COUNCIL OF THE EUROPEAN UNION,update

 

Press material Friday 17 November 2023

● Council of the EU   17/11/2023 12:19 | Press release | Banking Union: Council agrees common position on Daisy Chains   The Council adopted today a mandate to start negotiations with the European Parliament on the Daisy Chains proposal. The proposal is a targeted amendment of the Bank Recovery and Resolution Directive or (BRRD) and the Single Resolution Mechanism Regulation or (SRMR) to address certain issues in relation to the treatment of ‘internal MREL’ in bank resolution groups. Effective resolution The BRRD requires banks and other credit institutions established in the EU to meet a minimum requirement for own funds and eligible liabilities (‘MREL’) to ensure an effective and credible application of the bail-in tool. Failure to meet MREL may negatively impact institutions' loss absorption and recapitalisation capacity and, ultimately, the overall effectiveness of resolution. Where MREL is issued by a subsidiary within a banking group and directly or indirectly subscribed by its parent company, it is referred to as ‘internal MREL’. The subsidiary must deduct its holdings of internal MREL from its own funds to ensure the integrity and loss absorbency of the MREL instruments. New rules to avoid disproportionate effects After analysis, the Commission found that the application of the deduction requirement on internal MREL could have a disproportionate detrimental impact for certain banking group structures, namely those operating under a parent holding company. The Daisy Chains proposal aims to give the resolution authorities the power of setting internal MREL on a consolidated basis subject to certain conditions. Where the resolution authority allows a banking group to apply such consolidated treatment, the subsidiaries will not be obliged to deduct their individual holdings of internal MREL, thus preventing the detrimental effect identified by the Commission. In addition, the proposal introduces a specific MREL treatment for ‘liquidation entities’. Those are defined as entities within a banking group earmarked for winding-up in accordance with insolvency laws, which would, therefore, not be subject to resolution action (conversion or write-down of MREL instruments). On this basis and as a rule, liquidation entities would not be obliged to comply with an MREL requirement in excess of their own funds requirements, unless the resolution authority decides otherwise on a case-by-case basis for financial stability protection reasons. The main changes agreed in the Council clarify the definition and scope of liquidation entities and provide further detail on the conditions for the application of the consolidated treatment of internal MREL.

Press material Friday 17 November 2023

● Council of the EU   17/11/2023 11:19 | Press release | Council adopts position on digital labelling in the fertilisers sector   The Council has today adopted its position (‘negotiating mandate’) on the proposed regulation on digital labelling of EU fertilising products. This proposal, which amends regulation (EU) 2019/1009, aims to improve the readability of labels, leading to a more efficient use of fertilising products, and to simplify the labelling obligations for suppliers while reducing costs for the industry. While the Council’s position shares the main objectives of the amended regulation, it introduces several improvements in an attempt to strike the right balance between moving towards the digitalisation of labels for economic operators and the prevention of potential information problems for end-users, taking into consideration digital skills and connectivity limitations that some farmers may face. "This regulation reinforces the digitalisation of the fertilisers’ sector. The new rules will cut red tape and costs for producers and give clear and consumer-friendly information to farmers when they purchase the products they need." Héctor Gómez Hernández, acting Spanish Minister for Industry, Trade and Tourism Commission proposal Labelling of fertilisers is currently regulated by regulation (EU) 2019/1009. The revision of this legislation proposes allowing suppliers of fertilising products to communicate labelling information in a physical format, a digital format, or a combination of the two. The Commission’s text proposes that a digital-only format will be allowed when the EU fertilising products are sold without packaging or when the products are sold to economic operators who are not end-users of the products. Farmers and other consumers of fertilising products sold in packaging would continue to benefit from both digital and physical labels for the most important information (i.e. health and environmental protection, agronomic efficiency or contents). The Commission’s proposal prescribes the content and the technological requirements for digital labels. The economic operators would have to ensure that the digital label will be searchable, accessible, free of charge and capable of meeting the needs of vulnerable groups. The Commission would be empowered to update the general digital labelling requirements through implementing acts. Council mandate The Council’s mandate clarifies the obligation to provide a physical label for products intended for end-users, whether they are sold with or without packaging. The requirements for digital labels have been streamlined to avoid excessive administrative burden. For instance, the quantity of the product, which changes frequently, has been made a non-mandatory element of the digital label to avoid a new digital label having to be generated during each transaction if the volume of the product changes. Likewise, the production date of the product has been retained as a non-mandatory element of the digital label if it is already stated in the physical label. To ensure better traceability and to level the playing field with local distributors, the Council mandate adds importer information as a mandatory element of digital labels. To align with the Council’s position on the Chemicals Labelling and Packaging regulation, the mandate introduces a clarification to make it clear that the requirement upon economic operators to provide, upon request by end-users, the information included in the digital label by alternative means and free of charge applies independently of a purchase. The negotiating mandate introduces a requirement to post physical labels in a visible place at the point of sale to ensure that end-users and market surveillance authorities have access to the information not provided in the digital label. This would allow potential buyers to consult the data needed to make an informed decision regardless of their digital skills or access to the internet, while providing distributors with a simple way to comply with the obligation to provide this information to their customers. The Council position makes sure that labels will continue to include the relevant information for assessing the agronomic efficiency of the fertiliser and for selecting the right product at the time of purchase. Therefore, some elements which, in the Commission’s original proposal, had been moved to the digital label, have been moved back to the physical format. This includes, among other information, the soluble content of the nutrients in fertilisers.

