally satisfactory situation.

The simplification of horizontal regulations
contributed to the aim of harmonised application and interpretation of Union
law in all Member States. The discussions in the Committee on legal and
technical issues and on the annual report on physical checks contributed to
realising these aims as well. The audits performed in 2010 generally show a very high degree of conformity
by Member States.In line with the priorities defined in
the 27th report to EP for agricultural sector, the priorities indicated in the wine sector were realised. The
grubbing-up scheme in the wine sector met with considerable success between 2008
and 2011. Only half the demand could be satisfied by the available budget. The
national support programmes budgets were also almost completely allocated,
indicating the attainment of many of the objectives set out. Member States
fully used the possibility given in the wine reform in 2008 to establish their
national support programmes with the measures necessary for the modification of
their own wine sector. The budget execution reached 98, 5% of the available
funds for 2010. The main measures remain restructuring measures (44%) and
distillation (37, 5%). The part of the budget used for distillation should
diminish in 2011 and onwards and therefore this part of the budget will be
dedicated to other measures such as investments and promotion in third
countries.

(b) Direct payments and cross
compliance

Direct payments scheme

The acquis in the direct payments
sector is stable and its application by the Member States in 2010 was generally
satisfactory. However some specific issues have created implementing
difficulties for Member States, for example regarding the assessment of the
eligibility of certain marginal areas.

The legislation defines the agricultural
area eligible for payments under the single payment scheme (SPS) and the single
area payment scheme (SAPS) as well as what is considered agricultural activity.
Following the principle of decoupling introduced by previous reforms, no production
is required on the eligible hectares. This has lead to certain grey zones where
it can be difficult for both farmers and national authorities to determine in
practice whether the area in question is actually agricultural or whether the
character and main purposes of the area are rather to be considered as natural,
recreational or forest.

To help Member
States face this challenge and also in reply to a request raised by the Member
States in the context of the simplification exercise, the issue of eligibility was
thoroughly examined in the Management Committee for Direct Payments. The
examination which had already started in 2009 included presentations by the
Member States, written description of the Member States implementation of
eligibility rules and exchange of view and experiences as regards challenging
situations as well as the best practices and methods to deal with such
situations. In order to obtain more extensive background knowledge on the
subject in view of possible future developments a number of without commitment
alternative scenarios to the current eligibility rules were analysed as well.
The Commission services elaborated a discussion paper resuming the main issues
arising from the discussions. It appeared that the challenges were of a limited
character and the best practices to deal with these challenges were identified.

During the year 2010, the Commission
services have continued working in close cooperation with Member States to
ensure the correct application of the rules governing specific support (Articles
68 to 72 of Regulation (EC) No 73/2009). The Commission services examined new
measures notified by 01/08/2010 by two Member Sates to be implemented from 2011
and these services sent comments to them in order to ensure a correct application
of the EU legislation, in particular as far as potential overlapping with
supports under other CAP instruments and consistency with CAP measures were
concerned.

Cross compliance

Regarding cross compliance the work
undertaken during 2010 concerned the follow-up of the exercise of
simplification of the system of management and control started in 2009. On the
bases of the simplification proposals made by Member States the remaining
proposals have been transformed into legislative or quasi-legislative. In this
respect a first set of amendments of Commission Regulation (EC) No 1122/2009[102]
has been drafted in order to improve controls and sanction rules as well as to
adapt the system of maintenance of permanent pasture to better reflect the
reality. A second set of amendments of the same Commission Regulation has been
finalised early in 2010 in the Management Committee for Direct Payments in
order to better take into account the certification schemes in the control
system and to better make use of specific control systems. Certain
simplification initiatives concern working documents which have been modified
accordingly. Finally simplification proposals concerning Council Regulations
(EC) N°73/2009 and 1698/2005 were dealt with under the Lisbon Treaty procedures
in the course of 2010.

(c) Rural development

The main risk factors identified in the
rural development sector relate to error rates. The control statistics reported
by the Member States for rural development measures under Axis 2 in 2009 show
an error rate significantly above the materiality threshold presently used by
the European Court of Auditors (2%).

All of the 90 Rural
Development Programmes are up and running. However, there were been substantial
delays in the implementation of certain measures in a number of programmes. The rate of budget implementation varies between Member States, the
four thematic Axes of the policy, as well as between different measures within
the Axes. By the end of 2010, Member States have implemented between 23% and
58% of their allocated EAFRD funds (including advance payments). The
expenditure declared by the Member States so far focuses on measures related to
improving the environment and the countryside. The differences in budget
implementation between different measures clearly show that investment measures
(Axis 1, 3, and Leader) are slower to get started than area or animal-related
payments. Leader, in particular, has experienced a slow start, but the
implementation has accelerated in 2010. Otherwise, the experience is not enough to base clear
conclusions on the possible problems.

(d) Quality policy

Quality

EU agricultural product quality legislation
constitutes a fairly stable acquis characterised by a globally
satisfactory situation.

The reflection process leading to the 2009
Communication and the following impact assessment exercise showed, however, the
need for enhancing the overall coherence of the food quality policy.
Simplification and streamlining of existing EU quality schemes were also
considered necessary to improve the schemes’ take up and visibility in the
market place.

The Quality package adopted in December
2010 intends to provide solutions to these needs.

Organic

The overall application of the organic
production rules may be considered as stabilised and on the whole satisfactory.
Legislation concerning the new EU organic logo was successfully introduced (see
above). With regard to organic wine, the Commission launched the discussions
within the Standing Committee for Organic Farming, the European Parliament and
stakeholders.

(e) Technical standards directive
(Directive 98/34/EC)

Following the
information available to the Commission the functioning of Directive 98/34/EC
in the agricultural sector appears to be satisfactory. In 2009 there were, for
example, no infringement procedures launched against the Member States for not
following detailed opinions.

4.3.
Evaluation results - Priorities and actions planed 2011

(a) Legislative and management
priorities and action programming 2011

          General comments

The main priority as regards legislative
activity in the agricultural sector will be the legal drafting of the proposals
required for the adoption and implementation of the new CAP reform. The
Commission, after extensive consultation of the stakeholders will prepare
legislative proposals to be presented in 2011. These will follow the ordinary
legislative procedure applied for the first time to a reform of the CAP. This
reform should enter into force in 2014.

One of the other main priorities for the
Commission as regards legislative activity in the agricultural sector will still
be to implement the important changes introduced by the Treaty on European
Union (TEU) and the Treaty on the Functioning of the European Union (TFEU) and
in particular the extension of the ordinary legislative procedure (co-decision) to agriculture and the adoption of new rules on the Commission's delegated and implementing powers (Comitology). The alignment process of the CAP legislation to the new
legal bases resulting from Lisbon Treaty will be continued: the aligned legal
proposals adopted by the Commission in 2010 will be dealt with by the Council
and Parliament in 2011. Furthermore, Commission will adopt the legal proposals
for the alignment of the legal acts of the CAP not included by the proposals
adopted in 2010.

Market instruments

Besides the ongoing
pursuit of legal and operational simplification, the Commission will continue
to work on the improvement of the acquis in order to be ready to adapt to the challenges it faces notably regarding
the animal products sector where it will proceed to the follow up of the responses to the recommendations of the High Level
Experts Group for Milk (report delivered on June 15, 2010 amid the Council
Presidency Conclusion of the 27.09.2010). The Commission's legislative
proposals for the milk package were adopted on 9 December 2010. The adoption by
the EP and the Council is expected during 2011.

As regards wine, reports to be delivered by
the Commission to the Council and the European Parliament one shall be delivered
in 2011 relating to wine promotion measures, and a second one will be delivered
in 2012 relating to the wine implementation of the reform of 2008. In addition,
an external evaluation of the wine sector will be carried out in 2011 and discussions
will be pursued to secure a Council mandate to negotiate membership of the OIV
for the European Union and to successfully complete those negotiations.

Many product
specifications on wine PDO/PGI and spirit drinks GI will have to be examined in
accordance with EU law. Around 1800 files are expected to be received and then
analysed. On alcohol, the discussion on the Combined Nomenclature should be
opened. Spirit drinks regulation will need to be modified for the sake of a
better legal clarity. The working document on compound term could be legally
adopted. The codification/recast of Council Regulation (EEC) No 1601/91
laying down general rules on the definition; description and presentation of
aromatized wines, aromatized wine based drinks and aromatized wine product
cocktails was not finally adopted in the co-decision procedure. The outcome was
that a new proposal had to be prepared by the Commission. This proposal is scheduled
in 2011. Legislation on seeds could be revised in 2011. Continuation of the
effort to achieve simplification by eliminating the registration of hops
contracts will require a modification to the Council CMO Regulation (EC) No
1234/2007[103].

In the fruit and vegetable sector, in order
to ensure the smooth functioning of the acquis, a recast of the
implementing rules (Commission Regulation No1580/2007) which incorporates
interpretative notes and some technical adjustments was launched. Several
issues are addressed such as price-reporting, the new crisis prevention and
management tools for producer organisations and the annual reporting of sector
specific data by Member States. Adoption of the recast is scheduled for
Spring/Summer 2011.

As regards horizontal rules, revision and introduction of operational simplifications of existing
horizontal Regulations will be initiated in the field of tariff rate quotas, licences,
and export refunds / trade mechanisms.

The financial and economic situation in
Member States and globally are having an impact on agricultural products. An
additional priority for the moment is to monitor the market situation for each
of the products concerned. Price volatility requires close market monitoring
and quick reactions by using the existing market measures as reviewed under the
"Health check".

Direct payments and cross compliance

A priority for 2011 will be to participate
in the ordinary legislative procedure in order for the Council and the European
Parliament to adopt the Commission proposal amending Regulation (EC) No73/2009.

The main task in 2011 will be the
preparation of the legislative proposal for the new Direct payments scheme.

Rural development

The main task in 2011 will be the
preparation of the legislative proposals for the Rural Development Policy after
2013, including an adapted Common Monitoring and Evaluation Framework (CMEF)
and the Common Strategic Framework (CSF) with the structural funds. Having
already started in 2010, the impact assessment process will be completed during
2011. Drafting and discussing of corresponding legal texts will constitute a
major part of the work relating to future Rural Development Policy for the
year.

The Commission, together with Member
States, will also further continue the process of reducing the error rates in
rural development. This will be done by identifying and sharing best practises
regarding control issues, expanding audit activity, enhancing collaboration
with geographical rural development units and by improving the verifiability
and controllability of rural development measures in general and those under
Axis 2 in particular.

Quality policy

Quality

The adoption of the Quality package on
agricultural product quality policy adopted in by the Commission in December
2010 has opened the way to inter-institutional discussions on the content of
the EU initiative on food quality. The presentation of the legislative proposal
in the Council and the Parliament, within the context of the ordinary
legislative procedure, will be at the centre of Commission’s efforts to
reinforce and improve the EU food quality policy.

Whilst progressing through the legislative
procedure, the ongoing activities to ensure an efficient application of the
Regulations in force will continue.

Building on continuous improvements in
scrutinizing techniques applied to applications, the efforts made in accelerating
the rate of reaching the final decision on applications - while ensuring the
respect of sectoral EU legislation - will continue.

The scrutiny of third-country applications
will contribute to the finalisation of international agreements on the protection
of geographical indications.

The assessment of the Food Quality
legislations of candidate countries and associated countries against EU
legislation will also be carried out.

Organic

According to the provisions of the organic
farming legislation, the Commission will present in 2011 a report to the
European Parliament and to the Council reviewing the experience gained from the
application of the organic farming legislation.

The Commission hopes that an agreement will
be reached between the European Parliament and the Council on its proposal to align
the organic farming legislation with the provisions of the Lisbon Treaty.

With regard to imports from third
countries, the Commission intends to publish the first list of control bodies
recognised for the purpose of equivalence.

Clearance of accounts

For 2011, the annual work plan foresees 119
conformity audits with missions and several desk checks of which the number is
estimated to be around 20 based on last years' experience. For the conformity
audits, the work program is based on a central risk analysis in which all the
Directorate auditors were actively involved.

32 audits are planned of various market
measures including the sugar restructuring fund, Article 69/68, wine, POSEI and
fruit and vegetable operational funds.

24 audits will take place for area aids and
entitlements of which 2 each to EL, BG, RO and PT of which the latter 3 have
action plans in place for the IACS. 10 cross-compliance audits will take place.
For non area coupled aids, 9 audits will be carried out covering animal premium
schemes and Article 69.

44 audits will be carried out on Rural
Development measures of which 12 cover Axes 1 and 3 and measures with flat rate
support and 16 cover Axis 2 focusing on the "Agro-environment" and
"Natural Handicaps" measures, additional 4 audits concern the SAPARD
programme. Furthermore there will be 12 ex-post audits on rural development
expenditure regarding the 2000-2006 programming period for EAGGF-Guidance.

(b) Enforcement priorities

As already mentioned, in the area of
agriculture and rural development, monitoring the application of EU law under the
Article 258 TFEU (ex Article 226 TEC) procedure concentrates on two main
objectives: removing barriers to the free movement of agricultural products and
ensuring that the more specific mechanisms of agricultural regulations are
applied effectively and correctly.

Regarding recourse to the infringement
procedure, priority will be granted to cases which raise issues concerning the
compatibility of Member States' legislative, regulatory or administrative
measures with EU agricultural rules and to cases where Member States concerned
refrain from applying the common rules referred to above, thus jeopardizing the
effectiveness of important mechanisms of the common agricultural policy,
particularly regarding the 1st pillar.

For the year 2011, the Commission will in
particular be vigilant in pursuing infringements of the type described in the
previous paragraph challenging the application of the CMO's reform in the wine
sector and those which would affect the application of the direct payment
regime , and in particular "cross compliance".

4.4.
Summary

Taking into account the significant volume of agricultural law and its
more than 50 years history, it may be considered as a quite stable acquis
that, on the one hand, is subject to frequent technical modifications under the
Comitology procedure, and on the other hand, undergoes, on a regular basis,
much more profound modifications. The last one of these was the 2003 reform
that was subject to the "Health check" process.

The policy is divided into two pillars: the first
pillar consists of a framework for supporting the income of farmers through the
payment of direct aid and a system for managing and supporting agricultural markets.
The second pillar of the CAP provides a framework to support the development of
rural areas of the EU.

The implementation of the CAP is a joint
responsibility of the Member States and the Commission, known as shared
management under which the responsibility for
implementation at the level of the final beneficiaries has been delegated to
the Member States. In the agricultural sector, preparatory working contacts
between experts, review of problems arising and multilateral and/or bilateral
exchange of information all help to ensure correct implementation. Furthermore,
the Management Committees, which meet regularly, acts
not only as a body delivering its opinion on legal proposals for Commission
regulations, but also serves as a privileged forum for the exchange of
information and best practice between the Member States and the Commission,
thus playing a key role in preventing implementations problems.

The detailed overview of the implementation
of EU law in the agricultural sector shows that it can generally be considered
as satisfactory while any problem with the implementation of the rules in the
Member States is closely followed through the audit mechanisms and clearance of
accounts procedure which acts as a direct incentive to Member States to comply
with EU law.

Even so, the agricultural acquis is
regularly subject to reforms and/or modifications in order to adapt the CAP to
its new challenges. By Commission Communication of 18/11/2010 on the "Common
Agricultural Policy towards 2020. Meeting the food, natural resources and
territorial challenges of the future", a new process of reform has now
been launched. In 2010, the main challenges that prompted action from the
Commission as regards this acquis consisted of the alignment process of
the CAP legislation to the new legal bases resulting from Lisbon Treaty. This
process will be carried on: the aligned legal proposals adopted by the
Commission in 2010 will be dealt with by the Council and Parliament in 2011. Furthermore,
Commission will adopt the legal proposals for the alignment of the legal acts
of the CAP not included in the proposals adopted in 2010.

Nevertheless deficiencies and infringements in the
application of EU law by Member States in the agricultural sector occur and can
be dealt with through infringement proceedings. The use of these proceedings concentrates on two main objectives: removing barriers to the free
movement of agricultural products and ensuring that the more specific
mechanisms of agricultural regulations are applied effectively and correctly.

Regarding the
recourse to infringement proceedings, priority will be given to cases which
raise issues concerning the compatibility of Member States' legislative,
regulatory or administrative measures with EU agricultural rules and to cases
where the Member States concerned refrain from applying these common rules, thereby
jeopardizing the effectiveness of important mechanisms of the common
agricultural policy, particularly regarding the 1st pillar.

For the year 2011,
the Commission will in particular be vigilant in pursuing infringements of the
type described in the previous paragraph challenging the application of recently
reformed important CMO in the wine sectors and those which would affect the
application of the direct payment regime, and in particular "cross
compliance".

In the
agricultural sector, the Commission will continue to make use of the clearance
of accounts procedure to convince Member States to adapt their management and
control systems in the event that an infringement could be detected through
conformity audit mechanisms.

5.
ENERGY

The EU acquis in the field of energy
has a daily impact on citizens and businesses in Europe. The Commission's
services ensure that this legislation is properly applied and enforced so as to
guarantee that citizens fully benefit from the existing legal framework,
competitiveness is encouraged and a fully functioning internal energy market
becomes a reality. Priorities focus on actions ensuring secure and competitive
energy supplies and having a significant impact on the fight against climate
change.

To safeguard the effective implementation
of the acquis in 2010, the Commission's services continued to apply a
combination of infringement actions and preventive mechanisms, such as, for
example, guidance to the Member States on the interpretation and application of
the legislation. Efforts to foster cooperation with the Member States and
support national action persisted. Infringements proceedings remained a crucial
tool for enforcing the existing framework. Cases of non-communication of
national transposition measures were swiftly dealt with by launching systematically infringement proceedings against the
respective Member States. Identified non-conformity
cases have been tackled through initiating infringement action, based on
developed and consistently applied prioritisation criteria.

In parallel to enforcement measures,
considerable work towards streamlining and advancing the regulatory framework
by adopting new legislation was carried out. New legislative actions came as a
reaction to identified limitations of the existing legal framework or global
events calling for coherent reply at EU level, e.g. the Deepwater Horizon.

5.1.
ENERGY - Internal
electricity and gas market
5.1.1.
Current position
5.1.1.1.
General introduction

The completion of the internal market for
electricity and gas enabling European companies to compete Europe-wide is one
of the Commission's priority areas of its strategy for sustainable, competitive
and secure energy. The second regulatory package adopted in 2003 introduced
important changes in the internal energy market such as legal unbundling of
TSOs, the preparation of the full opening of the market and the obligation of
installing national regulators and reinforcing their powers. Several Member
States, however, so far failed to properly implement it. The package comprised
Directives 2003/54/EC and 2003/55/EC of 26 June 2003 concerning common rules
for the internal market in electricity and gas, respectively and Regulation
1228/2003 of 26 June 2003, on conditions for access to the network for
cross-border exchanges in electricity. A similar regulation was adopted for gas
at a later stage, i.e. Regulation 1775/2005 of 28 September 2005 on conditions
for access to the natural gas transmission networks.

The third package of legislative measures
adopted in 2009 aims at responding to most of the problems identified in the
failure of application of the second package. A demonstration of Member States'
commitment to the internal energy market will be the timely and correct
implementation of this third package into national law. The Commission will
assist Member States in implementing the third package and will continue to
pursue the full and correct implementation of the second package, including
through formal infringement procedures. The main aim of these efforts is to
develop the internal energy market and to favour competition on the market.

Directives 2009/72/EC and 2009/73/EC, which
form part of the third internal energy market package, are already in force and
should be transposed by the Member States by 3 March 2011. Regulation (EC)
713/2009 establishing an Agency for the Cooperation of Energy Regulators
(ACER), Regulation (EC) 714/2009 on cross-border exchange in electricity and
Regulation (EC) 715/2009 on cross-border network access in gas are fully
applicable as of 3 March 2011, except the organisational provisions on ACER
which became applicable with the entry into force on 3 September 2009.

5.1.1.2.
Report of work done in 2010

Enquiries, problems and complaints

Several complaints were received in 2010. Problems
reported mainly refer to the supplier switching processes, price issues and the
monopolistic structure of some national markets, malfunctioning of cross-border
trade and network access in the electricity sector. In the gas sector, problems
were reported as regards the access to the gas network and generally the
malfunctioning of the gas market.

One of the issues raised by several
complaints is the malfunctioning of the supplier switching processes and the
fact that companies do not pass on reductions of wholesale market prices to
customers. Therefore, overbilling might happen. This is still due to a lack of
competition on energy markets, in particular where a major incumbent has a
dominant position on the market.

The third legislative package has been
adopted with the aim to, inter alia, ensure real and effective choice of
supplier to the benefit of all EU consumers. It places consumer choice,
competitive prices and security of supply at the centre of its approach. The
proper implementation of the legislation is thus of great importance for
safeguarding the interests of consumers in the gas and electricity markets.

Management of infringements

In order to
complete the internal electricity and gas market and
prepare the ground for the implementation of the third legislative package, it is essential that the rules of the second legislative package are
implemented correctly. Therefore, the European Commission issued in June 2010 a
reasoned opinion against 19 Member States for electricity and 16 Member States for gas in the infringement cases which were opened in June 2009. The key
violations identified remained the same: lack of transparency, insufficient
coordination efforts by transmission system operators to make maximum
interconnection capacity available, absence of regional cooperation, lack of
enforcement action by the competent authorities in the Member States and lack
of adequate dispute settlement procedures for consumers.

The Court of
Justice of the European Union gave its final judgment on a case in relation to
regulated prices on the Italian gas market (Federutility case C-265/08,
20.4.2010). The Court stated that regulated prices can be in line with the Gas
Directive provided that they are strictly proportionate and limited in time.
The infringement proceedings already opened against some Member States still
applying regulated prices for gas and electricity are being reassessed in the
light of this case law and will be continued where necessary.

Petitions

During 2010, 4
petitions were dealt with raising issues related to the internal market for gas
and electricity.

New
legislation

Following the
adoption of the third legislative package in 2009, less new legislation
followed in 2010. However, the European Commission adopted on 10 November 2010
a set of new transparency rules for the European gas market([104]).
In relation with cross-border exchanges in electricity, the European Commission
adopted also guidelines on inter-transmission system operator compensation
(ITC) and on transmission charging[105].

In addition,
the European Commission adopted on 8th December 2010 its Proposal
for a Regulation on Energy Market Integrity and Transparency (COM(2010)726) in
order to prevent market manipulation and insider trading on energy markets. The
draft Regulation was adopted under Article 194(2) TFEU, its final adoption by
co-legislators is expected for 2011.

As regards the security of supply for gas,
the prevention and crisis response mechanisms were considerably strengthened through the adoption of
Regulation (EC) No 994/2010 of the European Parliament and of the Council of 20
October 2010 concerning measures to safeguard security of gas supply and
repealing Council Directive 2004/67/EC([106]) which entered
into force on 2nd December 2010. The Commission started
immediately to work in close cooperation with Member States on the
implementation of the new Regulation. First steps have already been taken to
speed up the implementation, notably with regard to the investments for
enabling bi-directional capacity in the cross border interconnections. In this
regard, the Commission together with the European Network of Transmission
System Operations for gas (ENTSOG) is to prepare an inventory to take stock of
the situation and to examine the capacity needed. To assist Member States in
their implementation, the issue is discussed as a permanent point in the agenda
of the meetings of the Gas Coordination Group (GCG). In addition, the
Commission closely monitors the steps taken by the Member States to fulfil the
provisions included in the Regulation and reports to the GCG. The Group is also
a useful platform to exchange best practices in the preparation of the risk
assessment and the Emergency and Preventive Action Plans.

5.1.2.
Evaluation of the current position

Following the adoption of the third
legislative package, first steps were taken during 2010 in relation to the
implementation of this legislation in order not to loose 18 months until its
full application as this could be detrimental to the development of the
internal energy market. The European Regulators Group for Electricity and Gas
(ERGEG) was tasked – for the interim period – to develop draft framework
guidelines on several issues in gas and electricity. These will provide the basis
for the development of network codes by the ENTSOs, which could then be made
legally binding and would allow the internal market to be completed. In
parallel, the organs of the new Agency, i.e. the Administrative Board, the
Board of Regulators and the Director, were installed and took up their
functions. First staff members were recruited and the necessary agreements were
made with the host country Slovenia to enable ACER to start full operation on 3
March 2011. The Commission is also assisting the Member States in the transposition
of the third legislative package.

Regional initiatives were again an
important tool for making progress towards the internal energy market. Focus
was on improving congestion management allocation and calculation, in particular
in electricity where several market coupling projects were implemented,
improving and harmonising transparency, improving security of supply in the gas
sector, access to pipeline capacity and other issues. In order to further
improve the functioning of the regional initiatives, the European Commission
launched a public consultation to get input from the market where adaptations
are needed in order to enhance the efficiency and effectiveness of the regional
markets for them to deliver an integrated energy market by 2014. Although the
energy markets are developing and become more integrated and more competitive,
progress is still slow and the full potential of liberalisation has still to be
realised. Therefore, it was also important to progress with the work foreseen
in the third package before it had to be legally applied. A lot of work has
been done during this interim period already on the so-called framework
guidelines and network codes. In order to partially remit this slow progress,
the European Commission continued the infringement procedures started in 2009
in relation to the second legislative package. This is necessary to ensure the
correct implementation of EU legislation at national level, in particular as
regards the electricity and gas Regulations and the Annexes to the electricity
and gas Directives.

5.1.3.
Evaluation results

Infringement proceedings initiated in the
gas and electricity sector have been successfully carried out and will be
continued in 2011. As a consequence of the infringement procedures launched by
the Commission in 2009, some Member States finally transposed the directives
properly into their national laws. Consequently, for these countries the
infringement procedures were closed.

The third energy package responds to most
of the problems identified in the failure of application of the second package.
The European Commission will closely follow the implementation of the third
energy package by the Member States and will assist the Member States in order
to ensure timely and proper implementation of the package. To support this
process, the Commission has published interpretative notes on unbundling,
national regulatory authorities (NRAs), retail issues and gas storage[107].
Where necessary, infringement procedures will be launched.

5.1.4.
Sector summary

While the situation in more mature markets
is demonstrating the potential benefits of energy market liberalisation, there
are still a number of areas and Member States where significant obstacles to
the efficient functioning of the electricity and gas market persist. The need
for new legislation was evident and led to the adoption of the third energy
package.

The Commission's efforts concentrated and
will continue concentrating on an efficient implementation of the existing and
new legislation in both, the electricity and gas sector, by combining the
following actions:

- Remedial action: Continue to pursue
infringement procedures so as to ensure proper implementation of the
electricity and gas legislation in the main areas where failures were registered
such as: penalties, transparency and capacity allocation of networks, third
party access and consumer protection, all in both sectors. This action will
continue in 2011 for both sectors.

- Preventive action: In the context of the
adoption of the third energy package, the services of the Commission will
assist the Member States in the implementation of the legislation.

5.2.
ENERGY – Coal and oil
5.2.1.
Current position
5.2.1.1.
General introduction

With regard to the legislation in the
domains of coal and oil, the largest part of the Commission's work in EU law
management in 2010 consisted in facing the challenge to reinforce the safety of
offshore oil and gas activities, which led to the adoption of a Communication
from the Commission to the European Parliament and the Council (COM(2010) 560
final; 12.10.2010).

The main relevant legislation for the oil
sector is Council Directive 2009/119/EC (Council Directive 2009/119/EC of 14
September 2009 imposing an obligation on Member States to maintain minimum
stocks of crude oil and/or petroleum products; OJ L 265, 9.10.2009, p.9).

Although
Directive 2009/119/EC repeals Directive 73/238/EEC, Directive 2006/67/EC and
Decision 68/416/EEC, it does so only with effect from 31 December 2012.
Therefore currently applicable legislation still include Council Directive
2006/67/EC (Council Directive 2006/67/EC of 24 July 2006 imposing an obligation
on Member States to maintain minimum stocks of crude oil and/or petroleum
products – Codified version; OJ L 217, 8.8.2006, p 8), Council Directive 73/238/EEC
of 24 July 1973 on measures to mitigate the effects of difficulties in the
supply of crude oil and petroleum products (OJ L 228, 16.08.1973, p 1 -2) as
well as Council Decision 68/416/EEC of 20 December 1968 on the conclusion and
implementation of individual agreements between Governments relating to the
obligation of Member States to maintain minimum stocks of crude oil and /or
petroleum products (OJ L 308, 23.12.1968, p.19).

Directive
94/22/EC (Directive 94/22/EC of the European Parliament and of the Council of
30 May 1994 on the conditions for granting and using authorizations for the
prospection, exploration and production of hydrocarbons; OJ L 164, 30.6.1994, p
3) also continued to form part of the acquis in the sector.

5.2.1.2.
Report of work done in 2010

Infringements - complaints

With regard to
the application of Directive 94/22/EC, the Commission's services continued to
welcome publication demands received from Member States but also followed the
implementation of those provisions by the Member States. Further procedural
steps concerning two infringements procedures were executed in 2010. Namely,
infringement proceedings opened against Belgium for failure to comply with its
obligation to duly notify competent authorities and for other grievances were
closed as finally the Member State met the requirements set out by the
Commission. An infringement case against Poland concerning national procedures
for granting rights over oil and gas resources, in which the Commission sent a
reasoned opinion to the Polish authorities in 2008, was referred to the Court
of Justice of the European Union. Although the Commission continued contacts
with the Polish authorities in the course of 2010, no effective progress
without resort to litigation could be reached.

New legislation

Directive
2009/119/EC foresees a transition period until 31/12/2012 by which date all
Member States shall have to ensure compliance with the Directive and the
currently applicable Directive 2006/67 will be repealed. Consequently and with
respect to oil, the activities in 2010 included active dialogues with Member
States.

As the new
system of emergency oil stocks brings EU rules much closer to IEA practices and
provides better assurances of the availability and verifiability of the stocks,
the Commission's services ensured that the necessary meetings or contacts with
the services of IEA as well as with those of Eurostat took place.

The seriousness
of the Deepwater Horizon accident led the Commission to launch in May 2010 an
appraisal of safety in offshore exploration and production activities in
European waters. On the basis of a review of applicable legislation as well as
of consultations with both industry and competent authorities, the Commission
identified in July five main areas where action is needed and adopted on 12th
October 2010 the Communication "Facing the challenge of the safety of
offshore oil and gas activities" (COM(2010) 560 final).

Tasks
effected in relation to coal

As regards
coal, regular monitoring of the coal sector and market continued as foreseen in
the applicable provisions (namely, Regulation (EC) 405/2003). Information on
import price indexes as well as coal import, production and consumption volumes
were collected, analysed and discussed with stakeholders through the National
Coal Experts committee and in the annual Coal Dialogue. The half-yearly price
indexes and annual market report were published in 2010 as foreseen[108].

5.2.2.
Evaluation of the current position

Work has
continued on amending the current oil stocks reporting procedures and
instruments to provide for the use of a single reporting tool by the end of the
transition period. The new reporting will be based on the Monthly Oil Stock
(MOS) questionnaire which needs some update/streamlining in order to be
suitable for the purposes of the new Directive, including the reporting of
commercial stocks. In 2010, Eurostat and Directorate-General for Energy
prepared a detailed proposal including the tables and definitions which is now
discussed with the IEA. The possibility of developing an electronic tool is
also envisaged to allow the consultation of the Coordination Group by
electronic means, without convening a meeting in Brussels.

Furthermore, a
specific external study of the feasibility of increasing the frequency of
commercial oil stocks reporting to weekly has come to its end in 2010. The
study found limited and mostly unquantifiable benefits; no evidence for reduced
volatility or lower prices was found.

In oil (or gas)
upstream, in the frame of the assistance given to Member States in the course
of their implementation of Directive 94/22, some 46 demands for publications of
notices from Member States were dealt with in 2010 under the provisions of the
Directive.

Concerning
offshore oil activities, the European Parliament has issued a resolution
calling on the Commission to bring forward a comprehensive legal framework
ensuring uniformly high safety standards apply across the EU and third
countries and including proposals covering inter alia accident prevention,
disaster response and liability (Resolution on EU action on oil exploration and
extraction in Europe adopted on 7 October 2010).

In its
communication of 12th October 2010, the Commission presented some
initial steps towards such objective:

Namely, the
Commission proposes to work towards a revised and more coherent legal framework
ensuring the application of state-of-the-art practices across the whole of the
EU. The main requirements for the licensing of hydrocarbon exploration and
production need to be defined at EU level. The existing environmental
legislation, as well as the health and safety framework should also be
reviewed, and the feasibility to apply EU product safety legislation to
equipments used on mobile offshore units needs to be examined. Proposals to
amend the Environmental Liability Directive should be made and a new guidance
document should address the applicability of the Waste Framework Directive to
oil spills. The Commission also called upon the Member States to apply a
precautionary approach in the licensing of complex operations and to assess the
need to suspend such licensing, until the European safety regimes have been
assessed in the light of the Deepwater Horizon accident. The EU's intervention
capacity for offshore accidents would need to be reinforced, and further
actions will also need to be promoted at the levels of the industry, of the
regulatory and supervisory authorities as well as of EU neighbours.

The Commission
also announced that it will work with Member States, industry and other
stakeholders to provide the public with easy access to continuously updated
information on safety measures, risk management, contingency plans and
company-specific statistics on key safety indicators.

As regards
coal, Council Regulation (EC) 405/2003 has expired on 31 December 2010 as
stipulated in its Article 12. The average coal import prices for the 2nd
half of 2010 will therefore be the last information published on the topic by
Directorate-General for Energy. Information on coal production, imports/exports
and consumption will in the future still be available via Eurostat.

Regulation (EC) 405/2003 had originally been agreed in parallel with
the current State aid for coal Regulation which also expired on 31 December
2010. While drafting the proposal for a new Regulation on State aid for coal,
the Commission's services have analysed the information requirements and
concluded that the new coal State aid regime will no longer necessitate the
collection of data and elaboration of import price index up to then done on the
basis of Regulation (EC) 405/2003. Furthermore, according to the reactions
received to a questionnaire sent to Member States' coal experts, the use of the
price index seems to have been rather limited in the coal sector. It has
therefore been decided that maintaining such EU-wide reporting re­quirements on
coal importers and Member States would not be justified.

5.2.3.
Evaluation results

The
Commission's resources will need to remain concentrated on the preparation and
drafting of the package of measures to enhance offshore safety, as well as on
the implementation of the new oil stocks legislation, both at EU level and at
the level of Member States.

In 2010 the
Commission carried out intensive stakeholder dialogues and an assessment of the
regulator and industry practices in the European offshore oil and gas sector
and the legislative framework applicable to the prevention, mitigation and
liability for accidents on offshore installations. The issue was raised also
during dialogues with key third countries such as Norway. The review of EU
minimum standards for occupational health and safety, environmental liability,
product safety, disaster response and hydrocarbon licensing resulted in a list
of topics where further action should be taken to improve legislation and bring
about more coherent offshore safety practices across the EU. The structure of
the 2011 package of measures to enhance offshore safety is likely to comprise a
comprehensive legislative proposal based on the best existing practices in
Europe ,a proposal for the EU to become party to the Offshore Protocol to
Barcelona Convention and the issuance by Directorate-General for Environment of
guidelines on the application of the Waste Directive.

Concerning oil
stocks, the main tasks that will deserve attention and follow-up in 2011 will
be as follows:

· The revised Monthly Oil Stock (MOS) questionnaire has to be
finalised and agreed first by the IEA and then by Member States. Eurostat is
planning to start the comitology procedure in order to amend the Energy Statistics
Regulation in the second half of the year.

· The review of internal emergency procedures, given the more active
and central role given by the new Directive to the Commission in case of supply
disruptions.

· Continuing the preparation of an electronic tool to allow the
consultation of the Coordination Group by electronic means.

· Assisting Member States with the transposition of the Directive; a
discussion workshop is envisaged to share experience
and discuss questions.

· The examination of methodologies and standards for reviewing
emergency preparedness and stockholdings of/in Member States.

5.2.4.
Sector summary

The Commission
continued its work related to the implementation of the oil stocks Directive
which was adopted in 2009. In addition to assisting Member States, the
Commission's efforts focused on the development of an oil stock reporting
system which meets the requirements set in the Directive. In 2011, other
aspects will be also addressed, including the preparation for its reinforced
role in the coordination of emergency procedures and the reviews of emergency
preparedness and stockholding of Member States.

In the field of
offshore safety, a review conducted following the Deepwater Horizon accident
has shown that the regime governing the offshore oil and gas activities in the
EU is very fragmented and leaves areas of legal uncertainty. Legislative action
appears to be needed to ensure the spread of best practices across the EU and
filling the identified gaps. Therefore, in 2011 the services of the Commission
will hold further consultations with stakeholders regarding proposed
initiatives in view of tabling proposals for concrete measures.

5.3.
ENERGY - Renewable energy sources
5.3.1.
Current position
5.3.1.1.
General introduction

Renewable
energy is a key component of the EU energy strategy. Recognising that renewable
energy will form the heart of any future low carbon energy sector, the EU
introduced a comprehensive and robust supportive legislative framework.

Main pieces of EU
acquis are:

–
Directive 2001/77/EC of the European Parliament
and of the Council of 27 September 2001 on the promotion of electricity from
renewable energy sources in the internal electricity market[109]

–
Directive 2003/30/EC of the European Parliament
and of the Council of 8 May 2003 on the promotion of the use of biofuels or
other renewable fuels for transport[110].

–
Directive 2009/28/EC of the European Parliament
and of the Council of 5 June 2009 on the promotion of the use of energy from
renewable sources and amending and subsequently repealing Directives 2001/77/EC
and 2003/30/EC[111].

5.3.1.2.
Report on the work done in 2010

All existing
complaints or cases launched under Directive 2001/77/EC or Directive 2003/30/EC
were either pursued or closed in the course of 2010. Overall, 69 infringement
proceedings and complaints relating to the renewable energy sources EU
acquis were dealt with during year 2010, 47 of which were closed. At the
end of 2010, 22 of these infringement cases or complaints were still ongoing.

Directive
2009/28/EC, which entered into force on June 25th 2009 and contained
some preliminary reporting requirements (National Renewable Energy Action
Plans), was due to be implemented by 5 December 2010. Enforcement of the
reporting requirements is ongoing (infringements for non-reporting were opened,
evaluation of plans began, followed by clarifying letters to some Member
States). Scrutiny of national transposition began and will continue in 2011
(technical study launched in January to assist examination of national
legislation).

To facilitate
timely and correct implementation of the Directive the Commission undertook a
number of studies and worked with stakeholders. Stakeholder
"roadmaps" were produced to help Member States prepare their National
Renewable Energy Action Plans, a "Concerted Action" network of Member State officials was launched, with active Commission participation, to enable
discussion of best practice in implementing the Directive.

5.3.2.
Evaluation of the current position

The new legal
framework of Directive 2009/28/EC will replace Directives 2001/77/EC and
2003/30/EC which have been partially repealed as of April 1st 2010
and will be completely repealed on 1 January 2012. The Commission is firmly
committed to close monitoring and enforcement of Directive 2009/28/EC.

The earlier need
to pursue Member States for non-reporting and the inflow of complaints received
suggests that several Member States have not been implementing the
relevant Directives in a complete or appropriate manner. Continued failures of
this nature risk to undermine the 2020 targets, and thus the EU's whole energy
and climate strategy.

The
Commission's Communication on renewable energy of 31/1/2011[112]
included a progress report and highlighted Member States' failure to achieve
the 2010 targets. It also highlighted the need for major efforts to correctly
and fully implement the new Directive 2009/28/EC. Continued close monitoring
and enforcement action by the Commission is therefore warranted.

5.3.3.
Evaluation results
5.3.3.1.
Priorities

Strong and
rapid measures to encourage Member States to properly implement and apply the acquis
continue to be needed.

5.3.3.2.
Planned action

During 2011,
the Commission will complete its evaluation of National Renewable Energy Action
Plans, undertake infringements and pursue complaints as appropriate. It will
also scrutinise national legalisation to ensure complete and correct
transposition of the Directive.

The Commission
continues to do its utmost to assist Member States in implementing the
Directive. In addition to the national action plan template published in 2009[113],
it will prepare a template for Member States to help them to comply with their
2011 reporting requirements under the Directive.

A range of
communications, guidance notes and studies will also be produced to help ensure
Member States implement the Directive fully and appropriately. This includes
the ongoing work of the "Concerted Action" project[114]
in the framework of the Intelligent Energy for Europe Programme.

Member States'
reporting requirements for 2011 include submission of progress reports. The
Commission will thoroughly evaluate all these reports and take action against
those Member States that fail to provide them.

5.3.4.
Sector summary

The Commission
continues to vigorously enforce the acquis on renewable energy. The
Commission's progress reports over the years, the non-reporting of several Member States and the complaints received from industry stakeholders all indicate that
there continue to be problems hampering the development of renewable energy and
failures to take sufficient measures, in accordance with the acquis. Removing
barriers and encouraging the growth of renewable energy by the Commission will
continue to be an important priority of the Commission, as renewable energy
development is a crucial and integral element of the EU's whole energy and
climate strategy. In 2011 it will continue to monitor and help Member States in
implementing the acquis, notably Directive 2009/28/EC.

5.4.
ENERGY – Energy
efficiency
5.4.1.
Energy performance of buildings
5.4.1.1.
Current position

a) General introduction

Buildings are responsible for 40% of energy
consumption and 36% of EU CO2 emissions. Energy performance of
buildings is key to achieve the EU Climate & Energy objectives, namely the
reduction of a 20% of the Greenhouse gases emissions by 2020 and a 20% energy
savings by 2020. Improving the energy performance of buildings is a
cost-effective way of fighting against climate change and improving energy
security, while also creating job opportunities, particularly in the building
sector.

The main piece of the EU acquis is Directive
2002/91/EC of the European Parliament and of the Council of 16 December on the
energy performance of buildings[115]. The recast
Directive 2010/31/EU on
the energy performance of buildings was adopted in May 2010[116].
It will repeal the old Directive as of February 2012.

b) Report on the work done in 2010

The main achievement in the field of energy efficiency in
the building sector in 2010 was the adoption of the recast Directive on energy
performance of buildings (hereafter: "EPBD") on 19 May 2010 and its
entry into force on 8 July 2010. The proposal intended to simplify and
strengthen the provisions of the EPBD and thus to increase the energy
efficiency of Europe's building stock, to tackle climate change and to
contribute to an increased security of energy supply.

Implementation efforts regarding the existing Directive
continued in 2010 with meetings of the 'Concerted Action' in Amsterdam in January
2010 and in Ljubljana in September 2010, hence continuing the work done in previous
years. This instrument is intended to promote dialogue and exchange of best
practice. Being an active forum of national authorities from 29 countries, it
focuses on finding common approaches to the most effective implementation of
this piece of EU legislation. In the meantime, Concerted Action is being
replicated in other policy areas - such as energy services and renewable energy
sources - as it has proven to be a successful instrument.

This effort in dissemination and consultation was continued
with the launch of an internet based platform as an initiative to increase
awareness of all parties in the building chain.

Infringement proceedings continued. In January 2010, eight
cases were open, two of them for non-communication and six for
incomplete/incorrect transposition. Five cases out of these eight have been
closed in 2010: the two non-communication cases as well as three of the
non-conformity cases. Of particular importance was the closure of the two
non-communication cases as a result of the adoption of additional transposition
legislation by the two concerned Member States. Directive 2002/91/EC is
therefore now transposed in all 27 Member States.

The work of the Commission in 2010 focused on the
completion of the conformity check of the Directive 2002/91/EC. The main
problems detected concern the correct transposition/application of the
Directive's provisions regarding the issue of energy performance certificates
and the inspection of boilers and air-conditioning systems. The Commission
received several complaints concerning the lack of issue of energy performance
certificates in some Member States. As a result of it the Commission sent
complementary letters of formal notice concerning two cases already open, and
opened one new infringement case and five EU Pilot files. Additionally, two
information letters have been sent to the countries not being at that moment
members of the EU Pilot system.

Petitions

One petition was received concerning the independence of
experts in charge of inspections for which a final response was given.

5.4.1.2.
Evaluation of the current position

The Commission's ambitious recast proposal that strengthens
the current legislation relating to the energy performance of buildings has
been adopted on 19 May 2010 (Directive 2010/31/EU) and has already entered into
force. Member States have until 9 July 2012 to adopt transposition measures. In
the meanwhile, the Commission will follow-up the open infringement cases on the
Directive 2002/91/EC and continue to monitor its correct transposition.

5.4.1.3.
Evaluation results

a) Priorities

Attention will focus on
the enforcement of the existing legislation and the preparation of the
subsequent implementation of the new Directive. After finalising the conformity
assessment, more infringement procedures might be launched in 2011.

b) Planned Action

The Commission will adopt
in 2011 a delegated act setting a methodology framework to assist Member States
in setting cost-optimal minimum performance requirements. It also aims at
adopting an implementing decision to establish an EU voluntary certification scheme
for the energy performance of non-residential buildings.

5.4.1.4.
Sector summary

The Energy Performance of Buildings
Directive (EPBD) is the main EU legal tool that provides for a holistic
approach towards efficient energy use in the buildings sector. The EPBD's main
objective is to promote the cost-effective improvement of the overall energy
performance of buildings. Improving the energy performance
of buildings is a cost-effective way of fighting against climate change and
improving energy security, while also creating job opportunities, particularly
in the building sector.

The Commission's activities in this field are
concentrated in the enforcement of the existing acquis while assisting
the Member States in the correct and timely transposition of the recast Directive.

5.4.2.
Energy efficiency of
products
5.4.2.1. Current Position

a) General Introduction

The main pieces of legislation in this
field are the following: (i) Directive 2009/125/EC of 21 October 2009
establishing a framework for the setting of ecodesign requirements for
energy-using products; (ii) Directive 2010/30/EU of 19 May 2010 on the
indication by labelling and standard product information of the consumption of
energy and other resources by energy-related products, and (iii) Decision
2006/1005 on the coordination of energy-efficiency labelling programmes for
office equipment in the EU and USA ("Energy Star").

b) Report of work done in 2010

The work covered three distinct areas:

On ecodesign, the implementation of
Directive 2009/125/EC[117] continued. Three
detailed measures implementing the Directive were adopted in 2010 as regards:

–
domestic dishwashers (Commission Regulation (EU)
No 1016/2010)[118];

–
domestic washing machines (Commission Regulation
(EU) No 1015/2010)[119];

– amendment of Commission Regulation (EC) No 245/2009[120]
on fluorescent lamps without integrated ballast, for high intensity discharge
lamps and for ballasts and luminaires able to operate such lamps (Commission
Regulation (EU) No 347/2010)[121] .

In addition to the adoption of legislative
measures there was on-going work, such as preparatory studies, impact
assessments, stakeholder meetings for the preparation of additional
implementing measures for some 12 product groups. Member States had to
transpose the Directive by 20 November 2010.

On labelling, the
recast of Framework Directive 92/75/EEC has been adopted on 19 May 2010 as
Directive 2010/30/EU[122]
on the indication by labelling and standard product information of the
consumption of energy and other resources by energy-related products. The
measure extended the scope to include labelling of commercial and industrial
products, regulated the layout and unauthorised use of the label, and
simplified the legislation to ensure a uniform implementation on the internal
market by using (directly applicable) Regulations instead of Directives. Member
States have to transpose the Directive by 20 July 2011.

On energy labelling, the implementation of
Directive 2010/30/EU continued. Four detailed delegated acts implementing the
Directive were adopted in 2010 as regards:

– domestic refrigerators/freezers (Commission Delegated Regulation
(EU) No 1060/2010)[123];

– televisions (Commission Delegated Regulation (EU) No 1062/2010)[124] ;

– domestic dishwashers (Commission Delegated Regulation (EU) No
1059/2010)[125];

–
domestic washing machines (Commission Delegated
Regulation (EU) No 1061/2010)[126].

On requirements on the labelling of tyres
with respect to fuel efficiency and other essential parameters, the regulatory
committee voted on the implementing regulation of the Tyre Labelling Regulation
1222/2009[127]. This implementing regulation is replacing the current testing method
of wet grip of C1 tyres (tyres mainly fitted to passenger cars) by a more
accurate testing method. The aim is to improve accuracy of testing for the
purpose of tyre labelling.

Petitions

During 2010, one petition was dealt with
regarding Eco-design, but has not yet been closed.

5.4.2.2. Evaluation of the current position

The activities carried out in 2010 resulted
in the adoption of a significant number of legislative acts together with
considerable development of legislative proposals for additional legislative
activity in 2011.

5.4.2.3. Evaluation results

a) Priorities

The twin priorities will be to ensure the
enforcement of the existing legislation, as well as adopting further
implementing measures to extend the scope of measures to products not yet covered
by ecodesign and labelling requirements.

b) Planned action

Work will be concentrated on the
development and, where appropriate, adoption of implementing acts or voluntary
agreements for air conditioners, domestic lighting, personal computers, imaging
equipment, complex set-top boxes, fans, pumps, water heaters, boilers, laundry
dryers, vacuum cleaners and commercial refrigerators.

5.4.2.4. Sector summary

In the context of the Second Strategic
Energy Review adopted in November 2008, the Commission's activities in the
field of energy efficiency of products are concentrated in the enforcement of
the existing acquis. It is also anticipated that the Commission will
continue adopting several implementing measures under Directive 2009/125/EC and
Directive 2010/30/EU.

5.4.3.
Energy end-use efficiency and energy
services
5.4.3.1.
Current position

a) General introduction

The European Union
(EU) has adopted a framework for energy end-use efficiency and energy services.
Among other things, this includes an indicative energy savings target for the
Member States, obligations on national public authorities as regards energy
savings and energy efficient procurement, and measures to promote energy
efficiency and energy services.
The main piece of the EU acquis in this field is Directive 2006/32/EC of
the European Parliament and the Council of 5 April 2006 on energy end-use
efficiency and energy services[128].

b) Report on
the work done in 2010

With regard to energy end-use efficiency and energy
services, the efforts on the implementation of the existing legislation were
continued. The focus was on the development of common methods and indicators
for measurement and verification of energy savings as well as the template for
the second National Energy Efficiency Action Plans (NEEAPs). For that purpose,
the Commission organised two Energy Demand Management Committee meetings and a
number of bilateral meetings and other exchanges with relevant Member States.
Because of the lack of the consensus between Member States, formal
harmonisation of methods and indicators for measuring energy savings was not
possible. However, the work has led to the development of a recommended set of
indicators and formulas for measurement and verification of final energy
savings.

The Commission also prepared an extended template for the
second NEEAP, which covers now reporting obligations arising from Directive
2006/32/EC, Directive 2010/31/EU[129], as well as
other areas covered by national energy efficiency policies. In October and November
2010 the Commission organised training workshops for officials from all EU
Member States as well as Croatia and Norway on the preparation of the second
NEEAP. Also a special telephone helpline and an internet helpdesk were set up
to provide Member States with on-line assistance with the preparation of their
new NEEAPs.

Follow-up on the implementation of Directive 2006/32/EC and
exchanges on good practices are carried out through regular exchanges supported
and facilitated by the Commission in the framework of the Concerted Action on
Directive 2006/32/EC. In 2010 three meetings of the Concerted Action were held.

Regarding transposition of the Directive, at the end of
2008 the Commission started infringement proceedings for non-communication
against 24 Member States. In January 2010, ten of these cases were still open.
In order to have a better insight on how the transposition had been made, the
Commission engaged at the end of 2009 in regular bilateral discussions with
those Member States not having completed the transposition of the Directive.
These bilateral meetings continued in 2010. In December 2010 the number of the
Member States having not completed the transposition was reduced to four.

Petitions

During 2010, answers were provided for two petitions
relating to individual metering and are still under examination by the European
Parliament's Petitions Committee.

5.4.3.2.
Evaluation of the current position

Despite significant efforts, consensus between the EU
Member States on harmonisation of methodologies for measurement and
verification of energy savings on the basis of the Annex IV of Directive
2006/32/EC could not be reached. As such, the Commission came to the conclusion
that the methodology for the measurement of verification of energy savings
should be extended beyond the current scope of Directive 2006/32/EC to all
energy savings including measurement of the progress in Member States towards
the strategic objective of 20% by 2020.

Concerning the establishment of the Second NEEAPs, the key issue is related to reporting on already achieved
energy savings. As indicated in various Communications from the Commission[130]
[131],
the NEEAPs should become a central tool for Member States as regards planning
and reporting on national measures and achieved energy savings. This has been
already confirmed in recent parallel EU legislation: e.g. the recast of the
Energy Performance of Buildings Directive refers to NEEAPs as the main
reporting tool. In 2010 the Commission proposed a common template for the
second NEEAP, due by end of June 2011, which extended the scope of reporting
beyond the scope of energy savings as currently defined by Directive 2006/32/EC
to energy savings and energy saving measures addressing all sectors (end-use
energy efficiency, energy transmission/distributions and energy generation).

Based on parallel studies carried out on the occasion of
the preparation of the new EU Energy Efficiency Plan as well as feedback from
the Member States on problems with the implementation of their first NEEAPs, it
has become clear that the impact of the current Directive 2006/32/EC to achieve
EU 2020 target for energy efficiency is insufficient. In order to cover all the
potential for energy savings in all sectors and strengthen the existing
framework for the development of energy services market the Commission will
analyse ways for a possible recast of Directive 2006/32/EC.

5.4.3.3.
Evaluation results

a) Priorities

Primary attention will be paid to the assessment of the
impact of the Directive 2006/32/EC and identification of ways to strengthen the
current EU framework legislation on energy savings. At the same time, the
Commission will continue encouraging Member States to adopt strong and
comprehensive second NEEAPs.

b) Planned
Action

Efforts will be concentrated on the preparation of a
legislative proposal for the revision of Directive 2006/32/EC. The Commission
will investigate possible strengthening of this legislation including
investigating on the creation of a suitable legal basis for the 20% strategic
objective for primary energy savings by 2020.

In parallel, the Commission will continue providing its
assistance to the Member States in the preparation of the second NEEAPs and the
use of recommended methods and indicators for the measurement and verification
of energy savings. In the second part of 2011, after receipt of the second
NEEAPs, the Commission will start thorough analysis of each national Action
Plan.

5.4.3.4.
Sector summary

Efforts on the implementation of the existing legislation
were continued with a focus on the development of common methods and indicators
for measurement and verification of energy savings and a template for the
second National Energy Efficiency Action Plans.

Consensus between the EU Member States on harmonisation of
methodologies for measurement and verification of energy savings on the basis
of the Annex IV of Directive 2006/32/EC could not be reached. It has become
clear that the impact of the current Directive 2006/32/EC to achieve EU 2020
target for energy efficiency is insufficient. Preparations of a legislative
proposal for the revision of Directive 2006/32/EC are underway, which will
investigate in a possible strengthening of this legislation.

5.4.4.
Combined heat and
power generation (CHP, cogeneration)
5.4.4.1.
Current position

a) General introduction

The main piece of legislation is Directive 2004/8/EC of 11 February
2004 on the promotion of cogeneration based on a useful heat demand in the
internal energy market ("CHP Directive")[132],
complemented by two Commission Decisions - one on harmonised efficiency reference
values for the separate production of electricity and heat (2007/74/EC)[133],
and the other one containing detailed guidelines for the calculation of
electricity from cogeneration (2008/952/EC)[134].

b) Report on the work done in 2010

Efforts on
enforcing the transposition and implementation of the CHP Directive have
continued in 2010. In the beginning of 2010, 18 infringements procedures were ongoing
for failure to implement the Directive's provisions (non-communication of
transposition measures and no submission of the reports required). At the end
of 2010 all Member States completed the transposition, but there were still five
cases open for failure to communicate the necessary reports.

Discussions with
Member States and stakeholders started on the future development of CHP
policy, on the potential of CHP and on the review of the reference values for
separate production of electricity and heat (in accordance with Article 4 of
the CHP Directive). Preparatory works have been launched to complement the
analysis of the Commission on these issues.

5.4.4.2.
Evaluation of the current position

From a legal
perspective, the situation regarding cogeneration is evolving positively. Most
of the Member States have been completing the transposition of the Directive and
providing the information required by the Directive.

However, from an operational perspective, the situation of the CHP
sector is not improving in real terms. According to statistical data[135],
there is no real development of the sector at EU level since the adoption of the
CHP Directive in 2004.

5.4.4.3.
Evaluation results

a) Priorities

Primary
attention will be paid to the enforcement of the existing legislation. In
addition, it will be necessary to work further on how to strengthen the current
EU framework legislation in order to significantly support the development of
CHP in the EU, and consequently contribute as much as possible to the future EU
energy saving objective.

b) Planned
action

The Commission
will continue its efforts with regard to the follow-up and enforcement of the
existing legislation, including an analysis of conformity of the notified
legislation.

The Commission
will review the reference values for the separate production of electricity and
heat.

The Commission
will also prepare a report on the implementation of the Directive and present,
if appropriate, further proposals to foster cogeneration, in relation to the
future Energy Efficiency Plan.

5.4.4.4.
Sector summary

Monitoring of
the implementation continues. Infringement procedures have been opened to
support this objective. The level of transposition and implementation in Member
States is improving.

The reference
values for the separate production of electricity and heat will be reviewed.

A report on the
implementation of the Directive will be prepared and further proposals to
foster cogeneration will be indicated if appropriate.

5.5.
ENERGY - Nuclear
Energy
5.5.1.
Current position
5.5.1.1.
General introduction

The Commission has significant
responsibilities under the Euratom Treaty on nuclear safety and security. In
particular, the Commission has to monitor nuclear material used for civil
purposes so that it is only used for the uses their users have declared them to
be used for (i.e. nuclear security); and to protect citizens against the
dangers from ionising radiation by ensuring the respect of EU legislation on
radioprotection and by having a high level of nuclear safety in all Member
States. Nuclear energy can play a role in enhancing competitiveness, promoting
sustainable development, fighting climate change and reducing external energy
dependence. While it is up to the Member States to choose whether or not to use
nuclear energy, the role of the EU is to develop in the interest of all Member
States the most advanced legal framework for nuclear energy, meeting the
highest standards for safety, security and non-proliferation.

The Lisbon
Treaty amended the Euratom Treaty by its Protocol No 2. The Euratom provisions
continue to have their full legal effect and Euratom keeps its own legal
personality outside the framework of the EU. The amendments are only intended
to adapt the Euratom Treaty to the new rules laid down in the Lisbon Treaty, in
the institutional and financial fields, which were inserted to the TFEU and
made applicable to Euratom Treaty through new Article106a of the Euratom Treaty.
In particular, Articles 141 to 143 of the Euratom Treaty defining the
infringement procedure are repealed and Articles 258 to 260 TFEU are now
applicable for Euratom. Accordingly, Article 82 of the Euratom Treaty also
refers to new Articles 258 to 260 TFEU.

Most of the
activities in the nuclear field are based on Chapter 3 (Health and Safety) and
Chapter 7 (Safeguards) of the Euratom Treaty and on the acquis derived
thereof.

A comprehensive
list of primary and secondary legislation applicable in the field of nuclear
energy is given in Annex.

5.5.1.2.
Report of work done in 2010

Management of the acquis, in particular
through committees and expert groups:

The Group of Experts (GoE) provided for
in Article 31 adopted its opinion in February 2010
on the revision and recast of the Euratom Basic Safety Standards Directive. As
the five years mandate of this group expired, a newly nominated Group of
Experts met twice in June and November 2010. Main topics were medical exposures
and the revision of the international Basic Safety Standards.

As regards the European Nuclear Safety
Regulators Group (ENSREG), the main achievements of the Group were: (i) the
launching of the dedicated ENSREG Website (www.ensreg.eu), where the activities
of the Group are presented in detail and (ii) the presentation to the
Commission of expert advice on the then envisaged Euratom legislation in the
area of radioactive waste and spent fuel management. This guidance has been
reflected in the November 2010 Commission proposal for a Directive on the
management of spent fuel and radioactive waste[136].
Also, during 2010, several activities were initiated (to be further pursued in
2011), e.g. (i) the support for the transposition and implementation of the
Nuclear Safety Directive, by suggesting a unified structure for the Member
States' Reports on the implementation of the Directive, facilitating the
consultation and cooperation of the national regulatory authorities,
establishing a common methodology for the periodic safety self-assessments and
a system for the coordination of the international peer-review; (ii) the
elaboration of Guidelines for regulators' transparency and (iii) the
preparations for the first European Nuclear Safety Conference (28-29 June 2011,
Brussels).

The European
Nuclear Energy Forum (ENEF)([137]) is conceived as a platform to promote a broad discussion among all
relevant stakeholders on the opportunities and risks of nuclear energy. In 2010,
during the fifth ENEF plenary meeting held in Bratislava in May 2010, the role of nuclear in the gradual transition of Europe towards a
low-carbon economy was discussed also taking into
account security of supply and competitiveness considerations. ENEF called for
improved transparency of nuclear energy and reflected good practices in siting
decisions for geological repositories showing how important early and open
involvement of the public in such a long-term process is.

As regards risks of nuclear energy ENEF has recognised the
need for a legally binding Euratominstrument for radioactive waste. Among the
essential elements, ENEF underlines that each Member State should develop and
implement an adequate national plan for nuclear waste management in line with
the subsidiarity principle. It is equally important to ensure a sufficient
level of training and qualified staff, in particular for technicians and
engineers in the nuclear industry, but also for radioprotection and medical
applications of nuclear.

On the opportunities of nuclear energy ENEF discussed the
contribution of nuclear to a low-carbon economy.

A concrete result of preparatory work is the European
Nuclear Energy Leadership Academy (ENELA) founded in early 2010.

Chapter 7 (Safeguards)
of the Euratom Treaty: The Commission continued to
satisfy itself that in the territories of the Member States nuclear materials
were not diverted from their intended use as declared by the users and that the
international safeguards obligations assumed by Euratom were complied with. On
1st May 2010, Romania acceded to INFCIRC/193, the trilateral
safeguards agreement between the Euratom Community, the IAEA and the EU's
non-nuclear weapons states. From March 2010 all EU operators of nuclear
facilities make their regular reports of nuclear material holdings and
transactions in a manner which complies fully with the requirements set out in Regulation
(Euratom) No 302/2005.

A nuclear
liability workshop was held in June 2010 with the aim to explore
possibilities to harmonise the nuclear liability regime in the EU. As a
conclusion of the workshop, it was suggested to create an expert group to build
consensus for a possible legislative proposal.

The European
Commission hosted a Meeting on the Security of Supply of Medical
Radioisotopes in EU Member States held in Luxembourg on 4-5 May 2010. The
purpose of the meeting was to provide a forum to exchange information on
possible medium-term solutions and on details of the most promising reactor
opportunities for securing Molybdenum-99 (Mo-99) production in the long term.

Management
of the acquis (incl. enquiries, problems and complaints)

The submission of draft texts under Article
33 Euratom Treaty allows the Commission to make appropriate recommendations
before the finalisation of the national procedure for the adoption of
transposition measures, so that possible instances of non-compliance can be
identified even before the texts are adopted. In 2010, 19 notifications were
dealt with under Article 33. Most of them concerned the implementation of
Council Directive 2009/71/Euratom of 25 June 2009 establishing a Community
framework for the nuclear safety of nuclear installations. Likewise, other
notifications aim at updating Member States' legislation transposing previous
Euratom Directives, e.g. Basic Safety Standard Directive and Directive
97/43/Euratom.

Under Article 35 of the Euratom
Treaty, Commission services conducted 7 verification missions. The purpose was
to provide an independent assessment on the adequacy of facilities intended to
monitor levels of radioactivity in the environment. All verifications started
with a preliminary audit of the monitoring and inspection activities carried
out by the relevant national authorities and of the legal framework in force.

Eleven opinions were drafted by the
Commission in accordance with Article 37 of the Euratom Treaty,
concerning plans for the disposal of radioactive material.

An update of the nuclear illustrative
programme (PINC 2010) is being prepared – in the context of the 2050
Roadmap – in order to review the latest situation regarding Member States'
policies, nuclear investment decisions and requirements, as well as to
highlight some key aspects for future investments.

Articles 41-43 of Euratom Treaty establish notification procedure on nuclear investments: in 2010 2 new notifications were received, 8 were under examination and 8 were finalised, in
particular the Commission point of views on Cernavoda nuclear power plant.

Article 103 is
part of the Euratom Treaty's Chapter on external relations. It establishes a
procedure for the preliminary examination by the Commission of the compatibility
with the Euratom Treaty of draft agreements or contracts which are about to be
concluded, within the scope of the Euratom Treaty, between a Member State and a third party. In 2010, 15 notifications pursuant to Article 103 Euratom, were
dealt with.

Management of infringements

Concerning the complaints management, 6 new
complaints were received in 2010.

In 2010, the two remaining infringement
cases initiated in 2009 for non communication of final transposing measures for
Council Directive 2006/117/Euratom were closed as the Member States concerned
completed the transposition.

Monitoring of the safeguards situation
continued in the case of a Commission Directive based on Article 82 Euratom
Treaty, concerning another installation on the Sellafield site. To this end, a
detailed work programme to improve the situation was prepared by the United Kingdom and accepted by the Commission services in the first half of 2010. If
progress continues to be satisfactory (the UK has provided 13 progress reports
so far), the Commission will refrain from referring the case to the Court of
Justice.

Petitions

During 2010, 15 petitions in total
concerning the nuclear energy sector were dealt with. For all petitions, an
adequate answer was provided (often in close cooperation with other DGs). However,
the European Parliament's Petitions Committee did not analyse all answers yet
and could therefore not accept the closure of these cases. Hence, most
petitions take several years before being formally closed.

New legislation

DG Energy has contributed to the development of an even
more advanced EU legal framework for nuclear energy meeting the highest
standards of safety, security and non-proliferation. On
3 November 2010 the Commission has adopted a revised proposal for a Council
Directive on the management of spent fuel and radioactive waste. The
general objective of the proposal is the establishment of Euratom framework for
the responsible management of spent fuel and radioactive waste, ensuring that
Member States provide for appropriate national arrangements guaranteeing a high
level of safety while maintaining and promoting public information and
participation. EU will become the first regional
nuclear actor having binding rules for nuclear safety and waste management. This
proposal is planned to be adopted by June 2011.

In 2010 a Council Regulation[138] has been adopted as new
legal basis for the extension of financial EU support to the Kozloduy
Programme (Bulgaria) with an additional commitment of €300 million for the
period 2010 – 2013. On the implementation of the EU support, a total sum of
€255 million has been made available: €155 million to the European Bank for
Reconstruction and Development (EBRD) and €100 million to the Lithuanian
Central Project Management Agency (CPMA).

A Communication from the Commission to the European Parliament and the Council on
medical applications of ionizing radiation and security of supply of
radioisotopes for nuclear medicine[139] was adopted by the Commission in August 2010. The Communication proposes
a way forward to resolve the urgent issue of shortage of supply of
radioisotopes for nuclear medicine. The Council adopted Conclusions on 6
December 2010.

The revised Commission Recommendation on
the application of Article 37 of the Euratom Treaty was adopted in
October 2010[140]. It improves some
terminology to ensure consistency and clarity of the provisions and simplifies
the general data to be provided by Member States to the essential information
necessary for the Commission to issue its opinion. In addition, it excludes
from the scope of Article 37 a limited number of trivial operations having no
or negligible radiological impact in other Member States. It strengthens the
assessment of accidental situations by introducing a new requirement for safety
related information on unplanned releases from nuclear reactors and
reprocessing plants. Concerning dismantling operations, in addition to nuclear
reactors and reprocessing plants, a submission of general data for the
dismantling of mixed-oxide fuel fabrication plants is now required.

The Agreement between the European
Atomic Energy Community and the Government of Canada for cooperation in the
peaceful uses of atomic energy is now being renegotiated based on the
Council mandate adopted on 27 July 2009. The initial Agreement was signed in
1959 and, due to the continuous development of nuclear trade between the
Parties, has been amended five times.

The Agreement between the European
Atomic Energy Community and Australia is due to expire in January 2012. The Council
adopted the negotiating mandate for a revised agreement between the European
Atomic Energy Community and the Government of Canada for cooperation in the
peaceful uses of atomic energy on 12 July 2010, and the renegotiations of the
existing agreement were finalised. The scope of the agreement covering only
transfers of nuclear materials was extended to transfers of equipment and
technology, and nuclear cooperation in general. The text of the agreement will
be submitted to Council for approval during the 1st quarter of 2011.

Negotiations for a new Agreement between
the European Atomic Energy Community and South Africa are ongoing. The
negotiating mandate was adopted by the Council on 25
October 2010. A new agreement between Euratom and South Africa will create a stable long-term framework for co-operation between the two
Parties and their governments and industrial operators in the peaceful uses of
nuclear energy.

Preparatory meetings took place resulting
in the start of the negotiations of a new and comprehensive cooperation
agreement in peaceful uses of nuclear energy between Euratom and the Russian Federation, setting up an overall framework for political, technical and
industrial cooperation.

In the framework of the continuing
cooperation with Ukraine on energy and nuclear safety matters, a joint
European Commission-IAEA-Ukraine project on the evaluation of the nuclear
safety of the Ukrainian Nuclear Power Plants was finalised in 2010.

Preventive measures being taken in
relation to newly adopted legislation

In 2010, Directorate-General for Energy ensured
support and oversaw the correct and timely transposition of the Directive
2009/71/Euratom (the 'Nuclear Safety Directive') into the Member States'
legislation, through a continuous cooperation with the responsible national
authorities. In addition, DG Energy has organised in Luxembourg on 7 May 2010,
a seminar where the Member States' experts were invited to raise, seek
clarifications and discuss with the Commission any legal issues that they
considered of relevance in the transposition process. The dialogue with the
Member States has also been ensured at the level of the Council Atomic
Questions Group, where several transposition procedural clarifications were
presented, as well as at the level of the European Nuclear Safety Regulators
Group (ENSREG) to whose activities Directorate-General for Energy
actively contribute.

Implementation of EU energy policy
priorities

The priorities in the field of energy focus
on actions having a significant impact on the fight against climate change and
ensuring secure and competitive energy supplies.

The implementation of the Euratom acquis
generally benefits both objectives: it regulates the use of an energy source
which has virtually no carbon emissions and it contributes substantially to the
security of supply.

The Strategic Energy Technology Plan of the
EU is the technology related "implementation tool" to meet the
ambitious 3x20 Energy Policy Target. The SET Plan recommends launching European
Industrial Initiatives to develop and bring to the market innovative low carbon
energy technologies. The Nuclear Initiative under the SET Plan is fostering the
long term sustainable contribution of nuclear energy to the low carbon energy
mix, by proposing the building of prototype fast breeder reactors and closed
fuel cycle. The first prototypes are foreseen to start operation in 2020. This
is directly related to one of the axis of actions of the Sustainable Nuclear
Energy Technology Platform, the two other ones being connected with the plant
lifetime management and waste management of existing installations, and with
the production of nuclear heat via cogeneration and the potential of High
Temperature Reactors.

The European Sustainable Nuclear Energy
Initiative has been officially launched on 15 November 2010 under the Belgian
Presidency.

5.5.2.
Evaluation of the current situation

a) The current situation for the control of
the existing acquis is stable.

b) Cases could all be managed in the normal
timeframe and fell roughly under the same level of priority, i.e. normal.

5.5.3.
Evaluation Results
5.5.3.1.
Priorities and Planned Actions

Assist the Member States to comply with
their legal obligation for a timely and correct transposition of the Nuclear
Safety Directive.

Complete the adoption of a Council Directive
on safe management of radioactive waste and spent fuel followed by correct
transposition.

5.5.4.
Sector summary

In the nuclear sector the Commission is
called to accompany the expected massive development with an advanced legal
framework for nuclear energy based on the Euratom Treaty that maintains and
improves the high standard of regulation achieved in the EU Member States. The
Commission's priority is to be up-to-date concerning the legislation for the
protection of the health and for nuclear security and to fully use our
competences in the field of nuclear safety. As main achievement to be mentioned
is the adoption of the Nuclear Safety Directive.

The key action in the near future, for
which a lot of work was already achieved during 2010, is therefore the follow-up
of proposal for a Council Directive (Euratom) on safe management of
radioactive waste and spent fuel which was adopted on 3 November 2010.

On the other hand, the recast of the Basic
Safety Standards, which will consolidate the legislation in the field and set
modern, unified standards for the protection of the health of the citizens in
the EU made good progress.

(see also Annex I - List of measures in force and other relevant
instruments referred to in the text of the document)

6.
MOBILITY and TRANSPORT
6.1.
Passenger rights
6.1.1.
Current position
6.1.1.1.
General introduction

Since the 2001
White Paper, where the Commission announced the establishment of passengers’
rights in all modes of transport and its intention to place users at the heart
of transport policy, four Regulations are in force by the end of 2010, in the
sectors of aviation and rail transport:

·
Regulation (EC) No 889/2002 of the European
Parliament and of the Council of 13 May 2002 amending Council Regulation (EC)
No 2027/97 on air carrier liability in the event of accidents

·
Regulation (EC) Nº 261/2004, establishing common
rules on compensation and assistance to passengers in the event of denied
boarding and of cancellation or long delay of flights;

·
Regulation (EC) Nº 1107/2006 concerning the
rights of disabled persons and persons with reduced mobility when travelling by
air;

·
Regulation (EC) Nº 1371/2007 on rail passengers’
rights and obligations, applicable as from December 2009.

Furthermore,
in the field of maritime transport, Regulation (EU) 1177/2010 on passenger
rights in maritime and inland waterways transport has been adopted and will
apply as from December 2012 and, in the field of road transport, Regulation
(EU) No 181/2011 concerning the rights of passengers in bus and coach
transport has been published in February 2011 and will apply as from March
2013.

The overall regulatory background on air
passenger rights also includes other legislation, for example: Regulation
1008/2008, on common rules for the operation of air services in the Community;
Directive 96/67, which defines the conditions for access to the ground-handling
market at European airports, and therefore could be used as leverage to improve
the quality of baggage handling in order to prevent baggage damage or
mishandling; and Regulation (EC) No 2111/2005 of the European Parliament and of
the Council of 14 December 2005 on the establishment of a Community list of air
carriers subject to an operating ban within the Community and on informing air
transport passengers of the identity of the operating air carrier, and
repealing Article 9 of Directive 2004/36/EC.

6.1.2.
Report on the work done

The Commission
continued its efforts to guarantee the correct implementation of the provisions
protecting passengers' rights in the following modes of transport:

Rail Transport

Two meetings
with NEB in charge of the application of Regulation 1371/2007 took place in
January and November.

Preliminary
interpretative guidelines of the main provisions of Regulation 1371/2007 have
been prepared.

Maritime and inland waterways Transport

Regulation (EU) 1177/2010 on passenger
rights in maritime and inland waterways transport has been adopted and
published in December 2010. It will apply as from December 2012.

Coach and Bus Transport

After an agreement was reached on 30
November 2010 in conciliation between the Council and the European Parliament, Regulation
(EU) 181/2011 concerning the rights of passengers in bus and coach transport has
been published in February 2011 and will apply as from March 2013.

Air Transport

Regarding
Passengers rights legislation, the Commission kept working towards a
homogeneous application of the relevant Regulations in all the Member States.
The Commission has been constantly in contact with Member States to ensure the
good application of all legal developments in the field of APR, in the light of
the recent case law from the European Court of Justice (rulings C-402/07 and C-432/07, Sturgeon and Others and follow up of
the case C-549/07, Wallentin-Hermann).

As a
consequence of the ash cloud crisis of April 2010 and in order to alleviate its
impact on the industry, interpretative guidelines on the application of
Regulation 261/2004 in the framework of the ash crisis have been agreed with
all NEBs (National Enforcement Bodies). Two ad-hoc meetings in the framework of
the volcano crisis as well as a regular meeting took place with NEBs of
Regulation 261/2004; one meeting took place with NEBs of Regulation 1107/2006.

Three studies on air passenger rights (APR)
legislation have been concluded in 2010: 1) study on the application of
Regulation 261/2004, 2) study on the application of Regulation 1107/2006, 3)
study on national penalty schemes on Regulation 1107/2006.

Two Commission
communications on APR have been prepared for adoption in 2011: a communication
(ex post assessment) on Regulation 261/2004 as well as a communication
(application report) on Regulation 1107/2006. The communication on Regulation
261/2004 will be accompanied by a staff working paper on national measures of
enforcement of the Regulation.

A public
consultation on five pieces of APR legislation, which was launched in December
2009, was carried out in early 2010. A stakeholder hearing to present the
results was organised on 28/6.

Public Service Obligations (Regulation
1370/2007)

A general
contract on a study concerning the application of the Regulation has been
launched and followed up. A specific contract on the interpretation of the main
provisions of the Regulation has been executed.

There have
been regular contacts with national authorities (+/- 10 Member States) and
stakeholders.

Information Campaign on passenger rights

A Europe wide
information campaign to raise citizen's awareness of their rights when
travelling was launched in Brussels on 29 June. The information campaign is
carried out in cooperation with a contractor and includes the setting up of a
specific website, the production of video clips, information brochures and
gadgets such as luggage tags as well as the participation in events such as
travel fairs etc. Four events in Member States capitals (DE, SE, UK, BG) have already been organised between September and December 2010.

6.1.3.
Evaluation of the current position

The Commission
works actively to promote the application and enforcement of the current regime
of protection of passenger rights by monitoring national authorities and by
enabling them to exchange best practice. Meetings and workshops are organized
on a regular basis with stakeholders. Inquiries from citizens received are
analysed either by the Commission services themselves or by the Europe Direct
Contact Centre (EDCC) with whom the Commission has concluded a specific
contract in order to cope with the high number of citizens' inquiries, mainly
in the field of air and rail passenger rights. In addition, the Commission
monitors studies and consultations to have a better view of the opinion of the
public on these matters.

However, the
outcome of these actions show that full implementation and enforcement of the
regulations protecting passenger rights is not yet sufficiently ensured in all
situations and Member States and further efforts are requested both by national
authorities and by the industry.

6.1.4.
Evaluation results

Air transport

The results from the various studies,
consultations, surveys etc. have provided valuable which can be generally
summarized in the following three main conclusions: 1.) Given the complexity of
the Regulation and a lack of definition of some controversial terms, there is
still a lack of uniform interpretation by co-legislators (although the CJEU
rulings as well as the interpretative guidelines from the Commission have
provided some clarity); 2.) Enforcement throughout the EU is still not carried
out in a uniform manner, although it has improved thanks to the Commission
efforts and increasing cooperation between and from NEB. 3.) There is still a
lack of awareness by passengers about their rights and how to claim them
through easily accessible complaint handling procedures and effective means of
redress (this is one of the reasons for the launch of the information campaign
for passengers in 2010).

Rail Transport

The information campaign with the aim of
informing all EU passengers on the rights that they enjoy pursuant to EU
legislation on passengers' rights highlights in particular the EU rail
passenger rights which derive from Regulation 1371/2007.

The Commission has
continued to keep close contacts with the NEBs
("National Enforcement Bodies") already designated and has requested
those Authorities that are lagging behind to designate NEBs in order to ensure
an effective enforcement of rail passengers' rights as established by the
Regulation.

6.1.5.
Sector summary

In line with
the overall Commission political strategy to put citizens at the heart of Europe and also according to the priorities set out in the future White Paper on Transport
Policy the priority for passenger rights remains guaranteeing the full and
effective application of passenger rights in all modes of transport. With the
adoption of legislation for maritime and land transport (bus and coach) in
2010, a legislative framework providing a minimum set of rights in all modes
has now been achieved. The objective of the White Paper on Transport of 2001 to
put the citizen at the heart of this policy has hence been achieved.

This legislative framework offers a more
and more effective regime of protection to passengers within the EU. The main
objective for 2011 consists in the consolidation of this framework, by harmonising
application and enforcement across Member States, by providing interpretative
guidance to all relevant parties and by raising awareness among passengers
about their rights. An impact assessment will be launched in 2011 to evaluate the
impact of various policy options regarding the application of Regulation
261/2004, including the implications of recent case law of the ECJ.

6.2.
Inland Waterway Transport
6.2.1.
Current position
6.2.1.1.
General introduction

Inland waterway transport plays an important role for the transport
of goods in Europe. More than 37 000 kilometres of waterways connect hundreds
of cities and industrial regions. Some 20 out of 27 Member States have inland
waterways, 12 of which have an interconnected waterway networks. The potential
for increasing the modal share of inland waterway transport is significant.
Compared to other modes of transport which are often confronted with congestion
and capacity problems, inland waterway transport is characterized by its
reliability, its low environmental impact and its major capacity for increased
exploitation.

The main pieces of acquis in this field are the following:

·
Directive 2006/87/EC of the European Parliament
and of the Council of 12 December 2006 laying down technical requirements for
inland waterway vessels, as amended. It establishes harmonised conditions for
issuing technical certificates for inland waterway vessels. It is aimed at
increasing the safety of passengers and freight transport by inland waterway in
Europe. This Directive repealed and replaced Directive 82/714 as from 30th
December 2008;

·
Directive 2005/44/EC on harmonised river
information services (RIS) on inland waterways in the EU. It established a
framework for the deployment and use of RIS in the EU and for the establishment
and further development of technical requirements and specifications for
harmonised and interoperable RIS. It defines further the minimum requirements
to be fulfilled by Member States to enable the setting-up of RIS.

6.2.1.2.
Report on the work done in 2010

In 2010, the acquis
was further developed.

A follow-up of
the transposition of Directive 2005/44 was performed and continuous monitoring
of the implementation of the Directive was ensured via frequent meetings with
Member States' authorities and stakeholders, expert group meetings and
conformity checks. A Commission Regulation defining technical specifications
was discussed and amendments of existing Commission Regulations defining
technical specifications were prepared. The process of ensuring the proper
implementation of the Directive will continue along the same line.

The technical
Annexes to Directive 2006/87/EC laying down technical requirements for inland
waterway vessels continued to be further aligned with legislation agreed in the
framework of the Central Commission for Navigation on the Rhine. For this
purpose 4 meetings of the Joint meeting of experts from EU Member State and the
Central Commission for Navigation on the Rhine were held. A study has been
commissioned and finalised on the subject of approval of three classification
societies.

For the proper implementation of the Directive, regular
communication with Member States is maintained. Workshops have been attended in
Member States and a number of questions from citizens and inspection bodies
were answered. Good cooperation with the International River Commissions and
the UN-ECE on technical requirements for inland waterway vessels was kept.

6.2.2.
Evaluation of the current position

The situation keeps evolving, and an increased workload is foreseen
due to necessary legislative developments. Four infringement procedures had
been launched (United Kingdom, Poland, Luxembourg and Germany) due to the fact that the transposition deadline for new directives had elapsed. Due to
positive reactions from the mentioned Member States, these procedures have been
closed.

6.2.3.
Evaluation results

As in the past, priority will be given to strengthening the
competitive position of the inland waterway transport in the transport system
and to facilitate its integration into the intermodal logistics chain.

Directive 2006/87/EC should be amended following the agreement
reached on several subjects in the technical working party which will be
adopted after a favourable opinion of the Committee. The procedure for the
recognition of classification societies has to be completed. The relation with
the River Commissions, and especially the shared secretariat of the Joint
Working Group, should be reflected upon. A seminar on the interpretation of
requirements in the annexes of Directive 2006/87/EC is to be organised. This
was already the subject of the seminar in 2008 in Budapest to prepare
Inspection Bodies from Member States. The Directive is in force since the end
of 2008 and experiences from inspection bodies with difficulties in
interpreting the requirements are appearing. This requires again a Joint
Seminar of Inspection Bodies from the Member State of the Danube Commission,
the Central Commission for the Navigation on the Rhine and the EU. Such seminar
was foreseen in 2010 but has been postponed till 2011.

Infringement procedures have been closed against Member States not having
transposed the Directive 2006/87 and its amendments.

6.2.4.
Sector summary

With a view to strengthening the competitive position of the inland
waterway transport in the transport system, and to facilitate its integration
into the intermodal logistic, the Commission will consider reinforcing its
administrative capacity in order to keep developing the harmonisation of
additional technical requirements on zone 1 and 2, on the one hand, and to
monitor the individual implementation of Directive 2006/87, as amended, on the
other hand.

6.3.
Maritime Transport - Internal market
6.3.1.
Current position
6.3.1.1.
General introduction

The principle of freedom to provide
services had been applied to the maritime transport services gradually. The
liberalisation of intra-EU maritime transport preceded by a few years the
liberalisation of maritime transport within Member States (maritime cabotage). The main pieces of the acquis
in this field are the following:

·
Council Regulation (EEC) No 4055/86 of 22
December 1986 applying the principle of freedom to provide services to maritime
transport between Member States and between Member States and third countries
(OJ L 378 of 31.12.1986, p.1-3). The Regulation gives Member State nationals
(and non-EU shipping companies using ships registered in a Member State and
controlled by Member State nationals) the right to carry passengers or goods by
sea between any port of a Member State and any port or off-shore installation
of another Member State or of a non-EU country.

·
Council Regulation (EEC) No 3577/92 of 7
December 1992 applying the principle of freedom to provide services to maritime
transport within Member States (maritime cabotage), (OJ L 364 of 12.12.1992, p.
7-10). This Regulation grants freedom to provide maritime transport services
within a Member State (maritime cabotage) for EU ship owners operating ships
registered in a Member State and flying the flag of that Member State, subject
to these ships complying with all the conditions for carrying out cabotage
within that Member State. While liberalising the cabotage services, the
Regulation takes into account the issue of public service obligations, in view
of ensuring that islands and far distant maritime regions have adequate
connections with the mainland territories.

6.3.1.2.
Report on the work done in 2010

During 2010 the Commission
continued monitoring the correct application of Regulation N° 4055/86. In terms
of thematic areas, the Commission focused on ensuring respect of the principle
of non-discrimination in regard to port dues. In the framework of this
exercise, the Commission decided to take action before the Court of Justice and
on 4 February 2010 the Court issued its judgment sanctioning the discriminatory
system of port dues charged by Spain (Case C-18/09).

As regards Regulation N° 3577/92,
following the complaints it has received, the Commission scrutinised national
legislation of four Member States with the objective to ensure compliance with
the principle of non-discrimination between ship owners, and assisted Member
States in aligning their legislation with the provisions of the Regulation.

In 2010 the Commission continued to support
accession countries, in particular Croatia, in their efforts to align to and
implement the relevant acquis.

Furthermore, work has started on preparing a new
interpretative communication on maritime cabotage. The
Commission has published its first interpretative communication on maritime
cabotage in 2003 (amended in 2006). However, following the consultation on the
fifth report on maritime cabotage undertaken in 2009, it became apparent that
the interpretation of Regulation 3577/92 still raises questions and requires
further clarification. The new communication will update the 2003 communication
in line with the experience gained during practical application of Regulation
and include recent developments in the EU law and case-law.

6.3.2.
Evaluation of the current position

Compared to the liberalisation of intra-EU
maritime transport, which traditionally has been rather liberal and open to
competition across the EU even before the adoption of Regulation N°4055/86, the
liberalisation of maritime cabotage required substantial changes in the
legislation of several Member States which used to reserve the provision of
cabotage only to national ship owners.

After the end of transitional periods in 2004,
Regulation No 3577/92 has been fairly evenly implemented across the EU.
However, there still exists a need to monitor the national provisions
concerning public service contracts and obligations in order to ensure full
respect of the principle of non-discrimination between ship owners.

6.3.3.
Evaluation results
6.3.3.1.
Priorities

The priorities for the Commission in
achieving the internal market in maritime transport services consist in
continuing monitoring and helping Member States to implement the relevant acquis.

6.3.3.2.
Planned action

The main objective for
2011 is to publish a new interpretative communication (updating and clarifying
the one of 2003) and the fifth report on the application of Regulation No
3577/92.

6.3.4.
Sector summary

The priority remains guaranteeing the full application of
the freedom to provide services to maritime transport between Member States and
within Member States (maritime cabotage).

6.4.
Maritime Safety
6.4.1.
Current position
6.4.1.1.
General introduction

The maritime
safety EU acquis aims at enhancing the safety of ships in European
waters, protecting the marine environment and ensuring appropriate living and
working conditions on board. The main relevant pieces of legislation in this
area are:

·
Directive 2009/15/EC of the European Parliament
and of the Council of 23 April 2009 on common rules and standards for ship
inspection and survey organisations and for the relevant activities of maritime
administrations, (OJ L 131 of 28.5.2009, p. 47). This directive addresses the
responsibility of Member States as flag States by establishing measures to be
followed by the Member States and organisations concerned with the inspection,
survey and certification of ships for compliance with the international
conventions on safety at sea and prevention of marine pollution;

·
Council Directive 95/21/EC of 19 June 1995 on
port State control of shipping (OJ L 157 of 7.7.1995, p.1), repealed on
31/12/2010 and replaced by Directive 2009/16/EC of the European Parliament and
of the Council of 23 April 2009 on port State control (OJ L 131 of 28.5.2009,
p. 57). The directive sets out rules applicable to Member States in their
capacity of port States. It provides for increased compliance with
international and relevant Community legislation on maritime safety, protection
of the marine environment and living and working conditions on board ships of
all flags and for the establishment of common criteria for control of ships by
the port State and harmonised procedures on inspection and detention;

·
Directive 2002/59/EC of the European Parliament
and of the Council of 27 June 2002 establishing a Community vessel traffic
monitoring and information system (OJ L 208 of 5.8.2002, p. 10), recently
amended by Directive 2009/17/EC of the European Parliament and of the Council
of 23 April 2009 (OJ L 131 of 28.5.2009, p.101). The system established in
accordance with this directive aims at improving the response of the
authorities to incidents, accidents and potentially dangerous situations at
sea, including search and rescue operations, and at better preventing and
detecting pollution by ships.

Other relevant legislation includes directives on:

· marine equipment (Directive 96/98/EC as amended),

· harmonised safety rules and standards for passenger ships (Directive
2009/45/EC),

· safety regime for fishing vessels (Directive 97/70/EC),

· safe loading and unloading of bulk carriers (Directive 2001/96/EC),

· registration of persons on board passenger ships (Directive
98/41/EC),

· mandatory surveys for the safe operation of regular ro-ro ferry and
high speed passenger craft services (Directive 99/35/EC),

· enforcement of seafarers hours of work (Directive 1999/95/EC),

· stability requirements for ro-ro passenger ships (Directive
2003/25/EC),

· accident investigation
(Directive 2009/18),

· insurance of ship owners for maritime claims (Directive 2009/20/EC),

· compliance with flag State requirements (Directive 2009/21/EC).

The following Regulations are also part of the acquis:

· accelerated phasing-in of double hull or equivalent design oil
tankers (Regulation (EC) n° 417/2002),

· prohibition of organotin compounds on ships (Regulation (EC) n°
782/2003),

· transfer of cargo and passenger ships between registers within the
Community (Regulation (EC) n° 789/2004),

· common rules and standards for ship inspection and survey organisations
(Regulation (EC) No 391/2009),

· liability of carriers of passengers by sea (Regulation (EC) No
392/2009).

Finally, environment-related directives on port reception facilities
for ship-generated waste (Directive 2000/59/EC) and on ship-source pollution
and on the introduction of penalties for infringements (Directive 2005/35/EC as
amended by Directive 2009/123) should also be listed.

6.4.1.2.
Report of the work done in 2010

The Committee on Safe Seas (COSS) set up under Regulation (EC) no.
2099/2002 met in March, May, July, September and December. The meetings
provided the opportunity for Commission services to discuss with
representatives of Member States virtually all aspects of maritime safety.
Favourable opinions were issued on several proposed texts (marine equipment,
recognition of classification societies, port State control, implementation of the International Safety Management Code,
training of seafarers, establishment of
criteria for the use by LNG carriers of technological methods as an alternative
to using low sulphur marine fuels and vessel traffic monitoring system).

Regular meetings on maritime policy took place in 2010  with Member
States. These meetings also provided an opportunity to foster clarification and
better implementation of the acquis.

The High Level Steering Group on SafeSeaNet, set up in July 2009 in
accordance with Directive 2002/59/EC on vessel traffic monitoring[141],
also met in June and in October 2010 to discuss issues related to this maritime
information exchange system with a view to improving its effectiveness.

The European Maritime Safety Agency continued its broad program of
inspection visits in the Member States. This program was initiated in 2004 at
the request and in co-operation of the Commission and it currently covers the
following areas: classification societies, training of seafarers, port State
control, port reception facilities and vessel traffic monitoring and
information systems (started in March 2009). The reports produced by the EMSA
teams serve as basis for further Commission follow-up with the Member States
either through requests for clarification or the launching of infringement
procedures. In an area where there is a reduced number of complaints received
from citizens or enterprises, these inspections are of great value to the
Commission as they allow it to assess how the EU maritime safety acquis
is implemented in the Member States.

The number of infringement procedures declined in 2010 from around
40 at the beginning of the year to around 20 at the end of 2010. This was
essentially due to the corrective measures introduced by Member States in order
to improve the quality of the transposition of the acquis and its
implementation, following pre-judicial initiatives by the Commission. The
remaining procedures concern essentially port State control issues. They will
be affected by the change of legislation on 1 January 2011 (date of
implementation of the new port State control Directive n°2009/16/EC).

6.4.2.
Evaluation of the current position

The EU maritime safety law is relatively young. This is all the more
true as it was significantly completed and renewed in May 2009 with the
publication of the Third Maritime Safety package comprising two Regulations and
six Directives, two of which had to be transposed by the end of 2010. It is
however based on international conventions and other instruments, for some of
which there is considerable implementation experience in the Member States.
Current implementation situation thus ranges from relatively stable, whilst not
yet entirely acceptable (for instance, for Directive 95/21/EC on port State
control of shipping which is closely related to the rules of the Paris MOU to
which most Member States have been party to for several years) to more
difficult cases as Directive 2000/59/EC on port reception facilities, where key
provisions such as those on the coverage of costs by all ships, the monitoring
of deliveries and the performance of inspections are still implemented unevenly
throughout the EU.

The situation tends to become more complex as it is imperative to
ensure a smooth implementation of the Third Maritime Safety Package. This
package covers a broad range of issues, some of which consist of improvements
of current acquis (port State control, vessel traffic monitoring and
information system, classification societies), while others are essentially new
(accident investigation, Flag State obligations, liability of carriers of
passengers by sea, insurance of ship owners).

6.4.3.
Evaluation results
6.4.3.1.
Priorities

There is a clear continuity in the efforts to ensure an appropriate
transposition and implementation of the maritime safety acquis. In terms
of thematic areas, emphasis continues to be put on the traditional areas of the
monitoring of classification societies and of the implementation of directives
on the training of seafarers, port State control, vessel traffic monitoring and
information system, port reception facilities and ship source pollution and
penalties. Particular attention was given to the effort by Member States to
ensure timely and adequate transposition and implementation of the Third
Maritime Safety Package. Member States lagging behind will be pursued in 2011
and the transposition measures adopted will be checked. The Commission will
also continue to rely on the systematic assessment of implementation in the
Member States based on the inspections by EMSA to be followed by contacts with
Member States and, when appropriate, direct pre-judicial initiatives.

A pre-emptive approach is also taken in relation to the alignment to
and implementation of the acquis by accession countries, in particular Croatia, through dialogue and assessment of administrative capacity (visit of EMSA at the
end of 2010).

6.4.3.2.
Planned action

Contact with
national administrations will be ensured through COSS meetings as well as
meetings of the High Level Steering Group on SafeSeaNet. Particular attention
will be given to the transposition and implementation of the newest
legislation.

Follow-up of
EMSA inspection reports will be ensured leading to clarification actions and/or
infringement procedures in the key areas mentioned under point 1.

6.4.4.
Sector summary

The monitoring and promotion of the implementation of the maritime
safety acquis concentrates on the traditional key areas (classification
societies, training of seafarers, port State control, vessel traffic monitoring
and information system and port reception facilities). Dialogue with Member
States continues in different fora (COSS, meetings with the
Directors-Generals of national administration, SSN, technical co-operation
through EMSA). When appropriate, infringement procedures are also undertaken.
Considerable effort is to be devoted to controlling the implementation of the
new acquis (Third Maritime Safety Package published in May 2009) with a
view to ensuring its correct implementation by all Member States.

6.5.
Maritime Security
6.5.1.
Current position
6.5.1.1.
General introduction

The main objective of the EU
legislation on Maritime Security is to implement· measures aimed at enhancing
ship, port facility and port security in the face of the threats posed by
intentional unlawful acts. The EU legislation intends to provide a basis for harmonised interpretation and implementation of
international measures to enhance maritime security adopted by the
International Maritime Organization (IMO) in 2002, with the establishment of
the International Ship and Port Facility Security Code (ISPS Code) and the ILO[142]/IMO Code of Practice on Security in
Ports.

The main pieces of Community acquis in this field
are the following:

·
Regulation (EC) No 725/2004[143]
of the European Parliament and of the Council of 31 March 2004 on enhancing
ship and port facility security: The Regulation takes into account amendments
to the 1974 International Convention for the Safety of Life at Sea (the SOLAS
Convention). The maritime security measures established by the Regulation are
only some of the measures necessary in order to achieve an adequate level of
security across all parts of maritime
transport. The Regulation is limited in scope to security measures
onboard vessels and the immediate ship/port interface.

·
Directive
2005/65/EC[144] of
the European Parliament and of the Council of 26 October 2005 on enhancing port security: The Directive is mainly based on the
recommendations contained in the ILO/IMO Code of Practice on Security in Ports. The Directive completes the mechanism provided for under the
Regulation by establishing a security system for all port areas, in order to
ensure a high and comparable level of security for all European ports. The aim
of the Directive is to improve security in
port areas not covered under the Regulation and to ensure that the enhancement
of port security will support the security measures taken under the Regulation,
without creating additional obligations in areas already governed by the
Regulation.

·
Regulation (EC) No 324/2008[145]
of 9 April 2008 laying down revised procedures for conducting Commission inspections in the field of maritime security: In
2005, in order to monitor the application by Member States of the
Regulation and to verify the effectiveness of national maritime security
measures, procedures and structures, the Commission adopted Regulation (EC) No
884/2005[146], laying down procedures
for conducting Commission inspections in
the field of maritime security. On 9 April 2008, the Commission adopted Regulation (EC) No 324/2008 laying down
revised procedures for conducting Commission inspections in the field of
maritime security, which also laid down “procedures for the monitoring by
the Commission of the implementation of Directive 2005/65/EC jointly with the
inspections at the level of Member States and port facilities in respect of
ports...”. This Regulation, repealing Regulation (EC) No 884/2005,
came into force on 1 May 2008.

6.5.1.2.
Report on the work done in 2010

During the year 2010 the work done
on monitoring the application of Community law in the field of maritime
security had considerable developments.

·
The Maritime Security Committee (MARSEC) met 5
times which provided occasions to discuss with the Member States issues in the
common interpretation of the security standards defined at the international
level. The common interpretation issues are recorded in a manual regularly
updated. Furthermore, these issues are also addressed with the stakeholders
from the advisory group on maritime security (SAGMaS).

·
Concerning the implementation of the Port
Security Directive, the majority of the Member States required to transpose the
provisions of the Directive only did it after the deadline (15 June 2007) had
passed. Taking into account the initial delays in the transposition into
national laws, it occurs clearly that the effective implementation in all the
EU ports could not be entirely completed within particularly short times.

Upon request of some Member States, the
Commission organised, on 21 October 2010, a seminar on the implementation of
the Port Security Directive, which 19 Member States attended (plus Norway, Iceland and the EFTA Surveillance Authority). This seminar was the second event after a first workshop held in September 2006 in order the help the Member
States in implementing the Directive. The purpose of
the seminar was to give Member States an opportunity for exchanging views,
experiences and information as well as for discussing pertinent issues with
regards the implementation of Directive 2005/65/EC.

·
In 2010, the Commission's services carried out
126 inspections in the field of maritime security. The inspections permitted to
check the implementation of the security legislation on the ground by the
operators concerned, as well as the supervision of it by the Member States. The
inspections have been focused mainly on port facilities and ships in order to
check that assessments and security plans have been drawn up in line with
Regulation (EC) No 725/2004, that they have been effectively implemented
on the ground, and that the national authorities are conducting the necessary
inspections and checks.

6.5.2.
Evaluation of the current position

·
Considering the implementation of the Port
Security Directive, it should be noted that the delays in preparing and
adopting national transposition measures in a variety of Member States have had
a knock-on effect, in that the relevant port authorities were not able to
implement the Directive until the national measures had been finally approved and
adopted. However, on request of the Commission, action plans and progress
reports are regularly asked to Member States to understand the achievement of
key provisions of the Directive.

·
Since the end of 2008, the Commission carried
out inspections for the monitoring of the implementation of Directive
2005/65/CE in accordance with the provisions of Regulation (EC) No 324/2008.
These inspections are conducted jointly with the inspections to the level of Member States and port facilities. These inspections were carried out in 53 ports of 19
Member States. The principal failures are related to the port security
assessments and the definition of the boundaries of the port.

·
Regarding Regulation (EC) No 725/2004, the
inspection team reported on several occasions a lack of control exerted by the
Member States to check the correct application of EU legislation in the port
facilities and ships under their competence. This will remain a priority in
2011.

6.5.3.
Evaluation results

The EU inspections are mainly intended to verify whether
the legal requirements are being properly and effectively implemented by the
Member States.

In 2010, the Commission conducted 126 inspections (71 port
facilities, 15 ports, 33 ships and 7 national administrations). Maritime security inspections have again proved
to be particularly useful. On the one hand, inspections have permitted to
further increase compliance of the objects inspected. On the other hand,
statistical analysis could identify areas where non-compliance occurs above
average and maritime security policy took adequate steps as a remedy; best
practices identified during inspections were disseminated to all Member States
as a very cost-effective way of further improving maritime security; the
participation of national inspectors at inspections outside of their country
also contributed to the exchange of best practice and to mutual trust building.

The inspections have a double benefit. They highlight
vulnerabilities and the remedies required regarding the EU legislation on
maritime security. It has been noted an improvement of the situation following
the inspections carried out.

Furthermore, the working programme for the performance of
maritime security inspections carried out by the Commission systematically
includes a section for verifying that the procedures for monitoring the
application of the Directive have been correctly applied.

6.5.4.
Sector summary

While the situation in maritime security sector is
demonstrating the benefits of harmonised rules, enhancing ship, port facility
and port security in the face of the threats posed by intentional unlawful
acts, there are still a number of areas where some obstacles to efficient
maritime security persist.

The efforts are concentrating in ensuring an efficient
implementation of the existing maritime security legislation, by combining
action in two fields:

·
permanent contact with national administrations
on the one hand through the work of the Maritime Security Committee and on the
other hand in the context of preparation and follow up of inspections;

·
based on the results of the inspections carried
out by the Commission and on the on-going conformity checks, an action plan
identifying the main areas where there is failure to comply with the Directive
and Regulation will be the basis for initiating different actions, including
infringement proceedings as necessary.

6.6.
Inland Transport
6.6.1.
Current position
6.6.1.1.
Road Transport sector

In road
transport the control of the application of EU law centred on the correct
transposition by Member States of the social rules, including working time
(Directive 2006/22/EC[147], Directive 2009/4/EC[148],
Directive 2009/5/EC[149], Directive 2002/15/EC[150]),
of rules on road charging (Directive 2006/38/EC[151]
amending the Directive 1999/62/EC[152]) and of rules on the
mutual recognition of professional qualifications and freedom of establishment
(Directive 96/26/EC[153]).

As regards the
transposition of Directive 2006/22/EC the Commission pursued infringement
proceedings initiated in the previous years against five Member States who
failed to communicate the transposition measures or who did not properly
transpose the measures of the Directive[154].
The proceedings against one of those Member States were initiated because of
failure to implement the Directive which had been already declared by the Court
in 2009. The Member States in question at last communicated their transposition
in the course of the year and the cases have been closed.

As regards
working time in road transport, the Commission continued the control of
implementation concerning the Directive 2002/15/EC where only one Member State (The Netherlands) was not in conformity and this led to initiating
infringement proceedings in 2008. The case was assessed in-depth and could be
closed in 2010.

In 2008 the
Commission had adopted a proposal to modify Directive 2002/15/EC. The aim of
this proposal was four-fold: to clearly put false self-employed drivers in the
category of mobile workers, to exclude genuine self-employed drivers from the
directive, to make the enforcement more harmonised and to clarify the night
time provisions. Since the European Parliament rejected the Commission proposal
in June 2010, the Commission started enquiries with Member States about the
transposition of the Directive 2002/15/EC concerning the application to
self-employed drivers.

As regards
Directive 2009/4/EC and Directive 2009/5/EC on social rules and tachograph the
Commission has opened infringement proceedings against four Member States[155]
but all of them had been closed since the Member States communicated the
transposition measures already in the course of 2010.

As regards
Directive 96/26/EC on admission to the occupation the Commission continued
proceedings against two Member States[156] where the
cases are still under proceeding.

6.6.1.2.
Rail Transport sector

Rail
Transport sector

Member States had to transpose the Directives of the first railway
package (91/440/EEC as amended, 95/18/EC as amended and 2001/14/EC) by 15 March
2003 or upon accession in the case of the new Member States. The first railway
package defines basic requirements such as the independence of the essential
functions of an infrastructure manager from rail operators, the charging scheme
for infrastructure charges, the setting up of rail regulatory bodies. On this
basis, it provides for the opening of the rail freight market to all
EU-licensed operators, from 2003 on the Trans European Rail Freight Network,
from 1 January 2006 for all international rail freight transport and from 1
January 2007 for all rail freight transport.

The Commission adopted on 3 May 2006 a report on the implementation
of the 1st railway package (COM(2006) 189 final) which contained important
findings on the state of implementation in the Member States and announced the
criteria that the Commission would apply for controlling implementation in each
individual member state, in particular on the issue of independence of
essential functions.

In order to complement the general findings of the report with
concrete data from Member States, and to evaluate whether these Directives had
been correctly and completely transposed into Member States' law and
regulations, questionnaires were sent out to Member States in June and November
2007. After analysing the replies to these questionnaires, the Commission sent
letters of formal notice to 24 Member States on 27 June 2008.

After sending these letters, the Commission services met with
representatives from all 24 Member States to discuss possibilities to remedy
the shortcomings identified in these letters. On the basis of these meetings,
the replies of Member States to the letters and formal notice, and after
changes have been made in some Member States, the Commission sent reasoned
opinions to 21 Member States on 6 October 2009. These reasoned opinions addressed
in many cases a reduced number of infringements in relation to the letters of
formal notice due to the efforts of some Member States in the meanwhile to
remedy some of the infringements.

After the analysis of the replies of the Member States to which reasoned
opinions had been sent out in 2009, the Commission decided on 24 June 2010 to
refer 13 of these Member States to the Court of Justice.

Member States had to transpose the Directives on the
interoperability of the rail system within the EU (2008/57/EC and 2009/131/EC)
by 19 July 2010. The Commission opened 41 cases of non-communication (letters
of formal notice sent on 20 September 2010) concerning these two directives.

6.6.1.3.
Road Safety and Transport of Dangerous Goods
sector

The legislation on road safety covers the driving licence, the
initial qualification and periodic training of professional drivers,
roadworthiness testing, the compulsory use of safety belts, the registration of
vehicle documents, the safety of tunnels and the safety of road infrastructure.

The main pieces of legislation in this area are therefore:

·
Directive 91/439/EEC of 29 July 1991 on driving
licences as amended as well as Directive 2006/126/EC on driving licences
(recast) as amended.

·
Directive 2003/59/EC of 15 July 2003 on the
initial qualification and periodic training of drivers as amended.

·
Directive 2000/30/EC of 6 June 2000 on the
technical roadside inspection as amended.

·
Directive 2009/40/EC of 6 May 2009 on
roadworthiness tests for motor vehicles and their trailers (recast) as amended.

·
Directive 91/671/EEC of 16 December 1991 relating
to compulsory use of safety belts in vehicles of less than 3,5 tonnes as
amended.

·
Directive 2004/54/EC of 29 April 2004 on minimum
safety requirements for tunnels in the Trans-European Road Network.

·
Directive 2008/96/EC of 19 November 2008 on road
infrastructure safety management.

In July 2010 the Commission adopted a Communication "Towards a
European road safety area: policy orientations on road safety 2011-2020" (COM(2010)389 final). The proposed policy orientations up
to 2020 take full account of the results obtained during the 3rd road safety
action programme 2001-2010 and aim to provide a general governance
framework and challenging objectives which should guide European, national and
local strategies for implementation, in line with the principle of
subsidiarity.

The year 2010 was also largely devoted to the Council negotiations
on the proposed Directive facilitating cross-border enforcement in the field of
road safety (which was adopted by the Commission in March 2008). Although the
discussions were blocked in Council since the end of 2008, work resumed under
Belgian presidency in the second half of 2010 and brought to a positive
political conclusion in first reading at the December meeting of the Transport
Council. This breakthrough in the negotiation is an important step towards the
fulfilment of the strategic objective concerning the increased enforcement of
traffic rules, in line with the policy orientations on road safety for the
decade 2011-2020. When adopted, this new piece of legislation is expected to
have a strong deterrent effect by encouraging all drivers to respect traffic
law and therefore to contribute to a further reduction of fatalities on EU
roads.

Several committee meetings were organized by the Commission during
2010 and provided the opportunity for the Commission services to discuss with
representatives of Member States their preparation as regards the transposition
of Directive 2006/126/EC on driving licences and Directive 2008/96/EC on road
infrastructure safety management, in view of the upcoming deadlines for both
Directives (respectively 19 December 2010 for Directive 2008/96/EC and 19
January 2011 for Directive 2006/126/EC).

With regard to the Driving License Committee, the meetings organized
during 2010 were focused on the state of preparation for the transposition. In
addition, Member States were also requested to report back to the Commission
possible implementation difficulties at an early stage.

In the road safety sector, two past infringements were closed in
2010, namely one relating to the late transposition of an amendment to
Directive 91/439/EEC on driving licences introduced by Directive 2008/65/EC,
the other concerning the incorrect application of Directive 2000/30/EC of 6
June 2000 on technical roadside inspection.

30 new infringement proceedings were however open in 2010, all for
non-communication of the national measures transposing Directive 2009/112/EC of
25 August 2009 amending Council Directive 91/439/EEC on driving licences (14
infringements) and Directive 2009/113/EC of 25 August 2009 amending Directive
2006/126/EC of the European Parliament and of the Council on driving licences
(16 infringements). Both Commission Directives introduce amendments to the
Annex III of Directive 91/439/EEC and of Directive 2006/126/EC regarding
minimum standards of physical and mental fitness for driving a power-driven
vehicle to include additional minimum requirements on eyesight, diabetes and
epilepsy.

6.6.2.
Evaluation
6.6.2.1.
Road Transport

In 2009 the legislator successfully completed the revision of the EU
road transport legislation with the adoption of the "road package"
comprising of three new regulations. Regulation (EC) 1071/2009[157]
establishes common rules that road transport operators have to fulfil in order
to be allowed to engage in the profession. Regulation (EC) 1072/2009[158]
governs the rules for access to the international road haulage market and in
particular also the rules on cabotage. Finally, Regulation (EC) 1073/2009[159]
lays down the rules for carrying out international passenger transport services
by road. The new rules will apply as from December 2011 with the exception of
the cabotage rules which became applicable in May 2010.

Following the adoption of Commission Regulation 1266/2009[160]
on digital tachograph, the Commission organised a number of initiatives to
facilitate its smooth implementation as from October 2011 and 2012.

In July 2010 the Commission adopted Regulation 581/2010[161] on the
maximum periods for the downloading of relevant data from vehicle units and
from driver cards in relation to Regulation (EC) No 561/2006 on harmonisation
of certain social rules. The new rules apply as from end of July 2010.

In December 2010 the Commission adopted Regulation (EU) 1213/2010[162]
on the ERRU (European Register of Road Transport Undertakings) so that the
exchange of information through ERRU will become operational by 2013 as
foreseen by the legislation.

6.6.2.2.
Rail Transport sector

In the railway sector the reasoned opinions sent to 21 Member States
for incorrect transposition of the first railway package targeted three main
shortcomings: 1) the lack of independence of the infrastructure manager in
relation to railway operators, 2) insufficient implementation of the rules of
the Directive on track access charging, such as the absence of a performance
regime to improve the performance of the railway network and the lack of
incentives of the infrastructure manager to reduce costs and charges and 3) the
failure to set up an independent regulatory body with strong powers to monitor
competition in the railway sector and rule on complaints.

6.6.2.3.
Road Safety and Transport of Dangerous Goods
sector

Despite continuous efforts undertaken by the Commission, in
particular in the driving licence committee to underline the obligation from
Member States to notify their national measures within the agreed deadlines,
the Commission is faced with a regular situation of late transposition of
Directives by a significant number of Member States.

In view of encouraging a timely transposition of Directive
2008/96/EC on road infrastructure safety management and of Directive
2006/126/EC on driving licences, the Commission organised several committee
meetings with representatives of the 27 Member States to remind them of their transposition
obligations. These meetings were also devoted to identifying, together with the
Member States, possible implementation problems at an early stage; under this
perspective, it was decided to set-up an expert group to review the Annexes of
Directive 2006/126/EC, which will meet several times in 2011.

Apart from the infringement procedures, the Commission is requested
to take positions on numerous petitions on road safety addressed by citizens to
the European Parliament. They mainly concern the non-recognition of driving
licences and the respect of road traffic laws.

6.6.3.
Evaluation results
6.6.3.1.
Road Transport

For the road transport sector, following the adoption of the
"road package", in May 2010 new amended rules became applicable in
two areas: road cabotage and driving times and rest periods for occasional service
of international carriage of passengers. In both areas the Commission will
continue to closely monitoring the application of the new rules by Member
States and assists Member States' authorities as well as operators in correctly
applying these new regimes. The Commission will also pay a particular attention
to the correct implementation as of 10 October 2011 of the new specifications
on tachograph introduced by Regulation 1266/2009.

In addition, as regards the road transport Directives special
attention will be given to the following areas:

·
Directive 2006/38 amending Directive 1999/62/EC
on the charging of heavy goods vehicles for use of certain infrastructures. The
control of the correct application of the new rules which had to be transposed
by June 2008 will continue[163].

·
Directive 2002/15 on the organisation of working
time of persons performing mobile road transport activities as a consequence of
the rejection of the Commission proposal by the European Parliament.

·
Directive 2006/22 determining the minimum level
of enforcement for the European provisions on driving times and rest periods,
and on the use of the tachograph. After all Member States' transposing measures
have been verified, attention will be given to the functioning of risk rating
systems. Further potential infringement actions will be taken against two
Member States[164] who have not yet
notified to the Commission the introduction of such system in accordance with
Art. 9 of the Directive.

·
Commission Decision 2009/750/EC on the
definition of the European Electronic Toll Service (EETS) and its technical
elements, and implementing Directive 2004/52/EC on the interoperability of
electronic road toll systems. The Decision lays down rights and obligations on
Member States, EETS providers and toll chargers. Attention will be given to the
availability of the elements necessary for EETS to be deployed and enter into
operation, such as the possibility for an organisation to become registered as
an EETS provider, the designation or establishment of Conciliation Bodies in
order to facilitate mediation between EETS providers and toll chargers. Member
States having national electronic toll collection systems must ensure that EETS
is available for all vehicles exceeding 3,5 tonnes or allowed to carry more
than nine passengers at the latest three years after Decision 2009/750/EC entry
into force and for all other types of vehicle, at the latest five years after
the Decision’s entry into force. Decision 2009/750/EC entered into force the 8
October 2009. The respective deadlines are thus 7 October 2012 for the heavier
vehicles and 7 October 2014 for all the other vehicles.

·
Directive 2010/40/EU on the framework for the
deployment of Intelligent Transport Systems in the field of road transport and
for interfaces with other modes of transport. The Directive empowers the
Commission to adopt delegated acts in accordance with Article 290 of the TFEU
in respect of the adoption of specifications for actions within the 4 priority
areas referred to in Article 2 of the Directive, as well as for the
development, where appropriate, of necessary standards. Attention will be given
to the transposition of the Directive by 27 February 2012, and to the provision
by Member Sates of reports referred to in article 17(1) and (2) of the Directive.
According to the Decision (C(2011) 289 final) of 15 February 2011 concerning
the adoption of the Working Programme on the implementation of Directive
2010/40/EU, the Commission will work in priority on the specifications for the
priority actions eCall, free minimum universal information services and information
services for safe and secure parking, including appropriate consultations with
Member States experts. The Commission will also continue the implementation of
the ITS Action Plan[165], i.a. by launching
several studies related to the 24 priority actions and supporting the work of
the Urban ITS Expert Group.

6.6.3.2.
Rail Transport sector

The Commission services will follow the cases in the Court of
Justice in order to achieve positive decisions of the Court on the
interpretation of the rules of the First Railway Package.

6.6.3.3.
Road Safety and Transport of Dangerous Goods
sector

In the legislative field, the priority will be to build on the
progress made in 2010 on the negotiations regarding the proposed Directive facilitating
cross-border enforcement in the field of road safety, the main objective for
the Commission being to facilitate an agreement in second reading between the
two co-legislators.

With regard to infringements, a close follow-up will be given by the
Commission to the infringement procedures launched in 2010 for
non-communication of the national measures transposing two Directives, namely
Directive 2009/112/EC of 25 August 2009 amending Council Directive 91/439/EEC
on driving licences and Directive 2009/113/EC of 25 August 2009 amending
Directive 2006/126/EC of the European Parliament and of the Council on driving
licences.

In addition, two Directives will require special attention in 2011,
namely Directive 2008/96/EC on road infrastructure safety management and
Directive 2006/126/EC on driving licences so as to ensure a timely and
appropriate transposition by the Member States. Contact with national
administrations will be ensured through regular committee meetings and a
follow-up meeting regarding the transposition of Directive 2006/126/EC will be
organised in the course of 2011 (in the form of a committee meeting). This
meeting will also be the opportunity to examine with Member States possible
implementation difficulties at an early stage. Expert group meetings on the
Annexes of Directive 2006/126/EC will also be organised in 2011.

6.6.4.
Sector summary
6.6.4.1.
Road Transport

The majority of the new rules regulating market access for transport
of goods and passengers by road will become applicable in 2011. By then the
regulatory framework of the road transport sector will be modernised and
streamlined. The Commission will continue to control the implementation and
application of the social rules in close cooperation with the Member States. It
will also continue to monitor the tolling arrangements in each individual Member State.

6.6.4.2.
Rail Transport sector

In the rail sector and on the basis of the replies of Member States
to the reasoned opinions (1st railway package), and information on legislative
changes or commitments, the Commission will consider in which cases it is
necessary to initiate court procedures in relation to the 8 cases for which no
referral decision was taken yet.

Conformity assessments of national legislation transposing the
Railway Safety Directive 2004/49/EC were initiated in 2009 and have been
progressing during 2010. Requests for clarifications of the national
legislation will be made to individual Member States either through
administrative letters or the submission of queries through EU Pilot during
2011.

The non-communication cases concerning the interoperability
Directives will be further followed-up in 2011.

6.6.4.3.
Road Safety and Transport of Dangerous Goods
sector

In the road safety sector, special attention will be dedicated to
the main issue of late notification by Member States. Efforts will continue to
be undertaken to remind the Member States of their transposition obligations
within the agreed deadlines and to point out that timely, correct and complete
notifications are a priority for the Commission to ensure the proper
functioning of EU law. Therefore, a close follow-up will be given to the
infringements procedures initiated in 2010 for non-communication of the
national measures.

Finally, priority will also be given to the finalisation of the inter-institutional
negotiation on the Directive facilitating cross-border enforcement in the field
of road safety.

6.7.
Sector: Air Transport
6.7.1.
Current position
6.7.1.1.
General Introduction

Single Sky
and Modernisation of air traffic control

The creation
of the Single European Sky aims at achieving a better performing and seamless
sky in Europe and is based on two successive packages of basic regulations
adopted in 2004 and completed in 2009: Regulations No 549/2004 laying down a
framework for the creation of the Single European Sky (SES), Regulation No
550/2004 on the provision of air navigation services, Regulation No 551/2004 on
the organisation and use of the airspace, Regulation No 552/2004 on
interoperability.

These initial
Regulations have been amended by Regulation 1070/2009 which introduced new
concepts such as a performance scheme for air navigation services or the
centralisation of network management functions at European level.

As a result of
the ash cloud crisis in April 2009, the Single European Sky has been
accelerated in order to complete the regulatory work by end of 2010 and deliver
benefits at the latest by 2012. More than twenty implementing rules have been
adopted since 2004 to complement the basic regulations.

The efforts of
the Commission will focus in the future on the implementation of the measures.

Air safety

The main
activities in the sector of EU air safety policy, based on Article 100(2) of
the TFEU, are the revision and completion of EU rules in the field of air
safety, monitoring the implementation of the EU legislation and the continuous
improvement of safety in the EU and abroad.

A description
of the different components of this policy is available at http://ec.europa.eu/transport/air/safety/safety\_en.htm.

Infrastructures and airports

This sector
implements and supervises the implementation of the "action plan for
airport capacity, efficiency and safety" that the Commission adopted in
2007 to increase the output of the existing infrastructures and to optimize the
planning of new infrastructures, whilst raising safety standards at highest
levels and enhancing the environmental compatibility of airports. Within this
context, the sector notably supervises the Community Observatory on airport
capacity which it set up in 2008.

The sector
also involves the implementation of the following legal regulatory instruments:

·
Council Regulation (EEC) N° 95/93 of 18 January
1993 on common rules for the allocation of slots at Community airports;

·
Council Directive 96/67/EC of 15 October 1996 on
access to the groundhandling market at Community airports;

·
Directive 2009/12/EC of the European Parliament
and of the Council of 11 March 2009 on airport charges;

·
Some of the requirements of Regulation (EC) No
1008/2008 on common rules for the operation of air services in the Community
(Recast).

Aviation security

Regulation (EC) No 300/2008 of the European Parliament and of the
Council of 11 March 2008 establishes common rules in the field of civil aviation
security. It applies since April 2010 and replaces the previous aviation
security legislation under Regulation (EC) No 2320/2002. The Regulation is
complemented by detailed implementing rules taking the form of several
Commission Regulations and a Commission Decision. A list of applicable
legislation is contained in the Annex. In particular, the rules require Member
States to establish and implement a national civil aviation security programme
complemented by a quality control programme in order to ensure the application
of the common basic standards on aviation security. Member States also have to
designate a single appropriate authority responsible for the coordination and
the monitoring of the implementation of the common basic standards and ensure
the availability of sufficient resources to monitor compliance. Regulation (EC)
No 300/2008 also requires from the Commission to carry out inspections of
national administrations and a suitable sample of airports in all Member
States.

6.7.1.2.
Report on the work done in 2010

Internal Market, Air transport Agreements and Multilateral relations

·
Non-conformity of the bilateral Air Services
Agreement (ASA) between the Member States and the Russian Federation with EU
law

Following the 'Open Skies' judgements of the European Court of
Justice (ECJ) of 5 November 2002 and the adoption of Regulation (EC) No
847/2004 on the negotiation and implementation of air service agreements
between Member States and third countries, Member States need to bring their
bilateral agreements with third countries in line with EU legislation. While
this process is well advanced in the case of the agreements with most third
countries, the bilateral agreements with the Russian Federation have to date
not been modified and continue to infringe EU law in two respects.

Firstly, according to the ASA with Russia, a carrier established in
an EU Member State of which substantial ownership or effective control do not
remain with this Member State or its nationals does not have the right to
exercise the traffic rights granted under the ASA. Such a restriction of the
right to establish and manage an undertaking is not compatible with
Article 49 of the Treaty on the Functioning of the European Union (TFEU)
as confirmed by the judgments of the ECJ of 5 November 2002.

Secondly, the ASAs of Member States with Russia include provisions
which violate competition law. In particular, the ASA mandates the designated
airlines to enter into commercial agreements to specify additional details of
their commercial relationship. In many cases, the ASA mandates the airlines to
agree on the Siberian over-flights charges as well as on other tariff elements.
By prescribing such commercial agreements between the designated airlines and
encouraging them to agree on certain charges and price elements, Member States
seems to have enacted measures which jeopardise the functioning of the internal
aviation market and undistorted competition therein contrary to Article 4(3)
TFEU in combination with Article 101 TFEU.

Since the adoption of Regulation No 847/2004, the Commission has
continuously reminded Member States to bring their ASAs with Russia in line with EU legislation. Whenever Member States have notified air service negotiations
with Russia to the Commission according to Regulation 847/2004, the Commission
has reminded them in writing of their obligations.

In June 2010, the Commission invited all Member States to comment on
these issues and most Member States responded to this request. The responses,
however, confirmed the continuous infraction of EU law so that - in October
2010 - it was decided to launch formal infringement procedures against four
Member States. Similar proceedings against all remaining Member States shall be
launched by mid-2011.

·
Allocation of limited air traffic rights

On 17 January 2011, the European Commission has sent a Reasoned
Opinion letter against Poland for non compliance with Regulation 847/2004 and
the absence of a non-discriminatory procedure for the allocation of limited air
traffic rights in Poland. The article 5 of Regulation 847/2004 obliges Member
States to lay down transparent and non-discriminatory national procedures for
the allocation of limited air traffic rights. Six years after the adoption of
the Regulation, Poland has still not laid down such procedure and is the last
EU Member state without any rules regarding the allocation of limited traffic
rights

The absence of such a procedure in Poland prevents an EU air
carrier, coming from another Member state that Poland, to compete for traffic
rights between Poland and third countries. The non implementation of Article 5
of Regulation 847/2004 allows a potential exclusion of other EU air carriers
desiring to operate from an establishment in Poland and infringes the very
basic rules of the aviation common market.

Single Sky
and Modernisation of air traffic control

As a result of
the acceleration of the Single European Sky in 2010, the Single Sky Committee
(Article 5 of Regulation No 549/2004) met seven times in plenary sessions and
nine times in working sessions on dedicated regulatory issues. The Industry
Consultation Body (Article 6 of Regulation No 549/2004) met six times during
last year.

This
considerable work led to the adoption of major measures contributing to
building and reinforcing the Single European Sky, notably:

· The establishment of a performance scheme, with the adoption
of Regulation No 691/2010 laying down a performance scheme for the air
navigation services, the amendment of Regulation No 1794/2006 on a common
charging system, the adoption of a Commission Decision on the designation of
the Performance Review Body, the nomination of a Chairman for this Body and the
adoption of EU-wide performance targets binding on the EU States;

· the acceleration of the creation of functional airspace blocks
(FABs), to be achieved by end of 2012, with the adoption of a Regulation on the
information to be provided before the establishment and modification of a functional
airspace block (not yet published), the production of Guidance Material for the
establishment and modification of FABs, as required by Article 9a of Regulation
No 550/2004 and the nomination of a FAB Coordinator;

· the centralisation of European Air Traffic Management network
functions, including network crisis management , through the preparation of
an implementing rule on the network functions, of a Commission Decision on the
nomination of a Network Manager;

· The consolidation of relations with Eurocontrol, through the
signature of two specific contracts under a Framework Agreement for provision
of support to the implementation of the Single European Sky and other EU
aviation policies, the creation of a European Aviation Coordination Crisis
Cell, the opening of an EU Liaison Office and the coordination of tasks between
the Commission, the European Aviation Safety Agency and Eurocontrol on safety
regulatory activities;

· Preparation of a strategy for the deployment of SES new
technologies, including scenarios for the governance and the financing.

Air safety

On 20th
October 2010, the European Parliament and the Council adopted Regulation (EU)
No 996/2010 on the investigation and prevention of accidents and incidents in
civil aviation that repealed Directive 94/56/CE. The main objectives of this
Regulation are to: enhance the investigating capacity of the EU and
independence of accident investigation; clarify the role of European Safety
Aviation Agency (EASA) in accident investigation; strengthen implementation of
safety recommendations; alleviating potential tensions between accident investigation
and judicial proceedings, while maintaining separation and independence of
investigation. This Regulation came into force on 10 November 2010.

In the field
of continuing airworthiness (maintenance) of aircraft, Commission
Regulation (EC) No 2042/2003, was amended twice, on 5 February and 26 October
2010, in order to enhance the existing rules and the corresponding levels of
safety.

The
implementation by Member States of Directive 2004/36/EC regarding the conduct
of ramp inspections on aircraft using Community airports (SAFA) is
satisfactory and in constant improvement, mainly due to a number of supporting
activities carried out by the Commission and EASA: in 2010 the SAFA steering
committee met three times. In 2010, efforts were undertaken to improve the
functioning of the EU SAFA programme, in particular through the carrying out of
quality review analysis of SAFA reports or by the initiation of a
Standardisation programme, which in fine aims at ensuring that all SAFA
inspections are done in a standardised manner in all countries.

The
transposition of Directive 2008/49/EC regarding the procedures for conduct of
ramp inspections was completed by the EU Member States in 2010 and the 3
infringement procedures pending were duly closed.

The Commission
has worked together with EASA to ensure a correct and harmonised implementation
of the acquis under the scope of the EASA (so called
"standardisation inspections") with special attention to those safety
areas which revealed problematic. For example, the Commission analysed some 150
reports stemming from 120 standardisation inspections carried out by the Agency
in 2010 and ensured the appropriate follow-up. This allowed the Commission to
identify a number of significant non-compliances to the safety rules and to
request urgent action from the Member States concerned.

On 11 January
2010, the Commission presented a report on the application of Regulation (EC)
No 2111/2005 on the establishment of a Community list
of air carriers subject to an operating ban within the Community over the past three years. The application of the EC list has
demonstrated that it is a successful tool to contribute to ensuring a high
level of safety in the Community but the report recommends to promote the
exchange of verifiable and reliable information at the international level as
well as to better coordinating efforts to grant technical assistance to those
States where it is mostly needed. In relation with the implementation of the
Regulation (EC) No 2111/2005, the EU list of air carriers subject to an
operating ban was up-dated 4 times (Regulations 1071/2010, 791/2010, 590/2010
and 273/2010). These updates are the outcome of a fruitful cooperation between
the Commission, the Member States and EASA. More than 450 air carriers were
examined during the year.

The Commission
has treated in 2010 an important number of derogations and exemptions
from the provisions of Regulations (EEC) No 3922/91 (13 cases) and (EC) No
216/2008 (around 39 cases) notified by Member States. This has been done with
the support of EASA. The control of such cases is essential for the harmonised
implementation of the common rules.

In 2010, the EASA
Committee established by Regulation (EC) No 216/2008 met 5 times with the
following objectives: analysing and agreeing on amendments to current
legislation in the fields of airworthiness and on new EU rules in the area of
pilot licences; discussing on interpretation issues related to current
legislation and discussing on the strategy for forthcoming rulemaking
activities.

3 formal complaints
were treated in 2010 by the European Commission in the field of air safety and
a number of queries and parliamentarian questions related to the
implementation of the acquis or to forthcoming new legislation, mainly
related to flight time limitations, quality of air in aircraft cabins, seat
pitch, pilot licences, accident investigation and trans-boundary private
flights.

–
Infrastructures and airports

–
The Action Plan for airport capacity,
efficiency and safety

The Community Observatory on airport capacity continued to work on the
slot allocation process, on airport capacity assessment methodologies and on
the potential of intermodality in fighting airport congestion and linking
different transport modes at airports.

Measures aiming at enhancing the consistency between airport slots
and flight plans which had been approved by the "Single Sky
Committee" in December 2009 were adopted by the Commission with the Regulation
(EU) No 255/2010 of 25 March 2010 laying down common rules on air traffic flow
management[166]. The new Regulation
will apply from September 2011. Its Article 9 contains provisions to enhance
the consistency between flight plans and airport slots which will permit a
proper implementation of Article 14(1) of Regulation 95/93/EC: such a mechanism
will allow airports to ask for the rejection of flight plans of aircraft
intending to operate without slots in the meaning of Regulation 95/93.

–
Capacity

–
In relation to the creation of an inventory of
airport capacity, the Commission launched the preliminary works, while
pertinent works on the related cartography had been finalized before. A test
questionnaire on airport capacity was sent to all Member States with a view to
its possible use as an inventory tool in the future. The Commission received
answers from 23 Member States covering 59 airports. These responses were then
analysed from the point of view of assessing the quality/utility of the
questionnaire which was revised accordingly.

–
Slots

The main
objective for 2010 was to carry out an in-depth assessment of the functioning
of the Slot Regulation[167]. In this sense, the
following actions were undertaken: An online public consultation was carried
out and a stakeholders' hearing took place in November. A study undertaken by
an external consultant has been launched to feed into an impact assessment
process.

Another key
objective was to ensure the proper implementation by Member States. The
situation at several airports was assessed notably by asking annual reports for
the majority of slot coordinators.

Several
investigations on possible infringements took place. One case was closed and
three others are under investigation.

