CELEX: 52018PC0083
Language: en
Date: 2018-03-02
Title: Proposal for a COUNCIL DECISION on the position to be adopted, on behalf of the European Union within the EEA Joint Committee concerning an amendment to Annex XXII (Company Law) and Protocol 37 (containing the list provided for in Article 101) to the EEA Agreement

EUROPEAN COMMISSION
            Brussels, 2.3.2018
            COM(2018) 83 final
            2018/0039(NLE)
            Proposal for a
            COUNCIL DECISION
            on the position to be adopted, on behalf of the European Union within the EEA Joint Committee concerning an amendment to Annex XXII (Company Law) and Protocol 37 (containing the list provided for in Article 101) to the EEA Agreement
            
               
         
         
            
               EXPLANATORY MEMORANDUM
            
            
               1.CONTEXT OF THE PROPOSAL
            
            
               •Reasons for and objectives of the proposal
            
            
               The draft Decision of the EEA Joint Committee (annexed to the proposed Council Decision) aims to amend Annex XXII (Company law) and Protocol 37 (containing the list provided for in Article 101) to the EEA Agreement in order to incorporate Regulation (EU) No 537/2014 on specific requirements regarding statutory audit of public-interest entities
                  1
                and Directive 2014/56/EU on statutory audits of annual accounts and consolidated accounts
                  2
               .
            
            
               The adaptations appearing in the draft of the annexed Decision of the EEA Joint Committee go beyond what can be considered mere technical adaptations in the sense of the Council Regulation No 2894/94.The Union position shall therefore be established by the Council.
            
            
               •Consistency with existing policy provisions in the policy area
            
            
               The annexed draft EEA Joint Committee Decision extends the already existing EU policy to the EEA EFTA States (Norway, Iceland and Liechtenstein).
            
            
               •Consistency with other Union policies
            
            
               The extension of the EU acquis to the EEA EFTA States, through their incorporation into the EEA Agreement is conducted in conformity with the objectives and principles of that Agreement, aiming at establishing a dynamic and homogeneous European Economic Area, based on common rules and equal conditions of competition. 
            
            
               2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
            
            
               •Legal basis
            
            
               The legislation to be incorporated into the EEA Agreement is based on Article 50 and 114 of the Treaty on the Functioning of the European Union.
            
            
               Article 1(3) of Council Regulation (EC) No 2894/94
                  3
                concerning arrangements for implementing the EEA Agreement provides that the Council establishes the position to be adopted on the Union’s behalf on such Decisions, on a proposal from the Commission. 
            
            
               The EEAS in cooperation with the Commission submits the draft Decision of the EEA Joint Committee for adoption by the Council as the Union’s position. The EEAS would hope to be able to present it in the EEA Joint Committee at the earliest possible opportunity.
            
            
               •Subsidiarity (for non-exclusive competence) 
            
            
               The proposal complies with the subsidiarity principle for the following reason. 
            
            
               The objective of this proposal, namely to ensure the homogeneity of the Internal Market, cannot be sufficiently achieved by the Member States and can therefore, by reason of the effects, be better achieved at Union level. 
            
            
               The process of incorporation of the EU acquis into the EEA Agreement is conducted in conformity with the Council Regulation (EC) No 2894/94 of 28 November 1994 concerning arrangements for implementing the Agreement on the European Economic Area which confirms the approach taken. 
            
            
               •Proportionality
            
         
         
            
               In accordance with the principle of proportionality, this proposal does not go beyond what is necessary in order to achieve its objective.
            
            
               •Choice of the instrument
            
            
               In conformity with Article 98 of the EEA Agreement, the chosen instrument is the EEA Joint Committee decision. The EEA Joint Committee shall ensure the effective implementation and operation of the EEA Agreement. To this end, it shall take decisions in the cases provided for in the EEA Agreement. 
            
