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

COUNCIL OF THE EUROPEAN UNION (COUNCIL)

Data protection: Council agrees position on GDPR enforcement rules (13.06.2024) – The Council has reached an agreement on a common member states’ position on a new law which will improve cooperation between national data protection authorities when they enforce the General Data Protection Regulation (GDPR). The Council position maintains the general thrust of the proposal but amends the draft regulation as regards clearer timelines, enhanced and efficient cooperation and early resolution mechanism.

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Il recente parere dell’EDPB sull’uso del sistema “Pay or Consent”

Sempre più spesso, navigando sui siti di alcune testate giornalistiche o su altre piattaforme online, gli utenti si trovano davanti a una scelta: abbonarsi al servizio oppure acconsentire all’uso dei propri dati per l’invio di contenuti pubblicitari personalizzati.

Una pratica diffusa, quella del “Pay or Consent” (letteralmente: “Paga o Acconsenti”), ma non per questo necessariamente lecita, oggetto del recente parere dell’EDPB (Opinion 08/2024 del 17 aprile 2024). La pronuncia è stata sollecitata da alcune Autorità per la Protezione dei Dati nazionali (Olanda, Norvegia e Germania) e, peraltro, tiene conto anche della sentenza della Corte di Giustizia dell’Unione europea nel caso C-252/21, che ha visto coinvolta Meta.

Tra gli aspetti principali in merito alla configurazione giuridica della fattispecie del “Pay or Consent” emerge senza dubbio la questione della validità del consenso che, si ricorda, ai sensi del GDPR dev’essere, tra le altre cose, liberamente prestato. Ebbene, secondo l’EDPB, la libertà di scelta dell’utente dipende anche dalle opzioni che gli vengono offerte, e risulta difficile immaginare che le piattaforme possano ottenere un consenso liberamente prestato se la scelta si riduce a: pagare un abbonamento o “pagare” con i propri dati.

I titolari, argomenta l’EDPB, non dovrebbero offrire una sola alternativa a pagamento oltre al servizio che include il trattamento dei dati a fini di pubblicità comportamentale, ma dovrebbero prendere in considerazione la possibilità di fornire agli interessati una terza “alternativa equivalente” che non comporti il pagamento di un corrispettivo. Solo in questo modo gli utenti potranno esercitare una vera scelta; infatti, se gli utenti sono messi in condizione di poter usufruire del servizio non solo gratuitamente, ma anche senza dover necessariamente acconsentire alla pubblicità comportamentale, si può dedurre che coloro che prestino il proprio consenso alla profilazione lo facciano liberamente e consapevolmente, e non perché si tratta solo della scelta dell’unica alternativa (apparentemente) gratuita.

A ciò si aggiunga un altro fattore determinante nella validità del consenso prestato: lo squilibrio di potere tra un titolare che ricopre un’importante posizione sul mercato (ad esempio una testata giornalistica) e l’interessato (utente del sito web). Squilibrio che si accentua se si considera la tipologia di servizio e il fatto che lo stesso possa dirsi “essenziale” per gli utenti. In sostanza, il rischio è che nei sistemi “Pay or Consent” gli utenti che non intendono pagare né sottoporsi a un trattamento dei propri dati per l’invio di pubblicità comportamentale si trovino costretti a rinunciare, ad esempio, alla possibilità di informarsi.

Il tema della libertà del consenso prestato è senza dubbio quello che appare più controverso in tale dinamica, ma naturalmente devono essere rispettate anche le altre condizioni affinché il consenso possa dirsi lecito: esso, come noto, dev’essere libero, specifico, informato, inequivocabile ed ottenuto in maniera chiara e comprensibile per l’interessato. Senza trascurare, naturalmente, gli altri principi del GDPR, cui devono attenersi tutti i titolari in occasione di un trattamento di dati personali.

Per approfondimenti:

EDPB, “Opinion 08/2024 on Valid Consent in the Context of Consent or Pay Models Implemented by Large Online Platforms”, 17 April 2024.

AI Act: le nuove regole sull’Intelligenza Artificiale in Europa

Il 21 maggio 2024 è stato approvato il testo definitivo dell’AI Act.

Si tratta del primo regolamento al mondo in materia di intelligenza artificiale volto a promuovere lo sviluppo e l’adozione di sistemi AI sicuri e affidabili all’interno del mercato unico europeo, che operino nel rispetto delle libertà e dei diritti fondamentali dei cittadini, compreso il diritto alla protezione dei dati personali.

L’obiettivo è quello di stimolare nuovi investimenti e promuovere l’innovazione nel campo dell’intelligenza artificiale, considerato un settore ormai cruciale non solo nel mercato europeo ma anche a livello globale, costituendo un elemento di significativa rilevanza strategica in numerosi ambiti e per diversi soggetti.

Innanzitutto, l’AI Act classifica i sistemi di intelligenza artificiale sulla base del rischio per i diritti e le libertà dei soggetti interessati. Infatti, i sistemi di IA che presentano un “rischio limitato” saranno soggetti a obblighi di trasparenza meno rigidi, a differenza dei sistemi di AI considerati ad “alto rischio” che dovranno rispettare una serie di requisiti specifici e che saranno soggetti ad obblighi di trasparenza più stringenti, fatta eccezione per quei sistemi di AI autorizzati dalla legge e impiegati per accertare, prevenire, indagare o perseguire reati.

Inoltre, l’AI Act introduce una serie di divieti con riferimento ad alcune pratiche considerate rischiose, tra cui:

• l’adozione di tecniche che manipolano la cognizione e il comportamento individuale;
• la raccolta casuale di dati biometrici da spazi pubblici, su Internet o tramite i sistemi di videosorveglianza;
• l’uso di sistemi per il riconoscimento delle emozioni in contesti lavorativi o scolastici;
• l’implementazione di punteggi di social scoring;
• l’elaborazione biometrica per l’inferenza di dati appartenenti a categorie particolari;
• l’impiego di sistemi con funzioni di polizia predittiva rivolti a specifici individui.

L’AI Act detta nuove regole anche con riferimento ai cd. foundation model, ossia quei sistemi computazionali basati sull’AI (ad esempio, ChatGPT) impiegati per diverse attività e finalità, quali la generazione di video, testi e immagini, conversazioni in linguaggio vocale, calcoli e altro ancora.

In relazione a tali sistemi, l’AI Act prevede l’obbligo per i fornitori di effettuare valutazioni d’impatto sui sistemi ad alto rischio o per quelli impiegati nel settore bancario e assicurativo. Tra gli altri obblighi imposti ai fornitori di questi sistemi, rientra anche quello di eseguire test per cercare di risolvere i rischi sistemici e adottare misure che garantiscano un livello adeguato di sicurezza dell’infrastruttura hardware e software.

Un ulteriore aspetto riguarda la previsione di misure volte a favorire lo sviluppo e l’adozione di un’AI sicura. Sotto questo profilo, le autorità competenti di ciascuno Stato membro sono tenute ad istituire uno spazio di sperimentazione normativa dedicato all’AI per garantire un ambiente controllato che promuove l’innovazione e facilita lo sviluppo, l’addestramento, la sperimentazione e la convalida dei sistemi di AI.

In tale contesto, è importante che i sistemi di AI, prima di essere immessi nel mercato, siano stati collaudati. Pertanto, occorre eseguire prove in condizioni reali, ossia sulla base dei dati esistenti forniti da soggetti che abbiano prestato il proprio consenso al trattamento per finalità di sperimentazione normativa per l’AI.

In ogni caso, si pone l’accento sulla tutela del diritto alla protezione dei dati personali, posto che la raccolta dei dati da parte dei sistemi di AI comporta un elevato rischio per i diritti degli interessati ove non fossero adottate misure di protezione o non venissero intraprese azioni per mitigare il rischio di trattamenti illeciti.

Per questa ragione, l’AI Act prevede regole specifiche per la protezione delle persone fisiche i cui dati sono trattati, specie con riferimento alle categorie particolari di dati (come nel caso dei sistemi di AI ad “alto rischio” che utilizzano i dataset per addestrare, testare e convalidare i modelli di apprendimento basati su AI).

I fornitori di tali sistemi possono trattare dati appartenenti a categorie particolari, a condizione che: a) l’utilizzo di tali dati sia limitato e siano adottate adeguate misure di sicurezza, b) siano implementate idonee misure volte a rendere i dati sicuri e protetti nonché soggetti a garanzie adeguate; c) i dati non siano divulgati o comunicati a terzi; e d) i dati siano cancellati una volta raggiunta la finalità del trattamento. 

Infine, non mancano le sanzioni per coloro che violano le previsioni dell’AI Act. Infatti, in base alla tipologia di violazione commessa, l’autorità competente potrà irrogare una sanzione pari ad un importo massimo (che oscilla tra 7,5 e 35 milioni di euro) ovvero, se il trasgressore è un’impresa, a una percentuale del fatturato mondiale totale annuo relativo all’esercizio precedente, se superiore. È prevista un’eccezione per le PMI o startup, a cui si applicheranno sanzioni ridotte.

Per approfondimenti: Artificial Intelligence Act

Il Garante Privacy sanziona un Comune per videosorveglianza illecita e violazione della privacy dei dipendenti

Il Garante per la protezione dei dati personali ha sanzionato un Comune per trattamento illecito di dati personali tramite videosorveglianza. L'intervento è avvenuto a seguito della segnalazione di una dipendente che contestava l'installazione di una telecamera vicino all’orologio-timbratore, l’unico strumento utilizzato per la rilevazione dell’orario di servizio dei dipendenti. Il Comune aveva utilizzato le immagini per contestare alla dipendente alcune violazioni dei propri doveri d’ufficio, tra cui il mancato rispetto dell'orario di servizio e, alla richiesta di motivazioni da parte del Garante Privacy, il Comune ha giustificato la presenza della telecamera con motivi di sicurezza. Tuttavia, il Garante ha rilevato che il Comune non aveva rispettato le procedure di garanzia previste per i controlli a distanza e aveva usato le immagini per scopi disciplinari. Inoltre, il Comune non aveva fornito un'informativa adeguata ai lavoratori e ai visitatori sul trattamento dei dati personali tramite la telecamera.

Per quanto la sanzione irrogata al Comune sia di modesta entità, l’episodio evidenzia chiaramente la delicatezza della tematica, che richiede un’attenta gestione da parte delle aziende.

Per approfondimenti: provvedimento dell’11 aprile 2024 (10013356)

Telemarketing: Il Garante Privacy sanziona due gestori di energia per 100mila Euro

Il Garante per la protezione dei dati personali ha sanzionato due gestori di energia con multe di 100mila euro ciascuno per trattamento illecito di dati personali. L'azione è seguita a due reclami e 56 segnalazioni da parte di utenti che hanno ricevuto telefonate indesiderate e attivazioni non richieste di contratti energetici. Le indagini hanno rivelato che le chiamate, effettuate senza consenso degli interessati, erano rivolte principalmente a utenti iscritti nel Registro pubblico delle opposizioni (Rpo). I call center, dopo aver acquisito i contatti degli utenti da società terze e agenti o procacciatori, contattavano illegalmente gli utenti stessi, molti dei quali sottoscrivevano poi contratti di fornitura. Il Garante ha inoltre ingiunto ai call center di implementare idonee misure tecniche, organizzative e di controllo affinché il trattamento dei dati personali degli interessati avvenga nel rispetto della normativa sulla privacy.

