Maximum Harmonization Research Articles

The Single Rulebook and the European Banking Authority

Chapter 10 starts with a discussion of the so-called Single Rulebook (SR) and the European Banking Authority, summing up the state of the art and critically examining the most recent developments. As the author shows, the Single Rulebook is not truly an example of maximum harmonization and is not really a ‘single’ document, but is rather a ‘multi-tiered’ structure. Several of the Directives composing the SR leave, in fact, wiggle room to Member States, and in any case local rules might create different regulatory environments in which the shared EU rules apply, with sometimes relevant effects on substantive harmonization. The chapter also analyses how the role of the European Banking Authority (EBA) should be strengthened to facilitate a more effective and harmonized rule-making activity.

Claims of travel agents in case of insolvency of the organizer of tourism in the light of EU directives

The aim of the study is to analyse the protection scope of claims of insolvent travel agency’s customers under EU law. The thesis assumes that the protection granted to the customers by the EU legislator covers all financial claims that may arise as a result of the failure of the tourist event in the consequence of the insolvency of the trader. At the same time, the tendency of the EU legislator is to deepen the scope of protection granted to the customers, through, among others, expanding the catalogue of entities benefiting from increased normative protection This extremely broadly defined by EU law standard of customer protection means that any incoherence to the rule, permitted by national legislation, will constitute an improper implementation of the Directive. This in turn can lead to a Member State’s liability. The topicality of the above mentioned problem increases the requirement for maximum harmonization of the legislation of Member States introduced by Directive 2015/2302, the implementation deadline for which is January 1, 2018. The aim of the EU legislature is to bring the rules of the Member States closer together so that customers can enjoy a homogeneous range of protection, regardless of where they purchased a tourist event.

Examining the future of regulatory reporting for the banking industry

Reporting is an important tool for assessing bank risk profile, financial stability and with respect to the design and conduct of monetary policy. For the banking industry, regulatory reporting is primarily informed by the principle of maximum harmonisation, even though, in practice, banks have to comply with many other requests. Overburden due to reporting clearly calls for more proportionality in the implementation of common reporting in Europe. In this respect, the European Reporting Framework (EFR) could offer a solution, as a long term objective, for a more pragmatic approach to reporting.

A Question of Coherence

Digitalization is revolutionizing our life. In response to its ever growing impact, the European Commission has tabled two proposals for new directives, one pertaining to contracts for the supply of digital content, the other regarding online and other distance sales of goods. This contribution analyses both proposals critically. It questions the need for having a separate regime encompassing contracts for sale of digital content in light of the possibility of adapting the existing legal framework to reflect the particularities of such agreements. It also warns against adopting more specific rules on online sales, which would further widen the gap in their treatment when compared to face-to-face agreements. The author bemoans the confusion and contradictions the new proposals would introduce to EU consumer law. The choice of a maximum harmonization approach extends this lack of coherence into Member State law. Even worse, the EU legislator interferes with areas that have so far been the exclusive domain of national civil law, such as determining adequate levels of damages or the consequences of termination. Despite the need for compromise, the author suggests that the Commission should not seek them at any cost, but stick to principles of good law-making in multi-level governance systems.

Unfair Commercial Practices

This paper offers an introduction and analysis of the 2005 UCP Directive 2005/29/EC. First, an outline of the Directive is provided after which the key elements of the Directive are introduced. Then, the relationship between the UCP Directive and other European Directives as well as national laws on fair competition and consumer protection is discussed in light of the broad scope and the maximum harmonisation principle which underlies the UCP Directive. Further, certain aspects of enforcement of the UCP Directive are considered. After these mostly descriptive sections of the chapter, some further attention is devoted to one of the main themes running through the UCP Directive, namely the tension between championing self-reliance of ‘average consumers’ and offering protection against certain unsavoury practices. In conclusion, some unresolved issues and matters meriting further research are discussed.

The Interplay between the EBA and the Banking Union

In the last five years the European institutional architecture of banking regulation and supervision has undergone sweeping changes, brought about by a number of sequential legislative initiatives. Such a Copernican revolution naturally calls for investigating whether and how these different layers of reforms add up to (or can be interpreted in a way that ensure) an overall consistent, efficient and effective design for banking regulation and supervision. This is particularly the case for the European Banking Authority (EBA) and the Banking Union (BU), two new institutional players which in the public debate are sometimes dubbed as overlapping or even conflicting. The paper provides a critical analysis of this interplay and its components, also with the aim to provide food for thought for further exploration, from a private as well as a public law perspective. It starts from the reasons behind the foundation of the EBA and the BU, to show how these new institutional players in fact were created to pursue two distinct and complementary goals, and operate on two separate but interconnected institutional levels. The paper then dwells on the panoply of innovative regulatory tools which the EBA can dispose of in order to accomplish its mission to foster maximum harmonization and the creation of a single set of common rules (the “Single rulebook” or SR): technical standards, guidelines and recommendations, and other “soft law” instruments, such as the QA ii) provide more certainty on the scope and possible effects of EBA’s mediation role; iii) rethink the governance of the EBA, if one wants to get to a more balanced interplay between national and European drivers.

