communities european the commission ofaei.pitt.edu/1113/1/internal_market_wp_com_85_310.pdf ·...

92
COMMISSION OF THE EUROPEAN COMMUNITIES COMCB5) 310 final Brussels, 14 June 1985 COMPLETING THE INTERNAL MARKET White Paper from the Commission to the European Counci CMi Lan , 28-29 June 1985) COMC85) 310 finaL

Upload: others

Post on 20-Mar-2020

2 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

COMMISSION OF THE EUROPEAN COMMUNITIES

COMCB5) 310 final

Brussels, 14 June 1985

COMPLETING THE INTERNAL MARKET

White Paper from the Commission

to the European Counci

CMi Lan , 28-29 June 1985)

COMC85) 310 finaL

Page 2: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 1 -

CONTENTSPage

DecLarations by the European Counci relating to the InternaL Market

I NTRODU cn ON

IntroductionControl of goods

Commercial and economic poL icyHea l th

TransportStat i st i csConcLusion and timetabLe

Control of individuaLs

PART ONE : THE REMOVAL OF PHYSICAL BARRIERS

II .

III.

Free movement of goodsThe need for a new strategyThe chosen st rategyHarmonis.ation - a new approachPreventing creation of new obstacLesMutual recognitionNuclear materiaLs

PART TWO : THE REMOVAL OF TECHNICAL BARRIERS

II.

III.

IV.

Pub L i c procurement

Free movement for labour and the professionsa new initiative in favour of Community Citizens

Common market for servicesTraditional ServicesFinancial servicesTransportNew techno Logi es and servi ces

CapitaL movements

VI. Creation of suitabLe conditions forindustrial cooperation

Creati on of a Legal framework faci l itatingcooperation between enterpri sesIntellectuaL and industri al propertyTaxat i on

VII. Appl ication of Community lawInfringementsTransparencyCompetition poL icy and state aids

Page 3: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 2 -

PART THREE : THE REMOVAL Of fISCAL BARRIERS

Int roduct i onCommerciaL Traffic and VaLue Added TaxThe Individual TraveL lerExci ses

II . ApproximationThe Broad Pi ctu Value Added TaxExcises

III. The Commission s proposaLsValue Added TaxExci sesEnforcementDerogations

CONCLUSION

ANNEX : Timetable for compLeting theInte rna L Market by 1992

Page 4: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 3 -

DECLARATIONS BY THE EUROPEAN COUNCILRELATING TO THE INTERNAL MARKET

The European Council... instructs the Council - to decide, before the end of March 1983, on the priority

measures proposed by the Commission to reinforce theinternaL market"

Copenhagen, 3/4 December 1982

It asks the Counci L and the Member States to put in hand withoutdelay a study of the measures which couLd be taken to bring aboutin the near future...

the abolition of aLL poLice and customs formalities forpeopLe crossing intra-Community frontiers...

FontainebLeau, 25/26 June 1984

The European Council... agreed that the Council in itsappropriate formations

should take steps to compLete the InternaL Market,including impLementation of European standards

DubL in, 3/4 December 1984

the European Counci l laid particular emphasis on thefolLowing... fieLds of action

a) action to achieve a singLe Large market by 1992 therebycreating a more favourable envi ronment for stimulatingenterpri se, competition and trade it caL Led upon theCommission to draw up a detailed programme with a specifictimetabLe before its next meeting

BrusseLs, 29/30 March 1985

Page 5: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 4 -

INTRODUCTION

Unifying this market (of 320 miLLion) presupposes that MemberStates wilL agree on the abolition of barriers of aLL kinds,harmonisation of rules, approximation of legislation and taxstructures, strengthening of monetary cooperation and the necessaryflanking measures to encourage European fi rms to work together. is a goal that is weLL within our reach provided We draw thelessons from the setbacks and delays of the past. The Commissionwi II be asking the European Counci l to pledge itseLf to compLetionof a fully unified internal market by 1992 and to approve thenecessary programme together with a real istic and bindingtimetable.

In such terms did the Commi ssion define its task in the "Programmeof the Commission for 1985" which was presented to the EuropeanPa r l i ament on 6 Ma rch. On 29 and 30 Ma rch; the Eu rope an Counc il inBrussels broadly endorsed this vi ew and

"laid particular emphasis on

...

action to achieve a singlemarket by 1992 thereby creating a more favourable environmentfor stimulating enterprise, competition and trade ; it calledupon the Commission to draw up a detai led programme with aspecific timetable before its next meeting

This White Paper is designed to spell out the programme andtimetable. Given the European Counci l' s clear and repeatedcommitment to the completion of the common market, the Commissiondoes not intend in this Paper to rehearse again the economic andpolitical arguments that have so often led to that conclusion.Instead the Commission, which whoLeheartedly shares the Counci lIcommitment and objective, set.s out here the essential and logicalconsequences of accepting that commitment together with an actionprogramme for achieving the objective.

The Treaty clearly envisaged from the outset the creation of asingle integrated internal market free of restrictions on themovement of goods; the abol ition of obstac les to the free movementof persons, services and capital; the institution of a systemensuring that competition in the common market is not distorted;the approximation of laws as required for the proper functioning ofthe common market; and the approximation of indirect taxation inthe interest of the common market.

In the early days attention concentrated on the common customstariff, which was established eighteen months ahead of the 12-yearprogramme set out in the Treaty. It was a remarkable achievement -one that we can look back on with pride and one from which we canderive inspi ration for the future. That task achieved attentionturned to indi rect taxes. The high water mark was perhaps theadoption - unanimously by the Counci l - of the 6th VAT di rective in1977. But thereafter momentum was lost partly through the onset ofthe recession, partly through a lack of confidence and vision.

Page 6: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- s -

The recession brought another problem. The Treaty specificallyrequi red not simply the abolition of customs duties as between theMember States, but also the elimination of quantitativerestrictions and of all measures having equivalent effect.Originally it was assumed that such "non-tariff barriers

as they

are commonly caLLed, were of limited importance compared withactual duties. But during the recession they multiplied as each

Member State endeavoured to protect what it thought was its .short

term interests - not only against third countries but againstfellow Member States as weLL. Member States also increasinglysought to protect national markets and industries through the use

of public funds to aid and maintain non-viable companies. The

provision in the EEC Treaty that restrictions on the freedom to

provide services should "be progressively abolished during thetransitional period" not only fai led to be implemented during thetransitional period, but over important areas hi led to implemented at all. DisgracefuLLy, that remains the case.

But the mood has begun to change, and the commitment to berediscovered gradually at first, but now with increasing tempo.

The Heads of State and Governments at the European Counci l meeting

in Copenhagen in 1982 pledged themselves to the completion of the

internal market as a high priority. The pLedge was repeated atFontainebleau in June 1984; at DubLin in December of that year;and, most recently, in Brussels, in March 1985. The time for talkhas now passed. The time for action has come. That is what thisWhite Paper is about.

The case for the completion of the internaL market has been argued

elsewhere: and, as the communiques at successive European Councilshave indi cated, it has been accepted by the Heads of State andGovernments of the Member States. But it is worth recalling thatthe objective of completing the internal market has three aspects

First, the weLding together of the ten, soon to be twelve,individual markets of the Member States into one single market of320 million people

- Second, ensuring that this single market is also an expandingl

market - not stati c but growing

- Third, to this end, ensuring that the market is flexible so thatresources, both of people and materials, and of capital andinvestment, flow into the areas of greatest economic advantage.

Whilst, therefore, the discussion in this Paper will be directeprimarily to the first of these objectives there will be a need keep the other two objectives constontly in mind and to ensure thothe measures taken contribute to those ends.

10. For convenience the measures that need to be taken have bee~

classified in this Paper under three headings

Page 7: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

11.

12.

13.

- 6 -

- Part one : the removal of physical barriers

- Part two : the removal of technicaL barriers

- Part three : the removal of fiscal barriers.

The most obvious example of the fi rst category are customs posts atfrontiers. Indeed most of our citizens would regard the frontierposts as the most visible example of the continued division of theCommunity and their removal as the clearest sign of the integrationof the Community into a single market. Yet they continue to existmainly because of the technical and fiscal divisions between MemberStates. Once we have removed those barriers, and found alternativeways of dealing with other relevant problems such as publicsecurity, immigration and drug controls, the reasons for theexistence of the physical barriers wi LL have been eliminated.

The reason for getting rid entirely of physical and other controlsbetween Member States is not one of theology or appearance, but thehard practical fact that the maintenance of any internal frontiercontrols wi II perpetuate the costs and disadvantages of a dividedmarket the more the need for such controls diminishes - short oftotal elimination - the more disproportionate become the costs,expenses and disadvantages of maintaining the frontiers and adivided market.

While the elimination of physi cal barriers provides benefits fortraders, particularLy through the disappearance of formalities andof frontier delays, it is through the eLimination of technicalbarriers that the Community will give the Large market its economicand industrial dimension by enabLing industries to make economiesof scale and therefore to become more competitive. An example ofthis second category - technical barriers - are the differentstandards for individuaL products adopted in different MemberStates for hea l th or safety reasons, or for envi ronmental orconsumer protection. Here the Commission has recently launched amajor new initiative which has been welcomed and endorsed by theCouncil. The barriers to the freedom to provide services couldperhaps be regarded as a separate category; but these barriers .areanalogous to the technical barriers which obstruct the freemovement of goods, and they are probably best regarded" as part the same category. There is an additional merit in such an approachsince the traditional dichotomy between "goodsfl and "services" hasfostered an attitude in which "services" are somehow regarded asinferior and relegated to the bottom of the queue. Technicalbarriers are technical barriers whether they apply to goods orservices and aLL should be treated on an equal footing. Thegeneral thrust of the Commission s approach in this area will be tomove away from the concept of harmonisation towards that of mutualrecognition and equivaLence. But there wi II be a continuing rolefor the approximation of Member States ' laws and regulations, aslaid down in Article 100 of the Treaty. Clearly, action underthis Article would be quicker and more effective if the Council

Page 8: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

14.

15.

16.

-7 -

were to agree not to allow the unanimity requi rement to obstructprogress where it could otherwise be made.

The removal of fiscal barriers may weLL be contentious and this

despite the fact that the goals laid down in the Treaty are quite

expl icit and that important steps have already been taken along theroad of approximation. This being so, the reasons whyapproximation of fiscal legislation is an essential and integralelement in any programme for completing the internal market are

explained in detai l in Part Three of this Paper. Approximationof indi rect taxation will rai se severe problems for some MemberStates. It may, therefore, be necessary to provide for derogations.

We recogni se that many of the changes we propose wi LL presentconsiderable difficulties for Member States and time will be neededfor the necessary adjustments to be made. The benefits to integrated Community economy of the large, expanding and flexiblemarket are so great that they should not be denied to its citizensbecause of difficulties faced by individual Member States. ThesedifficuLties must be recognised, to some degree they must beaccommodated, but they should not be allowed permanently tofrustrate the achievement of the greater progress, the greaterprosperity and the higher level of employment that economicintegration can bring to the Communi ty.

Last year, the Commission submitted a ConsoLidation programmeidentifying a series of proposals to be adopted by the Council in1984 and 1985. This White Paper pursues this effort in a widerperspective and with a view to completing the Internal .Market by1992. It therefore comprises the essential items of last yearpaper without expressly repeating the Consolidation Programme whichstill remains valid.

17. This White Paper is not intended to cover every possi ble issuewhich affects the integration of the economies of the Member Statesof the Community. It focusses on the Interna l Market and themeasures which are directly necessary to achieve a singleintegrated market embracing the 320m people of the enlargedCommunity. There are many other matters - aLL of them important inthei r own way - which bear upon economi c integration, indi rectlyaffect the achievement of the Internal Market and are the subjectof other Community policies.

18. For example, it is a fact that in order to fad Litate the key roLe

which the internal market can play in the poli cy for the recoveryof industriaL structures, the suspension ~f internal borders must

be accompanied by actions which strengthen research and thetechnological base of the Community s industry. Such actions wiLL

aLlow firms to benefit from the size of the single market. It

within this context that the present work of strengthening the

Community s technological base shouLd be seen.

COM(84) 305 final of 13 June 1984.

Page 9: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

19.

20.

21.

22.

- 8 -

Similarly, the strengthening of coordination of economi c policiesand the EMS wi II be essential factors in the integration ofnational markets. However, any action taken to ensure the freemovement of factors of production must necessari ly be accompaniedby increased survei LLance by the Commission in the field competition rules to ensure that firms and Member States adhere tothese rules. In particular, a strong and coherent competitionpol icy must ensure that the partitioning of the internal market isnot permitted to occur as a result of protectionist state aids orrestrictive practices by firms. Moreover the commercial identity ofthe Community must be consol idated so that our trading partnerswi LL not be given the benefit of a wider market without themselvesmaking simi lar concessions.

There are many other areas of Community policy that interact withthe InternaL market in that they both affect its workings and wi LL

benefit from the stimulus that wi LL be provided by its completion.This is particuLarly true of transport, social, environment andconsumer protection policy. As far as social aspects are concerned,the Commission wi II pursue the dialogue with governments and socialpartners to ensure that the opportunities afforded by completion ofthe Internal Market wi LL be accompanied by appropriate measuresaimed at fulfilling the Community s employment and social securityobj ect ives.

The Commission is firmly convinced that the completion of theInternal Market wi LL provide an indispensable base for increasingthe prosperity of the Community as a whole. The Commission is,however conscious that there may be risks that, by increasing thepossibi lities for human material and financial services to movewithout obstacle to the area. of greatest econon:Jic advantage,existing discrepancies between regions couLd be exacerbated andtherefore the objective of convergence jeopardized. This means thatfuLL and imaginative use will need to be made of the resourcesavai lable through the structural funds. The importance of the fundswi LL therefore be enhanced.

Although this White Paper wi LL touch on these matters where theyhave a di rect bearing on the working of the Internal Market, itwi LL not attempt to cover them in fuLL and in detai L as theyrepresent considerable areas of study in their own right and meritseparate and fuller consideration elsewhere. The existence ofthese problems does not mean that the frontiers and other frontiercontrols should not be abolished. On the contrary the task we faceis to find solutions to the problems on the basis that thefrontiers will have been abolished.

23. A detai led timetable for implementing the Commission s proposedprogramme of measures for the removal of physical technical andfiscal barriers is to be found in the Annex to this Paper.

Page 10: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 9 -

PART ONE : THE REMOVAL Of PHYSICAL BARRIERS

24.

25.

INTRODUCTION

It is the physical barriers at the customs posts, the immigration

controls, the passport.s, the occasional search of personal baggage,

which to the ordinary citizen are the obvious manifestation of thecontinued division of the Community - not the "broader and deeper

Community" envi.saged by the original Treaties but .a Community sti divided. These barriers are equally important to trade and

industry, commerce and business. They impose an unnecessary burdenon industry flowing from the delays, formalities, transport andhandl ing charges, thus adding to costs and damaging competi-t i veness.

There is therefore a double reason for removing the physicalbarriers - an economic reason and a political reason. The

" settingup of the ad hoc Committee on a People Europe at theFontainebleau European Counci l (the Adonnino Committee) is ampletestimony to the importance of the political concept. There is noarea in which progress, where it can be made, would be more visibleor more directly relevant to the aims, ambitions and vision of the

Commun i ty.

26. Under the Treaty, customs duties and quantitative restrictions inintra-Community trade have been abolished. Customs posts internal frontiers have, however, continued to exist as convenient point at which to check compliance with nationalindirect taxation rules. Use has aLso been made of this continued

official presence to enforce national protective measureS relating

to for example terrorism, drugs, other prohibited goods andimmigration. Measures adopted by the Community itself have led

Member States to use internal frontier posts for controllingaspects of common policies (agriculture and steel) and for applyingsafeguard clauses.

27. Our objective is not merely to simplify existing procedures, but todo away with internal fronti er controls in thei r enti rety. In somecases this wi lL be achieved by removing the underlying causes whichgive rise to the controls. In others it wi LL be a matter of findingways and means other than controls at the internal frontiers to

achieve comparable levels of protection and/or information.

28. Where the underlying causeS consist partly of national policies andpartly of common pol i ci es wh i ch are not yet fu LLy developed,achieving our obj ective wi l l requi re national poLicies either to beprogressively relaxed and ultimately abandoned where they are no

longer justified, or replaced by truly common policies applicableto the Community as a whole. Community policies which are not yet

fully developed and at present give rise to internal frontier

Page 11: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

29.

30.

31.

32.

II.

33.

- 10 -

controls wi LL have to be amended so as to obviate the need forcontrols. It follows that once these barriers have been removed,the reasons for the existence of controls at internal frontierswil l have been eliminated.

The Commission recognises, however that certain national pro-tective measures do not in aLL their aspects faLL within the scopeof the Treaty. Two very important examples are measures againstterrorism and the ilLicit trade in drugs. The Commission shares thelegitimate concerns of the Member States about the need to controldrugs and terrorism and is weLL aware of the role of internalfrontier posts in this respect. It needs to be stressed, howeverthat frontier controls are by no means the only or indeed the mosteffective measures in this regard. If the objective of abolishingaLL internal frontier controls is to be met alternative means ofprotection will need to be found or, where they exist,strengthened. Obvious examples are improving controls at theexternal frontiers of the Community using spot-checks at theinternal frontiers and inLand and further enhancing cooperationbetween the national authorities concerned.

InternaL frontier controls are made on both goods and individuaLsand are motivated by fiscal, commercial economic, heaLthstati sti cal and poLi ce considerations. Individuals and thei personal property are usually checked by customs and police orimmigration officials, and go.ods by customs and sometimes morespecialised authorities.

The customs authorities ' primary role at internal frontier posts -or within the Member State where formaLities and checks take pLaceinland is to ensure that the indirect taxation system of theMember State in question (VAT, excise duties) continues to operate.It therefore follows that, from the customs viewpoint, the problemof removing physical controls is largely related to that ofremoving fiscal barriers. This latter problem is dealt with indetail in Part Three of this Paper.

The considerations which apply to goods and individuals are verydi fferent. We therefore examine them separateLy.

CONTROL Of GOODS

To date Community action has concentrated on alleviating internalfrontier formalities and facilitating the movement of goods. this end and in accordance with Articles 12, 30 and 95 of the EEC-Treaty, the Commission has ensured and will continue to ensure thatthe customs authorities observe the principles of non-discrimination and proportional ity. The Community transit procedureand the single admini strative document are concrete examples of theachievements reached by means of Community Legislation they canand shouLd be improved further in the medium term (for example byrenouncing the Community transit guarantee). Where appropriate,there should be increased use of electronic data transmission

Page 12: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

34.

35.

- 11 -

systems, on the basis of common standards. In addition theimplementation of the fourteenth VAT di rective wou ld great lysimplify internal frontier formaLities by shifting the collectionof VAT to inland tax offices but it will not in itself eLiminate

the need for customs checks at frontiers either on entry into the

importing country or, with greater reason, from the exportingcountry in order to provide proof of actual export.

In order to provide a suitabLe foundation for further progress, theCommission wi LL at an early stage seek a commitment from the MemberStates that no new or more stringent controls or formalitiesreLating to .goods are introduced. With cooperation between MemberStates, further simplification at internaL frontiers might beachieved by avoiding duplication of controLs on both sides of the

frontier (so-called "banaLisation

").

For exampLe, it might be

possible for the exporting Member State to obtain proof of actual

export of goods or statistical data on exports from the customsoffice of entry in the importing Member State importation. But thefact remains that to shift from the alleviation to the eliminationof internal frontier controls requi res a major and qualitativelydifferent approach. To do this we need to find ways of abolishingthe barriers which give rise to the need for the different controlsimposed on goods.

Commercial and economic pol icy

Commercial pol icy measures affecting Member States individually(residual import quotas maintained by some Member States importmeasures taken by the Community but limited to one or severalMember States only individual import quotas for Member States as

part of a Community-wide measure or of an agreement coordinated bythe Community) may lead the Commission on the basis of Article 115of the EEC Treaty to authorise a Member State to exclude theproduct under protection from free movement within the territoryof the Community. National measures stemming from authorisation bythe Commission necessarily involve formalities at internalfrontiers. It is worth noting that it is the absence of or fai lureto apply a common policy which give rise to such action. It followsthat, unti l the powers transferred by the Treaty to the Communityare fully exercised and the common commercial pol icy has beenstrengthened in such a way that aLL national protection measures

and aLL regional quotas set up by the Community can be abol ished~there wiLL be a continuing need for some form of control. The

Commission takes the view that it is not an unreasonable aim toachieve this abolition of nationaL and regional quotas by 1992.Nevertheless we recogni se that there may well be considerableprobLems to be overcome.