            
               3.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
            
            
               •Ex-post evaluations/fitness checks of existing legislation
            
            
               Not applicable 
            
            
               •Stakeholder consultations
            
            
               Not applicable 
            
            
               •Collection and use of expertise
            
            
               Not applicable 
            
            
               •Impact assessment
            
            
               Not applicable 
            
            
               •Regulatory fitness and simplification
            
            
               Not applicable 
            
            
               •Fundamental rights
            
            
               Not applicable 
            
            
               4.BUDGETARY IMPLICATIONS
            
            
               There are no budgetary implications expected as a result of the incorporation of Regulation (EU) No 537/2014 on specific requirements regarding statutory audit of public-interest entities and Directive 2014/56/EU on statutory audits of annual accounts and consolidated accounts into the EEA Agreement.
            
            
               5.OTHER ELEMENTS
            
            
               •Implementation plans and monitoring, evaluation and reporting arrangements
            
         
         
            
               Not applicable 
            
            
               •Explanatory documents (for directives)
            
            
               Not applicable 
            
            
               •Detailed explanation of the specific provisions of the proposal
            
            
               References to ‘Union legislation’ contained in Regulation (EU) No 537/2014
            
            
               In line with Article 7 EEA, only acts that have been incorporated into the EEA Agreement are binding upon the EEA EFTA States. Therefore, adaptation (a) to Regulation (EU) No 537/2014 ensures that provisions reserving applicable Union legislation reflect that, in an EEA context, the legal framework of reference is the EEA Agreement and the acts incorporated therein.
            
            
               Articles 41 and 44 of Regulation (EU) No 537/2014
            
            
               Article 41 of the Regulation introduces transitional periods regarding the entry into force of the obligation to rotate statutory auditors and audit firms and to organise selection procedures for the choice of such auditors. As mentioned in the preamble to the Regulation, this transitional period is important “in order to ensure legal certainty and the smooth transition to the regime introduced by” the Regulation. These considerations apply equally to the EFTA States. However, since the Regulation will be incorporated into the EEA Agreement later than its entry into force in the EU, these transitional periods must be adjusted so as to ensure that undertakings established in the EFTA States benefit from the same adjustment period. Adaptation (b) therefore adjusts the dates in Article 41 to relate to the entry into force of the Joint Committee Decision incorporating the Regulation into the EEA Agreement.
            
            
               Article 44 of the Regulation delays by one year the entry into force of the prohibition of clauses restricting the choice of auditor by shareholders. For the reasons exposed above, mutatis mutandis, adaptation (c) therefore adjusts this date to relate to the entry into force of the present Joint Committee Decision. 
            
            
               Article 30c(3) of Directive 2006/43/EC
            
            
               In line with Article 7 EEA, only acts that have been incorporated into the EEA Agreement are binding upon the EEA EFTA States. The Charter of Fundamental Rights of the European Union is an instrument of the EU’s primary law which is not binding upon non-Member States and is not relevant in an EEA context. Therefore, adaptation (a) to Directive 2014/56/EU disapplies the reference to the Charter contained in Article 30c(3).
            
            
               However, the obligation made upon competent authorities that the publication of sanctions respects fundamental rights, and in particular the right to respect for private and family life and the right to the protection of personal data, remains as such applicable in the EEA.
            
            
               2018/0039 (NLE)
            
            
               Proposal for a
            
            
               COUNCIL DECISION
            
            
               on the position to be adopted, on behalf of the European Union within 
                  the EEA Joint Committee concerning an amendment to Annex XXII 
                  (Company Law) and Protocol 37 (containing the list provided for 
                  in Article 101) to the EEA Agreement
            
            
               THE COUNCIL OF THE EUROPEAN UNION,
            
            
               Having regard to the Treaty on the Functioning of the European Union, and in particular Article 50 and 114 in conjunction with Article 218(9) thereof,
            
            
               Having regard to Council Regulation (EC) No 2894/94 of 28 November 1994 concerning arrangements for implementing the Agreement on the European Economic Area
                  4
               , and in particular Article 1(3) thereof 
            
            
               Having regard to the proposal from the European Commission,
            
         
         
            
               Whereas:
            
            
               (1)The Agreement on the European Economic Area
                  5
                ('the EEA Agreement') entered into force on 1 January 1994.
            
