Explanatory Memorandum to COM(2023)637 - Harmonised requirements in the internal market on transparency of interest representation carried out on behalf of third countries - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2023)637 - Harmonised requirements in the internal market on transparency of interest representation carried out on behalf of third ... |
|---|---|
| source | COM(2023)637 |
| date | 12-12-2023 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
This proposal aims to contribute to the proper functioning of the internal market for activities conducted with the objective of influencing the development, formulation or implementation of policy or legislation, or of public decision-making process, in the Union (“interest representation activities”) carried out on behalf of third countries by laying down harmonised rules for a high level of transparency of such activities when carried out in the internal market.
A high level of transparency in this field will also place citizens, public decision-makers and other stakeholders in a better position to understand which third countries request the provision of interest representation activities.
To the extent that it is normally provided against remuneration, interest representation, including interest representation provided to third countries, constitutes a service within the meaning of Article 57 of the Treaty on the Functioning of the European Union (‘TFEU’).
The provision of interest representation in the Union is a growing and increasingly cross-border activity. Interest representation activities are regulated in different ways in the Member States. Currently, 15 Member States1 have a transparency register on interest representation activities, though not always at the national level. Those Member States that have a regulatory framework provide for measures that differ in the following respects: the scope of the entities and activities covered, including the relevant definitions of interest representation activities; the thresholds for the size of entities or level of activities triggering transparency or registration requirements; the requirements concerning record keeping; the data collected from entities engaged in interest representation, including regarding their identity and the identities of their clients; the existence, powers, structure and independence of supervisory authorities; the nature of sanctions and the amounts of fines, where they exist; and the frequency of updates to the registered information. 12 Member States do not regulate the transparency of interest representation activities. The legislative framework is therefore highly fragmented across the Union2.
This fragmentation causes obstacles in the internal market for interest representation activities, including when carried out on behalf of third countries, which undermine the proper functioning of the internal market. The divergences among Member States create an uneven playing field and increase compliance costs for entities seeking to carry out cross-border interest representation activities. The uneven playing field directs cross-border interest representation activities away from more regulated Member States towards less regulated ones. There is, in turn, a risk of forum shopping and regulatory arbitrage, that is, the exploitation of differences in regulatory requirements, by entities seeking to evade regulation in certain Member States.
Interest representation activities are increasingly used by third country governments alongside formal diplomatic channels and processes to promote their policy objectives3. This situation is recognised by Member States as presenting an opportunity for third-country actors to evade transparency requirements and covertly influence decision-making and democratic processes in the Union. Some Member States are therefore considering developing new rules to address foreign influence, including by imposing general obligations on entities receiving foreign funding that would in practice apply to the provision of interest representation on behalf of third countries. The fragmentation described is therefore likely to increase specifically in relation to interest representation carried out on behalf of third countries. This would expose entities carrying out interest representation to additional obstacles when providing interest representation for third countries in the internal market.
When presented transparently, ideas from third countries can contribute positively to public debate and are a welcome part of international engagement. However, when carried out covertly, interest representation on behalf of third countries is prone to being used as a channel for interference in Union democracies4. By shaping public opinion, this is in turn can influence political choices to the detriment of the political life in the Member States and the Union as a whole.
As noted by the Organisation for Economic Co-operation and Development (“OECD”), “influence and lobbying by foreign interests can have a transformative impact on the political life of a country, not only on domestic policies but also on its foreign policy, its election system, economic interests and its ability to protect its national interests and national security”5. Foreign governments can make use of public resources to carry out wide-ranging and sustained influence campaigns. The risks involved in lobbying and influence activities by foreign government are therefore higher than the risks posed by purely domestic activities6.
There is also a lack of information about interest representation carried out on behalf of third countries in the internal market. Member States do not consistently collect or systematically share information on such interest representation. This makes it difficult to identify and map interest representation activities carried out on behalf of third countries in the Member States and do so in a coordinated and efficient way across the Union. In addition, the lack of transparency regarding the funding of certain interest representation activities does not allow citizens and policymakers to identify sources of such funding. This lack of information is another factor that could lead Member States to respond to this phenomenon in different ways. There is a public interest in such information, both as an objective of the national legislation regulating interest representation activities already mentioned, but also of interested actors and citizens more generally seeking to understand how public decisions are influenced.