36. If Article 115 were no longer to be applicable, any importrestrictions would have to be applied on a Community-wide basis.The enforcement of such quotas, which relies to a large extent on

the admini strations of Member States, wou ld requi re intensivecooperation between national administrations and the Commission.Should it prove impossible to eliminate all individual quotas for

Page 13: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

37.

38.

39.

40.

- 12 -

Member States by 1992 internal frontier controls could no longerbe the instrument of thei r application. Alternative ways ofapplying quotas would need to be found.

The case is di fferent for the use of clauses to cope withimbalances giving rise to serious threat of balance-of-paymentsdifficulties. It is not possible realistically to set out a precisetimetable for progressive restriction of the use of Article 108, inview of the direct link between this Article and economicsituations of individual Member States. But if the aim ofeliminating internal frontier controls by 1992 is to be achieved,measures applicable at internal frontiers wi l l need to be renouncedby then.

Certain mechanisms appLying to trade in agricultural products alsorequi re controls at internal frontiers. For example, monetarycompensatory amounts are applied to trade in certain commodities onexport and import countervail ing .charges under .Article 46 can beapplied to trade in commodities where no common organisation hasyet been agreed certain taxes and other mechani sms can be neededin other commodity sectors. CLearly these requirements must beabolished through the development of the relevant parts of theCommon Agricultural Policy. It would further require the automaticadjustment of agricultural prices in the case of monetaryrealignment, preferably within the EMS the setting-up of commonorgani sations for agri cul tural products not so far covered withthe aim of removing the possibility of recourse to Article 46 ; andadaptation of other market organisations. Trade in steel too subject to additional controls stemming from the Common SteelPolicy and environmental policy (control of transport of dangerousand toxi c wastes). Steps wi Ll also have to be taken to cope withthe consequences for these po l i d es of the e li mi nat i on of i nternalfrontier formalities.

Health

As regards health protection, the internal frontier posts are oftenused for making veterinary and plant health c.hecks. These controlsstem from differences in national public health standards, whichgive national authorities grounds for checking that" importedproducts conform to national requirements. The Community has,therefore, set out to implement a programme for the harmonisationof essential health requirements, a technically complex andprocedurally slow process. But even where there is harmonisation,internal frontier controls have not always been eliminated becauseMember States sti LL insist on carrying out their own checks. Somesteps have been taken to transfer inland the checks on veterinaryand plant health certificates. But there are gaps in thesemeasures: thei r general adoption wi II depend upon mutual acceptanceby Member States that the checks on goods have been properlyappl ied by the exporting State.

As a further early step towards the objective of abolishinginternal frontier controls by 1992 all veterinary controls (live

Page 14: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

41.

42.

43.

- 13 -

animals and animal products) and plant health controls wi LL have to

be limited to the places of departure, and controls of veterinaryand plant health certificates made at the places of destination(together with control of products if there are reasons to assume

fraudulent or negligent practices).

To faci l itate this, more common standards wi LL have to be est bl ished for trade between Member States and for imports from thi rdcountries for those Live animals and animal products where they aresti LL Lacking. Animal products conforming to these standards wouldreceive a Community mark. In addition .supervising authorities inthe country of origin would have to check goods for consumption inother Community countries, in accordance with coordinatedprocedures. Mutual trust wouLd be enhanced by the appointment ofCommunity inspectors to check that controls were being correctlycarried out. Furthermore, ' Member States should cooperate infighting fraudulent practices in the Community framework, and rules

of l iabi L ity in cases of damage resulting from fraudulent ornegligent practices would need to be estabLished.

Certain import restrictions and quarantine measures would sti LL be

justified on grounds of protection of plant and animal health, line with common standards. In order to harmonise as far possible such restrictions, common policies designed to fightdi sease would ~ave to be strengthened.

In order to meet the obj ect i ve of 1992 , a maj or effort at Communi

and at Member States level wi LL be needed to achieve common Levels

and policies for veterinary and plant health and to align nationalstandards to common standards as much as possi bleB To the extentthat thi s can be achieved, the roLe of the veterinary and phyto-sanitary certificate could be drasticaLly reduced and specificrestrictions only needed for disease emergencies. For animalproducts, use of the heaLth mark would be sufficient.

Transport

44. Other internal frontier controls are aimed at the carriage of goodsand have to do either with the administration of transport policyor with safety requirements. Most intra-Community transport ope-rations are subject to quotas, for which vehicles must carrytransport authorisations. The authorisations and the books ofrecord sheets are mostly checked at the frontier. If these controlsar.e to be abolished, the transport quotas themselves must beprogressively relaxed and abolished. Goods - particularLy dangerousproducts - may also be checked for safety reasons. Moreover,vehicles are increasingly being checked at the frontier forcompliance with national requirements this is particularly true

in the case of motor coaches. Systematic safety controls atinternal frontiers will need to be eliminated. Road vehicles whichenter a Member State would however remain liable to check under thesame conditions as apply nationally to road vehicles. The adoptionand proper enforcement of common safety standards would greatlyfacilitate this process.

Page 15: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

45.

46.

- 14 -

Statistics

Systematic formalities ar.e carried out for statistical purposesthe statistics are required not onLy by the Member States but alsoby the Community. The introduction of the single administrativedocument wi LL initially simplify frontier formalities, butadditional harmonisation or elimination will be needed if thedifferent statisticaL data are to be presented in a unifotm way by1992. Furthermore, statisticaL data wi LL have to be coLLected noton the basis of documents accompanying goods, but from firms in theway that statistics on internal activities are coLLe.cted atpresent. Modern methods of data coLLection, including samplingtechni.ques, wi LL help to ensure that accurate and comprehensivetrade stati sti cs can be compi led.

Conclusion and ti.etable

Given the technical complexities of the measures to be adopted andthe major legislative task which will faLL to Communityinstitutions, the Commission intends that this work should beplanned in two stages. In the first stage, the emphasis should beto shift, where possible by 1988 controls and formalities awayfrom the internal frontiers. In the second stage, the aim would beto coordinate policies and approximate Legislation so that theinternal frontier barriers and controls are eliminated in theirentirety by 1992.

47.

III. CONTROL OF INDIVIDUALS

48.

49.

50.

The formalities affecting individual travellers area constant andconcrete reminder to the ordinary citizen that the construction ofa real European Community is far from complete.

Even though these controls are often no more than spot checks, theyare seen as the outward sign of an arbitrary administrative powerover individuals and as an affront to the principLe of freedom movement within a single Community.

This prompted the Fontainebleau European Counci l to give theAdonnino Committee the task of examining the measures to be takento bring about "the abolition of aLL police and customs formalitiesfor people crossing intra-Community borders . The Committee thoughtthis aspect to be so important that it presented an interim reportin March of this year.

The formalities in question are, in normal circumstances, of twodifferent kinds police checks relating to the identity of theperson concerned and the safety of personal effects being carried;and tax checks relating to personal effects being carried. Weconcentrate here on the pol ice checks. The removal of fiscaLbarriers and controls is covered in Part Three.

Page 16: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

51.

52.

53.

54.

55.

.. 15 -

The Commission s efforts .and initiatives in this area have beenmed at making checks at internal frontiers more flexible, as they

cannot ' be abolished altogether until, in l ine with the concernsexpressed by the European .Counci l, adequate , safeguards areintroduced against terrorism and drugs.

Agreement has already been reached on th~ . mmission' s proposal forcommon passport testifying to the individual' s position as

citizen of a Member State. As an additional' steptowards abolition. of physical controls ' the Commission has proposed the introductionof a means of seLf-identification which would enabLe, the autho-riiies to see at a glance that the individual is entitled to freepassage .. the Green Disc. This proposal is at present before theCouncil and shouLd be adC?pted forthwith.

As noted in the introduction to this Part pol ice checks at in-ter'nal frontiers are bound up with the legitimate concerns of th,e .pol iti caL authorities in the fight against terrorism, drugs andcrime. Consequently, they can only be abolished, as part, Of aLegislative ,andadmini strative process whereby they are trc:lnsferredto the strengthened' external frontier of the Community andcooperation between the relevant national authorities is furtherenhanced.

The Commission wi LL at an early stage seek a commitment from theMember States that no ' new or more stringent control~ or formalitiesaffecting individuals are introduced at.

. ,

inernaL frontiers. . TheCommission wiLL as a next step be proposing measures to el'iminatecompletely by 1988 checks on leaving one Member State when~nteringanother. This type of check has already been vi rtuatly abolishedin practice at internal frontier crossings by road. ' This stepwould entail administrative cooperation ' betwe'en the' policeauthorities and the ihformation trans~ission networks tc? enable thepol ice in the country of entry to carry out checks an behalf of thepolice in the country of departure. . A system of this kind wouldprovide continuing protection in the combat, against terrorism.Moreover, such a system would not preclude , security ... as opposed toidentity .. thecksbeing carried out in airpor~s.

By 1992, the Commiss ion wishes to arrive at the stage wherebythecks on entry are also abolished for Communit'y cit'izens arrivingfrom another Community country. To thi.s end, directives wi tl proposed concerning:

The approximation ' of arms legislation; the absence of checksmust not provide an incentive to buy arms in countries withLess strict legislation. A proposal wi tl be made in 1985with the target of approval in 1988 at' the late~t;

The approximation of drugs legislation:made in 1987, for adoption in 1989 ;

proposa ls wi II be

Non-Community citizens: the abolition of checks' at internalfrontiers wiLL make it much easier for, nationals of non-

Page 17: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

56.

.. 16 -

Community countries to move from Member State to another. a fi rst step, the Commission wilL propose in 1988 'at thelatest coordination of the rules on residence, entry andacces~ to' employment, applicable to nationals of non-Community countries. In this , regard problems may arise overthe question of the change

' .

' residence of non-Community, citiiens between the Member States, and these wi LL need to belooked a1;~ Measures wi LL be proposed aLso in 1988 at ' thelatest on the right Of asylum arid the position of refugees.Decisions wi II be needed on these matters by 1990' at theLatest;

'Vi.sa policy: the freedom . of lIIovement. for non-Communitynationals which visas provide, may undermine the agreements

, which , Member States have with non-member countries. , it will

therefore be necessary to go further than the existingcollaboration in the context .of politi caL cooperation anddevelop' Community pol icy on visas. This would need' to

rike ' ttle' right balance between national foreign policy, prerogatives and preserving the effectiveness of existing

bi l.ater,al agreements. The requisite proposaLs shouLd be madein 1988 for adoption by 1990. There wiLL also bea need tofiX . common rules concerning extradition pol icy. Thenecessary proposal, to be made in 1989, shouLd be adopted by199L

The adoption of these measures by the Counci l, accompanied by aredeployme,nt , of reSources to strengthen controls , at the externalfrontiers, al)d . enhanc.ed COoperation between police and otherreLevant agendes within the Member States, should enable policechecks at internal . frontiers to be eliminated by 1992.

Page 18: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 17 -

PART TWO : THE REMOVAL Of TECHNICAL BARRIERS

59.

60.

57. The el iminaHon of border controls, important as it is, does notof itself create a genuine common market Goods and people movingwithin the Community should not find ' obstacles inside the dif-ferent Member States as opposed to meeting them ' at the border.

This does not mean that there should be the same rules everywhere,but that goods as weLL as citizens and companies should be able tomove freely within the Com/liunity. Subject :to certain importantconstraints (see paragraph 65 below) the general principle shouldbe approved that, if a product is lawfuLLy manufactured andmarketed in one Member State there is no reason why it should notbe sold freely throughout the Community. ' Indeed, the objectives national legislation, such as the pr:'otection of human health andLife and of the environment, are more often than not identical. ItfoLLows that the rules and controls developed to achieve tho.objectives, , although they may take different forms, essentiaLLycome down to the same thing, and so shouLd normaLLy be accordedrecognition in aLL Member States, not forgetting the possibilitiesof cooperation between national authorities. What is true forgoods, is also true for services and for people. If a Communitycitizen or a company meets the requirements for its activity in onemember State, there should be no valid reason why those citizens orcompanies should not exercise their. economic activities also other parts of the Community.

58.

The Commission is fully aware that thi s strategy implies a changein habits and in traditional ways of thinking. What is needed is aradical change of attitude which wouLd lead to new and innovativesolutions for problems - real or apparent - which may appear whenborder controls no longer exist.

FREE MOVEMENT Of GOODS

Whilst the physical barriers dealt with in Part One impede tradeflows and add unacceptabLe administrative costs (ultimately paid bythe consumer), barriers created by different nationa l productregulations and standards have a double-edged effect: they not onlyadd extra costs, but they also distort production patterns;increaseunit costs; increase stock holding costs; di scourage businesscooperation, and fundamentally frustrate the creation of a common/liarket for industrial products. Unti l such barriers are removed,Community manufacturers are forced to focus on national rather thancontinental markets and are unable to benefit from the economies ofscale which a truly unified internal market offers. Fai lure achieve a genuine industrial common market becomes increasinglyserious since the research, development and commercialisation costsof the new technologies, in order to have areal istic prospect of

Page 19: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

61.

62.

63.

64.

- 18 -

being internationally competitive, require the background of a homemarket of continental proportions.

The need fot a new strategy

The harmonisation approach has been the cornerstone of Communityaction in the fi rst . 25 years and has produced unprecedentedprogress in the creation of common rules on a Community-wide basis.However, over the years, a number of shortcomings have beenidentified and it is clear that a genuine common . market cannot berealised by 1992 if the Community relies exclusively on Article 100of the EEC Treaty. There will certainly be a continuing need foraction under Article 100; . but its role will be reduced as newapproaches, resulting in quicker and less troublesome progress, areagreed. At least,. as far as veterinary and phytos'anitary controlsare concerned, Arti c le 43 makes possible qualified majority votingthe Council however has regularly used Article 100, which requiresunanimity, as an additional Legal base. The Commission does notthink this position is justified. Where Artlcle 100 is sti IIconsidered the only appropriate instrument, ways of making itoperate more flexibly wi II need to be found. Clearly, action underthis Article would be quicker and more effective if the Counci Lwere to agree not to allow the unanimity requirement to obstructprogress where it could otherwise be made.

The new strategy must be coherent in that it wi II need not merelyto take into account the objective of realizing a common market perse, but also to serve th. further objectives of bui lding expanding market and a flexible market. It must' aim not simply toremOVe technical barriers to trade, but to do so in a manner whichwill contribute to increasing industrial efficiency andcompetitiveness, leading to greater wealth and job creation.

In principle, therefore, given the Counci l' s recognition(Conclusions on Standardization 16 July 1984) of the essentialequivalence of the objectives of national legislation, mutuaLrecognition could be an effective strategy for bringing about acommon market in a trading sense. This strategy is ' supported inparticular by Articles 30 to 36 of the EEC Treaty, which prohibitnational measures which would have excessively and unjustifiablyrestrictive effects on free movement.

But while a strategy based purely on mutual recognition wouldremove barriers to trade and lead to the creation of a genuinecommon trading market, it might well prove inadequate for thepurposes of the bui lding up of an expanding market based on thecompetitiveness which a continental-scale uniform market cangenerate. On the other hand experi ence has shown that thealternative of relying on a strategy based totally on harmonizationwould be over-regulatory, would take a long time to implement,would be inflexibLe and could stifle innovation. What is needed is

strategy that combines the best of both approaches but, aboveall, allows for progress to be made more quickly than in the past.

Page 20: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

65.

66.

67.

68.

- 19-

The chosen strategy

The Commission takes into account the underlying reasons for theexistence of barriers to trade, and recognises the essentialequivalence of Member States legislative objectives in theprotection of ' health and safety, and of the environment. Itsharmonization approach is based on the following principles

- a clear distinction needs to be drawn in future internal marketinitiaiives between what it is essential to harmonize, and whatmay be left to mutual recognition of nationaL regulations andstandards this implies that, on the occasion of eachharmonisation initiative, the Commission wi LL determine whethernational regulations are excessive in relation to the mandatoryrequirements pursued and thus, constitute unjustified barriersto trade according to Article 30 to 36 of the EEC Treaty

- legislative harmonisation (Council Directives based on Article100) wi II in future be restricted to laying down essential healthand safety requirements which wi LL be obligatory in all Ml;!mberStates. Conformity with this wi LL entitle a product to freemovement

harmonisation of industrial standards by the elaboration ofEuropean standards wiLL be promoted to the maximum extent, butthe absence of European Standards should not be allowed to beused as a barrier to free movement. During the waiting periodwhi le European Standards are being developed the mutualacceptance of national standards, with agreed procedures, shouLdbe the guiding principle.

The creation of the internal market relies in the first pLace onthe wi II ingness of Member States to respect the principle of freemovement of goods as laid down in the Treaty. This principle allowsthe Commission to require the removal of all unjustified barriersto trade. But it is not sufficient when barriers are justifiedunder the Treaty. Si mi la rly, there wi ll. be cases where the int ro-duction of common standards, particularly in the high technologysectors, wi LL encourage and increase the internationalcompetitivity of Community industries.

Harmonisation - a new approach

Article 100 of the Treaty empowers the Counci l, acting unanimouslyon a proposal from the Commission to legislate by Directive forthe approximation of the laws, regulations and administrativeact ions of Member States whi ch di rect ly affect the establ i shment orthe functioning of the common market. However, a number ofshortcomings have been recognized in the procedures established forthe implementation of Article 100.

The practice of incorporat ing detailed techni.cal specifi cations inDirectives has given rise to long delays because of the unanimityrequi red in Counci l deci sion making. Henceforth in those sectors

Page 21: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

69.

70.

71.

- 20 -

where barriers to trade are created by justified divergent nationalregulations concerning the hea lth and safety of citi zens andc~)Osumer and .envi ronmentaL protection, legi sLative harmoni zationwi II be confined to laying down the essentiaL requi rements, con-formity with which wi II entitle a product to free movement withinthe Community. The task of defining the technical specifications ofproducts which will be' deemed to conform to legislatedrequirements, will be entrusted to European Standards issued by theComite Europeen de la Normalisation (CEN) or by sectoral EuropeanStandards in the electrical and building sectors such as CENELEC,UEAtc or RILEM, acting on qualified majority votes.

The Commission is taking steps to strengthen the capacity of theseEuropean Standards bodies and also, in the telecommunicationssector, of CEPT. This i s ' seen not only as a necessary adjunct tothe "new approach" but as an essential ingredient in the gradualreplacement of national standards by European Standards in allareas.

The Council generally should off-load technicaL I!Iatters by makingmore use of its powers of , delegation as re.commended by the EuropeanCouncil. Article 155 of the EEC Treaty makes express provision forthis possibility and' opens the way to a simplified legislativeprocedure. This procedure has already been used successfully incustoms matters and with the adaptat ion of existing directives totechnical progress. The encouraging results suggest that thisprocedure should be extended.

This general policy wilL put particular emphasis on certainsectors these include information technoLogy andtelecommunications, construction and foodstuffs.

- in the information technology and telecommunications sector, theCommission wants to establish specific rules which take accountof the requi rement for much greater preci sion and more rapiddecision-making so . as to ensure compatibi lity, intercoi-munication and interworking between the users and operatorsthroughout the Community. This sector is usually theresponsibility of public authorities and particularly the PTT'In this context it is important that this task be undertaken asmuch as possi ble on a common basis, and that the resu l tingspecifications (and corresponding tasks and certificationprocedures) be mutually recognised from the start. RecentCommission proposals as well as the agreement concluded in July1984 with CEPT have been in keeping with this tendency;

- because of the existence of a wide range of products in the fieldof construction, the Commission wi II proceed to establishEuropean codes concerning bui ldings in such a way as to ensurecompatibi l ity between components and the structures in which theywill be used. The Commission considers that s~ch action wi II itself contribute to deregulation efforts;

Page 22: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

72.

73.

74.

- 21 -

- in the foodstuffs sector, Community legislative action has been

concentrated and wilL continue to be concentr,ated, . on issuing"horizontal" directives governing the use of food additives,labelling regulations etc., where the essentiaL need to protectthe heaLth and safety of consumers is involved. In line with the

new approach", and in line with the recommendations of the DoogeCommittee, the Commission wi II propose more efficient proceduresfor the implementation of Article 100, harnio.nisation in thissector. This . approach wi II be based on the ' principle ofdelegating to the Commission, advlsed by the Scientific C()mmitteefor Food, the task of drawing up and managing the more detai ledand technical aspects ,of these directives, leaving ' the Counci lfree to ,concentrate on the essential safety and h'ealth criteriahich must be observed. To this end, the Commission wi II submit a

communi cati on to the Counc i l and to the Eu rope an Pa r l i amentbefore th.e end of 1985, and it will propose the extension ofDirective 83/189/EEC to the food sector.