Per approfondimenti: provvedimento dell’11 aprile 2024 (10008076)

Videosorveglianza con riconoscimento facciale a Roma: il Garante apre un’istruttoria

Il Garante per la protezione dei dati personali ha avviato un'istruttoria su un progetto di videosorveglianza con riconoscimento facciale nelle stazioni della metropolitana di Roma. Stando alle notizie di stampa, in vista del Giubileo l'Amministrazione di Roma Capitale prevede di installare telecamere con riconoscimento facciale, capaci di identificare “azioni scomposte” all’interno della metropolitana da parte di chi in passato si è reso autore di “atti non conformi”. Il Garante ha quindi richiesto all’Amministrazione di Roma Capitale di fornire una descrizione tecnica delle funzionalità di riconoscimento facciale, la finalità, la base giuridica del trattamento dei dati biometrici e una copia della valutazione d'impatto sulla protezione dei dati, concedendo all'Amministrazione un termine di 15 giorni per rispondere. L'Autorità ha inoltre ricordato che fino al 2025 è in vigore una moratoria sull'uso di sistemi di videosorveglianza con riconoscimento facciale in luoghi pubblici o aperti al pubblico da parte delle autorità pubbliche o dei soggetti privati. Solo l’autorità giudiziaria, nell’esercizio delle funzioni giurisdizionali, e le autorità pubbliche, a fini di prevenzione e repressione dei reati possono effettuare tali attività di trattamento, previa approvazione del Garante.

Per approfondimenti: comunicato del 9 maggio 2024

Modifiche al Codice Privacy: semplificate le regole per la ricerca medica, biomedica ed epidemiologica

La recente modifica al Codice Privacy italiano, avvenuta tramite la conversione del decreto-legge 2 marzo 2024 n. 19, introduce significativi cambiamenti nel settore della ricerca scientifica in campo medico, biomedico ed epidemiologico. In particolare, secondo la nuova formulazione dell’art. 110 del Codice Privacy, nei casi in cui non sia possibile ottenere il previo consenso dell’interessato, i dati personali dei pazienti possono essere trattati per fini di ricerca scientifica in ambito medico, biomedico ed epidemiologico a condizione che sia stato ottenuto il parere favorevole del comitato etico e che siano osservate le garanzie dettate dal Garante Privacy. È stato dunque eliminato il requisito dell’autorizzazione preventiva da richiedere al Garante Privacy, sostituito dal rispetto delle garanzie indicate dal Garante Privacy nelle regole deontologiche sul trattamento di dati per fini di ricerca. 

Il Garante per la protezione dei dati personali dovrà dunque intervenire con misure generali valide per una pluralità di progetti attraverso le regole deontologiche, che saranno sottoposte a consultazione pubblica, coinvolgendo anche la comunità scientifica nella loro formazione.

Questa riforma ha l’obiettivo di bilanciare la necessità di proteggere i dati personali con l'esigenza di facilitare la ricerca scientifica, particolarmente rilevante nel contesto della salute pubblica.

Per approfondimenti: provvedimento 9 maggio 2024 (10016146)

EDPB: Pubblicata la relazione annuale

La relazione annuale del comitato europeo per la protezione dei dati (“EDPB”) riepiloga le attività svolte dal comitato nel corso dell’anno (raccomandazioni e relazioni sulle migliori pratiche formulate dal comitato, decisioni vincolanti, applicazione pratica degli orientamenti e così via).

Nel corso dell’anno 2023, l’EDPB ha adottato due decisioni vincolanti, una decisione vincolante avente carattere d’urgenza e due nuove linee guida. Inoltre, l’EDPB ha adottato 37 pareri ai sensi dell’art. 64 del GDPR, la maggior parte dei quali riguardanti il tema delle c.d binding corporate rules e quello dei requisiti di accreditamento degli organismi di certificazione. Infine, l’EDPB ha adottato due pareri legislativi, di concerto con l’EDPS.

Con specifico riferimento alle decisioni vincolanti, si segnalano le seguenti:

• Decisione vincolante 1/2023, con cui l’EDPB ha risolto una controversia sui trasferimenti di dati da parte di Meta Platforms Ireland Limited.
• Decisione vincolante 2/2023, con cui l’EDPB ha risolto una controversia in materia di trattamento dei dati di utenti di età compresa tra i 13 e i 17 anni da parte di TikTok Technology Limited, rilevando che i pop-up di registrazione e di pubblicazione dei video non presentassero all’utente le opzioni in modo oggettivo e neutrale. 

Inoltre, nel corso del 2023 l’EDPB ha adottato le seguenti linee guida:

• Linee guida 03/2022, adottate in data 14 febbraio 2023, in materia di c.d. design patterns ingannevoli nelle piattaforme di social media, aventi l’obiettivo di stabilire raccomandazioni e orientamenti pratici ai fornitori di social media, su come valutare ed escludere i design ingannevoli nelle piattaforme social.
• Linee guida 05/2022 sull’utilizzo della tecnologia di riconoscimento facciale (FRT) nell’ambito dell’applicazione della legge. Le linee guida forniscono informazioni rilevanti per i legislatori a livello europeo e nazionale, nonché per le autorità di polizia, quando implementano e utilizzano tali sistemi FRT.

Per approfondimenti: Relazione annuale EDPB

Il parere dell’EDPB sull’utilizzo delle tecnologie di riconoscimento facciale da parte degli operatori aeroportuali

A fine maggio l’EDPB ha adottato un parere (Opinion n. 11/2024) sull’uso delle tecnologie di riconoscimento facciale per semplificare il flusso dei passeggeri e la conservazione dei dati biometrici da parte degli operatori aeroportuali.

Il parere, in particolare, analizza la compatibilità del trattamento con:

• il principio di limitazione della conservazione (art. 5, paragrafo 1, lettera e), GDPR),
• il principio di integrità e riservatezza (articolo 5, paragrafo 1, lettera f), GDPR),
• la protezione dei dati fin dalla progettazione e per impostazione predefinita (articolo 25 GDPR),
• la sicurezza del trattamento (articolo 32, GDPR).

Preliminarmente, l’EDPB osserva che nell’UE non esiste un obbligo giuridico uniforme per i gestori aeroportuali e le compagnie aeree di verificare che il nome sulla carta d’imbarco del passeggero corrisponda al nome sul loro documento d’identità, ma l’eventuale obbligo è eventualmente oggetto di leggi nazionali. Pertanto, qualora la legge nazionale non imponga alcuna verifica dell’identità dei passeggeri, non sarà possibile effettuare il riconoscimento mediante l’uso di dati biometrici, in quanto ciò comporterebbe un trattamento eccessivo di dati personali.

Ciò premesso, l’EDPB ha preso in considerazione la conformità del trattamento dei dati biometrici dei passeggeri con riguardo a quattro diversi scenari.

1. Dati memorizzati unicamente sui dispositivi personali dei passeggeri

In questo scenario, i dati biometrici sono memorizzati nei dispositivi personali dei passeggeri, sotto il loro esclusivo controllo, e vengono utilizzati per l’autenticazione ai vari checkpoint aeroportuali. Questo scenario potrebbe essere compatibile con il GDPR, a condizione che siano implementate adeguate misure di sicurezza e che non esistano soluzioni alternative meno intrusive.

• Dati memorizzati centralmente all’interno dell’aeroporto con chiavi di accesso detenute dai passeggeri

Nel secondo scenario i dati biometrici sono memorizzati centralmente nell’aeroporto in forma criptata, la cui chiave di decrittazione è in possesso dei soli passeggeri. L’EDPB ritiene che, sebbene la memorizzazione centralizzata comporti dei rischi, questi possono essere mitigati con adeguate misure di sicurezza, rendendo il processo compatibile con il GDPR, a condizione che il periodo di memorizzazione sia giustificato e limitato al minimo necessario.

• Dati memorizzati centralmente sotto il controllo dell’operatore aeroportuale

Un’altra ipotesi considerata dall’EDPB è quella in cui i dati biometrici sono memorizzati centralmente sotto il controllo dell’operatore aeroportuale, consentendo l’identificazione dei passeggeri, per un massimo di 48 ore. Secondo il parere dell’EDPB, questo scenario non è compatibile con il GDPR, poiché la centralizzazione comporta rischi elevati per i diritti fondamentali dei passeggeri in caso di violazione dei dati.

• Dati memorizzati nel cloud sotto il controllo delle compagnie aeree o dei loro fornitori di servizi

Infine, l’EDPB valuta il caso in cui dati biometrici sono memorizzati nel cloud sotto il controllo della compagnia aerea o del suo fornitore di servizi, consentendo l’identificazione dei passeggeri. Questo scenario comporta rischi elevati poiché i dati possono essere accessibili a più entità, inclusi fornitori non appartenenti all’EEA. L’EDPB conclude che questo scenario non è compatibile con il GDPR a causa dell’elevato rischio di violazione dei dati e della mancanza di controllo da parte dei passeggeri sui propri dati.

In tutti i casi dovrebbero essere trattati solo i dati biometrici dei passeggeri che si iscrivono attivamente e prestano il proprio consenso.

In conclusione, l’EDPB ha rilevato che gli scenari in cui i dati biometrici sono conservati esclusivamente dai passeggeri (scenario 1) o in una banca dati centrale, ma con una chiave di decrittazione nelle sole mani degli utenti (scenario 2), se implementati con un elenco di garanzie minime raccomandate, sono gli unici che risultano compatibili con i principi del GDPR sopra richiamati e che controbilanciano adeguatamente l’intrusività del trattamento, garantendo agli interessati il massimo controllo sui propri dati personali.

Gli scenari 3 e 4, al contrario, sono considerati dall’EDPB troppo intrusivi e non proporzionati ai benefici attesi e, pertanto, le soluzioni basate sull’archiviazione in una banca dati centralizzata all’interno dell’aeroporto o nel cloud, senza chiavi di decrittazione nelle mani del passeggero, non possono essere ritenute compatibili con i principi sopra richiamati.

Per approfondimenti:

EDPB, “Opinion 11/2024 on the use of facial recognition to streamline airport passengers’ flow (compatibility with Articles 5(1)(e) and(f), 25 and 32 GDPR”, 23 May 2024.  