–
For the first time since 1993, the provision of
the Slot Regulation relating to the external dimension of the slot regime has been
successfully activated. After receiving a complaint from the Austrian
authorities regarding the situation of Austrian airlines in Ukraine and their difficulty in securing slots, the Commission intervened urgently to create and
convene the Slot Comitology Committee. The action at the EU level proved very
valuable since the matter was solved in cooperation with the Ukrainian
authorities after receiving unanimous support of the Member States.

– Airport Charges/taxes

Directive 2009/12 EC on airport charges was adopted by the Council
and European Parliament on11 March 2009 (OJ L 70, 14.3.2009, p. 11). This
Directive aims to require transparency, user consultation and the application
of the principle of non-discrimination when calculating charges levied on users.
The Directive lays down minimum requirements in the calculation and levying of
airport charges at all airports with more than 5 million passenger movements
per year, in addition to the largest airport in each Member State. Member States have previously signed up to the principles behind the Directive
(transparency, non-discrimination and cost-relatedness of airport charges) at
international level (ICAO).

Member States are currently preparing implementation measures
(Deadline set by the Directive: 15.03.2011)

In 2010, a number of files have been analysed regarding the
compatibility of taxes/charges with the EU law, in particular with Regulation
1008/2008 and existing case-law. One case was closed, another was opened, and
two complaints were received by the Commission towards the end of the year.

Groundhandling

Efforts to ensure the proper implementation of Directive 96/67/EC by
Member States were intensified and the situation at several airports was
assessed. As a result eight Member States were affected as follows:

Four reasoned opinions
were sent to four of them. In one case the Member State concerned started
immediately to implement the corrective actions proposed by the Commission and
accepted to amend accordingly the relevant national law. Pending this modification
the case has been suspended. The three other cases were still under scrutiny at
the end of 2010;

A letter of formal notice
was sent to one Member State, and preliminary investigations into another one
started;

In the aftermath of Commission's intervention,
two Member States have implemented corrective actions to comply with the
Directive: the corresponding cases were therefore closed.

In addition,
further work has been carried out in 2010 to assess the functioning of the
groundhandling market, notably through a public consultation (December
2009-February 2010).

Aviation security

The Commission continued to fulfil its monitoring obligations and
conducted inspections (including follow-up inspections) of 5 national
administrations and 21 airports.

Two letters of formal notice were sent following inspections of
national administrations. In one case, the concerned Member State failed to maintain its national aviation security programme while the second case relates
to the application of the EU rules at small airports. Two infringement cases
were closed following rectification of the identified shortcomings. Three
infringement cases remained open during the year and were being closely
followed. In all these cases, several informal contacts with the Member States
have already taken place in order to assist them in a swift rectification of
deficiencies and good progress has been observed.

In order to achieve a reduction in the number and severity of
deficiencies identified during Commission inspections the following measures
have been taken in 2010:

· Detailed implementing rules complementing Regulation (EC) No
300/2008 were developed in close cooperation with all stakeholders. These new
implementing rules apply since April 2010. This major revision improves clarity
and consistency, thus paving the way for an even higher compliance level.

· The change in applicable rules was accompanied by several workshops
assisting Member States in preparing the transition.

· The Commission organised three training courses for national
auditors of Member States on the new compliance monitoring requirements and
provided them with a new hand book including guidance.

· The implementation of a peer-review system with an active
participation of national auditors from all Member States in Commission
inspections was continued.

6.7.2.
Evaluation of the current position

Single Sky
and Modernisation of air traffic control

Annual reports
on the SES implementation: in application of Article 12 of Regulation No
549/2004 and Article 7 of Commission Regulation No 2150/2005, Member States
have the obligation to submit to the Commission annual reports on their
implementation of the actions required by the SES legislative package.

The second
reporting exercised covered the year 2009 and allowed to collect information
from the 27 EU Member States as well as from Norway and Switzerland. The national reports were collected, consolidated and analysed in a General Report on
the SES legislation implementation prepared with the support of Eurocontrol. Some
of the national reports were subject to a follow-up by a letter through
correspondence.

Overall, this
exercise has been deemed very useful to assess the exact stage of
implementation of the SES legislation at national level, to raise awareness on
the importance given to this matter by the European Commission and to attract
the Commission's attention on deficiencies and on areas requiring support
action at European level.

Infringement
procedures

Only one
infringement case remains open out of the five still pending early 2010.

This case
concerns a "non-conformity" infringement procedure against Greece for non-compliance with basic Single European Sky legislation, in particular for the
absence of establishment of en effective and independent national supervisory authority.

The annual
reports from the Member States as well as the decrease in the number of pending
infringement procedures indicate an overall enhanced compliance with the Single
European Sky legislation.

Some areas
still need to be improved, for instance the resources and capability of
national supervisory authorities, the legal frameworks for cross-border
provision of air navigation services, the certification of these services, the
implementation of effective flexible use of airspace and civil-military
coordination and the establishment of Functional Airspace Blocks.

Air safety

Overall, transposition
of the acquis in the fields of air safety and environmental requirements
is good at present.

Concerning the
day to day implementation of the legislation, the situation could be
considered preoccupying in a limited number of Member States concerning mainly
the requirements related to air operations and continuing airworthiness. The
main causes are linked with the insufficient capacity of national competent
authorities to oversee the entities under their responsibility, either due to
lack of adequate number or qualified staff or to deficient procedures. In some
cases, the entities themselves are circumventing EU rules either due to
incorrect understanding or on purpose, for administrative or commercial
reasons. This has been identified and corrective actions have been requested.

The
consequences of the non compliances with regard to technical safety
requirements under the scope of EASA are the decline of the safety
level, which can be corrected through appropriate measures ranging from action
plans to revocation of certificates or even withdrawal of the mutual
recognition or fines imposed by Member States. In case of persistency, an
infringement procedure against the Member State concerned can also be
initiated. The Commission is closely following any such potential safety threat
but no formal infringement procedure has been required up to now.

The national
competent authorities are always the ultimate body responsible for overseeing
the entities under their jurisdiction as well as for taking the necessary
corrective actions. The Commission and EASA should be able to detect some type
of deficiencies with the different tools for oversight on their hands (inspections,
ramp checks, complaints, etc) and when identifying cases of concern, get in
contact with the competent authorities and take any actions necessary in order
to put an end to the potential breach, as explained above.

In some cases, the need to clarify or amend the EU rules is
identified. The Commission works continuously with EASA and the Member States, in the context of the relevant Committees, with a view to address these
cases. In the fields of air operations and pilot licensing the situation should
improve with the upcoming adoption of new harmonised rules by 2012.

Regarding the implementation of the EU acquis concerning
occurrence reports in civil aviation (Directive 2003/42/EC and its implementing
rules), the situation has improved but is not yet optimal. The Commission acted
in 2010 against 5 Member States (3 via EU Pilot and 2 letters of formal
notice), which served to put an end to the incompliance.

Infrastructures
and airports

In 2011,
priority will be granted to the Strategic initiative on airports in accordance
with the European Commission's work programme for 2011 ('Airport package') as
well as to the correct implementation process of the Airport charges Directive.

Groundhandling

The
implementation of the Directive on groundhandling is under close monitoring.
The situation has improved after action of the Commission but remains essential
to continue a close surveillance of Member State's transposition instruments
and the way they are applied.

The
implementation of the Directive still raises a number of questions. To this
end, an evaluation of the current functioning of the Directive has been
undertaken and an impact assessment process has been launched.

Slots

The
implementation of the Regulation on airport slots raises a number of questions.
To this end, the European Commission is assessing the situation at several
Member States airports and is working to an evaluation of the current
functioning of the Slot Regulation has been undertaken and an impact assessment
process has been launched.

Airport Charges

Member States are obliged to transpose the Directive[168]
into national law by 15 March 2011. The Commission is therefore closely
monitoring this process and will intervene in cases of incorrect or delayed
implementation.

Aviation security

Since the introduction of Community rules in 2002 and of Commission
inspections in 2004, results of aviation security inspections have steadily
improved. The compliance with main provisions during aviation security
inspections of airports rose from 62% to 85% in 2009. Due to the fact that
security provisions in the new aviation security regulations have been
regrouped and combined the figure of the compliance rate for 2010 is not
directly comparable to the figures of previous years which was based on a
higher number of individual provisions. In 2010 the compliance rate was 80%
which still constitutes a very encouraging result. It confirms that the
transition to the new regulatory framework went smoothly.

It is expected that the improved aviation security legislation and
clearer rules on national quality control will further improve compliance
levels in the European Union. However, a continued effort in inspections,
enforcement and advice will remain vital to ensure a positive evolution. In
particular, the Commission will have to closely follow availability of
sufficient resources for compliance monitoring to fulfil national quality
control obligations. The Commission will therefore continue to take a strict
and coherent approach to the rectification of deficiencies identified during
Commission inspections.

6.7.3.
Evaluation results
6.7.3.1.
Priorities

Single Sky
and Modernisation of air traffic control

The priorities
for the Commission in the field of ATM do not change, they consist in
developing a total-system approach in line with the gate-to gate concept to
ultimately improve the performance of the European Aviation System in key areas
such as the environment, capacity and cost-efficiency, having due regard to the
overriding safety objectives.

The
legislative package will be soon completed and the Commission will focus in
2011 on the effective implementation of the concepts defined and the actions
required by the regulations.

Air safety

In 2010, the
main priorities, which remain valid, were:

· the revision and completion of EU rules in the field of air safety;

· monitoring the implementation of the EU legislation; and

· the adoption of a safety management system at EU level.

Infrastructures and airports

In 2011,
priority will be granted to the Strategic initiative on airports in accordance with
the European Commission's work programme for 2011 ('Airport package') as well
as to the correct implementation process of the Airport charges Directive.

Aviation security

The priorities for the Commission in the field of aviation security
remain unchanged, namely to further develop harmonised rules in aviation
security that provide an adequate level of protection whilst limiting the
negative impact on facilitation and to ensure the application by all Member
States of the common basic standards contained in Regulation (EC) No 300/2008.

6.7.3.2.
Planned action

Single Sky
and Modernisation of air traffic control

The Commission
plans in 2011 to support the effective implementation of the Single European
Sky on the basis of five pillars:

· a regulatory pillar with the implementation of the performance
scheme, of the network Manager, the Functional airspace block as well as
through consolidated relations between the institutions and organisations
active in the ATM field (EASA, EU, SESAR JU and Eurocontrol);

· A safety pillar based on the extension of EASA's competences to ATM;

· A technology pillar, related to the development and deployment of
the ATM Master Plan under the aegis of the SESAR JU;

· An airport capacity pillar integrating airports in the performance
scheme, the adoption of measures coordinating ATFM and airport slots and
contribution to the 'Airport package';

· A Human Factors pillar aimed at associating more effectively the
social partners.

Air safety

The Commission intends to complete by end
2013 the adoption of all basic rules governing all the areas directly linked
with air safety, which are airworthiness of aircraft, air crew certification,
air operations, air traffic management, air navigation services, air traffic
controllers and aerodromes. This should allow to ensure consistency of rules
applicable in the different areas, improved safety and efficiency by the
completion of the so called "total system approach".

It is also essential to improve the
gathering and assessment of safety relevant information (mainly coming from
accident investigation, occurrence reporting and SAFA) as well as the
efficiency of EU actions in the field of air safety through the development of
a safety management system at EU level. The latter system should be launched in
2011, based on the technical expertise of EASA and prepared in coordination
with Member States and stakeholders concerned.

New legislation

· Adoption of a series of new harmonised rules in the fields of flight
crew licensing, air collision avoidance system, air operations, air traffic
management, air navigation services , air traffic controllers and aerodromes;
and

· Amendment of the Directive 2003/42/EC on occurrence reporting in
civil aviation, review of existing legislation related to aircraft
airworthiness, inspections conducted by EASA and funding of EASA certification
activities (fees and charges);

· Review of the airport noise directive (Directive 2002/30/EC on the
establishment of rules and procedures with regard to the introduction of
noise-related operating restrictions at Community airports) with the view to
enhance the consistent application of the ICAO so-called "balanced
approach" and clarify the relationship with the environmental noise
directive (Directive 2002/49/EC relating to the assessment and management of
environment noise). The review of this Directive will be part of the airport
package, whose adoption is planned for mid 2011.

Infrastructures
and airports

The Airports Package

In accordance with the European Commission's work programme for
2011, an 'Airport package' will be presented as part of the flagship initiative
"Restoring growth for jobs" and more particularly of the
thematic area "Tapping the potential of the Single Market for
growth".

Depending on the conclusions of ongoing impact assessments the
package could include comprise:

· A proposal on airport capacity assessment and inventory;

· The revision of Council Regulation (EEC) 95/93 of 18 January 1993 on
common rules for the allocation of slots at Community airports;

· The revision of the Council Directive 96/67/ec on access to the
groundhandling market at community airports;

· The revision of Directive 2002/30/EC of the European Parliament and
of the Council of 26 March 2002 on the establishment of rules and procedures
with regard to the introduction of noise related operating restrictions at
Community airports.

Aviation security

The Commission will continue to apply a strict compliance monitoring
and enforcement policy to ensure an adequate protection of its citizens. The
Commission therefore intends to continue its inspections at a frequency
comparable to previous years but to increase the number of inspections of cargo
security regimes, which have shown certain vulnerabilities. Particular emphasis
will be given to ensuring that Member States have an adequate number of
resources to fulfil their obligations.

In order to assist Member States in its compliance monitoring effort
the Commission will continue the implementation of its peer-review system and
regularly inform Member States of non-compliances found during inspections in
the Regulatory Committee on aviation security, which meets 6 times per year.
These updates on non-compliances identified during inspections help Member
States to identify critical areas where deficiencies occur repeatedly.

6.7.4.
Sector summary

Single Sky
and Modernisation of air traffic control

The priorities
of the commission in this sector remain unchanged: the key objective is the
effective implementation of the requirements of the Single European Sky
package. Good progress has been made so far by the Member states and the
various stakeholders concerned, but the action of the European Union needs to
be reinforced in order to bring concrete support to States of stakeholders
facing difficulties in some implementation areas, now that the legislative
foundations are almost completely laid down.

Air safety

Objectives:

· Immediate reaction to safety threats identified (recurrent);

· Follow-up of the correct transposition and implementation of the acquis
through a number of different tools, including inspections (recurrent);

· Updating and complement the acquis whenever necessary
(recurrent).

–
Legislation in preparation

· Proposal for a Directive of the European Parliament and of the
Council amending Directive 2003/42/EC on occurrence reporting in civil aviation
to be presented in 2011.

· Commission Regulation concerning fines and periodic penalty payments
for non-compliance with provisions of Regulation (EC) No 216/2008 and its
Implementing Rules to be adopted in 2011.

· Commission Regulations in the fields of air crew licensing, Air
Collision Avoidance System, Air Operations, Air Traffic Management, Air
Navigation Services, Air Traffic Controllers and Aerodromes, to be adopted
between 2011 and 2013.

Aviation security

The priorities for the Commission in the field of aviation security
remain unchanged, namely to further develop harmonised rules in aviation
security that provide an adequate level of protection and to ensure the
application by all Member States of the common basic standards contained in Regulation
(EC) No 300/2008.

The planned key actions are the continuation of the well established
inspection regime at current frequencies, the strict enforcement of EU rules
following the identification of deficiencies and the assistance of Member
States in applying an adequate national quality control system.

7.
CLIMATE ACTION
7.1.
Emission Trading Scheme (ETS Directive)

The EU ETS
legislation is the cornerstone of the Climate Change policy. Particular
attention is therefore dedicated to this legislation within the present Report.

The EU ETS was
established with the adoption of the Emissions Trading (Directive 2003/87/EC[169]).
It is a market-based instrument aiming at gradually reducing emissions in
selected sectors. It should help the EU and the Member States meet their Kyoto
Protocol commitments to reduce greenhouse gas emissions in a cost-efficient manner.
The EU ETS started operating in January 2005. A revision of the ETS Directive (Directive
2009/29/EC[170]) was prepared and
negotiated in 2008 and entered into force in June 2009. This revision broadly
amends the EU ETS design as from 1 January 2013 (i.e. the beginning of the
third trading period 2013-2020). In addition, Directive 2008/101/EC[171],
which amended Directive 2003/87/EC by providing for the inclusion of the aviation
sector in the EU ETS, entered into force in February 2009.

7.1.1.
Report of work done in 2010

In 2010 the EU ETS-related work continued
to focus on two main sets of activities: (a) ensuring that the current ETS
works properly and that its rules are correctly applied by Member States and
(b) preparing the implementing measures for the revised ETS Directive to be
implemented from 2013 for and for EEA-wide implementation of aviation
activities covered by the EU ETS from 2012.

(a) Ensuring proper implementation
of the ETS by Member States

Conformity assessments

On the basis of conformity assessment
initiatives related to the ETS Directive, the Commission services indentified
various issues requiring clarification in respect of national legislation
transposing the Directive. As of January 2010, 21 Member States had replied to administrative
letters of inquiry sent in the course of 2009 asking for clarification of the
national legislation. Following further exchange of views, the necessary
clarifications were provided to the Commission.

Implementation and legal enforcement

Cases related to the ETS Directive -
National Allocation Plans:

The individual national allocation plans (NAPs)
adopted by Member States fix the total number of emission allowances and set
out the methodologies to allocate them to individual installations covered by
the EU ETS. NAPs for the period between 2008 and 2012 are thus an important
element in the Member States' strategies for achieving their relevant emission
reduction targets under the Kyoto Protocol.

In 2007 several Member States opposed the
Commission decision on their respective NAP. In essence, they claimed that the
upper limit set by the Commission on the total quantity of allowances they may
allocate was too low, and that the Commission had exceeded the limits of its
discretion when assessing the proposed NAPs by using its own methodology.

Consequently, 9 Member States brought
annulment actions on the basis of Article 263 TFEU before the European Court of
Justice. The Slovak Republic subsequently withdrew its case, and in early 2010
the following cases were pending before the General Court: T-221/07 Hungary,
T-194/07 Czech Republic, T-369/07 Latvia, T-368/07 Lithuania, T-499-500/07
Bulgaria, T-483-484/07 Romania. For each of these cases, the written procedure has
ended.

In Cases T-183/07 and T-263/07, the General
Court annulled the Commission's decisions rejecting the respective NAP on 23
September 2009. The Commission lodged appeals to Cases T-183/07 and T-263/07 on
3 December 2009. Those appeals were still pending in 2010 and are based on
several legal grounds. Most importantly, the Commission considers that the
General Court interpreted the powers of the Commission in the NAP assessment
process too narrowly. The Commission also submits that the General Court did
not sufficiently taken into account the fundamental purpose of the EU ETS – to
reduce overall EU emissions of greenhouse gases – and the need to ensure the
equal treatment of Member States during the NAP assessment process.

As a result of
the judgements in Cases T-183/07 and T-263/07 (see above), the Commission
adopted new decisions on the originally notified Estonian and Polish NAPs on 11
December 2009. As the NAPs were rejected, both Estonia and Poland had to submit new NAPs for further assessment by the Commission. Poland notified a new
national allocation plan on 8 April 2010. On 19 April 2010, the Commission
decided not to raise any objections with regard to this NAP. With regard to the
Estonian NAP, at the end of 2010, the Estonian authorities had not yet
submitted a new NAP for assessment to the Commission.

Some companies covered by the EU ETS also
brought actions. By judgment of 2 March 2010, the General Court dismissed the
action brought by Arcelor (T-16/04) for partial annulment of Directive
2003/87/EC for compensation for the damage suffered by the applicant following
the adoption of that directive. This case was the last case still pending
before the General Court.

In its judgment, the General Court found
that Arcelor was not individually or directly concerned by the contested
provisions of Directive 2003/87/EC within the meaning of the fourth paragraph
of Article 263 TFEU and declared the application inadmissible. The claims for
damages was considered admissible, but rejected as, according to the Court,
Arcelor had failed to demonstrate that, in adopting the contested directive,
the legislator acted unlawfully or committed a sufficiently serious breach of a
rule of law designed to confer rights on the company.

Other cases related to the ETS
Directive

Several administrative inquiry letters
regarding the application of the EU ETS Directive were sent to Member States in
2010.

One inquiry related to the application of
the fine provided for in Article 16 of the EU ETS Directive. Other inquiries
concerned the adoption of tax law provisions or similar with respect to EU ETS
allowances. Such provisions may  be equivalent to a non-permissible ex-post
adjustment of the relevant national allocation plan. The relevant national authorities
were therefore invited to provide further information on this legislation. Any
appropriate follow-up will be decided in 2011.

Cases related to the Aviation ETS
Directive

Infringement cases for non-communication of
national measures of transposition for Directive 2008/101/EC including aviation
activities into the EU ETS were opened against 18 Member States after the
expiration of the transposition deadline – 2 February 2010.

Non- communication cases have progressed
during year 2010 through closure or further steps in the infringement
procedures (seven Reasoned Opinions against those Member States still lagging
behind transposition were adopted and notified in November 2010).

Communication by Member States in early
2011 of national measures of transposition for Directive 2008/01/EC will enable
the Commission to close a number of the above mentioned cases. In parallel, the
Commission will be proposing the continuation of the infringement procedures
against those Member States still lagging behind full transposition by the end
of the third trimester of 2011.

(b) Preparing the timely implementation
of the revised EU ETS

Before 2013, 15 comitology procedures, 7
legislative proposals and a variety of reporting requirements are foreseen to
implement the EU ETS for the third trading period.

During 2010, the Commission continued to
hold a number of separate stakeholder and expert meetings regarding the list of
(sub-)sectors deemed to be exposed to a significant risk of carbon leakage, the
auctioning regulation, the harmonised rules for transitional free allocation
(benchmarks), the need for measures to prevent market abuse and the regulations
on monitoring and reporting of emissions and on verification of emission
reports and accreditation of verifiers.

In 2010, implementing measures and
further guidance for the revised EU ETS from 2013 were prepared in the
following areas.

Carbon leakage

A list of sectors and subsectors deemed to
be exposed to a significant risk of carbon leakage was adopted by the Commission
on 24 December 2009 as Commission Decision 2010/2/EU.

Benchmarking

According to Article 10a(1) of the revised
EU ETS Directive, the Commission has to adopt transitional EU-wide rules for
harmonised free allocation (benchmarks). During 2010 the Commission held a
number of broad stakeholder meetings and bilateral consultations with industry
and NGOs as well as expert meetings with Member States' representatives to
ensure a thorough and correct understanding of the various technical issues to
be addressed in that Decision.

The relevant text was proposed by the
Commission's services and approved by the Climate Change Committee on 15
December 2010. After scrutiny by the European Parliament and the Council it was
adopted by the Commission on 27 April 2011 (ref. Commission decision C(2011) 2772).

Preparations for large-scale
auctioning as from the 3rd trading period

Article 10(4) of the revised EU ETS
Directive requires the Commission to adopt a Regulation on the auctioning of
allowances. The Commission adopted the Auctioning Regulation on 12 November
2010.

The Commission and the Member States have now begun the implementation of the Auctioning Regulation (e.g. the
preparation of joint procurement agreements for the common auction platforms
and for the single auction monitor, an amendment of the Auctioning Regulation
to determine the volume of 'early auctions').

Protection from insider dealing and
market manipulation

Article 12(1a) of the revised EU ETS
Directive provides that the Commission, by 31 December 2010, shall examine
whether the market is sufficiently protected from insider dealing or market
manipulation and, if appropriate, bring forward proposals to ensure such
protection.

On 21 December 2010, the Commission
published a Communication on carbon market oversight. It provides for an assessment
of the carbon market structure, the level of market oversight, the level of
protection of the carbon market from market abuse and the available options
(incl. the classification of allowances as a financial instrument). The
Commission concluded that a major part of the carbon market is subject to
appropriate oversight, but that more may be needed in the spot market.

An internet-based stakeholder consultation
will be conducted in the first half of 2011, the results of which will feed
into a thorough impact assessment. This work will inform the decision on
whether to come forward with a legislative proposal.

Registries

· On 7 October 2010, the Commission adopted Regulation 920/2010 for a
standardised and secured system of registries pursuant to Directive 2003/87/EC
and Decision No 280/2004/EC. It mainly contains the rules and the technical
modalities deemed necessary to adapt the registries system and particularly the
EU Registry to accommodate the introduction of aviation into the scheme for
greenhouse gas emission allowance trading within the EU from 1 January 2012
onwards. Furthermore, it addresses the need to provide more detailed and robust
rules to fight against fraud and other criminal activities.

· The revised EU ETS Directive provides that all allowances will be
held in the Community Registry as from 2012. This will transfer the bulk of
Member State-level ETS-related IT-operations to the Commission, a process which
will require a significant expansion of the Registry related IT-capacities of
the Commission. Further amendments to the Registry Regulation (Regulation
916/2007/EC) are therefore currently prepared to be adopted in 2011.

Quantitative restrictions on the use
of JI/CDM credits

· Article 11a(9) of the revised EU ETS Directive refers to the
measures which can be applied to restrict the use project types. In 2010, the
Commission prepared and proposed a Regulation determining certain restriction
applicable to the use of international credits from projects involving industrial
gases. These projects raise concerns relating to their environmental integrity,
value-for –money and geographical distribution. The aim of the Commission
proposal is to ensure a better quality and distribution of credits in the
international carbon market. The proposal was adopted on 21 January 2011.

EU ETS for aviation activities

In 2010, implementing measures and further
guidance for the revised EU ETS for aviation activities (under the EU ETS from
2012) were prepared in the following areas:

· Updating of the list allocating aircraft operators to States for
administrative purposes;

· Frequently asked questions addressing key issues encountered in the
implementation of the system and guidance from the compliance forum regarding
verification.

· Working on the extension of the aviation activities covered by the
EU ETS to the EEA area according to the same timeline
than the EU -27 ETS.

Linking with other GHG trading
schemes

Article 25 of the revised EU ETS Directive
enables the EU to conclude agreements with third countries to provide for the
mutual recognition of allowances between the EU emissions trading scheme and
other GHG emissions trading schemes. Such agreements may be concluded with
third countries that have implemented compatible mandatory GHG emission trading
systems with absolute emissions caps. The Commission has presented in 2010 a
Recommendation to the Council to authorise the Commission to open negotiations
on linking with the Swiss emissions trading system. The Council adopted its
authorisation to the Commission to start negotiations by a decision adopted on
21 December 2010.

7.1.2.
Evaluation based on the current situation

(a) Ensuring proper implementation
of the ETS by Member States

For the current ETS, the following problems
and corrective actions were identified:

Conformity assessments

The conformity studies on the transposition
by Member States of the ETS directive as amended by Directive 2004/101/EC of
the European Parliament and of the Council of 27 October 2004 and the administrative
letters of inquiry that were issued focussed on those provisions of the ETS
Directive that were not likely to be modified as a consequence of the adoption
of the revision of the ETS Directive in 2008 and 2009. The assessment of the
replies received revealed a few issues of concern. The Commission services have
inquired about these issues with the Member States concerned and will take the
appropriate steps to ensure full compliance.

Implementation and legal enforcement

Despite the ongoing court cases related to
some national allocation plans, the allowance market works properly.

The security of the national registries
from an IT perspective has become more and more a concern over the past few
months. So-called phishing attacks, whereby the credentials of the
administrators were stolen, have taken place in 2010. Immediate action was
taken both by the Commission and by the national administrators as EU
legislation requires that Member States take all necessary steps to ensure the
security of their own registry.

In order to counter the threat of so-called
'carousel fraud', whereby VAT and goods are passed around between companies and
jurisdictions to exploit the way VAT is treated within multi-jurisdictional
trading, in the context of emissions allowances trading, the Council has
amended Directive 2006/112/EC on the common system of value added tax in March
2010. It has provided for an optional and temporary application of a
reverse-charge mechanism in relation to supplies of certain services, including
namely the transfer of emission allowances under the EU Emissions Trading
Scheme (EU ETS), susceptible to fraud. The aim is to reverse VAT liability for
all types of emission allowances and making it payable by the buyer of the
emission allowances.

(b) Preparing the implementation
of the revised EU ETS

The revised EU
ETS was adopted to improve some specific areas of the current EU ETS. These
areas for improvement were identified through a review and extensive
stakeholder consultations during the first trading period (2005-2007), as
follow:

· Emissions trading can only exploit its environmental strength and
justification, if there is scarcity on the allowance market. However, the lack
of verified emissions data when setting up the National Allocation Plans (NAPs)
for the first trading period (2005-2007) combined with over-optimistic
projections of emissions led to the issuance of more allowances than was
justified to ensure the necessary scarcity on the market.

· Member States had different levels of ambition for the emission
reductions required of the sectors included in the EU ETS, and consequently
different Member States set different levels of allocation for the same sector.
They also applied widely differing allocation methods.

· The Commission's approval of NAPs turned out to be a long-lasting,
cumbersome and complex process.

· Some sectors pass the market value of the allowances through to
their customers in their product prices and received significant free
allocations.

The issues
identified during the review of the EU ETS justified a
revision of the ETS design itself. They have been largely addressed in the
revised ETS Directive. The Commission proposed a fully harmonised approach
including an EU-wide and annually shrinking cap on allowances - to replace the
prevailing bottom-up approach based on NAPs - leading to an emission reduction
of 21% by 2020 as compared to 2005 levels, with reductions continuing
thereafter. The Commission also proposed to phase-in auctioning over a period
of time as the principal allocation method for all operators, and provided for
harmonised rules for the transitional free allocation. These elements do not
only guarantee that the required emission reductions are achieved, they also
increase the certainty and predictability in the system, thereby fostering
investments to reduce emissions.

Thus, the ETS
revised Directive sets up the general framework for the corrective action to
the problems identified with the current ETS. In 2010, the European Commission
has continued the preparatory work to define all the detailed implementing
measures and further guidance to enable the revised ETS to work from 2013.
Specific problems raised during the preparatory work have been intensely
discussed with Member States (via informal meetings and Comitology) and
stakeholders throughout the year. The Commission will endeavour to address
these problems in the measures and guidance that it will propose in 2011.

7.1.3.
Perspectives

Transposition and implementation processes
are well under way and according to plan. The Commission will continue to
defend its decisions and the integrity of the EU ETS Directive in ongoing Court
proceedings.

With respect to
the reverse-charge mechanism for VAT, the Commission will reiterate the
importance of the implementation of this mechanism and plans to inquire about
the implementation of Member States.

During 2011, the following measures are
planned to be adopted or implemented to ensure the proper and timely
implementation of the ETS.

A proposal for the harmonised rules on
transitional free allocation (benchmarking) was submitted to the Council
and the European Parliament for scrutiny. It was adopted on 27 April 2011.
Ensuring harmonised implementation by Member States will be a priority for the
rest of 2011.

By 30 September 2011, Member States are
required to send their intentions in terms of free allocation as of 2013 for
each installation on their territory to the Commission. Upon submission, the
Commission will assess the proposed allocation and may reject it.

The Registries
Regulation needs to be further amended to fully take account of the revised
EU ETS.

A Regulation
for the monitoring and reporting of emissions and, where relevant, activity
data, from the activities listed in Annex I, as well as for the monitoring and
reporting of tonne-kilometre data is to be adopted by 31 December 2011.

Furthermore, a Regulation
on accreditation and verification of emission reports is also to be adopted
by 31 December 2011.

Concerning the list of sectors and
subsectors deemed to be exposed to a significant risk of carbon leakage,
the Commission has analysed further sectors and subsectors during 2010 and proposed
to add a number of sectors and subsectors to the list. The proposal was agreed
by the Climate Change Committee on 19 May 2011. The draft decision is now under
scrutiny by the Council and the European Parliament.

The Commission is also to update and
publish the total quantity of allowances for the year 2013 and the
estimated quantity of allowances to be auctioned as of 2013.

With regards to
the protection from insider dealing and market manipulation, following
the organised cyber-attacks on national registries between November 2010 and
January 2011, protection will be improved by means of continuously adapting
security measures based on experience and new technologies.

Furthermore, transactions
in the EU ETS carbon market relate both to the allowances themselves and to
derivative products based on allowances, e.g. futures. In general, such
derivatives qualify as financial instruments and are usually traded on one of a
number of specialised exchanges. Some of these exchanges qualify as regulated
markets. This means that a significant part of the trade in the EU ETS carbon
market is already covered by the applicable financial markets legislation. However,
financial market legislation does not apply to the spot market, and for some of
the provisions there are exemptions for non-investment firms.

The
Commission's ongoing work in the field of financial markets regulation will
also affect the level of protection of the EU ETS carbon market.

The focus of
the work going forward will be to assess whether additional measures are needed
to protect the types of transactions in the EU ETS carbon market that are
currently not covered by existing legislation or legislation in the pipeline in
the field of financial markets. Further analysis and
stakeholder consultations will take place in 2011.

Generally, during 2011 the Commission plans to continue holding a number of
broad stakeholder meetings and further bilateral consultations with
industry and NGOs as well as expert meetings with Member States'
representatives on the implementation of the transitional EU-wide rules for
harmonised free allocation (benchmarks) and on other issues, such as the
regulations on monitoring and reporting and on accreditation and verification
as well as on the security of the registries.

EU ETS for aviation activities

Year 2011
represents an important milestone concerning the implementation of EU ETS on
aviation from January 2012 onwards.

The following measures are planned to be
adopted or implemented to ensure the proper and timely implementation of the
ETS on aviation in 2011:

·
An update of the list determining the
aircraft operators' administering State in an EEA-wide area is to
be finalised and published further to the inclusion of the Directive
2008/101/EC into the EEA agreed in April 2011, so as to ensure the smooth
functioning of the EU ETS for aviation, once the EEA EFTA countries are fully
included in the system.

·
Calculation of the EU 27 figures for
allowances and the EEA wide benchmarks for the
periods 2012 and 2013-2020 are also due by 30 September 2011. These will be
derived from the verified benchmarking data (measured in
"tonne-kilometres") being collected by aircraft operators for the
year 2010 and reported to the Member States by 31 March 2011.

·
Preparation of the review of the
functioning of the Directive in relation to aviation activities (e. g. impacts,
functioning, effectiveness, special reserve, thresholds, exemptions) in the
second trimester 2011 with the small emitters study.

Negotiations with Switzerland on linking with the EU ETS aviation will start in the first trimester 2011.

7.2.
Monitoring and Reporting
7.2.1.
Introduction

Together with
the Emissions Trading Directive, Decisions 280/2004/EC[172]
(the Monitoring Mechanism Decision – MMD) and 2005/166/EC[173]
are among the most important cross-cutting measures in this area of climate
change. With the adoption of these decisions, the EU established a mechanism
for the monitoring and reporting of the Member States' greenhouse gas (GHG)
emissions and their projected progress towards GHG targets. This mechanism has
enabled the Commission to more accurately, rigorously and regularly evaluate the
(quality of the) progress made in reducing emissions under the UNFCCC and the
Kyoto Protocol. As a result, Member States have improved timeliness and quality
in the submission of their data.

7.2.2.
Report of work done in 2010

Monitoring
and Reporting

In relation to
the implementation of the Monitoring Mechanism Decision (MMD), the Commission continued
its efforts to ensure the complete and timely submission of data by the Member
States. Under Article 3 (1) of Decision 280/2004/EC, read in conjunction with
Decision 2005/166/EC, Member States must submit to the Commission by 15 January
2010, the first main elements of their national greenhouse gas (GHG) inventory
report of actual progress (NIR). By 15 March 2010, Member States must submit
their complete NIR. These reports are required by the Commission so it can compile,
in collaboration with the Member States an assisted by the European Environment
Agency (EEA), the EU's annual inventory report on the EU's actual GHG emissions
in compliance with the UN Framework Convention on Climate Change and the Kyoto
Protocol In 2010 there was no reporting obligation (biennial requirement) under
Article 3(2) of the MMD.

With respect to
Monitoring and Reporting in 2010 the Climate Change Committee voted in favour
of amending the existing Commission Decision 2007/589/EC, the so-called
Monitoring and Reporting Guidelines in order to include monitoring and
reporting guidelines for greenhouse gas emissions from new activities and gases
pursuant to Directive 2003/87/EC. Apart from relatively minor changes to
existing annexes to the Decision, the current amendment adds six new annexes
providing activity-specific guidelines for the production of: soda ash and
sodium bicarbonate; ammonia; hydrogen and synthesis gas; bulk organic
chemicals; ferrous and non-ferrous metals; primary aluminium. Final adoption by
the Commission is planned in the first half of 2011.

Enforcement:
ensuring complete and timely reporting by the Member States

In early 2010, the Commission has closed
pending infringement cases against 4 Member States that had failed to submit
their 2008 annual and 2007 biennial reports. New infringement cases had been
launched in 2009 against 24 Member States on the ground that they had
communicated to the Commission no or incomplete 2009 annual reports on GHG
emissions or 2009 biannual report on policies and measures.

In view of the
Copenhagen Climate Change Conference (COP 15/CMP 5) the Commission found it
important to take a strict approach in this regard. In 2010 the Commission was
able to close all cases. In 2010 some Member States still continued to submit
incomplete data. Also in 2010, the enforcement branch of the UNFCCC Compliance
Committee concluded that Bulgaria was in non-compliance with its UNFCCC
obligations, resulting in the suspension of Bulgaria's eligibility to participate
in the mechanisms under the Kyoto Protocol.

Still, it is the Commission's view that the
emphasis of its enforcement action should not be exclusively on the start of
new infringement proceedings, but also on a constructive collaboration with the
Member States resulting in the Member States submitting their complete reports
on time. This is the approach that the Commission will continue to follow
concerning the 2011 annual reports due for 15 January 2011 as well as the 2011
biennial reports due for 15 March 2011.

7.2.3.
Perspectives

Ensuring timely
and proper provision of climate-relevant data

Accurate, up-to-date information is an
essential basis for climate change policy. Under Decisions 280/2004/EC and
2005/166/EC, Member States must provide the Commission with annual reports on
their actual emissions of greenhouse gases and biennial reports on domestic
climate change policies and measures and emission projections, so that the
Commission can accurately report on the progress made by the EU as a whole. To that
end the Commission has rigorously checked whether national reports are
submitted on time and whether the data are correct and complete. As a result of
the enforcement action, reporting continues to improve in terms of timing and
content.

One of the challenges for the Commission
will therefore be to ensure that reporting of national greenhouse gas emissions
improves still further, so that all Member States communicate complete reports
to deadline to ensure an effective follow-up to the United Nations Convention
on Climate Change and its Kyoto Protocol.

In line with the above, further studies were
carried out to examine the revision of Decisions 280/2004/EC and 2005/166/EC in
the light of the adopted Climate and Energy Package and the developments at
international level. The experience gained so far has shown that the current
system, although it has its merits, is not always fully effective and no longer
suffices. As the EU's commitments become more stringent and its emission
reduction goals more ambitious, it is imperative that the EU is able to deliver
on those goals in a more effective and efficient manner. The revision of the
Monitoring Mechanism Decision currently underway (se below) will significantly
enhance the monitoring, reporting and review system that was first introduced
under the Kyoto Protocol and it will ensure that the EU continues to lead by
example.

Revision of
the Monitoring Mechanism Decision

The adoption of
a new monitoring and reporting scheme is mandated by the experience gained
through the implementation of the Kyoto Protocol, which shows that the current
system is not fully effective, the implementation of the Climate and Energy
package adopted by the European Parliament and Council in December 2008 and future
possible reporting obligations resulting from the ongoing international discussions
and negotiations following the Copenhagen Accord.

In 2010, the
Commission identified and assessed policy options on the basis of previous and
new studies and took preparatory steps to launch an online stakeholder
consultation and to complete an impact assessment. The Commission also
organised a workshop with Member States to discuss the main issues linked to
the revision of the Monitoring Mechanism Decision.

In 2011, the
Commission will also continue its work on the revision of Decision 280/2004/EC
through an online stakeholder consultation, preparation of an impact assessment
and of a legal proposal.

Other implementing measures on
monitoring and reporting under ETS

In 2010,
preparatory work has been carried for drafting a new Commission Regulation on
ETS Monitoring and Reporting in compliance with Article 14 of Directive
2003/87/EC. Adoption by the Commission is expected by December 2011.

A new
Commission Regulation on ETS Accreditation and Verification in compliance with
Article 15 of Directive 2003/87/EC is also being prepared. Adoption by the
Commission is expected by December 2011.

7.3.
Ozone depleting substances and Fluorinated Gases
7.3.1.
Introduction

The Regulation on Ozone Depleting
Substances sets out controls on production, importation, exportation, supply,
use, leakage, recovery and lays down the phasing-out in line with the
obligations under the Montreal Protocol. Regulation (EC) No 1005/2009 recast
and replaced Regulation (EC) No 2037/2000 as of 1 January 2010, clarifying, simplifying and streamlining the previous provisions
and procedures to the extent possible.

Regulation (EC) No 842/2006 on certain
fluorinated greenhouse gases (F-Gases) aims at reducing emissions of three
groups of fluorinated greenhouse gases: hydrofluorocarbons, perfluorocarbons
and sulphur hexafluoride through a series of targeted sector-specific measures
such as systematic checks for leakage and recovery from equipment by certified
personnel; labelling of products and equipment; the prohibition of placing on
the market of certain products containing such gases and of the use of those
gases in certain applications. The Regulation is complemented by 10 Commission
Regulations adopted between 2007 and 2008.

7.3.2.
Report of work done in 2010

Revision of the existing legal framework

The Regulation on Ozone Depleting
Substances applies since 1 January 2010 (Regulation (EC) No 2037/2000 was
repealed from the same date). The Commission adopted Regulation (EU) No
744/2010 amending Regulation (EC) No 1005/2009 with regard to the critical uses
of halons, which introduces cut-off and end-dates for all exempted uses of
these substances.

The Regulation on F-Gases requires the
Commission to publish a report in 2011 based on the experience of its application
and, where necessary, present proposals for revision of the relevant provisions
of the Regulation. A technical study was launched in the context of the
preparatory phase of the review and a targeted Expert Group composed of Member
States authorities, industry organisations and environmental NGOs was also established
to assist the Commission services, particularly in relation to the ongoing
study.

Compliance
promotion and legal enforcement

Implementation
of the Regulation on Ozone Depleting Substances

During 2010 no
new infringement cases relating to the Regulation on Ozone Depleting Substances
were launched. Four infringement cases (against Cyprus, Denmark, Greece and Italy) were closed regarding the failure to fulfil the obligations in relation
to the decommissioning of halons used in fire extinguishers of ships. One case
on this issue (against Malta) was further pursued and referred to the Court of
Justice.

Implementation
of the Regulation on F-Gases

The Commission
monitored attentively the implementation by the Member States of certain
requirements laid down in the Regulation and in the implementing Commission
Regulations. In particular, some delays observed in the establishment of
national certification systems for personnel and companies working with F-Gases
and in the adoption of rules on penalties by the Member States have required
appropriate follow-up action from the Commission.

Implementation of the Regulation on Ozone
Depleting Substances

Regarding the implementation of the Ozone
Regulation, Member States were found in compliance with the Regulation and no
major difficulties have been encountered with the enforcement of the Regulation.

7.4.
Transport related emissions
7.4.1.
Introduction

Commission strategy to reduce CO2
emissions from cars and vans

The European Commission has a comprehensive
strategy (COM/2007/0019 final) to
reduce CO2 emissions from new cars and vans sold in the European Union, to
ensure that the EU meets its greenhouse gas emission targets under the Kyoto
Protocol and beyond.

This strategy, which was adopted in 2007,
aims to tackle CO2 emissions from both the production and consumer sides and is
designed to help the EU reach its long-established objective of limiting
average CO2 emissions from new cars to 120 grams per km by 2012 - a reduction
of around 25% from 2006 levels.

Regulation (EC) 443/2009 (CO2 from cars Regulation)

Regulation (EC)
443/2009 of the European Parliament and of the Council setting emission
performance standards for new passenger cars as part of the Community's integrated
approach to reduce CO2 emission from light-duty vehicles is
the cornerstone of the EU's strategy to improve the fuel economy of cars and
ensure that average emissions from new passenger cars in the EU do not exceed
120 gCO2/km.

The key elements of that legislation are the limit value curve, long-term target, phasing-in requirements, excess
emissions premiums, eco-innovations, pool acting jointly to meet emission
targets, monitoring CO2 emissions from new passenger cars.

Directive
1999/94/EC (Labelling
Directive)

Directive
1999/94/EC of the European Parliament and of the Council of 13 December 1999 relates to the availability of consumer information on fuel economy
and CO2 emissions in respect of the marketing of new passenger cars. The main
requirements of the Directive are the provision of information on CO2 emissions
and fuel economy for all new cars at the point of sale: car label, a poster and
a guide informing on CO2 emissions of all cars offered on sale; and mandatory
consumer information regarding CO2 and fuel economy of new cars in printed
advertisements.

Directive
98/70/EC (Fuel quality Directive)

As part of the
integrated approach set out in the strategy, it was foreseen that a
contribution to the 120g/km objective would come from use of low greenhouse gas
fuels. In view of the fact that complementary measures had to be measurable,
monitorable and a party needed to be accountable for them, the Fuel quality
Directive (Directive 98/70/EC) was modified to include a greenhouse gas
reporting and reduction requirement. This modification set out in article 7a of
the Directive requires a 6% reduction in the greenhouse gas intensity of the
fuel supplied by 2020 as a contribution to the strategy to reduce greenhouse
gas emissions from light duty vehicles.

7.4.2.
Report of work done in 2010

Commission strategy to reduce CO2
emissions from cars and vans

The Commission has adopted a progress
report (COM/2010/0656 final) in November 2010, concluding that most of the
measures contained in the 2007 strategy have already been implemented or are in
the process of being implemented. The goal of reducing new car emissions to 120
gCO2/km by 2012 is however not likely to be achieved because some measures have
been implemented late. Despite a low probability of achieving the 2012 target,
the strategy, and the measures it includes, has played an important role in
reducing CO2 emissions from light-duty vehicles.

Regulation (EC) No 443/2009 (CO2 from cars Regulation)

In 2010 the work was focused on preparing
measures implementing Regulation (EC) No 443/2009, including on monitoring of
CO2 emissions, derogations for small volume and niche manufacturers and
eco-innovations.

Commission Regulation (EU)
No 1014/2010 on monitoring and reporting of data on the registration of
new passenger cars pursuant to Regulation (EC) No 443/2009 of the European
Parliament and of the Council was adopted on 10 November 2010.

Decision (EC) 1753/2000 of the European
Parliament and of the Council establishing a scheme to monitor the average
specific emissions of CO2 from new passenger cars

The Commission also adopted as part of the
implementation of Decision (EC) No 1753/2000 a report on the monitoring of CO2
emissions from new passenger cars in 2009.

Proposal for a regulation on CO2
from vans

In 2010 the proposal on CO2 from vans,
adopted by the Commission in October 2009, was in co-decision. Negotiations
between the co-legislators were concluded by the end of 2010 in a series of
informal trilogue discussions leading to a first reading agreement. The European
Parliament voted on the compromise amendments in February 2011 and the formal
approval by the Council took place on 31 March. The main provisions of the Regulation
mirror Regulation (EC) 443/2009 on CO2/cars and include a 2-step
approach to setting CO2 emission standards for new vans, i.e. a
target of 175g/km in 2017 and 147g/km in 2020. In addition, the legislation
includes other key elements from the cars Regulation such as the limit value curve, phasing-in of the first
target, excess emissions premiums, eco-innovations, pools acting jointly to
meet emission targets, monitoring CO2 emissions from new light
commercial vehicles.

Directive 98/70/EC (Fuel Quality
Directive)

Following adoption of the amendment to this
Directive in April 2009 a number of issues required further work. The
methodology for reporting GHG intensity of energy used within the scope of the
Directive other than biofuels is foreseen in the Directive to be adopted
through Comitology. The Commission held a public consultation in September 2009
followed by an expert meeting early in 2010 to provide input to this work.
Following extensive deliberations a draft implementing measure has been the
subject of consultation within the Commission. Further information of relevance
to this measure became available at that time with the completion of a study on
the GHG intensity of fuel production from tar sands and oil shales.

The Directive also foresaw the need to
correct the lack of accounting for greenhouse gas emissions due to Indirect
Land Use Change. The Commission adopted a report on its work in December 2010
in which it stated it will present an impact assessment if appropriate together
with a legal proposal by July 2011.

Compliance promotion and legal
enforcement

Directive 1999/94/EC (Labelling
Directive)

During 2010 no new infringement cases
relating to Directive 1999/94/EC were launched. Three cases against Spain, Italy, and Belgium concerning the absence of enforcement by the
authorities, however, remained open from previous years
and were further pursued accordingly.

Regulation (EC) 443/2009 (CO2 from cars Regulation)

In 2010 the European Commission has started
the preparatory work in order to develop all the detailed implementing measures
and further guidance where required to enable an efficient monitoring system. In order to ensure that the data collected and reported by Member
States to meet requirements set out in the legislation, the Commission followed
up with several Member States where missing data or data quality had proven to be
an issue of concern.

The Commission will continue to work
closely with Member States to improve the quality of their reporting.

Directive 1999/94/EC (Labelling
Directive)

Regarding the implementation of Directive
1999/94/EC, it can be said that while a limited number of infringement cases
have remained open from previous years and individual issues may persist, in
general Member States are in compliance with the Directive.

Directive 98/70/EC
(Fuel quality Directive)

In 2010 the Commission has continued work
on the implementation measures. In particular this concerns the methodology for
reporting GHG intensity of energy used other than biofuels. It has also
continued with the evaluation of vapour pressure derogation requests under
Article 3(4) of the Directive. Fuel Quality reporting required under the
Directive continues and the Commission has not identified any specific
problems.

7.5.
Other climate related legislation
7.5.1.
Carbon Capture and Storage (CCS)

CCS
Directive

Directive 2009/31/EC on the geological
storage of carbon dioxide (CCS Directive) is one of the world's first comprehensive
legal frameworks for the regulation of the environmental risks of carbon
capture, transport and storage. It entered into force on 25 June 2009. Although
it covers the full chain of activities arising in CCS, carbon capture and
transport are comparable to other activities already regulated at EU level. The
CCS Directive therefore regulates these activities by introducing them into the
scope of the existing legislation. Carbon capture is regulated under Directive
2008/1/EC (IPPC Directive) and under Directive 85/337/EC (EIA Directive', and
pipeline transport is regulated under the EIA Directive.

The Directive establishes an authorisation
regime for geological storage sites and covers site exploration,
characterisation, selection, monitoring, closure and post-closure management, as
well as composition of the CO2 stream. One notable provision included is that
draft permit decisions for storage sites (and also decisions on transfers of responsibility,
see below) are to be submitted to the Commission, which is to issue - within 4
months - an opinion on whether the draft permit decisions meet the requirements
of the Directive. The Commission has established a Scientific Panel to assist
it in its assessment (see below).

There are no implementing provisions
required under the CCS Directive, but the Commission has in 2010 finalised a
guidance document on a number of issues (composition of the CO2 stream,
conditions for transfer of responsibility to Member States, and financial
contributions required of the operator at the point of transfer of
responsibility).

The Commission also intends to produce
guidance on a number of other issues.

More specifically, monitoring and
reporting guidelines (MRGs) were adopted[174] for CCS
under the Emissions Trading Directive for the purposes of quantifying the
emissions for which allowances must be surrendered for capture, transport and
storage activities, including in the case of leakage

Commission has also started working on the
review of draft storage permits under article 10 of the Directive.

During 2010 the Commission also established
a Scientific Panel to provide technical input into the Commission opinions
on draft permit decisions and decisions on transfer of responsibility. Guidance
documents on the key aspects of implementation were also adopted.

In 2011, conformity checking will be
carried out to check transposition of the CCS Directive in the Member States.

7.5.2.
EU Effort Sharing Decision (ESD)

Decision 406/2009/EC[175]
(Effort Sharing Decision, ESD) lays down binding annual targets for
greenhouse gas emissions outside the scope of the ETS, for the period
2013-2020, for each Member State. It entered into force on 25 June 2009. About
60% of the total EU-27 greenhouse gas emissions are covered by the ESD. The
most important emitting sectors are transport (about 30% of total ESD
emissions), private households and services (25%), and agriculture (15%).

By way of contrast with the EU ETS, which
is EU-wide market-based instrument already in place with well established rules and procedures for
installations and Member States, the Effort Sharing Decision is a new legal
instrument with far-reaching consequences for Member States' obligations to
reduce greenhouse gas emissions. Though the ESD will
rely on both EU-wide and national measures, the most mitigation actions will
have to be prepared and implemented at Member State level.

By 2013, the following key actions will be
necessary to implement the ESD and prepare for the 2013-2020 compliance period:

–
Determining the exact targets for Member States for
the period between 2013 and 2020 (comitology decision);

–
Amending the Monitoring Mechanism Decision (
ordinary legislative procedure);

–
Establish modalities for transfers of emission
allocations between Member States (comitology decision);

–
Prepare for the inclusion of land use, land-use
change and forestry (LULUCF) in the EU reduction commitment (co-decision, see
below).

In 2010 the Commission services have
started preparations for a number of implementing provisions under the ESD for
decision in 2011 / 2012.

In 2011 the Commission will present a
decision to be adopted through comitology procedure (including a vote in the
Climate Change Committee) in order to determine the annual emission allocations
expressed in absolute tonnes of CO2 equivalents for the period
between 2013 and 2020 in accordance with Article 3.2 of the Decision. The
Commission will also prepare for a Comitology decision to establish
"modalities" for transfers of emission allocations between Member
States and increase their transparency under the ESD as required by Article 3.6
of the Decision.

7.5.3.
Land use, land-use change and forestry (LULUCF)

Articles
8(1) and 8(6) of the ESD and Article 28(1) of the ETS Directive require the
Commission to consider, in the absence of an international agreement, a number
of issues regarding LULUCF. The Commission will report in 2011 and assess
options for the possible inclusion of emissions and removals from activities
related to LULUCF in the Community reduction commitment. If considered
necessary, the Commission will make a legislative proposal.

8.
ENVIRONMENT
8.1.
Nature Conservation
8.1.1.
Current position
8.1.1.1.
General introduction

The most important pieces of nature
conservation legislation are the Birds Directive, 2009/147/EC (codified version
replacing Directive79/409/EEC[176]) and Habitats
Directive, 92/43/EEC[177]. The former sets out
measures for the protection, management and control of all species of naturally
occurring European wild birds, as well as introducing rules to protect their
habitats. The latter protects natural habitats and wild flora and fauna
throughout the European Union and establishes a European
ecological network known as “Natura
2000”.

Nature conservation legislation constitutes
a fairly stable part of the EC environmental acquis. Developments in
this sector mainly concern the annexes to the Birds and Habitats Directives
that have been adapted on a number of occasions in response to scientific and
technical progress and to the successive enlargements of the European Union.
The most recent adaptation is in response to the Accession of Bulgaria and Romania to the European Union on 1 January 2007. The Union is at present very close to the
completion of the Natura 2000 network and regulatory stability is required in
order to focus on the sustainable management of the areas.

8.1.1.2.
Report of work done in 2010

Establishment of the Natura 2000
network and designation of Special Areas of Conservation

Further progress was
made in 2010 in the establishment of the Natura 2000 network, consisting of
Special Protection Areas (SPAs) under the Birds Directive and Sites of
Community Importance (subsequently to be designated as Special Areas of
Conservation) under the Habitats Directive. On 10 January 2011, the Commission
adopted six Decisions updating existing Biogeographical Lists of Sites of
Community Importance (SCIs). The additions include 739 new sites and a total
area of 27,000 km². More than half of the area added is made up of marine
sites. This means that further significant progress has also been made as
regards the designation of marine areas. Substantial designations of marine,
especially offshore, sites are, however, still expected in 2011 and 2012.
Taking also into account new SPAs, the Natura 2000 now covers almost 18% of the
EU’s landmass and almost 180.000 km² of marine areas, making it the largest
interconnected network of protected areas in the world.

Several Member States have increased the
number of designated areas following infringement procedures launched by the
European Commission and several of these procedures have been closed in 2010. A
Marine Biogeographical Seminar for the outstanding sea regions (Mediterranean, Black Sea, Macaronesian Atlantic) was organized in 2010 and the proposals of SCIs in these
regions have been evaluated.

Most Member States are still in a process
of designating their Sites of Community Importance as Special Areas of
Conservation (SACs) according to Article 4(4) of the Habitats Directive. This
exercise includes the establishment of detailed conservation objectives for the
individual sites and the design of appropriate management instruments according
to Article 6(1) of the directive. Member States have to designate their SCIs as
SACs not later than six years after the inclusion of the sites in a Community
list. That deadline was 28 December 2007 for most sites of the Macaronesian
biogeographical region, 22 December 2009 for most sites of the Alpine
biogeographical region and 7 December 2010 for most sites of the Atlantic and Continental regions. An infringement procedure was launched in 2008 against Portugal and Spain for not having designated sites in that region as SACs. Following this procedure,
Portugal adopted the necessary legal acts in order to approve the designation
of SACs and the Commission took the decision to close the infringement case. On
the contrary as the progress in the Spanish case was considered as
insufficient, the Commission decided to refer the case to the Court of Justice (case
C-90/10) and is currently awaiting its ruling.

The Commission will consider launching new
infringement procedures against Member States which still have not provided
sufficient designations for the Natura 2000 network or which have not
designated their SCIs as SACs within the deadline required by the Habitats
Directive.

            Non-conformity with the
Birds and Habitats Directive

In 2010, the Commission
pursued infringements dealing with non-conformity of national transposing
legislation with the Birds and Habitats Directive. As regards the Birds
Directive, the Commission decided in 2010 to address a complementary Letter of
Formal Notice (under article 258 of the Treaty on the Functioning of the EU) to
the United Kingdom, and a Reasoned Opinion (under the same article) to Poland and Romania. Furthermore, on 15 July 2010 the Court ruled that Italy has failed to adequately
transpose the directive

As regards the Habitats Directive, a
Reasoned Opinion (under article 258 of the TFEU) was sent to Denmark and Poland.

            Insufficient designation
of Special Protection Areas

Under the Birds Directive, Member States
are obliged to designate all of the most suitable sites as Special Protection
Areas to conserve wild bird species. The designation must be based on
objective, verifiable scientific criteria. To assess whether Member States have
complied with their obligation, the Commission uses the best available
ornithological information. Where the necessary scientific information provided
by Member States is lacking, national inventories of Important Bird Areas (IBA)
compiled by the non-governmental organisation Birdlife International, are used.
While not legally binding, the IBA inventory is based on
internationally-recognised scientific criteria. The Court of Justice has
already acknowledged its scientific value, and in cases where no equivalent
scientific evidence is available, the IBA inventory is a valid basis of
reference in assessing whether Member States have classified a sufficient
number and size of territories as Special Protection Areas.

In 2010, the Commission sent a
complementary Letter of Formal Notice (under article 260 of the TFEU) against Greece for failing to designate enough Special Protection Area (SPA) on its territory. In
2010 the Court of Justice also ruled against Austria for not having designated
1 SPA and for insufficiently designating another one.

            Bird Hunting

Hunting is regulated in the European Union
by the Birds Directive. Although the Directive contains a general prohibition
on the killing of wild birds, it does allow certain species to be hunted
provided this does not take place during the breeding season or migration
periods. Hunting periods are set at national levels, and vary according to
species and geographical location. Exceptionally, Member States may allow the
capture or killing of birds covered by the Directive outside of the normal
hunting season for a limited number of reasons, although such derogations are
only available when there is no alternative solution.

As regards huntable species, the Commission
has prepared further management plans on such species with an unfavourable
conservation status. They are not legally binding but give guidelines to
Members States to fulfil their obligations on species' conservation.

The Court of Justice ruled on 20 September
2009 (case C-76/08) that, although autumn hunting did not in the specific case
of Malta provide a satisfactory alternative solution to spring hunting, Malta
had nonetheless breached the specific conditions for derogation under Art 9 of
the Birds Directive and the principle of proportionality in permitting spring
hunting. Following this ruling, the Commission decided to pursue the
infringement procedure and to send in 2010 a Letter of Formal notice (under
article 260 TFEU) to Malta.

In 2009, the Commission decided to take Italy to the Court of Justice in relation to certain regional hunting legislation. On 11
November 2010, the Court ruled (case C-164/09) that the legislation passed by
the region of Venice violates the obligations of the Member State under article 9 of the birds directive.

            Species
protection

The Habitats Directive comprises an
important pillar which is related to the protection of species. In particular,
Articles 12 and 16 are aimed at the establishment and implementation of a
strict protection regime for animal species listed in Annex IV(a) of the
Habitats Directive within the whole territory of Member States. Focus is mainly
on developing guidance documents such as the Guidance document on the strict
protection of animal species of Community interest under the 'Habitats'
Directive 92/43/EEC that was finalized in February 2007. Specific guidance
documents have also been developed for the protection and management of large
carnivores. An initiative for preparing species protection plans for a number
of priority species has been further pursued.

Furthermore, the Commission is preparing
further new or revised action plans for globally threatened bird species.

In order to reduce the conflicts between
Cormorants and fisheries, the Commission is currently finalising guidance on
the appropriate use of derogations under Article 9 of the Birds Directive and
has also launched a contract with a view to establishing a platform for
exchange of best practices on the issue and to gathering reliable monitoring
population data.

            Further judgments of the
Court of Justice in 2010

In case C-491/08 of 19 June 2010, against
Italy and concerning a planned tourist complex in Narbolia located in an SCI
(site of Community importance), the Court found that Italy failed to adopt the
necessary conservation measures and measures to avoid deterioration of the
habitats for which the site is designated (breach of Art.6(2) of the Habitats
directive).

In case
C-164/09 of 11 November 2010, against Italy, the Court concluded it (Venice region) did not respect the conditions of Article 9 of the Birds Directive by
adopting and applying the present hunting derogations.

In its judgement C-308/08
the Court found that the Commission failed to prove that the implementation of
the road upgrading project at issue has actually had a real impact on the
habitat fragmentation of the Iberian lynx. According to the Court, the evidence
before the Court was not sufficient for it to find that the project for
upgrading the country road, accompanied by the corrective measures, constitutes
in itself intervention of a kind which places the Iberian lynx on the site
concerned in danger of extinction and which, accordingly, risks seriously
compromising the ecological characteristics of that site. Therefore the Court
dismissed the action.

It should also
be brought to the fore that by Order of 10 December 2009 (in case C-573/08) , the Court requested
that Italy suspends the application of a Regional hunting law in one Lombardia
Region. This is the second case where the Commission successfully obtained
interim measures against Italy.

Finally, in a preliminary
ruling (C-226/08) of 14 January 2010, the Court
rejected an attempt by the municipality of Papenburg in Lower Saxony to prevent
the German authorities from designating parts of the Ems river as protected
sites under the EU's Natura 2000 network. In this preliminary ruling the Court
confirmed that member states can only refuse to include a site in the Natura
network on environmental grounds, not for economic or social reasons. The Court also ruled, in this same case, that Article 6(3) and (4)
of Directive 92/43, as amended by Directive 2006/105, must be interpreted
as meaning that ongoing maintenance works in respect of the navigable channels
of estuaries, which are not connected with or necessary to the management of
the site and which were already authorised under national law before the expiry
of the time-limit for transposing Directive 92/43, as amended by Directive
2006/105, must, to the extent that they constitute a project and are likely to
have a significant effect on the site concerned, undergo an assessment of their
implications for that site pursuant to those provisions where they are
continued after inclusion of the site in the list of sites of Community
importance pursuant to the third subparagraph of Article 4(2) of that
directive.

            Petitions

In 2010, the
Commission received 32 petitions related to the issue of nature protection (Austria, Bulgaria, Denmark, France, Germany, Greece, Hungary, Ireland, Italy, Poland, Portugal, Slovakia and Spain). The subjects raised in these petitions ranged from the
measures for the protection of Natura 2000 sites themselves to the
environmental effects of infrastructure projects on designated sites. A
proportion of the nature protection petitions concerned projects with a
potential impact on designated sites in Spain, Portugal and Hungary. Responding to concerns raised within the Petitions Committee, Directorate-General for Environment
organised a nature conservation seminar for Bulgarian officials in Sofia in spring 2010.

8.1.2.
Evaluation based on the
current situation

Despite the small number of legal
instruments in this field, nature conservation legislation accounts for
between a fifth and a quarter of environmental infringements. The nature sector
accounts for the highest number of open environmental cases. The high number of
cases in the nature sector is due mainly to the extent of the network, which
now includes around 26, 000 sites: there are Natura 2000 sites in the vicinity
of nearly every EU citizen. This is positive in as much as it brings the EU
close to its citizens but it also means that the Commission receives a lot of
complaints about threats to these sites. Although the demand from
citizens, specialised and active NGOs and the European Parliament is high, the
complaint and legal enforcement mechanisms for nature conservation in the
Member States are often weak or inappropriate.

In order to rationalise the handling of
this high number of cases and ensure the effective implementation of the nature
directives, the Commission has taken several measures, which can be divided
into three categories:

· Focus on the main implementation priorities: the core obligations of the directives were effectively addressed
(i.e. correct and complete transposition and establishment of the Natura2000
network), while systemic problems of bad implementation were tackled (e.g.
hunting derogations).

· Proactive cooperation with Member States:
this includes the drafting of interpretative guidance documents for the main
provisions of the nature directives; the development of targeted guidance for
economic sectors such as the port sector, wind energy, the non-energy
extractive industry, and inland waterways, which have particular challenges in
relation to the legislation; training of the competent authorities; regular
contacts with the national, regional and local authorities, establishment of
the “GreenEnforce Network“.

· Improvements in the handling of complaints: specific methods have been developed with the purpose of helping
the complainants (i.e. ad hoc nature supplementary information form, which
guides the complainants as regards the information needed to evaluate a
complaint) and making more effective use of complaints (i.e. grouping of
complaints in order to focus on systemic breaches).

Those measures have had a significant
effect, as they resulted in the reduction of the implementation deficit.

8.1.3.
Evaluation results
8.1.3.1.
Priorities and Planned action (2011 and beyond)

Priorities and planned actions will be the
following:

· Completing the establishment stage of the Natura 2000 network. The terrestrial part of the Natura
2000 network is either established or close to establishment in accordance with
the Habitats and Birds Directives. Habitats and species coverage still needs to
be extended in places, mainly in the EU-12 Member States, and legal action will
be pursued against Member States when necessary. The process to finalise the
establishment of marine sites is well underway. In order to facilitate the
marine site identification process, a guidance document has already been
prepared by the Commission services. Marine Biogeographic Seminars covering all
European sea regions took place in 2009 and 2010. The Member States are
expected to have made substantial marine designations, both for SCIs and SPAs,
by 2012.

· Ensuring a systematically correct approach to Natura 2000 site
protection. To enable the
Natura 2000 network to achieve its goal of conserving key elements of Europe’s biodiversity, there needs to be proper scrutiny and minimisation of, the impacts
of potentially damaging plans and projects in line with ECJ case-law. Ensuring
application of best scientific knowledge for appropriate assessments,
examination of alternatives and, where appropriate, provision of compensatory
measures are all major challenges. In this regard, the Commission services have
issued guidance on relevant key provisions of the nature directives. In 2010
the Commission issued guidance to promote best practice within specific
economic sectors, such as wind energy and non-energy extractive industries;
further guidance is being finalised (port development) or under preparation
(inland waterway transport and agriculture).

·
Ensuring overall positive management of
Natura 2000 network. Apart
from vetting potentially damaging plans and projects, Member States need to set
up effective management systems for Natura 2000, supporting human activities
such as conservation-sensitive farming that are beneficial to conservation
objectives while also meeting socio-economic needs. In 2009 a new expert group
on the management of Natura 2000 was established. Meetings were held throughout
2010 with an aim to develop and exchange information on best practice in Natura
2000 management, focusing in particular on SAC designation, integrated
management approaches and reconciling nature conservation and economic
development objectives. The Commission intends in 2011 to launch a new process
at biogeographical level in order to address jointly with Member States the
conservation needs of the respective Natura 2000 sites. Work to assure adequate
financing of Natura 2000 through EU funds is underway and a Communication on
that issue is scheduled by mid-2011.

· Prioritisation of Commission’s legal enforcement work. In the coming years, the Commission will continue to pursue its
legal enforcement action to help meet the main objectives of the nature
conservation legislation. To this effect, high priority will continue to be
given to pursuing infringement cases concerning significant non-conformity of
national implementing legislation with the Birds and Habitats Directives,
insufficient site designations (mainly in the EU-12 Member States and for
marine sites), including lack of designation of SCIs as SACs where the deadline
has expired, and the lack of adequate legal protection and management regimes
for the Natura 2000 sites. Focus will also be on addressing breaches concerning
big infrastructure projects or interventions involving EU funding that have
significant adverse impacts on Natura 2000 sites. In this context, the
Commission will take into account considerations such as irreversible
ecological damage and, where appropriate, seek interim measures from the
European Court of Justice[178]. Infringements
concerning unsustainable hunting practices in some Member States will also be
followed up closely. In order to better handle individual complaints pointing
to widespread problems of bad implementation, the established practice of
launching horizontal infringement cases will continue to be followed. The
approach in implementing EU legislation in general is set out in the Commission
Communication "A Europe of results – Applying Community law"
(COM(2007)502 final)[179]. The approach to be
taken in the implementation of EC environmental law in particular is laid down
in the Commission Communication on implementing European Community
Environmental Law (COM(2008)773 final)[180]. In addition
to legal action, the Commission is taking several proactive actions to promote
enforcement, including dissemination of good practices, awareness-raising and
communication, increased integration in other policies.

8.1.4.
Sector summary

As regards the designation of Special
Protection Areas and Sites of Community Importance as part of the Natura 2000
network, further substantial progress was made in 2010. In January 2011, the
Commission adopted six decisions updating existing Biogeographic Lists of Sites
of Community Importance (SCIs). The additions include 739 new sites
representing a total area of 27,000 km². More than half of that is made up of
marine sites, indicating further significant progress as regards the
designation of marine areas, although substantial efforts are still needed,
especially offshore.

Most Member States are now in a process of
designating their Sites of Community Importance as Special Areas of
Conservation (SAC) according to Article 4(4) of the Habitats Directive. Member
States have to designate their SCI as SACs not later than six years after the
inclusion of the sites in a Community list. The deadline for designation as SAC
was 28 December 2007 for most sites of the Macaronesian biogeographical region
and 22 December 2009 for most sites of the Alpine biogeographical region. For
most sites of the Atlantic and Continental regions it was 7 December 2010.

Effective management of Natura 2000 sites
will be increasingly a priority in the coming years. In that regard the
Commission is focusing on proactive measures such as exchange and dissemination
of best practices, awareness-raising and communication, assuring adequate
financing of Natura 2000 needs, improved integration in other major EU
policies.

Species protection continues to constitute
a challenge when implementing the Nature Directives. The species listed in the
Directives shall be strictly protected but they can also be hunted provided the
conditions in the Directives are fulfilled. The proper functioning of the
Natura 2000-network is ensured by hunting derogations granted on correct
grounds and by appropriate protection regimes and management of protected
sites, including of the species present there.

The priorities in the Nature sector have
largely remained the same from previous years. Legal enforcement work in this
sector, as in other environment sectors, must be prioritised in the interest of
the efficient pursuit of the objectives of environment legislation. The
approach to be taken in the implementation of EC environmental law in
particular is laid down in the Commission Communication COM(2008)773 final on implementing European Community Environmental Law.

Therefore, in the
coming years, the Commission will continue to pursue its legal enforcement
action to help meet the main objectives of the nature conservation legislation.
To this effect, high priority will continue to be given to pursuing
infringement cases concerning significant non-conformity of national
implementing legislation with the Birds and Habitats Directives, insufficient
site designations (mainly in the EU-12 Member States) and the lack of adequate
legal protection and management regimes for the Natura 2000 sites, including
the lack of designation of SCIs as SACs where the deadline has expired. Focus
will also be on addressing breaches concerning big infrastructure projects or
interventions involving EU funding that have significant adverse impacts on
Natura 2000 sites. In this context, the Commission will take into account
considerations such as irreversible ecological damage and, where appropriate,
seek interim measures from the European Court of Justice[181].
Infringements concerning unsustainable hunting practices in some Member States
will also be followed up closely. In order to better handle individual
complaints pointing to widespread problems of bad implementation, the
established practice of launching horizontal infringement cases will continue
to be followed.

8.2.
Waste Management
8.2.1.
Current position
8.2.1.1.
General introduction

EU waste policy aims to turn the EU into a
resource-efficient recycling society. This is a policy area which has a huge
potential to make the EU more resource-efficient. Collection and recycling of
waste save the use of virgin materials and reduce CO2 emissions. Studies
published during 2010 and in the beginning of 2011 indicate that proper
implementation of EU waste legislation could have significant economic,
financial and social benefits in terms of increased access to valuable
secondary raw materials, less unfair competition in the market and strong
encouragement for innovative equipment manufacturers and services. The
significant costs of having to clean up after illegal dumping and its negative
impacts on air and water could be avoided. In addition to the waste-related
benefits, full implementation of EU waste legislation would reduce emissions of
greenhouse gases, including methane from landfills, equivalent to almost 200
million tons of CO2 a year. This would save €2.5billion annually at a carbon
price of around €13 per tonne.[182]

EU waste legislation
covers a large share of the entire EU environmental acquis and includes
thirteen main legislative acts adopted by the European Parliament and the
Council and a large number of related decisions adopted through comitology
procedures.[183] The overall scope of
this legislation is the prevention or reduction of waste production, the
re-use, the recycling, other types of recovery than recycling and the disposal
of different categories of waste; permitting and control of disposal
operations, mainly landfills; and shipments of waste within the EU as well as
to and from third countries.

Two main instruments
directly addressing waste management operations are the new EU waste framework
directive which became due for transposition on 12 December 2010[184]
(2008/98/EC) and the EU landfill directive[185] (1999/31/EC
and Council decision on waste acceptance criteria 2003/33/EC). The waste
framework directive modernises and simplifies the EU waste acquis. This
Directive, when properly implemented, will be an important tool to make the EU
more resource-efficient. The directive contains key provisions on the
prevention of waste (Articles 3.12 and 9), waste prevention programmes (Article
29 and Annex IV) and the establishment of waste management plans (Article 28).
The EU waste framework directive sets out a hierarchy promoting waste
prevention over its recovery, with disposal as the last recourse, and lays down
basic requirements for waste management including permit obligations for waste
handling. The directive obliges Member States to ensure that waste is managed
without endangering human health and the environment, and prohibits the
abandonment, dumping or uncontrolled management of waste (Art. 13, 36). It
requires adequate networks of waste treatment installations (Art. 16).

The EU landfill directive is intended to
prevent or reduce the adverse effects of landfilling on the environment,
particularly on surface water, ground water, soil, air and human health. It
specifies requirements for landfill sites and targets for diversion of
biodegradable municipal waste from landfills in order to reduce methane
emissions, coupled with technical requirements for capture and treatment of
landfill gas.

Further, EU waste
legislation contains specific rules for waste shipments[186]
and a series of directives on different waste streams: waste electrical and
electronic equipment; end-of-life vehicles; packaging waste; batteries;
persistent organic pollutants (POPs); including e.g. polychlorinated biphenyls
(PCBs); mining waste and sewage sludge.[187]

8.2.1.2.
Report of work done in 2010

The new waste framework directive

Member States had to notify the
transposition of the new waste framework directive by 12 December 2010. The
Commission monitored the transposition of the directive closely and urged
Member States for a timely transposition indicating that it would take the
necessary legal steps against Member States failing to communicate their
national transposition measures. At the beginning of 2011 cases were launched
against 23 Member States (all except Czech Republic, Denmark, Italy and Austria) for failure to adopt and notify transposition measures by the prescribed
deadline.

The Commission actively supported Member
States with the transposition of the waste framework directive. During 2010,
three multilateral meetings were organised by the Commission with the Committee
of the Member States established under the waste framework directive.
Awareness-raising events and information exchanges with Member States and stakeholders were organised to take place in 15 Member States during 2010-2011
concerning the implementation of the EU waste framework directive. The Commission's
representatives also presented the directive on numerous workshops and
conferences in Member States.

The Commission prepared during 2010 a
number of comitology decisions relating to the new waste framework directive,
in particular on end-of-waste criteria (submitted to Council for adoption), the
calculation of targets set by the directive, an implementation questionnaire,
the notification format for waste management plans and waste prevention
indicators. Guidelines on waste prevention programmes, an update of the
existing guidance on waste management plans and guidance on
life-cycle-assessments were also prepared in order to be published during 2011.

The proposed recast
of the WEEE Directive

The Commission's proposal for the recast of
the WEEE Directive (Directive 2002/96/EC on waste electrical and electronic
equipment) is in the co-decision process. The proposal aims to contribute to a
better regulatory environment by providing further clarity on the legislation,
reducing administrative burden, improving coherence among EU legislation and
strengthening enforcement.

The Council has in
first reading proposed to apply a definition of
producer that builds on the concept of national markets. This national concept
can lead to a situation of multiple registration, multiple payments for the
same product, multiple requirements for treatment information and marking of
products, as well the obligation for producers to be legally represented in
more than one Member State. The Commission had proposed to clarify that a
concept based on the Community market should be used to avoid such burdens, and
still considers that a European approach to the producer obligations should be
agreed. This applies especially to the obligations of cross-border distance
sellers.

The Commission proposal will also result in
significant benefits for the environment. In order to address the environmental
problem caused by the “leakage” of electronic waste to substandard treatment
and to illegal exports, the Commission proposed a new waste collection rate in
the WEEE Directive. The rate is proposed to be set at the level of 65% by
weight of what has been placed on the market in the two preceding years on
average, which implies an ambition level of 85% of WEEE generated. National
targets would therefore take into account the economies of each individual Member State. The target would become binding by 2016.

The collection target
is one of the crucial issues of the Directive and needs to be ambitious, while
at the same time it must be ensured that the reality of each Member State is reflected in the appropriate ambition level. This is especially the case for
problematic WEEE fractions. The Commission proposed that the option of a
specific target for cooling and freezing equipment should be looked into
separately at a later date. A report on this issue could be extended to include
further categories such as mercury containing lamps, small equipment, or
others.

The enforcement of the WEEE Directive was
proposed to be strengthened in order to specifically address the problem of
illegal waste shipments. The WEEE proposal includes rules to avoid illegal
shipments of electrical and electronic waste, especially when falsely declared
as used products. Minimum monitoring requirements for shipments of WEEE are
proposed and minimum inspection requirements are reinforced. In order to improve effective border controls against illegal
exports, the Commission has here proposed to reverse the burden of proof at the
port of exit: exporters of "equipment for reuse" would in the future
be obliged to show proof of testing through mandatory documentation. This would
make it easier for officials at port authorities to decide whether equipment
must be considered as e-waste or not, and to stop illegal exports effectively where
necessary.

The Commission proposed
the recast procedure in order to tackle specific issues arising with the
directive. An extension of the scope was not part of the Commission proposal
nor of the impact assessment carried out in the context of the Commission
proposal. The Commission does not support to amend substantial parts of the
Directive without a proper impact assessment. An open scope could make a number
of new exclusions necessary. The establishment and interpretation of these
would risk increasing un-clarity compared to the current, well established,
situation.

The Commission received
in the second half of 2010 reports from Member States as regards implementation
of the WEEE Directive in the years 2007 and 2008. The Commission is currently
analysing this information, and will take the necessary steps as soon as
possible.

With regard to the
transposition of the WEEE Directive, conformity is achieved for 13 Member
States. In 2010 the Commission continued legal enforcement actions opened in
2007 horizontally against a number of Member States. As of end of 2010,
infringement cases were open for 11 Member States (Czech Republic, Denmark, Finland, France, Ireland, Italy, Lithuania, Latvia, Portugal, Sweden and Slovakia). A case was open in 2010 for bad application of the Directive in Romania. In 2011, the Commission in cooperation with the remaining Member States (Malta, UK, Belgium) will assess their national legislation. Legal enforcement action will be taken
in 2011 where necessary.

The proposed recast
of the RoHs Directive

The RoHS Directive (Directive 2002/95/EC on
the restriction of the use of certain hazardous substances in electrical and
electronic equipment) sets strict limit values for
lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls or
polybrominated diphenyl ethers in various specified types of electrical and
electronic products.

RoHS has prevented many thousands of tonnes
of banned substances from being disposed of and potentially released into the
environment since it came into force in 2003. It has led to important changes
in product design in the EU and worldwide. RoHS has also served as a model for
similar laws outside the EU. RoHS currently covers a vast spectrum of products
that use electricity.

In 2008, the Commission launched the recast
of this Directive. A first reading agreement with the European Parliament was
reached on 24 November 2010. Key elements included the gradual extension of the
scope to all electrical and electronic equipment; a mechanism for reviewing or
amending the list of banned substances; clearer rules for granting exemptions
from the substance ban; coherence with REACH; clarification of important
definitions; and alignment with the legislative package for marketing of
products. The Commission made four declarations on scope, review,
nano-materials and correlation tables.

The Commission prepared
to launch studies for an impact assessment of the changes in scope that were
not impact assessed, and to provide for potential new exemption requests under
the current scope. In order
to facilitate implementation, the Commission gathered ideas for an update of
the RoHS Frequently Asked Questions (FAQ) document.

With regard to the transposition of the
RoHS Directive, correct transposition is achieved by 27 Member States, for 11
of them after legal enforcement actions were launched.

The RoHS Annex –
Review of the current RoHS exemptions

The Annex to the RoHS Directive lists
specific applications where the use of restricted substances under RoHS is
allowed, as long as the substitution is technically or scientifically
impracticable. The RoHS Directive requires the Commission to carry out a review
of all exemptions every four years to verify if the exemptions are still
justified.

Directorate-General for Environment
prepared this review through a study (technical and scientific assessment of 29
exemptions) accompanied by a series of extensive stakeholder consultations. The
review was subject to comitology procedure with scrutiny (vote by the Member
States experts in the Technical Adaptation Committee, followed by three months
scrutiny of the European Parliament). The Commission proposal was fully based
on technical and scientific evidence, as well as on coherence with other
established EU policies such as Ecodesign requirements. The reviewed Annex was
adopted and published as Commission Decision
2010/571/EU of 24 September 2010 amending, for the purposes of adapting to
scientific and technical progress, the Annex to the RoHS Directive as regards
exemptions for applications containing lead, mercury, cadmium, hexavalent
chromium, polybrominated biphenyls or polybrominated diphenyl ethers (OJ L 251,
25.9.2010). A corrigendum was published on 29
September 2010.

Additionally, Directorate-General for Environment
currently review five new requests by industry for exemptions or modifications
of existing exemptions.

The waste shipment
regulation

In order to strengthen the implementation
and application of the EU waste shipment regulation, support services were
established including a forum, a help-desk and a Frequently Asked Questions
(FAQ) site. The aim of these measures was to enable national authorities to
rapidly exchange information/best practices and discuss questions concerning
the day-to-day application of the EU waste shipment regulation, including also
matters pertaining to the prevention of illegal shipments of waste. It is
accessible to Member States and also open to other stakeholders.

A comitology decision was adopted extending
the derogation period for Bulgaria to raise objections to shipments of certain
waste to Bulgaria for recovery under the EU waste shipment regulation (OJ L210,
11.8.2010, p.35).

The Commission completed two studies
regarding criteria and requirements for waste shipment inspections in June 2010
and prepared a stakeholder consultation on the feasibility of strengthening EU
legislation on these matters. Currently, inspections
and controls of waste shipments appear to vary significantly between Member
States. In some countries only very few and insufficient controls are carried
out. The waste chain is only as strong as its weakest link and waste is
suspected to be illegally exported via the EU sea-ports having the least
effective controls. The studies contain a detailed
assessment of the environmental, economic and social impacts of the criteria
which were considered as amongst the most appropriate, see http://ec.europa.eu/environment/waste/shipments/reports.htm.
Council conclusions (JLS) of 3 June 2010 invited the
Commission to "consider strengthening the European requirements on inter
alia inspections and spot check carried out under Regulation (EC) No 1013/2006
on shipments of waste, in order to fight illegal waste shipments"[188]
The Commission was also invited to "suggest the development of additional
measures to support Member States with the enforcement of Regulation (EC) No
1013/2006 on shipments of waste".

The Regulation on
Persistent organic pollutants (POPs)

Following a comitology decision, the EU
regulation on persistent organic pollutants 850/2004/EC (the "POPs
regulation") was amended by Commission regulation No 756/2010 of 24 August
2010, as regards Annexes IV and V. By this amendment, new substances were added
to the list of persistent organic pollutants. As a consequence of substances
being covered by the POPs Regulation, their production, placement on the market
and use will be severly restricted and the management of wastes contaminated
with these persistent organic pollutants is strictly regulated (substances
exceeding a given POP concentration have to be destroyed or treated in a way
that the POPs substances are irreversibly transformed, i.e. in most cases they
will have to be incinerated).

The End-of-Life
Vehicles Directive

Directive 2000/53/EC on end-of-life
vehicles (the "ELV directive"), prohibits the use of lead, mercury,
cadmium or hexavalent chromium in materials and components of vehicles put on
the market after 1 July 2003, Article 4(2)(a). Annex II to this directive lists
vehicle materials and components exempted from the prohibition set out in
Article 4(2)(a).The fourth revision of Annex II was adopted on 23 February 2010
amending Annex II.

Commission Decision 2008/689/EC specified
that in the case of solder in electronic circuit boards and other electrical
applications except on glass and solder in electrical applications on glass,
the exemptions in Annex II should be reviewed. Technical and scientific
assessment demonstrated that these two exemptions should be split into 10 more
specific applications. Out of these, five materials and components containing
lead should continue to be temporarily exempted from the prohibition set out in
Article 4(2)(a) since the use of these substances in those specific materials
and components is still technically or scientifically unavoidable. It was
therefore appropriate to prolong the expiry date of these exemptions until the
use of the prohibited substances becomes avoidable. Five other materials and
components containing lead should continue to be exempted from the prohibition
set out in Article 4(2)(a) without an expiry date since the use of these
substances in those specific materials and components is technically or
scientifically unavoidable and no viable alternatives are envisaged in the near
future. These exemptions should be reviewed in 2014 in the light of technical
and scientific progress to assess when the use of these substances will become
avoidable. The exemption concerning lead in solders in electrical glazing
applications on glass except for soldering in laminated glazing should be
reviewed by 1 January 2012 since substitutes for this application exist but
their technical properties need to be further tested and confirmed. In the case
of lead and lead compounds in components in bonding agents for elastomers in
power-train applications containing up to 0,5 % lead by weight, the exemption
should not be prolonged because the use of lead in this type of applications
has become avoidable. In addition, it was considered technically impossible in
certain cases to repair vehicles with spare parts other than original ones as
this would require changes in dimensional and functional properties of entire
vehicle systems. Such spare parts cannot fit into the vehicle systems
originally manufactured with parts containing heavy metals and these vehicles
cannot be repaired and may need to be prematurely disposed of. For reasons of
consumer safety and environmental benefits derived from the extension of the
product’s lifetime it was therefore appropriate to allow the repair of these
vehicle components with the original parts.

A further proposal as regards exemptions
under Annex II (the use of lead in automotive thermoelectric materials in
application reducing CO2 emissions by recuperation of exhaust heat) was opposed
by the Council. Although the Council supported the substance of the draft
Commission directive, a qualified majority of delegations opposed its adoption
on the grounds that, by requiring member states to draw up correlation tables,
the Commission had exceeded the implementing powers provided for in the basic
act, i.e. the ELV Directive. A new Commission Directive 2011/37/EU[189] amending
Annex II to the ELV Directive was adopted on 30 March 2011.

With regard to the transposition of the ELV
Directive, conformity has been achieved for 15 Member States. In 2010 the
Commission has continued enforcement actions concerning non-conform national
legislation. As of December 2010, 12 infringement procedures were ongoing (Belgium, Czech Republic, France, Italy, Cyprus, Lithuania, Latvia, Poland, Slovenia, Slovakia, Sweden and the United Kingdom).

The Batteries
Directive

The Batteries Directive (2006/66/EC)
prohibits placing on the market of batteries and accumulators containing mercury
and cadmium. This prohibition applies above set thresholds and is subject to a
number of exemptions. One specific exemption is for use of cadmium in portable
batteries and accumulators intended for use in cordless power tools (for
example, tools used by consumers and professionals for turning, milling,
cutting, drilling or gardening activities).

The Batteries
Directive requires the Commission to review the exemption for the use of
cadmium in cordless power tools. The Commission submitted a report to the European
Parliament and to the Council in December 2010 and concluded that at this stage,
although alternative technologies exist, it is not appropriate to bring forward
proposals to withdraw the exemption for cordless power tools from the ban on
cadmium in batteries and accumulators because not all the technical information
(notably costs and benefits of the use of cadmium and its substitutes in
portable batteries and accumulators for cordless power tools) is yet available
in support of such a decision. The Commission ordered in October 2010 a
comparative life-cycle analysis, to gather this information beyond the existing
scientific literature and including a peer review, as required by scientific
quality standards, which will provide the missing information in order to
decide on whether or not to keep the exemption for the use of cadmium batteries
in cordless power tools. Based on that information, the Commission will, if
appropriate, then proceed with proposals for legislation with a view to
prohibiting cadmium in batteries and accumulators in cordless power tools by
withdrawing the existing exemption.[190]

Commission
Regulation No 1103/2010 was adopted establishing, pursuant to
Directive 2006/66/EC of the European Parliament and of the Council, rules as
regards capacity labelling of portable secondary (rechargeable) and automotive
batteries and accumulators.

During 2010, an updated document on
Frequently Asked Questions regarding the Batteries Directive was prepared for
publication in 2011.

With regard to the
transposition of the Batteries Directive, full transposition has been achieved
by all Member States. The last infringement cases for failure to communicate
measures of transposition of the Directive were closed in 2010, for two of
those after a condemning judgment by the Court of Justice in cases C-512/09
against Greece and C-513/09 against Belgium. The deadline for Member States to
transpose Directive 2008/103/EC amending the Directive 2006/66/EC on batteries
and accumulators expired in January 2009. Full transposition has been achieved
by all Member States. In 2011 the Commission in cooperation with the Member
States will carry out an assessment of the conformity of national legislation
of all Member States and take legal enforcement action where necessary.

Bio-waste

On 18 May 2010, the Commission adopted a
Communication in which it assessed issues relating to bio-waste and proposed a
set of measures for bio-waste based on existing legislative possibilities. On 3
December 2010, a round of stakeholder consultations was launched in order to
prepare an impact assessment (and potential proposal) aimed at setting a
recycling targets for bio-waste as an element of modification of recycling
targets in the waste framework directive. An examination of end-of-waste
criteria for compost (i.e. compost standards) was initiated in accordance with
the waste framework directive.

Landfills Directive

With regard to transposition of the
Landfill Directive 1999/31/EC, as of December 2010 full conformity had been
achieved in almost all Member States, except France, who was referred to the
Court of Justice, the United Kingdom, whose final measures to achieve
conformity are under assessment and Bulgaria whose legislation is under
assessment.

With regard to horizontal cases concerning
structural illegal landfilling Greece was followed up with an additional letter
of formal notice on the basis of Article 260 TFEU. Cases for illegal waste
disposal were started or followed up against Greece, Spain, Ireland and Slovakia.

With regard to the serious situations in Italy, specifically concerning deficient implementation of waste legislation in the Campania region, in 2010 the Commission has worked very closely with Italian authorities. In
June 2007, the Commission launched legal action against Italy over the chronic waste crisis affecting Naples and the rest of the Campania region. In view of
the continuation of the infringement, the Commission referred the case to Court
of Justice in July 2008. On 4 March 2010 the Court of Justice ruled that Italy had failed to set up an adequate and integrated waste management system in the Campania region and to guarantee that waste is collected, treated and disposed of without
endangering human health and the environment. The Commission is now assessing
the measures adopted by Italy to comply with the judgment and will decide the
follow up of the case further the results of the ongoing assessment.

Packaging Directive

With regard to the Directive 94/62/EC on
packaging and packaging waste, in 2010 the Commission in cooperation with the
Member States carried out an assessment of the conformity of national
legislation of all Member States but Italy and Cyprus. Legal action has been
taken against two Member States (Latvia and Slovakia). The assessment will
continue in 2011 covering also the remaining Member States.

Mining Directive

Concerning the Directive 2006/21/EC on the
management of waste from extractive industries full transposition has been
achieved for all Member States but France who was condemned by the Court of
Justice in the case C-35/10 and the United Kingdom, condemned by the Court in
the case C-259/09. In 2010, as a horizontal exercise for 19 Member States the
Commission carried out an assessment of the conformity of national legislation
in cooperation with the relevant Member States. The Member States concerned are
Denmark, Hungary, Italy, Lithuania, Latvia, the Netherlands, Poland, Romania, Slovenia, Luxembourg, Malta, Spain, Slovakia, Bulgaria, Germany and Sweden. Legal action has been taken against three countries (Slovakia, Slovenia and Latvia). The assessment will continue in 2011 covering also the remaining Member
States.

Judgments of the Court of Justice in
2010

In 2010 the Court delivered judgment in nine
cases related to waste sector. The United Kingdom and France were condemned for failure to transpose the Directive 2006/21/EC on the management of waste
from extractive industries (4 February 2010, C-259/09 Commission v United Kingdom and 29 July 2010, C-35/10 Commission v. France). Belgium and Greece were condemned for failure to transpose the Directive 2006/66/EC on batteries and
accumulators and waste batteries and accumulators (15 July 2010, C-512/09 Commission
v Greece; 29 July 2010, C-513/09 Commission v Belgium). France was condemned for non-conform transposition of the Directive 2000/53/EC on end-of life
vehicles (15 April 2010, C-64/09 Commission v France). Italy was condemned for failure to fulfil its obligations under the Directive 2006/12/EC on waste
over the waste crisis affecting Naples and the rest of the Campania region (4
March 2010, C-297/08 Commission v Italy). The Court concluded that Italy has not fulfilled its obligations under the Waste Directive 2006/12/EC by failing to set up an
integrated and adequate network of disposal installations in Campania region
and to ensure that waste is recovered and disposed of without endangering human
health and the environment. Portugal was condemned for failure to fulfil its
obligations under the Directive 2006/12/EC on waste concerning waste tipping in
disused quarries (10 June 2010, C-37/09 Commission v Portugal). In addition, the Court judged on a preliminary reference of an Italian court on the
interpretation of the polluter pays principle in the framework of Article 10 of
the Directive 1999/31/EC on the landfill of waste (25 February 2010, C-172/08 Pontia
Ambiente) and of a Finnish court on the interpretation of the Directive
2000/76/EC on the incineration of waste (25 February
2010, C-209/09 Lahti Energia).

Petitions

During 2010, almost twenty petitions
concerned alleged infringements of EU waste legislation, in particular the
landfill directive and the waste framework directive. Majority of the petitions
concerned situations in Italy, Spain and United Kingdom. These petitions
related to a number of cases of illegal waste disposal and, in the
case of the waste framework directive, transposition of EU waste
requirements in national law.

8.2.2.
Evaluation based on the current situation

Significant deficits in the implementation
and enforcement of EU waste legislation remain in large parts of the EU,
particularly as regards illegal waste dumping, inadequate waste disposal- and recovery
infrastructure and illegal waste shipments. Implementation of EU waste
legislation thus continues to be notoriously deficient, which is well reflected
in the high number of infringements, complaints, court proceedings, petitions
and questions from the European Parliament. Some of the infringement cases and
court proceedings concern horizontal cases on hundreds of illegal landfills in Europe.

The implementation of the new waste
framework directive which is crucial for modern European waste policy poses a
new big challenge for implementation in the years to come. In addition, the
implementation of the waste shipment regulation, the landfill directive and the
future recast of the WEEE- and RoHS Directives are particularly important
pieces of legislation which could if properly implemented make significant
progress towards achieving EU waste policy objectives.

Overall waste generation is still growing
although this is now at a rate slower than GDP growth, showing a certain
decoupling between waste generation and economic growth. Over the past 10
years, the recycling rate of municipal solid waste has doubled (from 19% to 38%
between 1998 and 2007) and landfilling has decreased significantly.

A large disparity between Member States on
how EU waste requirements are applied in practice and 'on-the-ground' was shown
to exist through information exchanges and awareness-raising events organised
with national authorities and stakeholders as well as in statistics from the
EEA and Eurostat. For example, large differences exist between the recycling
performances of Member States: from few percent to up to 60 to 70% for the most
advanced Member States. In a first analysis, it seems that the most performing
Member States have set in place a range of legal and economic instruments which
were very efficient, such as landfill taxes, 'clever' charging systems linked
with waste generation, producer responsibility schemes and landfill bans.

8.2.3.
Evaluation results
8.2.3.1.
Priorities

Future focus should be on full
implementation of existing legislation and support to Member States so that
they can learn from each other. As proper waste management also has a huge
potential in terms of reduction of greenhouse gas emissions and economic,
financial and social benefits this should be followed up with specific measures,
inter alia, linking climate and waste policies and ensuring consistency
between product design and waste policies.

It is key to ensure that the experiences
from the most performing Member States beneficiate to other Member States
notably for what concerns the application of performing instruments such as
taxes or charges, landfill bans and application of producer responsibility
principles.

8.2.3.2.
Planned action (2011 and beyond)

The Commission will continue and reinforce
its up-stream support for Member States in the field of waste. It will also
pursue an assessment of options on how to improve such support. A list of
best-practices for permitting and inspections under the waste framework
directive, the landfill directive and the WEEE- and RoHS directives will be
drawn up and tested during 2011.

The
implementation of the new waste framework directive, crucial for modern
European waste policy, will be closely monitored. It will be examined how to
provide effective support to Member States’ development of waste management
plans and waste prevention programmes. During 2011, a risk/fact-based
assessment of waste management plans will be started in order to assess and
improve Member States performance. An update will also be made of the existing
guidance on waste management planning.

Life-cycle
thinking could justify deviations from the established waste hierarchy (Article
4) since different waste treatment methods can have different environmental and
health outcomes. The Commission will use the life-cycle assessment tool when
assessing the national waste management plans and will in 2011 publish a set of
guidance documents on how life-cycle methodology can be applied to decisions on
waste management options.

Member States'
national measures transposing the new waste framework directive will be
assessed by the Commission with a view to ensure their conformity with the
directive.

Important cases
concerning infringements by Member States of EU waste legislation, such as
regards the serious situations in Italy's Campania region and in Sofia, Bulgaria, will be treated with high priority by the Commission until satisfactory
solutions are achieved and the situations have been rendered in compliance with
EU legislation. In addition, horizontal cases covering large numbers of
individual waste disposal operations will also be treated with high priority.
During 2010 such cases were pending regarding France, Italy, Spain, Ireland, Greece.

The high rates of illegal waste shipments
shall be brought down by effective measures and the feasibility of
strengthening criteria and requirements at EU level will be examined.

An in-depth assessment of the economic,
financial and social benefits of properly implementing the EU waste acquis
will be prepared. This will contain an overarching assessment of the entire EU
waste acquis as well as a number of specific case-studies in Member
States. A detailed overview will also be delivered of the different tasks
needed to strengthen implementation and enforcement of this acquis and
the appropriate arrangements to carry out these tasks. The Commission will thus
continue to assess the feasibility of a dedicated structure to support waste
implementation.

EU waste targets have to be reviewed in the
mid-term in order to face the challenge of increasing resource demand as well
as to better take into account environmental impacts of materials to move
towards 'sustainable material management'. This is also an opportunity in terms
of activity and job creation.

Member States’ compliance with the targets
set in the landfill directive for diverting biodegradable waste from landfills
will be closely monitored. In addition, the Commission will closely monitor
Member States' closure of sub-standard landfills not complying with the
requirements of the landfill directive (deadline by 16 July 2009, see Article
14 of the directive). The Commission has already taken and will continue to
take action as required in order to ensure that these key requirements are
fulfilled.

8.2.4.
         Sector summary

The large disparity between Member States
on application, implementation and enforcement of EU waste requirements
continues to exist. Overall waste generation is still growing although at a
rate slower than GDP growth. Future focus should be on full implementation of
existing legislation and support to Member States. A detailed assessment is
needed in order to be able to reap the economic, financial and social benefits
from proper implementation of the EU waste acquis. The different tasks
needed to strengthen implementation and enforcement of the EU waste acquis
and the appropriate arrangements to carry out these tasks should also be
examined.

8.3.
Environmental Assessment of Plans, Programmes
and Projects
8.3.1.
Current position
8.3.1.1.
General introduction

There are two important pieces of
legislation in this sector: Council Directive 85/337/EEC[191]
on the assessment of the effects of certain public and private projects on the
environment, as amended by Directives 97/11/EC[192],
2003/35/EC[193] and 2009/31/EC[194]
(known as the EIA Directive) and Directive 2001/42/EC of the European
Parliament and of the Council on the assessment of the effects of certain plans
and programmes on the environment (known as the SEA Directive[195]).

The EIA Directive obliges Member States to carry
out environmental impact assessments before certain types of public and
private projects which are likely to have a significant impact on
the environment are authorised. The SEA Directive seeks to ensure that the
environmental consequences of certain public plans and
programmes that are likely to have significant environmental effects are
identified and assessed while they are being prepared and before they are
approved.

8.3.1.2.
Report of work done in 2010

The EIA
Directive

The Commission
is continuously assessing the conformity of the national transposition measures
communicated and initiates, when necessary, infringement procedures. Due to its
large scope of application, the EIA Directive can generate a relatively high
number of complaints. However, given the essentially procedural character of
the obligations laid down by the Directive, only a small number of complaints
lead to infringement cases. The majority of the infringement cases concern bad
(incomplete or incorrect) transposition of the Directive's provisions or
failure of the Member States to apply the screening mechanism (article 4(2) and
Annex III of the Directive).

In 2010, the
Commission opened in total 5 new infringement procedures on the basis of the
EIA Directive. Cases were opened against Ireland, Spain, and Portugal concerning bad application of the EIA Directive, three of which were based on a complaint.
One case was launched against Netherlands for non-conform transposition of the
EIA Directive. Four cases out of those opened in 2009 and 2010 have already
been closed.

Article 2(3) of the EIA Directive allows Member States to exempt specific
projects in exceptional circumstances (e.g. for unforeseen civil emergencies;
threats to human health and the environment; security risks) from the
provisions of the Directive in whole or in part, and to notify the Commission.

In 2010, this
provision has been used by Spain. On 12 November 2010, the Spanish authorities
informed the Commission of their intention to exempt the project "Emergency
Works: recovery of sand from the beaches damaged by storms 2009-2010 in the province of Cadiz" from the EIA procedure. According to the information
received, the request was justified by an exceptional circumstance – the
emergency situation arising from the westerly storms, which have affected the
area of the province of Cádiz from December 2009. These storms have had an
exceptional duration and have caused serious damage to beaches. The loss of
sand caused endangers the stability of the beaches, and may endanger, in turn,
infrastructures close to them (boardwalks, access, etc...) and the safety of
people. The Spanish authorities have indicated that no EIA would be carried out
for this project because of the emergency situation. They explained that
another form of assessment has been done and that information has been made
available to the public concerned relating to the exemption decision and the
reasons for granting it. It should be stressed that, the recommendations of the
Commission's Guidance document on the "Clarification of the Application
of Article 2(3) of the EIA Directive"[196]
have been followed in this case.

The EIA Directive has
been identified as a potential instrument for a future simplification
exercise[197], the aim being to
identify overlaps, gaps and potential for reducing regulatory and
administrative burdens, in particular regarding transboundary projects. Adopted
25 years ago, the EIA Directive should be adapted to reflect the experience
gained as well as changes in EU legislation and policy, and European Court of
Justice case law.

The process for the review of the EIA Directive started in
2009 through the adoption by the Commission of the fourth Report on the
application and effectiveness of the EIA Directive (COM(2009)378)[198].
The Commission's report confirms that the objectives of the EIA Directive have
generally been achieved, indicates areas where improvements are needed (e.g.
screening, public participation, quality of the EIA, EIA transboundary
procedures, coordination between the EIA and other environmental directives and
policies, such as climate change and biodiversity) and presents possible
recommendations for action. The future review will aim to improve environmental
protection, increase the degree of harmonisation and simplify existing
procedures (for instance a "one-stop-shop" procedure, i.e. possibility
for coordination of assessment procedures resulting from the existing EU
Directives under the EIA umbrella).

In June 2010, a wide public consultation on the review of
the EIA Directive has been launched, on the basis of an on-line
questionnaire, which was translated in all official languages of the EU. The
consultation covered a broad variety of issues (e.g. quality of the EIA
process, harmonisation of assessment requirements between Member States, assessment of transboundary projects or projects with transboundary effects, role of
the environmental authorities, and development of synergies with other EU
policies). More information on the consultation can be found on the website of
Directorate-General for Environment[199].

The phase of public consultation was concluded by a Conference
for the 25th anniversary of the EIA Directive. The European
Commission organised this Conference with the Belgian Presidency. The
Conference took place on 18-19 November 2010 in Leuven (Belgium) under the headline "25th Anniversary of the EIA Directive: Successes – Failures –
Prospects". On 18/11, there was a high level panel of stakeholders,
which took stock of the 25 years of implementation experience. On 19/11, the
Conference concentrated on three key themes: scope of the EIA Directive,
quality of the EIA process and links of the EIA with international conventions
(mainly the Aarhus and Espoo Conventions). The speeches delivered during the
Conference are available on the website of Directorate-General for Environment[200].

The SEA Directive

The deadline
for transposing the SEA Directive expired on 21 July 2004. The Commission's
action initially focused on launching non-communication infringement
proceedings against Member States which had failed to transpose the Directive
into their national law. Subsequently, the Commission started a systematic
assessment of the conformity of the national transposition measures
communicated and initiated, when necessary, infringement procedures for
non-conform transposition.

Thus, in 2008
infringement proceedings for non-conform transposition of the SEA Directive
were opened against the following eleven Member States: Bulgaria, Czech Republic, Denmark, Estonia, Ireland, Latvia, Lithuania, Malta, Poland, Slovenia and United Kingdom. This action continued in 2009 and infringement proceedings
for non-conform transposition were opened against the following Member States
Spain, Belgium, Germany, Greece, Finland, France, Netherlands, Sweden,
Slovakia, Austria, Italy and Portugal. For some Member States the cases have
been already closed following clarification of national authorities and/or
adoption of necessary amendments ensuring compliance with the Directive's
requirements. Cases are still open against Belgium, France, Italy, Portugal, Slovakia, Finland and Sweden. In three cases (Belgium, Portugal and Slovakia), the Commission continued the infringement procedure by issuing reasoned opinions.

Petitions

The EIA and SEA
Directives generate a relatively high number of petitions, due to their large
scope of application. In 2010, 42 petitions were registered. Most of them are
related to the implementation of the Directives in Spain and Italy.

On the basis of
the experience in handling petitions, the Commission would like to draw the
attention on the following general observations:

Apart from the nature protection legislation (i.e. Birds and
Habitats Directives), it appears that most of the petitions are related to the
implementation of both the EIA/SEA Directives.

There
are still several open petitions concerning the implementation of the EIA
Directive in the Member States which joined the EU in 2004 and 2007. These
petitions are often linked to projects which have been initiated or approved
prior to the accession to the EU. The Commission has constantly referred to the
settled case-law of the Court, according to which the principle that projects,
likely to have significant effects on the environment, must be subjected to an
environmental assessment does not apply where the application for
authorisation for a project was formally lodged before the expiry of the
time-limit for transposition of a Directive[201]. This
implies that the EIA Directive does not apply to projects, for which the
application for authorisation was formally lodged before 1 May 2004 (for the 10
Member States which joined the EU at this date) or 1 January 2007 (for Bulgaria and Romania). The Petitions Committee is invited to carefully assess the implications of
the abovementioned settled case-law and draw the appropriate conclusions as
regards the follow-up of open petitions and the petitions to be received.

The
petitions related to the Nord Stream pipeline project (952/2006 and 614/2007)
and the resolution adopted in Plenary on 8 July 2008 gave the possibility to
the Commission to explain the obligations under the EIA Directive and its own
role in the EIA process.

The
central issue of the petitions and of the resolution was the alleged need for
the Commission to provide for an independent environmental impact
assessment/study of the project to be discussed with all interested parties. In
this regard, the Commission has stressed that it had neither the competence nor
the responsibility to undertake a full analysis of the environmental issues for
such a project in substitution of the Member States who are primarily
responsible for ensuring that this private project complies with the
requirements of the EU legislation. Indeed, it is the strict responsibility and
obligation of Member States first to assess the available information with
their competent environmental services, second to organise extended
consultations with the public, including transboundary ones as in this case,
and third to decide with respect to granting or not the final development
consent within their respective territories, making, at the same time,
available to the public all relevant documentation justifying their decision.

Another
important issue was related to the objectivity of the studies and information,
considering that it is the private developer that pays the consultant to prepare
the EIA environmental report. The Commission recalled that the EIA legislation
is a procedural directive which sets the framework for a complete environmental
assessment of public and private projects. The Commission explained that the
safeguards for the objectivity of the studies and information prepared are to
be found, on the one hand, in the description of the minimum information to be
included in the environmental impact assessment documentation (Annex IV of the
EIA Directive and Appendix II of the Espoo Convention) and, on the other hand,
in the consultations with the competent environmental authorities and the
public, including the transboundary ones. Indeed, all the information provided
by the developer has to be made available to the environmental authorities and
the public, which have to be consulted. The accuracy of this information can be
challenged at any point of the consultations, before the final decision is
taken. This means that the competent environmental authorities can use their
own capacity to proceed with a proper assessment of the information provided,
while NGOs or interested parties can – and very often do – challenge the whole
assessment on the basis of the data provided, in case they do not reflect the
real situation or omit clearly to conform to the requirements of the EIA
provisions. The final decision to grant or refuse development consent must take
into consideration the results of consultations and the information gathered
and must contain the main reasons on which it is based. All this is also made
available to the public.

The Commission
is confident that the abovementioned observations can facilitate the work of
the Petitions Committee and will be duly taken into account when deciding on
the follow-up to petitions.

Judgments of
the Court of Justice in 2010

The Commission services have prepared a booklet which contains the
statements of the most important Court ruling, as they were pronounced in each
particular case, concerning appropriate articles of the EIA Directive[202].
This document will be regularly updated with a view to facilitating the
implementation of the EIA Directive.

In 2010, the
number of judgements delivered by the European Court of Justice in relation to
the EIA Directive was relatively low. It is worth mentioning the Case C-378/09
(Judgement of 10/6/2010) concerning the failure of Czech Republic to transpose
correctly Article 10a on access to justice. The Commission initiated an
infringement procedure because the national legislation was restricting the
right of action of the public concerned, mainly NGOs, against decisions in the
environmental field. Given that the Member State has not contested the
Commission's action, the Court declared that the Czech Republic had failed to
fulfil its obligations under the EIA Directive. In 2011, the Court is expected
to deliver several rulings on Article 10a and the Aarhus Convention.

In 2010, the
Court has delivered its first important ruling as regards the interpretation of
the SEA Directive. The Judgement of 17/6/2010 in Cases C-105/09 and C-110/09
will contribute to a better understanding of the definition of "plans
and programmes" within the meaning of Directive 2001/42/EC.

In these cases, the Court replied to the
reference for a preliminary ruling from the Belgian Conseil d'État and
clarified the requirements under Articles 2(a) and 3(2)(a) of the SEA
Directive. In essence, the reference for a preliminary ruling was related to
whether a programme for the management of nitrogen in agriculture, which is
required under Directive 91/676/EEC concerning the protection of waters against
pollution caused by nitrates from agricultural sources, is liable to constitute
a plan or programme covered by Article 3(2)(a) of Directive 2001/42. The Court
ruled that an action programme adopted pursuant to Article 5(1) of Directive
91/676/EEC is in principle a plan or programme covered by Article 3(2)(a) of
Directive 2001/42/EC, since it constitutes a ‘plan’ or ‘programme’ within
the meaning of Article 2(a) of the latter directive and contains measures,
compliance with which is a requirement for issue of the consent that may be
granted for carrying out projects listed in Annexes I and II to Directive
85/337/EEC.

First of all, the Court verified whether
the action programme for the management of nitrogen was a plan within the
meaning of Article 2(a) of the SEA Directive; hence, the Court found that that
action programmes are (i) subject to preparation by an authority at national,
regional or local level or prepared by an authority for adoption, through a
legislative procedure by Parliament or Government, and (ii) required by
legislative, regulatory or administrative provisions (paragraphs 35-42 of the
Judgement).

Subsequently, the Court examined whether
the conditions of Article 3(2)(a) of Directive 2001/42 were fulfilled. This
provision provides that a systematic environmental assessment is to be carried
out for all plans and programmes which (i) are prepared for certain sectors and
(ii) set the framework for future development consent of projects listed in
Annexes I and II to the EIA Directive. With regard to the first condition
contained in Article 3(2)(a) of Directive 2001/42, it was apparent from the
very title of Directive 91/676 that action programmes are prepared for the
agricultural sector.

The most relevant part of the ruling is the
one where the Court assesses whether the second condition is fulfilled, i.e. whether
action programmes set the framework for future development consent of projects
listed in Annexes I and II to Directive 85/337 (paragraphs 45-55 of the
Judgement). In this regard, the Court examines the content and purpose
of those programmes, taking into account the scope of the environmental
assessment of projects as provided for by that directive. The Court
concluded that the action programme is to be regarded as setting the framework
for future development consent of projects listed in Annexes I and II to
Directive 85/337. It seems that the Court focused on the content of the
action programmes, which embody a comprehensive and coherent approach and
which contain specific and mandatory measures; in particular, the Court noted
that "it is clear from Article 5(4) of Directive 91/676 that action
programmes adopted under Article 5(1) must provide for a set of measures
compliance with which can be a requirement for issue of the consent that may be
granted for projects listed in Annexes I and II to Directive 85/337, and in
respect of the definition of which Directive 91/676 gives Member States a
certain discretion".

This interpretation of the Court will be
relevant when determining whether an SEA is needed for other types of plans and
programmes, in particular as regards the condition
according to which plans and programmes set the framework for future
development consent of projects.

8.3.2.
Evaluation based on the current situation
8.3.2.1.
Implementation and enforcement of the EIA
Directive

In July 2009,
the Commission adopted the fourth Report on the application and effectiveness
of the EIA Directive (COM(2009)378)[203]. The Commission's
report confirms that the objectives of the Directive have generally been
achieved. In some areas, improvements are still needed (e.g. screening, public
participation, quality of the EIA, EIA transboundary procedures, coordination
between the EIA and other environmental directives and policies, such as
climate change and biodiversity). The majority of the infringement cases
related to the EIA Directive concern bad (incomplete or incorrect)
transposition of the Directive's provisions or failure of the Member States to
apply the screening mechanism (Article 4(2) and Annex III of the EIA
Directive).

However, in
terms of compliance of the Member States with the EIA, the situation is
satisfactory. The principles of environmental assessment have been integrated
into the national EIA systems. All Member States have established comprehensive
regulatory frameworks and implement the EIA in a manner which is largely in
line with the Directive’s requirements; in many cases, Member States have built
on the minimum requirements of the Directive and have gone beyond them. As a
result, environmental considerations are taken into account in the
decision-making process, which has become more transparent.

With a view to adapting the Directive to the EU and international
policy and legal contexts, the Commission has initiated the review process (see
above). In the meantime, the Commission will develop guidance documents in
order to facilitate the implementation of the EIA Directive. The guidance
documents developed by the Commission services in previous years were often
used as a reference in contacts with national authorities. The Commission
services prepare two new guidance documents: the first one will be related to
the implementation of EIA to large-scale transboundary projects; the second one
will include practical guidelines and methodologies for integrating climate
change and biodiversity into EIA/SEA.

Implementation
and enforcement of the SEA Directive

In September 2009, the Commission adopted the first Report on the
application and effectiveness of the SEA Directive (COM(2009)469)[204].
According to the Commission's Report, it appears that the overall picture of
the application and effectiveness of the SEA Directive across all Member States
is a varied one, in terms of the institutional and legal arrangements of the
SEA procedure, and in terms of how Member States perceive its role. The
Directive is relatively recent and there is still not sufficient experience on
its implementation.

On the basis of the implementation experience, it seems that
problems in the correct application of the SEA Directive are similar to those
encountered in applying the EIA Directive (i.e. whether smaller plans and
programmes or modifications require an SEA and definition of "plans and
programmes"). The Court Judgement delivered in June 2010 has provided
useful clarifications. In addition, the Guidance of the Commission services on
the implementation of the SEA Directive has been often used[205].

Despite the
above concerns, in terms of compliance of the Member States with the
requirements of the SEA, the situation is satisfactory. This has also been
confirmed by the Commission's report which showed that, overall, the SEA
Directive contributes to the systematic and structured consideration of
environmental concerns in planning processes and better integration of
environmental considerations upstream; in addition, the SEA Directive ensures
better and harmonized planning procedures, and contributes to transparent and
participatory decision making processes.

8.3.3.
Evaluation results
8.3.3.1.
Priorities

In 2010, the
Commission services continued applying the broad priorities[206]
which were identified in the previous reports and which were highlighted by the
Commission in its communication COM(2008)773 and the Commission staff working document accompanying the communication. Individual breaches of certain provisions of the environmental impact assessment legislation, which are not covered by the abovementioned priorities, should primarily be addressed through the existing review mechanisms at Member State level.

On the basis of
the implementation experience, it is not necessary to modify the priorities
already identified regarding the enforcement of the EIA and SEA Directives. The
Commission services will therefore continue implementing the priorities
identified in the sectoral communication COM(2008)773 and the Commission staff working document accompanying it.

8.3.3.2.
Planned action (2011 and beyond)

EIA
Directive

The process for
the review of the EIA Directive will continue. Following the adoption of
the fourth Report on the application and effectiveness of the EIA Directive
(COM(2009)378) in 2009 and the public consultation in 2010, the Commission
services will carry out the impact assessment of the future Commission proposal
in 2011. The Commission's proposal is likely to be tabled in 2012.

In the
meantime, the Commission services will continue the implementation of the
existing Directive on the basis of the priorities already identified.

SEA
Directive

No legislative
change is envisaged in the short term. The application of the SEA in Member
States is still in its infancy and further implementation experience is needed.
The next report on the application of the SEA Directive, which should be
prepared in 2013, will be a good opportunity to assess its effectiveness.

In the
meantime, the Commission services will continue the implementation of the
existing Directive on the basis of the priorities already identified.

8.3.4.
Sector summary

The EIA
Directive has achieved its objectives. However, since the development of EIA is
an evolving process, the challenge of ensuring that the Directive is
implemented in an effective and consistent manner across all Member States is
continuous. The review of the EIA Directive has started and the legislative
impact assessment is ongoing. The Commission's proposal can be expected in
2012.

No legislative
change is envisaged as regards the SEA Directive, which is still in its
infancy.

For both
Directives, the Commission services will continue applying the implementation
priorities identified in the sectoral communication COM(2008)773 and the Commission staff working document accompanying the communication.

8.4.
Protecting Water and Marine Resources
8.4.1.
Current position
8.4.1.1.
General introduction

Water legislation in the European Union
entered a new era following the adoption of the Water Framework Directive[207] which establishes a
strategic framework for the protection of all water bodies, i.e. rivers, lakes,
coastal waters and groundwater in a highly integrated manner. As the
cornerstone of EU water policy, the Water Framework Directive provides that all
water bodies must meet the standard of “good status” as a rule by the end of
2015. To this end, Member States must draw up a river basin management plan
(RBMP) and a programme of measures for each river basin district. The draft
plans and programmes were to be submitted to the public for consultation by
December 2008 at the latest. They should have been adopted by 22 December 2009
and reported to the Commission 3 months thereafter, at the latest.

The Water Framework
Directive (WFD) will repeal several pre-existing EU water acts by December
2013, except the Urban Waste Water Directive, Drinking Water
Directive, Bathing Water Directive and Nitrates Directive. The
implementation of the Water Framework Directive must not jeopardise the
achievement of the objectives of these EU water acts and vice-versa. Under the
WFD, complementary Directives have been adopted on the protection of
groundwater against pollution and deterioration (Groundwater
Directive)[208] and on environmental
quality standards (Environmental Quality Standards Directive)[209]
establishing the standards which constitute the chemical status criteria for
the Water Framework Directive.

The Urban Waste Water Directive[210],
in particular, is a key element of EU water policy for achieving the Water
Framework Directive environmental objective of good status. The Urban Waste
Water Treatment Directive requires that wastewater generated by settlement
areas ('agglomerations') is collected and made subject to secondary treatment
before being discharged into the natural environment. More stringent treatment
must be applied when wastewater is discharged into so called sensitive areas.
The original EU15 Member States should have achieved the objectives of the Directive
in 1998 for sensitive areas, in 2000 for large towns and cities discharging in
normal areas and by 2005 for smaller towns discharging in normal areas.
Regarding EU12 Member States, which joined the EU in 2004 and 2007
respectively, the Accession Treaties provide for transitional periods similar
to the compliance deadline established in the Directive upon adoption in 1991.
The transitional periods are staggered and go as a rule not beyond 2015, in the
case of Romania for small agglomerations below 10000 until 2018.

The Drinking Water[211]
and Bathing Water[212] Directives
require Member States to meet binding quality standards to ensure safe
drinkable water from the tap and clean water for bathing, to monitor whether
the standards are complied with and to inform consumers and the public
accordingly.

The Nitrates
Directive[213] is also an important instrument which deals with the relationship
between agriculture and water quality. In order to reduce and prevent water
pollution caused by nitrates originating from agricultural sources, Member
States must monitor waters, designate so called nitrate vulnerable zones and
then adopt and implement action programs and codes of good agricultural
practices with the aim of improving fertiliser management that should result in
the prevention and reduction of nitrate leaching towards waters. Monitoring
programs are required to be set up to assess the efficiency of these action
programs.

The directive on the assessment and
management of flood risks (Floods Directive)[214]
requires Member States to assess flood risks and to establish flood risk
management plans by 2015, with the aim to reduce flood risk for human health,
economic activity, the environment and cultural heritage.

The Marine Strategy Framework
Directive[215] is the culmination of
the thematic strategy on the marine environment contained in the 6th
Environment Action Plan. By addressing all marine waters, it completes the full
water cycle throughout the European Union. It expands EU environmental law to a
geographical area equivalent to its land territory. The Directive establishes a
strategic framework for the protection of the marine environment in a highly
integrated manner, based on the ecosystem approach. It provides that all marine
waters must meet the standard of “good environmental status” as a rule by 2020,
and that coordination and cooperation between Member States has to take place
in shared marine regions. To this end, Member States must carry out a series of
preparatory stages from 2012 (comprehensive assessment, targets, indicators,
monitoring programmes) and draw up the necessary programmes of measures by
2015.

8.4.1.2.
Report of the work done in 2010

Management of the acquis, new
legislation and preventive measures

In 2010, Directive
2000/60/EC establishing a Framework for Community action in the field of water
policy (Water Framework Directive) reached a crucial milestone in
implementation, with the publication of the 1st River Basin Management Plans
(RBMPs) and their submission to the European Commission, which was due by 22
March 2010 at the latest. To improve transparency and benchmarking, the status
and content of the RBMPs has been made publicly available (and is regularly
updated) at:

http://ec.europa.eu/environment/water/participation/map\_mc/map.htm

The main aim of the Water Framework
Directive (WFD) is to achieve good status in all European waters.
Member States are required to include in their River Basin Management Plans
environmental objectives for all water bodies and a programme of measures to
achieve these objectives. These Programmes of Measures have to be operational
by 2012. The majority of the Member States (fifteen) have
delivered their RBMPs on time and carried out the required public consultation
process on the draft plans. For twelve Member States there have been delays –
in a few cases, serious ones- and the Commission has therefore started
infringement procedures. At the end of 2010, the most serious delays were those
affecting Spain, Portugal, Greece, Denmark and Belgium.

In the meantime, the Commission and the Member States continue their cooperation in the Common Implementation Strategy (CIS) for
the Water Framework Directive. The Common Implementation
Strategy, an informal process set up in 2001, has delivered extensive guidance
to promote the implementation of the WFD. Its objective is to provide a forum
for Member States, stakeholders and Commission's experts to work together
towards a successful implementation of the core water law at EU level. In 2010,
several additional guidance documents were agreed by the Water Directors in the
framework of the CIS, including one on chemical monitoring of sediment and
biota, and another one on risk assessment and the use of conceptual models for
groundwater. In the framework of the CIS work programme for the period
2010-2012, inter alia, 2 workshops were organised, one on biodiversity
and water, and the other one on economic issues under the WFD.

The implementation of the Water Framework Directive
has also been further promoted in 2010 as Member States had to bring into force
on 13 July 2010 at the latest all the domestic laws,
regulations and administrative provisions necessary to comply with the Environmental Quality Standards Directive (EQS).

The deadlines for
notification of national transposing legislation for the Groundwater
Directive expired on 15 January 2009 and for the Floods Directive
on 26 November 2009. For the Floods Directive, compliance
promotion took place in the form of the development of a transposition
checklist, which was circulated to Member States. A transposition checklist was
also developed for the EQS Directive. The Commission furthermore adopted a
Directive on technical specifications for
chemical analysis and monitoring of water status[216].

On the Drinking
Water Directive, the consultation process commenced in 2008 on the need
for reviewing the parameters and values (obligation by the Commission under
article 11(1)) as well as on the future eventual revision of the Directive was
in 2010 complemented by the compilation of data for compliance of larger
supplies (serving >5000 consumers) and smaller supplies (serving 50-5000
consumers), as well as an economic impact assessment study. In conclusion,
compliance with quality standards is very high for larger supplies, however
distinctly lower for smaller supplies, though in the latter case varying from
region to region. The Commission published its Synthesis Report for 2005-2007
drinking water data reported by Member States for supplies >5000 consumers[217].
The Commission also published its annual report[218]
on bathing water quality data under the Bathing Water Directive.
Under the Urban Waste Water Directive, the next reporting
exercise took place in 2009/2010, with the 6th report on the
implementation of the Directive foreseen for 2011.

As to the
implementation of the Nitrates Directive, the Nitrates Committee
made up of Commission and Member State representatives was convened four times
in 2010 mainly to discuss derogation files for Ireland, UK for the region of Northern Ireland, Belgium for the region of Flanders and Italy. These meetings resulted in positive opinions of the Nitrates Committee for draft Commission
Decisions for Ireland and UK for Northern Ireland that will allow those Member
States to apply higher amounts of livestock manure to
land. The procedure for final adoption of these two decisions was still
ongoing at the end of 2010. The files related to derogations for Italy and Belgium were not yet mature for vote at the end of 2010. The Commission published in
February 2010 its four yearly implementation report, referring to the period
2004-2007[219]. In addition, the
Commission continued to assess the implementation of the Nitrates Directive in
the various Member States which resulted in several meetings and written
exchanges with the Member States concerned.

The first action undertaken under the
Marine Strategy Framework Directive was the adoption by the Commission
of a Decision on criteria and methodological standards to achieve good
environmental status in marine waters (Decision 2010/477/EU). This Decision was
based on substantial scientific research and will be used by Member States in
developing the next stages of implementation due from 2012 (comprehensive assessment,
characteristics of good environmental status, targets and associated
indicators). The Decision also recognises the need for regular update based on
scientific information and adoption of management measures, in line with the
6-year cycle underlying the Directive.

Because it is a recent Directive, the
Commission set up, together with Member States, an informal Common
Implementation Strategy, with a series of meetings (including a high level
meeting of Marine Directors for each EU Presidency), to develop common
understanding in the process of policy development. This is accompanied by
increased activity by the European Commission in the various Regional Sea
Conventions around Europe, which are taken the role of facilitating regional
coordination by Member States in the implementation of the Directive.

Management of
complaints and of infringements

Despite the close cooperation with the
Member States, infringement actions were necessary in 2010.

Concerning the
Water Framework Directive, infringement action was concerned in 2010
with both non-conformity and bad implementation issues.

Assessment of conformity of national legislation: In 2010, the Commission pursued further the infringements that were
open against 19 Member States for incorrect and/or incomplete transposition. In
particular, four letters of formal notice (one of them being a complementary
letter of formal notice) were addressed to Germany, Italy, Ireland and the United Kingdom while four reasoned opinions were sent to Belgium, Denmark, Finland and Poland. Conversely, five infringement procedures were closed as the Member
States concerned – The Netherlands, Hungary, Lithuania, France and Estonia - had adopted / amended national legislation that led to a correct and complete
transposition of the Water Framework Directive. The Commission
also monitored the transposition progress made by other Member States, which
may lead to a closure, in 2011, to relevant infringement cases.

Bad implementation: Infringements were
open in 2010 against twelve Member States for having failed to submit on time
their river basin management plans. While some Cases could be rapidly closed,
reasoned opinions proved necessary for ten Member States: Belgium, Cyprus, Denmark, Greece, Malta, Slovenia, Spain, Romania, Poland and Portugal.

Complaints: A horizontal complaint
submitted against 11 Member States, on the scope of the term "water
services" is addressed by way of conformity cases.

Court rulings: A letter of formal notice
was sent to Spain under Article 260 of the Treaty as this Member State had not
taken all necessary measures to comply with the Court ruling of 7.5.2009 (Case
C-516-07) on the implementation of Article 3 (designation of relevant competent
authority in each river basin district) of the Water Framework Directive. By
ruling of 22 December 2010 (Case C-351-09) the Court ruled against Malta for its failure to comply with the monitoring requirements of the WFD.

The Environmental Quality Standards Directive (EQS)
had to be transposed into the law of the Member States by 13 July 2010 at the
latest. Infringement procedures have been initiated in autumn against the
twenty-two Member States that had not communicated its national transposing
measures to the Commission. While 2 Cases could already be closed in 2010, the
Commission envisaged, by the end of 2010, in the light of the information
provided by Member States, to close in the first trimester of 2011 a majority
of those non-communication cases. For reminder, the list of priority substances
contained in this Directive is being reviewed as required by the WFD and a
Commission proposal is expected in 2011.

In respect of the Groundwater
Directive, letters of formal notice for non-communication of national
measures deemed to transpose it were sent to twenty Member States in April
2009. By the end of 2010, the transposing measures were communicated by all
Member States with the exception of Germany and the Czech Republic. A reasoned
opinion was addressed to both, and a Court application has been lodged against
the Czech Republic. Germany notified due legislation following the reasoned
opinion. As concerns Czech Republic, by ruling of 22 December 2010 (Case
C-276/10), the Court ruled in favour of the Commission. The transposition
measures are being systematically checked with a view to addressing any
instance of non compliance (bad transposition) in the first semester 2011.

As far as the Floods Directive is
concerned, the transposition deadline was 26 November 2009, and a transposition
checklist had been shared with the Member States to facilitate compliance. In
January 2010, a number of non-communication cases were opened. By November
2010, only one Member State had not transposed at all the Directive, with some
Member States having partially transposed it. Reasoned opinions have been
addressed to FI, FR, PL, CZ, AT, LU. Following the Reasoned opinion, Finland has notified the transposing legislation. Two applications to Court have been
lodged, against Poland and France.

Regarding the
Urban Waste Water Directive, the Commission's enforcement work has
continued to focus firstly on ensuring full compliance with the Directive's
obligation to ensure that more stringent treatment is provided to discharges
from agglomerations into areas designated as sensitive by the 31 December 1998
deadline set for the older EU 15 Member States. In June 2010, the Commission
took the decision to refer Belgium to the Court of Justice for a second time
under Article 260 of the TFEU with a request for financial penalties for its
failure to ensure compliance with the earlier judgment of the Court of Justice
in case C-27/03. In June 2010, the Commission also decided to send an
additional Letter of Formal Notice under Article 260 of the TFEU to Luxembourg
for its failure to ensure compliance with an earlier judgment of the Court of
Justice in case C-452/02.

The Commission secondly continued to follow
up compliance with the 31 December 2000 deadline in the Urban Waste Water
Directive requiring collecting systems and appropriate treatment to be
provided for urban waste waters discharges emanating from larger agglomerations
of over 15,000 population equivalent. The Commission took the decision in March
2010 to refer both France and Spain to the Court of Justice under Article 258
of the TFEU. Similarly, it was decided in November 2010 to refer Italy to the Court of Justice.

In 2009 the Commission launched the first
phase of legal action for the EU 15 Member States with regard to ensuring
compliance with the collecting and treatment obligations for smaller
agglomerations of 2,000 to 15,000 population equivalent for which the deadline
of compliance was 31 December 2005. Sweden was added to the group of Member
States for which action was already launched in 2009, with a letter of formal
notice being sent in January 2010.

