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Legal Practice Briefing

Number 12

17 June 1994

EUROPEAN UNION DEVELOPMENTS

Regulatory changes are occurring rapidly in Europe and Australians must keep abreast of those changes in order to adapt and succeed.

The Legal Practice through its European Office in Brussels will publish regular issues of the Legal Practice Briefing to keep clients informed of key EU developments.

European Economic Area (EEA)

The twelve European Union (EU) countries and the Scandinavian and Alpine countries are rapidly changing their rules so that trade and business can be done on much the same terms throughout western Europe. The new European Economic Area (EEA) agreement to form the world's largest free trade area is now in force. The EEA will allow for the free movement of goods, persons, services and capital throughout the EU, Scandinavia and Austria. Trade, competition, business, public procurement rules and rules on technical standards will now be largely equivalent throughout western Europe. Cooperation in a large range of policy areas, including research and development, the environment and social and consumer policy will be considerably enhanced.

European Union

In almost all cases, the opportunities and challenges arising in Europe concern not only new rules but also a shift in decision-making and regulatory power from individual countries to the EU authorities in Brussels. The new EU rules, the EU Commission and both the European Court of Justice and national Courts will prevent a trader playing by the old rules of individual country markets. At the same time, the new rules and these same institutions are more likely to be able to assist in solving problems in Europe.

Standards

Differing Standards in Various EU States

Each EU country has standards for virtually every type of industrial and electrical product and each EU country has its own standards-setting body equivalent to the Australian Standards Association. The best known are the DIN standards body in Germany and the British Standards Institute in the UK.

One of the objectives of the single internal market program is to limit the extent to which standards restrict trade. Until recently, products which satisfied the French standard could not be sold in Germany unless they satisfied the German DIN standard. After much debate it was recognised that the purpose of a product standard was to satisfy certain minimal functional, health and safety requirements in a particular EU country. To overcome the problem of differing standards the EU established for each category of products certain minimum functional, health and safety requirements for those products.

Minimum EU Requirements

If an Australian exporter's product satisfies the minimum EU requirements, the product can be marketed throughout the EU. If, however, a more detailed EU standard has been established by either of the two main EU standards-setting bodies 'CEN' for industrial standards and 'CENELEC' for electrical standards or by a specific EU law, an Australian exporter is presumed to comply with the minimum requirements if the product complies with the detailed standard. The clear advantage of these EU standards is that if a product complies with the standard, it can be marketed throughout the EU without having to comply with twelve standards and obtaining certificates of conformity from the different standards-setting bodies.

Options for Dealing with Obstacles

If an Australian product is prohibited from import or sale in a particular EU country because the product does not comply with the local standard a number of options are open. The first is to apply to the local standards authority for a certificate of compliance and cooperate fully.

If the technical standard preventing import or sale is one which has been introduced since 1984, it is important to check with the EU Commission whether the particular EU country concerned has notified the Commission of the new standard. If the EU country's standard's authority delays making a decision on an application or refuses to grant a compliance certificate, a complaint should immediately be made to the EU Commission.

If the country concerned did not notify the EU Commission of the new standard, consideration should be given to taking Court action seeking a declaration of non-enforceability of the standard and possible damages for the loss of sales.

A second method of overcoming obstacles to trade is to find out if there is a CEN or CENELEC standard for the particular product. If there is, a certificate of conformity should be obtained from another EU country which has introduced the CEN or CENELEC standard. No EU country will then be able to prevent the product being marketed on the ground that it fails to comply with local standards.

Before exporting any product to the EU, a trader should check whether there is an EU standard applying to the product. The trader should ensure that the product complies with the EU standard and should obtain a certificate of compliance from one of the EU countries' standards bodies. Each EU country's standards body is required to recognise the other's certificates where the certificate is issued in respect of a standard established by CEN or CENELEC.