The Commission considers it essential that in all programmesdesigned to achieve a 'unified internal market, the interests of allsections likely to be affected e.g. both sides of industry,commerce and consumers, are taken into account. It furtherconsiders that such interests should be incorporated in the policyon the health and safety of workers and ' consumers. That is whyarrangements have been made to ensure the participation of consumer,representati ve bodi es in the work of CEN and CENELEC and theCommission, with the assistance of the Consultative ConsumersCommittee, will take further steps to ensure that consumerinterests are consulted.

Moreover, the Commission wi II review all pending proposals in order

to withdraw such proposals as are considered to be non-essential or

which are not in line with the new strategy.

Preventing creation of new obstacles

Experience shows that a State s membership Of the Community is notalways sufficiently .reflected in the attitudes and outlook of itsadministrations. When Member State Governments deem new acts orre.gulations to be necessary for national purposes, they do notalways or automatically, in drafting their national instruments,take account of the Community dimension or of the need to minimisethe difficulties for relations between Memb~r States. Opportunitiesare thus Lost for making simple and inexpensive improvements.

75. In order to prevent the erection of new barriers, Directive83/189/EEC now obliges Member States to notify the Commission inadvance of aLL draft regulations and standards concerning technicalspecifications that they intend to introduce ' on thei r own

territory. A standsti II on adoption must then be instituted by the

notifying Member State, during which the draft can be consider.ed by

the Commi ssion and the other Member States in order to determinewhether it contains any elements li kely to ,create barriers to tradeand, if so, to start remedial action under Articles' 30 or 100.

Page 23: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

76.

77.

- 22 -

This' new "information " procedure which came fully into f ce on1 . 1985, consti tutes a major step forward and has already beensucce$sful in pre-empting a number of potential obstacles to thefree movement of goods be~ween Member' States. It is necessarytherefore ' that this procedur.e, which ' does not yet cover allindustrial products, be extended to cover for example the food andpharmaceut.ical sectors. In the field of environmental protection acomparable , imp rovement could easily be achieved by makingobligatory, the gentleman agreement on notification which hasexisted since 1973.

MUtual recognition

Following the rulings of the Court ,of Justice both the ~uropeanParl lament and the DoOge Committee, have stressed the principle thatgoods lawfully manufactured and marketeQ in one Member State mustbe allowed free entry into other Member States. In cases where.harmonisation of regulations and standards is not consideredessential from either a health/safety or an industrial pointview immediate and full recogni'tion of differing qualitystandards, food. composition rules, etc~ must be the rule. In par-ti cu lar . sa les bans cannot be based on the sole argument that animported product has been manufactured according to specificationswhich differ from those used in the importing country. There is noobligation on the buyer , to prove the equivalence of a productproduced according to the rules of the exporting State. Similarly,he must not be required to submit such a product to additionalte-chf+i-c--ilt-- rn:t.s rior cel"l ification pnicedures in the importingState. Any purchaser, , be he wholesaLer, retailer or the finalconsumer, shoulcf h~ve the right to choos.e his supptier in any partof the Community without restriction. The Commission will use all:the powers available under the Treaty, parti cularly Arti des 30-36to reinforce this principle of mutual recognition.,

78. In the specific area of testing and certification Procedures, a. major initiative will soon ' be launched to bring about within theCommunity mutual recognition of tests and certification so as toavoid the wc;lsteful duplication of tests which in some sectors isthe rule rather than the exception. This initiative wi It involvethe drawing up of. common conditions and codes of practice forimplementation by laboratories and certification bodies. Thesecodes wi ll' be based on existing codes of Good Laboratory Practiceand Good Manufacturing Practice which are aLready in wide use.

79. The net long term effect of adopting and implementing this newstrategy wil l be to reduce the regulatory burden on enterpriseswhishing to operate on a Community wide basis. In those (henceforthmore limited) areas where harmonisation of regulations wi II sti IIbe requi red,. ' enterprises will only have to meet a single set

harmoni sed rules , rather than 10 or 12 different sets in order fortheir produc::ts to enjoy free circulation throughout the Community.Similarly the application of the new approach to standardisationand the move towards the principle of mutual recognition in anincreasing number of other areas wi LL speed up the deci sion-making

Page 24: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

-23 -

process and avoid the need feU" a. further layer of Community rulesto be super-imposed on national rules.

Nuclear.aterials

80. Because of the special nature of nuclear materiaL, transfers ofsuch material between Member States are subject to specificcondi,tions. In November 1984, the, Commission proposed a revision ofChapter VI of the Euratom Treaty. Inter at ia, this proposal wouldensure both the unity of the internal nuclear market and thevalidity of such corid1tions )Jnder Community law.

II . PUBLI C PROCUREMENT

81. P!Jblic procurement covers a sizeable part of GDP and is stillmarked. by the tendency of ,the authorities concerned to keep thei rpurchases and contracts within their own country. This continuedpartitioning of individual national markets is one of the mostevident barriers to the achievement of a real internal market.

82. The basic rule, contained in ArticLe 30 et seq. of the EEC Treaty,that goods should move freely in the common market, without beingsubject to quantitative restrictions between Member States and ofall measures having equivalent .effect, fully applies to the supplyof goods to public purchasing bodies, as do the basic provisions ofArticle 59 et seq. in order to ensure the freedom to provideservices~ Specific provisions seeking to termin:ate discriminatorypractices in the supply of goods were laid down in Directive70/32/EEC, whilst Directive 77/62/EEC intends to open the awardingprocedures to Community-wide competition. Equally, as far aspublic works contracts are , conc.erned, Di rective 71/305/EECcoordinates the awarding procedures in order to make the awardingprocess transparent to potential bidders in the whole of theCommunity. Directive 71/304/EEC concerns the freedom to provideservices in this field.

83. Statistics however indicate a minimal application of the Direc-tives; less than 1 ECU in 4 0f public expenditure in the areascovered by the co-ordination Directives is the subject ofpublication in the Official JournaL and thus, . even theoretically,0 f Communi t y-w i de compet i t i on .

84. The Commission will open discussions with fV1ember States and throughthem with the awarding entities on the application of theDirectives. Such discussions have to be based on detai led studiesof the Directives ' transposition and appl i cation in each MemberState, concentrating on a number of key areas such as proceduraLdetai ls (splitting of contracts, use of single tendering),particular entities (Defence, Health Regional Government) andproducts (computers, vehicles, medical equipment and supplies). Inaddition further action will be taken to improve the quality andspeed of the pub l i cat i on of not ices to tender and espeC i a lly to

Page 25: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

85.

86.

87.

- 24-

develop the elect roni c pub li sh in~ system TED CTenders lect roni cDaily) .

In order to stimulate a wider opening up of tendering f.or publiccontracts, there is a serious and urgent need for improvement ofthe Directives to increase transparency further. Priority should begiven ' to a , system of prior information to publication of theintention to use singl,e tender procedures to publi cation of theaward.s of contracts ; and to improved quality and fr-equency ofstatisti cs., Moreover, in view of the high volume of. . contractsfalling below the present levels of the threshold where theDi rectives apply, a review of these leveLs would seem appropriate.Besides, more visible action by the Commission in, policingcompl iance with existing law wi Ll increase the credibi l ity of theCommunity s efforts to break down the psychological barriers tocrossing frontiers.

Four major sectors - energy , transport, water and (in the caSe ofsupply contracts) telecommunications - are at present not coveredby DirectiVe,s. Whilst it is clear that enlargement of coverage mustbe real i sed before 1992 additional action is requi'red to takeaccount of the fact that some of the awarding entities in thesesectors fall under public law, ' whi le others are private bodies.Possible options are an approximation approach by way of Directivesand/or a competition approach based on Articles 85, 86 and 90 ofthe EEC Treaty, sometimes combined with an initially morepragmatic approach such as has been tried in the telecommu-nications sector. The Commission will submit proposals before theend of 1987.

Community-wide li beral i sation of publi c procurement in the field ofpublic services is vital for t:he future of the Community economy.Arti cle 58 of the EEC Treaty fully applies but, at present, onLyconstruction cont racts are covered by Pi rective 71/305/EEC thesupply of goods may include incidentaL services only to the extentthat the vaLue of the latter does not ' exceed that of the productsthemselves. This limitation should be removed so that access topublicly financed service contracts such as the services' associatedwith the construction industry are also opened up to suppliers fromother Member States. There are also certains servi ces in' the newtechnology area (see paragraphs 113 - 123 below) which need a Largemarket of continental dimensions in order to realise their fullpotentiaL. An example would be data processing in all its forms, asector where possible procurement policies have a major impact.Furthermore, the transformation of contracts to purchase intocontracts for the suppLy of servi ces is already having an impacton the coverage of the supplies Directive, mainly in the field ofcomputers. The Commission will submit proposals before 1987 whichshou ld lead to Counci l act i on in 1988 by the latest.

Page 26: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

88.

89.

90.

91.

92.

93.

- 25 -

lIt. FREE ~VE"ENT fOR LABOUR AND THE PROfESSIONSFAVOUR Of COMMUNITY CITIZENS

A NEW INITIATIVE IN

The Commission considers it crucial that the obstacles which sti IIexist within the' Community to free movement for the self-employedand employees ' be removed by 1992. It considers that Communitycitizens should be free to engage in their professions throughoutthe Community, if they so wish, withoqt the obligation to adhere toformalities which, in the final analysis; could serve to discouragesuch movement. "In the case of employees, it should be noted that su.ch' freemovement is almost entirely complete and the rulings of the Courtof , Justice restrict the right of public authorities in MemberStates to reserve posts for nationals. Certain problems" stiltexist, however, and the Commission intends to make the necessaryproposaLs which wi II eliminate the last obstacles standing in theway of the free movement and residence, of migrant Comm\Jnityworkers. Furthermore the Commission wi II take measures in order toremove cumbersome ,administrative procedures relating to residencepermits. The Commission has already submitted a proposaL concerningthe taxation of these workers and thei r families. The main probLemin this case is the taxation of wage-earners who reside in 6ne,Member State and earn thei r income in another (this affects mainLyfrontier workers).

The Commission wilt also ma.ke further efforts to bring about theadoption and swift implementation of its proposal concerning thecomparability of vocational training qualifications aimed atensuring that vocational proficiency certificates are more easilycomparable. In practical terms, thi's objective should be achievedby 1988 so that the second phase can be launched before 1990. ,Thissecond phase would involve the introduction of an Europeanvocational training card" serving as proof that the holder hasbeen awarded a specific qualification.

In the field of rights of establishment for the self-employed,litt le progress ' has been made, the main reason being thecomplexities involved in the endeavour to harmonize professionalqual ifications. However these endeavours have resulted in .considerable degree of freedom of movement for those engaged in thehealth sector. , The European Council, owing to the hold-upsprevi-ously experienced in this sphere, indicated its desire to"promote measures that would offer tangible improvements i, theeveryday life of Community citizens. In particular during themeeting in Fontainebleau it caLLed for the creation of a generalsystem for the mutual recognition of university degrees. In linewith the same philosophy, the Commission believes that there shouldbe mutuaL recognition of apprenticeship courses.

The Adonnino Committee submitted a preliminary report in March thisyear which .contains some guidelines on this subject and theCommi ssion has been requested to put them into concrete form.

FOr this rea$on, with the aim of removing obstacles to the right ofestablishment, the Commission - which approved the conclusions ofthe ' Adonnino report - wi II submit to the Counci l a draft framework

Page 27: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 26 -

irective on a general system of recognition in the course of' thisyear. The main ~lements in this system wiLL be the principLe ofmutual trust between the Member States; the principle of thecomparabi lity of university studies betwee~ the Me~b.r States; themutual recognition of degrees and diplomas without priorharmonization of , the conditions for access to and the exercise ofprofessions and the extension of the general system to saLaryearners. Lastly, any difference, notably as regards training,between the Member States would be compensated' by professionalexperi ence.

94. Finally, measures to ensure the free movement of individuals mustnot be restricted to the workforce only. ,Consequently, theCommission intends to increase its support for cooperationprogrammes between further education establishments in differentMember States with a view to promoting the mobility of students,facilitating the academic recognition of degrees and thus diplomas,and helping young people, in whose hands the future of theCommunity s economy lies, to think in European terms. At the end ofthis year, it wi Ll make new proposals on this subject, notablyconcerning a Community scholarship scheme of grants for studentswishing to pursue part of their studies or the acquisition ofrelevant professional experience in another Member State.

IV. A COMMON MARKET fOR SERVI CES

95. In the Commission s, view it is no exaggeration to see theestabl ishment of a common market in services as one of the mainpreconditions for return to economic prosperity. Trade inservices is as important for an economy as trade in goods. Thediversity of activities which can be classed as "services" and thefact that the providers of servi ces seem unaware of thei r commoninterests in the sector are two of the reasons why thei r role andimportance have been undervalued for so long. Another reason hasbeen the fact that, in the past, many servi ces were provided byindustry itself whereas now there is a trend to create speciali stcompanies or at least specialist units for service activities.Despite the provisions of Articles 59 and 62 of the Treaty,progress on the freedom to provide services across internalfrontiers has been much sLower than the progress achieved 'on freemovement of goods. This is particularly regrettable, since inrecent years specialisation and the rapid development of new typesof ,services has done much to demonstrate the potential for growthand job creation in the service sector as a whole.

96. Two examples shouLd suffice to illustrate this potential, and point out the risk that the Community might lose ground to its maintrading competitors if it fai ls to take sufficiently far- reachingaction.

97. Fi rst in 1982 market servi ces and non-market servi ces alreadyaccounted for 57% of the value added to the Community economy whi industry s contribution has dropped to less than 26%. Secondly, a

Page 28: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

98.

99.

100.

101.

102.

- 27 -

comparison of, employment prospects in the di fferent sectors betweefi1973 and , 1982 reveals that there has been a steady decline inemployment in" industry, which became even more rapid after1979/1980. By contrast, over the same period, more than 5mH Lionjobs were' created in the Community s market services sector. Thisfigure, whi le impressive in absolute terms, looks less so relativeto the equivalent figures for the USA (13. mi Ll ion) and .evenJapan (6. millionh Another cause' for concern is that in theCommunity, unlike , in our main competitors, this trend has tailedoff since 1980 as a result of the recession.

Although freedom to provide services in the Community has beendi rect lyappl i cable since the end of the transitional period as theCourt of Justice recognized in the Van Binsbergen judgement" firm$and individuals have not yet succeeded in taking fuL l advantage ofthis freedom. For these reasons, the Commission considers that swift action should.be taken to open up the whole market for services. This appliesboth to the new servi ce areas such as information marketing andaudiovisual services and to the so-called traditional (butrapidly evolving) services such as transport , banking and insurancewhich, if properlymobi lised, can play , a key supporting role forindustry and ~ommerce.

Traditional" Services

Of prime importance' - because the Community has been deprivingltsel f of the potenti al benefi ts for far too Long - i s the ru~ed to 'open up the cross-border market in the traditional services,notably banking and insurance and transport. The Commission wouldemphasi ze here that proposals necessary to open up these twosectors have already been made but sti ll await Council' s decision.The Counci l should, therefore, take the appropri ate deci siGns asindicated in the timetable to be compLeted by 1990.

Financial services

The l iberali~ation of financial services, linked to that of capitalmovements, ' wi II represent a major step towards Community financial'integration and the widening of the, InternaL Market. The accent is now put increasingly on the free circulation of"financial products made ever easier by developments oftechnology. Some compari son can be made between the approachfollowed by the Commission after the "Cassis de Dijon" judgementswith regard to industrial and agricultural products and what nowhas to be done for insurance policies, home-ownership saving~cont racts, conSumer credit , part i cipation in collective investmentschemes, etc. The Commission considers that it should be possibleto facilitate the exchange of such "f1nancial products at aCommunity level, using a minimal coordination of rules (especiallyon such matters as authorisation;; financial supervision andreorganisation winding up, etc) as the basis for mutuaL

Page 29: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

103.

104.

105.

- 28 -

recognition by Member States of what each does to safeguard theinterests of the public.

Such harmonisation particularly as regards the supervision ofongoing activities, should be guided by the principle of "homecountry .control" Thi s me,ans att ri buting the pri mary task ofsupervising the financial institution to the competent authoritiesof its Member State of origi to which would have to be commu-nicated aLL information necessary for supervision. The authoritie,of the Member State which is the destination of the service, whilstnot deprived of a LL power, would have a complementary role. Thereould have to be a miniml,lm harmoni sation of survei LLance stan-dards, though the need to ' reach agreement on this must not be

a.llowed further to delay the necessary and overdue decisions.

The implementation of these principles , in the field of creditinstitutions (especiaLly banks) is being pursued actively, in par-ti cular on the following lines

the standards of financial stabi l ity which credit institutionsmust live up to and the management principles which they mustapply (concerning, for instance, thei r own funds, the solvencyand liquidity ratios, the monitoring of large exposures) arebeing thoroughly coordinated

- the rules contained in the fourth and seventh company law Direc-tives on annual accounts and consolidated accounting are beingadapted to the sector of credit institutions

- furthermore, the conditions which must be fulfilled by insti-tutions seeking access to the markets as well as the measures tobe taken at Community Level when it comes to reorgani sing winding up an institution in case of crisis are being coordi-nated;

- to name a more specific ar.ea, the Commission is working towardsthe mutual recognition of the financiaL techniques used bymortgage credit institutions and of the rules applying to thesupervision of such institutions.

As regards insurance undertakings, di rectives adopted in 1973(non-life) and 1979 (life) to facilitate the exercise of the rightof establishment already coordinate rules and practices for thesupervision of insurers and particularly of their financiaLstability. Moreover close cooperation between supervisoryauthorities has been in existence for a long time. The ground isthus prepared for freedom of services across frontiers, whichshould therefore not present insurmountable probLems, especiallysince the Di rective of 11 May 1960 Liberates capital movements withregard to premiums and payments in respect of all forms ofinsurance. It must nevertheless be noted that a Directive intendedto facilitate the exercise of freedom of services in non-lifeinsurance by spelling out the part to be played by the varioussupervisory authorities in cross-frontier operations has not yet

Page 30: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

106.

107.

108.

109.

- 29

been adopted by the Counci l. It wi II furthermore be necessary inthe near future to examine closely those aspects of freedom ofserVi ces wh i ch are pecu li ar to, li fe assurance.

In the, securities sector, the coordination of ruLes applicable toundertakings for collective investment in transferable, securities,CUCITS) is aimed at providing equivalent safeguards for investorsin respect of the units issued by UClTS, irrespective of the MemberState in which the UCITS is situated. Once approved by theauthorities in its home Member. State, a UCITS wi II be able freeLyto market its units throughout, the Community, without permittingadditional controls to be iritroduced. Thus this directive wouLd bean example of the principle of "home country control" Mutualrecognition wi II be made possible by the coordination of thesafeguards offered by the financial product in question.

Apart from the UCITS proposal, other work sti II remains to be doneto ensure that securities markets operate satisfactori ly and in the

best interests of investors. Work currently in hand to create aEuropean securities market system, based on ' Community stockexchanges, is also relevant to the creation of an internaL market.This work is designed to break down barriers between stockexchanges and to create a , Community-wide trading system forsecurities of international interest. The aim is to link stockexchanges electronica lly, so that thei r members can execute orderson the stock exchange market offering the best conditions totheir clients. Such an interlinking would substantially increasethe depth and li qui di ty of Communi ty stock exchange markets, andwouLd permit them to compete more effectively not only with stockexchanges outside the Community but also with unofficial andunsupervised markets within it.Transport

The right to provide transport services freely throughout theComrriun'ity is an important part of the Common Transport Pol icy setout in the Treaty. It shou ld be noted that transport representsmore than 7 % of the Community s g.d.p., and that the developmentof a free market in this sector would have considerable economicconsequences for industry and trade. The recent decision of theCourt in the case brought by the European Parliament against theCouncil for fai lure to act in the field of the common transportpolicy (Case 13/83) highlights the necessity of making rapidprogress in this area.