In addition to this, an additional letter
of formal notice was sent under the new Article 260 of the TFEU to Greece in
May 2010 with regard to its failure to ensure compliance with the first
judgment of the Court of Justice in case C-119/02. Furthermore, the Court of
Justice gave its judgment against Portugal in case C-526/09 in December 2010
for its failure to ensure that industrial waste waters from sites in the town
of Matoshinhos were adequately treated and authorised under Article 11 of the Urban
Waste Water Directive.

For the Drinking
Water Directive, the Commission decided to refer Luxembourg to the Court of Justice in June 2010 (now case C-458/10) for its failure to fully and
correctly transpose the Directive. A letter of formal notice was sent to Slovakia for the same failure. Furthermore, in 2010 the Commission decided to close its
case against Ireland after it was satisfied that the Member State had sufficiently implemented Court ruling C-316/00 for the violation of the
"old" Drinking Water Directive (80/778/EEC).[220]

Concerning the new Bathing Water
Directive: Non-communication of
transposing national measures: Member States were required to transpose the
new Bathing Water Directive and notify these transposing measures
to the Commission by 24 March 2008 at the latest. At the end of 2009, only two Member States, the Czech Republic and Poland had still not notified full transposing measures
and the Commission referred these two Member States to the Court of Justice. In
the meanwhile, Poland notified transposition measures, while on 30 September
2010, the ECJ declared (Case C–481/09) that by failing to adopt all the laws,
regulations and administrative provisions necessary to comply with Directive
2006/7/EC, the Czech Republic has failed to fulfil its obligations under that
directive.

Commission's
enforcement work in 2010 focused on the analysis of the conformity of
transposition measures. This work is still ongoing as regards  19 MS. The Commission is continuing this exercise in 2011 and
depending on Member States' replies, infringement proceedings for
non-conformity might be launched.

As to the Nitrates Directive,
five Member States were involved in an infringement procedure, including Luxembourg, Spain, Greece, France and Poland. In its ruling of 29 June 2010 against Luxembourg (case
C-526/08), the Court declared that Luxembourg failed to adopt the laws,
regulations and administrative provisions necessary to comply with Articles 4
and 5 of the Nitrates Directive. Following this judgement and in the absence of
information on the measures taken in order to correct the breach, a letter of
formal notice was addressed under Article 260 of the TFEU to Luxembourg in
November 2010 with regard to its failure to ensure compliance with the judgement
of the Court in case C-526/08.

The Commission sent in October 2010 a
reasoned opinion to Spain regarding its non-compliant designation of vulnerable
zones and nitrates action programmes. By the end of 2010 substantial progress
was made by the Spanish authorities in amending legal texts but the required
amendments to legislation were not yet completed for all regions involved. The
Commission sent in March 2010 to Greece a letter of formal notice with regard
to its non-compliant action programmes. The Commission sent in
September 2010 a letter of formal notice to Poland regarding its failure
to a sufficient extent to designate the vulnerable zones and to adopt adequate
nitrate action programmes.

The Marine Strategy Framework
Directive had to be transposed by 15 July 2010 at the latest.
Infringement procedures have been initiated against eighteen Member States that
had not communicated its national transposing measures to the Commission. At
the end of 2010, the Commission envisaged, in the light of the information
provided by Member States, to close in the first trimester of 2011 several of
those non-communication cases. The reason behind the delay seems to be the
difficulty of taking forward such an integrated instrument, which requires the
agreement of a series of national institutions at various governance levels
(from national to regional and local) and various sectors.

Petitions

In 2010, the
Commission received 14 new petitions related to water quality management and
resource protection. The petitions concerned Finland, France, Ireland, Hungary, Italy, Spain, Germany and the United Kingdom. While the overall number is
stable, their content show an increased interest for flood related issues.

8.4.2.
Evaluation based on the current situation

Emission-oriented legislation, such as the Urban
Waste Water and Nitrates Directives, has achieved great progress in
protecting water quality. Much progress on integrated water management has been
made with the gradual implementation of the Water Framework Directive
and the publication of River Basin Management Plans. However, considerable
challenges remain. These include addressing issues of water scarcity, droughts
and floods, ensuring that waste water in the EU 12 and also originating from
small towns in the EU 15 is properly collected and treated and bringing about
the achievement of good chemical, ecological and quantitative status by 2015 as
required by the Water Framework Directive.

On the implementation
of the Water Framework Directive, the situation as regards the
delivery of the 1st River Basin Management Plans, at the end of
2010, can be summed up as follows: seventeen Member States had submitted their
Plans, five had started public consultation but not yet submitted their plans,
and five had not even started public consultation. As this is a key milestone
for achieving the environmental objectives in 2015, all instances of non
compliance have been timely addressed by way of infringement procedures
(summarised above, in the previous section).

One key
implementation challenge was identified in the 2nd implementation
report on the Water Framework Directive in relation to
monitoring, i.e. the absence of exhaustive national methods for assessing the
ecological status of surface water bodies or the existence of non-compliant
monitoring networks. This is an obstacle to the assessment of the ecological
status.

The non-communication
cases brought forward on the Groundwater Directive, have prompted
the notification of almost all the transposition measures to the Commission
(with only two Member States still missing). These are being the subject of
conformity assessment aimed at addressing all instances of non conformity in
2011. The same approach and timing is being followed for the Floods
Directive. Delays in transposing the Groundwater Directive
could in a few cases lead to delays in the implementation of certain
groundwater related aspects of the Water Framework Directive. The
implementation of the Groundwater Directive will be assessed in
relation to the River Basin Management Plans referred to above.

Water quality has improved following EU 15
Member States' encouraging progress in implementing the Urban Waste Water
Directive. Yet, there are still many agglomerations, for instance, in
Belgium, Italy and Spain that lack complete waste water collecting systems and
treatment facilities As to the EU12 Member States, the implementation of the
Directive is characterized by staggered transitional periods foreseen in the
Accession Treaties regarding the building of the necessary waste water
infrastructure, by the fact that the EU has made financial support available
and by supportive action on capacity building and technical advice. However,
the first of the staggered transitional deadlines for EU12 have expired by the
end of 2009 (Cyprus, Hungary, Latvia, Lithuania, Malta, Poland and Slovenia).

Concerning the Bathing Water
Directive, monitoring data annually published show continuing high
compliance of bathing waters with the legally binding standards, with
compliance during the 2009 bathing season reaching 95.6% for coastal bathing
waters and 89.4%. Concerning the Drinking Water Directive,
EU-wide data for larger supplies (serving >5000 consumers) and smaller
supplies (serving 50-5000 consumers) show a distinctly different pattern, with larger
supplies showing very high compliance whilst smaller supplies in many regions
show up to one third of supplies not fully complying, thus necessitating
further targeted implementation and enforcement action.

As to the
Nitrates Directive, significant progress has been made in the recent
years, including in 2010, regarding the designation of "vulnerable
zones" and the elaboration and implementation of monitoring programmes.
However, further improvements are clearly needed, in particular, with regard to
the quality of action programmes as nitrate concentrations are still major
concerns in some intensively farmed areas. The Commission published on 9
February 2010 its report[221]
to the European Parliament and Council on the implementation of the Directive
for the period 2004-2007.

The initial cycle of implementation of the Marine
Strategy Framework Directive is showing to be challenging for several
reasons, and actions are being taken to address them on a continued basis. The
various stages and deliverables under the Directive require substantial
conceptual policy development, as there is a need to elaborate on the basis of
a legislative instrument which was crafted as a framework instrument. In
addition, the Directive aims at addressing a range of human activities
affecting the marine environment, thereby tackling a multi-sectoral challenge
involving all the cumulative impacts on the marine environment. This requires
increased coordination efforts and enhanced scientific support that need to be
gradually articulated. To address these challenges, the Commission is taking an
active role in an informal Common Implementation Strategy where the actions of
Member States, and across the various marine regions, are being coordinated in
these initial stages of policy development.

8.4.3.
Evaluation results
8.4.3.1.
Priorities

The Commission will prepare the third and
major report on the implementation of the Water Framework Directive
in 2012 (as required by article 18 of the Directive), including a review of how
Member States have tackled their river basin management planning. This will be
part of the Blueprint to Safeguard Europe's Waters, which will also include a
review of the EU policy on Water Scarcity & Droughts and an assessment of
the vulnerability of environmental resources such as water, biodiversity and
soil to climate impacts and man-made pressures.

This review will
consider issues such as Member States' implementation of river basin based
management approaches, water pricing policies, including full account and
internalisation of environmental and resource costs, cooperation on
trans-boundary rivers, public consultations, land use changes, setting of
ecologically based objectives, protected areas, analysis of all pressures on
water resources, integration of water concerns into sector policies, degree of
achievement of good ecological and chemical status, good ecological potential
and good groundwater, chemical and quantitative status by 2015, and the
establishment of programmes of measures to reach the targets.

Regarding the Drinking Water
Directive, the Commission has in 2010 finalised its evaluation of a
need for a revision of the Directive, assessing parameters and values, the
coherence with other water-related legislation in particular the Water
Framework Directive, streamlining data exchange and reporting and
risk-based approaches for a holistic protection of drinking water from the
source to the tap of the consumer. The Commission will in 2011 publish its
conclusions.

For the Marine Strategy Framework
Directive, the priority is to support actively a coherent policy
development between Member States in taking forward their obligations, taking
also into account cooperation within marine regions. Thus, as from 2012, Member
States must elaborate comprehensive assessment, characteristics of good
environmental status, targets and associated indicators. A priority to secure
the success of these implementation milestones in the Directive is dependent on
a successful integration of environmental concerns in a range of sectorial
policies, such as the Common Fisheries Policy, the Integrated Maritime Policy,
transport, energy, agriculture, regional policy, research and international
cooperation.

For the Nitrates Directive,
priority will be given to the assessment of files from Member States that
request for a derogation on the limit for land application of livestock manure
and to continuing the follow up of implementation of the Directive in the
Member States, in particular focusing on the fulfilment of obligations on the
designation of "vulnerable zones" and the drawing up and updating of
nitrates action programmes. Under the WISE umbrella, the Commission will
continue its work on streamlining data management and updating the reporting
guidelines for the next Member State reporting exercise in 2012.

8.4.3.2.
Planned action (2011 and beyond)

Given that the preservation, improvement
and restoration of water quality is so closely linked to the Water
Framework Directive the Commission will focus on ensuring Member States
fully meet their obligations, including in particular the adoption and
implementation of appropriate River Basin Management Plans and programmes of
measures for each river basin district and the development of national methods
for assessing the ecological status of surface water bodies. Therefore, and in
view of the above mentioned third report on the implementation of the Water
Framework Directive, the following actions are planned:

- Enforcing the adoption of the 1st
River Basin Management Plans and carrying out the compliance assessments of
these plans, including checking the implementation of the Groundwater and the
Environmental Quality Standards Directives.

- Supporting and enforcing the
transposition of the Directives on Groundwater, Floods and Environmental
Quality Standards, including starting conformity assessments.

- Continuing the development, together with
the European Environmental Agency, of the Water Information System for Europe
(WISE) in 2010 as a single platform for water information and reporting to
simplify and reduce the overall administrative burden involved in reporting.

In addition, the Commission will launch, if
necessary, appropriate legal enforcement action against Member States that fail
to comply with the obligations set out in these Directives. In this respect,
the Commission will continue to make use of the Common Implementation Strategy
as an informal platform to foster better implementation and to exchange good
practice.

As regards the Floods Directive,
the first stage of implementation was the identification and notification (in
2010), of units of management and competent authorities, if these are other
than those in charge of the Water Framework Directive, and 23
Member States reported new information. Compliance checking of the information
is underway. The next implementation stages are the preliminary flood risk
assessment by 2011, flood mapping by 2013 and flood risk management plans by
2015. For these stages, the development of reporting formats as well as
information exchange between Member States is ongoing to support implementation

Planned new legislation includes the
preparation of a proposal on priority substances (amending annex X of the Water
Framework Directive) and the establishment of related environmental quality
standards. The list of priority substances and the environmental quality
standards contained in that Directive are being reviewed as required by the Water
Framework Directive and a Commission proposal is expected in 2011.

The Commission's work regarding the
implementation of the Urban Waste Water, the Drinking and the Bathing
Directives will be based on a twin-track approach. On the one hand, it
will continue to promote the exchange of information, experience and
cooperation at an informal level with Member States and stakeholders. On the
other hand, the Commission will draw up and publish implementation reports,
including a report an annual bathing water quality and also a tri-annual
EU-wide synthesis report on drinking water quality; the next implementation
report on the Urban Waste Water Directive is foreseen for 2011.
In addition, the Commission will launch, if necessary, appropriate legal
enforcement action against Member States that fail to comply with the
obligations set out in these Directives. For the Urban Waste Water
Directive, this is likely to involve the first steps in legal action
against some of the newer EU 12 Member States where extended deadlines for
compliance in the Accession Treaties have elapsed. For these Member States the
Commission will also continue to focus on tracking the availability of EU funds
and the quality of the forward planning of these countries for compliance with
future deadlines through focused bilateral contacts with the Member States and
in contacts between the relevant Commission Directorate Generals.

The Nitrates Directive: The Commission's work to ensure
compliant implementation will continue in 2011 on the basis of detailed
assessments of the information provided by Member States in their 4-year
implementation reports and via bilateral contacts. The assessments will focus
on the main obligations of the Nitrates Directive, namely on water monitoring,
the designation of "vulnerable zones" and the drawing up and updating
of nitrates action programmes. It will then need to be decided whether these assessments
need to be followed up with infringement action. The Commission will continue
to organise meetings of the Nitrates Committee on Member States' derogation
requests and to give Member States the opportunity to exchange information on
implementation. The Commission published its 4 yearly report221on
implementation in February 2010.

In relation to the Marine Strategy
Framework Directive, the planned action for 2011 and beyond will be the
active organisation of the Common Implementation Strategy with Member States,
to support a coherent policy development. In addition, increased participation
will be required in Regional Sea Conventions. Future action will include
increased efforts to integrate marine environment concerns in sectorial
policies, such as for instance the reform of the Common Fisheries Policy and
the design of the new Financial Perspectives (considering that the policy for
the protection of the marine environment was adopted in the middle of the
current cycle).

The new Bathing Waters
Directive was required to be transposed into national law by 24 March
2008. In 2010, the Commission continued to verify whether the transposition is
both correct and complete. In September 2010, the European Court of Justice
ruled that the Czech Republic had failed to transpose the Directive (case
C-481/09). The Commission will take further enforcement action where necessary.

8.4.4.
Sector summary

Substantial progress regarding the
implementation of EU water and marine law has been observed in the past decade
as a result of increased awareness among decision-makers of the critical
importance of meeting water quality standards to preserve water and marine
resources and the associated natural environment and to protect human health.
Better implementation has often been driven by informal and formal cooperation
between Member States, industries, non-governmental organisations, consumers
and the Commission as well as by infringement procedures. However, more efforts
need to be made to ensure full compliance with EU water Directives. In respect
of the Nitrates Directive, the Commission has noted that several regions within
the EU show worrying water quality trends for which reinforced action
programmes will need to be developed. With regard to the Urban Waste Water
Directive, Member States must ensure that it is fully applied, including in the
new EU 12 Member States and in smaller towns for all 27 Member States. With
regards to the Drinking Water Directive, targeted efforts by Member States will
be required to ensure compliance for those smaller supplies currently
delivering drinking water not fully complying with quality standards. The
implementation of EU water and marine legislation and the enhancement,
preservation and restoration of water quality will greatly depend on Member
States meeting their obligation to take all required measures to guarantee the
achievement by 2015 of the environmental objectives of "good chemical and
ecological status" for surface water bodies and of "good chemical and
quantitative status" for groundwaters set in the Water Framework
Directive. In the case of the marine waters, the programmes of measures due by
2015 will have to include the necessary actions to achieve "good
environmental status" by 2020.The Commission will continue to focus on the
proper transposition of European water and marine legislation, including of the
new Floods and Marine Strategy Directives and their implementation. The
Commission will continue its efforts to ensure that Member States fulfil their
obligation under these Directives and will assist them, when necessary, via
formal and informal cooperation channels.

8.5.
Air quality and environmental noise
8.5.1.
Current position
8.5.1.1.
General introduction

Ambient air quality

The new Directive
2008/50/EC of the European Parliament and of the Council of 21 May 2008 on
ambient air quality and cleaner air for Europe is the key legal instrument in
this sector[222]. The Directive entered
into force on 11 June 2008 and merges four Directives[223]
and one Council Decision[224] into a single air
quality instrument. It introduces new objectives for fine particles (PM2.5)
but does not change existing air quality standards. Available evidence points
to serious problems in complying with the air quality limit values in many
European air quality zones; the new Directive does, however, give under certain
conditions Member States greater flexibility in meeting some of these standards
in areas where they have difficulty complying.

Under the new Directive 2008/50/EC Member
States have the possibility to notify an exemption from the application of the
limit values for PM10 (and to postpone the limit values for nitrogen
dioxide (NO2) which entered into effect in 2010) provided that
certain conditions are satisfied. The Commission has nine months from the
submission of a notification to assess it and to decide whether to raise
objections or not. If no objections are raised, the notification will be
tacitly approved at the expiry of the nine months assessment period.

Product
regulation

There are several legal instruments
regulating the composition of products which aim to prevent or reduce the
emissions of certain air pollutants at source. These include Directive 98/70/EC
relating to the quality of petrol and diesel fuels[225],
Directive 1999/32/EC relating to a reduction in the sulphur content of certain
liquid fuels[226] and the Paints
Directive 2004/42/EC on the level of volatile organic compounds in paints,
varnishes and vehicle refinishing products[227] .

Environmental
noise

The Noise Directive[228]
, 2002/49/EC, lays down a common approach to avoiding, preventing or
reducing on a prioritised basis the harmful effects of exposure to
environmental noise. It requires the assessment and mapping of ambient noise in
large agglomerations and in the vicinity of major roads, railways and airports.

National
emission ceilings

The National Emission
Ceilings (NEC) Directive, 2001/81/EC[229], plays an
important role in defining and limiting the total national emissions of certain
air pollutants with the aim to reduce negative effects on human health and the
environment, such as acidification, eutrophication and ground-level ozone. The
NEC Directive covers air emissions of all economic sectors and sources within
the national territories.

8.5.1.2.
Report of work done in 2010

Ambient air quality

Since 2005 when the PM10 limit
values entered into force, a majority of Member States have reported as being
in non-compliance. In 2008, around 280 zones in 22 Member States did not comply
with these limits. The dilemma has been how to treat these breaches of existing
EU law whilst recognising the explicit possibility for Member States to seek a
time extension for compliance. The Commission's policy has been to launch
infringement proceedings in respect of those situations which have not been the
subject of a notification from the Member States or where the Commission has
raised objections following a Member State notification. There are currently
open infringement proceedings against 22 Member States in respect of PM10.

Up until the end of December 2010, the
Commission has adopted 29 Decisions on notifications coming from 19 Member
States, concerning an exemption from the obligation to apply the PM10
limit values. As the daily and the annual PM10 limit value are assessed
individually, a zone might get an exemption for the one but not the other limit
value. For that reason the figures following might not always round up. For
around 19 % of these, the Commission did not raise any objection, a further 40
% or so of the zones were already in compliance whilst objections were raised
for approximately 70% of the zones covered by the notifications. Member States
are free to re-notify for zones where objections have been raised but any
exemption must expire before 11 June 2011.

Whilst closing some bad application
infringement cases in 2010 (PM10 cases for Malta and Denmark, SO2
cases for Spain, France and Czech Republic), the Commission also continued to
pursue infringement procedures it had launched in previous years (PM10
cases for Belgium, Romania, Greece, UK, Slovakia, Poland, Austria, Germany,
Hungary, Czech Republic, France, Slovenia, Sweden, Portugal, Italy, Spain,
Cyprus, Latvia; SO2 case for Bulgaria) and has started some others
against two Member States (PM10 case for Bulgaria and SO2
case for Romania) that have shown exceedances of the relevant limit values that
have been in force since 1 January 2005. New exceedances were discovered in
2009 and reported to the Commission in 2010 as part of the formal reporting
requirements. These excesses may also be the subject of further infringement
proceedings in due course.

The deadline for transposing the Directive
2008/50/EC was on 11 June 2010. By that time only few Member States had
transmitted to the Commission the national measures transposing the Directive
into their national legal system. The Commission therefore launched
infringement procedures against 21 Member States for non-communication of those
national measures. In the course of 2010, 6 of those cases could, however,
already be closed (Italy, Portugal, Austria, Bulgaria, Cyprus, Germany).

Product
regulation

In 2010 the
Commission's work focused on the preparation of the review of the Directive
1999/32/EC on the sulphur content of certain liquid fuels. The last amendment
of the Directive in 2005 contains a review clause which requires the Commission
to review a number of general and specific issues following its experience with
the implementation of the Directive as well as progress made at the IMO level.
Since 2005, revised IMO rules were agreed for SO2 and for NOx
in October 2008. These rules are contained in Annex VI of the Marine Pollution
Convention 73/78 (MARPOL Annex VI). In addition to the verification of the
implementation of the Directive in Member States, a number of studies have been
commissioned in order to assess the impact of a revised MARPOL Annex VI on the
EU shipping industry. In addition, the Commission has regularly consulted
stakeholders on the review of Directive 1999/32/EC, including an on-line public
consultation (2010/2011) addressed to all interested parties.

Environmental
noise

Under the Noise Directive, the Member
States had to send to the Commission by 30 December 2010 an update of the list
of major roads, major railways and agglomerations. Most Member States delivered
their reports on time, only Belgium and Italy have not reported yet. The
reports are currently being assessed by the Commission.

The infringement case against Malta on the failure to draw up noise maps in accordance with Article 7(1) of the Directive
has been referred to the Court in 2010.

NEC Directive

According to
the NEC Directive, Member States shall prepare emission inventories and
emission projections for certain air pollutants and shall submit this
information to the Commission and the European Environmental Agency annually.
The report due by 31 December 2010 had to include emission inventories for 2008
(final) and 2009 (provisional) and updated emission projections for 2010.

The analysis of
the latest reports shows that a number of Member States are still projected to
be above the ceilings for 2010. In a few cases the transgression is small and
it is likely that the ceiling can be met in the course of the next years.

For eight
Member States (Austria, Belgium, France, Germany, Greece, Ireland, Luxemburg, Spain) the transgression is substantial, ranging from 10 to 42% and these Member
States would have to make significant additional efforts to comply with their
ceilings.

The Commission
is considering the most appropriate way to address these shortcomings and to
ensure proper implementation of the Directive by the deadline of end 2010.

Petitions

In 2010 the
Commission received 6 petitions related to air quality and environmental noise.
1 petition was closed during 2010. Many petitions started in previous years
required additional Communications by the Commission in 2010. Very often the
petitions do not address only ambient air quality but raise problems linked to
an industrial installation or a planned construction which from the
petitioners' point of view might also have an impact on the ambient air quality
and/or the noise levels. Member States frequently concerned by petitions are Italy, Spain, Romania, Greece, Malta and Bulgaria as regards air quality and Germany as regards noise (petitions mainly relating to aircraft noise). The petitions did not lead
to the start of infringement procedures as in most cases either the Commission
could not identify a breach of the relevant EU legislation or an infringement
procedure had already been launched.

8.5.2.
Evaluation based on the current situation

Ambient air quality

There remain
widespread non-compliance with air quality limit values and particularly those
for PM10 which is probably the pollutant of most concern given its
adverse impacts on health. The limits for nitrogen dioxide entered into force
in 2010 and it is likely that there will also be widespread non-compliance for
this pollutant (the information on exceedances in 2010 will be available by the
end of September 2011). This is due in part to a lack of preparedness by the
Member States to undertake the necessary assessments of air quality and to put
into place the necessary plans and actions to improve air quality in good time.
The ongoing "time extension" exercise should improve the capacity of
the Member State authorities to prepare plans and programmes. The Commission
will also start the work of the review of the air quality Directive which is
scheduled for 2013. Implementing measures in the pipeline for adoption on light
and heavy duty vehicles will also help improve compliance.

Product
regulation

The assessment of the implementation of
Directive 1999/32/EC highlighted a number of problems. In particular, as
regards the enforcement of the Directive, the reports on sulphur content of
fuels submitted to the Commission by Member States varied significantly in
structure and content, which rendered the assessment of the level of compliance
with the Directive very difficult. Member States' reports also showed the low
frequency of fuel samples taken, which was insufficient for a proper assessment
of compliance with the Directive's requirements. Furthermore, following the
adoption of the revised IMO's MARPOL Annex VI, there exist a discrepancy
between the rules contained in the Directive 1999/32/EC and the IMO rules,
which results in legal uncertainty for stakeholders. Similarly, several
international technical standards to which the Directive refers have been
amended. In addition, experience shows that the interpretation of certain
provisions of the Directive caused problems in practice and stakeholders
suggested they could be clarified.

Following a
review of the Paints Directive 2004/42/EC as foreseen in Article 9 of that
Directive, the Commission is preparing a report to the Council and the European
Parliament which should be ready in 2011.

Environmental
noise

The problems
identified in last year's report still remain and have been confirmed by an
extensive evaluation report[230] building on Member
States responses finalised in 2010.

8.5.3.
Evaluation results
8.5.3.1.
Priorities

Ambient air quality

In the coming years, the Commission will
continue to monitor closely the situation with regard to compliance with air
quality limit values in all Member States. It will continue to follow its
"horizontal approach", which allows air pollution problems to be
addressed in a far higher number of places than would have been possible if it
had only focused on individual cities or regions. Furthermore in the upcoming
review a SWOT analysis will be done in order to analyse what is working and what
is not and what could be further done in order to help Member States to reach
compliance.

Product
regulation

The priority is to align the Directive
1999/32/EC with the revised MARPOL Annex VI as well as improve enforcement
(monitoring and reporting) and compliance with the Directive 1999/32/EC.

Environmental
noise

The first priority is to improve the
consistency in the Member States' assessments of environmental noise and the
usefulness of the reported information. A second priority is to improve the implementation
of the Directive by the Member States by providing greater clarity and
guidance.

8.5.3.2.
Planned action (2011 and beyond)

Ambient air quality

Infringement procedures are to be continued
against Member States in breach of the limit values for PM10 which
did not apply for a time extension or did not meet the conditions for obtaining
such extension. In addition, the Commission will start monitoring more closely
the implementation of the limit values for NO2 which entered into
effect in 2010. As regards excessive SO2, the Commission will
continue to pursue the legal enforcement action against those Member States
which are still exceeding the limit values.

Product
regulation

The amendment of Directive 1999/32/EC is
planned for the first half of 2011.

Environmental
noise

In 2011, the Commission will present a more
detailed implementation report on this directive which is currently under
preparation.

In addition, the Commission intends to
complete the work on the harmonised assessment methods which will be presented
to the committee procedure later in 2011.

NEC directive

As described above, some Member States will
probably fail to meet the national emission ceilings for 2010 for one or
several pollutants mainly due to insufficient measures taken in order to reach
compliance. The Commission will continue to closely monitor the situation and
take action as appropriate. The possibility of launching infringement cases
cannot be excluded.

In 2011 the Commission will also focus on
assessing the quality of national transposition of the NEC Directive in all the
Member States. The Commission will take appropriate measures to follow up with
the Member States any potential deficiencies identified in the national
transposition during this conformity-checking exercise.

8.5.4.
Sector summary

In 2005 a set of legally binding EU air
quality limit values became applicable, including limit values for particulate
matter PM10, pollutant with very important adverse impacts on
health. A widespread non-compliance with PM10 limit values remains,
partly due to challenging and complex nature of this pollutant and the lower
and delayed impact of certain community measures. But the main reasons are
serious delays in the implementation of the directives in a large number of
Member States, mainly as regards the drawing up and implementation of the
necessary plans to ensure that air quality is improved in good time. The
capacity and awareness of the Member State authorities of the need to tackle
air pollution at the source and to prepare plans and programmes should be
increased through the procedure and conditions laid down in the new Directive
2008/50/EC on ambient air quality and cleaner air for Europe for extending the
time required for achieving compliance with the limit values for PM10,
NO2 and benzene, joined with coherent and timely enforcement where
appropriate.

In the coming years, the Commission will
continue to monitor closely the air quality situation in order to ensure long
term and sustainable compliance with the limit values in all Member States. In
particular, it will be a priority task to assess further time extension
notifications (primarily for NO2) or re-notifications (for PM10)
as well as to follow-up on the decisions adopted by the Commission. A further
priority will be to ensure a timely and effective implementation of Directive
2008/50/EC. Dissemination of information to the public and cooperation between
the Member States and the Commission in order to develop appropriate policies
should continue.

As regards the air emissions of sulphur
dioxide by ships, the focus will be on the improvement of enforcement of the
limits on sulphur content of marine fuels, in particular by providing Member
States with guidance on monitoring and reporting and on the alignment of the EU
rules to the relevant international rules (MARPOL Annex VI).

8.6.
Industrial installations
8.6.1.
Current position     
8.6.1.1.
General introduction

The most important piece of legislation
relating to industrial emissions is Directive 2008/1/EC (IPPC Directive,
codified version of Directive 96/61/EC)[231]. This
Directive sets out common permit rules for industrial installations in order to
prevent and control emissions into air, water or soil. Installations covered by
the IPPC Directive are required to operate under an integrated permit granted
by the competent authorities of the Member States. The provisions of the
directive were due to enter into effect either in October 1999 (for new
installations) or before 30 October 2007 (for existing installations).

The Large Combustion
Plants (or LCP) Directive, 2001/80/EC[232], aims to reduce emissions
of sulphur dioxide, nitrogen oxides and dust from combustion plants whose rated
thermal input is equal to or greater than 50 MW. The control of emissions from
such plants contributes significantly to the Union's efforts to protect the
health of EU citizens and the environment by combating acidification,
eutrophication and ground-level ozone as part of the overall strategy to reduce
air pollution (see also NEC Directive).

Further important
legislation relating to industrial emissions (other than greenhouse gases)
includes the Waste Incineration (WI) Directive, 2000/76/EC[233],
the VOC Solvent Emissions (SE) Directive, 1999/13/EC[234]
and the E-PRTR Regulation (EC) No 166/2006[235].

The Seveso II or
Major Accident Hazards Directive, 96/82/EC[236], applies to
establishments in which certain dangerous substances are present in
sufficiently large quantities to create a major accident hazard. It contains
obligations on both operators and Member State authorities to take measures aimed
at preventing major accidents and limiting their consequences.

8.6.1.2.
Report of work done in 2010

Revision of the existing legal
framework

The Directive on Industrial Emissions
(IED), which is a recast of seven directives (including the IPPC, LCP, WI and SE Directives) was adopted on 17 December 2010 and entered into force on 6
January 2011. Member States need to transpose the directive to national
legislation by 6 January 2013.

Work on a review of the Seveso II Directive
resulted in a Commission legislative proposal being adopted on 21 December
2010. Discussions on the proposal are currently ongoing.

Compliance promotion and legal
enforcement work

In the course
of 2010 the Commission continued to carry out implementation work concerning
the IPPC Directive in line with the actions specified in its action plan which
forms part of the 2007 Commission Communication "Towards an improved
policy on industrial emissions"[237]

Transposition of the IPPC Directive

In 2010 out of
the ongoing two non-conformity infringement procedures regarding the
non-conform transposition of the IPPC Directive, the one against Lithuania was
closed due to the adoption of legislative amendments addressing the
shortcomings. One case against Estonia remains open, as the Commission awaits
the confirmation from the Estonian authorities that the necessary legislative
changes are carried out.

Transposition of the LCP and WI Directives

The Commission
decided to channel the ongoing work regarding the transposition of the LCP and
WI Directives in the transposition exercise of the Industrial Emissions
Directive.

IPPC permits for existing installations under Article 5(1) of the
Directive

By 30 October
2007, all existing IPPC installations had to obtain a permit issued in
accordance with the requirements of the Directive. After the expiry of this
deadline, the Commission launched eleven infringement procedures in 2008
against Belgium, Bulgaria, Denmark, Estonia, Greece, Spain, Ireland, Italy, The Netherlands, Portugal and Slovenia and in 2009 against Austria, France, Malta and Sweden. Out of these Member States, Belgium, Greece, Spain, Italy, Slovenia and Sweden have been referred to the Court of Justice of the European Union.

Implementation of the IPPC and WI Directives

Three-yearly
implementation reports were to be sent by Member States to the Commission by 30
September 2009 (covering the period 2006-2008). The Commission has initiated an
infringement procedure against Greece and Luxembourg who have not fulfilled
this reporting obligation even after several reminders. As a result of these
procedures, all reports are received and the Commission has set up a study for
the assessment of the reports with the aim of publishing it in the course of
2011.

Implementation of the LCP Directive

For implementing the LCP Directive
provisions for certain existing plants, eight Member States have chosen to
apply a national emission reduction plan (NERP) instead of setting individual
emission limit values: the Czech Republic, Greece, Finland, France, Ireland, Portugal, Spain and the United Kingdom.

The Commission
has checked the compliance of these MS with the NERP ceilings but further
communications with MS were necessary in order to validate the assessment. For
those MS where breaches have been found, infringement procedures will be
launched in the course of 2011.

The Accession Treaties of four Member
States (Lithuania, Romania, Bulgaria and Poland) include transitional
derogations for some provisions of the LCP Directive, which are conditional to
meeting emission ceilings for all of the large combustion plants in the MS in
certain specified years. The Commission has assessed the 2008 and 2009 LCP
emissions in these MS against the Accession Treaty ceilings and has identified
potential breaches for Bulgaria. Further communication with Bulgaria will be carried out in 2011 to evaluate the situation in view of possible infringement
procedures.

Implementation of the VOC Solvents Directive

A summary
report of the information submitted by Member States on their implementation of
the SE Directive during the period 2005-2007 will be finalised in the course of
2011 in conjunction with the implementation report on the IPPC Directive
2008/1/EC.

Implementation of the E-PRTR Regulation

On 9 November
2009, the Commission and the European Environment Agency launched the new
European pollutant release and transfer register (E-PRTR). The register
contains information about the quantity and location of pollutants released to
air, water and land by industrial facilities throughout Europe. It includes
annual data for 91 substances and covers more than 24 000 facilities in 65
economic activities. It also provides additional information, such as the
amount and types of waste transferred from facilities to waste handlers both
inside and outside each country.

The Commission has
been working on a questionnaire for the three-yearly implementation reports to
be sent by Member States to the Commission, together with the information to be
reported to the E-PRTR pursuant Article 7 of the Regulation by 31 March 2011.

Transposition of the Seveso II Directive

In 2010 the Commission pursued infringement
procedures against a number of EU-12 Member States for non-conform
transposition of Directive 96/82/EC and the amending Directive 2003/105/EC (the
Seveso II Directive). During the course of the year several of those cases were
closed. At the end of 2010, cases remained open against Poland and Lithuania. The Commission also closed several cases
against EU-15 Member States. By the end of 2010, one case (Luxembourg) relating to non-conform transposition of amending Directive 2003/105/EC remained
outstanding.

External
Emergency Plans under the Seveso II Directive

The Commission also
continued legal action before the Court against several Member States where
external emergency plans for so-called upper-tier establishments were lacking
in breach of the Seveso II Directive. During 2010 the Court issued a ruling
against Spain (see below). Cases against Austria and Belgium were closed since
the Member States concerned had taken steps to ensure that the necessary plans
were in place. By the end of the year, two cases remained outstanding (failure
of Portugal and Spain to comply with Court rulings).

Petitions

So far, the
Commission received 4 new petitions related to industrial emissions with a
reference year of 2010. These petitions raised issues concerning France, Germany, Greece and Italy. In addition, the Commission has been dealing with those petitions
which were received in earlier years, but follow-up with the national
authorities has proved necessary to enable sending updated information to the
Parliament. Particular attention has been paid on cases where potential serious
or persistent breach of EU law could have been identified.

Judgements of the Court of Justice of the European Union in 2010

In a judgement
of 22 April 2010 (Case C-346/08), the Court found that by failing to apply the
Large Combustion Plants Directive to the power plant operated by Rio Tinto
Alcan Smelting and Power (UK) Ltd in Lynemouth, the United Kingdom had failed
to fulfil its obligations under that directive.

In several
judgements (Cases C-258/09, C-49/10, C-48/10, C-534/09, issued on 4 March 2010,
7 October 2010, 18 November 2010 and 2 December 2010 respectively), the Court
found that by not issuing permits to all existing installations by the deadline
of 30 October 2007, Belgium, Slovenia, Spain and Greece failed to fulfil their
obligations under that directive. A number of Member States are being referred
to the Court for the issue in the case of which the judgment is still pending.

The Court also
declared that Spain (Case C-392/08) was in breach of its obligations in
relation to the drawing up of external emergency plans pursuant to Article 11.1
(c) of the Seveso II Directive (judgement of 25 March 2010).

8.6.2.
Evaluation based on the current situation

IPPC Directive

The IPPC Directive
still falls short of being fully applied and respected. The main problems
relate to the important delays in issuing the IPPC permits, shortcomings in the
implementation (in particular BAT), a need for increased clarity in the
legislation, restrictions in its scope and insufficient enforcement of its
application. While the new Directive on Industrial Emissions addresses the
majority of these shortcomings, significant progress has already been achieved
in terms of permitting, due to increased support to Member States, and due to
the infringement procedures and the resulting judgements of the Court where
necessary. The Commission is continuing its in-depth assessment of the implementation
by Member States through the investigation of the permits and operational
conditions of some specific installations. To this end, a new study was
launched in 2010, which will also consider the implementation of some of the
sectoral Directives (see below).

LCP Directive

The Commission
has assessed the quality of national transposition of the LCP Directive in all
the Member States. The results of this assessment have been communicated to the
Member States with a request for further information and clarification on a
number of transposition issues. As a result of this exercise, several MS have
made commitments in terms of adopting new legislation to ensure full compliance
with the Directive's provisions. The Commission will continue to monitor transposition
of the relevant provisions within the framework of the transposition exercise
of the Industrial Emissions Directive.

As set out under point 1.1.1.2, the
Commission has identified issues concerning the application of the Directive in
a number of Member States, in particular concerning compliance of the emissions
with the ceilings defined under the NERP and with the ceilings under the
Accession Treaty. In case of confirmation of the identified breaches, the
Commission will launch infringement procedures in the course of 2011.

In addition, the correct application of the
Directive at individual installations will be considered in the framework of
the study mentioned in the context of the IPPC Directive.

Waste Incineration Directive and VOC
Solvents Directive

The correct application of these Directives
at individual installations will be considered in the framework of the study
mentioned in the context of the IPPC Directive.

Seveso II Directive

Overall, the
Directive is being satisfactorily applied and complied with. The level of
transposition and implementation of the Directive has continued to improve, and
the number of outstanding legal proceedings has continued to fall. As
noted above, a review of the Directive has recently been completed. This confirmed
that overall the Directive is fit for purpose and that no major changes are
required. The Commission proposal for a new Directive represents essentially a
technical adaptation of the existing rules. The main change proposed is the
adaptation of Annex 1 to the Directive, which defines its scope, to new
international and Union rules on the classification of dangerous substances.
Certain other amendments are proposed to update or clarify existing provisions
to improve implementation and the existing high levels of protection.

8.6.3.
Evaluation results
8.6.3.1.
Priorities

Industrial
emissions

Continued attention needs to be paid to
improved respect for the existing provisions and to a strong follow-up on their
full implementation.

Priority is therefore attached to:

Providing assistance to
Member States and ensuring full transposition of the relevant Community
legislation regarding the recently adopted Industrial Emissions Directive;
Increased assistance to
Member States on implementation;
Ensuring that Member
States fulfil their reporting obligations;
A more systematic approach
concerning the breaches of the IPPC Directive and launching of
infringement procedures;
Annual reporting on
progress in implementation of the Action Plan and its revision as part of
the next Commission's report on IPPC implementation (in the course of
2011) (see further information below);
Development of
transposition checklist and interpretative guidance documents on the new
IED to provide early support to Member States in transposition and implementation

On the basis of these priorities and the work programming set out
below, it is hoped to improve substantially compliance with the existing
provisions at the latest by 2012, by which time the focus of attention will
move to the implementation of the new legislative framework.

Seveso II Directive

Regarding the Seveso II Directive, the main
priority at present is to conclude the discussions on the legislative proposal
as quickly as possible so that the new Directive can be adopted and transposed
by Member States in good time to provide the necessary legal certainty before
2015, when the new Union rules on classification of dangerous substances become
definitive. However importance also continues to be attached to ensuring the
full transposition and implementation of the existing Directive.

8.6.3.2.
Planned action (2011 and beyond)

The Commission will continue to prioritise
work on its current collective infringement proceedings, covering a large
number of deficiencies in several Member States. Infringement proceedings could
also be opened against those Member States showing a significant delay in
fulfilling their reporting obligations.

The Commission will strengthen its
monitoring and supporting mechanisms by revising and refocusing the previous
IPPC Action Plan on Implementation for the time period 2008-2010 as set out
below.

· Ensure full transposition of the legislation on industrial emissions

The success of the
existing legislation relies first of all on effective transposition by Member
States in their national legal systems. In the course of 2011, the Commission
will focus on providing assistance to Member States in order to ensure timely
and full transposition of the Industrial Emissions Directive. Infringement
proceedings to ensure full and correct transposition of the industrial
emissions legislation will be considered only necessary if Member States fail
to fully transpose the IED into national law (deadline for that exercise: 6
January 2013).

· Support Member States in their implementation of the legislation

This will include
enhanced information exchange, the development of guidance, visits to
authorities and training. This support will continue throughout the
introduction and implementation of the revised legislation.

· Enhanced monitoring and compliance checks

The Commission will continue to monitor the number of IPPC permits
issued and updated and, where required, investigate the system of monitoring
and inspection at IPPC installations. Such investigation will cover specific
industrial installations and sectors, the use of general binding rules, and the
analysis of complaints.

· Improve data collection for the review of BREFs and BAT conclusions
and create stronger links with the Research Framework Programme

The Commission will continue to organise the
exchange of information between experts from Member States, industry and
environmental organisations resulting in the BAT Reference Documents (BREFs)
and BAT conclusions.

Seveso II Directive

The Commission will continue to monitor
implementation of the Seveso II Directive and take action as appropriate.
Ongoing work in relation to the proposed new Directive will also continue in
2011 as necessary.

8.6.4.
Sector summary

Both the transposition
and the implementation of the legislation related to industrial installations and
air emissions (in particular the IE, IPPC and the LCP Directives) pose
difficulties for Member States. The Commission, while supporting Member States
in different ways (transposition assistance, interpretational guidance,
studies, workshops), carries out enforcement actions to ensure full compliance.

The capacity and awareness of competent
authorities of the need to tackle pollution should be increased throughout the
EU.

In the coming years, the Commission will
continue to monitor closely the implementation of the existing legislation,
giving priority to the transposition and preparation of the implementation of
the incoming Directive on Industrial Emissions.

8.7.
Chemicals and Biocides
8.7.1.
Current position
8.7.1.1.
General introduction

Chemicals

The REACH
Regulation (1907/2006)[238], which entered
into force on 1 June 2007, is the cornerstone of the EU’s new chemicals
legislation. REACH, which is more far-reaching than previous legislation, deals
with the registration, evaluation, authorisation and restriction of chemicals. Registration
means the process by which information on the safety of chemicals is submitted
for registration to a central database, managed by ECHA. Evaluation includes a
quality check of the registration dossiers and an examination of testing
proposals and this is also carried out by ECHA; it also includes a more
thorough examination of specific substances, where Member States play an
important role. Substances of very high concern will require authorisation for
use and before being placed on the market. There is also a procedure for
restriction of manufacturing, placing on the market or use of certain
substances where there is an unacceptable risk to health or the environment,
which needs to be addressed on a community wide basis.

Regulation (EC) No
(1272/2008)[239] on the
Classification, Labelling and Packaging of Substances and Mixtures was adopted in 2008 and incorporates the UN GHS (United Nations
Globally Harmonised System) into Community law and will replace, after a
transitional period, certain provisions of the current directives related to
the classification, packaging and labelling of dangerous substances (Directive
67/548/EEC[240]) and
preparations (Directive 1999/45/EC[241]).
Provisions of these Directives shall be repealed with effect from 1 June 2015.

Two other pieces of
legislation should be mentioned here. Firstly, persistent organic pollutants
(“POPs“) are governed by Regulation (EC) No 850/2004[242]. This legislation implements the
commitments to which the Community has signed up to under the 1998 UN-ECE Protocol
on POPs and the UNEP Stockholm Convention on POPs. The Regulation contains
requirements to eliminate and/or restrict POPs substances to a level equal to
or stricter than foreseen under international agreements. The obligations from
the two international agreements have thus been completely transported into
Community Law and are, as such, enforceable according to these rules.

Secondly, basic provisions concerning the
protection of laboratory animals used in experiments are contained in the newly
adopted Directive 2010/63/EU, which updates the 1986 Directive 86/609/EEC on
the protection of animals used for scientific purposes. The aim of the new
Directive is to strengthen legislation, and improve the welfare of those
animals still needed to be used, as well as to firmly anchor the principle of
the 'Three Rs' - to Replace, Reduce and Refine the use of animals in EU
legislation. The new Directive entered into force on 10 November 2010. The
transposition of the Directive into national legislation is to be completed by
10 November 2012 and the Directive will take full effect on 1 January 2013.

            Export and import of
dangerous chemicals

Regulation (EC) 689/2008 of the European
Parliament and the Council of 17 June 2008 concerning the export and import of
dangerous chemicals implements the Rotterdam Convention on the Prior Informed
Consent Procedure (PIC) for certain hazardous chemicals and pesticides in
international trade. It establishes special rules for trade with third
countries of certain chemicals with a view to protecting human health and the
environment from potential harm and contributing to the environmentally sound
use of such chemicals. By 10 February 2011 around 150 substances (pesticides
and industrial chemicals) were listed in Annex I to the Regulation, including
40 substances that are subject to the PIC procedure under the Convention.

             Biocides

Directive 98/8/EC of
the European Parliament and of the Council regarding  the placing of biocidal
products on the market[243] (the Biocides
Directive) concerns the authorisation and placing on the market of biocidal
products in Member States, the mutual recognition of authorisations within the
Union and the establishment at Union level of a list of active substances which
may be used in biocidal products.

As of 1 February 2011, 40 active substances
were listed in Annex I and 1 active substance in Annex IA. In accordance with
Article 16(1) of the Directive, Member States are allowed to apply national
rules and practices during the implementation of the review programme. The
first three product authorisations and 31 mutual recognitions were granted in
accordance with the Biocides Directive in 2009 and 2010.

8.7.1.2.
Report of work done in 2010

This sector of EU environmental law is
characterised by substantial new developments; however, legal enforcement
action in these fields does not constitute a significant workload for the
Commission.

             Chemicals

REACH entered into force on 1 June 2007.
This included the establishment of the European Chemicals Agency (ECHA) and the
preparation of IT-systems to hold the new database. Registration of chemicals
manufactured or imported in quantities of 1 tonne or more per year started on 1
June 2008. Between 1 June and 1 December 2008 manufacturers had the possibility
to pre-register their phase-in substances. Pre-registration, as its name
suggests, precedes full registration and provides for extended deadlines.
Depending on the volumes and the hazardous properties of substances, these
extended deadlines are 2010, 2013 or 2018. In 2008, ECHA received approximately
2.7 million pre-registration dossiers. If a company failed to pre-register by 1
December 2008 it can no longer place its phase-in substances on the market
until it has completed registration. The first registration
deadline, 30 November 2010, marked an important milestone for the new EU
chemicals policy. This deadline applied to the most
hazardous substances (e.g. those that are carcinogenic, mutagenic or toxic for
reproduction) manufactured or imported in quantities of
1 tonne or more per year per company, substances very
toxic to the aquatic environment manufactured or
imported in quantities of 100 tonnes or more per year per company and substances manufactured or imported above 1000 tonnes per year.

24675
registration files for 4300 substances including
nearly 3400 phase-in substances were submitted to ECHA by the November
2010 deadline. ECHA is proceeding with the checking of the files to ensure that
all requirements have been met.

Six court cases
were brought up before the ECJ in 2010, all of them by individual companies
against ECHA and all of them seeking the annulment of the decision to include
certain substances in the candidate list. Some of the cases might be joined by
the Court due to their similarities and the admissibility of some of the
applications have been questioned by ECHA and the Commission. The Commission is
intervening in five of these cases.

Within the process of authorisation, the
Commission has adopted a decision to add 6 chemicals to the list of substances subject
to authorisation from the so called Candidate List. Companies that want to
continue using these six chemicals have to submit requests for authorisation.

The Candidate List currently consists of 46
Substances of Very High Concern (SVHC). Inclusion of substances in the
Candidate List triggers several legal obligations, for example, producers or
importers of articles have to notify
ECHA if their article contains a substance on the Candidate
List; Suppliers of articles
containing these substances must provide sufficient
information to allow safe use by their
customers or, upon
request, to consumers. Similarly, suppliers
of substances have to provide their customers with a safety data sheet.

Member States have notified the Commission
of national provisions for penalties applicable for REACH infringements. A Commission study finalised in 2009, on the
setting of penalties for the infringement of REACH provisions in national laws
identified a number of differences between Member States´ approach to adopting penalties
which are effective, proportionate and dissuasive. The Commission has,
therefore, organised a workshop for Member States on penalties in order to
discuss its findings. The results of the study, Member State's reports on the
operation of REACH as well as work of the Forum for Exchange of Information on
enforcement will provide the Commission with a broader picture as to the
effectiveness of enforcement of the REACH Regulation across Member States and
allow it to assess possible further steps.

The Forum for
Exchange of Information on Enforcement, composed of members nominated by Member
States, was set up within ECHA. The Forum coordinates a network of Member State authorities responsible for the enforcement of the Regulation. Its main tasks
include: proposing, coordinating and evaluating harmonised enforcement projects
and joint inspections; identifying enforcement strategies, best practice in
enforcement and examining proposals for restrictions with a view to advising on
enforceability.

In 2009, the ECHA Forum developed
inspection guidelines, in the form of minimum criteria to be applied as a
common basis for the performance of REACH inspection activities within the MS.
However, their provisions remain general and therefore it is useful to assess
whether more specific and binding inspection criteria should be introduced in
the REACH and CLP Regulation. At the end of 2010, the Commission launched a
study which aims to assess whether and how the current enforcement requirements
of REACH and CLP Regulations can potentially be reinforced.

Member States were obliged to notify the
Commission of national provisions for penalties applicable for CLP
infringements by 20 June 2010. A number of
Member States did not fulfil this obligation and the Commission has reminded
Member States of this obligation during the Competent Authorities meetings of
REACH and CLP. The Commission is currently considering launching infringement
procedures against those Member Sates who have still not complied.

In 2010, the
Commission started the review of the scope of REACH mandated by Article 138(6),
which calls on the Commission to assess by 1 June 2012 whether or not to amend
the scope of REACH to avoid overlaps with other relevant provisions of EU law.
On the basis of such a review, the Commission may if appropriate, present a
legislative proposal. The Commission is being assisted by a contractor in the
development of this work and has involved all its relevant services in the
assessment of EU legislation. As part of the project, stakeholders were called
to share any relevant experiences they may have gathered when facing the
challenges of implementing REACH through a dedicated website www.reachscope.eu,
which was operational from 10 March until 1 December 2010.

One of the aims of the CLP regulation is to
improve the protection of human health and the environment by providing
criteria for defining when a substance or mixture displays properties that lead
to its classification as hazardous. The CLP regulation applies to
manufacturers, importers, users or distributors of chemical substances or
mixtures. They must classify, label and package any substance or mixture,
regardless of its annual tonnage, in accordance with the Regulation. By 3 January 2011, industry had to notify ECHA of the classification
and labelling of all chemical substances that are hazardous or subject to
registration under the REACH regulation and placed on the EU market. ECHA
received 3 114 835 notifications of 107,067 substances.

With regard to the CLP Regulation, two
court cases challenged the classification of nickel and borates compounds
listed in the 30th and 31st ATP of Directive 67/548/EEC
and in the 1st ATP of CLP. The hearing took place on 20 January
2011.

In 2010 twenty non-communication cases were registered concerning
the transposition of Directive 2008/112/EC[244] amending a
number of Directives in order to adapt them to Regulation (EC) No 1272/2008 on
classification, labelling and packaging of substances and mixtures. More than a
half of them were closed during 2010.

In 2010 amendments
were made to Regulation EC No 850/2004 to implement within the EU, restrictions
on the 9 substances, which were included within the framework of the Stockholm
Convention on POPS in 2009.

The Commission
published the first report [245]on the application of
Regulation (EC) No 850/2004 on persistent organic pollutants in accordance with
Article 12(6) of the Regulation. Despite several reminders some Member States
had not fulfilled the reporting obligations. In the report, the Commission
concluded that "Compliance with the reporting obligation is not
satisfactory. A significant number of Member States have not respected their
reporting obligations. The quality of information provided must improve".

In 2010, the Commission finalised a study
on mixture toxicity and adopted its final report which aimed to provide a
‘state of the art’ overview of the science and methodologies for assessing the
hazardous effects arising from exposures to multiple chemicals from different
sources and pathways. The final report has been made publicly available on the Environment
website and was open for consultations to the interested parties. The Commission
organised a workshop and consultations with Member States on the subject. This
work coincided with an initiative taken in the Council in December 2009
requesting the Commission to assess how such effects arising from multiple
exposures are covered in current legislation.

            Export and import of
dangerous chemicals

Two amendments of Regulation (EC) 689/2008
of the European Parliament and the Council of 17 June 2008 concerning the
export and import of dangerous chemicals were favourably received by the
regulatory committee in which the Member States are represented and are expected
to be formally adopted and published in spring 2011. The amendments add further
chemicals to the list of chemicals subject to certain requirements for their
export (Annex I) and also to the list of chemicals that are banned for export
(Annex V). The Commission drafted a guidance document on implementation of the
Regulation, which was endorsed by the Member States and will be published in
February.

             Biocides

During 2008 the Commission followed the
transposition of the Commission Directives amending Directive 98/8/EC
concerning the placing of biocidal products on the market. The Commission has
closed all of the open infringement cases.

In 2010 four
non-communication cases were registered concerning Commission Directives 2009/85/EC[246],
2009/86/EC[247], 2009/87/EC[248],
2009/92/EC[249], 2009/93/EC[250]
and 2009/99/EC[251], which all concern the
inclusion of active substances in Annex I to Directive 98/8/EC.
Furthermore, three non-communication cases were registered concerning
Commission Directive 2009/94/EC[252] amending Directive
98/8/EC to include boric acid as an active substance in Annex I thereto.
Furthermore, two non-communication cases were registered concerning each of
Commission Directives 2009/94/EC[253], 2009/95/EC[254]
and 2009/98/EC[255]. All of the cases were
closed during 2010.

The Commission adopted Decision 2009/244/EC
concerning the placing on the market of a carnation (Dianthus caryophyllus L.,
line 123.8.12) genetically modified for flower colour, for the purpose of
import, retailing and ornamental uses (not for cultivation or food/feed uses).

On biocides, as set
out in the implementation report following Article 18 of the Directive
published in 2008, the current progress rate of the review programme will not
permit its completion by 14 May 2010 as planned. This is due mainly to the fact
that, before any review could start (the second phase), it was necessary to
establish an inventory of active substances used in biocidal products placed on
the European market of biocidal products. In light of these findings, the
Commission adopted Directive 2009/107/EC extending the deadline for completion
of the review programme until 14 May 2014[256].

The Commission presented its proposal for a
revision of the Biocides Directive in 2009. The proposal will take the form of
a Biocides Regulation repealing and replacing the Biocides Directive. The main
changes proposed by the Commission included an extension of the scope to
articles treated with biocidal products, a possibility to have certain
categories of products authorised at Union level, measures aimed at
strengthening the mutual recognition, obligatory rules on data sharing of tests
involving vertebrate animals and a partially harmonised fee structure. The
European Parliament voted on the proposal in the first reading in September
2010. The Council reached a political agreement on the file in December 2010.
The second reading will start in the second half of 2011. The proposed
Regulation is expected to be applicable as of 2013.

Petitions

During 2010, there was one petition handled
on strychnine hydrochloride.

8.7.2.
Evaluation based on the current situation

 Chemicals

The REACH Regulation
entered into force on 1 June 2007. Its main obligations started applying on 1
June 2008. The first registration deadline was an important milestone. From now
on the work of national enforcement authorities and Member States joined
enforcement projects will become even more important.  In order to ensure
compliance, Member States should put in place effective monitoring and control
measures. The Commission is concerned that Member States may not be able to
make sufficient resources available to ensure compliance by economic operators.

Every five years
Member States must submit a report to the Commission on the operation of the
Regulation in their respective territories, including sections on evaluation
and enforcement. The first reports were besubmitted in  June 2010. The
Commission is currently assessing the Member States reports and has in addition
launched a contract for the in depth analysis of MS reporting. The results of
the Member States reports, together with results from the ECHA reporting on the
operation of REACH, on the joint submission of information, on the status of
implementation and use of non-animal test methods, the results of several
Commission studies related to enforcement of REACH and CLP as well as the work
of the Forum for Exchange of Information on
enforcement will provide the Commission with a broader picture as to the
effectiveness of enforcement and implementation of the REACH Regulation across
the Member States and allow it to assess possible further steps. With
regard to the POPs Regulation, a possible reason for the delay in submitting
annual reports could be that they are considered low priority by Member States,
as the reporting format only sets out four questions which remain the same
every year. As for the three annual reports, the reasons could be linked to
non-ratification of the Stockholm Convention on POPs and/or the Protocol to the
regional UNECE Convention on Long-Range Transboundary Air Pollution (CLRTAP) on
POPs.

            Biocides

In the biocides area
the Commission undertook to monitor the progress made in the second phase of
the Review Programme for biocides regulated by Commission Regulation (EC) No
1451/2007[257]. Serious delays and significant
variations were found in the performance at all stages of the procedure between
the Member States.

The reasons for the delays are, for
example, the technical complexity of the work, insufficient human resources and
lack of experience with dossier preparation (by participants) and dossier
evaluation (by Member States). However, considerable time was also needed to
develop appropriate testing methodologies and exposure scenarios or for
defining harmonised approaches for the evaluations.

In reaction to the delays and variations in
the performance, the Commission took a number of actions, for example prepared
a note on the evaluation of multiple dossiers that should speed up and
facilitate the evaluation of dossiers from several applicants by the competent
authorities. At each meeting with the competent authorities, the Commission
makes an overview of late dossiers and agrees further steps with the relevant
competent authorities (see also section on 'Planned action').

The revised PIC Regulation was adopted in
2008 and requires the Commission to regularly compile a report on the operation
of the procedures, which shall include reports from Member States. The
Commission foresees that this report will be compiled in the course of 2012.

8.7.3.
Evaluation results
8.7.3.1.
Priorities

Chemicals

Effective
implementation of REACH and CLP Regulations is the main priority in the
chemicals sector. The Chemicals Agency is playing a key role in the effective
implementation of REACH. It will coordinate, over a period of 11 years, the registration
of some 30 000 chemical substances in use today.

Member States provided their first reports on the operation of REACH
in June 2010 and ECHA will report by June 2011. On the basis of these reports,
the Commission will prepare the first general report on the operation of REACH.

The priorities
for POPs will be, firstly, to transpose the agreements reached in 2009 under
the UNECE Protocol into the POPs regulation and secondly to develop proposals
for new additions to the Convention.

Biocides

The first applications for authorisations
and mutual recognitions in accordance with the Biocides Directive were received
and processed in 2009/2010. Estimations showed that the number of applications
for product authorisation and mutual recognition will exponentially increase in
the future. In view of this, further action is needed to facilitate the
implementation of the legal and practical requirements related to these
procedures. The Product Authorisations & Mutual Recognition Facilitation
Group, an informal group of Member States' authorities set up in 2007 in order
to discuss procedural, regulatory and scientific issues arising during the
course of product authorisation and mutual recognition, intensified its work in
2010. Several guidance documents were prepared and agreed by the Group (e.g.
frame formulations, letters of access, changes to authorisations).

In addition the speeding up of the
evaluation of biocidal active substances in the Review programme will be a main
priority.

As concerns the PIC Regulation, it is
planned to draft a proposal for an amendment that addresses changes resulting
from Regulation (EC) 1272/2008 on classification, labelling and packaging of
chemicals and to finalise the guidance documents for implementation of the
Regulation.

8.7.3.2.  Planned action (2011 and beyond)

Chemicals

The Commission will continue to work to
enhance good cooperation, coordination and exchange of information with Member
States and the European Chemicals Agency regarding enforcement so that the
system established by the REACH and CLP Regulations can operate effectively.
The Commission will work closely with the Forum for Exchange of Information on
Enforcement in this regard.

Concerning the
registration process there are two further registration deadlines in 2013 and 2018 for chemicals produced or imported in lower
volumes. The Commission will examine the lessons learned from the first
registration phase to allow as smooth a process as possible for future
registration deadlines.

Most guidance documents necessary for industry
preparedness for registration under REACH and notification to the
Classification and Labelling inventory under the CLP Regulation have been
adopted, with some necessary updates underway. The remaining staggered
deadlines for registration are 2013 and 2018. Equally a lot of work will be
developed in 2011 to ensure the proper functioning of the evaluation and
authorisation titles in REACH for which ECHA and Member States are responsible.

With regard to authorisation, following a
recommendation from ECHA in December 2010, the Commission is taking steps to
add a further 8 chemicals from the Candidate List to the list of substances
subject to authorisation. The Candidate List currently consists of 46
Substances of Very High Concern (SVHC) but the Commission is committed to
working together with Member States towards a target of including an additional
90 SVHC on the Candidate List by 2012 and to identify all relevant, currently
known SVHCs in the Candidate List by 2020

REACH calls for the Commission to carry out a review of the scope of
the Regulation by June 2012 to avoid overlaps with other relevant Community
provisions and on the basis of this, a legislative proposal could be presented,
if appropriate. The work to be undertaken has started and for this purpose the
Commission has launched a study which will be further developed in  2011 with
the view to assessing overlaps and gaps between REACH and other community
legislation when regulating chemicals, but also identifying ways of increasing
synergies between all relevant pieces of legislation.

In 2011 the
Commission is pursuing the study which aims to assess whether the current
enforcement requirements of REACH and CLP Regulations could potentially be
reinforced and how.

With regard to the POPs Regulation, the
Commission will continue to stress to Member States the importance of the
continuity of the information provided by them. Furthermore the Commission
intends to improve the reporting format with the aim to make it more
user-friendly and less time consuming. This can be achieved by establishing
links to the SEIS (Shared Environmental Information System) initiative. A SEIS
Regulation is currently under preparation. The Commission will also remind
Member States about their reporting obligations on the application of the POPs
Regulation, followed by legal enforcement action where necessary.

            Export and import of
dangerous chemicals

The Commission will present to the Council
and the European Parliament a proposal for a recast of Regulation (EC) 689/2008
concerning the export and import of dangerous chemicals which addresses changes
stemming from the Treaty on the European Union and the Treaty on the
Functioning of the European Union. The proposal will also align that Regulation
with Regulation (EC) No 1272/2008 on classification, labelling and packaging of
substances and mixtures and it will transfer certain administrative, technical
and scientific tasks to the European Chemicals Agency. In addition the proposal
seeks to clarify some technical issues.

The fifth Conference of the Parties of the
Rotterdam Convention will be held in June 2011 and requires a thorough
preparation by the Commission, which began in 2010 and is a priority in 2011.
The administrative work as well as the software of the European Database on
Export and Import of dangerous chemicals, which is the central tool for
implementation of the PIC Regulation, will undergo major changes that need to
be implemented smoothly.

            Biocides

With regard to biocides, the Commission
will continue to carefully monitor that the obligations of the Member States
under the biocides review programme, including the delivery of competent
authority reports, are adequately met and will take action where this is not
the case. During the meetings of the competent authorities for biocides, which
are held four times a year, the Commission asks for an update on significantly
delayed dossiers. Member States are invited to give their reasons in order to
solve outstanding issues or collect expert views.

In view of the acceleration in the product
authorisation stage, the Commission in consultation with the Member States will
focus on the smooth implementation of the process and ensure the operation of
the Register for Biocidal Products to be in line with the requirements.

8.7.4.
Sector summary

The Chemicals and Biocides sector of EU
environmental law is characterised by substantial new developments. In the
chemicals sector, though the main obligations under REACH started to apply from
June 2008, the majority of registrations came in by December 2010. The Industry
Classification and Labelling inventory will be established during 2011. The
available information on implementation is currently being assessed. Although
full compliance has been achieved concerning introduction of penalties, the
Commission is looking at the way forward for a more harmonised approach in
relation to these penalties.

As regards biocides, the revision of the
current legislative framework is expected to bring important improvements to
implementation. In addition, the review programme for biocides requires close
monitoring in order to avoid excessive delays and the start of the product
authorisation stage is a key challenge which will require attention in the
forthcoming years.

8.8.
Governance
8.8.1.
Current position
8.8.1.1.
General introduction

 Governance

Public access
to environmental information has always been considered as a key issue to
promote greater awareness of environmental matters, a free exchange of views
and more effective participation by the public in environmental decision-making.
The EU decided as long ago as 1990 to introduce specific legislation; however,
new impetus was given by the UN-ECE Aarhus Convention. Directive 2003/4/EC[258] expanded the
access granted under the previous legislation. The objectives of the Directive
are: a) to guarantee the right of access to environmental information held by
or for public authorities and to set out the basic terms and conditions of its
exercise; and b) to ensure that, as a matter of course, environmental
information is progressively available and disseminated to the public using in
particular computer telecommunication or electronic technology. Both 'passive',
i.e. upon request, and 'active' dissemination of environmental information are
covered by the Directive. Its scope is broad due to the fact that
'environmental information' and 'public authority' are both given very wide
definitions. The latter covers not only national, regional and local
authorities, including public advisory bodies, but also private
non-governmental bodies providing public services or performing public
administrative functions in relation to the environment. The Directive makes
provision for both administrative and judicial review. Directive 2003/4/EC had
to be transposed by 14 February 2005.

Public access to environmental information is complemented by the
second pillar of the Convention. This was implemented by Directive 2003/35/EC[259]
in respect of certain plans and programmes relating to the environment, as
provided for in Article 2. The scope of the instrument is further extended to
environmental impact assessment (EIA) and integrated pollution prevention and
control (IPPC). The main objective of this Directive is to ensure effective
public participation in decision-making linked to certain projects. This aim is
further strengthened by its integrated access to information and access to
justice provisions. This Directive had to be transposed by 25 June 2005.

The third
pillar of the Aarhus Convention is access to justice, which guarantees the
effectiveness of the previous two pillars, was partially implemented by the
previously mentioned two Directives and Directive 2004/35/EC and by Regulation
1367/2006[260].

Other activities pursued by the Commission to
enhance access to justice can be summarised as compliance promotion, which
ensures a dialogue with Member States on possible problems of implementing EU
law at national level. Amongst others, access to justice constitutes an
integrated element of the Cooperation with Judges programme that was started in
2008. Another initiative which contributes to enhance access to justice is the
e-Justice portal launched by the European Commission, where environmental
justice shall be gradually included.

8.8.1.2.
Report of work done in 2010

Governance

Despite some
delays, all the Member States have transposed Directive 2003/4/EC. The
Commission contracted an external consultant to carry out studies dealing with
the conformity of national implementing legislation with the requirements of
the Directive. Further to the finalisation of these studies in 2008 and their
examination, in 2009, letters were sent to most Member States inviting them to
comment on the findings of the studies.

Only few
petitions submitted to the European Parliament raised problems of the
application of Directive 2003/4/EC in the Member States. On the basis of
information available or supplementary documents supplied in the framework of
the petitions, there was no evidence that public authorities applied the
Directive incorrectly.

On 1.09.2010 a
hearing took place before the Court in case C-204/09, reference for a
preliminary ruling, Flachglas Torgau GmbH. Advocate-General's opinion and
judgement have not been issued yet. The Federal Administrative Court of Germany
asked several questions which concern interpretation of terms used in the
Directive, i.e. bodies and institutions acting in a legislative capacity,
public authority, confidentiality of proceedings.

On 22.12.2010
the Court delivered preliminary ruling in case C-524/09 Ville de Lyon following
the French Tribunal Administrative de Paris reference on the applicability of
Directive 2003/4/EC to information on the sale of emission quota and the scope
of "environmental information". The Court concluded that the
information requested comes under the specific rules governing public reporting
and confidentiality under Directive 2003/87/EC and Regulation 2216/2005.
According to Regulation 2216/2005 that information is confidential and subject
to specific rules on its access.

On 16.12.2010
the Court made a judgement in case C-266/09 Stichting Natuur en Milieu.
This concerns preliminary ruling reference from the Dutch Administrative College (College van beroep voor het bedrijfsleven) on the applicability of Directive 2003/4/EC
and the scope of "environmental information". In agreement with the
Advocate General, the Court concludes, first, that the Directive applies in the
present case because the decision denying environmental information was taken
after the transposition deadline of the Directive (while the request for
environmental information was made before that). Second, the definition of
environmental information has to be interpreted broadly and therefore includes
information submitted by operators in the application process for a permit
under the Plant Protection Products Directive (91/414/EEC). Third, protection
of commercial information is limited where it relates to information on
emissions into the environment or refusal to disclose is outweighed by public
interest.

Despite some
delays, all the Member States have transposed Article 2 of the Directive
2003/35/EC. By 25 June 2009 the Commission had to send a report on the
application and effectiveness of the Directive to other institutions. National
reports were not provided for by the Directive, however the Commission considered
it important to have information from the Member States. The requested
contributions were forwarded, in certain cases, with an important delay,
preventing from the elaboration of the report by the deadline. On the basis of
the received information, it appears that the effective application of Article
2 in the Member States was limited, notably due to the fact that in most cases
the SEA procedure (see the section on the SEA) was followed. There is no
evidence that it was applied incorrectly.

On 14 April 2010 the
Commission adopted a report on the application and effectiveness of Directive
2003/35/EC[261] compiled pursuant to
its Article 5. The report is limited to an examination of Article 2 of the
Directive (public participation concerning plans and programmes), due to the
fact that aspects dealing with Article 3 of the Directive (public participation
and access to justice in EIA) were examined in a Commission Report of 23 July
2009[262] and those elements
relating to Article 4 of the Directive (public participation and access to
justice under IPPC) will be dealt with in the report to be compiled pursuant to
Article 17(3) of Directive 2008/1/EC.

In the interests of clarity, the recast of Directive 2008/1/EC of
the European Parliament and of the Council of 15 January 2008 concerning
integrated pollution prevention and control took place in 2010.[263]
Provisions were taken over from the previous version of the Directive, however
the scope of public participation and access to justice has been broadened to
cases of granting or updating of a permit for an installation where the
competent authority may, in specific cases, set less strict emission limit
values taking into account aspects of cost efficiency.

The Seveso II Proposal for a Directive of the European Parliament and
of the Council on control of major-accident hazards involving dangerous
substances was adopted by the Commission.[264]
As a result of the review process, on 21 December 2010 the Commission adopted a
proposal
for a new Directive that would repeal and replace the current Seveso
I Directive by 1 June 2015. In order to make the broadest possible use of the Aarhus tools in EU law access to information, public participation and access to justice
provisions have been included in the text.

The Cooperation with Judges programme continued during the year
2010, starting with a seminar in Paris on Nature, followed by a London seminar discussing the same topic and in September a Lithuanian venue which all had
the integrated element of access to justice in environmental matters.

The role of the Court of Justice of the European Union (ECJ) in interpreting access
to justice provisions is outstanding and becoming more and more important in
broadening this area.  The Court delivered its first judgment on the topic in
2009 stating that Ireland has failed to transpose certain elements of Directive
2003/35, (case C-427/2007). By requiring the notion of prohibitive costs in
judicial environmental cases to be explicitly transposed, the Court provided a
better guarantee of effective access to justice for the public and NGOs. In a
preliminary ruling concerning the Swedish national rules (case C‑263/08) the
Court ruled on NGOs standing, stipulating that the national rule setting a
requirement that only an association with at least 2 000 members may bring
an appeal against a decision adopted on an environmental matter is against the
provisions and the objective of wide access to justice set out in Directive
85/337/EEC.

Ongoing cases before the Court of
Justice of the European Union

Since last year there are several new court
cases based on the preliminary references before the ECJ all concerning access
to justice and public participation. One is a Belgian case, the Belgian Council
of State has referred several questions (in Joined Cases C-12/09 to 131/09,
134/09 and 135/09) on the interpretation of the EIA Directive and also on its
provisions as modified by Directive 2003/35/EC, including its provisions on
access to justice.

Another Belgian case
is brought to the Court by the Belgian Constitutional Court under C-182/10. The
reference intends to receive clarification on topics such as the application of
article 1 (5) of the EIA Directive and its relation to the Aarhus Convention
regarding the applicability of legislative acts by virtue of which projects may
be exempt from the scope of the Directive and possible links to access to
justice. The Court requested clarification also on the legal status of the
Aarhus Convention Implementation Guide. A further issue of interpretation was
raised in relation to the requirement of EIA under Article 6(3) of Directive
92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna
and flora.

In another case, a
German administrative court of appeals has referred several questions (in Case
C-115/09) concerning the interpretation of Article 3.7 of Directive 2003/35/EC,
with respect to the admissibility of actions brought by environmental NGOs,
even if there are no subjective rights affected, and the standard of review to
be followed by national courts under that provision. The hearing of the latter
was held in June 2010, and following this, Advocate General Sharpston has
delivered her opinion in December 2010 indicating that NGOs need to be given
wide standing in order to meet the objective of wide access to justice set by
the Directive. It should also be mentioned that there is a pending case on the
same topic before the Aarhus Compliance Committee.

Direct effect of the Aarhus Convention (AC)
was also the subject of a preliminary reference. Regarding Article 9 (3) AC the
Supreme Court of the Slovak Republic referred several questions to the ECJ
amongst which one seeks ECJ's position whether it is possible to recognise
Article 9, and in particular Article 9(3) AC, which has become a part of EU
law, as having the direct applicability or direct effect of EU law (Case
C-240/09). Advocate General Sharpston has delivered her opinion in which she
indicates that she does not find that there is direct effect of the provisions
referred to. However, she does mention that even though not directly effective,
Member States national courts have an obligation to take into account these
provisions of the AC.

In Case C-165/09 regarding the
interpretation of provisions of the IPPC Directive and Directive 2001/81/EC of
the European Parliament and of the Council of 23 October 2001 on national
emission ceilings for certain atmospheric pollutants Opinion of Advocate
General Kokott has been released in December 2010. This also has an access to
justice relevance, as she indicated that the individuals have the right to
appeal before a national court by virtue of the IPPC access to justice
provisions whenever the annual national emissions ceilings (based on Directive
2001/81) are endangered.

In Case C-416/10 a reference for a
preliminary ruling from Najvyšší súd Slovenskej republiky (NSSR) was sent to
the ECJ to answer five questions relating to the SK system of public
participation in EIA and IPPC procedures. The preliminary reference deals with
the temporal effect of the EIA Directive, the role of national judges when
applying EU law and also relates to the question of effective access to justice
including the applicability of injunctive relief even though there is no
explicit provision on this in the EIA Directive (as modified by Directive
2003/35/EC).

Petitions

During 2010, there was one petition handled
on access to justice with regard to Ireland.

Compliance promotion

Several studies were carried out during the
years 2008-2010 in order to screen the implementation status of Member States
of Directive 2003/35/EC on public participation.

The Commission places a particular emphasis
on implementing and monitoring the Member States' application of already
adopted EU law, namely the Access to Information and Public Participation
Directives' provisions on access to justice. On the basis of the above studies
and judgements the Commission has started exchanges with the Member States in
order to establish a clear picture on how they comply with the provisions of
the Directive.

8.8.2.
Evaluation based on the current situation

Governance

According to
Directive 2003/4/EC, no later than 14 August 2009 Member States had to communicate
to the Commission their national reports on the experience gained in its
application to enable it to submit a report to other EU institutions. A
Guidance Document for these reports was drawn up by the Commission, in
co-operation with Member State experts, in 2007.

During 2009,
the Commission reminded Member States of the need to submit these reports. By
the end of 2009, the majority of the Member States had responded to the
Commission's reminder, but it proved nonetheless necessary to prepare action under
Article 258 of the Treaty for those Member States who had failed to submit a
report.

Although the
national reports had yet to be analysed at the end of the year, it appeared
that, in general, public authorities at national and regional level have applied
Directive 2003/4/EC correctly. However, given the Directive's wide scope, it
was less clear whether, at local level, notably in small municipalities or
entities, public access to environmental information is always provided
according to the relevant standards.

In addition, requests for clarification to the Commission services
show that public authorities need to make greater efforts to inform the public
adequately of their rights under the Directive. This right includes the right
to make an administrative or judicial challenge at national level to a refusal
by a public authority to provide requested information. In general, the
Commission considers that these rights should be exhausted before the
Commission itself examines the justification for an individual instance of
refusal of access to information. Moreover, it appears that public authorities
need to pay further attention to the active dissemination of environmental
information to the public, in particular, through the Internet.

On the basis of
information available and national contributions, there was no evidence that
public participation concerning plans and programmes, provided for in Article 2
of Directive 2003/35/EC was incorrectly applied by Member States.

The
implementation of public participation provisions related to EIA and IPPC is
still under assessment by the Commission, further action shall be taken in
light of the findings.

The Cooperation with Judges programme is considered to be a useful
tool in raising awareness of access to justice requirements at EU level amongst
judges. This can be regarded as a very effective way of fulfilling the
requirements of the Aarhus Convention on establishing a high level of access to
justice and also ensuring the implementation of access to justice provisions of
the Treaty of Lisbon[265]. Regarding the case-law
of the ECJ, there is a growing number of cases on the most important issues
related to access to justice (such as the admissibility rules of the public in
review procedures, and access to environmental information, in particular on
the definition of 'environmental information' and the issue of prohibitive
costs that can be regarded as barring effective access to justice) which have
an indisputable positive effect on better application of the Directive  and on
access to justice. It can be seen that based also on the implementation
activity of the Commission there is a growing number of cases linked to access
to justice.

8.8.3.
Evaluation results
8.8.3.1.
Priorities

Governance

The priority for the Commission is to verify
the conformity of national legislation with the requirements of Directives
2003/4/EC and 2003/35/EC to ensure that these are applied correctly in practice
by public authorities at all levels. In 2011, the Commission will analyse Member State responses to the enquiries it sent and will ensure the necessary further
follow-up. By monitoring Member States' implementation of existing provisions,
drawing attention to possible non-compliance and engaging in interactive
discussions the compliance promotion pursued by the Commission in access to
justice issues is considered very effective.

The Cooperation Programme with Judges has a
very important role of ensuring the high competence of Member States judges and
a high level of awareness of the latest developments in EU law, not only as
regards case-law, but also recent changes to the Treaties, international
activity. This also gives the possibility of national training centres to take
into account the material developed during these sessions. Six seminars were organized
in the first phase of implementation of the programme: four seminars dedicated
to EU nature law (in Sofia, Bulgaria, May 2009; in Paris, France, February 2010 and in London, United Kingdom, March 2010) and three seminars for EU waste
law.

More than 100 judges (judges and
prosecutors, from courts of first instance to Supreme Courts) from 20 Member
States participated in these seminars. The content of the seminars, mixing
front-teaching presentations with case-studies, proved to be very well adapted
to the audience. It was considered as very useful, there was a high attendance
rate with high quality expert debates amongst the different speakers and
participants.

The creation of
a European e-Justice portal, of which the first release was launched on 16 July
2010 is an important step in enhancing access to justice in Member States. The
environmental access to justice provisions in Member States are envisaged to be
incorporated into the site during the course of 2011-2012, which shall also
contribute to the effectiveness the procedures at Member States level.

Identifying
shortcomings in implementation and compliance promotion is a key aspect of
ensuring a higher level of application of EU law. Given the constantly evolving
nature of national legislation it is in some cases a considerable challenge to
be up to date of national legislation in force. This is the reason the
different stakeholder events, contact with civil society, cooperation with
judges and conferences can contribute to receive up to date and valid
information on application of EU law.

Thus, it is a key priority to ensure a constant exchange of
information with different stakeholders on the application of EU law in
national procedures and to ensure that effective legal protection is guaranteed
in environmental procedures.

8.8.3.2.
Planned action (2011 and beyond)

Governance

As mentioned
above, in 2011 the Commission will ensure an appropriate follow-up to the
dialogue it initiated with Member States in 2010 in order to address
transposition of the Aarhus-related Directives or concrete difficulties
encountered by public authorities in enforcement.

Compliance promotion in access to justice issues is envisaged to
continue beyond 2010. The on-going Cooperation with Judges Programme shall
ensure a constant dialogue with national judges on access to justice. The topic
elaborated and presented through three regional workshops will be EIA including
provisions implementing the Aarhus Convention on public participation and
access to justice. Development of training modules in other sectors of EU
environmental law (impact assessment studies, water, industrial emissions) is
foreseen.

Cooperation
with national authorities to ensure effective implementation is crucial. The
Commission will liaise with counterparts in implementing EU law at Member
States level.

It is also
envisaged to start preparation for the inclusion of environmental access to
justice provisions in the e-Justice portal described above.

As it was
presented above, the ongoing activity of ensuring implementation of Aarhus
provisions through compliance promotion, the Commission is exploring further
the possibility to extend Aarhus provisions to other areas where projects and
plans are involved in secondary EU law.

8.8.4.
Sector summary

Overall, Member
States appear to apply the Directive on access to environmental information
correctly, but the existing practice indicates that public authorities of all
levels, in particular lower ones, need to make greater efforts to inform and
respect the right of the public under the Directive.

Full
transposition of Directives 2003/4/EC and 2003/35/EC in the Member States is
also a priority for the Commission and in 2011 the Commission will pursue the
exchanges opened with Member States in 2010.

Based on the
reports submitted by Member States, the Commission will also prepare a report
on implementation of Directive 2003/4/EC.

A very important element of implementing the Aarhus Convention and
secondary law is the developing case-law of the ECJ in the field. In view of
the developing case-law of the ECJ, the Commission takes all the necessary
measures to implement the findings in Member States.

8.9.
Environmental Liability
8.9.1.
Current position
8.9.1.1.
General introduction

Directive 2004/35/EC of the European
Parliament and of the Council on environmental liability with regard to the
prevention and remedying of environmental damage (Environmental Liability
Directive)[266] establishes a framework
for environmental liability based on the "polluter pays" principle,
with a view to preventing and remedying environmental damage.

8.9.1.2.
Report of work done in 2010

The Environmental Liability Directive (ELD)
was to be transposed by 30 April 2007. Transposition was slow and finally only
completed by mid 2010 when the last Member State completed its transposing
legislation. The main reasons for the transposition delays were identified by
the Commission as linked with (1) existing legal frameworks, particularly where
Member States had already advanced liability rules on environmental issues, (2)
challenging technical requirements of the directive, such as the need for
economic valuation of environmental damage, different remediation types and
techniques and damage to protected species and natural habitats, and (3) the
framework character of the ELD which led to further delays as the broader range
of options instigated relatively longer debates at national level.

With completion of transposition, the last
non-communication cases launched by the Commission in 2007 were closed in 2010.
Currently, there is only one case open on the ELD, and this one is related to
the non-conformity of the national transposition. The Commission has assessed
and is further assessing the transposition as well as the implementation of the
ELD and has also started bilateral meetings with the Member States in this
regard with the aim that both sides may address questions and potential
problems in relation to transposition and implementation.

Apart from the seven
ECJ judgements of 2008 and 2009 as to non-communication, the only substantial
judgement so far on the ELD was given by the Court on 9 March 2010 in a
combined Italian case upon a request for a preliminary ruling (C-378/08
combined with C-379/08 and C-380/08). In its ruling the Court decided that the
polluter-pays principle is directed at action at EU level and can hence not be
directly invoked by individuals without intermediate implementing legislation
at EU level. The Court also decided that Member States have broad discretion in
laying down national rules implementing the polluter-pays principle and in
imposing remedial measures on the operator under the ELD when they have to
establish a causal link between the activity and the environmental damage (for
instance they may apply a presumption of causality which has to be based on
plausible evidence such as vicinity between activity and pollution or
correlation between the used substances and the pollutants). The competent
authority may also alter remediation measures which have already been partly or
fully implemented if those are obviously ineffective and if certain conditions
are met (operator and landowner heard, account taken of remediation criteria in
the ELD, grounds stated in the decision).

After the Commission's studies of 2008 and 2009 and extensive
consultations with national experts and relevant stakeholders, the Commission
adopted on 12 October the report on the effectiveness of the ELD in terms of
environmental remediation and the availability of financial security for the
activities covered by the scope of strict liability of the ELD[267].
The ELD Report concludes that transposition of the Directive was slow due to
the reasons outlined above, and that this lead to limited implementation and
experience so far which – together with the very divergent application by
Member States of implementation options offered by the Directive (e.g. on
extension of the scope of biodiversity damage or on the optional incorporation
of the permit and state of the art defences) - impacted negatively on the
developments of financial security instruments and markets.

Petitions

During 2010, there were no petitions on
this subject.

8.9.2.
Evaluation based on the current situation

The abovementioned ELD Report concluded
that insufficient availability of data on the effectiveness of the Directive in
terms of remediation and insufficient developments of financial security
instruments did not allow the Commission to draw reliable conclusions as to the
core question whether mandatory financial security should be established at EU
level. Developments in those Member States which have introduced or will
introduce mandatory financial security at national level (around one third of
the Member States) and also developments in relation with large scale accidents
(the Deepwater Horizon incident in the Gulf of Mexico, the red mud
accident at Ajka in Hungary) will have to be further monitored in order
to draw reliable conclusions.

The Report has however identified some
fields and measures for improving the implementation of the ELD: promoting
information exchange and communication between key stakeholders, awareness
raising of individual operators and financials security providers, development
of interpretation guidance and establishment of records or registries of ELD
cases.

Another, broader
implementation report by the Commission will be due by April 2014, based on
Member States application reports due by 2013. Besides several other questions,
that report will have to revisit the same questions on effectiveness and
financial security which had to be left unanswered in the report of 2010, then
on the basis of the evidence gathered until 2013/2014.

Apart from the
application of the significance criteria (Annex I of the Directive) and the
application of the appropriate measures to ensure the remedying of
environmental damage ('primary', 'complementary' and 'compensatory' remediation
according to Annex II of the Directive), the proper functioning of financial
security instruments will be significant for the successful implementation of
the ELD in the Member States in particular as regards effective remediation of
environmental damage. Furthermore, the Commission continued to provide support
to the Member States through interpretation of open questions in expert
meetings and in particular through an EU supported research project developing
a tool-kit on the remediation methods. The results of the research programme
REMEDE were made available in 2008[268].

8.9.3.
Evaluation results
8.9.3.1.
Priorities

All Member States completed the
transposition of the ELD and the Commission presented its report under Article
14(2) (COM(2010) 581 final). Therefore, the last horizontal non-communication
case was closed in 2010. The next priority for the Commission is to ensure that
the Environmental Liability Directive is correctly transposed in all Member
States. Therefore the Commission started to assess the conformity of the
domestic legislation with the ELD and has to conclude this exercise in
cooperation with Member States in 2011 and 2012 and where necessary launch
legal enforcement actions.

8.9.3.2.
Planned action (2011 and beyond)

The Commission's efforts need to continue
to ensure that the ELD is correctly transposed. Apart from continuing the
examination of the conformity of the transposing legislation of the Member
States and taking enforcement action as necessary, the Commission will continue
to discuss questions of interpretation and application of the ELD with
government experts in Commission organised meetings as well as in bilateral
meetings.

The Commission will also strive to draw
increasing attention to the areas identified in the ELD Report which deserve
more efforts in order to improve the implementation of the ELD (information
exchange, awareness raising, interpretative guidance, ELD-cases registries by
the Member States).

8.9.4.
Sector summary

Transposition of the ELD was finally
completed in 2010, but its application still remains relatively limited. The
Commission will have to promote the application and implementation of the ELD
through measures identified in the ELD Report. It also works towards completing
the conformity assessments and maintains dialogues with Member States on
transposition and implementation. Finally, the Commission will further continue
monitoring developments at national level, in particular with regard to
financial security instruments and markets.

9.
INFORMATION SOCIETY and MEDIA
9.1.
General Overview

In Information society and media the
regulatory framework for electronic communications continued to face a number
of incorrect implementation issues, despite a decreasing number of open
complaints and genuine efforts on the part of most Member States. Late
transposition has generated non-communication cases in relation to the revised
GSM Directive.

One key challenge in some Member States
remains the independence of national regulatory authorities (NRA's), which is a
prerequisite for ensuring fair and effective regulation of the sector.
Moreover, the Commission had to intervene against some Member States that have
imposed undue charges on operators. Finally, ensuring the effective
implementation of consumer rights remained another key challenge for several
Member States.

Commission guidance, such as the 2010
Recommendation on Regulated Access to Next Generation Access (NGA) networks, is
intended to provide increased regulatory clarity to all market players, which
is necessary to stimulate investment in fast and ultra-fast broadband.

Finally, in the run-up to the May 2011
deadline for transposing the revised regulatory framework for electronic
communications, guidance papers have been provided to Member States, as well as bilateral assistance, on request.

In the audiovisual sector, in spite of
preventive work with a view to ensuring timely and effective implementation of
the Audiovisual Media Services Directive by the end of 2009, a sizeable number
of infringements for non-communication of transposition measures were launched
in 2010.

Regarding the Public Sector Information
Directive, while a review is planned for 2012, a few Member States were still
struggling with the correct implementation of the existing Directive, regarding
for instance licensing and charging models that facilitate the availability and
re-use of public information resources.

9.2.
Electronic communications
9.2.1.
Current position
9.2.1.1.
General introduction

The EU regulatory framework for
electronic communications came into force in 2002. Its five Directives are
transposed into the national law of all 27 Member States[269].
The Framework Directive outlines the general principles, objectives, and
procedures. The Authorisation Directive creates a regime of general authorisations
for providers of communications services. The Access and Interconnection
Directive sets out rules for a multi-carrier marketplace, ensuring, in
particular, access to networks and services and interoperability. The Universal
Service Directive guarantees basic rights for consumers and minimum levels of
availability and affordability. The e-Privacy Directive covers protection of
privacy and personal data communicated over public networks.

Amendments to this regulatory framework,
included in the Better Regulation Directive[270]
and the Citizens’ Rights Directive[271] were adopted
in November 2009[272] and entered into force
in December 2009. The aim of this telecoms reform is to consolidate a
competitive internal market through more consistent national regulatory
approaches, reinforce consumer protection and users' rights, and provide for
more effective spectrum management and implementation. The new rules have to be
transposed into national laws of all Member States by 25 May 2011. The new
Regulation[273] establishing the new
European Telecoms Authority called "Body of European Regulators for
Electronic Communications (BEREC)" is directly applicable.

The Roaming
Regulation[274] was introduced
in 2007 because roaming charges were at excessive levels and constituted a barrier
to the Internal Market. In June 2009, the Regulation was extended for a further
three years up to June 2012 and to include SMS and data roaming services (at
wholesale level only) in addition to voice[275].

The Directive amending the GSM Directive
on the frequency bands to be reserved for the coordinated introduction of
public pan-European cellular digital land-based mobile communications in the
Community[276] came into force in
November 2009. It provides for the introduction in the 900 MHz band of new
wireless services, starting with UMTS services. The deadline for implementing
the revised GSM Directive was 9 May 2010.

While most of
the radio spectrum harmonisation decisions adopted until 2009[277]
on the basis of the Radio Spectrum Decision 626/2002/EC[278]
were implemented by the majority of Member States for some Decisions this was
not yet the case. In particular, the Commission services were monitoring
whether and how Commission Decision 2009/766/EC of 16 October 2009 on the
harmonisation of the 900 MHz and 1 800 MHz frequency bands for terrestrial
systems capable of providing pan-European electronic communications services in
the Community had been implemented by Member States.

On the basis of
the Decision No 626/2008/EC of 30 June 2008 of the European Parliament and
of the Council of Decision on the selection and authorisation of systems
providing mobile satellite services (MSS)[279],
the Commission adopted on 13 May 2009 a Decision No 2009/449/EC selecting two
operators of pan-European systems[280]. Implementation of the pan-European
MSS framework has now been taken-over by the Member States. The Commission
services closely monitor measures taken at national level, notably thanks to a
dedicated working group of the Communications Committee on the implementation
of Decision 2009/449/EC.

9.2.1.2.
Report of work done in 2010

Enforcing effective implementation of the
regulatory framework for electronic communications remained a priority in 2010.
In line with the Commission Communication on better monitoring of the
application of Community law[281], the Commission
services have continued to avoid the need for recourse to infringement
proceedings by making use of bilateral contacts with the relevant national
authorities, including via the EU Pilot system. They also provided general
guidance on implementation requirements via the Communications Committee
(COCOM) and the Radio Spectrum Committee (RSC).

During 2010, in view of the implementation
of the revised EU regulatory framework by May 2011, the Commission presented to
Member States in COCOM several guidance documents on the interpretation of
specific provisions, such as provisions on independence, universal service,
network sharing, and privacy. In addition, the Commission continued to discuss
with the Member States in COCOM the implementation of the European emergency
number '112' and of the reserved '116' numbers for harmonised services of
social value.

In addition to non-communication cases and
cases of non-compliance with judgments of the Court of Justice in the area of
electronic communications, infringement priorities in 2010 continued to focus
in particular on structural issues and consumer protection.

Structural issues included in particular the functioning and the independence of the
national regulatory authorities. As regards independence, the Commission has
systematically monitored the requirement for independence of national
regulatory authorities (NRAs), and has taken action when necessary. Firstly,
clear rules regarding the formal establishment of the NRA structures should
ensure the independence and impartiality of the NRA. The rules for dismissal of
NRA management are fundamental in this regard. An infringement is still pending
in Slovenia in this respect, while a Slovakian case and a Romanian could be
closed following legislative amendments. Secondly, Member States must ensure
that NRAs are legally distinct from and functionally independent of electronic
communications networks and services providers ('effective structural
separation'), not least when Member States retain ownership or control of
electronic communications undertakings. Concerns remained in this regard in
some Member States e.g., Romania, Latvia, and Lithuania. In the latter case,
the Commission decide to refer Lithuania to the Court of Justice.

Attention was also being paid to the full
application of the Community consultation procedure involving national
regulatory authorities and the Commission which aims to consolidate the
internal market for electronic commu­nications (Article 7 procedure). A key
principle of the regulatory framework for electronic communications is that
undertakings should not be subject to economic ex ante regulation unless
they have been found to be dominant in a relevant market, on the basis of a
thorough market analysis by their national regulatory authority (NRA). Two
infringement cases against Germany and Poland were pending, concerning the
absence of communication to the Commission of mobile termination rates and
costing methodology, and wholesale broadband access rates and costing methodology
respectively.

An increasing area of concern has been the
imposition of specific telecom taxes on providers of electronic communications,
in contradiction with the EU rules on administrative charges, under which
charges can be levied on telecoms operators to cover only certain
administrative and regulatory costs (mainly authorisations and regulatory
functions). Reasoned opinions were sent to France and Spain in this regard.

A second priority concerned the protection
of consumer rights. Consumer protection goes hand in hand with the growth
and diversification of electronic communication services and a growing number
of service providers. Infringement cases in this respect included: the
functioning of the European emergency number 112 (Italy); the possibility to
keep one's number when changing telecom operators, thereby allowing consumers
to fully benefit from competition (Bulgaria); an effective mechanism to settle
disputes between consumers and service providers that offers a more flexible,
cheaper, and less formal alternative to court proceedings (Luxembourg); respect
for consumer privacy (United Kingdom, Italy).

The general state of implementation of the
regulatory framework, monitored in close contact with the national authorities
and other stakeholders, is reflected inter alia in the Commission’s sector
specific annual Progress Report addressed to the European Parliament, the
Council, the European Economic and Social Committee and the Committee of the
Regions[282]. The Commission
continued to monitor implementation of the Roaming Regulation, which, by means
of its extensive six-monthly roaming data collection exercise, is providing a
key input to the Commission's monitoring activities. The Commission services
also closely monitor measures taken at national level to implement the
initiative on mobile satellite services (MSS) following the selection of
operators by the Commission, notably thanks to a dedicated working group of the
Communications Committee on the implementation of Decision 2009/449/EC.

The Commission monitors the correct
application of the provisions contained in the EU regulatory framework, also
via contacts with stakeholders and complaints received from EU citizens. The
online web tool 'EU Pilot', set up to provide quicker and better
solutions to problems arising in the application of EU laws, has been
increasingly used to facilitate contacts with the participating Member States
on the implementation of the EU rules relating to electronic communications.

Management of infringements

As regards infringement proceedings, during
2010, the Commission opened 17 new cases, including seven cases for non
communication of measures transposing the revised GSM Directive (concerning Spain, France, Italy, Cyprus, Hungary, Austria, and United Kingdom).

Seven cases were taken to the second phase
with a reasoned opinion being sent to the Member States concerned on the
following issues: the independence of the NRA – effective structural separation
(Romania), fixed number portability (Bulgaria), rules on alternative dispute
resolution (Luxembourg), the notification of mobile termination rates in
accordance with Article 7 of the Framework Directive (Germany), telecom
wholesale price rules (Poland) and administrative charges (France, Spain).

The Commission
decided to refer two cases to the Court of Justice under Article 258 TFEU: one
concerning the independence of the NRA in Lithuania, and one on the
implementation of rules on confidentiality of electronic communications in the United Kingdom.

At the same time, seven cases were closed
following progress in Member States. As the definition of subscriber was
amended in Polish law in line with the requirements of the Framework Directive,
the relevant case was closed by the Commission. Following modifications of the
national law, the Spanish case related to universal service, as well the
Swedish case in relation to dispute resolution, have been closed. As calls to
the European emergency number "112" in Italy became effectively
handled, the relevant case has been closed as well. Other closed cases
concerned the rules for dismissal of NRA management in Romania and Slovakia. Both cases could be closed following modifications of the national law.
Finally, the case of non implementation of spectrum decisions concerning the
169 MHz frequency band in Bulgaria was closed following clarifications provided
on the use of frequencies for security and defence purposes in line with the
said Decisions.

On the other hand, not all the Member
States have complied with the regulatory framework following infringement
proceedings, and in 2010 the Court of Justice ruled on three cases [Poland (C-545/08), Belgium (C-222/08) and Portugal (C-154/09)]. The Commission was closely following
whether the judgments of the Court of Justice were fully complied with. In
particular, as Italy was not complying with the judgement concerning the
availability of caller location information for 112 emergency number, it was
decided to refer Italy to the Court of Justice under Article 260 TFEU which
allows imposing financial sanctions on Member States that have not complied
with a judgement of the Court of Justice. In view of the progress made by Italy to comply with the judgement, the Commission decided to suspend the application to
the Court of Justice. At the same time, the Commission was able to close the
case against Poland (with regard to a judgement C-492/07 delivered in 2009) as
the issues were resolved.

In addition, the Commission was able to
close 10 presumed infringements based on complaints. At the end of 2010, there
were only two complaints pending. These complaints concerned the notification
of mobile termination rates in Poland and the rules on confidentiality in Ireland in view of an alleged limited scope of the provisions implementing Article 5 of the
ePrivacy Directive.

The Commission continues to frequently
issue press releases on the opened proceedings. These press releases are
available on the implementation and enforcement website dedicated to
Information Society and Media sector[283] together
with overview tables.

In November 2010, the European Law Academy
ERA on behalf of the Commission organised the 5th seminar for
national judges and the NRAs. The seminar topics have
been further expanded. In 2009, the
new package amended substantially the telecom framework and brought new
challenges for all the players involved including national judges and
regulators. Furthermore, a Digital
Agenda for Europe, one of the key initiatives of the EU 2020 strategy, has been
adopted in May 2010. The seminars were well received and participants indicated
their strong interest in the continuation of such seminars, as such seminars
contribute to creating a network of qualified judges applying EC telecom rules
in a consistent and efficient manner.

Petitions

Six petitions on the regulatory framework
were registered in 2010. These petitions concerned mainly Germany and Italy and involved consumer protection issues e.g. the quality of service, telecom
prices including of national and international SMS services, as well as
ePrivacy issues. All were answered without opening an infringement proceeding.

European Court of Justice

Finally, the European Court of Justice
issued several important judgments on substance in the electronic communication
area in 2010, both following infringement proceedings and requests for
preliminary ruling under Article 267 of the TFEU Treaty. These covered among
others universal service - providing special rates to certain categories of
low-income or disadvantaged customers (C-222/08 - Commission v Belgium,
C-389/08 – Base and others), designation of universal service provider
(C-154/09 - Commission v Portugal), broadband retail regulation without
prior market analysis (C-545/08 - Commission v Poland), out-of-court
dispute resolution (C-317/08 – C-320/08 - Alassini and others),
prohibition of combined sales (C-522/08 – Telekomunikacja Polska S.A.)
or number portability – charges to subscribers (C-99/09 – Polska Telefonia).

Changes underway

On 20 September 2010, the Commission
adopted three initiatives which are part of the Digital Agenda for Europe[284],
one of the seven flagship initiatives of the Europe 2020 strategy for smart,
sustainable and inclusive growth[285].

Firstly, the Commission adopted a
Recommendation on Regulated Access to Next Generation Access (NGA) networks,
which sets out a common regulatory approach for access to new high-speed fibre
networks that requires national telecoms regulators to ensure an appropriate
balance between the needs to encourage investment and to safeguard competition[286].
This is intended to provide increased regulatory clarity to all market players,
which is necessary to stimulate investment in fast and ultra-fast broadband.

Secondly, the Commission made a proposal
for a Decision of the European Parliament and of the Council to establish a
five year policy programme to promote efficient radio spectrum management and,
in particular, ensure that sufficient spectrum is made available for wireless
broadband[287]. Efficient and
competitive use of spectrum in the EU is expected to also support innovation in
other policy areas and sectors such as transport and the environment.

Thirdly, the Commission adopted a Broadband
Communication that sets out a coherent framework for meeting the Digital
Agenda's broadband targets and, in particular, outlines how best to encourage
public and private investment in fast and ultra-fast broadband networks[288].
It calls on EU Member States to introduce operational broadband plans for high
and ultra high speed networks with concrete implementing measures, it provides
guidance on how to cut investment costs and indicates how public authorities
may support broadband investment, including making better use EU funds. It also
announces plans by the European Commission and the European Investment Bank to
bring forward broadband finance instruments.

In 2010, three spectrum harmonisation
Decisions were adopted by the Commission: Decision 2010/166/EU of 19 March 2010
on harmonised conditions of use of radio spectrum for mobile communication
services on board vessels, Decision 2010/368/EU of 30 June 2010 amending
Decision 2006/771/EC on harmonisation of the radio spectrum for use by
short-range devices and Decision 2010/267/EU of 6 May 2010 on harmonised
technical conditions of use in the 790-862 MHz frequency band for terrestrial systems
capable of providing electronic communications services. In addition, the
Commission adopted a Recommendation on the authorisation of systems for mobile
communication services on board vessels (MCV services)[289].

Volume of enquiries and priorities

While the 27
Member States have completed the formal transposition of the regulatory
framework in 2007, there were still 27 proceedings for incorrect implementation
pending at the end of 2010. The Commission was however
able to close 10 presumed infringements based on complaints leaving only two
complaints pending at the end of 2010.

In the light of
complaints and issues raised by market players and national regulatory
authorities, priorities remained the same as in the previous year: the
functioning of the national regulatory authorities, the application of the
Community consultation (Article 7) procedure, and consumer rights, including
privacy. In addition, increasing attention was paid to administrative charges
unduly imposed on telecom operators. Compliance with
judgments of the Court of Justice continued to be an issue.

9.2.2.
Evaluation based on the current situation

Overall, the
implementation of the regulatory framework is working to bring competition to
electronic communications markets, to the benefit of consumers in terms of
prices and innovation. While examples of best practice are available across the
range of regulatory and market issues, there continues to be considerable scope
for further benefits to flow from a reinforced single market, strengthened competition
and a reduction in inconsistent regulation.

A number of
non-conformity and incorrect application issues remains, which require
attention and appropriate follow-up with a continued focus on the functioning
of the structural issues and consumer rights.

9.2.3.
Evaluation results: priorities and planned
action (2011 and beyond)

Specific attention will be paid in 2011 to
the transposition of the revised regulatory framework for electronic
communications, due by 25 May 2011. The swift and consistent implementation of
the revised regulatory framework for electronic communications is an explicit
priority of the Digital Agenda for Europe.

Priorities for
2011 regarding correct implementation are expected to remain similar to those
of the reporting year. The number of cases is expected
to remain about the same as in the reporting year.

In electronic
communications, monitoring is expected to focus again on structural issues,
such as the functioning and the independence of the national regulatory
authorities. Independence of regulators is essential for the proper functioning
of the electronic communications markets, and has been further strengthened in
the revised framework. Attention will continue to be paid to the application of
the Community consultation procedure involving national
regulatory authorities and the Commission which aims to consolidate the
internal market for electronic commu­nications (Article 7 procedure). Attention
will also be paid to undue administrative charges imposed on providers of
electronic communications.

Another
priority concerns the protection of consumer rights, including privacy. This
issue is expected to remain a priority, not least as a result of the
reinforcement of several consumer protection provisions in the revised
regulatory framework. The Commission will continue to closely monitor the
implementation of the Roaming Regulation which has ensured that consumers
benefited from significant cost savings using mobile phones while in another Member State. Specific attention might also have to be devoted to the monitoring of
spectrum refarming processes under the revised GSM Directive and to the full
implementation in accordance with the Decision on mobile satellite systems.

9.3.
The Audiovisual and Media
9.3.1.
Current position
9.3.1.1.
General introduction

The main
instrument is the Audiovisual Media Services Directive[290]
(hereafter the “AVMS Directive”). In March 2010, a codified version of
Directive 89/552/EEC and its subsequent amendments were adopted[291].
It repealed all previous versions and renumbered the Audiovisual Media Services
Directive as Directive 2010/13/EU. Non-binding measures include the
Recommendation on Film Heritage[292] and the Recommendation
on the protection of minors and human dignity in audiovisual and information
services[293].

9.3.1.2.
Report of work done in 2010

The activities
focused mainly on the monitoring and assessment of the transposition of the
Audiovisual Media Services Directive (Directive 2010/13/EU). In total, 25
infringement cases had to be opened for non-communication of measures
transposing the AVMS Directive in 2010. In June, reasoned opinions were sent to
12 Member States while many cases were closed.

As regards
correct implementation, a great deal of attention was devoted to the monitoring
of the implementation of provisions governing commercial communications. The
monitoring of advertising restrictions carried out by independent experts
covered not only quantitative restrictions, but also qualitative aspects of TV
advertising, e.g. the rules on the protection of minors. It addressed bother advertising
and other forms of commercial communications such as product placement.

In September 2010,
the Commission adopted its ninth report on the promotion and distribution of
European works and independent production[294], and an
accompanying staff working document[295]. In July 2010, the Commission adopted the Second Report on the challenges
for European film heritage from the analogue and the digital era. In
November 2010, the Council adopted Council Conclusions on film
heritage, including the challenges of the digital era (17-18 November 2010).
A study on challenges of the digital era for film heritage institutions was
also launched.

Preparatory work
for the first implementation report of the Audiovisual Media services Directive
was also carried out. In June 2010, a study on the levels of Media Literacy in
Member States was launched. In October 2010, a questionnaire was sent to the
Member States regarding the implementation of the Audiovisual Media Services
Directive and stricter rules adopted. In addition, a workshop on codes of
conduct governing advertising in food high in fat, salt and sugar took place.

Changes underway

Questions faced
by all Member States in the process of transposition of the AVMS Directive
continued to be clarified at two meetings of the Contact Committee set up under
Article 29 of the Directive as well as at one meeting of the Working Group of
EU Regulatory Authorities. In 2010, priority has been given to a thorough
examination of national implementing measures.

The AVMS
Directive changed the number and order of subsidiary jurisdiction criteria for
satellite (re)transmissions. In 2010, the Contact Committee completed an
exercise to identify those audiovisual media services which would change
jurisdiction at the end of the transposition period as a consequence of that
reversal of criteria. In addition, questions concerning the practical
application of the reporting obligation on European and independent works were
discussed both at the Contact Committee and Regulators meetings. Finally, a
call for tender for a study on the implementation of the
provisions of the Audiovisual Media Services Directive concerning the promotion
of European works in audiovisual media services was launched.

Volume of
enquiries and priorities

In the light of
complaints and parliamentary questions received so far, attention focused on
the following areas: television advertising, protection of minors, prohibition
of incitement to hatred, and freedom of expression. In addition, the issue of
events of major importance for society, with the cases brought before the Court
of Justice against the UK and Belgian measures, has been followed closely.

The number of
complaints on alleged pornographic content transmitted during daytime and
without encryption via satellite broadcasts decreased due to the cooperation
procedure put in place under the aegis of the Commission between regulators as
complaints about alleged pornographic content can be addressed directly to the
regulator of the complainant's country for appropriate follow-up. Other issues
arose concerning cross border gambling advertising and the concurrent
application of the Audiovisual Media Service Directive and of the Authorisation
Directive to digital terrestrial television services.

9.3.2.
Evaluation based on the current situation

The
transposition of the revised AVMS Directive has been delayed in many Member
States. It is too early, therefore, to give a definitive view on the benefits
of the review. At the same time, the number of complaints regarding
pornographic content and alleged hate speech has decreased, in part thanks to
cooperation between national regulators.

9.3.3.
Evaluation results: priorities and planned
action (2011 and beyond)

In general, the
number of cases of infringements and petitions is expected to stay at the same
level as in previous years. The correct implementation of the AVMS Directive is
expected to be central. A first implementation report of the Audiovisual Media
services Directive is expected to be adopted by the end of 2011. Monitoring of
audiovisual commercial communication rules is expected to remain central.

9.4.
Public Sector Information
9.4.1.
Current Position
9.4.1.1.
General introduction

Public Sector
Information (PSI) is the single largest source of information in Europe (e.g. maps and satellite images, legislation, statistics and company registers) and
is used as raw material for a variety of added-value products and services. Directive
2003/98 on the re-use of public sector information (PSI Directive) aims at
enhancing an effective cross-border reuse of PSI and to limit distortions of
competition on the EU market.

The Directive
is built around two pillars of the internal market: transparency and fair
competition. It contains provisions on transparency of conditions and
non-discrimination, on prohibition of cross-subsidies and exclusive
arrangements, on procedures regarding handling of re-use requests, on upper
limits for charging, as well as on practical means to facilitate finding and
using the material available for re-use. Ultimately, the Directive aims at a
change of culture in the public sector, creating a favourable environment for
the re-use of its information resources.

The Commission
applies the principles of the PSI Directive also to its own documents through a
Commission re-use policy. Commission Decision 2006/291/EC, Euratom goes beyond
the Directive by applying charges based on (at most) marginal costs and by
making all documents re-usable. Examples are EUROSTAT’s statistical data,
Commission translation memories, the EU law database EUR-Lex and studies.

9.4.1.2.
Report of work done in 2010

In 2010, the
Commission completed the evaluation of national provisions implementing the PSI
Directive and took appropriate steps against some Member States, who have not
transposed the PSI Directive correctly. In June 2010, the Commission decided to
refer Poland to the Court of Justice of the EU. In September 2010, the
Commission closed infringement cases against Italy and Sweden after these Member States adopted new legislation correctly implementing the PSI Directive.

The Commission
also analysed several complaints concerning incorrect application of the PSI
Directive. In particular, the complaints against Denmark and Latvia have been successfully dealt with under the EU Pilot system. The exchange of views with
national authorities has proved that there was no need to open infringements
against the Member States concerned.

In conformity
with the Commission Communication on better monitoring of the application of
Community law (COM (2002)725), the Commission continued to pursue various
accompanying measures in addition to formal infringement procedures. It has
been closely monitoring the implementation process and providing technical
assistance.

In particular, in
June 2010 the Commission organised and chaired its annual PSI Group meeting for
Member State experts and stakeholders with a view of providing assistance in
implementation and facilitating the exchange of good practices. In addition,
the Commission continued its deployment actions by participating in seminars
and workshops organised in the Member States, networking across Europe and co-funding a project for promoting pan-European PSI re-use (European PSI
platform). The objective of these actions is to stimulate developments of a
stronger and more transparent environment for the PSI re-use markets.

In 2010, the
Commission also carried out preparatory work for the 2012 review of the
Directive as foreseen by the Commission's Communication on the application of
the PSI Directive from 2009[296]. The Commission
analysed the current situation and collected information in view of an Impact
Assessment and possible legislative proposals. The Commission also organised an
on-line stakeholders' consultation.

Moreover, the
Commission undertook studies on PSI re-use. As foreseen by the 2009
Communication on the application of the PSI Directive, the Commission carried
out a comprehensive study for monitoring the most important PSI markets and
assessing the existence of possible exclusive agreements concluded by public
sector bodies. Nine Member States were surveyed. The research has yielded a
very few leads to potential exclusive agreements in the Member States and the overall results of the study are reassuring and positive.

Finally, the
Commission also published a report on Economic Indicators and Case Studies on
the PSI pricing models. Moreover, it launched calls for tenders on the
assessment of the different models of supply and charging for public sector
information, as well as on revised PSI market value for Europe. The results of
these studies are expected to contribute to the review of the PSI Directive.

9.4.2.
Evaluation based on the current situation

Directive
2003/98 on the re-use of public sector information is a first ever Directive in
this area. A positive evolution and progress has taken place since the adoption
of the Directive. At the time of the adoption of the PSI Directive, the issue
of the re-use was barely known to the Member States and to other stakeholders.
Seven years later, the PSI Directive is a well established legal instrument,
which focuses the attention of governments, public sector holders and re-users.
The online stakeholders' consultation conducted in autumn 2010 gathered around
600 replies showing a keen interest in the PSI Directive and in the re-use
matters.

Yet, the full
potential of the PSI Directive has no been unleashed. Barriers to re-use of
public sector information still exist. The analysis of the current situation
resulting from the state of implementation and application of the PSI Directive
in the Member States as well as from various consultations and studies should
indicate the most appropriate means for the Commission to propose in its
revision of the PSI Directive.

9.4.3.
Evaluation results
9.4.3.1.
Priorities

The Digital
Agenda for Europe lists the revision of the PSI Directive among its key
actions. Accordingly, the Commission will focus on preparation of the Impact
Assessment for the revision of the PSI Directive and will envisage possible
legislative amendments. Besides, the Commission will continue its enforcement
action as well as the relevant deployment measures.

9.4.3.2.
Planned action (2011 and beyond)

In 2011, the
Commission will focus on preparing the Impact Assessment with a view of a
further revision of the PSI Directive, planned for 2012. Taking into account
the progress made and the results of various studies, the Commission will
consider, inter alia, the possibility of proposing legislative amendments to
the PSI Directive.

The Commission
will also continue to monitor closely implementation and application of the PSI
Directive in the Member States. It will continue its enforcement action, by
conducting ongoing infringement cases and launching new ones if appropriate.

The Commission
will keep on working on its deployment actions by facilitating the exchange of
good practices and by providing technical assistance through close
administrative cooperation with the Member States, the PSI expert group, as
well as through other measures such as the European PSI platform.

9.4.4.
Sector summary

A positive
evolution and progress has taken place. Governments can stimulate content
markets by making public sector information available on transparent, effective
and non-discriminatory terms. This is an important source of potential growth
of innovative online services. However, the full potential of PSI re-use has
not yet been unleashed. The ongoing works within the Impact Assessment for the
review of the PSI Directive will show whether legislative amendments to the PSI
Directive are necessary.

In the
meantime, the Commission will continue to closely monitor implementation and
application of the PSI Directive by facilitating the exchange of good practices
and awareness-raising, and by launching infringement procedures where
necessary.

More
information on the re-use of public sector information:     http://ec.europa.eu/information\_society/policy/psi/index\_en.htm

9.5.
Electronic Signatures
9.5.1.
Current Position
9.5.1.1.
General introduction

The principal
instrument is Directive 1999/93/EC on a community framework for electronic
signatures[297]. The implementing
measures include the Commission Decision on the minimum criteria for the
designated bodies[298] and the Commission
Decision on the generally recognised standards for some electronic signatures
products[299]. There were no
infringement proceedings open. One complaint regarding the alleged
discriminatory treatment of electronic signature solution providers established
in other member states than Germany could be closed 2010.

9.5.1.2.
Report of work done in 2010

Building on the
Commission Action Plan on e-signatures and e-identification to facilitate the
provision of cross-border public services in the Single Market[300],
whose main objective is to promote the implementation of mutually
recognised and interoperable electronic signatures and e-authentication
solutions in Europe, Decision 2009/767/EC was adopted in 2009 and amended by Decision 2010/425/EU in July 2010. The
Decision sets out measures facilitating the use of procedures by electronic
means through the ‘points of single contact’ under Directive 2006/123/EC.

It also created
an obligation for Member States to establish and publish by 28 December 2009
their trusted list of supervised/accredited certification service providers
issuing qualified certificates to the public[301].

At the
beginning of 2010, the Commission has mandated the European standardisation
organisations to rationalise the current electronic signatures standardisation
framework, which was expected to start at the beginning of 2011.

9.5.2.
Evaluation based on the current situation

To address
problems of mutual recognition and cross-border interoperability of electronic
signature, standardisation work has been requested to the relevant European
Standardisation Organisation. In addition, in its "Digital Agenda for
Europe" communication[302], the Commission has
proposed a key action directed at the creation of a well functioning digital
single market with a view to eliminate the current barriers to the use of
e-signatures across Europe. Action focuses on the revision of the e-Signatures
Directive with the aim to adapt existing legislation to the new technological
and legal challenges of the digital world and to remove electronic barriers
created by the Member States with the adoption of different legal and technical
solutions.

9.5.3.
Evaluation results: priorities and planned
action (2011 and beyond)

In keeping with
the above key action, the European Commission intended to launch a public
consultation in early 2011 on how electronic signatures and electronic
identification (eID) and authentication can help the development of the
European Digital Single Market. The results of this consultation will feed into
the Commission's review of the existing eSignature Directive.

10.
MARITIME AFFAIRS AND FISHERIES
10.1.
General introduction

With the Lisbon Treaty, fisheries have
become one of the areas of shared competence between the Union and the Member States. However, the Treaty attributes exclusive competence the Union for the
conservation of marine biological resources under the common fisheries policy.
This means that only the Union can legislate in this latter field unless Member
States have been explicitly empowered to do so by a legally binding Union act.
The objectives for the common fisheries policy have been maintained unchanged
in the new Treaty.

The main body of secondary legislation
enacted in the field of fisheries to date, i.e. the conservation regime and the
concomitant control framework, remain matters of exclusive Union competence.
The full set of rules adopted under the Common Fisheries Policy can be found on
the following website: http://ec.europa.eu/fisheries/index\_en.htm.

The conservation regime in its current
version is governed by the basic Council Regulation (EC) No 2371/2002 on the
conservation and sustainable exploitation of fisheries resources under the
common fisheries policy[303]. The control,
inspection and enforcement system is circumscribed by the new Council
Regulation (EC) No 1224/2009 establishing a Community control system for
ensuring compliance with the rules of the common fisheries policy[304].
As for external fisheries, Council Regulation (EC) No 1005/2008 establishing a
Community system to prevent, deter and eliminate illegal, unreported and
unregulated fishing[305] serves to ensure
compliance with international conservation and management measures.

10.2.
Report of work done in 2010

Most provisions of the new Control
Regulation (EC) No 1224/2009 have become applicable from 1 January 2010. In
this context, work concentrated on the elaboration of the necessary
implementing rules throughout the entire year 2010. Priority had also to be
given to this process since some of the provisions of the said Regulation shall
not apply until after the corresponding implementing rules have entered into
force. In the meantime, this process has resulted in the adoption of Commission
Implementing Regulation (EU) No 404/2011[306].

Another priority consisted of a sustained
and, in the end, successful control campaign to protect the important bluefin
tuna stocks in the Atlantic and the Mediterranean. The control campaign
unfolded in most sensitive circumstances, namely the attempts to list bluefin
tuna under the Convention on Trade in Endangered Species (CITES) in early 2010
and the identification of the Union under the Trade Measures Recommendation of
the International Commission for the Conservation of Atlantic Tunas (ICCAT) for
non-compliance with certain conservation and management measures established by
that organisation. It served to secure compliance with the conservation
measures for this fish stock and thus to attain the twofold objective of full
respect of the catch quotas allocated to Member States and proper discharge of
the Union's international obligations vis-à-vis ICCAT. The campaign resulted in
the Commission's deciding early closures of the purse seine fisheries of France and Greece[307]
and of Spain[308]. The closure now forms
the subject matter of an action in annulment, which an operator brought before
the General Court[309].

Priority was also given to the control of
cod fisheries in the Baltic Sea in pursuance of the control action plan
undertaken by Poland in the framework of Council Regulation (EC) No 338/2008
providing for the adaptation of cod fishing quotas to be allocated to Poland in the Baltic Sea from 2008 to 2011[310]. Action in this field
has been addressed in the Report from the Commission to the Council on the
implementation of the Polish National Action Plan in the framework of Council
Regulation (EC) No 338/2008[311].

On 31 May 2010, transitional derogations to
the minimum mesh size and minimum distance from the coast for the use of
fishing gear under Council Regulation (EC) No 1967/2006 concerning management
measures for the sustainable exploitation of fishery resources in the Mediterranean Sea[312] lapsed. This led to a
sustained effort to induce Member States to ensure full compliance with the
requirements of the said Regulation by their vessels and operators.

On 28 May 2010, the Commission adopted
Regulation (EU) No 468/2010 establishing the EU list of vessels engaged in
illegal, unreported and unregulated fishing[313]. This
Regulation (together with the underlying basic Regulation (EC) No 1005/2008)
has been attacked by way of an action in annulment brought before the General
Court[314].

By way of its Decision of 12 November 2010,
the Commission initiated the conduct by Malta of an "administrative
inquiry" into irregularities that had become apparent in the Maltese
scheme for the control and enforcement of conservation and management measures
pertaining to bluefin tuna in the Mediterranean. This was the first case where
the Commission had recourse to the novel compliance tools under the new Control
Regulation (EC) No 1224/2009.

Furthermore, much work had to be devoted to
the adaptations of the common fisheries policy to the novelties introduced by
the Lisbon Treaty, e.g. the switch to co-decision as the ordinary legislative
procedure, delegated powers and implementing powers as completely novel
decision-making procedures, the handling of pending legislative procedures
which had to be continued under the new Treaty provisions, the issue of
implementation ("transposition") of international conservation and
management measures established by Regional Fisheries Management Organisations
and the alignment of existing basic acts on delegated powers.

Finally, the preparation of legislative
proposals for the Reform of the Common Fisheries Policy entered its decisive
phase in the second semester of 2010.

In this context, work mainly concentrated
on those cases where infringement proceedings had already resulted in
judgements of the Court, i.e. the driftnet cases against France[315]
and Italy[316] and the case concerning
the landing and marketing of undersized fish in Spain[317].
Regular contacts with Member States continued and inspection missions were
conducted throughout the year 2010 in order to verify whether and to what
extent the Member States concerned have complied with the respective judgments
of the Court.

Apart from that, the policy of formally bringing
each detected instance of non-compliance to the Member States' attention was
continued and led to a consistent use of the EU Pilot.

10.3.
Evaluation based on the current situation

Compliance with and enforcement of
applicable rules is a cornerstone of the Common Fisheries Policy given that
violations adversely affect the conservation and sustainable use of fisheries
resources with possibly grave consequences in the longer term. Still, Member
States' compliance records lack coherence.

There is also a link with the status of
fish stocks and the endemic overcapacity of the Community fishing fleet. Where
fishing opportunities decrease, Member States should step up their control and
enforcement efforts.

The new Control Regulation (EC) No
1224/2009 has brought into focus that a credible conservation policy
presupposes strict compliance with and enforcement of applicable rules. The new
control system has introduced manifold novel compliance tools vis-à-vis both
operators (e.g. a point system for serious infringements) as well as Member
States (e.g. administrative inquiries and action plans, strengthened
conditionality of financial assistance, closure of fisheries and or deduction
of catch quotas for failures to comply with the objectives of the common
fisheries policy and emergency measures).

Those new compliance tools will ensure that
the Commission stays with its core activity of controlling and verifying the
implementation of the rules of the Common Fisheries Policy by Member States.
They strengthen the Commission's capacity to intervene proportionately to the
level of non-compliance and, when applied properly either in separate
procedures or, as the case may be, synchronised with infringement proceedings,
they allow for a well-measured co-operative and at the same time decisive
approach towards compliance failures on the side of Member States. It is
expected that this will enhance compliance records at Union level, bring about
a level playing field in this area and result in a genuine compliance culture
eventually.

It is also expected that this will tackle
one other feature of compliance failures in the fields of fisheries, namely the
fact that, in most cases, non-compliance consists of administrative malpractice
on the side of Member States. The new compliance tools will allow handling
general and ongoing failures such that infringement proceedings can then be
instituted in those cases which can make a difference.

10.4.
Evaluation results
10.4.1. Priorities

The most tangible result was that a
systematic approach to infringements could be upheld and that priority-setting
and anticipatory planning has become the common denominator of all control
activities carried out by DG MARE in 2010.

It was also decisive that the first case of
recourse to the novel compliance tools under the new Control Regulation (EC) No
1224/2009, namely the administrative inquiry into the Maltese system for the
control of conservation and management measures pertaining to the most
sensitive bluefin tuna stock, was possible in 2010.

Furthermore, most of the pre-contentious
cases opened in 2010 could be resolved in a satisfactory manner via the EU
Pilot.

10.4.2. Planned action (for 2011 and beyond)

Conceptual work on the synchronisation of
the novel compliance tools under the new Control Regulation (EC) No 1224/2009
and infringement proceedings will be completed in 2011 with due regard to the
first experiences that can be gained in the application of those novel tools.

Ongoing infringement cases will be handled
in such a way that the underlying compliance failures by Member States can be
removed or, if ever Member States persevered, can result in appropriate
operational follow-up (mainly in those cases where the Common Fisheries Policy
is particularly put at risk, e.g. illegal driftnetting).

In the context of the reform of the Common
Fisheries Policy, the Commission plans to present a proposal for a
root-and-branch reform in the course of 2011, which will give priority to a
long-term perspective and which will re-emphasise the decisive importance of
compliance and of the rule of law as indispensable building blocks of the
policy.

10.5.
Summary

In the fields of fisheries, the
finality of all preventive and repressive action is to ensure the effectiveness
of conservation and management measures adopted under the Common Fisheries Policy.
Yet, Member States much too often favour short-term solutions when it comes to
compliance with and the enforcement of applicable rules. The new Control
Regulation (EC) No 1224/2009 has brought into focus that a credible
conservation policy presupposes strict compliance with and enforcement of
applicable rules.

The Common Fisheries Policy is based on the
provisions of Article 3, 4 and 38 to 43 of TFEU. The full set of existing rules
adopted under the Common Fisheries Policy can be found on the following
website: http://ec.europa.eu/fisheries/index\_en.htm .

11.
INTERNAL MARKET AND SERVICES
11.1.
Freedom to provide services and freedom of
establishment (other than financial services)

Current position

General introduction

The relevant
legal framework for this sector consists of Article 49 of the Treaty on the
Functioning of the European Union (TFEU) on the freedom of establishment as
well as of Article 56 of the TFEU on the freedom to provide services.

This framework is complemented by a number
of Internal Market Directives which develop these freedoms as regards specific
service activities or specific legal aspect (Postal
Services Directive[318], the Directive on the legal protection of conditional access services[319]
and the E-commerce Directive[320] ).

It is also
complemented by Directive 2006/123/CE on services in
the Internal Market[321], a horizontal
instrument adopted in December 2006 which had to be implemented by the Member
States by the end of 2009. In addition to the two Comitology decisions already
adopted in 2009[322], a Comitology decision
has been adopted on the 28th of July 2010 regarding the
establishment, maintenance and publication of trusted lists of certification
service providers supervised/accredited by Member States.[323]

Report of work done in 2010

A. Management
of legislation, including in committees and working groups

The Services Directive sets out a
comprehensive modernisation programme for national administrations and is more
than just a piece of European legislation to be implemented into national law.
Until the end of 2010 Member States have adopted more than 1.000 implementing
laws, some of which were "omnibus laws" containing dozens of changes
to different pieces of legislation. At the same time, the Commission maintained
its commitment from 2007 to provide assistance and guidance to Member States
throughout the whole implementation process. As in 2009, bilateral meetings
have been held with Member States as well as meetings of the “Expert Group on
the implementation of the Services Directive” on specific questions of the implementation. The
main aim of those meetings was to ensure a similar level of understanding by
all Member States of the work required and the priorities for action.

An important
and major part of the work carried out in 2010 concerned the "mutual
evaluation" process, an innovative and evidence-based exercise of
"peer review" foreseen by the Services Directive. By putting in place a structured dialogue between Member States it
has created transparency as to the results of the implementation of the
Services Directive and it has helped identify and promote good regulatory
practices. Discussions have also helped to foster a habit of dialogue. Following the agreement in October 2009
of the High Level Group of the Competitiveness Council,
the Commission and Member States on the methodology to use for what was to be a
major exercise involving 30 countries[324] and covering
close to 35.000 requirements, work started in 2010 with Member States meeting
between January and March in "clusters" of five countries each to
discuss the situation in those individual countries and prepare further
discussions. It then continued between March and October with "plenary
meetings" at which specific requirements and the main services sectors
covered by the Directive were examined[325]. Interested
parties were called upon to provide their views in a public consultation which
was conducted between the end of June and mid September 2010.

Taking the results of the process of
"mutual evaluation" of the Services Directive as a starting point,
the Commission adopted a Communication[326] setting out
an ambitious work programme that should improve and further develop the Single
Market for services. [327]

As regards the Points of Single Contact
(PSC), a so called "first generation" of PSC's is in place in 22
Member States. In five Member States (Greece, Italy, Romania, Slovenia and Slovakia) the electronic PSCs are not operational yet. Even if progress has been
achieved with regard to the online completion of procedures though the PSC,
difficulties remain as to their cross border use. Technical solutions for the
identification and authentication of service providers, e-signatures and
e-documents rely mostly on national means and their recognition and/or
validation is not always ensured. In order to facilitate the cross-border use
of e-procedures, and in particular the use of e-signatures, the Commission has
so far adopted two Decisions (2009/767/EC and 2010/425/EU). The first Decision
had in particular obliged Member States to establish so-called trusted
lists (TLs) of their certification service providers (who issue qualified
certificates) in order to facilitate verification of certificates for
e-signatures. The second Decision (2010/425/EU) obliges Member States to
provide machine processable forms of these TLs which means that applications
can be created to automate their use. This greatly facilitates the cross-border
validation of e-signatures. Given that the TLs can be used very widely, not
limited to the use under the Services Directive, the impact of the Decision has
been widely recognised by stakeholders, including commercial application
builders who have already put in place some commercial services based on the
TLs. The Commission has created a central list of Member States' TLs which
further facilitates their use.

A number of Member States are also
cooperating in the framework of the Competitiveness and Innovation Programme
(CIP) Large Scale Pilot "Simple Procedures Online for Cross-border
Services" (SPOCS)[328]. 16 Member States
participate in SPOCS directly and the rest can rely on the results of SPOCS
when they so wish. SPOCS should lead to additional technical solutions for more
user friendly PSCs[329].

Enhanced PSCs, as fully fledged e-Government
centres have also been highlighted as a priority in the recently adopted
"Digital Agenda for Europe"[330].
Beyond the legal obligations foreseen by the Services Directive, Member States
are encouraged to make available via their PSCs additional services that are
vital for supporting/encouraging their use and that are strongly called for by
the business community and the European Parliament, such as procedures relating
to taxation (registration for VAT or income tax) or social security
registration.[331] Another prerequisite to
stimulate cross-border trade is the provision of information and forms in other
EU languages through the PSCs. 11 Member States already provide translations to
varying degrees (mostly in English and/or the language(s) of neighbouring
countries). Most other Member States have plans to provide translated content
of their PSCs in the near future.

Concerning
the use of IMI, the "Internal Market Information
System"[332], the network of authorities registered in IMI
for the purposes of administrative cooperation in the area of services is
consolidating. End of 2010 there were around 5200 authorities which had been
registered in the system across the Member States to deal with information
exchanges on service providers. The number of registered authorities varies
widely according to the Member States depending on their size, their
administrative structure and their choice to organise their network of
authorities in a more centralised or decentralised manner. In general, a solid
structure for administrative cooperation appears to be in place in the large
majority of Member States.