COMPETITION LAW AND STATE AID

EUROPEAN COMMISSION (EC)

Italy: the European Commission approves 2 billion euro State aid measure to support STMicroelectronics to set up a new semiconductor manufacturing facility (31.05.2024) – The European Commission has approved, under EU State aid rules, a 2 billion euro Italian measure to support STMicroelectronics (‘ST') in the construction and operation of an integrated chip manufacturing plant for Silicon Carbide (‘SiC') power devices in Catania, Sicily. The measure will strengthen Europe's security of supply, resilience and digital sovereignty in semiconductor technologies, in line with the objectives set out in the European Chips Act Communication. The measure will also contribute to achieving the digital and green transitions.

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The European Commission amends Guidelines on Regional State aid to allow increased support to Strategic Technologies for Europe Platform projects (31.05.2024) – The European Commission has adopted an amendment to the Guidelines on Regional State aid (‘RAG') to allow Member States to grant higher amounts of regional aid for investment projects covered by the Strategic Technologies for Europe Platform (‘STEP'). The STEP aims to support the development and manufacturing of critical technologies relevant to the EU green and digital transitions, as well as the EU's strategic sovereignty. In particular, the nee amendment increases levels of regional aid for investment projects covered by the STEP by up to 10 percentage points in the regions eligible for aid under Article 107(3)(a) of the Treaty on the Functioning of the European Union and 5 percentage points in the regions eligible for aid under Article 107(3)(c) of the Treaty on the Functioning of the European Union (so-called ‘c' areas).

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The European Commission approves KKR's acquisition of NetCo (30.05.2024) – The European Commission has approved unconditionally, under the EU Merger Regulation, the acquisition by KKR & Co. Inc. (‘KKR') of NetCo. The Commission concluded that the transaction would raise no competition concerns in the European Economic Area (‘EEA'). In particular, the decision concerns the acquisition by KKR of NetCo, which comprises the primary and backbone fixed-line network business of Telecom Italia S.p.A. (‘TIM') as well as FiberCop S.p.A (‘FiberCop'). FiberCop is a joint venture between TIM and KKR comprising TIM's secondary fixed-line network. The European Commission investigated the impact of the transaction on the market for wholesale broadband access services in Italy and concluded that it would not significantly reduce the level of competition.

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The European Commission approves more than 1 billion euro of State aid by seven Member States for the fourth Important Project of Common European Interest in the hydrogen value chain (28.05.2024) – A fourth Important Project of Common European Interest (‘IPCEI') to support research, innovation and the first industrial deployment in the hydrogen value chain. The project contributes to the EU's target of 90% reduction of emissions from the mobility and transport sectors, in order for the EU to become climate-neutral by 2050. By fostering the use of hydrogen as a fuel, it will also help achieve the objectives of the European Green Deal, the EU Hydrogen Strategy and the Sustainable and Smart Mobility Strategy. The project, called ‘IPCEI Hy2Move', was jointly prepared and notified by seven Member States: Estonia, France, Germany, Italy, Netherlands, Slovakia and Spain.

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The European Commission approves up to 1 billion euro of State aid by six Member States for the first Important Project of Common European Interest in the health sector (28.05.2024) – The project, called “IPCEI Med4Cure”, was jointly notified by six Member States: Belgium, France, Hungary, Italy, Slovakia and Spain.IPCEI Med4Cure concerns research and development projects covering all key steps of the pharmaceutical value chain from collection and study of cells, tissues and other samples, to sustainable production technologies of breakthrough therapies, including personalised treatments, and to application of advanced digital technologies. The project aims at accelerating medical advancement and at fostering the resilience of the EU health industry by enhancing drug discovery, in particular for unmet medical needs such as rare diseases and developing innovative and more sustainable production processes for pharmaceuticals. These developments will improve the quality of healthcare and increase the EU's preparedness for emerging health threats while contributing to the green transition.

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Czech Republic: the European Commission approves State more than 3 billion euro aid scheme to support high-efficiency combined heat and power generation (27.05.2024) – The beneficiaries are operators of new or modernised CHP installations in Czechia that meet the definition of high-efficiency cogeneration as set out in the Energy Efficiency Directive. All technologies and projects that enable the production of electricity from high-efficiency CHP installations are eligible, except for those powered by solid fossil fuels, diesel and oil. Projects involving natural gas will be required to either close the aided installations or enable switch to renewable and low-carbon gases by 2050, to avoid lock-in of natural gas. Under the scheme, the aid will take the form of a feed-in premium (bonus) for each MWh of produced electricity for a duration of 15 years. The amount of bonus is set through tenders, except for small installations (up to 1 MWe) where the amount is set administratively by the Czech Energy Regulatory Office on an annual basis and limited to the funding gap.

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France: the European Commission approves State 4 billion euro aid scheme to support decarbonisation measures in the manufacturing sector (24.05.2024) – Under this measure, the aid will take the form of direct grants amounting to up to 30% of the project's investment costs. The measure will be open to companies active in the manufacturing sector in France. Eligible electrification projects must lead to a reduction of greenhouse gas emissions from industrial processes of at least 40% compared to, while energy efficiency projects must lead to a reduction in the energy consumed in industrial processes of at least 20% compared to today. For investments relating to activities covered by the EU Emission Trading System (‘ETS'), the emissions reduction must go below the relevant ETS benchmarks in force at the time of granting the aid.

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The European Commission fines Mondelēz almost 350 million euro for cross-border trade restrictions (23.05.2024) – Mondelēz, headquartered in the US, is one of the world's largest producers of chocolate and biscuit products. Its portfolio includes well-known chocolate and biscuit brands such as Côte d'Or, Milka, Oreo, Ritz, Toblerone and TUC and until 2015 coffee brands such as HAG, Jacobs and Velours Noir. The Commission's investigation found that Mondelēz breached EU competition rules: (i) by engaging in anticompetitive agreements or concerted practices aimed at restricting cross-border trade of various chocolate, biscuit and coffee products; and (ii) by abusing its dominant position in certain national markets for the sale of chocolate tablets. The Commission concluded that Mondelēz's illegal practices prevented retailers from being able to freely source products in Member States with lower prices and artificially partitioned the internal market. Mondelēz' aim was to avoid that cross-border trade would lead to price decreases in countries with higher prices.

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Germany: the European Commission approves State almost 2 billion euro aid scheme to support rail freight transport operators providing single and group wagon transport (21.05.2024) – The aim of the scheme is to help rail operators cover part of the high operating cost. In doing so, the scheme aims to support and preserve the modal shift from road to rail transport, thus promoting a greener means of transport. In single wagon load transport, individual wagons or groups of wagons from different consignors are bundled together to form one train. On the contrary, wagon group transport keeps the same composition from the origin to the destination and is eligible under the scheme for journeys up to a maximum distance of 300 km if operated by short block trains with up to 15 wagons. Both types of transport struggle to reach economic viability. Single wagon load transport entails high costs due to its complex and multi-step nature resulting from the switching and shunting of wagons. Wagon group transport operated by short block trains does not benefit from economies of scale due to the lower number of wagons and the short distances they serve.

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RUSSIAN SANCTIONS

COUNCIL OF THE EUROPEAN UNION (COUNCIL)

DPRK: EU sanctions nine additional individuals and entities involved in the country’s activities related to illegal weapons programmes and supporting Russia’s war of aggression against Ukraine (31.05.2024) – The Council sanctioned a further six individuals and three entities in view of sanctions evasion activities carried out by the Democratic People’s Republic of Korea’s (DPRK) that could generate funds for its illegal nuclear and ballistic missile programmes, in violation of and with flagrant disregard for the relevant UN Security Council resolutions, and in view of the military support given by the DPRK to Russia’s war of aggression against Ukraine.

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Iran: EU lists more individuals and entities for the transfer of drones for Russia’s war of aggression against Ukraine and for the transfer of drones and missiles in the Middle East and Red Sea region (31.05.2024) – The Council adopted restrictive measures against six individuals and three entities for their role in the transfer of unmanned aerial vehicles (UAVs) to Russia in support of its war of aggression against Ukraine; the transfer of UAVs or missiles to armed groups and entities undermining peace and security in the Middle East and the Red Sea region; or for being involved in Iran’s UAV programme.

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Information manipulation in Russia’s war of aggression against Ukraine: EU lists two individuals and one entity (27.05.2024) – The Council decided to impose restrictive measures against two individuals and one entity responsible for conducting propaganda actions targeted at civil society in the EU and its neighbouring countries, gravely distorting and manipulating facts in order to justify and support Russia's war of aggression against Ukraine. The propaganda has repeatedly and consistently targeted European political parties, especially during election periods, as well as targeting civil society, asylum seekers, Russian ethnic minorities, gender minorities, and the functioning of democratic institutions in the EU and its member states.

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Russia: EU sets up new country-specific framework for restrictive measures against those responsible for human rights violations and lists 20 persons (27.05.2024) – The Council established a new framework for restrictive measures against those responsible for serious human rights violations or abuses, repression of civil society and democratic opposition, and undermining democracy and the rule of law in Russia. The decision to establish this new sanctions’ regime is part of the EU’s response to the accelerating and systematic repression in Russia. The new regime was proposed by the High Representative for Foreign Affairs and Security Policy, Josep Borrell, after the untimely death of the opposition politician Alexei Navalny in Siberian prison in February.

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TRADE

EUROPEAN COMMISSION (EC)

EU requests World Trade Organization consultation on Colombia’s compliance in frozen fries dispute (31.05.2024) – The European Commission has launched compliance proceedings against the Republic of Colombia in view of its failure to comply with rulings by the WTO Panel and Appeal Arbitrators concerning anti-dumping duties on imports of frozen fries from Belgium, the Netherlands and Germany. This is why the EU is making recourse to the WTO’s compliance consultation process. With this step, the EU seeks to preserve the rights of EU exporters and to send a signal to Colombia – as well as other countries intending to limit EU exports – that anti-dumping investigations need to be carried out in full respect of WTO rules.

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COUNCIL OF THE EUROPEAN UNION (COUNCIL)

EU-Kenya: Council of the EU takes final step to allow the implementation of the Economic Partnership Agreement (30.05.2024) – The Council of the European Union adopted a decision on the conclusion of the EU-Kenya Economic Partnership Agreement (EPA). The agreement will provide duty-free, quota-free EU market access to all exports from Kenya (except arms) as soon as it enters into force, as well as partial and gradual opening of the Kenyan market to imports from the EU. This will boost trade in goods and create new economic opportunities, with targeted cooperation to enhance Kenya's economic development.

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The Council adopts conclusions on the future of industrial policy (24.05.2024) – The Council of the European Union, on the initiative of the Belgian presidency, has adopted conclusions on 'A competitive European industry driving our green, digital and resilient future'. Boosting the competitiveness of European industry should be high on the political agenda of the next European Commission and these conclusions provide the way forward towards a new European competitiveness deal. The conclusions analyse the situation of the EU's industrial sector, explore ways to improve innovation, access to finance and the business environment for manufacturers, and propose the main principles underlying a future EU industrial policy.