In addition to the measures a lready mentioned in the context of theelimination ' of frontier checks in road haulage traffic, thecompletion of the internal market requires the following actions inthe transport sector

- for , the transport of goods by road between Member States, thephasing out of quantitative restrictions (quotas) and theestablishment of conditions under which non-resident carriers may

Page 31: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

110.

111.

112.

113.

- 3P ~

operate transport services in another Member State (cabotage)will be completed by 1988 at the Latest.

for the transport of passengers , by road,services will be introduced by 1989.

freedom to provide

- for the international transport of goods by inlandwaterway, freedom to provide serv;ces where this is not yet the,case wi II be introduced. Where necessary, conditions wi II establ i,shed under which non-resident .carriers may operC)te inlandnavi gation servi ces in another Member State (cabotage). Bothmeasures should come into effect by 1989.

- the freedom to provide sea transport services between MemberStates shaLL be establ ished by the end of 1986 at t~e latest,though with the possibility of , a limited period for phasing outcertain types of restri ctions.

- in the air transport sector, it is necessary to provide by 1987for greater fr.eedom in ai r transport servi ces ~etween Memberstates. , This wi II involve in particular changing the system forthe setting and approval of tariffs, , and limiting the rights ofGovernments to restrict capacity and access to the market.

Implementation of common policy measures in the transport sector bythe dat.es mentioned above will require decisions by the Council byDecembe,r 1985 (air fares and some aspects of maritime, transport) by June 1986 (remaining aspects in the aviation and maritimesectors) ~ and by December 1986 (road haulage, inland waterways,coach services).

If the Counci l fai ls to make progres, towards the adoption ofproposed Regulations concerning the application of competitionrules

, ,

to air and to sea transport, tne Commission intends to takeDecisions recording existing infringements and authoris;ng MemberStates to take measures as determined by the Commission accordingto Art i c le 89 of the EEC Treaty.

All these measures form only part of the common transport' policywhich extends to other measures (e g. state aid policy., improvementof rai lway financing, harmonization in the road sector,infrastructure planning and investment) which are not of directrelevance to the internal market but which are an essential elementof this pol icy.

New technologies and Services

The development of new technologies has led to the creation anddeveLopment of new cross-border servi ces which are playing ani nc reas i ng ly important ro le i the economy. However, theseservices can develop their full potential only when they serve alarge, unobst ructed market. This applies equally to audiovi sualservices, information and data processing services and tocomputerized marketing and distribution services.

Page 32: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

114.

115.

116.

117 .

118.

119.

120.

- 31 -

In addition, the Commission would stress that a market free ofobstacles at Community level necessitates the installation ofappropriate telecommunication networks with common standards.

In the fieLd of audiovisual services, the objective for theCommunity should be to seek to establish a single Community-widebroadcasting area. Broadcasting is an i.mportant part of thecommunications industry which is expected to develop very rapidlyinto a key sector of the Community economy and wit l have a decisiveimpact on the future competitiveness of Community industries in theinternal market.

In accordance with the Treaty objective of creating a common marketfor services, all those who provide and relay broadcast servicesand who receive them should be able, if they wish to do so on aCommunity-wide basis. This freedom goes hand in hand with theright of freedom of information regardless of frontiers.

As a result of the development of broadcasting within essentiallynational frameworks, legal obstacles, actual and potential, lie inthe path of those seeking todeve lop broadcasting activiti esacrossthe borders of Member States. These obstacles consi st mainly ofdi fferent l imitat ions on the extent to which broadcast programmesmay contain advertising as well as of the ri ghts of owners ofcopyright and related rights to authorise retransmission by cableof broadcasts for each Member State separate ly. On the basi s ofthe Commission Green Paper, adopted in May 1984, on theestabli shment of the common market for broadcasting, especially bysatell ite and cabLe, a number of measures are necessary to reali a single Community-wide broadcasting area. As a first step towardsthis objective, the Commission will submit appropriate proposaLs in1985. The Counci l should take a deci sion before 1987.

The information market is aLso undergoing far reaching changes as aresult of the appli cation of new information technologies. Thesechanges are mainly due to - the almost exponential growth of the amount of information

avai lab le - the growing speed with- the strong tendency of- the application of new

which new information becomes obsoLeteinformation to flow across borders; andinformation technologies.

Information itself and information services are becoming more andmore widely traded and valuable commodities, and in many respectsprimary resources for industry and commerce. The opening of themarket for it is therefore of increasing importance. Moreover, thefunctioning of markets for other commodities depends upon thetransmission and avai labi l ity of information. ' As a commodity,however, it has unique and difficult properties.The information market has been supported by a series of programmesdecided by the Counci l on 27 July 1981 and 27 November 1984. Thecurrent one is due for mid-term evaluation in the course of thisyear. But a satisfactory internal market requires more. It

Page 33: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

121.

122.

123.

124.

125.

126.

- 32 -

requires, as the European Council has recognized, a common policyand strategy within which a tr.ansparent regulation and transparentconditions can be bui It;. The Commission has issued a generaldiscussion paper on thi s subject and intends to follow it up withappropriate proposa Ls and guidelines in the period 1985-1987.

The European marketing and distribution system wilL also undergo athorough technologicaL transformation. Home videotex wi II permitthe ordering of products di rect from the manufacturer, thusrevoLutionizing traditionaL distribution channels, whi le ensuringgreater market transparency. These new technologies, which willbring in thei r wake a need for adequate consumer protection, couldlead to increased comme.rciaL activity within the Community,parti cularly in the mai l-order sector.

Electroni c banking too wi LL promote information and commercialtransactions. ' The new payment cards (memory cards, on-line cards)wi II tend to replace existing cheques and credit cards. ALthoughan agreement aLready exists on the compatibility of videotexequipment in the Community, there is no simi lar agreement for theproduction of the new cards.

The Commission intends to make proposals to heLp define commontechnical features of the machines used to produce the new paymentcards, so that they can be identical throughout the Community. wi II aLso seek to encourage, in conformity with Communitycompetition rules, the conclusion of agreeme.nts at European levelbetween banks, traders, producers and consumers on thecompatibi L ity of systems, networks linkage, user ruLes and/or ratesof commi ssion.

CAPITAL MOVEMENTS

Greater liberalisation of capital movements in the Community shouldserve three aims.

First, the completion of a large internal market inevitably invol-ves a financial dimension. The free movement of goods, servicesand persons must also mean that fi rms and private individualsthroughout the Community have access to efficient financialservices. The effectiveness of the harmonisation of nationalprovisions governing the activities of financial intermediaries andmarkets would be greatly reduced if the corresponding capitalmovements were to remain subject to restrictions.

Secondly, it must be str.essed that monet.ary stabi l ity, in the senseof the general level of prices and exchange rate relations, isessential precondition for the proper operation and development ofthe internal market. In this regard, action to achieve greaterfreedom of capital movements would need to move in paraLLel with

the steps taken to reinforce and develop the EuropeanMonetary System. Exchange-rate stabi l ity and convergence ofeconomic policies help the .gradual removal of barriers to the free

Page 34: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

127.

128.

129.

130.

- 33 -

movement of capitaL; conversely, greater financia l freedom leads to

greater discipline in the conduct of economic policies.

Thirdly, the decompartmental isation of financial markets shouldboost the economic development of the Community by promoting theoptimum allocation of European savings. The task is to set up an

attractive and competitive integrated financiaL system for bothCommuni ty and non-Communi ty busi ness ci rc les.

A number of Member States have had to make use of the protectiveclaus. provided for in the Treaty (Articles 73 and 108(3))tomaintain or reintroduce restrictions on capital movements which arein principle liberalised under Community law. From now on theCommission s attitude towards the use of safeguard clauses wi LL be

governed by the foLLowing criteria

- authori zat i on to app ly protect i velimited period;

measures shouLd be for a

- measures should be continually reviewed and gradually abolishedas the difficulties which originaLLy justified them diminish;

- agreement should be reached not to apply the protective clauses

to capital movements which are' so short term as to be classifiedas speculative and which are most directly linked to the freemovement of goods, services and persons.

Generally speaking, however, capital now moves more freely in theCommunity than at the end of the 1970s. The United Kingdom removedall exchange controls in 1979 and the arrangements appLied inDenmark now comply with the Community rules in force. December 1984, the Commission authorised France, Italy and Ireland

to retain, according to the above criteria, in varying degrees,restrictions on certain capital movements. These decisions tookinto account the measures taken on this occasion by the French and

!tal ian authorities to relax such restrictions. These derogationshave been renewed for a limited period.

Unlike the Treaty provisions relating to free trade in goods andservices, the principle of freedom of capital .movements does notapp ly di rect ly. All pro,gress towards such freedom i nvo L ves an

extension, by way of Directives, of the Community obligations lastlaid down in 1960 and 1962. The following two aims must be pursuedin view of this extension

- as an accompaniment to measures to coordinate the conditionsunder which financial intermediaries operate and thus to promotethe development of a common market in financial services. this end, proposal for Directive concerning theliberalisation of transactions in the units issued by collectiveinvestment undertakings for transferable securities is currentlybeing discussed by the Council. A similar liberalizing proposalwiLL be necessary in due course in the mortgage lending field;

Page 35: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

131.

132.

VI.

133.

134.

135.

- 34 -

- in order to adapt Community obligations to changes in financialtechniques and so improve the arrangements for operations whichhave grown substantiaLLy in importance. Action wi LL have to betaken at Community level to Liberal ise operations such as theissue, placing and acquisition of se.curities representing riskcapital transactions in securities issued by Communityinstitutions and long-term commerciaL credit.

In addition to the responsibi L ity which Community bodies have forcreating and administering a legislative framework for thel i bera l i sat i on of capi ta l movements they wi II have to take act i on

with a view to graduaLLy liberalizing all operations of Communityinterest.

The Commission intends to step up its monitoring of any exchangecontrol measures which, whi le not infringing Community obligationsto liberal ise capital movements, nevertheless constitute apotential obstacle to payments relating to normaLLy l iberalisedtrade in goods, services or capital. FoLLowing the "Luisi-Carbonejudgement of 31. 1984, the Commission has already informed MemberStates about the limits to the controls whi ch Member States mayapply. From 1992 onwards, any residual currency control measuresshould be applied by means other than border controls.

CREATION Of SUITABLE CONDITIONS FOR INDUSTRIAL COOPERATION

The removal of internal boundari es and the establishment of freemovement of goods and capital and the freedom to provide servi cesare clearly fundamental to the creation of the internal market.Nevertheless, Community action must go further and create environment or conditions likely to favour the development ofcooperation between undertakings. Such cooperation wi LL strengthenthe industrial and commercial fabric of the internal marketespecially in the case of smaLL and medium sized enterprises, whichare particularly sensitive to their general environment preciselybecause of thei r size.

In spite of the progress made in creating such an environment,cooperation between undertakings of different Member States issti II hampered by excessive legal, fiscal and administrativeproblems, to which are added occasional obstacles which are more areflection of different mental attitudes and habits. It is,however, the Commission s function to take steps to deal with anydistortion of competition arising from the part~tioning of markets

by means of agreements on business practices or undisclosed aidfrom public funds. The Commission wiLL also continue to applycompetition rules by authorizing cooperation between undertakingswhich can promote te.chnical or economic progress within theframework of a unified market.

The Commission wi LL also seek to ensure that Community budgetaryand financial faci lities make their full contribution to thedevelopment of greater cooperation between fi rms in different

Page 36: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

136.

137.

138.

139.

140.

- 35 -

Member States. It wi II seek to guide future research programmes inthis direction, both at the precompetitive research stage and atthe stage of pi lot or demonstration projects. The ESPRIT and BRITEprogrammes now underway have aLready had a very positive impact onEuropean fi rms in terms of the opportunities for cooperation whichthey represent. The Regional Fund must also be enabled tocontribute to greater cooperation between firms.

Creation of a legal framework faci l itating cooperation betweenenterprises.

The absence of a Community legal framework for cross-borderactivities by enterprises and for cooperation between enterprisesof different Member States has led - if onLy for psy.chologi ca lreasons - to numerous potential joint projects failing to get offthe ground. The Community is now for the first time, setting thestage for a .new type of association to be known as the "EuropeanEconomic Interest Grouping that will be governed by uniformCommunity legislation and wi II make it easier for enterprises fromdifferent Member States jointly to undertake specific activities.

ALso, it is worth noting that a Council decision is sti II awaitedon the proposed statute for a European Company. The Commission isconscious that the creation of an optional legal form at Communitylevel holds considerable attraction as an instrument for theindustriaL cooperation needed in a unified, Internal Market. decision on the proposed statute will clearly be needed by 1992. Inthe interim period, the Commission intends to concentrate onmeasures to approximate national laws and does not precLude thepossibil ity of amending its European Company proposal in order tobui ld on results achieved in discussions of approximation measures.

The small number of one-man businesses apart, enterprises aregenerally organised in the form of companies or firms, and theCo9Jmunity rule on non-discriminatory treatment applies to them whenformed in the Community. This rule is of prime importance where theacquisition of shareholdings is concerned.

There i s case, however, for making better use of certainprocedures such .as offers of shares to the public for reshaping thepattern of share ownership in enterprises, since the rulescurrently in force in this sphere vary a great deal from onecountry to another. Such operations should be made more attractive.This couLd be done by requiring minimum guarantees, particularly onthe information to be given to those concerned, whi le it would beleft to the Member State to devi se procedures for monitoring suchoperations and to designate the authorities to which the powers ofsupervision were to be assigned. A proposal will be made in 1987and the necessary decisions should be taken by 1989.

As and when the internal market is developed further, enterprisesincorporated in the form of compani es or fi rms wi II become more andmore involved in all manner of intra-Community operations,resuLting, in an ever-increasing number of links with associated

Page 37: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

141.

142.

143.

144.

- 36 -

enterpri ses, creditors and other parties outside the country inwhich the registered office is located. To keep pace with thistrend, a series of measures have aLready been taken or are underdiscussion aimed at coordinating Member States. laws, especiallythose governing l im.ited companies, which, in economic terms,constitute the most important category.

Admlttedly, this approximation of legislation is designed to secureequivalent prote.ction for those concerned but these are, to a verylarge extent enterprises too. In point of fact , by improving thelegaL reLationship between enterprises, the coordination of companylaw has at the same time improved cooperation between them.

Nevertheless, a c.ompany constituted under a specific national lawdoes not enjoy the same fad l ities as a natural person when comes to moving from one Member State to another. The traditionalways of setting up in another Member State involve theestabli shment of subsidiaries or branches, for whi ch non-discriminatory treatment is expressly laid down in the Treaty ofRome. As things stand now, however, the legal position of branchesset up by companies from other Member States is far fromsatisfactory throughout the Community. Thus, to the extent thatcertain matters affecting the corporate sector have already beenharmoni sed, branc;hes establi shed in the Community and forming anintegral part of an enterprise should also reap the benefits ofsuch harmoni sation under a legis lative poLicy of deregulation. Withthis in mind, the obLigation, say, to publish accounts relatingonly to the activities of a branch established in the Communityshould be dispensed with in all cases, provided a copy of theparent company accounts is filed with the registration bodyresponsible for the branch. A proposal wi II be made in 1986 topermit a decision by the Council in 1988.

If it is to satisfy the needs of a genuine internal market, theCommunity cannot concentrate simply on the arrangements forcreating subsidiaries or branches in order to make it easier forenterpri ses to set up in other Member States. Enterpri ses mustalso be able to engage in cross-border mergers within theCommunity. This fad l ity could constitute the Last stage in aprocess of cooperation beginning, for example, ' with thestraightforward acquisition of a shareholding. On the face of it,adoption of the Commissi 's proposal for a , tenth Directive seemsto pose fewer difficulties especially as it could, to a very Largeextent, settle the matter by reference to the rules already inforce on internal mergers.

In practice, cooperation will result more often than not in thecreation of a group of legally separate but associated enterprises.This development is already the subject of coordination in thefieLd of consolidated accounts. HOwever, is it possible to stopthere The fact i s that the transparency of the group i s not theonly issue at stake. A fair balance must also be struck betweenthe interests of the group as a whole and its members, especiallyminority shareholders and creditors of subsidiaries. However,

Page 38: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

145.

146.

147.

148.

149.

- 37 -

there are serious gaps in most Member States ' legislation on thematter, which is sti LL too closely modelled on the idea of companyautonomy, an idea largely overtaken, it would seem, by the degreeof concentration that now exists. Depending on the 'outcome ofcurrent consultations, the Commission is considering making aproposal to this end.

Intellectual and industrial property

Differences in inteLLectual property Laws have a direct andnegative impact on intra-Community trade and on the abi tity

enterprises to treat the common market as a single environment forthei r economic activities.

It wiLL be necessary, as a first step, to reach a decision .on theCommunity Trademark proposal and on the proposal approximatingnational trade mark Laws. Considerable advantages wi LL flow fromthis which wi It enable undertakings to adap,t their activities tothe fuLL sc.aLe of the Community by making it possible for them obtain on a single application one , trade mark covering aLL theMember States. In order to al low the Community trade mark system tobe adopted by the Counci l, the Commission wi LL make the necessary

supplementary proposals (i .e. the rules implementlng the regu-Lation the fees regulation the siting of ,the Commuriity TradeMark office and its working language the rules of procedure ofthe Boards of Appeal). The Council shouLd decide on these mattersby 1987. The picture has recently been further complicated by the need toadapt existing trademark systems to technological change in number of areas including computer software, microcircuits andbiotechnology. In order to create a firm legal foundation forinvestment in new techniques, the systems mlist be adapted in aconvergent manner so that these changes wi LL not weaken an alreadyimperfect intel lectual property market.

In the patent field, the Luxembourg Convention on the CommunityPatent signed in 1975 which wi LL offer important advantages toindustry, has not yet entered into force. The Commi ssion favours

soLution whereby the Convention enter.s into force immediately, atleast amongst those Member States who are in a position to rati fyit.The Commission accordingLy intends to propose to the Counci lmeasures concerning patent protection of biotechnologicalinventions and the legaL protection of .microci rcuits, the Latter asa matter of urgency, in 1985. In addition, problems i.n the field of

copyright and related rights wi L l be ex a.m in ed' in a consu.ltat i vedocument to be published in 1985 with a view, to estabLishingpriorities. In this context, the introduction of a Communityframework for the legal protection of' software will be givenparticular attention.

Page 39: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

150.

151.

- 38 -

Taxation

The Commission intends to publish, by the end of 1985 a WhitePaper on the taxation of enterprises in the Community. This willserve the purpose of fitting the various proposals already pendingbefore Council into a general framework. It wiLL also be opportunity for assessing the .need for further common action inthis field. There is, indeed, a widespread feeling in privateenterprise in Europe that our fiscal environment for risk capitaland for innovation compares badly with that of our majorcompetitors.

In the meantime the Commission wi II urge the Counci l to compLeteongoing work on a group of proposals which aim at removingobstacles to cooperation between European firms (on tax treatmentof parents and subsidiaries, on taxation of mergers and onavoidance of double taxation), and to give high priority toharmonizing indirect taxes on transactions in securities as well asto the proposal which will allow wider use of carry forward andbackward of losses in all Member States.

VII. APPLICATION Of COMMUNITY LAW

152.

153.

154.

Infringellents

The Community political and Legislative efforts to create anexpanded home market for the people and the i ndust ri es of theCommunity, wil l be in vain if the correct appli cation of the agreedrules is not ensured. Unfortunately, under the pressure ofeconomic crisis, Member States have not always withstood thetemptation to yield to protectionist measures, and the Large volumeof complaints that the Commission has received has prevented itfrom dealing with them within a reasonable period. There is noreason why Member States, whose Heads of State and Government arecommitted to the completion of the Internal Market, should notexpect and welcome the knowledge that the Commission will carry outits duties of enforcing the rules that make .such a completionpossible, even if such enforce.ment is likely sometimes to affectthem directly and individually.

Of the total number of complaints received by the Commission, some60 %, i.e. on average 255 each year, relate to Articles 30-36 ofthe Treaty, but because of the lack of resources it can, in a givenyea r, sett le on ly one hundred cases. The resu l t i ng de lays andbacklogs benefit the infringing States, impede systematic action,lead to political and economic disequilibria of infringementproceedings, and frustrate the confidence of industry as wel l asthat of the man in the street. Measures have to be taken to remedythe situation.

Moreover, the Commission will continue its general action of im-proving and rationalising its internal procedures in order tocorrect violations rapidly and effectively. It wi II cLosely combine

Page 40: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

155.

156.

157.

158.