            
               (2)Pursuant to Article 98 of the EEA Agreement, the EEA Joint Committee may decide to amend, inter alia, amend Annex XXII (Company law) and Protocol 37 (containing the list provided for in Article 101) to the EEA Agreement.
            
            
               (3)Regulation (EU) No 537/2014 of the European Parliament and of the Council
                  6
                is to be incorporated into the EEA Agreement.
            
            
               (4)Directive 2014/56/EU of the European Parliament and of the Council
                  7
                is to be incorporated into the EEA Agreement.
            
            
               (5)For the EEA Agreement to function well, Protocol 37 to the EEA Agreement is to be extended to include the Committee of European Auditing Oversight Bodies (CEAOB) set up by Regulation (EU) No 537/2014, and Annex XXII to the EEA Agreement is to be amended in order to specify the procedures for association with this Committee.
            
            
               (6)Annex XXII and Protocol 37 to the EEA Agreement should therefore be amended accordingly. 
            
            
               (7)The position of the Union within the EEA Joint Committee should therefore be based on the attached draft decision,
            
            
               HAS ADOPTED THIS DECISION: 
            
            
               Article 1
            
            
               The position to be adopted, on behalf of the Union, within the EEA Joint Committee on the proposed amendment to Annex XXII (Company law) and Protocol 37 (containing the list provided for in Article 101) to the EEA Agreement, shall be based on the draft decision of the EEA Joint Committee attached to this Decision.
            
            
               Article 2
            
            
               This Decision shall enter into force on the date of its adoption.
            
            
               Done at Brussels,
            
            
               
                     For the Council
               
               
                     The President
               
            
         
         
            
                  
                     (1)
                  
                        Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC, OJ L 158, 27.5.2014, p. 77.
               
               
                  
                     (2)
                  
                        Directive 2014/56/EU of the European Parliament and of the Council of 16 April 2014 amending Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts, OJ L 158, 27.5.2014, p. 196.
               
               
                  
                     (3)
                  
                        OJ L 305, 30.11.1994, p. 6–8
               
               
                  
                     (4)
                  
                        OJ L 305, 30.11.1994, p. 6.
               
               
                  
                     (5)
                  
                        OJ L 1, 3.1.1994, p. 3. 
               
               
                  
                     (6)
                  
                        Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC, OJ L 158, 27.5.2014, p. 77.
               
               
                  
                     (7)
                  
                        Directive 2014/56/EU of the European Parliament and of the Council of 16 April 2014 amending Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts, OJ L 158, 27.5.2014, p. 196.
               
            
      
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               EUROPEAN COMMISSION
            Brussels,2.3.2018
            COM(2018) 83 final
            ANNEX
            to the
            Proposal for a Council Decision 
            on the position to be adopted, on behalf of the European Union within the EEA Joint Committee concerning an amendment to Annex XXII (Company law) and Protocol 37 (containing the list provided for in Article 101) to the EEA Agreement
            
               
         
         
            
               ANNEX
               DECISION OF THE EEA JOINT COMMITTEE 
               
                  No 
               
                  amending Annex XXII (Company law) and Protocol 37 (containing the list provided for in Article 101) to the EEA Agreement
            
            
               THE EEA JOINT COMMITTEE,
            
            
               Having regard to the Agreement on the European Economic Area (“the EEA Agreement”), and in particular Article 98 thereof,
            
            
               Whereas:
            
            
               (1)Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC
                  1
               , as corrected by OJ L 170, 11.6.2014, p. 66, is to be incorporated into the EEA Agreement.
            
            
               (2)Directive 2014/56/EU of the European Parliament and of the Council of 16 April 2014 amending Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts
                  2
                is to be incorporated into the EEA Agreement.
            
            
               (3)For the EEA Agreement to function well, Protocol 37 to the EEA Agreement is to be extended to include the Committee of European Auditing Oversight Bodies (CEAOB) set up by Regulation (EU) No 537/2014, and Annex XXII to the EEA Agreement is to be amended in order to specify the procedures for association with this Committee.
            