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WORLD TRADE ORGANIZATION (WTO)

The European Union initiates compliance proceedings over Colombian duties on frozen fries (04.06.2024) – The European Union has requested World Trade Organization (WTO) consultations with Colombia to address measures taken by Colombia to comply with an earlier WTO panel ruling and arbitration award regarding Colombia’s anti-dumping duties on imports of frozen fries originating in Belgium, the Netherlands and Germany.

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The European Union and Australia affirm intention to implement recent World Trade Organization rulings (24.05.2024) – The European Union and Australia affirmed their intention to implement recent World Trade Organization (WTO) panel rulings regarding EU measures concerning palm oil and biofuels from Malaysia and Australian duties on Chinese imports at a meeting of the Dispute Settlement Body (DSB). China also reported to the DSB on its implementation of a WTO ruling regarding Chinese duties on steel imports from Japan.

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ENERGY AND GREEN DEAL

EUROPEAN COMMISSION (EC)

The European Commission starts working on a new pilot mechanism to boost the hydrogen market (03.06.2024) – The European Commission takes further steps to support the development of the European hydrogen market by launching work on a pilot mechanism. The new mechanism was created under the recently adopted decarbonised gases and hydrogen package and aims to accelerate investments by providing a clearer picture of the market situation of both off-takers and suppliers and facilitating contacts between them. It will be in place for five years and will be part of the European Hydrogen Bank.

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The European Commission welcomes the new EU Methane Regulation to reduce harmful emissions from fossil fuels in Europe and abroad (27.05.2024) – The European Commission welcomes the first-ever EU rules to curb methane emissions from the energy sector in Europe and across the globe The new regulation obliges the fossil gas, oil and coal industry in Europe to measure, monitor, report and verify their methane emissions according to the highest monitoring standards, and to take action to reduce them. It requires EU gas, oil and coal operators to stop avoidable and routine flaring and to reduce flaring and venting to situations such as emergencies, technical malfunctions or when it is necessary for safety reasons.

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The European Commission welcomes Net-Zero Industry Act (27.05.2024) – The Commission welcomes the final adoption of the Net-Zero Industry Act (“NZIA”), which puts the EU on track to strengthen its domestic manufacturing capacities of key clean technologies. For the EU to become a leader in the clean tech sector, NZIA sets a benchmark for the manufacturing capacity of strategic net-zero technologies to meet at least 40% of the EU's annual deployment needs by 2030. The benchmark provides predictability, certainty and long-term signals to manufacturers and investors and allows progress to be tracked. To support carbon capture and storage projects and increase the availability of CO2 storage sites in Europe, NZIA also sets a target of 50 million tonnes of annual injection capacity in EU geological CO2 storage sites by 2030.

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The European Commission welcomes entry into force of the European Critical Raw Materials Act (23.05.2024) –The Critical Raw Materials Act establishes benchmarks to increase capacities for extraction, processing, and recycling of critical raw materials in the EU and guide diversification efforts. In addition, it creates a framework to select and implement Strategic Projects, which can benefit from streamlined permitting and enabling conditions for access to finance; as well as sets out national requirements to develop exploration programmes in Europe. Moreover, the Regulation will improve the circularity and the efficient use of the critical raw materials by creating value chains for recycled critical raw materials. To ensure resilience of the supply chains, the Act allows the monitoring of critical raw materials supply chains, and information exchange and future coordination on strategic raw materials' stocks among Member States and large companies.

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COUNCIL OF THE EUROPEAN UNION (COUNCIL)

Energy Charter Treaty: the Council gives final green light to EU’s withdrawal (30.05.2024) – The formal decision by the Council of EU gives the final green light for the EU and Euratom to withdraw from the Energy Charter Treaty after the European Parliament approved it during its last plenary session in April 2024. The decisions are linked as they form the two pillars of a political compromise known as the Belgian roadmap on the Energy Charter Treaty. The Energy Charter Treaty (ECT) is a multilateral agreement that entered into force in 1998 and contains provisions on investment protection and trade in the energy sector.

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Sustainable electricity grids: the Council approves conclusions (30.05.2024) – The Council of the EU approved conclusions on the EU’s electricity grid infrastructure, proposing a series of measures for an interconnected and resilient electricity network in Europe, to ensure energy security and achieve decarbonisation in the EU. The Council conclusions highlight the need for long-term, coordinated electricity grid infrastructure planning at European level, and call on the European Commission to assess and identify any gaps and develop measures, if needed, to improve the governance framework at EU level.

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The Council gives final green light to cut methane emissions in the energy sector (27.05.2024) – The Council adopted a regulation on tracking and reducing methane emissions as part of the ‘Fit for 55’ package. The regulation introduces new requirements on measuring, reporting and verifying methane emissions in the energy sector. Mitigation measures, such as detecting and repairing methane leaks and limiting venting and flaring, will aim to avoid methane emissions. Operators will have to measure methane emissions at source level and draw up monitoring reports that will be checked by independent accredited verifiers. Member states will maintain and regularly update an inventory of all wells, as well as mitigation plans for inactive wells, in order to prevent any public health and environmental risks from methane emissions. National authorities will carry out periodic inspections to check and ensure operators' compliance with the requirements of the regulation, including the taking of follow-up remedial measures.

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The Council gives its final approval to the ecodesign regulation (27.05.2024) – The Council adopted the ecodesign regulation, which sets requirements for sustainable products. The regulation replaces the existing ecodesign directive and enlarges its scope, beyond energy products, to all kind of goods placed in the EU market. The new regulation introduces new requirements such as product durability, reusability, upgradability and reparability, rules on the presence of substances that inhibit circularity; energy and resource efficiency; recycled content, remanufacturing and recycling; carbon and environmental footprints; and information requirements, including a Digital Product Passport. The Commission will be empowered to set ecodesign requirements by delegated acts and the industry will have 18 months to comply with them. Ecodesign criteria will be applicable in public procurement to incentivise the public purchase of green products. The new regulation introduces a direct ban on the destruction of unsold textiles and footwear (SMEs will be temporarily excluded) and empowers the Commission to introduce similar bans for other products in the future. The ecodesign regulation will be aligned to the digital services act, when it comes to products sold online.

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EUROPEAN PARLIAMENT (EP)

The European Parliament publishes document on the Energy Performance Building Directive recast (28.05.2024) – The European Parliament has published an accompanying document in sight of the entry into force of the recast Energy Performance of Buildings Directive (“EPBD”). The EPBD has been designed to accelerate building renovation rates, reduce energy consumption, and promote the uptake of renewable energy in buildings. These measures should help the EU reach its target of a net 55 % reduction in greenhouse gas (“GHG”) emissions by 2030, as a stepping stone towards achieving climate neutrality by 2050. Under the revised directive, Member States will have to ensure a reduction in the average primary energy used in residential buildings of at least 16 % by 2030 and between 20 % and 22 % by 2035. To ensure sufficient flexibility and reflect national circumstances, each Member State will be allowed to adopt its own national trajectory to reduce average primary energy use. Member States may choose buildings to target and measures to take, providing 55 % of the energy reduction is achieved by renovating the worst performing buildings.

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BANKING & FINANCE

EUROPEAN CENTRAL BANK (ECB)

The European Central Bank publishes the April 2024 Euro area bank interest rate statistics (05.06.2024) – According to the ECB’s Euro area bank interest rate: (i)composite cost-of-borrowing indicator for new loans to corporations and for new loans to households for house purchase unchanged at 5.18% and 3.80%, respectively; (ii) composite interest rate for new deposits with agreed maturity from corporations broadly unchanged at 3.65%; interest rate for overnight deposits from corporations broadly unchanged at 0.91%; (iii)composite interest rate for new deposits with agreed maturity from households decreased by five basis points to 3.11%, driven by both interest rate and weight effects; interest rate for overnight deposits from households unchanged at 0.39%.

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The European Central Bank publishes the April 2024 monetary developments in the euro area (29.05.2024) – According to the ECB’s the April 2024 monetary developments in the euro area, the annual growth rate of the broad monetary aggregate M3 increased to 1.3% in April 2024 from 0.9% in March, averaging 0.8% in the three months up to April. The components of M3 showed the following developments. The annual growth rate of the narrower aggregate M1, which comprises currency in circulation and overnight deposits, was -6.0% in April, compared with -6.6% in March. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) decreased to 15.7% in April from 16.7% in March. The annual growth rate of marketable instruments (M3-M2) increased to 22.6% in April from 19.3% in March.

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The European Central Bank publishes the April 2024 Consumer Expectations Survey results (28.05.2024) – According to the ECB’s Consumer Expectation Survey for the month of April 2024, median consumer inflation perceptions over the past 12 months remained steady, while median inflation expectations for the next 12 months and for three years ahead declined slightly; expectations for nominal income growth and nominal spending growth over the next 12 months remained substantially unchanged; expectations for economic growth over the next 12 months became less pessimistic, while the expected unemployment rate in 12 months-time increased; expectations for home price growth over the next 12 months rose, while expectations for mortgage interest rates over the 12 months ahead remained unchanged.

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EUROPEAN BANKING AUTHORITY (EBA)

The European Supervisory Authorities call for enhanced supervision and improved market practice on sustainability-related claims (04.06.2024) – The European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) have published their final Reports on Greenwashing in the financial sector. In their respective reports the ESAs reiterate their common high-level understanding of greenwashing as a practice whereby sustainability-related statements, declarations, actions, or communications do not clearly and fairly reflect the underlying sustainability profile of an entity, a financial product, or financial services. This practice may be misleading to consumers, investors, or other market participants. Therefore, the ESAs stress again that financial market players have a responsibility to provide sustainability information that is fair, clear, and not misleading.

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The European Banking Authority and the European Securities and Markets Authority invite comments on the review of the investment firms prudential framework (03.06.2024) – The EBA and ESMA published a discussion paper on the potential review of the investment firms’ prudential framework. The discussion paper aims at gathering early stakeholder feedback to inform the response to the European Commission’s call for advice (CfA). To assess the impact of the possible changes discussed in the paper, the EBA also launched a data collection exercise on a voluntary basis.

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The European Supervisory Authorities sign a memorandum of understanding to strengthen cooperation and information exchange (31.05.2024) – The European Supervisory Authorities (EBA, EIOPA, and ESMA - the ESAs) announced that they have concluded a multilateral Memorandum of Understanding (MoU) to strengthen cooperation and information exchange with the European Union Agency for Cybersecurity (ENISA). This MoU sets out the framework for cooperation and exchange of information on tasks of mutual interest, including policy implementation, incident reporting, and oversight of critical Information Communication Technologies (ICT)third-party providers. It will also promote regulatory convergence, facilitate cross-sectoral learning and capacity building on areas of mutual interest, and information exchange on emerging technologies.