Meetings Friday 17 November 2023

● Council of the EU   17/11/2023 11:06 | MEETING | Agriculture and Fisheries Council, 20 November 2023   Background brief - Agriculture and Fisheries Council, 20 November 2023

Press material Friday 17 November 2023

● Council of the EU   17/11/2023 03:42 | Press release | Waste shipments: Council and Parliament reach agreement on more efficient and updated rules   The Council and the European Parliament’s negotiators today reached a provisional political agreement to update the regulation on shipments of waste. The revision of the regulation aims to reduce shipments of problematic waste to outside the EU, update shipment procedures to reflect the objectives of the circular economy and improve enforcement. It sets procedures and control regimes to ensure that international shipments of waste do not pose a threat to human health and the environment, and to promote the use of waste as a resource in a circular economy within the EU. The deal is provisional pending formal adoption by both institutions. "Embracing waste as a valuable resource rather than something to dispose of is crucial for our shift to a circular economy. Today’s agreement will provide us with the necessary framework to better recover and reuse waste as a secondary material. At the same time, it will help us make sure that the waste we export will not be harmful for the environment and human health. Today’s deal is another important step towards the EU’s zero-pollution and climate-neutrality goals." Teresa Ribera Rodríguez, acting Spanish third vice-president of the government and minister for the ecological transition and the demographic challenge Scope and objectives of the regulation The co-legislators agreed to expand the objectives of the regulation to include climate neutrality and the achievement of the circular economy and zero pollution. The agreement covers intra-EU shipments of waste (with or without transit through third countries), imported and exported waste from and to third countries, and waste shipments in transit through the EU to or from third countries. Intra-EU shipments The text bans the shipments of all waste destined for disposal within the EU, except if consented to and authorised under strict conditions and in well-justified cases. Intra-EU shipments of waste for recovery operations will be allowed following the procedure of prior written notification and consent (‘PIC’). The text of the agreement contains a derogation for shipments of waste explicitly destined for laboratory analysis and experiments if such waste does not exceed 250 kg. In this case, the shipment of such waste will need to follow the general information requirements outlined in the regulation. Notification procedure and timelines According to the ‘PIC’ procedure, notifiers within the EU and exporters to third countries need to notify and receive written confirmation from the countries of dispatch, destination and transit prior to export. The notification and other documentation required by the regulation is to be submitted and exchanged through a central electronic system operated by the Commission. The agreement sets out specific timelines and deadlines for the notification procedure, requests for additional information by competent authorities, and decisions by such authorities on the validity of the notification. The timelines agreed by the co-legislators will ensure that no disproportionate delays occur in those processes, while at the same time providing the competent authorities with sufficient time to obtain and assess the documentation and to analyse and respond to requests during those processes. The text also sets out timelines for notifiers to respond to the written consent from the competent authorities and for the receiving facility to inform the notifier and the competent authorities on the reception of the waste. In order to provide transparency, the co-legislators agreed to require the Commission to facilitate public access to information related to waste shipments by publishing and regularly updating data on notifications of shipments via its website. Exports of waste The agreement maintains the ban for member states to export waste for disposal to third countries and to export hazardous waste destined for recovery in non-OECD countries. For shipments outside the EU member states, the co-legislators agreed that waste management facilities at the country of destination should be audited by independent bodies. The audits would prove that the facilities treat waste in an environmentally sound manner and operators would only be allowed to export waste to these facilities if this were the case. The new rules require the Commission to establish a register that contains up-to-date information on facilities that have been subject to an audit to help waste exporters prepare for shipments. Exports of plastic waste The provisional agreement introduces stricter rules regarding the export of plastic waste to third countries. In particular, it includes a ban on exports of non-hazardous plastic waste (B3011) to non-OECD countries. The text provides for the possibility by non-OECD countries to submit, no earlier than five years after the entry into force of the regulation, a request to the Commission indicating their willingness to import EU plastic waste, if they fulfil strict waste management standards. In the case of positive outcome of the assessment of such request, the Commission will adopt a delegated act to lift the ban for these countries. The co-legislators agreed to allow the export of non-hazardous plastic waste to OECD countries, subject to the ‘PIC’ notification procedure. The text calls on the Commission to strictly monitor the export of plastic waste to OECD countries to make sure such export does not have significant impact on the environment or human health and that EU-imported waste is adequately managed in these countries. Enforcement The provisional agreement calls on member states to lay down effective, proportionate and dissuasive penalties for infringements of the provisions set out in the regulations. These may include, where relevant, fines and the revocation or temporary suspension of authorisations related to waste management and shipments. The agreement also introduces requirements for member states to ensure that the regulation is effectively enforced by establishing effective cooperation mechanisms at national level and between member states via the exchange of relevant information and good practices. The co-legislators agreed to the Commission’s proposal to set up a waste shipment enforcement group that would facilitate and improve cooperation and coordination between member states, in order to prevent and detect illegal shipments. Next steps The provisional agreement will now be submitted to the member states’ representatives within the Council (Coreper) and to the Parliament’s environment committee for endorsement. If approved, the text will then need to be formally adopted by both institutions, following legal-linguistic revision, before it can be published in the EU’s Official Journal and enter into force. Background The waste shipment regulation implements the provisions of the Basel Convention on the control of transboundary movements of hazardous wastes and their disposal and the correlated OECD decision into EU law. The regulation covers the export and import of waste from the EU to third countries, as well as shipments between EU member states of hazardous and non-hazardous waste. It notably prohibits the export of hazardous waste from OECD and EU countries to non-EU and non-OECD countries. The regulation also sets out notification and consent procedures for waste shipments. However, since the adoption of the regulation in 2006, exports of waste from the EU to third countries have increased considerably, notably to countries that are not members of the OECD. The lack of detailed provisions to ensure that waste is managed sustainably in the countries of destination has led to weak enforcement and environmental and public health challenges in those countries. The Commission adopted its proposal to update the waste shipment regulation on 17 November 2021. The European Parliament reached its position in January 2023, while the Council adopted its negotiating mandate in March 2023. Mandate for negotiations with the European Parliament on the waste shipment regulation Commission proposal for a regulation on shipments of waste Waste trade (background information) Basel convention

