Luxembourg, 19/06/2015 (Agence Europe) - On Thursday 18 June, the European Commission decided to send France, Hungary and Luxembourg official warning letters over their infringement of EU rules in the financial services domain. The three countries now have three months to comply with EU rules, failing which they may be sent to the European Court of Justice.
French rules require companies in the construction industry to take out insurance against potential damage which would make the building unfit for use. The Commission does not contest the objective of the rule in question, but is challenging the fact that companies have to take out insurance from insurers established in France, which the Commission says is a restriction on the freedom of establishment in the EU.
A Hungarian law introduced in 2014 terminated some usufruct contracts held by foreign investors, shortening the transitional period for investors from 20 years to only four and a half months. The Commission says that foreign investors were deprived of their rights by the law since the land lease contracts were signed with a longer time frame in mind.
The Commission is formally requesting Luxembourg to transpose Directive 2013/14 (that came into force at the end of 2014) to reduce over-reliance on financial credit ratings in the EU. Under the directive, investors should not overly rely on credit ratings, or use them as the only parameter when assessing the risks related to investments made by IORPS, UCITS and Alternative Investment Funds (AIFs).
Five member states (Austria, the Netherlands, Romania, Slovakia and Sweden) have been asked to terminate intra-EU bilateral investment treaties between them, which set terms and conditions for private investment by nationals and companies of one state in another state. In accordance with European Court of Justice case law, the Commission feels that such agreements confer unfair advantages to investors from these countries within the Single Market. The Commission has requested information from the remaining 21 member states that still have this type of agreement in place. Ireland and Italy have already ended all their intra-EU bilateral investments treaties. (Mathieu Bion)