Banking and Finance

The Venezuelan Central Bank (VCB) established the interest rates applicable to obligations derived from employment relationships (59.26% and 47.63% - August 2024; 59.23% and 47.62% - September 2024) and to transactions with credit cards (60.00% annual maximum lending rate and 17.00% annual minimum lending rate - September and October 2024). (Official Gazette of 10/29/2024. Official Notices. Entry into force: Upon publication in the Official Gazette). BANKING AND FINANCE TAX Bonded Warehouse Regime and not used, must be delivered to the Regional Management, Sector or Unit of Internal Taxes of the domicile of the taxpayer for destruction; 4) the liquor warranty seals identified with designation F-07-2015 or years preceding 2015 that are in SENIAT’s custody must be destroyed in accordance with the procedures established in the rules that govern the matter. (Official Gazette of 10/08/2024. Administrative Ruling SNAT/2024/000098. Entry into force: Upon publication in the Official Gazette).

Tax

The National Integrated Service of Customs and Tax Administration (Servicio Nacional Integrado de Administración Aduanera y Tributaria - SENIAT) issued an Administrative Ruling with the purpose of regulating the use and period of effectiveness of the Warranty Seals to be placed on the Taxed Species of National and Imported Production.
Said Ruling established:
1) the liquor warranty seals acquired by the producers or importers of taxed species may not be transferred, assigned or sold;
2) the liquor warranty seals the issue and circulation of which is authorized by SENIAT may be used for a period of two years as from the date of acquisition;
3) the liquor warranty seals identified with designation F-07-2015 or years preceding 2015, acquired under the Bonded Warehouse Regime and not used, must be delivered to the Regional Management, Sector or Unit of Internal Taxes of the domicile of the taxpayer for destruction;
4) the liquor warranty seals identified with designation F-07-2015 or years preceding 2015 that are in SENIAT’s custody must be destroyed in accordance with the procedures established in the rules that govern the matter. (Official Gazette of 10/08/2024. Administrative Ruling SNAT/2024/000098. Entry into force: Upon publication in the Official Gazette).

Civil Aeronautics

The Ministries of the Popular Power for Ecosocialism and for Transportation issued the rules to coordinate the environmental management in the civil aeronautics activity carried out at the national and international airfields and airports of the Bolivarian Republic of Venezuela. (Official Gazette of 10/11/2024. Joint Resolution. Entry into force: Upon publication in the Official Gazette).

Miscellaneous

The Autonomous Service of Registries and Notaries’ Offices (Servicio Autónomo de Registros y Notarías - SAREN) issued an Administrative Ruling with the purpose of regulating the implementation of electronic means in the processes carried out by the SAREN, in order to optimize the service of registries and notaries’ offices, in relation to the verification of the identity of the executing parties, through the biometric analysis of the user identification elements, in the framework of the electronic handling of the registry and notary processes carried out by said Service. The implementation of fingerprint biometry electronic means will be progressively applied, starting at the notaries’ offices located in the capital region. (Official Gazette of 10/17/2024. Administrative Ruling No. 525. Entry into force: Upon publication in the Official Gazette).

Banking and Finance

Paraguay reaches investment grade for the first time in its history

The risk rating agency Moody's announced that it raised Paraguay's credit rating from Ba1 to Baa3, granting it investment grade for the first time in its history, reported the Ministry of Economy and Finance (MEF) on past July 24, 2024. Paraguay joins a select group of countries in the region to have the sovereign degree, Chile, Colombia, Mexico and Peru.

In a statement, they indicated that this stable outlook is reached after 26 years when the rating agency assigned a rating to Paraguay for the first time and after 9 years since the last upward review. "This unprecedented achievement is based on the country's solid economic fundamentals and its long history of macroeconomic stability," the MEF said.

They claim that it is the result of more than 20 years of responsible, consistent and predictable public policies. Prudent management of macroeconomic policies was able to achieve and preserve the sustainability of public finances and maintain low inflation

Tax

Agreement between Paraguay and Spain to avoid double taxation finally in force

After ratification by Paraguayan Law Nr. 7.271/2024 and publication in the Official bulletin of the Spanish Kingdom on July 29, 2024, said important agreement for the economic relationships between both countries shall be in force starting October 14, 2024, having effect for all tax purposes since January 1, 2025.

The agreement comprehends the Personal Income Tax, Corporate Tax and Non Resident income taxes in both countries (the so called IRP, IRE and IDU, and INR in Paraguay and IRPF, IS and IRNR in Spain) document observes OECD standards and includes measures to prevent tax base erosion and profit shifting (BEPS), affecting to Personal and Company income taxes in both countries (including income taxes for non-residents), which must now be ratified by the respective Congresses for its entry into force. Model Tax Convention on Income and on Capital 2017 shall be applicable for the interpretation of articles 5 (permanent establishment) and 7 (entrepreneurial benefits) of said Agreement.

Energy

Amendment of Law "On the Independent Production and Transmission of Electric Energy (PTIEE)"

On August 20224 Law No. 7299/2024 that amend Law Nr. 3009/2006 was enacted to foster private investments for the generation of renewable electricity through small hydroelectric plants (SHPs), by introducing correction of concepts that blocked the previous legislation to be applicable and improving the legal framework, by extending the threshold to grant licenses up to 50 MW and generation greater than 50MW should be subject to international public tenders, without the requirement of a risk-sharing contract with the national utility company (ANDE) as stated in the previous Law, although it retains a first call right to acquire the energy generated in case it is not exported or it is needed in the internal market.

Among other changes, the Ministry of Public Works and Communications replaced a Council of several Ministries (MOPC, Environment, Industry and Trade, Foreign Affairs) that made the procedure very bureaucratic. It must be clarified that shall Law is only applicable for the generation of electricity from the use of natural gas and/or minor hydroelectric generation, which also includes cogenerators and self-generators. This Law does not apply to other renewable energies (solar, wind) governed by Law No. 6977/2023, on Non-Conventional Renewable Energies (NCRE).

Public Procurement

Enactment of Decree Nr. 2264/2024, which regulates Law No. 7021 of December 9, 2022, "On Public Supply and Procurement".