- 39 -

its actions of prevention .and cure, and it wi II consider thepossibLe introduction of sanctions and wiLL explore allpossibH ities for interim measures to suspend the enforcement ofany national legislation which manifestly infringes Community law.

Transparency

Elimination of unjustified trade barriers is traditionally done on

a case-by case basis by individual infringement proceedings. Giventhe practical shortcomings of piecemeal proceedings, the Commissionwi LL h.ave to take more systematic action, by publ ;shing generalcommunications setting out the legal situation particularly inregard to Articles 30 to 36 for the whole of an economic sector in relation to a particular type of barrier. These communications

would serve as a guide for public authorities regarding theirobLigations, as well as for Community citizens regarding the rightswhi ch they enj oy.

The Commission intends to publish before 1988 communications onmotor-cars, foodstuffs, pharmaceuticals, and chemical products aspriority sectors. The Commission will gradually establish adefinite link between its proposals for harmonisation of laws and

its communications setting out the impact of Articles 30 to 36. any case, it is understood that, in the event of approximationLagging behind the agreed schedules, the Counci l' s inaction cannotrelieve the Commission of its obligation to take whatever measuresare necessary to ensure free movement of goods within the Communityunder conditions which are consistent with the aims of the Treatyand the deadline of 1992.

Competition pol icy and state aids

A strong competition pol icy wi II play fundamental role maintaining and strengthening the internal market. It willcontribute to an improved allocation of resources and toreinforcement of the effici.ency and competitiveness of Europeancompanies. As the Community moves to complete the Internal Market,it will be necessary to ensure that anti-competitive practices donot engender new forms of local protectionism which would only leadto a re-partitioning of the market.

In this context, it wi II be particuLarly important that theCommunity discipline on state aids be rigorously enforced. Thereare tendenci es to spend large amounts of publi c funds on state aids

to uncompetitive industries and enterprises. Often, they not onlydistort competition but also in the long run undermine efforts toincrease European competitiveness. They represent a drain on scarcepubl ic resources and they threaten to defeat .efforts to bui ld theinternal market. As the physicaL and technical barriers inside theCommunity are removed, the Commission wi It see to it that arigorous policy is pursued in regard to state aids so that publicresources are not used to confer artifi cial advantage to some fi rmsover others. An effective Community discipline will make itpossible to ensure that available resources are directed away from

Page 41: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 40-

non-viable activities towardsindustries of the future.

competi titive and job' creating

159. The Commission is drawing up an inventory of state aids and wi publish by 1986 a report sett ing out the implications for futurestate aids policy.

Page 42: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 4~ -

PART III THE ~EMOVAl OF fISCAL BARRIERS

INTRODUCTION

160.

161.

162.

163.

FiscaL checks feature prominently among the functions carried outat the ,Com~unity ' s internal frontiers. ConsequentlYI the removal offrontier controls is bound to have inescapable impLications for theMember States as far as indi rect taxes are concerned. Theadjustments that wi LL be needed to solve these practi cal problemsare also very much in line with the terms of the commitmentundertaken by those who signed the Treaties and with historicaldevelopments since then.

When the Customs Union was achieved in 1968, it was alreadyapparent that the mere removal of tariffs would not enable a truecommon internal market to be created; and that differences inturnover taxes in particular were the source of serious distortionand hence a serious obstacle to the completion of the InternalMarket. That such a situation might arise was foreseen in theTreaty itseLf. Article 99 specifically provided that theCommission should make proposa ls for the approximation of indi recttaxation when this was needed for the completion of the internalmarket; and Arti cle 100 provided the legal means for so doing.

Accordingly, in 1967 the Member States decided that the existingturnover taxes must be repLaced by a Value Added Tax levi ed on acommon basis. It was recognized from the outset that theimposition of such a tax on a common basis would raise many

difficuLties for Member States and would have to be phased in overa period of yea~s. But it is clear from both the Fi rst and theSecond VAT Directives which gave effect to this decision that acommon basis was not only intended but was regarded as essential.

The adoption of a harmonized VAT was given further impetus by theCounci l Decision in 1970 that the Community should be financedthrough "own resources A significant element in this new "own

resources" regime was the allocation to the Community of the yieldof part (not to exceed a rate of 1 per cent) of the harmonized VAT.

It is clear from the Directives that what was in mind was not anotional calculation but the aLLocation of a specific share of an

actual harmonized tax. The following year (1971) saw the adoptionof a Counci l Resolution confi rming its intention to create an areawithin which goods, services and capital could circulate freely and

without distortions of competition. Not only was a common tax base

regarded as essential to achieve this end, but common tax rates asweLL were contemplated. In the words of the Resolution

: "

Beforethe end of the first stage, the Council will deliberate on thestudies undertaken, and on the proposals made, by the Commissionconcerning the approxi mati on of rates of value added tax and ofexcise duties.

164. The broad principles of the harmonized common tax base for VAT werelaid down in outline in the Second VAT Directive dated 11 April1967. This was followed after a period of intensive considerationand discussion,' by the Sixth VAT Directive, adopted in 1977 which

set out in great detai l the provisions of the common base. Because

Page 43: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

165.

166.

167.

168.

- 42 -

of the problems involved in reaching agreement on a number ofdifficuLt .and contentious issues, the Sixth Directive contains anumber of lacunae as well as special schemes, derogations andtransitional provisions. At the same time, Article 35 of theDirective specifically provided that these derogations and specialarrangements should ultimately be brought to an end. Nowhere isthe ,general phi losophy set out more succinctly than in the preambleto the Directive. This declares

Whereas account should be taken of the objective ofabolishing the imposition of tax on the importation and theremission of tax on exportation in trade between MemberStates; whereas it should be ensured that the common systemof turnover taxes is non-discriminatory as regards the originof goods and services, so that a common market permitting fai rcompetition and resembling a real internal market mayultimately be achieved"

Since 1977 a number of supplementary Di rectives have been adoptedand a number await the Council' s decision.

Soon after the fi rst steps were taken to harmonize turnover taxes,the Community turned its attention to excise duties. As a firststep the Commission identified tobacco, alcoholic drinks andhydrocarbon oi Ls as the products on wh i ch exc i ses should be levi - a choice which coincides with the coverage adopted by most MemberStates.

In the case of tobacco limited degree of harmonization hasalready been achieved. The basic di rective adopted in 1972 definedthe structures of excise duty on cigarettes; provided forharmonization in successive stages; and defined a range ofrelationships between the specific duty and the total duty. In thecase of alcoholic drinks and hydrocarbon oils, li ttle pr.ogress hasbeen made despite the presentation by the Commis.sion of a wholerange of di rectives. At the same time, however, a limited degreeof progress has been made as a result of judgements by the EuropeanCourt which have compelled Member States to abandon taxarrangements which benefited domestic producers to the detriment ofproducers in other Member States.

It is clear from what has been said above that the harmonization ofindirect taxation has always been regarded as an essential andintegral part of achieving a true common market. Momentum has beenlost in recent years but this was due essentially to the impact ofthe recession on the economic policies of Member States andpreoccupation with other problems. But progress is being resumedand now we must proceed vi gorously if we are to achieve the targetdate of 1992 for the comp let i on of the Interna l Market.

If goods and services and people are to move freeLy from one memberState to another in just the same way as they can move within amember State, it is essential that frontier controls be abolished.Since these are primari ly designed to ensure that each memberState can collect the revenue in the form of indirect taxation towhich it feels entitled, there are clear implications for theindirect taxation policies of individual Member States. Let us bequite clear that we are talking here not in terms of frontierfacilitation, i.e. simplifying frontier procedures in the way that

Page 44: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

169.

170.

171.

- 43-

the Directive on the Harmonization of Frontier Procedures and theSingle Administrative Document aim to do, but in terms of removing

the frontiers altogether as only in this way is it possible toachieve the stated objective of free movement of goods and ofpeople.

Indi rect taxes, whether in the form of VAT or exci ses, enter moreor less directLy into the final price of the goods or services on

which they are imposed. Different levels of taxation are thereforereflected in different price levels. If the differences in Levelare substantial, the differences in final prices will also be

substantial, though small differences can often be absorbed eitherin margins or by consumer indi fference. Given the relationshipbetween prices and levels of taxation, we need to consider whether

or not it would be practically possible, in the absence of frontiercontrols, for Member States to charge significantly differentleve ls of i ndi rect taxat i on.

The considerations which apply to commercial traffic and to the

individual traveller are not the same. They are therefore treatedseparately in the following paragraphs the VAT dimension i examined first the analysis is then widened to include theexcises.

Co..ercial Traffic and Value Added Tax

The starting point must be the 14th VAT Di rective and the system of

postponed accounting which shifts the accountancy procedures forVAT from frontiers to inland tax offices. The strongest point infavour of the 14th VAT Directive is that it embodies a tried and

proven system, operated by Belgium, the Netherlands and Luxemburg,and previously by Ireland and the United Kingdom. For a variety ofreasons, none of them convincing in the Commission s view theDirective has not yet been adopted by the Counci L, and this despitethe fact that the system it incorporates has the solid backing of

practical eiperience behind it. Adoption ~f the 14th VAT Directivewould unquestionably represent a valuable step forward insimpl i fying procedures and speeding the f Low of commerciaL traffi It would not, however, result in the complete abolition of frontiercontrols since documentation would sti II have to be provided at the

frontier and Member States would sti II wish to retain the power to

check movements of goods as a protection against fraudulenttransactions which would deprive them of revenue.

172. If, therefore, frontiers and with them frontier controls are to beabolished, a satisfactory Community procedure will need to be foundby which saLes and purchases across borders would be treated exactly the same way as similar sales and purchases within theborders of the Member States. In other words, the sale would betaxable in the hands of the vendor and the VAT incurred by the

purchaser would be deducti ble i rrespective of the Member State inwhich it has been charged. It would then be necessary to set up aCommunity "Clearing House System" to ensure that VAT collected inthe exporting Member State and deducted in the importing Member

State was reimbursed to the latter. Computeri sation of procedureswill play an important role in this context.

Page 45: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

173.

174.

175.

176.

177.

- 44 -

In principle the Clearing House System described above , would createa situation for taxable persons within the borders of the Communityidentical to that which exists within the borders of the individualMember States. But in practice the present widely divergent ratesand coverage of VAT would expose the system to the risk of heavyand systematic fraud and evasion. Apart from other devices itwould be' aLL too easy for traders in high rate Member States toobtain supplies from low rate Member States and omit them fromtheir records. Not only would this be a loss of revenue, but suchpracti ces wou ld result in serious distortion of trade between Lowrate and high rate Member States. No one would pretend that fraudand evasion do not occur at present and would not continue even iftax rates and coverage were approximated. .But the scale qn which it

could occur after the abolition of frontier controLs withoutapproximation would be unacceptably large.

Furthermore, the Clearing House System could not deal with theproblem of the smaLL trader not registered for VA, who couldlegitimately shop across the border and would do so wheresignificant differences in taxation and corr~sponding differencesin prices existed.

The only conclusion that can be drawn from this analysis is that nomeans exists of removing the frontier controls and thus thefrontiers if there are significant tax and corresponding pricedi fferences between the Member States.

The Individual Traveller

The fact that tax levels vary greatly from one member State toanother results in considerable differences in prices and creates apowerful incentive for people living in high tax countries to crossthe border and shop in low-tax countries. It needs to remembered that many Land frontiers in the Community cross heavi lypopulated areas. The Benelux countries, France and Germany cometogether in a geographical knot where cross-border shopping is easyand increasingly customary. Simi lar active cross-border shoppingtrade is found between Denmark and Germany and between the adjacentareas of Ireland and Northern Ireland.

It would not be possible without the introduction of a whole rangeof new and offens i ve cont ro ls to di sc ri mi nate between "genui netravellers and those who crossed frontiers to go shopping. It hasequally already been recognised that it is unacceptable to attemptto coLLect tax from every individual traveller carrying dutiablegoods in however smaLL quantities. For these reasons, and tofacH itate travel within the Community, a system of "traveLLers IaLLowances" has been developed. First adopted in 1969, they nowstand at goods .worth 280 ECU plus modest prescribed quantities ofcigarettes and alcoholic drink. Because of the problems of cross-border shopping, increasing difficulty has been experienced inobtaining the agreement of Member States to even modest increasesin the traveLLers ' allowances. While an increase to 350 ECUmay beagreed shortly, this is below what even in the present cir-cumstances the Commi ssion and the Parliament would consider to bereasonab le.

Page 46: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

178.

179.

180.

181.

- 45 -

The very existence of travellers ' aLLowances, their modest amounts

and the disproportionate difficulty in obtaining agreement toLimited increases all demonstrate that it would be impossible todismantle the fiscal frontiers unless there were a considerablemeasure of approximation of indirect ~axation.

Exc:ises

As far as the individual traveller is concerned, the position inrelation to excises does not greatly di ffer from that relating toVAT. ' This analysis concentrates therefore on the considerationsaffecting commercial traffic.

At present, so far as the trade is concerned, goods subje.ct toexcise duties are usually kept in bonded warehouses under control

of the authorities, the tax being suspended. The tax is thencharged when goods are taken from the bonded warehouse forconsumption, that is, delivered to a distributor, or direct to acustomer. When goods are exported, they are usua LLy exported "inbond" i.e. duty is suspended and cancelled after proof of export.This in itself requires a check at the frontier. Correspondingly,checks are made and the potential Liability is duly estabL ishedatthe point of entry into the importing country. Unless the goods

are imported into bond, duty then has to be paid. Alternatively,the goods may be received into a bonded warehouse and duty is

thencharged ,in the importing country only when the goods are about to

go into consumption, i .e. when they are delivered from the bondedwarehouse to a di st ri butor or di rect to the customer. Wh ile thi ssystem ensures that tax is charged only in the country where the

goods are ultimately consumed, and at the rates of tax chargeablein that country, it presupposes the maintenance of existingthorough frontier formal itie.

It aLready open to the Council to produce the fi rst simplificationof existing frontier procedures by adopting the directives oncommon structures for the excises which are aLready before it. further streamlining could be achieved by linking national systemsof excise suspension. Goods could then go from their place ofproduction or from a bonded warehouse in the exporting country and,with a minimum of control, cross the frontier to a bonded warehousein the importing country. The excise due would not be calculatedand charged unti L the goods were taken out of "bond" in the countryof destination. But though this system would indeed simpLifycontrols at the frontiers, it would not in itself mean that they

couLd be abolished.

182. If frontier controls were dismantled whi le the present widedifferences in exci se taxation persisted, the system would' beexposed to fraud and evasion. This situation would allow excised

goods to be routed through a bonded warehouse in a low ratecountry, taken out of "bond" there and shipped on for consumptionin a high rate country. There would also be a strong incentive forthose tr.aders in high rate countries who were not covered by thebonded warehouse system to obtain their goods in low ratecountries. The only way of dealing with these problems would be toimpose frontier controls, the very thing we are seeking to abolish.

Page 47: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

183.

184.

II.185.

186.

- 46 -

We conclude that there is no way of removing frontier controls forgoods subject to excise duties whi lst the present significantdifferentials in coverage and rates continue to exist.

Whether from the point of view of commercial traffic or of theindividual traveller, we conclude that the removal of frontierstogether with the associ ated cont ro ls wiL l requi re for pract i ca lreasons not only the setting up of a Community Clearing HouseSystem for VAT and a linkage system for bonded warehouses forexcised products, but also a considerable measure of approximationof indirect taxes. We wish to make it clear that complete har-monization which has come to imply absoLute identity in everyrespect, is not essential and for this reason we should now use theterm "approx i mat ion

APPROXIMATION

The fi rst question that has to be answered is how close doesapproximation have to be. The short answer is that it must besufficiently close that the operation of the common market is notaffected through distortions of trade, diversion of trade andeffects on competition. In this connection, American experience isinstructive. In the United States there are no fiscal frontiers assuch nor is there complete harmonisation of retai l taxes asbetween the individual states. American evidence thereforesuggests that some variations can be accommodated; but, in order totake account of market forces, these need to be limited in scale,with differences of upto 5% even between nei ghbouri ng states co-existing without undue adverse effects. Transposing this experienceinto the Community context would suggest a margin of +/- 2 1/2 percent either side of whatever Target Rate or Norm is chosen. In thecase of VAT this would be a very significant degree offlexibi lity. Thus, for example, if the Norm for the standard ratewere 16 1/2 per cent, actual rates adopted by Member States couldbe in the range of 14 per cent to 19 per cent. These figures areinserted purely as an i ll.ustration although as a matter of interestthe range of 14 per cent to 19 per cent encompasses the standardrates imposed by six of the nine Member States with VAT. In thecase of excises, the indicative range of +/-2 1/2 per cent wouLdbe less significant as excises frequently account for, a largeproportion of the retail price.

Retai l markets are often tolerant of quite significant differencesin retail prices. Distance, convenience, service, image and a hostof other factors enter into consumer choice; price is only one.But where competition is severe, prices do tend to move to a commonlevel. In such circumstances minor differences in tax levels tendto be absorbed by the trade, leaving the ultimate retail price tothe consumer li tt le affected. The pressures thus exerted on thetrade wi LL be transmitted to government. Thus market forces wi themselves create pressures to achieve a degree of approximationand in one case have already done so in the Community.

Page 48: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

The Broad Pi cture

187.

.. 4'1 ..

It will require a great deal of statist; cal ' and econometric workbefore specific ' proposals can be put forward. Much of this workcan, only be done' by or in association with Member ' Stateadministrations. , Indeed it would be surprisin.g if, many Member

" States had not, ' as a matter of routine, already mfjde such studies.This White Paper therefore confines itsetf ,to a general analysiswhich will 'enable the broad picture tQ 'be, , seEm ' and leave the,detai led studies to be undertaken as part of' the preparatory workOn the draft di rectives which wi II be requi red.

188. ' Table 1 sets out the ,total yieLd of indirect taxation, subdivided, into VAT and Excises, as a proportion of ' GDP in e-aGh of theMember States in 1982.

189. The point which emerges, immediately is' that for most 'Member Statesthere are no very significant differences from the average in thetotal yieLd of indirect taxation.

TABLE 1 - Indi rect taxation as percentag~ of the GDP (1982)

Per centVAT: EXCISEStotal Big five(1J'

VAT ANDEXCISES

BelgiumDenmarkGermanyFranceIreland

, ItaLyLuxembourgNether landsUnited Kingdom

6,!

, 6.4..

27'58,

10., 15. 71

11.17.

, 8.10.

Wei ghted .Average (2) 10.

(1) Tobacco products, beer, wine, spiritS and mineraloi l product(2) ExcLuding Greece, where the necessary statistics were not avai-

lab le

190. , Looked at in this way approximation presents' a ' manageable budgetaryproblem for most Member States and it would not seriously, disturbthe existing relationship between direct 'and indirect , taxation.The exceptions are Denmark and Ireland both ,of which rely heavi on indirect taxation and where the present , level measured as , a

percentage of GDP is , 50 per cent or more above- the Communityaverage.

Page 49: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

'48 -

191' ., When ' one ' looks ' at , the yield of the ' VAT and of the excise.separate ly, bi gger di fferences appeal'. In the case of the, VAT apreponderance of Member States have a yield around 6 per cent ofGDP (,i .e. within fhe range 6 per cent +/- 1 per cent) but , fourStates ha\le yields higher than this, of which two exceed 9, percent" , In the case, of the excises, the,re ar~ five Member Stateswith yields between 2 per cent and 3pe r, cent of GDP threeMemberSt(;ltes with , yieLds, of around 5 per cent and one member, State,Ireland" with a yietdof no less than ~~9 per cent.

To , sUm, up, the prob lem in most Member States i s not so much thetotal yield of incJ;r~ct taxation but the composition of that yield- the d.ivi$ion , between VAT and the exci,ses and within the excisesthe di fferences , , tax burden between di fferent sectors ' anddifferent product~. , But given adequate tim~ and ftexibiLity forspreading, the change over period of ' years, and , given thenece,ssary politlcal will, the approximation could be realized andit couLd ' be handled with no greater difficulty than many MemberStates have encountered in determining their domestic tax policy.

193.

194.

195.

196.

192.

Value AddedTcix

There are three questions to be addressecL in ~.e of VAT(1) th~ cO'mmon b~ covera.ge;(2) the n~f rates; and(3) t~ve l of the rate or rates, and parti cularly of the main or

standard .rate. AU these issues , are interlocking the extent of the coverage hasan important bearing ' on the number of rates; and' the level ofrates is linked both to the number and to the coverage.