Article
20(2) of the Services Directive requires Member States to make sure that
service recipients, in particular consumers, are not made subject to
discriminatory requirements imposed by service providers on grounds of their
nationality or place of residence. In 2010 the Commission has continued its
work in order to ensure that this non-discrimination obligation is correctly
implemented by Member States and enforced by national authorities and courts.
In particular, building on the results of the study on business practices
liable to fall under Article 20 carried out by an external contractor
throughout 2009, the Commission has discussed the first experiences with the application
of national legislation implementing this provision with Member States and consumer assistance bodies. Based on this work, the Commission intends to publish,
by the end of 2011, guidelines to Member States aiming at facilitating the
practical application of this provision.

Concerning
the assistance for recipients of services as foreseen in Article 21 of the
Services Directive, a meeting of national bodies providing assistance to
recipients of services, business as well as consumers, when they want to have
access to services from another Member State was held on 1st October 2010.
First experiences of the network as well as members' experiences in cases of
discrimination on the basis of nationality/place of residence have been
discussed.

B. Management
of Infringements

In order to ensure that work is speeded up
in the Member States that had not yet finalised implementation of the
Services Directive, the Commission sent in June 2010 a reasoned opinion for
non-communication of the national transposition measures of the Services
Directive to 12 Member States.[333]

The control of the application of Articles
49 and 56 of TFEU remains an important task. Infringement proceedings in
2010 concerned the various areas of the Internal Market.

As in previous years, a number of
infringement procedures concerned health services:

The Commission referred Germany to the Court of Justice[334] over
its rules on reimbursement of cost of care services received in other
Member States. The German rules on care insurance
scheme ("gesetzliche Pflegeversicherung") provide that
care services received during a temporary stay in another Member State will not be reimbursed to the same level as care services received within Germany. On several occasions, the Court of Justice has recognised patients' rights to
receive reimbursement of medical expenses incurred in other Member States
through their health insurances. In the Commission's view, the same rule
also applies in relation to care services received in other Member States.
In another case concerning the reimbursement of
medical expenses, Slovakia received a reasoned opinion[335]
as under Slovak legislation, patients from Slovakia cannot be certain that they will be reimbursed for medical treatment received in
other Member States in line with the principle of the freedom to provide
services.
Denmark received a
reasoned opinion[336] because
Danish law does not allow the recognition of medical prescriptions issued
by a doctor in another Member State (except for Sweden and Finland). In the Commission's view, this is not justified by the public health reasons
cited by the Danish authorities, especially given the fact that the
medicines will be delivered on the basis of a medical prescription legally
issued by a doctor in another Member State. Furthermore, Swedish and
Finnish prescriptions have been recognised for some time without having
produced the harmful effects claimed by the Danish authorities.

The Court delivered four decisions
C-211/08 of 15.06.2010, C-173/09 of 5.10.2010
(preliminary ruling) C-512/08 of 5.10.2010 C-490/09 of 27.1.2011 relating to the issue of reimbursement
of healthcare in another Member State, out of which three were actions for
failure to fulfil obligations referred by the Commission.

According to the judgement of 15June 2010,
patients who need to receive unscheduled healthcare because of their state of
health during a temporary stay in another country will be reimbursed the amount
that is reimbursable under the legislation of the Member State where the
treatment is received. This is in line with the European Health Insurance card
provided for by Regulation 1408/71 now 883/2004. However, in certain cases the
reimbursed amount is lower than the amount which would have been reimbursed if
the healthcare had been provided in the patient's home country. The Court
considered that the restrictions to the freedom to provide hospital treatment
services, tourist services or educational services (even in particular for the
situation of elderly persons or of those suffering from chronic or pre-existing
illness) alleged by the Commission were too uncertain and indirect. The Court
considered that the mechanisms established by Regulation 1408/71 were based on
the principle of overall compensation of risks and should be respected.

In its preliminary ruling of 5th October
2010, the Court confirmed its case-law regarding reimbursement of hospital
care. The Court confirmed that Article 56 TFUE and Article 22 of Regulation
1408/71 could apply at the same time. Regarding Article 56 TFUE, the Court
considered that national legislation which excludes, in all cases,
reimbursement in respect of hospital treatment given in another Member State without prior authorisation amounts to an unjustified restriction to the
freedom to provide services. The Court clarified that reimbursement of medical
costs without the prior authorisation provided for by Article 22 (1)(c)(i) of
Regulation 1408/71 can only be required within the limit of the cover provided
by the sickness insurance scheme of the Member State of registration of the
patient.

In a judgement also delivered on 5th
October 2010, the Court considered that an authorisation may be required for
the reimbursement of non hospital treatments when these treatments require the
use of major medical equipment, such as the ones exhaustively listed in the
national legislation at issue, which are especially onerous and therefore made
subject of a planning policy and subsidies in the Member State of affiliation
and subsidised by it.

Finally, in its judgement of 27th January
2010 , the Court declared that, by failing to provide a reimbursement mechanism
regarding costs of laboratory analyses and tests carried out in another Member
State, Luxembourg has failed to fulfil its obligations under Article 56 TFEU.
By contrast, the Court considered that the Commission failed to place before
the Court all the information needed to enable the Court to establish that the
dispensing conditions for laboratory analyses and tests were incompatible with
Article 56 TFUE.

Regarding the freedom of establishment, the
Court delivered on 16 December 2010 a judgement relating to restrictions on the
ownership by non-biologists of a stake in a firm operating biological analysis
laboratories. Like in its judgments regarding "pharmacies", the Court
stated that such restrictions were justified by the protection of public
health, were appropriate for securing attainment of this objective and did not
go beyond what is necessary for attaining that objective. By contrast, the
Court considered that by prohibiting biologists from holding shares in more
than two companies formed in order to operate jointly one or more biomedical
analysis laboratories, the French Republic has failed to fulfil its obligations
under Article 49 TFUE.

In other areas, the Commission has sent
a reasoned opinion to the Netherlands[337], asking the Member State to review its rules on the posting of workers who do not (yet) enjoy
free movement within the EU. Under Dutch rules, businesses must obtain work
permits for certain staff members before they can be temporarily posted to the Netherlands to perform services. This applies to staff members from Bulgaria and Romania, as well as to staff members from non-EU countries who live and work legally in
the Member State of their employer. The Commission considered that this work
permit requirement constitutes a breach of the rules of the Treaty regarding
the freedom to provide services.

The Commission has also decided to take
action against Belgium before the Court of Justice[338]
for failure to fulfil its European obligations by requiring self‑employed
service providers from other Member States to make a prior declaration
before being able to provide temporary services in Belgium (so called 'Limosa' declaration). The fact that the Belgian
authorities in a general way are making the exercise of a fundamental freedom
subject to a prior administrative step is a serious restriction on the freedom
to provide services. In order to be compatible with EU law, such a restriction
must be justified and proportionate according to the consistent rulings of the
Court. But the justifications cited by the Belgian authorities regarding self‑employed
workers have not convinced the Commission.

The Commission has also decided to refer Belgium to the Court of Justice[339] over its rules on temporary
employment agencies. According to EU
principles, any company providing a service in a Member State (in conformity
with the national law in force) has the right to provide the same service
without restrictions in all other Member States. However, Belgium imposed a number of requirements on temporary employment agencies established in other
Member States that wish to provide their services in Belgium.[340]
In particular, their scope was limited to activities related to human resources
and they had to take on a specific legal form. In the Commission's view, these
requirements were disproportionate and had the effect of limiting competition
in this field. This situation was also likely to disadvantage employers and
Belgian workers who used the services of these companies.

In the area of patent agents, Portugal was referred to the Court while Austria received a letter of formal notice requesting full
information on its execution of the Court's ruling of 11 June 2009 (Case
C-564/07). Despite its stated intention to change its
rules in this area, Portugal still requires any patent agent established in a Member State who wishes to act before the Portuguese trademarks and patent office as a
temporary service provider to be registered in advance with and be accredited by
the Portuguese authorities. Furthermore, registration is subject to a prior
check on professional qualifications. In the Commission's view, these
requirements breach EU rules on the freedom to provide services and the
recognition of professional qualifications.

A reasoned opinion was sent to Greece[341]
asking for an amendment of its legislation on the minimum prices that
lawyers should charge for their services. The Commission considered that these
national rules have the effect of restricting lawyers from other Member States
from operating in Greece and limiting the range of legal services on offer to
Greek citizens.

The Court issued a ruling on 21 January
2010 in which it considered the bilateral agreement concluded between Germany and Poland on work contracts in Germany to be applied in a discriminatory way. Only German
undertakings could call on Polish subcontractors for the performance of work
contracts in Germany. Undertakings established in other Member States that were
considering providing services in Germany could not benefit from the agreement
and thus could not call on Polish subcontractors to provide their services. The
Commission held the view that such an interpretation neither complied with EU
Treaty rules on the freedom to provide services nor with the rules of the
Treaty of Accession. Following the Court ruling, Germany accepted to modify the
interpretation it had given so far of the provisions of the said agreement.
Consequently the Commission closed its infringement proceedings against Germany.

In its ruling of 18 November 2010, the
Court confirmed its case law on the temporary provision of services by
condemning Portugal for its legislation relating to construction services which
did not make any distinction between establishment and temporary provision of
services.

The Commission decided on
18 March 2010 to close infringement proceedings against France concerning restrictions on the establishment of retail stores which were incompatible
with Article 49 TFEU, following the adoption of a new legislation in 2008 and
the application measures in 2009.

On establishment
of pharmacies, the Court of Justice, on 1 June 2010, ruled in Joined Cases
C-570/07 and C-571/07 that Article 49 TFEU, in principle, does not preclude
national legislation that provides for a minimum distance between pharmacies of
250 metres and for a minimum number of 2800 inhabitants per pharmacy.
Nevertheless, it considered that Article 49 TFEU precludes such national
legislation in so far as the basic ‘2 800 inhabitants’ and ‘250 metres’ rules
prevent, in any geographical area which has special demographic features, the
establishment of a sufficient number of pharmacies to ensure adequate
pharmaceutical services. It left it to the national court to ascertain this. Finally,
the Court ruled that the Asturias provisions that benefited those applicants
for a pharmacy licence with experience in Asturias are incompatible with
Article 49 TFEU.

In July 2010,
the Commission decided to refer Greece to the Court of Justice regarding
restrictions on the establishment of petrol stations. The Commission
challenged, in particular, the incoherence of the provisions relating to the
location of new petrol stations' installations, the need to provide a fire
safety study certified by a sworn expert registered in Greece and the minimum distances between petrol stations. The referral was suspended in September
2010 as the adoption of a new legislation was planned for November. The new
Greek law was finally adopted on 7.12.2010. It is currently under examination.

As far as Concessions
are concerned, the Commission challenged the Italian legislation concerning
authorisations for the public domain (beaches), which granted a preference to
the outgoing holder of the authorisation. Following the letter of formal
notice, the Italian authorities amended the law, but the new provisions still
foresee a restriction, notably the automatic renewal of the authorisation. A
complementary letter of formal notice was sent in May 2010. In their reply, the
Italian authorities notified a draft law abolishing the abovementioned
restriction.

Concerning the
question of restrictions on land acquisition, the European Commission
sent on 28.6.2010 a reasoned opinion to Germany to ensure non‑discriminatory
treatment for EU citizens with regard to the sales of land by municipalities,
as a number of them have introduced for the sale of land a special system aimed
at favouring residents. The Commission considers that these provisions of
German municipalities do not comply with the principles of non‑discrimination,
free movement of EU citizens, free movement of workers, freedom of
establishment and free movement of capital. Germany replied to the reasoned
opinion on 28.10.2010. The reply is currently under examination.

In the area of gambling
services, the Commission services continued bilateral dialogue with Member
States seeking to address issues raised in the infringement proceedings. The
Commission decided on 5 May[342] and 24 November[343]
to close infringement proceedings against Italy and France respectively
following the adoption of new legislation in both Member States that allows for
the cross border provision of on-line gambling services, with clear rules for
the authorisation and the granting of licences to domestic and European
operators. On 3 June 2010, the Court of Justice ruled[344]
that Article 56 TFEU does not preclude legislation that gives a single operator
exclusive rights to offer gambling services and prohibits any other operator
from doing the same in the relevant territory. The Court ruled that the
principle of equal treatment and the consequent obligation of transparency
applies to procedures for the granting or renewing of a gambling licence to a
single operator, if it is not given to a public operator whose management is
subject to direct State supervision or a private operator whose activities are
subject to strict control by the public authorities. The Court also ruled[345]
that national legislation, which seeks to curb addiction and combat fraud, can
be regarded as limiting betting activities in a consistent and systematic
manner even where the holder(s) of an exclusive licence may introduce new games
and advertise their supply of gambling services. In so far as an implementing
measure is necessary to ensure the effectiveness of that legislation and does
not include any additional restriction over and above that which arises from
the legislation itself, national courts are not required to determine further,
in each case, the suitability or proportionality of the measure to reach the
stated objective.

On 8 July 2010[346] the Court of Justice
ruled that Article 56 TFEU does not preclude prohibitions on advertising of
gambling organised for the purposes of profit by private operators in other
Member States. However, a Member State subjecting gambling to a system of
exclusive rights cannot make promotion of gambling organised in another Member State subject to stricter penalties than the promotion of gambling operated on
national territory without a licence.

In the first of three cases adopted
on 8 September 2010[347] the Court declared that, by reason of the primacy of
directly-applicable Union law, national legislation concerning a public
monopoly for sports betting services which comprises restrictions that are
incompatible with Articles 49 and 56 TFEU cannot continue to apply during a
transitional period.

In the second case[348] the Court
ruled that national authorities that seek to justify a public monopoly by an
objective to combat gambling addiction and prevent incitement to squander money
do not necessarily have to produce a study establishing the proportionality of
the measure which is prior to its adoption. Moreover, the choice to use a
monopoly, in the context of a non-exclusive legislative framework, may satisfy
the requirement of proportionality, as regards the objective of a high level of
consumer protection, if there is a legislative framework for the establishment
of the monopoly suitable for ensuring it will be able to pursue this objective
in a consistent and systematic manner. The fact that the competent national
authorities may be confronted with difficulties in ensuring compliance with
such a monopoly, due to the online offer of gambling services by operators
established outside that Member State, is not capable of affecting the
potential conformity of such a monopoly with the Treaty. The national court may
consider that such a monopoly is not suitable to achieve the objective for
which it was established if it finds that (a) a monopoly is seeking, through
advertising, to increase participation in its other types of gambling services
to maximise its revenue; (b) other gambling services are offered by licensed
private operators; and (c) the competent authorities are conducting or
tolerating policies of expanding supply of gambling services not covered by the
monopoly, with a higher potential risk of addiction, again with a view to
maximising revenues. Finally, an operator having an authorisation to offer
gambling services in its Member State of establishment, does not prevent
another Member State, while complying with the requirements of European Union
law, from making such operator subject to an authorisation issued by its own
authorities.

In the third case[349], the Court ruled that an operator holding an authorisation to offer
online sports betting services only to persons located outside the territory of
its seat of establishment and wishing to offer services to such persons does
not cease to fall within the scope Article 56 TFEU. The national court may
legitimately be led to consider that a regional public gambling monopoly is not
suitable to achieve the objective of reducing and limiting gambling
opportunities in a consistent and systematic manner if that court at the same
time establishes that: (a) other types of games of chance may be exploited by
authorised private operators; and that (b) the competent authorities pursue
policies of expanding supply of  games of chance falling outside the said
monopoly and which  pose a higher risk of addiction than those subject to the
monopoly, in particular with a view to maximising revenue. A system of prior
authorisation for the supply of certain gambling services, which derogates from
the freedom to provide services, may satisfy the requirements of Article 56
TFEU only if it is based on objective and non‑discriminatory criteria known in
advance, in such a way as to limit the discretion of national authorities so
that it is not used arbitrarily. National legislation prohibiting the provision
of on-line gambling services for the purposes of preventing the squandering of
money on gambling, combating gambling addiction and protecting young persons
may be regarded as suitable for pursuing such legitimate objectives, even if
the offer of such games remains authorised through more traditional channels.

On 9 September, the Court of justice ruled that Article 49
TFEU must be interpreted as precluding national legislation under which only
operators whose seat is in the territory of that Member State may offer
gambling services in gambling establishments. Moreover, the obligation of
transparency flowing from Articles 49 and 56 TFEU precludes the grant of concessions
to operate gaming establishments without any competitive procedure[350].

Evaluation based on the current position

In 2010, the work continued on the control
of the correct implementation of the Services Directive by Member States as
well as on the carrying-out of the so called “mutual evaluation process”.
The main results of the mutual evaluation process were presented by the
Commission in a communication of 27 January 2011.[351]As
regards the implementation of the Services Directives most Member States have
informed the Commission that they have completed their implementation work.
However some Member States still need to finalise their work. In particular in
two Member States the adoption of the horizontal legislation has accumulated
serious delays.

Concerning infringement procedures, the
Commission focused in particular on those areas which are not covered by the
Services Directive.

Evaluation results

(a)
Priorities

The overall assessment of the
"mutual evaluation" process is very positive. It has allowed the drawing up of a detailed picture of the state of an
important part of the Single Market for services. It has been the first time
that Member States and the Commission have carried out together a thorough
assessment of national rules affecting service activities. This concerned rules
at national, regional and local level as well as rules set by professional
associations with regulatory powers. In that respect, mutual evaluation has had
an unprecedented "Single Market effect" within Member States as all
levels of national administrations were called upon to critically assess their
own rules and those existing in other Member States from a Single Market
perspective. Finally, this process has also proven to be a valuable tool to
identify remaining obstacles for the Single Market and to lay the basis for
future policy actions in the service sector.

Concerning gambling services, the
Directorate-General for Internal Market and Services held a Conference on 12
October 2010 jointly with the Belgian Presidency. It is expected that
pro-active work on gambling services will be a priority in 2011 through the
launch of a public consultation on online gambling in the Internal Market.

(b) Planned
actions (2011 and beyond)

Based on the report on the results of the
mutual evaluation process and as set out in the Communication "Towards
a better functioning Single Market for services – building on the results of
the mutual evaluation process of the Services Directive"[352],
the Commission will continue and step up work with Member States on an
individual basis so as to achieve a complete and correct transposition and
implementation of the Services Directive in all Member States. A series of
bilateral meetings with those Member States where there are strong indications
of incorrect or incomplete implementation of the Services Directive will be
held.

In parallel, a first economic assessment
of the actual implementation of the Directive and of its impact on the
functioning of the services markets will be carried out by the Commission in
2011.

The Commission, based on Member States'
input as to the specific sectors that should be examined, will launch a so
called "performance check" of the Single Market for services.
The aim will be to assess the situation from the perspective of the users of
the Single Market. The performance check should provide an assessment of how
different pieces of EU legislation are applied and how they work on the ground.
It should also allow the formulation of sector-specific conclusions on the
functioning of the Single Market for services within one year in a report to
the European Parliament and the Council and, where necessary, identify the need
for other actions, including legislative intervention if required.

Targeted actions aimed at tackling
remaining regulatory barriers unjustifiably hindering the potential of the
Single Market for services will also be undertaken. There will be an assessment
of the issue of reserves of activity focussing in particular on areas
where the link with the professional qualification required warrants further
discussion. This should be done in view of the need to achieve more integrated
services markets offering high quality services as demanded by service
recipients. Another assessment will be launched to better understand the manner
in which restrictions on capital ownership and legal form affect
certain services sectors and to gather evidence on the economic effects of
these rules. In addition the difficulties for cross-border service providers
resulting from insurance requirements will be examined first with
stakeholders, including the insurance industry, with a view to finding
practical solutions. On the basis of these assessments and the findings of the
"performance check" the Commission will decide by 2012 on possible
specific initiatives.

In order to ensure that the freedom to
provide services clause in Article 16 of the Services Directive is applied
properly and consistently in all Member States, the Commission will closely
monitor its application and discuss its findings with all Member States. This
process can be built upon the Services Directive itself, which already foresees
that the Commission reports on the functioning of this clause. The
monitoring should, to a large extent, be based on the collection of information
and views from Member States and stakeholders. In this respect the Commission
will issue its first annual guidance on the application by Member States of the
freedom to provide services clause and the evolution of cross-border service
provision in the Single Market by the end of 2011.

In 2011, the Commission will also work with
Member States to consolidate the notification system in the Services Directive
and to help providing guidance to national administrations as to its operation.
By the end of 2012, the Commission will report on the functioning of the system
and the need for a targeted extension of its scope of application.

And finally, in
order to ensure that service providers, in particular SMEs, do not give up on
testing markets across borders simply because it is made too difficult by
regulatory barriers and in order to enforce their rights in the Single Market,
the Commission will assess the effectiveness of means of redress available at
national level to service providers for breach of their Single Market rights by
national administrations and decide on next steps by the end of 2012.

As regards the "Points
of Single Contact", the Commission will continue to cooperate with
Member States in order to improve the practical functioning of the existing
PSCs with the aim to make them more user-friendly and useful for entrepreneurs,
both as regards the availability/presentation of information and the
availability and ease of the completion of procedures online both within a Member State and across borders. This work will be carried out through the so called
"EUGO" network of national PSC experts (set up in 2010) to serve as a
forum for the exchange of good practice, benchmarking of PSCs and development
of common solutions at EU level. In 2011 the Commission will also carry out a
large external benchmarking study to assess the usability of the PSCs from a
business perspective and to identify the need for further action. The results
of this study will be presented at a large conference, to take place in Brussels on 28 November 2011.

Furthermore the Commission will continue to
work with Member States to further enhance the cross-border use of e-procedures
via PSCs. A new Decision is to be adopted that should improve Member States'
capacities to process e-signatures to facilitate the verification of documents
signed electronically by public authorities. In order to assist Member States
to implement the Decision, open source software for the creation/validation of
common e-signature formats is being developed by an outside contractor for
Member States' use at national level.

SPOCS Pilot will continue and start testing
in real life the technical solutions put in place.

At a more
horizontal level, interoperability of electronic tools, such as electronic
signatures and electronic identification is to be enhanced via the forthcoming
revision of the "e-signatures" Directive[353].
Such interoperability is a key priority in the context of the "Single
Market Act".

Work will also
continue in 2011,

to monitor and improve the
use of IMI for the administrative cooperation obligations under the
Directive;
to support the network of
assistance to recipients of services and all other measures contained in
the Directive to benefit consumers (e.g. obligation for business not to
discriminate consumers because of their residence) and to improve the
quality of services.

Concerning infringement proceedings
and enquiries, the Commission will continue to use EU Pilot according to set
priorities or alternative problem solutions mechanisms such as SOLVIT. The
efficient use of resources has to be taken in account, notably due to the vast
variety of restrictions concerning the Internal Market. As in previous years,
the enforcement of the Treaty rules on the freedom to provide services and the
freedom of establishment will continue to focus in particular on areas not
covered by the Services Directive as well as on cases of clear discriminations
or cases concerning entire categories of services providers. Considering the
emphasis the Commission will put on the control of implementation of the
Services Directive, infringement proceedings for incorrect implementation of
this Directive will be treated as priority.

In the area of postal services and
related logistics:

Current position

With the deadline for the implementation of
the 3rd Postal Directive approaching, the main focus in 2010 was the
continued provision of assistance to Member States in the run up to the
complete implementation of the postal acquis.

As part of direct assistance to Member
States, numerous bilateral meetings were held with ministries and national
regulatory authorities; these meetings took place with all Member States that
are in the first group to implement the 3rd Postal Directive and
several of the second group. These meetings focused on delivering advice and
guidance as well as providing preliminary evaluations of draft legislation
under preparation by national authorities. In many instances, these meetings
helped improve the quality of draft legislative texts.

With a view to ensuring the proper
implementation of the Postal Directive, a wide range of transposition issues
was also taken forward in the framework of a series of Working Groups convened
under the auspices of the Postal Directive Committee.

Building upon the recommendations of the
sector study on the Role of Regulators in a More Competitive Postal Market[354]
and following the activities already undertaken in 2009, the Commission
established the European Regulators Group for postal services (ERGP)[355].
This expert advisory group should serve as a body for reflection, discussion
and advice to the Commission in the postal services field.

It
should facilitate consultation, coordination and cooperation between the
independent national regulatory authorities in the Member States, and between
those authorities and the Commission, with a view to consolidating the internal
market for postal services and ensuring the consistent application in all
Member States of the postal acquis.

Evaluation based on the current position

Two sector studies were delivered and
presented to stakeholders at the end of September 2010.[356]
The first study on Main developments in the postal sector between 2008-2010,
provided a clear overview of the developments and changes underway in the
postal sector and assessed the impact of recent market and regulatory
developments on postal markets, especially in relation to the provision of
universal service, employment in the postal sector and the impact of the VAT
exemption on markets. The second study presented the external aspects of the EU
postal acquis, especially in relation to the ongoing trade negotiations
(multilateral and bilateral) and the acts of the Universal Postal Union.

The findings of sector studies, combined
with complaints from stakeholders focusing on an incorrect interpretation and
uneven application of the postal acquis by some Member States, are being
used by the Commission to curtail bad market practices (e.g.
predatory/excessive pricing), tackle and remove regulatory barriers to entry
(e.g. excessive and burdensome licence conditions, access to the postal
infrastructure) and ensure the timely and correct implementation of the postal acquis.

Market monitoring is being enhanced and
supported also through the provision and publication of more comprehensive key
data on postal markets in the EU (in close co-operation with EUROSTAT).

Evaluation
results

(1)       Priorities

Following its
establishment in August 2010 and adoption of the Work Programme in December of
the same year, the objectives of this Group are to ensure greater coherence in
the operation of the postal regulatory model, exchanging best regulatory
practices and "regulatory know how", notably with less well resourced
national regulators, and contributing to the consolidation of the internal
market for postal services. The priority for 2011 would therefore be to deliver
on adopted work programme and to develop best regulatory practices in
identified areas, which should contribute to the attainment of common
objectives.

Another
priority would be the assessment of the transposition measures concerning the 3rd
postal directive (directive 2008/6/EC) for which the deadline for 16 Member
States has expired on 31 December 2010.

(2)       Planned
action (2011 and beyond)

The European Commission and the Spanish
Presidency co-hosted a High Level Conference on Postal Services in Valencia on 29-30 April 2010. The Conference provided a unique forum for informal
discussion on the prerequisites for successful market opening, ensuring greater
competitiveness across the postal sector and overcoming the challenges faced by
regulatory bodies. Commission departments will follow up on the results of such
conference and more in particular on the implementation of the postal reform
which was recognised as the key issue.

11.2. Financial Services

The financial services sector includes
three major areas for which similar European policies apply: banking, insurance
and securities. The objective of the EU secondary legislation is to
facilitate the establishment and the cross-border provision of services for
financial institutions on the basis of the home country control principle. In
addition to these main areas, financial services legislation covers occupational
pensions payments and retail financial services.

11.2.1.
 Banking

Current position

General introduction

As regards infringement proceedings in the banking
sector, the Commission mainly dealt with non-communication cases. As
regards the transposition of Directive 2007/44/EC which lays down the
procedures and criteria for the prudential assessment of acquisitions and
increase of holdings in the financial sector[357], seven
infringement cases against Greece, Spain, Italy, the Netherlands, Poland,
Portugal and the United Kingdom due to non-communication of the national
transposition measures before the deadline of 21 March 2009, initiated in 2009,
were still pending in 2010. Three cases were closed following to the
notification of the implementing measures by the Member States concerned, while
four cases – against Greece, Portugal, Poland and the Netherlands – were referred to the Court of Justice. Out of these cases, three were settled in Court
further to the complete implementation of the directive, whereas the case
against the Netherlands resulted in a Court's judgment establishing the failure
of this country to transpose Directive 2007/44/EC in December 2010[358].

The Commission also launched infringement
proceedings against seventeen Member States for non-communication of the
implementing measures of Directive 2009/14/EC which has amended the EU rules on
deposit guarantee schemes[359]. 14 cases were already
closed in 2009 and the remaining three cases in 2010 (against Slovenia, Finland and Greece).

In November 2010, 17 infringement
proceedings were started against several Member States for failure to transpose
Directive 2009/111/EC[360]. This Directive is part
of the first package of changes to the Banking Directive 2006/48 (also known as
"Capital Requirements Directive" or CRD) adopted in response to the
financial crisis in order to strengthen prudential rules and supervision. The
whole package of amendments had to be implemented in national law by the end of
2010. The other instruments of the package are two Commission Directives[361]
which have made technical amendments to the Annexes of the CRD. Parallel
infringement proceedings were also launched against the same 17 Member States
for non-communication of the measures implementing these technical directives.

Report of work done in 2010

Further changes to the CRD to strengthen
rules on bank capital regarding bank trading activities and on remuneration
policies in the banking sector were adopted in December 2010[362].

A Directive improving depositor protection
was proposed in July 2010 and is now being negotiated[363]. It follows
Directive 2009/14/EC[364], which only dealt with
selected issues to improve depositor confidence in the financial crisis. The
new proposal marks a comprehensive revision and notably improves consumer
protection and the financing of Deposit Guarantee Schemes.

In August, the Commission proposed a first
revision of the Financial Conglomerates Directive[365],
aimed at enabling supervisors to apply group related provisions in banking, insurance
and supplementary conglomerates rules at the level of the ultimate parent
undertaking, regardless of its legal statute.

In preparation of future legislative
proposals, the Commission launched a public consultation regarding the putting
in place of an EU framework for crisis resolution in the banking sector and
issued a communication on bank resolution funds. Consultations were also carried out in preparation of further
proposed amendments to the CRD scheduled for 2011[366].

Evaluation results

The Commission's strategy to encourage
early and consistent transposition in this area is to help Member States
through the 'Capital Requirements Directive Transposition Group' (CRDTG). In
2010, the CRDTG has been busy providing clarifications, answering questions and
assisting Member States in the transposition of new legislation. Currently
about 400 answers are posted on its website[367].

(1)       Priorities

The main priorities in the banking area
concern the preparation of legislative proposals aimed at improving regulation,
strengthening supervision and developing a regime for dealing effectively with
bank crisis. Co-operation with Member States will continue to ensure good
preparation and coherent implementation of the law, through Committee and
working group discussions, including further work of the CRDTG.

(2)       Planned
action (2011 and beyond)

The Commission
will continue to monitor the implementation and application of the banking
legislation across the EU.

A further
legislative proposal incorporating the new Basel III regulatory framework for
banks in EU law is expected to be adopted by the Commission in July 2011. These
proposals will significantly strengthen the prudential requirements for credit
institutions and investment firms and such the overall financial stability. The
proposal will also include measures related to the Commission's efforts to
create a single rule book for banking in the EU. In this regard, a regulation
appears to be the most efficient legal instrument to achieve such objective.
Therefore, the legislative proposal will comprise two elements: a proposal for
a new regulation in banking and a proposal amending the CRD.

A more
comprehensive review of the Directive on Financial Conglomerates is planned in
2011. The Commission will launch a consultation about a more fundamental
revision of this Directive, following up developments at G20 level regarding
the supplementary supervision of groups with material activities in financial
markets beyond one regulated sector.

Other legislative work is envisaged in 2011
to address the problem - surfaced during the financial crisis - of the absence
of a coherent and comprehensive EU regime for dealing with cross-border bank
crisis. The Commission intends to present a proposal for a new framework for
bank recovery and resolution in September 2011.

11.2.2.
 Insurance
and occupational pensions

Current position

In 2010, 5 files related to insurance and
occupational pensions were opened in EU Pilot,1 in SOLVIT,. 11 infringement
cases were closed and one was referred to the Court. Bilateral contacts were
held with the Member States either through package meetings, other (ad hoc)
meetings or in the relevant sector committees.

As regards the non-communication cases
launched in the insurance sector with regard to Directive 2005/68/EC (the
reinsurance Directive), the only case still under examination was closed in
2010.

As regards motor insurance, the
infringement case against the UK for non-communication of the transposing
measures of Directive 2005/14/EC (judgement of 3.9.2009 in Case C-2008/457) was
closed in 2010.

In 2010, the Court ruled that the Czech Republic had failed to transpose Directive 2003/41/EC on the institutions for
occupational pension funds (Case C-343/08, judgement of 14 January 2010). The
procedure under Article 260 TFEU was launched thereafter. Several other
proceedings were launched concerning this Directive in 2010.

In 2010, the Court rendered its judgement
in an important case concerning the Belgian sickness funds
("mutualités/ziekenfondsen"), which offer complementary health
insurance without respecting the solvency rules of directives 73/239/EEC and
92/49/EEC (1st and 3rd non-life insurance Directives). In its ruling of 28
October 2010 (C-41/10), the Court found that Belgium had breached those
Directives. The procedure under Article 260 TFEU was launched thereafter.

As regards petitions a total of 5 petitions
were handled on insurance and pensions. They dealt inter alia with motor
insurance, life assurance, non-life insurance (especially health insurance) and
pension funds. About 168 queries of other nature concerned the insurance and
pensions sector.

The key change and challenge ahead is the
proposal for a directive called "Solvency II" Directive which was
adopted in 2009 and is to be transposed by late 2012. The Directive provides
for a transposition period of about 3 years so that implementing measures
needed to make the new framework completely operational are adopted beforehand.
Intensive work intended to prepare its transposition and proper application continued
in 2010 and will continue through 2012. It is furthermore necessary to adapt
this Directive to the changes brought by the new regulatory architecture for
financial services and notably the Regulation which set the European Insurance
and Occupational Pensions Authority (EIOPA) in December 2010. A key year is the
one of 2011, when the Commission tables the Omnibus 2 Directive proposal,
adapting Solvency II to the changes introduced by the EIOPA Regulation
mentioned above, and the proposal of the Level 2 implementation measures. It is
intended to modernise the evaluation and calculation of risks and therefore
will provide for a new, prospective, and economic and risk based approach
putting much greater emphasis on sound risk management and robust internal
controls by insurance undertakings. In addition Solvency II will also
profoundly influence the way in which supervision is carried out by the
competent supervisory authorities. It also contains a new approach as regards
insurance groups. It is far too early to anticipate what will be the effects
and consequences of the new Directive.

Evaluation based on the current position

Conformity check of Directives transposed
remains a key challenge. In the insurance sector,  comprehensive and updated
concordance tables allow for the checking of the substantive conformity of the
transposition.

The implementation of the Directive on Reinsurance
(2005/68/EEC) was due by 10.12.2007, but not all Member States had
completed their transposition process by that date. The checking of the
completeness of the communication of the transposition of the said Directive
has been completed. Focus has since shifted to a more in-depth and
comprehensive look at the substance of the transposition measures.

In the insurance sector, breache of EU law
have generally a considerable impact in economic terms and in terms of proper
functioning of the relevant market both for undertakings and final users. A
level playing field is particularly affected because breaches either limit the
possibilities of competitors to stay on the market or allow national companies
to offer services without fulfilling the obligations imposed by EU legislation.
It also has consequences for the services and products that are offered to the
consumers.

The number of complaints and infringement
cases is likely to increase or at least remain broadly stable in 2011-2012
mainly due to increasing awareness of citizens of their rights in all 27 Member
States. The economic/financial crisis may have repercussions on national measures
and subsequently on complaints. Priority will be given to cases of
non-communication of transposition measures, non-respect of Court judgments and
cases that show a breach of a fundamental freedom or principle of the TFEU or a
breach of a Directive which is blatant.

The main structural problems result from
the complexity of the legislation adopted sometimes in several steps according
to the Lamfalussy process. To tackle this problem, seminars explaining the
legislation have already been organised and regular contact with Member States
is maintained via the relevant Committees and their working groups and also by
using the package meetings and other ad hoc meetings. For the Solvency II
proposed Directive a longer transposition period (of around 3 years) is planned
(with the so called "level 2" measures under the Lamfalussy process
adopted around 1 year before the final implementation date). The same
complexity creates problems in transposition which may also be of substance
(problems of interpretation, for instance, or of misapplication, either in
general or in specific individual cases).

Evaluation results

(1)       Priorities

The main priority will be the ongoing work
on the "level 2" measures as regards the Solvency

II Directive. The checking of recently to be
transposed Directives, notably Directive

2005/68/EC on reinsurance, will be
continued.

To ensure timely and effective problem
solving, an efficient co-operation with the Member states as well as an
efficient management of infringement proceedings will be pursued.

(2)       Planned action (2011 and beyond)

As for insurance legislation,
preliminary Guidance on the transposition of Solvency II has started in close
co-operation with the Member States and will continue through to 2012.

A detailed checking of the substance of the
transposition of Directive 2005/68/EC by the

Member States will be continued and
completed by the Commission services. Failure to fully implement these
Directives prevents the creation of a level playing field and could conceivably
affect reinsurance undertakings and the reinsurance market in a negative way.

The package meetings (and other meetings)
with Member States, as well as the use of EU Pilot, will be continued in order
to tackle problems in this respect.

11.2.3.
 Securities

Current position

(1)       General
introduction

'Securities
markets' legislation includes the following (main) directives and
regulations:

Directive on Markets in
Financial Instruments 2004/39/EC[368]
(MiFID) and its implementing provisions (Commission Directive 2006/73/EC[369] and
Commission Regulation 1287/2006[370]),
which regulate the provision of investment services and activities in the
EU and for the trading activity, including the operation of regulated
markets and multilateral trading facilities (MTF) and the rules applicable
to systematic internalisers.
Investor Compensation Scheme
Directive 1997/9/EC[371] (ICSD)
introducing a compensation for investors having lost their assets as a
result of the failure of an intermediary providing investment services.
Market Abuse Directive
2003/6/EC (MAD)[372] and its
implementing texts (Commission Directive 2003/124/EC[373],
Commission Directive 2003/125/EC[374],
Commission Regulation 2273/2003[375],
Commission Directive 2004/72/EC[376]),
whose aim is to prevent and to fight against insider dealing and market
manipulation.
Prospectus Directive
2003/71/EC[377] and its
implementing Regulation 809/2004[378]
regulating the obligation to produce a prospectus and the content of the
prospectus to be published when securities are offered to the public or
admitted to trading in the EU.
Regulation (EC) No 1060/2009
of the European Parliament and of the Council on credit rating agencies

(2)       Report of work done in 2010

Concerning the application of the acquis,
in the area of securities markets, the Commission service
continued with the quality check of the implementation of the respective acquis.
In this regards the following cases need to be mentioned:

Markets in Financial Instruments
Directive (MiFID). Concerning Poland, the Polish
authorities notified to the Commission the transposing law following a Court
judgement in 2009 (case C-143/08), therefore the Commission services closed the
two infringement proceedings opened for non communication and incorrect
transposition of the MiFID and its implementing Directive 2006/73/EC. Thus, all
non communication cases against Member States for MiFID and its implementing
Directive 2006/73/EC have been closed.

Furthermore, the Commission service
investigated two cases of incorrect transposition of the MiFID and its
implementing Directive. The case against Austria was closed after having
received satisfying explanation by the Austrian authorities. The case against Hungary is still under examination.

Moreover, the questions and answers
database on MiFID (and meanwhile extended to other areas), launched by the
Commission in 2007, continues providing all stakeholders with the possibility
to clarify interpretational issues concerning MiFID.

Within the framework of the MiFID review,
the Commission service organised a two-day public hearing which was held in Brussels in September 2010 and launched a public consultation on 8 December 2010 to help
preparing the legislative proposal to amend the Directive by 2011.

Investor Compensation Scheme Directive
(ICSD). On 12 July 2010 the Commission adopted a
proposal to amend the ICSD.[379] The review of the ICSD
is linked to evidence received on problems in its practical implementation,
divergences in its national application and to reflect changes in other
legislative instruments, such as MiFID and the Deposit Guarantee Schemes
Directive. The main elements of the review are the following: reinforce the
funding requirements of the schemes and introduce a borrowing mechanism between
national schemes as a last resort tool; reduce the considerable payout delays
before the investor receives any compensation, requiring provisional payout of
partial compensation if payout delays exceed a given time period; further
specify the information requirements to clients; provide that investors have
the right to be compensated by the scheme also in case of failure of a third
party custodian resulting in the investment firm not being able to return the
client's assets; extend coverage to provide for compensation to UCITS unit
holders when there is a loss of assets due to the failure of the depositary of
the UCITS scheme; increase the level of compensation to a fixed level of € 50
000; remove the requirement by which investors could bear a proportion of up to
10% of the loss within the compensation limit. Parallel reviews are also being
conducted on other compensation schemes (the Deposit Guarantee Scheme Directive
and a possible insurance scheme).

Market Abuse Directive (MAD). Two infringement proceedings, one against Luxembourg and one against the United Kingdom, had to be assessed. Both infringements concerned
provisions on the powers of competent administrative authorities and
administrative sanctions. Both Member States reacted by implementing a
provision which tackles the issue sufficiently. Accordingly, both cases were
closed in 2010.

The Commission issued a public consultation
between June and July 2010 on the review of the MAD to receive feedback from
competent authorities and market participants on future legislative proposal to
review the MAD.

Short selling/CDS. The Commission adopted a proposal for a Regulation on short selling
and credit-default swaps (CDS) in September 2010[380].
The proposal includes measures to increase transparency to regulators and the
market about short selling positions in certain instruments; the marking or
flagging of short orders for shares executed on trading venues; measures to
reduce settlement and other risks of uncovered or naked short selling and
powers to competent authorities and the European Markets and Securities
Authority (ESMA) to take measures under exceptional circumstances.

OTC derivatives/central
counterparties/trade repositories (EMIR). The
Commission adopted a proposal for a Regulation on OTC derivatives, central
counterparties and trade repositories in September 2010[381]. The Regulation
introduces a reporting obligation for OTC derivatives, a clearing obligation
for eligible OTC derivatives, measures to reduce counterparty credit risk and
operational risk for bilaterally cleared OTC derivatives, common rules for
central counterparties (CCPs) and for trade repositories, and rules on the
establishment of interoperability between CCPs.

Prospectus Directive. The Commission
service launched an infringement procedure against Poland on the incorrect
transposition of the prospectus language requirements. Poland has adapted its regulatory framework and notified it to the Commission services which are
analysing it.

Directive 2010/73/EU amending the Prospectus Directive was adopted
by the European Parliament and the Council on 24 November[382].

Credit Rating Agencies. In June 2010 the Commission
adopted a proposal to amend the Regulation No 1060/2009 on credit rating
agencies (CRA Regulation)[383] to entrust ESMA with exclusive
supervisory powers over CRAs, for which a political agreement was reached by
the European Parliament and the Council in December 2010. In addition, the
Commission adopted a decision on the recognition of the legal and supervisory
framework of Japan as equivalent to the requirements of the CRA Regulation.[384]

The Commission services launched a public consultation in
December 2010 on further issues linked to the use of credit ratings and the
rating industry, such as the overreliance on ratings, the high concentration in
the rating industry, the ratings of sovereign debt, the conflicts of interest linked
to a specific bussines model and the civil liability of CRAs.

Evaluation based on the current situation

Secondary legislation is in permanent
development in the financial services area, although the main
pillars have been already established following the Financial Services Action
Plan launched in 1999.

The acquis requires a continuous and
close monitoring of national measures to ensure timely and proper
transposition. Further, some directives require the Commission to report on a
number of key provisions that will allow to better evaluate their impact and to
determine possible problems that need to be addressed. In this area the
permanent dialogue within the various sectoral committees and the newly created
European Supervisory Authorities[385] contributes to avoid
deviations by Member States in the application of relevant EU law. Furthermore,
convergence in the supervisory practices is also one of the key objectives in
this area.

Particular attention has been and continues
to be devoted to the observation and analysis of MiFID on securities markets,
with the aim of assessing, in the perspective of the ongoing review, aspects
such as investor protection, transparency, availability of data, fragmentation,
and regulatory framework applicable to different venues. The Commission
services have further followed closely, the phenomenon of high frequency
trading, in the framework of the MiFID review. In addition, the G20
recommendations are taken into account in this review.

As to the ICSD, the review of the Directive
was needed in order to solve problems raised by several complainants to the
Commission concerning the application of the directive and to keep it aligned
with other changes in the acquis.

On the Prospectus Directive, no particular
problems were identified in the transposition check. However, some concerns
were raised by plaintiffs regarding the way in which certain Member States
implement additional requirements outside the Prospectus Directive. CESR updated
in 2010 the common positions by its Members in the application of the Directive
and continued to operate the Q&A database. CESR also worked on a mapping
exercise leading into a peer review whose first results were presented in
November 2010.[386] While CESR finds Member
States broadly compliant with Prospectus Directive, the mapping showed existing
divergences in practices and in the day-to-day application. ESMA will continue
this work and the Commission services will closely follow the exercise.

Adopted in early 2003, MAD has introduced a
comprehensive framework to tackle insider dealing and market manipulation
practices. However, since its adoption in 2003 the financial and regulatory
landscape has changed notably through the financial crisis and there are a
number of areas where the Directive can be updated and improved. Furthermore,
the necessity for improvement was confirmed lastly through two infringement
procedures concerning the power of competent authorities and sanctions to be
pronounced which were closed in 2010.

Evaluation results

(1)       Priorities

In the area of financial services,
priority will be given to the review of MiFID, MAD and CRA Regulation and to
the negotiation of the legislative proposals on ICSD and on short selling and
CDS.

(2)       Planned action (2011 and beyond)

The MiFID review is due in 2011. It will
focus on issues that need to be revised and on a number of areas emerged from
the first years of application in the EU. The review will tackle three
principal issues: (i) ensure the directive is fully up-to-date concerning the
latest technological and market developments in the interests of fair
competition and efficient markets; (ii) bring into effect important G20
commitments in the field of derivatives and commodity market transparency and
oversight; (iii) repair specific shortcomings revealed by the financial crisis,
whether in the field of investor protection or enforcement and supervision.

The MAD review will aim at: (i) increasing
the integrity of markets by widening the scope of the legislation to capture
new markets (MTFs and other organised trading facilities) and instruments
(OTC); (ii) increasing the protection of investors by strengthening the
investigative and sanctioning powers of regulators; and (iii) clarifying
certain key provisions and reducing administrative burdens where possible,
especially for SMEs.

The review of the CRA Regulation will
mainly focus on reducing the reliance on credit ratings, improving the
transparency on sovereign debt ratings, increasing competition in the credit
rating business, minimise any potential conflict of interest due to the
business model and reinforce CRAs' civil liability.

The Commission services will further
continue to assist Member States via ESC and ESMA in providing advice and
answering questions emerging from the implementation of the acquis.

11.2.4.
 Asset
management

Current
position

(1)       General
introduction

In the area
of asset management the Commission focussed on legislative action on the
basis of commitments made in 2009:

1. The
compromise text of the Directive on Alternative Investment Fund Managers
(AIFMD) was approved by the European Parliament on 11 November. Its formal
adoption and entry into force is expected to follow in early 2011. The AIFMD
will then be transposed over a period of 2 years, becoming fully operational by
early 2013;

2. Level 2
measures to the UCITS IV Directive were adopted on 1 July, in accordance with
the set deadline, so that Member States could implement the whole UCITS IV
package (Directive 2009/65/EC and its implementing measures) by 30 June 2011.
These comprise 4 acts:

a) Commission Directive 2010/43/EU on
organisational requirements, conduct of business rules, conflict of interests
and content of the agreement between a management company and UCITS depositary;

b) Commission Directive 2010/44/EU on fund
mergers, master-feeder structure and notification procedures;

c) Commission Regulation 583/2010 on key
investor information; and

d) Commission Regulation 584/2010 on
notification and supervisory co-operation.

The adoption
of these measures completes the reform of the UCITS IV regulatory framework
introduced by the UCITS IV Directive, ensuring the workability of the level I
provisions.

3. Two
consultation papers were issued announcing legislative changes:

a) on legislative steps for the Packaged
Retail Investment Products initiative, and

b) on the UCITS
depositary function and on the UCITS managers’ remuneration. This followed the
commitment made by the Commission in its communication on 2 June 2010 to
publish proposals for appropriate legislative responses to issues revealed by
the Madoff fraud and the Lehman Brothers default.

(2)       Report
of work done in 2010

In the asset
management sector, the Commission pursued investigations against one Member State. This procedure concerns the national rules designed to counter the negative
effects of the financial crisis. These measures empower the national
authorities to take decisions which will allow certain UCITS to breach the minimum
common rules set out in the UCITS Directive.

Concerning
the UCITS IV package, during the second half of 2010, the Commission services
provided assistance to Member States in their transposition efforts. A
transposition workshop was organised in September 2010 to kick-off dialogue
with Member States on the practical problems authorities are facing or may face
in transposing the UCITS IV Package. The workshop showed the need for further
discussion. This took place through the transposition network allowing for
direct contact with experts involved in the transposition in national authorities.
The dialogue will continue in 2011 (transposition deadline – 30 June 2011).

2010 was marked by important actions
affecting the asset management regulatory landscape:

AIFMD

In 2010 intensive negotiations of AIFM
Directive, based on the Commission proposal of April 2009, has been completed.
On 11 November the European Parliament approved the compromise text, thereby
sealing a first reading agreement with the Council. Following the adoption of
the AIFM Directive the Commission will continue its work on implementing
measures required to give effect to the provisions of this Directive (over 90
implementing powers)  In November 2010 the Commission issued a mandate to CESR
/ ESMA to develop technical advice on these measures.

Packaged Retail Investment Products
(PRIPs)

Following the April 2009 Commission
indicating the possible ways and means to improve regulatory protection for
retailed investors and a technical workshop which allowed to gather views of
relevant stakeholders, the Commission published a consultation paper on
legislative steps for the Packaged Retail Investment Products initiative.

The consultation seeks feedback from
stakeholders on the next steps to be taken in improving the European regulation
of the retail investment market. The Commission committed in 2009 to developing
legislative proposals for raising standards of investor protection and
improving the consistency of existing measures across the different sectors
making up the retail investment market.

Changes to UCITS IV Directive

Results of the
public consultation of July 2009 showed the need to revise the UCITS depositary
framework in order to strengthen investor protection. In
the context of AIFMD negotiations the Commission also committed itself to
introduce targeted changes to the depositary provisions in the UCITS Directive.
These changes aim at: clarifying the Ucits
depositary functions and ensuring consistency between the legislation
applicable to the depositaries of UCITS and that applicable to the depositaries
of AIF.

The financial
crisis also revealed that the remuneration and incentive schemes commonly
applied within financial institutions were themselves exacerbating the impact
and scale of the crisis. Remuneration policies contributed to short-termism and
incentivised excessive risk taking, thereby increasing levels of systemic risk.
In the light of these systemic issues and commitments that were made at the G20
level to address them, the EU is taking coordinated steps across all financial
services sectors to introduce consistent requirements governing the
remuneration policy.

The purpose of
the consultation paper published in December 2010 was to collect views and supporting evidence on the key options
that are emerging in these two areas. The
conclusions from this consultation will serve as a basis for the
Commission to review the UCITS Directive in 2011.

Evaluation based on the current
situation

Verification launched in 2009, on the basis
of Member States responses to the administrative letter, showed the limited
range of adopted, crisis-related legislative measures or administrative
practice. Nevertheless, few questions still remain open, like the one
concerning the possible scope of interpretation of the UCITS Directive by
Member States in the context of the financial crisis, e.g. introduction of side
pockets, or waivers of certain UCITS obligations. The reflections took place
also in CESR and its dialogue with the Commission will continue in 2011.

It should be noted that concerns related to
the depositary liability will be addressed in the legislative initiative
resulting in the modification of UCITS rules on depositaries.

Evaluation results

Following the adoption of the AIFM
Directive, the important work of adopting level 2 measures will start in 2011
for completion in 2012. In this context, particular efforts are needed from the
Commission services to actively follow the work of ESMA on its technical
advice.

In addition, the work on PRIPs initiative
and revision of depositary rules and new requirements on remuneration policies
within the UCITS Directive will enter in their decisive phases. Proposals are
expected in the mid-2011.

As the deadline for Member States to
transpose the UCITS IV Directive and its implementing directives expires on 30
June 2011, the Commission services will be attentive to the need to ensure that
a maximum number of timely notifications from Member States are submitted. Soon
afterwards, the process of transposition check should be launched.

Legislation

1. Council Directive 85/611/EEC of 20 December
1985 on the coordination of laws, regulations and administrative provisions
relating to undertakings for collective investment in transferable securities
(UCITS) (OJ L 375, 31.12.1985, P. 3), as amended, available on the following
website:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1985L0611:20080320:EN:HTML

2. The recast of the 85/611/EEC Directive
(Directive 2009/65/EC) is available on the website:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:302:0032:01:EN:HTML

3. Implementing measures to Directive
2009/65/EC are available on the website:

-
Commission
Directive 2010/43/EU of 1 July 2010 implementing Directive 2009/65/EC of
the European Parliament and of the Council as regards organisational
requirements, conflicts of interest, conduct of business, risk management and
content of the agreement between a depositary and a management company Text
with EEA relevance

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:176:0042:01:EN:HTML

-
Commission
Directive 2010/44/EU of 1 July 2010 implementing Directive 2009/65/EC of
the European Parliament and of the Council as regards certain provisions
concerning fund mergers, master-feeder structures and notification procedure
Text with EEA relevance

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:176:0028:01:EN:HTML

-
Commission
Regulation (EU) No 583/2010 of 1 July 2010 implementing Directive
2009/65/EC of the European Parliament and of the Council as regards key
investor information and conditions to be met when providing key investor
information or the prospectus in a durable medium other than paper or by means
of a website Text with EEA relevance

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:176:0001:01:EN:HTML

-
Commission
Regulation (EU) No 584/2010 of 1 July 2010 implementing Directive
2009/65/EC of the European Parliament and of the Council as regards the form
and content of the standard notification letter and UCITS attestation, the use
of electronic communication between competent authorities for the purpose of
notification, and procedures for on-the-spot verifications and investigations
and the exchange of information between competent authorities Text with EEA
relevance

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:176:0016:01:EN:HTML

11.2.5.
 Payments
and retail financial services

Current
position

(1)       General
introduction

A proposal for
a Regulation establishing technical requirements for credit transfers and
direct debits in euros and amending Regulation (EC) No 924/2009, COM(2010)775 (hereby referred as "the SEPA migration end-dates Regulation") was adopted by the Commission and published in December 2010.

In order to ensure
a timely and consistent transposition of the new E-Money Directive 2009/110/EC
((hereby referred to as 'the EMD') by end April 2011, the Commission services
have continued to accompany Member States in their transposition process
through transposition workshops, bilateral meetings and Q&A facility on the
internet. The transposition of the Payment Services Directive 2007/64/EC
(hereby referred to as 'the PSD') has been accomplished, with the sole
exception of one Member State.

(2)       Report
of work done in 2010

The preparatory
work on the end-date Regulation proposal (impact assessment, inter-service
consultation, public consultations and public hearing in November) as well as
the actual drafting of a highly technical legal text was the main focus of the Commission
services attention in the area of payments. The proposal was adopted by the
Commission on 16 December and transmitted to other EU institutions and the ECB.
The main objective of the proposal is to accelerate the current slow rate of
migration to pan-european credit transfers and direct debits by fixing
technical requirements which must be respected by proposed migration end-dates.
At the same time the proposal also provides clarity on the business model for
pan-european direct debits and reassures consumers when using such products by
providing various mandate checking options.

An EMD
Transposition Group (EMDTG), which has been set up a year before, met three
times. The Group role was to address common transposition issues faced by
Member States authorities and other stakeholders and to share responses with
all interested parties. In total the Group collected around 100 questions from
Member States concerning 24 articles of the EMD and provided written
observations which served as a basis for reaching a common understanding. The
web-based question-and answer tool, which has proved its effectiveness during
the transposition of the PSD, has been also developed and used to answer
individual questions on the EMD.

An ad hoc working group – the EMD
Passporting Liaison Group – composed of representatives of a number of
competent authorities in Member States responsible for the
authorisation/supervision of e-money Directive Passport Notifications
institutions has been set up and worked on the drafting of Guidelines on
Electronic Money. These guidelines will be submitted afterwards to the Payments
Committee for information and discussion. While the use of the Guidelines is
voluntary, all competent authorities appointed under Directive 2009/110/EC will
be strongly encouraged to use them for passport notification purposes. While
the Commission services participated only as an observer in this working group,
these Guidelines will be made available on the relevant area of the
Commission’s website for easy stakeholder access and transparency.

The Commission
Communication Reaping the benefits of e-invoicing for Europe which was
announced in the Digital Agenda for Europe was adopted on 2 December
2010. It aims at fostering the uptake of electronic invoicing within the EU. The Communication builds on the final report of the independent
Expert Group on e-invoicing, and on a public consultation following this
report. It is accompanied by a Decision which
establishes a European E‑invoicing Forum to be set up by June 2011.

The interpretative guideline concerning application of Article 8 of
Regulation 924/2009 (on mandatory reachability for direct debits), which was much
awaited by the payment industry, has been published in March. Another
interpretative note, concerning the application of Article 3 of the same
Regulation in the case of ATM withdrawals has been also drafted and published
in January 2011.

In the field of
payments, the number of petitions, questions and complaints remained relatively
constant in comparison with previous years. Three petitions were received in
2010. The majority of the enquiries (around 200) concerned cross-border payment
services and the application and interpretation of the two main legislative
acts in this area – namely Regulation 924/2009 and the PSD.

Several
infringement proceedings were launched during this period. Most of them
concerned the late or non-transposition of the PSD. However, all of them, with
the exception of the one involving Poland, were closed before summer following
completion of transposition in all the Member States concerned. Poland was brought before the Court of Justice and the case is still pending, awaiting
judgement. Another ongoing proceeding concerns Denmark and concerns
discrimination of holders of payments cards issued in other Member States in
breach of Articles 56 and 63(2) TFEU.

In the area of retail financial services,
preparatory work (impact assessments, public consultations) continued on two
legislative proposals concerning responsible lending and borrowing and the
access to basic bank accounts.

Evaluation based on the current
situation

The work on EMD transposition seems to be well advanced in almost all Member States, though no
notifications of transpositions were received by the Commission by the end of 2010.
The deadline for implementation was 30 April 2011. The actions covered by the
EMD Transposition Plan have been praised by most of the Member States as being
very helpful for ensuring a quick and consistent implementation. Other
stakeholders have also expressed their support.

Late transposition of the PSD by Poland provokes legal uncertainty for
both citizens and the payment industry. In addition, it undermines the SEPA project and, in particular, the possibility
of offering SEPA Direct Debit in, from and to that Member State. Moreover, while
most of the provisions on disclosure requirements and the rights and
obligations of payment service providers and payment service users could be
invoked directly by citizens before national courts, this is not the case for
provisions regarding a positive action by Member States (e.g., setting-up of
registers, designation of competent authorities, etc.). So delay in the
transposition of these provisions exposes Poland to the risk of actions for
compensation for losses related to the Member State's failure to implement the
Directive in time.

The breach of Articles 56 and 63(2) TFEU
by Denmark leads to the situation whereby holders
of payment cards issued in other Member States are faced with disproportionate
additional charges when using their cards in Denmark (including for internet
transactions). On the other hand, holders of payment cards issued in Denmark are not subject to such charges. This constitutes a clear discrimination of
customers from other Member States and, implicitly, could be treated as
discrimination on the base of nationality, since holders of payment cards
issued in Denmark are naturally, in the great majority of cases, Danish
nationals.

The main
challenges that could present themselves in the area of retail financial
services include a possibility that consumers and businesses will not be
motivated to seek out the benefits of the Single Market, in an environment of
increasing national focus and even protectionism. This could lead to a
magnification of the current problems of access to financial services for
non-residents. Significant efforts will have to be made if citizens' confidence
in the financial sector is to be restored.

Evaluation results

(1)       Priorities

Priorities in the field of payment services
will be evolving in the course of 2011, with a focus on the adoption of the
proposal for a Regulation fixing SEPA migration end-dates. This legislation
will mandate the migration euro credit transfers and direct debits to new
common standards and rules, thus paving the way to establishing a true Single
Market for euro payments in the EU.

The Commission services will maintain
efforts and closely follow-up the transposition process (EMD) and support
Member States' work with the aim of ensuring consistent application of the
existing acquis (Regulation 924/2009, PSD and EMD) in Member States.
More priority will be given to monitoring the correct and consistent
enforcement of the payment legal framework.

Preparatory steps will be also undertaken
in view of the foreseen reviews of the EMD, the PSD and the Regulation
924/2009, scheduled for 2012. Particular regard will also be given to possible
measures that support and facilitate operational migration
to pan-european credit transfers and direct debits as set out in the
proposed SEPA migration end-dates Regulation. For this purpose, tenders for
studies on specific aspects of the PSD and Regulation 924/2009 will be launched
in the course of 2011.

As for the activities carried out in the
area of retail financial services, in the coming year, the Commission will
bring forward proposals to promote responsible lending and borrowing as well as
to facilitate access to basic bank accounts.

(2)       Planned action (2011 and beyond)

Independently of whether the negotiations of
the SEPA migration end-dates Regulation are completed in the course of 2011,
the Commission services will continue to closely monitor the progress of
migration to pan-European (SEPA) credit transfers and direct debits in the
Member States and take a pro-active approach in identifying any potential
barriers to that migration.

Where necessary and upon request, expert
group or bilateral meetings will also be held to support legislative efforts,
to closely monitor the implementation process and to spread best practice among
Member States. Finally, a template for a concordance table will be provided by
the Commission services facilitating the task of Member States to illustrate
the correlation between the EMD provisions and the transposition measures
adopted for incorporation into domestic law.

Summary

Based on the experience of the
transposition of the PSD, we can conclude that a pro-active transposition
approach has a positive impact and enhances consistent implementation by Member
States. Therefore, a similar – although slightly lighter - approach has been
applied for the implementation of the EMD. Legal and political pressure will be
kept up on Member States which are late with the transposition of the PSD (Poland) or otherwise infringe EU payment services legislation and the TFEU (Denmark).

Legislation:

For detailed information on applicable
legislation and work undertaken in the area of payments and retail financial
services see the following web pages:

http://ec.europa.eu/internal\_market/payments/index\_en.htm

http://ec.europa.eu/internal\_market/finservices-retail/index\_en.htm

11.3.  Free movement
of capital (Articles 63 et seq. TFEU)

Current position

(1)       General introduction

The relevant Treaty provisions governing
the freedom of capital movements are enshrined in Articles 63 to 66 TFEU. In
particular, Article 63 TFEU provides that "all restrictions on the movement
of capital between Member States and between Member States and third countries
shall be prohibited".  A list of transactions that are to be considered as
capital movements can be found in Annex I of Directive 88/361/EEC.[387]
The legal framework governing this Treaty freedom can be found on the Europa
website.[388]

(2)       Report of work done in 2010

Work done in 2010 was again based on the
priorities set in 2008, namely continuing the pro-active approach by way of
monitoring, concentrating on more important cases, diversifying the range of
restrictions to the free movement of capital which are being dealt with and
addressing these restrictions at an early stage.

Since the last
report, the number of opened formal infringement cases has considerably
diminished[389]. The Commission
services have engaged in a pro-active dialogue with Member States' authorities
with the aim of exchanging views and, as facilitator, to closely liaise
on topical matters and so avoid situations which could develop into
infringements. EU Pilot also contributed significantly to the reduction in the
number of formal infringement proceedings for those Member States which
participated in this system. The implementation of a new registration system
(CHAP –“Complaints Handling – Accueil des Plaignants has also facilitated the
handling of complaints.

Of the number
of cases that were open during the reporting period, those relating to
privatisation and special rights of the State in privatised companies form the
majority (about 60% of the total number of cases).

The other types
of cases concerned bilateral investment law, real estate law, and financial
services. The cases related to several specific sectors, the most common being
the energy sector followed by real estate, telecoms, financial services and
manufacturing. The energy sector cases concerned measures introduced by the
Member States to secure their national interests (including protecting the
security of supply) but which were potentially incompatible with the TFEU.

On the free
movement of capital, the Court of Justice outlawed the Portuguese Government's
special rights allocated in connection with the State’s golden shares in
Portugal Telecom[390], thus confirming many
of the rules established in its earlier jurisprudence on special rights,
namely:

The free movement of capital
includes both, 'direct' investments as well as 'portfolio' investments[391], and
national measures must be regarded as restrictions to Article 63 TFEU if
they are likely to prevent or limit the acquisition of shares in the
undertakings concerned or to deter investors of other Member States from
investing in their capital[392].
The Court further clarified
what constitutes a measure attributable to the State within the scope of
Article 63 TFEU, in particular by contrasting these measures to situations
resulting from a normal application of company law[393].
The Court also reiterated
that golden shares granting an influence which is not justified by the
size of the State's shareholding are liable to discourage investors and
thus represents a restriction[394]. And it
further found that Article 345 TFEU does not have the effect of exempting
the Member States’ systems of property ownership from the fundamental
rules of the Treaty and cannot, therefore, be relied on as justification
for special rights[395].
It found again in a
different sector that special rights are not comparable to the rules
concerning selling arrangements addressed in the Keck and Mithouard judgment,
as they affect the position of a person acquiring a shareholding as such
and, consequently, affect access to the market[396].
The Court also held that an
interest in ensuring the conditions of competition on a particular market
cannot constitute valid justification for restricting the free movement of
capital[397].
And it pointed out that
whilst ensuring the availability of the telecommunications network in case
of crisis, war or terrorism may constitute a ground of public security in
the sense of Article 65(1)(b) TFEU[398],
such requirements must be interpreted strictly, so that their scope cannot
be determined unilaterally by each Member State without any control by EU
institutions and they may be relied on only if there is a genuine and
sufficiently serious threat to a fundamental interest of society[399]. The
Court again highlighted the difficulty for Member States to argue a
connection between the holding or acquisition of shares and the
safeguarding of public security[400].

On 11 November 2010 a further case on
special rights in Energias de Portugal (EdP) was decided. The ruling in this
case, as that in July 2010, found that, by maintaining special rights for the
State and other public bodies in the company, Portugal had failed to fulfil its
obligations under ECT Article 56 (freedom of capital movements - now Article 63
TFEU). The special rights involved included a right of veto for a number of
important company decisions (e.g. disposal of assets, recourse to significant
financing, opening or closing places of business, amendments to the Articles of
Association, etc.) as well as the right to appoint a director. In addition,
there was/is a restriction (which does not apply to the State) on the number of
votes which could be cast by individual shareholders up to a limit of 5% of the
share capital of EdP, regardless of the number of shares held.

Of special interest in the EdP ruling, was
the Court's treatment of a claim from Portugal that it measures should only be
examined under the right of establishment rather than the freedom of
capital movements. Here Portugal relied on a ruling in a case against Italy (C-326/07 of 16/5/2009). In the EdP ruling, the Court rejects Portugal's arguments in some considerable detail (§§ 39-44). The Court refers to the Italian case
but notes (§ 43): " 43 National legislation not intended to
apply only to those shareholdings which enable the holder to have a definite
influence on a company’s decisions and to determine its activities but which
applies irrespective of the size of the holding which the shareholder has in a
company may fall within the ambit of both Article 43 EC and Article 56 EC
(C-326/07 Commission v Italy, § 36)". From that, the Court, in this
case, concludes the following (§44): "44 It must be stated that, in
this action for failure to fulfil obligations, it is not inconceivable that the
national provisions at issue affect all shareholders and potential investors
and not only those shareholders capable of exerting a definite influence on the
management and control of EdP. Consequently, the contested provisions must be
examined in the light of both Articles 56 EC and 43 EC." Later on, in
§56-57 of the ruling, the Court notes why the veto rights affect all
shareholders. It treats controlling shareholders in §56. However, importantly
in §57, which considers portfolio investment, it states: "57 Similarly,
the right of veto at issue may have a deterrent effect on portfolio investment
in EdP in so far as a possible refusal by the Portuguese State to approve and
important decision, proposed by the organs of that company as being in the
company's interest, is in fact liable to depress the value of that company and
thus reduce the attractiveness of an investment in such shares…."

Evaluation based on the current position

In 2010, eight
infringement cases have been closed and two cases (restrictions on purchase of
secondary residences in Cyprus and restrictions on acquisition of agricultural
land in Tyrol (Austria)) have been opened.

The decisions to close eight cases were
taken following satisfactory amendment or clarification of potentially
discriminatory provisions in Member States. They were related to:

special powers in certain strategic companies (Italy)
an act conferring special powers in important
national enterprises (Poland)
privatisation agreements (two cases concerning Romania)
investment restrictions for statutory pension
funds (Slovakia)
rental prices for apartments in restituted
properties (Slovakia)
limitation of voting rights of non-state
shareholders (Greece)
restrictions on acquisition of real estate in
Tyrol (Austria).

Two cases are pending before the Court of
Justice:

the special rights in a privatised company
(GALP) in Portugal and;
investment restrictions for pension funds in Poland.

In seven other cases, following Court
rulings, the Commission services are following the process for amending the
discriminatory provisions and achieving compliance with Court rulings. Thus:

C-112/05 Commission v Germany (Volkswagen);
C-205/06 and C-249/06 Commission v Austria and Sweden (issues of EU rather than national competence with respect to third country
Bilateral Investment Treaties);
C-118/07 Commission v Finland (also a Bilateral
Investment Treaty issue);
C-207/07 Commission v Spain (powers in an energy
company), and;
C-171/08 Commission v Portugal (Telecom) as well as
C-543/08 Portugal (EdP).

For a number of ongoing cases, Member
States are in the process of removing provisions conflicting with the Treaty.
The Commission services are closely following this process.

On the BITs
outstanding issues, while it is important that protection is maintained for
investors, it is all the more important that all investors be put in a position
of legal certainty in compliance with EU law. The Court judgements concerned
three Member States who must now remove the incompatibility found by the Court.
However, many more Member States are likely to be in a similar situation (there
are now, after recent accessions, around 300 other pre-accession BITs which
were not subject to the Court rulings, since those countries were not Member
States at that stage, but which contain identical provisions).

Evaluation results

(1)       Priorities

During
the period under review two procedures were engaged in respect to transitional
provisions which had been granted to individual Member States.

With
respect to Bulgaria and Romania the Accession Treaty laid down that the
transitional period granted to these two countries with respect to the
acquisition of agricultural and forestry land would be reviewed. The review was
carried out in 2010 and the Commission reported the results of its analysis to
the Council on 14 December 2010[401].

In the
context of the enlargement of May 2004, several new Member States were granted
a transitional period of 7 years (until 1 May 2011)  for the acquisition of farming and forestry
land[402]. There was an extreme
possibility of a further extension of up to 3 years for certain of these new
Member States. Poland was granted a transitional period of 12 years (until 1
May 2016) without a possibility to extend it. In September 2010 Hungary requested an extension. By Decision of 20 December 2010[403],
in the light of the arguments presented by Hungary, the Commission granted an
extension. In December 2010 Latvia also requested an extension. Other countries
with a transitional period might follow.

(2)       Planned action (2011 and beyond)

As
regards foreign investment, the Commission will, where necessary, cooperate
actively with Member States that have updated or are in the process of updating
their legislation to cater for perfectly legitimate objectives as foreseen in
EU law.

Summary

In the area of free movement of capital the
priorities will remain enforcement action in important sectors (energy) as well
as close and permanent monitoring activities related to strategic foreign
investment control by Member States and to the unrolling of the specific
measures taken in the context of the crisis. Increased activity related to
Member States' bilateral investment treaties which involve agreements between
Member States will also be required. A resolution to this question by mutual
agreement or infringement procedures will be required, so that this long
running issue may start to be resolved in 2011.

11.4.
 Public
procurement

Current
position

(1)       General
introduction

European public
procurement provisions are based on the right of establishment and the freedom
to provide services stemming from Articles 49 and 56 of the TFEU.

The secondary
legislation in this field is three folds:

First, there are two
Directives on the coordination of procedures for the award of public
works, supply and service contracts, Directives 2004/17/EC and 2004/18/EC
adopted in April 2004 replacing the previous Directives 92/50/EEC,
93/36/EEC, 93/37/EEC and 93/38/EEC. Directive 2004/18/EC concerns award
procedures carried out by public contracting authorities meeting certain
value thresholds. Directive 2004/17/EC covers contract awards by entities
operating in specific sectors (water, energy, transport, postal services).
Secondly, there are two
Directives concerning the legal protection of bidders participating in
public procurement procedures, Directives 89/665/EEC and 92/13/EEC. These
Directives have been modified by Directive 2007/66/EC which has been
adopted in December 2007 and had to be implemented by Member States by
December 2009.
Thirdly, a special Directive
for Defence and Sensitive Security procurement (Directive 2009/81/EC[404] of 13
July 2009) has been adopted in 2009. Member States have until August 2011
to transpose these new procurement rules into national law.

(2)       Report
on the work done in 2010

(a) New
legislation in preparation or proposed and being adopted, impact assessments
and implementation plans being developed in connection with new proposals, etc.

Substantial
progress has been made in 2010 on an impact assessment on a Commission
initiative on public procurement rules for service concessions, which
was finalised at the beginning of 2011.

Article 30
of Directive 2004/17/EC provides that the Directive
does not apply to contracts that are awarded for the pursuit of one of the
covered activities if, in the Member State in which it is performed, the
activity is directly exposed to competition on markets to which access is not
restricted. In other words, the Directive does not apply if there has been a
liberalisation resulting in such a level of competition that the discipline of
the Directive is no longer needed. This exemption will
be applicable where the Commission has adopted a formal Decision establishing
that the conditions are met.

In 2010, four
requests for exemption were submitted to the Commission concerning electricity
generation and sale in Italy, exploration for and extraction of oil and gas in
Italy and in Denmark, except Greenland and the Faroe Islands; exploration for
and extraction of coal in the Czech Republic. Commission Decision 2010/142/EU
of 3 March 2010 exempting certain services in the postal
sector in Austria[405] ; Commission Decision 2010/292/EU of 29 March
2010 exempting exploration for and exploitation of oil and gas in England,
Scotland and Wales[406] and Commission Decision
2010/403/EU of 14 July 2010 exempting the production and wholesale of
electricity in Italy’s Macro-zone North and the retail of electricity to end
customers connected to the medium, high and very high voltage grid in Italy[407],
were adopted in 2010. Decisions concerning the Italian,
Danish and Czech requests must be adopted, respectively, by 19.4.2011,
28.2.2011 and 23.5.2011 at the latest.

(b)
Preventive measures being taken in relation to recently adopted new
legislation, transposition package meetings, development of guidelines,
initiation of networking systems to manage the new legislation, etc.

A transposition plan including a number of
initiatives aiming to accompany Member States in the transposition process was
elaborated immediately after the adoption of Directive 2009/81/EC on defence
and sensitive security procurement. During 2010 six workshops took place
between January and July 2010 with national experts in charge of preparing
measures to be taken at national level to transpose the said directive. The
most sensitive or complex issues, both from implementation and legal
perspective, were debated. The discussion resulted in a series of guidelines –
essentially intended to national authorities – published on the Commission
website.[408] The second half of the
year has been dedicated to bilateral contacts with national authorities, where
more detailed problems had to be analysed. Technical assistance will continue
until the end of the transposition process and for those Member States which
would not succeed in respecting the deadline also at the end of 2011.

Two guides on social procurement and
procurement of social services of general interest have been updated in 2010
and were published in early 2011[409].

In addition, package
meetings were held with four Member States (IT, DE, UK, EL) to discuss the most pertinent issues of the application of procurement law in the respective
Member State, which allowed to solve a considerable number of infringement
cases as well as to discuss the compliance of legislative developments in
Member States with the EU legal framework.

Finally, the
Commission invested in bilateral processes with Member States like the work on structural
reforms in the public procurement system in Greece in the framework of the
crisis support measures and Memorandum of Understanding.

(c) Main actions
being taken to control the correct application of the law - conformity
assessments, reports on application of legislation, studies, etc.

Conformity of
the national transposition measures for the Remedies Directive (Directive
2007/66/EC)) has been verified for the majority of Member States in 2010.

An in-depth
evaluation process has been launched in 2010 aimed at assessing the application
and effects of EU public procurement rules in the past, and several studies
have been committed on various aspects, the results of which are due in the
first half of 2011.

In addition, an
intense cooperation is maintained between Commission services where the proper
application of EU public procurement rules plays an essential role for the
achievement of specific sectoral objectives. Namely funding programs establish
that full respect of public procurement rules is a condition for EU financial
support (regional and social funds, TEN programs). This cooperation takes place
both prior and after the payment of funds.

(d) Management
of the acquis through committees and expert groups

Exchange with
the Member States on the public procurement legal framework is well
established. The Commission regularly convenes Committees. First, the Advisory
Committee on Public Contracts (ACPC), which consists of the representatives of
Member States authorities, met five times in 2010. Specialised working
groups of the ACPC also met in 2010, i.e. the Working Group on E-Procurement
and the Economic and Statistical Working Group (two meetings each). The
Commission also organises meetings of the Advisory Committee on the opening up
of Public Procurement (CCO), which consists of public procurement and other
technical experts.

In the context
of the described Committees, discussions included the following topics:

-           Evaluation of the EU acquis in public
procurement and reform of Directives 2004/17/EC and 2004/18/EC

-           A Commission initiative concerning European
rules for the award of service concessions;

-           The elaboration of a guidance document on
the application of EU public procurement law to relations between contracting
authorities;

-           Electronic dimension of public procurement
(i.e. PEPOL project, preparation of the Commission Green Paper on
e-procurement; actions in favour of SMEs);

-           Transposition of the 'Remedies' Directive
2007/66/EC (i.e. national time-schedules, problems met) and actions of the
Commission in the transposition context (bilateral meetings with Member States
to facilitate the transposition, launch of infringement procedures after implementation
deadline, etc);

-           Transposition of the "Defence"
Directive  2009/81/EC of 13 July 2009 (i.e. national time-schedules, problems
met) and actions of the Commission in the transposition context (i.e. bilateral
meetings with Member States, etc);

-           Discussion on actions to be taken  by Member
States to implement the European Code of best practices facilitating access by
SMEs to public procurement contracts;

-           National recovery plans to overcome the
economic crisis and phasing out of such measures;

-           Information on various negotiations with
third countries which contribute to reinforce the role of the European public
procurement legislation (i.e. GPA negotiations);

-           Compilation of indicators of public
procurement subject to the EU Directives, processing of national statistical
reports, and statistical analysis of various aspects of total public
expenditure (breakdown of total expenditure, analysis of above and below
threshold expenditure).

(e)
Enquiries, problems and complaints management

In 2010, 226
new complaints have been registered by the Commission in the public procurement
field. Countries most concerned were Germany, Italy, Greece, UK and Bulgaria. Enquiries and complaints in the field of public procurement have been increasingly
treated within the EU Pilot system since the majority of Member States joined
the system in the course of 2010. Public procurement files accounted for 50 %
of the EU Pilot files in the internal market and services area.

(f)
Petitions

In 2010 the
sector of public procurement received four petitions concerning problems
encountered in Spain, Italy and Romania.

(g)
Management of infringements

In 2010, in 155
public procurement infringement files the Commission took relevant decisions to
advance the files. Of these, 76 cases (49%) could be closed; 12 (approx. 7.5%)
had to be referred to the Court.

In the public
procurement field, 20 non-communication procedures had to be launched in 2010
concerning the Directive 2007/66/EC ("Remedies Directive"), which all
could be closed except for one case due to compliance by the end of 2010. Two
cases under Article 260 TFEU were opened and one brought before the Court.

Evaluation based on the current position

A comprehensive
evaluation of the public procurement Directives 2004/17 and 2004/18 was set in
motion in 2010. This essentially economic evaluation focuses on identifying the
impact of the Directives, and assessing the effectiveness of the Directives in
attaining their hoped-for objectives. The results of the evaluation – published
in June 2011[410] – will, along with
stakeholder responses to the Commission Green Paper on the modernisation of
public procurement policy[411],
constitute the basis for proposing relevant adjustments to the Directives.
Without prejudging the outcome of this in-depth evaluation project, the
following indications can be made.

Transposition
of the EU acquis can be considered satisfactory by the end of 2010,
although the delays in the transposition of the Remedies Directive (see
reference to non-communication cases above) deprived aggrieved bidders of the
improved measures for redress against decisions of contracting authorities for
the period of delay.

As regards
compliance of Member States with EU procurement rules, it has to be taken into
account that more than 70.000 contracting authorities in the EU run procedures
which have to respect EU rules on a daily basis. Any indicators such as the
number of complaints have to be put into perspective against this background.

2010 saw a
continued high level of caseload of public procurement infringement complaints.
The increase in some countries may be explained by a more difficult economic
situation, which sharpens competition among economic operators for a reduced
number of public contracts in an environment of less private sector
opportunities. However, the number of infringement complaints and cases
indicates that compliance levels should be improved in a number of Member
States. The Impact Assessment on a Commission initiative on concessions
revealed an important level of non-compliance with EU procurement principles in
the area of service concessions. It equally has to be recognised that the
Commission regularly detects cases of non-respect of EU public procurement
rules in the context of the disbursement of the Union's structural and social
funds. Every tender procedure disregarding the EU procurement rules puts their
objectives – best value for money, equal and fair opportunities for European
business and fight against corruption – at risk.

Application of
EU procurement rules lies exclusively with the Member States. The underlying
reasons for cases of non-compliance at national level can include poor
administrative capacity (contracting authorities subject to EU procurement
rules include municipalities and other authorities at local level), complex and
inefficient administrative procedures, insufficient awareness in contracting
authorities, problems of corruption and conflicts of interest, unclear
transposition in national rules as well as insufficient deterrent mechanisms for
violations. While responsibility for corrective action therefore lies mainly
with Member States, the Commission can contribute with support and legislative
measures to remedy existing weaknesses.

Evaluation
results

In terms of
legislative actions, work will focus on

Adoption of a proposal
intended to modernise Directives 2004/17/EC and 2004/18/EC, including the
development of a transposition plan at an early stage;
Adoption and
inter-institutional negotiation of a proposal for a Directive on service
concessions;
Adoption and
inter-institutional negotiation of a proposal for an instrument
transposing Member States' obligations under the GPA.

In terms of
support measures, efforts will primarily be devoted to

Ensuring smooth
transposition of Directive 2009/81/EC in all Member States until the
transposition deadline (21 August 2011) and verification of the quality of
the national transposition measures;
Finalising the verification
of the quality of the national transposition measures of the Remedies
Directive 2007/66/EC;
Monitoring of the phasing
out of national measures in the field of public procurement to overcome
the economic crisis, and work on structural reforms in Member States
mostly hit by the economic crisis.

Concerning
infringement cases, in addition to the priority categories of non-communication
cases and Article 260 cases, the following factors will determine the priority
treatment of a case: high contract value and EU funding, problems of a
horizontal nature affecting many procurements in a given Member State, cases raising important and/or new legal issues.

Legislation:

http://ec.europa.eu/internal\_market/publicprocurement/legislation\_en.htm

11.5.
Professional qualifications

Current position

(1)   General introduction

This sector deals with Member States'
requirements for professional qualifications which lead to barriers to the free
movement of qualified professionals in the Single market. To alleviate these
barriers, Directive 2005/36/EC of the European Parliament and of the Council on
the recognition of professional qualifications[412]
implements Articles 45, 49 and 56 of the FEU Treaty for all regulated
professions. Beneficiaries are all EU citizens holding a professional
qualification. For lawyers, additional specific rules have been laid down at EU
level (Directive 77/249/EC on the free provision of services of lawyers[413]
and Directive 98/5/EC on the freedom of establishment of lawyers[414]).

(2)       Report
of work done in 2010

The work carried out in 2010 concentrated
on the launch of the evaluation and on transposition, implementation and
accompanying measures to Directive 2005/36/EC with a view to enabling citizens
to make use of the new rights offered by the legislation (in particular the
free provision of services and the mutual recognition under the so-called
general system for cases which were previously only covered by the Treaty). The
Commission also dealt with all kinds of difficulties reported by citizens when
applying for recognition, such as undue delays in decision taking, compensatory
measures required by the host Member State, negative decisions and requests for
supplementary documentation, using all available means and in particular the
network of national coordinators for Directive 2005/36/EC, EU Pilot and SOLVIT
according to the nature of the problem, to find appropriate and EU law
compliant solutions.

(a) Management of the acquis through
committees and expert groups

The Commission held 7 meetings of its
expert group composed of the national coordinators responsible for the
application of Directive 2005/36/EC. The Group discussed the preparation of the
evaluation of Directive 2035/36. The other main task has been to examine the
compliance with Directive 2005/36/EC of new diplomas in architecture notified
by Member States with a view to their insertion in the Annex to the Directive,
granting the right to automatic recognition to the holders of these diplomas.
In total, 33 diplomas and 4 certificates were examined. This work has allowed
the achievement of a good level of mutual trust between Member States avoiding
subsequent problems of bad application.

A network of Contact Points for Directive
2005/36/E, whose role is to inform and assist citizens, met once.

In addition, the regulatory committee of
Directive 2005/36/EC met twice  and voted on a Commission regulation amending
Annex II (to upgrade some paramedical diplomas) and V (to add medical oncology
and medical genetics to the list specialities to be recognized automatically)
to the Directive. These meetings also allowed for peer pressure to accelerate
the transposition of Directive 2005/36/EC for which some Member States were
late.

(b) Enquiries, problems and complaints
management:

Due to the large number of beneficiaries
(all EU citizens holding a professional qualification and who wish to work in
another Member State even temporarily), a large number of enquiries is received
by the Commission which do not necessarily reveal a problem of application of
EU law. In those cases the Commission refers citizens who wish to enquire about
the situation in Member States to the national contact points under Directive
2005/36/EC whose task it is to give all information about regulated professions
in their territory but also about procedural steps to be taken.

In the CHAP database approximately 88
inquiries and 82 complaints from citizens have been registered in 2010. As far
as the complaints are concerned, roughly a half of these has already been
closed.

When enquiries reveal a potential problem
of application of EU law in individual cases, the Commission mostly refers
citizens to the SOLVIT network and/or inserts their cases into the system with
the citizen's consent.

Throughout 2010, 23 cases were introduced
in EU Pilot for possible breaches of EU Law. 7 cases have been solved and 4
cases led to the opening of the infringement procedure.

(c) Management of infringements

The volume of infringements concerning
restrictions in breach of Articles 45, 49 and 56 of the TFEU and the directives
on the mutual recognition of professional qualifications which were dealt with,
remained broadly rather stable in 2010. Approximately 31 decisions (to proceed
with or to close a case) were taken by the Commission.

Concerning
the infringement proceedings opened against Member States for
non-communication of national implementing measures, the cases referred to
in the previous report concerning Directive 2006/100/EC and Directive
2005/36/EC have been closed further to compliance by Member States.

The
infringements cases opened against Bulgaria, the Czech Republic, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia because of the nationality
condition for notaries did not progress in 2010. This is due to the fact
that almost all the Member States concerned intervened to support the Member
States already referred to the Court of Justice (Germany, Austria, Belgium, France, Greece and Luxembourg). In these circumstances, it was considered
necessary to examine and take into account all new arguments which might be
brought forward by these Member States Estonia has abolished the condition of
nationality but the Netherlands stopped the process of abolishing it waiting
for the judgments of the Court. The Commission also referred Portugal to the Court on the same issue, because even though Portugal formally abolished the
nationality condition previously in force for notaries, this condition
thereafter appeared to still be applied.

Concerning the measures taken by Greece to
comply with the judgment of the Court of 21 April 2005[415]
regarding Greek legislation on the ownership, opening and operation of opticians'
shops by companies, by judgment under Article 260 TFEU (ex-Article 228 EC)
of 4 June 2009 in Case C-568/07 Commission v. Greece, the Court held
that by failing to take, by the date on which the time-limit set in the
reasoned opinion issued by the Commission expired, all the measures necessary
to comply with the judgment of 21 April 2005 in Case C-140/03 Commission v
Greece, Greece had failed to fulfil its obligations under Article 260 TFEU
(ex-Article 228(1) EC), and condemned Greece to pay a lump sum. This having
been done, the case has been closed in January.

In addition, under Article 260 TFEU
(ex-article 228 EC), the Commission sent reasoned opinions to Greece for
non-execution of the judgments of the Court of Justice in cases C-274/05
regarding the recognition of professional qualifications of engineers
and C-84/07 regarding the recognition of professional qualifications of
opticians. In particular, in both cases, Greece still refused to recognise
diplomas awarded by competent authorities of other Member States under
franchise agreements. Consequently, holders of such diplomas were still unable
to practise their profession in Greece. The compliance to be achieved for those
two judgments has been included in the Memorandum of Understanding with the
Greek government for financing assistance in 2010.

(d) Petitions

In 2010, 13 petitions have been dealt with.
These petitions in essence reflected the issues raised in enquiries and
complaints which the Commission receives. Most cases concern complex individual
situations.

(e) Preventive measures being taken in
relation to recently adopted new legislation-conformity assessment of national
transposition, transposition package meetings, development of guidelines,
initiation of networking systems to manage the new legislation, etc.

In order to monitor the appropriate and
smooth application of this Directive, the Code of Good Conduct which specifies
the good national administrative practices competent authorities should follow
when processing applications, adopted by the Group of Coordinators of Directive
2005/36/EC, has been published on the Europa website.

To enable citizens to make better use of the
Directive, a document with frequently asked question has been published on the
Europa website along with the "User’s Guide".

To ensure legal certainty for professions
benefiting from automatic recognition, whose corresponding national titles are
listed in Annex V to Directive 2005/36/EC, the Commission published twice[416]
the new titles and changes to existing titles notified by Member States on the
basis of Article 21 (7) of Directive 2005/36/EC. These publications facilitate
free movement as they give the right to the holders of the qualifications
concerned to benefit from automatic recognition.

Evaluation based on the current position

Directive 2005/36/EC had to be transposed
by Member States by 20.10.2007. The 7 Member States which did not yet
completely transpose it by the end of 2009 achieved it in 2010. For Directive
2006/100/EC relating to accession of Bulgaria and Romania, which had to be
transposed by 1.01.2007, the 3 Member States which had not completed
transposition in 2009 did it in 2010. However, and as indicated in the previous
report, due to the fact that Directive 2005/36/EC replaced 15 directives while
maintaining their basic mechanisms of recognition, the non-transposition in due
time by all Member States did not have a major negative impact on free movement
and free establishment. In the large majority of cases, recognition of
qualifications still took place on the basis of the national implementing
measures adopted on the basis of the now repealed directives. The Commission
services published a report on the transposition and the implementation of the
Directive in 2010, which contains a first assessment of how the Directive has
been transposed.

A second scoreboard was published in
April 2010 offering an overview of where Member States stand in
implementing Directive 2005/36/EC into national law. As stressed in the
previous report, the main challenge related to this directive is represented by
the enormous number of national measures needed to transpose it. By the end of
2010, around 1249 measures had been notified to the Commission.

The IMI system plays a key role in the
smooth implementation of the Directive. It allows competent authorities from
the host and home Member States to exchange information linked with an
application for recognition where doubts are raised in relation to the
professional. The number of information exchanges increased by another 30 %. It
was extended to 4 additional professions (tour guides, psychologists, engineers
and social workers) in October 2010, bringing the total number of professions
covered to 35.

Evaluation results

(1)       Priorities

As indicated in the previous report, the
following are being identified as key issues: the new regime for providing
services for professions falling under the general system of recognition
because there was no specific regime for the provision of services for all the
professions falling under the previous Directives 89/48/EEC and 92/51/EEC on
the general system; the subsidiary application of the general regime, which did
not exist either (recognition then fell under the Treaty) as well as principle
questions under the Treaty such as partial access to a given profession.

A transposition report and the experience
reports of the national authorities have been published on our website. With
professional organizations a meeting on the evaluation of the directive has
been organized on 17 March and on 29 October.

(2)       Planned
action (2011 and beyond)

A public consultation will be launched in
2011. This consultation will aim at gathering stakeholders' (in particular
professionals and consumers) views on a modernisation of the Professional
Qualifications Directive (Directive 2005/36/EC), in particular as regards a
professional card.

The final evaluation report and a Green
Paper are foreseen for the autumn 2011 with a view to preparing a proposal for
updating the Directive as announced in the Single Market Act.

Summary

Transposition of Directive 2005/36/EC has
been completed in all Member States. The Commission therefore focussed on how
Member States have implemented the Directive into their national regulations.
The key challenges for the Commission have been first to ensure that Member
States accurately transpose the Directive and second to evaluate how the
Directive works and whether it delivers the effects compared to the objective
of simplification. The evaluation could also take account of swiftly changing
conditions, such as labour market, public health and others.

11.6. Company law, corporate governance and anti-money laundering

Current position

(1)       General introduction

Directives in the fields of company law and
anti-money laundering aimed at ensuring the stability and reputation of the
financial sector (Anti-Money Laundering Directives, Directives 2005/60/EC and
2006/70/EC), harmonizing transparency requirements in regulated markets
(Directives 2004/109/EC and 2007/14/EC), granting a transparent framework for
takeover bids (Directive 2004/25/EC), ensuring shareholders' rights (Directive
2007/36/EC), strengthening rules on remuneration in the banking sector
(Directive 2010/76/EC) and facilitating cross border mergers as well as easing
administrative burden of companies by modernising and simplifying the current acquis
(Directives 2003/58/EC, 2005/56/EC, 2006/68/EC, 2007/63/EC and 2009/109/EC). Taking
into account the importance and impact of this acquis, the Commission
established an Action Plan in 2008 to reduce transposition deficit and complete
conformity assessments in the fields of company law and anti-money laundering.

(2)       Report of work done in 2010

In the absence of communication of national
transposition measures, 27 infringement cases were handled in 2010[417].
The Commission put particular emphasis on a straightforward management of
infringement cases and identified priorities such as to ensure compliance with
judgements of the European Court of Justice. Furthermore, the Commission
continued to apply a number of complementary measures in order to reduce
transposition deficit. It continued to publish scoreboards on state of play of
transposition and package meetings were used to raise the issue of
transposition. The Commission also kept up pressure on Member States through
meetings of committees and national expert groups, in particular the Company
Law Experts' Group and the Committee on the Prevention of Money Laundering by
requesting delegations to justify their bad transposition record.

The Court of Justice issued one Court
ruling for a non-communication case in this sector in 2010[418].
Furthermore, during 2010, the Commission dealt with seven infringement
procedures based on Article 260 TFEU, all of them in the field of anti-money
laundering. All the procedures could be closed before the formal referral to
the Court of Justice of the European Union. As infringement procedures based on
Article 260 TFEU aim at ensuring compliance with Court rulings, these cases
have been treated as a priority and followed-up closely by the Commission.

The infringement procedures for non
communication of national measures for Directive 2007/36/EC (the transposition
deadline was 3 August 2009) were also followed up closely. Eight cases were
referred to the Court of Justice. By the end of 2010, five cases remained
pending before the Court. The Shareholder's Rights Directive aims at
introducing minimum standards to ensure that shareholders of companies whose
shares are traded on a regulated market have a timely access to the relevant
information ahead of the general meeting and simple means to vote at a
distance. It also abolishes share blocking and introduces minimum standards for
the rights to ask questions, put items on the general meeting agenda and table
resolutions. Late transposition might jeopardize the objective to enable
shareholders of listed companies throughout the European Union to exercise
their rights and have their say.

The Action Plan elaborated in 2008 also
included the monitoring of the national legislation implementing directives in
the fields of company law and anti-money laundering. Conformity checks were
therefore given all attention in 2010. The first phase of conformity checks,
i.e. the technical conformity assessments, was concluded for a high volume of
national transposition measures. Taking into account the high number of
Directives adopted and transposed in the previous years, the absence of
concordance tables and the fact that the assessment of long and comprehensive
national instruments (for example Civil and Commercial Codes) have significant
implications in terms of resources, the Commission outsourced a part of the
first phase of conformity checks in the course of 2009. The work related to
seven different directives in the fields of company law and anti-money
laundering[419] and consisted in the
substantial analysis and the reporting of the relevant transposition measures[420].
The second phase of the conformity checks (i.e. the analysis of the technical
assessment and, when required, the launching of formal infringement procedures
for non conformity) will be carried out as from 2011.

Although only one case for non compliance
with the EU acquis was opened in 2010 (the case was opened ex officio),
five non conformity cases were examined in 2010 in the fields of company law
and anti-money laundering. All of them were at an early stage in the formal
procedure. In parallel, contacts with national authorities were privileged to
come to acceptable solutions. Although this approach will also be followed in
2011, the non conformity cases will be pursued in the absence of effective
action with a view to putting an end to the relevant infringements.

As regards external submissions in the
fields of company law and anti-money laundering the number of enquiries,
petitions and complaints has increased; four petitions were received in 2010.
Two cases were registered in EU Pilot in 2010. Furthermore, fourteen complaints
were registered in CHAP.

One new Directive which deals also with
issues related to company law (remuneration policies in the banking sector) has
been adopted in 2010: Directive 2010/76/EC
of the European Parliament and of the Council of 24 November 2010 amending
Directives 2006/48/EC and 2006/49/EC as regards capital requirements for the
trading book and for re-securitisations, and the supervisory review of
remuneration policies.

Evaluation based on the current position

Through the rigorous action and the
comprehensive range of initiatives taken by the Commission in accordance with
its Action Plan, positive results have been achieved. The most significant success
in 2010 in the fields of company law and anti-money laundering were the
completion of national transposition of three Directives[421]
and the conformity assessment of 57 national measures for seven directives.

81% of the infringement cases for non communication
recorded at the beginning of 2010 had been closed by the end of the year and
the transposition of three Directives could be completed. Furthermore, all the
cases in relation to which the transposition deadline had expired before 2010
had been referred to the Court.

Completing the transposition of the Third
Anti-Money Laundering Directive and its implementing measures[422]
was essential since they aim at boosting the fight against financial crime as
well as preventing damage to the stability and reputation of the financial
sector and the single market. Moreover, delayed implementation could create
difficulties for the banking sector in terms of costs related to the different
rules in force in Member States. For its part, the implementation of the Directive
simplifying the rules for merger or division of public
limited liability companies as regards the requirement of an independent expert’s report[423]
grants more flexibility to European companies. This had a particular importance
in the context of the financial crisis.

The Commission drew up conclusions on the
high effectiveness of the measures taken on the basis of the Action Plan in
relation to the completion of the national transposition of Directives in the
fields of company law and anti-money laundering. However, a number of Member
States proved to have still problems by being late with implementation. While
in the fields of company law, Belgium, France, Greece, Luxembourg, Spain and Sweden[424] had difficulties to
transpose on time, anti-money laundering rules were implemented late by Belgium, France, Ireland and Spain[425]. Although the
Commission has kept and will keep up the pressure on the Member States which
are late with transposition, there are 22 Member States which had no
transposition deficit anymore at the end of 2010.

The technical assessment of national
transposition measures in the fields of company law and anti-money laundering
was also a major success. The assessment included a reference to the relevant
articles of the national implementing measures in the light of the
corresponding articles of the concerned Directive (all in both the concerned Member State's official language and in English) and an indication of the technical
assessment of conformity.

Evaluation results

(1)       Priorities

Priorities in the fields of company law and
money laundering will not change substantially in 2011. The Commission will
endeavour to reduce further the transposition deficit, keep up pressure on
Member States to ensure compliance with Court rulings, follow up closely
non-communication cases and continue with the conformity checks of national
transposition measures. Two new transposition deadlines will expire in 2011.
The transposition of Directive 2010/76/EC[426]
is due for 1st January 2011 for issues related to remuneration
policies in the banking sector. And the transposition deadline of Directive
2009/109/EC[427], simplifying reporting and documentation requirements in the case of mergers and
divisions, is 30 June 2011. A particular emphasis will be put on the four cases of late
transposition of the Directive on Shareholders' Rights that were referred to
the Court in June 2010[428].

(2)       Planned action (2011 and beyond)

As complementary instruments included in
the Action Plan had successfully reduced the transposition deficit in the
fields of company law and anti-money laundering, they will be applied in the
future. Concerning non-communication cases, Member States will be requested to
provide detailed information on the state of play of transposition at relevant
committee and experts' meetings. A scoreboard in the fields of company law and
anti-money laundering will be published on a quarterly basis and as required,
package meetings will be used as well. In the case of Directive 2007/36/EC,
procedures under Article 260 TFEU would be accelerated as soon as the relevant
Court Decisions will have been delivered.

Remaining technical conformity assessments
will be continued in the course of 2011. Given the high number of measures to
be considered, the risk-based approach will be pursued. The second phase of the
conformity checks (i.e. the analysis of the technical assessment and, when
required, the launching of formal infringement procedures for non conformity)
will be carried out as from 2011.

Summary

In the fields of company law and anti-money
laundering, the focus remained on reducing the transposition deficit, on
ensuring compliance with Court rulings and on assessing the conformity of
national measures. The Action Plan established in 2008 has brought very
positive results. The actions and instruments identified in it will therefore
be applied in 2011, too. In order to overcome the remaining difficulties
related to conformity checks, risk-based assessments will be continued.
Infringements will be followed up strictly against Member States which are late
with transposition.

11.7.
 Auditing
– statutory audits

Current
position

(1)       Report
of work done in 2010

In the field of
auditing, in 2010 the Commission carried on its work on the correct
implementation of the Directive 2006/43/EC on statutory audits of annual
accounts and consolidated accounts of 17 May 2006[429]
("the Directive"), which transposition was due on 29 June 2008.

In 2009, six
Member States (Austria, Estonia, Ireland, Italy, Spain and Luxemburg) were
referred to the Court of Justice for non communication of the transposition
measures for the Directive 2006/43/EC. However, all theses cases were closed by
September 2010, the Member States having communicated their national
transposition measures.

To facilitate
the establishment of auditor public oversight bodies in Member States, as
required by the Statutory Audit Directive, and to help the existing ones become
operational, the group of national experts "European Group of Auditors'
Oversight Bodies" (EGAOB) continued its work on exchanging good practices
on the establishment of those systems. Three EGAOB meetings – including one ad
hoc EGAOB on the Green Paper on Audit Policy[430]
- were organized in 2010.

Within the
EGAOB, the sub-group on Cooperation which became the sub-group on Third
Countries held three meetings in 2010. At these meetings, issues related to the
equivalence assessment of third countries audit regulatory systems under Article
46 of the Directive, the adequacy assessment under Article 47 of the Directive,
and the extension of the transitional regime for certain third countries were
discussed.

Another
sub-group established within the EGAOB, the sub-group on Inspections held four
meetings in 2010. The issues discussed at the meeting of this sub-group related
to, among others, the inspections procedures among the Member States,
inspections of network firms, PCAOB joint inspections.

Under the
Directive, the Commission services may also adopt various implementing measures
using the comitology procedure; whereby the Commission services are assisted by
the Audit Regulatory Committee (AuRC) composed of representative of the Member
States. In 2010, six AuRC meetings were held; issues discussed include the
transposition of the Directive, the equivalence and adequacy assessments, the
cooperation between EU public oversight authorities.

In the area of
adequacy, Article 47 of this Directive requires the Commission to assess the
adequacy of the third country auditor oversight competent authorities that wish
to cooperate with the Member States' auditor public oversight authorities on
the exchange of audit working papers, in cooperation with the Member States.

The Commission
adopted a Decision on 5 February 2010 recognising the adequacy of the auditor
oversight system of the competent authorities of Canada, Japan and Switzerland [431] and another Decision on
1 September 2010 on the adequacy of the competent authorities of Australia and the United States of America[432]. These Decisions enable
the exchanges of audit working papers between the EU Member State's oversight
authorities and their counterparts in the above mentioned third countries.

In the area of
equivalence, the Commission also used the means under Article 46 of the
Directive 2006/43/EC to assess the equivalence of third country auditor
oversight, external quality assurance, investigations and penalties systems. A
draft Decision on the equivalence of certain third country public oversight systems
for auditors and a transitional period for audit activities of certain third
country auditors in the European Union[433] was
submitted to the AuRC for its consideration in 2010. The draft Decision
received a favourable vote from the AuRC at its meeting of 8 November 2010.
This draft recognises the equivalence of the audit oversight systems in ten
countries: Australia, Canada, China, Croatia, Japan, Singapore, South Africa, South Korea, Switzerland, and the United States of America. It also grants a transitional
period to auditors from twenty countries: Abu Dhabi, Bermuda, Brazil, the Cayman Islands, The Dubai International Financial Centre, Egypt, Guernsey, Hong Kong, India, Indonesia, the Isle of Man, Israel, Jersey, Malaysia, Mauritius, New Zealand, Russia, Taiwan, Thailand and Turkey. Following the adoption of this
Decision, auditors from these third countries will be able to continue their
audit activities in the European Union while further assessments are carried
out. After the exercise of the European Parliament's right of scrutiny which
ended on 11 December 2010, the formal adoption of the draft Decision by the
Commission and its publication in the Official Journal eventually took place in
January 2011.

(2)       Changes
underway in 2011

The Commission published a Green Paper on
audit policy on the 13th of October 2010 seeking views from
stakeholders and the broader public on a broad range of issues related to
statutory audit; the consultation closed on the 8th of December
2010, although responses continued to be filed after that date. In all, almost
700 responses were received. The objective of this Green Paper was to initiate
a debate on the role and governance of auditor; it covered issues encompassing
the concentration of the audit market and its potential implications on
financial stability, the need respond to the specific needs of small and medium
size practitioners, the audit of SMEs and international standards on auditing.
This debate would continue at a Conference organised in February 2011. The conclusions
of this debate may lead to a decision on the need to propose amendments to the
current acquis in the area of audit.

Furthermore, the European Commission,
following a competitive tendering procedure, awarded in 2010 a contract for
undertaking an external study on the effects of the implementation of the acquis
on statutory audit of annual and consolidated accounts including the
consequences on the audit market. The study will also provide up to date data
on the European audit market. The results of this study should be available in
autumn 2011.

Evaluation
based on current position

The
transposition deadline for the Directive 2006/43/EC was 29 June 2008. Amongst
the remaining six Member States which did not transpose the Directive in 2009,
all of them finally implemented the Directive in 2010.

The obligation
for Member States to establish independent competent authorities to ensure a
public oversight, external quality assurance, investigations and penalties of
statutory auditors and audit firms is now completed in twenty-six Member States
(most of these authorities became operational in 2009). As of end 2010, only
one Member State (Cyprus), had not established in practice an effective auditor
public oversight body, even if it has adopted the relevant legislation to set
up such an oversight body. On 6 April 2011, a reasoned opinion was sent to the
Cypriot authorities because of its failure to set up a public oversight system
for statutory auditors and audit firms under national law in accordance with the
Directive 2006/43. Following that, the Commission services received information
that an effective oversight body was established in Cyprus and the case was
thus closed.

(1)       Priorities

The main
priority concerns the reshaping of the audit policy at European level through
the Green Paper, and the aftermath of its public consultation on the acquis
in this domain.

Another
priority is ensuring that auditors' public oversight bodies pursuant to the
Directive are operational in the Member States and cooperate with each other
and work towards the reinforcement of the supervision of audit firms at
European level.

(2)       Planned
action (2011 and beyond)

The
transposition scoreboard will continue to be updated regularly and to be
published on the Commission website.

The expert
group "European Group of Auditors' Oversight Bodies" (EGAOB) will
also continue its work on facilitating co-operation between public oversight
bodies established by the Member States pursuant to Directive 2006/43/EC.

11.8. Accounting

Current position

(1) Report of work done in 2010

In the field of accounting, 9
Directives were in force in 2010. Two of them had not yet, in 2010, been
transposed in all Member States: Directive 2006/46/EC, which transposition
deadline expired on 5 September 2008 (the last transposition was completed in
January 2011), and Directive 2009/49/EC which transposition deadline expired on
1 January 2011. The Commission services control the application of the relevant
EU law by the means of infringement procedures and discussions in meetings with
the Member States.

The majority of infringement cases and the
petitions received stem from the non-communication/non-adoption of national
transposing measures. Five infringements procedures have been closed in 2010.
The Court had given a ruling on 2 cases. The Commission services have been
encouraging the Member States to complete a swift transposition. As regards
transposition of Directive 2009/49, which transposition deadline was 1 January
2011, 17 Member States notified complete transposition; they are under
examination by the services. For the 10 Member States which did not notify full
transposition, several reminders have been sent before and after the
transposition deadline to national authorities.

(2)       Changes underway

The Commission services are working on a
larger simplification and modernisation proposal to review the 4th
and 7th Company Law Directives which is expected to be adopted by
the Commission in 2011.

Evaluation based on the current position

At the beginning of 2010, the transposition
deficit in the accounting field was rather low (6 infringement procedures were
open) and were all closed in the course of the year, except for one which was
closed in January 2011. The delay in transposition was not due to political
difficulties but rather to administrative delays in the Member States'
legislative procedures.

(1)       Priorities

The main priority in the field of
accounting remains to ensure the timely transposition of adopted Directives.
Furthermore, as mentioned above, the Services are working on a general
comprehensive overhaul of the accounting acquis (4th and 7th
Company Law Directives).

(2)       Planned action (2011 and beyond)

In the case of the Directive whose
transposition deadline expired, the Commission Services are closely monitoring
the transposition status by pursuing infringement cases. In the case of future
Directives, the Commission services will continue to use complementary measures
such as possible transposition workshops, bilateral meetings and discussions
within the Accounting Regulatory Committee.

As regards the planned overhaul of the 4th
and 7th Company Law Directives, the Commission services are pursuing
a public consultation, meetings with stakeholders, targeted questionnaires, an
external study aimed at evaluation of the cost burden reduction potential of
certain proposed simplification measures, in order to be able to present the
amending proposal accompanied by a corresponding Impact Assessment.

11.9.
 Protection
of rights

Current
position

Patents

On 30 June
2010, the European Commission proposed a Council Regulation on the translation
arrangements for the EU patent[434]. The Commission's
proposal was the subject of extensive discussions in the Council. Subsequently,
the Presidency proposed a compromise based on the Commission's proposal with
some extra elements addressing the concerns of several Member States. Despite
strong support of a large majority of Member States for the Presidency
compromise, it was not possible
to achieve unanimous agreement among the 27 EU Member States.

Following the failure of the Council to
agree on translation arrangements for the EU patent on the basis of the
compromise by the Presidency, twelve Member States sent a request to the
Commission to propose enhanced cooperation in the area of the creation of
unitary patent protection. Furthermore, a number of other Member States were
also favourable to enhanced cooperation and signalled their wish to
participate.

On 14 December, the Commission adopted a
proposal for a Council decision authorising enhanced cooperation in the area of
the creation of unitary patent protection indicating the scope and objectives
of enhanced cooperation.

In 2010, discussions
on creation of a unified patent litigation system have been suspended since the
European Court of Justice was still considering a request for an opinion
submitted by the Council[435] regarding the
compatibility with the EU Treaties of the draft Agreement to establish the
European and EU Patents Court.

Trademarks

The process of comprehensive evaluation of
the trade mark system in Europe continued throughout 2010. The major, but not
the only, element of the evaluation is a study on the overall functioning of
the European trade mark system, commissioned to the Max Planck Institute on 16
October 2009, which will serve as a basis for the revision of the Council
Regulation (EC) No 207/2009 on the Community trade mark and of the Directive
2008/95/EC approximating the laws of the Member States relating to trade marks.

The Council adopted on 25 May 2010
conclusions on the future revision of the Trade Mark system in the European
Union[436]. The Conclusions
identified the key points to which the Council would like to draw the
Commission's attention in designing the future revision. The Conclusions called
on the Commission to present proposals for the revision of the Community Trade
Mark Regulation and the Trade Mark Directive.

In the area of
the enforcement of intellectual property rights, the monitoring of the
transposition of Directive 2004/48/EC was done. The Directive had to be
implemented by Member States by 29 April 2006. All Member States have notified
their national implementing measures. According to Article 18 of the Directive,
Member States were requested to submit a national report on the implementation
and impact of the Directive. Based of these reports, the Commission adopted in
December 2010 a Communication on the Application of the Directive. This Report
was complemented with a Staff Working Document.

The Commission
continued the work of the European Observatory for Counterfeiting and Piracy.
Subsequently, the Commission organised in February 2010, the second meeting of
private stakeholders and in June the first Joint Plenary meeting with public
and private sectors. In addition, the Commission in June organised, jointly
with the European Parliament, the award ceremony for the competition addressed
to schools. Finally, the Legal sub-group of the Observatory has produced three
different reports regarding the legal framework and in particular comparative
analysis and recommendations on the implementation of the Directive
2004/48/EC.

The Commission
continued also the work of the stakeholders' dialogue on the sale of
counterfeit goods over the internet and on the similar dialogue for the illegal
down loading and illegal up loading. The objective of these dialogues is to
foster voluntary inter-industry agreements between the relevant stakeholders;
such agreements, given the quick development in the digital economy, often
provide for quicker and more flexible solutions than legislation.

A study on a
possibility to establish an electronic exchange system on counterfeit goods has
been concluded in November.

Evaluation
based on current position

In the context
of a highly political area and due to the complex nature of the Directive
2004/48/EC, the main problem encountered by the Commission was the late
transposition by some Member States. This has impacted directly the sending of
national reports on the implementation of the Directive. The monitoring was
done through a constant dialogue with the Member States not having sent its
report. The latest reports have been submitted only in October. Subsequently,
the Commission has not been able, in its report, to engage in a critical
economic analysis of the effects that this Directive may have had on innovation
and the development of the information society.

As far as the
follow up of the European Counterfeiting and Piracy Observatory is concerned,
in addition to the three working groups that have been set up and which meet on
regular basis (one working group on statistics, one on legal framework and one
on public awareness), a reflection has been launched on a possible future
sustainable structure of the Observatory.

As far as the stakeholders' dialogues are
concerned, several meetings have taken place. A drafting of a Memorandum of
Understanding between participants has been almost completed for the
stakeholders' dialogue on the sale of counterfeit goods over the internet.

Concerning trademarks, the Community Trade
Mark Regulation and the Trade Mark Directive have stood well the test of
delivering an efficient and effective trade mark registration system. However,
given the considerable time passed since their adoption, a revision process has
been launched, in order to consider any necessary updates.

As regards Patents, failure to reach an
agreement on the translation issue and thus to break an impasse over a single
EU patent prompt some Member States to resort to enhanced cooperation under
which at least nine EU countries can go ahead while others may join at any time
at a later stage.

(1)       Priorities

The priorities
identified in the 2009 Annual Report were the same also for the year 2010. The
monitoring of the Directive 2004/48/EC and the planning for the enhancement of
administrative cooperation were duly performed. Priorities in 2010 included
also the comprehensive evaluation of the European trade
mark system the creation of a single EU patent and the establishment of a
unified patent litigation system in the EU.

(2)       Planned
action (2011 and beyond)

On December
2010, the Commission adopted a report on the conformity of the national
measures with the provisions of the Directive 2004/48/EC. This report will be
followed-up by a public consultation and a deep impact assessment. If a modification
of Directive appears necessary a proposal may be submitted by the end of 2011
or beginning 2012. Meetings with the Council on the Commission Communication
will be organised during the year.

Following the
creation of the European Counterfeiting and Piracy Observatory, a tender on the
methodology for the collection of statistics is expected to be delivered in the
course of next year. A proposal regarding its future structure and, in
particular, its transfer to the Office for Harmonisation in the Internal Market
(OHIM) is expected this year.

As far the
stakeholders' dialogue the Commission will keep working with the stakeholders
on a possible adoption of the Memorandum of Understanding.

In addition the Commission will follow-up
the study on how to set up an information system for the rapid exchange of
information on counterfeit goods.

Concerning Trademarks, in March 2011, the
final report of the study on the overall functioning of the trade mark system was
submitted to the Commission.

The Commission will come up with proposals
for revision of the Community Trade Mark Regulation (EC) 207/2009 and the Trade
Mark Directive 2008/95/EC in the 1st quarter of 2012. The objective
is to modernise the trade mark system both at EU and national levels by making
it more effective, efficient and consistent as a whole, including enhancing the
complementarity between the EU and national systems by facilitating cooperation
between the OHIM and national trade mark offices.

As far as Patents are concerned, the creation
of unitary patent protection is foreseen under the mechanism of enhanced
cooperation. In March 2011, the Council authorised the launch of the enhanced
cooperation among 25 Member States (Italy and Spain do not take part).
Discussions in the Council and the European Parliament will continue throughout
2011 on the proposals for regulations implementing enhanced cooperation in the
area of unitary patent protection. Their adoption is envisaged in 2012.

As regards the
unified patents court, discussions were re-launched in the Council as the Court
of Justice delivered its opinion on the compatibility of the draft agreement
creating the unified patent court with the EU Treaties in March 2011.
Discussions on the way forward will continue throughout 2011. It is envisaged
that the draft agreement will be signed by the Member States in a diplomatic
conference convened in 2012.

12.
REGIONAL POLICY
12.1.
Current situation
12.1.1.
General introduction

According to Article 174 TFEU, European
regional policy aims to reduce disparities between the levels of development of
the various regions and the backwardness of the least favoured regions by
actions supported by the Structural Funds[437] (the
European Regional Development Fund[438], ERDF, and the European
Social Fund[439], ESF) and the Cohesion
Fund[440] (CF). ERDF and CF are
under the responsibility of the Directorate General for Regional Policy, while
ESF is under the responsibility of the Directorate General for Employment,
Social Affairs and Equal Opportunities. These Funds are managed by the Commission
and the Member States under shared management arrangements, as are similar
programmes under the European Agricultural Fund for Rural Development[441]
and the fisheries sector[442]. In addition,
Directorate General for Regional Policy is responsible for programmes under the
Instrument for Pre-Accession Assistance (IPA)[443].
Rules covering the programming period 2007-2013 were adopted in 2006. All 317
operational programmes financed by the ERDF and CF were negotiated in
partnership and adopted by the Commission in 2007 or early 2008[444].
The new programmes of the Member States overlap with those of the period
2000-2006, for which the final eligibility date for expenditure was the end of
2008 or 30 June 2009. Closure is now under way for the 2000-2006 programmes and
projects.

In accordance with EU law[445],
assistance under the Funds is provided according to an approach of complementarity
and partnership between the Commission and the Member States, with due regard to
their respective powers. In this context, implementation on the ground is the
responsibility of the Member States, meaning in particular that the Commission is
normally not responsible for the selection of individual projects (exceptions
being the approval of CF projects for the 2000-2006 period and of major projects
within ERDF programmes), as this comes under the competence of the national
authorities.

To be eligible for co-financing from the EU
budget, projects must be selected and implemented in accordance with the
principles laid down in the programming documents adopted by the Commission,
and must comply with the specific legislation governing Cohesion Policy
expenditure and generally applicable law (public procurement, state aid, the
environment, etc.) and also with relevant national rules. The management and
control system put in place by the Member States seeks to ensure the regularity
of all expenditure and the Commission supervises its effective functioning.
When the rules are found to have been breached, making expenditure ineligible,
the irregular expenditure has to be excluded by means of "financial
corrections". If the Member States fail to correct irregular expenditure
or to remedy deficiencies in the management and control system, the Commission
itself may impose financial corrections or require improvements in the control
system. In the event of serious deficiencies, the Commission can interrupt or
suspend its interim payments to a programme until the weaknesses are corrected.

Most complaints tend to arise when an
economic operator or member of the public considers that individual projects do
not (fully) respect relevant EU and/or national rules and prefers to address
the complaint to the Commission rather than to his/her national authorities.
Such complaints can only be resolved with considerable support from the
national authorities. Last year, the number of complaints dealt with by the
Directorate General for Regional Policy increased significantly (from 141 to
227). Nevertheless, they do not normally lead to infringement procedures, but
are resolved by application of the normal control and financial correction
provisions specific to Cohesion Policy.

12.1.2.
Report of work done in 2010
12.1.2.1. New legislation

Simplification of existing legislation is
in itself an additional means to promote a reduction in errors and
irregularities while reducing administrative burdens.

After a first wave of simplification in
2009, new regulations were adopted in 2010[446] with a set
of measures amending two Council Regulations and proposing further
simplification of the rules governing the financial management of the
Structural Funds, in the context of efforts to provide more support in face of
the international financial crisis and to improve the effectiveness of the
delivery system of cohesion policy.

A regulation was also adopted allowing the
extension of financial support from the ERDF for housing interventions for
extremely poor and marginalised communities, including many Roma communities[447].
The aim is to promote the inclusion of Roma and other marginalised people by
providing them with acceptable housing conditions.

12.1.2.2. Preventive measures taken (Comitology and cooperation with Member
States)

In 2010, eight documents providing
technical guidance in order to facilitate the implementation of operational
programmes and to encourage good practice(s) were prepared by the Commission
and then presented, discussed and finalised during the nine meetings of the
Committee for the Coordination of the Funds (COCOF)[448].

12.1.2.3. Main actions being taken to control the correct application

Financial corrections

Financial corrections by the Member States
themselves[449] and by the Commission[450]
are applied where expenditure for a project is irregular or where there are
serious deficiencies in the management and control system of the operational
programme (under the Member States' responsibility) which has put at risk the
Union contribution paid to the programme. In 2010, total financial corrections
carried out by the Member States (accepted at Commission request) and by the
Commission (through a formal Commission decision), following Commission audit
work (ERDF and CF; periods 1994-1999 and 2000-2006) amounted to approximately
EUR 755 million. This amount is in addition to the EUR 288 million corrected in
2007, the EUR 1 billion corrected in 2008 and the 2 billion corrected in 2009,
reaching thus a total of EUR 4, 1 billion in the years 2007-2010. The
corrections reflect the completion of the follow-up of previous audit work and
an acceleration of financial correction procedures under the "Action plan
to strengthen the Commission's supervisory role under shared management of
structural actions"[451] (hereinafter referred
to as "Action Plan").

Compliance assessment

In order to improve the management and
control of the 317 programmes for the 2007-2013 period, the Member State authorities
have to undertake at the beginning of the period an assessment of the
description of the national management and control system per programme
accompanied, by an independent report giving an opinion on their compliance
with the regulatory requirements to be submitted before the first interim
payment can be made. This compliance assessment is a new element[452]
seeking to ensure that the set up of management and control systems are in
conformity with applicable rules. By the end of 2010, all compliance assessment
reports (except one) regarding national systems had been received by the
Commission, of which 313 (more than 98% of those received) were judged
acceptable as of 31 December 2010.

Audits

In 2010, the Commission carried out 13
on-the-spot audit missions for the 2000-2006 period and 94 for the 2007-2013
period concerning ERDF and Cohesion Fund in 21 Member States (and some
cross-border programmes). They focussed on the remaining risks in management
and control systems, the review of bodies responsible for the closure of the
2000-2006 programmes, audits of operations on a representative sample of
projects for the 2007-2013 period and review of the work of the audit
authorities for the 2007-2013 period. There were also 4 IPA/ISPA audit missions
in Croatia, Macedonia and Turkey. Deficiencies uncovered typically concerned
organisational problems in the systems themselves or breaches in public
procurement or eligibility rules. The outcome of these audits may take the form
of action plans to improve performance, and possibly also suspension and
interruptions of payments or the launch of financial corrections procedures,
where necessary.

12.1.2.4. Management of the acquis through committees and expert groups

Beyond the development of guidelines
presented to the COCOF committee, no other committees or expert group meetings
linked to the legality of the expenditure of the Funds have been organised.

12.1.2.5. Enquiries, problems and complaints management

135 complaints have been registered. The complaints
concerning Regional Policy did not lead to an infringement procedure in 2010.

A first category of complaints concerns the
selection process of individual projects under the different programmes. The
principal motivation for complaints was the rejection of the complainant's application
for financial support. As indicated above, under shared management, such
complaints are examined by the competent national administrative or judicial
authorities. A second category of complaints concerns alleged non-compliance of
individual projects with EU law, mostly relating to environmental law or public
procurement law. A third category of complaints concerns the alleged defects in
selected projects (examples include allegations that a particular
infrastructure project is not in the right place (e.g. roads), does not work
properly (water sewage treatment plants) or constitutes poor value for the
European tax-payer's money. In such cases, there is generally no specific
allegation of a breach of EU law.

As indicated in previous reports,
concerning the new Council Regulation on a European Grouping of Territorial
Cooperation (EGTC)[453], which entered into
force on 1 August 2006, Member States have been required to adopt national
rules to ensure the effective application of the Regulation and to inform the
Commission of these rules. By the end of 2010, only two Member States had not
completely adopted national rules due to their particular constitutional
set-up. These results were achieved through political dialogue and cooperation
with the national authorities without recourse to infringement procedures.

12.1.2.6. Petitions

Directorate-General for Regional Policy has
treated as a lead service 11 petitions involving projects possibly co-financed
by the Funds and has been associated or consulted on 20 petitions, mostly led
by Directorate-General for Environment. In general, petitions concern the
misuse of EU funding, deterioration of environment linked to the construction
of infrastructure projects, or other alleged infringements of Union law.

12.2.
Evaluation based on the current situation
12.2.1.
Assessment of the current situation
(satisfactory or problematic nature of the current situation)

In January 2005, the Commission made it a
strategic objective to strive for a positive statement of assurance (DAS) from
the European Court of Auditors. To make progress towards this goal, it
introduced an Action Plan towards an Integrated Internal Control Framework[454].
In 2008, the Commission adopted a specific Action Plan[455]
to strengthen its supervisory role in the structural actions area, in order to
address the European Parliament's concerns arising from the weaknesses
identified by the Court of Auditors in its 2006 Annual Report. The structural
actions Action Plan addressed both the causes and effects of the high rate of
error found by the European Court of Auditors in structural actions
expenditure. The Commission's focus has been on increasing the effectiveness of
the controls undertaken by the Member States and of its own supervisory
activity, in order to ensure that by the time the 2000-2006 programmes and
projects are closed, most of the irregular expenditure is corrected and the
residual risk of error is as low as possible. For the 2007-2013 period, the Commission's
preventive actions aim to ensure that the Member States' management and control
systems function effectively from the beginning of the programme implementation
and that deficiencies are detected as early as possible.

12.2.2.
Importance of the impact of the identified
problems on the objectives of the acquis

Achieving the aims of cohesion policy in
reducing geographical disparities of the programmes depends on effective
implementation and requires that projects are selected and implemented
correctly. The planned actions set out below contribute to this overall
priority.

12.2.3.
Underlying reasons for problematic areas

Under shared management (see following
section), according to Article 317 of the Treaty, "the Commission shall
implement the budget in cooperation with the Member States, in accordance with
the provisions of the regulations made pursuant to Article 322, on its own
responsibility (…), having regard to the principles of sound financial
management. Member States shall cooperate with the Commission to ensure that
the appropriations are used in accordance with the principles of sound financial
management". Consequently, any item of expenditure co-funded from the
Funds shall comply with the provisions of the Treaty and of acts adopted under
it[456]. Compliance with the acquis
on matters as diverse as single market rules (EU Directives on public procurement),
competition (state aid rules), environment, research, transport or energy poses
a complex task for Member States when implementing operations on the ground
together with a huge number of public or private final beneficiaries spending
the contribution from the Funds.

12.2.4.
Responsibility for the problems and their
correction

Under shared management, the Commission is
responsible for the execution of the Union budget, but the Member States are
responsible for the implementation of the individual projects. Errors and
irregularities (which in practice contain very few cases of fraudulent
behaviour) concerning the projects are matters outside the direct control of
the Commission. Member States are responsible in the first instance to correct
these errors (mainly by financial corrections on project level). The Commission
seeks to ensure, through its supervisory role that the management and control
systems set up by the Member States are effective and, in cases where the
systems are dysfunctional or where the corrections undertaken by Member States
are not sufficient, applies financial corrections on programme
or - in the case of CF for the 2000-2006 period – on
project level.

12.2.5.
Corrective action required (priority character,
timing and scale)

From the different actions carried out in
2010, it is evident that the respect of the regional policy acquis
requires actions of a different nature: corrective (financial corrections,
action plans, and infringement and complaints procedures), preventive
(simplification of the acquis, compliance assessment, audits and
controls, guidance notes, seminars) and informal/political (comitology, direct
dialogue).

The implementation of the Action Plan and
the Joint Audit Strategy of the Directorates-General in charge of Cohesion
Policy, which focus on measures to strengthen the supervision of the correct
implementation of the programmes and projects, further simplification and the
finalizing of the compliance assessment, have been key elements to reduce as
far as possible errors linked to the closure of the 2000-2006 programmes and to
avoid errors under the new programming exercise.

12.3.
Evaluation results
12.3.1.
Priorities

As indicated in its "Annual Management
Plan 2011" (21 December 2010) one of the specific objectives identified[457]
is to seek reasonable assurance that the management and control systems in the
Member States and beneficiary countries comply with the requirements of the EU
regulations and are functioning effectively, so as to prevent and detect errors
and irregularities and assure the legality and regularity of the expenditure
declared to the Commission. To this end, the Directorate
General for Regional Policy will seek to ensure through its supervisory role that
Member States and regions have established the appropriate structures for management
and control and will advise on measures to tackle weaknesses in administrative
capacity for delivery, as well as provide appropriate support for setting up a sufficient
stock of projects.

12.3.2.
Planned action (2011 and beyond)
12.3.2.1. New legislation in preparation

The informal preparation of the new
legislation concerning the 2014 to 2020 programming period has been intensified
in 2010, but formal proposals will be sent to the legislator in 2011, including
on the EGTC instrument.

12.3.2.2. Preventive measures taken (Comitology and cooperation with Member
States)

In order to help the national and regional
authorities with implementation, many  guidance notes were presented in the
years 2007 to 2010. Two are planned to be presented to the Committee for the
Coordination of the Funds (COCOF) in 2011. Due to the amendments to the
legislation adopted in 2009 and 2010, some guidance notes will have to be
revised accordingly.

12.3.2.3. Main actions being taken to control the correct application

Interruptions of payments

As a preventive
measure, in addition and as a possible first step to the suspension of payments
decided by the Commission, Authorizing Officers by Delegation are empowered by
Article 91 of Regulation (EC) No 1083/2006) to interrupt payment deadlines of
Structural funds and Cohesion fund applications for payments of the 2007/13
programming period if (a) in a report of a national or
Community audit body there is evidence to suggest a significant deficiency in
the functioning of the management and control systems or (b) he has to carry
out additional verifications following information coming to his/her attention
alerting that expenditure in a certified statement of expenditure is linked to
a serious irregularity which has not been corrected. These interruptions are
valid for a maximum period of 6 months and lifted as soon as the remedy
measures have been undertaken by the national authorities. In 2010, 41
applications for interim payments have been interrupted (corresponding to a
total amount of EUR 2.155.582.086,26), most of which
having been lifted, to date.

Financial corrections

The current
estimate of potential financial corrections likely to result from the financial
correction procedures underway at the end of 2010 is approximately EUR 459
million (it was 600 million at the end 2009). Due to the audit work
executed (see below section 1.3.2.3.3), financial corrections through formal
Commission decisions are necessary only in cases that recommendations for
remedial actions for deficiencies identified in the systems or detected
irregularities have not been taken up by the Member States.

Compliance assessment

Concerning the 2007-2013 period, the
compliance assessment exercise has been almost completed.

Audits

In terms of audit and control activities, the
Directorate General for Regional Policy will maintain the momentum generated by
the Action Plan to strengthen the Commission's supervisory role under shared
management of structural actions and continue rigorous actions in 2011 under
its multi-annual audit strategy. Overall, it will continue to seek to make
progress towards a positive declaration of assurance (DAS) on expenditure under
Cohesion policy through preventive and corrective measures focused on the
closure of the programmes for 2000-2006, and the start up and functioning of
the programmes for the 2007-2013 period. Concerning the 2000-2006 period, the
completion of financial corrections, the completion of the follow-up of the
review of bodies responsible for the closure of the 2000-2006 programmes and
the review of closure declarations has been the main priority in 2010.
Concerning the 2007-2013 period, audits will continue to be focused on the work
of the audit authorities to obtain assurance on the reliability of their work
and on the functioning of the management and control systems in the Member
States.

13.
TAXATION and CUSTOMS UNION
13.1.
Situation in the sector of CUSTOMS
13.1.1.
Current position
13.1.1.1. General introduction

In continuation with previous years, the strategy
was to put the emphasis on the prevention of the infringements, fully in line
with the Communication[458] on a strategic review
of better regulation in the European Union, and moreover with the Communication[459]
on a better monitoring of the application of EU law, the attention is devoted
to a better and simplified legal environment. Due to its responsibilities in
the area of the EU legislation, the Commission continued
its efforts aiming at enhancing the correct and uniform application of
the customs EU legislation.

Member States are
fully committed to apply correctly EU customs rules, helped in this crucial
task by a close cooperation with the Commission. The key
element of this process is the priority given to preventive
approach aimed at involving all parties concerned. To enable a comprehensible
approach, the multi-annual programme of monitoring the compliance of Customs
legislation in different Member States has been satisfactorily continued and
developed. This pro-active strategy follows a planning process, targeting a
selection of legislative sectors presenting, according to the risk criteria,
actual or potential risk of incorrect or non uniform application, thus damaging
main interests of Trade and of financial importance.