This decree imposes a significant advance in what has to do with administrative management in public procurement. It seeks to improve efficiency, transparency and all flexibility in everything that has to do with public procurement processes. There are updates in terms of terminology, structure, facilitating reading and limiting the search for information and providing greater clarity to the management of State procurement, reducing the deadlines that have to do with protests, reconsideration appeals and deadlines for responses from public institutions to the DNCP.

A special type of bidding that he highlighted is joint procurement, which he described as an innovation in public procurement. It consists of public institutions coming together to buy goods or services, in search of efficiency through the implementation of economies of scale and administrative standardization. The annual average of the awards is USD 3.246 million, with 9.513 procedures and 3.266 suppliers.

Banking & Finance

The Venezuelan Central Bank (VCB) established the interest rates applicable to the obligations derived from employment relationships (59.20% and 47.60% - May and July 2024) and to transactions with credit cards (60.00% annual maximum lending rate and 17.00% annual minimum lending rate - June and August 2024). (Official Gazette of 08/16/2024. Official Notice. Entry into force: Upon publication in the Official Gazette).

Tax

A Presidential Decree exempted the net taxable income of territorial source obtained by Cooperative Associations organized under the Decree with the Force of Special Law of Cooperative Associations from payment of income tax. The benefit of exemption will have a duration of one (1) year as from the date of publication of said Decree in Official Gazette and it may be extended for one (1) year. The exemption will be applied to the fiscal years in progress when the Decree becomes effective. (Official Gazette of 08/12/2024. Decree No. 4.976. Entry into force: Upon publication in the Official Gazette).

The National Integrated Service of Customs and Tax Administration (Servicio Nacional Integrado de Administración Aduanera y Tributaria - SENIAT) established the rate applicable to the calculation of late payment interest accrued during March, April, May, and June 2024. It was established that the weighted average interest rate for loans of the six (6) principal commercial and universal banks of the country with the highest volume of deposits, excluding portfolios with prime rates, set by the Venezuelan Central Bank (VCB) for March, April, May, and June are: 58.98%, 58.98%, 59.20%, and 59.25% respectively, which rates are to be increased 1.2 times for the calculation of late payment interest accrued during said months (Official Gazette of 08/21/2024. Administrative Rulings Nos. SNAT/2024/000068, SNAT/2021/000076, SNAT/2021/000077, SNAT/2022/000081).

The SENIAT legalized the issue and circulation of liquor warranty seals. (Official Gazette of 08/21/2024. Administrative Ruling No. SNAT/2024/000082. Entry into force: Upon publication in the Official Gazette).

A Presidential Decree extended until 12/31/2024 the effectiveness of Decree No. 4.907, published in Official Gazette No. 6.784 Extraordinary of 12/29/2023 and extended by Decree No. 4.967, published in Official Gazette No. 6.818 Extraordinary of 06/28/2024, which Decree No. 4.907 establishes the exemptions from import duties and value added tax for the importation of goods indicated in Chapter II of said Decree.

Therefore, the exemptions or benefits indicated in Decree No. 4.907 continue to be in effect, in the terms and conditions that said Decree establishes. (Official Gazette of 08/30/2024. Decree No. 4.985. Entry into force. As from 09/01/2024).

Miscellaneous

The Ministries of the Popular Power for Economy, Finance, and Foreign Trade and for Transportation established, through a Joint Resolution, the regulation of the “Exporta Fácil Postal” service, which consists in an exportation service via mail, by means of the operating platform of the Instituto Postal Telegráfico de Venezuela (IPOSTEL) (Postal Telegraph Institute) or another authorized postal operator. The purpose of said Resolution is to establish the procedures for exportation of the products of startup entrepreneurs, micro, small and mediumsized entrepreneurs and artisans of the country, in order to achieve a fast process for the exit of the goods via mail. (Official Gazette of 08/15/2024. Resolution No. 005- 2024 and Resolution No. 034. Entry into force: Upon publication in the Official
Gazette).

A Presidential Decree: 1. Ordered the elimination of the Ministry of the Popular Power for Youth and Sports and created the Ministry of the Popular Power for Youth and the Ministry of the Popular Power for Sports; 2. Ordered the elimination of the Ministry of the Popular Power for Urban Agriculture, the competence of which will be transferred to the Ministry of the Popular Power for Communes and Social Movements, which will now be called Ministry of the Popular Power for Communes, Social Movements, and Urban Agriculture (Official Gazette No. 6.830 Extraordinary of 08/27/2024. Decree No. 4.980. Entry into force: Upon publication in the Official Gazette).

A Presidential Decree assigned the National Institute for Socialist Training and Education (Instituto Nacional de Capacitación y Educación Socialista - INCES) to the Ministry of the Popular Power for the Social Process of Work. (Official Gazette of 08/28/2024. Decree No. 4.983. Entry into force: As from the date of its publication in the Official Gazette).

Lo scorso 12 agosto è stato pubblicato nella Gazzetta Ufficiale dell’Unione europea il Regolamento (UE) 2024/2019 del Parlamento europeo e del Consiglio dell’11 aprile 2024 (“Regolamento”) recante una serie di modifiche sostanziali e/o procedurali al protocollo n. 3 sullo statuto della Corte di giustizia dell’Unione europea (“Statuto” e “Corte di giustizia”).

Si riporta di seguito una sintesi delle modifiche introdotte dal Regolamento.

1. Attribuzione al Tribunale della competenza pregiudiziale in materie specifiche

Il Regolamento introduce l’art. 50-ter al fine di attribuire al Tribunale dell’Unione europea (“Tribunale”) la competenza a conoscere delle domande di pronuncia pregiudiziale di cui all’art. 267 del TFUE rientranti in una o più delle seguenti materie:

1. il sistema comune di imposta sul valore aggiunto;
2. i diritti di accisa;
3. il codice doganale;
4. la classificazione tariffaria delle merci nella nomenclatura combinata;
5. la compensazione pecuniaria e l’assistenza dei passeggeri in caso di negato imbarco o di ritardo o cancellazione di servizi di trasporto; e
6. il sistema di scambio di quote di emissione di gas a effetto serra.