Press material Thursday 16 November 2023

● Council of the EU   16/11/2023 17:14 | Press release | Protection against market manipulation in the wholesale energy market: Council and Parliament reach deal   The Council and the Parliament today reached a provisional political agreement on the regulation to improve the EU’s protection against market manipulation in the wholesale energy market (REMIT). The REMIT regulation supports an open and fair competition in the European wholesale energy markets and sets the ground for increased market transparency and integrity. "This is good news for consumers and companies, especially in times of volatile energy prices. The REMIT regulation will improve the protection of consumers and companies against market manipulation and will strengthen the framework to address and prevent market abuse." Teresa Ribera Rodríguez, acting Spanish third vice-president of the government and minister for the ecological transition and the demographic challenge REMIT is part of a wider reform of the EU’s electricity market design. The remaining parts of the reform, which will be agreed by the Council and the Parliament at a later stage, aim to make electricity prices less dependent on volatile fossil fuel prices, shield consumers from price spikes and accelerate the deployment of renewable energies and improve consumer protection. Registration of market participants Both co-legislators agreed that market participants from third countries must designate a representative in a member state in which the market participants are active in the wholesale energy market. The representative must be designated by a written mandate and authorised to act on behalf of the market participant. In addition, market participants are obliged to ensure that their representative has the necessary powers and means to ensure the market participants’ efficient and timely compliance with the decisions and cooperation with the requests for information of the national regulatory authorities or the European Union Agency for the Cooperation of Energy Regulators (ACER). ACER’s decision-making powers and competence to impose sanctions The Council and the Parliament agreed on the scope of ACER’s decision-making powers to on-site inspections, requests for information and authorisations or withdrawal of authorisations of Inside Information Platforms (IIPs) and Registered Reporting Mechanisms (RRMs). In addition, ACER has the power to impose periodic penalty payments in order to ensure compliance with on-site inspection decisions and requests for information. The power to impose fines for infringements or breaches of the prohibitions or substantive obligations included in the regulation will remain in the hands of the member states. Delimitation of cases with cross-border impact The provisional agreement provides that ACER has the right to investigate cases with a cross-border dimension and to prioritise cases. ACER has the right to investigate cases where the conduct affects at least two member states. Objection to the exercise of ACER’s investigation power Both institutions agreed that the national regulatory authorities (NRAs) will continue to be able to object to the exercise of the agency’s investigatory powers when the NRAs have formally opened or have conducted an investigation on the same facts. The NRAs will have a maximum of 3 months to object. ACER’s tools to conduct investigations In order to conduct investigations, ACER will make use of several tools. For example ACER will be able to conduct on-site inspections and to issue requests for information; as well as the power to take statements. Next steps The provisional agreement reached today with the European Parliament now needs to be endorsed and formally adopted by both institutions. Background The reform of the electricity market design proposes to amend the relevant electricity market legislation and improve the EU’s protection against market manipulation through better monitoring and transparency (REMIT). The Commission adopted the proposals on the reform of the EU's electricity market design on 14 March 2023. Council general approach on REMIT Commission proposal on the electricity market reform Council reaches agreement on parts of electricity market reform (press release, 19 June 2023) Electricity market reform (background information)