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The European Supervisory Authorities publish templates and tools for voluntary dry run exercise to support the DORA implementation (31.05.2024) – The European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) published templates, technical documents and tools for the dry run exercise on the reporting of registers of information in the context of Digital Operation Resilience Act (DORA) announced in April 2024. Financial entities can use these materials and tools to prepare and report their registers of information of contractual arrangements on the use of ICT third-party service providers in the context of the dry run exercise, and to understand supervisory expectations for the reporting of such registers from 2025 onwards.

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The European Banking Authority shows that funds to protect deposits in case of bank failure are going up (28.05.2024) – EBA has published end-2023 data related to two key concepts and indicators in the Deposit Guarantee Schemes Directive (DGSD), namely available financial means (AFMs) and covered deposits. Data shows that: (i)deposits protected by EU deposit guarantee schemes (DGS) increased by 1.7% to 8.5 trillion Euros between 2022 and 2023, whereas funds available to protect those deposits in case of bank failures rose by 14.9% to 73 billion euro; (ii)the high increase in the amount of funds held by DGSs to protect deposits reflects the need for all the DGSs to reach the minimum target level of 0.8% of covered deposits by July 2024; (iii)as of December 2023, 21 of the 36 DGSs in the European Economic Area (EEA) had already reached the minimum target level ahead of the deadline.

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The European Banking Authority issues its final Guidelines on STS criteria for on-balance-sheet securitisation (27.05.2024) – EBA has released its final Guidelines on criteria concerning simplicity, standardisation, transparency, and additional specific criteria for on-balance-sheet securitisations (so-called “STS criteria”). The Guidelines aim to ensure a harmonised interpretation and implementation of STS criteria across the EU, aligning with existing guidelines for asset-backed and non-asset-backed commercial paper (ABCP and non-ABCP) securitisation. By providing a unified interpretation of STS criteria, the Guidelines support the adoption of the STS criteria, which is necessary for preferential risk weight treatment under the Capital Requirements Regulation (CRR).

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The European Banking Authority publishes a Report on the issuance of virtual IBANs (24.05.2024) – EBA published a Report on the issuance of virtual IBANs (“vIBANs”), noting the lack of a common definition and varying practices across the industry. The Report, which sets out the characteristics and use cases of virtual IBANs, highlights issues related to money laundering, consumer protection, authorisation, passporting, and regulatory arbitrage due to differing national interpretations and applications of EU financial regulations. The Report offers recommendations for clarifying EU law and suggests actions that national competent authorities can take to address these issues.

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EUROPEAN SECURITIES AND MARKETS AUTHORITY (ESMA)

The European Banking Authority and the European Securities and Markets Authority invite comments on the review of the investment firms prudential framework (03.06.2024) – ESMA and EBA published a discussion paper on the potential review of the investment firms’ prudential framework. The discussion paper aims at gathering early stakeholder feedback to inform the response to the European Commission’s call for advice (CfA). To assess the impact of the possible changes discussed in the paper, the EBA also launched a data collection exercise on a voluntary basis.

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The European Securities and Markets Authority publishes final MiCA rules on conflict of interest of crypto assets providers (31.05.2024) – ESMA the final Report on the rules on conflicts of interests of crypto-asset service providers (CASP) under the Markets in Crypto Assets Regulation (MiCA). In the report ESMA sets out draft Regulatory Technical Standards on certain requirements in relation to conflicts of interest for crypto-asset service providers (CASPs) under MiCA, with a view to clarifying elements in relation to vertical integration of CASPs and to further align with the draft European Banking Authority (EBA) rules applicable to issuers of asset-referenced tokens (ARTs).

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The European Securities and Markets Authority publishes final MiCA rules on conflict of interest of crypto assets providers (31.05.2024) – ESMA the final Report on the rules on conflicts of interests of crypto-asset service providers (CASP) under the Markets in Crypto Assets Regulation (MiCA). In the report ESMA sets out draft Regulatory Technical Standards on certain requirements in relation to conflicts of interest for crypto-asset service providers (CASPs) under MiCA, with a view to clarifying elements in relation to vertical integration of CASPs and to further align with the draft European Banking Authority (EBA) rules applicable to issuers of asset-referenced tokens (ARTs).

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The European Securities and Markets Authority issues a Statement on firms using AI in investment services (30.05.2024) – ESMA issued a Statement offering guidance to firms using AI technologies in the provision of investment services to retail clients. In its statement, ESMA states that it expects these firms to adhere to relevant MiFID II requirements, especially concerning organizational aspects, business conduct, and the regulatory obligation to act in the client’s best interest. AI applications covered by MiFID II requirements include customer support, fraud detection, risk management, compliance, and aiding firms in delivering investment advice and portfolio management.

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The European Securities and Markets Authority ESMA reminds on rules for sharing information during pre-close calls (29.05.2024) – ESMA issued a Statement reminding issuers of the legislative framework applicable to “pre-close calls” and encouraging adherence to good practices to help maintain fair, orderly, and effective markets. Specifically, ESMA emphasized that any disclosure of inside information must comply with the Market Abuse Regulation (MAR). Therefore, issuers should only share non-inside information during these “pre-close calls”. To address potential concerns, ESMA recommends several good practices for conducting such calls.

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The European Securities and Markets Authority reports on the application of MiFID II marketing requirements (27.05.2024) – ESMA released a joint report on its 2023 Common Supervisory Action (CSA) and the accompanying Mystery Shopping Exercise (MSE) concerning marketing disclosure rules under MiFID II. In collaboration with National Competent Authorities (NCAs), ESMA’s findings indicate global compliance with MiFID II requirements for marketing communications, including advertisements. Further, although ESMA finds that investment firms have generally established procedures to ensure compliance during the development of marketing materials, it also reports that NCAs have expressed concerns about sustainability claims in marketing communications. The report highlights areas for improvement, including the necessity for clear identification of marketing communications and a balanced presentation of risks and benefits.

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The European Securities and Markets Authority consults on commodity derivatives under MiFID review (23.05.2024) – ESMA launched a public consultation on proposed changes to the rules for position management controls and position reporting. The changes come in the context of the review of the Market in Financial Instruments Directive (MiFID II) and aim to minimise the burden on reporting entities. ESMA is consulting on changes to the technical standards (RTS) on position management controls, the Implementing Technical Standards (ITS) on position reporting, and on position reporting in Commission Delegated Regulation (EU). ESMA will review all comments submitted by 21^st August 2024.

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COUNCIL OF THE EUROPEAN UNION (COUNCIL)

The Council adopts package of new anti-money-laundering rules (30.05.2024) – Council adopted a new package of anti-money laundering rules, known as the AML package. This AML package includes the new AML Regulation, the 6^th AML Directive, and a Regulation establishing the new Anti-Money Laundering Authority (AMLA). The package is further complemented by Regulation (EU) 2023/1113, concerning information accompanying transfers of funds and certain crypto-assets, which was adopted on 31^st May 2023. This is the final step of the adoption procedure. Therefore, the texts will now be published in the EU’s Official Journal and enter into force.

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The Council adopts new EU rules to increase banks’ resilience to economic shocks (30.05.2024) – Council adopted new rules updating the Capital Requirements Regulation (CRR) and the Capital Requirements Directive (CRD IV) to the new standards issued under the Basel III framework. The main feature of the reforms is the introduction of an “output floor”, which limits the risk of excessive reductions in banks’ capital requirements and makes these requirements more comparable. This is the last step of the adoption procedure. The amended CRR and CRD IV will now be published in the EU’s Official Journal and enter into force 20 days later.

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EU FUNDS

EUROPEAN INVESTMENT BANK (EIB)

Spain: pain: the European Investment Bank and Banco Sabadell sign guarantee agreement to facilitate up to 400 million euro in new financing for SMEs and mid-caps (05.06.2024) – The and Banco Sabadell have signed a guarantee agreement for up to 200 million euro as the first tranche of a total EIB-approved operation of up to 300 million euro. The arrangement will allow the Spanish bank to facilitate up to 400 million euro in new loans over the next two years to finance projects by small and medium-sized enterprises (SMEs) and mid-caps in Spain. The operation will promote private sector investment and support the financing needs of a key segment of the Spanish economy in terms of both growth and jobs.

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France: the European Investment Bank and Brittany region sign finance contract for upper secondary school construction and refurbishment (04.06.2024) – The European Investment Bank and the Brittany region have signed a 25-year, 190 million euro finance contract to help modernise educational facilities and adapt them to local demand, with a view to improving the quality of secondary-level education in the area. Indeed, this loan will help to finance the Brittany region’s upper secondary school plan. In particular, 116 schools in the region are set to benefit from infrastructure upgrades, improvements to energy efficiency and climate resilience, better accessibility, and new educational equipment.

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Spain: the European Investment Bank and CIE Automotive sign 36 million euro loan for research and development in advanced technologies for the European automotive sector (31.05.2024) – The European Investment Bank and Aena have signed a 160 million euro loan to finance upgrades to the passenger terminal at Palma de Mallorca International Airport. The investment to cover building upgrades and improvements to baggage management and fire prevention systems, terminal equipment and security and IT systems. Operation comes under EIB Transport Lending Policy, which prioritises investments in resilient, safe and sustainable critical transport.

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Greece: the European Investment Bank to support businesses and startups in life sciences, health, and sustainability with 200 million euro new equity financing (14.05.2024) – The European Investment Bank and CIE Automotive have signed a loan worth 36 million euro to finance the company’s research, development, and innovation activities, as well as their application in the manufacture of high value-added components for the automotive sector. The financing will also support CIE Automotive’s investments in process optimisation through digitalisation, and in the development of more sustainable manufacturing technology. The investments will take place in the company’s facilities in Spain, Germany, France, and Italy, some of which are located in cohesion regions.

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Finland: mid-caps get growth and investment boost from Finnvera and the European Investment Bank (30.05.2024) – The European Investment Bank will provide a 200 million euro guarantee to Finnvera, the national promotional bank and official export credit agency of Finland, to facilitate the financing of Finnish mid-caps. The programme aims to tackle barriers to accessing finance by sharing risks associated with economic uncertainties like inflation, high interest rates, limited external growth opportunities and unpredictable energy supplies. The EIB support will allow Finnvera to create a portfolio of new loans for a total amount of up to 400 million euro, increasing its lending capacity and offering companies access to financing on favourable terms, such as reduced interest rates and lower collateral requirements. The operation will help mobilise investments of approximately 560 million euro in the real economy

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Finland: the European Investment Bank signs 17 million euro loan to iPhone refurbisher Swappie (30.05.2024) – The European Investment Bank and Swappie, Europe’s largest iPhone refurbisher, have signed a loan agreement to back the high quality refurbishment of iPhones, extending the lifespan of the devices and enabling consumers to reduce their carbon footprint in support of a circular economy. The EIB will provide a five-year, 17 million euro loan to the innovative Finnish startup to support its investment in research and development and robotics aimed at making iPhone repairs quick and reliable. The deal will also allow Swappie to enhance its refurbishment and operational capabilities, while rolling out more products and expanding its international reach. This agreement is backed by the InvestEU programme, which aims to trigger more than 372 billion euro in additional investment between 2021 and 2027.