Con riferimento ai punti da (a) a (d), il considerando 9 del Regolamento chiarisce che “Tali materie riguardano, al momento dell’adozione del presente regolamento, questioni quali la determinazione della base imponibile dell’imposta sul valore aggiunto o le condizioni per l’esenzione dal pagamento di tale imposta; l’interpretazione del regime generale delle accise e del quadro relativo alle accise sull’alcool, sulle bevande alcoliche, sul tabacco, sui prodotti energetici e sull’elettricità; gli elementi in base ai quali i dazi all’importazione o all’esportazione sono applicati nell’ambito degli scambi di merci, quali la tariffa doganale comune, l’origine e il valore in dogana delle merci; le procedure di importazione ed esportazione, comprese l’insorgenza, la determinazione e l’estinzione di un’obbligazione doganale; regimi doganali specifici; il regime di franchigie doganali, nonché l’interpretazione di voci tariffarie specifiche e i criteri per la classificazione di talune merci nella nomenclatura combinata di cui all’allegato I del regolamento (CEE) n. 2658/87 del Consiglio”.

Con riferimento al punto (e), il considerando 10 del Regolamento chiarisce che tali materie “riguardano questioni che, al momento dell’adozione del presente regolamento, sono disciplinate dai regolamenti (CE) n. 261/2004 [trasporto aereo], (UE) n. 1177/2010 [trasporto marittimo], (UE) n. 181/2011 [trasporto con autobus] e (UE) 2021/782 [trasporto ferroviario] del Parlamento europeo e del Consiglio”.

Con riferimento al punto (f), il considerando 10 del Regolamento chiarisce che tale sistema “al momento dell’adozione del presente regolamento, è disciplinato dalla direttiva n. 2003/87/CE del Parlamento europeo e del Consiglio e dagli atti adottati sulla base di tale direttiva”.

Fermo quanto precede, ai sensi del comma 2 del nuovo art. 50-ter, la Corte di giustizia conserverà la competenza a conoscere delle domande di pronuncia pregiudiziale che sollevino “questioni indipendenti di interpretazione del diritto primario, del diritto internazionale pubblico, dei principi generali del diritto o della Carta dei diritti fondamentali dell’Unione europea”.

In ogni caso, ai sensi del comma 3 della nuova disposizione, le domande di pronuncia pregiudiziale di cui all’art. 267 andranno presentate dinanzi alla Corte di giustizia. Sarà quest’ultima – “quanto prima possibile” e secondo le modalità previste dal proprio regolamento di procedura – a valutare se la domanda rientri esclusivamente in una o più materie attribuite alla competenza del Tribunale e, di conseguenza, a trasmetterla al Tribunale.

2. Partecipazione al procedimento da parte del Parlamento europeo, del Consiglio e della Banca Centrale Europea

Il Regolamento modifica l’art. 23 dello Statuto al fine di prevedere che, nel caso in cui sia sollevata una questione pregiudiziale, la decisione del giudice nazionale che sospende il procedimento debba essere notificata dalla cancelleria della Corte – oltre che alle parti in causa, agli Stati membri, alla Commissione, nonché all’istituzione/organo/organismo dell’Unione che abbia adottato l’atto di cui si contesta la validità o l’interpretazione, come già previsto dall’art. 23 – anche al Parlamento europeo, al Consiglio e alla Banca centrale europea.

Ai sensi del nuovo comma 2, qualora ritengano di avere “un interesse particolare nelle questioni sollevate dalla domanda di pronuncia pregiudiziale”, entro 2 mesi dalla notifica il Parlamento europeo, il Consiglio e la Banca centrale europea potranno presentare memorie od osservazioni scritte.

Ai sensi del nuovo comma 3, le memorie o le osservazioni scritte presentate da un interessato saranno pubblicate sul sito Internet della Corte di giustizia “entro un termine ragionevole” successivamente alla chiusura del caso, a meno che tale interessato non si opponga alla pubblicazione delle proprie memorie od osservazioni scritte.

3. Elezione di avvocati generali per il trattamento delle domande di pronuncia pregiudiziale devolute alla competenza del Tribunale

Il Regolamento introduce l’art. 49-bis dello Statuto al fine di prevedere che, nel trattamento delle domande di pronuncia pregiudiziale, il Tribunale sarà assistito da uno o più avvocati generali, eletti per un periodo di 3 anni – rinnovabile una volta – tra i giudici del Tribunale.

4. Istituzione della sezione intermedia del Tribunale

Il Regolamento modifica l’art. 50 dello Statuto al fine di prevedere, con riferimento alla composizione del Tribunale, l’istituzione di una sezione intermedia tra le sezioni composte da cinque giudici e la grande sezione.

Alla luce della formulazione del nuovo art. 50, il Tribunale si riunirà in: (a) sezioni composte da 3 o 5 giudici; (b) sezione intermedia; e (c) grande sezione. Inoltre, in coerenza con l’attuale formulazione, in alcuni casi il Tribunale potrà statuire nella persona di un giudice unico.

La nuova disposizione prevede che, nei procedimenti aventi ad oggetto una questione pregiudiziale, il Tribunale si riunirà in sezione intermedia su richiesta di uno Stato membro o di un’istituzione dell’Unione che sia parte del procedimento.

5. Rinvio della causa pregiudiziale alla Corte di giustizia o al Tribunale

Il Regolamento modifica l’art. 50 dello Statuto al fine di prevedere che, in linea con quanto previsto in relazione alla trattazione dei ricorsi:

• quando il Tribunale constata di essere incompetente a conoscere di una domanda di pronuncia pregiudiziale, questo dovrà rinviare la causa alla Corte di giustizia;
• quando la Corte di giustizia constata di essere incompetente a conoscere di una domanda di pronuncia pregiudiziale, questa dovrà rinviare la domanda al Tribunale, che in tale ipotesi non potrà declinare la propria competenza.

In relazione al suddetto meccanismo di rinvio, il considerando 18 del Regolamento chiarisce inoltre che “il Tribunale può, a norma dell’articolo 256, paragrafo 3, secondo comma, TFUE, rinviare alla Corte di giustizia una causa che rientra nella sua competenza, ma che richiede una decisione di principio che potrebbe compromettere l’unità o la coerenza del diritto dell’Unione”.