Press material Thursday 16 November 2023

● Council of the EU   16/11/2023 17:00 | Press release | Environmental crime: Council and European Parliament reach provisional agreement on new EU law   The Council presidency and European Parliament negotiators today reached a provisional agreement on a proposed EU law that would improve the investigation and prosecution of environmental crime offences. The new directive aims at establishing minimum rules on the definition of criminal offences and sanctions in order to better protect the environment, replacing the previous 2008 directive, which has become obsolete in the face of developments in EU environmental law. The directive defines environmental crime more precisely and adds new types of environmental criminal offences. It also harmonises the level of penalties for natural persons and, for the first time, for legal persons across all EU member states. More offences… The Council and European Parliament agreed to increase the number of offences that currently exist under EU criminal law from nine to 18. This broadens and clarifies the type of conduct that is prohibited because it harms the environment. The new offences include timber trafficking, which is a major cause of deforestation in some parts of the world, the illegal recycling of polluting components of ships and serious breaches of legislation on chemicals. The Council and European Parliament also agreed on a ‘qualified offence’ clause. Offences referred to in the directive, and which are committed intentionally, are considered a qualified offence if they cause destruction; irreversible, widespread and substantial damage; or long-lasting, widespread and substantial damage to an ecosystem of considerable size or environmental value, or to a natural habitat within a protected site, or to the quality of air, soil or water. … and tougher penalties In the case of natural persons who commit one of the offences covered by the directive, the text sets out the following penalties: for intentional offences causing death to any person, a maximum prison term of at least ten years for the qualified offence causing catastrophic results, a maximum prison term of at least eight years for offences committed with at least serious negligence causing death to any person, a maximum prison term of at least five years for other intentional offences included in the legislation, a maximum prison term of either at least five years or at least three years In the case of legal persons, the law sets out the following penalties: for the most serious offences, a maximum fine of at least 5% of the legal person’s total worldwide turnover, or alternatively €40 million for all other offences, a maximum fine of at least 3% of the legal person’s total worldwide turnover, or alternatively €24 million Additional measures may also be taken, including obliging the offender to reinstate the environment or compensate for the damage, excluding them from access to public funding or withdrawing their permits or authorisations. Training and resources In addition, member states will have to ensure that training is provided for those working to detect, investigate and prosecute environmental crime, such as judges, prosecutors and police authorities. EU countries will also need to make sure that these authorities have adequate resources – for instance in terms of the number of qualified staff and the financial resources to carry out their functions under the directive. The directive also contains provisions on support and assistance to persons reporting environmental crime, environmental defenders and persons affected by these crimes. Background and next steps Environmental crime is one of the world’s most profitable organised criminal activities and has a major impact not only on the environment but also on human health. It is highly lucrative, but it is hard to detect, prosecute and punish. A first EU directive on the protection of the environment through criminal law was adopted in 2008. Following an evaluation in 2019-2020, the European Commission concluded that the effect of the directive had been limited as the number of cases successfully investigated and resulting in a sentence remained low. Moreover, the sanction levels imposed were too low to be dissuasive and cross-border cooperation was not taking place systematically. On 15 December 2021, the Commission presented a proposal to improve the effectiveness of the directive. The agreement still needs to be confirmed by both institutions before going through the formal adoption procedure.