On Wednesday 21 May, the European Commission presented its fourth ‘omnibus’ simplification text. It primarily concerns ‘small midcaps’ (SMCs) with up to 750 employees and €150 million in turnover. These companies will now receive the same treatment as SMEs with fewer than 250 employees, at least within the framework of eight European laws. Some 38,000 companies are affected, according to the Commission, which intends to help them grow and export their products internationally.
In detail, the Commission is proposing to open up eight existing European laws that include differentiated treatment for SMEs, in order to introduce the new SMC category. They are: - the General Data Protection Regulation (GDPR); - the regulation on fluorinated gases; - the regulation on batteries; - the anti-subsidy regulation and the anti-dumping regulation; - the ‘prospectus’ regulation; - the directive on markets in financial instruments ('MiFID'); - the directive on critical entities.
Regarding the idea of amending these eight texts in particular, the European Commission has reportedly received the backing of a majority of groups in the European Parliament, which are committed to going no further than the changes proposed today, according to a Commission source.
The example of GDPR. What do these changes mean in practical terms for SMCs? In the case of GDPR, for example, they will no longer be obliged to keep a register of personal data processing activities, provided that these processing activities do not present a “high risk”, as defined by the regulation.
In addition, the sectoral ‘codes of conduct’ provided for in the regulation and designed to help businesses comply with GDPR will now have to take account of the specific needs of SMCs, in addition to those of SMEs.
The expected annual savings for businesses amount to €66 million, according to the Commission.
However, this specific reopening has led some players in the sector to fear that the co-legislators - the Council in particular - will more broadly reopen the regulation, which the ‘Draghi’ report had identified it as an impediment to innovation.
On the creation of the new status, SMEs are being cautious about this announcement. The new category “should not impact negatively in any way SMEs and in particular earmarked funding for SMEs”, said SMEunited President, Petri Salminen.
“Only 38.000 EU businesses currently fall in the small mid-cap range, so addressing the concerns of less than 0.1% of the private sector is clearly not going to be a game changer”, lamented Eurochambres CEO, Ben Butters.
Another example of gains for SMCs in other legislation: the two anti-subsidy and anti-dumping regulations are expected to be amended to include direct assistance for SMCs wishing to submit a complaint about the potential dumping of foreign products.
See the regulation: https://aeur.eu/f/gy6 and the directive: https://aeur.eu/f/gy7
Digitalisation of procedures for businesses. Beyond the case of ‘small midcaps’, the Commission has taken the logic of its fourth ‘omnibus’ a step further, proposing to reopen a number of texts relating to the marketing of products in the EU in order to digitalise paper-based procedures. For example, declarations of conformity, installation instructions and other documents will no longer be required on paper.
The texts concerned include: - the ecodesign regulation; - the regulation on machinery; - the regulation on personal protective equipment; - the directive on dangerous substances.
In the two legislative texts governing these digitalisation measures, the Commission has also made it possible for its own services to draw up common technical specifications (CTS) comparable to standards, in place of the standardisation bodies (see EUROPE 13645/1).
See the regulation: https://aeur.eu/f/gyc and the directive: https://aeur.eu/f/gyb
A lighter ‘batteries’ regulation. Finally, on Wednesday 21 May, the Commission also proposed to postpone by two years the due diligence obligations under the 2023 regulation on batteries. It wants to give battery producers in the EU the opportunity to be “better prepared, with the help of guidelines”.
But above all, this should take into account the fact that the notified bodies, which must monitor companies’ due diligence, are not yet in place in half of the Member States.
See the proposed regulation: https://aeur.eu/f/gy5 (Original version in French by Léa Marchal and Isalia Stieffatre)