Exchange Controls and Measures To Enhance Competition

Exchange Controls

Virtually all exchange controls between EU countries and Australia have now disappeared. If a problem occurs in sending money from an EU country to Australia, it is normally quite easy to transfer funds to another EU country and then transfer the funds to Australia. If the underlying transaction concerns the sale of goods within the EU, no EU country can prevent the transfer of funds within the EU without specific authorisation from the EU authorities.

Unfair Competition

Australian traders should take great care when entering into any agreement or arrangement with competitors, suppliers or distributors which might restrict competition within the EU. In particular, licensing or distribution arrangements which prevent or restrict cross-border sales within the EU should be avoided unless they comply strictly with the EU rules providing for specific exemptions from the EU competition regulations.

Non-compliance with EU competition rules can result in the following consequences:

  • the agreement will be void and unenforceable;
  • the EU Commission can impose heavy fines of up to 10 percent of worldwide turnover; and
  • competitors can claim damages in the Courts.

If a trader is finding it difficult to gain entry to one of the EU markets because, for example, all available distribution networks are tied-up, a trade fair will not allow products to be exhibited, or prospective purchasers or suppliers are demanding exactly the same unreasonable purchase or supply terms, a complaint of unfair competition should be made to the EU Commission. In some instances, the threat of a complaint to the competition authorities will be sufficient to gain entry to the market.

If the problem occurs in only one EU country a complaint can also be made to that country's national competition authorities. Competition laws similar to the EU wide rules have recently been introduced in Ireland, the Netherlands, Belgium, Italy and Spain.

Government Enterprises

If a competitor is a State-owned or State-controlled enterprise, a trader who is being competitively disadvantaged can also complain to the EU Commission where, for example:

  • subsidies or other benefits are being provided to the publicly owned competitor; or
  • there is discriminatory tax treatment; or
  • there is discriminatory regulatory treatment by other State bodies.

In many cases the EU Commission can force the State-controlled enterprise to act and be treated in the same way as any privately controlled company. In a number of cases the EU Commission has forced private companies and State-owned enterprises to repay large subsidies given to them by one or other EU government.

Regulation of the Post

The EU Council has asked the Commission to propose legislation opening up the postal services to competition. The objective is to maintain a universal service, protect the financial viability of service providers, introduce cost-based pricing and harmonise technical standards. The Commission has also been asked to define services which are 'reserved' in the sense that they are to be protected from competition.

Measures to Protect Consumers

Overview

The consumer protection measures in the EU which might restrict imports into the EU from Australia concern labelling and packaging of products, misleading advertising, retail marketing practices, unfair contract terms and product liability rules. The most important measures are product liability rules which impose strict liability on a producer and importer for any damage caused by a defect in a product. If an Australian trader is simply selling to an importer who does all the labelling, packaging and marketing to the consumer, the EU consumer protection rules will probably be restrictive only to the extent that the importer will want the product supplied to comply with any statement made with respect to the product.

Defective Products

In the EU, a defective product is defined as being a product which does not provide the safety a person is entitled to expect while the product is being used for a purpose for which it could reasonably be expected to be put. Australian producers should take care that their European distributors are advertising and distributing their products only for uses for which they were intended. If not, there is a risk of damages claims for perhaps millions of dollars. In any event, an Australian trader should consider insuring against the risk of product liability claims.

Unfair Contracts

If an Australian trader is selling products directly to consumers under a standard terms contract, care should be taken that the contract contains none of the unfair contract terms set out in the EU Directive and that the required labelling and indications appear on the product. This is particularly important for products such as chemicals, medicines, food, electrical appliances and toys.

Labelling

An example of where labelling requirements have led to trade friction and trade barriers is the labelling of Australian wines. To overcome this problem the EU and Australia have entered into an agreement which will prohibit Australian wine exporters from labelling their wines with names such as 'Champagne' and 'Sancerre'. Wines which are not properly labelled may be destroyed or the infringing labels removed.

Agency Agreements

A new EU Directive relating to self-employed commercial agents came into force on 1 January 1994. Its impact is likely to be greatest in the UK and Ireland since the Directive establishes obligatory rules on:

  • payment of commissions
  • notices of termination
  • indemnity payments or damages on termination of the agency agreement
  • post-termination non-competition clauses

Most of these changes benefit the agent rather than the person or enterprise contracting for the agent's services.

