9 Interconnection of business registers
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15801/09
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COM(09) 614
| Commission Green Paper: The interconnection of business registers
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| Legal base | — |
| Document originated | 4 November 2009
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| Deposited in Parliament | 11 November 2009
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| Department | Business, Innovation and Skills
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| Basis of consideration | EM of 24 November 2009
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| Previous Committee Report | None
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| To be discussed in Council | No date set
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
9.1 According to the Commission, the current crisis has highlighted
the importance of transparent financial markets, and it points
out that business registers play an essential role in providing
up-to-date and official information on companies. It also says
that, although they may offer additional standards (which may
vary from one country to another), the minimum standards of the
core service are set out in Directive 68/151/EEC (as amended),
with Member States now having in particular to maintain electronic
business registers since 1 January 2007. However, it notes that
registers operate on a national or regional basis, and only store
information on companies registered in the territory where they
are competent, whereas businesses are increasingly expanding beyond
national borders to take advantage of the single market, in addition
to which rulings by the European Court of Justice have increased
the opportunities for a business to incorporate in one Member
State and to conduct its activity partly or entirely in another.
9.2 Against this background, the Commission says
that, in order to facilitate cross-border access to official information,
there is a need to ensure an appropriate degree of transparency
and legal certainty in markets all over the Community, and that
the cross-border cooperation of business registers is essential
to achieve this. It has therefore sought in this Green Paper to
consider ways in which this might be achieved in relation to two
distinct but related purposes — access to information, and
cooperation on cross-border procedures (involving issues such
as mergers, seat transfers, or insolvency).
The current document
Existing cooperation mechanisms
9.3 The Commission notes that, despite the introduction
of electronic registers, it is still necessary to search at least
27 sources to gather the relevant business information on companies,
and that, even if this is available, searchers have to deal with
different languages, search conditions, and structures. It therefore
suggests that a single access point to information on all European
companies could save time and costs, and that it should be possible
to access reliable information on companies in all Member States,
preferably in all the Community's official languages, and to search
for information on companies active in different Member States
without having to access the relevant national registers one-by-one.
The Commission also points out that the interconnection of business
registers can strengthen cooperation in cross-border procedures
such as mergers or insolvency proceedings, this being required
under a number of company law instruments, notably the Directive
on cross-border mergers (2005/56/EC) and the Statutes for a European
company (Regulation (EC) No 2001/2157) and a European Cooperative
Society (Regulation (EC) No 2003/1435).
9.4 The Commission next identifies the existing mechanisms
for cooperation. These include the European Business Register
(EBR) initiative, which is a voluntary project undertaken by business
registers on a contractual basis (the Information Sharing Agreement)
with the support of the Commission, and which currently combines
registers from 18 Member States (including the UK),[26]
with the aim of offering reliable information, and allowing searches
for a company name. At the same time, the Commission points that
this informal approach has limitations, notably the difficulty
of expanding the network, and the fact that cooperation is limited
to facilitating cross-border access to company information, but
does not address the issue of cooperation in cross-border procedures.
It says that, as a result, some participants in the EBR have launched
a research initiative — Business Register Interoperability
Throughout Europe (BRITE) — funded largely by the Commission,
in order to promote inter-connection, but it observes that, since
this was a research project, its results have so far been implemented
in only a few countries in order to test their functionality.
9.5 Finally, the Commission refers to two other instruments
used in this area. One is the Internal Market Information System,
which aims to improve administrative cooperation between Member
States in relation to the functioning of internal market legislation
(and which is currently used in relation to the Professional Qualification
Directive (2005/36/EC), and will shortly be extended to the Services
Directive (2006/123/EC)). The other is the e-Justice initiative,
aimed at facilitating access to legal information, legal and administrative
institutions, registers, databases, and other sources within the
European justice project.
The way forward
9.6 The remainder of the Green Paper seeks to identify
possible ways forward, and it invites interested parties —
including Member States, the European Parliament, and the Economic
and Social Committee — to submit views by 31 January 2010,
in order to establish a broad consensus, following which the Commission
proposes to take a decision on the next steps.
9.7 In the case of access to information, it says
that, whilst building on the results of the EBR is reasonable
given the current participation by 18 Member States, its extension
to all 27 Member States is necessary, but difficult to achieve
by regulatory means because of the predominantly private nature
of the cooperation involved. It suggests that a possible approach
would be to lay down a requirement for all business registers
in the Community to be connected, but to leave Member States free
to decide how such a network is set up and what terms and conditions
should apply, perhaps through a "governance agreement".
In the longer term, it suggests that the network of business registers
could be connected with the electronic network set up under the
Transparency Directive (2004/109/EC), which could lead to the
creation of a single access point for all financial and legal
information.
9.8 In the case of cross-border mergers and seat
transfers, the Commission suggests that there are essentially
three options — to use the results of the BRITE project,
and designate or establish an entity in charge of maintaining
the necessary services extended to all Member States, to use the
Internal Market Information System by extending it to new areas
of Community legislation, or to adopt a combination of the two.
It then identifies a number of factors which need to be taken
into account, before inviting interested parties to express a
preference, or to put forward any cost-effective alternatives.
The Government's view
9.9 In his Explanatory Memorandum of 24 November
2009, the Minister for Business and Regulatory Reform at the Department
of Business, Innovation and Skills (Ian Lucas) says that the UK
supports work to improve the interconnection of registries which
will aid access to information (whether for private individuals,
companies or other registries), and that this will be particularly
useful in
- helping Member States to meet
cross-border communication requirements as set out in legislation
such as the Statute for a European Company, the Cross-Border Mergers
Directive, and the proposal for the European Private Company;
- helping to provide a range of information about
UK companies across Europe;
- encouraging registries to work together to consider
issues such as the identification of disqualified directors across
borders;
- encouraging Member States to participate in the
Branch Disclosure Service, which exchanges information between
different Member State registries about the status of parent companies.
9.10 He adds that the UK would like this work to
benefit all Member States without duplicating existing efforts,
and that its preference therefore is to build on the work of the
EBR and encourage more member states to join, on the grounds that
this would allow flexibility in seeking a range of information
from registries, and is currently the main route for inter-registry
communications. At the same time, the UK recognises the important
role of IMI in allowing interconnection on specific matters.
9.11 The Minister concludes by saying that any proposals
for governance agreements will be looked at closely to ensure
that they achieve their objective without subjecting Member States
to undue burdens. In the meantime, the UK will work closely with
the Commission as its ideas progress on this issue.
Conclusion
9.12 Given the increasing extent to which companies
operate in different Member States, and the current difficulties
of obtaining information about them, it clearly makes sense to
explore ways of facilitating cross-border access, given in particular
the greater need for transparent financial markets. To that extent,
this Green Paper provides a useful over-view of the current position,
and, although it is at this stage essentially seeking views from
interested parties, it suggests a number of steps which might
be taken. We therefore think it right to draw it to the attention
of the House, but, since any follow-up action will be the subject
of a further document, we see no need to withhold clearance.
26 It also involves Guernsey, Jersey, the former Yugoslav
Republic of Macedonia, Norway, Serbia and Ukraine. Back
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