13.1.1.2. Existing measures in force: see Annex IReport
of work done in 2010

In 2010 22 judgments related to customs
were delivered, while 23 judgments were delivered in 2009.

Most of the Court's judgments in this area
concerned references for preliminary rulings.

The most relevant judgment in 2010 was
C-386/08 Brita GmbH v Hauptzollamt Hamburg-Hafen: Brita, a German company
wished to import into Germany goods supplied by Soda-Club, a company based in
the West Bank to the east of Jerusalem. This company sought preferential
treatment for these products under the EC/MS-Israel Association Agreement while
Germany suspected the products to have been produced in the occupied
territories.

The judgment ruled that the assertion made
by the Israeli authorities that products manufactured in the occupied
territories qualify for the preferential treatment granted for Israeli
goods is not binding upon the customs authorities of the territorial
application of the Association agreement with Israel and the territory of the
State of Israel, must be interpreted as meaning
that products originating in the West Bank do not fall within the territorial
scope of that agreement and therefore do not qualify for preferential treatment
under the Association agreement with Israel. Goods which originate in the West Bank cannot benefit from preferential treatment unless origin certificates have been
produced by Palestinian competent authorities.

Regarding
parliamentary questions, nine have been treated, while one petition has been
registered.

As regards customs, the Commission opened no
own investigations regarding presumed infringements, and three files on the basis of complaints.

Besides, twenty three requests that
constitute potential infringements have been received.

No reasoned opinion (under Article 258
TFEU) has been sent. Thus, the total number of infringement cases (three) is lower
than in 2009 (four) and is also the same for reasoned opinions (0 in 2009).

During 2010, two infringement cases were closed
after the Member States concerned modified their legislation to comply with EU
Law.

Most of enquiries and complaints in this
area relate to the application of Customs legislation in general. No
prioritisation was necessary to deal with the cases as regards clear and
serious infringements of EU legislation.

13.1.2.
Evaluation based on the current situation

In the customs field, EU legislation is
mainly adopted in the form of Regulations. The correct and uniform application
of EU customs law is consequently a clear obligation for the Member States.

The policy on infringements should be
envisaged in a larger framework. The control of the correct application of EU
legislation should be seen as one of the instruments of a wider policy of the
harmonisation of Member States legislation and the implementation of EU
legislation (committees, working groups, soft law, comitology, proposing a
modifying act).

This is clear in the area of customs, where
the main EU legislative instrument is the regulation and where a correct
application of EU law and a common application of EU rules are dependent on
both clear and accurate legislation and strong cooperation between the Member
States. The practical application of EU legislation to individual cases is
particularly important, which accounts for the high volume of requests made by
national courts to the ECJ for preliminary rulings that become a major
guarantee of the uniform application of the EU law.

There has been no significant increase in
the number of infringements over recent years. The overall situation in the
area of customs remains stable and this tendency is expected to continue.

Another way of improving the correct
application of customs legislation is through increased use of informatics.
Thus, in recent years, Customs authorities have developed and introduced the
extensive application of electronic instruments, through the package called
'E-Customs'. The introduction of this computerisation involves both a
harmonisation and standardisation of data and procedures that should contribute
to improved application.

13.1.3.
Evaluation results
13.1.3.1. Priorities

As far as Customs are concerned, the
situation has not clearly changed regarding infringements but the number of
references to the Court has increased. Consequently, priorities set for 2010
remain unchanged for 2011. Considering that, on the one hand, the global volume
of infringements and complaints remains stable, and on the other hand, this
trend is likely to be stable in 2011, no specific action regarding
prioritization should be envisaged.

13.1.3.2. Planned action (2011 and beyond)

Taking into
consideration the evaluation of the current situation, a specific planning is
not required. Nonetheless, it should be noticed that a decrease of volume does
not necessarily mean that the situation is fully satisfactory and that
legislation is evenly and correctly applied. As in previous years, economic
operators or citizens might face problems when they have to comply with
measures in the short term, but they do not always report to Commission
services. This is why a pro-active and horizontal approach has been preferred to
continuing to target individual, isolated infringements approach.

In line with COM(2006) 689, attention has been put on helping Member States to ensure  correct and uniform application of EU customs legislation. The strategy is built on close cooperation with Member States oriented towards new tools enabling improved monitoring of the application of EU Customs law. Consequently multi-annual programme of monitoring the compliance of Customs legislation in the whole EU territory has been introduced and developed since 2008.

13.1.4.
Sector summary

During the year
2010 in the area of CUSTOMS, the volume of enquiries, complaints and
references for preliminary rulings has been stable compared to the other years.
Taking in consideration the likeliness of this tendency to continue, there is
no need for any specific urgent action to be launched.

Like
previously, the strategic emphasis targeted the prevention of the infringements
in order to act ex ante instead of increasing the intervention at the
downstream level, through the infringements process.

Existing measures in force: see Annex I

13.2.
Situation in the sector of INDIRECT TAXATION
13.2.1.
Current position
13.2.1.1. General introduction

Establishing an Internal Market supposes
the application of legislation on indirect taxation that neither distorts
competition nor free movement of goods and services.

Therefore it is necessary to achieve
harmonisation of legislation in line with the changes in the economy by means
of proposals for new directives although achieving that objective is often
compromised by the rule of unanimity.

For this reason a coordinated infringement
policy is necessary to ensure the proper functioning of the free market and to
avoid distortions where there is no harmonisation.

13.2.1.2. Existing measures in force (situation on 31/12/2010): see Annex IReport of the work done in 2010

a) New legislation in preparation or
already proposed and in the course of being adopted, impact assessments and
implementation plans being developed in connection with new proposals, etc.

Value added tax (VAT)

Measures for a consistent response to
carousel fraud in certain sectors

In order to allow Member States to take
rapid action against carousel fraud, the Commission adopted on 29 September
2009 a proposal for a Directive allowing the application of a reverse charge
mechanism on the supply of five categories of particularly fraud sensitive
goods and services, namely: computer chips, mobile phones, precious metals,
perfumes and greenhouse gas emission allowances.

The possibility for all Member States to
opt for the application of reverse charging under the same conditions to a
limited list of goods and services provides Member States with the necessary
tool to tackle worrying fraud phenomena in a flexible manner while ensuring
consistency in the response Member States give to carousel fraud and avoid
fraud relocation. The aim was also to provide valuable experience for
evaluating the efficiency of such a measure.

On 16 March 2010 the Council adopted the
part of this proposal relating to greenhouse gas emission allowances (Council
Directive 2010/23/EU).

The remaining part of the proposal is still
on the table of the Council.

Invoicing

On 13 July 2010, the Council adopted a directive
related to invoicing rules (Council Directive 2010/45/EU). The aim of the directive
is to simplify VAT invoicing requirements, and in particular to facilitate the
use of electronic invoicing by removing unnecessary conditions and, thereby, to
create the conditions for equal treatment with paper invoicing. The directive
also simplifies, modernises and harmonises other VAT invoicing rules. This
measure will reduce burdens on business, support small and medium sized
enterprises (SMEs) and help Member States to tackle fraud. While the Commission's
initial proposal would also have led to a set of simplified rules on invoicing,
the Council could not reach agreement on the removal of the many options
available under the current rules.

The directive is a key element of the EU
commitment to reduce burdens on business by 25% by 2012.

Improvement of the functioning of the
cross-border refund directive

The new VAT
Refund Directive (Council Directive 2008/9/EC) replaced on 1 January 2010 a
previous Directive from 1979 providing for a paper procedure by which taxpayers
established within the EU had to send original invoices to all Member States in
which they incurred VAT in order to receive a refund. The new Directive
introduces an electronic system by which the taxable person submits his
application to the Member State of refund via a web portal developed by the Member State in which he is established. Member States were obliged to make this web portal
available on 1 January 2010. The deadline for submission of the refund
application in the Member State of establishment was set for 30 September of
the calendar year following the refund period.

However, some
Member States were late in launching their web portals (mid-May for the last
one), whilst others have had a number of technical problems, both leading to a
situation in which taxable persons have not been able to submit their refund
applications. Additionally, divergences in the technical details relating to Member State web portals led to several difficulties.

Therefore the
Commission made a proposal to prolong the deadline applicable to 2009 requests
until 31 March 2011 as well as granting the Commission the necessary comitology
powers to adopt the technical measures that are necessary for such a pan-European
refund scheme to function properly[460].

The Council adopted
on 14 October 2010 the first part of the proposal relating to the extension of
the deadline (Council Directive 2010/66/EU). The second part relating to the
use of comitology to adopt technical implementing measures is however still
before the Council.

VAT on postal services

The ECOFIN Council of 7 December 2010
discussed the way forward on the 2003 Commission proposal on VAT on postal
services and acknowledged that it will not be possible, at this
stage, to make progress.

In the absence of progress at this stage, the
status quo, based on the current provisions of the VAT Directive and the case
law from the Court of Justice will remain.

VAT standard rate

Following the Commission's proposal (COM(2010)
331) of 24 June 2010, the Council adopted on 7 December 2010 Directive
2010/88/EU maintaining the current minimum standard rate of VAT at 15% until 31
December 2015.

Future of VAT

On 1 December 2010, the Commission adopted
a Green Paper on the future of VAT (COM(2010) 695) - "Towards a simpler,
more robust and efficient VAT system", by which it launched a wide public
consultation on how the EU VAT system can be strengthened and improved, to the
benefit of citizens, businesses and Member States.

In the same month a Communication on
"Removing cross-border tax obstacles for EU citizens"[461]
was also adopted. The Communication outlines the most serious tax problems that
EU citizens face in cross-border situations (e.g. double taxation, difficulties
in claiming tax refunds or obtaining information on foreign tax rules) and
announces plans for solutions in some areas such as e-Commerce.

Recast – Council Regulation (EU) N°
904/2010

In the context of the fight against VAT
fraud, the Commission worked on its proposal for a Council Regulation on
administrative cooperation and combating fraud in the field of Value Added Tax
(Recast) (COM (2009) 427 final), a proposal that was adopted by the Commission 18
August 2009. The aim of this proposal is to give Member States the means to
combat cross-border VAT fraud more effectively and to provide for a legal basis
for Eurofisc. The Council reached a political agreement on 8 June 2010. The
proposal was formally adopted by the Council on 7 October 2010 (Council
Regulation (EU) N° 904/2010). It was published in the Official Journal of EU on
10 October 2010 and the major part will enter into force on 1/1/2012.

Mutual recovery assistance

The Council adopted Directive 2010/24/EU
concerning mutual recovery assistance on 16 March 2010 (OJ L 84 of 31.3.2010).
This directive is based on Commission proposal COM(2009)28 of 2 February 2009. Member States have to transpose this Directive by 31 December 2011.

Outermost regions

The Commission adopted on 14 December a Report
on the functioning of Council Decision 2004/162/EC of
10 February 2004 concerning the dock dues tax arrangements in the
French overseas departments and a proposal for a Council decision amending
Decision 2004/162/EC as regards the products that may benefit from exemption
from or a reduction in dock dues. The proposal should be adopted during spring
2011 after the Parliament has given its opinion.

Excise duties

In the area of excise duties, Council
Directive 2010/12/EU of 16 February 2010 amending Directives 92/79/EEC,
92/80/EEC and 95/59/EC on the structure and rates of excise duty applied on
manufactured tobacco and Directive 2008/118/EC, was adopted. This new Directive
has a two fold objective: 1) to achieve greater convergence between the tax
levels and closer approximation of the retail prices of manufactured tobacco
products applied in the Member States and by this means improve the functioning
of the Internal Market; and 2) to ensure a higher level of health protection by
increasing the level of taxation, and consequently the level of price of
tobacco products, which in turn influences consumers to reduce tobacco
consumption.

b) Preventive measures being taken in
relation to recently adopted new legislation – conformity assessment of
national transposition, transposition package meetings, development of
guidelines, initiation of networking systems to manage the new legislation,
etc.

Implementation of the "VAT
Package"

From 1 January 2010, the new "VAT
Package", i.e. Directives 2008/8/EC of 12 February 2008 amending Directive
2006/112/EC as regards the place of supply of services and 2008/9/EC of the
same date laying down detailed rules for the refund of value added tax to
taxable persons not established in the Member State of refund but established
in another Member State, entered into force across the EU. Those directives
included new provisions which resulted in the payment of VAT for most business-to-business
services in the country of the customer rather than in the country where the
supplier is located, while for business-to-consumer services, VAT continued to
be paid in the Member State in which the supplier is established. On the same
date, a new electronic procedure was put in place in order to allow taxable
persons to claim back the VAT they paid in another Member State.

Implementing regulation

In preparation for the entry into force of
the new rules on supply of services and in order to further assure, at the EU
level, the smooth and coordinated transition to the new system, the Commission
adopted on 17 December 2009 a proposal on implementing measures for the VAT
Directive 2006/112/EC (COM(2009) 672 final). The proposal included a number of
measures related to the VAT Package, in particular with a view to prevent
situations of double taxation that could arise as a result of diverging
interpretations of the new rules. For example, there are guidelines for
suppliers on establishing the location and tax status of the customer, as this
will determine the rate of VAT that must be paid. Other guidelines focus on the
provisions within the VAT Package which complement or provide exceptions to
these general new rules. This proposal was based on work undertaken by the VAT
Committee in 2009.

The proposal has been extensively discussed
in 2010 by the Council (11 meetings were organised). The preparation of, and
subsequent discussions on, this proposal allowed for further clarification of
numerous concepts and rules adopted in Directive 2008/8/EC so that Member
States could, if they so wished, take them into account in their national
implementing measures. Political agreement was reached on 18 January 2011,
allowing for the adoption of the Implementing Regulation early 2011.

Refund directive

As regards the
new VAT Refund Directive, the Commission held a large number of meetings with
stakeholders and businesses in view of monitoring the concrete implementation
of the new scheme. In addition to the technical problems reported, it appeared
that several Member States do not always apply correctly the provisions of the
directive.

Specifically,
these cases relate to restrictions on the right of access of the web portal, in
particular to agents who are not established in the same Member State as the
applicant; the late opening of web portals (or more recently to major
disruptions in the functioning of national systems); the absence of any
confirmation by the Member State of establishment that a request has been
submitted; the limitation of the number of invoices which can be claimed in one
application; and the identification of VAT groups with multiple VAT numbers.

Preventive
measures have been taken through discussions in the relevant committee (SCAC).

Studies in the field of VAT

In 2010 the Commission launched several expert
studies aimed at an assessment of various fields of the current EU VAT system
and proposals for further developments on:

–
the impact of different medium-term options
relating to import VAT collection under centralised customs clearance;

–
the impact of the current VAT rules applied to
the public sector and to activities in the public interest, whose aim is to
identify options for legislative actions and assess their respective impact;

–
the feasibility of alternative methods for
improving and simplifying the collection of VAT through means of modern
technologies and/or financial intermediaries;

–
supplies on board means of transport with an aim
to identify eventual options for new legislative actions.

Implementation of Regulation 904/2010

The new provisions incorporated in recently
adopted Regulation 904/2020 enter into force in 2012. Several practical details
need to be further developed and approved by the Standing Committee on
Administrative Cooperation (SCAC).For this purpose several project groups will
be set up early 2011 under the Fiscalis program. The outcome of these project
groups and the decisions taken by SCAC will then need to be reflected in a
Commission implementing Regulation amending and completing Regulation
1925/2004, that is planned to be adopted by the end of 2011.

The specific provisions providing a legal
base for Eurofisc entered into force already shortly after the publication of
the 2010 Regulation in the Official Journal of EU. A first meeting of the
Eurofisc Group has already been held, where the rules of procedure were
adopted, the working fields were identified, the chairperson chosen and shortly
after also the working field coordinators were elected. In the beginning of
2011 each working field will start its activities.

Automated access by competent authorities
to certain types of information will enter into force only by 1/1/2013 but, as
this will require changes to the Member State IT systems, preparatory works
will also start early in 2011.

c) Main actions being taken to control
the correct application of the law – conformity assessments, reports on the
application of legislation, studies, etc

Value added tax (VAT)

The Commission has checked the correct
implementation by Member States of the Council Directive 2009/69/EC of 25 June
2009 regarding tax evasion linked to imports. This process has not yet been
completed as not all Member States have notified their transposition measures.

Article 2 of the Council Directive 2008/117/EC
of 16 December 2008 provides that the Commission shall, on the basis of information provided by the Member States, present,
no later than30 June 2011, a report assessing the impact of
Article 263(1) of Directive 2006/112/EC on Member States' ability to
fight against VAT fraud connected with intra‑EU supplies of goods and services
as well as the usefulness of the options provided for in
Article 263(1a) to (1c), as well as, depending on the conclusions of
the report, any appropriate proposals. Due to the fact that not all Member
States have implemented the above mentioned Directive by 1/1/2010 and in order
to have a complete picture of the impact of the new rules in all Member States,
the Commission has decided to present the report by the end of 2011, rather
than on 30 June 2011.

VAT Package

As the VAT Package brought about a
fundamental change to the VAT system, after 31 December 2009, with the new
rules on the place of supply of services and the refund of VAT to
non-established EU VAT traders, it has been inevitable that a number of
monitoring tools had to be implemented at an early stage by the Commission
services.

The Commission has checked thoroughly the
transposition of national legislation of Member States to conform to the EU VAT
Package rules –as a priority task identified in 2010 based on the Commission's
risk-based approach to some monitoring actions.

Those monitoring actions were initiated in
2008-2009 (preparatory stage prior to the entry into force of the new
legislation) and continued in 2009-2010 (first monitoring stage). They included
the following steps in the facilitation and control of this transposition:

–
Organisation of Fiscalis seminars on the new
place of supply and refund rules.

–
Preparation of Working Papers and chairing
discussions with national delegations on the new place of supply and refund
rules in the VAT Committee and the SCAC.

–
Internal monitoring of the implementation of new
measures in each Member State.

–
Analysis of the notifications of national
provisions to the Commission by Member States, followed by the Commission's
analysis of Member States' measures.

–
Analysis of the correctness of the transposition
for each Member State, based on Member State notifications and detailed
questionnaires on the place of supply and refund rules prepared by the
Commission services in order to facilitate the check to be conducted internally
by the Commission staff.

Excises

Twice a year, the Commission asks Member
States to update the excise duty tables containing detailed information
on the rates and tax reductions or exemptions applied by Member States on
excise goods subject to EU legislation (energy products and electricity;
alcohol and alcoholic beverages; manufactured tobacco). In doing so, the
Commission controls the respect by Member States of the minimum levels of
taxation and of the correct application of tax reductions or exemptions.

d) Management of the acquis through
committees and expert groups

VAT Committee

As regards management of the EU VAT
legislation, the VAT Committee, an advisory committee set up by Article 398 of
the VAT Directive 2006/112/EC of 28 November 2006, has competence to examine
questions raised by the Commission or the representatives of the Member States,
which concern the application of EU provisions on VAT. At least twice a year,
the VAT Committee examines questions raised on the interpretation and
application of the existing EU VAT legislation.

The VAT Committee in 2010 had 2 meetings discussing
issues arising from the new rules on the place of taxation of supplies of
services. It resulted, amongst other, in common guidelines on the admission to
events which could be included by the Council in the proposal for a recast of
implementing measures for the VAT Directive 2006/112 (COM(2009) 672 final)
under discussion.

There were also discussions on the scope of
the exemption applicable to the supply of postal services and the supply of
goods incidental thereto, leading to the agreement of guidelines as a follow-up
to the Court's judgement in the TNT-case (Case C-357/07 TNT Post UK Limited).

Business Expert Group

The Business Expert Group on the smooth
functioning of VAT in the EU was set up in 2010. The Group had 3 meetings of
one day each to discuss various topics concerning the EU VAT legislation with a
view to strengthen and improve the EU VAT system.

The group focuses on ways in which the
relationship between tax payers and tax administrations could result in a
smoother functioning of the present VAT system. Day-to-day practical problems
arising from managing the VAT system are to be discussed, as well as
suggestions for possible solutions. The aim is to offer a platform at EU level
where information on practical bottlenecks in the management of the VAT system
can be shared, discussed and solutions found in order to smoothen the
functioning of the system and for the benefit of both the tax administrations
and the business.

Administrative cooperation in the
field of VAT and the fight against VAT fraud

As regards administrative cooperation in
the field of VAT and the fight against VAT fraud, several expert groups, funded
through the Fiscalis 2013 budget, discussed specific problems that are either
related to specific fraud problems or targeted at exchanging best practises or
enhancing cross border administrative cooperation. These groups dealt with
multilateral controls, e-auditing, internet monitoring, new means of transport
(cars and yachts), risk management and e-learning.

In 2011 some new project groups will be set
up under Fiscalis in order to assist the Commission with the implementing
Regulation for Regulation 904/2010. These groups will discuss forms, feedback,
statement of best practises, statistics, etc.

Eurofisc has also started its activities in
2010 and the different working fields will report to the Eurofisc Group that
will annually report to SCAC.

Through SCAC the Commission will continue
to monitor the use Member States make of the tools on administrative
cooperation and the fight against VAT fraud offered to Member States by this
new legislation.

Mutual recovery assistance

Several expert project groups, funded
through the Fiscalis 2013 budget, discussed specific problems to prepare the
implementation of the new Council Directive (dealing with the development of
the request forms, the uniform recovery instruments, and the organisation of
the new communication structure).

Through the Recovery Committee, the
Commission monitors the use Member States make of the tools on mutual tax
recovery assistance.

e) Enquiries, problems and complaints
management

Within the area of indirect taxation,
the prioritisation criteria were fixed in line with the 2007 Communication of
the Commission on 'A Europe of results'. The Commission continued with its efforts
to ensure alignment of Member States' indirect tax legislation with the
requirements of primary and secondary EU law, by intensifying its infringement
actions following the adoption of new Directives and by pursuing a more
targeted infringement approach in support of ongoing policy initiatives such as
the Commission's initiative on tax policy coordination. Inter alia in the area
of VAT grouping, the Commission issued a Communication[462]
and has opened infringement procedures against Member States violating the VAT
Directive. Other priorities concerned procedures affecting the EU's own
resources and also procedures related to VAT on postal services, with
interpretation of the VAT Directive provided by the Court in the case TNT Post
UK Limited. Travel agencies and reduced VAT rates were likewise launched in
this context.

In the 2007 Communication[463], the Commission decided on the introduction of an arrangement for
monthly decision-taking to allow for the quicker progress of infringement cases
which have to be referred to the Court. The results of this new decisional
method were particularly significant within this domain where considerable
efforts were made to achieve this objective. A significant number of cases is
currently awaiting a ruling from the Court of Justice.

In the field of indirect taxation the
Commission receives an increasing number of complaints. They are registered in
CHAP (an internal registration system operating since 2009) and their treatment
is tracked in each step. There were 124 open complaints in December 2010, the
processing of which the Commission is trying to accelerate despite the
complexity of the cases.

The year 2010 is characterized by an
unusually high number of preliminary questions (52 cases). The role of the
Commission, to suggest an interpretation of EU law to the Court, is
particularly important in this area as most of the judgments of the Court of
Justice in this area are delivered on the basis of preliminary questions.

The Commission also continued with the EU Pilot
project to test and improve working methods between Commission services and
Member States on information exchange and problem solving.

SOLVIT will also remain an important
problem solving tool in cross-border cases involving Internal Market issues.

f) Petitions

Regarding the petitions treated in the area of indirect taxation, the
most recurrent issues reminded in the area of taxation of cars. It should be
noted that the majority of petitions related to already open infringement cases
by the Commission.

g) Management of infringements

Within the area of indirect taxation, 2010
was another year with a considerable number of infringement cases closed after Member
States brought their legislation into conformity with EU law during the
different steps of the procedure.

The following Court cases merit extra
attention:

In the joint cases Commission
v. France[464], Austria[465]
and Ireland[466] the
Court decided that by adopting and maintaining in force a system of minimum
prices for the retail sale of cigarettes released for consumption and a
prohibition on selling tobacco products ‘at a promotional price which is
contrary to public health objectives’, the concerned Member States (France,
Austria and Ireland) have failed to fulfill their obligations.

In the judgment in the
case Commission v. France[467] the
Court decided that France in applying a reduced rate of value added tax to the
supply of services by 'avocats', 'avocats' of the Council of State ('Conseil
d’État') and the Court of Cassation ('Cour de cassation'), for which they are
paid in full or in part by the State under the legal aid scheme, violated
provisions of EU law.

In the judgment in the
case Commission v. Poland[468] the
Court decided that Poland by applying a reduced value added tax rate to
supplies, import and intra-EU acquisition of clothing and clothing accessories
for babies and of children’s footwear, the Republic of Poland has failed to fulfill its obligations resulting from the VAT directive.

Finally the judgment in
the case Commission v. Austria[469] the
Court decided that by inclusion of the standard fuel consumption tax (SFCT),
which essentially consists of a single registration tax, in the basis of
assessment of the value added tax on the delivery of a motor vehicle Austria violated the EU law.

13.2.2.
Evaluation based on the current situation

It is important to recall again that
unanimity is and will remain the rule for the adoption (and thus the adjustment
of the principles as of 1979 in the area of VAT) of the texts towards harmonization
in the field of taxation. This situation makes harmonization through legislation
more complex.

The overall situation in the area of
indirect taxation is changing as infringement action and references to the
Court have steadily increased in recent years and this trend is likely to
continue. The key challenges will be to achieve correct application of EU law
within acceptable deadlines. This needs to be monitored continuously.

Hence, infringement policy simplifies the
situation for taxpayers by contributing significantly to more uniform
application of EU rules in this area.

A number of measures have already been
taken to improve the situation and to rationalize action. These include a more
strategic approach to infringement action by focusing on specific priorities
and adopting a more horizontal approach to similar infringements in different
Member States. In addition, a lot of emphasis is put on prevention by better
co-ordinating the preparation of national legislation transposing EU
legislation into national law.

The Commission's approach can be
illustrated by following examples:

- In the field of postal services, three
solutions adopted by the Member States were analysed (taxation, exemption,
partial taxation) in order to propose a solution before the Court, and then
after the judgment in the TNT Post case the national legislation of all Member
States was monitored.

- In the field of VAT grouping, after a
communication, all Member States not complying with the EU law were invited to
change their legislation. In those cases where legislation was not changed, a
referral to the Court is envisaged.- Regarding travel agencies, infringement
proceedings were suspended to give the Member States the possibility to adapt
the text of the Directive. After three successive EU presidencies without
progress, the Commission announced to the concerned Member States that the cases
will be referred to the Court in order to prevent distortions of competition.

The new system of complaints registration
(CHAP)introduced in 2009 to simplify the registration and treatment of
complaints continued to be used and tested.

Finally, it is welcomed that during 2010, 69
infringement cases have been closed because the Member States concerned brought
their legislation into conformity with EU law without the need for any referral
to the Court of Justice. These figures reveal clearly that the alignment of Member State legislation with EU law is being achieved through the work done by the Commission
and Member States in the context of infringement proceedings following the
adoption of new directives. As stated in its 2007 Communication, the Commission
has started to work with Member States to try to ensure quicker results without
recourse to infringement proceedings always being necessary.

13.2.3.
Evaluation results
13.2.3.1. Priorities

The existing pro-active infringement policy
and prioritisation of specific issues has been maintained and further developed
as a strategy in order to persuade Member States to approve ongoing legislative
proposals. Unfortunately, this policy has not always attained the goal (e.g.
travel agencies and postal services).

On the control of the implementation
of Directives, the national implementing provisions
were checked systematically by the Commission services in charge. In this
regard, correlation tables is recognised as a useful preventive tool for the
Commission, national administrations and stakeholders as they ensure transparency
and facilitate the complex work related to transposition of directives.

A second priority concerns the EU own resources. Those resources
within the area of indirect taxation include those accruing from VAT and are
obtained through the application of a uniform rate of tax to a tax base
determined in a uniform manner and in accordance with EU rules. Cases detected
through own investigation with a possible impact on own resources continue to
be initiated by the Commission. For example the Commission has initiated
several procedures concerning the correct application of VAT exemptions
according to Article 137 of the VAT Directive. Their purpose is to ensure the
equal treatment of Member States' contributions to EU own resources.

Last but not least, in the field of car
taxation, object of many complaints and petitions, the Commission, in
accordance with is using Article 110 of the TFEU as interpreted by the Court of
Justice, ensures that the Member States do not tax in a discriminatory way, at
the time of registration, second-hand vehicles bought in the other Member
States.

Cases of registration and use of leasing
cars and company cars in the Member State of the residence of an employee or
manager other than Member State where the company is based constitute a new
field of the control of application of EU law.

For indirect taxation issues, Directorate-General
for Taxation and Customs Union opened 80 new infringement cases: 46 of which
related to VAT, 22 related to excise duties and 12 regarding car, energy and
environmental taxation.69 infringement cases were closed after Member States
modified their legislation and therefore complied with EU Law; mostly after
referral to the Court of Justice before compliance
was achieved.

The infringement policy of the Commission
was reflected both in a considerable number of infringement cases and a
considerable number of observations made in the context of references for
preliminary rulings to the Court. The Court of Justice delivered 51 judgments
related to indirect taxation (45 in the domain of VAT and 6 regarding other
indirect tax issues), mostly judgments in consequence of a preliminary question
in pursuance of which the Commission has given its interpretation.

The volume of petitions in the different
sectors falling within the competences of Directorate-General for Taxation and
Customs Union is relatively moderate and stable (33 new petitions have been
introduced in 2010).

Finally the number references for
preliminary ruling increased significantly (52 in 2010 comparing with 36 in
2009)

13.2.3.2.          Planned action (2011 and beyond)

One of the specific objectives planned for
the mid-term is to create a simpler and transparent tax environment for
individuals, SME's and other businesses in cross-border transactions through
the control of the application of EU law, modernisation, better coordination
and harmonisation of tax systems in the Internal Market.

Since VAT has been identified as causing a
high level of administrative burden for business, the Commission is seeking how
to simplify and rationalise the VAT legislation.

The Commission will focus in the field of
indirect taxation on taxation of leasing and use of
company cars, particular aspects of VAT grouping and follow up of VAT-package-check
results.

13.2.4.
Sector summary

In the field of INDIRECT TAXATION, the number of enquiries, complaints and references for
preliminary rulings in this year continued to increase. The
Commission focused its efforts to ensure alignment of Member States' indirect
tax legislation with the requirements of primary and secondary EU law, by
pursuing a more targeted infringement approach. Infringement procedures
affecting the EU own resources and specific infringement procedures related to
VAT on postal services, VAT grouping, travel agents and reduced VAT rates were
followed up. Despite the good figures for notification regarding the
transposition of the existing secondary EU Law, the existing pro-active
infringement policy and prioritisation of specific issues should be maintained,
particularly concerning the implementation of new legislation (e.g. VAT
package). In 2010, 69 infringements
proceedings have been closed after Member States modified their legislation in
line with EU law, and 80 new infringement cases were opened.

Existing measures in force: see Annex I

13.3.
Situation in the sector of DIRECT TAXATION
13.3.1.
 Current
position
13.3.1.1.  General Introduction

There is very little harmonisation in the area of direct taxation.
As a consequence, the relevant Treaty provisions constitute the main part of
the legal framework.

Existing measures in force: see Annex I.

13.3.1.2. Report of work done in 2010

a) New legislation in preparation or already proposed and in the
course of being adopted, impact assessments and implementation plans being
developed in connection with new proposals, etc.

On 7 December 2010 political agreement was reached in the Council on
the proposal for a Council Directive on administrative cooperation in the field of taxation. It is based on a proposal of 2009[470]
and aims to create a legal
instrument of high quality enhancing administrative cooperation in the field of
taxation in order to allow the smooth functioning of the Internal Market by
providing effective means to combat tax evasion. The Directive ensures that the
EU standards for the exchange of information on request are aligned on
international standards. In particular, it provides that Member States can no
longer rely on bank secrecy to refuse the exchange of information.

Several proposals for Directives were also on the agenda
during 2010:

· In the interest of clarity and legal certainty,
a Proposal for a Council Directive on the common system of taxation
applicable in the case of parent companies and subsidiaries of different Member
States was put on the table aiming at transforming the planned codification
of Directive 90/435/EEC into a recast in order to incorporate the necessary
amendment;

· Negotiations are ongoing
on the amendment to the Savings Taxation Directive (2003/48/EC).
Adoption by Council in 2011 would require substantial transposition work.

Several public consultations were launched during 2010, which
aim to gather information in areas of importance for the Internal Market and EU
citizens, such as:

· Consultation on Taxation of cross
border interest and royalty payments between associated companies;

· Consultation on possible
approaches to tackling cross-border inheritance tax obstacles within the EU;

· Consultation on Double Tax
Conventions and the Internal Market: factual examples of double taxation cases.

Separately, the Council Resolution of
8 June 2010 on coordination of the Controlled Foreign Corporation (CFC) and
thin capitalisation rules within the European Union (2010/C 156/01) addressed
the question of how far the Member States are allowed to go in applying
anti-abuse measures while preserving the fundamental freedoms as applied by the
Court of Justice.

b) Main actions being taken to control
the correct application of the law – conformity assessments, reports on the
application of legislation, studies, etc.

In December 2010 the Commission launched an
external study covering all 27 Member States aiming to identify the most common
obstacles in the direct tax area that cross-border workers encounter when they
decide to exercise their fundamental freedoms. The results of the study will be
used as a basis for initiating infringement procedures.

c) Management of the acquis through
committees and experts groups

The Working Group for Administrative
Cooperation in the field of Direct Taxes (WG ACDT) examines matters
concerning the application of the Directive on mutual assistance in direct tax
matters and insurance premiums (Directive 77/799/EEC) and the application of
the Directive on the taxation of savings income in the form of interest payments
(Directive 2003/48/EC). Three meetings have been held in 2010.

In addition, a sub group of the WG ACDT
devoted to the design and IT development of common forms for exchange of
information met four times in 2010.

The eForms for exchange of information on
request, spontaneous exchanges and for feedback have been released for entry
into production at the end of 2010.

d) Enquiries, problems and complaints
management

Considering that there is little secondary
EU legislation in the area of direct taxation, almost all of the
enquiries and complaints in this area (a sizable volume of 145 well-founded
enquiries and complaints) relate to the application of the fundamental
Treaty freedoms in respect of differential treatment of domestic and
cross-border situations. They therefore fall mainly in the following category
of the 2007 Communication 'A Europe of results' – "breaches of EU law,
raising issues of principle or having particularly far-reaching negative impact
for citizens, such as those concerning the application of Treaty principles
(..)".

As in previous years, the main focus in 2010
were infringement actions targeted at areas where the Commission sees scope for
co-ordination of Member States' direct tax systems, as highlighted in the 2006
Communication on Co-ordinating Member States' direct tax systems in the
Internal Market. Particular emphasis was given to infringement cases in respect
of taxation of dividend payments and dividend payments to pension funds.

e) Petitions and parliamentary questions

Most of the petitions in the direct
tax area relate to possible infringements of Treaty freedoms and instances of
double taxation due to the simultaneous application of different Member States'
tax legislation. The volume of petitions in the direct tax area is relatively
moderate (10 petitions in 2010).

In addition, the direct tax area has been
of significant interest for the Honourable Members of the European Parliament as
indicated by the significant number of parliamentary questions on the
subject.

f) Management of infringements

In
the wake of the financial crisis and the need for Member States' to preserve
and expand their tax revenues, the external interest in the area of direct
taxation remains substantial. The stable number of well-founded enquiries
and complaints and the increased number of referrals for preliminary rulings
from the Court are a clear indication of this trend. This trend is likely to
increase and intensify over the coming years.

In the area of direct taxation, the
Commission opened a smaller number of infringements than in 2009. This was
partly due to more Member States joining EU Pilot and an increased use of this
tool in order to find solutions compatible with EU law without the need to open
a formal infringement procedure (32 such cases).

A special emphasis has been given to those
cases which reveal serious infringements of EU law that prevent EU citizens and
enterprises from exercising their rights to establish themselves or invest in
other Member States. Moreover, particular attention has been paid to those
areas where the Commission sees scope for co-ordination of Member States'
direct tax systems, as highlighted in the 2006 Communication on Co-ordinating
Member States' direct tax systems in the Internal Market[471]
and the subsequent specific communications on cross-border losses, exit taxes
and anti-abuse rules. In addition, work on the priority areas of cross-border
dividend payments and cross-border pensions continued. Finally, two new priority
areas are being addressed relating to inheritance tax and eliminating the
direct tax obstacles encountered by cross-border workers.

In the area of direct taxation, 2010
was once again a year with a considerable number of infringement files closed
after Member States changed their legislation in order to conform to EU law as
a direct result of the Commission initiating procedures under Article 258 TFEU.
Namely, 68 infringement procedures were closed after the Member States
concerned modified their legislation.

Likewise, the number of decisions by the Commission
to refer Member States to the Court of Justice for incompatible direct tax
legislation remained relatively stable (10 such decisions).

In 2010 the Court of Justice delivered 15
judgments related to direct taxation. Most of the Court's judgments in this area
(13) concerned references for preliminary rulings. The following cases were of
particular relevance:

In SGI[472]
the Court held that Belgian transfer pricing rules applicable only to
cross-border situations are a restriction of the freedom of establishment.
However they are justified by the need to prevent abuse and safeguard the
balanced allocation of taxing powers between Member States. The Court concluded
that the rules were, subject to verification to be carried out by the referring
court, proportionate.

In X-Holding[473]
the Court held that the Netherlands restricted the freedom of establishment by
not allowing cross-border group taxation for foreign subsidiaries. However, it
found the restriction justified by the need to safeguard
the balanced allocation of taxing powers, even where
the risk of double loss relief or tax avoidance was very limited.

In Gielen[474]
the Court ruled that the Netherlands infringed the freedom of establishment by
discriminating non-resident business operators by not taking into account the
hours that they worked in their foreign business when calculating a deduction
for self-employed persons and that the option for non-residents to be taxed as
residents did not justify this discrimination.

In Commission v. Spain[475]
the Court ruled that Spain infringed the freedom of capital movement by taxing
outbound dividends paid to companies in other EU Member States, while dividends
paid to Spanish companies were exempt from any taxation. The ruling confirms
the legal analysis of the Commission's Dividend Taxation Communication of 19
December 2003.

In
Commission v. Portugal[476]
(Case C-105/08), the Court rejected the action as it found that the Commission
had not proven that the Portuguese tax legislation leads in certain situations
to a higher taxation of non-resident financial institutions on the interest
they receive on loans made to Portuguese borrowers.

13.3.2.
Evaluation based on current situation

The situation in the direct tax area
continues to be challenging as the number of infringement actions stabilised
while the number of references to the Court has increased in recent years. It
remains to be seen whether this trend will continue.

The key challenges ahead are to manage the
high level of activity in the area without an increase in resources while
achieving equal surveillance and uniform application across Member States of EU
law in this largely non harmonised area.

A number of measures have already been
undertaken to improve the situation. This includes a more strategic approach to
infringement action and adopting a more horizontal approach to similar
infringements in different Member States.

Moreover, the Commission is encouraging
Member States to take a more pro-active approach to removing existing tax
obstacles by examining the scope for co-ordination of Member States' direct tax
systems. As outlined in the 2006 Communication on Co-ordinating Member States'
direct tax systems in the Internal Market[477], the aim of
this initiative is to ensure that national tax systems comply with EU law and
interact coherently with each other. The initiative seeks to remove
discrimination and double taxation for the benefit of individuals and business
while preventing tax abuse and erosion of the tax base. Coordinated solutions
could help to remove discrimination and further eliminate the tax obstacles to
cross-border activity and thus help to reverse the trend of increased
litigation by taxpayers in national courts and the ECJ.

13.3.3.
Evaluation results
13.3.3.1. Priorities

As far as direct taxation is concerned, the
priorities set for 2010 remain unchanged for 2011. Two new areas will also be
addressed with priority: inheritance tax and eliminating the direct tax
obstacles encountered by cross-border workers.

13.3.3.2. Planned action (2011 and beyond)

Given the evaluation of the current situation,
continued and intensified infringement action is envisaged in the direct tax
area.

Common Consolidated Corporate Tax
Base (CCCTB)

In 2011, adoption by the Council of the
planned legislative proposal for a Common Consolidated Corporate Tax Base (CCCTB)
would require substantial implementation/ transposition by Member States and
conformity assessment by the Commission possibly combined with expert group/
committee meetings to manage the application of the measure. Once adopted and
implemented, CCCTB would reduce the scope for cross-border restrictions and
thus result in a decrease in infringements in the corporate tax area.

Amendment Savings Directive[478]

The Commission on 13 November 2008 adopted
an amending proposal to the Savings
Taxation Directive, with a view to closing existing loopholes and
better preventing tax evasion. The Commission proposal seeks to improve the
Directive, so as to better ensure the taxation of interest payments which are
channelled through intermediate tax-exempted structures. It is also proposed to
extend the scope of the Directive to income equivalent to interest obtained
through investments in some innovative financial products as well as in certain
life insurance products. Adoption by the Council would require substantial
implementation by Member States and conformity assessment by the Commission
combined with committee meetings to manage the correct application of the
measure.

Financial Transaction Tax

On 7 September 2010, the Council held an
exchange of views on the options regarding financial industry contributions in
the wake of the financial crisis. Discussions covered the coordination of
levies on banks and other financial institutions and the possible introduction
of a financial transaction tax.

On 7 October 2010, the Commission set out
its ideas for the future taxation of the financial sector. Working on the basis
that the financial sector needs to make a fair contribution to public finances,
and that governments urgently need new sources of revenue in the current economic
climate, the Commission put forward a two pronged approach. At global level,
the Commission supports the idea of a Financial Transactions Tax (FTT), which
could help fund international challenges such as development or climate change.
At EU level, the Commission recommends that a Financial Activities Tax (FAT)
would be the preferable option. If carefully designed and implemented, an EU
FAT could generate significant revenues and help to ensure greater stability of
financial markets, without posing undue risk to EU competitiveness.

The Commission has lunched an in-depth
Impact Assessment to further examine the ideas it has set out in its
Communication. The Impact Assessment is planned to be ready by summer 2011. If
appropriate, legislative proposals will follow before the end of the year.

Inheritance taxes

It appears that Member States' inheritance tax rules as applied in
cross-border situations may hinder EU citizens from benefiting fully from their
right to move and operate freely across borders within the Internal Market and
create difficulties for the transfer of small businesses on the death of
owners. First, such individuals may be exposed to tax discrimination. Second,
there is the risk of taxation of a single inheritance by several Member States
with no comprehensive relief for the double taxation.

The Commission has worked on several different fronts to obtain more
evidence of the extent of any such cross-border inheritance tax problems within
the EU and to find solutions to the problems identified. In this
regard, a public consultation was launched in 2010 on cross-border inheritance
tax obstacles within the EU and possible approaches to tackling these issues.
As a reference document to this consultation, the Commission published a study
by external consultants on "inheritance taxes in EU Member
States and possible mechanisms to resolve problems of double inheritance
taxation in the EU". The Commission has also been preparing an impact
assessment, on the basis of which it will decide on the best solution and it
aims to adopt an initiative along these lines in 2011.

13.3.4.
Sector summary

As there is very little secondary EU
legislation in the area of DIRECT TAXATION, the main focus is on the
application of the fundamental Treaty freedoms in respect of differential
treatment of domestic and cross-border situations.

The number of well-founded enquiries and
complaints remain stable while the referrals for preliminary rulings from the
Court of Justice have increased, therefore the interest remains just as high as
in previous years.

In order to manage the workload in the
direct taxation area, the Commission will continue to pursue a strategic
approach to infringement action by focusing on specific priorities and by
looking more horizontally at similar infringements in different Member States.
Moreover, as outlined in the 2006 Communication on Co-ordinating Member
States' direct tax systems in the Internal Market, the Commission is
encouraging Member States to be more pro-active in removing existing tax
obstacles by examining the scope for co-ordination in this area. Such
co-ordinated action can help to remove discrimination and promote compliance
with EU law. The previous priorities established in this area remain unchanged
for 2011. In addition, two new areas will be addressed with priority: inheritance
tax and eliminating the direct tax obstacles encountered by cross-border workers.

14.
EDUCATION AND CULTURE
14.1.
Current position
14.1.1.
General introduction
14.1.1.1. Education and training

The continuing challenge in the field of
education and training is to ensure the application of the principle of free
movement for students, a fundamental objective of EU action in accordance with
Article 165 TFEU. Students in the different types and levels of education and
training should not be treated less favourably because they have exercised
their mobility to another country for all or a part of their studies. This
problem is particularly manifest in the case of recognition of diplomas awarded
in another country[479].

The Commission believes that learning
mobility plays a key role both in the personal and skills development of the
individual student and in promoting greater labour market flexibility after the
studies. It is also an important component for creating a Europe of citizens,
one of the key objectives of the Union. The obstacles to mobility should
therefore be removed as far as possible. Despite the relative lack of specific,
binding provisions in EU primary and secondary law in this area, the Commission
took action to protect the principle of free movement. The obstacles
encountered relate mainly to the equality of tuition and registration fees, to
some benefits directly related to student status, to the recognition of periods
of study and diplomas acquired in other Member States and to the scholarships
and/or student loans offered. Infringement procedures begun in 2009 on areas
such as discrimination in access to distance learning provided from a Member State other than the Member State of residence and discrimination in access to reduced
fares for students on public transport, have been continued in 2010.

The main Treaty articles and other legal
provisions applicable are:

· Article 18 TFEU, establishing the principle of prohibition of any
discrimination on grounds of nationality within the scope of application of the
Treaty[480].

· Article 20 TFEU, establishing citizenship of the Union and ensuring
citizens of the Union enjoy the rights conferred by the Treaty.

· Article 21 TFEU, which is the main provision on the right of every
citizen of the Union – and therefore every student or person undergoing a
training, and every teacher as well – to move and reside freely within the
territory of the Member States.

· Articles 165 TFEU, related to education. In paragraph 2, the
objectives of the EU institutions' action in the field of education are set
out. Among those objectives are "encouraging mobility of students and
teachers, by encouraging inter alia, the academic recognition of diplomas and
periods of study" and "encouraging the development of distance
education". Similar provisions are contained in Article 166, related to
vocational training.

· Directive 2004/38/EC, on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member
States. This Directive contains several provisions concerning students and
persons under vocational training. Indeed, students are an important category
of citizens moving between Member States and the Directive contains key
provisions related to students on, for example, rights of residence for
students legally enrolled in education or vocational training, and on equal
treatment of EU citizens with specific rules on social assistance and
maintenance grants.

Directives and other EU legal acts
containing provisions related to education or vocational training[481]
are not adopted on the basis of Articles 165 and 166 TFEU, because the
harmonisation of the laws and regulations of the Member States for the
achievement of the objectives referred to in these Articles is excluded by the
Treaty (see paragraph 4 of Articles 165 and 166). EU action based on these
articles may only encourage, support and supplement Member States' action,
while fully respecting their responsibility for the content of teaching and
vocational training and for the organisation of education and training systems.

Nevertheless, Article 165 paragraph 2,
taken together with the abovementioned Articles 18, 20 and 21 and Directives, provides
a clear structure for the legal framework on the free movement of students. On
that basis, a student who moves from his Member State of origin to another to
carry out all or part of his/her studies, is protected not only against
discrimination on grounds of nationality in the second Member State, but also
against prejudicial treatment in his/her Member State of origin on grounds
(directly or indirectly) related to the fact that s/he has studied abroad. This
new standard finds its application, e.g., when a student asks his/her own
Member State to recognize a diploma acquired in another Member State or when
s/he asks for the portability of a grant or scholarship in order to continue
studying in another Member State[482].

In that light, the refusal to recognize a
diploma without a proper justification or the application of disproportionately
long or costly procedures could be interpreted as penalising a European citizen
for having exercised his or her right to free movement and having followed
studies in another Member State. Such practices could, therefore, also constitute
violations of EU law.

Finally, it is useful here to show the
methodology used by the Commission in the exercise of its tasks for the
classification of the issues pertaining to education and training. The
categories are:

(1)
Access to educational institutions in a Member State for students from other Member States. The principle of non discrimination (18
CE) is the main rule here. Among seven cases handled by Directorate-General for
Education and Culture in 2010, the cases against Austria and Belgium concerning
access to their universities, principally for medical and related studies, by
candidates from Germany and France respectively, remain suspended for five years
(until 2012). The Commission is closely monitoring the impact of the conditions
imposed by those Member States, requiring them to submit to the Commission
statistical data[483] which will enable a
judgement to be drawn on whether the measures are necessary and proportionate.
Moreover, in the preliminary case C-73/08, Bressol, related to the
Belgian case of access to university (mainly for veterinary studies) the Court
of Justice pronounced its judgment on 13 April 2010 and then ruled that Articles
18 and 21 TFEU preclude national legislation, such as that at issue in the main
proceedings, which limits the number of students not regarded as resident in
Belgium who may enrol for the first time in medical and paramedical courses at
higher education establishments, unless the referring court, having assessed
all the relevant evidence submitted by the competent authorities, finds that
that legislation is justified in the light of the objective of protection of
public health. Therefore, in order to evaluate the impact of that judgment on
the handling of the Belgian infringement (and perhaps on the Austrian
infringement as well), the Commission must wait for the judgment of the
Constitutional Court of Belgium.

(2)
The conditions for awarding grants, either to
cover tuition and registration fees, or to cover living expenses. This issue is
examined both in connection with the host country, where it concerns students
from other Member States, and in relation to the country of departure, which,
under certain conditions (Case C-11-06, Morgan), is obliged to award grants to students who decide to go to another country for all or part of their studies.

(3)
Other rights of students in the host country
during their studies, in order to ensure equal treatment with domestic
students. To this category belongs the issue of of equality of treatment with
national students in relation to transport fares. On this issue, the Commission
in 2010 decided to refer to the Court of Justice the case against one Member
State (Austria) and to issue a reasoned opinion in another case (the
Netherlands).[484].

(4)
The academic recognition of diplomas. The
Commission receives a lot of correspondence on this issue, relating
particularly to excessive delays in recognising diplomas or periods of study,
exceeding a reasonable cost for such recognition, not permitting appeals
against negative decisions or not presenting justifications for such decisions.

Apart from the binding provisions of EU law
in this sector, the role of "soft law", consisting principally of
Recommendations of the European Parliament and of the Council, is particularly
important in providing a framework in which the difficulties encountered by
citizens can be resolved. In this context, the European Qualifications
Framework, due to be implemented by all Member States by 2012, is beginning to
have an impact. Valuable results are also often obtained in this area by the ENIC-NARIC
network (European Network of Information Centres, National Academic Recognition
Information Centres)[485].

14.1.1.2. Sport

In the area of sport, it is established
case-law of the Court of Justice that sport federations and regulations must
respect the fundamental rights guaranteed by the Treaty, and in particular the
principle of non-discrimination on grounds of nationality[486].
The same case law has recognised that this principle does not apply to rules
which have a purely sporting interest (i.e. rules which fall into the
definition of the specific nature of sport), such as the selection of athletes
for national teams. In this context, the principle of proportionality applies.

The entry into force of the Lisbon Treaty
introduced a new Article 165 TFEU extending the competence of the European
Union in the area of sport. Following a combined reading of Articles 18, 21 and
165 TFEU, the Commission considers that the general EU principle of prohibition
of any discrimination on grounds of nationality applies to sport for all EU
citizens who have used their right to free movement. As a consequence, sport
activities as a whole fall into the scope of EU law, including therefore amateur
as well as professional sport, while the latter also falls more specifically
under the provisions related to internal market freedoms, in so far as the
sport activities under consideration constitute an economic activity.

Moreover, the Commission considers amateur
sport to be a social advantage in the context of the free movement of workers.
According to Article 7(2) of Regulation (EEC) 1612/68[487],
migrant workers have to be treated equally with nationals of the host country
concerning access to employment, as well as working conditions and social
advantages. The Court has held that these cover also non financial advantages,
in particular those which would facilitate integration into the host Member State.

Additionally, the Commission takes into
account the recent ECJ case law[488] which considers that
Union citizenship is destined to be the fundamental status of nationals of the
Member States. In that regard, the Commission considers that the exercise of
the right to move and reside freely in another Member State is enhanced if
citizens of the EU are able to practice sport as amateurs on the same footing
as its nationals. Consequently, in exercising that right in another Member State, persons are in principle entitled, pursuant to Article 18 TFUE, to treatment
no less favourable than that accorded to nationals of the host State.

In applying Union law to amateur sport, the
Commission takes into account the specific characteristics of sport, as set out
in Article 165 TFEU and in the Commission's White Paper on sport[489].

14.1.2.
Report of work done in 2010
14.1.2.1. Education and training

The Commission services have intensified their
activity in this area, through infringement cases, replies to parliamentary
questions, petitions to Parliament, citizens' inquiries and complaints, and by
the application of new tools (EU Pilot, CHAP) for the implementation of EU law.

The Commission had opened, in 2009,
infringement proceedings under Articles 18, 20, 21 and 165 of the Treaty and
Article 24 Directive 2004/38 about discrimination of students by the host
country, regarding fares on public transport. On 2010, the procedures have
reached the stage of reasoned opinion for one Member State (the Netherlands), and the referral to the Court for another Member State (Austria). The Commission
believes that students who perform some or all of their studies in a Member State should have access to public transport of that State under the same conditions
as domestic students.

The Commission had also opened in 2009
infringement proceedings against two Member States relating to fees and grants for
distance learning. The Commission believes that students, who study in a Member State other than the one where the university providing the distance learning is
situated, should not pay higher tuition fees than students from that country
nor receive a lower maintenance grant than if the university was situated in
the Member State of residence. Significant improvements of the situation in one
of the Member States concerned (UK), which meant compliance with EU law,
enabled the Commission to close this case early in 2011, although the other one
(Germany) remained open at the end of 2010.

In an infringement file concerning tuition
fees in higher education (Poland), compliance has been achieved following
approaches from the Commission services. Therefore the file has been closed.

In response to a petition to the European
Parliament, the Commission services opened an infringement file for possible
discrimination in access to compulsory education based on the language spoken
by the child at home. Such a criterion risks constituting indirect
discrimination based on nationality. Clarification of the situation in the
Member State concerned (Belgium) enabled the Commission to close this case
early in 2011.

14.1.2.2. Sport

The Commission received a significant number
of complaints in 2010 relating to discrimination on grounds of nationality, concerning
access to competitions, obstacles to mobility and transfer or administrative
fees. The Commission's concern is to ensure that rights to free movement and
equal treatment are respected, taking into account the specific characteristics
of sport. A study launched by the Commission addressing the specific issue of
access to individual competitions has been published in December 2010 and the
conclusions and recommendations contained therein help provide better guidance
in this area.

The complaints concerned access to both
individual and collective competitions in various sports such as football,
handball, basketball, squash or shooting. Infringement proceedings started in
2009 were pursued concerning discrimination on grounds of nationality in
individual judo competitions (BE) and basketball regulations (Luxembourg). The former was closed in 2010 following modifications of national regulations that
brought them in line with EU law. Two requests were dealt through EU PILOT
related to nationality quota in squash and restrictions on the free movement of
young football players between clubs. The Commission continued its dialogue
with sport associations as foreseen in the White Paper on Sport.

14.2.
Evaluation based on the current situation
14.2.1.
Education and training

The observations are similar to those of
the previous report. The level of compliance of Member States with the acquis
can be considered generally satisfactory. However, the number of complaints and
petitions of citizens, especially on the recognition of diplomas and periods of
study, reveals that the obstacles to free movement are still widespread in
practice. On 2010, in an issue of recognition of professional qualifications, in
which the Commission decided to initiate infringement proceedings (Greece), some problems of recognition of academic qualifications were also the subject of the
proceedings.

Finally, the Commission has published the
guidance announced in a previous Report on monitoring the application of EU
law, for public authorities and stakeholders in the Member States, drawing out
the key implications of the case law established by the Court thus far, on
education and training. This guidance covers issues such as access to
educational institutions, recognition of diplomas, the portability of grants,
and other rights of students in the host country or in the country of origin. It
should help to establish the rights of students to free movement as a clear
area of EU law, underpinning the trend already established by the Court. In
doing so, it would contribute to the Union’s objective of achieving a substantial
increase in the level of mobility among students in higher education. This
guidance has been published in the framework of the Commission initiative Youth
on the Move[490].

14.2.2.
Sport

In the area of amateur sport, sport
regulations concerning various collective and individual sports, could
reportedly contravene to EU law. The Union acquis concerning collective
sports enables the Commission to act against discrimination on grounds of
nationality and obstacles to free movement. The Staff Working Document on Sport
and Free movement (January 2011) accompanying the Communication on Developing
the European Dimension in Sport (COM(2011)12) should provide guidance for a
better understanding of these issues. Other areas of sport challenging EU law
and not yet covered by the Court's case law, such as access to individual
competitions destined to select national athletes or award national titles,
medals or records, need legal certainty. In that light, the study on equal
treatment in individual sports competitions launched by the Commission and
published at the end of 2010 provides for a better guidance in this area and a
better definition of the specific characteristics of the concerned sports.

14.3.
Evaluation results
14.3.1.
Priorities
14.3.1.1. Education and training

The priority area remains the mobility of
students within the European Union, where the current obstacles prevent the Union from realising its full economic and social benefits. In this context, the academic
recognition of diplomas is probably the most difficult issue to deal with.

14.3.1.2. Sport

The priorities set in the previous Annual
Reports are unchanged. The Commission will continue to ensure that rights to
free movement and equal treatment are respected, taking into account the
specific characteristics of sport.

14.3.2.
Planned action (2011 and beyond)
14.3.2.1. Education and training

Noting that the area of education is a
separate chapter of the Union's acquis, the Commission intends to
support its implementation by:

· Opening formal proceedings in cases which, in the Commission’s view,
represent clear infringements of EU law;

· Participation in significant preliminary references to the Court,
when matters relating to education and sport are involved;

· The supervision of application of the abovementioned guidance to Member State administrations, students and other stakeholders.

14.3.2.2.
Sport

The planned actions for 2011 are to:

- Continue the enforcement of EU law,
relying on the new provisions of Article 165 TFEU;

- Continue dialogue with sport associations
in a preventive perspective;

- Continue to monitor closely the
activities of the national and international governing bodies for sport;

- Provide guidance and better explain the
existing rules to Member States and sport stakeholders so as to help them
address possible legal difficulties stemming from actions or rules in the field
of sport.

15.
HEALTH AND CONSUMERS
15.1.
Introduction

The mission of Directorate-General Health
and Consumers is to improve the health, safety and confidence of European
Citizens. Its policies and laws touch the daily lives of citizens. Consumers
can be confident that their food is safe and that the safety of their food is
protected by strict enforcement of controls. Patients can rest assured that a
high protection of public health. Citizens benefit from action at EU level
against animal and plant diseases and pests that is far more efficient and cost
effective than individual efforts of Member States. Consumers expect throughout
the EU an equally high level of protection in consumer markets that are more
competitive, open, transparent and fair. Directorate-General Health and
Consumers provides European Citizens with an improved regulatory framework that
maintains its capacity to manage and communicate on risk, especially during
times of crisis.

To accomplish the above Treaty powers are
used to the fullest extent possible while overcoming any obstacles in the application
of acquis in this domain.  Directorate-General Health and Consumers
ensures that EU laws are fully and consistently enforced and seeks to engage
society at large in its implementation efforts. Delivering effective policies
requires close cooperation with Member States so that lawmaking maximises
benefits and minimizes burdens to society. The food, consumer and health
policies are part of a globalised system where we should take every opportunity
to show that as international partners we expect to trade in safe products.

Member States are key partners because they
have the primary responsibility for ensuring implementation of EU law. But
equally better cooperation between national enforcement agencies and the
Commission will result in more uniform application of legislation in this area.
In addition, the Commission sought during the course of 2010 to empower
citizens, consumers and patients through information and education to enable
them to support implementation efforts of Member States and the Commission.

At the beginning of 2010, an internal
reorganisation of competencies took place between Commission departments.
Pharmaceuticals (including the European Medicine Agency), medical devices and
cosmetics policy areas were transferred from the domain of "Enterprise and
industry" to the domain of "Health and Consumers", and policy
areas of genetically modified organisms (GMO) and of sustainable use of
pesticides, were transferred from the domain of "Environment" to the
domain of "Health and Consumers", while policy areas "Consumer
Contract" and "Marketing law" became the responsibility of Commission
departments in the domain of "Justice".

The legislation in the health and consumers
areas is often technical and requires some guidance to Member States for better
implementation. For the implementation of this acquis prevention often
works better than legal action. Although infringement proceedings remain an
important instrument, prevention of an infringement is often a more optimal use
of the resources and nurtures better working relations with Member States.

Although most of the acquis in this
domain is stable, evaluation of the existing legislation is being continued to
ensure that it meets its policy goals without creating unnecessary burden to
business and national enforcers.

15.2.
Public health
15.2.1.
Blood and tissues
15.2.1.1. Current
Position

General Introduction

The legislative
framework for substances of human origin consists of:

·
Directive 2002/98/EC setting standards of
quality and safety for the collection, testing, processing, storage and
distribution of human blood and blood components;

·
Directive 2004/23/EC on setting standards of
quality and safety for the donation, procurement, testing, processing,
preservation, storage and distribution of human tissues and cells; and

·
Directive 2010/53/EU on standards of quality and
safety of human organs intended for transplantation.

The legislative
framework on blood and blood components is completed by the following
implementing measures: Commission Directive 2004/33/EC as regards certain
technical requirements for blood and blood components, Directive 2005/61/EC as
regards traceability requirements and notification of serious adverse events
and reactions and Directive 2005/62/EC as regards EU standards and
specifications relating to a quality system for blood establishments.

With regards to
tissues and cells, two implementing Directives complete the legislative
framework: Directive 2006/17/EC as regards technical requirements for the
donation, procurement and testing of human tissues and cells, and Directive
2006/86/EC as regards traceability requirements for the coding, processing,
preservation, storage and distribution of human tissues and cells. Finally,
Commission Decision 2010/453/EU of 3 August 2010 establishes guidelines concerning
the conditions of inspections and control measures, and on the training and
qualification of officials, in the field of human tissues and cells.

One of the main
challenges of 2010 was the completion of the EU's efforts to ensure common
quality and safety standards for the procurement, transport, characterisation,
transplantation and use of organs across the EU. The added value of this
initiative was to reduce the risks to patients across Europe, maximise the
benefits of transplantation for the EU citizens, increase trust in
transplantation systems, facilitate exchanges of organs and finally ensure high
quality transplantation for all Europeans. This was achieved through the
adoption of Directive 2010/53/EU of the European Parliament and of the Council
on 7 July 2010 and the Commission Action Plan on organ donation and
transplantation (2009-2015) that accompanies the Directive.

15.2.1.2. Report of
work done in 2010

With respect to the blood Directives 2002/98/EC,
2004/33/EC, 2005/61/EC and 2005/62/EC, the Commission continued checking
whether Member States have transposed them adequately into their national
legislation on the basis of checklist tables which were sent out to the Member
States in 2009. At the beginning of the year a number of Member States had not
yet sent to the Commission their responses. During the meeting with the
competent authorities in April, the Commission asked those Member States that
had not yet provided the relevant information to do so. Consequently a number
of Member States responded to the request, whilst the Commission continues to
follow up the situation with the remaining Member States that sent either no
information at all or sent insufficient information concerning their national
legislation transposing the blood directives.

As regards Directives in the field of tissues and cells the
transposition rate is satisfactory. Only one infringement procedure is pending
for incomplete transposition into national law of Directives 2004/23/EC, 2006/17/EC and 2006/86/EC with
respect to reproductive cells, foetal tissues and cells, and adult and foetal
stem cells.

Following the
completion of the notification of Member State's transposition, a questionnaire
is being prepared addressing the most important aspects of the three tissues
and cells Directives which will be sent to the Member States during 2011 for
completion. With this exercise the Commission aims to monitor the adequacy of
the transposition measures into the national law of the Member States.

In addition to
the transposition checks, two reports on the implementation of the Directives
on blood[491] and on tissues and
cells[492] have been developed
during 2009. Both were published in January 2010. The reports show that the
implementation of both Directives is satisfactory although further efforts are needed:

1.
in the blood sector regarding the finalisation
of the accreditation/designation/authorisation/licensing process in respect of
each individual blood establishment; the performance of inspections and the
submission of the annual report on vigilance to the Commission;

2.
in the tissue and cell sector regarding the
finalisation of the accreditation/designation/authorisation/licensing process
in respect of each individual tissue and cell establishment; development of
inspection systems; monitoring of import/export measures; registry of tissue
establishments, and fulfilment of different reporting requirements.

A common approach for setting up a vigilance and
traceability system for tissues and cells at EU level is currently being
developed.

In both sectors there are differences concerning how Member
States apply the principle of voluntary unpaid donation. These issues will be
further addressed in the relevant reports focusing on this principle which are
being finalised and will be transmitted to the European Parliament and the
Council in 2011.

In 2010, the Commission adopted Decision 2010/453/EC
establishing guidelines concerning the conditions of inspections and control
measures, and on the training and qualification of officials, in the field of
human tissues and cells provided for in Directive 2004/23/EC of the European
Parliament and of the Council.

On blood, a technical amendment to Annex V to Directive
2004/33/EC with regards to maximum pH values for platelets concentrates at the
end of the shelf life has been presented to and got a favourable opinion by the
regulatory committee on blood and blood components. The draft directive is
expected to be adopted in first semester of 2011.

With regard to organs, the European Parliament and the
Council adopted on 7 July 2010, in first reading, Directive
2010/53/EU on standards of quality and safety of human organs intended for
transplantation.

Work for the
preparation of the implementing measures and delegated acts in accordance with
Directive 2010/53/EC has been initiated in 2010.

In addition to
Directive 2010/53/EU, the Action Plan on Organ Donation and Transplantation
(2009-2015) aims at 1) increasing organ availability, 2) enhancing the
efficiency and accessibility of transplantation systems and 3) improving quality
and safety, through the creation of several technical working groups and
Projects funded by the Health Programme.

Significant
progress has been achieved in 2010 with regard to several priority actions of
the Action plan.

15.2.1.3. Evaluation,
Priorities & Perspectives

The Commission
continues to ensure that legislation on organs, blood, tissues and cells is
fully and consistently implemented by competent authorities. Member States are
called upon to take full responsibility for ensuring implementation of the EU
legislation in this field and promote cooperation between the Commission and
national competent authorities. The Commission holds bi-annual meetings with
the Competent Authorities for Blood and Tissues/Cells to exchange information,
expertise and experience on the implementation of the Directives. The first
Competent Authority meeting for Organs was held in September 2010. In addition
implementation of the organs Directive 2010/53/EU and of the Action Plan
(mid-term and final review – 2012 and 2015 respectively) remain a priority.

15.2.2.
Tobacco

The main pieces of legislation in the area
of tobacco control are Directive 2001/37/EC concerning the manufacture,
presentation and sale of tobacco products and Directive 2003/33/EC relating to
the advertising and sponsorship of tobacco products.

The two
existing Directives in the area of tobacco control are well
implemented in Member States.

Member States have, in general, wider
advertising and sponsorship bans than the cross-border bans required by the
Tobacco Advertising Directive (2003/33/EC). However, certain cases of tobacco
advertising at the point of sale, on billboards, in airports and advertising in
the context of on-line marketing occur. Advertising in the form of promotional
campaigns outside the EU is displayed on the internet. This is a challenge not
only for the EU but requires a global solution. Cross-border internet sales of
cigarettes continue to be an issue which involves tax evasion and illegal
tobacco advertising and promotion.

As regards the Tobacco Products Directive
(2001/37/EC), the second report on its implementation[493]
identified several areas which should be improved. In a resolution from October
2007, the European Parliament called on the Commission to present a proposal
for amendments to the Tobacco Products Directive.

Currently, an Impact Assessment is ongoing
for a review of the legislation in order to update it in relation to scientific
progress, market and international developments. The considerations include:
extending the scope to cover e.g. novel forms of oral tobacco, herbal
cigarettes and electronic nicotine delivery systems; regulating all non
combustible (smokeless) tobacco products in a consistent way; improving
consumer information for example by making picture warnings bigger and mandatory
and by making packaging more neutral (plain packaging); dealing with the
reporting, registration and regulation of ingredients; regulating the access to
tobacco products in a way that does not induce people to smoking.

Based on the outcome of the Impact Assessment,
the Commission will work on the legislative text that is expected to be
finalised by the end 2011.

The Commission is also looking at the
renewal of text warnings and corresponding pictures. This is done by Comitology
procedure and does not require a change in the Directive. New warnings could be adopted towards the end of 2011.

As regards the Council Recommendation on
smoke-free environments[494] the Commission will
support and encourage its implementation by the Member States. A meeting of the
National Focal Points on smoke free environments is planned for 2011.

In 2010 the fourth Conference of the
Parties of the Framework Convention on Tobacco Control (FCTC) took place. The
EU as Party to the FCTC contributed significantly to the progress in international
tobacco control as regards the protocol on illicit trade and the guidelines on
tobacco product regulation and disclosure; on education and communication; and
on tobacco cessation.

15.2.3.
Pharmaceuticals
15.2.3.1. Current
position

Currently the level of harmonisation in the
pharmaceutical is very well advanced; many aspects concerning safe, effective
and high-quality medicinal products are regulated in EU legislation. In this
regard the pharmaceutical acquis focuses on harmonised authorisation
requirements for human and veterinary medicinal products by establishing common
procedures and streamlining the scientific assessment. Additionally,
surrounding aspects such as clinical trials, orphan medicines, paediatric
medicines and advanced therapies are covered. Legislation is mainly based on
the internal market competence of EU (Article 114 TFEU), but partly also on
health competencies (Article 168 TFEU).

In general, compliance with the
pharmaceutical acquis is high. One reason for that is an established and
sustained dialogue between the Commission, the Member States and the competent
agencies on regulatory matters in the pharmaceutical sector. Working parties
dealing with the general interpretation of European pharmaceutical legislation,
such as the Pharmaceutical Committee, habitually discuss transposition and
implementation matters. Coordination groups in the human and in the veterinary
sector are in place to examine questions in relation to marketing
authorisations in two or more Member States. Additionally, the “Notice to
applicants” group publishes guidance documents intended for stakeholders. If
needed chapters of the guidelines interpreting requirements for applications
for marketing authorisations are updated at regular intervals. These working
parties are an important tool to find pro-active solutions outside or in
parallel with infringement procedures under Article 258 TFEU.

Nevertheless, these instruments cannot
totally replace the formal dialogue with Member States within the framework of
an infringement procedure. Eleven procedures had to be opened in 2010, for
example for the non-timely transposition of Directive 2009/120/EC. However, by
end of 2010, all but one was closed.

Additionally, the Commission continues to
receive complaints from stakeholders or initiates investigations on its own on
certain aspects of implementation of pharmaceutical legislation. In 2010 an
increase in the number of complaints was observed. In parallel, certain rulings
of the Court of Justice contributed valuable clarifications to the implementation
of the pharmaceutical acquis. In 2010 the Court of Justice delivered for
example the following judgments:

·
In cases C-350/08 and C-385/08 the Court
clarified based on infringement procedures initiated by the Commission
accession related questions concerning the “phasing in” of national marketing
authorisations granted prior to accession in the new Member States in order to
guarantee that all valid marketing authorisations in the EU comply with the
high standards of the acquis.

·
In case C-62/09 the Court provided guidance as
to the borderline between prohibited promotion for medicinal products on the
one side (covered by Directive 2001/83/EC) and financial
incentives granted by public health authorities for prescribing named generics
on the other (not-covered by Directive 2001/83/EC).

As regards legislative developments, the
adoption of parts of the pharmaceutical package and the implementing regulation for maximum residue limits took place in
2010. In December 2010 Regulation (EU) No 1235/2010 of the European Parliament
and of the Council of 15 December 2010 amending, as regards pharmacovigilance
of medicinal products for human use Regulation (EC)
No 726/2004 laying down Community procedures for the authorisation and
supervision of medicinal products for human and veterinary use and establishing
a European Medicines Agency as well as Directive
2010/84/EU of the European Parliament and of the Council of 15 December 2010
amending, as regards pharmacovigilance Directive
2001/83/EC on the Community code relating to medicinal products for human use, were published in the Official Journals. These new rules strengthen
pharmacovigilance by establishing clear standards, while at the same time
rationalising and simplifying obligations for all actors involved.

Other parts of the “package” are being
discussed within the co-decision procedure:

·
Two legislative proposals on information to
patients involving amendments of Directive 2001/83/EC and Regulation (EC) No
726/2004;

·
A legislative proposal on falsified medicines
involving amendments of Directive 2001/83/EC. A compromise agreement was reached between the three institutions at
the end of 2010.

Additionally, the Commission published
several guidance documents in the area of clinical trials and herbal medicines.

Finally, some groundwork was done to
consider the necessity for future policy action in the pharmaceutical sector.
Public consultations on the functioning of the Clinical Trial Directive
2001/20/EC and the review of the veterinary medicinal legislation were held.
Moreover, the Commission received in 2010 the final report on the evaluation of
the European Medicines Agency.

15.2.3.2. Evaluation
based on the current situation

The pharmaceutical sector remains a highly
dynamic sector, which is subject to frequent change because of innovation. In
such an environment questions of timely and correct implementation of EU law
are crucial to achieve the public health goals of the acquis and to
guarantee a level-playing field for the actors involved. In this respect the
priorities remain unchanged.

The experience of the past years shows that
in general the legal framework is well respected. Hence, implementation and
compliance by Member States with the acquis can be considered
satisfactory. An important contributor in this regard are the various working
groups, committees and networks which exists in the pharmaceutical sector and
which provide useful forums for raising and discussing relevant questions. At
the same time they may give impetus for tightening or clarifying the acquis,
where necessary.

15.2.4.
Medical devices

The role of medical devices in healthcare
is essential. The diversity and innovativeness of this sector contribute
significantly to enhanced quality and efficacy of healthcare.

Covering a wide range of products, from
simple bandages to the most sophisticated life-supporting products, the medical
devices sector plays a crucial role in the diagnosis, prevention, monitoring,
and treatment of diseases and the improvement of the quality of life of people
suffering from disabilities.

The involvement of Directorate-General
Health and Consumers concerns mainly the regulatory framework for market
access, international trade relations and regulatory convergence, all aiming to
ensure the highest level of patient safety while promoting the innovation and
the competitiveness of this sector.

Rules relating to the safety and
performance of medical devices were harmonised in the EU with Council Directive
90/385/EEC relating to active implantable medical devices, Directive 93/42/EEC
concerning medical devices and Directive 98/79/EC on in vitro diagnostic
medical devices.

15.2.4.1. Report of
work done in 2010

European databank for medical devices

Patient's safety will increase in Europe as a direct result of the development of the new European databank for medical
devices called 'Eudamed'.

A Commission Decision adopted on 19 April
2010 obliges EU Member States, as from May 2011, to enter and share data on
medical devices in this secure web-based databank.

Essential data for safety, such as
certificates (including those which are withdrawn or suspended) and incident
reports will be rapidly accessible to the Authorities in charge of market
surveillance and therefore risks for patients will be reduced.

Reprocessing of single use medical
devices, a complex issue

The current EU law (the Medical Devices
Directive) distinguishes between reusable medical devices and medical devices
intended for single use:

·
Some medical devices, such as many of the
surgical instruments, are intended by their manufacturers to be reused. In this
case, the legislation sets specific requirements that the manufacturer must
fulfil in order to allow safe reuse.

·
Other medical devices, such as syringes, needles
and catheters, are intended to be used once only for a single patient. Such
devices are defined as single-use medical devices.

The issue of the reprocessing of single use
medical devices, such as catheters, was discussed in the context of the last
revision of the medical devices Directives, especially at the request of the
European Parliament, but it was not possible to solve such a complex issue
during this negotiation.

To ensure a follow up of these discussions,
the Parliament asked the Commission to prepare a report on this issue and to
put forward appropriate measures.

The reprocessing practice of single-use
medical devices is not regulated at European level and the situation diverges
in the Member States, with the consequence that patients are treated with
reprocessed single-use medical devices in some Member States - without knowing it
- when it is not the case in some other Member States.

On the basis of a scientific opinion of the
Scientific Committee on Emerging and Newly Health Risks (SCENIHR), the
Commission adopted on 27 August 2010 a report which examines public health,
ethical, liability, economic and environmental considerations. In the light of
the findings of this report, the Commission will assess which measures are to
be put forward as part of the forthcoming review of the medical devices
Directives to ensure a high level of protection for patients.

Improved control and safety for the
future in vitro diagnostic medical devices for variant Creutzfeldt–Jakob
disease (vCJD)

In vitro diagnostic medical devices for
vCJD are not yet on the EU market.

However, to pave the way for such tests and
ensure an appropriate regulatory framework, two Comitology measures have been
prepared which are planned to be adopted in 2011:

The first measure will submit vCJD blood
screening, diagnostic and confirmation assays to the control of notified bodies
(instead of a manufacturer's control only) before such tests can be placed on
the market;

The second measure will establish
performance criteria for vCJD blood screening assays. Performance criteria will
be established for the two other categories of vCJD tests as soon as science
will have sufficiently evolved.

Possibility to provide instructions for
use on electronic way for medical devices

Work has progressed well on the preparation
of another Comitology measure which will allow that, for certain categories of
devices, the instructions for use may be provided in electronic rather than
paper form. In order to ensure at least an equivalent protection of patient
safety the modalities of delivering such electronic instructions need to be
specified. The measure is expected to be adopted during 2011.

Improved governance for GMDN (Global
Medical Device Nomenclature) Agency

Work was ongoing to improve the governance
of the GMDN Agency, to find a new funding mechanism and to achieve
international acceptance of the GMDN nomenclature. Use of a single nomenclature
for medical devices will greatly facilitate communication on devices. A
representative of Directorate-General Health and Consumers holds the Chair of
the Policy Advisory Group to the Agency. Work is ongoing on the translation of
GMDN into 20 EU languages.

Screening of
the national law transposing Directive 2007/47/EC

The screening
of national legislation transposing Directive 2007/47/EC, started in 2008 and
was completed in 2010. Several deficiencies of the national law of Member
States were identified and discussed with the respective Member State. The screening also helped to identify issues in which the Member States are ahead of EU
law. These issues are examined in order to enhance better understanding of the
regulatory landscape in a view of the next revision of medical devices
directives.

Screening of
standards

The screening
of standards providing presumption of conformity with legal requirements of
directives prevented some of these standards to deviate from the directives on
medical devices. The screening led to several informal interventions and the
first Commission driven formal objection against several standards.

Support for
and supervision of Member States authorities

Mostly in a
supportive role, but also partly in a supervisory role, the Commission followed
the application of the medical devices directives by the Member States. Numerous interpretative questions have been
clarified together with the authorities. Some of these interpretative questions
were dealt with in guidance documents. The Commission services offered advice
to authorities in individual cases, mainly in the field of market surveillance,
and co-ordinated Member States' actions with regard to incidents (so-called
vigilance cases). The screening of Member States' designations of Notified
Bodies led to numerous restrictions of the scope of designations. Cases of
insufficient performance of Notified Bodies were investigated.

International regulatory cooperation

1. At bilateral level, the main issues to
mention are the following:

·
USA: in the
context of a confidentiality arrangement, sharing of information took place on
the revision of both legislations (for example, on the rules on in vitro
diagnostic medical devices – IVD). On specific products, the exchange focused
primarily on the adoption of corrective actions to improve the safety and
performance of infusion pumps and to avoid the recurrence of serious vigilance
cases.

·
China: the
following major events took place in 2010: China International Medical Device
Forum in September in Beijing, High Level Forum on Standardization with SFDA,
Regulatory dialogue on Medical devices in October in Beijing.

·
India: a workshop
took place in June 2010, in view of regulatory developments, in order to
provide EU expertise.

·
Turkey: several
legal obligations were clarified in order to ensure the free movement of
medical devices within the Custom Union.

Following the development of several WHO's
programs in the field of medical devices, direct contacts have been
established with this organisation in order to enhance bilateral exchange of
information.

2. At multilateral level, the main results
are the following:

·
In the context of GHTF (Global Harmonization
Task Force), a first discussion took place on a strategy for the future of GHTF
and the EU will have to define its position in this context.

·
On a more technical side, the work has
progressed in the study groups through guidance on clinical evidence for IVD
and on labelling and essential requirements for IVD and MD. Such guidance will
be useful in the context of the recast of the medical devices Directives.

·
An international ad hoc working group, chaired
by a Commission representative, has prepared a draft guidance document on a
commonly agreed traceability system, based on a unique device identifier (UDI).
This paper was published for public consultation in November 2010. Comments were
received until April 2011 and are being analysed. This work is reflected at
European level: this issue was discussed under the Spanish Presidency in a
Competent Authorities meeting, and a small working group chaired by Directorate-General
Health and Consumers held its first meeting in June, composed of
representatives of some Member States, to which will be added representatives
of industry, hospitals and patients. The aim of this group of volunteers is to
provide concrete answers in view of an impact assessment of the implementation
of a UDI mechanism at the European level, which will improve market
surveillance and contribute to fighting against counterfeiting.

·
An international regulators ad hoc Task Force on
combination products, composed of the Members of the GHTF for medical devices
and of representatives of ICH (International Conference on Harmonization) for
the pharmaceutical products explored the possible way forward in converging the
regulatory frameworks of combination products internationally and produced a
draft report on the preliminary scoping of objectives, issues and process.

15.2.4.2. Evaluation,
Priorities & Perspectives

Experience indicates that the current
system does not always offer a uniform level of protection of public health in
the EU. New and emerging technologies have challenged the current framework,
highlighting gaps and pointing to a certain scarcity of expertise. In addition,
in recognition that the medical devices market is a global one, to keep
European industry competitive, the EU regime needs to further converge on the
'global model'. And finally, the legal system has been criticised as being too
fragmented and difficult to follow and fraught with national variation.

The Commission is considering a revision of
the legal framework for Medical Devices in order to improve and strengthen this
framework and to meet the growing expectations of European citizens since the
last technical revision brought about by Directive 2007/47/EC.

The initiative to undertake a systemic
revision of the three medical devices directives took off with a public
consultation in 2008. In 2010 it was complemented by an additional public
consultation concerning specific aspects related to in vitro diagnostic medical
devices (IVD).

The drivers for the proposed revision are
the simplification programme 2005, the "revised New Approach", legal
gaps regarding products falling outside any specific EU legislation and
weaknesses of the current directives (lack of coordination and unequal level of
enforcement).

The initiative to "recast" the
three medical devices directives shall contribute to a high level of safety for
the patient and user, delivering a transparent system whereby citizens can be
confident in the safety of medical devices. Its objective is also to ensure a
simple and easily-understandable regulatory environment for medical devices to
ensure the efficient functioning of the Internal Market.

A lot of contacts have also taken place
with the stakeholders, the work on the impact assessment has begun and the
roadmap was finalized in October 2010. A high level conference will be
organised in March 2011 on research and innovation in the field of medical
devices and the revision of the regulatory framework.

At the same time, the implementation of the
current medical devices directives will be ongoing in 2011 to support their
effective and coherent application throughout the EU, in particular as regards:

·
the maintenance of IT tools for the database
Eudamed;

·
the coordination of the treatment of vigilance
cases and market surveillances activities;

·
the elaboration of new and the revision of
existing guidance documents (MEDDEVs), in particular in the field of combined
medical devices/pharmaceuticals;

·
the supervision of the designation of Notified
Bodies by the Member States.

15.3.
Consumers

There are now some 500 million consumers in
Europe and their expenditure represents over half of the EU’s gross domestic
product (GDP). Consumers are essential to economic growth and job creation in a
large market of products and services.

The Commission's Consumer Policy supports
the aims laid out in Articles 169 and 114 TFEU, which promote the interests,
health and safety of European consumers. It is designed to ensure that the
internal market is open, fair and transparent and products sold are safe,
allowing consumers to exercise real choices, whilst excluding rogue traders.

With so many new products and brands and
increasingly sophisticated financial services, European consumers are having a
hard time getting their bearings. They are not comfortable with the idea of
buying something in another Member State: only one out of five people have done
so over the past twelve months. Yet, the EU single market offers many
possibilities for competition and for buying at a lower price.

15.3.1.
Report of work done in 2010

Consumer credit

Directive 2008/48/EC of 23 April 2008 on
credit agreements for consumers had to be implemented by Member States on 11
June 2010. By the end of 2010, 23 Member States have already notified their
implementing measures, although some of them have done it partially. Four
Member States have not yet notified any implementing measure.

The Commission sent a Reasoned Opinion for
non-communication on 24 November 2010 to Spain, Luxemburg, the Netherlands, Poland and Sweden. Sweden notified its implementing measure on 22 December 2010.
Moreover, a Reasoned Opinion has also been issued on 24 November 2010 against Belgium and France for partial transposition. In addition, the Commission launched on 24 November
2010 infringement procedures for incorrect transposition against Belgium, UK and Romania.

EU-Sweeps

In 2010 the fourth EU "Sweep" was
carried out, involving systematic and simultaneous checks in different Member
States to investigate potential breaches of consumer protection rules in the
tickets for cultural and sporting events sector. This Sweep looked into 414
websites, of which 60% were flagged for further investigation in the
enforcement phase. The exercise was carried out by all the EU Member States, as
well as by Norway and Iceland. The most common breaches detected in the 2010
Sweep were related to missing, incomplete or misleading information about the
price (e.g. hidden taxes or handling charges), 74% of the problems; unfair
terms and conditions (e.g. ticket delivery was not guaranteed on time or a
refund was excluded in the event of cancellation), 73% of the problems; and
missing, incomplete or misleading information about the trader (e.g. missing
geographical address and e-mail or falsely presenting himself as authorised by
the promoter), 48% of the problems. The results of the enforcement phase are
planned to be presented during the second half of 2011.

The final report on the follow-up of the
2009 Sweep related to websites selling electronic goods was published in 2010.
In 2009 the Sweep on electronic goods looked at 369 websites of which 55% were
flagged for further investigation. At the end of the enforcement phase, 84% of
the websites flagged were compliant with EU laws.

Consumer empowerment

Through the
European Consumer Consultative Group (ECCG), the Commission pursued its
dialogue with consumer organisations and consulted them on initiatives having
an effect on consumers. ECCG members also shared their views regarding the
application of EU legislation. Following the revision of the Commission
Decision setting up the ECCG[495] aimed at further
improving the efficiency and representativeness of
the group; the group has met 4 times under its new composition.

The European
Consumer Centres Network (ECC-Net)

In 2010, the European Consumer Centres
Network (ECC-Net) handled over 71000 contacts with consumers who turned to them
for advice about their rights or for help with problems in the course of
cross-border shopping.

The work of the centres shows that, in
2010, as it was already the case in 2009, European consumers’ biggest problems
were related to transport, recreation and culture and accommodation services.

The ECCs also helped consumers to reach
agreements on complaints with traders using out-of-court dispute resolution
mechanisms.

In addition, the ECCs have carried out
joint projects analysing consumer complaints and concerns on key issues such as
Alternative Dispute resolution mechanisms in Europe and a pan European survey
on ski resorts.

The ECCs participated actively in the
European Consumer Summit 2010 in the workshop dedicated to car hire that looked
at problem areas in existing practices and tried to raise standards for
consumers in the car hire sector.

Education and training activities

In 2010, an information
campaign raising awareness of EU-wide consumer rights was launched in Bulgaria. The campaign contributes to the better enforcement of consumer law by informing
consumers about specific rights they have at home and in other EU countries,
and by increasing awareness of associations and institutions that provide
further information and advice, such as consumer associations, government
institutions and European Consumer Centres.

In 2010 the Commission carried out a series
of training courses designed to help build the capacity of European consumer
organisations, aiming at providing a better understanding of the consumer acquis
and thereby preventing infringements. The Commission also distributed 3.275.500
copies of the Europa Diary containing consumer education materials to over
21.000 EU schools and developed its consumer education website: www.dolceta.eu.

Consumer Protection Cooperation (CPC)

The CPC Network was established by the
Consumer Protection Cooperation (CPC) Regulation[496]
in December 2006 to stop intra-Union infringements of EU consumer laws in
cross-border situations. It links some 250 enforcement authorities in Member
States to form an EU-wide enforcement network.

In 2010 the Network recorded a total of 222
new mutual assistance requests[497] (compared to 319 the
year before) which include 37 alerts concerning suspected or confirmed
intra-Union infringements (compared to 43 in 2009). As every year since the
Network started operating, a joint market surveillance and enforcement exercise
was carried out in the form of an EU-sweep (for more details see above under
"EU sweeps"). Other joint activities that started in 2010 include a
project on strengthening the Network's internet enforcement capacities by
establishing new means of sharing best practice and that takes forward some of
the work carried out in the context of a first common CPC activity in 2007. The
latter had established among other things a common methodology for the
EU-sweeps ("sweepers' manual").

A second project focuses on the visibility
of the Network's activities and will seek to develop a common (internal and
external) communication strategy for the Network. Both projects will continue
in 2011. The Commission pursued its efforts to address, in close partnership
with the Member States, the shortcomings in the Network's operations as
described in the first Commission biennial assessment of the application of
Regulation (EC) No 2006/2004[498]. Building on the work
already initiated in 2009, operating guidelines were endorsed by the CPC
committee in June 2010 and a number of initiatives were taken to enhance the
IT-tool used by the Network. Finally, as some issues required adjusting
partially some of the cooperation rules applied by the Network, an amendment to
the rules implementing the Regulation was discussed with the Member States and is
planned to be adopted by the Commission in 2011. Training on the IT-tool
continued with the assistance of the Trainers Network established in 2009.

Drawing from the experience learnt in 2009,
the Commission organised two workshops on subjects of relevance to the
CPC-Network: the outcome of the workshops on applicable law and sanctions were
taken forward in a follow-up discussion end of 2010 and a workshop on consumer
issues in the area of financial services prepared the ground for future Network
activities in 2011.

Product safety

In 2010 the Commission presented the key
elements and envisaged actions of the consultation on the revision of the
General Product Safety Directive. Streamlined procedures to get European
standards of safe products and alignment with other market surveillance rules
are in the core of the intended improvements. As the stakeholder consultation
confirmed, consumer confidence and level playing field for business indeed
require that the product safety framework and its enforcement are modern and
effective and that benchmarks are fully shared.

Commission Decision 2010/9/EU on the
safety requirements for bath rings, bathing aids and bath tubs and stands for
babies and young children

On 6 January 2010 the Commission adopted
Decision 2010/9/EU[499] setting the safety
requirements for products used to assist parents and caregivers to bath their
babies. The Decision, based on Article 4 (1) of Directive 2001/95/EC, lays down
the essential requirements to ensure that bath rings, bathing aids and bath
tubs are safe. There are no European safety standards for these products which
if not used adequately expose the babies to drowning. Also, requirements are
needed to eliminate additional risks such as entrapment and injuries.
Standardisation work follows to make this decision effective.

Commission Decision 2010/11/EU on the
safety requirements for child-resistant locks for window and balcony doors

On 7 January 2010, the Commission adopted
Decision2010/11/EU[500] setting the safety
requirements for child-resistant locks for windows and balcony doors.
This Decision, based on Article 4(1) of Directive 2001/95/EC lays down the
requirements that European standards will have to meet to ensure that these
locks are safe. Accidental falls of children from windows and balconies are a
leading cause of death or permanent damages to children below the age of 5 in Europe. There are no European standards for these products. The safety requirements will
ensure that the locks cannot be disengaged by children, resist wear and tear
and weather conditions and are moreover provided with the necessary
instructions to be installed by consumers. Standardisation work follows to make
this decision effective.

Commission Decision 2010/376/EU on the
safety requirements for some products in the sleeping environment of babies and
young children

On 2 July 2010 the Commission adopted
Decision 2010/376/EU[501] setting safety
requirements for 5 products commonly used in the sleep environment of babies
and young children. The products concerned are cot mattresses, cot bumpers,
sleeping bags for babies, suspended baby beds, duvets for babies. The Decision,
based on Article 4 (1) of Directive 2001/95, lays down the requirements that
European standards will have to meet to ensure that these products are safe. At
the moment there are no safety standards for these products, which can pose
serious risks to babies and young children, such as entrapment, suffocation,
strangulation and injuries. Standardisation work follows to make this decision
effective.

Commission
Decision 2010/153/EU prolonging the ban of dimethyl fumarate in all consumer
products

The Commission
adopted Decision 2010/153/EU on 11 March 2010 on the basis of Article 13(4) of
the General Product Safety Directive (GPSD). The Decision concerns dimethyl
fumarate (DMF), a biocide preventing moulds which is strongly sensitising and
can cause severe skin reactions. The Decision requires Member States to ensure
that all consumer products containing DMF are withdrawn from the market and
recalled from consumers. Since the Decision can only be valid for one year at a
time, it will be prolonged for further periods until a permanent measure is put
in place in EU legislation. Such a measure is currently under preparation under
REACH.

Commission Decision
2010/157/EU on child-resistant lighters

On 12 March
2010, the Commission adopted Decision 2010/157/EU, extending for the fourth
time – until 11 May 2011 – Decision 2006/502/EC requiring Member States to take
measures to ensure that only lighters which are child-resistant are placed on
the market and to prohibit the placing on the market of so-called novelty
lighters. Upon a mandate from the Commission, CEN is currently revising the
relevant standard (EN 13869:2002 ‘Lighters — Child-resistance for lighters —
Safety requirements and test methods’).

RAPEX system

RAPEX is the EU Rapid Information System
for dangerous non-food products which operates under the General Product Safety
Directive and the Regulation No 765/2008 setting out
the requirements for accreditation and market surveillance relating to the
marketing of products and repealing Regulation (EEC) No 339/93 (hereinafter the
'Regulation 765/2008'). The Member States, EFTA/EEA
countries and the Commission use RAPEX to rapidly exchange information about
dangerous non-food products found on and consequently withdrawn from the
European market.

RAPEX
operations improved again in 2010, when in total 2 244 notifications were
exchanged through the system by participating countries and the Commission.
This constitutes an increase of 13% compared to 2009. Half of the countries participating
in the system further enhanced their activities and submitted more
notifications on dangerous products than in the previous years. As RAPEX
notifications sent by the Member States in 2010 were of the better quality, the
number of notifications distributed for information purpose decreased by 14%
compared to 2009 (243 notifications distributed in 2010 compared to 283
notifications in 2009).

Clothing and
textiles, toys, motor vehicles, electrical appliances and childcare articles
were still among the most often notified products through the system. These
categories of products accounted for almost 80% of all products notified in
2010. It should be noted that since 2009, there has been a significant increase
in the number of RAPEX notifications on clothing and textiles (in 2009: 395
notifications, 23% of the total and in 2010: 625 notifications, 32%) which
results mainly from the enhanced market surveillance activities undertaken by
national authorities following, in particular, the launch of the joint market
surveillance action on cords and drawstrings in children's clothing and the
adoption of the Commission Decision 2009/251/EC banning dimethyl fumarate in
all consumer products. This proves that risk-focused EU-level measures and
joint prioritisation of certain types of products in the surveillance actions
taken by Member States result in well spent resources in terms of finding
dangerous products that could be harmful to consumers.

The number of
notifications with an unidentified country of origin increased slightly
compared with 2009 (from 7% in 2009 to 10% in 2010). It should, however, be
stressed that it is one of the big improvements of the system, as in 2004 23%
of notifications contained no information about the country of origin. This is
an indicator that the market surveillance authorities in Europe are
increasingly aware of the importance of (a) taking the incriminated product off
the shelves in their country but also (b) of the importance of traceability
data for authorities in other countries and ultimately in the country of origin
of the product. The number of dangerous products of Chinese and European origin
notified through RAPEX was maintained at the level of respectively 58% and 17%
of all notifications (i.e. 1 134 and 338 notifications). These results are
similar to previous year's results.

Extension of
the scope of RAPEX

On 1 January 2010, following the entry into
force of the Regulation 765/2008, the scope of the RAPEX system was extended.
As of that day, RAPEX applies to both consumer and professional products which
pose serious risks to various public interests, such as health and safety of
consumers, environment, energy efficiency, public security, etc.

Risk Assessment Application

Following Decision 2010/15/EU laying down
the new guidelines for the management of the EU Rapid Information System
‘RAPEX’ established under Article 12 and the notification procedure established
under Article 11 of Directive 2001/95/EC, improved risk assessment method
started to be applied. In December 2010, the Commission made available an
online system called "Risk Assessment Guidelines application".
The application was established to simplify the preparation of risk assessments
according to the new RAPEX Guidelines. The application makes it possible to
easily estimate and document the risk of consumer products, while giving the
risk assessor the necessary freedom to make the appropriate assumptions as
described in the Guidelines.

Joint Actions on market surveillance activities

To support the Member States in their
cross-border activities, in 2010 the Commission awarded a financial
contribution of EUR 1.4 million to a single joint market surveillance action,
covering 4 different product groups including; children's fancy dresses, laser
pointers, ladders and high visibility clothing. To further strengthen
cooperation between the Member States on consumer product safety, the
Commission will continue joint actions in 2011 and will financially contribute
to the best proposals suggested by Member States.

International cooperation

The Commission further strengthened
collaboration with its international partners in the product safety area. The
main aim is to share information about emerging product safety risks, provide
updates on legislative and normative developments and prevent dangerous
products from finding their way onto the EU market. More particularly, in
October 2010, Commissioner Dalli participated in the EU-US-China Trilateral
Summit on Product Safety, which took place in Shanghai, China. The meeting agreed a joint statement on points of consensus regarding international product
safety cooperation and committed to develop specific actions to further their
implementation. Negotiations with the United States for an agreement on
cooperation and information exchange in the area of consumer product safety and
consumer protection cooperation made progress but will continue in 2011.

In 2010 the collaboration with the People's
Republic of China's General Administration for Quality Supervision, Inspection
and Quarantine (AQSIQ) continued and the Commission continued to make available
on the Internet the analyses of the quarterly follow-up
reports to the RAPEX notifications sent to China.

COSMETICS

Cosmetic products
are important consumer products with an essential role in everyone's life:
apart from "traditional" cosmetic products, such as make-up and
perfumes, it also includes products for personal hygiene, for example
tooth-care products, shampoos and soaps.

Today's cosmetic market is driven by
innovation including new colour pallets, treatments targeted to specific skin
types and unique formulas concentrating on different needs. Most cosmetics
products have a lifespan of less than five years and manufacturers reformulate
25% of their products every year. They need to improve products constantly in
order to stay ahead in a highly competitive market where more choice and ever
greater efficacy are expected by the consumer.

The European cosmetics industry is a world
leader and dominant cosmetics exporter, a highly innovative sector and a
significant employer in Europe. The EU's involvement concerns mainly the
regulatory framework for market access, international trade relations and
regulatory convergence, all aiming to ensure the highest level of consumer
safety while promoting the innovation and the competitiveness of this sector.

Technical adaptations to the current
Cosmetics Directive

Until 2013 the work continues under the
current Cosmetics Directive and following opinions of the Scientific Committee
on Consumer Safety (SCCS), two technical adaptation directives were adopted in
2010 (one of them is important for the safety of hair-dyes) while two other are
in preparation (one of them concerning zinc oxide used as UV filter in
sunscreens).

A technical adaptation on tooth whitening
products was submitted to the Member States for a vote, but did not receive an
opinion. The file should be transmitted to the Council, and discussions are
ongoing to try to get Member States on board.

Animal testing

The Commission has to prepare annual
reports on this issue, explaining the evolution of the situation (number of
animals used, validation of alternative methods, international situation). The 2008
Report was adopted in September 2010.

In 2011 the Commission will inform the European
Parliament and the Council if the alternative methods will not be developed and
validated before 2013 for three complex end-points: repeated-dose toxicity,
reproductive toxicity and toxicokinetics.

In order to establish the perspectives for
the availability of alternative methods for these three end-points, the
Commission has set up a working group of independent experts proposed by
different stakeholders. This group has elaborated a draft technical report
which was available for public consultation until October 2010 and is now being
finalized. The results so far clearly indicate that - while important progress
has been made – full replacement of animal tests will not be possible by 2013
and for some end-points it is not likely to become a reality in the coming 10
years.

In parallel to this technical exercise, an impact
assessment will be carried out on the basis of the hypothesis that alternative
methods are not available. Options to be analysed in order to define the
Commission's position include keeping the 2013 deadline, a further extension of
the deadline and considering other mechanisms. A targeted stakeholder
consultation was launched in December 2010.

International regulatory cooperation

At bilateral level, the main results are the following:

·
a first meeting took place in June with Indonesia with the aim to convince this country to adopt the Asean cosmetics
Directive, based on the model of the EU legislation. Indonesia agreed to start
implementing the requirements of the Asean cosmetics Directive as from 2011 and
expressed the wish to further increase the regulatory cooperation with the EU;

·
an Asean Cosmetic meeting took place in
June during which Unit B2 presented the new cosmetics Regulation to the Asean
countries in view of an increased EU-Asean cooperation in the area of
convergence of cosmetics regulations;

·
a Consumer Thematic Day took place in Shanghai in October, and the EU-China Cosmetics Safety Assessment Seminar and the
regulatory dialogue on cosmetics at the same period in Beijing;

·
attention has been drawn by industry on
important difficulties encountered to export cosmetic products
to China. After signalling the problem in writing,
bilateral meetings were convened in the autumn with the Chinese Authorities in
charge of the registration of new cosmetics in order to speed up the resolution
of the backlog of imported cosmetics which could not be put on the Chinese
market.

At multilateral level, Directorate-General Health and Consumers took the chair in July 2010
of ICCR (International Cooperation on Cosmetics Regulation), for which
five teleconferences were held with regulators from US, Canada and Japan, as
well as a face-to-face meeting in Toronto in July 2010. This led to significant
progress towards regulatory convergence and, in particular, to the joint
support by the ICCR jurisdictions of a document on criteria for the
identification of nanomaterials in cosmetics.

15.3.2.
Evaluation, Priorities & Perspectives

On 13 March 2007 the Commission adopted a Consumer Policy Strategy
for 2007-2013. The strategy sets out the challenges, role, priorities and
actions of EU consumer policy for this period. The overall objectives of the
Strategy are to empower consumers, to enhance their welfare and to protect them
effectively. The Commission's vision is to achieve by 2013 a single, simple set
of rules for the benefit of consumers and retailers alike.

Given the progress achieved on the review
and development of the consumer acquis, effective enforcement will play
an important role. This will include, from the Commission's point of view,
continued efforts in accompanying the transposition process in the Member
States and supervising the transposition and application of directives by the
Member States.

As part of a larger exercise to monitor how
well the internal market functions for consumers, Commission services and the
Member States developed in 2009 a framework for regular collection of
enforcement indicators to measure the effectiveness of enforcement at national
level. National policies and institutions related to enforcement play a key
role in making the Internal Market function for consumers: free circulation of
safe products and the protection of consumers from rogue traders depend on the
effectiveness of enforcement and market surveillance in all Member States. An
expert group composed of members of the CPC (Consumer Protection Cooperation)
and GPSD (General Product Safety Directive) committees identified the most
appropriate indicators, taking account of differences between national
enforcement systems.

The Commission carried out in 2010 a
mid-term evaluation of the 2007-2013 Consumer Policy Strategy and of the
2007-2013 Programme of Community Action (as well as an ex-post evaluation of
the Programme of Community Action 2004-2006). The results of this evaluation
will feed into the preparation in 2011 of the next (post 2013) Consumer Policy
Strategy and Programme of Community Action. The new Strategy and Programme will
also integrate the results of separate evaluations which will be conducted in
2011 on consumer education tools.

The Commission plans to open a period of
joint reflection with the Member States on the future role of ECC-Net. In
parallel, an evaluation of the Network is foreseen five years after the merger
of the two previous networks into ECC-Net. This evaluation started in 2010.

One of the key initiatives is the
implementation of the new Cosmetics Regulation. Main issues are the Cosmetics
Products Notification Portal, a centralized notification database which will be
managed by the Commission, guidelines on the cosmetics product safety report,
guidelines on common criteria in order to use specific claims,
"cosmetovigilance", CMR substances and nanotechnologies. Other key
issues will be the availability of alternative methods to animals and the EU
Chair of ICCR until July 2011 when the ICCR-5 meeting takes place in Europe.

15.3.3.
Summary of the Consumer activities' field

The challenge in this sector in the near
future is to increase EU-wide consumer confidence in the Internal Market
through clearer, simplified and harmonised rules that are uniformly enforced by
national authorities. Another challenge is to further engage consumers in
enforcement efforts because the Commission cannot deliver effective application
of EU consumer law alone, without the Member States and consumers themselves
playing their full role. To do so the Commission will seek increased
transparency of enforcement action and output to ensure that Member States'
role is not only crucial in ensuring proper transposition of Directives but
also in effectively deploying the resources and mechanisms needed to ensure
compliance.

15.4.
Food safety and animal health and welfare
15.4.1.
General Introduction

For consumers, safety is the most important
ingredient of their food. Consumer confidence is an essential outcome of a
successful food policy and is therefore a primary goal of EU action in this
area. The central goal of the Commission's food safety policy is to ensure a
high level of protection of human health and consumers' interests in relation
to food, taking into account diversity, including traditional products, whilst
ensuring the effective functioning of the internal market.

The Commission's guiding principle is to
apply an integrated approach from farm to table covering all sectors of the
food chain, including feed production, primary production, food processing,
storage, transport and retail sale. The credibility and legitimacy of the
Commission's actions depend on how effectively the food safety policy is
implemented and results delivered. Greater transparency at all levels of food
safety policy is the thread running through the Commission's integrated
approach and will contribute fundamentally to enhancing consumer confidence in
Europe's food safety policy.

Legislation applicable to the various
components of the food chain includes, in addition to the food and feed law,
rules applicable to animal and plant health and to the welfare of animals.
There have been enormous developments in the past decades, both in the methods
of food production and processing, and the controls required to ensure that
acceptable safety standards are being met. Legislation
will be reviewed and amended as necessary in order to make it more coherent, comprehensive
and up-to-date. Enforcement of this legislation at all levels will be promoted.
Member States are key partners in ensuring adequate and uniform application of Europe's food safety legislation.

15.4.1.1. Report of
work done in 2010

Work is ongoing on the modernisation and
simplification of the legislation applicable to food and feed safety, animal
and plant health, and animal welfare. The aim is to achieve better
enforceability of existing rules, whilst providing for a state of the art
legislative framework.

Both the Animal Health Strategy[502]
and the recently launched work towards a Plant Health Strategy[503]
include the objective of providing the EU with a more coherent and directly
enforceable set of rules in these areas in order to replace a vast amount of Directives
adopted in the course of the last decades (the food safety acquis is one
of the largest, numbering more than 500 Directives).

In more general terms, the Commission
through an internal reorganisation in 2009 has integrated the issue of
enforcement throughout the EU food safety policy area. This has mainly resulted
in a systematic analysis of all issues related to implementation of EU
legislation and emerging from in-house information, including the more than 200
inspection reports produced yearly by the Food and Veterinary Office (FVO) of
the Commission, or from information received from Member States or
stakeholders. For each of them an appropriate action is decided upon in
cooperation with the responsible Units and a continuous follow-up is ensured
until the issue has been resolved.

The issues related to transposition
highlighted in the previous report have been specifically followed-up during
2009 and 2010, and all of them have now been closed due to the fact that
transposition has taken place.

FVO inspections

At EU level, valuable information regarding
the application of EU legislation along the food chain is provided by the
inspection activities of the Commission's FVO. Information collected by the FVO
during recent years was carefully screened during the course of 2009 to provide
an overview of potential shortcomings in relation to transposition problems of
some Directives or inadequate application of legislation throughout the food
chain.

The Commission services are in contact with
the Member States concerned to address these issues through an array of
approaches. The FVO continues to screen Directives with the purpose of
identifying any significant transposition problems. In a similar vein, the
Commission services are considering the most efficient and effective
enforcement action with respect to issues other than transposition that have
been identified by the FVO.

The Court delivered in the framework of
three infringement proceedings judgments condemning Greece to have failed to
correctly apply EU law:

·
The FVO missions have highlighted since 1998
fundamental systemic shortcomings in the performance of the Greek authorities’
official controls in the area of food safety, animal health and animal welfare.
These shortcomings are mainly attributable to the shortage of human resources
in the Greek veterinary services. Because of these shortages both in central
administration as well as in the decentralised authorities, there was a failure
to carry out the official controls in an effective and substantial way. The
Court concluded that the results of the efforts made by the Greek authorities
to solve these problems were unsatisfactory[504].

·
FVO missions provided evidence of systemic
deficiencies in the management of animal by-products. The Court concluded that Greece failed to correctly apply key provisions of Regulation (EC) No 1774/2002 laying down
health rules concerning animal by-products not intended for human consumption[505].

·
Also on the basis of evidence gathered during
FVO inspections, the Court of Justice condemned Greece for failure to apply in
a satisfactory way EU legislation relating to the protection of animals during
transport and in slaughterhouses[506].

All three cases show the need to give
priority to initiatives that aim at engaging fully Member States' enforcement
actors in discussions and actions to address the optimal use of finite
enforcement resources.

15.4.2.
Enforcement of the rules applicable to the food
chain
15.4.2.1. Current
Situation

Sustained attention to and coordination of
enforcement action remains a priority in all areas related to food and feed
safety, plant health and animal welfare.

Consideration will continue the
strengthening of cooperation on enforcement matters with and among Member
States' competent authorities and to a more transparent use and efficient
handling of the vast amount of enforcement related data which is available to
the Commission and to Member States.

Information contained in several reports
from the FVO audits carried out in 2010 indicate that in some Member States the
recent economic crisis might have had an impact on the availability of
resources allocated for official controls to verify compliance with the food
chain acquis (food and feed law, animal and plant health and animal
welfare rules). Lack of resources is not a valid justification for non
compliance with EU rules, and cases where insufficient controls result in a
violation of EU law will be dealt with accordingly.

The finite nature (and sometimes the
scarcity) of control resources is however a fact which deserves attention. The
Commission has therefore started a review of the rules on the financing of
official controls, as set out in Regulation (EC) No. 882/2004, with a view to
improving the mechanisms with the intention to ensure appropriate resourcing of
control activities at national level and ultimately to promote a more efficient
use of available resources.

Legislative changes underway

The impact assessment on the mentioned
review on the legislation on the financing of official controls has started and
it is planned to be finalised during early 2012. It will include extensive
consultation with the Member States and other stakeholders in order to assess
the advantages and disadvantages of the different options available for change.
The related data will be acquired in the course of the consultation or, where
needed, through specific surveys. A proposal for change, if required, can
therefore be expected in 2012 (further details can be found at the following
web address:

http://europa.eu/food/food/controls/inspection\_fees/index\_en.htm).

The review of the specific rules laid down
in Council Directive 96/23/EC will be continued in order to fully integrate the
related provisions within the framework of Regulation (EC) No. 882/2004 to
provide Competent Authorities, operators and exporting countries with a simpler
and more transparent framework for controls on residues of veterinary
medicines.

15.4.3.
GMO Food and Feed
15.4.3.1. Current
position

Regulation (EC) No 1829/2003 of the
European Parliament and of the Council on genetically modified (GM) food and
feed sets out a comprehensive set of rules governing the authorisation process
for GM food and feed, while ensuring a high level of protection of human and
animal health, of the environment and of consumers.

The Regulation provides for a single EU
procedure for the authorisation of all food and feed containing, consisting or
produced from a genetically modified organism. This authorisation, valid
throughout the EU, is granted subject to a single risk assessment process under
the responsibility of the European Food and Safety Authority (EFSA) and a
single risk management process involving the Commission and the Member States through  the examination procedure.

Directive 2001/18/EC of the European
Parliament and of the Council on the deliberate release into the environment of
genetically modified organisms (GMOs) outlines the principles for, and
regulates, experimental releases and the placing on the market of GMOs in the
EU for uses other than food and feed. The Directive provides for a notification
procedure for the placing on the market according to which the applicant
notifies the Member State where it wishes to cultivate. The Member State in question conducts an assessment report and decides whether to grant consent or
not to the applicant in consultation with the other Member States and the Commission. Once the consent for placing on the market is granted the product
may be used throughout the EU.

The Regulation provides for a single
authorisation procedure, “one door - one key”, for all food and feed containing
GMOs. The operator can submit his application in accordance with this
Regulation or else he can split this application and have it dealt with under
this Regulation and under Directive 2001/18/EC on the deliberate release of
GMOs into the environment.

15.4.3.2. Report of
work done in 2010

In line with its obligations deriving from
Regulation (EC) No 1829/2003 and Directive 2001/18/EC, the Commission
implemented the EU legislation on GM food and feed mainly in the two following
areas:

Authorisations were granted to those GM food and feed complying with
all the conditions set out in the basic legislation:

· On 02 March 2010 the Commission adopted Decision 2010/141/EU authorising
the placing on the market of products containing, consisting of, or produced
from genetically modified maize MON863xNK603 (MON-ØØ863-5xMON-ØØ6Ø3-6);

· On 03 October 2010 the Commission adopted Decision 2010/140/EU
authorising the placing on the market of products containing, consisting of, or
produced from genetically modified maize MON863xMON810
(MON-ØØ863-5xMON-ØØ81Ø-6);

· On 02 March 2010 the Commission adopted Decision 2010/139/EU
authorising the placing on the market of products containing, consisting of, or
produced from genetically modified maize MON863xMON810xNK603
(MON-ØØ863-5xMON-ØØ81Ø-6xMON- ØØ6Ø3-6);

· On 02 March 2010 the Commission adopted Decision 2010/136/EU
authorising the placing on the market of feed produced from the genetically
modified potato EH92- 527-1 (BPS-25271-9) and the adventitious or technically
unavoidable presence of the potato in food and other feed products;

· On 28 July 2010 the Commission adopted Decision 2010/432/EU
authorising the placing on the market of products containing, consisting of, or
produced from genetically modified maize 1507x59122 (DAS-Ø15Ø7-1xDAS-59122-7);

· On 28 July 2010 the Commission adopted Decision 2010/428/EU
authorising the placing on the market of products containing, consisting of, or
produced from genetically modified maize 59122x1507xNK603
(DAS-59122-7xDAS-Ø15Ø7xMON-ØØ6Ø3-6);

· On 28 July 2010 the Commission adopted Decision 2010/429/EU
authorising the placing on the market of products containing, consisting of, or
produced from genetically modified maize MON 88017 x MON 810 (MON-88Ø17-3 x
MON-ØØ81Ø-6);

· On 28 July 2010 the Commission adopted Decision 2010/420/EU
authorising the placing on the market of products containing, consisting of, or
produced from genetically modified maize MON89034xNK603 (MON-89Ø34-3xMON-ØØ6Ø3-6);

· On 28 July 2010 the Commission adopted Decision 2010/426/EU
authorising the placing on the market of products containing, consisting of, or
produced from genetically modified maize Bt11xGA21 (SYN-BTØ11-1xMON-ØØØ21-9).

Authorisations were granted to the following GM for cultivation
complying with all the conditions set out in the basic legislation:

· On 2 March 2010 the Commission adopted Decision 2010/135/EU
authorising the placing on the market of a potato product (Solanum tuberosum L.
line EH92-527-1) genetically modified for enhanced content of the amylopectin
component of starch.

·
The Commission monitored the situation as
regards the risk of non-authorised GM food and feed in products imported from
third countries being placed on the EU market. This was in particular the case
concerning emergency measures regarding the presence of the unauthorised
genetically modified organism Bt 63 in rice products coming from China and regarding the non-authorised genetically modified organism LL RICE 601 in rice products
originating from the United States for which an emergency withdrawal measure
was adopted. In addition, a protocol of sampling and testing on linseed has
been agreed with the Canadian authorities in order to prevent the import of the
non authorised linseed FP 967 and its functioning has been audited by FVO
inspections to Canada.

15.4.3.3. Evaluation
based on the current situation

The Commission launched in June 2009 two
evaluations in parallel, one on genetically modified food and feed and one on
the cultivation of GMOs, with a view to assess to what extent the EU
legislative framework and its objectives in this sector are still in line with
the needs of EU society.

The primary objective of these evaluations
is to assess the implementation of the major aspects of the legislative
framework and to present possible policy options.

Both evaluations have been concluded in
2010 and the results will be assessed in 2011.

15.4.3.4. Priorities
and planned action

Priorities

On 13 July 2010 the Commission proposed to
confer to Member States the freedom to allow, restrict or ban the cultivation
of GMOs on part or all of their territory. While keeping unchanged the EU's
science-based GM authorisation system, the proposed package consists of a
Communication, a new Recommendation on the co-existence of GM crops with
conventional and/or organic crops, and a draft Regulation proposing a change to
the GMO legislation. The new Recommendation on co-existence allows more
flexibility to Member States taking into account their local, regional and
national conditions when adopting co-existence measures. The proposed
regulation amends Directive 2001/18/EC to allow Member States to restrict or
prohibit the cultivation of GMOs in their territory.

The priority for 2011 is to obtain the
endorsement by the European Parliament and the Council of the draft Regulation.

Additionally, the Commission drafted and
presented to the Member States, with a view for adoption in 2011, a Commission
proposal for a Regulation which would harmonise the methods of sampling and
analysis for the official control of feed as regards presence of GMOs for which
an authorisation procedure is pending ("Low Level Presence" proposal –
LLP).

Another priority is the adoption of the
report on socio-economic implications of the cultivation of GMOs. The report
will be transmitted to Council and Parliament in 2011.

Planned action

The Commission will continue to decide on
applications for authorisations of GMOs for food and feed and cultivation and
with the implementation of the current legislative framework.

The guidelines on GM food and
feed have reached an advanced stage and will be presented for adoption to
the Member States representatives in 2011.

Discussion with the Member States on the
updated guidance on the Environmental Risk Assessment (ERA) of GMOs, as
published by EFSA on 12 November, will take place in 2011, in order to allow
the Member States to take greater ownership of the scientific content and data
requirements in this regard.

15.4.3.5. Summary

As an overview, in 2010, some key
authorisation decisions have been treated as expeditiously as allowed by
procedures. A draft text on LLP has been completed and presented to the Member
States whilst the cultivation package as adopted by the Commission and
presented to both the European Parliament and Council is currently under
discussion. The evaluation of the legislation has been completed and the
results will be assessed in 2011. The ERA guidelines will be discussed with the
Member States in 2011 whereas the guidelines for GM food and feed will be
presented for adoption in 2011. Finally, the report on socio-economic
implications of the cultivation of GMOs will be transmitted to Council and
Parliament at the beginning of 2011.

Food hygiene

15.4.3.6. Rapid
Alert System for Feed and Food

The Rapid Alert
System established by Regulation (EC) No 178/2002 (Article 50) is a tool for
exchange of information between competent authorities on consignments of food
and feed in cases where a risk to human health has been identified and measures
have been taken, such as withholding, recalling, seizure or rejection of the
products concerned. This quick exchange of information allows all Member States
to verify immediately whether they are also affected by the problem. Whenever
the product is already on the market and should not be consumed, the Member
States' authorities are then in a position to take all urgent measures,
including giving direct information to the public, if necessary.

A Commission
Regulation implementing Article 50 of Regulation (EC) No 178/2002 is scheduled
for adoption in 2011. These measures concern in particular the specific
conditions and procedures applicable to the transmission of notifications and
supplementary information. This Regulation was discussed with the Member States and the stakeholders before its adoption.

15.4.3.7. Food
hygiene legislation

The EU Food "Hygiene package" is
composed of three Regulations consolidating, updating and simplifying the EU
legislation on food hygiene:

·
Regulation (EC) No 852/2004 of the European
Parliament and of the Council on the hygiene of foodstuffs;

·
Regulation (EC) No 853/2004 of the European
Parliament and of the Council laying down specific hygiene rules for food of
animal origin; and

·
Regulation (EC) No 854/2004 of the European
Parliament and of the Council laying down specific rules for the organisation
of official controls on products of animal origin intended for human
consumption.

Those rules are based on the principles of
a risk-based approach to a comprehensive and integrated food chain and the
separation of responsibilities of food business operators and the competent
authorities. Food business operators are primarily responsible for the (food)
safety of their products.

·
Flexibility: the
new rules incorporated the principle of flexibility that enables inter alia
the continued use of traditional methods of production, processing and
distribution of food. In 2010, a Commission Staff Working Document on the Understanding of certain provisions on flexibility
provided in the Hygiene Package was presented to give guidance to the food
business operators and another one to provide guidance to the competent
authorities of the Member States. The aim is to better explain the
possibilities for flexibility so they are correctly used.

·
Composite products: A Regulation laying down requirements for the certification for
imports into and transit through the EU of certain composite products has been
adopted in 2010. Regulation (EC) No 853/2004 provides that food business
operators importing food containing both products of plant origin and processed
products of animal origin (composite products) are to ensure that the processed
products of animal origin contained in such food satisfy certain public health
requirements laid down therein. In addition, food business operators must be
able to demonstrate that they have done so, for example through appropriate
documentation or certification. The application of such measures would have
presented practical difficulties in certain cases. Commission Regulation (EC)
No 2076/2005 therefore provided a transitional measure derogating from that
obligation. This transitional period was prolonged until 31 December 2013 by
Regulation (EC) No 1162/2009.

·
Mechanically Separated Meat (MSM): In accordance with Article 9 of
Regulation (EC) No 999/2001, the Commission is required to present a
communication to the European Parliament and the Council on the future
necessity and use of MSM in the EU, including the information policy towards
consumers. On 2 December 2010, the Commission adopted a Communication
presenting an overview of the specific hygiene and labelling requirements in
the EU legislation and their implementation, an overview of the production and
use of MSM, information concerning the future necessity of production and use
of MSM and the perception of consumers concerning the use of MSM and the
preferred information policy from the side of consumers.

·
Review of meat inspection: In the Council Conclusions on the Hygiene report of 20 November
2009, the Commission has been requested to reflect on a new approach to meat
inspection taking into account trends of hazards over the last decades. The
Commission organised on 18 May 2010 a first Round Table on meat inspection with
all relevant parties (Member States Authorities, stakeholders, EFSA, international
organisations (Codex) and representatives of third countries) to review the
effectiveness of current sanitary inspection in slaughterhouses. Sessions were
included on current provisions on meat inspection, the risk-based approach and
the international context. A second conference focussed on pig meat inspection
was organised on 25 October 2010.

·
Derogations granted to Romania and Bulgaria: In order to give certain establishments in Romania and Bulgaria enough time to adapt to the EU legal framework, the Commission granted them
derogation from certain structural requirements of Regulations (EC) Nos
852/2004 and 853/2004. Commission Decision 2010/89/EU lays down transitional
measures concerning the application of certain structural requirements of to establishments
for meat, egg products, fishery products and cold stores in Romania. Commission Decision 2009/861/EC, amended in 2010 by Commission Decision 2010/653/EU grants
a derogation from Regulation (EC) No 853/2004 to allow the processing of
compliant and non-compliant milk with or without separate production lines. As
long as these establishments are covered by transitional measures, products
originating from them may only be placed on the domestic market.

·
Biotoxins: The
mouse bioassay is the official reference method for the detection of certain
marine biotoxins. In July 2006 the Commission requested EFSA to provide a
scientific opinion to assess the current EU limits and methods of analysis with
regard to human health for various marine biotoxins as established in EU
legislation, including new emerging toxins. The last opinion was published on
24 July 2009. EFSA noted that this bioassay has shortcomings and is not
considered an appropriate tool for control purposes because of the high
variability in results, the insufficient detection capability and the limited
specificity. Recently developed alternatives to the biological methods for the
determination of the marine biotoxins have successfully been tested in
pre-validation studies. Consequently, Regulation (EC) No 15/2011 was adopted
and establishes that a technique such as liquid chromatography (LC) mass
spectrometry (MS) should be applied as the reference method for the detection
of lipophilic toxins and used as matter of routine, both for the purposes of
official controls at any stage of the food chain and own-checks by food
business operators.

Following the report from the Commission to
the Council and the European Parliament on the experience gained from the
application of the hygiene Regulations, adopted in 2009, the Commission will
draft a proposal amending these Regulations. This will concern the review of
meat inspection and revision of certain articles. The procedure will start in
2011 with the aim to achieve a result by 1 January 2014.

15.4.3.8. Better
training for Safer Food

Regulation (EC) No 882/2004 provides the
legal base for the initiative "Better Training for Safer Food
(BTSF)". It aims at training official safety control staff in the Member States and third countries on food, veterinary and plant health issues. This
initiative keeps control staff up to date with EU rules and guarantee uniform
and efficient controls. This helps ensure respect for EU legislation and
contribute to providing safer food and feed.

In 2010, 120 events gathering 6000 people took
place in the Member States and in third countries.

In the Member States, the programme covered
the following subjects:

·
HACCP

·
Animal By Products

·
Food Hygiene and Control

·
Animal Health Controls (Aquaculture)

·
Animal Health Controls (bees and Exotic zoo animals)

·
Plant Health Control

·
BIPs Seaport/roads/rail

·
Zoonoses and microbiological criteria

·
Animal Welfare

·
Plant Protection Products

·
Feed law

·
Food Contact Materials

·
TSE

·
Import controls of food of non-animal origin

The third country programme concerned:

·
RASFF/TRACES

·
Avian Influenza

·
EU food import standards

·
GMO Analysis

·
Food testing on SPS issues

·
BTSF Africa

In 2011, 130 events will be organised for
approximately 6300 participants. The 2010 programmes will continue on:

·
HACCP

·
Animal By Products

·
Food Hygiene and Control (3 modules)

·
Animal Health Controls (Aquaculture)

·
Animal Health Controls (bees/exotic zoo animals)

·
Plant Health Control (2 modules)

·
Feed Law

·
Animal Welfare

·
Plant Protection Products

·
Veterinary/food safety controls in BIPs

·
Prevention, control, eradication of TSE

·
Microbiological criteria/zoonoses

·
Controls on feed/food of non-animal origin

New programmes will be launched on:

·
Quality schemes (organic farming/geographical
indications)

·
TRACES

·
Audit systems/internal auditing

·
FVO Pool of EU inspectors

15.4.4.
Transmissible spongiform encephalopathies

Regulation (EC)
No 999/2001 lays down rules for the prevention, control and eradication of
certain transmissible spongiform encephalopathies. The success of the EU's
efforts in combating Transmissible Spongiform Encephalopathies (TSEs), such as
Bovine Spongiform Encephalopathy (BSE) in cattle or scrapie in sheep and goats,
allows the EU to contemplate changes in some of its rules. On 16 July 2010, the
Commission adopted a Communication to the European Parliament and the Council,
which outlines areas where future possible changes to EU TSE-related measures
could be made. The document "The TSE Road Map 2 – A strategy paper on
Transmissible Spongiform Encephalopathies for 2010-2015" underlines that
any amendment should maintain the EU's high level of protection of human and
animal health and of food safety and should be backed up by solid science. The
Road Map is a reflection paper that opens up dialogue on the issue.

15.4.5.
Food additives
15.4.5.1. Current
position

General introduction presenting the
legislation

Council
Directive 89/107/EEC on the approximation of the laws of the Member States
concerning food additives authorised for use in foodstuffs intended for human
consumption has been repealed by Regulation (EC) No 1333/2008 on food additives
which applies since 20 January 2010.

The new
regulation required a review of all current additives authorisations for their
compliance with their general conditions of use by 20 January 2011 and transfer
of these provisions in the Annex of this Regulation. Until that transfer was
completed, the Annexes to Directives 94/35/EC, 94/36/EC and 95/2/EC continued
to apply. In addition, powers to adopt implementing measures were conferred to
the Commission to amend the annexes to Directives 94/35/EC, 94/36/EC and
95/2/EC until the establishment of the EU list of food additives in the Annex
of Regulation (EC) No 1333/2008.

Regulation (EC)
No 1333/2008 required furthermore the adoption of a programme for the
re-evaluation of food additives by 20 January 2010 and a regulation adopting
specifications of the authorised food additives. It requires the establishment
of new lists of food additives used in food additives, enzymes and nutrients
(Annex III, parts 2, 3 and 5).

Regulation (EC)
No 1331/2008 established as well that a common authorisation procedure for food
additives, food enzymes and food flavourings should be adopted by end 2010.

Report of work done in 2010

In 2010 the Commission adopted:

·
Commission Regulation (EU) No 257/2010 of 25
March 2010 setting up a programme for the re-evaluation of approved food
additives in accordance with Regulation (EC) No 1333/2008 of the European
Parliament and of the Council on food additives.

·
Commission Directive 2010/69/EU of 22 October
2010 amending the Annexes to European Parliament and Council Directive 95/2/EC
on food additives other than colours and sweeteners.

·
Commission Directive 2010/37/EU of 17 June 2010
amending Directive 2008/60/EC laying down specific purity criteria on
sweeteners (neotame).

·
Commission Directive 2010/67/EU of 20 October
2010 amending Directive 2008/84/EC laying down specific purity criteria on food
additives other than colours and sweeteners.

15.4.5.2. Evaluation
based on the current situation

In the
framework of the regulatory procedure with scrutiny, the European Parliament
adopted a resolution against the food additives which required a re-submission
addressing the concerns of the resolution. This delayed however the adoption of
all other parts of the text. In future, closer and earlier contacts with European
Parliament and more specific drafts are to be prepared.

The adoption of
an implementing measure for Regulation (EC) No 1331/2008 is slightly delayed. A
Commission proposal will be ready for vote at the Standing Committee on the
Food Chain and Animal Health in 2011.

The Commission
Regulations establishing the Union lists of food additives and the regulation
adopting specifications of the authorised food additives are in a final stage
of preparation. The procedure for their adoption will be launched in 2011.

15.4.5.3. Priorities
and planned action

Priorities

The adoption of following acts is prioritised:

1.      Commission
Regulation implementing Regulation (EC) No 1331/2008 establishing a common
authorisation procedure for food additives, food enzymes and food flavourings.

2.      Commission
Regulation amending Annex II to Regulation (EC) No 1333/2008 of the European
Parliament and of the Council on food additives by establishing a Union list of
food additives.

3.      Commission
Regulation amending Annex III to Regulation (EC) No 1333/2008 of the European
Parliament and of the Council on food additives by establishing. a Union list
of food additives approved for use in food additives, food enzymes, food
flavourings and nutrients.

4.      Commission
Regulation laying down specifications of the approved food additives.

5.      Commission
Directive amending Directive 2008/128/EC laying down specific purity criteria
concerning colours for use in foodstuffs (lycopene).

6.      Commission
Regulations amending the Annexes to Regulation (EC) No 1333/2008 of the
European Parliament and of the Council on food additives.

Planned actions

Actions 1, 2,
3, 4 and 5 are in a final stage and will be presented for vote at the Standing
Committee during 2011, except for action 5, which is expected to be adopted in
January 2011.

The Commission
Regulations amending the Annexes to Regulation (EC) No 1333/2008, will be
presented for vote at the Standing Committee during the second half of 2011
following consultation with Member State experts and stakeholders, and the Union
list of food additives needs to be established first.

15.4.5.4. Summary of
food additives

The application
of the EU law in the area of food additives is ongoing as planned. The adoption
of the Commission regulations establishing the Union lists of food additives
during the first half 2011 will receive highest priority. The Commission
Regulation on an implementing measure for Regulation (EC) No 1331/2008 will
allow an efficient management of the Union lists. Amendments to these lists
will be necessary to take into account possible safety concern raised in the
opinions of EFSA and to allow authorisations of new additives.

15.4.6.
Food enzymes
15.4.6.1. Current
Situation

General introduction presenting the
legislation

The new Regulation (EC) No 1332/2008 on
food enzymes harmonises for the first time the use of food enzymes, both as
food additives and processing aids.

This Regulation has already entered into
force, with the exception of Article 4 which shall apply from the date of
application of the Union list.

The Union list of food enzymes shall be
drawn up on the basis of applications made pursuant to the requirements of
Article 17 of the above Regulation. The deadline for submitting such
applications from interested parties is 24 months after the date of
applications of the implementing measures to be laid down in accordance with
Article 9(1) of Regulation (EC) No 1331/2008.

The Commission shall establish a Register
of all food enzymes to be considered for inclusion in the Union list in respect
of which an application complying with the validity criteria laid down in the
implementing measure has been submitted following the requirements of
Regulation on food enzymes.

The establishment of the Union list will
take place in a single step procedure after the EFSA has expressed opinions on
all products for which sufficient information has been submitted during the
24-month period. This is, however, a lengthy process which will take several
years.

Report of work done in 2010

When drafting Regulation on implementing
measure which concerns the content, drafting and presentation of the
applications to update the Union lists on food additives, food enzymes and
flavourings, the arrangements for checking the validity of applications and the
type of information that must be included in the opinion of the EFSA, a number
of meetings have taken place with Member States experts and with stakeholders.
EFSA was also consulted. The Commission is currently finalising this
implementing measure which should be adopted in the first half of 2011.