The domestic politics of financial regulation: Informal ratification games and the EU capital requirement negotiations

ABSTRACTThis paper contributes to our understanding of post-crisis financial regulation by reasserting the centrality of domestic politics in defining government preferences and explaining regulatory outcomes. It draws on Robert Putnam's two-level game approach and Foreign Policy Analysis to develop a model of a three-level informal ratification game. This adds value to existing approaches by capturing the contested nature of government preferences and delineating the causal mechanisms through which domestic groups shape international negotiations. The model is used to explain the UK's pivotal role in the reform of bank capital requirements in the European Union (EU). It demonstrates that governments are able to take advantage of a narrowing domestic ‘win-set’ by marginalising the influence of industry and building political momentum for regulatory reform. In particular, the paper shows how UK negotiators were able to exploit the increased domestic costs of agreement and synergistic strategies between negotiations to successfully oppose the maximum harmonisation of capital rules across the EU.

The EBA and the Banking Union

In the last 5 years, the European institutional architecture of banking regulation and supervision has undergone sweeping changes, brought about by a number of sequential legislative initiatives. Such a ‘Copernican revolution’ naturally calls for investigating whether and how these different layers of reforms add up to (or can be interpreted in a way that ensures) an overall consistent, efficient and effective design for banking regulation and supervision. This is particularly the case for the European Banking Authority (EBA) and the Banking Union (BU), two new institutional players which in the public debate are sometimes dubbed as overlapping or even conflicting. This paper provides a critical analysis of this interplay and its components, also with the aim to provide food for thought for further exploration, from a private as well as a public law perspective. It starts from the reasons behind the foundation of the EBA and the BU, showing how these two new institutional players in fact were created to pursue two distinct and complementary goals and operate on two separate but interconnected institutional levels. The paper then dwells on the panoply of innovative regulatory tools which the EBA can deploy in order to accomplish its mission to foster maximum harmonisation and the creation of a single set of common rules (the ‘Single Rulebook’ or SR): technical standards, guidelines and recommendations, and other ‘soft law’ instruments, such as the QA (ii) provide more certainty on the scope and possible effects of the EBA’s mediation role; and (iii) rethink the governance of the EBA, if there is to be a more balanced interplay between national and European drivers.

Balancing Protection of Public Health and Safety with the Free Movement of Goods in the EU Medical Device Sector: The Case of Borderline Productss Classification

In 2013, the CJEU ruled on the ‘Lyocentre’ case touching upon an important and contemporary issue in the EU Medical Device regime – the classification issue between medical devices and medicinal products. This problem is connected with the internal market v. protection of health dilemma as well as the choice between minimum and maximum harmonization. The Commission aspires to solve the above dilemma by going towards maximum harmonization in this area in the form of a proposal for a new Regulation on medical devices. My hypothesis is that the new regulatory framework may be able to better balance these objectives and also deal with several problematic issues of the medical device regime. However, it is not likely to solve the problem of borderline products. In order to check that, I will explore harmonization and internal market law literature as well as the relevant case law. My argument is that because classification of borderline products is strongly related to technology and medical science, which are constantly changing, a strict and inflexible regulatory framework cannot abide by their fast pace. I conclude that this problem cannot be fully eliminated, but it can be improved through soft law instruments, as they can be easily adapted to change.

Access to Documents in Antitrust Litigation EU and Croatian Perspective

The paper analyses access to documents in cartel-based damages cases from the EU and Croatian perspective. It considers all relevant EU and Croatian legislation and case-law primarily focusing on the expected impact of the newly enacted Damages Directive. It is argued that the new rules on access to documents provided by the Directive will not necessarily have a significant impact on damages proceedings following cartel decisions issued by the Commission. This is due to the introduction of an absolute ban on the disclosure of leniency statements and settlement submissions via a ‘maximum harmonization’ rule. This conclusion is drawn from statistic figures showing that EU cartel enforcement rests solely on the leniency and settlement procedures. With that in mind, it is concluded that the Directive’s general, permissive rules on access to documents (other than leniency and settlement procedures) will not be applicable in most damages cases following the cartel infringement decision issued by the Commission. However, it is also observed that the Damages Directive’s new rules on access to documents may have the opposite impact on private enforcement in cases following infringement decisions issued by National Competition Authorities (NCAs) which do not rely as much on leniency in their fight against cartels as the Commission. The Directive’s general rule on access to documents will apply in jurisdictions such as Croatia, where all of its cartel decisions so far have been reached within the regular procedure. It is argued that the general access rule, coupled with other rules strengthening the position of claimants in antitrust damages proceedings, might actually be beneficial for both public and private enforcement in such jurisdictions.