, '

The 2nd ' VAT 'Directive introduced the ma in principles and the 6thVAT Di rective went a long way to fi U in the necessary detai ls of COmmon VAT base in the European Community. ' In some areas it wasnot possible', however to achieve unanimi ty. As a result certaingaps were l~ft to be' covered by subsequent di rectives, and a numberof derogati ons were included.

Three of the , supplementary di rectives stemming from the 6thDi rective hav al~eady been adopted by , the Council (the 8thDi rective concerning arrangements for the refund of VAT to taxablepersons established in another member State; a directive on VAT

: exemptions for final ' importation of certai,n' goods; and the 10thDirective on VAT on the hi ring out of movable tangible property).

Eight other draft Directives are sti II pending before the Councll.Together with three forthcoming proposals , they aim at carryingforward the work of achieving the common VAT base. After thei rapproval the main outstanding problem in this area wi U be theremainil:)g derogations. They wi U have to be tackled by subsequentproposals. The principaL areas where substantiaL differences incoverage St.l U exist are: food; second-hand goods; fuel andtransport; and the treatment of smaLl traders and farmers. Some ofthe most important derogations are connected with zero-rating offood and other goods and services in IreLand and UK. This is why

Page 50: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

197.

198.

199.

- 49 -

VI\I coverage is as low as 35 per cent of private consumption inIreland and 44 per cent in the United Kingdom whereas most MemberState!; cover about 90 per cent. The high rates of tax imposed inIreLand, and the comparativeLy Low yieLd in the United Kingdom areboth a reflection of this restricted coverage~ A move towards amore uniform basis would therefore be helpful in both theserespect s . Table 2 shows the rates of VAT in force in the Member States as '31 March 1985.

As far as the, number of rates is concerned

, ,

seven out of the nineMember States at present impose VAT at a reduced rate or rates inaddition to the standard rate and three of . these also impose ahigher rate. ' This wou Ld suggest that a common system would beli kely to have, more than one rate , Nevertheless, despite thepresent predominance of multiple rate systems, there , are strongarguments in favour of a single rate. TABLE 2 - POSlnVE RATES OF VAT IN MEMBER STATES (1):1985

As at March

VAT Rates

lower standard higher VAT as per-centage ofGDP

BelgiumDenmaGermany France 5. 5 and 7Ireland (3) Italy 2 and 9Luxembourg 3 and 6NetherLands United Kingdom(3) -

6 and 17

18.

25 (2)

33.

(1) Greece has not yet introduced VAT~(2) An additional luxury tax of 8 per cent is charged on certainproducts. (3) Ireland and the United Kingdom apply ze~o rates to a wide ran~e 'of goods and servi ces.

As regards the level of rates, it is of more than passing interestthat approximation within a range of 14 per cent to 19 per cent forthe standard rate (i .e. a Norm of , 16 '1/2 ,per cent +/- 2 1/2 percent) would encompass six of the nine Member States which have aVAT. A range of 15 per cent to 20 per cerit(a norm of 171/2 per

Page 51: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

200.

201. '

- 5'

cent +/- 2 1/2 per cent) wouLd encompass five Member States out ofthe nine. It must be stressed that these are only illustrativeexamp les speci fi c proposa ls must awai t more detai ,led study. TheCommission will in due course publish the results of these studiesas a basis for further discussions. Excises

In the case of the excises, Member States have fairly commoncoverage as regards the , excise duties on manufactured tobacco,alcoholic beverages and hydrocarbon oi Ls. The main exception iswine

. ,

No duty is charged on wine in Italy or Greece, it is chargedonly on sparkling wine in Germany and only on imported wine inLuxembourg. L ikewi se certain hydrocarbon oil products are exemptedfrom duty in some Member States: for exampLe, heavy fuel oil inBelgium, domestic heating oi l in Belgium and ' Luxemburg, andlubricants in Belgium, France and the Netherlands.

In view of the large number of excisable products; (for example 28alcoholic beverages, 7 mineraL oils) it is not practicable to showa tl the rates for the Member States. Table 3 does, however, give arepresentative picture of comparative excise duty levels in theCommunity.

TABLE 3 - EXAMPLES OF EXCISE DUTIES IN MEMBER STATES - AS AT MARCH

ECU per 20 cigar- 1 li treettes of beer 75 lit 1 lit ofof 40% premiumspi tits petrol

Revenue,fromtheseexcisesin percent ofGDP (1)

1 litreof wi

BelgiumDenmark

, GermanyFranceGreeceI re landIta lyLu~ embou rg

NetherlandsUnited K.

0..

58(2)

37 '

0.;49

0.03

, 0.

(1) 1982 fi gures(2) estimated average

202. For ci garettes the rates vary from 0. 28 ECU per packet of 20,(Greece) to 1. 96 ECU (Denmark). The striking feature of thefigures for beer, wine and spirits is that in each ' case theheaviest taxation is to be found in Denmark, IreLand and the United

Page 52: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

III.203.

204.

205.

, 206.

207.

- 51 -

Kingdom. Since the excise duties represent an extremely highproportion of the retail price (up to 69 per cent for cigarettes,52 per cent for petroL), such wide discrepancies in excise taxationare bound to have significant effects on market prices and hence onthe marketsthemse lves..

THE CO"'! SSION . S PROPOSALS

The broad approach must now be for the Counci l to agree that waysmust be found to ensure that the adjustment that wi LL be requiredwhen internal frontier controls are abolished in 1992 is not tooabrupt and that the interim period be put to the best possible use.A good start would be provided by Counci l agreement ,to intensifyefforts at completing work on the VAT base and the structure ofthe excises mainLy on the basis of proposals already presented bythe Commission. Simultaneously the Commission wi LL put forward astandsti LL proposal to ensure that existing differences withrespect to the number of VAT rates and the coverage of excises arenot wi dened.

A next step which we would hope could betaken in 1986 will be forthe Commi ssion to present Target Rates or Norms together withproposed ranges of variation.. Member States wi LL then have theoption of moving a given indi rect tax immedi ately or in a seri es ofshifts towards the common rate band. During the same periodfurther consideration wi lL need to be given to existing derogationswhich have distorting effects on the Internal Market to see whetherthey need to be continued. The administrative arrangementsneccessitated by the new proposals wi II need to be put into place.

The following paragraphs set out the ' specific measures theCommission proposes should be taken together with reasonable targetdates. VAT and excises are examined separately and in turn.

Value Added Tax

Work on the common VAT base shou.ld now be taken forward by theapproval of proposa ls already presented by the Commission to theCounci l. They cover subjects like works of art, antiques and usedgoods, the import of second hand goods by final consumers(including the problem of double taxation) and the temporaryimportation of goods other than motor cars etc; and some limitedmoves towards abolition of derogations provided for in the 6th VATDirective.

There are eight draft di rectives involved. Considerable work hasalready been. done by the Counci l ,on a number of the draftdirectives and they should all be approved by the end of 1986.

Three proposals wi LL be presented by ' the Commission in 1985dealing with the special schemes for smaLL businesses, for flat-rate farmers and for passenger transport. These should then beapproved in the course of 1986.

Page 53: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

208.

209~

210.

211.

212.

- 52 -

Whi le this work is proceeding in the Counci l, the ,Commission will,in the course of this year, put forwa.rd proposaLs forstandstilL" It will not be possible at this stage to definethis in terms of rate!?, but provisions 'should be adopted whichwi II exclude the proliferation of VAT rates in Member States, " orthe widening of the gap between VAT rates, since this would makesubsequent adjustment more difficult.

Work on the next decisive stage, the approximation of rates, wouldommence after the Commission had presented the proposals~ These

wi II cover

the rate structure, i.e. whether the common VAT system has ' one,two or even more rates; i f more than one rate i s to be adopted'the proposaLs must indicate which goods and services should becharged aj: each of the rates;

the Target Rate(s) or Norm(s), i.e. the centraL-rate or rates,together with the permitted ranges of variation around them.

The proposals for the rate band or bands should be accompanied by a standstill provision, under which Member States would undertake notto move away from, but only towards, the common goal.

On the basis of these proposaLs, the necessary adjustment of ratescan then go forward. Member States wouLd have a period of someyears, following the adoption of the directives, in which tocomplete approximation by the end of 1992.

During the same period outstanding problems on the coverage of VATwi lL need to be resolved. They include VAT derogations with'distortive effects, such as significant differences in taxationbetween Member States of the same goods ' o.r , services. TheCommission wi lL put forward the necessary proposals as soon as it is cLear what the future objectives for rates will be as these aredecisive factors in assessing the risk or extent of distortion.. The final element on the VAT side wi II be the new arrangements fortreating sales and purchases across borders fn the same way asthose within Member States, with the sale taxable in the hands ofthe vendo and the VAT incurred by the purchaser deductibleirrespective of the Member'State in which it had been charged. Theonly formal ity which would be required ,of the taxabLe purchaserwould be to include tM deductible VAT in the box in his tax returnwhich corresponds to his supplier s Member State. A ClearingHouse System would have to be set up between . theMember , States sothat the VAT collected in the exporting Member State and deductedin the country of import could be credited to the latter . Withmodern information technology such a Clearing House System wouldnot demand heavy resources. But it wou Ld requi re mutual confidencebetween Member States ' VAT colLecting authorities. The ClearingHouse System could be brought into operation before the processof rate approximation had been completed. This wouLd achieve adecisive simplification for commercial transactions before thefull new tax structure came into force by the end of 1992.

Page 54: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

213.

- 53-

Excises

In the case of the excises, Counci l negotiations on the structureof the duties alcohoUc drinks a re now fC!r advanced, and 'package solution $hould , be achieved before the end of 1985. Nextin line, for approval before the end of ' 1986, will be the excisestructure for mineraL oi l products, and the thi rd stage' of thecommon cigarette duty structure. Th~ relevant, proposals arealready before the Council. The next step, will be for theCommission to table proposals for the final stage of the cigaretteduty structure and for a common structure for

' ,

the excises onother manufactured tobacco. These proposals should in their turnbe approved in the course of 1987.

214. In framing proposals ' for common rates it is necessary to Look atthe VAT and excises together. The reason f'Or this is that highyieLds from VAT often ten9 to be, counterbaLanced by low yields fromthe exdses and vice versa. In short the figures to be adopted forthe/exc.;se rates are dependent to someextent on the r~tes .adoptedfor VAT. The two sets of proposals must be presented together. TheCommission proposals for excise rate bands will therefore bepresented aLongside the simi tar VAT proposal , during, 1986. There'wi II be a proposa L for a, rate band for each of the, ex,ci ses to

" retained (tobacco prpducts, beer, wine" intermediary products,spirits and mineral oil products). ' ese will need to accomp,ani ed by a "standsti ll'" whereby Member States wouLdundertake to avoid moving away from the common bands.

During the subsequent period up to the end of 1992 Member Stateswi II need to carry out the adjustments requ~ red to the coverage oftheir excises and the , approximation of rates. The changes incoverage wi II inc lude the extension or introduction of , wineexcise in some Member States and the abolition or reduction of allexcises other than the common' ones, where tl1ese ' would createdistortions in the operations of the Common Market.

, ,

Examples areexcises on tradeable goods, such as coffee or tea.

215.

216.

217.

Finally, it will be necessary to introduce a system to Linktogether the bonded warehouse systems in individual Member Statesin order to allow intra-Community transactions in exci sed goods totake place without fronti er controls. Proposals for such a linkedsystem wi II be tabled as the approximation of rates goes forward.It wi II be possible for this to be done separately for' each groupof excises, probably with mineral oi ls, where present deviationsare smallest, as the forerunner. Enforce8ent

It is not of course, enough simply to pass Community legislation.One must .also ensure that the rules of the ' Treaty and of thederived legislation adopted under it are implemented and enforced.In the fiscal as in the other spheres, pursuit of infringements ofthe existing Community, law must go hand in hand with positivelegislative measures. The Commission has a duty not only to propOselegislation under Article 99 of the Treafy, but also to seekrespect of the principles of non-discrimination Laid down ' in

Article 95. It wi II continue to carry out ,that duty as an essential

Page 55: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 54 -

eLement of the drive 'to eLiminate aLL barriers to the conipLetion ofthe Inte rna L. Market.

Derogation$

218.. It has, a treadY ,been ~acfe clear in, the Introduction to this WhitePaper that the Commission recognises that the appro~iination ,indirect taxation' wilL give rise , to considerabLe problems for" someMember States ; , and that as a consequence ;,t may be necessary toprovide for ' derogations. There are areas ofconsiderable politicaLsensitivity wh ich ' may have to ' be accolJlmodated in this way.Neverthe less it , i s i n , the genera l i nterests of the Communi ty , thatsuch derogations , should be kept to the minimum.

Page 56: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

220.

221.

222.

- 55 -

CONCLUSION

219. Europe st~nds at the crossroads. We either go ahe.ad - withresolution and determination - or we drop back into mediocrity. can now either resolve to complete the integra~ion of the economiesof europe;or, through a Lack of political wilL to face the immenseproblems invoLved, we can simply aL low Europe to develop into nomore than a free trade area.

The difference is crucial. A weLL developed free trade ,area offerssignificant ' advantages it is something much b~tter than thatwhich ' exi~ted before the Treaty of Rome; better' even than thatwhich exists today. But it woyld fail and f~i l dhmatly to releasethe energies of the people of EurQpe; it would fail to deployEurope s immense economic resources to the maximum advantage; and, it wouLd fail to sathfy the aspirations of the peopLe of Europe.The free movement of goods is an important, vaLuable and possiblyindispensable step which has to be taken before economicintegration can be achieved. But it is not the ultimate goal; best it is the indispensable precursor. This philosophy is cLearlyrefLect,ed in the Treaties themselves. The Customs Union was thefi rst objective of the Treaty of Rome. But that it was by no meansintended as, the last is cLearly demonstrated by the fact that whatthe Treaty estabti shed was the European Economi Community. Thepreamble to the Treaty starts with the declaration

- i' Determined to lay the foundations of an ever closer unionamong the peoples of Europe, resoLved to ensure the eco-nomic and social progress of their countri~s by commonaction to eliminate the barriers which divide Europe

Just as the Customs Union had to precede Economic Integration, soEconomic Integration has to precede European Unity. What this WhitePaper proposes therefore is that the Community should now take afurther step along the road so clearLy deLineated in the Treaties.To do less would be to falL short of the ambitions of the foundersof the ~ommunity, incorporated in the Treaties; it wouLd be tobetray the trust invested in us; and it would be to offer thepeopLes of Europe a narrower, Less rewarding, less secure, lessprosperous future than they couLd otherwise enjoy. That is themeasure of the chaLLenge which faces us. Let it never be said thatwe were incapabLe of rising to it.

Page 57: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

Annex to the Wh iteP.pel"

TIME ABLE FOR COMPLETINGTHE INTERNAL MARKET IJY 99~

Page 58: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

CONTENTS

INTRODUCTION

p. '

I.

PART ONE THE REMOVAL OF PHYSICAL BARRIERS

I. CONTROL OF GOODS1. Various controls

i. Period 1985-1986, H . Period 1987-1992

' ,

2. Veterinary and phytosanitary controlsi. Period 1985-1986 it. Period 1987-1992

II.

..

CONTROL Of INDIVIDUALSi. Per;od1 85-1~86ii. Period 1987-1992

p. 6,

p. 12

PART TWO REfI10YALOF TECHNICAL BARRIERS

I. FREE MOVEMENT OF GOODSNew approach n standards pot;

i. Period 1985-1986ii. Period 1981-1992

2. Sectora lproposats :1. Motor vehicles

i. Pedod 1985-1986ii. Period 1987-1992

2. Tractors and Agricultural machinesi. Period 1985-1986li. Period 1987-1992

3. Food Lawi. Period 1985-19861;. Period 1987-1992

. Pharmaceuticals and high-tech-medi cines

i. Period 1985-1986ii . Period 1987,-1992

5. Chemical productsi. Period 1985-1986ii. Period 1987"1992

6. Construction and constructionproducts i ~ Period 1985-1986

, H. Period 1987-19927. Other items

i. Period 1985-1986ii. Period 1987-1992

p. 14'

p. 15p. 15

p. 15

p~ 16

p. 17

p. 18

p. 19

p. 20

II. PUBLI C PROCUREMENT

i. Peri ad 1985-1986ii. Period 1987-1992

p. 21

Page 59: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

III. FREE MOVEMENT FOR LABOUR AND THE PROFESSIONS

, ' . ,

Per d 1985":1986

, ,

ii. Period 1987~1992

IV. CONMON MARKET FOR SERVICES1.. F nanc Serv ces

1. Banksi . Period 198~-1986

H. Period 1987-19922. Insurance

, "

i. Peri od 1985-1986 'ii. P,riod 1987~1992

3. Transactions tn securitiesPeri od 1985;"1986

ii. Period 1987-19922. Transport

i. Pe,ri od 1985-1986ii. Period 1987-1992

3. New technologies and servi cesi. Peri od 1985-1986

V. CAPITAL MOVEMENTSi. Per od 1985

ii. Period 1987-1992

VI. CREATION OF SUITABLE CONDiTIONS FOR INDUSTRIALCOOPERATION1. Company Law

i. Period 1985-1986H. Period 1987-1992

2. IntetLectua l and industriaL propertyi. Peri od 1985-1986'

ii. Period 1987-1992 3. Taxat ion

Period 1985"':1986

VII. APPLICATION OF COMMUNITY LAW1. Transparency

i. Period 1985~1986ii. Period 1987-1992

2. Competition policy and state aid

i. Peri od 1985-1986

PART THREE : REMOVAL OF FISCAL BARRIERS

I. V. A..

i. Period 1985-1986;;. Period 1987-1992

II. EXCISE DUTIESi. Period 1985-1986

ii. Period 1987-19~2

p. 23

p. 25p. 25

p..

p.. 26

p. 27

p. 28

p.. 28

p. 29p. 29

p. 31

p. 31p. 31

p. 32

p. 33

p. 34

Page 60: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

INTRODUCTION

The Commissi. s White Paper sets out, the essential and logicaLconsequences of accepting the Europe.an CounciL' s repeated comniitmentto compLeting ' the Internal Market by 1992, together with an action

programme of the measures needed to meet that objective. This Annexto the Paper ~ets out the detailed timetable for implementing th,COni/ll;ss;on s proposed prograrjme~

The timetable ;'s set out in tabular, form and is divided into Partswhich correspond to the ' Parts of the' main body of the Paper. Withineach Part of the, timet~ble, the specific measures proposed by the Commission are separated into two p!:tl"iods, 1985to 1986 and 1987 to 1992,according to ttle year in which the Commission s proposal wiLL, be made.However, the timetable for the period 1985 to 1986 also incLudesmeasures which,. though not necesf,iari ly mentioned in the body of thePaper, have~Lready been propQsed to the Counci l and . rem~in an essentiaLpart of the 'Commissi s PrQgramme for completing the Internal Market.

The specific ~a$ures set out in the timetable aim to eLiminate barriersof all M:nds:(physi. cal, technical and fiscal). They would have an irnpactdirectly or'indirectlYi on the lives of all Cpmmunity citizens and onthe functions 'of Community enterprises of all kinds. By 1992, Communitycithens would ,for the first time be free to move within the Communitywithout systematic checks on their identHy or persona Lbelorigings;goods would be freed of aLL controls at internaL frontiers; Communitymanufacturers wpuld be able to market freely thei r goods on the basisof mutually agreed standards throughout the Community; and enterpriseswould be relieved of the current obstacles to providing cross-borderservices. Clearly, the, Inte,rnal Market cannot' be compLeted at a stroke. .Theinterim period , leading up to 1992 must be put to the best possible use toensure that the adjustments needed to cope with the finaL dismcmtling ofinternal frontiers are not too abrupt. Progre$S towards the objectiveneeds to be disc~rnableat an early stage, and wi Ll be lO provided thatthe proposed timetable is respected.

When wi Ll Community citizens and enterprises see tangible evidence of theeffect of the measures proposed? The fo Llowing mi Lestones a long the pathto completion of the Internal Market .give some indication of the progress

and benefits the Commission would wish to see.

For Community, citizens, and in particuLar, travellers, the first evidence

would be the , further easing of border controls and the introduction ofincreased duty free allowances by 1986; by 1988, checks on individualsleaving one ,Member State for another wouLd be eliminated; and by 1992,all systematic checks on the movement of citizens within the Communitywou ld di sappea r.