Time-Share Marketing Practices

The EU Council has agreed on a proposal for restricting the conduct and marketing of time-share holidays. Information must be given to a buyer before a contract is signed and strict procedures for cancellation and withdrawal must be followed if the buyer changes his or her mind after signing. There is a 'cooling-off' period of 10 days, and a time-share company cannot take advance payment during the cooling-off period.

Tourist Services

Strict rules exist about the provision of tourist services in Europe, in particular relating to the information to be provided to a prospective purchaser, the contents of brochures and the contents of the mandatory written contract. Sellers of travel packages in the EU must now be insured and consumers have greater rights to redress in case of failure to provide the advertised service. The Australian travel industry must therefore provide a consistent standard of service to European tourists, or European retailers of travel packages will be faced with compensation demands from disappointed tourists, which may result in a reluctance to continue offering travel packages from Europe to Australia.

The Netherlands, Ireland and the UK have introduced new rules complying with the EU Directive on packaged travel. Under these rules travel agents and tour operators must give detailed information and provide for compensation to consumers if a travel package does not meet the advertised service and standard.

Public Procurement - Government Contracts

Potential opportunities exist for Australian businesses in Europe with the opening up of government contracts for virtually all goods and services. New rules have been introduced for a more transparent and strict system of calling for tenders, common rules on the qualifications and selection criteria for contractors, as well as appeal and enforcement rules if proper procedures are not followed.

The new rules do not apply to contracts below a certain value, to air and maritime transport, or to oil, gas and coal exploration and extraction. They do, however, apply to port and airport facilities and the supply of energy products. The EU Government procurement market is estimated to be worth some 15 per cent of the EU's GNP more than 800 billion Australian dollars.

The cosy government supplier arrangements which exist in some EU countries are now being challenged both within the national governments and in the EU Courts. Although Australia is not a signatory to the GATT Public Procurement Code, the rules applicable to a bid for an EU Government tender will apply equally to an Australian enterprise and an EU enterprise.

It might be noted that the rules on EU Government procurement must also be followed by privatised companies with a special or exclusive right granted by a public authority (for example, British Telecom).

Tariffs

Imposition

A customs tariff based on the customs value of the goods is imposed on most goods originating in Australia and entering the EU. As a matter of law the same customs tariff is supposed to be applied to imports into the EU regardless of which EU country is the first country of import. However, this does not always happen and, although it is theoretically not possible, some EU countries still classify goods under different customs headings and so apply higher or lower customs tariffs. It is possible therefore, since the removal of internal border controls in January 1993, to export products to an EU country applying a lower tariff and then transport them internally to other EU markets.

If one EU country's customs authorities apply a very high tariff and another a lower tariff, a complaint may be made to the EU Commission. If the complaint to the EU Commission is unsuccessful, the complainant may apply to the appropriate Court in the EU country where the goods were first entered. This Court could then ask for an interpretative ruling from the EU Court of Justice. It should be noted, however, that the Court option is likely to be more expensive and time consuming than making a complaint to the EU Commission.

Reduced and Suspended Tariffs

Australian traders who are using EU origin inputs or components in the product they make and export to the EU, may reduce their customs bill by a mechanism known as the 'outward processing arrangements'. The procedure is as follows:

The EU input product, to be incorporated into another product in Australia, is declared to the EU customs at the time it is exported to Australia. It is declared as being destined for incorporation into goods which will later be imported into the EU from Australia. When the processed goods are exported to the EU, the customs tariff is reduced in proportion to the value of the EU inputs contained in the goods.

A similar mechanism called 'inward processing arrangements' is also available for Australian inputs entering the EU for processing into another product before the processed product is exported to a country outside the EU. Under the inward processing arrangements, the customs tariff normally imposed on the imported Australian inputs is suspended. As soon as the processed product incorporating the Australian inputs is exported from the EU, the suspension of customs duties becomes permanent.