Access to Documents in Antitrust Litigation – EU and Croatian Perspective

The paper analyses access to documents in cartel-based damages cases from the EU and Croatian perspective. It considers all relevant EU and Croatian legislation and case-law primarily focusing on the expected impact of the newly enacted Damages Directive. It is argued that the new rules on access to documents provided by the Directive will not necessarily have a significant impact on damages proceedings following cartel decisions issued by the Commission. This is due to the introduction of an absolute ban on the disclosure of leniency statements and settlement submissions via a ‘maximum harmonization’ rule. This conclusion is drawn from statistic figures showing that EU cartel enforcement rests solely on the leniency and settlement procedures. With that in mind, it is concluded that the Directive’s general, permissive rules on access to documents (other than leniency and settlement procedures) will not be applicable in most damages cases following the cartel infringement decision issued by the Commission. However, it is also observed that the Damages Directive’s new rules on access to documents may have the opposite impact on private enforcement in cases following infringement decisions issued by National Competition Authorities (NCAs) which do not rely as much on leniency in their fight against cartels as the Commission. The Directive’s general rule on access to documents will apply in jurisdictions such as Croatia, where all of its cartel decisions so far have been reached within the regular procedure. It is argued that the general access rule, coupled with other rules strengthening the position of claimants in antitrust damages proceedings, might actually be beneficial for both public and private enforcement in such jurisdictions

Even Lawyers are Consumers: Perceiving Business Attitudes in Online Contracts

When lawyers research EU consumer law, they generally tend to focus on interpreting applicable rules and discussing case law. Using the subject of withdrawal rights, which will be the main topic of this paper, we can see that there is an abundance of literature that covers rules and cases, answering questions such as whether the right to withdraw is efficient (and/or necessary), or whether the EU should stay the course with their maximum harmonization of mandatory withdrawal rights. Furthermore, there are countless articles that purport to analyze mandatory withdrawal rights from the consumers’ perspective by looking into behavioral economics or by taking into consideration consumer psychology. Our primary focus in this contribution, on the other hand, is to argue that the mere existence of these types of literature might mislead some to believe that the interests of the consumers have thoroughly been discussed, considered, and incorporated into the existing conversation. While the aforementioned contributions do indeed offer unique and interdisciplinary approaches for the determination of whether the mandatory right to withdraw is in the best interest of consumers, many – if not most – of the existing research fails to actually step into the shoes of a consumer. Rather than attempting to answer the question of the ‘likely effect’6 of mandatory withdrawal rights on consumers (as some have already attempted), this research will go beyond mere speculation and documents some actual experiences that consumers had when exercising their withdrawal rights. Our motivation behind this research was our concern about the apparent disconnect that exists between how we, as academics, debate the pros and cons of withdrawal rights vis-a-vis how we, as consumers, exercise withdrawal rights in our daily lives. It is our working hypothesis that once we climb down from the ivory tower and attempt to return an item that we purchased online, there is a world of previously unaddressed frustrations that can only be experienced by consumers. After all, everyone is a consumer, even the lawyers amongst us. This paper consequently wishes to answer the following question: ‘What standard of consumer protection do businesses actually offer to consumers in online contracts?’ In order to answer this question, this contribution looked at internet contracts by conducting a personal experiment in three European jurisdictions: England, the Netherlands and Romania. For every jurisdiction, we determined the e-store that had the largest market share in the sale of information technology products. We then ordered the same product (an Apple ‘Magic Mouse’) from all identified e-stores and subsequently exercised our withdrawal rights. The European perspective on mandatory withdrawal rights was then compared to Japanese and United States (New York) law in order to determine the protection granted to consumers in online sales, and the nature of this protection (mandatory/optional/insurance).