This lack of information and the resulting obstruction of effective oversight not only acts to the detriment of the functioning of the internal market but also of democracy in the Union, as it impacts Union citizens’ trust in democratic processes and decision-makers’ and their ability to exercise their rights and responsibilities. A recent Eurobarometer on Citizenship and Democracy showed that about 8 in 10 Europeans consider that foreign interference in Union democratic systems is a serious problem that should be addressed7. 84.5% of respondents to the public consultation consider that lobbying or public relations activities remunerated by or controlled by third countries are associated with a high risk of covert foreign interference. The European Parliament8 and the Council9 have underlined the importance of addressing the threat to democracy posed by foreign interference. These concerns have intensified since Russia’s war of aggression against Ukraine.
The main aim of this proposal, which complements existing measures at Union level, would be to introduce common transparency and accountability standards in the internal market for interest representation activities carried out on behalf of third countries. By providing common transparency requirements for such activities, the initiative would improve the functioning of the internal market of such activities, creating a level-playing field, reducing compliance costs for entities that seek to carry out interest representation activities on behalf of third countries across borders, and preventing regulatory arbitrage. A core element of the proposal is the establishment of national registers for entities carrying out such activities.
By providing for full harmonisation, the proposed Directive would provide for proportionate harmonised transparency requirements and a comprehensive system of safeguards, including effective judicial review, a harmonised sanction regime limited to administrative fines, independent supervisory authorities, obligations to prevent stigmatisation, and in particular the need to ensure that no adverse consequences arise from being subject to the transparency rules. This will effectively prevent gold-plating and stigmatisation. Member States would, within the framework of the harmonised rules, be prohibited from diverging from the rules by laying down more extensive transparency requirements.
This intervention would also aim to enhance the integrity of, and public trust in, the Union’s and Member States’ democratic institutions by ensuring the transparency of interest representation activities carried out on behalf of third countries, and by improving the knowledge of the magnitude, trends and actors behind such activities. Furthermore, a coherent and proportionate Union approach focusing on transparency and democratic accountability to address the challenges posed by interest representation on behalf of third country entities could serve to set standards globally. In comparison, the current fragmented approach by Member States is more likely to be damaging to the Union’s reputation, as it lacks a consistent and coherent approach.
Action at Union level is needed to prevent the emergence of new obstacles and to ensure the proper functioning of the internal market of interest representation activities carried out on behalf of third countries. Without Union action, Member States will address the identified risks to democracy unilaterally, risking undermining the internal market of interest representation carried out on behalf of third countries. Approximation of the legislation of the Member States is therefore the primary purpose of this initiative.
This proposal puts forward specific and targeted measures in a proportionate manner, seeking to ensure that entities carrying out interest representation activities on behalf of third countries in the internal market are able to do so in a harmonised, transparent and more predictable legal environment, benefitting the entities involved, the decision-makers targeted, and citizens. Strong safeguards prevent potential negative impacts on the entities concerned, ensuring full respect for fundamental rights and democratic principles and values. The proposal does not cover entities which receive financial support from other Member States, or from third country entities for purposes unrelated to interest representation.
This approach differs radically from those observed in certain other jurisdictions (characterised as ‘foreign agent’ laws)10. Such laws often include measures that unduly restrict civic space by stigmatising, intimidating and curtailing the activities of certain civil society organisations (CSOs), journalists or human rights defenders. The label of ‘foreign agent’ under such laws frequently seeks to undermine both the financial stability and credibility of the organisations targeted.
In contrast to such ‘foreign agent laws’, this proposal does not negatively label the activities of specific entities, including CSOs, nor does it seek to limit civic space. Instead, it provides for transparency and accountability requirements applicable to all entities carrying out interest representation activities on behalf of third countries, regardless of their legal status. Furthermore, the measures do not ban any type of activity or require transparency of foreign funding that is unrelated to interest representation activities carried out on behalf of third countries. Finally, the proposal includes safeguards aimed at ensuring a proportionate transposition and enforcement and avoiding risks of stigmatisation.
• Consistency with existing policy provisions in the policy area
This proposal complements the proposal for a Regulation on the transparency and targeting of political advertising11. The proposal on political advertising seeks to provide a high level of transparency for political advertising services in the Union regardless of the medium used, and to provide additional safeguards applicable to the targeting of political advertising based on the processing of personal data.
This initiative has a different scope than the proposal on political advertising: it covers interest representation activities carried out on behalf of a third country entity. This includes interest representation activities consisting of the organisation of communication or advertising campaigns, which could also be considered as political advertising. However, interest representation mainly covers activities which are not also ‘political advertising’ (e.g. lobbying individuals directly). Also, the political advertising proposal would cover activities within its scope regardless of whether they are provided on behalf of a third country.
