| Mutual Recognition as a Home Country Control Principle? Towards a new Approach in European Harmonisation of Financial Services Rules? - Bob Schmitz (ULC) and Manfred Westphal (vzbv) discussed the difference in both rules at the ECRC Conference in Brussels on September 15, 2007 |
WHAT CAN SAVE THE FAILED HARMONISATION APPROACH OF THE EU?
Last Saturday September 15, 2007 at 9.00 o'clock in Brussels representatives of the Council, the Commission, Bankers' Round Table, Consumer Organisations, the Economic and Social Comitte of the EU and from the European Parliament (who participated from the audience) discussed whether the upcoming EU-Credit Directive will fail to harmonise regulation on consumer credit in Europe.
While the supplier side seems to be quite disappointed about the effetcs this Directive will have for their efforts to address different rules in different host countries the consumer side was quite satisfied that this draft would not lead to the abrogation of most of the culturally important consumer and debtors' protection law.
Still all agreed that there should be further harmonisation but the way to achieve this remained highly controversial. While the consuemr side thought that host country control which they identify with the minimum harmonisation principle is a good way to let nations learn from each other and gradually develop a common body of legal principles and forms partly allowing only standardisation where non-cultural technical rules are at stake (i.e. how a box for standardised credit information should be structured) Council and a majority in Parliament seem to favour solutions which create common regulations top-down from Brussels to the member states. (maximum harmonisation) Instead the supplier side and DG Market support the idea of home country countrol for supplier which they would like to extend from bank supervision to consumer law.
There was an interesting discussion between consumer advocates whether "mutual recognition" could be understood in a way that consumer organisations could support. Together with standardisation such an understanding could perhaps pave the way to a new approach which would evade the threats mutual recognition were connected with the first draft of the service directive which had just like in the CCD to be eliminated before the Directive passed its final stage.
For this we got a letter from one of the participants at this discussion,
LETTER FROM BOB SCHMITZ (Luxemburg Consumer Organisation)
"During the round-table on EU consumer credit and payments directives on Saturaday (15/09)held as part of the 7th International Conference on Financial Services (organised by ECRC, European Coalition for Responsible Credit, Brussels), Manfred Westphal (vzbv) and myself had a discussion on the meaning of mutual recognition as complement to harmonisation. Manfred Westphal stressed the risks that this means that companies have only to comply with the rules of their country of origin (home country regime). I insisted that consumer organisations should oppose this reading. Mutual recognition should be dissociated from the country-of-origin principle. In my views, there are good arguments to insist that mutual recognition (if not accompanied by other restrictive conditions for host countries) is in line with the well-established Cassis-de-Dijon case law and the Rome II Treaty which state that the rules of the country apply where consumers have their domicile.
I admit, however, that presently much confusion (possibly deliberate) exists on the exact meaning of mutual recognition.
Annexed my (French language) pleading for clearly distinguishing mutual recognition/country-of-origin with respect to the Green Paper on the revision of the consumer acquis.
Enclosed further the ULC opinion on the pending draft of the consumer credit directive where mutual recognition has indeed been identified with the country-of-origin principle (the relevant parts are highlighted).
I quote from the COM explanatory memorandum : "la Commission complète sa politique d'harmonisation totale par une reconnaissance mutuelle pour un nombre limité de sujets... Conséquence de la disposition proposée sur la reconnaissance mutuelle, un prêteur, pour une activité dans un Etat membre autre que celui dans lequel il est établi, aurait besoin de satisfaire uniquement aux exigences légales de son Etat membre d'origine (ou leur équivalent) et non à celles de l'Etat membre d'accueil..."
At the panel discussion on Saturday, the representative of the European Commission, Eric Ducoulombier (DG Markt) recalled the COM's initial proposal of a mutual recognition clause (which later has been eliminated by the Council's Common Position). There was also support for the reading from the supplier side.
Will this debate resurface at the European Parliament Second Reading now ahead ?
All this may sound complicated and highly confusing. Given, however, that the outcome of harmonisation on credit (and other matters) will remain limited (either a total or a minimum harmonisation), a lot of implementation powers will still lie with individual Member States. It then becomes decisive to know which rules prevail : home or host country (without prejudice to conflict of law rules / Rome I and II, or taking precedence over these conflict of laws instruments?). I suggest serious litigation may lie ahead of consumer organisations!" |
| ID: |
40241 |
| Author(s): |
UR |
| Publication date: |
17/09/07 |
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Created: 17/09/07. Last changed: 08/10/07.
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