CELEX: 51989PC0528
Language: en
Date: 1989-11-16
Title: RE-EXAMINED PROPOSAL FOR A COUNCIL DIRECTIVE ON COMPANY LAW CONCERNING DISCLOSURE REQUIREMENTS IN RESPECT OF BRANCHES OPENED IN A MEMBER STATE BY CERTAIN TYPES OF COMPANIES GOVERNED BY THE LAW OF ANOTHER STATE

COMMISSION OF THE EUROPEAN COMMUNITIES
                                              COM (89) 528 final - SYN 63
                                              Brussel, 16 November 1989
                    Re-examined proposal for a
                         COUNCIL DIRECTIVE
                     on company law concerning
               disclosure requirements In respect of
               branches opened In a Member State by
                certain types of companies governed
                    by the law of another State
    (presented by the Commission pursuant to Article 149.2(d)
                        of the EEC Treaty)
 ---pagebreak---                                         - 2 -
                                                                    LVvw   ïi8,i
                                 Revised proposal for a
                                    CounclI Direct !ve
                               on company law concerning
                       disclosure requirements in respect of
                        branches opened In a Member State by
                        certain types of companies governed
                             by the iaw of another State
                    (Submitted by the Commission to the Council
                          on the basis of Article 149 (2d)
                                   of the EEC Treaty)
      Explanatory memorandum
      1.   On 29 July 1986 the Commission transmitted         to the Council  the
           abovementloned proposal for a Direct Ive.<1)
      2.   The European Parliament and the Economic and Social Committee
           delivered   their opinions on        18 November     1987< 2 ) and   24
                           (3)
           September 1987       respectively.
      3.   On   5 April     1988     the Commission    transmitted   an   amended
           proposal(4) to the Council, incorporating the substance of the
           changes requested by Parliament. The Council's Working Party on
           Economic Questions (establishments and services) examined that
           proposal in three readings from November 1988.
      4.   The Council adopted a Common Position on 16 May 1989,(5) for
           which it Indicated Its grounds/ 6 ) and on which the Commission
           formulated its observât Ions.*7*
      5.    In accordance with the coopération procedure, the European
           Parliament gave the proposal a second read   reading eft 13 September
           1989 and voted in favour of eight amendments
                                                            I
   (1) OJ No. C 20$, 12.8.1986, p. t2.
   (2) OJ No C 345, 21.12.1987, p. 1*
   (3) OJ NO C 319, 3t.11.1987, p. 61.
   (4) OJ No C 105, 2t.4.1988, p. f.
   (5) Council Document 6346/89, 11 May f989L
   (6) Council Document 6346/89 Add. 1, 11 May 1989
   (7) SEC(89)739 SYN 63, 18 May 1989.
|  (8) EP Doc. 133.773, 13 September 198Ô.
ir
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6. The Commission has been able to accept the following amendments
   Involving improvements to the wording:
   (a) the first amendment, which adds the words "not ieast" to the
   fifth recital;
   (b) the second amendment, which, in the sixth recital, stresses
   the possibility of comparing the economic and social influence
   of a branch with that of a subsidiary company;
   (c) the fourth amendment, which refers in Article 3 not only to
   the auditing and disclosure of accounting documents, but also to
   their being drawn up In accordance with the various accounting
   direct ives.
   (d) the third and the fifth amendments which refer          to the
   existence of other branches In the same Member State.
7. The Commission has rejected the   sixth, seventh and eighth
     amendments.
   As for the branches of third-country companies, the Member
   States may still request additional        information since the
   Directive's provision on that matter is of a minimal nature.
   This is the reason for the rejection of the sixth amendment,
   which would allow the Member State to demand the signature of
   certain persons having power of representation.
   The seventh amendment aims to enable the Member States, in the
   case of the non-compliance or non-equivalence of the accounts of
   a third-country company, to require not only the drawing up and
   disclosure of accounts limited to the branch's activity but also
   their audit. However, no equivalent requirement exists in the
   comparable rules concerning the branches of third-country credit
    institutions (Directive 88/117/EEC, Article 3 ) . It would seem
    indefensible to impose stricter requirements on the branches of
    industrial and commercial companies.
   Under the eighth amendment, where the accounting documents of
   third-country companies do not fully comply in every detail with
   the directives, despite being equivalent in principle, all
   differences would have to be expressly indicated at the time of
   disclosure. Moreover, the fact that they have not been audited
   would also have to be stated. The Commission considers that the
   equivalence criterion was introduced specifically to avoid
    Insisting on absolute conformity with the accounting directives.
   A substantial comparability of accounting documents was more
   what It had In mind. As for the question of auditing, it is easy
   to tell when accounts have not been audited by the mere fact
   that they do not bear any Indication to that effect.
 ---pagebreak---                                         4 -
                               Revised proposai for a
                                  CounclI Direct ive
                             on company iaw concerning
                       disclosure requirements in respect of
                       branches opened in a Member State by
                        certain types of companies governed
                            by the law of another State
COMMON POSITION OF THE COUNCIL            REVISED PROPOSAL OF THE COMMISSION
                                          5th recital
5th recital
                                          Whereas     in    this    field     the
Vnereas     n     this    field     the   difference In the laws of the
difference in the laws of the             Member States may interfere wlxh
Member States may interfere with          the exercise of the right of
the exercise of the right of              establishment;     whereas     It    is
establishment;     whereas     It    is   therefore necessary to eliminate
therefore necessary to eliminate          such differences, not        least in
such   differences      in order     to   order to safeguard the exercise of
safeguard the exercise of that            that right;
right;
                                          6th recital
6th recital
                                          Whereas to ensure the protection
Whereas to ensure the protection          of persons who deal with companies
of persons who deal with companies        through     the    Intermediary      of
through    the     Intermediary      of   branches, measures in respect of
branches, measures in respect of          disclosure are required in the
disclosure are required        in the     Member State in which a branch is
Member State in which a branch Is         situated; whereas the economic and
situated; whereas to effect such          social Influence of a branch may
disclosure it Is necessary to make        be   comparable     to   that   of    a
use   of   the   procedure     already    subsidiary company, so that to
instituted    for    companies    with    that extent the public interest in
share     capital       within      the   disclosure is comparable; whereas
Community;                                to effect such disclosure it is
                                          necessary    to make use of the
                                          procedure already Instituted for
                                          companies     with    share    capital
                                          within the Community;
                                          Article 2(1)(e#)(new)
Article 2
                                          (ea)    the    existence    of    other
                                          teranches In the same Member State
                                                          ^
 ---pagebreak--- Article 3                            Article 3
The compulsory disclosure provided   The compulsory disclosure provided
for by Article 2(1)(g) shall be      for by Article 2(1)(g) shall be
limited     to     the   accounting  limited     to    the    accounting
documents    of   the  company   as  documents of the company as drawn
audited and disclosed pursuant to    up, audited and disclosed pursuant
the law of the Member State by       to the law of the Member State by
which the company is governed in     which the company is governed in
accordance      with     Directives  accordance      with     Directives
78/660/EEC,      83/349/EEC     and  78/660/EEC,      83/349/EEC     and
84/253/EEC.                          84/253/EEC.
                                     Article 8(da) (new)
Article 8
                                     (da)   the   existence   of   other
                                     branches in the same Member State.
   The  other recitals and articles remain unchanged.
                                                                         -t
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                                                                       ISSN 0254-1475
                                                                COM(89) 528 final
                                                        DOCUMENTS
   EN                                                                              06
                                   Catalogue mapber : CB-CO-89-480-EN-C
                                                                ESBN 92-77-53987-9
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