Under the proposal on political advertising, transparency is ensured in particular by making available to individuals certain information with each political advertisement. In addition, political advertising publishers that are very large online platforms within the meaning of the Digital Services Act12 would have to make the information contained in the transparency notice available through the repositories of advertisements published pursuant to Article 39 of the Digital Services Act. The current initiative complements this by providing public access to complementary information in the national registers of the Member States related to the providers of the interest representation activities, in particular a clear indication regarding the third country on behalf of which the interest representation activity is carried out, the Member States where the interest representation will be carried out, and the legislative proposals, policies or initiatives targeted by the interest representation activity.
This proposal also complements the Digital Services Act, which requires providers of online platforms to make available certain information about advertisements they present on their online interfaces. In addition, the Digital Services Act requires providers of very large online platforms or of very large online search engines that present advertisements on their online interfaces to compile and make publicly available in a specific section of their online interface, through a searchable and reliable tool, a repository containing information on the advertisements. It also obliges such providers to assess and mitigate risks related to the functioning, design or use of their service that have actual or foreseeable negative effects on a series of societal risks including as regards civic discourse, electoral processes and public security.
This initiative has a different scope than the Digital Services Act, as it covers interest representation activities on behalf of third countries. Such activities can involve (e.g. as part of the organisation of and advertising or communication campaign) placing advertisements on the online interfaces of online platforms within the scope of the Digital Service Act. When this is the case, the current initiative provides that the providers of online platform services should be included by the entity carrying out interest representation activities in its registration, and the relevant costs attributed to their services should be included in the amount of remuneration declared by that entity. However, this initiative does in such situations not regulate responsibilities of online intermediaries and does not impose requirements directly on the providers of online platform themselves.
Furthermore, the proposal complements the proposal for a European Media Freedom Act13, which aims to address fragmented national regulatory approaches related to media freedom and pluralism and editorial independence to ensure the free provision of media services within the internal market, while ensuring that Member States remain able to adapt media policy to their national context, in line with their competences. That proposal also focuses on the independence and stable funding of public service media as well as on the transparency of media ownership and of the allocation of state advertising. Media service providers providing news and current affairs content would be required by that proposal to make easily and directly accessible to the recipients of their services their legal name and names of their direct, indirect or beneficial owners, which could in principle also include third country governments. In addition, media service providers would be obliged to take measures that they deem appropriate with a view to guaranteeing the independence of individual editorial decisions.
The Audiovisual Media Services Directive14 aims to create and ensure the proper functioning of a single market for audiovisual media services, while contributing to the promotion of cultural diversity and providing an adequate level of consumer and child protection. It is rather unlikely that advertising campaigns carried out with the objective of influencing the development, formulation, or implementation of policy or legislation, or public decision-making processes, in the Union covered by this proposal would fall within the scope of that Directive.
Where media service providers disseminate advertisements as a service for entities carrying out interest representation activities on behalf of third countries, this proposal would provide that such media service providers must be named in the registration of the entity, and the relevant costs must be included in the amount of remuneration declared. However, this proposal would in such situations not impose requirements on the providers themselves.
This proposal does not cover activities regulated by Regulation (EU, Euratom) 1141/2014 of the European Parliament and of the Council15, which governs the statute and funding of European political parties and European political foundations, including donations from a public authority of a third country, or from an undertaking over which such a public authority may exercise, directly or indirectly, a dominant influence.
Since 2020, the annual Rule of Law Reports16 monitor, under their anti-corruption pillar, the regulation of interest representation and lobbying in all Member States within the framework of existing European and international standards. Since 2022, the Commission has been making recommendations to Member States in the context of the Rule of Law Reports, including on aspects relevant to interest representation. For instance, in 2022, Denmark and Slovakia were recommended to introduce rules on lobbying, while Romania was invited to introduce rules on lobbying for Members of Parliament. Belgium was called upon to complete a legislative reform on lobbying establishing a framework that includes a transparency register and a legislative footprint and covers both members of Parliament and Government. In the same year, Spain was recommended to continue efforts to table legislation on lobbying, including the establishment of a mandatory public register of lobbyists17.
In 2023, the Commission noted in the context of the Rule of Law Reports that developments in the area of lobbying continued, as some Member States had revised their lobbying transparency rules in line with recommendations from 2022. For example, in Latvia, a new lobbying law had been adopted, which provides for the creation of a lobbying register. In Estonia, the authorities had continued efforts to effectively implement the guidelines on lobbying. Cyprus had adopted an implementing regulation on lobbying, which clarified the procedure for declaring, recording, and publishing lobbying activities. In Lithuania, current rules on lobbying gave positive results in terms of submitted declarations. The 2023 Rule of Law Report also contained further recommendations to Member States related to lobbying and interest representation where recommendations from 2022 had not been fully addressed or new challenges had emerged18.
