REGULATORY SCRUTINY BOARD OPINION Transparency of interest representation activities on behalf of third countries

EUROPEAN COMMISSION
17.11.2023
SEC(2023) 637
REGULATORY SCRUTINY BOARD OPINION
{COM(2023)636-637}
{SWD(2023)663-664}
Transparency of interest representation activities on behalf of third countries
Offentligt
KOM (2023) 0637 - SEK-dokument
Europaudvalget 2023
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This opinion concerns a draft impact assessment which may differ from the final version.
Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111
regulatory-scrutiny-board@ec.europa.eu
EUROPEAN COMMISSION
REGULATORY SCRUTINY BOARD
Brussels,
RSB
Opinion
Title: Impact assessment / Transparency of interest representation activities on
behalf of third countries
Overall opinion: POSITIVE WITH RESERVATIONS
(A) Policy context
The issue of influence by third countries in the European democratic space and elections
has long been on the EU agenda. In terms of third country interest representation, there is
currently regulatory fragmentation with more than half of the Member States regulating
the activity, with different scope, diverging obligations, supervision structures and
sanctions. As a result, service providers face uneven compliance costs and barriers to
operate across borders, which in turn may lead to forum shopping and regulatory arbitrage.
This initiative aims to ensure the proper functioning of the interest representation services
market within the EU and to regulate the transparency of third country interest
representation.
(B) Summary of findings
The Board notes the additional information provided and commitments to make
changes to the report.
However, the report still contains significant shortcomings. The Board gives a
positive opinion with reservations because it expects the DG to rectify the following
aspects:
(1) The report does not provide a clear narrative explaining that the initiative
focuses on transparency and proper functioning of interest representation
services on behalf of third countries in the EU internal market.
(2) The report does not sufficiently elaborate mitigation measures regarding
potential circumvention of the transparency requirements of interest
representation.
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(C) What to improve
(1) The report should provide a coherent and unambiguous narrative for this initiative
focusing on legal interest representation services on behalf of third countries in the internal
market of EU. The assessment should more precisely identify the gaps this initiative intends
to fill and how it articulates with the wider set of initiatives on the defence of democracy.
The report should provide a clear scope for the EU action, especially in terms of activities
and organisations to be regulated. It should make it clear that the initiative covers legal
activities.
(2) The analysis should bring out more clearly the key policy choices of the policy options.
The report should better explain how the various measures would work in practice. The
assessment should better articulate the mitigation measures regarding potential issues of
‘stigmatisation’ of legitimate representation activities. It should elaborate in more detail on
measures to avoid potential circumvention of the transparency rules for third country interest
representation taking into account that “core funding” of relevant actors is not per se in scope
of this initiative.
(3) The impacts of the different policy options should be adequately differentiated, in
particular as regards a realistic evaluation of the degree of take up of the various policy
measures in case of a recommendation. The report should better explain how the potential
sanctions would work and how effective they could be.
(4) The report should describe in greater detail the considered governance structure, and how
it would work to ensure appropriate implementation and enforcement. It should explain what
new elements and structures would be developed and who would be responsible for, e.g., IT
tools (including registers), governance structure, supervisory bodies, annual reports, etc. It
should further clarify how the national supervisory authorities would operate, and how
cooperation among Member States would be structured. Finally, it should better explain the
role of the Commission in this governance structure.
Some more technical comments have been sent directly to the author DG.
(D) Conclusion
The DG must revise the report in accordance with the Board’s findings before
launching the interservice consultation.
If there are any changes in the choice or design of the preferred option in the final
version of the report, the DG may need to further adjust the attached quantification
tables to reflect this.
Full title Impact Assessment report accompanying the document Proposal
for a Directive of the European Parliament and the Council
establishing harmonised requirements in the internal market on
transparency of interest representation activities carried out on
behalf of third countries
Reference number PLAN/2023/8687
Submitted to RSB on 11 October 2023
Date of RSB meeting 15 November 2023
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ANNEX: Quantification tables extracted from the draft impact assessment report
The following tables contain information on the costs and benefits of the initiative on which
the Board has given its opinion, as presented above.