As far as the control of goods is concerned, controls on the amount offuel carried by commerciaL road vehicles would be abolished by 198,controls on transport authorisations wilL be eliminated by 1986; by 1988veterinary cot:ltrols will be limited to places of departure and controLson veterinary ' and pLant health certificates to the places of destination;

Page 61: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

II.

also by 1988 controLs of road transport quotas would be aboLlshed;by 1992, further harmoniSation of veterinary and plant he,lth standardsand the use of the Community he,alth 'mark for animaL products wouLdeLiminate the need for frontier controLs. Community manufacturers ,would benefit progressively between now and1992 from the Commission s proposed new approach to technical harmonisatioand standards poL icy and from the , app' roximat;on of riat;ona l laws.. TheCommission s specific proposals will cover a very wide range of products,such as motor vehicle's, tractors a.nd agricultlilral machines, ' food, chemicaL

. :

and pharmaceutical products. ' Progresstowards the el iminat;on of barriers to trade wiL L vary from sector tosector, but, in the pharmaceutical sector, for exampLe, all obstacles tothe free circulation of pharmaceutical products would be removed by 1990.

Further benefits to Community manufacturers and suppl iers ,~i LL accruefrom the opening up of tendering for public contracts. By 1988, fourmajor sectors (energy, transport, water and teLecommunications) wouLdbe included in the system of prior information and publicity.

In the financia l servi ces field, greater freedom to provide servi ceS ininsurance!other than life insurance wouLd be achieved as early as 1986;by 1989, there would be freedom to supply services in the motor Liabilityinsurance! sector; and by 1991, obstacles to the supply of life insurancewouLd be eliminated.

Early evidence of progress would be seen in the transport sector. Thefreedom to provide sea transport services between the Member States wouLdbe established by the end of 1986; there wouldbe ~imtLa~' .~Hi.vementsin the air'transport sector by 1987 and in the road transport of, goodssector by 1988. The transport of passengers by road would beli be ra li sed by 1989.

. "

Significant landmarks in harmonising intellectual and industrial propertylaws would be the creation in 1987 of a Communitylrade M~rkand the entryinto force in the same year of the Luxembourg Convention on the CommunityPatent.

Page 62: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

TIMETABLE FOR COMPLETINGTHE INTERNAL MARKET BY 199

- The present time table has been drawn up in such a way as to allow atleast one year for the Member States to implement the measuresconcerned.

- Asterix denotes existing proposalsconsol idation progr.amme COM(84)305

- Two asteri xs denote proposals madeprogramme.

mentioned in last yearsfinal of 13. 1984.after presentation of consolidation

PART ONE : THE REMOVAL Of PHYSICAL BARRIERS

I. CONTROL O.F GOODS

Subject Doc n Date ofCommis-

s i onproposal

Expecteddate foradopt ionby Council

1. Various contr'l!!PERIOD 1985-1986

Simpl ification of Community transitprocedure : di scont i nuance of presen-tati on of transit advice note andguarantee*

COM C79) 456 1979 1986

Duty free admission of fue contain the fuel tanks of commercia l motorvehi cles*

COM(84) 1 1984 1985

Road transport : Abolition of controof quotas at border crossings

1985 1986

Transport of travellers : aboli-tion of border controLs related totransport authorisations

1985 1986

;~~~~~-

~985:8~-

~~;;;-

~xisting propo.sals (one or two asterixs) to beadopted by the Counci l within this period and new proposals to bepresented in 1985 and 1986.

Page 63: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 6 -

SUBJ ECT Doc . Date oCommi s-

si onproposaL

Expectedate foradopt ionby Council

**Access;on of Spain and Portugaltechnical adaptation

Act ofLegisLati.85-86

~ Admin strat ve Document (SAD)

fo L Low up

1985 1985COM(82) 401

Introduct on of commonborder posts ("banaLisation

1986 1986

Abol ition of customs presentationcharges 1985 1986

PERIOD 1987-1992

CompLet on of work Lead ng tofuLL abolition of all remainingimport formalities and controlson goods between Member States- statistical harmonisation- elimination of all nationaL

protect ive measures and allregionaL quotas, in Line withthe Community s commercia L poL icy

- Tax , approximation onT. and excise duties (see

Part Three).

1987

1989

1987-1989

1990

1989

1988-1990

2. Veterinary and phytosanitary controls

PERIOD 1985-1986

- Live animals of the bovine species:amended eradication di rectives to providefor finaL eradication of tubercuLosis,bruceLlosi s and leukosis in .al L MemberStates including PortugaL and Spain

1985 1986

- live animals of the 'porc ne specmodify, intensify and proLohgDi rect iveson eradication of cLassicaL swinefever in the Community as a whole and ofAfrican swine fever in Sardinia, Spain andPortuga l

1986 1987

- creat on of a spec veter nary funfinance the above mentioned eradi cationprogrammes and provide financiaL assistancein reLation to controL and eradicationof other diseases which may ari

1986 1987

Page 64: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 7 -

SUBJ ECT Doc . Date ofCommi s-

si on I sproposal

Expecteddate foradopti on

by Council

- production and trade in miLk*

- production and trade in medicatedfeedi ng stuffs*

- hormone growth promoters

COMC71 )64+ 1971COM(71) 1012+COM(72)884

COM (81 )795 1981

COM(84)295 1984

1985

1985

1985

- mi9robio LogicaL controls (meatspouLtry, red meat)* 1985COM (81) 500+

COM(84)4391981

- boar meat* 1985COM (83)655 1983

- medicaL examination of personneL* COM (84)337 1984 1985

- personneL responsibLe for inspection* COM(81 )504

- minced meat and simi Lar

1981 1985

- antibiotic residues*

- controL of residues**

- pedigree of bovine animaLs*

- pedigree of porcine anima

CO", (81) 1981

COM(85 192 1985

COM (79)649 1979

1985

1986

- imports of meat products fromthi rd countri es (animaL and pubL i chea l th)

- swine fever

- control of foot and mouth disease

Aujesky di sease and swinevesicular disease

- semen of anima

- modification of Directives72/461/EEC and 72/462/EEC

COM(84)530 1984

COM(84)900 1984

COM(82)+ CO",(83)584

CO", (82) 529

COM(83)512 1983

CO,.,(84) 500 1984

1986

1985

1985

1985

1985

- modification of Directive 77/99/EECon meat products

19861985

- first revision of the safeguardcLause concerning the veterinarythe export ing "'ember State takesthe appropriate measures subjectto Community decision

sector:

1986 1987

Page 65: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 8 -

SUBJ ECT Doc . Date ofCommi s-

s ionproposal

Expecteddate foradopt i onby Council

- formulation of di rectives concerninganimal hea Lth problems relating totrade in :. live poultry, poultry meat and

hatch ing eggs. dogs and cats

- Live animals of the bovine an porspeci es : amend Di rect i ve 64/432 to pro-vide for inspection and certification inherd of origin and, when necessary, re-inspection at place of destination

1986 1987

1987

- products of anima ls of the bov ne andporcine species and of poultry; amendDirectives 72/461/EEC, 80/215/EEC and71/118/EEC to provide for inspectionand certification at the placeof product ion and re-inspection,in the case of suspicion offraud at the place of destination

1986 1987

- rei nforc.ement of Community chec s ofapplication by on-the-spot Commissioninspectors; budget proposaL

1986 1987

- reinforcement of arbitration odi sput es 1986 1987

- appli cat ion of a Community veterinaryaction programme to controlirregularities and fraud in themovement of anima ls and animalproducts

1986 1987

- modification of the ruLes of frontcontro ls re lat ing to wel fare ofanimals in internationaL transport inorder to realise the free circulation

1986 1987

Proposal to amend Directive 77/93(plant health)* COM(84)288 1984 1985

Definition of role of Communityplant hea lth i nspectorate(amending Di rect ive 77/83) 1985 1986

Amendments to Art. 15 of Di recti ve77/93 (improvements to theoperation of safeguard provisions) 1985 1986

Page 66: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 9 -

SUBJ ECT Doc . Date oCommi s-

si onproposaL

Expectedate foradopti on

by Council

Further alignment of additionalpLant hea Lth standards set upby Member States in respectof thi rd countryproducts (amendingDi rect ive 77/93) 1985 1986

get proposa L ena ling estab L i shmentof Community pLant heaLth inspecto-rate 1986 1987 Budget

Proposal for a Directive concerningthe fixing of guidelines for theevaluation of additives used inan ima L foods tuf fs 1986 1987

ProposaL for fixing maximum LeveLsfor pesticide residues in foodstuffsof animal origin* COM(80) 14 1980 1985

ProposaL for fi xing maximum Levefor pesticide residues in feeding-stuffs* COM(77)377 1977 1986

Proposal for the modification ofdi recti ve 76/895/ EEC (maximumLeveLs for pesticide residue infruit and vegetabLe) 1986 1987

ProposaL to amend the annex ofdirective 76/895/EEC concerningresidues of pesti cides in and onfruit and vegetabLes (ethoxyquinand diphenyLamine)* COM(82)883 1983 1985

ProposaL to amend di rective 79/117on the prohibition of certainpLant protection products (ethyLeneoxide)* COM (82)712 1982

1986

ProposaL for the pLacing of plantprotection products on the market* COM(76)427 1976

ProposaL for the improvement ofCommunity systems of certificationof seeds 1985 1986

ProposaL for a system of certificationof reproductive materiaLs in fruitplants 1986 1988

Proposal for 4 years research programmeinto effective methods of controLL ingce rta i n harmfu l organi sms 1986 1987

1985

Page 67: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 10 -

SUBJ ECT Doc . Dat e

Commi s-

si onproposal

Expecteddate foradoptionby Counc i l

PERIOD 1987-1992

live animals of the bov ne specformulate di rectives for eradictionof contagious bovine pleuro-pneumonia in Portugal and Spainand for Blue Tongueon Greek Islands

1987 1988

- embryos of farm animals : Directivefor trade 1987 1988

- formulation of Directives concerninganimal health problems relat'ingto trade in:. live animals of equine species. Li ve ani ma ls of bovi ne and

capri ne sped es. live fish and fish products

1987 1988

ProposaLs limiting inspections toplaces of departure and proposalsconcerning the checking of plant healthce rti fi cates at the places ofdestination

1987 1988

1987 1988

1988 1989

1988 1989

1988 1989

- estabL ishment of certa n ruof Liability in respect of planthea lth

- brucellosis in smaL ruminants

- echninocol issis

- formulation of directivesconcerning veterinary inspectionproblems relating to trade inanimals and animal productsnot covered by exi st ingDirectives

- harmonised health conditionsfor production and trade in . shellfish and crustaceare and

prepa rati on

. fish and fish products

. game meat, products and preparations

198819881988

198919901990

- pedigree anima ls not covered byexisting Directives 1988 1989

Page 68: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 11 -

Expectedate foradoptionby Counc i l

SUBJ ECT Doc Dat e oCommis-sionproposal

1989 1990

1989 1-990

1990 1991

- simplification of annexes in Directive77/93 (plant hea lth)

- alignment of national standards andintra-Community standards in plant hea l th

- reduct on in ro le ofphytosanitary certifi catein intra-Community trade

- proposal for a system of certi catin reproduction .materials fordecorative plants 1989

harmful or.ganisms especiaLLyin seed potatoes and in fruitplant reproductive materia

1987

1990

1989

Revi s i on of labe LL ing rules forfood, dr.awn up in view of a uniformEE C labe l 1987

1988Guidelines forchecking requi rementsconnecti on with the approval of

plant protection production

1987

1988

- extension of applicatDirectives 66/401/EEC,70/437/EEC and 70/458/EEC seedl ings 1987

- proposal for creation of aEuropean law on plant breeders

1988

187

- harmonisation of control offoot and mouth di sease

- harmon i sed hea lth condit ions forproducti on and trade in food productsof anima l origin not covered byexisting legislation e.

1990

1990

, '

1992

199

- second revi sion of the safeguarclause concerni ng theveteri narysecto r:the exporting Member Statetakes the appropriate measures inorder to avoid specific measures inintra-Community trade.

1991 1992

- pathogens in feedingstuffs 1991 1992

Page 69: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 12 -

SUBJ ECT Doc . ()ate ofCommis-si onproposaL

Expecteddate foradoptionby Council

- appLi cation ,of hea th standards tonationaL products

1991 1992

suppression of veterinarycertifi catesof animaL products and simpLificationof certificates for Live animals.

1991 1992

- suppression o ant hea cert ifi cates 1991 1992

II. CONTROL Of INDIVIDUALS

PERIOD 1985-1986

Sixth Directive reLative'to exemptions in internationaltraveL : increase to 400 ECU*

Seventh Directive relating to

exemptions in internationaL traveLtax-free saLes*

COM(83)117 1983 1985

COM(83)166 1983 1986

Tax re iefs to be a Lowe on theimportation of goods in smaLLconsignments of a non-commerciaLcharacter* COM (83) 730 1983

rective on the eas ng ofcontrols at intra-CommunityBorde rs **

COM(85)224COM (85H49 1985

1988Directive on the approx matof arms legisLation 1985

Directive concerning abolition ofpoLice controls when leaving oneMember State to enteranother (intermediary stage) 1986 1988

PERIOD 1987-1992

1985

1985

Directive on the approximationof drugs LegisLation 1987 1989

Directive on the coordinationof ruLes concerning the status ofthird country nationaLs. 1988 1990

Di recti ve on the coordinati of ruLes concerning the rightof asylum and the status of refugees 1988 1990

Page 70: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 13 -

SUBJECT Doc . Dat eofCommi s-

sionproposal

Expectedate foradoptionby Counci

Directive on the coordinationof national visa policies

rect ve on the coordinationof rules concerning extradition

1988

1989

1990

1991

Page 71: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 14 -

SUBJ ECT Doc . Date oCommis-si onproposal

Expectedate foradopt i onby Counci l

PART TWO : THE REMOVAL OF TECHNICAL BARRIERS

I. FREE MOVEMENT Of GOODS

1. New approach in technical harmonisation and standards pol icy

PERIOD 1985-1986

Proposal for the extensionof information procedureson standards and techni cal rules (amendmentof di rective 83/189/EEC)

1986 1987

Standardisation in theadvanced manufacturing equipmentsector 1986

No formaldeci sianneeded

Certification : index of bodies 1986 No formaldecisionof theCounci lneeded

Recognition of tests and certificates In pr pleno formaLdec i s ionof the Counci needed

Construction sector - specific index of bodies- Eurocodes : adoption of EC1

EC2, EC3 and EC8- Recognition of tests and

decisions

No orma

decisionof theCounci lneeded

PERIOD 1987-1992

Proposa ls to be made for machi nesafety, pressure vesse ls, roadmaking equipment,electrical interferences, Liftingequipment in order to implementthe new approach

ectrome ical equipment

1987

1988

1987-1988

989

Page 72: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 15 -

SUBJ ECT Doc Date ofComm i s-

sionproposal

Expectedate foradopt ionby Counci

2. Sectoral proposals concerning approxi8ation .of laws

1. Motor vehi cles

PERIOD 1985-1986

1985- gaseous em ssions passengercars

- gaseous emi ssions- diesel parti culates- speed limits- revision of framework

Directive 70/156/EEC- revision of breaking Directive

1985198519851986

1986

1985

1986198619861987

no decisionneeded

PERIOD 1987-1992

Revision of European test procedurefor gaseous emi ssions

1987 1987

1987 1987

1987 1988

Revi sion of limit values for gaseousemissions of cars below 1400 cc

Global assessment of protectivecharacteristi cs of passenger carsin frontal and LateraL impact

Implementation of EEC type approvalscheme for other motor vehi c les (busesand coaches, motorcycles)

1989 1990

Adaptation of exi st ing CommunityRegulati ons

1987-90 No dec is i onneeded

2 Tractors and Agri cut tural machines

PERIOD 1985 to 1986

Imp ementat on D rect ve 74/1 EEC(wei ght and dimensions, driveshaft,engine stopping device, windscreen wipersfoot rest)

1986 1987

Page 73: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 16-

SUBJ ECT Doc . Dat e

Commi s-

si onproposaL

Expecteddate foradoptionby Counci l

PERIOD 1987-1992

Adaptation of existing CommunityRegulations

1987-90 No decisionneeded

3. Food law

PERIOD 1985-1986

GeneraL Directive on food additives(in part modifi cation of existingdi rectives)

1985 1986

GeneraL Directive on materials andarticles in contact with food (amendment)

1985 1986

GeneraL Directive on food for particuLarnutritionaL uses (amendment)

1985 1986

GeneraL Directive on food La ing(amendment)

985

GeneraL Directive on food inspection 1986 1987

GeneraL D rective samp ng and methoof analysis COM(84)39 1984

GeneraL Directive on quick frozen food

COM(84)489 1984

Management of exi~ting verticalDirectives (procedure)

1985

1985

Flavour ings*COM(8Q) 286

COM(82) 166 1980 1985

COM(83)626COM (85H9 1983 1986

Extraction solvents*

Preservat ives*

(modi fi cati on)

COM(81 )712 1981

COM(84)4 1984

COM (84)703 1984

COMUSj) ('6( '1'64

EmuLsifiers (modification)

Infant formuLae and foLLow-up miLk(dietetic foods)*

Cocoa and chocolate conso atlon*

1985

1985

1986

1966

Page 74: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 17 -

SUB.JECT Doc . Date ofCommi s-

si onproposal

Expecteddate foradoptionby Counc i l

Coffee extracts chicory extracts(modi fi cati on)

COM(84)138 1984 1985

COM(82) 1982 1985gation to cate ngred entsand alcoholic strength*

Claims in the abell ing of foo stuffs* COM(81) 1 1981

984Simulants (plastic materia n contact COM(84)1with foodstuffs)*

1985

1985

Modi fi ed sta rches*

Fruit Juices etc... (modification

COM(84)733 1984

1985

1985

COM (84) 1984

1986

1986

Jams etc (Modi f i cat i on

Proposal for a Directive amendingDirective 79/581/EECon consumer protection in theindication of the pricesof foodstuffs

1986

1985

PERIOD 1987-1992

GeneraL Di rective on i ~radi ationof foods tuf

1987 1988

1987 1988

1987-1989 1988-1990

General Directive on new foodstuffsobtained by a biotechnoLogical process

Additional labe ing requi rements(Nut riti on labelling)

Adaptation of directives on technical progress

4. Phar8aceuticals and high-technology medicines

PERIOD 1985-1986

Proposals for D rective concerningthe placing on the market of high-technology medicinal products incl.those derived from biotechnology*

1984 1986COM(84 437

Proposal amending Directive 318/EECconcerning the testingof medical specialities

Idem 1984 1986

Page 75: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 18 -

SUBJ ECT Doc . Dat e oCommi s-

sionproposal

Expecteddate foradopti on

by Counci

ProposaL amending Di rect ive 81/852/EECconcerning veterinary medicinalproduct s

Idem 1984 1986

Proposal for a Counci l Recommendationconcerning tests reLating to the pLa-cing on the market of medicalspecialities

Idem 1984 1986

Proposal for a Council Directiveamending Directive 65/65/EECconcerning medical specialities

Idem 1984 1986

Pri ce transparency in prices medi cines and socia l security refunds

1986 1988

Membership of the European P armaco-peia 1986 1987

PERIOD 1987-1992

Extension of Di rectives to medi cinaproduc t s no tal ready i n cl uded

1987 989

Amendment to the Di recti ve onveterinary medicines

1987 1989

Pharmaceutical products

, -

completion of work el iminatingobstacles to free ci rcuLati on ofpharmaceut i ca l products

1989 1990

Harmonisation of conditionof di stri but i on to pat i ent s

Informati on of doctors and pat i ent s

1990

1990

1991

991

5. Che.ical products

PERIOD 1985-1986

Council Directive relating torestri ctions on the market ingand use of PCBs (polychlorinatedbiphenyls)

Counci L Directive relating toRestrictions on the marketing and

use of asbestos

COM(84)513 1984 1985

COM(79)419 1985

COM (83) 556 1983

Page 76: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 19 -

SUBJECT Doc . Dat e

Commis-sionproposal

Expectedate foradoptionby Counci

Commission Directive adapting theDi recti ve 67/5481EEC "Dangeroussubstances 1985

decisionneeded

Commission Directive relatingto "Ammonium ni trate 1985 decision

needed

Non-ioni c detergents (modificationof the existing di recti ve) 1986

Classification, packaging andlabelling of dangerous preparations

COM(85)217 1985

1985

COM(85)63 1985

1986

Membership of the EuropeanAgreement on detergents

1986-1987

1986

Liquid fertilizers 1988

PERIOD 1987-1992

Secondary fe rt i l i zers 1987 1989

1988 1990

1989 1991

- Oligo-e lements in ferti li zers

- Method of analys is for secondaryfertilizers and oligo-elements

6. Construction and construction products

PERIOD 1985-1986

Directive on safety of buildings(resistance to earthquakes, otheraccidental damage, prevent i on ofprogressive collapse) 1985 1986

Directive on reliability (fitness forpurpose) and durabi l ity of bui ldings(responsibil ity of desi gners, bui lders)

rective on test methods forreaction to fire and resistanceto fire of building materialsand components

1985

1986 1986

1986

Page 77: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 20 -

SUBJ ECT Doc . Date

Commi s-

s ionproposaL

Expectedate foradoptionby Council

Directive to prohibit the introductionof new or modifi ed bui Lding reguLationsat local government LeveLs for a periodof 5 yea rs 1985

1978Revolv ng cranes

1986

1986

PERIOD 1987-1992

Revision of Directives on safetyreliabiLity and durabiLity

bui ldings in Light of new EurocodesEC 4, 5, 6, 7 1988

1988rective on fire safety in pubLic

bui ldings and hoteLs 1978

rective on insuLation products(protection of heaLth of bui Ldingworkers and occupants). 1987 1988

Deve opment and introduction of a ModeLCode for bui Lding reguLations (based onUN-EC modeLs) 1990 1992

rective on safety and reLiabiLity ofspeciaL structures (masts, towers, Longbridges, dri II ing platforms, water-retaining structures) 1990 1992

7 Other ite8s

PERIOD 1985-1986

1989

Household appL lances : ai rborne noi se* COM(81 )811 1981

Safety of toys* COM(83)323 1983

1986Measuring inst ruments an metmetrological control : eLectronicdevices (amending 71/316/EEC)- tyre pressure gauge- carbon monoxide measurement

COM (78)766 1978

COM(80)850 1980COM(8Q)850 1980

1985

1986

10.