6. Estensione della procedura di ammissione preventiva delle impugnazioni

Il Regolamento sostituisce l’art. 58-bis al fine di estendere la procedura di ammissione preventiva delle impugnazioni da parte della Corte di giustizia:

• alle impugnazioni relative a una pronuncia del Tribunale avente ad oggetto la decisione di una commissione di ricorso indipendente di un organo o di un organismo dell’Unione che, alla data del 1° maggio 2019, disponeva di tale commissione di ricorso ma non risultava espressamente previsto dall’art. 58-bis nella sua attuale formulazione.

Trattasi dei seguenti organi/organismi dell’Unione: (a) Agenzia dell’Unione europea per la cooperazione fra i regolatori nazionali dell’energia; (b) Comitato di risoluzione unico; (c) Autorità bancaria europea; (d) Autorità europea degli strumenti finanziari e dei mercati; (e) Autorità europea delle assicurazioni e delle pensioni aziendali e professionali; e (f) Agenzia dell’Unione europea per le ferrovie; e

• al contenzioso relativo all’esecuzione di contratti contenenti una clausola compromissoria.

7. Introduzione della procedura di consultazione in vista della presentazione di una domanda o di una proposta di modifica dello Statuto

Il Regolamento introduce l’art. 62-quinquies al fine di prevedere che, prima di presentare una domanda o una proposta di modifica dello Statuto, la Corte di giustizia o, se del caso, la Commissione debba procedere allo svolgimento di “ampie consultazioni”.

Il Regolamento entrerà in vigore il 1° settembre 2024 e prevede un regime transitorio in forza del quale:

• le domande di pronuncia pregiudiziale pendenti dinanzi alla Corte di giustizia al 1° ottobre 2024 saranno in ogni caso trattate dalla Corte di giustizia medesima;
• le impugnazioni avverso:
  • le decisioni del Tribunale vertenti su una decisione di una commissione di ricorso di uno degli organi / organismi dell’Unione di cui alle lettere da (a) a (e) del precedente punto 6, nonché
  • le decisioni relative all’esecuzione di un contratto contenente una clausola compromissoria

di cui la Corte di giustizia risulti investita al 1° settembre 2024 non saranno soggette alla suddetta procedura di ammissione preventiva delle impugnazioni.

Entro il 2 settembre 2025, la Corte di giustizia pubblicherà e aggiornerà un elenco di esempi che illustrano l’applicazione del suddetto art. 50-ter dello Statuto.

Entro il 2 settembre 2028, la Corte di giustizia trasmetterà al Parlamento europeo, al Consiglio e alla Commissione una relazione sull’attuazione del Regolamento, eventualmente corredata da una proposta di atto legislativo di modifica dello Statuto, in particolare al fine di rivedere l’elenco delle materie specifiche devolute alla competenza pregiudiziale del Tribunale.

This newsletter provides a selection of opinions and analysis from our EU legal experts on interesting policy developments, recent case law and new regulatory directions of major industry practices. It is released biweekly and covers areas such as: Competition Law, Sanctions, Trade, Energy, Finance, EU funds, Data IP and Privacy, Life Sciences, Transport and Court of Justice of the European Union news.

The aim is to provide an up–to–date tool for quick and easy consultation on the most current and important topics at EU level.

• Competition Law and State Aid
• Sanctions
• Trade
• Energy and Green Deal
• Banking & Finance
• EU Funds
• Life Sciences
• Transport and Electric Vehicles
• Data, IP and Privacy
• Consultions and Calls

EUROPEAN CENTRAL BANK (ECB)

July 2024 euro area bank lending survey (16.07.2024) – According to the July 2024 euro area bank lending survey (BLS): (i) credit standards were broadly unchanged at tight levels in the second quarter of 2024; (ii) loan demand continued to decline for firms, while recording the first increase for households since 2022; (iii) credit standards for firms displayed some heterogeneity across economic sectors, tightening strongly in commercial real estate.

• Link

Survey on the Access to Finance of Enterprises: moderate tightening in reported financing conditions (15.07.2024) – The survey on the access to finance of enterprises, issued by the European Central Bank, shows that access to bank loans improved in the second quarter of 2024. There was a slight decrease in the need for loans and an improvement in availability, leading to a small decrease in the bank financing gap. Firms reported an increase in turnover and were optimistic about the future. Cost pressures remained widespread, but there were signs of moderation in price and wage increases. Inflation expectations also declined.

• Link

The European Central Bank publishes the results of the June 2024 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets (10.07.2024) – The June 2024 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets, issued by the ECB, shows that overall credit terms and conditions eased between March and May 2024. The results were anticipated by the March 2024 survey, which showed that markets expected a further easing of terms and conditions. However, expectations were broken by the stillness of non-price terms, which were expected to tighten, but remained unchanged instead. Lastly, when asked about their expectations for the future, survey respondents expected overall price and non-price terms to remain unchanged across all counterparty types for the three months ahead (specifically, the period from June to August 2024).

• Link

The European Central Bank publishes the May 2024 Consumer Expectation Survey (28.06.2024) – According to the ECB’s Consumer Expectation Survey for the month of May 2024, median consumer inflation perceptions over the past 12 months and inflation expectations for the next 12 months have all modestly decreased, reaching their lowest point since September 2021. Following the trend of the previous months, median expectations for inflation for three years ahead have also slightly decreased. Another positive result is the decrease of uncertainty about inflation expectations over the next 12 months, which decreased to its lowest level since the invasion of Ukraine by Russia in February 2022. Consumer expectations for nominal income growth decreased slightly, while expectations for nominal spending growth over the next 12 months declined by 0.3%. Economic growth expectations for the next 12 months remained unchanged, while expectations for the unemployment rate for the 12 months ahead slightly decreased. The expectation for the price of housing remained unchanged since April 2024.