A complete suspension of customs duties is available to traders selling to the EU either electronic components or specialist chemicals used in the manufacture of other products where the goods are in short supply or not available in the EU.

Customs Value

Traders who export computer software to the EU should be careful when invoicing their clients to record as separate amounts the value of the software and the value of the media upon which the software is recorded. An invoice or receipt in which there is recorded only the total value of the software together with the value of the media upon which the software is recorded should never be issued.

Border Controls

Since the removal of EU internal border controls on goods, it is now possible to enter goods into a neighbouring EU country and deliver them indirectly to the target market. If this is done on a large scale, restrictions may still be imposed on the diverted goods before they enter the target market. An EU authorisation can be granted to the country where problems are being encountered. It should also be noted that the EU can authorise a restriction on all such exports to the EU, regardless of which EU country they first enter.

The basic principle now, however, is that if a trader is having difficulty sending goods directly to a target EU market, there is no legal impediment preventing the trader from sending the goods via a neighbouring EU country.

Pharmaceuticals and Medicines

Present Position

In 1992, Australia's medical and pharmaceutical exports to the EU were worth some $85 million. To market a particular pharmaceutical in the EU it is necessary to seek prior authorisation in each of the twelve EU countries. Recognition of certain tests and trial data, the introduction of common detailed standards and rules on information about the pharmaceutical has made the authorisation process a little easier, but twelve authorisation procedures still remain.

A Single Agency for Importation and Sales

An Australian exporter of pharmaceuticals will soon be able to apply to a single agency for authorisation to import and sell medical products into any EU country. At the end of 1992, the EU countries agreed that a new system for authorisation would be introduced to be in place within the next two years. Essentially, the system will be:

  • For most medicines, an authorisation granted in one EU country will be recognised by all EU countries unless a serious objection is raised. The national authorities will seek a solution to any objection and if no agreement is concluded, the matter will be referred to the new European Agency for the Evaluation of Medicinal Products (EAEMP) for its opinion. Once the EAEMP's opinion is ratified by the EU Commission, the opinion will be binding throughout the EU.
  • For biotechnology products, there will be a centralised authorisation by the EAEMP which will be ratified by the EU Commission.

This system would still allow for national authorisations where the product is limited only to the EU country of authorisation. Instead of twelve authorisations, however, only one will be needed. The EAEMP will supervise the authorising of pharmaceuticals submitted to one EU country's regulatory body. Once authorisation has been granted by that EU country, all other EU countries will have to recognise the authorisation.

Food Products

Health Protection

In order to protect the general health of its population, an EU country will often restrict the importation of food products. Where an EU country is attempting, either directly or indirectly, to stop the import or sale of a food through restrictions on trade across internal EU borders a trader has a number of options.

The first step should always be to attempt to resolve the problem with the national food authorities. If no satisfaction is obtained from the national authorities a complaint may be made to the EU Commission. If there has been a particularly blatant and unwarranted abuse of national health and safety rules, the EU Commission may take over the case and commence European Court proceedings in the EU Court against the country concerned.

Alternatively, a trader may simply import and sell the product and wait for the national health authorities to prosecute. The national Court could then refer the issue to the European Court. National authorities may also restrict indirect imports via another EU country on grounds such as:

  • unfair competition and consumer protection
  • environmental protection and public policy
  • protection of the health of plants and animals

Court action will probably be lengthy and may be unsuccessful. Sometimes the risk is very high because the intentional infringement of public health legislation is often a criminal offence.

Factors for a Trader to Consider

A trader who is faced with a restriction on the import and sale of food should take into account the following factors:

First, if there is an EU rule which permits the conduct, the EU country cannot prevent the indirect import on the grounds that the conduct infringes the national rules of the country concerned.

Second, if there is no EU rule permitting the conduct and a less trade restrictive mechanism can be used to protect the health and safety of consumers, the less trade restrictive mechanism should be used. For example, if the same objective can be achieved by better labelling or providing more information with the food product, the information and labelling requirements should be enhanced rather than a blanket ban being imposed on the import or sale of the food product.