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Montenegro: the European Investment Bank Global to invest up to 76 million euro in reconstruction of Bar–Podgorica–Vrbnica railway line under Team Europe initiative (29.05.2024) – The European Investment Bank Global has signed a 75.5 million euro financial agreement for the reconstruction of a 167 km long railway section between Bar, Podgorica and Vrbnica. These infrastructural improvements along the extended Trans-European Transport Network (TEN-T) will improve rail capacity, efficiency and safety, benefiting over 1 million passengers a year and international freight traffic. The project will also promote a modal shift from road to rail, contributing to a more sustainable transport system in the country.

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The European Investment Bank Global invests 25 million euro in Amethis Fund III to promote sustainable growth of African businesses (29.05.2024) – The European Investment Bank’s Global arm has invested 25 million euro in Amethis Fund III, a pan-African fund providing private equity growth capital to medium-sized companies on the continent. Amethis Fund III will target companies supplying goods and services to low- and middle-income populations in Africa. The target sectors include healthcare, business services such as logistics and IT, manufacturing and distribution, including agribusiness and fast-moving consumer goods, non-banking financial services, and services related to infrastructure and energy.

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Ukraine: School in Pryvovchanske reopens after major overhaul supported by the European Investment Bank (28.05.2024) – The lyceum in the village of Pryvovchanske, Dnipropetrovsk Oblast, has opened its doors again after a major overhaul under the Ukraine Early Recovery Programme (UERP) financed by the European Investment Bank (EIB). This upgrade has increased the school’s capacity, with almost 200 students from the villages of Pryvovchanske and Malooleksandrivka expected to attend in the upcoming academic year. his is the second school that has reopened in Dnipropetrovsk Oblast this year as part of the 200 million euro EIB loan designed to help Ukrainian municipalities rebuild their social infrastructure.

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Italy: the European Investment Bank provides ETRA with 100 million euro to support the transition to a greener, more circular economy (28.05.2024) – The European Investment Bank and ETRA SpA - Società benefit have signed an agreement concerning 100 million euro of investment in improving recycling facilities and integrated water services in the Veneto region. Specifically, the main initiatives to be financed by the EIB’s investment include the restructuring and construction of waste treatment and water supply installations, the purchase of biomethane-fuelled vehicles and the expansion of water networks. The project will thus help to promote climate action and further the transition towards a more circular economy, which are key objectives of the European Green Deal.

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Czechia: the European Investment Bank backs improved wastewater treatment with CZK 1.3 billion loan for city of Brno (27.05.2024) – The European Investment Bank has signed a 53.2 million euro) loan agreement with Brněnské vodárny a kanalizace (BVK), the municipal water and wastewater company in the Czech city of Brno. The operation will upgrade the sewage sludge treatment facility of BVK’s Modřice wastewater plant, thus further improving environmental protection and public services in Czechia’s second biggest city.

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Spain: the European Investment Bank and Castilla y León regional government sign 120 million euro loan to finance public hospital and healthcare facility renovations in five regional provinces (27.05.2024) – The European Investment Bank has signed a 120 million euro loan with the regional government of Castilla y León to finance the renovation and expansion of a series of hospitals and public healthcare facilities in the Spanish region’s cities of Valladolid, Salamanca, Palencia, Soria and Aranda de Duero. The projects will include the construction of two primary healthcare centres affiliated with the Valladolid and Salamanca University Hospitals, the renovation and expansion of the Palencia Río Carrión Hospital, the second phase of construction of the Soria Santa Bárbara Hospital, and the construction of the new Aranda de Duero Hospital in the regional province of Burgos.

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Spain: the European Investment Bank and Castilla y León regional government sign 25 million euro loan to finance local SME and mid-cap projects focusing on the circular economy and job creation (24.05.2024) – The European Investment Bank (EIB) has signed a 25 million euro loan with the regional government of Castilla y León via the Institute for Business Competitiveness of Castilla y León (ICECyL by its Spanish acronym), a body under the auspices of the regional Ministry of the Economy and Finance, to back small and medium-sized enterprises (SMEs) and mid-caps in the Spanish region. The EIB loan will enable ICECyL to finance projects from this business segment (mostly in the Castilla y León region) focusing on boosting competitiveness, promoting regional circular economy policies, and creating and safeguarding jobs.

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Mauritania: Banque pour le Commerce et l’Industrie and the European Investment Bank partner up to fund SMEs, with EU support (23.05.2024) – Three months after signing a financing arrangement with the European Investment Bank (EIB), the Banque pour le Commerce et l’Industrie (BCI) has already granted MRU 280 million (6.5 million euro) in loans to five SMEs to support employment, entrepreneurship and access to finance for Mauritania’s women and youth. The loans were made in areas like health, clean energy and sustainable food systems. They are a tangible contribution to the Team Europe Initiatives of green transition and stronger human development in Mauritania, set by the European Commission for 2021-2027. The BCI will grant MRU 1 billion (€25 million) in loans to SMEs and mid-caps under the arrangement with the EIB, supporting around 3 000 jobs, especially for youth and women.

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Italy: the European Investment Bank and Cassa Depositi e Prestiti provide 215 million euro for new University of Milan campus (21.05.2024) – The European Investment Bank (EIB) and Cassa Depositi e Prestiti (CDP) have provided 215 million euro in financing, partly backed by InvestEU, to Academo Srl, a project company formed by Lendlease and the Equiter Infrastructure II fund (managed by Ersel AM) to which the University of Milan has awarded the contract to design, build and operate its science and technology campus in the Milano Innovation District (MIND). The goal is to support the creation of new teaching spaces for university students and researchers as part of a broader environmental sustainability-focused urban regeneration project in Milan. This financing is the final step in the operation planning phase coordinated by Lendlease, which involves a total investment of more than 450 million euro.

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Poland: the European Investment Bank backs first Polish satellite programme with loan to Bank Gospodarstwa Krajowego (20.05.2024) – The European Investment Bank (EIB) announced backing for the development and launch of two Earth observation satellites that will provide high-resolution imagery for civilian and defence applications in Poland. The EIB is lending 300 million euro to Bank Gospodarstwa Krajowego (BGK) for the project to support the European space industry with the latest technology in Low Earth Orbit (LEO) satellites. It comes after the EIB’s Board of Directors approved the EIB Group’s new Security and Defence Industry Action Plan which is intended to step up investments in the sector.

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EUROPEAN INVESTMENT FUND (EIF)

InvestEU: the European Investment Fund, 123 Investment Managers and Lendosphere announce a new sustainable debt fund. (27.05.2024) – The European Investment Fund (EIF), as lead investor, is backing the first closing of the 123 Transition Energétique 2 fund to the tune of 30 million euro. The fund combines financing via a marketplace lending platform with institutional investors' contributions.

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InvestEU: the European Investment Fund extends support to Europe’s cultural creative businesses and audiovisual sector (21.05.2024) – The European Investment Fund (EIF) guarantee agreements will facilitate more than 141 million euro of new financing for creative sectors via intermediaries from France, Germany, and Finland. These agreements are supported by the InvestEU programme, which aims to trigger more than 372 billion euro in additional investments over the period 2021-2027. They aim to remedy a market failure in the cultural and creative sectors (CCS) and to stimulate European audiovisual production by facilitating its financing.

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LIFE SCIENCES

COUNCIL OF THE EUROPEAN UNION (COUNCIL)

The Council signs off on measures to make the EU mercury-free (30.05.2024) – The Council adopted a regulation to completely ban the use of dental amalgams and to prohibit manufacturing, import and export of other mercury-added products. The updated rules aim to address the remaining use of mercury in the European Union in line with the EU´s zero pollution ambition. Current rules already ban the use of dental amalgam for treating teeth in children under 15 years old, and pregnant or breastfeeding women. The new rules will extend the prohibition to include everybody in the EU as of 1^st January 2025. Exceptions will apply when the use of dental amalgam is deemed strictly necessary by the dental practitioner to address specific medical needs of the patient. Exporting dental amalgam will be prohibited from 1^st January 2025; the ban on manufacturing and import in the EU will apply from 1^st July 2026. Six additional mercury-containing lamps will also be made subject to a manufacturing, import and export ban as from 31^st December 2025 and 31^st December 2026.

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The Council adopts new measures to help prevent shortages (30.05.2024) – The Council has adopted new rules updating the law on medical devices in order to help prevent shortages and ease the transition to greater transparency and access to information. The regulation adopted amends the legislation on medical devices, including in-vitro diagnostic medical devices (IVDs), by: (i) further extending the transition period for certain IVDs (ii) enabling a gradual roll-out of EUDAMED, the new electronic database (iii) requiring manufacturers to flag up potential shortages of critical medical devices and IVDs. The regulation adopted will enter into force following publication in the EU’s Official Journal.

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The Council adopts new rules on substances of human origin (27.05.2024) – The Council has adopted new rules aimed at improving the safety and quality of blood, tissues and cells used in healthcare and facilitating cross-border circulation of these substances in the EU. The regulation on substances of human origin (SoHO) will ensure better protection for donors and recipients, as well as for children born following medically assisted reproduction. The new rules aim to strengthen the existing legal framework while also increasing flexibility in order to keep up with scientific and technical developments. Under the new regulation, member states may choose to apply stricter measures to protect their citizens.

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EUROPEAN MEDICINES AGENCY (EMA)

Medical devices: new guidance for industry and notified bodies (21.05.2024) – A new revision of the guidance available to applicants, marketing authorization holders and notified bodies of medical devices has been published by the EMA. This question-and-answer document provides practical considerations on the implementation of the medical devices and in vitro diagnostic regulations for combinations of medicinal products and medical devices. Products that combine a medicinal product (or substance) and a medical device are regulated either under the pharmaceutical framework or the medical device framework, depending on their main mode of action. The revision is based on the experience gained since the implementation of the new regulations and actual cases encountered.

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DATA, IP AND PRIVACY

EUROPEAN COMMISSION (EC)

European Commission establishes AI Office to strengthen EU leadership in safe and trustworthy Artificial Intelligence (29.05.2024) – The Commission has unveiled the AI Office, established within the EC. The AI Office aims at enabling the future development, deployment and use of AI in a way that fosters societal and economic benefits and innovation, while mitigating risks. The Office will play a key role in the implementation of the AI Act, especially in relation to general-purpose AI models. It will also work to foster research and innovation in trustworthy AI and position the EU as a leader in international discussions.

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COUNCIL OF THE EUROPEAN UNION (COUNCIL)

Artificial intelligence (AI) act: the Council gives final green light to the first worldwide rules on AI (27.05.2024) – The Council finally approved a ground-breaking law aiming to harmonise rules on artificial intelligence, the so-called artificial intelligence act. The flagship legislation follows a ‘risk-based’ approach, which means the higher the risk to cause harm to society, the stricter the rules. It is the first of its kind in the world and can set a global standard for AI regulation. The new law aims to foster the development and uptake of safe and trustworthy AI systems across the EU’s single market by both private and public actors. At the same time, it aims to ensure respect of fundamental rights of EU citizens and stimulate investment and innovation on artificial intelligence in Europe. The AI act applies only to areas within EU law and provides exemptions such as for systems used exclusively for military and defence as well as for research purposes.

