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ELM News ImageCommission moves fast to cut administrative burdens for small businesses

The European Commission has tabled a first set of pure reduction proposals to cut unnecessary administrative burdens for companies, primarily Small and Medium Sized Enterprises (SME's), without changing the level of protection. The three proposals, aimed at transport companies, small bakers, butchers and grocery shops and the merger or division of enterprises are part of a package of fast track actions, which the Commission announced only in January this year. The total package of ten actions will save companies 1,3 billion Euro a year on administrative costs. It is part of a broader policy objective of the Commission to cut administrative burdens for enterprises on a European level by 25 percent by 2012, on which the upcoming European Council will have to take a decision. A fourth fast track action on energy crops was already endorsed last month and will be adopted next week. With these three proposals the Commission moves at an unprecedented speed to deliver on its promise to cut red tape. The proposals will now go to the European Parliament and the Council for adoption. At the same time the Commission will start a screening programme to look at cutting administrative burdens and unnecessary information obligations in thirteen priority areas, like employment, taxation, agriculture and statistics.

Commission Vice President Günter Verheugen, responsible for Enterprise and Industry policy, said: “The Commission is sticking to its promise to cut unnecessary administrative costs. Through minor changes that will not affect the level of protection, today’s package will substantially reduce paperwork and make life easier for entrepreneurs. By doing this in a speedy manner we show that we're serious about removing burdens for enterprises.''

Commission Vice President responsible for Transport Jacques Barrot said: " I am satisfied that transport policy can contribute to simplification of rules through cutting 30 year old reporting obligations that are no longer required for today's transport operations."

Internal Market and Services Commissioner Charlie McCreevy said: "This shows that we're committed to making Europe an even better place to do business. EU companies, especially SMEs, will get real, practical benefits from having these unnecessary burdens lifted. And as our proposal on expert reports demonstrates, greater flexibility doesn't mean compromising shareholder protection."

Commissioner for Health Markos Kyprianou said: "I support fully this drive to reduce administrative burdens on small food operators, which maintains the highest levels of hygiene and food safety while allowing small businesses to flourish."

Today’s package ensures the following:

    * Companies will no longer have to commission costly expert reports, concerning the draft terms of mergers or divisions, if there is no demand for these reports among shareholders. This simplification applies to more than 600.000 public limited liability companies across Europe, although it is expected that mostly SMEs will make use of the exemption. It is estimated that the average cost of such reports amount to roughly 3.500 EUR.
    * Freight carriers will not have to carry separate transport documents, explaining i.e. frontier crossing points, routes to be taken etc. This action removes unnecessary reporting requirements from 1960 and aligns the remaining requirements with provisions in existing international conventions, while facilitating freight carries’ opportunities for using simpler means of documentation. The simplification applies to more than 300.000 freight carriers across Europe, a majority of which is SMEs.
    * Micro-enterprises in the food area, such as butchers, bakers and grocery shops, will no longer face the same demanding requirements for keeping records on hygiene procedures and practices as large supermarkets. The micro-enterprises will still have to abide by high sanitary standards but they will no longer have to spend time writing down the procedures and keeping detailed records of them. Analysis has shown that these businesses can, in fact, keep the same level of sanitary protection without facing enormous administrative burdens.

This package is the first example of pure reduction proposals from the Commission, aimed solely at removing red tape. As the proposals remove outdated or unnecessary burdens without changing the level of protection, the Commission expects this package to be agreed in a fast and efficient procedure by the legislators.

The first fast track action on energy crops has already been endorsed by the responsible committee and will be adopted by the Commission next week. This action removes unnecessary burdens on farmers, collectors and processors of agricultural energy products. Three other proposals will follow similar legal procedures in the coming weeks:

    * simplify procedures concerning exports of agricultural produce,
    * simplify statistical surveys regarding the information society,
    * remove unnecessary requirements for small fishing vessels.

One legal proposal updating the administrative procedures for (maritime) transport is already making good progress in the Council Working Party. This proposal will simplify documentation of transport as well as training activities for transport operators.

Further two proposals will be presented to the legislators later this month. This concerns the proposals to reduce the frequency of certain agricultural statistics concerning pigs and cattle, and introduce an electronic register to enhance data exchange regarding road haulage.