Third, the onus is on the national health authorities to show that there is a real scientific basis for a trade restriction on the grounds of protecting health.

Finally, there must be a mechanism by which the national authorities can assess whether the restriction on internal EU trade is justified.

New Rules on Traditional Foodstuffs

Agreement has been reached in the EU Council to allow EU countries to prohibit the use of additives in traditional foodstuffs. EU countries may maintain restrictions or prohibitions on the use of additives in traditional foodstuffs if these restrictions existed on 1 January 1992. The production and sale of all other foodstuffs produced in conformity with Union rules on additives must also be permitted in the particular country.

The Maastrict Treaty and the European Monetary System

General Implications

The Maastricht Treaty has now come into force. This occurred at the same time as a partial collapse of the European Monetary System (EMS).

Most provisions of the EMS are spelt out in the Maastricht Treaty and are supposed, among other things, to fix the exchange rates of each EU currency before the introduction of a single currency by the target date of 1 January 1999.

EU countries are to coordinate their economic policies and avoid excessive government deficits. EU countries must prohibit loan facilities at the Central Bank as well as prohibit non-commercial guarantees by the State. Privileged access to finance by government or government bodies must also be prohibited.

At the same time a European System of Central Banks (ESCB) and the European Central Bank (ECB) will be established with the exclusive power to authorise the issue of banknotes in the EU. The primary objective of these two bodies is to 'maintain price stability'.

Questions of monetary policy including interest rates, foreign exchange operations, management of foreign reserves and regulation of payment systems will be the responsibility of the ESCB. The Maastricht Treaty also envisages that the ECB will take over the supervision of banks and other financial institutions, although not insurance enterprises.

Effects on Australian Traders

These changes will directly affect Australian bankers, brokers, investment enterprises and foreign exchange dealers active in the EU. Instead of being supervised by the Bank of England or the Bundesbank, the transactions will be supervised by the European Central Bank.

While it may be some time before these changes actually occur, they are clearly on the way and even if the target of January 1999 is not reached, the gradual movement towards a single currency in Europe is continuing. The Maastricht Treaty will be one of the motors forcing Europe in that direction.

In other areas also the Maastricht Treaty might have implications for Australian traders. Capital movements between the EU and Australia will be liberalised allowing easier investment in both the EU and Australia. An EU-wide visa system will be introduced for Australians and other non-EU citizens and it will not be necessary to obtain separate visas for Spain and France. Those in the air and maritime transport sectors will probably be granted licences on an EU-wide basis rather than under a bilateral arrangement with each EU country.

New business opportunities ought to arise in areas where the EU authorities have new competences under the Maastricht Treaty. Areas where Australia has significant expertise, for example, distance education, public health, long distance transport, telecommunications and energy supply and the interoperability of the utilities networks, are potentially huge markets for Australian businesses. The new emphasis on and extra funds being provided for environmental protection and funds for the less developed regions, particularly in Southern Europe, is another potentially lucrative source of business for Australians.

A trader doing business in or with Europe whose funds are even partly being provided through the EU authorities would be wise to deal through a European partner, agent or distributor. If this is not possible, a company should be established in Europe to be responsible for all dealings with European authorities. This is particularly important if funds for a project are being paid directly from the EU. EU authorities are unlikely to fund an Australian enterprise if they can fund a Portuguese, Greek or Irish enterprise.

Cooperation in Law Enforcement and Defence Matters

The Maastricht Treaty contains two other matters which will probably not directly affect Australian traders, but which are of general interest.

The first is that there will be much greater cooperation between police in criminal matters and in relation to controls concerning people entering the EU. Asylum seekers and refugees are likely to be subject to much stricter controls.

The second is in the area of foreign and security policy. EU countries are now obliged to cooperate fully in foreign policy and will act more as a block in defence matters. Defence cooperation with Australia is now more likely to be made through the Western European Union as well as bilaterally and in NATO. Those involved in the defence industry, particularly with products which can be used for both civil and military purposes, are likely to see import and export controls in Europe being determined by EU authorities rather than individual EU country controls.