Transposition of the Directive 2011/83/EU on consumer rights - A challenge to national legislators

Abstract: In the area of European contract law legal area most affected by the process of harmonization, and consequently the process of revision is the area of consumer protection. Because in the last few decades most intense legislative activity is manifested in the adoption of consumer directives. Transposing consumer directives member states have recognized the opportunity of their own economic development, since the improvement of trade is only possible if consumers enjoy the same rights no matter where in the territory of the European Union conclude contracts . This paper is focused on new horizontal instrument of European consumer law, Directive 2011/83/EU on consumer rights. Directive 2011/83/EU is a pioneering step towards building a coherent European consumer protection law, and in this light will be indicated the problem questions that arise in the process of harmonization of regulation Member States with Directive 2011/83/EU, keeping in mind the maximum harmonization clause. Also critically will be considered the process of harmonization of positive legislation with the Acquis in the field of consumer protection.

The Transposition of the Consumer Rights Directive into UK Law: Implementing a Maximum Harmonisation Directive.

This article examines the transposition of the Consumer Rights Directive 2011/83/EU into UK law. At face value, the UK has complied with the Directive, adopting and publishing it by 13 December 2013 and providing that its provisions shall apply to contracts concluded after 13 June 2014, as required by Article 28. Indeed, Article 19 of the CRD (extra fees charged to consumers on payment) was introduced a year before the date anticipated in the Directive. It will be argued, however, that despite such positive indicia and the fact that the CRD is primarily a maximum harmonisation directive, a number of strategic decisions have been made, notably by the Department for Business, Innovation and Skills (BIS) charged with responsibility for transposing the CRD into UK law, which reveal an underlying and ongoing suspicion of EU intervention into domestic contract law. The article thus argues that directives, whether maximum or minimum harmonisation in nature, will always be vulnerable to policy choices at national level due to the discretion awarded to Member States in the transposition process.

The Role of Ecological Literacy Education with Academic Support in Raising Environmental Awareness for High School Students: “Enka Ecological Literacy Summer Camp Project Case Study”

The demands of the environment require a complete approach with nature and nature's balance. However, while human beings are climbing all over the ecological pyramid, they make irreversible mistakes and they form a position for themselves as supernatural, upsetting nature's delicate balance. This project and its process is one of the bridges we can use to bring back awareness in young people of the deteriorating environment and to educate them in order to limit or prevent further damage. Environmental education is the interdisciplinary field of study that aims to increase understanding of ecology for sophisticated individuals who are sensitive about it. Raising such individuals has developed positive behavioural changes in attitudes towards the environment and it is an important step in understanding both the relationships and integrity of nature. Integrity begins with a level of realizing and appreciating the fact that each human being is a part of nature. Therefore each human being must take on certain responsibilities. It is defined in the motto as “damage to nature, damage to yourself”. In environment-human interaction, ecological-literate individuals realize and appreciate the “maximum harmonization minimum damage” principle.Within the scope of this project, which took place with the participation of sixteen high school students between the 3rd and 7th September, 2012, university-high school collaboration was successfully carried out.

The Existence of Transaction Costs as the Rationale for Maximum Harmonization of the European Common Sales Law

In recent years, an extensive debate on the need for harmonization of a European sales law has evolved. The existing diversity of contract laws in the Member States has been perceived as a barrier to trade and hence as burdensome for the European internal market. Moreover, recent impact assessment studies suggest that this diversity is a source of substantial transaction costs. The observed existence of such substantial transaction costs represents a per se overwhelming argument for the adoption of an optional instrument on the European Common Sales Law. The analysis and calculations of opportunity and transaction costs that have been made provide seemingly unbiased, unprecedented, empirical and affirmative answers. However, this paper challenges and critically analyses the results and shows that it might simply be impossible to calculate either the full transaction costs of legal diversity or costs of uniformity. This analysis also shows that: (1) calculations made by the EU Commission rely heavily on subjective observation and selectively biased data; (2) that the obtained results might be severely impaired and over conclusive; and finally (3) that those results merely generate an anecdotal evidence of the possible volume of transaction costs originating from that contract law's differences. In order to obtain a more affirmative answer on the actual amount of transaction costs, this paper provides a list of possible refinements and suggests a set of new quantitative measures that would permit more accurate cross-firm, cross-country and cross-industry comparisons.

A single European pharmaceutical market: Does maximum harmonization enhance medicinal product innovation?

The pharmaceutical sector in the European Union is innovative, but not innovative enough to compete on the world market. This article addresses this issue from the perspective of market harmonization, since the European Commission perceives – according to the ‘European 2020 Flagship Initiative – Innovation Union’ – market fragmentation to be one of the major causes of the lack of innovation. In order to establish if maximum harmonization benefits innovation, two distinct legal regimes in the pharmaceutical sector will be compared. The general rules for medicinal products are weighed against the orphan medicinal products scheme. The latter is subject to uniform Union rules specifically introduced to stimulate research and development and has led to the development of a number of new products. The article shows that the most radical positive integration depends to a large extent on the prospect of it yielding revenue for the innovator. Hence, fuller harmonization can benefit innovation, but it is just as important, if not more important, to address other factors such as pricing, reimbursement and patent protection.

