Explanatory Memorandum to COM(2013)449 - Electronic invoicing in public procurement - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2013)449 - Electronic invoicing in public procurement. |
|---|---|
| source | COM(2013)449  |
| date | 26-06-2013 |
· Policy context
A shift towards paperless public administration, particularly in its cross-border dimension, is an important objective for the European Union and the Member States. E-invoicing is a particularly promising area to help achieve this objective.
The widely-acknowledged benefits of e-invoicing have led several EU Member States (Denmark, Austria, Sweden and Finland) to require the submission of e-invoices in public procurement in all or part of the public sector. However, these bottom-up initiatives are for the most part based on national standards, most of which are not interoperable. As such, they lead to an increase in complexity and costs for firms wishing to participate in cross-border procurement, and thereby generate market access barriers. The overall result is that the adoption of e-invoicing in Europe is still very limited, accounting for 4 to 15% of all invoices exchanged. An initiative in the area of e-invoicing in public procurement would prevent the further fragmentation of the internal market and facilitate the uptake of e-invoicing. Considering the fact that public procurement covered by the Public Procurement Directives represents roughly 3.7% of EU GDP, the implementation of an initiative aimed at eliminating market access barriers in e-invoicing in public procurement would make the public sector a lead market in this area and spearhead its wider use in the economy.
Over the last couple of years, a significant number of actors have called for action at the European level to stimulate the e-invoicing market across the EU, especially with regards to the exchange of invoices by governments. In the Communication 'Reaping the benefits of e-invoicing for Europe', COM(2010) 712, the Commission has called for e-invoicing to become the predominant invoicing mode in the EU by 2020. In a resolution in April 2012, the European Parliament called for making e-invoicing compulsory in public procurement by 2016, while Member States have called for measures to promote e-invoicing at the Informal Competitiveness Council of February 2012 and in the European Council Conclusions of June 2012. The occasion therefore seems ripe to undertake the proposed initiative on e-invoicing in public procurement and effectively remove the market access barriers caused by insufficient e-invoicing interoperability.
A proposal in this area would also complement the on-going modernisation of EU public procurement rules, a key action under the “Single Market Act I”, in particular with regard to the proposals on a full transition to e-procurement. Finally, action on promoting the uptake of e-invoicing in public procurement is seen by the Commission as a priority. This is reflected in the inclusion of an initiative on e-invoicing in public procurement in the “Single Market Act II” as one of its Key Actions.
· Links with standardisation issues
The proposal foresees that a new European e-invoicing standard will be drawn by the relevant European standard-setting body, in this case the European Committee for Standardisation (CEN). This will be done on the basis of a mandate by the European Commission which will be prepared at a later stage. The mandate will include a list of minimum requirements which the standard will have to incorporate. The work will then be carried out in line with the provisions of Regulation (EU) No 1025/2012.
Contents
·
The content of this proposal builds on extensive consultations with stakeholders. Two meetings of the European Multi Stakeholder Forum (EMSF) on e-invoicing were held in Brussels (on 26 September 2012 and 7 March 2013) and provided an important forum for discussing the building blocks of the potential EU initiative on e-invoicing in public procurement. The discussion papers of four Activity Groups of the EMSF provided practical feedback from the representatives of national multi-stakeholder forums and practitioners, such as service providers and firms. Additionally, a questionnaire was circulated among the members of the EMSF which attempted to gather data on existing e-invoicing systems, and their effectiveness, costs and benefits. The 20 replies which were received (19 from national fora and one from a standards-setting body) were also extensively used in the Impact Assessment.
The content of the initiative was presented and discussed with the Advisory Committee for Public Contracts (ACPC), comprising of Member State representatives, during a meeting on 19 September 2012. More informal bilateral meetings also took place with representatives of various industry associations, including the European E-invoicing Service Providers Association (EESPA), Business Europe and the European Association of Craft, Small and Medium-sized Enterprises (UEAPME).
Finally, an on-line consultation via the Interactive Policy Making tool (IPM) was held between 22 October 2012 and 14 January 2013 to gather information on current usage of e-invoicing and opinions concerning a potential EU initiative in this area. The public response to the consultation was very positive, with more than 700 replies submitted.
The various consultations with stakeholders provided the Commission with a good cross-section of the views held by the different stakeholders.