• Link

EUROPEAN BANKING AUTHORITY (EBA)

The European Supervisory Authorities publish the second batch of policy products under DORA (17.07.2024) – The three European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) published the second batch of policy products under the Digital Operational Resilience Act (DORA). This batch consists of four final draft regulatory technical standards (RTS), one set of Implementing Technical Standards (ITS) and 2 guidelines , all of which aim at enhancing the digital operational resilience of the EU’s financial sector. The package focuses on the reporting framework for ICT-related incidents (reporting clarity, templates) and threat-led penetration testing while also introducing some requirements on the design of the oversight framework, which enhance the digital operational resilience of the EU financial sector, thus also ensuring continuous and uninterrupted provision of financial services to customers and safety of their data.

• Link

The European Banking Authority clarifies the operational application of CRR 3 in the area of credit risk modelling (17.07.2024) – The European Banking Authority (EBA) welcomes the entry into force of the new European Banking Package, which implements the final Basel III framework into EU regulation. To ensure a smooth operational implementation of the Banking Package, the EBA encourages institutions and competent authorities to engage in an active dialogue. In particular, institutions should: (i) communicate to their competent authorities the targeted model landscape, in particular following the migration of exposures to the foundation approach (F-IRB) and standard approach. A key aspect is to ensure that rating systems perform adequately on their scope of application; (ii) assess and categorise changes coming from the implementation of the Capital Requirements Regulation (CRR3) that impact the performance of a rating system according to the EU Commission’s Delegated Regulation on materiality of changes to the IRB approach. On the other hand, changes coming from the implementation of CRR3 that do not impact the performance of a rating system should not be considered under the scope of the Commission’s Delegated Regulation on model change to the IRB approach;(iii) share with their competent authority an implementation plan on the foreseen modelling updates that are linked to future EBA supervisory products. In this context, modelling updates in relation to credit conversion factor (CCF) parameters (e.g. 12 months fixed horizon reference date) may not need to be prioritised until the date of application of the EBA Guidelines on IRB-CCF.

• Link

The European Supervisory Authorities establish framework to strengthen coordination in case of systemic cyber incidents (17.07.2024) – The three European Supervisory Authorities (EBA, EIOPA and ESMA) will establish the EU systemic cyber incident coordination framework (EU-SCICF), in the context of the Digital Operational Resilience Act (DORA), that will facilitate an effective financial sector response to a cyber incident that poses a risk to financial stability, by strengthening the coordination among financial authorities and other relevant bodies in the European Union, as well as with key actors at international level. Over the coming months, the ESAs will kickstart the implementation of the framework by setting up: (i) the EU-SCICF Secretariat, supporting the functioning of the framework; (ii) the EU-SCICF Forum, working on testing and maturing the functioning; (iii) the EU-SCICF Crisis Coordination, facilitating during a crisis the coordination of actions by the participating authorities. The ESAs will identify legal and other operational hurdles encountered during the initial set up and report these to the European Commission. The further development of the framework will be subject to the availability of resources and other measures taken by the European Commission.

• Link

The European Banking Authority publishes the report on the application of derogations to the deferral and pay out in instruments under CRD (16.07.2024) – The European Banking Authority (EBA) published a report on the application of derogations to the requirements to pay out a part of the variable remuneration for identified staff under deferral arrangements and in instruments that are available to small and non-complex institutions and for identified staff receiving only a relatively small amount of variable remuneration. This report forms part of the EBA’s contribution to the review to be performed by the European Commission. The report aims to assess the implementation and application of derogations within the EU and their impact on the costs, risk alignment of variable remuneration to the risk profile of the institution as well as on the ability to recruit and retain staff. Notably, prior to the explicit introduction of CRDV derogations, the national implementations of the CRD permitted small and non-complex institutions and staff receiving relatively low variable remuneration, to waive specific requirements based on proportionality grounds. Consequently, assessing the impact of CRDV changes remains challenging as it is limited to marginal changes to the regime that applies with more harmonised thresholds.

• Link

The European Banking Authority publishes the report on the application of gender-neutral remuneration policies (16.07.2024) – The European Banking Authority (EBA) published the report on the application of gender-neutral remuneration policies by institutions and investment firms. The report is based on the information collected from institutions, investment firms and competent authorities. The report shows that the industry faces no major hurdles in adopting and implementing gender-neutral remuneration policies, but that some entities still have not yet adopted remuneration policies that explicitly contain measures that ensure that remuneration is awarded gender neutrally and that this aspect is monitored over time. While the review focusses on the principle of equal pay, it also looked at the gender pay gap and the monitoring of indicators in the area of equal opportunities and equal pay. Despite some progress made by the industry, it has been observed that a gender pay-gap persists and that monitoring and transparency on those topics could be further improved. The persistence of a gender pay gap indicates that further work is needed to ensure ‘equal opportunities’ and that there are biases that require further attention. The EBA emphasises the importance of the consistent implementation of gender-neutral remuneration policies across all financial institutions.

• Link

The European Banking Authority reflects on EU stacking orders and provides insight into EU institutions’ management buffers (15.07.2024) – The European Banking Authority (EBA) published a Report on the stacking orders of capital, leverage and MREL/TLAC requirements and related capital buffers, as well as on reflections about management buffers practices in the European Union (EU). The Report describes the role of regulatory stacks, both going and gone concern, with a focus on micro-prudential elements. It also summarises the differences between the EU, the UK and US frameworks. The Report highlights institutions’ practices on management buffers. Further work of the EBA will include efforts to continue to clarify, where necessary, the interaction between the different stacks.

• Link

The European Supervisory Authorities publish a report on the use of behavioural insights in supervisory and policy work (11.07.2024) – The three European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) published a joint report following their workshop on the use of behavioural insights by supervisory authorities in their day-to-day oversight and policy work. The report provides a high-level overview of the main topics discussed during the workshop held on 14-15.02.2024 for national supervisors and other competent authorities, where participants explored the added value of behavioural insights in their work by exchanging their experiences and discussing the challenges they face. The report includes a catalogue of various studies carried out at both the European and national levels on the use of behavioural insights in supervisory and policy work. Behavioural insights are instrumental in helping financial markets deliver better products and services to consumers while also mitigating potential detriments they might face. Leveraging behavioural science and evidence-based practices when designing and implementing policies can further strengthen supervision and improve outcomes for consumers. The workshop and the subsequent report have been developed in accordance with the tasks defined in the Joint Committee Work Programme for 2024.