If the draft report has been revised in line with the Board’s recommendations, the content of
these tables may be different from those in the final version of the impact assessment report,
as published by the Commission.
I. Overview of Benefits (total for all provisions) – Preferred Option
Description Amount Comments
Direct benefits
Benefits for Member
State authorities.
Economic benefits:
• Increased knowledge and
understanding of the market for
interest representation activities
carried out on behalf of third
countries due to increased
transparency.
Social benefits:
• Increased knowledge of the
magnitude, trends and actors of
interest representation activities
carried out on behalf of third
countries.
• The establishment of a governance
structure at EU level facilitates
cooperation between Member
States and improve coordination in
addressing certain problems related
to interest representation.
Benefits are provided in a qualitative
way, not in a quantitative way.
Benefits for private
entities.
Economic benefits:
• Create a level playing field and
enhance legal certainty for interest
representation activities carried out
on behalf of third countries;
• Facilitate service provision across
multiple Member States as only 1
registration would be necessary;
• Help normalising, legitimising and
destigmatising interest
representation via an enhanced level
of transparency and trust in the
sector.
• For each Member State
(outside the Member State of
main establishment where a
registration is currently
required) in which an entity
carries out interest
representation on behalf of
third countries, that entity
would save between
approximatively EUR 828 and
EUR 3 314 per year.
• As the scale of the entities
potentially providing cross-
border activities is unknown, it
is not possible to provide the
total number of savings.
Benefits for society at
large.
Social benefits:
• enable citizens and public officials
to easily recognise influence
campaigns by third countries
Benefits are provided in a qualitative
way, not in a quantitative way.
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thereby contributing to the integrity
of, and public trust in, EU and
Member State decision making
processes
• support scrutiny from interested
actors (including CSOs, political
actors, researchers, elections
observes or journalist) to monitor
interest representation activities
carried out on behalf of third
countries.
• The strengthening of the quality of
information available would help
enrich the political debate
Indirect benefits
n/a n/a n/a
Administrative cost savings related to the ‘one in, one out’ approach*
Recurrent
(direct/indirect)
n/a n/a
One-off n/a n/a
II. Overview of costs – Preferred option
Citizens/Consumers Businesses Administrations
One-off Recurrent One-off Recurrent One-off Recurrent
Preferre
d policy
option
Direct
adjustment
costs
n/a n/a
EUR 71.2
million to
EUR 213.5
basic
familiarisati
on costs
EUR 57,000
to EUR
256,000
extended
familiarisati
on costs
n/a
EUR 1,500
– 4,600
familiarisati
on costs for
national
authorities
EUR
60,000 to
EUR
540,000
maintenan
ce costs
(12 MS
authorities
without
existing IT
tools)
Business-
as-usual
costs (15
MS with
existing IT
tools)
Direct
administrative
costs
n/a n/a n/a
EUR
615,000 to
EUR
921,000
registratio
n/a n/a
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n and
informatio
n
disclosure
costs per
year
Direct
regulatory fees
and charges
n/a n/a n/a n/a n/a n/a
Direct
enforcement
costs
n/a n/a n/a n/a n/a
EUR
565,000 to
EUR
848,000
Indirect costs n/a n/a n/a n/a n/a n/a
Costs related to the ‘one in, one out’ approach
Total
Direct and
indirect
adjustment
costs
n/a n/a EUR 71.2
million to
EUR 213.8
million total
familiarisati
on costs
n/a
Administrative
costs (for
offsetting)
n/a n/a n/a EUR
615,000 to
EUR
921,000
registratio
n and
informatio
n
disclosure
costs
(average
EUR
768,000)
Electronically signed on 17/11/2023 13:21 (UTC+01) in accordance with Article 11 of Commission Decision (EU) 2021/2121