As far as food enzymes are concerned, a
couple of trial dossiers were submitted in April and July 2010 by the
Association of Manufacturers and Formulators of Enzyme Products (AMFEP) to the
Panel on food contact materials, enzymes, flavourings and processing aids (CEF Panel)
to be tested under the published guidelines. This is a simulated evaluation to
give indications to EFSA about the type of dossiers that they will get and info
to applicants on how to prepare the application, notably concerning grouping of
dossiers. As a result of this exercise, which has taken place in December 2010,
EFSA will update its guidelines with more practical advice.

15.4.6.2. Evaluation based on the current situation

It is not yet possible to fully appreciate
the enforcement of Regulation (EC) No 1332/2008. However, significant
improvements are expected (in particular by food businesses) from the
simplification of the legislative framework.

15.4.6.3. Priorities
and planned action

Priorities

The Regulation
on implementing measure was planned to be adopted in the first half of 2011 and
a number of applications were expected to be submitted from interested parties
to the Commission. A data base for food enzymes will be established in order to
handle these applications. This database will be used for establishing a Register
of all food enzymes which will be made available to the public. This Register
will be established in 2012.

Planned action

The Commission
is responsible for verifying whether an application falls within the scope of
the enzyme Regulation and whether an application is valid. Once the application
is valid it will be submitted to EFSA for its risk assessment.

Meetings with
Member States, stakeholders and EFSA are also foreseen during 2011 to follow
the requirements of this set of legislation.

15.4.6.4. Summary

Although there is a new Regulation on food
enzymes which harmonises for the first time the use of food enzymes it is not
yet possible to fully appreciate the enforcement of this provision.

An important
number of dossiers are expected to be submitted in the two-year initial period
of submission which will start at the date of application of the implementing
measures. A couple of trial dossiers have been tested by the CEF panel and a
new database will be established.

15.4.7.
Food flavourings
15.4.7.1. Current
position

General introduction presenting the
legislation

The general
framework for food flavourings in the EU was established by Council Directive
88/388/EEC of 22 June 1988 on the approximation of the laws of the Member
States relating to flavourings for use in foodstuffs and to source materials
for their production. This Directive lays down general requirements for safe
use of flavourings in food and provides definitions for different types of
flavourings. It also establishes maximum levels for certain substances that are
naturally present in flavourings and in food ingredients with flavouring
properties, but which may raise concern for human health.

Commission
Directive 91/71/EEC of 16 January 1991 completing Council Directive 88/388/EEC
sets out labelling rules on flavourings.

It was
necessary to update these Directives in the light of technical and scientific
developments. Therefore, the Commission proposed on 28 July 2006 a new
Regulation on flavourings and certain food ingredients with flavouring
properties.

The new Regulation
(EC) No 1334/2008 on flavourings and certain food ingredients with flavouring
properties for use in and on foods was adopted on 16 December 2008. It repealed
Council Directive 88/388/EEC and Commission Directive 91/71/EEC as from 20
January 2011.

Similar to the
previous legislation, the Regulation lays down general requirements for safe
use of flavourings and provides definitions for different types of flavourings.
The Regulation sets out flavourings and source materials for which an
evaluation and approval is required. The Regulation prohibits the addition of
certain substances as such to food and lays down maximum levels for certain
substances, which are naturally present in flavourings and in food ingredients
with flavourings properties, but which may raise concern for human health. The
Regulation also sets out the rules for labelling of flavourings from business
to business and for sale to the final consumers. It also describes the specific
requirements for use of the term "natural".

Currently, Regulation
(EC) No 2232/96 sets out the basic rules for the use of flavouring substances
in or on foodstuffs and lays down a procedure for the establishment of an EU
list of flavouring substances. The Regulation will become obsolete after the
establishment of the EU list provided for in Regulation (EC) No 1334/2008, when
only those flavouring substances listed will be allowed to be added to foods.

The European
Parliament and the Council Regulation (EC) No 2065/2003 on smoke flavourings
used or intended for use in or on foods establishes an EU procedure for the
safety assessment and the authorisation of smoke flavourings in order to ensure
a high level of protection of human health and protection of consumers'
interests, as well as to ensure fair trade practices.

In addition, a
separate Regulation (EC) No 1331/2008 establishes an effective, expedient and
transparent common authorisation procedure for food additives, food enzymes and
food flavourings.

Report of work done in 2010

Several working
group meetings were organised with the governmental experts on flavourings to
discuss the EU list on flavouring substances (around 2600 substances). The list
will form part of the Regulation (EC) No1334/2008 and was scheduled to be
adopted in the by the end of the year. However, the evaluations of flavouring
substances by EFSA is still on-going, therefore, no list could be adopted yet.

The EU list on smoke flavourings was
discussed twice in the Standing Committee on Food Chain and Animal health, in
several working group meetings of governmental experts on flavourings and with
the stakeholders in the working group if the Advisory Group on the Food Chain,
Animal and Plant Health. However, no conclusion on the authorised substances
was reached so far.

15.4.7.2. Evaluation
results based on the current situation

The use of
flavourings continues to be regulated by general requirements laid down in the
framework measures. The use of flavourings substances is not yet harmonised in
the EU. Those smoke flavouring primary products for which a valid application
was submitted by 30 June 2005 in accordance with Regulation (EC) No 2065/2003
and for which applications have not been withdrawn, continue to be traded in
and used.

15.4.7.3. Priorities
and planned action

Priorities

Priority for
2011 is to adopt the EU list of flavourings substances and the EU list on smoke
flavouring primary products.

Planned action

Although the
evaluations of flavourings substance are on-going, the work on the EU list of
flavouring substances will continue and the intention is to establish the list
in the first half of 2011.

The EU list of
smoke flavouring primary products was expected to be established in the first
half of 2011 as EFSA was reviewing new scientific data in 2011 related to
already evaluated smoke flavourings.

15.4.7.4. Summary by
sector

The new
framework Regulation applies from 20 January 2011. New rules, for example on
categorising flavourings, on the labelling and on the maximum
levels for certain substances, which are naturally present in flavourings and
in food ingredients with flavourings properties, will apply. Work is on-going
to harmonise the use of flavouring substances and smoke flavouring primary
products in the EU.

15.4.8.
Residues of veterinary medicinal products
15.4.8.1. Current
position

General introduction presenting the
legislation

During their
lifetime animals may have to be treated with medicines for prevention or cure
of diseases. In food producing animals such as cattle, pigs, poultry and fish
this may lead to residues of the substances used for the treatment in the food
products derived from these animals (e.g. meat, milk, eggs). The residues
should not however be harmful to the consumer.

EU legislation
requires that the toxicity of potential residues is evaluated before the use of
a medicinal substance in food producing animals is authorised. If considered
necessary, maximum residue limits (MRLs) are established and in some cases the
use of the relevant substance is prohibited. The evaluation procedure is laid
out in Regulation (EC) No 470/2009 of 6 May 2009. This Regulation also sets out
procedures to establish and review reference points for action (RPAs) to be
used in case residues of non authorised substances are detected. Such RPAs are
currently established by Commission Decision 2005/34/EC. Finally, due to the
health risks for consumers, the use of certain groups of veterinary medicinal
products (such as substances having a hormonal or thyrostatic action and
beta-agonists) in stockfarming is banned by Directive 96/22/EC.

To guarantee a
high level of consumer protection, an EU-wide monitoring of certain substances
and residues is implemented by the Member States. Provisions on frequencies and
level of sampling, groups of substances to be controlled for each food
commodity, drafting and approval of annual national residue monitoring plans
(NRCPs) are laid down in Directive 96/23/EC and Commission Decision 97/747/EC.
The principal objective of Directive 96/23/EC is to detect illegal use of
substances in animal production and the misuse of authorised veterinary
medicinal products and to ensure the implementation of appropriate actions to
minimise recurrence of all such residues in food of animal origin. Detailed
rules for official sampling procedures and official treatment of samples until
they reach the laboratory responsible for analysis are laid down in Commission
Decision 98/179/EC. Laboratory accreditation and validation of methods used is
established in Commission Decision 2002/657/EC.

Residue
monitoring requirements for third countries wishing to export food of animal
origin to the EU are outlined in Directive 96/23/EC: such third countries must
submit a plan setting out the guarantees which it offers as regards the
monitoring of the groups of residues and substances. The guarantees must have
an effect at least equivalent to those provided for in the Directive for Member
States.

Report of work done in 2010

The annual
approval of the NRCPs of the Member States and third countries assures a
uniform basis for residue monitoring in the EU and provides for the necessary
guarantees regarding residues of veterinary medicinal products in food of
animal origin, both produced in the EU and imported from third countries. The
drafting of the annual report on the residue monitoring exercise of the
previous year, based on more than 750.000 analytical results, consolidates the
efforts regarding residue monitoring within the EU. Finally, the shortcomings
detected during the FVO missions carried out both in Member States and third
countries are closely monitored.

Several topics
related to residue monitoring were discussed during working group meetings:
accreditation of laboratories and validation of methods, interpretation of
results, control measure to apply in case of non compliance. The future steps
in residue monitoring, including control measures, reduction of administrative
burden, new implementing measures were presented to the Member States.

15.4.8.2. Evaluation
based on the current situation

The current
legal framework related to residues of veterinary medicinal products seems to
be achieving its goals through correct enforcement. No complaints have been
received regarding the bad application of the relevant legislation by the
Member States.

15.4.8.3. Priorities
and planned action

Priorities

The administrative procedure laid down in Directive 96/23/EC in
relation to the approval of the NRCPs is rather heavy and the outcome offers
little flexibility to adapt the NRCPs, once approved, in a risk based manner to
changes in risk profile. Reporting on monitoring is limited to
compliance/non-compliance and follow-up measures on non-compliant samples. Data
concerning residues below MRLs available at Member State level are not
available at EU level, reducing information related to the percentage of
animals treated and consumer exposure.

Since
Regulation (EC) No 470/2009 now offers the necessary legal basis, priorities
regarding control measures will relate to residues following cascade use (use
in non target species, defined in Directive 2001/82/EC) and residues of non
authorised substances. Regarding this last issue, it is important to clarify
how the existing RPAs under Commission Decision 2005/34/EC relate to the
provisions in Regulation (EC) No 470/2009.

Planned action

The general
objectives of the review of Directive 96/23/EC are the optimisation and
simplification of the overall legislative framework, the consistency with
Regulation (EC) No 882/2004 allowing for the introduction of risks assessment
criteria and an increased flexibility. This review will be continued starting
with the impact assessment with the involvement of Member States and other
stakeholders.

On the
establishment and review of RPAs, a mandate will be sent to EFSA to request and
opinion on scientific methods and methodological principles to be taken into
account in this context. Following discussion with the Member States, the
Opinion will be used as a basis for the implementing measures. The next step
will include the transfer (including possible review) of the existing RPAs to
this new implementing measure. In parallel, the actions to be taken in case of
repeated confirmed presence below RPA and the MRLs to be considered for control
purposes for foodstuffs derived from animals which have been treated under the
cascade system will be discussed at working group level.

15.4.8.4. Summary by
sector

The legislative
framework on monitoring of residues of veterinary medicinal products in food of
animal origin is effective but the administrative burden is high, both for the
Commission and the Member States.

Possibilities
for implementing measures laid down in Regulation 470/2009 relating to control
issues will be fully explored in the near future.

15.4.9.
Contaminants in food
15.4.9.1. Current
position

General introduction presenting the
legislation

The EU
harmonisation of legislation on contaminants in food fulfils two essential
objectives: the protection of public health and the removal of internal
barriers to trade.

Council
Regulation (EEC) No 315/93 of 8 February 1993, laying down community procedures
for contaminants in food, constitutes the framework for the EU action on
contaminants.

The Regulation
provides that:

·
Food containing a contaminant in an amount which
is unacceptable from the public health viewpoint shall not be placed on the
market;

·
Contaminant levels shall be kept as low as can
reasonably be achieved by following good practices at all stages of the
production chain;

·
In order to protect public health, maximum
levels for specific contaminants shall be established where necessary (by
comitology); and

·
The consultation of EFSA for all provisions
which may have an effect upon public health is mandatory.

Based on this
framework Regulation, maximum levels for the following specific contaminants in
foodstuffs have been established by Commission Regulation (EC) No 1881/2006 of
19 December 2006; such as nitrate, aflatoxins, ochratoxin A, fusarium-toxins,
and patulin (mycotoxins); lead, cadmium, mercury (heavy metals); dioxins and
PCBs; 3-MCPD; inorganic tin; benzo(a)pyrene (as marker substance for the group
of PAH).

In addition,
several Regulations have been adopted containing provisions as regards the
sampling and methods of analysis to be used for official control of the
compliance with the maximum levels established on contaminants, in order to
ensure a harmonised enforcement approach:

·
Commission Regulation (EC) No 1882/2006 of 19 December
2006 laying down methods of sampling and analysis for the official control of
the levels of nitrates in certain foodstuffs;

·
Commission Regulation (EC) No 1883/2006 of 19
December 2006 laying down methods of sampling and analysis for the official control
of the levels of dioxins and dioxin-like PCBs in certain foodstuffs;

·
Commission Regulation (EC) No 401/2006 of 23
February 2006 laying down methods of sampling and analysis for the official
control of the levels of mycotoxins in foodstuffs;

·
Commission Regulation (EC) No 333/2007 of 28
March 2007 laying down methods of sampling and analysis for the official
control of the levels of lead, cadmium, mercury, inorganic tin, 3-MCPD and
benzo(a)pyrene in foodstuffs.

Following
safeguard measures as regards mineral oil, melamine and aflatoxins are in
place:

·
Commission Regulation (EC) No 1135/2009 of 25
November 2009 imposing special conditions governing the import of products
originating in or consigned from China, and repealing Commission Decision
2008/798/EC.

·
Commission Regulation (EC) No 1151/2009 of 27
November 2009 imposing special conditions governing the import of sunflower oil
originating in or consigned from Ukraine due to contamination risks by mineral
oil and repealing Decision 2008/433/EC.

·
Commission Regulation (EC) No 1152/2009 of 27
November 2009 imposing special conditions governing the import of certain
foodstuffs from certain third countries due to contamination risk by aflatoxins
and repealing Decision 2006/504/EC.

Report of work done in 2010

The provisions
on maximum levels and sampling for aflatoxins in food were updated, including
the alignment of EU legislation with Codex decisions as regards maximum levels
and sampling for aflatoxins in almonds, hazelnuts and pistachios (Commission
Regulation (EU) No 165/2010 of 26 February 2010 amending Regulation (EC) No
1881/2006 setting maximum levels for certain contaminants in foodstuffs as
regards aflatoxins and Commission Regulation (EU) No 178/2010 of 2 March 2010
amending Regulation (EC) No 401/2006 as regards groundnuts (peanuts), other
oilseeds, tree nuts, apricot kernels, liquorice and vegetable oil).

Taking into
account the outcome of EFSA scientific opinion on ochratoxin A in food, new
provisions on maximum levels for ochratoxin A in spices and liquorice were
adopted (Commission Regulation (EU) No 105/2010 of 5 February 2010 amending
Regulation (EC) No 1881/2006 setting maximum levels for certain contaminants in
foodstuffs as regards ochratoxin A).

An amendment of
Regulation (EC) No. 1881/2006 containing clarifications and updates of the
existing provisions (e.g. with regard to the portion to be analysed for cadmium
in crabs), was finalised in 2010. Adoption and entry into force is foreseen for
2011. Additionally, an Information Note containing guidance for national
authorities to issue consumer advice on cadmium in crabs, was prepared and will
be put on the Directorate-General Health and Consumers' webpage when the
Regulation enters into force.

Following the
outcome of the FVO inspection mission in October 2009, Commission Regulation
(EU) 258/2010 of 25 March 2010 imposing special conditions on the imports of
guar gum originating in or consigned from India due to contamination risks by
pentachlorophenol and dioxins, and repealing Decision 2008/352/EC, was adopted.

Two recommendations on acrylamide were
finalised in 2010. The first, a recommendation extending the existing
monitoring programme, was adopted early 2010. The second, a recommendation for
Member States to carry out further investigations on acrylamide, was finalised
at the end of 2010, and adoption was planned for 2011.

Data is being
collected on a number of other contaminants, such as brominated flame
retardants (polybrominated diphenyl ethers (PBDE’s) etc), furan,
ethylcarbamate, perfluorooctane sulfonates/acids (PFOS/A).

15.4.9.2. Evaluation
based on the current situation

Much attention
is paid to the effective and uniform enforcement of the legislation on
contaminants and of related safeguard measures. Consideration is given to
enforcement issues from the very first stages of the discussions on new
measures, in order to ensure optimal uniform enforcement across the EU.

Enforcement
issues are discussed in the Standing Committee on the Food Chain and Animal
Health and in relevant expert groups thereof. These discussions result in some
cases in guidance documents for the control of the legislation, publicly
available and published on the Directorate-General Health and Consumers' web
pages:

·
Guidance document for competent authorities for
the control of compliance with EU legislation on aflatoxins[507]
(available in all EU languages);

·
Guidelines for the enforcement of provisions on
dioxins in the event of non-compliance with the maximum levels for dioxins in
food[508];

·
Guidance on sampling of whole fishes of different
size and/or weight[509];

·
Report on the relationship between analytical
results, measurement uncertainty, recovery factors and the provisions of EU
food and feed legislation, with particular reference to the contaminants
legislation[510].

15.4.9.3. Priorities
and planned action

Initiatives for
possible changes to the contaminant legislation include the development of
proposals to limit the presence in food of other contaminants (T-2 toxin, HT-2
toxin, arsenic and PCBs) and to review some existing provisions (heavy metals,
polycyclic aromatic hydrocarbons (PAHs) and dioxins). Alongside the review of
maximum levels for PAHs, Regulation (EC) No 333/2007 laying down methods of
sampling and analysis for the official control of the levels of lead, cadmium,
mercury, inorganic tin, 3-MCPD and benzo(a)pyrene in foodstuffs, will be
amended to reflect the changes in legislation.

In the
contaminants area new and emerging risks are difficult to predict, but require
continuous attention to protect public health.

15.4.9.4. Summary by
sector

Existing
maximum levels for contaminants are continuously reviewed and updated in the
light of new scientific evidence and technological progress. New maximum levels
are established where this is necessary to protect public health. Furthermore,
much attention is paid to the effective and uniform enforcement of the
legislation on contaminants and of related safeguard measures.

15.4.10.
Plant Protection Products – Pesticide Residues
15.4.10.1.
Current position

The legislation
in this area regulates the placing on the market and use of plant protection
products (Directive 91/414/EEC and Regulation (EC) No 1107/2009), the
sustainable use of pesticides (Directive 2009/128/EC) and the maximum residue
levels (MRLs) of pesticides that can be found in or on food and feed
(Regulation (EC) No 396/2005).

The evaluation,
marketing and use of plant protection products in the EU are regulated under
Council Directive 91/414/EEC. This Directive lays out a comprehensive risk
assessment and authorisation procedure for active substances and products containing
these substances. Each active substance has to be proven safe in terms of human
health, including residues in the food chain, animal health and the
environment, in order to be allowed to be marketed. It is the responsibility of
industry to provide the data showing that a substance can be used safely with
respect to human health and the environment.

The rules for
the placing on the market and use of plant protection products provide that
persons or companies wishing to secure the inclusion of active substances in
the positive list of Annex I of Directive 91/414/EEC, submit by a certain date
a dossier meeting the requirements of the Directive in order to demonstrate
that it may be expected that plant protection products containing those active
substances are sufficiently safe for human or animal health or for the
environment.

In 2010 the
Commission's activity in this area was mainly focussed on active substances
previously not included in Annex I of Directive 91/414/EEC and for which a new
dossier was re-submitted. 18 Commission proposals were finalised in 2010. This
work will continue in 2011, when some 60 active substances will have to be
evaluated by the Commission. In addition, several other decisions were taken
for 1) the approval or renewal of the approval for 12 active substances; 2) the
amendment of the conditions for approval of 15 substances, including new
provisions to protect honeybees for certain insecticides; 3) the establishment
of a work programme in view of the future renewal of 31 active substances.

In 2010 the
Commission started working on the implementation of Regulation (EC) No
1107/2009 concerning the placing of plant protection products on the market.
This Regulation will enter into force in June 2011 and will repeal Council
Directive 91/414/EEC. The work carried out in 2010 was mainly devoted to the
creation of the conditions for the correct implementation of the authorisation
system in 3 zones (zonal system) and to the transfer of the existing data
requirements under Directive 91/414/EEC into Regulation (EC) No 1107/2009.

As regards
Regulation (EC) No 396/2005, in 2010 the Commission adopted 5 Regulations to
set several new maximum residue levels (MRLs), following the EFSA evaluation of
new MRLs applications by manufacturers, as well as third countries. The
Commission finalised 4 other proposals for Regulations expected to be published
in the first half of 2011, including a proposal to reduce the MRLs of 13
pesticides no longer approved in the EU. In addition, the Commission also adopted
a Regulation to amend the list of commodities to which MRLs apply (Reg. (EU) No
600/2010), and a Regulation on a coordinated multi-annual control programme of
the EU on pesticide residues (Reg. (EU) 915/2010).

15.4.10.2.
Evaluation based on the current situation

Although this policy area is characterised
by complex technical issues, the enforcement of the legislation seems to be
adequate.

As regards the
new Regulation on the placing on the market of plant protection products and
the Directive on the sustainable use of pesticides, it will not be possible to
appreciate the situation comprehensively until the legislation is fully
applicable and implementing measures have been in force for some time.

The implementation of Regulation (EC) No
396/2005, which since September 2008 harmonises the setting of MRLs in the EU,
resulted in significant improvements (in particular for food business
operators) due the simplification of the regulatory system and to the removal
of national MRLs. However, this area needs to be further improved, with
particular regard to the time needed from the submission of an application from
a third party to the publication of the MRLs in the EU Official Journal.
Furthermore, the provisions of this Regulation need also to be aligned to the
timelines and procedures of Regulation (EC) No 1107/2009.

Commission Decisions not to include active
substances in the positive list of active substances that may be used in plant
protection products (Annex I of Directive 91/414/EEC) are regularly challenged
before the Court. As in 2009, the General Court and the Court of Justice
continued in 2010 to dismiss such applications[511].
In addition, one case was withdrawn from the Court. Those judgments confirm the
correct application by the Commission of EU law when assessing and deciding on
active substances.

15.4.10.3.
Priorities and planned action

In 2011 the
Commission's activity will be aimed mainly at the implementation of Regulation
(EC) No 1107/2009 and of Directive 2009/128/EC. This will include, among other
things, the adoption of new data requirements for the dossiers to be submitted
by industry on active substances and plant protection products and the adoption
of several implementing Regulations, required by 14 June 2011. By 14 December
2011 the Commission will present a report to the European Parliament and to the
Council on the establishment of a European fund on minor uses.

In parallel,
the activity under Directive 91/414/EEC will continue, with a special focus on
the dossiers submitted by several manufacturers under Regulation (EC) No
33/2008. This Regulation lays down rules concerning the re-submission of
dossiers regarding substances previously not included in the positive list of
Directive 91/414/EEC (Annex I). About 60 dossiers are expected to be finalised
in 2011.

The work in the
area of pesticides residues will increase in 2011, due to the need to review
existing MRLs for a) substances approved before 1 September 2008 and b)
substances both approved and not approved after 1 September 2008. This MRLs
review programme is based on the provisions of Article 12 of Reg. (EC) No
396/2005 and is expected to involve about 80 active substances per year. In
parallel, the normal MRL setting process will also continue, as required by
Reg. (EC) No 396/2005.

15.4.10.4.
Summary by sector

Placing on
the market of plant protection products

Activity in
2010 was mainly devoted to 1) the decision for active substances previously not
approved and for which new dossiers were resubmitted and 2) the preparation of
a number of implementing measures for Reg. (EC) No 1107/2009. In 2011 the
Commission will continue the work started in 2010 both for resubmitted
substances and for the implementation of the new Regulation (EC) No 1107/2009
and also of Directive 2009/128/EC. Important achievements are expected to take
place in both directions, as the Commission should finalise the decision-making
for around 60 substances and ensure the smooth implementation of the new
legislation. This will involve the adoption of several implementing Regulations
in 2011, the update of the data requirements for the dossiers and the
submission of a report on a European fund on minor uses.

Pesticide
residues

The
Commission's activity in 2010 focused mainly on the setting of new MRLs for
about 100 MRLs applications. The Commission has also worked to reduce the MRLs
for 13 old pesticides and to adapt the list of commodities by including several
new crops. In 2011 more work is expected in this area, due to the need to
review existing MRLs for several substances according to Article 12 of Reg.
(EC) No 396/2005.

15.4.11.
Extraction Solvents
15.4.11.1.
Current position

General introduction presenting the
legislation

Directive 2009/32/EC of the European
Parliament and of the Council of 23 April 2009 applies to extraction solvents
used or intended for use in the production of foodstuffs or food ingredients.

This Directive
establishes the list the above mentioned extraction solvents as well as maximum
residual amounts, where appropriate.

Report of work done in 2010

The European Food Safety Authority
evaluated the safety of dimethyl ether as an extraction solvent to remove fat
from animal protein raw materials. On the basis of the proposed uses, it was considered appropriate to
permit the use of this extraction solvent.

The conditions
of use for methanol and propane-2-ol were too strict for the production of
flavourings. Specific conditions for this use were therefore needed. The
proposed conditions of use for the production of flavourings should be
introduced in Part III of the annex to the Directive.

For the above
mentioned reasons the following act was adopted:

·
Commission Directive 2010/59/EU of 26 August
2010 amending Directive 2009/32/EC of the European Parliament and of the
Council on the approximation of the laws of the Member States on extraction
solvents used in the production of foodstuffs and food ingredients.

15.4.12. Food Labelling
15.4.12.1.
Current position

General Introduction

EU legislation on food labelling includes
general provisions on the labelling of foodstuffs to be delivered to the
consumer, as laid down in Directive 2000/13/EC of the European Parliament and
of the Council on the approximation of the laws of the Member States relating
to the labelling, presentation and advertising of foodstuffs. This Directive
sets out harmonised rules to enable European consumers to get comprehensive
information on the content and the composition of food products. Nutrition
labelling on foods is regulated by Directive 90/496/EEC. At the moment, under
EU legislation, nutrition labelling is optional, although it becomes compulsory
when a nutrition or health claim is made in the labelling, presentation or
advertising of a foodstuff or when vitamins or minerals are voluntarily added
to foods.

Report of work done in 2010

EU legislation on food labelling is
currently under revision. The Commission adopted, on 30 January 2008, a
proposal for a Regulation of the European Parliament and of the Council on the
provision of food information to consumers. This proposal combines Directive
2000/13/EC with Council Directive 90/496/EEC on nutrition labelling for
foodstuffs into one instrument. In addition, the proposal is in line with the
simplification process in the context of Better Regulation as it simplifies the
structure of the horizontal food labelling legislation in Directive 2000/13/EC,
by recasting and replacing provisions already in place under this Directive.

In 2010 there was progress in the
negotiations between the European Parliament and the Council. The European
Parliament adopted on 16 June 2010 its first reading position on the Commission's
proposal. The Employment, Social Policy, Health and Consumer Affairs Council of
7 December 2010 reached a political agreement on the Council position on the
Commission's proposal.

The labelling acquis is managed
through the Standing Committee on the Food Chain and Animal Health (SCFCAH).
The Committee plays a key role in exchange of views between the Member States
and the Commission regarding the application of the labelling provisions and
the increasing number of draft measures notified by the Member States (on the
basis of Article 19 of Directive 2000/13/EC). In 2010, the Commission dealt
with the assessment of the following notified draft national measures:

•          Italy: draft
measure providing, inter alia, for additional warnings for the labelling
of certain herbal extracts (completion of the assessment carried out in 2009).

•          France: draft measure
laying down the conditions and labelling requirements for the use of virgin
linseed oil for human consumption (completion of the assessment carried out in
2009).

•          Spain: draft Decree
laying down that labelling or documentation of all the meat intended for human
consumption which is obtained from animals slaughtered according to religious
rites shall indicate the following wording “obtained through the stunning
special exemption”.

•          Germany: Second Order
amending the Order on fruit juice and other regulations under food law
providing for the mandatory health warnings on energy drinks.

•          Belgium: draft measure
requiring inter alia compulsory warning to be provided on the labelling
of a number of plants.

•          Spain: draft Royal Decree
providing inter alia for mandatory labelling requirements for candied
fruit as well as for 'dragées' or 'confits' made of dried fruit.

•          Latvia: draft Regulation
requiring inter alia mandatory labelling requirements for dairy
products, composite dairy products or preparations of dairy products to which
other foodstuffs or ingredients, whatever piece-like or not, and flavouring
have been added; as well as labelling requirements for cheese and other
specific dairy products and preparations of dairy products.

Of the draft measures above, only the
Spanish draft Decree concerning candied fruit and 'dragées' or 'confits' made
of dried fruit was accepted by the Commission. The assessment of the Belgian
draft measure is still ongoing.

15.4.12.2.
Evaluation based on the current situation

During 2010 discussions on the Commission's
proposal for a Regulation on the provision of food information to consumers
continued with the European Parliament and the Council. The controversial
discussions demonstrated the difficulties in striking a balance between the
need to streamline and simplify food labelling and the need to help consumers
to make well informed choices. The main political issues were: the presentation
of nutrition information; the inclusion of origin labelling and whether it
should be mandatory for all or certain categories of foods; the application of
the general labelling requirements to alcoholic beverages; the responsibilities
of food business operators; and the inclusion of specific criteria to improve
legibility of information. The developments in the European Parliament and
Council during the first reading endorsed the approach of the Commission
proposal to strengthen nutrition labelling as a channel for information to
consumers to support their ability to choose a balanced diet.

Concerning national legislation in the area
of food labelling for specific foods, the increasing number of notifications
should be noted.

15.4.12.3.
Priorities and planned action

The priority in the general and nutrition
labelling sector remains the overhaul of existing legislation in order to
optimise this regulatory area. This involves work towards adoption of the
proposal for the Regulation on the provision of food information to consumers
by the European Parliament and the Council.

Following the adoption of the proposed
Regulation it will be necessary to take forward appropriate implementing
measures.

In parallel, work will continue on
developing guidance for technical issues on nutrition labelling. This comprises
guidance on acceptable tolerances between nutrition labelling values and values
found by controlling authorities, and guidance on methods of analysis on fibre.

The assessment of draft national measures
on additional mandatory labelling requirements for specific foods will continue
depending on the notifications of such measures by the Member States.

15.4.12.4.
Sector summary

EU food labelling legislation is regulated
by Directive 2000/13/EC. This Directive sets the compulsory
information that has to be provided to the final consumer, such as the name of
the product, the list of ingredients, the use-by date and any special
conditions of use. Nutrition labelling rules are laid down in Council Directive
90/496/EEC. This Directive provides harmonised rules on the basic nutrition
labelling provided on a voluntary basis or, when necessary, a mandatory basis.
In order to modernise and improve EU food labelling rules, the Commission
adopted on 30 January 2008 a proposal for a Regulation of the European
Parliament and of the Council on the provision of food information to
consumers, which is currently under discussion in the European Parliament and
the Council. The priority areas are the adoption of the final Regulation in the
coming year, to continue work on technical issues of nutrition labelling and to
assess Member State notifications of draft national legislative measures
concerning food labelling.

15.4.13. Nutrition and Health Claims
15.4.13.1.
Current position

General introduction

Regulation (EC)
No 1924/2006 of the European Parliament and of the Council, has been applicable
since 1 July 2007, and lays down harmonised rules for the use of health or
nutrition claims (such as “low fat”, “high fibre” and “helps lower
cholesterol”) on foodstuffs. The Regulation aims at ensuring that any claim
made on a food label in the EU is clear, accurate and substantiated and will
thus enable consumers to make informed and meaningful choices when it comes to
food and drinks. This should contribute to a higher level of human health
protection, as it ties in with the Commissions campaign for healthier lifestyle
choices by allowing citizens to know exactly what they are consuming. The
Regulation also strives to ensure fair competition and to promote and protect
innovation in the area of food. Only products offering genuine health or
nutritional benefits will be allowed to refer to that on their labels.

Among the
principles laid down in the Regulation, nutrient profiles were foreseen to be
established by January 2009. Nutrient profiles have to determine whether foods
are eligible to bear claims on the basis of their nutrient composition and will
be based primarily on the levels of nutrients for which excessive intakes in
the overall diet are not recommended (e.g. fat, saturated fat, salt and
sugars).

The Regulation
has two routes for authorising health claims; either via adoption of the EU
list of permitted health claims based on national lists (the so-called article
13 list of functional claims) or via authorisation procedures based on applications
directly from food business operators.

Regarding
nutrition claims, the Regulation included in its Annex a list of such
authorised claims.

Report of work done in 2010

In 2010,
further development of the nutrient profiles system and analysis of its impact
were performed following EFSA's advice in 2008. The Commission services have
put forward draft measures taking into account the opinion of EFSA, Member States, and stakeholders. These draft measures raised considerable public interest,
showing that longer discussion was needed, thus delaying the Commission
Decision on this matter.

Concerning
nutrition claims, an amendment adding 5 new nutrition claims was adopted in the
beginning of 2010. The new nutrition claims are related to the content in fatty
acids such as omega-3 fatty acids, and conditions for the use of such claim
guarantee a minimum content of these fatty acids in foods bearing these claims.

The Commission
authorised and rejected the first health claims under the Regulation. In
total, since 2009, 13 were authorised and 52 were rejected of those based on
applications directly from food business operators. Such health claims refer to
the reduction of disease risk, to children's development and health of
children, or newly scientific evidence and/or include a request for protection
of proprietary data.

Concerning the
EU list of permitted health claims based on national lists further
work was done to consolidate the unexpected high number (44.000) of health
claims from the Member States. Examination of the national lists showed that
Member States had applied the relevant criteria differently when preparing the
lists and in certain cases not applied them at all. Consequently, consolidating
the national lists into a single list including the claims for which the
Authority should give scientific advice, required further discussions with the
Member States, stretching throughout 2009/2010. The list submitted to EFSA was
finalised with the submission of an addendum in March 2010. The consolidated
list contains more than 4600 health claims.

Meetings with
Member States' experts have been held on a monthly basis to facilitate
discussions on the application of the Regulation and to prepare the votes in
the Standing Committee on the authorisation of health and nutrition claims.
Guidance documents aimed at the food business operators and enforcement
authorities are being developed. The guidance strives to ensure that only valid
applications are submitted to EFSA and that authorised claims are used in
compliance with the Regulation.

15.4.13.2.
Evaluation based on the current situation

Though key
implementation measures, such as the nutrient profiles, still need to be
adopted, the application of the new Regulation is already showing signs of its
effects. The decisions on permitted and not permitted claims in 2010, though
limited in numbers, resulted in strong messages passed onto the market for the
benefit of the European consumer and fair competition on the market.

The new rules
on nutrition claims on fatty acids such as "Source of Omega-3 fatty
acids" ensure that consumers will have significant contributions of these
fatty acids when choosing foods bearing such claims. Few Member States had
rules for the use of these claims and therefore the introduction of harmonised
rules is an improvement of consumer information that could help consumers to
make healthier choices.

15.4.13.3.
Priorities and planned actions

Priorities

The priority
remains to ensure a smooth implementation of the Regulation, meeting the
objectives of that legislation in terms of both protecting consumers and
harmonizing the use of nutrition and health claims within the EU. The work in
this area will focus on the adoption of measures establishing nutrient profiles
and of the EU list of permitted claims.

Planned action

Nutrient
profiles have to be set up in accordance with the basic Regulation, as they are
necessary to complete the implementing rules and allow an efficient functioning
of that legislative framework.

Concerning the
list of permitted Article 13 health claims, on 27 September 2010 the Commission
announced its intention to adopt it in two steps: one for all claims other than
those on botanical ingredients, and a subsequent consideration of claims on
botanicals. The Commission and the Member States received from EFSA 3 series of
opinions providing advice on 1944 health claims in the consolidated list. 2
more series of opinions are expected by June 2011. The adoption of the EU list
of permitted health claims is expected for end of 2011 or the beginning of
2012. EFSA advice on the assessed health claims is being scrutinized and
discussed with the Member States and stakeholders with a view to prepare the
list.

15.4.13.4.
Sector summary

Implementing
Regulation (EC) N° 1924/2006 on nutrition and health claims made on food was a
major task in 2009 and 2010. Substantial
preparatory work has been completed for the establishment of specific nutrient
profiles, and further development of the nutrient profiles system and analysis
of its impact were performed. Five additional nutrition claims were proposed
and received a favourable opinion from the Regulatory Committee, and have been
included in the list at the beginning of 2010. Regarding health claims based
on applications directly from food business operators, 13 were authorised and
52 were rejected by the Commission on the basis of the scientific opinions
published by EFSA.

Concerning the
EU List of permitted health claims based on national lists further
work was done to consolidate the unexpected high number (44.000) of health
claims submitted by the Member States. EFSA evaluated a very substantial number
of such claims included in the consolidated list.

15.4.14. Dietetic foods
15.4.14.1.
Current position

General introduction

Directive 2009/39/EC on foodstuffs intended
for particular nutritional uses (recast of Council Directive 89/398/EEC,
hereafter referred to as the Framework Directive) establishes requirements on
product composition and appropriate consumer information for foods that are
suitable to fulfil the particular nutritional requirements of certain groups of
the population.

Foods for particular nutritional uses, or
dietetic foods, are defined as foodstuffs which owing to their composition or
manufacturing process, are clearly distinguishable from foodstuffs for normal
consumption, which are suitable for their claimed nutritional purposes and
which are marketed in such a way as to indicate such suitability. The labelling
of these products must include the particular elements of the qualitative and
quantitative composition or the special manufacturing process which gives its
particular nutritional characteristics.

For a number of these groups specific
legislation has already been adopted. There are Commission Directives on foods
for infants and young children, foods for weight reduction, medical foods and
gluten-free foods. There are two groups of foods covered by the Framework
Directive and mentioned in its Annex for which no specific rules have been
elaborated so far: food products for people with diabetes and foods for sports
people.

Products that do not belong to the
abovementioned categories are required to undergo a notification procedure in
the Member States, with a view to facilitating the official monitoring and the
placing on the market of innovative products.

Report of work done in 2010

The Framework Directive on dietetic foods
is now more than 30 years old and a number of issues have arisen in relation to
its scope and implementation. Many relate to the continued evolution of EU food
legislation. Of particular importance is the adoption of the Directive on food
supplements, the Regulation on the addition of vitamins and minerals and of
certain other substances to foods and the Regulation on nutrition and health
claims made on foods. Following the developments in the food market over the
last decade and due to the broad definition mentioned above, many 'normal'
foods now claim particular nutritional benefits due to their composition.

These elements render the revision of this
legislation necessary.

An impact assessment to support the
revision of the legislation on dietetic foods was therefore undertaken in 2009
and submitted to the Impact Assessment Board which issued a favourable opinion
on 20 December 2010.

15.4.14.2.
Evaluation based on the current situation

It is clear from surveys, reports and
comments from stakeholders and national competent authorities that recently
adopted food legislation overlaps to a large extent with some of the underlying
principles of the dietetic food framework legislation. Consequently, the
application of each piece of legislation to dietetic foods might be unclear for
businesses or Member States. Discussions have highlighted difficulties in
particular with regard to the interpretation of the definition of dietetic
foods.

There is also a need to consider the
legislation on dietetic foods in relation to the more "strategic
goals" of ensuring a better and simplified legal framework to facilitate
innovation. The impact assessment on the revision of the Framework Directive on
dietetic foods therefore also considers the need to simplify the legislative
framework for businesses and Competent Authorities and to reduce administrative
burdens. Particular attention is given on small businesses to ensure that any
change made to the legislation is easily communicated and simple to implement.

15.4.14.3.
Priorities and planned actions

Priorities

The main priority is to continue on the
ongoing work related to the revision of the legislation on foods for particular
nutritional uses, otherwise called dietetic foods.

Three key objectives must be achieved through
the revision: 1) ensure appropriate consumer information, 2) ensure the free
movement of goods within the internal market and with third countries, and 3)
minimise burdens on food business operators and ensure suitable flexibility and
clarity for small businesses.

The Commission services will now start the
work on the draft proposal on the basis of the preferred option identified in
the Impact Assessment.

Planned action

The adoption of a proposal by the
Commission is scheduled for 2011.

15.4.14.4.
Sector summary

The need to optimise the existing legal
framework on dietetic foods to take into account the more recent developments
in food legislation (food supplements, fortified foods, claims) and to clarify
their interactions with the dietetic food legislation is considered under the
revision of the framework Directive on dietetic foods. On the basis of the
impact assessment, the Commission has assessed all the potential impacts that
various options for the revision could have on the management of dietetic
foods. The adoption of a proposal by the Commission is
foreseen for 2011.

Food Supplements and addition of
vitamins and minerals and of certain other substances to foods

15.4.14.5.
Current position

General introduction

Directive 2002/46/EC of the European
Parliament and of the Council on food supplements partially harmonises the
rules applicable to the placing of food supplements on the market.

The scope of the Directive covers all food
supplements. However, only the specific rules applicable to the use of vitamins
and minerals in the manufacture of food supplements are laid down in the
Directive. In accordance with Article 4(8) of the Directive, the Commission
adopted on 5 December 2008 a Report[512] on the use of
substances other than vitamins and minerals in food supplements which concludes
that the existing EU legal instruments already constitute a sufficient
legislative framework for regulating this area and does not consider it
opportune to lay down specific rules for substances other than vitamins or
minerals for use in foodstuffs. Therefore, the use of substances other than
vitamins or minerals in the manufacture of food supplements continues to be
subject to the rules in force in national legislation.

Regulation (EC) No 1925/2006 of the
European Parliament and of the Council, which is applicable as of 1 July 2007,
harmonises the provisions laid down in Member States that relate to the
addition to foodstuffs of vitamins and minerals and of certain other
substances, such as amino acids, essential fatty acids, fibre, various plants
and herbal extracts. The objective of this Regulation is to ensure the
effective functioning of the internal market whilst providing a high level of
consumer protection.

Report of work done in 2010

In 2010, the Commission requested the EFSA
to evaluate the safety of other vitamin and mineral substances for use in foods
based on dossiers submitted by food business operators. The Commission followed
the assessment work carried out by EFSA.

15.4.14.6.
Evaluation based on the current situation

In order to complete the harmonization in
that sector, the two acts mentioned above foresee that maximum amounts should
be set up for use of the vitamins and minerals listed in their Annexes in foods
and in food supplements.

An impact assessment report to analyse the
economic, social and environmental impacts of the options for the setting of
maximum amounts is being finalized.

15.4.14.7.
Priorities and planned actions

Priorities

In the area of food supplements and of
fortified foods, the priority remains the completion of the harmonization for
the use of vitamins and minerals.

Planned actions

Future activities in the field of food
supplements and of fortified foods relate to the adoption of implementing
measures which include, inter alia, the setting of maximum amounts of
vitamins and minerals and the updating of the positive list of substances in
the Annexes to the Directive.

The lists of vitamins and minerals and
their forms that may be added to foods including food supplements will be
updated.

15.4.14.8.
Sector summary

Directive 2002/46/EC and Regulation (EC) No
1925/2006 of the European Parliament and of the Council respectively harmonise
partially the rules applicable to the placing of food supplements on the market
and the addition of vitamins and minerals and of certain other substances to foodstuffs.

The completion of the harmonization should
take place in the near future with the setting up of maximum amounts for the
use of the substances concerned.

15.4.15.
Novel foods
15.4.15.1.
Current position

General introduction

Novel foods are
foods and food ingredients that have not been used for human consumption to a
significant degree within the EU before 15 May 1997. Regulation (EC) No 258/97
of the European Parliament and of the Council lays out detailed rules for the
authorisation of novel foods and novel food ingredients.

Companies that
want to place a novel food on the EU market need to submit their application in
accordance with Commission Recommendation 97/618/EC which concerns the
scientific information and the safety assessment report required.

The Commission
adopted on 14 January 2008 a proposal for a Regulation of the European
Parliament and the Council on novel foods, based on Article 114 TFEU, which
would revise and replace the existing legislation.

Report of work done in 2010

A total of 6
novel foodstuffs (puree and concentrate from Morinda citrifolia; Ferric
Sodium EDTA, Ferrous Ammonium Phosphate by a Commission Decision and Sucromalt,
Guar gum and Magnolia bark extract pursuant to their initial assessment carried
by a Member State which did not receive objections) were authorised for
marketing in the EU. The authorisation of bee venom as novel food ingredient
was refused following the initial assessment. Around 50 novel food products
that were substantially equivalent to existing foods or food ingredients were
notified according to the simplified procedure in 2010.

15.4.15.2.
Evaluation based on the current situation

The current
legislation lays down a decentralized procedure leading to a long (3-5 years)
and costly process which may prevent companies, in particular SMEs, from
innovating in the food sector. The Commission's proposal addressed these
points, in particular through a centralised evaluation and authorisation
procedure and to provide for better conditions for innovation in the food
sector.

The European
Parliament adopted its opinion in second reading on the novel food proposal on
7 July 2010 and reconfirmed most of the amendments adopted at first reading.
Following the rejection of these amendments by the Council, the conciliation
procedure has been launched.

The
inter-institutional debate has remained focused on the issues of animal cloning
for food production and to a lesser extent on nanotechnology in food.

On cloning, the
Commission adopted on 19 October 2010 a report to the Council and the European
Parliament on all aspects of animal cloning for food production.

The report, based on the EFSA opinion[513]
and statements[514], clearly establishes
that food derived from clones and their offspring does not differ from
conventional food as regards food safety. However animal welfare concerns,
linked to the use of the technique, have been identified in the case of clones.

To address the animal welfare issues of
cloned animals, the report concludes that the Commission intends to propose
legislation to suspend for 5 years the use of the cloning technique in the EU
for food production purposes and traceability of their reproductive material.

More specifically, the report proposes a) a
temporary suspension of the use of the cloning technique for the reproduction
of all food producing animals; b) a temporary suspension of the use of these
animals for food production; c) a temporary suspension of the marketing of food
from these animals; and d) the establishment of the traceability of imports of
semen and embryos to allow farmers and industry to set up data banks of
offspring in the EU.

On
nanotechnologies, the draft definition of "engineered nanomaterials"
has been supported by the European Parliament, the Council and the
stakeholders. A provision has also been introduced in the Novel Food Regulation
allowing for its adaptation to the scientific developments at EU or
international levels. It was agreed that all food ingredients containing such
nanomaterials would need a pre-market authorisation.

As regards the
labelling of food containing nanomaterials, the Commission is in favour of the
introduction of a mandatory labelling requirement for all such foodstuffs to
ensure a proper consumer information through the food information proposal.

15.4.15.3.
Evaluation based on the current situation results

Priorities

Taking into
account the objectives of the Commission's proposal of improving the
authorisation procedure of novel foods, and of providing for better conditions
for innovation in the food sector, the priority is to reach agreement in conciliation
on the proposal.

Planned actions

Compromise
solutions on the main negotiation issues should be found without delay, during
the conciliation phase. The Commission will provide all the necessary support
to facilitate a final agreement. The Commission also intends to perform an
impact assessment and to prepare a legislative proposal on cloning as foreseen
in its report.

15.4.15.4.
Sector summary

The current
legislation on novel foods does not allow for an efficient authorization
procedure and for stimulating innovation in the food sector. The proposal
currently under conciliation procedure aims at adapting the legislative
framework in these respects. In that context discussions gave rise to a debate
on the issues of the safety implications and ethical concerns of the use of
cloning and nanotechnologies in the food sector.

15.4.16.
Food contact materials
15.4.16.1.
Current Situation

Presentation of the legislation

Regulation (EC) No 1935/2004 of the
European Parliament and of the Council on materials and articles intended to
come into contact with food (FCM) sets out the basic requirements for a
harmonised European market on food contact materials, while ensuring a high
level of protection of human health. This legal act empowers the Commission to
set material particular rules in specific legislation.

Specific legislation exists for ceramics,
regenerated cellulose film, plastic food contact materials and recycled
plastics, and active and intelligent materials.

Report of work done in 2010

In order to facilitate the application of
current rules on plastics intended to come into contact with food a draft
Commission Regulation on plastic materials and articles intended to come into
contact with food was endorsed by the Standing Committee on 10
September 2010. The proposal draws together fourteen Directives covering basic
rules for plastic materials and removes obsolete and contradictory rules and
outdated analytical methods. It updates the list of authorised substances in
accordance with the scientific assessment by the EFSA, and of food simulants
and testing regime according to scientific knowledge. The draft Commission
Regulation also clarifies the approach for the authorisation of nanomaterials.
All explanatory parts will be compiled in a separate guidance document. The new
proposal, which is expected to be adopted in 2011, will speed up the
authorisation of new substances and simplify rules on migration test, therefore
it will definitely ensure a better application of current EU law in the field.

Following the continuous high number of
non-compliant plastic kitchenware originating from China notified through the
Rapid Alert System on Feed and Food (RASFF) during the last years, a draft
Commission Regulation laying down specific conditions and detailed procedures
for the import of polyamide and melamine plastic kitchenware originating in or
consigned from People's Republic of China and Hong Kong Special Administrative
Region, China, was endorsed by the Standing Committee on 25 November 2010.

Following the
EFSA Scientific Opinion on Bisphenol A (BPA)[515] adopted on
23 September 2010, and the
notification of national bans by Denmark and France as set out in Article 18 of
Regulation (EC) No 1935/2004, a draft Commission Directive amending Directive
2002/72/EC as regards the restriction of use of Bisphenol A in plastic infant
feeding bottles was endorsed by the Standing Committee on 25 November.
The measure is based on the precautionary principle referred to in Article 7 of
Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28
January 2002 laying down the general principles and requirements of food law,
establishing the EFSA and laying down procedures in matters of food safety[516],
which allows EU to provisionally adopt measures on the basis of available
pertinent information, pending an additional assessment of risk and a review of
the measure within a reasonable period of time.

15.4.16.2.
Evaluation based on current situation

Harmonisation of legislation for plastic
food contact materials started in 1980 and led to fourteen Directives. The draft
Commission Regulation on plastic materials and articles intended to come into
contact with food to be adopted in 2011 will simplify the application of
the legal provisions for plastic materials.

While the harmonisation of legislation on
plastic food contact materials at EU level is nearly complete, only the basic
principles are set out for other materials such as paper and board, printing
inks, adhesives. The lack of harmonised measures at EU level creates problems
in particular where Member States do not have legislation in place and specific
rules for compliance with general safety requirements for food contact
materials remains unclear. Member States would welcome the development of EU
measures for certain materials. A system tackling not-yet harmonised materials
should be developed. This system will have to avoid overregulation of the
sector and at the same time should be efficient and be able to ensure that the
safety of citizens is guaranteed.

Taking into account the recent EFSA
Opinions on lead[517] and cadmium[518],
the Council Directive on the approximation of the laws of the Member States
relating to ceramic articles intended to come into contact with foodstuffs[519]
needs to be revised.

15.4.16.3.
Priorities and planned actions

Priorities

First priorities are the adoption of the
draft Commission Regulation on plastic materials and articles intended to come
into contact with food and of the draft Commission Directive amending Directive
2002/72/EC as regards the restriction of use of Bisphenol A in plastic infant
feeding bottles in 2011.

Once the draft Commission Regulation on
plastic materials and articles intended to come into contact with food is
adopted, which will repeal Directive 2002/72/EC, it will be amended accordingly
to reflect the restrictions concerning Bisphenol A proposed in the draft
Commission Directive amending Directive 2002/72/EC as regards the restriction
of use of Bisphenol A in plastic infant feeding bottles.

The draft Commission Regulation
laying down specific conditions and detailed procedures for the import of
polyamide and melamine plastic kitchenware originating in or consigned from
People's Republic of China and Hong Kong Special Administrative Region, China, is planned to be adopted in the first half of2011.

Planned actions

A roadmap for setting out the policy
regarding not yet harmonised materials (Paper and board, glass, wood, cork,
metals and alloys, textiles, adhesives, ion-exchange resins, printing inks,
silicones, varnishes and coatings and waxes) will be drafted in 2011.

The Council Directive on the approximation
of the laws of the Member State relating to ceramic articles intended to come
into contact with foodstuffs (84/500/EEC) will be updated during 2011 to take
into account opinions by EFSA on lead and cadmium.

Adoption of regulation(s) updating the list
of authorised substances to be used in plastic food contact materials following
the adoption of opinions by EFSA.

15.4.16.4.
Summary by sector

The legislation on food contact materials
will gain in clarification once the draft Commission Regulation on plastic
materials and articles intended to come into contact with food developed in
2010 is adopted. The update of the legislation on ceramics following the recent
EFSA opinions on lead and cadmium will adjust the legislation to current
scientific knowledge. The preparation of the roadmap for the setting out the
policy on not-yet harmonised materials will avoid possible problems that Member
States may face due to lack of specific requirements for these materials at
national level.

The implementation of the draft Commission
Regulation laying down specific conditions and detailed procedures for the
import of polyamide and melamine plastic kitchenware originating in or
consigned from People's Republic of China and Hong Kong Special Administrative
Region, China, will reinforce the controls of imported plastic products and
therefore the enforcement of the EU legislation.

15.4.17. Plant Health
15.4.17.1.
Current position

General introduction presenting the
legislation

The plant health legislation provides the
framework for the protection of the EU territory against the introduction of
organisms that are harmful to plants and not yet present or, if locally
present, not widespread and under official control. Therefore, all plants and
some plant products are subject to phytosanitary requirements at import; a
restricted number of plant species require phytosanitary guarantees for
internal movements within the EU. This preventative approach avoids expensive
curative action afterwards or loss of agricultural production or environmental damage.

Report of work done in 2010

The Commission's strategy in the plant
health field continued on the lines initiated in 2009, i.e. focussing on a
correct implementation of existing legislation, while developing a new plant
health law.

The correct implementation of the current acquis
was ensured by a stricter enforcement of existing legislation, a revision of
some emergency measures and an appropriate budget for co-financing eradication
actions in Member States. Stricter enforcement and strengthening of existing
legislation was put in place for several emergency measures against the
introduction or spread of harmful organisms. This was the case with a strict
follow-up of the implementation of existing measures against the spread of pine
wood nematode Bursaphelenchus xylophilus in conifers in Portugal, as well as for a new isolated outbreak on the Spanish side of the Portugal/Spain
frontier. The emergency measures to prevent the introduction of the Chinese
longhorn beetle and the measures to contain the further spread of the red palm
weevil – Rhynchophorus ferrugineus which threatens most palms
species in the Mediterranean areas were updated. For Western corn rootworm - Diabrotica
virgifera virgifera in maize, an impact assessment was elaborated to
underpin the development of a new EU control strategy, as this pest is now
widespread in certain areas within the EU.

The existing phytosanitary policy for the
import of potatoes from Egypt was prolonged for one year. Phytosanitary
restrictions for the import of Japanese and Korean bonsai, Argentinean and
Chilean strawberry plants and oak logs from the USA were renewed for a ten year
period. The recognition of zones in the EU with an extra protection against
certain harmful organisms was screened and updated where necessary.

Upon request of Germany, Spain, France, Italy, Cyprus and Portugal, and in order to ensure a better and harmonised protection
against the spread of new pests and diseases in the territory of the Union, the EU co-financed the national eradication campaigns against harmful organisms for
a total amount of EUR 7,3 million. The campaigns concerned actions against
longhorn beetles (Anoplophora chinensis and A. glabripennis), red
palm weevil (Rhynchophorus ferrugineus), Western corn rootworm (Diabrotica
virgifera virgifera), round-headed apple tree borer (Saperda candida)
and pine wood nematode (Bursaphelenchus xylophilus).

In parallel, the initiative to develop a
new common plant health strategy has been further elaborated. The existing
regime aims to protect the EU territory against introduction and spread of
regulated organisms which are harmful to plants. It lays down specific
requirements for imports of all plants and some plant products into the EU and
for internal movement of a limited number of plants within the EU. During 2010,
an overall evaluation of the current plant health regime was finalised with the
input of an external contractor. The evaluation results and recommendations
were presented to the Member States and stakeholders during two conferences and
comments have been collected. Terms of reference were developed for an extra
study in preparation of an impact assessment for new policy options, and the
study was contracted out.

15.4.17.2.
Evaluation based on the current situation

The monitoring of the implementation and
updates of the current plant health acquis needs to continue to offer a
harmonised protection of the EU territory against harmful organisms. However,
due to several important changes since the first EU plant health legislation
was adopted in 1977, including globalisation of trade, accession of new Member
States, and the environmental expectations of society, a global revision of the
plant health strategy is needed.

15.4.17.3.
Priorities and planned action

Priorities

The completion of the new plant health
strategy with a better focus on prevention is the major priority. The revisions
of the emergency measures against pine wood nematode and against Western corn
rootworm have to be accomplished in order to reflect better the situation in
situ.

Planned action

The results of the 2010 evaluation study
and the additional 2011 impact assessment study, will allow the Commission to
develop a proposal for a new plant health law. This process includes extensive
input from Member States and stakeholders.

As far as the EU control strategy against
the spread of Western Corn Rootworm is concerned, an impact assessment has been
launched and will allow the review of the existing emergency measures in 2011.

15.4.17.4.
Summary by sector

Regular updates of existing phytosanitary
emergency measures, prolongation of temporary import conditions for specific
plant material, revision of protected zones and verification of correct
implementation of EU acquis was continued in 2010 to keep the existing
plant health legislation operational. In parallel, all preparatory work has
been initiated in 2010 to allow the development of a proposal for a new plant
health law in 2011.

15.4.18.
Plant reproductive material – Plant Variety
Rights – Plant Genetic Resources
15.4.18.1.
Current position

General introduction presenting the
legislation

The sector of
plant reproductive material consists of the three work areas:

·
legislation on marketing of seed and plant
propagating material

·
legislation on plant variety rights and

·
international initiatives on plant genetic
resources.

The legislation
on the marketing of seed and plant propagating material consists of 12 basic
Council Directives. The two pillars of the legislation concern (1) the
registration of new plant varieties and (2) the inspection (e.g. certification)
of seed and propagating material for marketing of such varieties. Detailed
requirements, depending on the type of plant species, are set for the
registration of new varieties and quality inspection of lots prior to
marketing.

The EU plant variety rights regime was created
by Council Regulation (EC) No 2100/94. On the basis of a single application to
the Community Plant Variety Office based in Angers (France), a breeder may be
granted an EU-wide intellectual property right for his/her new variety.

The objectives of the International Treaty
on Plant Genetic Resources for Food and Agriculture are the conservation and
sustainable use of plant genetic resources for food and agriculture and the
fair and equitable sharing of the benefits arising out of their use. The
Commission on Genetic Resources for Food and Agriculture is an
intergovernmental forum for negotiations and discussions by Governments on
matters related to biodiversity for food and agriculture.

Report of work done in 2010

Seed and plant propagating material

In the sector of seeds and plant
propagating material, the current legislation was kept updated and further
developed. However, an increasing part of the work concentrated on the review
of the legislation. A specific working group 'on seeds and propagating material'
for the stakeholders of the sector hold a number of meetings to discuss the
legislative work.

The common catalogues on varieties of
agricultural and vegetable plant species were updated 12 times and both had a
consolidated edition published. Altogether over 1800 new varieties of
agricultural plant species and 1000 vegetable varieties were included in the
catalogues. The Community list of Forest Reproductive Material was also
regularly updated and a new common catalogue for vine propagating material was
created. In 2010, the Member States made 20 requests for less stringent
requirements on minimum germination under Regulation (EC) 217/2006 and accepted
by the Commission. In August 2010, the Commission adopted Directive 2010/60/EU providing for certain derogations for marketing
of fodder plant seed mixtures intended for use in the preservation of the
natural environment. Concerning the review of the legislation, an
external study to collect necessary data for the impact assessment was carried
out. The impact assessment was elaborated and Member States and stakeholders
were extensively consulted.

Plant Variety
Rights

In 2010 the number of applications for
plant variety rights increased compared with 2009. Currently, more than 17 500
varieties of plants are protected under the EU system. As the EU plant variety
rights regime dates back to more than 15 years, Directorate-General Health and
Consumers launched an external evaluation, which started in May 2010.

Genetic Resources

Some preparatory meetings for the upcoming
meeting of the contracting parties of the International Treaty in 2011 were
organised.

15.4.18.2.
Evaluation based on the current situation

The impact
assessment on the review of the seeds and plant propagating material
legislation is ongoing and a public consultation is foreseen for the beginning
of 2011. Several working group meetings with the Member States to prepare new
legislation have been held and legal drafting is under way. Notwithstanding the
work done on the review of the legislation, different actions have been
undertaken to ensure the updating and adaptation to current needs as well as
the administrative procedure of the seeds and plant propagating material
legislation. This was carried out in a timely manner. The new rules on the
preservation seed mixture were adopted as planned. Following the adoption of
Council Directive 2008/90/EC on the marketing of fruit plant propagating
material and fruit plants intended for fruit production (recast), work is under
way to update and develop the implementing rules.

15.4.18.3.
Priorities and planned action

Priorities

The priority of
the sector is to finalise the necessary impact assessment and the development
of a legal proposal for the review of the legislation on marketing of seeds and
plant propagating material. Another priority of the sector is to finalise the
evaluation of plant variety rights legislation and to prepare a conference to
present and discuss the results and the future of the plant variety rights
regime. There is a legal obligation to adopt all requested implementing
measures for fruit plants before 30 September 2012 when the basic Directive
enters into force.

Planned action

Concerning the
review of the legislation, the aim is to finalise the necessary impact
assessment in 2011 and to prepare a proposal for the new legislative framework
in 2011. The revision will be aligned with other ongoing revisions, like the
revision of the plant health legislation and Regulation (EC) No 882/2004 on
official controls, foreseen for 2012. Therefore it is likely that some
additional information gathering for the impact assessments will need to be
carried out in 2011. Depending on the outcome of the evaluation results of the
PVR regime a recast of the current legislation could be foreseen. The results
of the evaluation will be discussed with the stakeholders in course of 2011,
including through the organisation of a conference. The fruit implementing
measures are foreseen to be adopted in 2011.

15.4.18.4.
Summary by sector

Two Commission
Directives and 9 Decisions were adopted in 2010. The work on impact assessment
work on the review of the seeds and plant propagating material legislation and
on the implementing measures for the fruits plants are both ongoing. A new
major project on evaluating the legislation on plant variety rights started. In
addition, important pre-legislative work for the seeds and plant propagating
material review and on issues related to plant variety rights legislation was
carried out.

15.4.19.
Animal Health – including non food-borne
zoonotic diseases
15.4.19.1.
Current position

General introduction

Animal health is an important factor for a
functioning agriculture and internal market and the safe supply of food. It has
been part of the EU acquis from the very beginning of the EU and
legislation in force dates back to the 1960s. Animal health legislation has
been adapted over the years, in order to accommodate new diseases such as BSE
or changes in the spread of existing diseases such as avian influenza or
bluetongue. Outbreaks of e.g. classical swine fever and foot and mouth disease have
triggered adoption of specific legislation.

The result is a body of law of over 60 acts
(mostly Directives) laying down horizontal and vertical principles for intra-EU
trade, imports of animals and their products, health and movement controls
(veterinary checks), the notification of diseases and financial support.

Formal complaint cases in this area are
few. Most refer to isolated cases of alleged incorrect implementation at local
level which usually cannot be solved by the EU institutions but have to be
dealt with in national courts.

Nevertheless, requests for interpretation
and the difficulties arising from the complexities and inconsistencies have
shown that this framework does not fully comply with more modern requirements
for simplicity, transparency and flexibility. Thus in 2007 the Commission
presented its plans to improve the situation through a New Animal Health
Strategy[520]. This triggered a broad
consultation involving stakeholders, trade partners and institutions. As a
result, a Communication on an Animal Health Action Plan[521]
was published in 2008, listing all the actions considered necessary up to 2013
for a new approach to animal health. The most important action is the
preparation of a proposal on a new animal health law.

Against this background the challenge to
address acute animal health concerns effectively remains. Animal health is
under consistent threat from outbreaks within the EU, in neighbouring countries
or on the territory of trade partners. Diseases such as classical or African
swine fever and foot and mouth disease, which cause heavy economic losses, are
constantly at EU gates. Modified agricultural practices increase the importance
of fish diseases and tuberculoses. Changes in the environment, especially in
the climate, foster the spread of bluetongue.

Report of work done in 2010

In 2010 the Commission pursued the actions
to implement the Animal Health Action Plan mentioned above.

Serious disease outbreaks can have
devastating impacts on farmers, society and the economy, and the new strategy
is based on the principle that “prevention is better than cure” and thus puts
greater focus on precautionary measures, disease surveillance, controls and
research. The aim is to reduce the incidence of animal disease and minimise the
impact of outbreaks when they do occur.

One part of this approach is the review of
the existing animal health legislation while creating an overarching EU Animal
Health Law. It will in particular provide the principle rules for some
fundamental issues, such as responsibilities of animal keepers, business
operators, competent veterinary authorities, as well as concerning disease
prevention and protection from biological threats (biosecurity). It will
clarify the links between animal health policy and other relevant EU policies
and thus ensure coherence. The new law will embrace the principles of Smart Legislation
by providing flexibility to adapt to new circumstances and to take account of
new developments in science, relevant technology and animal husbandry.

The best possible implementation and
enforcement of the new rules will be assisted by careful alignment of those
with the applicable general rules on official controls for the animal health
area as laid down by Regulation (EC) No 882/2004, by amending that Regulation and
creating further detailed control rules as necessary.

Preparatory work continued in 2010 for a
proposal and impact assessment of this law. The above key issues have been
discussed on several occasions and in various fora (such as the Working Group
of the Chief Veterinary Officers and the Animal Health Advisory Committee). A
web-based public consultation was open from the beginning of the year to
mid-March to collect data on foreseen implementation and administrative costs
and burdens.

The intra-EU movement of pet and companion
animals (such as dogs and cats) is of practical importance to citizens. The
relevant Regulation[522] was amended in 2010 to,
finally, fully harmonise the regime in the whole EU, after a limited (1,5 year)
prolongation of the special regime to facilitate transition. During the
negotiations the Commission declared its intention to align the whole
Regulation (and not only the amended Articles) to the provisions of Articles
290 and 291 of the TFEU (new comitology) and handled the matter with urgency.
It was also identified that less than optimal legal clarity, readability and
"user-friendliness" of the Regulation compromises its uniform
implementation and compliance across the EU.

New rules are applicable as from 1 January
2010 in the area of electronic identification of ovine and caprine animals. The
Commission addressed this issue in several fora, informed all concerned about
the details, and regularly required reports from Member States on their efforts
to correctly implement these rules. Assistance to Member States included a high
level conference on traceability, partially dedicated to this subject and even
field visits to Member States (e.g. UK) where implementation proved to be
challenging.

Preparatory work has been ongoing on the
area of bovine identification for a proposal to amend the relevant Regulation[523].
This Regulation has been identified in the past as burdensome by the High Level
Group on Administrative Burden. The planned changes intend to facilitate the
use of modern electronic identification technology in the sector, lessen
administrative burden for holding registers, passports and beef labelling while
adhering to the objectives of the Regulation. They also intend to align the
Regulation to the Articles 290 and 291 of the TFEU. This will facilitate future
implementation and compliance.

The provisions
of Council Decision 79/542/EEC regulating certain aspects of the import of
specific live animals and fresh red meat into the EU were recast in a
Commission Regulation and the Decision was repealed. This was due to
fundamental changes in the regulatory framework on this area but also to
provide increased clarity and transparency. New model import certificates
incorporating public health provisions were laid down. These integrated models
assist all concerned stakeholders to comply with the rules and enable
authorities to check compliance more easily. An ample transitional period was
provided for smooth changeover from the old to the new regime.

Directive
2008/73/EC has a deadline of 1 January 2010 for transposition and
implementation. Member States were reminded, and possible problems were
discussed in the Standing Committee on the Food Chain and Animal Health. Most Member
States have transposed and implemented its provisions, but 2 infringements for
non-communication of national measures are ongoing against Austria and Portugal.

In 2010 the
first ever series of trainings for official veterinarians on rules in the area
of bee health and bee keeping as well as for exotic zoo animals started and
will continue into 2011.

The control of the spread of bluetongue
continued to be successful. However the evaluation of the current legal
environment based on direct experience with an ongoing vaccination campaign
indicated that although it is effective, it is less than optimal. The rules are
complex, often difficult to apply for local farmers, traders, local and
national veterinary services and other stakeholders and more restrictive than
they could be.

Because of this, a specific reflection on
bluetongue continued in 2010 and led to a new Commission proposal to change the
Directive. The key elements of this proposal (and a subsequent amendment to the
implementing rules) relate to the facilitation of preventive use of modern,
inactivated vaccines with less restriction for increased simplification,
proportionality and sustainability.

In 2010 simplification and streamlining of
the animal health implementing rules for the movements (including imports) of
semen, ova, and embryos of the equine, ovine and caprine species and ova and
embryos of the porcine species took place. It comprised an amendment to the
relevant Annex to Directive 92/65/EEC and was followed up by a complete recast
of the eight relevant Commission Decisions into three new Commission Decisions.
The whole exercise created better alignment of the substantial rules to
international standards, new model certificates as well as the management of
lists of establishments from which such products can originate.

Successful disease control relies not only on an
adequate legal framework but also on its implementation. In 2010, Member States
again have responded to outbreaks in a swift and successful manner. None of the
outbreaks had an impact on public health or led to major economic losses. The
framework to adopt rapid safeguard measures was kept updated, as well as
constant re-evaluation of the situation, the legal requirements and best
possible implementation, mostly with the experts from the Member States in the
Standing Committee on the Food Chain and Animal Health.

15.4.19.2.
Evaluation based on the current situation

Considering the above, the animal health
framework for handling various disease generally is adequate and effective. It
can however be improved by smarter and more efficient solutions. Hence the area
is currently in a phase of reform with the purpose to identify opportunities of
further enhancing efficiency and to reduce unnecessary burdens.

15.4.19.3.
Evaluation based on the current situation
results

Priorities

The combat of disease outbreaks is the
first priority dictated by the circumstances. The second priority remains the
further development of the Animal Health Strategy as a long term goal.

Planned action

In 2011 work will continue on the creation
of the Animal Health Law with the view that the final proposal could be adopted
in early 2012. The proposal to amend Regulation (EC) No 1760/2000 is expected
to be finalised in the first part of 2011. Preparatory work will continue
throughout 2011 on the important area of how the EU finances certain animal
health measures (whether emergency measures or planned and systematic
eradication of diseases). This should result in late 2012 in an impact
assessment and proposal for the review of Decision 2009/470/EC, the financial
instrument for EU veterinary expenditure. On the area of pet animals,
developments in 2010 both in the European Parliament and Council necessitate a
recast of the whole Regulation.

15.4.19.4.
Summary of Sector

This sector faces major overhaul. The goal
is to consolidate a long term and largely successful and profound collaboration
into a more modern system by integrating tried and tested methods within an improved framework.
The challenge to swiftly and effectively react to epidemics will remain.

15.4.20.
Zootechnics
15.4.20.1.
Current position

Zootechnical legislation is closely linked
with the Animal Health acquis as it establishes minimum genetic criteria
to ensure free trade in breeding animals and their genetic material (semen,
embryos). The current system of EU zootechnical legislation was established in
the 1980s by the Council in order to remove barriers to trade. The result is a
body of law of over 30 pieces of legislation (6 basic Directives and their
implementing acts) laying down principles on the registration of breeding
animals in herd books and the work of breeding organisations.

Report of work done in 2010

A series of consultations has taken place
with stakeholders and Member States. Advice was given to the Member States on
the implementation of the legislation.

15.4.20.2.
Evaluation based on the current situation

The present system generally works well.
But the provisions of the basic zootechnical legislation granting implementing
or delegating powers to the Commission are not consistent with the requirements
of Articles 290 and 291 of the TFEU. In addition the relevant Council texts are
scattered across 11 similar but in certain details different acts. A similar
pattern can be seen at Commission level. This compromises the coherence, full
implementation, accessibility and legal clarity of this acquis. This can
also cause unjustified obstacles to EU trade and threaten the uniform
application of EU law. A significant volume of complaints suggest that both Member States and economic operators are finding it difficult to apply this legislation in
practice.

Hence it has been recognised that there is
scope to clarify and simplify the legislation as well adapt it to the TFEU. In
addition complaint cases have identified several problems in the current
framework which need to be handled, such as:

·
It does not specifically address cross-border
activities of approved breeding organisations, while these organisations
increasingly serve breeders in several Member States and breeding programmes
are carried out at international level.

·
Due to lack of clarity of the legislation there
are disparities in the application and the implementation of zootechnical
legislation. This can cause unjustified obstacles to EU trade and threaten the
uniform application of EU law.

15.4.20.3.
Evaluation based on the current situation
results

Priorities

The first priority is to recast the
legislation as soon as possible into one single piece of legislation. The
second priority is to support Member States in the implementation of the
current legislation.

Planned action for 2011 and beyond

Recast of the legislation and its
adaptation to the TFEU is planned for the first half of 2011.

15.4.21.
Animal by-products
15.4.21.1.
Current Situation

General introduction

Animal by-products not intended for human
consumption include slaughterhouse waste, fallen stock and dairy products going
to animal feed, as well as a variety of other products for different
applications. The health rules for those animal by-products are currently laid
down in Regulation (EC) No 1774/2002 and a number of implementing measures. The
Regulation relies on a risk-based categorisation of animal by-products, which
determines the options for their use and obligations for their disposal.
Experience with the application of the Regulation since 2003 revealed that the
interaction with other EU legislation, its risk-benefit ratio, and the
proportionality of the prescribed measures in particular as regards their use
for technical applications, posed problems and needed to be reviewed.
Therefore, based on a Commission proposal, the European Parliament and the
Council adopted Regulation (EC) No 1069/2009, which replaces Regulation (EC) No
1774/2002 as from 4 March 2011.

Report of work done in 2010

Regulation (EC) No 1069/2009 only
establishes the general principles for animal by-products and leaves its
implementation to Commission measures. Therefore the Commission carried out
wide consultations with stakeholders in 2010. Based on those consultations, a
draft implementing Regulation was submitted to the Standing Committee on the
Food Chain and Animal Health and received a favourable opinion. It is foreseen
to be adopted and published in good time for the application of Regulation (EC)
No 1069/2009.

The training of officials and some
stakeholders on the new principles has already started under the "Better
Training for Safer Food" initiative, with 4 trainings done in 2010.

15.4.21.2.
Evaluation based on the current situation

The new implementing rules for Regulation
(EC) No 1069/2009 replace the technical standards set out in the 11 Annexes to
Regulation (EC) No 1774/2002, as well as in more than 10 separate Commission
measures by a single, more coherent legal act. They specify the obligations of
commercial operators handling animal by-products and of the control authorities
of Member States and they lay down specific requirements for the hygienic
handling, processing, tracing and placing on the market of such by-products.
The new rules determine under which conditions certain animal by-products
(which were until now excluded from any use), may be used, under appropriate
health conditions. Thus, the new implementing rules contribute to further
simplification of the EU law and a further reduction in administrative burden
for business operators.

15.4.21.3.
Evaluation based on the current situation
results

Planned Action

The Commission will ensure that the new
implementing rules continue to be updated in the light of progress in science
and technology, particularly as regards new processes for the treatment of
animal by-products, which are subject to a risk assessment by the European Food
Safety Authority. In addition, in the course of 2011, further "Better
Training for Safer Food" training courses will be organised in order to
contribute to a smooth transition to the new legal framework.

Summary of Sector

Significant achievements were made in 2010.
The challenge now is to further assist the players in the sector (both the
authorities of the Member States and the economic operators) to learn,
understand, correctly implement and enforce the new rules and obtain the maximum
benefit.

15.4.22.
Feed
15.4.22.1.
Current position

General introduction presenting the
legislation

The relevant Treaty provisions for
legislation in the Feed sector are Article 43 and Article 168(4)(b) of the
TFEU.

As regards the feed marketing and feed
labelling sector, new Regulation (EC) No 767/2009 of the European
Parliament and of the Council of 13 July 2009 applies since the 1 September
2010. It lays down rules on the placing on the market and use of feed for both
food-producing and non-food producing animals within the EU, including
requirements for labelling, packaging and presentation. Feed materials and
compound feed are both covered by this Regulation.

Council Directive 90/167/EEC still applies
to medicated feed, but new legislation is in preparation (see below).

As regards the feed additives
sector, Regulation (EC) No 1831/2003 of the European Parliament and of the
Council provides for the rules on the authorisation for placing on the market
and use, including labelling, of these products. Detailed rules for the preparation
and presentation of applications for authorisation are laid down in Commission
Regulation (EC) No 429/2008, while the Community Reference Laboratory (CRL)'s
duties and tasks are set out in Commission Regulation (EC) No 378/2005.

Undesirable substances in feed are governed by Council and European Parliament Directive
2002/32/EC.

Report of work done in 2010

Feed marketing and labelling

Regulation (EC) No 767/2009 on the placing
on the market and use of feed entered into application on 1 September 2010. It
constitutes an essential piece of legislation to ensure a high level of feed
safety and thus of public health, but also to provide adequate information for
users and consumers and to strengthen the effective functioning of the Internal
Market.

In 2010 the management tools for the
harmonised implementation of the new regime were established, including the
following actions:

·
After the adoption of the Catalogue of feed
materials, collaboration with the feed business sectors enabled the development
of an updated and modernised version of this key tool. The coverage of the feed
materials listed in the draft new Catalogue, which has already been endorsed by
the Standing Committee, is significantly increased and the information about
their properties is improved.

·
Guidelines clarifying the borderlines between
different types of feed were defined.

·
The list of prohibited materials in feed was
updated.

·
Transitional measures for the application of the
new labelling rules were adopted to facilitate compliance of feed operators to
the new legislation.

·
The permitted tolerances for the compositional
labelling of feed were adapted to scientific and technological developments.

·
The list of dietetic feed was updated further to
operators' requests.

Medicated feed

Council Directive 90/167/EEC on medicated
feed is outdated and not consistent with current legislation on both feed and
veterinary medicinal products. Preparatory work for recasting and modernising
the legislation for this specific type of products was carried out in 2010,
including:

·
the finalisation of an external study on the
evaluation of the EU legislative framework in the field of medicated feed;

·
exchanges within the Standing Committee on the
situation within the Member States;

·
the launch of the impact assessment in advance
of the drafting of the legislative proposal.

Feed additives

In 2010, nearly 30 Regulations concerning
additives authorisations were adopted by the Commission after completion of a
procedure involving EFSA, the CRL and the Member States, and applicants'
requests of confidentiality of the data submitted have been processed by the
Commission.

The preparatory work for the re-evaluation
of current additives authorisations, as provided for in Regulation (EC) No
1831/2003, continued in view of the large amount of applications received by
the deadline of 8 November 2010. This important challenge was successfully
taken up with the reception and management by the Commission of several hundred
applications covering all essential existing feed additives. This allows the
continuity of relevant authorisations and therefore supports good animal health
and welfare within the EU.

A Regulation clarifying the
"non-additive" status of a series of products was adopted by the
Commission, in order to bring clarity to operators regarding
"borderline" products.

As regards the labelling of feed additives
and premixtures, clarification and simplification of the rules laid down in
Regulation (EC) No 1831/2003 were achieved with the entry into force on 1
September 2010 of amending provisions contained in Regulation (EC) No 767/2009.

Undesirable substances in feed

In 2010, maximum levels of certain
contaminants in feed were reviewed in the context of Directive 2002/32/EC,
taking account of EFSA risk assessments. In addition, work and discussion with
the Member States and stakeholders continued as regards the acceptability of
detoxification processes and as regards the consolidation of the annexes to
Directive 2002/32/EC.

Regular discussion took place with the Member States and stakeholders concerning feed contamination cases reported through the
RASFF.

Committee and expert groups

The management of the above mentioned feed
sectors is subject to close co-operation with the Member States through regular
(generally monthly) meetings of the Standing Committee on the Food Chain and
Animal Health, section on Animal Nutrition, and punctual expert groups meetings
where appropriate.

International issues

In 2010, the Commission continued its
participation to the work of task forces in OIE, CODEX and FAO in the feed
sector.

15.4.22.2.
Evaluation based on the current situation

The adoption in 2010 of key implementing
measures of Regulation (EC) No 767/2009 concerning the marketing and
labelling of feed ensured the effective and uniform application of the new
regime from 1 September 2010. In particular, clarification of the status of
certain "borderline" products and modernisation of the Catalogue of
feed materials bring more legal certainty to feed operators in the EU.

EU legislation on medicated feed is
obsolete and not in line with current legislation on feed, in particular the
Feed Hygiene Regulation, but also with legislation on veterinary medicines.
This makes the preparation of new legislation in this sector a priority action,
as provided for in the Commission Work Programme

In the field of undesirable substances
in animal feed, the setting of maximum levels of contaminants is decided
through successive amendments to the Annex to Directive 2002/32/EC. This
complicates the legibility of such measures. It is necessary to integrate and
re-structure all amendments into a new tool. In addition, the analysis and
management of RASFF notifications may result in amendments to the existing
legislation where needed.

Planned action

As regards the feed marketing and
labelling sector, it is intended to adopt further implementing measures in
order to ensure the optimal application of Regulation (EC) No 767/2009.

For the medicated feed sector, a
full impact assessment will be carried out in 2011, taking into account the
preparatory work already carried out, in order to present by 2012, as provided
for in the Commission Work Programme, a Commission proposal recasting and
modernising the legislation in this field. This initiative will be in a package
with the revision of the Directive on veterinary medicinal products.

The main challenge in the feed additives
area will be the optimal implementation of the review exercise of all
current authorisations, in collaboration with EFSA and the EU Reference
Laboratory. This will result in a thorough "cleaning" of the Register
of feed additives with the withdrawal of additives which were not subject to
any re-evaluation applications. In addition, requests for the authorisation of
feed additives submitted to the Commission will continue to be processed within
the time-limits prescribed by Regulation (EC) No 1831/2003. It is also
envisaged to study the possibility of a revision of the labelling rules,
including concerning claims, laid down in Regulation (EC) No 1831/2003.

As far as undesirable substances in
feed are concerned, in addition to the continuous review of maximum levels in
the framework of Directive 2002/32/EC, it is envisaged to take measures
concerning the presence of pharmaceuticals in feed for non-target animals and
to adopt measures on acceptability criteria for detoxification/decontamination
processes in feed. Work concerning the consolidation of the annexes of
Directive 2002/32/EC will continue in 2011.

More generally, adaptation of the feed
legislation will be needed in order to comply with the provisions of the Lisbon
Treaty concerning delegated and implementing acts.

15.4.22.3.
Summary by sector

In summary, the following actions are to be
considered as main priorities for 2011 and beyond in the feed sector:

·
management of a full impact assessment and
preparation of new legislation in the field of medicated feed;

·
adoption of further implementing measures of
Regulation (EC) No 767/2009 on the placing on the market and use of feed;

·
implementation of the re-evaluation exercise of
current feed additives authorisations.

15.4.23.
Import controls on live animals and food from
animal origin
15.4.23.1.
Current position

General introduction presenting the
legislation

Live animals and products of animal origin
(such as meat, eggs and fish) and animal products not intended for human
consumption (such as semen and embryos) are considered to represent a high risk
because they can be vectors for the transmission of diseases not only to
humans, but also to livestock. Apart from the threats to human health, the
threats to animal health are particularly worrying due to the detrimental
effects of the spread of disease on European livestock production.

Live animals and animal products can only
enter the EU through approved border inspection posts (BIPs) under strictly
harmonised import conditions. These require that such imports are sourced from
approved third countries, from approved or registered establishments and that
the veterinary certificates accompanying the consignments are signed by the
competent authority of the exporting country providing detailed information as
to the public and animal health status of the products and their conformity
with the EU’s import requirements. In the event of a serious animal disease
outbreak in a third country, import restrictions may be established to prevent
the introduction of the disease in the EU.

Upon arrival, BIP staff carries out
mandatory controls including documentary, identity and physical checks to
verify that the goods conform to their description and meet EU import conditions.
Physical checks are always required in the case of live animals, however such
checks may be reduced for animal products when they meet harmonised import
conditions and when veterinary agreements - proving that the third country can
offer the same or equivalent levels of safety to those of the EU - are in
place. Targeted analytical checks may form part of the physical check.

Once a consignment has satisfactorily
undergone these checks a Common Veterinary Entry Document (CVED) is issued
allowing the goods to be released for free circulation. There is close
co-operation between veterinary and customs authorities, who do not permit the
release of animals or animal products unless and until a CVED has been issued.

Report of work done in 2010

A roadmap of the review of the legislative
framework of the import controls on live animals and products of animal origin
was developed in the context of the review of the Official Food and Feed
Controls Regulation (EC No 882/2004) on official controls on food and feed safety,
animal health and animal welfare. This Regulation will serve as the basic act
for the new legislation on live animals and products of animal origin that will
be developed.

In 2010, two Commission decisions were
adopted to amend the list of border inspection posts approved in accordance
with Directives 91/496/EEC and 97/78/EC:

·
Commission Decision 2010/277/EU of 12 May 2010
amending Decision 2009/821/EC as regards the lists of border inspection posts
and veterinary units in Traces;

·
Commission Decision 2010/617/EU of 14 October
2010 amending Decision 2009/821/EC as regards the lists of border inspection
posts and veterinary units in Traces.

In the last quarter of 2010, a report was
prepared to the Council and the Parliament on the effectiveness and consistency
of sanitary and phytosanitary controls on imports of food, feed, animals and
plants.

Directorate-General Health and Consumers
also contributed to a Commission Project Group aimed at developing technical
specifications for establishing national Single Windows linking national
electronic customs clearance systems with the CVED in TRACES. The establishment
of the Single Windows will reduce administrative burden and deepen the
cooperation between customs and veterinary services involved in import controls.

The programme Better Training for Safer
Food (BTSF) has a specific training module
for the staff of BIPs to facilitate a harmonised approach to imports by BIPs.
Several training courses for this module took place in 2010.

15.4.23.2.
Evaluation based on the current situation

The General Food Law and the Official Food
and Feed Controls Regulation (EC No 882/2004) will continue to provide the
general framework for the control of foodstuffs and of other products of
relevance for the food chain, while a number of new and innovative steps will
be taken to consider how the current system can evolve towards a more efficient
mechanism for the handling of coordinated import controls at EU borders.

The review of its provisions will
consolidate this integrated approach by looking at the rules currently
applicable to veterinary controls on import of live animals and products of
animal origin currently laid down in Council Directives 91/496/EEC and 97/78/EC
respectively.

Changes to the Official Food and Feed
Controls Regulation are planned as part of the wider initiative to recast and
simplify EU legislation - in the areas of food and feed safety, animal health,
animal welfare and plant health – initiated in 2004. The aim is to ensure an
integrated approach to official controls in all areas related to the food
chain.

15.4.23.3.
Priorities and planned action
15.4.23.4.
Priorities

The priorities are to:

·
Introduce mechanisms to better link the level of
controls to the level of the associated risks to better target resources and
increase the efficiency of controls;

·
Optimise the legislation to ensure that policy
goals are met;

·
Simplify and clarify the legislation;

·
Take into consideration the burdens to business
and enforcers;

·
Introduce new technologies into the legislation;

·
Clarify and streamline the interaction with
other EU legislation regarding import controls, in particular customs
legislation.

Planned action

In operational terms, this will require the
improvement of current tools, such as the TRACES database, and the possible
development of new ones, to allow risk management decisions on imported goods
to fully take into account the risk profile of a given consignment considering
its associated hazard and origin. This will be supported by data mining and
handling functions to provide for more harmonisation of import controls across
EU borders, and a consistent and transparent process to determine border
controls. The use of electronic databases including electronic certification
should be promoted to reduce administrative burden and to enhance co-operation
between different authorities involved in import controls.

15.4.23.5.
Summary

The review and update of the legislative
rules governing import controls on live animals and products of animal origin
will bring about a more holistic approach, which will serve to reinforce the
efficiency of the EU’s import control regime, ensure an optimal allocation of
resources and make it easier to promote and defend the EU’s regulatory model.
In addition, the legislation will also address the many challenges posed by
emerging technologies, new diseases and globalisation.

Relations with International
Organisations

In 2010 Directorate-General Health and
Consumers continued its participation to plenary sessions and preparatory
meetings of the Codex Alimentarius Commission (CAC) and of the World Trade
Organisation/Sanitary and Phytosanitary Committee. The accession of the EU and
its representation by the Commission are clearly defined in Council Decision
2003/822/EC.

15.4.24. Animal welfare
15.4.24.1.
Current Situation

General introduction

Animals are keys to food supply and human
nutrition. Animal welfare concerns have grown in the society and there is a
growing insistence on high animal welfare standards. As the world's largest
trader (exports plus imports), Europe leads in promoting high levels of animal
welfare. TFEU recognises that animal are sentient beings and animal welfare
requirements must be taken into account when drafting and implementing EU
policies.

Animal welfare in holdings/on the farm

Council Directive 98/58/EC on the
protection of animals kept for farming purposes sets general rules for the
protection of animals of all species kept for the production of food, textiles
or for other farming purposes. It defines general principles and minimum
standards on appropriate feeding, comfort and prevention of unnecessary
suffering. More specific rules apply to species raised in intensive systems
such as laying hens, broilers, calves and pigs.

Animal welfare during transport

Council Regulation (EC) No 1/2005 on the
protection of animals during transport and related operations intends to reduce
the stress and harm that animals can experience when moved. It sets general
principles and introduces standards for vehicles and equipment, and
requirements for those dealing with animals when being transported.

Animal welfare at the time of killing

Every year nearly 360 million pigs, sheep,
goats and cattle, several billion poultry and 25 million fur animals are
slaughtered in the EU for production purposes. The control of contagious
diseases may require the killing of thousands to millions of animals.

Directive 93/119/EC on the protection of
animals at the time of slaughter or killing laid down minimum requirements
applicable to the killing of animals for production purposes within and outside
slaughterhouses. From 1 January 2013, it will be replaced by Council Regulation
(EC) No 1099/2009.

Ban on cat and dog fur

Regulation (EC) No 1523/2007 of 11 December
2007 bans the placing on the market and the import to, or export from, the EU
of cat and dog fur, and products containing such fur. The ban applies since 31
December 2008.

Complaints:

3.
The number of complaints on animal welfare
remains relatively high, partly because in recent years the general public,
together with Civil Society, have become more aware of issues related to animal
welfare standards. The Commission is often placed in a position of resolving
difficult judgement calls involving:

· The fact that a number of welfare requirements are in conflict with
some economic interests;

· The fact that animal welfare science is a relatively new area and
consequently stakeholders are not aware of the benefits of respecting some
provisions of the EU legislation.

Different levels of priority are given to
animal welfare in Member States due to the following factors:

· The need for compromise on minimum standards which lead to
complaints against Member States applying stricter rules;

· Animal welfare does not receive the same level of prioritisation in
the political agenda of each Member State.

In 2010, most of the complaints were either
related to the conditions of transport of animals or to the conditions under
which pigs are kept.

Report of work done in 2010

Strategic initiatives

During 2010, the Commission mandated an
external consultant to carry out an evaluation of the EU policy on animal
welfare. The outcomes of the study were made available in December 2010.

Several communication actions were
organised aiming at improving the level of knowledge of inspectors in Member
States within the framework of "Better Training for Safer Food", or
facilitating the exchange of best practices between stakeholders in order to
improve enforcement. In addition, the Commission carried out specific actions
to raise the awareness of the general public on animal welfare. The first
international conference on animal welfare education was organised in Brussels on 1 and 2 October 2010.

Animal welfare in holdings/on the farm

Following the results of the EU funded
research project Welfare Quality, the Commission is working on the possibility
to integrate animal based welfare indicators into future legislation on farm
animals. To this effect, the Commission mandated the EFSA to assess the welfare
indicators currently available in dairy cows and see how these could be used to
address EFSA recommendations on the welfare of dairy cows. The Commission
intends to extend this approach to other farm species (pigs, beef cattle,
calves, broilers, laying hens) in the next two years.

The proper implementation of Directive
1999/74/EC on the protection of laying hens in order to avoid possible internal
market distortions is a priority for the Commission which is closely following
the actions taken so far by Member States to phase out battery cages by 1
January 2012. During 2010, the Commission monitored closely the situation through
FVO visits and Member States reports. Regular discussions within the framework
of the Standing Committee on the Food Chain and Animal Health and meetings of
Chief Veterinary Officers took place in order to collect and review the data on
the state of play of the implementation. In particular, the Commission
requested Member States to provide updated data and national plans for the
proper implementation of Council Directive 1999/74/EC.

The Commission
continues to work to obtain a better implementation of Directive 2009/120/EC on
the protection of pigs. To this effect, the Commission organised a second
workshop on the welfare of pigs in Parma on 11 November 2010. The aim is to
exchange on best farming practices pig welfare between Member States and main stakeholders. In particular, it represents a constructive approach to address
some of the difficulties met by Member States to fully implement EU
requirements on the welfare of pigs such as avoidance of routine tail docking
and providing adequate enrichment material. Furthermore, the future
implementation of group housing of sows and gilts in all pig holdings by 1
January 2013 was discussed.

Directive 2007/43/EC on the protection of
broilers applies since 30 June 2010. In July 2010, EFSA published scientific opinions
on the impact of genetic selection of broilers and on the welfare of
grand-parents and parents of broilers. The Commission will use EFSA scientific
opinions to prepare the report to the European Parliament and the Council on
the welfare of broilers required by the Directive.

Animal welfare during transport

The number of complaints and numerous requests for specific
amendments reveal that Council Regulation (EC) No 1/2005 on the transport of
animals is not properly enforced. As foreseen this Regulation, the Commission
is preparing a report on the welfare of animals being transported in the EU.

The report will take into account scientific evidence on the welfare
needs of animals as presented in the recent scientific opinion produced by the EFSA.
The Commission plans to adopt the report in September 2011. In the light of the
conclusions of the report and the outcome of the following discussions with the
Council and the European Parliament, the Commission will decide on which
actions are necessary to ensure proper implementation of the current
legislation, and it will analyse if changes to the legislation are needed.

Meanwhile, the Commission is taking
concrete actions to ensure a better and more harmonised enforcement of
Regulation (EC) No 1/2005. The Commission organised in December 2010 a meeting
with the contact points in charge of transport of the Member States in order to
exchange practical experience on controls on the transport of live animals.

The Commission launched a call for
proposals for a preparatory action of EUR 4 million on high quality control
posts, which was successfully awarded in 2010. The action will be performed in
2011-2012 and will include the renovation of 12 control posts as well as the
development of a certification scheme. It will include training and
communication to stakeholders.

Animal welfare at the time of killing

Following complaints, the Commission
launched a survey on the way Member States competent authorities granted the
derogation from stunning in the case of ritual slaughter. The results of the
survey have been analysed and will be communicated to the Member States in 2011
for improving the situation.

FVO Inspections Findings

Laying hens

The FVO carried audits in 25 Member States
between 2008 and 2010 in order to assess the situation in the laying hen sector
regarding in particular the state of preparedness of Member States to implement
the ban on battery cages from 1 January 2012. As mentioned earlier, the
situation is quite variable between Member States: some are already
implementing the ban, others took actions and will ready by 1 January 2012 and
others are late in putting the necessary measures in place to implement the ban
on battery cages by the legal deadline.

In the pig sector there is a general lack
of enforcement of long standing requirements such as provision of enrichment
materials and avoidance of routine tail-docking. The state of preparedness for
Member States to implement group housing of sows and gilts in all pig holdings
by 1 January 2013 is quite variable and will need to be closely monitored over
the next two years.

Concerning the transport of animals, the
requirements of vehicles for long journeys and the control of journey times are
in general not sufficiently applied. The conditions of transport of horses for
slaughter are still a problematic issue.

Although on farm emergency slaughter has
been implemented in a number of Member States, the issue of the transport of
injured cows to slaughterhouses continues to be a significant problem in
others.

15.4.24.2.
Evaluation based on the current situation

Animal welfare remains an issue attracting
public attention given that ordinary citizens are keenly interested in how
livestock is raised and whether the required animal welfare standards are being
respected. Member States are key in ensuring implementation of animal welfare
legislation. The Member States' role is not only crucial in ensuring
transposition of Directives in this area but also in effectively deploying the
resources and mechanisms needed to ensure compliance with the EU's animal
welfare requirements.

Some resources are devoted to dealing with
situations for which the Commission lacks powers to regulate. Stray dogs and
cats, for instance, do not fall under the scope of the Treaty but yet the
Commission devotes considerable resources in replying to citizens complaining
about cruelty towards pet animals.

The different relevance and political
weight that animal welfare has amongst Member States makes it difficult to set
rules that satisfy agriculture, animal welfare organisations and consumers at
the same time.

The evaluation performed in 2010 identified
several areas for improvement, and in particular enforcement, research,
communication, education and international issues. The Commission will work in
2011 to present a second EU strategy for the protection and welfare of animals
2011-2015, which will set up the main policy objectives for the forthcoming
years on animal welfare.

Priorities

Enforcement difficulties have been
identified as one of the key problems to be addressed in the future strategy
for animal welfare. Different possibilities will be explored in the framework
of the future strategy to tackle the issue.

It will remain important to react swiftly
and adequately to the concerns of interested stakeholders. The FVO will
continue to put an emphasis on establishing data on the compliance of Member
States with EU rules on animal welfare in order to detect shortcomings but also
in order to understand more precisely why certain Member States have difficulties
to comply with welfare rules.

The Commission will continue to raise
awareness on animal welfare by developing further already existing tools such
as "Farmland" and developing new education tools targeted towards
children, and by pursuing its active participation in the "Better Training
for Safer Food" programme.

Planned Actions

In 2011, the Commission will prepare the
second EU strategy for animal welfare 2011-2015. This document will laid down
the specific objectives and actions needed for the forthcoming years on animal
welfare at EU level. Several reflections are ongoing and in particular the
Commission will consider the suggestion of the European Parliament to propose a
general EU framework law. Such a law could be the occasion to introduce new
principles in particular animal based indicators as developed by the Welfare
Quality Project, an EU research based project on animal welfare.

A number of actions which have been
initiated in the previous years will be maintained and expanded.

Concerning farm animals, the Commission
will continue to work for a better implementation of the current EU
legislation. Priorities will be given to help Member States to be ready to
implement the ban on battery cages by 1 January 2012, and to the proper
enforcement of certain requirements of the Directive on the protection of pigs.
The Commission will work to facilitate the future implementation of group
housing of sows by 1 January 2013.

Concerning broilers, the Commission will
launch an evaluation study in order to prepare a report to the European
Parliament and to the Council concerning the influence of genetic parameters on
identified deficiencies resulting in poor welfare of chickens and the state of
play of the Directive.

Concerning the transport of animals, the Commission will work on a report to the European
Parliament and to the Council on the impact of Regulation (EC) No 1/2005 on the
protection of animals during transport, using the EFSA scientific opinion which updates the scientific information
available on the welfare of animals during transport as well as the results of
the study on transport which was launched in 2010. The Commission report
is planned for adoption in September 2011.

The implementation of
the ban on cat and dog fur within the EU will be assessed on the basis of
questionnaires sent to the Member States, in a report which the Commission
intends to submit to the European Parliament and to the Council by December
2011.

15.4.24.3.
Summary of Sector

The challenge in this sector is to reply to
the growing concerns of European citizens' on animal welfare both in the EU and
internationally, and to balance the expectations of animal welfare
organisations with the requirements of a competitive agriculture, while seeking
to simplify legislation and reduce administrative burden.

15.5.
Overall evaluation
15.5.1.
Better application of the health and consumer
acquis is everyone's concern

The Commission seeks to use the full extent
of its Treaty powers in these policy areas that have such a direct impact on
citizens, consumers and economic operators. To do so Directorate-General Health
and Consumers endeavours to engage society at large so that everyone reaps the
benefits of the acquis in this area. But the Commission cannot alone
deliver better application of this acquis without the cooperation of the
Council, the European Parliament and Member States. Member States are primarily
responsible for implementation and the Commission works to build partnerships
and bridges of cooperation to ensure that legislation becomes reality on the
ground.

Cooperation between Commission services and
national enforcers and experts is essential, starting from the design phase of
any new legislation. Evaluations carried out by the Commission assess
systematically the actual application of the relevant EU legislation and will
contribute to the preparation of subsequent impact assessments, which measure
the real impact of intended changes on the daily lives of citizens and on other
stakeholders.

The Commission is mindful that this area of
legislation is often technical, complicated and not easy to understand by
enforcers, economic operators and ordinary citizens. Every effort is being made
to promote a regulatory environment that is modern, simple and proportionate
but that does not weaken the necessary health protection afforded by the
policies in this area.

This area is very close to many concerns
that citizens have about Europe. The Commission will seek to increase
transparency on actions being taken by Member States' enforcement actors to
ensure compliance. At the same time the Commission will seek to empower
citizens, consumers and patients through information to enable them to support
implementation practices and outcomes in Member States.

15.5.2.
Prevention

The Commission continued in 2010 to issue
or to update implementation guidelines on the correct application of its policy
areas. In the public health policy area, the Commission, by adopting Decision
2010/453/EC, established guidelines concerning the conditions of inspections
and control measures, training and qualification of officials in the field of
human tissues and cells provided for in Directive 2004/23/EC. In the consumer
policy area the Commission, by adopting Decision 2010/15/EU, revised the RAPEX
guidelines. This revision was necessary because of the significant increase in
the number of notifications through the RAPEX network that has be followed up
in the Member States and of the need to increase the traceability of dangerous
products notified via the system.

In addition the Commission organised
workshops to assist the Member States with the implementation of Directives
which they are in the process of transposing (for example the implementation of
the Organs Directive 2010/53/EU) or with national authorities and stakeholders
to promote an exchange of information and best practices between industry and
veterinary experts from Member States (for example on how to minimise animal
suffering during pig tail docking).

For the implementation and consistent
application of Directive 91/414/EEC concerning the placing of plant protection
products on the market, the Commission continued to develop further guidelines.
Currently 47 guidelines documents are available to the public.

In 2006 the Commission launched a training
programme entitled "Better Training for Safer Food". This is an EU
training strategy for food and feed law, animal health and welfare rules and
plant health rules. Training is designed for Member State's and third country's
competent authority's staff involved in official control activities. It aims to
keep them up-to-date with EU law in the areas specified above and to ensure
more uniform and efficient controls across the EU and on imports to the EU.
Better Training for Safer Food comprises training programmes on subjects where
needs for improved application of EU law have been identified. The number of
programmes and the number of people trained have increased each year since the
initiative's launch. Further new training actions are to be launched in 2011.
These include training on new subjects such as Audit systems/Internal auditing,
TRACES[524] and quality schemes.

Another type of prevention is provided for
in Directive 98/34/EC laying down a procedure for the provision of information
in the field of technical standards and regulations. This Directive obliges
Member States to notify to the Commission, before they are adopted, draft acts
containing technical standards and regulations. During 2010 the Commission
services responsible for health and consumers examined around 220 notifications
of draft legislation.

The rapid alert system for food and feed
(RASFF) is an effective tool to exchange information about national measures
taken responding to serious risks detected in relation to food or feed[525].
This is a concrete and visible result of a successful European integrated
approach to ensure food safety. It helps Member States to act more rapidly and
in a coordinated manner in response to a health threat caused by food or feed.
Its effectiveness is ensured by keeping its structure simple: it consists
essentially of clearly identified contact points in the Commission and at
national level, and exchanging information in a clear and structured way by
means of templates. The Commission together with Member States continues to
work hard in further shaping this essential tool that contributes to high food
safety standards in the EU, preventing dangerous food or feed from reaching the
consumer and allowing swift action to be taken to remove such products from the
market. In 2010 a total of 3358 original notifications were transmitted through
the RASFF; of which 592 were classified as alert, 1188 as information and 1578
as border rejections.

The EU rapid information system RAPEX (for
dangerous non-food consumer products found and consequently withdrawn from the
market) is a similar tool. In 2010, 2244 notifications were exchanged through
the system. Following the entry into force of Regulation (EC) No 765/2008 the
scope of the system was extended.

Discussions with Member States in expert
groups or with stakeholders in, for example, workshops, often identify areas of
difficulty in fully appreciating the nature of specific legislative
instruments. The Commission services often provide detailed interpretations of
specific provisions in order to achieve broad but uniform understanding of
specific provisions.

15.5.3.
Regular review of
legislation

The health and consumer legislation is
regularly reviewed after careful evaluation of impacts as well as continuous
and fruitful dialogue with citizens, consumers and other stakeholders in order
to:

·
optimise the legislation for ensuring that
policy goals are met;

·
enhance the effectiveness of the legal
framework;

·
simplify and clarify the legislation;

·
take into consideration the burdens to business
and enforcers;

·
to introduce new technologies into the
legislation;

·
clarify the interaction with other EU
legislation.

In 2010, as a result of that work, the
adoption of Regulation (EU) No 1235/2010 amending, as regards pharmacovigilance
of medicinal products for human use, Regulation (EC) No 726/2004 laying down
Community procedures for the authorisation and supervision of medicinal
products for human and veterinary use and establishing a European Medicines
Agency, and Regulation (EC) No 1394/2007 on advanced therapy medicinal
products as well as Directive and the adoption of Directive 2010/84/EU amending
as regards pharmacovigilance, Directive 2001/83/EC on the Community code
relating to medicinal products for human use, finalised the revision of several
key pieces of legislation.

Evaluations of existing legislation have
been carried out and will be the basis of impact assessments in 2011 for future
major legislative revisions (e.g. in the plant health legislation and the plant
seed legislation). Further evaluations have been launched (inter alia on the
plant variety rights legislation).

15.5.4.
Audits,
Inspections and market surveillance

Another aspect of prevention is the ability
of the Commission services to see for themselves the realities of enforcement
on the ground.

Enforcement of the food safety legislation
would be weak if the FVO was not able to examine whether Member States and third countries from which food is imported, properly apply food and feed safety
controls.

Each year the FVO develops an audit and
inspection programme identifying priority areas and countries. It carries out
around 250 audits and inspections, including both general and specific audits,
annually. Following each, a report is issued which sets the actions needed to
improve compliance. The large majority of weaknesses in control systems identified
by the FVO are addressed through specific action plans drawn up by national
authorities in response to its recommendations.

In recent years, the FVO has developed
overall country profiles for each Member State and for the EU's main trading
partners. These profiles bring together and summarise the results of general
and specific audits and inspections over time and across all relevant sectors.
They can thus help to identify systemic weaknesses in the overall design and
application of national control systems. As these results are progressively
refined and validated, remedial action can be proposed that address the
underlying causes that are common to a number of specific sectors, for example,
the absence of a system of documentary records of controls or the absence of an
effective system of sanctions for non-compliance.

The FVO regularly carries out general
follow-up missions in order to monitor the action taken by Member States to
address the concerns identified by FVO in its recommendations. Directorate-General Health and Consumers has reorganised
its structure in order to enhance the enforcement in the food safety area
(including animal health and welfare and plant health). An enforcement Unit
ensures a coordinated and sustained approach to all enforcement issues through
improved decision making. Its task is supported by a recently developed
internal database which enables to coordinate progress towards the resolution
of particular enforcement issues that, on the basis of risk analyses, need to
be followed up.

In the consumer policy area the Commission
for the fourth time carried out a market surveillance exercise in the form of a
sweep on sites selling tickets for cultural and sporting events. Such sweeps
allow the Commission to identify the existing incompliant conditions on
websites and through contacts with the involved companies to obtain corrections
on the websites.

Conclusion

The above shows the Commission's
determination to fully implement its acquis in the policy areas of
consumers, food safety and public health and to up-date its regulatory
framework, if necessary. Consumers can be confident that the safety of their
food is protected by strict enforcement of controls. Trade can take place under
conditions of uniform and high safety levels, which allow markets to focus on
price, quality and consumer preferences. The Commission remains ready to manage
any emergencies or other unforeseen circumstances in this area having always in
mind the welfare, well-being and protection of European citizens.

16.
HOME AFFAIRS
16.1.
Immigration and integration
16.1.1.
Current position: General introduction

EU legislation in the field of immigration
and integration currently consists of nine directives.

Regarding legal migration, four sets
of measures have been adopted:

· a first set of measures adopted in 2003: the Family Reunification
Directive 2003/86[526] and the Long-term Residents Directive 2003/109[527];

· Directive 2004/81 on the residence permit issued to third-country
nationals who are victims of trafficking in human beings or who have been the
subject of an action to facilitate illegal immigration, who cooperate with the
competent authorities[528];

· the Students Directive 2004/114[529] and the
Researchers Directive 2005/71[530]; and

· the Highly qualified Workers Directive 2009/50[531] (‘EU Blue Card’).

Three directives concern irregular immigration:

· the Carriers Liability Directive 2001/51[532] and Directive 2002/90[533] defining
facilitation of unauthorised entry, transit and residence; and

· the Employer Sanctions Directive 2009/52[534], which aims to reduce illegal immigration by prohibiting the
employment of illegal staying migrant workers and providing for sanctions
against employers who infringe the prohibition.

The EU’s comprehensive migration policy
continues to be developed, so efforts in this area are as much about developing
new legislation as ensuring the correct application of existing legislation.
Regarding labour migration, in its 2005 Policy Plan on Legal Migration[535], the Commission announced its
intention to present proposals for a general framework directive and directives
for specific categories of paid workers.

The first such directive — the EU Blue Card —
was adopted in 2009, and discussions continued in the European Parliament and
Council on the proposed ‘Single Permit’ Directive[536]. The Commission presented
proposals for Directives on seasonal workers and intra-corporate transferees in
July 2010, and discussions in the European Parliament and Council are ongoing.

16.1.2.
Current position:
Report on work done in 2010

In line with the Stockholm Programme's call
on the Commission to evaluate and, where necessary, to review the Family
Reunification Directive, taking into account the importance of integration
measures[537], the Commission intends to carry out a wider consultation — in the
form of a Green Paper — on the future of the family reunification regime.

In 2010, the Commission presented a Report on
the Victims of Trafficking Directive (2004/81)[538]. It found that the
number of residence permits issued on the basis of this Directive was
significantly lower than the number of victims identified. This proved that the
potential of this Directive is being underused.

As regards presumed infringements disclosed
by complaints, the case in the Netherlands concerning the high level of fees
charged to those applying for long-term residents’ permits is still pending
before the Court of Justice. In another infringement case, concerning the same
point, but against Cyprus, the results of the ECJ judgment will be applied
accordingly.

The Commission continued the infringement procedure
against Austria regarding rules under which third-country national students are
permitted to work in that Member State. The Commission considers that the
Students Directive 2004/114 requires that third-country national students be
allowed to work under less restrictive conditions.

Regarding the management of the existing acquis,
a meeting of the contact committee on legal migration directives in December
2010 provided the opportunity for a useful exchange of views between the
Commission and national experts involved in their application. A meeting of
national contact points appointed under the Long-term Residents Directive
2003/109 was also held. Alongside discussions in the contact committee, the
European Migration Network[539] (EMN) continued to be a means for Member States (and the
Commission) to address ad hoc queries to obtain a quick overview on how
other Member States transpose specific provisions of the directives. The
Committee on Immigration and Asylum (CIA) provided a forum for the Commission
to give up-dated information to Member States on the legal acquis, as
well as allowing Member States to comment on factual aspects of their
transposition in the context of the Commission's reports.

Work continued on the external transposition
studies for the Students Directive and the updated study on the Long-term
Residents Directive, commissioned with a view to preparing implementation
reports on the directives. In cooperation with Commission department in the
area of Research, the contract for an external study on the Researchers
Directive was launched. The final study is due in August 2011. These three
studies will form the basis of the Commission’s reports on the application of
the directives in question.

Regarding the transposition of new
legislation, Member States have to transpose the EU Blue Card into national law
by June 2011, and the Employer Sanctions Directives by July 2011. Meetings of
the contact committees were held in late 2009 and in 2010 (two meetings for the
EU Blue Card, three meetings for Employers’ Sanctions), enabling a useful
exchange of views between the Commission and national experts involved in the
national transposition of the directives.

Legislative discussions in the Council and
European Parliament continued on the ‘Single Permit’ Directive for labour
migration. This will provide for a single permit (residence and work) and basic
socio-economic rights for migrant workers. Negotiations also started on
proposals adopted in July 2010 on seasonal workers and intra-corporate transferees.

16.1.3.
Evaluation based on
the current situation

Bearing in mind that it took until 2009 to
fully transpose directives dating from 2005 and earlier EU-wide, there is a pressing
need for Member States to reinforce their efforts to complete transposition of
the most recent directives in this field, the EU Blue Card and Employer
Sanctions, by the mid-2011 deadline. By end of 2010, only one Member State had communicated its full transposition measures for these to the Commission.

The Commission has continued to pursue the
most important presumed infringements disclosed by complaints, and it will go
on doing so.

Legislative activity (preparing new proposals
as well as legislative discussions themselves) continued to be important in
this sector. The Lisbon Treaty has introduced co-decision in the area of legal
immigration, thus giving an enhanced role to the European Parliament. This has
given impetus to legislative discussions on the general framework directive for
a single permit and rights.

16.1.4.
Evaluation results:
Priorities

The main priorities are:

1.
Ensuring the correct application of existing
legal migration directives;

2.
Ensuring the correct and timely transposition of
the Blue Card and Employers’ Sanctions Directives;

3.
Preparing Commission reports on the application
of existing directives;

4.
Ensuring appropriate follow-up to the Report on
the Victims of Trafficking Directive.

16.1.5.
Evaluation results:
Planned action (2011 and beyond)

As regards priorities 1 and 2, the Commission
will examine Member States’ transposition measures for the Blue Card and
Employer Sanctions Directives, and will take action as appropriate for
non-transposition and incorrect transposition of the Directives. In addition it
will actively follow up complaints about the application of the other legal migration
directives in Member States.

As regards priority 3, the Commission will in
2011 present reports on the Long-term Residents, Students and Researchers
Directives. On the basis of these, the Commission will decide what further
action is needed.

As regards priority 4, the Commission will
examine all cases of problems in applying this directive. This may involve
contacting Member States and/or launching procedural steps for non-compliance,
where appropriate, in accordance with Article 258 TFEU. In its report on the
Victims of Trafficking Directive, the Commission also announced that it may
consider the need for amendments.

Other activity will
include:

–
Contributions to the Commission’s intervention
before the Court of Justice with regard to requests by national courts for
preliminary rulings on the interpretation of EU legislation in the area of
legal migration;

–
Continued discussions in the "contact
committees", allowing Member States an open forum in which to discuss
questions or problems they have identified in their transposition of the
Directives.

16.1.6.
Summary

The Commission will prepare reports on the
Students, Researchers and Long-term Residents Directives. Given the ongoing
development of the EU’s comprehensive migration policy, it will also give
attention to the legislative process to ensure coherence with directives
already adopted. Ensuring the correct transposition of the two Directives
adopted in 2009 will be a priority.

16.2.
Asylum
16.2.1.
Current position: General introduction

Following
the entry into force of the Treaty of Lisbon, asylum policy is now regulated by
Article 78 TFEU. The asylum acquis is essentially composed of four directives
(Reception Conditions[540], Qualification[541], Asylum Procedures[542] and Temporary Protection[543])
and three regulations (Dublin[544],
Eurodac[545] and
European Asylum Support Office[546]). The directive on the status of
third-country nationals who are long-term residents[547] is
also relevant for asylum policy. Amendments to all these legal instruments
(except the European Asylum Support Office Regulation) are currently being
negotiated by the co-legislators.

Regarding asylum policy, the
main development in 2010 was the continuation of negotiations on legal
instruments for the second phase of the Common European Asylum System (CEAS).
Negotiations gathered pace, especially during the second semester, as the
Belgian Presidency had made asylum one of its priorities. Significant progress
was made on some legal instruments, e.g. with the formal adoption of the
instruments aiming at the creation of the European Asylum Support Office (EASO)
and a compromise reached between the European Parliament and the Council on the extension of the legal system for third-country nationals with long-term
resident status to include persons with international protection (modification of Directive 20003/109/EC).
Concerning the Qualification Directive, in the course of 2010, the Presidencies
proposed several compromise amendments and an important number of reservations
was lifted. Progress was also made on the 'Joint
EU Resettlement Programme'. Discussions were however difficult
on some instruments, in particular with limited progress on the Asylum
Procedures Directive, the Reception Conditions Directive and the Dublin
Regulation. As far as the EURODAC Regulation is
concerned, the Commission aims with a new proposal at allowing for a rapid agreement
by the co-legislators, and thereby facilitate progress on the whole asylum
package as well as the timely set up of the IT Agency (that should also be
responsible for the management of EURODAC).

As far as the EASO is concerned the
co-legislators formally approved the creation of the EASO and Member States
decided that its seat would be in Valletta, Malta. Since then, the Commission
has been actively working with a view to preparing the start of EASO's operations,
and it should be fully operational by 19 June 2011.

16.2.2.
Current position: Report on work done in 2010

The Commission decided in
June 2010 to refer Belgium to the Court of Justice for failure to communicate
measures fully transposing the Asylum Procedures Directive further to
infringement proceeding initiated in 2008. In September 2010, the Commission
received notification of full transposition, so the infringement proceeding was
closed.

In June 2010, the Commission decided to refer
Ireland to the Court of Justice for failure to communicate measures fully
transposing the Asylum Procedures Directive. Ireland delivered its Defence to
the Court of Justice on 25 November 2010. It indicated that it intended to
adopt measures transposing the provisions of the Asylum Procedures Directive in
the near future.

In March 2010, the
Commission proposed closing three cases of non-communication against Sweden, Spain and Cyprus, further to notifications of full transposition of the Asylum Procedures
Directive; and to close two cases of non-communication against Sweden and Spain concerning the Qualification Directive.

The Commission has taken steps to review
reported deficiencies in the asylum system in Greece. The reports raised
concerns as to whether the Greek asylum system is in compliance with the
minimum standards prescribed by EU law, particularly those set out in the
Asylum Procedures Directive, the Qualification Directive and the Reception
Conditions Directive. In November 2009, the Commission sent Greece a letter of formal notice followed by a supplementary letter of formal notice in June 2010.

An Action Plan has been drawn up and
submitted to the Commission in August 2010. The Commission, Member States, the European Asylum Support Office, UNHCR and other European Partners have
signalled their commitment to assist Greece in this process (by financial and
other means). In December 2010, Member States experts visited Greece under Commission financing, to provide advice in the areas of backlog management, training
and screening/registration of asylum applications. The expert reports drafted
in collaboration with UNHCR have become the basis for planning future
supporting measures. The provision of EU assistance to Greece will continue in 2011, with the support of the Commission and EASO and in close cooperation
with UNHCR.

16.2.3.
Evaluation based on
the current situation

In line with ambitions
the Council articulated in the Hague Programme adopted in 2004, and the
Stockholm Programme agreed in December 2009, as well as in the Commission’s own
2008 Policy Plan on Asylum, the scope of the asylum acquis needs to be
extended and enhanced to ensure successful completion of the Common European
Asylum System (CEAS).

More specifically, EU
asylum legislation should guarantee:

–
higher levels of protection generally;

–
a more level playing field for persons seeking
asylum in different Member States;

–
more efficient treatment of asylum applications;

–
better coordination of external aspects of
asylum policy;

–
more solidarity between Member States in sharing
the burdens associated with receiving asylum seekers.

Moreover, the Commission
is particularly concerned by the fact that rates of recognition of asylum
seekers as qualifying for protection still vary very considerably among Member
States, despite common minimum standards and a significant degree of
harmonisation via the current acquis,. This can be attributed to a
number of causes, including insufficiently far-reaching legislative
harmonisation, variation in the manner in which current legislation is applied
in practice, and variation in the nature of information on the situation in
countries-of-origin on which asylum decisions are taken.

In view of these
shortcomings, the Commission intends to continue to pursue a ‘twin-track’ approach.
This will consist of working to extend and improve the EU acquis, as
well as consolidating it by:

(a) taking infringement
actions against Member States for non-transposition and/or incorrect
application of the acquis, and

(b) enhancing practical cooperation
activities, particularly by ensuring that the European Asylum Support Office is
placed on a sound footing.

16.2.4.
Evaluation results:
Priorities and planned action (2011 and beyond)

To date, the Commission
has given priority to creating and further developing EU legislation in the
asylum field, and to facilitating practical cooperation among Member State authorities.

The Commission intends to
pursue the following priorities regarding development, application and
monitoring of EU law in the coming years:

–
Further development of EU legislation, notably
as regards the amendment of existing legislative instruments and the possible
adoption of new ones;

–
Pursuit of practical cooperation efforts to
improve the practical implementation/application of the acquis in Member
States, particularly as regards ensuring an effective transition to setting up
the EASO;

–
Monitoring and evaluating the implementation of
EU legislation;

–
Contribution to the Commission’s intervention
before the Court of Justice with regard to requests by national courts for
preliminary rulings on the interpretation of EU legislation, and follow-up of
individual complaints about compliance with EU legislation in Member States.

16.2.5.
Summary

EU law in the asylum
field is still being developed. Some shortcomings have been identified in the
scope and impact of the existing acquis and in the manner in which it is
applied. The priority in the short to medium term should be to extend and
improve the legislation. At the same time, practical cooperation among Member
States needs to be intensified with a view to ensuring more consistency in
their application of the acquis, particularly by ensuring the successful
establishment of a European Asylum Support Office. The Commission will continue
to monitor and evaluate implementation of the law, to intervene before the
Court of Justice with regard to requests by national courts for preliminary
rulings on interpretation of the law, and to follow up complaints against
Member States for incorrect application of the acquis.

16.3.
European visa policy
16.3.1.
Current situation: Report on work done in 2010

In July 2009, the
European Parliament and Council adopted a Regulation establishing a Community
Code on Visas[548], applicable since 5 April 2010. The Visa Code recasts the legal
framework for the common visa policy and enhances transparency, equal treatment
of applicants and legal certainty, and it harmonises procedures for issuing
short-stay visas. It includes inter alia provisions on mandatory
motivation of visa refusal and right to appeal (applicable as from 5 April
2011), harmonised deadlines for the visa handling process, enforcement of local
Schengen cooperation and development of consular representation at local level.

In line with Article 51
of the Visa Code, the Commission elaborated two Commission decisions providing
operational instructions on the practical application of the Visa Code, i.e.
the Commission Decision of 19 March 2010 establishing the Handbook for the
processing of visa applications and the modification of issued visas[549] and the
Commission Decision of 11 June 2010 establishing the Handbook for the
organisation of visa sections and local Schengen cooperation[550].

16.3.2.
Evaluation based on
the current situation

As the Visa Code has only
recently become applicable, efforts were focused mainly
on ascertaining together with Member States that the new provisions were
correctly interpreted, through discussions in the Visa Working Party and the
Visa Committee. It was not considered opportune to open infringement
proceedings, since no flagrant systematic practice infringing the Visa Code had
been observed.

Under the Visa Code, Member States are
required to try to harmonise their practices in the framework of local Schengen
cooperation in each third country.

In 2010, the Commission continued to receive
complaints from individuals that EU law had been incorrectly implemented in the
field of visas. After examination, it appeared that, when well founded, these
complaints reflected some weaknesses in the current Visa acquis. These
will be resolved thanks to implementation of the Visa Code and sustained
efforts in the framework of local Schengen cooperation.

16.3.3.
Evaluation results:
Priorities and planned action (2011 and beyond)

In light of important
changes that intervened on 5 April 2010 and those due on 5 April 2011, the
Commission considers that ensuring timely, correct and efficient implementation
of the new legislative framework by all Member States is a priority. The Commission will undertake systematic screening of Member States’
implementation of the Visa Code's provisions, particularly those with a
significant impact on visa applicants.

Due
to the importance of visa policy in EU external relations, as well as the
impact of an efficient visa policy on combating irregular migration, the
Commission closely monitors implementation of the Visa Code. Existing fora such
as the Visa Working Group in Council or the Visa Committee will continue to
play an important role in identifying issues of common interest and solving
them in an appropriate way.

At local level, the
involvement of EU delegations in local Schengen cooperation should increase,
and they should play a stronger role in ensuring that the common visa policy is
implemented correctly and in a harmonised way by all
Member States’ consulates.

16.4.
Document Security (European passport and
residence permits)
16.4.1.
Current situation: Report on work done in 2010

Regarding infringement procedures on
residence permits, the case against Italy was withdrawn from the Court in
September 2010 as Italy had started to issue residence permits in conformity
with Regulation (EC) No 1030/2002.

Regarding non-conformity with Regulation (EC)
No 2252/2004 on passports, reasoned opinions were sent to Bulgaria and Cyprus in March 2010. Following confirmation that biometric passports were being
issued, the case against Bulgaria was closed in September 2010 and the case
against Cyprus is expected to be closed in early 2011. Belgium was sent a letter of formal notice for non-conformity with Regulation (EC) No 2252/2004 on
passports as regards the implementation of the second biometric identifier
(fingerprints).

16.4.2.
Evaluation results:
Priorities and planned action (2011 and beyond)

The main priorities are:

(1)
Ensuring correct implementation of Regulation
2252/2004. The vast majority of Member States have now correctly implemented
the Regulation. However, further measures are needed in terms of infringement
policy and to carry out the conformity testing of specimens notified by Member
States.

(2)
Ensuring correct implementation of Regulation
1030/2002 on residence permits (incorporating facial image); deadline: May
2011.

(3)
Facilitating Member States' implementation of
the complex Public Key Infrastructure (required to protect personal data stored
on documents) for both residence permits and passports.

In 2011, conformity testing of 2nd
generation biometric passports (with a chip storing facial image and
fingerprints) will be carried out by the Joint Research Centre, and the
Commission will decide on any subsequent infringement procedures as appropriate.

16.5.
Border management and return policy
16.5.1.
Current position: General introduction

In the field of border management and return
policy, the Commission mainly carried out monitoring of the application of EU
law. This resulted in the follow-up of one infringement proceeding launched in
2008, and several consultations between the Commission and some Member States via EU Pilot. Moreover, the Commission handled multiple consultations with
Member States on the compatibility of draft bilateral agreements with third countries
in the framework of the Local Border Traffic Regulation. Strategic priority was
given to preparing the ground for timely, correct transposition of the European Parliament and Council Directive
2008/115/EC on common standards and procedures in Member States for returning
illegally staying third-country nationals (the ‘Return
Directive’).

16.5.2.
Current position:
Report on work done in 2010

The Commission has received and followed up
several complaints from individuals and written questions from Members of European
Parliament related to the incorrect application of EU law in the field of
border management, particularly of the Schengen Borders Code. Most of these
concern non-compliance with provisions related to the abolition of internal
border controls at land and air borders and to the removal of obstacles to
traffic at road crossing points at internal borders between Member States.

Furthermore, the Commission drafted a
proposal to amend the Schengen Borders Code as a result of experience since its
entry into force. Adoption is expected in early 2011.

Within the framework of the Local Border
Traffic (LBT) Regulation, multiple consultations took place between the
Commission and a number of Member States on the compatibility between bilateral
draft agreements with third countries and the LBT Regulation. There were
exchanges of information and informal advice, and experts' meetings, as well as
formal exchanges of correspondence.

Regarding implementation of Council Directive
2004/82/EC on the obligation of carriers to communicate passenger data, the
evaluation of transposition measures communicated by Member States has been
completed by closing the non-communication case against Poland.

Regarding return policy, action focused on
cases of non-communication of transposition of Directive 2001/40/EC on mutual
recognition of decisions on the expulsion of third country nationals closing
one remaining case against Malta and Directive 2003/110/EC on assistance in
cases of transit for the purposes of removal by air closing the case against Spain.

To facilitate the correct, consistent
transposition of the Return Directive, Commission Services convened three
meetings of a Contact Group in 2010. This group provides an informal forum for
exchanging views between Member States and the Commission on how to meet requirements
set out in the directive. The Commission also organised two workshops, bringing
together Member States and key stakeholders in the return process, namely
international and non-governmental organisations which have concrete practical
experience on selected issues. They focused on how best to apply specific
provisions in the directive. The topics discussed were the requirement to
provide alternatives to detention, and the return of unaccompanied minors.

The deadline for transposing all provisions
of the directive into national law (except for those relating to free legal aid)
expired on 24 December 2010. The deadline for provisions relating to free legal
aid will expire on 24 December 2011. All Member States, with the exception of
the United Kingdom and Ireland, are bound by the Return Directive. By the end
of 2010, only six Member States had notified measures that they consider
constitute full transposition of the directive: the Czech Republic, Estonia, Greece, Spain, Portugal and Slovakia. A further four Member States had notified measures
which they consider as constituting partial transposition by the same date: Belgium, Latvia, Lithuania and Sweden. The Commission will examine these notifications in the course
of 2011.

According
to the doctrine of direct effect developed by the European Court of Justice,
provisions of a directive which confer rights on individuals and which are
sufficiently clear and unconditional become directly effective from the end of
the time limit for implementing the directive. Many of the provisions of the
Return Directive fulfil these requirements and therefore have to be directly
applied by national administrative and judicial authorities in Member States, even
if they have not yet transposed the directive.

16.5.3.
Evaluation based on
the current situation

The correct application of EU legislation in
the field of border management, particularly in the absence of internal border
controls, has a substantial impact on the area without internal borders in
which the free movement of persons has to be ensured. Alleged internal border
checks at land borders and at airports were again reported during 2010. The
Commission is closely monitoring the situation regarding internal border zones.
It is also following developments regarding the dismantling of remaining
traffic obstacles at road crossing-points at internal borders.

In October 2010, the Commission adopted a
report to the European Parliament and the Council on the application of Title
III (Internal borders) of the Schengen Borders Code[551].
In the report, the Commission paid particular attention to the practical
application of Article 21 of the Schengen Borders Code (police checks within
the territory, particularly in internal border zones), to difficulties related
to the removal of obstacles to traffic at road crossing-points at internal
borders, and to difficulties arising from the reintroduction of border controls
at internal borders.

In November 2010, the Commission adopted a
proposal for a Regulation of the European Parliament and of the Council on
setting up an evaluation mechanism to verify application of the Schengen acquis[552].
The proposal is currently under discussion in the Council and European
Parliament. It organises in more detail the Commission's power to carry out
unannounced on-site visits to verify the absence of controls at internal
borders. The Commission is of the opinion that such visits would make a
significant contribution to the correct application of EU law as regards the
abolition of internal border controls.

In the field of return, the Commission
continued its successful experience of organising a Contact
Group (or Contact Committee) in 2010. This facilitates the correct and
consistent transposition of the Return Directive. Since the directive was
adopted at the end of 2008, Commission services have convened six such
meetings, including three in 2010. The Contact Group,
and related Workshops on specific return-related topics, are highly appreciated
by Member States. They have contributed to better transposition of the directive
and to better general understanding of its provisions. The Group will therefore
continue meeting during 2011, though the transposition deadline expired in
December 2010. It is expected that these meetings will go on facilitating
correct application of the directive at national level in the coming years and will
facilitate transposition where this has not yet taken
place.

16.5.4.
Evaluation results:
Priorities

In 2010, priority was given to following up
complaints received from citizens and questions from Members of European
Parliament regarding checks carried out on persons in internal border zones and
at airports, and to remaining obstacles to traffic at road crossing points at
internal borders. The Commission regularly addressed Member State national authorities to obtain explanations, particularly on alleged checks on persons
within internal border zones, and it sought information on remaining traffic
obstacles, concerning their progressive removal.

In the field of return, strategic priority
was given to preparing the ground for timely, correct transposition of the Return Directive 2008/115/EC. Several complaints
related to return issues were received, but no concrete follow-up could be
given, as the transposition period for the directive had not yet expired.

16.5.5.
Evaluation results:
Planned action (2011 and beyond)

As one of its fundamental objectives, the
Commission will continue to closely monitor the correct application of EU
legislation on dismantling internal border controls and remaining traffic
obstacles. The Commission’s proposal on the Schengen evaluation mechanism could
undoubtedly contribute to accomplishing this. Priority will thus be given to
following up complaints received from individuals and questions from Members of
European Parliament. The Commission will continue to seek explanations from
relevant Member States regarding alleged border checks and remaining traffic
obstacles at internal borders. The Commission will take all measures necessary,
including the launching of infringement procedures, to ensure the correct
application of EU law.

Moreover, the Commission will continue to
have consultations with Member States and to analyse the compatibility of draft
local border traffic agreements with EU law. The Commission submitted a second
report on the implementation and functioning of the local border traffic regime
to the European Parliament and Council and this was adopted on 9 February 2011.

