MBB circular on EU policy and legislation 04/2019

EU Japan trade agreement comes into force – since February 2019

Earlier this year, an economic partnership agreement between the EU and Japan came into force that removes the vast majority of customs duties paid annually by European companies exporting to Japan. This accounts to nearly 97% of what Japan currently applies to goods imported from the EU. Furthermore, the agreement will remove several non-tariff barriers such as for key EU food and drink exporters to Japanese consumers, which will consequently increase the export opportunities in a range of other sectors. The EU estimates that annual trade with Japan could increase by nearly €36 billion, which clearly presents an opportunity for Maltese exporters interested in this market of some 130 million consumers. In 2018, Malta exported a total value of Eur150 million to Japan, and imported Eur83 million, with an overall positive trade balance for the year of Eur83 million.

Building on modern templates of other bilateral trade agreements, the EU also insisted on including references to adopt ambitious standards on sustainable development and commitments to meet criteria set by the Paris climate agreement.

Aside from agricultural products, the agreement is also of great importance to services sectors, particularly financial services, e-commerce, telecommunications and transport. The agreement also opens procurement market for EU companies in 54 large cities. Furthermore, special safeguards are included for SMEs, and specific provisions are made to respect standards of labour, environmental and consumer protection. The agreement also covers the free flow of data among the two partners.

Better enforcement and modernization of EU consumer protection rule – adopted April 2019

The Council and the Parliament reached an agreement on the directive on better enforcement and modernisation of EU consumer protection rules (also known as Omnibus), which is part of a wider package called 'A new deal for consumers', which includes an extensive fitness check of EU consumer and marketing law as well as an evaluation of the Consumer Rights Directive to adjust to the digital economy.

This Omnibus directive focuses on a range of issues that were identified by the fitness check and the evaluation, but that had not yet been addressed by other legislative and non-legislative measures. It therefore covers issues such as harmonising penalties for infringements and possibilities for individual consumer redress, increasing transparency on online marketplaces, extending protection for consumers of 'free' digital services and addressing the issue of dual quality of products. The proposal would amend four of the seven main horizontal directives that make up the core of EU consumer legislation and that apply to all sectors of economy: the Unfair Commercial Practices Directive (UCPD), the Consumer Rights Directive (CRD), the Unfair Contract Terms Directive (UCTD) and the Price Indication Directive (PID).

Some of the outcomes are as follows:

  • Online Marketplaces: consumers would have to be informed of the main parameters determining ranking of products in searches and the relative importance of those parameters. They would also have a right to be informed if the price was personalised based on automated decision-making
  • Penalties: depending upon the infringement, a trader may be fined a maximum fine of 4 % of the trader's annual turnover
  • Dual Quality: quality of food which is intentionally different in member states may be considered as misleading on a case-by-case basis
  • New Banned Practices: several additional practices shall be added to the list of banned practices in Annex I of the UCPD, the most notable of which are:
    • providing search results in online search queries without clearly disclosing any paid advertisement or payment for achieving a higher ranking;
    • stating that reviews of a product are submitted by consumers who have actually used the product without reasonable and proportionate steps to check if this is true
    • submitting false consumer reviews or commissioning others to submit them
  • Redress: consumers harmed by unfair commercial practices would have access to proportionate and effective remedies, including compensation for damages suffered by the consumer, price reduction or the termination of contract. The conditions would be determined by member states
  • Information on consumer rights: the European Commission would be required to set up an online entry point where consumers could get access to up-to-date information about EU consumer rights and submit a complaint through the Online Dispute Resolution (ODR) Platform and to the competent European Consumer Centre (ECC). The Single Digital Gateway, which is in the process of being established, shall serve as the online entry point.

For questions or more detailed information on any topic please contact EU Affairs Manager Daniel Debono and Senior Advisor Mark Seychell from the Malta Business Bureau’s Brussels Representative Office on infobrussels@mbb.org.mt

MBB circular on EU policy and legislation 04/2019