• Link

The European Banking Authority updates list of other systemically important institutions (11.07.2024) – The European Banking Authority (EBA) updated the list of other systemically important institutions (O-SIIs) in the EU, which, together with global systemically important institutions (G-SIIs), are identified as systemically important by the relevant authorities according to harmonised criteria laid down in the EBA Guidelines. This list is based on year-end-2023 data and includes the overall score calculated according to the EBA Guidelines and the capital buffer rate that the relevant authorities have set for the identified O-SIIs. The list is available also in a user-friendly visualisation tool.

• Link

The European Banking Authority updates the supervisory reporting framework (09.07.2024) – The European Banking Authority (EBA) published its final draft implementing technical standards (ITS) on supervisory reporting requirements implementing the changes necessary to keep the supervisory reporting framework relevant and meaningful and aligned with the amending CRR 3, which implements the latest Basel III reforms. These ITS will allow supervisors to have sufficient comparable information to monitor compliance by institutions with CRR 3 requirements, thus further promoting enhanced and consistent supervision.

• Link

The European Banking Authority releases technical package for its 3.5 reporting framework (09.07.2024) – The European Banking Authority (EBA) published a technical package for version 3.5 of its reporting framework. This package provides the standard specifications that include the validation rules, the Data Point Model (DPM) and the XBRL taxonomies to support the following reporting obligations: (i) amendments to the technical standards on specific reporting requirements for the Fundamental Review of the Trading Book (FRTB); (ii) diversity benchmarking Guidelines; (iii) the cross-sectoral technical standards on the standard templates for the purposes of the register of information in relation to all contractual arrangements on the use of ICT services provided by ICT third-party service providers under the Digital Operational Resilience Act (DORA); (iv) the amendments to the reporting and disclosure technical standards on minimum requirements for own funds and eligible liabilities and total loss-absorbing capacity (MREL/TLAC), following the final changes introduced by the co-legislators in the level 1 text.

• Link

The European Banking Authority publishes the European Supervisory Examination Programme for 2025 (08.07.2024) – The EBA’s European Supervisory Examination Programme for 2025 outlines key areas of focus for supervisory attention across the EU. It aims to drive supervisory convergence by providing supervisory authorities with a unified set of priorities for 2025, including managing increasing economic and financial uncertainties, addressing digital challenges such as digital risk management and the digital transformation, and transitioning towards Basel III and the EU banking package (i.e. the Capital Requirements Regulation III and the Capital Requirements Directive VI, which entered into force on 09.07.2024). The EBA will keep monitoring how these three topics are incorporated into the priorities of the competent authorities and their daily supervisory activities throughout 2025 and use these finding to assess the degree of convergence of supervisory practices.

• Link

The European Banking Authority publishes its annual Report on convergence of supervisory practices for 2023 (08.07.2024) – The annual Report on convergence of supervisory practices for 2023 confirms that most supervisory authorities adequately included the key topics identified for attention in the 2023 European Supervisory Examination Programme. These topics include macroeconomic and geopolitical risks, operational and financial resilience, transition risks, and money laundering/terrorism financing risks. However, there is still disparity in the transitions in the areas of Environmental, Social, Governance and data aggregation capabilities. The EBA’s analysis shows that further consistency in the identification and treatment of risks covered by Pillar 2 requirements across the EU can be obtained. Further convergence is expected after the adoption of the Capital Requirements Regulation III and Capital Requirements Directive VI, and the consequent review of the Supervisory Review and Evaluation Process guidelines. 

• Link

The European Banking Authority publishes Guidelines on the “travel rule” (04.07.2024) – The new Guidelines on the “travel rule”, issued by the EBA, detail which information should be attached to the transfer of funds and certain crypto-assets, and what should intermediaries and service providers do if such information is incomplete or missing. The objective of these Guidelines is to create a uniform and effective approach to trace these transfers, if necessary, and prevent, detect or investigate money laundering and terrorist financing. The Guidelines’ release follows the entering into force of Regulation (EU) 2023/1113 in June 2023, which updates the EU’s legal framework enhancing the transparency of the transfer to crypto-assets service providers.

• Link

The European Banking Authority publishes the spring edition of its Risk Assessment Report (02.07.2024) – The spring edition of the Risk Assessment Report of the EBA combines the content of two different reports, that have always been published separated. It now covers the EBA’s common risk assessment as well as the analysis of banks’ asset encumbrance and funding plan data. Results show that the banks involved in the study are currently facing elevated geopolitical risks, compounded by economic and interest rate uncertainty. They are planning to gradually increase their loan exposures, as supported by the increase of non-performing loan ratios across all segments. In terms of funding, banks are planning to significantly increase long-term market-based funding. They have also increased the availability of collateral, which can be used for future funding purposes. Overall, the profitability of banks in the EU and the European Economic Area has increased, although it is expected to slow down in the future.

• Link

EUROPEAN SECURITIES AND MARKET AUTHORITY (ESMA)

The European Securities and Market Authority publishes 2023 data on cross-border investment activity of firms (15.07.2024) – The European Securities and Markets Authority (ESMA), together with the National Competent Authorities (NCAs), completed an analysis of the cross-border provision of investment services during 2023. The data sets were collected from investment firms across 30 jurisdictions in the EU/EEA. The main findings include: (i) a total of around 386 firms provided services to retail clients on a cross-border basis in 2023; (ii) approximately 8 million clients in the EU/EEA received investment services from firms located in other EU/EEA Member States in 2023; (iii) compared to 2022, the cross-border market for investment services grew by 1.6% in terms of firm numbers, and by 5% in terms of retail clients, while the number of complaints increased by 31%; (iv) Cyprus is the primary location for firms providing cross-border investment services in the EU/EEA, accounting for 20% of the total firms passporting investment services. Luxembourg and Germany follow with 15% and 14% of all firms, respectively; and Germany, France, Spain, and Italy are the most significant destinations (in terms of number of retail clients) for investment firms providing cross-border services in other Member States.

