This month, European news headlines were again dominated by the so-called “Brexit” campaign, which will determine whether Britain will remain within the European Union. On February 19, the Heads of State and Government of the Member States of the European Union reached an agreement on a new settlement for the United Kingdom in the European Union. The agreement takes the form of a Decision of the Heads of State and Government which will take effect after the United Kingdom has informed the European Council that it will remain a member of the European Union. After the summit, David Cameron, the British Prime Minister, announced that the UK will hold a referendum on its membership of the EU on Thursday June 23. He and his Cabinet formally agreed that the Government will campaign in favour of continued UK membership of the EU; but six Cabinet Ministers have chosen to back the “Brexit” campaign to leave the EU, after Cameron suspended the usual rule of “collective responsibility” for this referendum – a rule according to which members of the Government must normally support all cabinet decisions, no matter their personal views, or resign.
1. Atlantic Council launches EuroGrowth Task Force Initiative
On March 2, the Atlantic Council launched the new EuroGrowth Task Force Initiative, co-chaired by Ambassador Stu Eizenstat, of Covington, and former Commission President Jose Manuel Barroso. At the inaugural event, European Commission Vice President for Jobs, Growth, Investment and Competitiveness Jyrki Katainen delivered the keynote address. The aim of the Task Force is to examine the reasons for the persistent, 25-year growth deficit (on average over 1% of GDP annually) and slower job growth between the EU countries and the U.S., and to recommend policies to help Europe overcome these gaps. The Task Force will examine a number of areas, including capital markets, innovation and IP issues, and labor market flexibility. If you are interested in this work, and in particular in participating in the Task Force, please contact us. For Vice-President Katainen’s speech at the Atlantic Council, see here.
2. Digital Single Market Policy
On February 2, the European Commission also presented a draft Decision to coordinate the 470-790 MHz frequency band in the Union – see here. The growing demand for mobile data traffic caused by the consumption of video on mobile devices puts pressure on existing network capacity. Additionally, a new generation of network technologies (“5G”) will to go to market in the coming years and promises to drive a new cycle of technological innovation, including the so-called “Internet of Things”. In order to ensure a stable regulatory framework for these new technologies, the Commission intends to harmonise the use of frequency bands in the Union, and repurpose the 700 MHz band (694-790 MHz) for wireless broadband. Currently, the 700 MHz band is mainly used for TV-broadcasting services (so-called digital terrestrial television).
To that end, the proposal makes the distinction between two frequency bands:
- The sub-700 Mhz Band (470-694 MHz) would remain available as a priority for audio-visual distribution, including digital terrestrial television.
- The 700 MHz band (694-790 MHz) would be repurposed for wireless broadband by 2020, with harmonised technical conditions.
The 700 MHz band, together with the 800 and 900 MHz frequency bands, should boost network capacity for wireless broadband and prevent an over-saturation of the networks. The common deadline for 2020 allows for a transition period in which most radio equipment will be upgraded within the normal equipment renewal cycle, and ties in with the initial deployment of 5G technology.
Two Member States, France and Germany, have already authorised the use of the 700 MHz band for wireless broadband, while several other Member States have communicated their intention to do the same in the coming years.
On February 29, 2016, the text of the EU-U.S. Privacy Shield, the upcoming trans-Atlantic data-transfer framework between the EU and U.S., designed to replace the invalidated EU-U.S. Safe Harbor arrangement, was released by the U.S. Department of Commerce. The Department’s release coincided with the release of a draft adequacy decision by the European Commission. The Privacy Shield principles are more stringent in several regards than the previous Safe Harbor arrangement – notably, in enforcement, onward transfer and regular review. Specifically, the Privacy Shield principles expand notice and choice obligations; expand onward transfer requirements to contractors and service providers; provide for annual re-certification and reviews; expand remedies and enforcement; and lay down rules on when national security and law enforcement will have access to data.
The EU must now formally adopt the Privacy Shield Framework through the “comitology” procedure (more specifically, the “examination” procedure – for a brief outline of this procedure, see here). This will involve a non-binding opinion by the Article 29 Working Party (expected in April at the latest), a binding opinion by a qualified majority of the Article 31 Committee, and the formal adoption of the adequacy decision by the EU College of Commissioners. The procedure is expected to last until early summer. Both the European Parliament and the Council may request that the European Commission amend or withdraw the adequacy decision at any time before its formal adoption. Once the Framework is approved, the U.S. Department of Commerce has stated that it will be delivered to the Federal Register for publication within 30 days.
For a full analysis, and more information on the latest developments, we gladly refer you to our InsidePrivacy–blog.
3. Energy and Climate Change Policy
On February 16, the European Commission presented its energy security package for Europe. The package is a further step in the creation of an European Energy Union and presents a wide range of measures designed to strengthen the resilience of the EU to certain types of gas supply disruptions. Specifically, the package includes: (i) a proposal on safeguard measures for the security of gas supplies; (ii) a draft Decision on Intergovernmental Agreements in energy; (iii) an EU strategy for liquefied natural gas and gas storage; and (iv) an EU strategy on Heating and Cooling.
The proposal for a regulation concerning measures to safeguard the security of gas supply (repealing current Regulation 994/2010) proposes a shift from a national approach to a regional approach when designing security of supply measures. Among other things, it mandates regional emergency plans, under which information would automatically be transmitted to the Commission, which would have increased supervision powers. The proposal can be found here.
Additionally, the Commission has proposed a Decision establishing a mechanism for the exchange of information between Member States and the Commission for intergovernmental agreements in the field of energy. The objective of the Decision is to ensure transparency and compliance with EU law in intergovernmental energy agreements between Member States and third countries. Importantly, the proposed Decision requires Member States to inform the Commission of any ongoing negotiations and empowers the Commission to conduct an ex ante binding compatibility check of the agreements. The draft Decision is available here.