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CONSULTATIONS AND CALLS

EUROPEAN COMMISSION (EC)

The European Commission launches consultation on aviation and fitness check of EU airport legislation (06.06.2024) – The Commission is carrying out a fitness check of EU airport legislation to determine if it is still fit for purpose and delivering on its objectives. This fitness check will consider recent trends such as market consolidation, capacity challenges, labour shortages, increased competition from non-EU airlines/airports and the need to decarbonise. It will also assess the potential for simplification and burden reduction, especially should any inconsistencies or synergies be identified.

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The European Commission launches consultation on Heavy-duty vehicles – extending manufacturer reporting on CO2 emissions and fuel consumption (11.06.2024) – Under EU Regulation 2018/956, vehicle manufacturers are required to report on CO2 emissions from and fuel consumption of heavy-duty vehicles. This initiative amends the Annex to the Regulation to oblige manufacturers of certain medium and heavy lorries, buses, coaches and trailers to report on these vehicles from 2024.

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The European Commission launches consultation on Carbon Offsetting & Reduction Scheme for International Aviation (CORSIA) – rules for calculating offsetting requirements (13.06.2024) – Directive 2003/87 implements the Carbon Offsetting and Reduction Scheme for International Aviation ('CORSIA') under the International Civil Aviation Organization (ICAO). Article 12(8) of this Directive requires the Commission to lay down detailed rules to calculate offsetting requirements under CORSIA for emissions up to 2026. The rules rely on the standards and recommended practices of CORSIA, as interpreted by the Directive.

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The European Commission launches consultation on Cooperation on direct taxation (07.07.2024) – Directive 2011/16/EU (directive on administrative cooperation - DAC) establishes a system for secure administrative cooperation between the national tax authorities of EU countries and lays down rules and procedures for exchanging information. This evaluation will assess the effectiveness, efficiency and continued relevance of the DAC and its amendments (DAC2 to DAC6), as well as its coherence with other policy initiatives & priorities and the EU added value.

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The European Commission launches consultation on energy labelling requirements for computers (18.07.2024) The Regulation aims to help consumers choose the most energy-efficient computers by using a scale from A (most efficient) to G (least efficient). The energy label will also provide other useful information on durability and reparability. The consultation covers both the ecodesign and energy labelling initiatives. This consultation covers both the Eco-design and Energy labelling interlinked initiatives. You just need to provide feedback once.

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The European Commission launches consultation on Trade in seal products – fitness check of EU rules (07.08.2024) – Seals are hunted in parts of the world for commercial, subsistence and cultural reasons. In 1983, following people's concerns about animal welfare, the EU banned the import of certain seal pup skins. In 2009, a general ban on placing seal products on the EU market was introduced, with two exceptions. This initiative will assess if the rules in place remain fit for purpose, focusing on their socio-economic impact and their impact on seal populations.

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Weekly Updates from our London Branch

We are excited to bring you the latest news and updates from the heart of the UK’s vibrant legal and business landscape. Our team of legal experts is at the cutting edge of corporate, financial, and commercial law, pioneering innovative and strategic solutions to our clients' most complex challenges. Below is a glimpse of our recent impact in London and across the UK.

Highlights from the London Office

Our London office is has been assisting a prominent public company in the food sector in the bidding process for the acquisition of a private limited company based in the UK, renowned for its expertise and success in the same field. In line with our commitment to providing comprehensive legal support, our team has conducted a thorough due diligence exercise, covering a wide spectrum of practice areas, aiming to provide our client with actionable insights to mitigate potential risks and maximise opportunities. Furthermore, we have been instrumental in the drafting of key transactional documents aligned with our client's strategic objectives. 

Navigating Legal Waters 

Changes to the taxation of non-UK domiciled individuals

 Effective April 6, 2025, the non-domiciled tax regime that allowed UK-residents who met certain requirements to only pay tax on money they earned in the United Kingdom will be abolished. A new transitional regime will be implemented, offering a four-year exemption on foreign income and gains (FIG). 
This exemption applies to those who establish UK tax residency after a period of ten consecutive years of non-UK tax residence. During this initial four-year period, qualifying individuals can utilise FIG in the United Kingdom without incurring additional tax liabilities. Additionally, distributions from non-resident trusts will be exempt from taxation. The standard taxation of UK-sourced income and gains for non-domiciled individuals remains unchanged.
The Overseas Workday Relief (OWR) that had been granted to reduce UK tax liability in certain circumstances where an individual completes work overseas, while being a UK-resident, will be retained and simplified for the initial three years of UK residence. Eligibility for OWR, effective April 6, 2025, will be determined by an employee's residency.

Starting April 6, 2025, the current protection from taxation on future income and gains arising from trust structures will be eliminated for non-domiciled and deemed domiciled individuals who do not qualify for the new four-year FIG regime. Any FIG arising within non-resident trust structures will be taxed on the settlor or transferor (if resident in the UK for over four years). This aligns with the current treatment of trust income and gains for UK-domiciled settlors. FIG generated within the trust structure before April 6, 2025, will be subject to taxation on the settlor or beneficiaries if it can be matched to worldwide trust distributions.

Governmental News 

The Government has unveiled a new proposal to introduce a new way for private companies to scale and grow

The government has unveiled a new proposal for a novel platform, PISCES (Private Intermittent Securities and Capital Exchange System). PISCES will provide a controlled environment for private companies to trade their securities on an occasional basis. It blends features of public stock markets, like multilateral trading, with the flexibility of private markets regarding company disclosures. Participation in PISCES will allow private companies to scale more easily. It facilitates liquidity, assists shareholders (including employees) in realising their gains, and allows companies to streamline their shareholder base. Investors will gain better access to private companies while enjoying greater transparency and efficiency compared to traditional private markets.  

UK Governance Concludes Consultation on Cybergovernance

The UK Government has recently concluded its consultation on a proposed Cyber Governance Code of Practice, which aims to provide directors and shareholders with practical guidance, tools and strategy to enhance cybersecurity measures within their organisations. The suggested Draft Code is part of the government’s strategy to boost cyber resilience as detailed in 2022 National Cyber Strategy, which allocates £2.6 billion investment in improving the nation’s cyber and legacy IT infrastructure.

Why the Draft Code matters

This strategy aims to ensure the UK remains secure and resilient in a rapidly evolving digital world while leveraging the opportunities within the growing cyber and tech landscape. With nearly a third of UK firms experiencing a cyber breach or attack this past year, there was an increased need for a governmental strategy to address this cooperate criminal activity. The Draft Code, developed collaboratively by the department for Science, Innovation and Technology, industry leaders (‘DSIT’), and the National Cyber Security Centre (‘NCSC’), targets the vulnerabilities in IT systems that malicious actors frequently exploit.

This proposal strengthens the pipeline for future UK initial public offerings (IPOs) by fostering a smoother interface between private companies and public markets. It complements the government's ongoing and comprehensive reforms aimed at solidifying the UK's position as a premier listing destination.  

Furthermore, the Draft Code underscores the necessity of integrating cyber risk management with overall business risk management practices. This holistic approach ensures that cybersecurity is given the same priority as financial or legal risks, which is crucial for maintaining business continuity in a ever growing tech-sphere. The Draft Code also highlights the potential benefits of voluntary compliance with the Draft Code. Although it is not statutory requirement, adhering to the Code can help organisations stay ahead of cyber threats, align with regulatory expectations and gain confidence from stakeholders. The government’s collaboration with regulators like the Information Commissioner’s Office (‘ICO’) ensures that the Draft Code complements existing legislation, providing a comprehensive approach to cybersecurity. In conclusion, while compliance with the Cyber Governance Code of Practice is not compulsory, it is intended to be a voluntary tool to help organisations orient themselves in an ever-growing tech world. Compliance with the Draft Code might also be viewed favourably in the event of regulatory scrutiny or enforcement actions following a data breach or cyber incident. It remains vital provides practical steps on how companies can protect themselves, and the broader implications for business continuity and regulatory compliance. 

Financial Insights  

BoE and FCA's joint consultation on the Digital Securities Sandbox

 The Bank of England (BoE) and Financial Conduct Authority (FCA) are seeking feedback on their proposed strategy for operating the Digital Securities Sandbox (DSS). This initiative, overseen by both regulators, aims to facilitate the integration of innovative technology in digital assets within the UK. The DSS will adapt UK regulations to allow financial market participants to leverage new technology, such as Distributed Ledger Technology (DLT), in the trading and settlement of digital securities like shares and bonds. Successful applicants to the DSS will gain authorisation to provide securities depository and settlement services, as well as operate a trading venue under the adjusted regulations. This marks the first instance where these services can be provided by a single legal entity. The DSS will be accessible to a broad spectrum of firms, including emerging financial markets infrastructure (FMI) providers, to maximize learning opportunities and foster innovation and competition within the UK financial system. 

 FCA Introduces New Anti-Greenwashing Rule

 Effective May 31, 2024, the UK Financial Conduct Authority (FCA) will implement a new anti-greenwashing rule, referred to as "the AGW rule," in its already established AGW guidance. This development is significant, due to the absence of a current legal definition of 'greenwashing' in the UK and part of an ongoing effort to require FCA regulated firms to adhere to new movements of disclosure within the eco-advertising business. As a result, the commercial sector must rely on the AGW guidance, which clarifies the terms that denote false or misleading statements regarding eco-advertising and the performance, production, or provision of services. This includes misleading advertising and environmental claims. Under the new AGW rule, all FCA-regulated firms are mandated to ensure that their sustainability claims are accurate and not misleading. 

The DSS represents a significant step in exploring digital asset innovation in the UK, potentially leading to swifter and more cost-effective methods for trading, settling, and utilising these securities among financial market participants.  The DSS will operate for a five-year period and may pave the way for a new permanent regulatory framework for securities settlement. The consultation seeks input from interested stakeholders on how the DSS will operate to maximise the potential benefits of the technology while safeguarding financial stability and market integrity. The new sandbox reinforces the UK's leading position as a  a global and dynamic financial hub by driving the adoption of new technologies for trading and settling traditional assets, such as bonds and equities. 

Detailed guidance accompanies this rule to facilitate adherence to fairness and accuracy standards. Moreover, the AGW rule extends beyond financial services to encompass retail, professional business-to-business communications, and business-to-consumer projects. It is advised all FCA authorised firms commit to reviewing and updating all of their customers' materials, websites, marketing and all T&C documents. FCA-regulated firms and companies have until May 31, 2024, to comply with the regulation, where failure to do so may result in fines up to millions of pounds.