            
               (4)Annex XXII and Protocol 37 to the EEA Agreement should therefore be amended accordingly,
            
            
               HAS ADOPTED THIS DECISION:
            
            
               Article 1
            
            
               Annex XXII to the EEA Agreement shall be amended as follows:
            
            
               1.The following is added in point 10f (Directive 2006/43/EC of the European Parliament and of the Council):
            
            
               ‘-32014 L 0056: Directive 2014/56/EU of the European Parliament and of the Council of 16 April 2014 (OJ L 158, 27.5.2014, p. 196).
            
            
               The provisions of the Directive shall, for the purposes of this Agreement, be read with the following adaptation:
            
            
               In Article 30c(3), as regards the EFTA States, the words “as laid down in the Charter of Fundamental Rights of the European Union” shall not apply.’
            
            
               2.The following is inserted after point 10i (Directive 2013/34/EU of the European Parliament and of the Council):
            
            
               ‘10j.32014 R 0537: Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC (OJ L 158, 27.5.2014, p. 77), as corrected by OJ L 170, 11.6.2014, p. 66.
            
            
               Modalities for the association of the EFTA States in accordance with Article 101 of the Agreement:
            
            
               The competent authorities of the EFTA States referred to in Article 32(1) of Directive 2006/43/EC shall have the right to participate fully in the Committee of European Auditing Oversight Bodies (CEAOB), under the same conditions as competent authorities of the EU Member States but without the right to vote. Members from the EFTA States shall not be eligible for the Chairmanship of CEAOB pursuant to Article 30(6).
            
         
         
            
               The provisions of the Regulation shall, for the purposes of this Agreement, be read with the following adaptations:
            
            
               (a)The words “Union or national legislation” shall be replaced by the words “the EEA Agreement or national legislation” and the words “Union or national law” shall be replaced by the words “the EEA Agreement or national law”.
            
            
               (b)In Article 41, as regards the EFTA States:
            
            
               (i)the words “17 June 2020” shall read “six years after the date of entry into force of Decision of the EEA Joint Committee No …/… of …[this decision]”;
            
            
               (ii)the words “17 June 2023” shall read “nine years after the date of entry into force of Decision of the EEA Joint Committee No …/… of …[this decision]”;
            
            
               (iii)the words “16 June 2014” shall read “the date of entry into force of Decision of the EEA Joint Committee No …/… of …[this decision]”;
            
            
               (iv)the words “as at 17 June 2016” shall read “two years after the date of entry into force of Decision of the EEA Joint Committee No …/… of …[this decision]”.
            
            
               (c)In Article 44, as regards the EFTA States, the words “17 June 2017” shall read “one year after the date of entry into force of Decision of the EEA Joint Committee No …/… of …[this decision]”.’
            
            
               Article 2
            
            
               The following point is added in Protocol 37 to the EEA Agreement:
            
            
               ’40.The Committee of European Auditing Oversight Bodies (CEAOB) (Regulation (EU) No 537/2014 of the European Parliament and of the Council).’
            
            
               Article 3
            
            
               The texts of Regulation (EU) No 537/2014, as corrected by OJ L 170, 11.6.2014, p. 66, and Directive 2014/56/EU in the Icelandic and Norwegian languages, to be published in the EEA Supplement to the Official Journal of the European Union, shall be authentic.
            
            
               Article 4
            
            
               This Decision shall enter into force on […], provided that all the notifications under Article 103(1) of the EEA Agreement have been made
                  3*.
            
            
               Article 5
            
            
               This Decision shall be published in the EEA Section of, and in the EEA Supplement to, the Official Journal of the European Union.
            
            
               Done at Brussels, .
            
            
               
                     For the EEA Joint Committee
               
               
                     The President
                     
                     
                     
                     The Secretaries
                     to the EEA Joint Committee
                  
            
         
         
            
                  
                     (1)
                  
                        OJ L 158, 27.5.2014, p. 77.
               
               
                  
                     (2)
                  
                        OJ L 158, 27.5.2014, p. 196.
               
               
                  
                     (3)
                  *
                        [No constitutional requirements indicated.] [Constitutional requirements indicated.]