During 2011, strategic priority will be given
to examining national measures notified to the Commission for transposition of the Return Directive 2008/115/EC. The Commission will be
assisted in this task by an external contractor with relevant expertise in the
national laws of Member States. Infringement proceedings will be launched
against Member States which have not communicated transposition measures. The
Commission will, moreover, continue to convene the Contact Group during 2011,
to facilitate the correct application of the directive at national level, and
to facilitate the transposition of the Return
Directive 2008/115/EC where this has not yet been done. Once the transposition
deadline has expired, the Commission will become more active regarding
complaints and petitions from stakeholders (NGOs, etc) calling for action
to be taken against Member States which have allegedly incorrectly transposed
the directive, or which are allegedly not applying or incorrectly applying
aspects of it. This could result in infringement
proceedings against some Member States. Depending on the number of complaints
received, there will be a need to set priorities.

16.6.
Security
16.6.1.
Data Retention Directive

Current position: General introduction

On 15 September 2007, Member States should
have brought into force legal instruments to comply with the Data Retention
Directive 2006/24/EC. In all, 18 Member States[553]
invoked the clause of Article 15(3) that allowed them to postpone application
of the directive to the retention of communications data relating to internet access,
internet telephony and internet e-mail until 15 March 2009.

Current position: Report on work done
in 2010

In 2010, the Commission continued
non-communication cases against four Member States: against Greece and Ireland,
condemned by the European Court of Justice on 26
November 2009 (cases C-211/09 and C-202/09 respectively), against
Sweden, condemned in February 2010 in case C-185/09, and against Austria,
condemned in July 2010 in Case C-189/09.

In May 2010, the Commission sent Greece a letter of formal notice pursuant to Article 260 TFEU. A similar letter was sent to
Sweden in June 2010.

The Commission closed an infringement case
against Luxembourg after receiving its national transposition measures.

Evaluation based on
the current situation

The evaluation report that the Commission
intended to submit to the Council and Parliament further to Article 14 of the directive,
due on 15 September 2010, was postponed until early 2011 to take on board
further data and analysis. The state of notifications will also be included in
that evaluation.

Evaluation results: Priorities and
planned action (2011 and beyond)

The Commission will proceed with pending
infringement cases and open new ones against Member States where the applicable
law was annulled because of rulings of Constitutional Courts, unless the Member
States concerned enact new legislation.

16.6.2.
European Programme
for Critical Infrastructure Protection

Current position: General introduction

The Directive 2008/114/EC on the
Identification and Designation of European Critical Infrastructures and the
Assessment of the Need to Improve their Protection was adopted in December 2008
and entered into force in January 2009.

Its objectives
are:

– To establish a procedure to identify European Critical
Infrastructures (ECIs);

– To establish a procedure to designate infrastructures as European
Critical Infrastructures;

– To devise a common approach to assess whether it is necessary to
improve the protection of such infrastructures.

Current position — Report on work done
in 2010

The deadline for
implementing Directive 2008/114/EC is January 2011, and most Member States are
working on identifying potential ECIs in the energy and transport sectors.
Generally, work on identification is being carried out at national level by
working groups bringing together the relevant national ministries or agencies,
as well as associations of operators.

By the end of 2010, 14 Member States had
notified measures that they consider constitute full transposition of the directive.
A further two Member States had notified measures which they consider as
constituting partial transposition by the same date. The Commission will
examine these notifications in the course of 2011 and take the necessary
actions also in respect of Member States which will not notify measures by the
deadline.

The Commission continued
to offer its support to the process of identification of potential ECIs. Two
workshops have taken place at the Joint Research Centre in Ispra, with a view
to exchanging practices and information on the implementation procedure in Member
States. Both workshops also provided an opportunity to discuss
the general framework for reviewing the directive, and both Member States and Commission made preliminary contributions on the structure and content of the
process leading to the review.

Evaluation based on the current
situation

The situation and volume of work in 2010 was
stable and focused on exchanging information and good practices on the
identification and designation of ECI experience in Member States.

Evaluation results: Priorities and
planned action (2011 and beyond)

The review of Council
Directive 2008/114/EC will begin in January 2012, i.e. three years after its
entry into force. For a smooth review process, mutual trust and a sound basis
for discussion between Member States, the Commission and the European
Parliament must be established as early as possible. This is particularly
important, as the legal basis of the directive changed with the entry into
force of the Lisbon Treaty.

The voluntary
‘implementation’ workshops and the CIP contact point meetings will remain the
backbone of the review process throughout 2011 and beyond. If needed, extra
meetings could be added, or side-events dedicated to preparing the review. In
addition, the Commission will procure a separate study to inform the review
process.

The Commission will deliver summary reports
providing results from these workshops. Shortly before the start of the review
process (January 2012), the Commission, supported by Member States, will put
forward a general report summarising preparatory activities. This report will
be the starting point for political discussions at Council level.

Moreover, a general discussion on the
European Programme for Critical Infrastructure Protection will start in 2011.

16.6.3.
Directive on
preventing and combating trafficking in human beings, and protecting victims,
replacing Framework Decision 2002/629/JHA

Current position: General introduction

In March 2010, the European Commission tabled
a proposal for a new directive on trafficking in human beings, aimed at further
approximating legislation and penalties, ensuring successful prosecution,
better protection of victims and assistance to them, and prevention of
trafficking. In December 2010, political agreement was reached on a final text.

The
objectives of the directive are:

–
To approximate substantive criminal law;

–
To bring robust provisions on victims’ rights in
criminal procedures and on assistance;

–
To facilitate prosecution of offenders,
including extraterritorial jurisdiction;

–
To step up preventive measures to discourage the demand that fosters trafficking.

16.6.4.
Third pillar
instruments

Current position: Report on work done
in 2010

Monitoring in the context
of ex-third pillar instruments was mainly done on the basis of implementation
reports. These had to be produced following specific provisions in articles in
the legal instrument itself.

In the case of the
Council Framework Decision 2008/919/JHA of 28 November 2008, amending Framework
Decision 2002/475/JHA on combating terrorism, Article 3 requested Member States
to take the measures necessary to comply with the Framework Decision by 9
December 2010. During 2010, the Commission assisted Member States by organising
two expert meetings on the transposition of the Framework Decision, on 19 April
and 28 June.

The Commission is
currently preparing an update of the first implementation report on the
application of Framework Decision 2003/568/JHA of 22 July 2003 on
combating corruption in the private sector. The report will be issued in
mid-2011.

Also being prepared is an
implementation report on Decision 2007/845/JHA, concerning cooperation between
Asset Recovery Offices of the Member States in the field of tracing and
identification of proceeds of crime, or other property related to crime.

The Council Framework
Decision 2008/841/JHA of 24 October 2008 on the fight against organised crime
required Member States to take measures necessary to comply with its provisions
before 11 May 2010 and to communicate the text of transposing legislation to
the General Secretariat of the Council and to the Commission.

The Swedish Framework
Decision (Council Framework Decision 2006/960/JHA) concerning simplification of
the exchange of information and criminal intelligence across the European Union
required the Commission to submit an evaluation report to the Council before 18
December 2010. Just four months after the implementation deadline had expired,
the Commission organised a conference that sought to review implementation of
this instrument. The outcome of that conference, including detailed replies to
the Commission’s questionnaire, fed into a second conference on implementation,
also organised in 2010.

Evaluation based on
the current situation

Regarding the Council Framework Decision
2008/919/JHA of 28 November 2008 amending Framework Decision 2002/475/JHA on
combating terrorism, only three Member States fully complied with their
obligations and informed the Commission in time about provisions to transpose
the Framework Decision. The Commission has sent a reminder to the other Member
States concerned. The deadline set for submitting notifications is 4 March
2011.

Evaluation results: Priorities and
planned action (2011 and beyond)

In accordance with Article 3(2) of the
Framework Decision 2008/919/JHA and on the basis of information received from
Member States, the Commission will prepare a report to assess whether Member
States have taken the measures necessary to comply with the Framework Decision.

The second report on
implementation of Framework Decision 2003/568 on combating corruption in the
private sector and the report on implementation of Decision 2007/845/JHA concerning
cooperation between Asset Recovery Offices of the Member States in the field of
tracing and identification of proceeds of crime, or other property related to,
crime, are scheduled for 2011.

Regarding Council
Framework Decision 2008/841/JHA on the fight against organised crime, on the
basis of a Council report based on information provided by Member States and a
written report transmitted by the Commission, the Council will, before 11
November 2012, assess the extent to which Member States have complied with the
Framework Decision.

17.
JUSTICE
17.1.
Free movement of
persons
17.1.1.
Current Position
17.1.1.1. Introduction

Free movement
is a core right of EU citizens and their family members. It is one of the most
cherished rights by EU citizens. Citizenship of the Union confers on every EU
citizen a primary and individual right to move and reside freely in the EU. It
should therefore be strictly enforced.

Article 21(1) TFEU
stipulates that every citizen of the Union shall have the right to move and
reside freely within the territory of the Member States, subject to the
limitations and conditions laid down in the Treaties and by the measures
adopted to give them effect. These limitations and conditions are to be found
in Directive 2004/38/EC[554] which codified the
existing legislation and case-law in the area of free movement, streamlined the
procedures, cut the red tape and simplified the legal text in the interest of
reader-friendliness and clarity.

17.1.1.2. Report of work
done in 2010

Building on
the 2008 report[555] on the application of
Directive 2004/38/EC which concluded that the transposition of the Directive in
Member States was not satisfactory and identified a large number of
shortcomings and following the 2009 guidelines[556]
for better transposition and application of Directive 2004/38/EC which provided
guidance to Member States on how to apply Directive 2004/38/EC correctly, in
2010 the Commission focused on enforcing the EU rules on free movement.

In accordance
with the priorities established by the previous Annual Report on the Control of
Application of Community law, the Commission held bilateral meetings with
almost all Member States to discuss the issues of implementation of Directive
2004/38/EC identified as problematic. By the end of 2010, the Commission met
the authorities of 22 Member States[557], thus largely complying
with its commitments.

A group of
Member States’ experts on the practical application of Directive 2004/38/EC
established in 2009 met three times in 2010 to discuss issues related to the
correct application of EU law in the area of free movement, particularly on
fighting abuses and frauds. The exchange of views, know-how and best practices
are contributing towards improved implementation of EU law and the case-law of
the Court of Justice of the European Union. The group continues to meet on a
regular basis.

In 2010, the
Commission continued to deal with a large number of enquiries and complaints in
the area of free movement of persons; 781 enquiries and complaints were
received.There were also 44 written EP questions and 31 petitions in this area.

The Commission
made an extensive use of informal dispute-settlement mechanisms, such as
SOLVIT. According to the 2010 report on development and performance of the
SOLVIT network[558], in 2010 SOLVIT centres
closed 306 cases concerning residence rights, which amounted to 23% of the
total of all SOLVIT cases, managing to solve 91% of them. There was a decrease
in cases in comparison to 2009 (549 cases handled and closed) because one
Member State has reduced the delays in handling applications for residence
cards for EU citizens' family members, in response to the high number of
problems flagged, among others by SOLVIT. Progress has also been made with
regard to other cases under Article 258 TFEU, where priority was given to older
cases.

Concerning
cases raising issues of principle or having particularly far reaching negative
impact for citizens, the United Kingdom informed the Commission in October 2010
that it has abolished delays in handling applications for residence cards for
EU citizens' family members. A simplified guide on EU law for EU citizens on
freedom of movement was updated, published and widely distributed in 2010 in
all EU languages.

17.1.2. Evaluation based on the current situation

The analysis and the work done by the Commission in 2010 showed that
the situation in the area of free movement of persons requires further
improvement.

In October 2010, the Commission adopted the EU citizenship report
2010 "Dismantling the obstacle to EU citizens' rights"[559], which gives a
comprehensive overview of the obstacles citizens still face and makes proposals
on how they can best be removed. The report underlines the fact that the right
to free movement is hindered by divergent and incorrect application of EU law
and by cumbersome administrative procedures. To facilitate free movement of EU
citizens and their third-country family members, the Commission will enforce EU
rules strictly, including on non-discrimination, by promoting good practices
and increased awareness of EU rules on the ground and by stepping up the
dissemination of information to EU citizens about their free movement rights.

Alike, the
2008 report on the application of Directive 2004/38/EC concluded that the
overall transposition of the Directive was rather disappointing. The situation improved
gradually in 2010. The 2009 guidelines and the exchange of views and
information with the Member States during the bilateral meetings held in 2010
provided them further guidance on what legislative amendments are needed in
their national legislation and on how to apply the Directive 2004/38/EC
correctly, with the objective of dismantling the obstacles to free movement of
EU citizens and of making the EU an area of security, freedom and justice. To
address the unsatisfactory implementation, the Commission continued working in
2010 at technical level with the Member States within the group of experts. The
work of the group in 2010 focused on the sensitive areas of fighting frauds and
abuses, but also on how to improve information about residence rights.

Many EU
citizens have complained about Member States not implementing correctly their
national law transposing EU law in the area of free movement of EU citizens.
The complaints concern various problematic areas in the field of free movement
and residence rights. An important issue addressed by the Commission in 2010
related to the delays in handling residence applications of EU citizens and
their family members in the United Kingdom. Some 350 individual complaints were
received by the Commission on this issue since October 2008 alleging that the
authorities of that Member State were failing to meet the deadlines imposed by
national and EU law. Following contacts with the Member State, a comprehensive
solution was implemented and in October 2010 the Commission was informed that
the backlog has been cleared and that measures were taken to avoid such
backlogs in future. The Commission will continue to closely monitor the
situation.

This
particular issue underlines the crucial role Member States play in the
practical implementation of EU law and that correct transposition must be
accompanied by robust measures enabling national authorities to effectively apply
the law. This is even more important in the areas of direct concern to large
groups of EU citizens, such as residence applications.

In 2010 first
positive results could be visible, since a significant number of Member States,
following the bilateral meetings and exchanges with the Commission, modified
their law or announced amendments including a precise calendar to ensure full
transposition of Directive 2004/38/EC thoroughly discussed. Improvement of
transposition will remain a priority for the Commission in 2011.

17.1.3.
Evaluation results
17.1.3.1. Priorities

In 2011 the
Commission will pursue the infringement cases related to the incorrect
transposition of Directive 2004/38/EC. It will also address the infringement
proceeding raising issues of principle or having particularly far reaching
negative impact for citizens.

17.1.3.2. Planned
action (2011 and beyond)

As from 2011
the Commission will step up its efforts to ensure that the Directive is
correctly transposed and implemented across the EU, using fully its powers
under the Treaty and launching infringement proceedings, when necessary.

The Commission
will continue working at technical level with the Member States in the group of
experts.

The Commission
will continue to inform EU citizens about their rights under the Directive. An
updated simplified guide on EU law for EU citizens on freedom of movement,
which was launched in 2010, will continue to be widely distributed. The
Commission will encourage Member States to launch awareness-raising campaigns
to inform EU citizens of their rights under Article 34 of the Directive.

17.1.4.
Summary

The Commission attaches great importance to the concrete fulfilment
of the fundamental and personal right of EU citizens and their family members
to move and reside freely. The transposition and implementation of the
Directive in Member States need to be further completed. The Commission has
been stepping up its efforts to ensure full enforcement and will continue to
work closely together with Member States to solve more problematic issues of
free movement and share best practices. Together with intensified information
to citizens this should bring real improvements in the daily life of EU
citizens and their family members.

17.2.
Citizenship
17.2.1.
Current position
17.2.1.1. Introduction

Article 22 of
the Treaty on the Functioning of the European Union grants the right to EU
citizens to vote and to stand as candidates in municipal and European elections
in the Member State where they reside, without holding the nationality of that
State. These rights were put into effect by Directive 1993/109/EC[560]
as regards European Parliament elections and Directive 1994/80/EC[561]
as regards municipal elections. Directive 1994/80 was modified by Directive
1996/30/EC and Directive 2006/106/EC in view of consecutive enlargements of the
Union.

17.2.1.2. Report of
work done in 2010

In October 2010, the Commission adopted the Report on the
implementation of EU law in the 2009 European elections[562]. The report
concludes that on the whole, the legal conditions allowing EU citizens to
exercise their right to vote and to stand as candidates in their Member State of residence are fulfilled. As for the few issues of transposition of
Directive 93/109/EC and of the Act of 1976 that were identified in the report,
a number of EU Pilot (pre-infringement) cases have been opened during 2010.

In particular,
six cases were opened concerning the transposition of Directive 93/109/EC, one
case concerning the implementation of the Act of 1976 on the election of
Members of the European Parliament and five cases concerning the right of EU
citizens to become members or to found a political party in the Member State where they reside.

The Commission
has also dealt with 97 enquiries and complaints on citizenship and electoral
rights of the EU citizens: 55 on citizenship and 42 on electoral rights. In
2010, there were 14 written EP questions and 5 petitions in this area. This
shows the increasing awareness and interest of EU citizens concerning their
electoral rights.

17.2.2.
Evaluation based on the current situation

Essentially, all Member States transposed the Union legislation in
electoral matters. No infringement proceedings were open as of 31 December
2010. The situation in the field of the electoral rights of EU citizens can be
considered broadly satisfactory.

However, as a
result of a compatibility study concluded in February 2009, EU Pilot
(pre-infringement) cases were opened in 2010. The replies of the Member States
are currently under examination.

As far as the
right of EU citizens to vote and stand as candidates in the municipal elections
in the Member State of residence is concerned, a Commission Report assessing
the implementation of Directive 93/109/EC is planned for 2011.

17.2.3.
Evaluation results
17.2.3.1. Priorities:

In 2011, the Commission will continue the
work to ensure conformity of national legislations of Member States with
Directive 93/109/EC (participation of EU citizens in European elections) and
Directive 94/80/EC (participation of EU citizens in municipal elections) and to
ensure conformity across the EU member States with the 1976 Act on the
elections of the representatives of the European Parliament.

17.2.3.2. Planned
action (2011 and beyond)

As from 2011,
the Commission will step up its efforts to ensure that the instruments in
electoral matters are correctly transposed and implemented. The Commission will
continue working at technical level with the Member States in the group of
experts and launch infringement proceedings when necessary.

A report on
the implementation of Directive 94/80/EC (participation of EU citizens in
municipal elections) is planned for 2011.

On the basis
of a study on possible developments of the EU law on electoral rights,
concluded in 2010, and in the light of the 2010 report on European elections, the
Commission is considering options to better achieve the objectives of Directive
93/109/EC. The objective is to improve the efficiency of the administrative
proceedings to facilitate participation of candidates in the elections, as well
as to improve the information exchange mechanism for preventing double voting.

A proposal to
amend the Directive, presented by the Commission in 2006[563],
is currently with the Council and negotiations are suspended. Any new step for
improvements has to take into account the outcome of the electoral reform
ongoing in the European Parliament which may have a direct effect on the
Directive.

17.2.4.
Summary

Electoral
rights of the EU citizens accompany their right to free movement and are part
of the rights attached to the Citizenship of the Union: EU law in the electoral
field grants the right to the EU citizens to participate in municipal and
European elections in the Member State where they reside without holding the
nationality of that State. Detailed arrangements for the exercise of these
rights are to be found in Directive 94/80/EC with regard to municipal elections
and in Directive 93/109/EC with regard to European elections. The Act of 1976
on the election of representatives of the European Parliament as amended by
Council Decision 2002/772/EC, lays down common principles for the Member States
in the organisation of the European elections.

Transposition
of Union law in electoral matters can generally be considered satisfactory.
However, EU Pilot (pre-infringement) cases were opened in 2010 addressing a
number of issues. These issues concern inter alia details of the arrangements
in the organisation of elections, such as the procedure for registering voters
or candidates on the electoral rolls. They also concern the possibility of
founding or participate in a political party for those EU citizens residing in
another EU Member State who want to stand as candidates in municipal and
European elections.

The Commission
should continue to focus on checking and ensuring correct transposition and
implementation of Directives 93/109/EC and 94/80/EC and of the Act of 1976, as
amended by Council Decision 2002/772. This will need close work at technical
level with the Member States and use of infringement proceedings, where
necessary.

The Commission
shall report on the implementation of Directive 94/80/EC on municipal elections
in its Report planned for 2011. The Commission will also pursue preparatory
work to consider how to go forward with the modification of Directive 93/109.

17.3.
Fundamental rights
17.3.1.
Current Position
17.3.1.1. Introduction

With the entry into force of the Lisbon Treaty the Charter is now legally binding on the EU's
institutions and on Member States when they are implementing EU law. The foreseen accession of the EU to the European Convention of Human Rights
will complement the strong protection of fundamental rights that already exists
in the Union's legal order through the EU's own Charter of Fundamental Rights
and the case law on fundamental rights developed over time by the Court of
Justice.

The important number of letters received by the Commission reveals a
strong interest and expectation from citizens on fundamental rights. It also
reveals that more information is needed to explain that the Commission has no
general powers to intervene in cases of violations of fundamental rights and
that it can do so only if an issue of Union law is involved.

The Commission shall ensure that when implementing EU legislation,
Member States strictly respect fundamental rights and that cases involving
fundamental rights should be treated as a matter of priority. This obligation
will become even more essential when the EU will gain full membership to the
European Convention of Human Rights.

17.3.1.2. Report of
work done in 2010

The Commission
has published on 19 October 2010 a Communication setting the "Strategy for
the effective implementation of the Charter of Fundamental Rights by the
European Union"[564]. The objective of the
Charter Strategy is to make the fundamental rights as effective as possible. The
respect of the rights enshrined in the Charter must be upheld throughout the
entire legislative process. The Commission reinforced the evaluation of the
impact on fundamental rights of its legislative proposals by establishing a
"Fundamental Rights Check-List" to check systematically the
compliance of the proposals with the Charter.

The 2010
Report on the Application of the EU Charter of Fundamental Rights, to be
adopted in 2011, will show that all Commission departments in 2010 received
more than 4000 letters from the general public on fundamental rights issues.
Approximately one third concerned situations where the Charter could apply,
while the rest did not involve Union law and fell outside the powers of the
Commission to control the application of Union law. Approximately half of
petitions and questions from the European Parliament concerned cases where the
Charter could apply and the rest were related to issues outside of EU
competence.

The EU Treaty (Article
6 paragraph 2 TEU) requires the EU to become a member of the European
Convention on Human Rights. The Commission has thus recommended on 17 March
2010 to the Council to open accession negotiations with the Council of Europe.
On the basis of a mandate agreed by the Council, the Commission launched
accession negotiations on 7 July 2010. The EU's
accession to the European
Convention of Human Rights will complement the strong protection of fundamental rights that already exists in
the Union's legal order through the EU's own Charter of Fundamental Rights and the fundamental rights
developed over time by the
Court of Justice.

17.3.2. Evaluation based on the current situation

The 2010
Charter Strategy pointed out that for the rights enshrined in the Charter to be
effective the public needs to be well informed about these rights and how to
enforce them in practice when they are violated. Citizens should know where
they can turn for assistance in cases of violations of fundamental rights. The
Commission will promote awareness raising and will explain in particular what
it can and cannot do.

17.3.3. Evaluation results

The Charter Strategy announced the
presentation of an Annual Report on the Application of the EU Charter of the
Fundamental Rights, as an essential tool in implementing the rights and
freedoms of the Charter. These annual reports will track the progress being
made and also the new concerns that are arising. The Annual Report will be the
track record on the implementation of all the provisions of the Charter.

17.3.4.
Summary

The Charter needs to be put into practice whenever EU law applies,
so that people can effectively enjoy their fundamental rights. That is why the
Commission, in 2010, adopted a Strategy on the effective implementation of the
Charter. The Charter Strategy pointed out the need to inform the public about
fundamental rights and how to enforce them in practice when they are violated.

17.4.
Protection of personal data
17.4.1.
Current position
17.4.1.1. Introduction

Personal data is collected and used in many aspects of everyday
life. The protection of personal data is a fundamental right, which requires
that individuals must be protected with regard to the processing of personal
data. Personal data should be able to flow freely from one Member State to another. In order to remove the obstacles to the free movement of such data
without diminishing the protection of personal data at the level of the EU,
Directive 95/46/EC (the data protection Directive) was developed to harmonise
national provisions in this field.

In 2010, the
Commission continued the monitoring of the correct application of the Directive
95/46/EC on data protection, the main piece of legislation in this area.

As concerns the
protection of personal data processed in the framework of police and judicial
cooperation in criminal matters, the Commission started monitoring the
implementation of Framework Decision 2008/977/JHA at the end of 2010. Member
States were obliged to have taken the necessary measures and to have informed
the Commission by 27 November 2010.

17.4.1.2.
Report of the work done in 2010

The year 2010 has been marked by the ongoing works in the context of
the reform of the data protection framework. Two stakeholder conferences were
organised in June/July 2010 which were based on a list of questions prepared by
the Commission. The contributions provided valuable insight on issues covered
by Directive 95/46/EC which need to be revised. In
November 2010, the Commission presented a comprehensive approach on personal
data protection in the EU.

In parallel, works started on an impact assessment on a new legal
framework, replacing and amending the legal instruments currently in force in
the area of data protection.

The Commission
has received 87 letters (information/documents requests and complaints) from
citizens, 55 parliamentary questions and 3 petitions in 2010.

In 2010, the
Commission was also dealing with 13 infringement cases in the data protection
field. The number of cases referring to the incorrect application of the data
protection directive was higher than the non-conformity cases.

The conclusions of the European Court of
Justice in an infringement case against Germany on the lack of independence of
the data protection authority of 9.3.2010 (C-518/07) were essential and allowed
the Commission to advance a similar case against Austria, bringing the matter
before the Court of Justice at the end of 2010. As the data protection authorities have the crucial task of protecting the
fundamental right to data protection, the Commission will continue to
investigate the correct application of the provision contained in Article 28 of
Directive 95/46/EC referring to the independence of data protection authorities.

The Commission advanced a case against the UK for concerns in relation to the transposition of Directive 95/46/EC and its application by UK courts. The Commission has worked with the UK authorities to resolve a number of issues,
but several remained, notably limitations of the Information Commissioner's
Office's powers or the possibility of courts in the UK to refuse the right to
have personal data rectified or erased. Therefore the Commission adopted a
reasoned opinion against the UK.

17.4.2.
Evaluation based on the current situation

The situation
and volume of work in 2010 was stable regarding the infringement cases. The
number of letters and enquiries has decreased while the number of parliamentary
questions increased.

In terms of implementation of the Directive, the
increased level of harmonisation that might have
provided a solution has not been obtained. The improvement, which was hoped for
and which could have resolved the difficulties identified during the first and
the second review of the implementation of the Directive was neither achieved
by the guidance of case law and of the opinions of the Article 29 Working Party
nor through the Commission's infringement policy. Additionally developments
such as the impact of new technologies and globalisation, divergent approaches
in national law, application and enforcement, created uncertainties and contributed to administrative burden.

No new
infringement cases have been opened in 2010.

17.4.3.
Evaluation results
17.4.3.1.
Priorities

The priority during 2010 was to advance with
the elaboration of a new legal framework for data protection. The Commission
has succeeded to identify/analyse a number of issues to be covered by the new
instrument.

The Commission has also made significant
progress in the handling of infringement cases which have been pending for a
number of years.

17.4.3.2.
Planned action (2011 and beyond)

The primary objective for 2011 will be the
adoption of the new legislative framework for data protection.

The Commission will also present a report
on the implementation of Framework Decision 2008/977/JHA which will be based on
the information received from the Member States. A stakeholder conference was
held scheduled on 2 February 2011. Member States were given the possibility to
discuss problems they encountered in the implementation process and to
highlight issues they consider important in view of the currently ongoing
review of the data protection framework.

The implementation of the ruling of the European Court on the lack of independence of the data protection authority in Germany was closely monitored. A letter of formal notice under Article 260(2) TFEU was
notified to Germany on 7 April 2011 as Germany had not complied with the
Court's ruling.

17.4.4.
Summary

Work towards the reform of the current
legislative data protection framework was the major objective in 2010. The
adoption of the reform package is due in 2011.

Until the adoption of the new legislation,
the Commission will continue to monitor the application of Directive 95/46/EC.

17.5.
Judicial cooperation in civil matters
17.5.1. Current position
17.5.1.1.
Introduction

Judicial cooperation in civil matters aims
to contribute to the creation of a genuine European area of justice based on
mutual recognition and trust. In particular, it aims to promote the elimination
of obstacles to the good functioning of cross-border civil proceedings in the
Member States and thus improve the daily life of citizens and businesses mainly
by fostering access to justice. In this context, a considerable number of
instruments have been adopted in the area of civil, commercial and family law
establishing European rules on jurisdiction, applicable law, recognition and
enforcement of judgements for cross-border civil justice cases.

17.5.1.2. Report of
the work done in 2010

· New legislation

On
24 March 2010, the Commission adopted a package of proposals to
respond to a request by a group of Member States to establish enhanced
cooperation in the area of the law applicable to divorce and legal separation[565].
The enhanced cooperation package consists of two parts: first, a Council Decision
that authorises enhanced cooperation for 14 Member States and, second, a
Council Regulation containing the actual measures applying in participating
Member States.

On
12 July 2010, the Council of the European Union, with the consent of
the European Parliament, authorised 14 Member States to go ahead with the
first enhanced cooperation in the history of the European Union and implement
rules enabling international couples to agree on which law would apply to their
divorce or legal separation[566]. The proposal will increase flexibility and autonomy by giving
spouses a possibility to choose the law which will apply to their divorce. The new Regulation[567] entered into force on
30 December 2010 and will apply as from 21 June 2012.

Proposed
legislation

Following the 2009 Report evaluating the
application of Regulation 44/2001 (Brussels I) and the Green Paper identifying
ways to improve its functioning, a Proposal for the amendment to Regulation
(EC) n°44/2001 (Brussels I) was adopted on 14 December 2010[568].

Preparatory
legislative work

The Impact assessment on Proposals for a
Regulation on matrimonial property rights and property rights of registered
partnerships was finalised with the view to propose two Regulations to cover
questions on jurisdiction, applicable law recognition and enforcement of
judgements of international couples' property rights.

A Green Paper on the free circulation of
documents within the European Union was adopted on 14 December 2010. In this
paper, the Commission asks questions on how to improve the free
circulation of public documents, such as diplomas, proof of nationality,
property deeds. The Green Paper is open for consultation until April
2011.

As to the evaluation exercises, evaluation
studies on the Legal Aid Directive and the EEO Regulation as well as the
assignment of claims under the Rome I Regulation were launched in 2010.

External Competence

During 2010 negotiations concerning the
proposal for a Council Decision on the signature and conclusion of the
Convention on the International Recovery of Child Support and Other Forms of
Family Maintenance continued at the Council; the negotiations are now
progressing towards a definitive agreement which could be reached in the course
of 2011.

The first two Commission's decisions based
on Regulations No 662/2009 and 664/2009 were adopted and three Commission
Decisions with Denmark were signed[569].

Cooperation with other international
organisations (as HCCH, Council of Europe, UNIDROIT, UNCITRAL, CIEC) has been
further carried out with participation in the relevant meetings and follow-up
of the Conventions in the area of civil judicial cooperation.

Monitoring of enlargement issues and
contacts with European Neighbour Policy countries continued on a regular basis.

The international negotiations related to
the Space Protocol to the Cape Town Convention progressed.

European
Judicial Network in civil and commercial matters (EJN)

In 2010, the European Judicial Network in
civil and commercial matters prepared the entry into force of its amending
decision (Decision 568/2009/EC), especially with respect to the association of
the legal professions to the network, new tasks for the contact points and
various projects aimed at increasing the level of awareness of the Network with
the judicial authorities, citizens and companies.

In 2010, five contact points meetings have
been organised which were dealing, amongst others, with the following topics:
parental responsibility, the European order for payment procedure, the European
Small Claims Procedure, the service of documents, legal aid and the migration
of the EJN website to the European e-Justice portal.

A citizens'
guide to
cross-border civil litigation in the European Union has been published in 2010 on the
portal of the EJN.

17.5.2.
Evaluation based on the current situation

In 2010, the Commission continued to
monitor the correct application of the civil justice acquis. The
Commission answered 91 complaints. The number of infringement cases pending
decreased from 14 to 4. The remaining ones will be dealt with in the
forthcoming period.

The Commission
is also contributing to the correct interpretation of acquis through
observations to the preliminary questions to the Court of Justice. With the
entering into force of the Lisbon Treaty, which allows also first instance
courts to ask the Court of Justice for preliminary rulings, their number has
increased considerably in the area of civil justice.

In the area of family law, the new urgent
preliminary ruling procedure (PPU) is available since 1 March 2008 and has also
increased the number of cases. The new procedure enables the Court of Justice
to deal much more quickly with issues relating to the area of freedom, security
and justice. Such an issue may arise, for example, in proceedings concerning
parental responsibility if the jurisdiction under EU law of the national court
hearing the case depends on the answer to the question referred for a
preliminary ruling.

In 2010, Commission observations were made
in 20 cases in civil justice, 4 of them being "PPU" procedures doubling
in number compared to 2009.

The Commission gave opinions on 14
preliminary questions which concerned the application of the Regulation (EC)
44/2001 (Brussels I), the most important one being the Pammer –
Alpenhof ruling.

In the Cases C-585/08 and C-144/09 Pammer
– Alpenhof, the Court of Justice explained the rules of
jurisdiction in European Union law that are applicable to consumer contracts,
in relation to services offered on the internet. Mere use of a website by the
trader does not in itself trigger application of the rules of jurisdiction for
the protection of consumers in other Member States.

In the family law area, 4 of the
Preliminary ruling cases were ‘PPU’ procedures relating to the interpretation
of Regulation (EC) No 2201/2003 (the 'Brussels II a Regulation’).

In the Case C-211/10 PPU the
Court of Justice ruled that the enforcement of a certified judgment which
required the return of the child could not be refused either on account of a
judgment delivered subsequently by a court of the Member State of enforcement
or on account of a change of circumstances after its delivery. In Case
C-400/10 PPU, the Court of Justice stated that the removal of a
child by a parent to another Member State was wrongful only if it was in breach
of custody rights granted by national law. Furthermore, the Court ruled that
national legislation under which the acquisition of rights of custody by a
father who was not married to the mother of the child was dependent on his
obtaining a court judgment was not in breach of the right to respect for
private and family life protected by the Charter of Fundamental Rights of the
EU. The Court of Justice’s judgment in Case C-491/10 PPU clarifies
that the court with jurisdiction in the Member State of enforcement cannot
oppose the enforcement of a certified judgment, ordering the return of a child
who has been wrongfully removed, on the ground that the court of the Member
State of origin which handed down that judgment may have infringed Article 42
of Regulation (EC) No 2201/2003 interpreted in accordance with Article 24
of the Charter of Fundamental Rights of the European Union. In Case C-497/10
PPU the Court of Justice was given the opportunity to interpret the
concept of ‘habitual residence’ for the purposes of the provisions of
Regulation (EC) No 2201/2003 that make reference to a child’s habitual
residence in a Member State.

Awareness raising activities

The Commission published a citizens' guide to cross-border civil litigation in the European
Union in all languages. The European
Union has a system of laws in place designed to help individuals and businesses
with cross-border litigations. The Guide aims to explain these laws and the principles behind these
European procedures and how citizens can choose whether they want to use them. The "Compendium of Community Legislation on Judicial
Cooperation in civil and commercial matters" was published in all
languages and distributed in the 27 Member States.

In October 2010, at the same time as the European Day of Civil
Justice, the Commission published a Eurobarometer survey in civil justice.

17.5.3. Evaluation results
17.5.3.1. Planned
action (2011 and beyond)

A wide range of
activities has been launched in order to improve the conditions for
cross-border trade and consumer rights, such as the revision of the Brussels I
regulation and the legislative proposal on attachment of bank accounts which
will contribute to reducing costs for businesses in line with the objectives of
the flagship initiative Industrial policy for the globalisation era. Together with
the foreseen legislation on European contract law, these activities strongly
aim at improving consumer confidence in cross-border trade and increase
business activities in cross-border trade.

The proposals
on matrimonial property rights and property rights of registered partnerships
are planned to be adopted in 2011. Both Regulations will include provisions on
jurisdiction rules, applicable law rules, and recognition and enforcement
rules. As regards applicable law, the proposed Regulations will in particular
provide for objective criteria, allowing determining the law applicable to the
assets of the couples and should also explore the spouses' possibilities of
choosing, to a certain extent, the law applicable to their assets. The
proposals will also deal with the question of jurisdiction. Its provisions will
have to be consistent with existing or future rules, relating to divorce
proceedings and successions.

17.5.4. Summary

With the aim of facilitating the life of individuals and businesses
involved in cross-border litigation, a wide range of activities has taken place
in the area of judicial cooperation in civil matters during 2010. The European
Union adopted new legislation on the question of the law applicable to divorce
and legal separation using for the first time in its history the enhanced
cooperation procedure. Intense preparatory legislative work has been carried
out by means of impact assessment studies, evaluation reports and Green Paper
consultations. A proposal for revising existing legislation has been put
forward to improve and facilitate the circulation of judgments across the
European Union. Particular attention has been given to the correct
implementation and application of the civil justice acquis. The role of
the European Judicial Network in civil and commercial matters has been
reinforced. Numerous preliminary questions to the Court of Justice of the
European Union gave the Commission the opportunity to contribute to the
interpretation of civil justice instruments. With regard to the Union's external competence, cooperation with
international organisations and negotiations on questions of private
international law were carried out. Last but not least, various activities took
place aiming at measuring and raising public awareness across the EU of civil
justice instruments and procedures.

17.6.
Consumer and marketing law
17.6.1.
Current position
17.6.1.1. Introduction

There are more than 500 million consumers
in Europe and their expenditure represents over half of the EU’s gross domestic
product (GDP). Consumers are essential to economic growth and job creation in a
large market of products and services.

Directorate-General Justice's
responsibility for consumer and marketing law is embedded in the Commission's
Consumer Policy Strategy as well as in the implementation of the Stockholm
Programme, the aim of which is to create an area of freedom, security and
justice for Europe's citizens. The objective in consumer and contract law is to
maintain and develop an effective legislative framework which promotes the
economic interests of European consumers and ensures an open, fair and
transparent internal market. This will allow consumers to exercise real choice,
give them the required protection, while providing a level playing field and
predictable rules for businesses and excluding rogue traders, thereby helping
consumers and businesses take full advantage of the market’s potential.

Directorate-General for Justice is in
charge of eight directives in the area of consumer and marketing law. In 2010
it was active in both monitoring the transposition and application of these
directives as well as the modernisation of the acquis.

17.6.1.2. Report of
the work done in 2010

· Review of the Package Travel Directive

In the framework of the potential revision
of the Package Travel Directive (90/314/ EEC), a public consultation was open
until 7 February 2010. It mainly focused on possible ways of solving problems
with the current rules. It also aimed to quantify the impacts of various
possible legislative options. At the same time a public consultation on air
passenger rights was initiated. It touched on a related topic, namely the
possible introduction of passenger protection in the event of airline
bankruptcy (There is currently no insolvency protection for standalone air
tickets, i.e. for flights which are not included in a travel package). In April
2010, the Commission held a stakeholders' workshop to discuss different policy
options. In the second half of 2010, the Commission worked on the impact
assessment for the revision of the Directive taking account the parallel impact
assessment on passenger protection in the event of airline insolvency.

· Negotiations on the proposal for a new directive on consumer rights

The co-decision legislative process in
relation to the proposal for a new Directive on consumer rights has now come to
a successful conclusion. The proposal, which was adopted by the Commission in
2008, intended to bring together and update the Distance Selling Directive
97/7/EC, the Doorstep Selling Directive 85/577/EEC, the Consumer Sale of Goods
Directive 99/44/EC and the Unfair Contract Terms Directive 93/13/EEC, thereby
reducing the legal fragmentation in the internal market. Intense negotiations
on the proposal under the Belgian presidency led to the adoption of a general
approach by the Council on 24 January 2011. The general approach focuses on
distance and off-premises contracts and foresaw, with the exception of three
opening clauses, to fully harmonise the information requirements, the right of
withdrawal and the provisions on delivery and passing of risk. Directives
99/44/EC and 93/13/EEC would remain unchanged. The European Parliament adopted
the agreed text in plenary on 23 June 2011. Formal adoption of the new
Directive by the Council is expected in October 2011.

· Transposition, application and interpretation of the existing
directives

Directive 2005/29/EC on Unfair
Commercial Practices

The national laws transposing Directive
2005/29/EC have been in force in all Member States since the beginning of 2010.
However, the transposition of the Directive continues to pose a number of
challenges considering the important legal impact of full harmonisation in a
broad area which was characterised by considerable differences in national
rules and policies.

In order to ensure an adequate implementation
of the Directive in the Member States, the Commission continued its
transposition checks and discussions with Member States and stakeholders with a
view to solving transposition problems. In this connection, the Commission
intervened in various cases referred to the Court of Justice for preliminary
rulings, such as C-540/08 Mediaprint and C-122/10 Ving Sverige (judgement
issued on 12 May 2011). In the Mediaprint case, the Court had to examine the
compatibility of an Austrian provision banning the sale of newspapers combined
with the possibility to take part in a competition (i.e. sales of newspapers
with so-called "bonuses"), and stated that "[…] the Directive
must be interpreted as precluding a national provision, such as that at issue
in the main proceedings, which lays down a general prohibition on sales with
bonuses and is not only designed to protect consumers but also pursues other
objectives".

In 2010 the Commission started the
preparation of the report on the application of the Directive (as provided for
by Article 18 of the Directive) and launched a call for tender for a study to
assess the application of the Directive in the fields of financial services and
immovable property. In the report the Commission will address various issues
including the effects of full harmonisation in areas such as sales promotions.

To promote a common understanding and to
develop a uniform application of the Directive, the Commission worked on the
development of a legal (online) database for the Directive. The database will
make available to the public information on the transposition and
implementation measures in the Member States, relevant decisions of the
European Court of Justice, the leading national jurisprudence and
administrative practice, relevant legal literature, guidelines from national
authorities, codes of conduct etc. This database was launched at a conference
in July and will be publicly available as from July 2011.

Other consumer protection directives

In 2010 the Commission continued
infringement proceedings resulting from systematic checks on the quality of
transposition of certain consumer protection directives. In addition, its
services dealt with a number of complaints identifying potential implementation
problems. The Commission also replied to numerous parliamentary questions and
correspondence from citizens.

In particular, the Commission closed all
infringement proceedings based on the inadequate transposition of Directive
93/13/EEC on unfair terms in consumer contracts which were opened in 2008. In
2010 the two remaining cases were closed since the CZ and SK changed their
legislation following a reasoned opinion[570].

Three out of the nine infringement cases
opened in 2009[571] in relation to
deficiencies in the transposition of Directive 99/44/EC on the sale of consumer
goods and associated guarantees were closed after a letter of formal notice. In
six cases the Commission issued reasoned opinions in 2010. Two of these cases
were closed following legislative changes in the Member States concerned[572].
In the four remaining cases[573] the Member States
concerned have announced legislative changes.

In relation to Directive 90/314/EEC on
package travel, PL, following the Commission's letter of formal notice, amended
its national rules transposing Article 7 of the Directive. This provision
obliges Member States to ensure that consumers are guaranteed a refund of the
money paid over and repatriation in case of the organiser's insolvency.

Finally, there were a number of new
requests for preliminary rulings under Article 267 TFEU in relation to
different consumer protection directives as well as rulings on questions that
had previously been submitted to the Court of Justice. Some of these cases are
mentioned below.

In Case
C-215/08 E. Friz the Court ruled that Directive 85/577/EEC does apply to
contracts concerning a consumer's entry in a closed-end real property fund
established in the form of a partnership even though the principal purpose of
joining is not to become a member of that partnership, but is a means of capital
investment. If the consumer exercises his right of withdrawal from such
partnership, Article 5 (2) of Directive 85/577/EEC does not preclude a national
law according to which the consumer's claim against that partnership is
calculated on the basis of the value of his interest at the date of his
withdrawal from this membership; the consumer may thus get back less than the
value of his capital contribution or have to participate in the losses of that
fund.

In Case C-511/08 Heinrich Heine on a
preliminary request from a German court concerning Directive 97/7/EC on
distance contracts, the Court found that the provisions of Directive 97/7/EC on
the legal consequences of the withdrawal clearly have as their purpose not to
discourage consumers from exercising this right. Therefore, the directive
precludes national legislation which, in the context of a distance contract,
allows the supplier to charge the costs of delivering the goods to the consumer
after the latter has exercised his right of withdrawal.

In Case C-484/08, Caja de Ahorros y
Monte de Piedad de Madrid, the Court of Justice
confirmed that, given its minimum harmonisation
character, Directive 93/13/EEC on unfair terms in consumer contracts does not
preclude national legislation which authorises a judicial review as to the
unfairness of contractual terms which relate to the definition of the main
subject‑matter of the contract or to the adequacy of the price and
remuneration, even in the case where those terms are drafted in plain,
intelligible language[574].

In Case C-137/08 VB Pénzügyi Lízing
the Court of Justice further developed its case law on Article 6(1)[575]
of Directive 93/13/EEC on unfair terms in consumer contracts. Following on from
previous judgments in relation to this provision[576]
the Court concluded that national courts must investigate
of their own motion whether a term conferring exclusive territorial
jurisdiction in a contract concluded between a seller or supplier and a
consumer, which is the subject of a dispute before it, falls within the scope
of Directive 93/13 and, if it does, assess of its own motion whether such a
term is unfair[577].

In Case C-76/10[578]
Pohotovosť s.r.a. the Court of Justice established, in line with
existing case law[579], that also in
connection with the assessment of execution requests for arbitration awards
which were granted in the absence of the consumer and have become final,
national courts are obliged to examine, of their own motion, whether a sanction
(e.g. a penalty) which was applied in the arbitration award is
disproportionate, where they have available to them the necessary legal and
factual elements and in so far as, under national rules of procedure, such an
assessment can be carried out in similar actions of a domestic nature. The
Court also concluded that the lack of indication of the annual percentage rate
of charge required under the consumer credit legislation may be a decisive
factor when determining whether the cost of the credit is expressed in plain
intelligible language in the sense of Article 4 of Directive 93/13[580].

In the joined cases C‑585/08 and C‑144/09
Pammer & Alpenhof, concerning Directive 90/314/EEC on package travel, the
Court confirmed that a voyage by freighter (which included accommodation) could
be considered to be a "package travel" under the Directive.

17.6.2. Evaluation based on the current situation

The acquis in consumer and contract
law has been transposed by all Member States. The quality of the transposition
of several directives has improved or is about to improve in specific Member
States due, in particular, to infringement proceedings. Several questions on
the interpretation of particular provisions have been clarified through rulings
by the Court of Justice. Specific implementation problems, may, however, still
be discovered through new complaints and requests for preliminary rulings.

Continued efforts will be necessary in
particular in relation to the assessment of the quality of transposition of
Directive 2005/29/EC on Unfair Commercial Practices.

Since the time-limit for the transposition
of Directive 2008/122/EC on timeshare will run out in February 2011, the
monitoring of the transposition of this Directive will be made in the next
period.

17.6.3. Evaluation results
17.6.3.1. Priorities

The revision of the Package Travel
Directive (90/314/EEC) will be a priority in 2011.

In addition, the assessment of the
implementation of Directive 2005/29/EC on unfair commercial practices and the
preparation of the Report on the application of the Directive will receive
particular attention. The same applies to the announced communication on the
review of Directive 2006/114/EC on misleading and comparative advertising.

The monitoring of the timely transposition
of Directive 2008/122/EC on timeshare, and, at a later stage, of the quality of
the national transposition measures will also constitute an important objective
for the Commission's services.

17.6.3.2. Planned action (2011 and beyond)

Several initiatives in the field of
consumer and marketing law are included in the Commission's action plan for the
implementation of the Stockholm Programme for the creation of an area of
freedom security and justice for European Citizens in the period 2010-2014. Moreover,
the Commission plans to issue a Consumer Agenda in the first quarter of 2012.
The Consumer Agenda will build on the results achieved by the Commission's
Consumer Policy Strategy for 2007-2013 and will bring together a number of
initiatives in different areas which aim at improving the situation for
Europe's consumers. It will contribute to fighting a number of obstacles to EU
economic growth and improve the protection of consumers. Compared to the
current Strategy, it will focus on the empowerment of consumers throughout the
consumption life-cycle in a constantly changing environment. For example, it
will address the challenges consumers face because of the increased importance
of digital products and the online environment, increased complexity of
decision making (information overload, more responsibility shifted to
consumers), the need to move towards more sustainable patterns of consumption,
population ageing and social inclusion/vulnerable consumers.

The actions planned in the coming years aim
to improve the legislative framework, achieve transparency of the applicable
rules and to ensure effective implementation in the Member States.

They include the revision of the Package
Travel Directive (90/314/EEC), a Communication followed by a possible legislative
proposal to bring existing EU consumer acquis in line with developments
in the digital environment, as well as different activities in relation to the
Directive on Unfair Commercial Practices (2005/29/EC). The latter actions
involve increased transparency through the launch of the legal online database,
the examination of the transposition in the Member States as well as the
possible review of the Directive in connection with the report on the
application of the Directive. This report as well as the planned communication
on the Misleading and Comparative Advertising Directive (2006/114/EC) may lead
to new legislative proposals.

The Commission will also have to decide
whether and how the existing public database on the national rules transposing
eight consumer protection directives and their application is to be continued
beyond 2011.

Effective implementation by the Member
States will remain a very important aspect. Therefore the Commission will
supervise the transposition of recent directives (e.g. Directive 2008/122/EC on
timeshare and the new Consumer Rights Directive once it has been implemented) and
respond to complaints and, where appropriate, initiate infringement
proceedings.

17.6.4. Summary

The combined action of Commission and Member States in 2010 has led to a high degree of conformity with the acquis in the
area of consumer and marketing law. There are however important challenges
ahead. In the near future one of the challenges is to create a more coherent
framework for cross-border shopping through clearer, simplified and harmonised
rules that are uniformly enforced by national authorities, to increase EU-wide
consumer confidence and enable consumers and businesses to fully benefit from
the potential offered by the internal market. The implementation of the new
Consumer Rights Directive will constitute one step towards this goal, but
further action will be needed. This will require continued efforts by all
players and, in particular, the Member States, whose role is to transpose and
enforce Union law. Consumers and their organisations may help also by
signalling problems in the implementation of particular rules.

17.7.
Judicial cooperation in criminal matters
17.7.1.
Current position
17.7.1.1. Introduction

With the entry into force of the Lisbon
Treaty and the abolition of the pillars structure, the implementation of
Framework Decisions in the field of judicial cooperation in criminal matters is
expected to become less problematic in future. There is widespread recognition
that implementation of third pillar instruments has been very poor. In the
former third pillar, the Commission did not have enforcement powers and
therefore could not start infringement procedures against Member States who did
not implement Framework Decisions (or who implemented them belatedly or
incorrectly).

17.7.1.2. Report of the work done in 2010

There are currently 12 mutual recognition
instruments in criminal law, out of which five ought to have been implemented
before or by 2010.

Out of the 12 instruments, only the
European Arrest Warrant instrument has been implemented satisfactorily and on
time. Framework Decision 2002/584/JHA on the European Arrest Warrant has been
transposed by all Member States. Since the Framework Decision came into
operation, in general the time taken to execute a warrant is provisionally
estimated to have fallen from more than nine months to five weeks. This does
not include frequent cases where the person consents to surrender, for which
the average time taken is two weeks.

Implementation of the other instruments has not been satisfactory.
In particular 4 instruments have been merely partially implemented so far:

· Council Framework Decision 2001/220/JHA of 15 March 2001 on the
standing of victims in criminal proceedings has been poorly implemented.
Although the scope of this Member States' initiative covering most of the
rights of victims of all types of crimes is still relevant, European societies
have evolved and there is growing awareness and a changing judicial culture to
better address the rights and needs of victims of crime. This legislation has
not been effective in meeting the desired outcome of addressing the needs of
victims and achieving minimum standards across the EU. No Member State can claim to have fully implemented the instrument. The ineffectiveness of this
legislation is also due to ambiguous drafting, lack of concrete obligations and
lack of infringement possibilities under the former 3d pillar. In 2010, the
Commission's services have carried out three expert meetings, a public
consultation and an external impact assessment study, which confirmed these
findings and helped to elaborate options for EU legislation.

· Council Framework Decision 2005/214/JHA of 24 February 2005 on the
application of the principle of mutual recognition to financial penalties[581]
has been implemented in 22 Member States, while implementation (or
notification) from 5 Member States is still missing. Besides delays in its
transposition, the quality of implementation leaves much to be desired. While
some of the most important issues such as the abolition of dual criminality and
the recognition of decisions without further formality are properly reflected
in the implementing provisions, the grounds for refusal have been implemented
mostly as obligatory grounds and additional grounds have been added in
contravention of the Framework Decision. Little information is still available
on its practical application.

· Council Framework Decision 2003/577/JHA of 22 July 2003 on the
execution in the European Union of orders freezing property or evidence[582]
has been implemented by 23 Member States. Little information is still available
on the practical application of the legislation. Feedback from practitioners
seems to indicate that the certificate to request the execution of freezing
orders is rather difficult to complete and does not contain all the necessary
fields. Therefore, judicial authorities tend to prefer recourse to the mutual
legal assistance forms.

· Council Framework Decision 2006/783/JHA of October 2006 applies the
principle of mutual recognition to confiscation orders issued by a court
competent in criminal matters for the purpose of facilitating enforcement of
such confiscation orders in a Member State other than the one in which the
confiscation order was issued. The implementation report adopted by COM in
August 2010 (delay resulted from the low number of notifications received by
the deadline set by the FD: only two notifications were received on time)
showed that the degree of implementation of FD is clearly not satisfactory.
Thirteen Member States implemented the FD and notified it the Commission (at
least informally) by the end of February 2010, fifteen months after the
deadline set by the Framework Decision. The national implementing provisions
received from the thirteen Member States are generally satisfactory and can be
considered to be in line with the Framework Decision, especially regarding the
most important issues such as the abolition of dual criminality checks and the
recognition of decisions without further formality. Unfortunately, the analysis
of grounds for refusal of recognition shows that almost all Member States
included in their national legislation several additional grounds, in
contravention of the Framework Decision. At present, notifications on the
implementation of the Framework Decision have been received from 17 Member
States.

Since the rules currently in force do not allow the Commission to
initiate infringements proceedings in respect of legislation adopted before 1
December 2009 (for a transitional period of five years from the entry into
force of the Lisbon Treaty), DG Justice had decided to launch an array of
initiatives designed to improve the implementation record in this area, in
particular by providing Member States with guidance and help during the
implementation stage. These initiatives have included: a series of workshops
with national legislators and practitioners on the three Framework Decisions
mentioned above, preparation of handbooks for practitioners; streamlined
contact with national authorities responsible for implementation; participation
of Commission officials in national training for judges and prosecutors.

17.7.2.
Evaluation based on the current situation

Workshops carried out in 2010 contributed to creating a new forum
for discussion and exchange of information on the practical application of the
Framework Decision and prompted implementation by a number of Member States. Workshops have been instrumental in increasing compliance with the
Framework Decision and in streamlining contact between national authorities and
the Commission, which in turn lead to better quality of implementing
legislation. They have also allowed demonstrating an
increasing cross-border use between certain Member States.

However, the degree of implementation of the three instruments above
is still not satisfying.

17.7.3.
Evaluation results
17.7.3.1. Priorities

The number of legislative proposals to be
adopted in 2011 or already on the table imposes a prioritisation of the work.
On that basis, the main priorities for 2011:

· Recast the Framework Decisions on the standing of victims in
criminal proceedings in the framework of a broader package of legislative and
non legislative measures to improve the situation of victims of crime;

· Recast the Framework Decisions on mutual recognition of confiscation
orders and freezing orders;

· Monitoring the correct implementation of the Framework Decisions on
probation orders and custodial sentences (see below);

· Monitoring of the conformity of national measures transposing
Directive 2004/80 (compensation for victims of intentional crime).

17.7.3.2. Planned action (2011 and beyond)

Conclusions from the workshops and other meetings on the instruments
led to the decision on recasting the Framework Decisions mentioned above in the
framework of the 2011 Working Programme in view of achieving better quality
legislation as well as improving effective measures in the fight of the
cross-border criminality. Legislative proposals on all instruments will be
adopted in 2011.

At the same time the Commission's implementation strategy will be
continued concerning other instruments. In an attempt
to prevent problems stemming from implementation at an earlier stage,
Implementation Workshops with national legislators and practitioners this year
will concern Framework Decisions 2008/947/JHA on probation measures and
2008/909/JHA on custodial sentences (transfer of prisoners), for which the
implementation periods are still running until December 2011. Streamlined
contacts with Member States may include implementation "package
meetings", where all the different services involved in the implementation
work could benefit from the expertise of the Commission services.

The legislative and non legislative package on victims' rights to be
adopted in 2011 will include concrete measures to improve the implementation of
the new legislation such as elaborating handbooks, exchange of best practices
and training of officials which will be in contact with victims.

Regarding Directive 2004/80/EC on compensation for victims of
violent intentional crime, and although infringement procedures were already
launched against two Member States for lack of communication of national
transposing measures (Greece) and for non transposition (Italy), there is
increasing evidence, largely based on NGOs and citizens' letters, parliamentary
requests and petitions, that these two Member States might still not be
compliant with the current Directive. The
implementation of the Directive is currently under exam by the Commission which
will shortly take action under the EU pilot scheme.

The Commission will also present a report on the application of
Framework Decision 2002/584/JHA on the European Arrest Warrant.

17.7.4.
Summary

The EU has
only been legislating in this area for around 10 years. The expertise of Member
States’ national legislators is therefore still limited. In order to reduce
this gap, the Commission has undertaken a number of initiatives to improve the
situation, including: implementation workshops on a regional basis, on top of
the regular expert meetings which take place in Brussels; streamlined contacts
between national administrations and Commission services, possibly coupled by
meetings in the capitals; dissemination of implementation handbooks.

Since the
entry into force of the Lisbon Treaty, the Commission can exercise enforcement
powers, straight away as concerns newly adopted legislation and subject to a
period of five years as concerns Framework Decisions adopted before 1 December
2009. Until then, the Commission will continue to monitor the correct
application of criminal justice instruments by other means.

17.8.
Antidiscrimination and gender equality
17.8.1. Current position
17.8.1.1. Introduction

The legislative acquis in the field
of gender equality and anti-discrimination is composed of 11 Directives, based
mainly on the specific Treaty provisions: Article 157 TFEU (former Article 141
TEC) for gender equality and Article 19 TFEU (former Article 13 TEC) for
antidiscrimination.

The number of infringement proceedings
concerning this field used to be high due to a combination of non-conformity
and non-communication cases. The majority of these cases were non-conformity
cases opened in the period 2005-2007 following conformity check of recently
transposed directives. During the period 2008-2010 the number of infringements
has steadily decreased following amendments to national laws in the Member
States which brought the national legislation in line with the EU acquis:
more than 100 cases at the end of 2008, 74 at the end of 2009 and 45 at the end
of 2010. By the end of 2010, the last remaining non-communication cases were
expected to be closed in early 2011 following adoption of national transposing
laws.

17.8.1.2.
Report of work done in 2010

New legislation
adopted

· Directive 2010/18/EU of 8 March 2010 implementing the revised
Framework Agreement on parental leave concluded by BUSINESSEUROPE, UEAPME, CEEP
and ETUC and repealing Directive 96/34/EC,

· Directive 2010/41/EU of 7 July 2010 on the application of the
principle of equal treatment between men and women engaged in an activity in a
self-employed capacity and repealing Directive 86/613/EEC.

Directive 2010/18/EU implements the revised
framework agreement on parental leave concluded by the social partners at
European level. The Directive extends workers' rights to parental leave from
three to four months for each parent. The Directive will
allow working parents to better balance family and work. To encourage a more equal take-up of leave by both parents, at least
one of the four months shall be provided on a non-transferable basis. The transposition deadline for the Directive is 8 March 2012.

Directive 2010/41/EU strengthens social
protection of self-employed workers with a view to removing disincentives to
female entrepreneurship and improves the social protection of
"assisting" spouses who often work in the self-employed sector
without enjoying the corresponding rights. The Directive grants for the first
time at EU level a maternity allowance to self-employed workers. Self-employed
workers are also granted a leave period of at least 14 weeks should they choose
to take it. The Directive marks an important step forward in terms of
increasing social protection and providing equal economic and social rights for
self-employed men and women, and their partners. The transposition deadline
for the Directive is 5 August 2012.

There are Member States which have already
notified transposing measures for both directives, therefore well in advance of
the transposition deadlines in 2012.

New legislation in preparation

In the area of gender equality and
anti-discrimination, two 2008 legislative proposals remained under discussion
in 2010:

· a proposal for a Directive implementing the principle of equal
treatment between persons irrespective of religion or belief, disability, age
or sexual orientation outside employment,

· a proposal for a Directive amending Directive 92/85/EEC on the
introduction of measures to encourage improvements in the safety and health at
work of pregnant workers and workers who have recently given birth or are
breastfeeding.

Concerning the proposal for a Directive implementing
the principle of equal treatment between persons irrespective of religion or
belief, disability, age or sexual orientation outside employment the Council
negotiations continued at technical level in 2010. However, no significant
progress has been registered in the Council.

Council discussions on the proposal for a
Directive amending Directive 92/85/EEC also continued in 2010. The European
Parliament commissioned a cost – benefit study of the amendments and in its
first reading position in October 2010 proposed considerable amendments to the
proposal. These amendments raised concerns in a number of Member States as
regards the cost of the Directive and remained under analysis until the end of
2010.

Monitoring of
infringements

All Member States have transposed
Directives 2000/43/EC, 2000/78/EC and 2002/73/EC. One procedure for
non-communication of national measures to transpose Directive 2004/113/EC and
two procedures for Directive 2006/54/EC remained still open at the end of 2010.
However, in one of the proceedings concerning Directive 2006/54/EC Member State
had already notified national transposition and in the two other proceedings
the national law had been adopted and the cases were pending the entry into
force of the national laws on 1.1.2011.

To monitor the application of the EU
legislation in the area of gender equality and anti-discrimination the
Commission took the following action in 2010:

· With regard to ensuring the conformity with Article 157 TFUE, the
Commission was analysing the new legislative package adopted by one Member
State (FR) whilst the Article 260 TFEU proceedings against IT and EL could be
closed in November 2010 since the gender differences in pensionable age were
corrected in both Member States.

· Concerning Directive 2000/43/EC, the Commission closed five cases
(SE, LV, SI, CZ and DE) ; seven other cases for incorrect transposition
remained open at the end of 2010,.

· Concerning Directive 2000/78/EC, the Commission closed six cases
(CZ, HU, LV, LT, SE and DE); eight other cases for incorrect transposition
remained open at the end of 2010.

· Concerning transposition of Directive 2006/54/EC five
non-communication proceedings (BE, EE, IT, LU and UK) were closed whilst
proceedings against two Member States (AT, PL) remained technically open until
the end of the year; in the meantime AT had already notified the national
transposing law.

· Concerning transposition of Directive 2004/113/EC the
non-communication proceedings against UK were closed, whilst proceedings
against PL remained open until the end of the year.

· Concerning Directive 2002/73/EC, six cases (DE, LT, LV, SI, IT and IE) for incorrect transposition were closed, the Commission being satisfied
with the amendments introduced or the explanations given. Thirteen proceedings
remained open, but a number of these were heading for a solution following
legislative amendments at national level.

Contribution to preliminary rulings:

The Commission's services also contributed
to a number of preliminary rulings received by the Court of Justice under
Article 267 TFEU (ex Article 234 TEC) in connection to the application of the
gender equality and anti-discrimination acquis. The cases below worth
particular attention:

In Case C-149/10, Chatzi, the Court
was asked whether a mother who gives birth to twins is entitled to two periods
of parental leave, one period for each child, or whether she is entitle to only
one period of parental leave corresponding to the birth. Indeed, children have
the right to protection and care as is necessary for their well-being. In its
ruling, the Court considered that the right to protection and care of the child
does not mean however that children have to be acknowledged as having an
individual right to see their parents obtain parental leave.

Case C‑555/07, Kücükdeveci: In
Germany, the notice periods which an employer must comply with in the case of
dismissal increase progressively according to the length of the employment
relationship. Periods of employment completed by an employee before reaching
the age of 25 were not taken into account for calculating the notice period.
The Court found that the German rules on dismissal were discriminatory as they
contain a difference of treatment based on age which cannot be justified.

In Case C-45/09, Rosenbladt, the
Court was asked whether a collective agreement providing that the working
relationship automatically terminates when the employee has reached the age of
65 is in accordance with Article 2 (1) prohibiting the discrimination on ground
of age and 6(1)[583] of Directive 2000/78.
The Court replied that Article 6 of the Directive does not preclude such
national provisions, to the extent that such provisions are objectively
justified by a legitimate aim related to employment policy (social policy
objective).

In addition, the
Commission's services handled an important number of complaints coming from
citizens. The Commission also replied to numerous parliamentary questions and
requests for information from citizens.

17.8.2. Evaluation based on the current situation

The monitoring of the transposition of the
two antidiscrimination directives adopted in 2000 and of the gender equality
directive adopted in 2002 gave initially rise to a high number of infringement
cases, but many of these could be closed in 2010. This led to a considerable
decrease in the number of infringement proceedings, but the work still needs to
be continued in 2011. In 2010 work was underway to check the conformity of
legislation in BG and RO with the existing acquis.

The number of infringement cases can be
expected to decrease further although the work on conformity checks of
Directive 2004/113/EC and Directive 2006/54/EC is likely to lead to opening of
new proceedings in 2011.

The work done in 2010 led to significant
progresses towards conformity with the EU legislation in the in the area of
anti-discrimination and gender equality. It can be assessed that the full
transposition of the legal acquis was almost achieved by the end of
2010. Whilst three proceedings for non communication of national measures to
transpose the two most recently adopted Directives (2004/113/EC and 2006/54/EC)
remained open at the end of 2010, the national laws had been adopted and the
proceedings were expected to be ready for closure in early 2011.

The only two proceedings under Article 260 TFEU
(IT and EL) were successfully closed in November 2010 following compliance by
the Member States with the Court rulings. Dealing with these cases had been one
of the priorities set for 2010.

17.8.3. Evaluation results
17.8.3.1. Priorities

The main priorities for 2011 will be:

· Monitoring of the conformity of national measures transposing
Directives 2004/113/EC and 2006/54/EC, since full transposition of these two
directives was foreseen by the beginning of 2011.

· Continuing the negotiations on the two legislative proposals on the
table.

· Dealing with the pending infringement cases as quickly as possible.

17.8.3.2. Planned
action (2011 and beyond)

In the area of gender equality and
anti-discrimination, the negotiation of the two legislative proposals from 2008
currently on the table remains a priority. The Commission will have to continue
its efforts to facilitate the adoption of these proposals.

On infringements the efforts will
concentrate on advancing with the existing infringement cases as quickly as
possible. After analysing the replies from Member States, the Commission will
either refer them to the Court or close them.

Since full transposition of Directives
2004/113/EC and 2006/54/EC will be achieved by the beginning of 2011, the new
priority will be to monitor the conformity of national transposition measures
with the two Directives. This may lead to opening of new infringement
proceedings in the future.

In 2012 the transposition deadline of
Directives 2010/18/EU and 2010/41/EU will expire, which will gradually set as a
new priority towards 2012 and beyond monitoring the transposition of these two
directives.

17.8.4. Summary

The Commission will continue to use all the
available means to monitor the application of EU law in the field and to deal
with the workload resulting from this monitoring work. This will include the
use of a number of different tools such as CHAP and EU Pilot, but also external
expertise and information from Equality Bodies and Networks of Independent
Legal Experts.

National Equality Bodies will continue to
contribute to a reduction in the number of complaints concerning this area of
EU law, in the areas in which they are competent (so far gender and race).

18.
TRADE

Trade policy is governed by Article 207 of
the Treaty on the Functioning of the European Union. The bulk of the Union
legislation in this field takes the form of regulations, for example, the basic
anti-dumping and countervailing duty regulations, the Generalised System of
Preferences Regulation, the Trade Barriers Regulation and the Import and Export
Regulations.[584] There are only two
directives. These directives are Council Directive 98/29/EC of 7 May 1998 on
harmonisation of the main provisions concerning export credit insurance for transactions
with medium and long-term cover and Council Directive 84/568/EEC
of 27 November 1984 concerning the reciprocal obligations of export credit
insurance organizations of the Member States acting on behalf of the State or
with its support, or of public departments acting in place of such
organizations, in the case of joint guarantees for a contract involving one or
more subcontracts in one or more Member States of the European Communities.
There were no infringements cases open during 2010 concerning these directives.

It is not expected that there will be any
significant work required on the transposition of these directives in 2011.

19.
ENLARGEMENT
19.1.
Current position – Most important legal
instruments and related work and reporting on 2010

(1)       General introduction

Enlargement
policy is based on Article 49 of the EU Treaty. Association agreements with
candidate or potential candidate countries may contain certain rights and
obligations which are directly applicable under EU law. Violation of such
provisions by a Member State could therefore be subject to infringement
proceedings.

This
is in particular the case for the 1963 EEC-Turkey Association Agreement, its
1970 Additional Protocol and related Association Council Decisions,
particularly Decision 1/80. The Stabilisation and Association Agreements with
the former Yugoslav Republic of Macedonia (2004), Croatia (2005), Albania
(2009) and Montenegro (2010) and the Interim Agreements on Trade and
Trade-related issues with Bosnia and Herzegovina (2008) Serbia (2010) fall into
the same category of EU law, partly liable for trial in the European Court of
Justice as far as implementation or application by Member States is concerned.

(2)       Report of work done in 2010

The
Commission has received correspondence and complaints from citizens related to
legal acts and agreements in the field of enlargement. However, they mainly
concerned alleged violations of obligations by the third country or other
matters not directly related to the application of EU law by Member States.

The
Court has issued four judgements in 2010 on the interpretation of standstill
clauses under the EEC-Turkey Association Agreement referred by national jurisdictions
for preliminary ruling. Moreover, the Court has ruled in April 2010 that the
Dutch legislation and practice to charge Turkish workers higher fees for
issuing or prolonging their residence permits than those required for EU
nationals in a comparable situation was contrary to EU law.

In
2010, the Commission received more complaints and inquiries related to the
application and interpretation of certain provisions, including standstill
clauses, of the EEC/Turkey Association Agreement, which are being examined in
cooperation with the governments concerned. Following comprehensive
explanations by the government, the Commission continued to thoroughly assess
possible infringements in several other cases, which concern alleged breaches
of the standstill clauses set out in the 1970 Additional Protocol and the
Association Council Decision No1/80.

19.2.
Evaluation based on the current situation

All
complaints received on the application of EU law by a Member State concern the application of the EEC/Turkey Association Agreement. Taking into account the
references to preliminary rulings pending at the Court, this confirms that the
application and interpretation of this Association Agreement is still subject
to a variety of legal interpretations with regard to residence and work of
Turkish citizens in Member States. In addition, the number of judicial
decisions interpreting the scope of application of the EEC-Turkey Association
Law has triggered an increasing number of complaints in this field.

Other
Stabilisation and Association Agreements with Western Balkan countries which
have entered into force are, so far, not subject to any infringement case.

The
number of complaints has slightly increased but does not yet require additional
prioritisation.

19.3.
Evaluation results

There
is only one priority in the area of enlargement and that is the application of
the EEC/Turkey Association Agreement. This priority remains unchanged given the
limited number of cases.

19.4.
Summary

Infringement
procedures in the area of enlargement are rare in comparison to other policy
areas. All pending cases at the Court and the Commission concern the alleged
violation of directly applicable provisions, particularly standstill clauses,
under the EEC/Turkey Association Agreement.

20.
EUROSTAT
20.1.
General introduction

Ensuring the quality of statistical
information is both an operational and a legal requirement insofar as European
statistics production must respect the principles set out in Article 338 of the
TFEU and in Regulation (EC) No 223/2009 of the European Parliament and of the
Council of 11 March 2009 on European statistics[585],
and in the various sectoral legislative instruments[586].

Moreover, in accordance with Decision 1578/2007/EC
on the Community statistical programme 2008 to 2012[587],
compliance monitoring of European legislation in the field of statistics is a
specific objective of strategic importance for the medium to long-term
development of European statistics:

"The quality of Community
statistics comprises the fundamental requirement of compliance with the
principles of the Treaty and the secondary legislation. Therefore, a vigorous
and systematic monitoring of the application of the legislation is a priority.
A global and coherent compliance strategy structured around the principles of a
realistic legislative policy, the obligation of Member States to apply
systematically the statistical legislation and a coherent and systematic
monitoring of compliance, will be followed. Close
contacts with the competent national authorities throughout all of the phases
is part of the compliance process".

20.2.
Report of work done in 2010

Since 2006, about the Commission monitors
the state of play of legislation in the field of statistics and recommend
possible follow-up actions. In addition, the ESS Committee (European
Statistical System Committee) has been regularly informed of the actions
carried out by the Commission in the field of compliance monitoring.

As for the previous years, the non-compliance
with the transmission deadlines remained the principal problem in 2010.
However, and even if a large part of the statistical legislation is affected by
this transmission problem, constant work and frequent operational contacts
allow a regular improvement of the respect of legislation.

Furthermore, it appears also that the
evaluation of quality remains a difficult exercise, even at operational level.
However, Regulation (EC) No 223/2009 establishes a new framework for quality
(article 12) with a list of specific criteria which should be used for the
assessment of quality. Those criteria should be systematically included in all
new statistical legislation through a standard article.

The improvement of the overall situation can
generally be confirmed. Member States in default are making serious efforts to fully
comply when they are challenged at suitable level. In most cases, Member States
react positively to reminders. In several cases, a solution to the difficulties
could be found thanks to reciprocal collaboration with the National Institutes.
This collaborative approach has been applied also in the only ongoing
infringement procedure concerning statistics (against Greece), where close
contacts with Greek authorities have ensured progress in relation to the
grievances contained in the letter of formal notice.

It is important to notice that in order to ensure
a complete follow up of compliance with European statistical legislation,
there are also parallel systems in place which serve the purpose of ensuring
fulfilment of the complex methodological rules discussed with Member States at
different sectoral statistical Committees and expert Working Groups.

21.
HUMAN RESOURCES and SECURITY
21.1.
Current position – Most important legal
instruments and related work and reporting on 2010
21.1.1.
General introduction

In the field
of human resources, the Commission seeks to guarantee that European Union law
is correctly applied to EU staff by ensuring that Member States adopt
legislation and implementing provisions in compliance with 1) the Protocol on
Privileges and Immunities of the European Union as well as with 2) the
Regulations and Rules applicable to officials and other servants of the EU.

In particular,
the following legal texts are applicable:

- Council
Regulation (EEC, Euratom, ECSC) No 259/68 of 29 February 1968 and amendments
thereto,

- The Protocol on the Privileges and
Immunities of EU (PPI), annexed to the Treaty on the European Union of 2010,

- Other agreements between the European
Commission and Member States regarding the functioning of the Institutions'
services.

21.1.2.
Report of work done in 2010

In 2010, the
Commission pursued infringements by proceeding directly against national rules
providing for the imposition of taxes on EU Institutions based in Brussels, in violation of the provisions providing for a tax exemption under Article 3 of
the PPI.

The Commission
has continued to make additional arrangements for the transfer of pension
rights for officials and other servants of the European Union who had either originally
worked and acquired pension rights in Member States (transfer in) or who leave
the Institutions (transfer out). This ongoing process has been quite successful
and some of the competent national authorities have already fulfilled their
obligations in this regard. In other cases, the Commission services continue to
insist with the national authorities to arrange for this right provided in the
Staff Regulation ('SR') to be correctly implemented.

The Commission
monitored the coverage of staff by the sickness' insurance scheme in all
Members States in line with the rules provided by the SR. In this framework,
actions were taken to ensure that there was no discrimination linked with the
status of non-resident in a Member State.

In 2010, the Court
of Justice declared not to have jurisdiction to rule on
the action of the European Commission seeking
a judgment to confirm that Belgium should comply with its undertaking, to
subsidise the cost of equipment for European Schools (Case C-132/09).

21.2.
Evaluation based on the current situation

As regards the
transfer of pension rights and taking into account the direct applicability of
the SR, some Member States have failed to adopt the necessary internal rules
allowing these transfers even several years after having joined the EU. As
regards new Member States, some are still working on basic legislation, while
others on implementing regulations. However, it should be stressed that even if
the implementing regulations are in place, their practical application is not
always guaranteed.

In this area,
the Commission continues to seek pro-active solutions outside or in parallel
with the infringement procedure provided under Article 258 of the Treaty on the
functioning of the European Union. Contacts are regularly organised between the
institution's administration and the competent authorities of the Member States
in order to anticipate and resolve matters, as far as possible, which could
otherwise lead to such proceedings.

The tax laws
applied by Member States both to the European Institutions and staff are
carefully examined and checked for possible infringements of Articles 3 and 12
of the PPI. Complaints relating to national taxation in violation of the PPI
are sometimes lodged by current or former staff of European Institutions.
Taking into account the obligation of EU to assist its staff members and their
families in proceeding against any attack to them by reason of their position
or duties, the Commission grants legal assistance for ensuring that the
benefits provided by the PPI are respected in all Member States. Only in few
cases, when national procedures do not allow for the conflict to be settled in
a satisfactory manner, the Commission would consider it necessary to launch
infringement procedures against Member States.

21.3.
Evaluation results
21.3.1.
Priorities

The priorities
in the human resources field remain the same as those which were identified in
previous years. Implementation of national rules for permitting a correct
application of the SR and the other rules applicable to officials and other
servants of the Union is one of the major issues in this sector.

On the basis
of statutory rules, the Commission's services continue to assess whether
assistance, in the form of legal support, against presumed infringements of
Article 12 of PPI in the field of taxation has to be granted to current or
former staff.

21.3.2.
Planned action

In this context, the collaboration with
Member States has proven to be of great assistance for solving conflicts and
ensuring the correct application of the Union legislation.

Nevertheless,
despite the efforts of the Human Resources Services in helping national
authorities to fulfil their obligations within a reasonable timeframe, the
Commission will not refrain from proceeding with infringement procedures under Article
258 of the Treaty where required.

22.
BUDGET
22.1.
Current situation
22.1.1.
General introduction

 The
main three own resources financing the EU budget are: traditional own
resources, the VAT-based own resource and the balancing resource based on
Member States' gross national income (GNI). The own resources system is at
present under review.

In
particular, the following legal texts are applicable:

·
Articles 311 and 322(2) of the Treaty on the
Functioning of the European Union,

·
Council Decision 2007/436/EC, Euratom on the
system of the Communities' own resources,

·
Council Regulation (EC, Euratom) No 1150/2000 implementing
the above decision,

·
Council Regulation (EEC, Euratom) No 1553/89 on
the definitive uniform arrangements for the collection of own resources
accruing from value added tax.

Additional
budgetary revenue is secured under Articles 3 and 4 of the Protocol on the
Privileges and Immunities of the EU (PPI), annexed to the above Treaty as
Protocol n° 7.

The
main rules for budget execution are contained in Council Regulation (EC,
Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to
the general budget of the European Communities as last amended by Regulation
(EC, Euratom) No 1081/2010 of 24 November 2010.

22.1.2.
Report of work done in 2010

In
2010, the Commission detected 278 anomalies in
the area of traditional own resources (of which 120 in the course of on-the-spot inspections) and
set 52 reservations
in the area of VAT/GNI (= 52 VAT+ 0 GNI). Correspondingly, 649 accounting actions for traditional own resources and 183 for VAT/GNI were
generated for potential corrective payments (principal amounts and belated
interest) by Member States. Most of the newly detected anomalies could be
solved at an initial stage in bilateral discussions with Member States,
including senior level management meetings, or in the Advisory Committee on Own
Resources.

Regarding
infringements, in 2010 the follow-up to the Court judgments of 15 December 2009
and 4 March 2010 concerning duty-free imports of military and dual use goods
made by seven Member States continued. Three other 2010 Court judgments
(C-423/08 of 17 June 2010, C-442/08 of 1 July 2010 and C-334/08 of 8 July 2010)
in favour of the Commission in the field of Own Resources as well as two
pending Court cases were followed up, amongst which the priority case against
Germany relating to the refusal of the German authorities to cooperate with the
European Court of Auditors with regard to the administrative VAT cooperation of
Member States under Council Regulation (EC) No 1798/2003. Six infringement
cases were closed in 2010, of which five related to earlier Court decisions in
favour of the Commission.

22.2.
Evaluation

The
Commission's work on infringements and the important clarifications provided by
Court decisions in recent years in the area of own resources have allowed to
keep the number of conflicts and differences of interpretation between the
Commission and the Member States at a low level. Problems were encountered with
the availability of supporting documentation. This issue should be addressed in
the revision of the regulation for the next financing framework period.

22.3.
Evaluation results

(1)       Priorities

The
priorities set up in the 2009 Annual Report were maintained in 2010. In setting
priorities in the field of infringements, the Commission has to take account of
the system of own resources which provides for solidarity and joint financing
of the EU budget. Accordingly, where a Member State does not establish own
resources or omits the recovery of established amounts, the financial charge of
the other Member States increases. In view of assuring equal treatment of
Member States a strict monitoring by the Commission services and, if necessary,
infringement proceedings, are essential. The Commission takes legal action whenever
a satisfactory solution cannot be found in bilateral contacts and discussions
with Member States in the Advisory Committee for Own Resources. Priorities are
assigned based on the seriousness of infringements and their impact on the
budget.

(2)       Planned action

The
Lisbon Treaty introduced new financial provisions (Article 310 et seq. TFEU)
in the system of own resources and the Budget Review addresses the 'Reform of EU financing'. There is therefore an opportunity to reinforce the sincere cooperation
between the Union and the Member States as prescribed by Article 4 (3) of the
Treaty on the EU. In budgetary infringement cases where the Court of Justice
examines to which extent Member States are obliged to make available Own
Resources, Member States should keep all necessary documentation enabling a
swift follow-up of the Court's decisions. Article 3 of Council Regulation n°
1150/2000 already contains a general obligation for Member States to keep supporting
documents concerning the establishment and making available of own resources.
Recent experience with the follow-up of Court decisions suggests that this
obligation may need to be reinforced in case of infringements.

22.4.
Summary

In
general, Member States contribute timely and correctly to the EU budget and
comply with the budgetary legislation, which ensures a stable and smooth
financing of the EU budget. In this light, keeping the existing priorities as
mentioned above is appropriate.

23.
Annex I - List of measures in force and other
relevant instruments referred to in the text of the document

I.            ENTERPRISE AND INDUSTRY

I.1.         REACH

·
REACH and its implementing legislation are
available through the following link:

http://ec.europa.eu/enterprise/sectors/chemicals/documents/reach/index\_en.htm

·
REACH and its links to previous legislation on
restriction is available here:

http://ec.europa.eu/enterprise/sectors/chemicals/documents/reach/archives/market-restrictions/index\_en.htm

I.2 Classification, labelling and
packaging:

http://ec.europa.eu/enterprise/sectors/chemicals/documents/specific-chemicals/index\_en.htm

I.3 Pyrotechnic Articles and Explosives

http://ec.europa.eu/enterprise/sectors/chemicals/documents/specific-chemicals/index\_en.htm

I.4 Drug precursors

http://ec.europa.eu/enterprise/sectors/chemicals/documents/specific-chemicals/index\_en.htm

I.5 Detergents

http://ec.europa.eu/enterprise/sectors/chemicals/documents/specific-chemicals/index\_en.htm

I.6 Fertilisers

http://ec.europa.eu/enterprise/sectors/chemicals/documents/specific-chemicals/index\_en.htm

I.7 Textiles/clothing, footwear and wood

http://ec.europa.eu/enterprise/sectors/textiles/single-market/textiles-names-legislation/index\_en.htm

I.8 Non-harmonised area

Treaty provisions:

http://ec.europa.eu/enterprise/policies/single-market-goods/files/treaties/tfeu\_en.pdf#page=15

Regulation Mutual
recognition regulation:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:218:0021:0029:en:PDF

Guide to the
application of Treaty provisions governing the free movement of goods:

http://ec.europa.eu/enterprise/policies/single-market-goods/files/goods/docs/art34-36/new\_guide\_en.pdf

II.          EMPLOYMENT,
SOCIAL AFFAIRS AND INCLUSION

List
of measures in force

II.1.       Free
movement of workers and coordination of social security schemes

II.1.1.     Free
movement of workers

Art. 45 TFEU

Regulation (EEC) No 1612/68 of the Council
of 15 October 1968 on freedom of movement for workers within the Community. A
codification of this regulation is under way.

Directive 2004/38/EC of the European
Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member
States.

II.1.2      Social Security

· Article 48 TFUE

· Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the
application of social security schemes to employed persons, self-employed
persons and to the members of their families moving within the Community.

· Regulation (EC) No 859/2003 of the Council of 14 May 2003 extending
the provisions of Regulation (EEC) No 1408/71 and Regulation (EEC) No 574/72 to
nationals of third countries who are not already covered by those provisions
solely on the ground of their nationality.

· Regulation (EC) No 883/2004 of the European Parliament and of the
Council of 29 April 2004 on the coordination of social security schemes.

· Regulation (EC) No 987/2009 of the European Parliament and of the
Council of 16 September 2009 laying down the procedure for implementing
Regulation (EC) No 883/2004 on the coordination of social security systems.

· Regulation (EC) No 988/2009 of the European Parliament and of the
Council of 16 September 2009 amending Regulation (EC) No 883/2004 on the coordination
of social security systems, and determining the content of its Annexes.

Recently adopted measures due to enter
into force in the sector of the coordination of social security systems

· Regulation (EC) No 1231/2010 of the Council extending the provisions
of Regulation (EC) No 883/2004 and of Regulation (EC) No 987/2009 to nationals
of third countries who are not already covered by those provisions solely on
the ground of their nationality.

II.2.       Labour Law

II.2.1.     Working conditions

·
Directive 96/71/EC[588]
of the European Parliament and of the Council of 16 December 1996 concerning
the posting of workers in the framework of the provision of services

·
Council Directive 97/81/EC[589]
of 15 December 1997 concerning the Framework Agreement on part-time work concluded
by UNICE, CEEP and the ETUC - Annex : Framework agreement on part-time work;

·
Council Directive 98/23/EC[590]
of 7 April 1998 on the extension of Directive 97/81/EC on the framework
agreement on part-time work concluded by UNICE, CEEP and the ETUC to the United
Kingdom of Great Britain and Northern Ireland;

·
Council Directive 1999/70/EC[591]
of 28 June 1999 concerning the framework agreement on fixed-term work concluded
by ETUC, UNICE and CEEP;

·
Council Directive 1999/63/EC[592]
of 21 June 1999 concerning the Agreement on the organisation of working time of
seafarers concluded by the European Community Shipowners Association (ECSA) and
the Federation of Transport Workers' Unions in the European Union (FST);

·
Council Directive 2000/79/EC[593]
of 27 November 2000 concerning the European Agreement on the Organisation of
Working Time of Mobile Workers in Civil Aviation concluded by the Association
of European Airlines (AEA), the European Transport Workers' Federation (ETF),
the European Cockpit Association (ECA), the European Regions Airline
Association (ERA) and the International Air Carrier Association (IACA);

·
Directive 2003/88/EC[594]
of the European Parliament and of the Council of 4 November 2003 concerning
certain aspects of the organisation of working time;

·
Council Directive 2005/47/EC[595]
of 18 July 2005 on the Agreement between the Community of European Railways
(CER) and the European Transport Workers’ Federation (ETF) on certain aspects
of the working conditions of mobile workers engaged in interoperable
cross-border services in the railway sector;

·
Directive 2008/104/EC[596]
of European Parliament and of the Council of 19 November 2008 on temporary
agency work.

· Council Directive 2009/13/EC implementing the Agreement concluded by
the European Community Shipowners' Associations (ECSA) and the European
Transport Workers' Federation (ETF) on the Maritime Labour Convention, 2006 and
amending Directive 1999/63/EC

II.2.2.     Information and consultation of workers

·
Council Directive 94/45/EC[597]
of 22 September 1994 on the establishment of a European Works Council or a
procedure in Community-scale undertakings and Community-scale groups of
undertakings for the purposes of informing and consulting employees;

·
Council Directive 97/74/EC[598]
of 15 December 1997 extending, to the United Kingdom of Great Britain and
Northern Ireland, Directive 94/45/EC on the establishment of a European Works
Council or a procedure in Community-scale undertakings and Community-scale
groups of undertakings for the purposes of informing and consulting employees

·
Council Directive 2006/109/EC[599]
of 20 November 2006 adapting Directive 94/45/EC on the establishment of a
European Works Council or a procedure in Community-scale undertakings and
Community-scale groups of undertakings for the purposes of informing and
consulting employees, by reason of the accession of Bulgaria and Romania;

·
Council Directive 2001/86/EC[600]
of 8 October 2001 supplementing the Statute for a European company with regard
to the involvement of employees;

·
Council Directive 2003/72/EC[601]
of 22 July 2003 supplementing the Statute for a European Cooperative Society
with regard to the involvement of employees;

·
Directive 2002/14/EC[602]
of the European Parliament and of the Council of 11 March 2002 establishing a
general framework for informing and consulting employees in the European
Community - Joint declaration of the European Parliament, the Council and the
Commission on employee representation;

·
Directive 2009/38/EC on the establishment of a
European Works Council or a procedure in Community-scale undertakings and
Community-scale groups of undertakings for the purposes of informing and
consulting employees (Recast).

II.2.3.     Protection of workers

·
Council Directive 91/383/EEC[603]
of 25 June 1991 supplementing the measures to encourage improvements in the
safety and health at work of workers with a fixed- duration employment
relationship or a temporary employment relationship;

·
Council Directive 91/533/EEC[604]
of 14 October 1991 on an employer's obligation to inform employees of the
conditions applicable to the contract or employment relationship;

·
Council Directive 94/33/EC[605]
of 22 June 1994 on the protection of young people at work;

·
Council Directive 98/59/EC[606]
of 20 July 1998 on the approximation of the laws of the Member States relating
to collective redundancies;

·
Directive 2008/94/EC[607]
of the European Parliament and of the Council of 22 October 2008 on the
protection of employees in the event of the insolvency of their employer
(codified version);

·
Council Directive 2001/23/EC[608]
of 12 March 2001 on the approximation of the laws of the Member States relating
to the safeguarding of employees' rights in the event of transfers of
undertakings, businesses or parts of undertakings or businesses;

II.3.        Health and safety at work

·
Directive 89/391/EEC[609]
of 12 June 1989 on the introduction of measures to encourage improvements in
the safety and health of workers at work;

·
Council Directive 89/654/EEC[610]
of 30 November 1989 concerning the minimum safety and health requirements for
the workplace (first individual directive within the meaning of Article 16(1)
of Directive 89/391/EEC);

·
Directive 2009/104/EC[611]
of the European Parliament and of the Council of 16 September 2009 concerning
the minimum safety and health requirements for the use of work equipment by
workers at work (second individual Directive within the meaning of Article
16(1) of Directive 89/391/EEC – Codification of Directive 89/655/EEC, as
amended by Directives 95/63/EC and 2001/45/EC);

·
Council Directive 89/656/EEC[612]
of 30 November 1989 on the minimum health and safety requirements for the use by
workers of personal protective equipment at the workplace (third individual
directive within the meaning of Article 16(1) of Directive 89/391/EEC);

·
Council Directive 90/269/EEC[613]
of 29 May 1990 on the minimum health and safety requirements for the manual
handling of loads where there is a risk particularly of back injury to workers
(fourth individual directive within the meaning of Article 16(1) of Directive
89/391/EEC);

·
Council Directive 90/270/EEC[614]
of 29 May 1990 on the minimum safety and health requirements for work with
display screen equipment (fifth individual directive within the meaning of
Article 16(1) of Directive 89/391/EEC);

·
Directive 2004/37/EC[615]
of the European Parliament and of the Council of 29 April 2004 on the
protection of workers from the risks related to exposure to carcinogens or
mutagens at work (sixth individual directive within the meaning of Article
16(1) of Directive 89/391/EEC - Codification of Directive 90/394/EEC);

·
Directive 2000/54/EC[616]
of the European Parliament and of the Council of 18 September 2000 on the
protection of workers from risks related to exposure to biological agents at
work (seventh individual directive within the meaning of Article 16(1) of
Directive 89/391/EEC) - Codification of Directive 90/679/EEC);

·
Council Directive 92/57/EEC[617]
of 24 June 1992 on the implementation of minimum safety and health requirements
at temporary or mobile construction sites (eight individual directive within
the meaning of Article 16(1) of Directive 89/391/EEC);

·
Council Directive 92/58/EEC[618]
of 24 June 1992 on the minimum requirements for the provision of safety and/or
health signs at work (ninth individual Directive within the meaning of Article
16(1) of Directive 89/391/EEC);

·
Council Directive 92/91/EEC[619]
of 3 November 1992 concerning the minimum requirements for improving the safety
and health protection of workers in the mineral-extracting industries through
drilling (eleventh individual directive within the meaning of Article 16(1) of
Directive 89/391/EEC );

·
Council Directive 92/104/EEC[620]
of 3 December 1992 on the minimum requirements for improving the safety and
health protection of workers in surface and underground mineral-extracting
industries (twelfth individual directive within the meaning of Article 16(1) of
Directive 89/391/EEC);

·
Council Directive 93/103/EC[621]
of 23 November 1993 concerning the minimum safety and health requirements for
work on board fishing vessels (thirteenth individual directive within the
meaning of Article 16(1) of Directive 89/391/EEC);

·
Council Directive 98/24/EC[622]
of 7 April 1998 on the protection of the health and safety of workers from the
risks related to chemical agents at work (fourteenth individual directive
within the meaning of Article 16(1) of Directive 89/391/EEC);

·
Commission Directives establishing indicative
exposure limit values:

·
Commission Directive 91/322/EEC[623]
of 29 May 1991 on establishing indicative limit values by implementing Council
Directive 80/1107/EEC on the protection of workers from the risks related to
exposure to chemical, physical and biological agents at work

·
Commission Directive 2000/39/EC[624]
of 8 June 2000 establishing a first list of indicative occupational exposure
limit values in implementation of Council Directive 98/24/E on the protection
of the health and safety of workers from the risks related to chemical agents
at work

·
Commission Directive 2006/15/EC[625]
of 7 February 2006 establishing a second list of indicative occupational
exposure limit values in implementation of Council Directive 98/24/EC and
amending Directives 91/322/EEC and 2000/39/EC

·
Commission Directive 2009/161/EU[626]
of 17 December 2009 establishing a third list of indicative occupational
exposure limit values in implementation of Council Directive 98/24/EC and
amending Commission Directive 2000/39/EC

·
Directive 1999/92/EC[627]
of the European Parliament and of the Council of 16 December 1999 on minimum
requirements for improving the safety and health protection of workers
potentially at risk from explosive atmospheres (fifteenth individual directive
within the meaning of Article 16(1) of Directive 89/391/EEC)

·
Directive 2002/44/EC[628]
of the European Parliament and of the Council of 25 June 2002 on the minimum
health and safety requirements regarding the exposure of workers to the risk
arising from physical agents (vibration) (sixteenth individual directive within
the meaning of Article 16(1) of Directive 89/391/EEC);

·
Directive 2003/10/EC[629]
of the European Parliament and of the Council of 6 February 2003 on the minimum
health and safety requirements regarding the exposure of workers to the risk
arising from physical agents (noise) (seventeenth individual directive within
the meaning of Article 16(1) of Directive 89/391/EEC);

·
Directive 2004/40/EC[630]
of the European Parliament and of the Council of 29 April 2004 on the minimum
health and safety requirements regarding the exposure of workers to the risks
arising from physical agents (electromagnetic fields) (18th individual
Directive within the meaning of Article 16(1) of Directive 89/391/EEC); as
amended by Directive 2008/46/EC[631]

·
Directive 2006/25/EC[632]
of the European Parliament and of the Council of 5 April 2006 on the
minimum health and safety requirements regarding the exposure of workers to
risks arising from physical agents (artificial optical radiation) (19th
individual Directive within the meaning of Article 16(1) of Directive
89/391/EEC);

·
Council Directive 2010/32/EU[633]
of 10 May 2010 implementing the Framework Agreement on prevention from
sharp injuries in the hospital and healthcare sector concluded by HOSPEEM and
EPSU;

·
Council Directive 92/29/EEC[634]
of 31 March 1992 on the minimum safety and health requirements for improved
medical treatment on board vessels;

·
Directive
2009/148/EC of the European Parliament and of the Council of 30 November
2009 on the protection of workers from the risks related to
exposure to asbestos at work[635]

·
Directive 2007/30/EC[636]
of the European Parliament and of the Council of 20 June 2007 amending Council
Directive 89/391/EEC, its individual Directives and Council Directives
83/477/EEC, 91/383/EEC, 92/29/EEC and 94/33/EC with a view to simplifying and
rationalising the reports on practical implementation.

III     ENERGY

III.1.       Legislation in force

Primary law

·
Article 194 TFEU:
the insertion of a specific legal basis for energy in the Treaty on the
Functioning of the European Union has strengthened EU energy policy. This
Article consolidates and clarifies the competences of the EU in the field of
energy. The use of Art. 194 TFEU is without prejudice to the application of
other provisions of the Treaty.

·
Article 192 TFEU: environmental measures which
affect the energy mix.

·
Article 122 TFEU: short term measures necessary
to react to an actual crisis.

·
Articles 170 and 171 TFEU: trans-European
networks

·
Article 113 TFEU: energy taxation

·
Articles 258 and 260 TFEU: so-called
"infringement procedures".

Secondary Law

· The texts of current Community legislation on energy are available
in section 12 of the EUR-Lex database

http://eur-lex.europa.eu/en/legis/20100301/chap12.htm

Euratom

Primary Law: Euratom Treaty

A number of provisions of the Treaties vest
the Commission with specific powers:

– Article 33 Euratom Treaty: Verification
of conformity of draft legislation in the field of radiation protection and education
and training (the Commission may issue recommendations).

– Article 37 Euratom Treaty:  Assessment
of national plans for the release of radioactive waste into the environment,
before approval by the national authorities (the Commission shall deliver an
opinion).

– Article 38 Euratom Treaty: In
cases of urgency, the Commission shall issue a directive requiring the Member State concerned to take, within a period laid down by the Commission, all necessary
measures to prevent infringement of the basic standards and to ensure
compliance with regulations. Article 38 of the Euratom Treaty institutes also a
special derogative procedure from the general infringement procedure, allowing
the Commission or any Member State concerned to bring the matter before the Court
of Justice if the State in question fails to comply with the Commission
directive within the period laid down therein.

– Articles 41/43 Euratom Treaty: This
notification procedure on nuclear investments requires that any new investment
related to nuclear activities has to be communicated to the Commission which
shall, in return, send its views to the Member State concerned.

– Article 77 Euratom Treaty:  The
Commission shall satisfy itself that, in the territories of member states, (a)
ores, source materials and special fissile materials are not diverted from
their intended uses as declared by the users; (b) the provisions relating to
supply and any particular safeguarding obligations assumed by the Community
under an agreement concluded with a third state or an international
organisation are complied with.

– Article 78 Euratom Treaty:  Operators
shall declare to the Commission the basic technical characteristics of the
installations, to the extent that knowledge of these characteristics is
necessary for the attainment of the objectives set out in Article 77.

– Article 81 Euratom Treaty:  The
Commission's nuclear inspectors (Commission's staff!) shall at all times have
access to all places and data and to all persons who, by reason of their
occupation, deal with materials, equipment or installations subject to the
safeguards. If the carrying out of an inspection is opposed, it can be carried
out compulsorily (after decision of the president of the Court of Justice; or,
even, after Commission's written order, if there is danger in delay).

– Article 82 Euratom Treaty: In
case of infringement to the safeguards provisions established by its safeguards
inspectors, the Commission may issue a directive calling upon the Member State concerned to take, by a time limit set by the Commission, all measures
necessary to bring such infringement to an end. Possible direct referral of the
matter to the Court of Justice, if the Member State in question does not comply
with the Commission directive in the timeframe set up therein, in derogation
from the general infringement procedure.

– Article 83 Euratom Treaty: In the
event of an infringement on the part of persons or undertakings of the
obligations on nuclear safeguards, the Commission may impose the following
sanctions, in order of severity : (a) a warning ; (b) the withdrawal of special
benefits such as financial or technical assistance ; (c) the placing of the
undertaking for a period not exceeding four months under the administration of
a person or board appointed by common accord of the Commission and the state
having jurisdiction over the undertaking; (d) total or partial withdrawal of
source materials or special fissile materials.

– Article 103 Euratom Treaty: assessment
of draft international agreements in the fields of the Euratom Treaty (the
Commission may issue comments on the drafts)

– Articles 141 and 143 Euratom Treaty have
been repealed as of 30/11/2009; Articles 258 and 260 TFEU now apply.

– Article 145 Euratom Treaty: if
the Commission considers that a person or undertaking has committed an
infringement of this Treaty (other than to the safeguards provisions), it shall
call upon the member state having jurisdiction over that person or undertaking
to cause sanctions to be imposed in respect of the infringement in accordance
with its national law. If the state concerned does not comply with such a
request within the period laid down by the Commission, the latter may bring an
action before the Court of Justice to have the infringement of which the person
or undertaking is accused established.

Secondary law

· The Community acquis related to Title II, Chapter 3, can be
consulted in section 15 of the EUR-Lex database, the Community acquis
(heading 15.10.20.10 "Nuclear Safety and Radioactive Waste").

http://eur-lex.europa.eu/en/legis/20100301/chap15102010.htm

· A comprehensive list of acquis and case-law related to the
Euratom Treaty can be consulted in the annexes to the Commission staff working
paper (SEC (2007) 347) accompanying the Communication on the 50 years of the
Euratom Treaty (COM(2007) 124 final) at

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52007SC0347:EN:NOT

III.2.       Legislation
adopted in 2010

General

·
Council Regulation n° 617/2010 of 24 June 2010
concerning the notification to the Commission of investment projects in energy
infrastructure within the EU & repealing Regulation (EC) n° 736/96 (OJ L
180, 15.7.2010, p. 7).

·
Commission Regulation n°833/2010 of 21 September
2010 implementing Council Regulation n°617/2010 concerning the notification to
the Commission of investment projects in energy infrastructure within the
European Union (OJ L 248, 22.9.2010, p. 36).

Internal electricity and gas market

·
Commission Decision of 10 November 2010 amending
Chapter 3 of Annex 1 to Regulation (EC) No 715/2009 of the European Parliament
and of the Council on conditions for access to the natural gas transmission networks
(OJ L 293, 11.11.2010, p. 67).

·
Commission Regulation (EU) No 774/2010 of 2
September 2010 on laying down guidelines relating to inter-transmission system
operator compensation and a common regulatory approach to transmission charging
(OJ L 233, 3.9.2010, p. 1)

·
Commission Regulation (EU) No 838/2010 of 23
September 2010 on laying down guidelines relating to inter-transmission system
operator compensation and a common regulatory approach to transmission charging
(OJ L 250, 24.9.2010, p. 5)

Security of supply - gas

·
Regulation (EU) No 994/2010 of the European
Parliament and of the Council of 20 October 2010 concerning measures to
safeguard security of gas supply and repealing Directive 2004/67/EC (OJ L 295,
12.11.2010, p. 1)

Energy Performance of Buildings

·
Directive
2010/31/EU of the European Parliament and of the Council of 19 May 2010 on
the energy performance of building (recast) (OJ L 153, 18.6.2010, p. 13)

Energy efficiency of products

·
Directive 2010/30/EU of the European Parliament and
of the Council of 19 May 2010 on the indication by labelling and standard
product information of the consumption of energy and other resources by
energy-related products (OJ L 153, 18.6.2010, p; 1)

·
Commission Delegated Regulation (EU)
No 1059/2010 of 28 September 2010 supplementing Directive 2010/30/EU
of the European Parliament and of the Council with regard to energy labelling
of household dishwashers (OJ L 314, 30.11.2010, p. 1)

·
Commission Delegated Regulation (EU)
No 1061/2010 of 28 September 2010 supplementing Directive 2010/30/EU
of the European Parliament and of the Council with regard to energy labelling
of household washing machines (OJ L 314, 30.11.2010, p. 47)

·
Commission Delegated Regulation (EU)
No 1062/2010 of 28 September 2010 supplementing Directive 2010/30/EU
of the European Parliament and of the Council with regard to energy labelling
of televisions (OJ L 314, 30.11.2010, p. 64)

·
Commission Delegated Regulation (EU)
No 1060/2010 of 28 September 2010 supplementing Directive 2010/30/EU
of the European Parliament and of the Council with regard to energy labelling
of household refrigerating appliance (OJ L 314, 30.11.2010, p. 17)

·
Commission Regulation (EU) 1016/2010 of 10
November 2010 implementing Directive 2009/125/EC of the European Parliament and
of the Council with regard to ecodesign requirements for household dishwashers
(OJ L 293, 11.11.2010, p. 31)

·
Commission Regulation (EU) 1015/2010 of 10
November 2010 implementing Directive 2009/125/EC of the European Parliament and
of the Council with regard to ecodesign requirements for household washing
machines (OJ L 293, 11.11.2010, p. 21)

·
Commission Regulation (EU) No 347/2010 of 21
April 2010 amending Commission Regulation (EC) No 245/2009 as regards the
ecodesign requirements for fluorescent lamps without integrated ballast, for
high intensity discharge lamps, and for ballasts and luminaires able to operate
such lamps (OJ L 104, 24.4.2010, p. 20)

Euratom

·
Revised Commission recommendation on the
application of Art. 37 of the Euratom Treaty was adopted in October 2010 (210/635/Euratom, OJ L 279, 23.10.2010, p. 36-67)

·
Regulation
(Euratom) No 647/2010 of the Council of 13 July 2010 on financial
assistance of the Union with respect to the decommissioning of Units 1 to 4 of
the Kozloduy Nuclear Power Plant in Bulgaria (Kozloduy Programme) (OJ L 189,
22.7.2010, p. 9).

·
Commission Decision C(2010)6885 on the procedures related to the programming and monitoring of the measures and financial assistance under the Bohunice, Ignalina and Kozloduy programmes for the period 2007 to 2013 was adopted on 8 October 2010 and repealed
Commission Decision C(2007)5538.

·
Commission Decision C(2010)6971 on the financing of additional Community contributions to the Nuclear Decommissioning Assistance Programmes for Bohunice, Ignalina and Kozloduy in 2010 was adopted on 12 October 2010.

III.3.       New
measures proposed or in preparation in 2010

Internal electricity and gas market

·
Proposal for a Regulation of the European
Parliament and of the Council on energy market integrity and transparency (COM(2010(726)
final).

Euratom

·
Proposal for a Council Directive on the management
of spent fuel and radioactive waste (COM(2010)618, 3.11.2010).

·
Proposal of Revision and recast of the Basic
Safety Standards: The revision of the Basic Safety
Standards is also the opportunity for the consolidation of existing radiation
protection legislation involving four other Directives and incorporating one
Commission Recommendation. The draft text of the Directive is complete and the
drafting of the Impact Assessment Report is in an advanced stage. The Article
31 Group of Experts gave its opinion in February 2010.

·
Negotiating mandate for a Euratom-Australia
cooperation agreement: The proposal of a Council
Decision on the new mandate to renegotiate the Euratom-Australia agreement, due
to expire in 2012. The Council adopted the negotiating mandate for a revised
agreement on 12 July 2010. The text of the agreement will be submitted to
Council for approval during the 1st quarter of 2011.

·
Negotiating mandate for a Euratom-South Africa cooperation agreement was adopted by the Council on 25
October 2010.

IV          MOBILITY and TRANSPORT

Current Legislation:

Single Sky
and Modernisation of air traffic control

Air safety (Legal basis: Article 100(2) (ex-Article 80 par.2)

Newest
legislation

· Regulation (EU) No 996/2010 of the European Parliament and of the
Council of 20 October 2010 on the investigation and prevention of accidents and
incidents in civil aviation repealing Directive 94/56/EC (OJ 12.11.2010)

Infrastructures
and airports

Newest legislation:

· Regulation (EU) No 255/2010 of 25 March 2010 laying down common
rules on air traffic flow management.

· Regulation (EC) No 545/2009 of the European Parliament and of the
Council of 18 June 2009 amending Regulation (EEC) No 95/93 on common rules for
the allocation of slots at Community airports.

· Directive 2009/12/EC of the European Parliament and of the Council
of 11 March 2009 on airport charges.

Aviation security

· Regulation (EC) No 300/2008 of the European Parliament and of the
Council of 11 March 2008 on common rules in the field of civil aviation
security and repealing Regulation (EC) No 2320/2002, as amended;

· Commission Regulation (EC) No 272/2009 of 2 April 2009 supplementing
the common basic standards on civil aviation security laid down in the Annex to
Regulation (EC) No 300/2008 of the European Parliament and the Council, as
amended;

· Commission Regulation (EU) No 1254/2009 of 18 December 2009 setting
criteria to allow Member States to derogate from the common basic standards on
civil aviation security and to adopt alternative security measures;

· Commission Regulation (EU) No 18/2010 of 8 January 2010 amending
Regulation (EC) No 300/2008 of the European Parliament and of the Council as
far as specifications for national quality control programmes in the field of
civil aviation security is concerned;

· Commission Regulation (EU) No 72/2010 of 26 January 2010 laying down
procedures for conducting Commission inspections in the field of civil aviation
security;

· Commission Regulation (EU) No 185/2010 of 4 March 2010 laying down
detailed measures for the implementation of the common basic standards on
aviation security, as amended;

· Commission Decision C(2010)/774 of 13 April 2010 laying down detailed measures for the implementation of the common basic standards on aviation, as amended.

V.           TAXATION and CUSTOMS UNION

V.1         Situation in the sector of
CUSTOMS

The following webpage contains a list of
legal measures in the customs area adopted since 2003:

http://ec.europa.eu/taxation\_customs/common/legislation/legislation/customs/index\_en.htm

· Relevant Treaty provisions:

Art 18;

Art 23-27 TCE;

Art 95 (approximation of laws);

Art 133;

Art 135.

· Relevant secondary EU law acts:

·
Council Regulation (EEC) No 2913/92 (Council Regulation (EEC) No 2913/92 establishing the EU Customs
Code)

·
Commission Regulation (EEC) No 2454/93 (provisions for the implementation of Council Regulation (EEC) No
2913/92 establishing the EU Customs Code);

·
The Common Customs Tariff (Combined Nomenclature and tariff measures): Council Regulation (EEC)
No 2658/87 on the tariff and statistical
nomenclature and the duty relief legislation (Council Regulation (EEC) No 918/83 of 28 March 1983 setting up a EU
system of relief from customs duty);

·
Regulation (EC)
No 1889/2005 of the European Parliament and of
the Council;

·
International agreements in customs matters or the customs provisions of international
agreements;

·
Specific legislation on customs control
(counterfeit, drug precursors, cultural goods, cash control) in particular :

·
Council
Regulation (EC) No 1383/2003;

·
Council Regulation (EC) No 111/2005;

·
Council Regulation (EEC) No 3911/92.

V.2         INDIRECT TAXATION

The following webpage contains a list of
legal measures in the tax area adopted since 2003:

http://ec.europa.eu/taxation\_customs/common/legislation/legislation/taxation/index\_en.htm

Existing measures in force (situation on 31/12/2010)

Relevant Treaty (TFEU) provisions:

Mainly:

Art 110;

Additional:

Art 45

Art 49

Art 56

Art 63

Art 113

Relevant secondary
EU law acts

Directive 2010/88/EU

Directive 2010/66/EU

Directive 2010/45/EU

Directive 2010/23/EU

Directive 2010/12/EU

Directive 2009/162/EU

Directive 2009/132/EC

Directive 2009/69/EC

Directive 2009/55/EC

Directive 2009/47/EC

Directive 2008/118/EC

Directive 2008/117/EC

Directive 2008/55/EC

Directive 2008/9/EC

Directive 2008/8/EC

Directive 2007/75/EC

Directive 2007/74/EC

Directive 2006/138/EC

Directive 2006/112/EC

Directive 2006/98/EC

Directive 2006/79/EC

Directive 2003/96/EEC

Directive 2002/10/EC

Directive 95/60/EC

Directive 95/59/EC

Directive 92/84/EEC

Directive 92/83/EEC

Directive 92/80/EEC

Directive 92/79/EEC

Directive 91/680/EEC

Directive 86/560/EEC

Directive 86/247/EEC

Directive 83/648/EEC

Directive 83/182/EEC

Directive 78/1032/EEC

Directive 72/230/EEC

Directive 69/463/EEC

Directive 68/297/EEC

Council Regulation (EU) N° 904/2010

Commission Regulation (EC) 1174/2009

Council Regulation (EU) N° 37/2009

Council Regulation (EU) N° 143/2008

Commission Regulation (EC) No 1179/2008

Council Regulation (EC) 1777/2005

Commission Regulation (EU) N° 1925/2004

Council Regulation (EU) N° 1798/2003

V.3         DIRECT TAXATION

The following webpage contains a list of
legal measures in the tax area adopted since 2003:

http://ec.europa.eu/taxation\_customs/common/legislation/legislation/taxation/index\_en.htm

Existing measures in force (situation on
31/12/2010)

· Relevant Treaty (TFEU) provisions:

Art 21;

Art 45 (to 48);

Art 49 (to 54);

Art 56 (to 62);

Art 63 (to 66);

Art 115;

·
Relevant secondary EU law acts:

Directive
77/799/EEC (+2 amending directives);

Directive
90/434/EEC (+1 amending directive);

Directive
90/435/EEC (+1 amending directive);

Directive
2003/48/EC;

Directive
2003/49/EC (+1 amending directive);

Directive
2008/7/EC;

Directive
2008/55/EC;

Directive 2009/133/EC.

VI          EDUCATION AND CULTURE

A full list of relevant provisions, which
also includes non-binding provisions, can be found at:

· http://eur-lex.europa.eu/en/legis/20100101/chap1630.htm
for education and training

· http://eur-lex.europa.eu/en/legis/20100101/chap1640.htm
for culture

· http://ec.europa.eu/sport/white-paper/doc/wp\_on\_sport\_en.pdf
for sport

A guide to the rights of mobile students in
the European Union – a European Commission staff working document, mentioned
above:

· http://ec.europa.eu/education/yom/wpguidance\_en.pdf

·

VII         HEALTH AND CONSUMERS

Main Measures
in Force 31/12/2010

VII.1      Public Health

Relevant EU Treaty
provisions:

Art 114 TFEU

Art 168(4) TFEU

Relevant secondary European Union law acts:

· Directive 2001/37/EC of the European Parliament and
of the Council of 5 June 2001 on the approximation of the laws, regulations and
administrative provisions of the Member States concerning the manufacture,
presentation and sale of tobacco products

· Directive 2002/98/EC of the European Parliament and
of the Council of 27 January 2003 setting standards of quality and safety for
the collection, testing, processing, storage and distribution of human blood
and blood components and amending Directive 2001/83/EC

· Directive 2003/33/EC of the European Parliament and
of the Council of 26 May 2003 on the approximation of the laws, regulations and
administrative provisions of the Member States relating to the advertising and
sponsorship of tobacco products

· Directive 2004/23/EC of the European Parliament and
of the Council of 31 March 2004 on setting standards of quality and safety for
the donation, procurement, testing, processing, preservation, storage and
distribution of human tissues and cells

· Commission Directive 2004/33/EC of 22 March 2004 implementing
Directive 2002/98/EC of the European Parliament and of the Council as regards
certain technical requirements for blood and blood components

· Commission Directive 2005/61/EC of 30 September 2005
implementing Directive 2002/98/EC of the European Parliament and of the Council
as regards traceability requirements and notification of serious adverse
reactions and events

· Commission Directive 2005/62/EC of 30 September 2005
implementing Directive 2002/98/EC of the European Parliament and of the Council
as regards Community standards and specifications relating to a quality system
for blood establishments

· Commission Directive 2006/17/EC of 8 February 2006 implementing
Directive 2004/23/EC of the European Parliament and of the Council as regards
certain technical requirements for the donation, procurement and testing of
human tissues and cells

· Commission Directive 2006/86/EC of 24 October 2006 implementing
Directive 2004/23/EC of the European Parliament and of the Council as regards
traceability requirements, notification of serious adverse reactions and events
and certain technical requirements for the coding, processing, preservation,
storage and distribution of human tissues and cells

· Decision No 2119/98/EC of the European Parliament and of the
Council of 24 September 1998 setting up a network for the epidemiological
surveillance and control of communicable diseases in the Community

· Commission Decision 2003/534/EC of 17 July 2003 amending
Decision No 2119/98/EC of the European Parliament and of the Council and
Decision 2000/96/EC as regards communicable diseases listed in those decisions
and amending Decision 2002/253/EC as regards the case definitions for
communicable diseases

· Commission Decision 2007/875/EC of 18 December 2007 amending
Decision No 2119/98/EC of the European Parliament and of the Council and
Decision 2000/96/EC as regards communicable diseases listed in those decisions

· Commission Decision 2000/96/EC of 22 December 1999 on the
communicable diseases to be progressively covered by the Community network
under Decision No 2119/98/EC of the European Parliament and of the Council

· Commission Decision 2003/542/EC of 17 July 2003 amending
Decision 2000/96/EC as regards the operation of dedicated surveillance networks

· Commission Decision 2009/312/EC of 2 April 2009 amending Decision
2000/96/EC as regards dedicated surveillance networks for communicable
diseases,

· Commission Decision 2009/539/EC of 10 July 2009 amending
Decision 2000/96/EC on communicable diseases to be progressively covered by the
Community network under Decision No 2119/98/EC of the European Parliament and
of the Council

· Commission Decision 2000/57/EC of 22 December 1999 on the
early warning and response system for the prevention and control of
communicable diseases under Decision No 2119/98/EC of the European Parliament
and of the Council.

· Commission Decision 2008/351/EC of 28 April 2008 amending
Decision 2000/57/EC as regards events to be reported within the early warning
and response system for the prevention and control of communicable diseases

· Commission Decision 2009/547/EC of 10 July 2009 amending
Decision 2000/57/EC on early warning and response system for the prevention and
control of communicable diseases under Decision No 2119/98/EC of the European
Parliament and of the Council

· Commission Decision 2002/253/EC of 19 March 2002 laying down
case definitions for reporting communicable diseases to the Community network
under Decision No 2119/98/EC of the European Parliament and of the Council

· Commission Decision 2008/426/EC of 28 April 2008 amending
Decision 2002/253/EC laying down case definitions for reporting communicable
diseases to the Community network under Decision No 2119/98/EC of the European
Parliament and of the Council

· Commission Decision 2009/363/EC of 30 April 2009 amending
Decision 2002/253/EC laying down case definitions for reporting communicable
diseases to the Community network under Decision No 2119/98/EC of the European
Parliament and of the Council

· Commission Decision 2009/540/EC of 10 July 2009 amending
Decision 2002/253/EC as regards case definitions for reporting Influenza
A(H1N1) to the Community network

· Regulation (EC) No 1882/2003 of the European Parliament and
of the Council of 29 September 2003 adapting to Council Decision 1999/468/EC
the provisions relating to committees which assist the Commission in the
exercise of its implementing powers laid down in instruments subject to the
procedure referred to in Article 251 of the EC Treaty

· Regulation (EC) No 851/2004 of the European Parliament and of
the Council of 21 April 2004 establishing a European Centre for Disease
Prevention and Control

· Regulation (EC) No 596/2009 of the European Parliament and of
the Council of 18 June 2009 adapting a number of instruments subject to the
procedure referred to in Article 251 of the Treaty to Council Decision
1999/468/EC with regard to the regulatory procedure with scrutiny — Adaptation
to the regulatory procedure with scrutiny — Part Four

· Directive 2010/53/EU of the European Parliament and of the
Council on standards of quality and safety of human organs intended for
transplantation

· Commission Decision 2010/453/EU of 3 August 2010 establishing
guidelines concerning the conditions of inspections and control measures, and
on the training and qualification of officials, in the field of human tissues and
cells provided for in Directive 2004/23/EC of the European Parliament and of
the Council

Pharmaceutical
Legislation Medicinal Products for Human Use:

http://ec.europa.eu/health/documents/eudralex/vol-1/index\_en.htm

Pharmaceutical
legislation Medicinal Products for Veterinary Use:

http://ec.europa.eu/health/documents/eudralex/vol-5/index\_en.htm

Medical Devices
Legislation

http://ec.europa.eu/consumers/sectors/medical-devices/documents/index\_en.htm

VII.2      Consumers

Relevant EU Treaty
provisions:

Art 169 TFEU

Relevant secondary
European Union law acts:

· Council Directive 87/357/EEC of 25 June 1987 on the
approximation of the laws of the Member States concerning products which,
appearing to be other than they are, endanger the health or safety of consumers

· Council Directive 90/88/EEC of 22 February 1990 amending
Directive 87/102/EEC for the approximation of the laws, regulations and
administrative provisions of the Member States concerning consumer credit

· Directive 98/7/EC of the European Parliament and of
the Council of 16 February 1998 amending Directive 87/102/EEC for the
approximation of the laws, regulations and administrative provisions of the
Member States concerning consumer credit

· Directive 2001/95/EC of the European Parliament and
of the Council of 3 December 2001 on general product safety

· Directive 2002/65/EC of the European Parliament and
of the Council of 23 September 2002 concerning the distance marketing of
consumer financial services and amending Council Directive 90/619/EEC and
Directives 97/7/EC and 98/27/EC

· Regulation (EC) No 2006/2004 of the European Parliament and
of the Council of 27 October 2004 on cooperation between national authorities
responsible for the enforcement of consumer protection laws (the Regulation on
consumer protection cooperation)

· Directive 2008/48/EC of the European Parliament and
of the Council of 23 April 2008 on credit agreements for consumers and
repealing Council Directive 87/102/EEC

· Commission Decision 2006/502/EC of 11 May 2006 requiring Member
States to take measures to ensure that only lighters which are child-resistant
are placed on the market and to prohibit the placing on the market of novelty
lighters

· Commission Decision 2008/322/EC of 18 April 2008 prolonging the
validity of Decision 2006/502/EC requiring Member States to take measures to
ensure that only lighters which are child-resistant are placed on the market
and to prohibit the placing on the market of novelty lighters

· Regulation (EC) No 765/2008 of the European Parliament and of
the Council of 9 July 2008 setting out the requirements for accreditation and
market surveillance relating to the marketing of products and repealing
Regulation (EEC) No 339/93

· Directive 2009/22/EC
of the European Parliament and of the Council of 23 April 2009 on injunctions
for the protection of consumers' interests (Codified version)

· Commission Decision 2009/251/EC of 17 March 2009 requiring
Member States to ensure that products containing the biocide dimethylfumarate
are not placed or made available on the market

· Commission Decision 2009/298/EC of 26 March 2009 prolonging
the validity of Decision 2006/502/EC requiring Member States to take measures
to ensure that only lighters which are child-resistant are placed on the market
and to prohibit the placing on the market of novelty lighters

· Commission Decision 2009/490/EC of 23 June 2009 on the safety
requirements to be met by European standards for personal music players
pursuant to Directive 2001/95/EC of the European Parliament and of the Council

· Commission Decision 2009/705/EC of 14 September 2009 setting
up a European Consumer Consultative Group

· Commission Decision 2010/9/EU of 6 January 2010 on the safety
requirements to be met by European standards for bath rings, bathing aids and
bath tubs and stands for infants and young children pursuant to Directive
2001/95/EC of the European Parliament and of the Council

· Commission Decision 2010/11/EU of 7 January 2010 on the
safety requirements to be met by European standards for consumer-mounted
childproof locking devices for windows and balcony doors pursuant to Directive
2001/95/EC of the European Parliament and of the Council

· Commission Decision 2010/15/EU of 16 December 2009 laying
down guidelines for the management of the Community Rapid Information System
RAPEX established under Article 12 and of the notification procedure established
under Article 11 of Directive 2001/95/EC (the General Product Safety Directive)

· Commission Decision 2010/153/EU of 11 March 2010 prolonging
the validity of Decision 2009/251/EC requiring Member States to ensure that
products containing the biocide dimethylfumarate are not placed or made
available on the market

· Commission Decision 2010/157/EU of 12 March 2010 prolonging
the validity of Decision 2006/502/EC requiring Member States to take measures
to ensure that only lighters which are child-resistant are placed on the market
and to prohibit the placing on the market of novelty lighters

· Commission Decision 2010/376/EU of 2 July 2010 on the safety
requirements to be met by European standards for certain products in the sleep
environment of children pursuant to Directive 2001/95/EC of the European
Parliament and of the Council

Cosmetics Legislation:

http://ec.europa.eu/consumers/sectors/cosmetics/regulatory-framework/index\_en.htm#h2-legislation

VII.3      Food Safety

GMO

Relevant EU Treaty
provisions:

·
34 and 36 of TFEU (Quantitative
restrictions-Free movement of goods and grounds for exceptions)

·
114 TFEU (Approximation of Laws)

·
168 TFEU (Protection of Health)

Relevant secondary European Union law
acts:

· Directive 2001/18/EC of the European Parliament and of the
Council of 12 March 2001 on the deliberate release into the environment of
genetically modified organisms and repealing Council Directive 90/220/EEC

· Commission Decision 2009/770/EC of 13 October 2009
establishing standard reporting formats for presenting the monitoring results
of the deliberate release into the environment of genetically modified
organisms, as or in products, for the purpose of placing on the market,
pursuant to Directive 2001/18/EC of the European Parliament and of the Council

· Directive 2009/41/EC of the European Parliament and of the
Council of 6 May 2009 on the contained use of genetically modified
micro-organisms (Recast)

· Regulation (EC) No 1946/2003 of the European Parliament and
of the Council of 15 July 2003 on transboundary movements of genetically
modified organisms

· (Cartagena Protocol)

· Commission Decision repealing Decision 2006/601/EC on
emergency measures regarding the non-authorised genetically modified organism
LL RICE 601 in rice products New measures already
proposed and due to be adopted

The authorisation Decisions:

· Commission Decision 2010/141/EU authorising the placing on
the market of products containing, consisting of, or produced from genetically
modified maize MON863xNK603 (MON-ØØ863-5xMON-ØØ6Ø3-6);

· Commission Decision 2010/140/EU authorising the placing on
the market of products containing, consisting of, or produced from genetically
modified maize MON863xMON810 (MON-ØØ863-5xMON-ØØ81Ø-6);

· Commission Decision 2010/139/EU authorising the placing on
the market of products containing, consisting of, or produced from genetically
modified maize MON863xMON810xNK603 (MON-ØØ863-5xMON-ØØ81Ø-6xMON- ØØ6Ø3-6);

· Commission Decision 2010/136/EU authorising the placing on
the market of feed produced from the genetically modified potato EH92- 527-1
(BPS-25271-9) and the adventitious or technically unavoidable presence of the
potato in food and other feed products;

· Commission Decision 2010/432/EU authorising the placing on
the market of products containing, consisting of, or produced from genetically
modified maize 1507x59122 (DAS-Ø15Ø7-1xDAS-59122-7);

· Commission Decision 2010/428/EU authorising the placing on
the market of products containing, consisting of, or produced from genetically
modified maize 59122x1507xNK603 (DAS-59122-7xDAS-Ø15Ø7xMON-ØØ6Ø3-6);

· Commission Decision 2010/429/EU authorising the placing on
the market of products containing, consisting of, or produced from genetically
modified maize MON 88017 x MON 810 (MON-88Ø17-3 x MON-ØØ81Ø-6);

· Commission Decision 2010/420/EU authorising the placing on
the market of products containing, consisting of, or produced from genetically
modified maize MON89034xNK603 (MON-89Ø34-3xMON-ØØ6Ø3-6);

· Commission Decision 2010/426/EU authorising the placing on
the market of products containing, consisting of, or produced from genetically
modified maize Bt11xGA21 (SYN-BTØ11-1xMON-ØØØ21-9).

· Commission Decision 2010/135/EU authorising the placing on
the market of a potato product (Solanum tuberosum L. line EH92-527-1)
genetically modified for enhanced content of the amylopectin component of
starch.

FOOD HYGIENE

Relevant EU Treaty
provisions:

Art 43 TFEU

Art 114 TFEU

Art 168 TFEU

Relevant secondary European Union law
acts:

· Regulation
(EC) No 178/2002 of the European Parliament and of the Council of 28
January 2002 laying down the general principles and requirements of food law,
establishing the European Food Safety Authority and laying down procedures in
matters of food safety

· Regulation (EC) No 882/2004 of the European
Parliament and of the Council of 29 April 2004 on official controls performed
to ensure the verification of compliance with feed and food law, animal health
and animal welfare rules

· Commission Regulation
(EC) No 669/2009 of 24 July 2009 implementing Regulation (EC) No 882/2004
of the European Parliament and of the Council as regards the increased level of
official controls on imports of certain feed and food of non-animal origin and
amending Decision 2006/504/EC

· Council Directive
96/23/EC of 29 April 1996 on measures to monitor certain substances and
residues thereof in live animals and animal products and repealing Directives
85/358/EEC and 86/469/EEC and Decisions 89/187/EEC and 91/664/EEC

· Commission Decision 97/747/EC of 27 October 1997 fixing the
levels and frequencies of sampling provided for by Council Directive 96/23/EC
for the monitoring of certain substances and residues thereof in certain animal
products

· Commission Decision 98/179/EC of 23 February 1998 laying down
detailed rules on official sampling for the monitoring of certain substances
and residues thereof in live animals and animal products

· Commission Decision 2002/657/EC of 12 August 2002
implementing Council Directive 96/23/EC concerning the performance of
analytical methods and the interpretation of results

· Regulation
(EC) No 852/2004 of the European Parliament and of the Council of 29 April
2004 on the hygiene of foodstuffs

· Regulation (EC) No
853/2004 of the European Parliament and of the Council of 29 April 2004
laying down specific hygiene rules for food of animal origin

· Regulation (EC) No 854/2004 of the European
Parliament and of the Council of 29 April 2004 laying down specific rules for
the organisation of official controls on products of animal origin intended for
human consumption

· Commission Regulation (EC) No 2073/2005 of 15 November 2005 on
microbiological criteria for foodstuffs

· Commission Regulation (EC) No 2074/2005 of 5 December 2005 laying down
implementing measures for certain products under Regulation (EC) No 853/2004 of
the European Parliament and of the Council and for the organisation of official
controls under Regulation (EC) No 854/2004 of the European Parliament and of
the Council and Regulation (EC) No 882/2004 of the European Parliament and of
the Council, derogating from Regulation (EC) No 852/2004 of the European
Parliament and of the Council and amending Regulations (EC) No 853/2004 and
(EC) No 854/2004

· Commission Regulation (EC) No 2075/2005 of 5 December 2005 laying down
specific rules on official controls for Trichinella in meat

· Commission Regulation (EC) No 2076/2005
of 5 December 2005 laying down transitional arrangements for the implementation
of Regulations (EC) No 853/2004, (EC) No 854/2004 and (EC) No 882/2004 of the
European Parliament and of the Council and amending Regulations (EC) No
853/2004 and (EC) No 854/2004

· Commission Regulation (EC) No 1162/2009 of 30 November 2009
laying down transitional measures for the implementation of Regulations (EC) No
853/2004, (EC) No 854/2004 and (EC) No 882/2004 of the European Parliament and
of the Council

· Commission Decision 2009/861/EC of 30 November 2009 on
transitional measures under Regulation (EC) No 853/2004 of the European
Parliament and of the Council as regard the processing of non-compliant raw
milk in certain milk processing establishments in Bulgaria

· Commission Decision 2010/89/EU of 9 February 2010 on transitional
measures concerning the application of certain structural requirements of
Regulations (EC) No 852/2004 and (EC) No 853/2004 of the European Parliament
and of the Council to certain establishments for meat, fishery products and egg
products and cold stores in Romania

· Commission Decision 2010/653/EU of 21 October 2010 amending
Annex II to Decision 2009/861/EC on transitional measures under Regulation (EC)
No 853/2004 of the European Parliament and of the Council as regards the
processing of non-compliant raw milk in certain milk processing establishments
in Bulgaria

· Commission Regulation (EU) No 15/2011 of 10 January 2011
amending Regulation (EC) No 2074/2005 as regards recognised testing methods for
detecting marine biotoxins in live bivalve molluscs

Food Hygiene Overview:

http://ec.europa.eu/food/food/biosafety/hygienelegislation/index\_en.htm.