The Aim for Complete Uniformity in EU Private Law: An Obstacle to Further Harmonization

Abstract: The use of maximum harmonization directives in EU private law in combination with open legal concepts is controversial. Due to differing legal cultures, it is likely that open legal concepts will be interpreted differently in the Member States. This seems to conflict with the aim of maximum harmonization as put forward by the European Commission: reducing legal fragmentation and increasing legal certainty among consumers and businesses. Although supporting the notion that national interpretations of open legal concepts are likely to differ, this article posits that this is not incompatible with the aim of maximum harmonization. It proposes a different understanding of the concept of maximum harmonization that allows for different national applications of the rules. This understanding is based on the distinction between harmonizing a legal framework (the written rules) and harmonizing the application of this legal framework. By acknowledging the importance of fully harmonizing the written rules without harmonizing the national applications of these rules, it demonstrates that maximum harmonization does not necessarily conflict with the use of open legal concepts. Résumé: L'usage de directives visant á un maximum d'harmonisation en droit privé européen combiné avec des concepts légaux ouverts est sujet á controverses. Etant donné l'existence de cultures juridiques différentes, les concepts légaux ouverts sont susceptibles d'être interprétés différemment dans les Etats membres. Ceci semble être contraire au but del'harmonisationmaximaletellequeprésentéeparlaCommissioneuropéenne:réduire la fragmentation juridique et accroître la sûreté juridique parmi les consommateurs et les entreprises. Quoique défendant la notion selon laquelle il est probable que les interprétationsnationalesdeconceptsjuridiquesouvertssoientdifférentes, leprésentarticle soutient que ceci n'est pas incompatible avec le but d'une harmonisation maximale. Il propose une explication différenteduconceptdel'harmonisationmaximalequipermetdesapplications nationales différentes de régles. Cette interprétation est basée sur la distinction entre l'harmonisationd'uncadrejuridique (les régles écrites) etl'harmonisationdel'application dececadrejuridique.Enreconnaissantl'importanced'unepleineharmonisationdesrégles écrites sans harmonisation des applications nationales de ces régles, il démontre que l'harmonisation maximale n'est pas nécessairement en conflit avec l'usage de concepts juridiques ouverts.

United in diversity: maximum versus minimum harmonization in EU securities regulation

Judging by recent policy statements by HM Government, gold-plating, ie the super-equivalent implementation of EU law,1 is increasingly falling out of favour in the UK. The general position is that gold-plating should be avoided, unless in exceptional circumstances.2 The reason usually given for this policy decision is that UK businesses should not be put at a competitive disadvantage compared with their European counterparts.3 If we focus on the securities markets directives, then this is a somewhat narrow explanation, since the listing in a highly regulated environment can also be interpreted by investors as a signal for the quality of the issuer, which may translate into lower costs of capital for the issuer.4 This article uses the policy change in the UK as a starting point to analyse the extent to which gold-plating remains permissible in EU securities regulation, focusing on prospectus disclosure, transparency requirements and...

Transposition of the New Consumer Credit Directive in Estonia

Abstract: On 30 September 2010, the Estonian Parliament adopted amendments to the Law of Obligations Act (LOA) aimed at implementing the new EU Consumer Credit Directive into Estonian legislation. These amendments entered into force on 1 July 2011, thus over a year later than the mandatory transposition deadline under the Directive. The reason for the delay was the fact that on 1 January 2011 Estonia joined the euro zone and the Estonian credit institutions were not ready to face two substantial challenges - introduction of the euro and coping with the new requirements of the Consumer Credit Directive - simultaneously. The transposition of the Directive has led to extensive amendments in the chapter of consumer credit contract, but a major reform of the general contract law was not required. The article discusses the transposition of the new Directive into Estonian law, paying particular attention to issues where the Member States have been granted regulatory discretion. All in all, the new Consumer Credit Directive aiming at maximum harmonization has been correctly transposed into Estonian law. The article also shows that the Estonian legislator, while in pursuit of higher consumer protection standard, has considerably expanded the scope of application of the consumer credit regulation to cover areas (e.g., small-scale loans and mortgage credit) beyond those of the Directive. This in turn is not helping to put an end to legal fragmentation of consumer credit regulation across the EU as creditors from other Member States willing to offer consumer credit products in Estonia are still facing somewhat different consumer credit provisions than the one in force in their home countries.