Chemical propertyes of toys

ProposaL for a CounciL directon eLectricaL toys

Hydraulic diggers (noise)

1985

1985

19851986

1986

1987

1986

Page 78: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 21 -

BJECT Doc . Dat e

, Comini sionproposal

Expecteddate foradoptionby Counc i l

Protection ,of hotels againstfi re (proposal for a recommen-dat ion) 21. 1984

198Metrology terti ficat ion

Individual protective devicesequi pment: . heLmets for motorcycledriv.ers (re~uLt of notificationon the basi s of 189/83 di recti ve). safety boots and shoes (idem)

1986

1986 '

Proposal fora revis on of Chapter.6 of the Euratom Treaty concerningnuclear materia ls COM(84)606 1984 1987

Proposal for a Di rect ive onconsumer protection inrespect of the indication ofpri ces for non-food products

General Col,lnc Direct ves on cos-metics (amendment)

COM(83H54 1983

1986 1988"

PERIOD 1981-1992

1986

198

1987

1987

1985

Proposal for general Di recti vein textiles

Proposal for a D rective onf lammabi L ity

Individua l' protective devices- eye protect ive devi ces - respi ratory protective devices- industrial safety belts

protective cLothing

1987 1988

1988 . 1989

1987 19881-988 19901988 19~O1989 1991

1987 1989Metro logy completion of wor

II. PUBLIC PROCUREMENT

PERIOD 1985-1986

Improvement of Directivespubl i c procurement 1985 1987

Page 79: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

-22-

SUBJECT, Doc. Dat e

, Comm;s-si onproposaL

Expec~edate foradopt ionby Counci

PEI'UOD 1987-1992

Improvemen~ oMfrectives on publicpro~u~ntExtens;onofDirectives to excLudedsectors- , te LecommuQ;cat ions and energy

1987 1988

Publi c procurement in the fiel of

servi ces ; open ing .up , ' markets forpriori ty sectors

Public work procutement' ' a ddi ona, harmoni sat ion of procedures

Extension of Di rectives to exc luded sectors:electricity or, water

989 1990

1991

1989 1990

, "

Public procurement- serV ces :, other sectors

Implementation of irectiVes1990-1992

Page 80: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 23

oC.SUBJECT Date ofCommi s-

, sionproposal

Expected'date foradoptionby Counci L

III. FREE MOVEMENT FOR LABOUR AND THE PROfESSIONS

PERIOD 1985-1986

Proposa l a Low ng teliminatipn of remainingobstacles related to themovement , and residence ofCommunity workers**

proposa concern ng tharmonization of incomeprovisions with respectfreedom of movement forwithin the Community

mi grant

taxat ion

workers

Proposa concern ng thecomparability of vocationaLtraining-quaL ifi cat ions

COM(85)48FinaL'

COM (79)737FinaL

, COM (83) 482COM(84)406

1985

1979

19831984

1987

1985

1985

Proposals for promotingstudent mobi l i ty andcoopera-ti on between further educat ionestabLishments in differentMember States

ProposaL for the deveLopment ofcooperati on programmes betweenMember States for apprenti ces undergoing vocationaL training

Proposa for the deve opmentof yo.uth exchanges inthe Community includingyoung peopLe in vocationaL training andvoLuntary work abroad.

1985

1985

1986

1986

Proposals for cooperation betweenhigher education and industryfor advanced training relat ing tonew technologies (COMETT) 1985 1986

Proposal for a Directiveconcerning transitionaL measuresfor access to activiti es in thetechnical field and for thei r exerci se* COM(69)934 1969 1985

ProposaL for a Directiveconcerning the coordinationof provisions in respect oftraining of engineers* COM(69)934 1969 1985

Page 81: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

-24 -

SUBJECT Doc 'O Date of ExpecteCommis- date forsion s adoptionproposal, by Council

Proposal fora, Directiveon the coordination relating tocommer Ci a l agent s *

Proposa l for a D rect

conc~rning the coordinationprovi'$ions in respect of

certai "activiti es iri thefieLd of pharmacy*

Amende , proposa f.o r

Di rective ~oncerning themutual recogni ti on of.di plomas in pharmacy**

COM(76)670COM(78l773

COM (81)4

COM(84)15

19761978 1985

1981 1985

1.984 1985

ProposaL for a Counci lDirective on specific trainingin general medical. practice**

Right of Esta shment:Proposal for a Directive sett ingup a general system of mutualrecognition of higher,

. '

educat ion dipLomas

COM(84)654 1984 1986

1985 1987

Right of residence for nationalsof. Member States not yetor no longer employed* COM(79)215

COM(80)358COM (8Q)649

1979 1985

PERIOD 1981-1992

ProposaL concerning the eliminationof cumbersome administrati vepro-cedures relating to residence permits

Proposa conc~rn ng the l1tro uctionof a European "vocational trainingca rd" provi ng the qua l if i cat ion ' of itsholder. Assessment on t e funct ng athe genera l system of mutual reco-gnition and eventuaL proposa~, inorcter toimprove it

1987 1988

19. 1990

1990 1991

Page 82: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

-25 ~

ECT Doc . Date oConimi ~

si onproposal

Expectedate' foradopti on

by Counci l

IV . COMMON ,MARKET FOR SERVICES

1. fINANCIAL SERVICES

1 . 1 . Banks

PERIOD 1985~1?86

Proposa l for a . recton the accounts of banks COM(81 )84

COM(84)124 1984 , 1987

Proposa or a Di recti veon the accounts of forei branches of banks 1985 1987

Proposal for a Di red iveon the freedom of establ ishmentand the freedom to supplyservi ces in the field ofmortgage credi t COM (84)7 1985 198

ProposaL for a Di recti ve on

reorganisation and winding-up ofcredit institutions 1985 19.87

Proposed Recommendat ion on

the harmonization of the concept of own funds 1985 1986

Proposed Recommendat ion on theestabl ishment of a guaranteesystem of deposit within theCommunity 1986 1987

Proposed Recommendation on thecontrol of large expOSlJres bycredi t insti tutions 1986 1988

PERIOD 1987-1992

Proposal for a Second D recton coordination of credit institutions 1987 1989

Page 83: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

.:.26 -

SUBJ E Doc . Date oCommi s-

sionproposal

Expectedate foradopti on

by Count 'it

2. Insurance

PERIOD 1985-1986

Proposal fora Directiveto fad litate freedom to provideservices ' i n insurance other thanlife insurance COM(75)516

COM (78)63 , 1978 1986

Proposal for a Directive oncoordination of laws relating tolega l expenses insurance

COM(79)396 'COM(82)43

COM(79 459COM(82)255

1979 1987

Proposal for a Directiveconcerning credit insurance 1979 1988

roposa l for a D recti ve

on insurance contracts COM (79l355modifiedCOM(80)854

1979 1988

ProposaL for a, Di rective concerningthe winding-up of insuran~ecompanies 1986 ' 1989

Proposal for a Di recti ve on theaccounts of insuranceundertak ings

1986 1989

Proposal for a 3rd Directconcerning motor li abiL ity insurance 1986 1989

PERIOD 1987-1992

Proposal for a Directive on freedom to supply servi cesin the motor Liabilityinsurance sector 1987 1989

Proposal for a Directive forfreedom to supply servicesin the field of life insurance 1987 1991

3. Transactions in securities

PERIOD 1985-1986

Proposa for a D rect ve or thecoordination of Laws, regulati~ns,and administrative provisionsrega rdi ng co llective investmentundertak ings fortransferable securiti

COM(76) 152COM (77) 227 1976 1985

Page 84: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

, - 27 -

SUBJ ECT Doc . Date of,Commis-sionproposal

Expecteddate' foradopt i onby Council

Proposal for ' a Di rect ive concerning information to bepublished when major holdingsin the capitaL of a listedcompany are acqui red or d;~posed of

Proposal for a .Directive coordinatingthe requi rements for the drawing up,scrutiny and distribution of theprospectus to be publ ishedwhen securi ties are offered forsubs.c ri pt i on or sa le to the publi

1988

COM(80)89~modified

, '

COM(82)441 '

1981 1988

PERIOD 1987-1992

Proposal for a Di recti veconcerning investment advisors 198( 1989

2. TRANSPORT

PERIOD 1985-19,

(see controlof goods)Road transport, abol iti onof border controLs relatedto transport authorisations.

*Ai r transport : fares COM(81 )396

COM (84H21981 1985

*Air tr~nsport : bilateral agreements,arrangements and memoranda of under-standing between Member States

*Non..,resident carriers : nationaltransport servi ces

CQM(84H2, 1984 1986

COM(84H2 1984 1987

COM (83 40, , 1983 1986REG 3621/84 1988

COM(6 )722 1967, 1989

COM(82)816 1982 1988

*Air transport : app cation ofArticLe 85 EEC

*Community quota for the carriage ofgoods by road between Member StatesfinaL stage *Access to the i n land wat erway f rei ghtma rket

Page 85: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

-28 -

, SUBJ ECT Doc . Date oComm;s-si onproposaL

Expecteddate foradopt ionby Counci

*Maritime transport " (freedom toprovid~ service$ in the,Sea transport' sector) COM (85) 90 1985

198bera sat onof coach serv ces

1986

1989 '

3~' NEW, ,tECHNOLOGIES AND SERVI CES

PERIOD 1985..1986

Proposal for a Directive

order to coordinate certainaspects of. the n~tipnaL LawsreglJLating advertising on radioand television '

ProposaL for a , Directive 'in, order to coordinate certain aspectsof the national Laws reguLati ng copy-rights in si!JIultaneous cable transmissionof programmes

' , ' ,

1985

1985 1987

Proposals, concern,ing the, gradua. opening up of the market in

information services 1986

ProposaL concerning the d~finof common techni caL features of

, themachinesu$ed to produce the newpayment cards 1986 1987

Proposa ls encourag ng, the,concLusion of agreements betweenbanks, traders, producers andconsumers on thecQmpatibi lity ofsystem netlliorks, Linkage userrules and/or rates of , commission 1986 1987

v. CAPITAL 'MOVEMENTS

PERIOD 198~-1986

1987

1987

Liberalisationof unitS in collectiveinvestment undertakings fortransferable seclJriti

COM(78)COM(79) 328 ' 1979 1985,

Proposal for a Direct,concerning the liberaLisation

, of transactions concerningmortgages 1986 1987

Page 86: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 22 -

SUBJ ECT Doc . Date oComllii s....

sionproposal

Expectedate for

, adoptionby Council

Proposals .for the liberalisationof operations such as the i SS4e,placing and acquisition of se cur it i es represent i ng r i skcapital, transactions insecurities , issues by Communityinstitutions and Long-termcommercia l credit 1986 1987

VI.. C:REATION OF SUITABLE CONDITIONS FOR INDUSTRIAL COOPERATION

1. COIIpany ,law,

PERIOD 1985-1986

Propos;:.! ls fora Regufor an European Economi Interest Grouping COM(73) 2046

COM(78) 1391-9731978 1985

Proposa for a . Fifth Comp.anyLaw Di recti ve (structureof publi c limited companies) COMC72) 887

COM(83) 18519731983 1988

Proposal for , a Tent Directiveconcerning cross-border mergers

Proposa for em ELeventhCompany Law D i rec t i ve di spense branches ofcompani es frompubl i shing separate accounts

COM (84)727 1985 1987

1986 1988

PERIOD 1987';'1992

Proposal for a Directive on theliquidation of companies

Proposals fora Direct ve ontakeover bids

1987 1989.

1987 ,/ 1989

1990Proposal fora Directiveon the relationship of undertakingsi n a group

Page 87: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 30 -

SUBJ ECT . Doc . Date ' ofCommis-si onproposal

pecteddate foradoptionby Counci

Amendment to proposal fora ReguLati on on the Statute fora European Company

COM(7Q)600COM (75) 150

1970

19751988 1990

2. Intellectual and in~ustrial property

PERIOD 1985-1986

Amen proposal for aRegu lat i on on Communityt radem.arks , COM(8Q)635

, COM(84)470

Amended proposal fora rstDirective to approxi-mate the laws of the MemberStates re lat ingto trade marks

tOM(80)635

Proposal for a Regulat on on theru les needed for implement ingthe Community trade markregulation

19801984

19801985

1985

1987

1987

1987

Proposal on the site of theCommunity trade mark officeand. its working language 1986 1987

Proposal for a Regulation onthe rules of procedure for theBoa rds of Appea l of the Communi trade mark' s, Office 1986 1987

Proposal for a Regulationon the fees to be pa to the Community TradeMark Office 1986 1987

Proposal for a Directive onlegal protection of micro-ci rcuits

Amen ed Convent on onthe Community Patent

1985 , 1987

gnature Entryby Member ' i ntoStates in ' force in1986 , 1987

C re at i on of a Commun i tyPatent' s Appeal Court (COPAC)

gnature Entryby Member into forceStates

' ,

in 19B7in 1986

Page 88: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

~ 31 -

'SUBJ ECT Ooc~n Oateo, Commi sionproposal

~xpectedate foradoptionby Council

PERIOD 1987-1992

Pr~posa l for a' ecti.ve 9!i egaprotection of biotechnologic:i nvent i ons

1987 1989 ,

Proposal for a 0 rective to protectcomputer programs"

1989

3. Taxation (Removing tax obstacles to cooperation betwe.en enterprises indifferent Member Stat es: )

PERIOD 1985-1986

Arbitrat on procedure concernthe el imination of double taxation*

COM (t6)6H 1976

COM( 69)6 1969 1985" Common system o taxation appto, parent companies and theirsubsidiari es*

Common system of' taxation o mergers,i visi ons and contributions assets* COM(69)S 1985 '

Harmonizat on of taxes ontiansactions in securities 1976 1986COMC76) 124

VII. APPUCATION OF COMMUNITY LAW

1. Transparency

PERIOD 1985-1986

Communi cation of ,the Commf~~1on inrelation to Article 30 of the Treaty

, on pri ce fixing and ons, icknessinsurance concern; ngpharmaceut i ca ls

1985decisionneeded

' ,

PER10D 1987-1992

Communication of the Comm, in re lation to Art icle 30 of the Treatyon the conditions ofal lowing on themarket of foodstuffs

198dec i si onneeded

Page 89: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

.. 32 -

SUBJ ECT Doc . Date oCommis-sionproposal

xpe~tedate for '~dopt i on byCounc i l

Communication of the Commission inrelation to' Article 30 of the Treatyon the elimination of controls andformal ities on goods

1989 No decision'needed

2. Competition pol icy and state aids

PERIOD 1985-1986

Inventory of State aids and r~portsetting out the impli cat ions offuture state aids policy

198deci lionneeded

Page 90: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 33-

BJ ECT Doc . Date QfCommi s-

sionproposaL

Expectedate for adoptionby Counc i l

PART THREE:

I. '

REROVAl Of flS~Al BARRIERS

PERIOD 1985-1986

Proposa for a Council Decprovidi ng for a st.andst illensuring: - no prol iferationof VAT rates

in Member States- no widening of the gap between

VAT rates in each Member State

T. D rec ive concerndehrred payment on importation*

Proposal on flat rate farmers

Proposa on passenger transport

1985 1986

COM,(82) 402 1982 1985

1~85 1986

1~a5 1986

1985 1986Pr9Posal 011 special schemes small business

th V . A. T . ect ve works of , art,collectors ' items, anti quesandu$ed goods

thV. T. D rective concerningexpenditure on which tax is notdeductible* 13th V. T. Directive concerntax refunds to persons not esta-bt ished in the Community*

COM (77)735 1978COM(79) 249

COM(82)870 1983COM(84)84

COM(82)443 1982COM(83) 413

1986

1986

1986

16thV. T. Directive concerningimports by final cons~m~rs ofgoods which have already bornetax in another Member State*

th V. T. Direct ve concerning, the temporary importation of goodsother than means of transport*

T. D rect ve concernthe abolition of certain derogations(Article 28(3) of Directive 77/388/C.

19th V. T. Directive : misceLlaneoussupplementary and amending provisionsof Directive 77/388/EEC

COM(84)318 1984 1986

COM(84)412 1984 1985

COM (84)649 19. 1986

COM(84)643 1984 1986

Page 91: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 34 -

SUBJ ECT Doc . Date ofCommis..;si onproposal

Expected,date foradopt i onby Count; l

Oirective on the stores of ships,ai rcr,aft andd internat ionaL tr,ains* COMC79)794

1986 1987Proposa concern ng t e ratest ructure (number of rates)

Proposal f xing the common rate(sarid corresponding standsti arrangement

1980 1986

PERIOD 1987-1992

1986 1987

Proposal concerning abol iti on, of derogations with distortiveeffects 1987 1988

ProposaL concern ng the esta lishmentof a V. A~T. Clearing flouseSystem 1989 1990

II. EXCISE DUTIES

PERIOD 1985-1986

Proposa l for a Counc Dec on provfor a standst ill ensuring no introductionof new excise duties which give rise toborder forma Lit i es Proposals, concern ng harmonization,of the structure of excise duties onalcohoLic drinks*

COM(72 225FinalCOM(82)153FinalCOM(85) 150FinalCOM(85)151Final

Proposal for an exci se duty on wine COMC72 225Final

1985 1986

1985

1982 1985

1985 1985

1985 1985

Proposal concerning the introductionof a third stage concerning theharmonization of the structureof ciga rette duty* COM(80)69 1980 1986

Proposal concerni ng the harmoni-zation of the structure of exel seson mi nera l oi ls COM(73)1234 , 1973 1986

Page 92: COMMUNITIES EUROPEAN THE COMMISSION OFaei.pitt.edu/1113/1/internal_market_wp_COM_85_310.pdf · Control of goods Commercial and economic poL icy Hea l th Transport Stat i st i cs ConcLusion

- 35 -

BJE Doc . Date , of ExpecteCommi s- date for$i on

, '

adopti on

proposal , by Counci t

Proposal (:onceroing the harmonizationOf the structures of exc,ise duties

on other manufactured tobacco 1986 1987

Proposa concern ng the final stage of the harmonizationof the st rl,.lcture of ci ga rette duty 1'986 ' 1987

ProposaLs on common rate ands foraLL ha rmonized exci se duties andcorresponding' standsti II arrangement 1986 1987

PERIOD 19'1';'1992

Proposa l$' concerning the gradual

abolition' ()r reducti on of excisesnot covered by the Common systemand giving ris~to border formalities

1987 ~989 19891990.

Proposalcoocerning t ntro uctof a linkage ' b~,tween nati ona L bondedwa rehouses for' exci se goods 1989 1990