Data Protection

Users’ right not to receive unsolicited commercial calls

The Spanish Data Protection Agency (AEPD) has issued a circular clarifying some parts of the content of the General Telecommunications Law. First of all, the law, in accordance with the protection of personal data and privacy, prohibits commercial communications that have not been authorised by the user, generating great controversy as companies have continued to send commercial communications. The AEPD has stated that this law has a period of one year to enter into force from the time it is published in the Official State Journal.

This new regulation implies a substantial change with respect to the legal regime applicable under the derogated General Telecommunications Law, article 48.1.b. of which recognised the right of end users “to oppose receiving unwanted calls for commercial communication purposes that are made by means of systems other than those established in the previous letter and to be informed of this right”, giving priority to the right of end users not to receive such calls and the consequent obligation of those responsible not to make them, unless they can prove the existence of any of the exceptions contemplated in the law.

Real Estate

Law 12/2023 of 24 May on the right to housing

The new Housing Law in Spain establishes significant changes in the real estate sector, such as the obligation of the landlord to pay brokerage fees, the creation of a database of rental contracts, and the possibility of declaring “stressed residential market areas”. It also introduces tax incentives for landlords who rent out their properties and establishes penalties for unoccupied properties.

Definition of large tenant
A definition of large tenant is established, and it is considered as such a person (natural or legal) owner of more than ten urban properties for residential use or owner of a built surface area of more than 1,500 m2 for residential use. This excludes garages and storage rooms. The definition may be modified by the Autonomous Region and replaced by “owner of more than five properties”, when so motivated by the competent administration.

Database of rental contracts
A database of housing rental contracts will be created. This register will be formed with information from bond registers, property registers and other sources of information at state, regional or local level, which will allow the administration to have even more information on rentals and payments.

Limits on rent
The competent administrations will be able to declare housing “stressed residential market areas”, those areas where there is a particular risk of insufficient housing supply. The duration of this declaration will be 3 years and may be extended annually. The declaration of a “stressed residential market area” will require the preparation of a justification report, indicating that one of the following circumstances exists: (i) the average mortgage or rent burden in the family unit plus supplies of the households in that area, exceeds 30% of incomings, (ii) the purchase or rental price of housing in the area has experienced in the last 5 years a percentage of growth of at least 3% more than the CPI (Consumer Price Index) of the autonomous region.

A penalty for owners of empty properties
The different administrations, by cross-referencing their data, will be able to check the use and destination of properties throughout their territorial scope. This collection of information is specially aimed at analyzing unoccupied properties. Local councils may impose a penalty of up to 50% of the IBI (Property tax) quota on residential properties that are permanently unoccupied. Properties will be considered permanently unoccupied if they remain unoccupied, continuously and without justified cause, for a period of more than two years, and belong to owners of, four or more properties destinated for residential use, in addition to any other additional requirements that may be included in the municipal by-laws. The penalty that local councils may impose may be up to 100% when the period of inoccupation exceeds three years. They may even increase this penalty by a further 50% in the case of properties belonging to owners of two or more residential properties that are unoccupied in the same town.

Income tax incentives
The following tax benefits are granted to property owners who may be included in any of these
situations:

• Deduction of 90% of the net rental income. This bonus applies to owners of properties in stressed areas who reduce the rental price by more than 5%.
• Deduction of 70% of the net rental income. This bonus applies to owners who meet the following conditions:
  o Housing located in a stressed residential market area, which is rented for the first time and the tenant is between 18 and 35 years of age.
  o The tenant must be a public administration or non-profit organization and the property is destinated for social renting with a monthly rent lower than that established in the rental subsidy program.
• Deduction of 60% of the net rental income. This applies when the home has been subject to renovation, and this has been completed in the two years prior to the conclusion of the contract.
• Deduction of 50% of the net rental income in other cases.

Business Law and M&A

Royal Decree-Law 5/2023

The “Royal Decree-Law 5/2023 of 28 June” sets out in its first book a completely new regime for structural modifications of commercial companies, both internal and cross-border, intra- and extraEuropean (i.e. outside the European Economic Area). This Royal Decree - Law not only complies with the transposition into Spanish law of the so-called Mobility Directive, but also repeals Law 3/2009 of 3 April and integrates the entire legal regime of structural modifications, both internal and cross-border, into a new regulation. The new regulation will enter into force one month after its publication in the Official State Journal, on July 29th, 2023, although a transitional regime is
established for operations in progress before its entry into force, so that Law 3/2009 will apply to structural modifications whose projects have been approved by the companies involved before July 29th, 2023.

The new law has a structure that differs significantly from the previous standard. For example, it
contains:

• Common provisions applicable to all structural modifications (whether internal or crossborder).
• Specific rules for each type of internal modification.
• General rules for cross-border structural changes for both intra-European and extraEuropean changes.

Main new developments:
Protection mechanisms:

With regards to the protection of creditors, one of the new features is the elimination of the traditional right of opposition. Instead, it is replaced by a system of appropriate safeguards. This new regime is based on the company's offer of guarantees in the draft, without making such an offer mandatory. Additionally, when an independent expert’s report is present, it allows for an independent expert to provide an opinion on the adequacy of any security offered. However, it is not mandatory for the expert to give such an opinion. Furthermore, a procedure is established for creditors to exercise their right to obtain adequate security.

The time limit for exercising this right is one month for internal transactions, and three months for cross-border transactions. The counting of this time limit starts from the publication of the draft terms, rather than from the publication of the merger resolution, as it was previously.
In mergers and split-offs, the possibility of opposing the merger based on discrepancies in the exchange ratio is eliminated. Instead, shareholders who do not vote in favor have the option to seek cash compensation through a court application. This change means that the previous article 38.II of Law 3/2009, which allowed for an expert to be involved in determining such compensation when specified in the bylaws or the resolution of the shareholders’ meeting, is no longer applicable.

The new regulation consolidates various scenarios that previously granted the right of separation or similar mechanisms. It also includes the right for dissenting shareholders in such cases to sell their shares or holdings in exchange for appropriate compensation. If there is an independent expert’s report available, it must provide an opinion on the adequacy of the compensation.

It’s important to note that a disagreement with the offered compensation does not allow to contest the amendment itself. Instead, it enables the dissenting shareholder to request additional cash payment through legal means.
The employees, as is the case for creditors and shareholders, have granted the right to submit comments on the draft structural amendment, which must be taken into account by the board to submit comments on the draft structural amendment.

Main procedural developments
The general structure of the procedure is conserved, the documents required to carry out the operation are extended, with effects on the timing of the operations.

Project:

• All structural modification operations, including transformation, will need the preparation of a structural modification project.
• The project needs to be accompanied by certificates that verify the company’s compliance with its tax and Social Security obligations.
• The explicit mention is made regarding the board's ability to amend the structural modification project.

Preparatory Advertising:
Unless in the case of structural modifications adopted by unanimous universal meeting, moreover the project, an information notice must be published on the website or filed at the Commercial Trade Registry. This notice must be addressed to shareholders, creditors, and employee representatives (or employees if they do not exist) to inform them about the possibility of providing feedback to the company regarding the proposed operation. These observations can be submitted up to 5 business days prior to the general meeting.

Administrators’ report:
The report of the administrators will include two sections, one for the shareholders and another for the employees. These sections can be presented as a single report or separately, depending on the addressee. However, if the shareholders of the participating companies agree, their section of the report may not be issued. The employees’ section of the report will provide an explanation of the implications for labor relations, significant changes in employment terms and conditions, and any impact on the location of business premises, including how these changes affect the company’s subsidiaries.

Independent expert’s report:
Is a crucial component that should encompass the expert’s assessment of the suitability of the cash compensation provided to shareholders. Additionally, upon the directors’ request, the report may also include an evaluation of any guarantees offered to creditors.
As usual, is mandatory for all structural modification operations to ensure transparency and fairness.
However, specific exceptions may be applicable in certain circumstances, allowing for flexibility in the requirement.

Tax

New Tax Reform in Effect

The tax reform came into effect on June 20, 2023, modifying matters related to the payment of income tax, deductible expenses, and value-added tax. Some of the key changes include:

Increased deductible expenses: The tax reform increases the amount of expenses that households can deduct from income tax. Individuals can now deduct up to US$15,294 per year for personal expenses, based on the number of family responsibilities they have. The maximum number of family responsibilities is five.
Therefore, a person with five dependents could deduct multiple expenses and receive the largest reduction in income tax payments, which is US$2,753 per year. Finally, those who have no family responsibilities, on the other hand, benefit from a reduction in their income tax payment of US$964 per year.

New income tax table: The new law regulates the income tax rate from 5% to 37%, but it makes it easier for beneficiaries to determine their payment rate. This means a reduction in tax payable.

Changes for popular businesses and microentrepreneurs: Popular businesses previously paid a single income tax of US$60 per year. The new tax reform establishes a progressive payment table, which means that popular businesses with less than US$2,500 in annual income are exempt from income tax. This benefits 340,000 producers. The new reform also establishes a rate of 0% valueadded tax for these businesses and excludes 500,000 artisans from the Simplified Regime for Entrepreneurs and Popular Businesses. Taxpayers with sales between US$2,500 and US$20,000
per year will pay between US$5 and US$60 per year in tax.

Environmental

Ministry of the Environment strengthens wildlife protection

The Ministry of the Environment has officially launched the Ecuadorian Biodiversity Information System (BIS-EC), which is designed to be an information system for supporting the control and management of biodiversity in the country. BIS-EC provides connection services that enable access and use of information and collaboration on specialist topics using state-of-the-art technologies.

This collaborative approach aims to improve access to biodiversity data and information while helping to improve research, exploitation, monitoring, control, traceability, and decision-making processes. BIS-EC is an important part of the Single Environmental Information System led by the Ministry of Environment, Water Ecology and Transition, in response to the need for updated data and statistics that reflect the management and protection of natural heritage objects from Ecuador.

Data Protection

The Personal Data Protection Law enters the Penalty Regime

The new regulation focuses on broadly protecting personal data, ensuring its security and confidentiality. Additionally, it establishes a system of sanctions that applies to both national and foreign companies operating in Ecuador. In this way, the objective of guaranteeing the exercise of the right to the protection of personal data is fulfilled, which includes access and decision-making regarding information and data of this nature.

The recently enacted regulation includes a system of sanctions for those who fail to comply with the provisions regarding the use and processing of personal data. These companies are obligated to implement data protection programs and systems that enable data subjects to exercise their rights. Among the sanctions, fines ranging from 0.1% to 1% of the total sales of the last annual billing exercise are established for companies that fail to responsibly handle user data, depending on the type of violation. Also, the public entities will be subject to fines of up to 20 minimum
wages.

In the case of recurring or serious violations or misuse of personal data, the temporary or permanent closure of the offending entity is also contemplated, in addition to the possibility of suing those who misuse data, both within and outside Ecuador. The severity of the infringement and the type of sanction depend on its intentionality, recurrence, nature, and repetitiveness.