Documents considered by the Committee on 13 November 2017 Contents

6Compliance package: Action plan on the reinforcement of SOLVIT

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; further information requested; drawn to the attention of the Business, Energy and Industrial Strategy Committee

Document details

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Action plan on the Reinforcement of SOLVIT: Bringing the benefits of the Single Market to citizens and businesses

Legal base

Department

Business, Energy and Industrial Strategy

Document Number

(38697), 8770/17 + ADD 1, COM(17) 255

Summary and Committee’s conclusions

6.1The European Commission’s 2015 Single Market Strategy expressed concern at the inconsistent procedures available to people and companies seeking to exercise their rights within the EU, and the inadequate enforcement of existing Single Market rules. These factors prevent companies from selling their products elsewhere in the EU and make it more difficult for citizens to exercise their rights in the same way as locals.

6.2To tackle these deficiencies of the Single Market, on 2 May the European Commission adopted a package of legislative and non-legislative measures designed to improve compliance, which are collectively referred to as the Compliance Package. This package includes an action plan for the reinforcement of the SOLVIT network—a group of centres in each member state which work with each other and national authorities to informally resolve disputes that arise as a result of a decision issued by an authority or regulator that affects the EU free movement rights of EU businesses and citizens.

6.3The Action Plan includes the following recommendations and commitments:

6.4The Minister believes the Commission’s Action Plan will improve the functioning of SOLVIT as a Single Market enforcement tool, and particularly welcomes plans to improve the legal support provided to SOLVIT Centres and to use the evidence of SOLVIT cases to inform future policy and enforcement measures.

6.5However, the Minister indicates that the Government believes the proposals “should go further”. To this end, he says that the Government would support “an improvement in the interaction with Commission services, CHAP (the Commission’s register of complaints and enquiries), and Pilot and national SOLVIT Centres”; “a connection between SOLVIT and the Commission for the follow-up of unresolved cases and systemic problems”; and “including problems repeatedly raised in SOLVIT cases on the agenda of the relevant Council Working Party so that real, long-term solutions can be found”.

6.6The SOLVIT Action Plan, combined with other elements of the Compliance Package, attempts to tackle longstanding UK concerns about the implementation and enforcement of Single Market rules. The Committee notes the Government’s in principle support for the Action Plan and its desire, which is shared by other Member States, for the proposed actions to be more ambitious.

6.7In relation to Brexit, the Minister states that “involvement in the SOLVIT network after EU exit has yet to be determined” but acknowledges that “effective enforcement of the Single Market will remain important for UK businesses”.

6.8Given that the Government intends to leave the Single Market, the terms of trade between the UK and the EU may alter significantly at the moment of exit, as the UK becomes a third country. The legal changes that arise as a consequence of this change in status are likely to lead to increased demand for cross-border support of the type provided by the SOLVIT network in the short to medium-term, particularly where they affect cross-border trade and employment.

6.9There is a strong incentive for the Government to ensure that this demand is met: if it is not, there is a risk that UK businesses which are obstructed by public authorities in EU Member States will choose to relocate part of their operations abroad in order to access the market directly, even when this is not legally necessary. The same issues would appear to apply to EU businesses operating in the UK.

6.10We therefore ask the Minister to explain what action the Government intends to take to address these concerns, by responding to the following questions:

6.11We ask for responses to each of these questions as well as an update on progress in working groups by 6 December 2017, or earlier if there is any prospect of political agreement being reached before then, whether in working parties, COREPER or the Council. In the meantime we retain this proposal under scrutiny and draw it to the attention of the Business, Energy and Industrial Strategy Select Committee.

Full details of the documents

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Action plan on the Reinforcement of SOLVIT: Bringing the benefits of the Single Market to citizens and businesses: (38697), 8770/17 + ADD 1, COM(17) 255.

