Verheugen plans red-tape clean-up

The European Commission is to propose lightening the administrative burden for companies exporting goods from one EU country to another.

The proposals from the department of Enterprise and Industry Commissioner Günter Verheugen on the free movement of goods are set for release at the end of this month (31 January).

The move is an attempt to cut through red tape that has tied up the single market.

The principle of free movement of goods is supposed to be one of the cornerstones of the EU single market. Many internal market barriers have already been lifted by sector-specific EU rules aimed at harmonising technical standards. Sectors that are not covered by harmonised rules are catered for by the principle of mutual recognition, which makes it illegal for EU countries to refuse imports from other member states, even in cases where products are not fully compliant with standards in the target country.

But many EU companies still face barriers because of abuses of the mutual recognition rule. According to the European Court of Justice’s landmark ‘Cassis de Dijon’ ruling in 1979 member states can bar products on the grounds of public safety, health concerns or environmental considerations. "Some member states ignore the principle of mutual recognition. They always think that their national law is the one to follow," said Jean-Luc Laffineur, a Brussels-based lawyer who advises industry on internal market issues.

Products covered by harmonised legislation can also be denied market entry as a direct result of ‘gold-plating’, the practice of adding regulations at national level to EU laws through non-statutory means. "There’s a lot of gold-plating going on, certainly in Germany and the UK," said Adrian Harris, secretary-general of the engineering lobby Orgalime. Manufacturers of engineering products are often confronted with complex variations in national laws applicable to small parts rather than finished products.

Verheugen is trying to make the legal framework governing the internal market in goods more transparent. According to one Commission official, the ‘burden of proof’ (for example, on safety standards) will be shifted from companies to national watchdogs. Proposals will create clear guidelines on community standards for labelling purposes and address shortcomings in market surveillance at national level.

"Free movement of goods is one of the… areas [of EU integration] people seem to think works," said Vincent McGovern, policy adviser at BusinessEurope, the employers’ federation.

"Yes, it’s the one where most progress has been made. But, to say it works is a simplification of the situation."

The European Commission is to propose lightening the administrative burden for companies exporting goods from one EU country to another.