Financial Services

Credit Institutions and Insurers

Banks and insurers with a licence in one EU country may now conduct business anywhere in the Union in the same way as local banks or insurers. However, different consumer protection and advertising rules in each EU country may apply. A similar system will soon be extended to providers of investment services and stockbrokers as well. Australian investment service providers should note that there are now strict rules on insider trading throughout the EU.

Australian credit institutions licensed to do business in the EU will need to comply with new rules on large exposures, as well as limits on shareholdings in a non-financial institution.

One of the clear advantages of these changes for Australian traders is that they can now use the same financial institution or insurer for all their European business there will be no need for an intermediary in each EU country.

Cross-Border Payment Systems

The EU Commission has announced an action plan aimed at enhancing the efficiency and transparency of cross-border payments. The voluntary code of conduct is to be studied again to determine whether it has remedied the high cost and lack of transparency in cross-border payments.

Should the Commission study find that no real improvements have occurred, the Commission will probably introduce a draft Directive to force compliance by financial institutions.

Export Credit Insurance

New rules have been proposed on non-marketable risk in the field of export credit insurance. The rules are designed to ensure that EU exporters have the same carriage coverage available throughout the EU at a similar cost. They are also aimed at eliminating State-sponsored guarantees for short-term risk.

The proposed Directive will harmonise the methods by which EU countries assess the real and political risk of exporting to a particular country.

Legal Status of Directives

EU authorities have the power to issue Directives, Regulations and Decisions.

Decisions and Regulations

Decisions are addressed to particular legal persons and are used to adopt individual administrative acts. Regulations are non-individualised, are of general application and are binding in all respects. Most importantly, Regulations are directly applicable in each EU country and require nothing further to be enforceable by or before any arm of Government, the administration or the Courts.

Directives

Directives are, however, not directly applicable in EU countries. A Directive is binding in relation to the result to be achieved for each EU country to which it is addressed, but each EU country has the freedom to choose the form and method of achieving the required result. For example, the Directive on Product Liability sets out the basic result strict liability which must be achieved through a change in the laws of each EU country. Most countries passed new laws while others introduced administrative regulations. The Directive also gives EU countries an option for the strict liability regime to apply to agricultural products or not. No such option would be in a Regulation.

A Directive is only ever directed to an EU country and invariably has a date by which it must be implemented. Any action on a Directive can only be taken against the EU country which has wrongly implemented or failed to implement the Directive.

Recent cases have shown that an individual can obtain compensation for the failure of an EU country to properly achieve the clear result required by implementation of a Directive. Private parties have begun to take further action on the basis of this recent expression of the law by the European Court.

Intellectual Property Rights

EU Trademark Introduced

Following an agreement that the EU's trademark office be established in Alicante in Spain, the EU Council has agreed on a new regulation establishing a Union trademark. The Union mark will automatically be valid throughout the EU and it is expected to extend to the Scandinavian and Alpine countries also. The mark will confer on its owner the exclusive right to prohibit any third party from using the trademark without his or her consent. Existing national trademark systems will continue, but a trademark will not be able to be registered simultaneously under both a national system and the Union system.

Copyright Protection

A new Directive has been adopted on the duration of copyright and neighbouring rights. In general, copyright will be protected for 70 years after the death of the author, while neighbouring rights will be protected for 50 years from publication of a work. If the work is protected in at least one EU country on 1 July 1995 the copyright owner can benefit from the 70-year or 50-year protection period.

Restrictive Practices

In principle, the protection of the specific subject matter of a copyright entitles the copyright-holder to reserve the exclusive right to reproduce the protected work. The copyright cannot, however, be used in such a way that it:

  • pursues an aim which is manifestly abusive of a dominant position in the market (EC Treaty Article 86); and
  • is no longer exercised in a manner which corresponds to its essential function which is to protect moral rights in the work and to ensure a reward for the creative effort.