The Commission also proposed an EU strategy for liquefied natural gas (“LNG”) and gas storage, which is intended to prepare the EU for the developing global LNG market. The strategy is designed to address the lack of coherence among regions as regards access to LNG. For the complete text of the strategy, see here.
Finally, the energy security package includes an EU strategy on Heating and Cooling, which is intended to promote the use of renewable energies and energy efficiency in the building and industry sectors. Heating and cooling of buildings and industry consumes half of the EU’s energy and is 75% powered by fossil fuels. Among other things, the Strategy announces the Commission’s intention to present a proposal to amend the Renewable Energies Directive in 2016, and the review of the Energy Performance of Buildings Directive and Energy Efficiency Directive. In the context of the building sector, the strategy announces the Commission’s intention to examine new incentives to promote the uptake of smart energy systems, provide funding for energy efficiency works at buildings and properties, speed up the replacement of inefficient heating and cooling systems with more performant systems, and empower consumers on the consumption of heating and cooling. For the complete EU strategy on heating and cooling, see here.
4. Internal Market and Financial Services Policies
On February 10, EU Commissioner Jonathan Hill and Timothy Massad, Chairman of the U.S. Commodity Futures Trading Commission (“CFTC”), announced a common approach regarding requirements for central clearing counterparties (“CCPs”). CCPs are financial organizations that insure the parties’ credit risk during a financial transaction. The object of the agreement is to allow European CCPs to operate in the U.S. market and U.S. CCPs to operate in the EU market, by ensuring that both the EU and the U.S. CCPs recognise one another’s requirements. Indeed, on June 21, 2016, the first phase of mandatory clearing with recognised CCPs will take effect in the EU, creating a strong incentive to implement the common approach in time for this deadline.
The European Commission will shortly adopt an equivalence decision for the CFTC’s regime, to allow the European Securities and Markets Authority (“ESMA”) to recognise U.S. CCPs. Under the European Market Infrastructure Regulation, ESMA has up to 180 working days to conclude the recognition.
5. Life Sciences and Healthcare Policies
On February 17, the Environment Committee of the European Parliament voted on the proposal for a Regulation on veterinary medicinal products. The draft regulation overhauls the existing regulatory framework on medicinal products for veterinary use, including the authorization, manufacturing, marketing, distribution, drug safety, and use of veterinary medicinal products. Importantly, the Parliament wanted to strengthen the proposal to combat antibiotic resistance. It therefore supported provisions banning the prophylactic use of antibiotics and regulating the conditions under which veterinary medicine professionals are permitted to prescribe and sell antibiotics. The vote in plenary session is set to take place on March 10, 2016.
On February 9 and 10, 2016, the Dutch Presidency of the Council of the European Union hosted a Ministerial Conference on Antimicrobial Resistance (“AMR”). Commissioner Andriukaitis used the conference as a platform to present preliminary results of the evaluation of the 2011-2016 EU Action Plan against the Rising Threats from Antimicrobial Resistance.
For the coming years, the Commissioner emphasized three priorities. The first is to make the EU a best practice region in the field of AMR. The Commission will therefore develop, among other things, a “One Health” AMR Network, to bring together experts from Member States in the veterinary, human health and environmental sectors. The Commission will also adopt EU harmonized guidelines on the prudent use of antimicrobials in human medicine by the end of 2016.
The second priority is a stronger push for innovation and research aimed at developing rapid diagnostic tests and vaccines, through close cooperation with Commissioner Carlos Moedas (in charge of Research, Science and Innovation) and with the European Medicines Agency.
The third priority is to enhance EU international action and added value on AMR. The Commissioner will continue to work bilaterally and multilaterally to increase the number of measures taken to tackle AMR.
6. Trade Policy and Sanctions
On February 10, the European Union launched a public consultation on how to respond to the expiry of certain provisions of the Accession Protocol to the WTO of the People’s Republic of China. As explained in our last newsletter – available here – on December 11, 2016, these provisions will expire, which may result in a change in the methodology used to establish dumping practices in trade defence investigations regarding the People’s Republic of China. The consultation will run for ten weeks and the results will be used by the Commission to identify to most suitable regulatory and non-regulatory actions. In addition, a stakeholder conference will be organised in mid-March. Meanwhile, on February 12, the European Commission opened new anti-dumping investigations into the import of three steel products originating from China. The EU now has 37 trade defence measures in place and nine ongoing investigations on imports of steel products originating from China.
On February 22-26, 2016, the U.S. and the EU held the 12th round of talks on the Transatlantic Trade and Investment Partnership (“TTIP”). In a press conference following the talks, Chief Negotiators Ignacio Garcia Bercero (EU) and Dan Mullaney (U.S.) underscored that each party remains committed to negotiating an ambitious, high standard agreement. During these rounds, the EU and the U.S. each tabled new proposals on regulatory cooperation, both in manufacturing and in services. These proposals included public procurement, but notably did not include geographic indicators. The negotiating teams also discussed investor-state dispute settlement (“ISDS”), which had been excluded from previous rounds. This comes after the Commission released a negotiating text on investment protection. Notably, the U.S. tabled two texts on labor and on the environment, and proposed making adherence to high labor and environmental standards enforceable under TTIP.
The Chief Negotiators announced that, starting with the next round, the negotiating teams would begin finalizing the TTIP text, which they expect to have nearly completed by July and finalized by the end of 2016. Additionally, in line with the conclusion of the 12th round, the Commission published a table of TTIP documents shared with Member States and the European Parliament – including EU legal and non-legal texts, position papers, and joint EU-U.S. documents, many of which are available online. For the Commission’s updates on the status of TTIP negotiations, see here. For EU Chief Negotiator Bercero’s statement, see here.