Food Hygiene
Guidance documents:

http://ec.europa.eu/food/food/biosafety/hygienelegislation/guide\_en.htm.

FOOD

· Directive 2000/13/EC of the European Parliament and of the
Council on the approximation of the laws of the Member States relating to the
labelling, presentation and advertising of foodstuffs

· Council Directive 90/496/EEC of 24 September 1990 on
nutrition labelling for foodstuffs

· Regulation (EC) No 1924/2006 of the European Parliament and
of the Council of 20 December 2006 on nutrition and health claims made on foods

· Directive 2009/39/EC of the European Parliament and of the
Council of 6 May 2009 on foodstuffs intended for particular nutritional uses

· Regulation (EC) No 1331/2008 of the European Parliament and
of the Council of 16 December 2008 establishing a common authorisation
procedure for food additives, food enzymes and food flavourings.

· Regulation (EC) No 1333/2008 of the European Parliament and
of the Council of 16 December 2008 on food additives.

· Regulation (EC) No 1332/2008 of the European Parliament and
of the Council of 16 December 2008 on food enzymes and amending Council
Directive 83/417/EEC, Council Regulation (EC) No 1493/1999, Directive
2000/13/EC, Council Directive 2001/112/EC and Regulation (EC) No 258/97.

· Commission Directive 2009/163/EU of 22 December 2009 amending
Directive 94/35/EC of the European Parliament and of the Council on sweeteners
for use in foodstuffs with regard to neotame.

· Commission Regulation (EU) No 257/2010 of 25 March 2010
setting up a programme for the re-evaluation of approved food additives in
accordance with Regulation (EC) No 1333/2008 of the European Parliament and of
the Council on food additives.

· Commission Directive 2010/37/EU of 17 June 2010 amending
Directive 2008/60/EC laying down specific purity criteria on sweeteners.

· Commission Directive 2010/69/EU of 22 October 2010 amending
the Annexes to European Parliament and Council Directive 95/2/EC on food
additives other than colours and sweeteners.

· Commission Directive 2010/67/EU of 20 October 2010 amending
Directive 2008/84/EC laying down specific purity criteria on food additives
other than colours and sweeteners.

· Commission Directive 2008/128/EC of 22 December 2008 laying
down specific purity criteria concerning colours for use in foodstuffs.

· Council Directive 88/388/EEC of 22 June 1988 on the
approximation of the laws of the Member States relating to flavourings for use
in foodstuffs and to source materials for their production.

· Council Decision 88/389/EEC of 22 June 1988 on the establishment,
by the Commission, of an inventory of the source materials and substances used
in the preparation of flavourings.

· Regulation (EC) No 2232/96 of the European Parliament and of
the Council of 28 October 1996 laying down a Community procedure for flavouring
substances used or intended for use in or on foodstuffs.

· Regulation (EC) N° 2065/2003 of the European Parliament and
of the Council of 10 November on smoke flavourings used or intended for use in
or on foods.

· Regulation (EC) No 1334/2008 of the European Parliament and
of the Council of 16 December 2008 on flavourings and certain food ingredients
with flavouring properties for use in and on foods and amending Council
Regulation (EEC) No 1601/91, Regulations (EC) No 2232/96 and (EC) No 110/2008
and Directive 2000/13/EC.

· Council Regulation (EEC) No 315/93 of 8 February 1993 laying
down Community procedures for contaminants in food.

· Directive 1999/2/EC of the European Parliament and of the
Council of 22 February 1999 on the approximation of the laws of the Member
States concerning foods and food ingredients treated with ionising radiation.

· Directive 1999/3/EC of the European Parliament and of the
Council of 22 February 1999 on the establishment of a Community list of foods
and food ingredients treated with ionising radiation.

· Commission Regulation (EC) No 1881/2006 of 19 December 2006
setting maximum levels for certain contaminants in foodstuffs.

· Commission Regulation (EU) No 105/2010 of 5 February 2010
amending Regulation (EC) No 1881/2006 setting maximum levels for certain
contaminants in foodstuffs as regards ochratoxin A.

· Commission Regulation (EU) No 165/2010 of 26 February 2010
amending Regulation (EC) No 1881/2006 setting maximum levels for certain
contaminants in foodstuffs as regards aflatoxins.

· Commission Regulation (EC) No 1882/2006 of 19 December 2006
laying down methods of sampling and analysis for the official control of the
levels of nitrates in certain foodstuffs.

· Commission Regulation (EC) No 1883/2006 of 19 December 2006
laying down methods of sampling and analysis for the official control of levels
of dioxins and dioxin-like PCBs in certain foodstuffs.

· Commission Regulation (EC) No 401/2006 of 23 February 2006
laying down the methods of sampling and analysis for the official control of
the levels of mycotoxins in foodstuffs.

· Commission Regulation (EU) No 178/2010 of 2 March 2010
amending Regulation (EC) No 401/2006 as regards groundnuts (peanuts), other
oilseeds, tree nuts, apricot kernels, liquorice and vegetable oil.

· Commission Regulation (EC) No 333/2007 of 28 March 2007
laying down the methods of sampling and analysis for the official control of
the levels of lead, cadmium, mercury, inorganic tin, 3-MCPD and benzo(a)pyrene
in foodstuffs.

· Commission Regulation (EC) No 1151/2009 of 27 November 2009
imposing special conditions governing the import of sunflower oil originating
in or consigned from Ukraine due to contamination risks by mineral oil and
repealing Decision 2008/433/EC.

· Commission Regulation (EC) No 1152/2009 of 27 November 2009
imposing special conditions governing the import of certain foodstuffs from
certain third countries due to contamination risk by aflatoxins and repealing
Decision 2006/504/EC.

· Commission Regulation (EC) No 1135/2009 of 25 November 2009
imposing special conditions governing the import of certain products
originating in or consigned from China, and repealing Commission Decision
2008/798/EC.

· Commission Regulation (EU) 258/2010 of 25 March 2010 imposing
special conditions on the imports of guar gum originating in or consigned from India due to contamination risks by pentachlorophenol and dioxins, and repealing Decision
2008/352/EC.

· Commission proposal for a Regulation of the European Parliament and
of the Council on the provision of food information to consumers (COM 2008(40)
final).

· Council Directive 96/22/EC of 29 April 1996 concerning the
prohibition on the use in stockfarming of certain substances having a hormonal
or thyrostatic action and of beta-agonists, and repealing Directives
81/602/EEC, 88/146/EEC and 88/299/EEC.

· Regulation (EC) No 470/2009 of the European Parliament and of
the Council of 6 May 2009 laying down Community procedures for the
establishment of residue limits of pharmacologically active substances in
foodstuffs of animal origin, repealing Council Regulation (EEC) No 2377/90 and
amending Directive 2001/82/EC of the European Parliament and of the Council and
Regulation (EC) No 726/2004 of the European Parliament and of the Council.

· Council Directive 91/414/EEC of 15 July 1991
concerning the placing of plant protection products on the market

· Regulation
(EC) No 1107/2009 of the European Parliament and of the Council of 21
October 2009 concerning the placing of plant protection products on the market
and repealing Council Directives 79/117/EEC and 91/414/EEC

· Directive 2009/128/EC of the European Parliament and of the
Council of 21 October 2009 establishing a framework for Community action to
achieve the sustainable use of pesticides

· Regulation (EC) No 396/2005 of the European
Parliament and of the Council of 23 February 2005 on maximum residue levels of
pesticides in or on food and feed of plant and animal origin and amending
Council Directive 91/414/EEC

· Commission Regulation
(EC) No 1097/2009 of 16 November 2009 amending Annex II to Regulation (EC)
No 396/2005 of the European Parliament and of the Council as regards maximum
residue levels for dimethoate, ethephon, fenamiphos, fenarimol, methamidophos,
methomyl, omethoate, oxydemeton-methyl, procymidone, thiodicarb and vinclozolin
in or on certain products

· Commission Regulation (EU) No 915/2010 of 12 October 2010
concerning a coordinated multiannual control programme of the Union for 2011,
2012 and 2013 to ensure compliance with maximum levels of and to assess the
consumer exposure to pesticide residues in and on food of plant and animal
origin

· Commission Directive 2010/59/EU of 26 August 2010 amending Directive
2009/32/EC of the European Parliament and of the Council on the approximation
of the laws of the Member States on extraction solvents used in the production
of foodstuffs and food ingredients

· Directive 2002/46/EC of the European Parliament and of the
Council of 10 June 2002 on the approximation of the laws of the Member States
relating to food supplements

· Regulation (EC) No 1925/2006 of the European Parliament and
of the Council of 20 December 2006 on the addition of vitamins and minerals and
of certain other substances to foods

·
Council Directive 84/500/EEC of 15
October 1984 on the approximation of the laws of the Member States relating to
ceramic articles intended to come into contact with foodstuffs

· Commission Directive 2002/72/EC of 6 August 2002 relating to
plastic materials and articles intended to come into contact with foodstuffs

· Regulation (EC) No 1935/2004 of the European Parliament and
of the Council of 27 October 2004 on materials and articles intended to come
into contact with food and repealing Directives 80/590/EEC and 89/109/EEC

· Directive 2009/54/EC of the European Parliament and of the
Council of 18 June 2009 on the exploitation and marketing of natural mineral
waters

· Commission Directive 2003/40/EC of 16 May 2003 establishing
the list, concentration limits and labeling requirements for the constituents
of natural mineral waters and the conditions for using ozone-enriched air for
the treatment of natural mineral waters and spring waters

· Commission Regulation (EU) No 115/2010 of 9 February 2010
laying down the conditions for use of activated alumina for the removal of
fluoride from natural mineral waters and spring waters

Directorate General for Health and
Consumers' Website:

http://ec.europa.eu/food/food/labellingnutrition/foodlabelling/index\_en.htm

Nutrition profiles and health claims

The basic act
as well as all related legislation and measures adopted may be found at the
following address.

http://ec.europa.eu/food/food/labellingnutrition/claims/index\_en.htm

The legislation on dietetic foods is
based on Article 114 of the TFEU and can be found on the following web link:

http://ec.europa.eu/food/food/labellingnutrition/nutritional/index\_en.htm.

The legislation on food supplements and
on the addition of vitamins and minerals and of certain other substances to
foodstuffs is based on Article 114 of the TFEU and can be found on the
following web links:

http://ec.europa.eu/food/food/labellingnutrition/supplements/index\_en.htm

http://ec.europa.eu/food/food/labellingnutrition/vitamins/index\_en.htm

The information related to novel foods can
be found at the following address:

http://ec.europa.eu/food/food/biotechnology/novelfood/index\_en.htm

Labelling of
foodstuffs:

·
General food labelling, legislation and
decisions on draft national measures notified by Member States:

http://ec.europa.eu/food/food/labellingnutrition/foodlabelling/index\_en.htm

Nutrition
Labelling:

http://ec.europa.eu/food/food/labellingnutrition/nutritionlabel/index\_en.htm

·
Information on the Commission proposal for a
Regulation of the European Parliament and of the Council on the provision of
food information to consumers:

http://ec.europa.eu/food/food/labellingnutrition/foodlabelling/proposed\_legislation\_en.htm

PLANT HEALTH

· Council Directive 2000/29/EC of 8 May 2000 on
protective measures against the introduction into the Community of organisms
harmful to plants or plant products and against their spread within the
Community

· Commission Regulation (EC) No 1756/2004 of 11 October 2004
specifying the detailed conditions for the evidence required and the criteria
for the type and level of the reduction of the plant health checks of certain
plants, plant products or other objects listed in Part B of Annex V to Council
Directive 2000/29/EC

· Commission Directive 2004/103/EC of 7 October 2004 on
identity and plant health checks of plants, plant products or other objects,
listed in Part B of Annex V to Council Directive 2000/29/EC, which may be
carried out at a place other than the point of entry into the Community or at a
place close by and specifying the conditions related to these checks

· Council Directive 69/464/EEC of 8 December 1969 on
control of Potato Wart Disease

· Council Directive 74/647/EEC of 9 December 1974 on
control of carnation leaf-rollers

· Council Directive 93/85/EC of 4 October 1993 on
control of Potato Ring Rot

· Council Directive 98/57/EC of 20 July 1998 on the
control of Ralstonia solanacearum (Smith) Yabuuchi et al.

· Council Directive 2006/91/EC of 7 November 2006 on
control of San José Scale

· Council Directive 2007/33/EC of 11 June 2007 on the
control of potato cyst nematodes and repealing Directive 69/465/EEC (from
01/06/2010)

· Commission Directive 92/70/EEC of 30 July 1992 laying
down detailed rules for surveys to be carried out for purposes of the
recognition of protected zones in the Community

· Commission Directive 93/51/EEC of 24 June 1993
establishing rules for movements of certain plants, plant products or other
objects through a protected zone, and for movements of such plants, plant
products or other objects originating in and moving within such a protected
zone

· Commission Regulation (EC) No 690/2008 of 4 July 2008
recognising protected zones exposed to particular plant health risks in the
Community

· Commission Directive 92/90/EEC of 3 November 1992
establishing obligations to which producers and importers of plants, plant
products or other objects are subject and establishing details for their
registration

· Commission Directive 92/105/EEC of 3 December 1992
establishing a degree of standardization for plant passports to be used for the
movement of certain plants, plant products or other objects within the Community,
and establishing the detailed procedures related to the issuing of such plant
passports and the conditions and detailed procedures for their replacement

· Commission Directive 93/50/EEC of 24 June 1993
specifying certain plants not listed in Annex V, part A to Council Directive
77/93/EEC, the producers of which, or the warehouses, dispatching centres in
the production zones of such plants, shall be listed in an official register

· Commission Directive 94/3/EC of 21 January 1994
establishing a procedure for the notification of interception of a consignment
or a harmful organism from third countries and presenting an imminent
phytosanitary danger

· Commission Directive 98/22/EC of 15 April 1998 laying
down the minimum conditions for carrying out plant health checks in the
Community, at inspection posts other than those at the place of destination, of
plants, plant products or other objects coming from third countries

· Commission Directive 2008/61/EC of 17 June 2008
establishing the conditions under which certain harmful organisms, plants,
plant products and other objects listed in Annexes I to V to Council Directive
2000/29/EC may be introduced into or moved within the Community or certain
protected zones thereof, for trial or scientific purposes and for work on
varietal selections

SEEDS – PLANT VARIETY

· Council Directive 66/401/EEC of 14 June 1966 on the marketing of fodder plant seed

· Council Directive 66/402/EEC of 14 June 1966 on the marketing of cereal seed

· Council Directive 68/193/EEC of 9 April 1968 on the marketing of material for the vegetative
propagation of the vine

· Council Directive 2008/72/EC of 15 July 2008 on the marketing of vegetable propagating and
planting material, other than seed

· Council Directive 92/34/EEC of 28 April 1992 on the marketing of fruit plant propagating
material and fruit plants intended for fruit production

· Council Directive 2008/90/EC of 29 September 2008 on the marketing of fruit plant propagating
material and fruit plants intended for fruit production

· Council Directive 98/56/EC of 20 July 1998 on the marketing of propagating material of
ornamental plants

· Council Directive 1999/105/EC of 22 December 1999 on the marketing of forest reproductive
material

· Council Directive 2002/53/EC of 13 June 2002 on the common catalogue of varieties of
agricultural plant species

· Council Directive 2002/54/EC of 13 June 2002 on the marketing of beet seed

· Council Directive 2002/55/EC of 13 June 2002 on the marketing of vegetable seed

· Council Directive 2002/56/EC of 13 June 2002 on the marketing of seed potatoes

· Council Directive 2002/57/EC of 13 June 2002 on the marketing of seed of oil and fibre plants

· Commission Decision
80/512/EEC of 2 May 1980 authorizing the Kingdom
of Denmark, the Federal Republic of Germany, the Grand Duchy of Luxembourg, the
Kingdom of the Netherlands and the United Kingdom not to apply the conditions
laid down in Council Directive 66/401/EEC on the marketing of fodder plant
seed, as regards the weight of the sample for determination of seed of Cuscuta

· Commission Decision
85/370/EEC of 8 July 1985 authorizing the
Netherlands to assess the satisfaction of the varietal purity standards laid
down in Annex II to Council Directive 66/401/EEC for seed of apomictic
uniclonal varieties of Poa pratensis, also on the basis of the results
of seed and seedling testing

· Commission Decision
2004/371/EC of 20 April 2004 on conditions for
the placing on the market of seed mixtures intended for use as fodder plants

· Commission Directive
2008/124/EC of 18 December 2008 limiting the
marketing of seed of certain species of fodder plants and oil and fibre plants
to seed which has been officially certified as ‘basic seed’ or ‘certified seed’

· Commission Decision
80/755/EEC of 17 July 1980 authorizing the
indelible printing of prescribed information on packages of cereal seed

· Commission Directive
2004/29/EC of 4 March 2004 on determining the
characteristics and minimum conditions for inspecting vine varieties

· Commission Directive
93/61/EEC of 2 July 1993 setting out the
schedules indicating the conditions to be met by vegetable propagating and
planting material, other than seed pursuant to Council Directive 92/33/EEC

· Commission Directive
93/62/EEC of 5 July 1993 setting out the
implementing measures concerning the supervision and monitoring of suppliers
and establishments pursuant to Council Directive 92/33/EEC on the marketing of
vegetable propagating and planting material, other than seed

· Commission Directive
93/48/EEC of 23 June 1993 setting out the
schedule indicating the conditions to be met by fruit plant propagating
material and fruit plants intended for fruit production, pursuant to Council
Directive 92/34/EEC

· Commission Directive
93/64/EEC of 5 July 1993 setting out the
implementing measures concerning the supervision and monitoring of suppliers
and establishments pursuant to Council Directive 92/34/EEC on the marketing of
fruit plant propagating material and fruit plants intended for fruit production

· Commission Directive
93/79/EEC of 21 September 1993 setting out
additional implementing provisions for lists of varieties of fruit plant
propagating material and fruit plants, as kept by suppliers under Council
Directive 92/34/EEC

· Commission Directive
93/49/EEC of 23 June 1993 setting out the
schedule indicating the conditions to be met by ornamental plant propagating
material and ornamental plants pursuant to Council Directive 91/682/EEC

· Commission Directive
1999/66/EC of 28 June 1999 setting out
requirements as to the label or other document made out by the supplier
pursuant to Council Directive 98/56/EC

· Commission Directive
1999/68/EC of 28 June 1999 setting out
additional provisions for lists of varieties of ornamental plants as kept by
suppliers under Council Directive 98/56/EC

· Commission Regulation
(EC) No 1597/2002 of 6 September 2002 laying
down detailed rules for the application of Council Directive 1999/105/EC as
regards the format of national lists of the basic material of forest
reproductive material

· Commission Regulation
(EC) No 1598/2002 of 6 September 2002 laying
down detailed rules for the application of Council Directive 1999/105/EC as
regards the provision of mutual administrative assistance by official bodies

· Commission Regulation
(EC) No 1602/2002 of 9 September 2002 laying
down detailed rules for the application of Council Directive 1999/105/EC as
regards the authorisation of a Member State to prohibit the marketing of
specified forest reproductive material to the end-user

· Commission Regulation
(EC) No 2301/2002 of 20 December 2002 laying
down detailed rules for the application of Council Directive 1999/105/EC as
regards the definition of small quantities of seed

· Commission Regulation
(EC) No 69/2004 of 15 January 2004 authorising
derogations from certain provisions of Council Directive 1999/105/EC in respect
of the marketing of forest reproductive material derived from certain basic
material

· Commission Decision
2004/678/EC of 29 September 2004 authorising
Member States to permit temporarily the marketing of seed of the species Cedrus
libani, Pinus brutia and planting stock produced from this seed not
satisfying the requirements of Council Directive 1999/105/EC

· Commission Decision
2005/853/EC of 30 November 2005 authorising France to prohibit the marketing to the end user, with a view to seeding or planting in certain
regions of France, of reproductive material of Pinus pinaster Ait. of Iberian Peninsula origin, which is unsuitable for use in such territories under Council
Directive 1999/105/EC

· Commission Decision
2005/871/EC of 6 December 2005 releasing Denmark and Slovenia from certain obligations for marketing of forest reproductive material under
Council Directive 1999/105/EC

· Commission Decision
2006/665/EC of 3 October 2006 temporarily
authorising Spain to approve for marketing seed of the species Pinus radiata
and planting stock produced from this seed imported from New Zealand which does not satisfy the requirements of Council Directive 1999/105/EC in respect of
identification and labelling

· Commission Decision
2007/527/EC of 25 July 2007 authorising Bulgaria and Romania to derogate from Council Directive 1999/105/EC on the marketing of forest
reproductive material with regard to the stocks accumulated from 1 January 2003
to 31 December 2006

· Council Decision 2008/971/EC of 16 December 2008 on the equivalence of forest reproductive
material produced in third countries

· Commission Decision
2008/989/EC of 23 December 2008 authorising
Member States, in accordance with Council Directive 1999/105/EC, to take
decisions on the equivalence of the guarantees afforded by forest reproductive
material to be imported from certain third countries

· Commission Directive
89/14/EEC of 15 December 1988 determining the
groups of varieties of spinach beet and beetroot referred to crop isolation
conditions of Annex I to Council Directive 70/458/EEC on the marketing of
vegetable seed

· Commission Directive
2003/91/EC of 6 October 2003 setting out
implementing measures for the purposes of Article 7 of Council Directive
2002/55/EC as regards the characteristics to be covered as a minimum by the
examination and the minimum conditions for examining certain varieties of
vegetable species

· Commission Directive
93/17/EEC of 30 March 1993 determining Community
grades of basic seed potatoes, together with the conditions and designations
applicable to such grades

· Commission Decision
2004/3/EC of 19 December 2003 authorising, in
respect of the marketing of seed potatoes in all or part of the territory of
certain Member States, more stringent measures against certain diseases than
are provided for in Annexes I and II to Council Directive 2002/56/EC

· Commission Decision
97/125/EC of 24 January 1997 authorizing the
indelible printing of prescribed information on packages of seed of oil and
fibre plants and amending Decision 87/309/EEC authorizing the indelible
printing of prescribed information on packages of certain fodder plant species

· Commission Directive 2003/90/EC of 6 October 2003 setting out
implementing measures for the purposes of Article 7 of Council Directive
2002/53/EC as regards the characteristics to be covered as a minimum by the
examination and the minimum conditions for examining certain varieties of
agricultural plant species

· Commission Decision
2004/266/EC of 17 March 2004 authorising the
indelible printing of prescribed information on packages of seed of fodder
plants

· Commission Directive
2008/124/EC of 18 December 2008 limiting the
marketing of seed of certain species of fodder plants and oil and fibre plants
to seed which has been officially certified as ‘basic seed’ or ‘certified seed’

· Commission Directive
2008/62/EC of 20 June 2008 providing for certain
derogations for acceptance of agricultural landraces and varieties which are
naturally adapted to the local and regional conditions and threatened by
genetic erosion and for marketing of seed and seed potatoes of those landraces
and varieties

· Council Regulation
(EC) No 2100/94 of 27 July 1994 on Community
plant variety rights

· Commission Directive 2009/145/EC of 26 November 2009
providing for certain derogations, for acceptance of vegetable landraces and
varieties which have been traditionally grown in particular localities and
regions and are threatened by genetic erosion and of vegetable varieties with
no intrinsic value for commercial crop production but developed for growing
under particular conditions and for marketing of seed of those landraces and
varieties

· Commission Directive 2010/60/EU of 30 August 2010 providing
for certain derogations for marketing of fodder plant seed mixtures intended
for use in the preservation of the natural environment

ANIMAL HEALTH

· Council Decision 79/542/EEC of 21 December 1976 drawing up a
list of third countries from which the Member States authorize imports of bovine
animals, swine and fresh meat

· Council Directive 2008/73/EC of 15 July 2008 simplifying
procedures of listing and publishing information in the veterinary and
zootechnical fields and amending Directives 64/432/EEC, 77/504/EEC, 88/407/EEC,
88/661/EEC, 89/361/EEC, 89/556/EEC, 90/426/EEC, 90/427/EEC, 90/428/EEC,
90/429/EEC, 90/539/EEC, 91/68/EEC, 91/496/EEC, 92/35/EEC, 92/65/EEC, 92/66/EEC,
92/119/EEC, 94/28/EC, 2000/75/EC, Decision 2000/258/EC and Directives
2001/89/EC, 2002/60/EC and 2005/94/EC

· Council Decision 2009/470/EC of 25 May 2009 on expenditure in
the veterinary field

· Council Directive 90/425/EEC of 26 June 1990 concerning veterinary and zootechnical checks
applicable in intra-Community trade in certain live animals and products with a
view to the completion of the internal market

· Council Directive 89/662/EEC of 11 December 1989 concerning veterinary checks in intra-Community
trade with a view to the completion of the internal market

· Council Directive 96/93/EC of 17 December 1996 on the certification of animals and animal
products

· Council Directive 2002/99/EC of 16 December 2002 laying down the animal health rules governing
the production, processing, distribution and introduction of products of animal
origin for human consumption

· Council Directive 89/608/EEC of 21 November 1989 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 legislation on veterinary and
zootechnical matters

· Council Directive 91/496/EEC of 15 July 1991 laying down the principles governing the
organization of veterinary checks on animals entering the Community from third
countries and amending Directives 89/662/EEC, 90/425/EEC and 90/675/EEC

· Council Directive 97/78/EC of 18 December 1997 laying down the principles governing the
organisation of veterinary checks on products entering the Community from third
countries

· Regulation (EC) No 1760/2000 of the European Parliament and of the Council of 17 July 2000
establishing a system for the identification and registration of bovine animals
and regarding the labelling of beef and beef products and repealing Council
Regulation (EC) No 820/97

· Council Directive 64/432/EEC of 26 June 1964 on animal health problems affecting intra-Community
trade in bovine animals and swine

· Council Directive 2008/71/EC of 15 July 2008 on the identification and registration of pigs

· Council Regulation
(EC) No 21/2004 of 17 December 2003 establishing
a system for the identification and registration of ovine and caprine animals
and amending Regulation (EC) No 1782/2003 and Directives 92/102/EEC and
64/432/EEC

· Council Directive 90/427/EEC of 26 June 1990 on the zootechnical and genealogical conditions
governing intra-Community trade in equidae

· Council Directive 2003/85/EC of 29 September 2003 on Community measures for the control of
foot-and-mouth disease repealing Directive 85/511/EEC and Decisions 89/531/EEC
and 91/665/EEC and amending Directive 92/46/EEC

· Council Directive 2001/89/EC of 23 October 2001 on Community measures for the control of
classical swine fever

· Council Directive 2002/60/EC of 27 June 2002 laying down specific provisions for the control of
African swine fever and amending Directive 92/119/EEC as regards Teschen
disease and African swine fever

· Council Directive 92/35/EEC of 29 April 1992 laying down control rules and measures to combat
African horse sickness

· Council Directive 2005/94/EC of 20 December 2005 on Community measures for the control of avian
influenza and repealing Directive 92/40/EEC

· Council Directive 92/66/EEC of 14 July 1992 introducing Community measures for the control of Newcastle disease

· Council Directive 2006/88/EC of 24 October 2006 on animal health requirements for aquaculture
animals and products thereof, and on the prevention and control of certain
diseases in aquatic animals

· Council Directive 2000/75/EC of 20 November 2000 laying down specific provisions for the control
and eradication of bluetongue

· Regulation (EC) No 999/2001 of the European Parliament and of the Council of 22 May 2001 laying
down rules for the prevention, control and eradication of certain transmissible
spongiform encephalopathies

· Regulation (EC) No 220/2009 of the European Parliament and of
the Council of 11 March 2009 amending Regulation (EC) No 999/2001 laying down
rules for the prevention, control and eradication of certain transmissible
spongiform encephalopathies, as regards the implementing powers conferred on
the Commission

· Commission Regulation (EC) No 103/2009 of 3 February 2009
amending Annexes VII and IX to Regulation (EC) No 999/2001 of the European
Parliament and of the Council laying down rules for the prevention, control and
eradication of certain transmissible spongiform encephalopathies

· Commission Regulation (EC) No 162/2009 of 26 February 2009
amending Annexes III and X to Regulation (EC) No 999/2001 of the European
Parliament and of the Council laying down rules for the prevention, control and
eradication of certain transmissible spongiform encephalopathies

· Commission Regulation (EC) No 163/2009 of 26 February 2009
amending Annex IV to Regulation (EC) No 999/2001 of the European Parliament and
of the Council laying down rules for the prevention, control and eradication of
certain transmissible spongiform encephalopathies

· Commission Decision 2009/719/EC of 28 September 2009
authorising certain Member States to revise their annual BSE monitoring
programmes

· Directive 2003/99/EC of the European Parliament and of the
Council of 17 November 2003 on the monitoring of zoonoses and zoonotic agents,
amending Council Decision 90/424/EEC and repealing Council Directive 92/117/EEC

· Regulation (EC) No 2160/2003 of the European Parliament and of the Council of 17 November 2003
on the control of salmonella and other specified food-borne zoonotic agents

· Zoonoses and Antimicrobial Resistance (AMR):

Zoonoses:  http://ec.europa.eu/food/food/biosafety/salmonella/index\_en.htm

AMR:   http://ec.europa.eu/food/food/biosafety/public\_consultation\_AMR\_en.htm

· Council Directive 92/119/EEC of 17 December 1992 introducing general Community measures for the
control of certain animal diseases and specific measures relating to swine
vesicular disease

· Council Directive 82/894/EEC of 21 December 1982 on the notification of animal diseases within
the Community

· Council Directive 91/68/EEC of 28 January 1991 on animal health conditions governing
intra-Community trade in ovine and caprine animals

· Council Directive 89/556/EEC of 25 September 1989 on animal health conditions governing
intra-Community trade in and importation from third countries of embryos of
domestic animals of the bovine species

· Council Directive 88/407/EEC of 14 June 1988 laying down the animal health requirements
applicable to intra-Community trade in and imports of deep-frozen semen of
domestic animals of the bovine species

· Council Directive 90/429/EEC of 26 June 1990 laying down the animal health requirements
applicable to intra- Community trade in and imports of semen of domestic
animals of the porcine species

· Council Directive 92/65/EEC of 13 July 1992 laying down animal health requirements governing
trade in and imports into the Community of animals, semen, ova and embryos not
subject to animal health requirements laid down in specific Community rules
referred to in Annex A (I) to Directive 90/425/EEC

· Regulation (EC) No 998/2003 of the European Parliament and of the Council of 26 May 2003 on the
animal health requirements applicable to the non-commercial movement of pet
animals and amending Council Directive 92/65/EEC

· Council Directive 96/22/EC of 29 April 1996 concerning the prohibition on the use in
stockfarming of certain substances having a hormonal or thyrostatic action and
of ß-agonists, and repealing Directives 81/602/EEC, 88/146/EEC and 88/299/EEC

· Council Directive 2004/68/EC of 26 April 2004 laying down animal health rules for the
importation into and transit through the Community of certain live ungulate
animals, amending Directives 90/426/EEC and 92/65/EEC and repealing Directive
72/462/EEC

· Directive 2004/41/EC of the European Parliament and of the Council of 21 April 2004
repealing certain Directives concerning food hygiene and health conditions for
the production and placing on the market of certain products of animal origin
intended for human consumption and amending Council Directives 89/662/EEC and
92/118/EEC and Council Decision 95/408/EC

· Council Directive 2009/157/EC of 30 November 2009 on
pure-bred breeding animals of the bovine species

· Council Directive 88/661/EEC of 19 December 1988 on the zootechnical standards applicable to
breeding animals of the porcine species

· Council Directive 89/361/EEC of 30 May 1989 concerning pure-bred breeding sheep and goats

· Council Directive 90/428/EEC of 26 June 1990 on trade in equidae intended for competitions and
laying down the conditions for participation therein

· Council Directive 91/174/EEC of 25 March 1991 laying down zootechnical and pedigree requirements
for the marketing of pure-bred animals and amending Directives 77/504/EEC and
90/425/EEC

· Council Directive 94/28/EC of 23 June 1994 laying down the principles relating to the
zootechnical and genealogical conditions applicable to imports from third
countries of animals, their semen, ova and embryos, and amending Directive
77/504/EEC on pure-bred breeding animals of the bovine species

· Council Directive 92/118/EEC of 17 December 1992 laying down animal health and public health
requirements governing trade in and imports into the Community of products not
subject to the said requirements laid down in specific Community rules referred
to in Annex A (I) to Directive 89/662/EEC and, as regards pathogens, to
Directive 90/425/EEC

· Regulation (EC) No 1774/2002 of the European Parliament and
of the Council of 3 October 2002 laying down health rules concerning animal
by-products not intended for human consumption

· Regulation (EC) No 1069/2009 of the European Parliament and
of the Council of 21 October 2009 laying down health rules as regards animal
by-products and derived products not intended for human consumption and
repealing Regulation (EC) No 1774/2002 (Animal by-products Regulation)

· Council Directive 2009/156/EC of 30 November 2009 on animal health
conditions governing the movement and importation from third countries of
equidae

FEED

Relevant EU Treaty provisions:

Articles 43 and 168(4)(b) TFEU

Relevant secondary European Union law
acts:

· Commission Directive 81/680/EEC of 30 July 1981 amending
Directives 71/250/EEC, 71/393/EEC, 72/199/EEC, 73/46/EEC, 74/203/EEC,
75/84/EEC, 76/372/EEC and 78/633/EEC establishing Community methods of analysis
for the official control of feedingstuffs

· Commission Regulation (EC) No 429/2008 of 25 April 2008 on
detailed rules for the implementation of Regulation (EC) No 1831/2003 of the
European Parliament and of the Council as regards the preparation and the
presentation of applications and the assessment and the authorisation of feed
additives

· Regulation (EC) No 183/2005 of the European Parliament and of
the Council of 12 January 2005 laying down requirements for feed hygiene

· Commission Regulation (EC) No 378/2005 of 4 March 2005 on
detailed rules for the implementation of Regulation (EC) No 1831/2003 of the
European Parliament and of the Council as regards the duties and tasks of the
Community Reference Laboratory concerning applications for authorisations of
feed additives

· Regulation (EC) No 767/2009 of the European Parliament and of
the Council of 13 July 2009 on the placing on the market and use of feed,
amending European Parliament and Council Regulation (EC) No 1831/2003 and
repealing Council Directive 79/373/EEC, Commission Directive 80/511/EEC,
Council Directives 82/471/EEC, 83/228/EEC, 93/74/EEC, 93/113/EC and 96/25/EC
and Commission Decision 2004/217/EC

· Regulation (EC) No 1831/2003 of the European Parliament and
of the Council of 22 September 2003 on additives for use in animal nutrition

· Directive 2002/32/EC of the European Parliament and the Council of 7 May 2002 on undesirable
substances in animal feed

· Commission Directive 2005/7/EC of 27 January 2005 amending
Directive 2002/70/EC establishing requirements for the determination of levels
of dioxins and dioxin-like PCBs in feedingstuffs

· Commission Directive 2009/8/CE of 10 February 2009 amending
Annex I to Directive 2002/32/EC of the European Parliament and of the Council
as regards maximum levels of unavoidable carry-over of coccidiostats or
histomonostats in non-target feed

· Commission Regulation (EC) No 124/2009 of 10 February 2009
setting maximum levels for the presence of coccidiostats or histomonostats in
food resulting from the unavoidable carry-over of these substances in
non-target feed

· Commission Directive
2008/38/EC of 5 March 2008 establishing a list
of intended uses of animal feedingstuffs for particular nutritional purposes

· Council Directive 90/167/EEC of 26 March 1990 laying down the conditions governing the
preparation, placing on the market and use of medicated feedingstuffs in the
Community

· Commission Decision 2010/277/EU of 12 May 2010 amending
Decision 2009/821/EC as regards the lists of border inspection posts and
veterinary units in Traces

· Commission Decision 2010/617/EU of 14 October 2010 amending
Decision 2009/821/EC as regards the lists of border inspection posts and
veterinary units in Traces

· Commission Regulation (EU) No 242/2010 of 19 March 2010
creating the Catalogue of feed materials

ANIMAL WELFARE

Relevant EU Treaty provisions:

Article 13 TFEU

Relevant secondary European Union law
acts:

· Council Directive 98/58/EC of 20 July 1998 concerning the
protection of animals kept for farming purposes

· Council Directive 91/629/EEC of 19 November 1991 laying down the
minimum standards for the protection of calves codified in Council Directive
2008/119/EC

· Council Directive 91/630/EEC of 19 November 1991 laying down minimum
standards for the protection of pigs codified in Council Directive
2008/120/EC

· Council Directive 2007/43/EC of 28 June 2007 laying down
minimum rules for the protection of chickens kept for meat production

· Council Directive 1999/74/EC of 19 July 1999 laying down
minimum standards for the protection of laying hens

· Council Regulation (EC) No 1/2005 of 22 December 2004 on the
protection of animals during transport and related operations and amending
Directives 64/432/EEC and 93/119/EC and Regulation (EC) No 1255/97, Council
Regulation (EC) No 1/2005 of 22 December 2004 on the protection of animals
during transport and related operations and amending Directives 64/432/EEC and
93/119/EC and Regulation (EC) No 1255/97

· Council Directive 93/119/EC of 22 December 1993 on the
protection of animals at the time of slaughter or killing

· Council Regulation (EC) No 1099/2009 of 24 September 2009 on
the protection of animals at the time of killing

· Regulation (EC) No 1523/2007 of the
European Parliament and of the Council of 11 December 2007 banning the placing
on the market and the import to, or export from, the Community of cat and dog
fur, and products containing such fur

VIII       BUDGET

Relevant EU Treaty
and secondary EU law acts:

·
Articles 311 and 322(2) TFEU

●       Council Decision
2007/436/EC, Euratom on the system of the Communities' own resources.

●       Council Regulation
(EEC, Euratom) No 1553/89 of 29 May 1989 on the definitive uniform
arrangements for the collection of own resources accruing from value added tax

●       Council Regulation
(EC, Euratom) No 1150/2000 of 22 May 2000 implementing Decision 94/728/EC,
Euratom on the system of the Communities' own resources

·
Protocol
(No 7) on the privileges and immunities of the European Union, in
particular Articles 3 and 4.

New measures
already proposed and due to be adopted in the sector:

·
Proposal
for a Regulation of the European Parliament and of the Council on the Financial
Regulation applicable to the general budget of the European Union (Recast)
{SEC(2010) 639} /\* COM/2010/0260 final - COD 2010/0154 \*/.

[1] The 10 directives
are:

1.
Low Voltage Directive: Directive 2006/95/EEC on the harmonisation
of the laws of Member States relating to electrical equipment designed for use
within certain voltage limits;

2.
Simple Pressure
Vessels Directive: Council
Directive 2009//105/EC on the harmonisation of the laws of the Member States
relating to simple pressure vessels;

3.
Non-automatic
Weighing Instruments Directive: Council Directive 90/384/EEC on the harmonisation of the laws of the
Member States relating to non-automatic weighing instruments;

4.
Civil Explosives
Directive: Council
Directive 93/15/EEC on the harmonisation of the provisions relating to the
placing on the market and supervision of explosives for civil uses;

5.
ATEX Directive: Directive 94/9/EC of the European
Parliament and the Council on the approximation of the laws of the Member
States concerning equipment and protective systems intended for use in
potentially explosive atmospheres;

6.
Lifts Directive European Parliament and Council Directive
95/16/EC of 29 June 1995 on the approximation of the laws of the Member States
relating to lifts;

7.
Pressure Equipment
Directive: Directive
97/23/EC of the European Parliament and of the Council on the approximation of
the laws of the Member States concerning pressure equipment;

8.
Measuring Instruments
Directive: Directive
2004/22/EC of the European Parliament and of the Council on measuring
instruments;

9.
Electromagnetic
Compatibility Directive:
Directive 2004/108/EC on the approximation of the laws of the Member States
relating to electromagnetic compatibility and repealing Directive 89/336/EEC;

10.
Pyrotechnic articles Directive 2007/23/EC on the placing on the
market of pyrotechnic articles.

[2]               UNECE Regulations are harmonized technical
regulations regarding new motor vehicles and motor vehicle equipment that are
adopted pursuant to the 1958 Agreement under the auspices of the United Nations
Economic Commission for Europe (www.unece.org).
As a contracting party to the 1958 UNECE Agreement, the European Union can
decide to apply a Regulation.

[3]               Proposal
for a Regulation (EU) No …/… of the European Parliament and of the Council on
the approval of agricultural or forestry vehicles - http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0395:FIN:EN:PDF

[4]               Proposal for a Regulation (EU) No .../2010 of the
European Parliament and of the Council on the approval and market surveillance
of two- or three-wheel vehicles and quadricycles           
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0542:FIN:EN:PDF

[5]               Directive 2010/19/EU of 9 march 2010 amending, for
the purposes of adaptation to technical progress in the field of
spray-suppression systems of certain categories of motor vehicles and their
trailers, Council Directive 91/226/EEC, and Directive 2007/46/EC of the
European Parliament and of the Council (OJEU L72, 20.3.2010, p. 17).

[6]               Regulation (EC) 371/2010 of 16 April 2010 replacing
Annexes V, X, XV and XVI to Directive 2007/46/EC establishing a framework for
the approval of motor vehicles and their trailers, and of systems, components
and separate technical units intended for such vehicles (Framework Directive) –
(OJEU L 110, 1.5.2010, p. 1).

[7]               Regulation (EC) No 406/2010 of 26 April 2010
implementing Regulation (EC) No 79/2009 on type-approval of hydrogen-powered
vehicles (OJEU L 122, 18.5.2010, p. 1).

[8]               Regulation (EC) No 661/2009 of the European
Parliament and of the Council of 13 July 2009 concerning type-approval
requirements for the general safety of motor vehicles, their trailers and
systems, components and separate technical units intended therefor (OJEU L 200,
31.7.2009, p.1).

[9]               Regulation (EU) No 672/2010 of 27 July 2010
concerning type-approval requirements for windscreen defrosting and demisting
systems of certain motor vehicles and implementing Regulation (EC) No 661/2009
concerning type-approval requirements for the general safety of motor vehicles,
their trailers and systems, components and separate technical units intended
therefor (OJEU L 196, 28.7.2010, p. 5).

[10]             Regulation (EU) No 1003/2010 of 8 November 2010
concerning type-approval requirements for the space for mounting and the fixing
of rear registration plates on motor vehicles and their trailers and
implementing Regulation (EC) No 661/2009 concerning type-approval requirements
for the general safety of motor vehicles, their trailers and systems,
components and separate technical units intended therefor (OJEU L 291,
9.11.2010, p.22).

[11]             Regulation (EU) No 1005/2010 of 8 November 2010
concerning type-approval requirements for motor vehicle towing devices and
implementing Regulation (EC) No 661/2009 concerning type-approval requirements
for the general safety of motor vehicles, their
trailers and systems, components and separate technical units intended therefor
(OJEU L 291, 9.11.2010, p.36).

[12]             Regulation (EU) No 1008/2010 of 9 November 2010
concerning type-approval requirements for windscreen wiper and washer systems
of certain motor vehicles and implementing Regulation (EC) No 661/2009
concerning type-approval requirements for the general safety of motor vehicles,
their trailers and systems, components and separate technical units intended
therefor (OJEU L 292, 10.11.2010, p. 2).

[13]             Regulation (EU) No 1009/2010 of 9 November 2010
concerning type-approval requirements for wheel guards of certain motor
vehicles and implementing Regulation (EC) No 661/2009 of the European
Parliament and of the Council concerning type-approval requirements for the
general safety of motor vehicles, their trailers and systems, components and separate
technical units intended therefor Text with EEA relevance (OJEU L 292,
10.11.2010, p. 21).

[14]             http://ec.europa.eu/enterprise/sectors/automotive/files/application-unece-regulations\_en.pdf

[15]             http://ec.europa.eu/enterprise/sectors/automotive/files/directives/draft\_regulation\_iva\_en.pdf

[16]             http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0607:FIN:EN:PDF

[17]             http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0001:FIN:EN:PDF

[18]             Bearing in mind that EU whole vehicle type-approval
will gradually become mandatory by October 2012 for new types of all categories
of motor vehicles, the aim of the TAAEG is to ensure uniform application of the
relevant technical requirements within the EU type-approval system. Several
tasks are envisaged, including the monitoring of the enforcement of EU
legislation by national authorities and solving the issue of the diverging
views concerning type-approval in order to ensure mutual recognition.

[19]             http://ec.europa.eu/enterprise/sectors/automotive/competitiveness-cars21/energy-efficient/communication\_en.htm

[20]             Commission Decision of 14 October 2010 re-launching of
the CARS 21 High Level Group on the Competitiveness and Sustainable Growth of
the Automotive Industry in the European Union, OJEU C280 of 16.10.2010, p.32.           
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2010:280:0032:0034:en:PDF

[21]             COM (2009) 709

[22]             Directive 2008/47/EC amending, for the purposes of
adapting to technical progress, Directive 75/324/EEC on the approximation of
the laws of the Member States relating to aerosol dispensers (OJ L 96,
9.4.2008, p.15).

[23]             Commission Directive 2007/13/EC amending Annex II to
Council Directive 71/316/EEC on the approximation of the laws of the Member
States relating to common provisions for both measuring instruments and methods
of metrological control (OJ L 73, 13.3.07, p.10).

[24]             OJ L 247, 21.9.2007, p.17.

[25]             The Directives that are proposed to be repealed are
Directives 71/317/EEC, 71/347/EEC, 71/349/EEC, 74/148/EEC, 75/33/EEC,
76/765/EEC, 76/766/EEC and 86/217/EEC.

[26]             OJ L 249, 17.9.2002, p. 21–26.

[27]             OJ C353, 28.12.2010 p. 17.

[28]             OJ C 322, 17.12.2008, p. 10–11.

[29]             IP/09/1632.

[30]             OJ 2004, L 24/1.

[31]             C-99/02, Commission v Italy.

[32]             C-207/05, Commission v Italy.

[33]             Case C-499/99, Commission v Spain.

[34]             Articles 45 and 48 TFEU.

[35]             C-94/08 Commission v. Spain, judgment of 20.11.2008.

[36]             C-460/08 Commission v. Greece, judgment of 10.12.2009.

[37]             C-285/01, judgment of 9.09.2003.

[38]             C-542/09.

[39]             C-162/00, ECR 2002 I-1049.

[40]             C-438/00.

[41]             C-265/03.

[42]             Note that Denmark, Iceland, Liechtenstein, Norway and Switzerland did not apply Regulation (EC) no859/2003 and similarly do not apply
Regulation (EC) No 1231/2011.

[43]                    Network
of experts on free movement of workers: http://ec.europa.eu/social/main.jsp?catId=475&langId=enTress
network: http://www.tress-network.org/TRESSNEW/

[44]             COM(2010) 373 final, of 13.07.2010. http://ec.europa.eu/social/main.jsp?catId=25&langId=en

[45]             SEC(2010)1609 of 14.12.2010. http://ec.europa.eu/social/main.jsp?langId=en&catId=89&newsId=956&furtherNews=yes

[46]             http://ec.europa.eu/social/main.jsp?langId=en&catId=849

[47]             OJ L 327, 05.12.2008.

[48]             OJ L 124, 20.05.2009.

[49]             OJ L 195, 27.7.2005, p. 15–17.

[50]             Judgment 19.6.2008, case C-319/06, Commission vs. Luxembourg.

[51]             Judgment 20.5.2010 , case C-158/09, Commission vs. Spain.

[52]             COM (2010) 802 final, 21.12.2010.

[53]             SEC (2010) 1611 final.

[54]             Communication 'Reviewing the Working Time Directive',
COM (2010) 801 final, 21.12.2010.

[55]             SEC (2008) 475 of 11 April 2008.

[56]             Focussing on the following issues (1) how to protect
employees and retired persons against the risk of under-funding of the pension
schemes, and to what extent; (2) how to guarantee any unpaid contributions to
the pension schemes; and (3) how to deal with cases where the supplementary
pension scheme is managed by the employer himself.

[57]             COM 2010(365).

[58]             Council Directive 98/59/EC of 20 July 1998 on the
approximation of the laws of the Member States relating to collective
redundancies. OJ L 225 of 12.8.98, p.16.

[59]             Council Directive 2001/23/EC of 12 March 2001 on the
approximation of the laws of the Member States relating to the safeguarding of
employees' rights in the event of transfers of undertakings, businesses or
parts of undertakings or businesses, OJ L 82 of 22.03.2001, p.16. Article 7
deals with information and consultation of workers' representatives in cases of
transfers of undertakings.

[60]             Directive 2002/14/EC of the European Parliament and of
the Council of 11 March 2002 establishing a general framework for informing and
consulting employees in the European Community. OJ L 80 of 23.3.2002, p.
29.

[61]          OJ L 134,
1.6.2010, p. 66.

[62]             Commission Decision 95/319/EC of 12 July 1995, OJ L
188, p. 11 (as amended).

[63]             OJ L 114, 27.4.2006, p.38.

[64]             http://epp.eurostat.ec.europa.eu/cache/ITY\_SDDS/en/hsw\_acc\_work\_esms.htm

[65]             COM(2007) 62.

[66]             Resolution 2007/2146.

[67]             Council Regulation (EC) No 1782/2003 of 29 September
2003 establishing common rules for direct support schemes under the common
agricultural policy and establishing certain support schemes for farmers and
amending Regulations (EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/2001,
(EC) No 1454/2001, (EC) 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No
1673/2000, (EEC) No 2358/71 and (EC) No 2529/2001.

[68]             Council Regulation (EC) No 72/2009 of 19 January 2009
on modifications to the Common Agricultural Policy by amending Regulations
(EC) No 247/2006, (EC) No 320/2006, (EC) No 1405/2006, (EC) No 1234/2007,
(EC) No 3/2008 and (EC) No 479/2008 and repealing Regulations (EEC) No
1883/78, (EEC) No 1254/89, (EEC) No 2247/89, (EEC) No 2055/93, (EC) No
1868/94, (EC) No 2596/97, (EC) No 1182/2005 and (EC) No 315/2007.

[69]             Council Regulation (EC) No
73/2009 of 19 January 2009 establishing common rules for direct support schemes
for farmers under the common agricultural policy and establishing certain
support schemes for farmers, amending Regulations (EC) No 1290/2005, (EC)
No 247/2006, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003.

[70]             Council Regulation (EC)
No 1234/2007 of 22 October 2007 establishing a common organization of
agricultural markets and on specific provisions for certain agricultural
products (Single CMO Regulation).

[71]             Council Regulation (EC) No 1698/2005 of 20 September
2005 on support for rural development by the European Agricultural Fund for
Rural Development (EAFRD) – See also Commission Regulation (EC) No 1974/2006 of
15 December 2006 laying down detailed rules for the application of Council
Regulation (EC) No 1698/2005 on support for rural development by the European
Agricultural Fund for Rural Development (EAFRD) and Commission Regulation (EC)
No 1975/2006 of 7 December 2006 laying down detailed rules for the
implementation of Council Regulation (EC) No 1698/2005, as regards the
implementation of control procedures as well as cross-compliance in respect of
rural development support measures.

[72]             Council Regulation (EC) No 1290/2005 of 21 June 2005 on
the financing of the common agricultural policy.

[73]             Commission Regulation (EU) No
807/2010 of 14 September 2010 laying down detailed rules for the supply of food
from intervention stocks for the benefit of the most deprived persons in the Union.

[74]             Council Directive 2001/112/EC
of 20 December 2001 relating to fruit juices and certain similar products
intended for human consumption, OJ L 10, 12.1.2002, p. 58–66.

[75]             Commission Directive
2009/106/EC of 14 August 2009 amending Council Directive 2001/112/EC
relating to fruit juices and certain similar products intended for human
consumption, OJ L 212, 15.8.2009, p. 42–44.

[76]             Council Regulation (EC) No 73/2009 of 19 January 2009
establishing common rules for direct support schemes for farmers under the
common agricultural policy and establishing certain support schemes for
farmers, amending Regulations (EC) No 1290/2005, (EC) No 247/2006, (EC) No
378/2007 and repealing Regulation (EC) No 1782/2003.

[77]             Commission Regulation (EC) No 1120/2009 of
29 October 2009 laying down detailed rules for the implementation of the
single payment scheme provided for in Title III of Council Regulation (EC)
No 73/2009 establishing common rules for direct support schemes for
farmers under the common agricultural policy and establishing certain support
schemes for farmers - Commission Regulation (EC) No 1121/2009 of
29 October 2009 laying down detailed rules for the application of Council
Regulation (EC) No 73/2009 as regards the support schemes for farmers
provided for in Titles IV and V thereof.-Commission Regulation (EC) No 1122/2009 of 29 October 2009 laying down detailed rules for the implementation of Council
Regulation (EC) No 73/2009 as regards cross-compliance, modulation and the
integrated administration and control system, under the direct support schemes
for farmers provided for that Regulation, as well as for the implementation of Council
Regulation (EC) No 1234/2007 as regards cross-compliance under the support
scheme provided for the wine sector in Council Regulation (EC) No 479/2008.

[78]             Council Regulation (EC) No 1698/2005 of 20 September
2005 on support for rural development by the European Agricultural Fund for
Rural Development (EAFRD).

[79]             Commission Regulation (EC)
No 1974/2006 of 15 December 2006 laying down detailed rules for the
application of Council Regulation (EC) No 1698/2005 on support for rural
development by the European Agricultural Fund for Rural Development (EAFRD).

[80]             Commission Regulation (EU)
No 65/2011 of 27 January 2011 laying down detailed rules for the
implementation of Council Regulation (EC) No 1698/2005, as regards the
implementation of control procedures as well as cross-compliance in respect of
rural development support measures.

[81]             Commission Regulation (EC)
No 1974/2006 of 15 December 2006 laying down detailed rules for the
application of Council Regulation (EC) No 1698/2005 on support for rural
development by the European Agricultural Fund for Rural Development (EAFRD).

[82]             Commission Regulation (EU)
No 108/2010 of 8 February 2010 amending Regulation (EC)
No 1974/2006 laying down detailed rules for the application of Council
Regulation (EC) No 1698/2005 on support for rural development by the
European Agricultural Fund for Rural Development (EAFRD)

[83]             Council Regulation (EC)
No 510/2006 of 20 March 2006 on the protection of geographical indications
and designations of origin for agricultural products and foodstuffs.

[84]             Council Regulation (EC)
No 509/2006 of 20 March 2006 on agricultural products and foodstuffs as
traditional specialities guaranteed.

[85]             Council Regulation (EC) No
834/2007 of 28 June 2007 on organic production and labeling of organic
products and repealing Regulation (EEC) No 2092/91.

[86]             Commission Regulation (EC) No
889/2008 of 5 September 2008 laying down detailed rules for the implementation
of Council Regulation (EC) No 834/2007 on organic production and labeling
of organic products with regard to organic production, labeling and control..

[87]             Commission Regulation (EC)
No 1235/2008 of 8 December 2008 laying down detailed rules for
implementation of Council Regulation (EC) No 834/2007 as regards the
arrangements for imports of organic products from third countries.

[88]             Commission Regulation (EU)
No 271/2010 of 24 March 2010 amending Regulation (EC) No 889/2008
laying down detailed rules for the implementation of Council Regulation (EC)
No 834/2007, as regards the organic production logo of the European Union.

[89]             Commission Regulation (EU) No 471/2010
of 31 May 2010 amending Regulation (EC) No 1235/2008, as regards the
list of third countries from which certain agricultural products obtained by
organic production must originate to be marketed within the Union.

[90]             Proposal for a Regulation of the European Parliament
and of the Council amending Council Regulation (EC) no 834/2007 on organic
production and labelling of organic products – COM(2010) 759 final.

[91]             Regulation (EC) No 110/2008 of
the European Parliament and of the Council of 15 January 2008 on the
definition, description, presentation, labelling and the protection of
geographical indications of spirit drinks and repealing Council Regulation
(EEC) No 1576/89.

[92]             Council Regulation (EC)
No 1128/2009 of 20 November 2009 repealing certain obsolete Council
acts in the field of the common agricultural policy.

[93]             Council Regulation (EC)
No 1139/2009 of 20 November 2009 repealing certain obsolete Council
acts.

[94]             Regulation (EC) No 882/2004 of
the European Parliament and of the Council of 29 April 2004 on official controls
performed to ensure the verification of compliance with feed and food law,
animal health and animal welfare rules.

[95]             For more explanations on the
management of the agricultural budget and its audit tools, see: http://ec.europa.eu/agriculture/fin/clearance/factsheet\_en.pdf

[96]             For a more
detailed description of the conformity clearance activities, see 2009 Annual
Activity Report in the domain of agriculture.

[97]             1999/468/EC: Council Decision
of 28 June 1999 laying down the procedures for the exercise of implementing
powers conferred on the Commission.

[98]             2004/391/EC: Commission
Decision of 23 April 2004 on the advisory groups dealing with matters covered
by the common agricultural policy, OJ L120/50 of 24.4.2004.

[99]             Judgement of 5 October 2006 in case C- 84/04,
Commission v. Portuguese Republic, Rec 2006, p.I-9843.

[100]            The list of products is not exhaustive. The products referred
to above due to their nature and constant consumption require particular
supervision of the application of the following directives: Council Directive
2001/110/EC of 20 December 2001 relating to honey ,
Directive 2000/36/EC of the European Parliament and of the Council of 23 June
2000 relating to cocoa and chocolate products intended for human consumption,Council Directive 2001/113/EC of 20
December 2001 relating to fruit jams, jellies and marmalades and sweetened
chestnut purée intended for human consumption and Council Directive 2001/112/EC of 20 December 2001 relating to fruit
juices and certain similar products intended for human consumption.

[101]            Directive 2000/36/EC of the
European Parliament and of the Council of 23 June 2000 relating to cocoa and
chocolate products intended for human consumption.

[102]            Commission Regulation (EC) No
1122/2009 of 30 November 2009 laying down detailed rules for the
implementation of Council Regulation (EC) No 73/2009 as regards
cross-compliance, modulation and the integrated administration and control
system, under the direct support schemes for farmers provided for that
Regulation, as well as for the implementation of Council Regulation (EC)
No 1234/2007 as regards cross-compliance under the support scheme provided
for the wine sector.

[103]            Commission Regulation (EC)
No 1580/2007 of 21 December 2007 laying down implementing rules of Council
Regulations (EC) No 2200/96, (EC) No 2201/96 and (EC)
No 1182/2007 in the fruit and vegetable sector , OJ L 350,
31.12.2007, p. 1–98.

[104]            Commission Decision of 10 November 2010 amending Chapter
3 of Annex 1 to Regulation (EC) No 715/2009 of the European Parliament and of
the Council on conditions for access to the natural gas transmission networks
(OJ L 293, 11.11.2010, p. 67).

[105]            Commission Regulation (EU) No 774/2010 of 2 September
2010 on laying down guidelines relating to inter-transmission system operator
compensation and a common regulatory approach to transmission charging (OJ L
233, 3.9.2010, p. 1); Commission Regulation (EU) No 838/2010 of 23 September
2010 on laying down guidelines relating to the inter-transmission system
operator compensation and a common regulatory approach to transmission charging
(OJ L 250, 24.9.2010, p. 5).

[106]            OJ L 295, 12.11.2010, p.1.

[107]            http://ec.europa.eu/energy/gas\_electricity/interpretative\_notes/interpretative\_note\_en.htm

[108]            Commission
Staff Working Document – The Market for solid fuels in the Community in 2008
and Estimates for 2009 (SEC(2010)996,24.8.2010); http://ec.europa.eu/energy/observatory/coal/hard\_coal\_imports\_en.htm

[109]            OJ L 283, 27.10.2001, p. 33.

[110]            OJ L 123, 17.5.2003, p. 42.

[111]            OJ L 140, 5.6.2009, p. 16.

[112]            COM(2011)31 final, 31.1.2011.

[113]            http://ec.europa.eu/energy/renewables/background\_documents\_en.htm

[114]            http://www.ca-res.eu/

[115]            OJ L 1, 4.1.2003, p. 65.

[116]            OJ L 153, 18.6.2010, p. 13.

[117]            OJ L285 of 21.10.2009, p.10.

[118]            OJ L293 of 11.11.2010, p.31.

[119]            OJ L293 of 11.11.2010, p.21.

[120]            OJ L76 of 24.3.2009, p.17.

[121]            OJ L104 of 24.04.2010, p.20.

[122]            OJ L153 of 18.06.2010, p.1.

[123]            OJ L314 of 30.11.2010, p.17.

[124]            OJ L314 of 30.11.2010, p.64.

[125]            OJ L314 of 30.11.2010, p.1.

[126]            OJ L314 of 30.11.2010, p.47.

[127]            OJ L 342 of 22.12.2009, p.46.

[128]            OJ L 114, 27.4.2006, p. 64.

[129]            Directive 2010/31/EU of the European Parliament and of
the Council of 19 May 2010 on the energy performance of buildings (recast), OJ
L 153, 18.6.2010, p. 13.

[130]            Communication from the Commission
to the Council and the European Parliament on Energy efficiency: delivering the
20% target, COM(2008) 772 final.

[131]            Commission Staff Working Document, Synthesis of the complete assessment of all 27 National Energy
Efficiency Action Plans as required by Directive 2006/32/EC on energy end-use
efficiency and energy services. Moving forward together on saving energy, SEC(2009) 889 final.

[132]            OJ L 52, 21.2.2004, p. 50.

[133]            OJ L 32, 6.2.2007, p. 183.

[134]            OJ L 338, 17.12.2008, p. 55.

[135]            Eurostat - annual statistics based on data submitted by Member
States according to Article 10(3) of the Directive 2004/8/EC.

[136]            COM(2010)618, 3.11.2010.

[137]            Detailed
information on the ENEF activity is available at http://ec.europa.eu/energy/nuclear/forum/forum\_en.htm

[138]            Council Regulation on the extension of financial support
to Bulgaria for the decommissioning of units 1 to 4 of the Kozloduy Nuclear
Power Plant and for the mitigation of the economical consequences.

[139]            COM/2010/0423 and SEC/2010/0974.

[140]            2010/635/Euratom, OJ L 279, 23/10/2010 p. 36 – 67.

[141]            Commission Decision of 31 July 2009 establishing the
High Level Steering Group on SafeSeaNet (OJ L 201 of 1/8/2009, p.63).

[142]            International Labour Organization.

[143]            Regulation (EC) No 725/2004 of the European Parliament and of the
Council of 31 March 2004 on enhancing ship and port facility
security, OJ L 129,
29.4.2004, p. 6.

[144]            Directive 2005/65/EC of the
European Parliament and of the Council of 26 October 2005 on enhancing port
security, OJ L 310, 25.11.2005, p. 28.

[145]            Commission Regulation (EC) No
324/2008 of 9 April 2008 laying down revised procedures for conducting
Commission inspections in the field of maritime security, OJ L 98, 10.4.2008,
p. 5.

[146]            Commission Regulation (EC) No
884/2005 of 10 June 2005 laying down procedures for conducting Commission
inspections in the field of maritime security, OJ L 148, 11.6.2005, p. 25.

[147]            OJ L 102, 11 April 2006, p. 35.

[148]            OJ L 21, 24 January 2009, p. 39.

[149]            OJ L 29, 31 January 2009, p. 45.

[150]            OJ L 80, 23 March 2002, p. 35.

[151]            OJ
L 157, 9 June 2006, p. 8.

[152]            OJ
L 187, 20 July 1999, p. 42.

[153]            OJ
L 124, 23 May 1996, p. 1.

[154]            Italy, Malta, Austria, Luxembourg were not in
conformity. Portugal did not communicate the measures and a procedure under
Art. 260 TFEU was initiated since there was a previous judgment under Art. 258
TFEU.

[155]            Bulgaria, Cyprus and Czech Republic for Directive
2009/4/EC and Bulgaria, Cyprus and Slovakia for Directive 2009/5/EC.

[156]            Germany and Belgium.

[157]            OJ
L 300, 14 November 2009, p. 51.

[158]            OJ L
300, 14 November 2009, p. 72.

[159]            OJ L
300, 14 November 2009, p. 88.

[160]            OJ L 339, 22 December 2010, p. 3.

[161]            OJ L 168, 2 July 2010, p. 16.

[162]            OJ L 335, 18 December 2010, p. 21.

[163]            The following Member States are currently under review
as regards their tolling arrangements: Bulgaria, Czech Republic, France, Greece, Portugal, Romania, Slovenia, Spain, UK.

[164]            Italy and Portugal.

[165]            COM(2008)887.

[166]            OJ L80, 26.3.2010, p. 10.

[167]            Council Regulation (EEC) N° 95/93 of 18 January 1993 on
common rules for the allocation of slot at Community airports.

[168]            Directive 2009/12/EC of the European Parliament and of
the Council of 11 March 2009 on airport charges.

[169]            Directive 2003/87/EC of the European Parliament and of
the Council of 13 October 2003 establishing a scheme for greenhouse gas
emission allowance trading within the Community and amending Council Directive
96/61/EC (OJ L 275, 25.10.2003, p. 32–46).

[170]            Directive 2009/29/EC of the European Parliament and of
the Council of 23 April 2009 amending Directive 2003/87/EC so as to improve and
extend the greenhouse gas emission allowance trading scheme of the Community (OJ
L 140, 05.06.2009, p.63-87).

[171]            Directive 2008/101/EC of the European Parliament and of
the Council of 19 November 2008 amending Directive 2003/87/EC so as to include
aviation activities in the scheme for greenhouse gas emission allowance trading
with the Community (OJ L 8, 13.01.2009, p.3-21).

[172]            Decision 280/2004/EC of the European Parliament and of the Council of
11 February 2004 concerning a mechanism for monitoring Community greenhouse gas
emissions and for implementing the Kyoto Protocol (OJ L
49, 19.2.2004, p. 1–8).

[173]            Commission Decision 2005/166/EC of 10 February 2005
laying down rules implementing Decision No 280/2004/EC of the European
Parliament and of the Councilconcerning a mechanism for monitoring Community
greenhouse gas emissions and for implementing the Kyoto Protocol (OJ L 55,
1.3.2005, p. 57–91).

[174]            Decision 345/2010/EC of the European Commission of 08 June 2010
concerning the inclusion of monitoring and reporting
guidelines for greenhouse gas emissions from the capture, transport and
geological storage of carbon dioxide (OJ L 155, 22.6.2010, p. 34-47).

[175]            Decision No. 406/2009/EC of the European Parliament and
of the Council of 23 April 2009 on the effort of Member States to reduce their
greenhouse gas emissions to meet the Community's greenhouse gas emission
reduction commitment up to 2020.

[176]            Council Directive 79/409/EEC of 2 April 1979 on the
conservation of wild birds OJ L 103, 25.4.1979, p. 1-18.

[177]            Council Directive 92/43/EEC of 21 May 1992 on the
conservation of natural habitats and of wild fauna and flora OJ L 206,
22.7.1992, p. 7–50.

[178]            In the last 3 years the Commission has three times
sought for interim measures in nature protection cases. In cases C-503/06, Commission
v. Italy and C-76/08, Commission v. Malta, the Court ordered the
Member States to halt illegal hunting activities on 19 December 2007 and 24
April 2008 respectively. In case C-193/07, Commission v. Poland, the
Commission sought interim measures from the ECJ to prevent a Polish motorway
project causing serious habitat damage: the request was dropped when Poland agreed to halt the relevant works pending an ECJ judgment

[179]            http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2007:0502:FIN:EN:PDF

[180]            http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0773:FIN:EN:PDF

[181]            In the last two years the Commission has three times
sought for interim measures in nature protection cases. In cases C-503/06, Commission
v. Italy and C-76/08, Commission v. Malta, the Court ordered the
Member States to halt illegal hunting activities on 19 December 2007 and 24
April 2008 respectively. In case C-193/07, Commission v. Poland, the
Commission sought interim measures from the ECJ to prevent a Polish motorway
project causing serious habitat damage: the request was dropped when Poland agreed to halt the relevant works pending an ECJ judgment

[182]            Progress report on the thematic strategy on the
prevention and recycling of waste, COM(2011)13 final, Commission staff working document, available at http://ec.europa.eu/environment/waste/pdf/Commission%20Working%20Doc.pdf,
study on the feasibility of a waste implementation body,   http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/113&format=HTML&aged=0&language=EN&guiLanguage=fr

[183]            http://ec.europa.eu/environment/waste/index.htm.

[184]            Directive 2008/98/EC of the European Parliament and of
the Council of 19 November 2008pn waste, OJ L 312, 22.11.2008.

[185]            Council Directive 1999/31/EC of 26 April 1999 on the
landfill of waste, OJ L 182, 16.7.1999, p. 1, Council decision of 19 December
2002 establishing criteria and procedures for the acceptance of waste at
landfills pursuant to Article 16 of and Annex II to Directive 1999/31/EC.

[186]            Regulation (EC) No 1013/2006 of the European Parliament
and of the Council of 14 June 2009 on shipments of waste, OJ L 190, 12.7.2006,
p.1.

[187]            For more information on specific regulations, directives
and decisions, see http://ec.europa.eu/environment/waste/index.htm

[188]            Council of the European Union, CRIMORG/ENV/ENFOCUSTOM/ENFOPOL,
3.06.2010

[189]            Commission Directive 2011/37/EU of 30 March 2011
amending Annex II to Directive 2000/53/EC of the European Parliament and of the
Council on end-of-life vehicles, OJ L 85, 31.3.2011, p. 3.

[190]            See more; Commission report of 2 December 2010 on the
exemption from the ban on cadmium granted for portable batteries and accumulators
intended for use in cordless power tools [COM(2010) 698 final -
Not published in the Official Journal].

[191]            OJ L 175, 05.07.1985, p.40.

[192]            OJ L 073, 14.03.1997, p.5.

[193]            OJ L 156, 25.06.2003, p.17.

[194]            OJ L 140, 5.6.2009, p.114.

[195]            OJ L 197, 21.7.2001, p. 30.

[196]            The Commission's Guidance can be found at: http://ec.europa.eu/environment/eia/pdf/eia\_art2\_3.pdf

[197]            COM(2009)15.

[198]            The report can be found at: http://ec.europa.eu/environment/eia/eia-support.htm

[199]            http://ec.europa.eu/environment/consultations/eia.htm

[200]            http://ec.europa.eu/environment/eia/conference.htm

[201]            See Case C-431/92, Commission/Germany, paragraphs 29 and
32, and Case C-81/96 Gedeputeerde Staten van Noord-Holland, paragraph 23.

[202]            http://ec.europa.eu/environment/eia/pdf/eia\_case\_law.pdf

[203]            The report can be found at http://ec.europa.eu/environment/eia/eia-support.htm

[204]            The report can be found at http://ec.europa.eu/environment/eia/sea-support.htm

[205]            It can be found at http://ec.europa.eu/environment/eia/sea-support.htm
(available in 11 languages).

[206]            It should be recalled that those priorities include the
following:Non-conformity of transposing measures for the EIA/SEA Directives
likely to affect the attainment of the legislative objectives. These cases now
mainly concern the EU-12 Member States;Breaches concerning big infrastructure
projects or interventions involving EU funding;Breaches linked to bad
transposition of certain provisions of the environmental impact assessment
legislation likely to affect overall the attainment of the legislative
objectives;Breaches that reveal interpretation problems concerning certain
provisions of the environmental impact assessment legislation which could have
a significant influence on the impact of the legislation that would justify
seeking clarification from the Court of Justice.

[207]            Directive 2000/60/EC of the European Parliament and of
the Council of 23 October 2000 establishing a framework for Community action in
the field of water policy (OJ L 327,
22.12.2000, p. 1–73).

[208]            Directive 2006/118/EC of the European Parliament and of
the Council of 12 December 2006 on the protection of groundwater against
pollution and deterioration (OJ L 372, 27.12.2006, p. 19–31).

[209]            Directive 2008/105/EC of the European Parliament and of
the Council of 16 December 2008 on environmental quality standards in the
field of water policy, amending and subsequently repealing Council Directives
82/176/EEC, 83/513/EEC, 84/156/EEC, 84/491/EEC, 86/280/EEC and amending
Directive 2000/60/EC of the European Parliament and of the Council (OJ L 348, 24.12.2008, p. 84–97).

[210]            Directive 91/271/EEC of 21 May 1991 concerning urban
waste-water treatment (OJ L 135, 30.5.1991).

[211]            Directive 98/83/EC of 3 November 1998 on the quality of
water intended for human consumption (OJ L330, 5.12.1998).

[212]            Directive 76/160/EEC of 8 December 1975 concerning the
quality of bathing water (OJ L031, 5.2.1976). This Directive is in the process
of being replaced by Directive 2006/7/EC of 15 February 2006 concerning the
management of bathing water quality and repealing Directive 76/160/EEC (OJ L of
4.2.2006).

[213]            Council Directive 91/676/EEC of 12 December 1991
concerning the protection of waters against pollution caused by nitrates from
agricultural sources, OJ L 375, 31.12.1991, p. 1–8.

[214]            Directive 2007/60/EC of the European Parliament and of
the Council of 23 October 2007 on the assessment and management of flood risks (OJ L 288, 6.11.2007, p. 27–34).

[215]            Directive 2008/56/EC of 17 June
2008 establishing a framework for community action in the field of marine
environmental policy (Marine Strategy Framework Directive) (OJ L 164,
25.6.2008, p. 19-40).

[216]            Commission Directive 2009/90/EC of 31 July 2009 laying down, pursuant to
Directive 2000/60/EC of the European Parliament and of the Council, technical
specifications for chemical analysis and monitoring of water status. OJ L 201, 1.8.2009, p 36.

[217]            http://ec.europa.eu/environment/water/water-drink/reporting\_en.html

[218]            http://ec.europa.eu/environment/water/water-bathing/report\_2010.html

[219]            Report from the Commission to the Council and the
European Parliament on implementation of Council Directive 91/676/EEC
concerning the protection of waters against pollution caused by nitrates from
agricultural sources based on Member State reports for the period 2004-2007
(COM(2010)47final);
Commission Staff Working Document, accompanying document to the Report from the
Council and the Parliament COM(2010)47.

[220]            Council Directive 80/778/EEC of 15 July 1980 relating to
the quality of water intended for human consumption (OJ L 229, 30.8.1980,
p.11). Directive 80/778//EEC was repealed and replaced by Directive 98/83/EC on
25 December 2003.

[221]            Report from the Commission to the Council and the
European Parliament on implementation of Council Directive 91/676/EEC
concerning the protection of waters against pollution caused by nitrates from
agricultural sources based on Member States reports for the period 2004-2007.

[222]                  .OJ L 152,
11.6.2008, p. 1–44.

[223]            The four directives merged into the new directive are:
Council Directive 96/62/EC of 27 September 1996 on ambient air quality
assessment and management; Council Directive 1999/30/EC of 22 April
1999 relating to limit values for sulphur dioxide, nitrogen dioxide and oxides
of nitrogen, particulate matter and lead in ambient air; Directive 2000/69/EC of the European Parliament and of the
Council relating to limit values for benzene and carbon monoxide in ambient
air; and Directive 2002/3/EC of the European Parliament and of the Council
relating to ozone in ambient air.

[224]            Council Decision 97/101/EC establishing a reciprocal
exchange of information and data from networks and individual stations
measuring ambient air pollution within the Member States.

[225]            Directive 98/70/EC of the European Parliament and of the
Council of 13 October 1998 relating to the quality of petrol and diesel fuels
and amending Council Directive 93/12/EEC (OJ L 350, 28.12.1998, p. 58–68).

[226]            Council Directive 1999/32/EC of 26 April 1999 relating
to a reduction in t he sulphur content of certain liquid fuels and amending
Directive 93/12/EEC (OJ L 121, 11.5.1999, p. 13–18).

[227]            Directive 2004/42/EC of the European Parliament and of
the Council of 21 April 2004 on the limitation of emissions of volatile organic
compounds due to the use of organic solvents in certain paints and varnishes
and vehicle refinishing products and amending Directive 1999/13/EC (OJ L 143,
30.4.2004, p. 87).

[228]            Directive 2002/49/EC of the European Parliament and of
the Council of 25 June 2002 relating to the assessment and management of
environmental noise (OJ L 189,
18.7.2002, p. 12–25).

[229]            Directive 2001/81/EC of the European Parliament and of
the Council of 23 October 2001 on national emission ceilings for certain
atmospheric pollutants (OJ L 309, 27.11.2001, p. 22).

[230]            Study report on the "Review of the Implementation
of the Environmental Noise Directive 2002/49/EC" (see http://ec.europa.eu/environment/noise/home.htm
)

[231]            Directive 2008/1/EC of the European Parliament and of
the Council of 15 January 2008 concerning integrated pollution prevention and
control (OJ L 24, 29.1.2008, p. 8).

[232]            Directive 2001/80/EC of the European Parliament and of
the Council of 23 October 2001 on the limitation of emissions of certain
pollutants from large combustion plants (OJ L 309, 27.11.2001, p. 1)

[233]            Directive 2000/76/EC of the European Parliament and of
the Council of 4 December 2000 on the incineration of waste (OJ L 332,
28.12.2000, p. 91).

[234]            Council Directive 1999/13/EC of 11 March 1999 on the
limitation of emissions of volatile organic compounds due to the use of organic
solvents in certain activities and installations (OJ L 85, 29.3.1999, p. 1).

[235]            Regulation (EC) No 166/2006 of the European Parliament
and of the Council of 18 January 2006 concerning the establishment of a
European Pollutant Release and Transfer Register and amending Council
Directives 91/689/EEC and 96/61/EC (OJ L 33, 4.2.2006, p. 1).

[236]            Council Directive 96/82/EC on the control of
major-accident hazards involving dangerous substances OJ L 10, 14.1.1997, p. 13–33.

[237]            COM(2007) 843 final.

[238]            Regulation (EC) No 1907/2006 of the European Parliament
and of the Council of 18 December 2006 concerning the Registration, Evaluation,
Authorisation and Restriction of Chemicals (REACH), establishing a European
Chemicals Agency, amending Directive 1999/45/EC and repealing Council
Regulation (EEC) No. 793/93 and Commission Regulation (EC) No 1488/94 as well
as Council Directive 76/769/EEC and Commission Directives 91/155/EEC, 93/67/EEC,
93/105/EC and 2000/21/EC.

[239]            OJ L 353, 31.12.2008, p. 1

[240]            OJ L 196, 16.08.1967, p. 1.

[241]            OJ L 200, 30.07.1999, p. 1.

[242]            OJ L 158, 30.4.2004, p. 7.

[243]            OJ L 123, 24.4.1998, p.
1.

[244]            OJ L 345, 23.12.2008, p. 68.

[245]            COM(2010)514.

[246]            OJ L 198, 30.7.2009, p. 28.

[247]            OJ L 239, 6.9.2008, p. 9.

[248]            OJ L 198, 30.7.2009, p. 35.

[249]            OJ L 201, 1.8.2009, p. 43.

[250]            OJ L 201, 1.8.2009, p. 46.

[251]            OJ L 203, 5.8.2009, p. 62.

[252]            OJ L 201, 1.8.2009, p. 50.

[253]            OJ L 201, 1.8.2009, p. 50.

[254]            OJ L 201, 1.8.2009, p. 54.

[255]            OJ L 203, 5.8.2009, p. 58.

[256]            Directive
2009/107/EC of 16 September 2009 amending Directive 98/8/EC, OJ L262,
6.10.2009, p40

[257]            Commission Regulation (EC) No
1451/2007 of 4 December 2007 on the second phase of the 10-year work programme
referred to in Article 16(2) of Directive 98/8/EC of the European Parliament
and of the Council concerning the placing of biocidal products on the market,
OJ L 325, 11.12. 2007, p 3.

[258]            Directive 2003/4/EC of the European Parliament and of
the Council of 28 January 2003 on public access to environmental information
and repealing Council Directive 90/313/EEC, OJ
L 41, 14.2.2003.p. 26–32

[259]            Directive 2003/35/EC of 26 May 2003, OJ L 156,
25.06.2003, p. 17. Public participation and access to justice concerning Directives
85/337/EEC and 96/61/EC are dealt with the relevant sections of this Report.

[260]            See Regulation (EC) No 1367/2006 of the European Parliament
and of the Council of 6 September 2006 on the application of the provisions of
the Aarhus Convention on Access to Information, Public Participation in
Decision-making and Access to Justice in Environmental Matters to Community
institutions and bodies (OJ L 264, 25.9.2006, p. 13).

[261]            (COM(2010)143).

[262]            (COM(2009)378).

[263]            Directive 2010/75/EU of the European Parliament and of the
Council of 24 November 2010 on industrial emissions (integrated pollution
prevention and control) Text with EEA relevance OJ L 334,
17.12.2010, p. 17–119 (BG, ES, CS, DA, DE, ET, EL, EN, FR, IT, LV, LT, HU, MT,
NL, PL, PT, RO, SK, SL, FI, SV) .

[264]            Seveso II Proposal for a Directive of the European
Parliament and of the Council on control of major-accident hazards involving
dangerous substances was adopted by the Commission. /\* COM/2010/0781 final - COD 2010/0377 \*/.

[265]            The Charter of Fundamental Rights of the European Union
confirms the right to an effective remedy for everyone whose rights and
freedoms guaranteed by the law of the European Union are violated Article
47(1). OJ, C 364 18.12.2000, p.1 This is further strengthened by Article 19(1)
of the Treaty on European Union incorporating the principle of effective
judicial protection, OJ C 306, 17.12.2007.

[266]            OJ L 143, 30.4.2004,
p. 56.

[267]            Report from the Commission to the Council, the European
Parliament, the European Economic and Social Committee and the Committee of the
Regions under Article 14(2) of Directive 2004/35/EC on the environmental
liability with regard to the prevention and remedying of environmental damage, COM(2010) 581 final.

[268]            Available on the Internet at the official Website of
Resource Equivalency Methods for Assessing Environmental Damage in the EU
(REMEDE): <http://www.envliability.eu/>

[269]            Directive 2002/21/EC (Framework Directive), Directive
2002/20/EC (Authorisation Directive), Directive 2002/19/EC (Access Directive),
Directive 2002/22/EC (Universal Service Directive) and Directive 2002/58/EC on
privacy and electronic communications (further referred to as the ePrivacy
Directive).

[270]            Directive 2009/140/EC of the European Parliament and of
the Council of 25 November 2009 Directives 2002/21/EC on a common regulatory
framework for electronic communications networks and services, 2002/19/EC on
access to, and interconnection of, electronic communications networks and
associated facilities, and 2002/20/EC on the authorisation of electronic
communications networks and services.

[271]            Directive 2009/136/EC of the European Parliament and of
the Council of 25 November 2009 amending Directive 2002/22/EC on universal
service and users’ rights relating to electronic communications networks and
services, Directive 2002/58/EC concerning the processing of personal data and
the protection of privacy in the electronic communications sector and
Regulation (EC) No 2006/2004 on cooperation between national authorities
responsible for the enforcement of consumer protection laws

[272]            OJ L 337, 18.12.2009, p. 37; OJ L 337, 18.12.2009, p. 11.

[273]            Regulation (EC) No 1211/2009 of the European Parliament
and of the Council of 25 November 2009 establishing the Body of European
Regulators for Electronic Communications (BEREC) and the Office

[274]            Regulation (EC) No 717/2007 of the European Parliament
and of the Council of 27 June 2007 on roaming on public mobile telephone
networks within the Community and amending Directive 2002/21/EC, OJ L 171, 29.6.2007, p. 32.

[275]            Regulation
(EC) No 544/2009 of the European Parliament and of the Council of 18 June 2009 amending
Regulation (EC) No 717/2007 on roaming on public mobile telephone networks
within the Community and Directive 2002/21/EC on a common regulatory framework
for electronic communications networks and services  http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:167:0012:0023:EN:PDF

[276]            OJ L 274, 20.10.2009, p. 25.

[277]            Commission Decision 2005/928/EC of 20 December 2005 on
the harmonisation of the 169,4-169,8125 MHz frequency band in the Community
(frequency band originally designated for the ERMES paging system); Commission
Decision 2005/513/EC of 11 July 2005 on the harmonised use of radio spectrum in
the 5 GHz frequency band
for implementation of Wireless Access Systems including
Radio Local Area Networks (WAS/RLANs); Commission Decision 2005/50/EC of 17
January 2005 on the harmonisation of the 24 GHz range radio spectrum band for
the time-limited use by automotive short-range radar equipment in the
Community; Commission Decision 2004/545/EC of 26 July 2004 on the harmonisation
of radio spectrum in the
79 GHz range for the use of automotive short-range
radar equipment in the Community; Commission Decision 2006/771/EC of 9 November
2006 on the harmonisation of the radio spectrum for use by short-range devices
(SRD); Commission Decision 2006/804/EC of 23 November 2006 on harmonisation of
the radio spectrum for radio frequency identification (RFID) devices operating
in the ultra high frequency (UHF) band; Commission Decision 2007/90/EC of 12
February 2007 amending Decision 2005/513/EC of 11 July 2005 on 5 GHz WAS/RLAN;
Commission Decision 2007/98/EC of 14 February 2007 on the harmonised use of
radio spectrum in the 2 GHz frequency bands for the implementation of systems
providing mobile satellite services (MSS); Commission Decision 2007/131/EC of
21 February 2007 on allowing the use of the radio spectrum for equipment using
ultra-wideband technology in a harmonised manner in the Community (UWB);
Commission Decision 2007/344/EC of 16 May 2007 on harmonised availability of
information regarding spectrum use within the Community; Commission Decision
2008/294/EC of 7 April 2008 on harmonised conditions of spectrum use for the
operation of mobile communication services on aircraft (MCA services) in the
Community; Commission Decision 2008/411/EC of 21 May 2008 on the harmonisation
of the 3400 - 3800 MHz frequency band for terrestrial systems capable of
providing electronic communications services in the Community; Commission
Decision 2008/432/EC of 23 May 2008 amending Decision 2006/771/EC on
harmonisation of the radio spectrum for use by short-range devices (SRD);
Decision 2008/477/EC of 13 June 2008 on the harmonisation of the 2500-2690 MHz
frequency band for terrestrial systems capable of providing electronic
communications services in the Community; Commission Decision 2008/671/EC of 5
August 2008 on the harmonised use of radio spectrum in the 5875 - 5905 MHz
frequency band for safety related applications of Intelligent Transport Systems
(ITS); Commission Decision 2008/673/EC of 13 August 2008 amending Decision
2005/928/EC on the harmonisation of the 169,4-169,8125 MHz frequency band in
the Community; Commission Decision 2009/343/EC of 21 April 2009 amending
Decision 2007/131/EC on allowing the use of the radio spectrum for equipment
using ultra-wideband technology in a harmonised manner in the Community;
Commission Decision 2009/381/EC of 13 May 2009 amending Decision 2006/771/EC on
harmonisation of the radio spectrum for use by short-range devices and
Commission Decision 2009/766/EC of 16 October 2009 on the harmonisation of the 900
MHz and 1 800 MHz frequency bands for terrestrial systems capable of providing
pan-European electronic communications services in the Community.

[278]            Decision of the European Parliament and of the Council
of 7 March 2002 on a regulatory framework for radio spectrum policy in the
European Community (Radio Spectrum Decision), OJ L 108, 24.4.2002, p.1.

[279]            OJ L 172, 2.7.2008, p. 15.

[280]            OJ L 149, 12.6.2009, p. 65.

[281]            COM(2002) 725, of 11 December 2002.

[282]            “Progress Report on the Single European Electronic
Communications Market - 2009 (15th Progress Report)”, COM(2010)253 of 25 May 2010. The report covering 2010 is not yet available.

[283]            http://ec.europa.eu./information\_society/policy/ecomm/implementation\_enforcement/index\_en.htm

[284]            COM (2010)245.

[285]            COM (2010) 202.0

[286]            2010/572/EU, OJ L 251, 25.9.2010.

[287]            COM(2010) 471.

[288]            COM (2010)472.

[289]            2010/167/EC.

[290]            Directive 89/552/EEC of the European Parliament and of
the Council of 3 October 1989 on the coordination of certain provisions laid
down by law, regulation or administrative action in Member States concerning the
provision of audiovisual media services (Audiovisual Media Services Directive)
as last amended by Directive 2007/65/EC of 11 December 2007, OJ L 332 of 18
December 2007.

[291]            OJ L 95, 15.4.2010, p. 1–24.

[292]            Recommendation of the European Parliament and of the
Council of 16 November 2005 on film heritage and the competitiveness of related
industrial activities, OJ L 323 of 9 December 2005, p. 57.

[293]            Recommendation of the European Parliament and of the
Council of 20 December 2006 on the protection of minors and human dignity and
on the right of reply in relation to the competitiveness of the European
audiovisual and on-line information services industry, OJ L 378 of 27 December
2006, p. 72.

[294]            COM (2010)450.

[295]            SEC(2010)995.

[296]            COM(2009)212.

[297]            OJ L 13, 19.01.2000, p.12.

[298]            OJ L 298, 16.11.2000, p.42.

[299]            OJ L 45, 15.07.2003, p.45.

[300]            COM(2008)798.

[301]            See at:
http://ec.europa.eu/information\_society/policy/esignature/eu\_legislation/trusted\_lists

[302]            Communication from the Commission to the European
Parliament, the Council, the European Economic and Social Committee and the
Committee of the Regions A Digital Agenda for Europe, COM(2010)245, 19.5.2010.

[303] OJ L 358, 31.12.2002, p. 59.

[304] OJ L 343, 22.12.2009.

[305] OJ L 286, 29.10.2008, p. 1.

[306] OJ L 112, 30.04.2011, p. 1.

[307] See Commission Regulation (EU) No 498/2010, OJ L 142, 10.06.2010,
p. 1.

[308] See Commission Regulation (EU) No 508/2011, OJ L 149, 15.06.2010,
p. 7.

[309] Case T-367/10, Bluefin Tuna Hellas Maritime Company vs. Commission.

[310] OJ L 107, 17.04.2008, p. 1.

[311] SEC(2010) 434 final 16.08.2010.

[312] OJ L 36, 08.02.2007, p. 6.

[313] OJ L 131, 29.05.2010, p. 22.

[314] Case T-337/10, Seatech International and Others vs. Council and
Commission.

[315] Judgement of 05.03.2009 in Case C-556/07, Commission vs. France.

[316] Judgement of 29.10.2009 in Case C-249/08, Commission vs. Italy.

[317] Judgement of 22.12.2008 in Case C-189/07, Commission vs. Spain.

[318]            Directive 2008/6/EC of the European Parliament and of
the Council of 20 February 2008 amending Directive 97/67/EC with regard to the
full accomplishment of the internal market of Community postal services, OJ L
52, 27.2.2008.

[319]            Directive 98/84/EC of the European
Parliament and of the Council of 20 November 1998 on the legal protection of
services based on, or consisting of, conditional access - OJ L 320, 28.11.1998,
p. 54–57.

[320]            Directive 2003/31/EC of the European Parliament and of
the Council of 8 June 2000 on certain legal aspects of information society
services, in particular electronic commerce, in the Internal Market (Directive
on electronic commerce), OJ L 178 of 17.7.2000, p. 1.

[321]            O.J. L 376/36 of 27.12.2006.

[322]            One on the use of the Internal Market Information System ("IMI") for
the exchange of information between administrations as foreseen in the Services
Directive (Commission Decision 2009/739/EC of
2 October 2009, OJ L 263 of 7 October 2009) and another one on practical arrangements
concerning the use of electronic procedures in the Points of Single Contact (Commission Decision 2009/767/EC of 16 October 2009, OJ L 299 of 14 November2009).

[323]                  Commission
Decision 2010/425/EU amending Decision 7009/767/EC, OJ L 199 of 31 July 2010.

[324]            The three EFTA countries part of the EEA Agreement - Iceland, Lichtenstein and Norway- also participated.

[325]            The following services sectors were identified by Member
States as a priority: construction and property related services, tourism and
related services, food and beverage services, services of regulated
professions, wholesale and retail services, business services and private
education services. The Services Directive Committee was informed on the results
of the process at its meeting of 15 October 2010.

[326]                  "Towards a better functioning Single Market for services –
building on the results of  the mutual evaluation process of the Services
Directive" - Communication from the Commission to the European Parliament,
the Council, the European Economic and Social Committee and the Committee of
the Regions, COM (2011)20.

[327]                  See below section on "Evaluation based on current
position".

[328]            CIP pilots are financed half by the Commission (DG
INFSO) and half by the consortium where in addition to Member States, academia,
and industry is present. The involvement of industry is essential to ensure the
practical take up of solutions developed.

[329]            SPOCS also enhances the PSCs with additional technical
solutions for content syndication (to have the data on PSCs updated each time a
change takes place for example at a relevant authority's webpage). It also
foresees some assistance for businesses with mapping the documents that are
required in Member States as some documents may exist in one Member State and
not in another or they may have different names (like anti-maffia declarations
which could be an extract of penal register in another one).

[330]            "A Digital Agenda for
Europe", COM(2010) 245 final/2.

[331]            This is strongly called for by the European Parliament
in its recently adopted report on the implementation of the Services Directive
(2010/2053(INI). See:  http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&reference=A7-2011-0012&language=EN

[332]            IMI is an electronic network which allows for direct
communication and exchange of information between competent authorities in
different Member States and thus facilitates the administrative cooperation
required by the Services Directive.

[333]            Austria, Belgium, Cyprus, France, Germany, Greece, Ireland, Luxemburg, Portugal, Romania, Slovenia and the United Kingdom – see
IP/10/821.

[334]            IP/10307.

[335]            IP/10/505.

[336]            IP/10/505.

[337]            IP/10/304.

[338]            IP/10/680.

[339]        IP/10/307

[340]
       Certain of these restrictions have been lifted in 2010.

[341]            IP/10/498

[342]            IP/10/504.

[343]            IP/10/159.7

[344]                  Case
C-203/08, Sporting Exchange Ltd, trading as ‘Betfair’, v Minister van Justitie.

[345]                  Case
C-258/08, Ladbrokes Betting & Gaming Ltd/Ladbrokes International Ltd v
Stichting de Nationale Sporttotalisator.

[346]                  In
Joined Cases C‑447/08 and C‑448/08, criminal proceedings against Otto Sjöberg
(C-447/08) and Anders Gerdin (C-448/08).

[347]            Case C‑409/06, Winner
Wetten GmbH v Bürgermeisterin der Stadt Bergheim.

[348]                  Joined
Cases C‑316/07, C‑358/07 to C‑360/07, C‑409/07 and C‑410/07,Markus Stoß (C‑316/07),Avalon
Service‑Online‑Dienste GmbH (C‑409/07) and Olaf Amadeus Wilhelm Happel (C‑410/07)
v Wetteraukreis and Kulpa Automatenservice Asperg GmbH (C‑358/07), SOBO Sport
& Entertainment GmbH (C‑359/07) and Andreas Kunert (C‑360/07) v Land Baden‑Württemberg.

[349]                  Case
C‑46/08, Carmen Media Group Ltd v Land Schleswig-Holstein, Innenminister des
Landes Schleswig-Holstein.

[350]                  Case
C‑64/08, criminal proceedings against  Ernst Engelmann.

[351]            "Towards a better functioning Single Market for services
– building on the results of  the mutual evaluation process of the Services
Directive" - Communication from the Commission to the European
Parliament, the Council, the European Economic and Social Committee and the
Committee of the Regions, COM (2011)20.

[352]                  idem.

[353]            Directive 1999/93/EC of the European Parliament and of the Council of
13 December 1999 on a EU framework for electronic signatures.

[354]            Available at: http://ec.europa.eu/internal\_market/post/doc/studies/2009-wik\_regulators.pdf.

[355]            Commission Decision of 10 August2010 establishing the
European Regulators Group for Postal Services (ERGP), OJ C 217.

[356]            Available at: http://ec.europa.eu/internal\_market/post/doc/studies/2010-main-developments\_en.pdf
and http://ec.europa.eu/internal\_market/post/doc/studies/2010-wik-external-dimension\_en.pdf.

[357]            Directive 2007/44/EC of the European Parliament and of
the Council of 5 September 2007 amending Council Directive 92/49/EEC and
Directives 2002/83/EC, 2004/39/EC, 2005/68/EC and 2006/48/EC as regards
procedural rules and evaluation criteria for the prudential assessment of
acquisitions and increase of holdings in the financial sector (OJ L 247,
21.9.2007, p. 1–16).

[358]            Judgment of the Court of
16 December 2010 in Case C-233/10, European Commission v Kingdom of The Netherlands.

[359]            Directive 2009/14/EC of the European Parliament and of
the Council of 11 March 2009 amending Directive 94/19/EC on deposit-guarantee
schemes as regards the coverage level and the payout delay  (OJ L
68, 13.3.2009, p. 3–7).

[360]            Directive 2009/111/EC of the European Parliament and of
the Council of 16 September 2009 amending Directives 2006/48/EC, 2006/49/EC and
2007/64/EC as regards banks affiliated to central institutions, certain own
funds items, large exposures, supervisory arrangements, and crisis management.

[361]            Commission Directive 2009/27/EC of 7 April 2009 amending
certain Annexes to Directive 2006/49/EC of the European Parliament and of the
Council as regards technical provisions concerning risk management (OJ L 94,
8.4.2009) and Commission Directive 2009/83/EC of 27 July 2009 amending
certain Annexes to Directive 2006/48/EC of the European Parliament and of the
Council as regards technical provisions concerning risk management (OJ L 196,
28.7.2009).

[362]            Directive 2010/76/EU of the European Parliament and of
the Council of 24 November 2010 amending Directives 2006/48/EC and
2006/49/EC as regards capital requirements for the trading book and for
re-securitisations, and the supervisory review of remuneration policies ,
OJ L329 of 14.12.2010.

[363]            COM 2010/368 and 369.

[364]                  Directive
2009/14/EC of 11 March 2009 amending Directive 94/19/EC on deposit-guarantee
schemes as regards the coverage level and the payout delay  (OJ L 68,
13.3.2009).

[365]            COM(2010) 433 final.

[366]            The consultations are published at http://ec.europa.eu/internal\_market/bank/regcapital/index\_en.htm

[367]            http://ec.europa.eu/internal\_market/bank/regcapital/transposition\_en.htm

[368]            Directive
2004/39/EC of the European Parliament and of the Council of 21 April 2004 on
markets in financial instruments amending Council Directives 85/611/EEC and
93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council
and repealing Council Directive 93/22/EEC (OJ L 145, 30.4.2004, p. 1).

[369]            Directive 2006/73/EC of 10 August 2006 implementing
Directive 2004/39/EC of the European Parliament and of the Council as regards
organisational requirements and operating conditions for investment firms and
defined terms for the purposes of that Directive (OJ L 241, 2.9.2006, p. 26).

[370]            Regulation (EC) No 1287/2006 of 10 August 2006
implementing Directive 2004/39/EC of the European Parliament and of the Council
as regards record-keeping obligations for investment firms, transaction
reporting, market transparency, admission of financial instruments to trading,
and defined terms for the purposes of that Directive (OJ L 241, 2.9.2006, p.
1–25).

[371]            Directive 97/9/EC of the European Parliament and of the
Council of 3 March 1997 on investor-compensation schemes (OJ L 84, 26.3.1997,
p. 22–31).

[372]            Directive 2003/6/EC of the European Parliament and of
the Council of 28 January 2003 on insider dealing and market manipulation
(market abuse) (OJ L 96, 12.4.2003, p. 16–25).

[373]            Directive 2003/124/EC of 22 December 2003 implementing
Directive 2003/6/EC of the European Parliament and of the Council as regards
the definition and public disclosure of inside information and the definition
of market manipulation (OJ L 339,  24.12.2003, p. 70–72).

[374]            Directive 2003/125/EC of 22 December 2003 implementing
Directive 2003/6/EC of the European Parliament and of the Council as regards
the fair presentation of investment recommendations and the disclosure of
conflicts of interest (OJ L 339,
24.12.2003, p. 73–77).

[375]            Regulation (EC) No 2273/2003 of 22 December 2003 implementing
Directive 2003/6/EC of the European Parliament and of the Council as regards
exemptions for buy-back programmes and stabilisation of financial instruments (OJ L 336, 23.12.2003, p. 33–38).

[376]            Directive 2004/72/EC of 29 April 2004 implementing Directive
2003/6/EC of the European Parliament and of the Council as regards accepted
market practices, the definition of inside information in relation to
derivatives on commodities, the drawing up of lists of insiders, the
notification of managers' transactions and the notification of suspicious
transactions (OJ L 162, 30.4.2004, p. 70–75).

[377]            Directive 2003/71/EC of the European Parliament and of
the Council of 4 November 2003 on the prospectus to be published when
securities are offered to the public or admitted to trading and amending
Directive 2001/34/EC (OJ L 345, 31.12.2003,
p. 64–89).

[378]            Regulation (EC) No 809/2004 of 29 April 2004
implementing Directive 2003/71/EC of the European Parliament and of the Council
as regards information contained in prospectuses as well as the format,
incorporation by reference and publication of such prospectuses and
dissemination of advertisements (OJ L 149,
30.4.2004, p. 1–126).

[379]            COM(2010) 371 final.

[380]            COM(2010) 482 final.

[381]            COM(2010) 484 final

[382]            Directive 2010/73/EU amending Directives 2003/71/EC on
the prospectus to be published when securities are offered to the public or
admitted to trading and 2004/109/EC on the harmonisation of transparency
requirements in relation to information about issuers whose securities are
admitted to trading on a regulated market, OJ L327/1 of 11.12.2010.

[383]            OJ L 302, 17.11.2009, p.1.

[384]            OJ L 254, 29.9.2010, p. 46.

[385]            EBA in the banking sector, EIOPA in the insurance sector
and ESMA in the securities sector.

[386]            See CESR's executive summary of the report, Ref.
CESR/10-123.

[387]            OJ No L178, 8.7.1988.

[388]            http://ec.europa.eu/internal\_market/capital/framework/index\_en.htm

[389]            This was in part due to a decline in Merger and
Acquisition activity.

[390]            Judgment in case C-171/08, Commission v Portugal, of 8/7/2010.

[391]            Case C-171/08, §49, see also e.g. joined cases
C-282+283/04, Commission v the Netherlands, §19.

[392]            Case C-171/08, §50, see e.g. cases C-367/98, Commission
v Portugal, §§45/46, C-483/99, Commission v France, §§40/41, C-463/00,
Commission v Spain, §§61/62, C-174/04, Commission v Italy, §§30/31.

[393]            Case C-171/08, 54-56, confirming case C-112/05,
Commission v Germany, §§45/46.

[394]            Case C-171/08, §60, see, inter alia, case C-112/05,
Commission v Germany, §50.

[395]            Case C-171/08, §64 ("settled case law"), see
e.g. cases C-463/00, Commission v Spain, §67, C-503/99, Commission v Belgium, §44, C- 483/99, Commission v France, §44.

[396]            Case C-171/08, §§65-67, confirming case C-98/01,
Commission v the United Kingdom (BAA), §§45-47.

[397]            Case C-171/08, §70, see cases C-174/04, Commission v Italy, §§36/37, C-274/06, Commission v Spain, §44.

[398]             Case C-171/08, §72 building on an analogy with energy
supply in case C-274/06, Commission v Spain, §38; see also e.g. cases C-326/07,
Commission v Italy, §69 and C-463/00, Commission v Spain, §71.

[399]                  Case C-171/08, §73, referring, inter alia, to case C-54/99, Église
de scientology, §17.

[400]            Case C-171/08, §74; see also cases C-326/07, Commission
v Italy, §48, C-207/07, Commission v Spain, §51.

[401]                  Report from the Commission to the Council on Review of the
transitional measures regarding theacquisition of agricultural real estate
foreseen in the Accession Treaty 2005; COM(2010)734 of 14/12/2010.

[402]            The Czech Republic, Slovakia, Hungary, Estonia, Latvia, Lithuania.

[403]            Decision 2010/792/EU of 20 December 2010.

[404]            OJ L 216, 20.08.2009, p. 76.

[405]            OJ L 056 , 06/03/2010, p. 8.

[406]            OJ L 84 of 31.3.2010, p. 52.

[407]            OJ L 186 of 20.7.2010, p. 44.

[408]            http://ec.europa.eu/internal\_market/publicprocurement/dpp\_en.htm

[409]            http://ec.europa.eu/internal\_market/publicprocurement/other\_aspects/index\_en.htm#social

[410]            http://ec.europa.eu/internal\_market/publicprocurement/modernising\_rules/evaluation/index\_en.htm

[411]            http://ec.europa.eu/internal\_market/publicprocurement/modernising\_rules/consultations/index\_en.htm

[412]            OJ L 255, 30.9.2005, p. 22.

[413]            OJ L 78, 26.3.1977, p. 17.

[414]            OJ L 77, 14.3.1998, p. 36.

[415]            Judgment of 21.04.2005, Case C-140/03 Commission v. Greece.

[416]            Communication of 19 May 2010, OJ C 129 of 19.5.2009, p.
1 and Communication of 14 December 2010, OJ C 337, p. 10.

[417]            More than 140 procedures had been handled in 2009, out
of which only 0.7% of the cases were non-conformity cases in the fields of
company law and anti-money laundering. In 2010, only 18.50% of the procedures
handled were non-conformity cases.

[418]            Decision of the Court of Justice of the European Union
of 24 June 2010, in case C-2009/478.

[419]            Directives 2004/109/EC and 2007/14/EC (Transparency
Directives), Directive 2003/58/EC (modification to the 1st Company
Law Directive), Directive 2005/56/EC (Cross-Border Mergers Directive),
Directive 2007/36/EC (Shareholders' Rights Directives) and Directives
2005/60/EC and 2006/70/EC (Anti-Money Laundering Directives).

[420]            In the context of the outsourcing, 8,500 pages have been
translated and analysed.

[421]            Directive 2005/60/EC, Directive 2006/70/EC and Directive
2007/63/EC.

[422]            Directives 2005/60/EC and 2007/60/EC.

[423]            Directive 2007/63/EC.

[424]            At the beginning of 2010, Belgium and Greece were late with the transposition of the Directive simplifying the 3rd and the 6th
Company Law Directives (2007/63/EC). Both Member States notified implementing
measures in 2010. The score of the transposition of the Shareholders' Rights
Directive (2007/36/EC) improved throughout 2010, and by the end of the year,
only five out of the 14 infringement cases existing at the beginning of the
year remained open (Belgium, France, Luxembourg, Spain and Sweden).

[425]            At the beginning of 2010, Belgium, France, Ireland and Spain had not implemented Anti-Money Laundering Directives (2005/60/EC and
2006/70/EC) and were pursued in the context of Article 260 of the TFEU. These
four Member States transposed the directives in 2010 before the relevant cases
were referred to the Court to ask for a penalty.

[426]            Directive 2010/76/EC
of the European Parliament and of the Council of 24 November 2010 amending
Directives 2006/48/EC and 2006/49/EC as regards capital requirements for the
trading book and for re-securitisations, and the supervisory review of
remuneration policies.

[427]            Directive 2009/109/EC of the
European Parliament and of the Council of 16 September 2009 amending
Council Directives 77/91/EEC, 78/855/EEC and 82/891/EEC, and Directive
2005/56/EC as regards reporting and documentation requirements in the case of
mergers and divisions.

[428]            France notified measures transposing Directive
2007/36/EC at the beginning of 2011.

[429]            OJ L 157, 9.6.2006, p.87.

[430]            COM (2010) 561 final.

[431]            OJ L 35, 6.2.2010, p. 15.

[432]            OJ L 240, 11.9.2010, p.6.

[433]            OJ L 15, 20.1.2011, p. 12.

[434]            COM(2010) 350 final.

[435]            Opinion 1/09. OJ C 220, 12.9.2009, p. 15–15.

[436]            OJ C 140,
29.5.2010, p. 22–23.

[437]            Council Regulation (EC) No 1083/2006 of 11 July 2006
laying down general provisions on the European Regional Development Fund, the
European Social Fund and the Cohesion Fund and repealing Regulation (EC) No
1260/1999 (OJ L 210, 31.7.2006, p. 25).

[438]            Regulation (EC) No 1080/2006 of the European Parliament
and of the Council of 5 July 2006 laying down general provisions on the
European Regional Development Fund and repealing Regulation (EC) No 1783/1999
(OJ L 210, 31.7.2006, p. 1).

[439]            Regulation (EC) No 1081/2006 of the European Parliament
and of the Council of 5 July 2006 laying down general provisions on the
European Social Fund and repealing Regulation (EC) No 1784/1999 (OJ L 210,
31.7.2006, p. 12).

[440]            Regulation (EC) No 1084/2006 of the European Parliament
and of the Council of 5 July 2006 laying down general provisions on the
Cohesion Fund and repealing Regulation (EC) No 1164/94 (OJ L 210, 31.7.2006, p.
79).

[441]            Council Regulation (EC) No 1698/2005 of 20 September
2005 on support for rural development by the European Agricultural Fund for
Rural Development (OJ L 277, 21.10.2005, p. 1).

[442]            Council Regulation (EC) No 1198/2006 of 27 July 2006 on
the European Fisheries Fund; (OJ L 223, 15.8.2006, p. 1).

[443]            Council Regulation (EC) No 1085/2006 of 17 July 2006
establishing an Instrument for Pre-Accession Assistance (IPA) (OJ L 210,
31.7.2006, p. 82).

[444]            In addition 17 programmes under IPA were adopted. The
following is focussed on ERDF and CF programmes.

[445]            Article 9 of Regulation (EC) No 1083/2006.

[446]            Regulation (EU) No 539/2010 of the European Parliament
and of the Council of 16 June 2010 amending Council Regulation (EC) No
1083/2006 laying down general provisions on the European Regional Development
Fund, the European Social Fund and the Cohesion Fund as regards simplification
of certain requirements and as regards certain provisions relating to financial
management - (OJ L 158, 24.6.2010).

                Commission Regulation
(EU) No 832/2010 of 17 September 2010 amending Regulation (EC) No 1828/2006
setting out rules for the implementation of Council Regulation (EC) No
1083/2006 laying down general provisions on the European Regional Development
Fund, the European Social Fund and the Cohesion Fund and of Regulation (EC) No
1080/2006 of the European Parliament and of the Council on the European
Regional Development Fund. (OJ L 248, 22.9.2010).

[447]            Regulation (EU) No 437/2010 of the European Parliament
and of the Council of 19 May 2010 amending Regulation (EC) No 1080/2006 on the
European Regional Development Fund as regards the eligibility of housing
interventions in favour of marginalised communities (OJ L 132, 29.5.2010)

[448]            Article 103 of Regulation (EC) No 1083/2006.

[449]            Article 23 of Regulation (EEC) No 4253/88 for the
1994-1999 periods; Article 39(1) of Regulation (EC) No 1260/1999 for the
2000-2006 period; Article 98 of Regulation (EC) No 1083/2006 for the 2007-2013
period.

[450]            Article 24 of Regulation (EEC) No 4253/88 for the
1994-1999 period; Article 39(3) of Regulation (EC) No 1260/1999 for the
2000-2006 period; Articles 99 to 100 of Regulation (EC) No 1083/2006 for the
2007-2013 period.

[451]            COM (2008)97 of 19 February 2008.

[452]            Articles 71 and 72 of Regulation (EC) No 1083/2006.

[453]            Regulation (EC) No 1082/2006 of the European Parliament
and of the Council on a European Grouping of territorial cooperation (OJ L 210,
31.7.2006, p. 19).

[454]            COM (2006) 9 and SEC (2006) 49.

[455]            "Action Plan" (COM (2008)97 of 19 February
2008).

[456]            Article 9(5) of Regulation (EC) No 1083/2006.

[457]            See section 5.2.

[458]            COM(2006)689
of 14.11.2006.

[459]            COM(2002)725
of 16.05.2003.

[460]            Proposal for a Council Directive
amending Directive 2008/9/EC laying down detailed rules for the refund of value
added tax, provided for in Directive 2006/112/EC, to taxable persons not
established in the Member State of refund but established in another Member
State (COM(2010)381final).

[461]            COM(2010)769 of 20 December 2010

[462]            COM(2009)325.

[463]            COM(2007)502.

[464]            Judgment of 4 March 2010, case C-197/08.

[465]            Judgment of 4 March 2010, case C-198/08.

[466]            Judgment of 4 March 2010, case C-221/08.

[467]            Judgment of 17 June 2010, case C-492/08.

[468]            Judgment of 28 October 2010, case C-49/09.

[469]            Judgment of 22 November 2010, case C-433/09.

[470]            (COM (2009)29).

[471]            COM(2006)823 of 19.12.2006.

[472]            Ruling of the Court of Justice in
case C- 311/08, Société de Gestion Industrielle SGI of 21.01.2010.

[473]            Ruling of the Court of Justice in case C-337/08, X Holding v.
Staatssecr. van Fin. of 25.02.2010.

[474]            Ruling of the Court of Justice in case C- 440/08, Gielen v.
Staatssecr. van Fin of 18.03.2010.

[475]            Ruling of the Court of Justice in case C-487/08, Commission v. Spain
of 03.06.2010.

[476]            Ruling of the Court of Justice in case C-105/08, Commission v.
Portugal of 17.06.2010.

[477]            COM(2006)823 of 19.12.2006.

[478]            Directive 2003/48/EC on taxation of income from savings (OJ L 157 p
38 of 26.06.2003).

[479]            When the diploma or the
professional qualifications in itself would be sufficient to exercise the profession
in the Member State of origin, the terminology used is "recognition of
professional qualifications"; that is the responsibility of the
Directorate General for Internal Market and recognition in this case is
regulated by binding provisions (notably Directive 2005/36/EC). When the
citizen is mainly interested in the recognition of the diploma itself,
especially for continuing studies, this is called academic recognition (TFEU,
Article 165, par. 2, second indent).

[480]            The Court of Justice has held that the field of
education is among those included in the scope of the Treaty under Article 12.
Inter alia, see the judgment of 11 July 2002 in the case C-224/98, D'Hoop,
grounds 29 to 32; judgment of 15 March 2005 in the case C-209/03, Bidar,
operative part. Article 12 (Article 18 TFEU) must be read in conjunction with
the provisions of the Treaty on citizenship of the Union, i.e. articles 17 (Article
20 TFEU) and 18 (Article 21 TFEU).

[481]            Another example is Council Directive 2000/78/EC of 27
November 2000 establishing a general framework for equal treatment in
employment and occupation. This Directive, which lays down a general framework
for combating discrimination on the grounds of religion or belief, disability,
age or sexual orientation, may apply in some questions related to education and
vocational training.Directive.

[482]            Judgment of the Court of 23 October 2007 in the joint
cases C-11/06 and C-12/06, Morgan and Bucher.

[483]            A second annual set of statistics was provided by Austria in December 2009 and a third one in November 2010.

[484]            To the same category (student rights toward the country
of destination) could be classified the issue of entry and residence permit for
students. As for the movement of students between Member States, the issue was
addressed initially by Directive 93/96/EC and recently by Directive 2004/38/EC.
As for the movement of students between a EU country and a third country to
which extends the application of Union programmes, the problems are often
resolved by the provisions governing the programme (mandatory or not). In cases
of other third countries, the solutions are given either by the provisions of
mutual agreements or by other instruments of the Union, which are the
responsibility of the Directorate General for Justice, Liberty and Security.

[485]            http://www.enic-naric.net/

[486]            See the Court of Justice's cases C-36/74 Walrave;
C-13/76 Donà; C-415/93 Bosman.

[487]            Regulation (EEC) 1612/68 of the Council of 15 October 1968 on freedom of movement for workers
within the Community.

[488]            See Cases C-184/99 Grzelczyk, paragraphs 31 to
33; C-85/96, Martinez Sala, paragraph 63; C-158/07 Förster,
paragraphs 37 to 43.

[489]            White paper on sport, 11 July 2007, COM (2007) 391
final.

[490]            http://ec.europa.eu/education/yom/wpguidance\_en.pdf

[491]            COM(2010)0003 final.

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0003:FIN:EN:PDF

[492]            COM (2009) 0708 final.

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2009:0708:FIN:EN:PDF

[493]            COM(2007) 754 final.

[494]            2009/C 296/02.

[495]            Commission Decision 2009/705/EC, OJ L 244, 16.9.2009, p.
21–24.

[496]            Regulation (EC) No 2006/2004 of the European Parliament
and of the Council of 27 October 2004 on cooperation between national
authorities responsible for the enforcement of consumer protection laws, OJ L
364 dates 9.12.2004.

[497]            Data extracted from the IT-tool used by the Network as
of 30 November 2010.

[498]            COM (2009) 336 final.

[499]            http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:003:0023:0029:EN:PDF

[500]            http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:004:0091:0093:EN:PDF

[501]            http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:170:0039:0048:EN:PDF

[502]            Communication from the Commission to the Council, the
European Parliament, the European Economic and social committee and the
Committee of the Regions on a new Animal Health Strategy for the European Union
(2007-2013) where “Prevention is better than cure”. COM(2007) 539 final.

[503]            The Council called on the Commission to evaluate the
current plant health acquis and to consider possible modifications to
it, and subsequently present a proposal for a Community plant health strategy.
The Commission has launched the evaluation, and is preparing a study.

[504]            Judgment of the Court of Justice of 23.4.2009 in case
C-331/07.

[505]            Judgment of the Court of Justice of 17.12.2009 in case
C-248/08.

[506]            Judgment of the Court of Justice of 10.9.2009 in case
C-416/07.

[507]            http://ec.europa.eu/food/food/chemicalsafety/contaminants/aflatoxin\_guidance0309\_en.pdf

[508]            http://ec.europa.eu/food/food/chemicalsafety/contaminants/guidelines-july\_2004\_en.pdf

[509]            http://ec.europa.eu/food/food/chemicalsafety/contaminants/guidance-sampling%20-whole-fish-with%20exemples-dec2006.pdf

[510]            http://ec.europa.eu/food/food/chemicalsafety/contaminants/report-sampling\_analysis\_2004\_en.pdf

[511]            Cases C-77/99 Gowan Comercio v; Commission, C-517/08P
Makhteshim-Agan Holding v. Commission.

[512]            COM(2008)824.

[513]            http://www.efsa.europa.eu/EFSA/efsa\_locale-1178620753812\_1211902019540.htm

[514]            http://www.efsa.europa.eu/cs/BlobServer/Statm\_of\_Efsa/sc\_statementej\_RN319\_en.pdf?ssbinary=true

[515]            http://www.efsa.europa.eu/en/scdocs/scdoc/1829.htm

[516]            OJ L 31, 1.2.2002, p. 1.

[517]            http://www.efsa.europa.eu/en/scdocs/scdoc/1570.htm

[518]            http://www.efsa.europa.eu/en/scdocs/scdoc/980.htm

[519]            OJ L 277, 20.10.1984, p. 12.

[520]            COM(2007)539final.

[521]            COM(2008)545final.

[522]            Regulation (EC) No 998/2003.

[523]            Regulation (EC) No 1760/2000.

[524]            TACES: TRAde Control and Expert System (a trans-European
network for veterinary health which notifies, certifies and monitors imports,
exports and trade in animals and animal products).

[525]            The legal basis of RASFF is Article 50 of Regulation
(EC) No 178/2002 of the European Parliament and of the Council laying down the
general principles and requirements of food law, establishing the European Food
Safety Authority and laying down procedures in matters of food safety, OJ L 31,
1.2.2002, p. 1.

[526]            Council Directive 2003/86 of 22 September 2003 on the
right to family reunification, OJ L 251, 3.10.2003, p. 12.

[527]            Council Directive 2003/109/EC of 25 November 2003
concerning the status of third-country nationals who are long-term residents,
OJ L 16, 23.1.2004, p. 44.

[528]            OJ L 261, 6.8.2004, p. 19.

[529]            Council Directive 2004/114/EC of 13 December 2004 on the
conditions of admission of third-country nationals for the purposes of studies,
pupil exchange, unremunerated training or voluntary service, OJ L 375, 23.12.2004,
p. 12.

[530]            Council Directive 2005/71/EC of 12 October 2005 on
a specific procedure for admitting third-country nationals for the purposes of
scientific research, OJ L 289, 3.11.2005, p. 15.

[531]            Council Directive 2009/50/EC of 25 May 2009 on the
conditions of entry and residence of third-country nationals for the purposes
of highly qualified employment, OJ L 155, 18.6.2009, p. 17.

[532]            Council Directive 2001/51 of 28 June 2001 supplementing
the provisions of Article 26 of the Convention implementing the Schengen
Agreement of 14 June 1985, OJ L 187, 10.7.2001, p. 45.

[533]            Council Directive 2002/90 of 28 November 2002 defining
the facilitation of unauthorised entry, transit and residence, OJ L 328,
5.12.2002, p. 17.

[534]            Directive 2009/52/EC of the European Parliament and of
the Council of 18 June 2009 providing for minimum standards on sanctions and
measures against employers of illegally staying third-country nationals, OJ L
168, 30.6.2009, p. 24.

[535]            COM(2005) 669 final.

[536]            Proposal for a Council Directive on a single application
procedure for a single permit for third-country nationals to reside and work in
the territory of a Member State and on a common set of rights for third-country
workers legally residing in a Member State, COM (2007) 638 final of 23.10.2007.

[537]            Presidency Conclusions, document EUCO 6/09. The
Programme itself is in document 17024/09.

[538]            COM(2010) 493 final.

[539]            Council Decision 2008/381/EC of 14 May 2008 establishing
a European Migration Network, OJ L 131, 21.5.2008, p. 7.

[540]            06.02.2003 Council Directive 2003/9/EC of 27
January 2003 laying down minimum standards for the reception of asylum seekers;
OJ L 031, 06.02.2003 p. 18 – 25.

[541]            30.09.2004 Council Directive 2004/83/EC of
29 April 2004 on minimum standards for the qualification and status of third
country nationals or stateless persons as refugees or as persons who otherwise
need international protection and the content of the protection granted;
OJ L 304, 30.09.2004 p. 12 – 23.

[542]            13.12.2005 Council Directive 2005/85/EC of 1
December 2005 on minimum standards on procedures in Member States for granting
and withdrawing refugee status OJ
L 326, 13.12.2005, p. 13.

[543]            20.07.2001 Council Directive 2001/55/EC of
20 July 2001 on minimum standards for giving temporary protection in the event
of a mass influx of displaced persons and on measures promoting a balance of
efforts between Member States in receiving such persons and bearing the
consequences thereof; OJ L 212, 07.08.2001, p. 12 – 23.

[544]            25.02.2003 Council Regulation (EC) No
343/2003 of 18 February 2003 establishing the criteria and mechanisms for
determining the Member State responsible for examining an asylum application
lodged in one of the Member States by a third-country national; OJ
L 50, 06.02.2003, p. 1 – 10.

[545]            15.12.2000 Council Regulation (EC) No
2725/2000 of 11 December 2000 concerning the establishment of 'Eurodac' for the
comparison of fingerprints for the effective application of the Dublin
Convention; OJ L 316, 15.12.2000,
p. 1 – 10.

[546]            29.05.2010 Regulation (EU) no 439/2010 of the European Parliament
and of the Council of 19 May 2010 establishing a European Asylum Support
Office; OJ L 132, 29.05.2010, p. 11- 28.

[547]                  23.1.204
Council Directive 2003/109/EC of 25 November 2003 concerning the status of
third-country nationals who are long-term residents Official Journal L 16,
23.1.2004, p. 44–53.

[548]            Regulation (EC) No 810/2009 of the European
Parliament and of the Council of 13 July 2009 establishing a
Community Code on Visas.

[549]            C(2010) 1620 final.

[550]            C(2010) 3667 final.

[551]            COM(2010) 554 final.

[552]            COM(2010) 624 final.

[553]            The Netherlands, Austria, Estonia, United Kingdom,
Cyprus, Greece, Luxemburg, Slovenia, Sweden, Lithuania, Latvia, Czech Republic,
Belgium, Poland, Finland, Germany and upon accession Bulgaria and Romania.

[554]            Directive 2004/38/EC of the European Parliament and of
the Council of 29 April 2004 on the right of citizens of the Union and their
family members to move and reside freely within the territory of the Member
States (OJ L 158 of 30 April 2004, p. 77).

[555]            COM(2008)840 final.

[556]            COM(2009)313 final.

[557]            Belgium, Bulgaria, Cyprus, Czech
Republic, Denmark, Ireland, Spain, France, Italy, Latvia, Hungary, Malta, Austria, Poland, Portugal, Romania, Slovak Republic, Slovenia, The Netherlands, Finland, Sweden, United Kingdom.

[558]            Report under finalisation.

[559]            COM(2010) 603 final

[560]            Council Directive 93/109/EC of 6 December 1993 laying
down detailed arrangements for the exercise of the right to vote and stand as a
candidate in elections to the European Parliament for citizens of the Union
residing in a Member State of which they are not nationals.

[561]            Council Directive 94/80/EC of 19 December 1994 laying
down detailed arrangements for the exercise of the right to vote and to stand
as a candidate in municipal elections by citizens of the Union residing in a
Member State of which they are not nationals.

[562]            Report on the election of Members of the European
Parliament (1976 Act as amended by Decision2002/772/EC, Euratom) and on the
participation of European Union citizens in elections for theEuropean
Parliament in the Member State of residence (Directive 93/109/EC); COM(2010)605

[563]            COM(2006)791Proposal for a Council Directive amending
Directive 93/109.

[564]            Communication from the Commission of 19 October 2010 on
the Strategy for the effective implementation of the Charter of Fundamental
Rights by the EU, COM/2010/0573 final, available at:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0573:FIN:EN:PDF

[565]            Proposal for a Council Decision No …/2010/EU authorising
enhanced cooperation in the area of the law applicable to divorce and legal separation,
COM(2010) 104 final/2 and Proposal for a Council Regulation (EU) implementing enhanced cooperation in the area of the law applicable to divorce and legal separation, COM(2010)105 final/2.

[566]            Council Decision 2010/405/EU of 12 July 2010 authorising
enhanced cooperation in the area of the law applicable to divorce and legal separation,
OJ L 189, 22.7.2010, p. 12.

[567]            Council Regulation N 1259/2010/EU of 20 December 2010
implementing enhanced cooperation in the area of the law applicable to divorce
and legal separation, OJ L 343, 3.12.2010, p. 10.

[568]            COM (2010) 748 final.

[569]            Commission Decision authorising Denmark to ratify the
1995 Unidroit Convention on Stolen or Illegally Exported Cultural Objects – Commission
Decision of 22.4.2010 authorising Denmark to ratify the Protocol to amend the
Convention on Third Party Liability in the Field of Nuclear Energy of 29 July
1960, as amended by the Additional Protocol of 28 January 1964 and by the
Protocol of 16 November 1982 – Commission Decision of 22.4.2010 authorising
Denmark to ratify the International Convention on Civil Liability for Bunker
Oil Pollution Damage, 2001 (the Bunkers Convention).

[570]            Commission's press release IP/09/1451.

[571]            Commission's press release IP/09/1032.

[572]            Luxembourg and Greece.

[573]            Czech Republic, Estonia, Poland and Slovenia.

[574]            See point 1 of the operative part of the Court's judgment of 3 June 2010.

[575]            Article 6 (1) reads: "Member States shall lay down
that unfair terms used in a contract concluded with a consumer by a seller or
supplier shall, as provided for under their national law, not be binding on the
consumer and that the contract shall continue to bind the parties upon those
terms if it is capable of continuing in existence without the unfair
terms."

[576]            E.g. Cases C-243/08 Pannon GSM, and C-40/08 Asturcom
Telecomunicaciones.

[577]            See point 3 of the operative part of the Court's
judgment of 9 November 2010.

[578]            Order of the Court of Justice of 16 November 2010, in
particular point 54 and point 1 of the operative part. This case is also
relevant from the point of view of the consumer credit legislation, which is in
the remit of DG SANCO.

[579]            See in particular C-40/08 Asturcom
Telecomunicaciones.

[580]            See, in particular, paragraphs 71 and 72, as well as
point 3 of the operative part.

[581]            Council Framework Decision 2005/214/JHA of 24 February
2005 on the application of the principle of mutual recognition to financial
penalties, OJ L 76/16 of 22.3.2005.

[582]            Council Framework Decision 2003/577/JHA of 22 July 2003
on the execution in the European Union of orders freezing property or evidence,
OJ L 196 of 2.8.2003, p. 45.

[583]            Article 6(1) reads: "Notwithstanding Article 2(2),
Member States may provide that differences of treatment on grounds of age shall
not constitute discrimination, if, within the context of national law, they are
objectively and reasonably justified by a legitimate aim, including legitimate
employment policy, labour market and vocational training objectives, and if the
means of achieving that aim are appropriate and necessary".

[584]            Council Regulation (EC) No 384/96 of 22 December 1995 on
protection against dumped imports from countries not members of the European
Community as amended; Council Regulation (EC) No 2026/97 of 6 October 1997 on
protection against subsidized imports from countries not members of the
European Community as amended; Council Regulation (EC) No 732/2008 of 22 July
2008 applying a scheme of generalised tariff preferences for the period from 1
January 2009 to 31 December 2011 as amended; Council Regulation (EC) No 3286/94
of 22 December 1994 laying down Community procedures in the field of the common
commercial policy in order to ensure the exercise of the Community's rights
under international trade rules, in particular those established under the auspices
of the World Trade Organization as amended; Council Regulation (EC) No 260/2009
of 26 February 2009 on the common rules for imports and Council Regulation
(EEC) No 2603/69 of the Council of 20 December 1969 establishing common rules
for exports.

[585]            OJ L 87, 31.3.2009, p. 164.

[586]            As an indication, the legal corpus in the field
of statistics comprises around 300 acts of secondary legislation, of which
about one third are basic acts, i.e. acts of the Council and/or of the EP.

[587]            Decision 1578/2007/EC of the European Parliament and the
Council of 11 December 2007 on the Community statistical programme 2008 to 2012
- Point 3.2 of Annex I – (OJ L 344, 28.12.2007, p. 15).

[588]            OJ L 18, 21.1.1997, p. 1–6

[589]            OJ L 14, 20.1.1998, p. 9–14

[590]            OJ L 131, 5.5.1998, p. 10–10

[591]            OJ L 244, 16.9.1999, p. 64–64

[592]            OJ L 167, 2.7.1999, p. 33–37

[593]            OJ L 302, 1.12.2000, p. 57–60

[594]            OJ L 299, 18.11.2003, p. 9–19

[595]            OJ L 195, 27.7.2005, p. 15–17

[596]            OJ L 327, 5.12.2008, p. 9-14

[597]            OJ L 254, 30.9.1994, p. 64–72

[598]            OJ L 365, 31.12.1994, p. 46–51

[599]            OJ L 363, 20.12.2006, p. 416–417

[600]            OJ L 294, 10.11.2001, p. 22–32

[601]            OJ L 207, 18.8.2003, p. 25–36

[602]            OJ L 80, 23.3.2002, p. 29–34

[603]            OJ L 206, 29.7.1991, p. 19–21

[604]            OJ L 288, 18.10.1991, p. 32–35

[605]            OJ L 216, 20.8.1994, p. 12–20

[606]            OJ L 225, 12.8.1998, p. 16–21

[607]            OJ L 283, 28.10.2008, p. 36-42

[608]            OJ L 82, 22.3.2001, p. 16–20

[609]            OJ L 183, 29.6.1989, p. 1

[610]            OJ L 393, 30.12.1989, p. 1

[611]            OJ L 260, 3.10.2009, p. 5

[612]            OJ L 393, 30.12.1989, p. 18

[613]            OJ L 156, 21.6.1990, p. 9

[614]            OJ L 156,21.6.1990, p. 14

[615]            OJ L 229, 29.6.2004, p. 23

[616]            OJ L 262, 17.10.2000, p. 21

[617]            OJ L 245, 26.8.1992, p. 6

[618]            OJ L 245, 26.8.1992, p. 23

[619]            OJ L 348, 28.11.1992, p. 9

[620]            OJ L 404, 31.12.1992, p. 10

[621]            OJ L 307, 13.12.1993, p. 1

[622]            OJ L131, 5.5. 1998, p. 11

[623]            OJ L177, 5.7. 1991, p. 22

[624]            OJ L 142, 16.6.2000, p. 47

[625]            OJ L 38, 9.2.2006, p. 36

[626]            OJ L 338 of 19.12.2009, p. 87

[627]            OJ L 23, 28.1.2000, p. 57

[628]            OJ L 177, 6.7.2002, p. 13

[629]            OJ L 42, 15.2.2003, p. 38

[630]            OJ L 184, 24.5.2004, p. 1

[631]            OJ L 114, 26.4.2008, p. 88

[632]            OJ L 114, 27.4.2006, p. 38

[633]            OJ L 134, 1.6.2010, p. 66

[634]            OJ L 113, 30.4.1992, p. 19

[635]            OJ L 330, 16.12.2009, p. 28

[636]            OJ L 165, 27.6.2007, p. 21

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