The EU Court of First Instance has indicated that agreements (for example, transferring copyright or granting reproduction rights) which restrict or distort competition will only be permitted if the restrictions on competition are inherent in the protection of the actual substance of the intellectual property right. This suggests that any ancillary or unrelated restriction on competition, which arises out of the exercise of the intellectual property right, will be contrary to EU law.

In previous cases EU Courts have found that holders of trade marks, patent rights or registered designs cannot enter into agreements so as to prevent parallel imports within the EU thereby distorting competition in the common market.

In Brief

Employment and Education

Working Hours

A controversial 'working time' Directive which guarantees minimum daily, weekly and annual rest periods has been adopted by the EU Council. The average working week will be limited to 48 working hours, including overtime. Night work is to be limited to an average of eight hours per night. The UK has said that it intends to bring a Court action challenging the legal basis of the Directive.

Sex Discrimination

The EU Court has ruled that an employer must justify the existence of differences in pay between male and female employees doing work of equal value. In Enderby the court held that where there is prima facie evidence of discrimination the burden of proof shifts from the employee to the employer so as to give employees effective means of enforcing their rights under EU law.

Rail Transport

Third Party Access

Following an earlier Directive on the separation of rail track ownership and rail transport services, it is proposed by the EU Commission that the principle of 'third party access' be applied to the EU's rail network. The proposal is designed to ensure that track access conditions are non-discriminatory, equitable and transparent, as well as to establish minimum standards for private railway companies.

Taxation

An EU Commission paper proposes to reform the existing tax system so as to include environmental taxes. It is proposed that taxes which create distortion and hinder competition, such as national insurance and value added tax, could be replaced by so-called 'green' taxes. It is considered that the introduction of taxes on, for example, land fill sites or packaging, would benefit the environment while permitting a reduction of the existing tax burden. This tax is one of a number of proposed environmental taxes, including a tax on fossil fuels such as coal and natural gas.

Joint Ventures

The EU competition authorities have introduced an accelerated procedure for clearance of cooperative joint ventures (JVs) so that the treatment of cooperative JVs is substantially the same as that for concentrative JVs. (The EU Commission considers that JVs are concentrative when the parents withdraw from the market, as well as from upstream and downstream markets, and at the same time establish an autonomous economic entity in the JV.) The purpose is to seek to have enterprises make decisions on the structure of their JV arrangements independently of the procedural rules followed by the EU Commission.

The Environment

New Packaging Rules

The EU Environment Council agreed on a compromise solution for the problem of packaging and packaging waste. Initial targets have been set for recovering between 5060 per cent of packaging of which 2545 per cent should be recycled.

Environmental Subsidies

The EU Commission has adopted new rules for assessing the compatibility of environmental State aids (subsidies) with provisions of the EU treaty. Running costs subsidies may be permitted if they are limited in time and are necessary to implement new costly policies such as the treatment of waste. Subsidies to assist in the purchase cost of environmentally friendly products may also be allowed but only if there is no discrimination between suppliers and the EU rules on free movement of goods are respected.

Telecommunications

New Action on Satellites

The EU Commission has approved a draft Directive aimed at the compulsory opening of satellite equipment and service markets in the EU countries. This would amend the Commission's 1990 Telecommunications Services Directive, banning the granting to preferred operators of 'exclusive' or 'special' rights to provide satellite telecommunication services.

Satellite Broadcast Copyright Convention Adopted

The Council of Europe has adopted a Convention to end years of controversy over copyright in works broadcast by satellite. The Convention will solve disputes arising when a program is composed in one country and transmitted to a satellite in another country by providing that copyright in works broadcast by satellite will be governed by the law of the State where the transmission originates. The Convention was signed on 11 May 1994 and will come into effect after its ratification by seven States.

ISSN 1448-4803 (Print)
ISSN 2204-6283 (Online)

The material in this briefing is provided for general information only and should not be relied upon for the purpose of a particular matter. Please contact the Legal Practice before any action or decision is taken on the basis of any of the material in this briefing.

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