• Link

The European Securities and Market Authority publishes the 2024 ESEF Reporting Manual (11.07.2024) – The European Securities and Markets Authority (ESMA), published the update of its Reporting Manual on the European Single Electronic Format (ESEF) supporting a harmonised approach for the preparation of annual financial reports. ESMA has also updated the Annex II of the Regulatory Technical Standards (RTS) on ESEF. The updated Manual provides technical improvements and guidance to facilitate the analysis and comparison of the data, such as: (i) recommendations when tagging empty fields or dash symbols; (ii) clarifying that extension elements should be anchored to core elements sharing the same data type; (iii) advising on practices to further improve the readability of the information extracted from a block tag; and (iv) encouraging the use of unique identifiers for each tagged fact. The Manual intends to promote a harmonised and consistent approach for the preparation of annual financial reports in the format specified in the RTS on ESEF, providing guidance on common issues that may be encountered when creating ESEF documents, and explaining how to address them.

• Link

The European Securities and Market Authority’s stress test of Central Counterparties finds clearing system resilient (09.07.2024) – The European Securities and Markets Authority (ESMA) has published the results of its fifth stress test exercise for Central Counterparties (CCPs). The results confirm the overall resilience of European Union (EU) CCPs, as well as third-country Tier 2 CCPs, to core credit and liquidity financial risks under the tested scenarios. In line with the EMIR mandate, where the assessments exposed shortcomings in the resilience of one or more CCPs, ESMA will issue the necessary recommendations.

• Link

The European Securities and Market Authority publishes a Final Report on the Guidelines on Enforcement of Sustainability Information (05.07.2024) – After a long consultation with the stakeholders, ESMA issued its Guidelines on Enforcement of Sustainability Information contained in its Final Report. The Guidelines pursue the objective of supporting the consistent application and supervision of sustainability reporting requirements, in order to build convergence on supervisory practices on sustainability reporting. The Final Report is also accompanied by a Public Statement, which is meant to ease large issuers’ initial difficulties in implementing the new requirements. These measures all align with ESMA’s broader mission of promoting EU capital markets as a hub for green finance and improving supervisory consistency amongst EU National Authorities In the future, ESMA will continue to monitor the sustainability reporting practices as well as the application of the guidelines.

• Link

The European Securities and Market Authority publishes the second Final Report under the Markets in Crypto-Assets Regulation (04.07.2024) – ESMA’s second Final Report under the Markets in Crypto-Assets Regulation covers eight draft technical standards aimed at enhancing transparency for retail investors, providing clarity for providers on disclosure and record-keeping requirements, and establishing data standards to facilitate supervision by National Competent Authorities. The draft standards also provide market participants with technical requirements to ensure human and machine readability of crypto-asset white papers, as well as templates and formats for crypto-assets service providers to manage their transaction records. The Final Report also analyses public disclosures that enhance investor’s knowledge on the impact on the environment of the technology behind their crypto assets.

• Link

COURT OF JUSTICE OF THE EUROPEAN UNION (CJEU)

The European Court of Justice delivers its opinion on so-called “floor clauses” in mortgage loans (04.07.2024) – The European Court has delivered its judgment in the Case C-450/22, which pertains to the examination of transparency in collective actions in relation to floor clauses in mortgage loans. These clauses establish a lower limit for the variable interest rate, ensuring it does not drop below a certain point even if the reference rate does. A collective action against 101 financial institutions in Spain was initiated by the Spanish association of users of banks, savings banks, and insurance, with the objective of discontinuing the use of floor clauses and seeking reimbursement of payments made under them. The case was appealed to the Spanish Supreme Court, which expressed doubts about the appropriateness of collective proceedings for reviewing the transparency of floor clauses. The CJEU clarified that the directive under scrutiny does not exclude judicial review of transparency in the context of a collective action. Therefore, the Spanish Supreme Court will need to determine whether significant events, such as the collapse in interest rates in the 2000s or the court’s own judgment in 2013 declaring floor clauses as non-transparent, could have influenced the average consumer’s level of attention and information when entering into a mortgage loan agreement.

• Link

This newsletter provides a selection of opinions and analysis from our EU legal experts on interesting policy developments, recent case law and new regulatory directions of major industry practices. It is released biweekly and covers areas such as: Competition Law, Sanctions, Trade, Energy, Finance, EU funds, Data IP and Privacy, Life Sciences, Transport and Court of Justice of the European Union news.

The aim is to provide an up–to–date tool for quick and easy consultation on the most current and important topics at EU level.

• Competition Law and State Aid
• Sanctions
• Trade
• Energy and Green Deal
• Banking & Finance
• EU Funds
• Life Sciences
• Transport and Electric Vehicles
• Data, IP and Privacy
• Consultions and Calls

EUROPEAN CENTRAL BANK (ECB)

The European Central Bank publishes first progress report on digital euro preparation phase (24.06.2024) – The European Central Bank published its first progress report on the digital euro preparation phase, which was launched on 1^st November 2023 with the aim of laying the foundations for the potential issuance of a digital euro. The report outlines the progress made on key digital euro design aspects and the envisaged next steps for the project.

• Link

The European Central Bank publishes its report on Financial Integration and Structure in the Euro Area (18.06.2024) – The European Central Bank latest report on Financial Integration and Structure in the Euro Area shows that large investments are needed, in order to face future needs such as the green and digital transitions, security and aging populations. This can only be possible if the financial systems in the Euro Area are further integrated. Indeed, since its establishment, the Euro Area has demonstrated its strengths by being highly resilient during crises. However, progress in its financial integration has declined significantly over the last two years, without ever increasing by a noteworthy amount since the start of the monetary union. To further financial integration, the ECB calls for policy actions aimed at mobilising available savings, developing Euro Area bond and equity markets, and making these markets more attractive to foreign investors, while also facilitating cross-border banking and harmonising regulatory frameworks and disclosure requirements. 

• Link

The European Central Bank publishes its annual review on the euro’s international role (12.06.2024) – According to the ECB’s annual review, the euro remained the world’s second most important currency in 2023. Despite high global inflationary pressures and geopolitical tensions, the share of the euro remained above 19%, according to multiple indicators of international currency use. Moving forward, the ECB recommends a broader integration of the European’s financial and economic systems to increase the resilience of the international use of the euro.

