Enforcement

The affected EU-Regulation

All EU legislation. Both in relation to existing and future EU legislation there should be an increased focus on ensuring that the rules adopted in the EU can actually be (and are) enforced in the entire EU. Lacking enforcement creates fragmentation of the internal market, unequal competitive situations between Member States' companies and between companies of Member States and third countries. It creates significant commercial consequences in addition to a considerable loss of legitimacy and lack of trust in EU legislation and as such in the wider European population. This equally applies for trust in any other sort of legislation – consumer protection, environmental protection etc.
 

The affected Danish regulation

All Danish legislation which originates from EU legislation.
 

Affected businesses

All Danish and European companies are in practice affected by EU legislation – and thus by the enforcement of this legislation. Given the structure of the internal market and free movement rules, almost all Danish companies will be affected by the lack of enforcement in other member states, where competitors are established. 
 

Reasoning behind the recommendation

The Commission does not enforce rules sufficiently when it comes to member states not conforming to the common EU rules. There is no obvious prioritisation in the Commission's enforcement and use of letters of formal notice.

The current Commission has communicated that it wants to a greater extent ‘use its discretionary power to target its enforcement efforts’. However, it is not stated in detail on what basis such priorities are set.

At the same time, the authorities of a number of EU countries are sufficiently motivated,competent or have enough resources to effectively ensure that the rules are observed internally in the Member States.

In addition, there is an increasing influx of goods and services from third countries that in reality do not comply with community rules. This creates a distortion of competition and a fragmentation of the internal market as well as a lack of consumer protection. 

Extra-territorial enforcement is inherently an ongoing challenge, but it is not a sustainable situation that a location outside the EU can exempt companies that service or deliver goods to European consumers for their responsibility. The same rules should apply for sales to European consumers – regardless of whether the supplying company is located in a third country or not. 

With the rise of direct e-commerce to European consumers from companies or platforms in third countries, the problem is strongly increasing, and a number of areas should be looked at, including product safety, liability, consumer protection, environmental requirements etc.

Lack of enforcement costs jobs and growth, creates distortion of competition and deprives both citizens, employees, consumers and businesses of their rights. In this regard it is also of crucial importance that the Commission make sure that the proposed legislation is in practice enforceable. A practical suggestion could be to include the market surveillance authorities more in the legislative process. 
 

Expected consequences for industry and commerce

A more homogeneous enforcement across the EU will significantly ensure less fragmentation of the internal market and a more homogeneous competitive situation. It is not possible to estimate the value it could create, but it is presumably a considerable amount.
 

Economic consequences

As this concerns all future proposals by the Commission in the period 2024-2029 and all existing legislation, there are naturally considerable financial consequences. This applies throughout the European economy.
 

Certain considerations

Denmark has a long tradition of enforcing rules in general, including EU rules, although there may be exceptions that needs to be addressed. 

It is obviously in Denmark's interest that a general thorough enforcement of the rules is adopted in the EU. It creates an unequal competitive situation for Danish businesses and undermines legitimate policy goals and trust in the EU system in general and consumer trust specifically when there is less enforcement in other countries.

The guiding principle should and must be, that the rules that have been adopted are also enforced in practice - everywhere within the EU. 

Enforcement has fallen considerably over time. 
 

Current Danish efforts 

The Forum is not aware of any further ongoing Danish efforts in the area – apart from of course the general high level of enforcement in Denmark, and the many efforts being made in connection with maintaining that level.

The coming Commission should strengthen its focus on enforcement of new and existing rules. In particular, we recommend focusing on the following areas:

Generally, about enforcement:

• Enforcement must be based on knowledge of the market and the challenges in relation to regulatory compliance that the legislation relates to. In areas where the Commission and the Member States have limited resources available, enforcement should be risk-based, focusing on areas that makes a significant difference to achieving what the legislation seeks to achieve.
   
• Company based market surveillance is a good supplementary tool to improve the compliance situation in a company as a whole and contributes to the knowledge on which types of problems are prevalent.
   

Fragmented enforcement in Member States:

• Better coordination should be ensured, for example by setting up enforcement groups for all legislation, in which Member States can coordinate their enforcement of the rules - so unnecessary fragmentation of the market and competition is avoided, and knowledge can be shared about best practice. 

To the extent that enforcement groups are created, they must cooperate and coordinate at the level appropriate to their role as an authority.

The purpose is to ensure a more homogeneous and effective enforcement. 
 

Insufficient enforcement by the Commission towards Member States:

• The Commission must take its role as "guardian of the treaties" seriously
   
• The Commission must enforce and effectively ensure that the Member States take on their responsibility for enforcing companies' compliance with all EU legislation, including particularly focusing on deviations/violations that have a significant impact on the Single market, the economy, consumer protection, workers, health and safety, the environment and likewise. 
   
• The Commission should also give particular priority to violations/deviations that create a significant degree of distortion of competition.
   
• The Commission should justify its estimates and priorities in its enforcement efforts.
   

Inadequate enforcement towards third countries:

• The Commission, together with the Member States, should ensure that the physical market control of goods and services is sufficient and that resources are allocated to this. This applies whether the seller is established in an EU country or in a third country.
   
• The Commission and the Member States should inform consumers better about their vulnerability and lack og consumer protection when making use of direct purchasing from sellers in third countries and the lack of responsibility for online intermediaries.
   
• Real and practically usable sanction options should be introduced in relation to companies from third countries that do not comply with EU rules.

Regeringen tiltræder anbefalingen om at arbejde mod bedre håndhævelse af EU-reglerne for det indre marked på både europæisk og nationalt niveau. Regeringen vil bl.a. fortsætte sin aktive deltagelse i relevante håndhævelsesgrupper som ’Single Market Enforcement Taskforce’ (SMET) og ’EU Product Compliance Network’ (EUPCN) samt arbejde for, at Kommissionen foretager en revidering af ’New Legislative Framework’ (NLF), der skal sikre importørlignende forhold for online virksomheder.