Newsletter November 2018

Foreign investment screening framework

The European Parliament, the Council and the Commission reached in November a political agreement on an EU framework for screening foreign direct investment. The package agreed will ensure that the EU and its Member States are equipped to protect their essential interests while remaining one of the most open investment regimes in the world.

Openness to foreign direct investment is enshrined in the EU Treaties. Foreign direct investment fuels economic growth, innovation and employment. However, in some cases foreign investors might seek to acquire strategic assets that allow them to control or influence European enterprises the activities of which are critical for the security and public order in the EU and in its Member States.

Free movement of non-personal data within the EU

The Council signed off on the reform that will bring down barriers to the free movement of non-personal data within the EU. The new rules are designed to boost the data economy and the development of emerging technologies such as cross-border autonomous systems and artificial intelligence. A provisional deal was concluded with the European Parliament on 19 June 2018.

The reform bans data localisation restrictions imposed by member states on the geographical location for storing or processing non-personal data, unless such restrictions are justified on grounds of public security. Member states’ authorities will continue to have access to data even when it is located in another country. Data may need to be accessed for example for the purposes of regulatory or supervisory control.

Draft normative act: establishment of sovereign funds for development and investment

The Government approved the Emergency Ordinance initiated by the Ministry of Public Finance, which created the general legal framework for the establishment of sovereign development and investment funds.

The creation of sovereign funds for development and investment involves the creation of financial investment vehicles (financial intermediation) in shares / participations in profitable projects / companies, a segment not currently covered by the financial market in Romania, which, on the one hand, have a multiplier role in the economy for sustainable development and, on the other hand, catalyze / mobilize available financial resources to the real sector and profitable projects.

The enforcement of EU rules for non-compliant product

The EU is introducing new rules which will ensure that products placed on the EU market comply with EU safety and environmental protection rules. Ambassadors agreed on the Council’s position on a new regulation which enhances the enforcement of EU rules for non-compliant products, while offering businesses incentives for compliance.

Illegal and non-compliant products on the market distort competition and put consumers and professional end-users at risk. Economic operators disregard the rules either through lack of knowledge or intentionally to gain a competitive advantage. Moreover, businesses are often active both within the EU and worldwide, and modern supply chains are evolving rapidly. In international e-commerce in particular, when no importer is part of the supply chain, market surveillance authorities have great difficulty in addressing non-compliant products, as no responsible entity is established within the EU.

The Investment Plan for Europe

The Investment Plan has exceeded its initial target and expectations and has now mobilised €360 billion worth of investments, two-thirds of which come from private resources. Thanks to the backing of the European Fund for Strategic Investments (EFSI), 850,000 small and medium businesses are set to benefit from improved access to finance. Estimates show that the EFSI has already supported more than 750,000 jobs, while 1.4 million jobs are set to be created by 2020, generating positive impact in millions of European homes.

The Juncker Plan has already increased EU GDP by 0.6%, a figure set to reach 1.3% by 2020. All Member States are benefiting, especially those who were hit the hardest by the crisis. Today, the EFSI’s successful model is becoming the new benchmark for EU-supported investments, both within and outside the EU, with the new InvestEU fund and the Neighbourhood, Development and International Cooperation Instrument proposed by the Commission for the next long-term EU budget.

The Standardisation in the Single Market more efficient

The European Commission presented in November an action plan to enhance efficiency, transparency and legal certainty in the development of harmonised standards for a fully functioning Single Market.

Largely voluntary and industry-driven standards – from the A4 paper size to 5G technology via airbags – reduce costs, promote innovation, ensure interoperability between different devices and services, and help companies to access markets. The EU has harmonised standards in a range of areas such as chemicals, construction products, cosmetics, toy safety, medical devices and packaging. With the actions presented today, the Commission responds to the demands of stakeholders and acts to ensure that the European standardisation system meets the challenges of rapidly evolving technological developments, emerging economic trends and growth models while promoting synergies with international and global standards.

The Communication provides an overview of the functioning of the European standardisation system, takes stock of the initiatives launched in recent years and presents four key actions that the Commission will immediately undertake to enhance the efficiency, transparency and legal certainty for the actors involved in the development of harmonised standards.