• Link

EUROPEAN SUPERVISORY AUTHORITIES (ESAs)

The European Supervisory Authorities publish a joint Opinion on the assessment of the Sustainable Finance Disclosure Regulation (18.06.2024) – The European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority published a joint opinion in the context of a comprehensive review of the SFDR framework called by the European Commission. The Opinion argues for the introduction of two straight-forward categories for financial products in the Sustainable Finance Disclosure Regulation: “sustainable” and “transition”. These two categories have the purpose of enhancing the consumers’ comprehension of the products, in order to reduce greenwashing risks and increase the information available to investors. The ESAs also suggests that the European Commission (i) adopt sustainability indicators to grade financial products, (ii) improve the definitions of sustainable investments, and (iii) simplify the way the disclosures are presented to investors.

• Link

The European Supervisory Authorities renew the term of the President of the Board of Appeal, and elect a new Vice President (14.06.2024) – Michele Siri, Professor of Insurance and Financial Markets Law, University of Genoa, Italy, was renewed by the ESAs as their Board of Appeal’s President for a new term of two years and a half, and Margarida Lima Rego, Associate Professor and Vice-Dean at NOVA School of Law, NOVA University, Portugal, was appointed as Board of Appeal’s Vice-President for the same time period.

• Link

EUROPEAN BANKING AUTHORITY (EBA)

The European Banking Authority publishes amendments to counterparty credit risk standards as part of its new roadmap for the implementation of the Banking Package in the EU (24.06.2024) – The European Banking Authority published its final draft amending Regulatory Technical Standards (RTS) on the standardised approach for counterparty credit risk (SA-CCR). This regulatory product is part of the new roadmap on the Banking Package. The amendments to the Capital Requirements Regulation (CRR3) have expanded the EBA mandate to specify the formula to calculate the supervisory delta of options under the SA-CCR framework. Alongside the supervisory delta formula for interest rate options compatible with negative interest rates, the mandate now also requires the specification of the supervisory delta formula for commodity options compatible with negative commodity prices. Therefore, the existing RTS on SA-CCR have been amended to include the formula for commodity options.

• Link

The European Banking Authority updates the Pillar 3 disclosure framework finalising the implementation of the Basel III Pillar 3 framework (21.06.2024) – The European Banking Authority published a final draft implementing technical standards (ITS) on public disclosures by institutions that implement the changes in the Pillar 3 disclosure framework introduced by the amending Regulation (EU) 2024/1623 (CRR 3). These ITS will ensure that market participants have sufficient comparable information to assess the risk profiles of institutions and understand compliance with CRR 3 requirements, further promoting market discipline.

• Link

The European Banking Authority publishes its final draft Regulatory Technical Standards under the Capital Requirements Regulation (20.06.2024) – The European Banking Authority  published the final draft for Regulatory Technical Standards (RTS) under the Capital Requirements Regulation (CRR), covering both the conditions for assessing the materiality of model extensions and changes, and the changes to the subset of modellable risk factors, applicable under the Fundamental Review of the Trading Book rules. The draft differentiates material extensions and changes from non-material extensions and changes and sets out a combination of quantitative and qualitative conditions for the categorisation of extensions and changes. This publication completes the June 2019 roadmap on market and counterparty credit risk approaches. 

• Link

The European Banking Authority publishes regulatory products under the Markets in Crypto-Assets Regulation (19.06.2024) – The European Banking Authority published the last package of technical standards and guidelines under the Markets in Crypto-Assets Regulation (MiCAR), thereby completing the delivery of its technical standards under the regulation. This package covers reporting, liquidity stress testing, as well as supervisory colleges, and it comprises, among others, (i) the Final draft RTS further specifying the liquidity requirements of the reserve of assets; (ii) the Final draft RTS to specify the highly liquid financial instruments; and (iii) the Guidelines on recovery plans.

• Link

The European Banking Authority publishes the technical standards and guidelines under the Markets in Crypto Assets Regulation (13.06.2024) – Pursuant to the provisions of the Markets in Crypto Assets Regulation, the EBA published a set of regulatory instruments to develop a well-regulated market for asset-referenced and e-money tokens in the European Union. The regulatory package covers prudential matters. It comprises new regulatory technical standards relating to own fund and liquidity, and new guidelines on recovery plans.

• Link

The European Banking Authority issues a revised list of its Implementing Technical Standards validation rules (13.06.2024) – The revised list of Implementing Technical Standards (ITS) validation rules, issued by the EBA, deactivated some of the rules present in older versions of the list. This means that data submitted in accordance with deactivated rules should not be formally validated by the Competent Authorities.

• Link

EUROPEAN SECURITIES AND MARKET AUTHORITY (ESMA)

The European Securities and Market Authority publishes the 2023 Annual Report (14.06.2024) – The Annual Report for 2023 illustrates the authority’s key achievements after the first year of implementation of its five-years plan for enhancing investor protection and promoting stable and orderly financial markets in the European Union. The Annual Report

mainly focuses on investor protection, risk monitoring and supervision. In 2023, ESMA has been especially active in the monitoring of risks and resilience of financial markets and in supporting supervisory convergence through extensive work in the digital space. Among others, some of ESMA’s key achievements are: the exploration of new areas of regulation, in preparation for the implementation of the Digital Operational Resilience Act; the launch of a new data strategy for 2023-2028, aiming to leverage technology and data to improve market supervision and investors’ protection; the assessment of greenwashing through a progress report on greenwashing risks and supervision.

• Link

COUNCIL OF THE EUROPEAN UNION (COUNCIL)

Council reaches agreement for a new regulatory package for retail investment (12.06.2024) – Council reached an agreement for a new regulatory package, aimed at strengthening the EU rules on retail investor protection. The package will provide retail investors with clearer information about investment products and will ensure more transparency and disclosure. Vincent Van Peteghem, Belgian Minister of Finance, commented the agreement by highlighting the need to incentivize retail investors to make sound investment decisions in the EU market, in the hope that their enhanced trust in the capital markets will make their savings flow to innovative European companies, including small and medium enterprises.

• Link