Background

SOLVIT

6.12SOLVIT, as set out in a 2013 Commission Recommendation, is an informal alternative to other problem-solving mechanisms, such as national court procedures, formal complaints to the Commission and petitions. SOLVIT is a free of charge service provided since 2002 by the national administration in each EU Member State and in the EFTA states that are members of the EEA (Iceland, Liechtenstein and Norway).39 SOLVIT works under short deadlines and provides solutions to EU/EEA citizens and businesses when they are experiencing difficulties with having their EU rights recognized by public authorities, particularly while moving or doing business across borders within the EU. SOLVIT deals with all cross-border problems relating to the four freedoms of movement (persons, goods, services and capital) including policies closely linked to them (such as taxation, employment, social policy and transport).

6.13To resolve problems, SOLVIT centres cooperate with each other via an online database. SOLVIT cases are handled by two centres: the Home centre prepares the case together with the client, and the Lead centre deals with the authority that took the decision at stake. Home centres should give a first response to applicants within seven days. Once a Home centre has accepted a case it analyses it thoroughly and prepares it to be sent to the Lead centre. In order to do so it has to gather relevant documents and information from the applicants. The deadline for doing so is fixed at 30 days. Lead centres should solve the cases submitted to them within 70 days.

The Single Market Strategy

6.14The European Commission’s Single Market Strategy included the objective to “Ensure a culture of compliance and smart enforcement to help deliver a true Single Market”.40

6.15The Strategy defined this challenge as follows:

Despite the overall success of the Single Market, significant obstacles remain for citizens and businesses to make the most of it. Citizens interested in moving to another country and businesses wanting to sell products or provide services cross-border still encounter problems.

At the moment, people and companies wanting to live, work or do business in another EU country find it difficult to find online the information they need in order to meet local requirements. Even when existing national and EU services offer information and assistance, it is fragmented, incomplete and of varying quality. Procedures that are online in some EU countries are not accessible to users from another EU country. As a result, users cannot exercise their rights in the same way as locals.

Another reason why many of the opportunities that the Single Market offers are not a reality is that EU law has not been fully implemented or enforced. In mid-2015, around 1,090 infringement proceedings were pending. Non-compliance weakens the Single Market’s potential and lowers citizens’ confidence in it. Enforcement of the Single Market includes national authorities ensuring that products are safe and comply with the rules. There are still too many unsafe and non-compliant products sold in the EU market, which puts compliant businesses at a disadvantage and endangers consumers. In several areas, the principle of mutual recognition which ensures that goods that are lawfully marketed in one EU country enjoy the right to free movement and can be sold in another EU country is not being applied. This prevents companies, especially SMEs, from selling their products elsewhere in the EU.41

6.16To tackle these challenges, the Commission states in the Strategy that it “is taking important steps to encourage a culture of good government, compliance and enforcement by improving services and assistance for citizens and businesses interested in grasping the opportunities available in the biggest market in the world.”

The Compliance Package

6.17On 2 May 2016, in order to achieve these objectives, the Commission adopted a Compliance Package, whose elements comprise:

6.18The Commission also intends to “strengthen the market surveillance mechanism to detect unsafe and non-compliant products and to remove them from the EU market” and to “reinforce the application of the mutual recognition principles.”

The Minister’s letter of 10 July 2017

6.19In his analysis of the policy implications of the proposal for the UK given its imminent exit from the European Union, the Parliamentary Under-Secretary of State (Lord Prior) states:

“While the UK’s involvement in the SOLVIT network after EU exit has yet to be determined, effective enforcement of the Single Market will remain important for UK businesses.”

6.20The Government is supportive of the need for EU action in this area:

“We welcome the Commission’s Action Plan as providing some improvements to the functioning of SOLVIT as an important Single Market enforcement tool. Of note are the Commission’s plans to improve the legal support provided to SOLVIT Centres, and to use the evidence of SOLVIT cases to inform future policy and enforcement measures.”

6.21However, the Minister indicates that the Government would prefer a higher degree of ambition:

“…we would agree with many other Member States that the Commission proposals should go further. Additional actions would address more effectively problems that are outside of SOLVIT Centres’ scope, or situations they are unable to influence satisfactorily, such as:

Previous Committee Reports

None.





20 November 2017