Recent Developments January 2017

News Update EU
16 januari 2017

Commission proposal on tougher privacy rules for telecoms and internet services

On 10 January 2017 the Commission announced its proposal for a regulation to ensure stronger privacy in electronic communications, while opening up new business opportunities. The proposed measures aim to update current rules, extending their scope to all electronic communication providers. They also aim to create new possibilities to process communication data and reinforce trust and security in the Digital Single Market. At the same time, the proposal aligns the rules for electronic communications with the new world-class standards of the EU's General Data Protection Regulation. According to the Commission there will be new business opportunities for telecoms operators to use data and provide additional services. For example, they could produce heat maps indicating the presence of individuals to help public authorities and transport companies when developing new infrastructure projects. According to the proposal users of any service will need to give companies permission to gather their data – and companies will have to remind them every six months that they’re still using it. Companies breaking new EU privacy rules can expect fines of up to €20 million or 4% of global turnover.

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AG Sharpston opinion on EU competence in free trade agreements

On 21 December 2016 AG Sharpston issued her opinion regarding the Free Trade Agreement between the EU and Singapore (the ‘EUSFTA’), which was initiated in September 2013. The EUSFTA is destined to be an agreement between the EU and the Republic of Singapore, without participation of the Member States. The Commission argued that the EU has exclusive competence to conclude the agreement. The Council and the governments of the Member States, on the other hand, contended that the EU cannot conclude the agreement on its own because certain parts of EUSFTA fall within the shared competence of the EU and the Member States. AG Sharpston agrees with this view and considers that the EUSFTA can only be concluded by the EU and the Member States acting jointly. She adds that the EU has no external competence to agree to be bound by that part of the EUSFTA which terminates bilateral agreements concluded between certain Member States and Singapore. In her view, that competence belongs exclusively to the Member States concerned. While the AG notes that difficulties may arise from a ratification process involving all of the Member States alongside the EU, she considers that that cannot affect the question of the competence to conclude the agreement. This opinion has been regarded as an important pointer towards Brexit and the trade agreements that the UK and the EU will have to conclude.

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Damages for excessive length of proceedings before General Court

On 10 January 2017 the Court of Justice of the European Union ("CJEU") decided that the EU has to pay damages to two German companies as a result of the excessive length of the proceedings before the General Court. The companies Gascogne Sack Deutschland and Gascogne brought actions before the General Court on 23 February 2006, seeking the annulment of a decision adopted by the Commission. The General Court dismissed those actions by judgments of 16 November 2011. The CJEU considered that the right to adjudication within a reasonable period was breached as a result of the excessive length of the proceedings. The proceedings lasted for more than five years and nine months and this cannot be justified by any of the specific circumstances of those cases. The period of 46 months between the end of the written part of the procedure and the opening of the oral part of the procedure showed an unjustified period of inactivity of 20 months. In particular, the CJEU notes that, in the field of competition law (a field which is characterised by a greater degree of complexity than that of other types of cases), a period of fifteen months between the end of the written part of the procedure and the opening of the oral part of the procedure generally constitutes an appropriate period. The judgment is important because it is the first case of its kind and may be a precedent for more damage actions. However, the amount of damages awarded was very limited; €57 000 is hardly worth the effort.

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Commission launches new initiative to improve health and safety of workers

On 10 January 2017 the Commission issued its action plan to promote Occupational Safety and Health in the EU. Following up on its commitment to continue to improve occupational health and safety, the Commission will undertake the following key actions: (i) Set exposure limits or other measures for another seven cancer-causing chemicals. This proposal will not only benefit workers' health, but also sets a clear objective for employers and enforcement authorities to avoid exposure. (ii) Help businesses, notably small and micro enterprises, in their efforts to comply with health and safety rules. (iii) The Commission will work with Member States and social partners to remove or update outdated rules within the next two years. The aim is to simplify and reduce administrative burden, while maintaining workers' protection.

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Entry into force of tax transparency rules

As of 1 January 2017, Member States are obliged to automatically exchange information on all new cross-border tax rulings that they issue. This is the result of Directive 2015/2376 regarding mandatory automatic exchange of information in the field of taxation. Aim is to ensure that where one Member State issues an advance tax ruling or transfer pricing arrangement, any other affected EU Member State may monitor the situation and the possible impact on its tax revenue. The information exchanged will be stored in a secure central depository, held by the European Commission and accessible to all EU Member States. All information will be kept confidential and may not be used for any purposes other than those required to determine whether and to what extent Member States comply with the Directive. Every six months national tax authorities will send a report to the depository, listing all the cross-border tax rulings that they have issued. Other Member States will then be able to check those lists and to ask the issuing Member State for more detailed information on a particular ruling. This first exchange should take place by 1 September 2017 at the latest. By 1 January 2018, Member States will also have to provide the same information for all cross-border rulings issued since the beginning of 2012.

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The Houthoff Buruma EU team is available at or +32 (0)2 507 98 00.

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