· Impact Assessment
The Impact Assessment was submitted to the Impact Assessment Board (IAB) in February 2013. During the meeting of 20 March 2013, the IAB raised a number of issues which in the board’s opinion would need to be addressed further, and requested a resubmission of the Impact Assessment.
The revised Impact Assessment was resubmitted to the IAB on 19 April 2013. The main modifications in response to the opinion of the IAB concerned the strengthening of the problem definition and the subsidiarity and proportionality analysis, the improvement of the impacts analysis and better presentation of stakeholder views.
On the 8th of May 2013, the IAB issued a positive opinion.
After having analysed five different options, the Impact Assessment concluded that the most appropriate solution is to impose on contracting authorities and contracting entities an obligation to accept the reception of electronic invoices complying with a new common European invoicing standard as of a particular date. This would help to overcome the fragmentation inherent in the current patchwork of national e-invoicing systems and guarantee the integrity of the internal market. The chosen approach would combine the strong stimulus of an obligation to ensure interoperability in e-invoicing in public procurement with a more flexible approach as to the most appropriate means of ensuring the use of e-invoicing as such.
The final Impact Assessment report and its executive summary are published with this proposal.
· Legal basis
The proposal is based on Article 114 of the Treaty on the Functioning of the European Union (TFEU). By providing for the establishment of a common European standard and obliging Member States to ensure that contracting authorities and contracting entities do not refuse the reception of electronic invoices complying with such European standard, this proposal will remove market access barriers in cross-border public procurement and obstacles to trade. It will therefore improve the conditions for the functioning of the internal market.
· Subsidiarity principle
According to the principle of subsidiarity, the Union can act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, but can be better achieved at EU level. For the reasons detailed below, EU action is needed to remove market barriers and obstacles to trade deriving from the existence of different national rules and standards as well as to ensure interoperability. Hence, the proposal complies with the subsidiarity principle. The number of existing standards, requirements, and solutions remains very large and e-invoicing networks appear to be growing more, not less, entrenched along national boundaries. The bottom-up initiatives from Member States have aggravated the interoperability problem, as more e-invoicing standards have emerged on the market, further increasing the costs and complexity of ensuring interoperability. As a consequence, actions undertaken by Members States are not sufficient to ensure e-invoicing interoperability in cross-border procurement.
The rationale for an EU action stems from the transnational nature of the problem of insufficient interoperability between national (and proprietary) e-invoicing systems. Given the cross-border nature of public procurement transactions covered by the Public Procurement Directives and the lack of meaningful results of some Member States’ efforts to resolve the interoperability issues, an EU action on e-invoicing in public procurement seems to be the only solution available to co-ordinate their actions and to prevent further fragmentation of the internal market. Furthermore, only the EU can act as an unbiased arbiter in the discussion on interoperability and objectively recommend the best approach to eliminating market barriers.
There is little indication that, without EU action, the current situation concerning e-invoicing in public procurement will change or improve in the foreseeable future.
· Proportionality principle
The proposal complies with the proportionality principle since it does not go beyond what is necessary in order to achieve the objective of ensuring the proper functioning of the internal market.
Different policy options have been assessed in the Impact Assessment, leading to the conclusion that the preferred option is also optimal in terms of proportionality - the chosen approach would combine the strong stimulus of an obligation to ensure interoperability in e-invoicing in public procurement with a more flexible approach as to the most appropriate means of ensuring the use of e-invoicing as such.
· Choice of instruments
The choice of legal form for the Commission's legislative proposal is determined both by the chosen legal basis and by the content of the proposal. As mentioned previously, Article 114 TFEU is the appropriate legal basis for this proposal. In principle, this article leaves open the choice of either a directive or a regulation as the legal form of a proposal. However, since the objective of the proposal can sufficiently be achieved by imposing on the Member States an obligation of result while leaving them the choice of form and methods, the choice of a directive is the most appropriate.
· Transposition measures and explanatory documents
National measures at different levels (legislative, regulatory, administrative and technical) are likely to be needed in order to transpose this Directive and to concretely enable contracting authorities and contracting entities to apply it. Only Member States can explain how these different measures transpose the Directive and how they interact each with the others. Hence, the notification of transposition measures needs to be accompanied by such explanatory documents.
All budgetary implications linked to the development of a European standard by the appropriate European standardisation organisation are already covered by the provisions of Regulation (EU) No 1025/2012. This proposal has no additional financial impact over and beyond the resources already allocated to the standardisation actions in the current and the future Multiannual Financial Framework.