The proposed Directive on combating corruption19 seeks to protect democracy as well as society from the impact of corruption and proposes updating the Union criminal legal framework to include, beyond the offences of bribery and misappropriation, trading in influence, abuse of functions, obstruction of justice, and enrichment from corruption. If left unaddressed, covert influencing and a general lack of transparency in interest representation could enable and breed corruption. Where such offences are committed to the benefit of a third country, the proposed Directive provides that Member States should consider this an aggravating circumstance. This proposal would complement the proposed Directive on combating corruption as the transparency of interest representation activities on behalf of third country entities is equally expected to make a positive contribution to the prevention and detection of corruption.
• Consistency with other Union policies
Nurturing, protecting, and strengthening democracy in the Union is at the heart of the Commission’s priorities as set out in the Political Guidelines issued by President von der Leyen20. In 2020 under the headline ambition ‘A new push for European Democracy’, the Commission presented the European Democracy Action Plan21, with the aim of protecting and strengthening Union democracies by safeguarding the integrity of elections, promoting free and fair elections, strengthening media freedom and pluralism, and countering disinformation and foreign interference.
In the 2022 State of the Union address22, President von der Leyen announced a package of measures to defend democracy from covert foreign influence. The package complements actions already taken at Union level under the European Democracy Action Plan. Apart from this initiative, the package includes specific measures on electoral matters ahead of the elections to the European Parliament and measures to foster an enabling civic space and promote inclusive and effective engagement by public authorities with civil society organisations (CSOs) and citizens23. All these measures aim to bolster democratic resilience from within.
This initiative would amend the Whistleblower Directive24 to ensure that whistleblowers are able to alert the supervisory authorities to be set up by Member States of actual or potential infringements of the proposal’s requirements.
This initiative does not affect in any way the application of Union restrictive measures adopted pursuant to Article 29 of the Treaty on European Union (‘TEU’) and Article 215 TFEU. These measures are an essential tool of the Union’s Common Foreign and Security Policy through which the Union can intervene where necessary to prevent conflict or respond to emerging or current crises in the international sphere, and to promote peace, democracy, respect for the rule of law, human rights and international law. In particular, this proposal does not affect the prohibition to make available, directly or indirectly, funds or economic resources to or for the benefit of natural or legal persons, entities or bodies, or natural or legal persons, entities or bodies associated with them which are listed in Union restrictive measures.
This initiative will have a link to the proposal for a Directive on cross-border activities of associations (ECBAs)25. While that proposal creates an additional legal form of non-profit association and will facilitate their cross-border activities and grant them certain rights, this legislative initiative will introduce common transparency and accountability standards for interest representation activities seeking to influence the decision-making process in the Union and carried out on behalf of third countries. In practice, ECBAs will have to comply with the targeted transparency requirements under this proposal only if they carry out interest representation activities on behalf of third country entities.
This initiative would not affect the prerogatives of the Commission to initiate and conduct investigations into distortive foreign subsidies under the Foreign Subsidies Regulation26 or to issue opinions under the Foreign Direct Investment Screening Regulation27.
Finally, some entities carrying out interest representation on behalf of third countries could fall within the scope of the Corporate Sustainability Reporting Directive (CSRD)28. These cases would be limited and restricted to the situation where the actions of a large company would be attributed to a third country.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The legal basis for the proposal is Article 114 TFEU, which provides for the adoption of measures to ensure the establishment and functioning of the internal market. This provision enables the adoption of measures for the approximation of the provisions laid down by law, regulation or administrative action in the Member States which have as their object the establishment and functioning of the internal market. It is the appropriate legal basis for an intervention covering service providers in the internal market and addressing differences between Member States’ provisions which obstruct the fundamental freedoms and have a direct effect on the functioning of the internal market.
Differences in national laws exist and are increasing, given that some Member States have legislated or intend to legislate on transparency requirements applicable to interest representation. This situation creates regulatory fragmentation insofar as the rules addressing transparency of entities carrying out interest representation in relation to third countries differ as to the specific elements of transparency that they require (the information to be disclosed, the frequency of their update) and their scope (the types of activities covered or exempted).
Such fragmentation poses obstacles to the cross-border provision of interest representation and is likely to increase specifically with respect to the provision of such activities carried out on behalf of third countries. The harmonised transparency measures aim at creating an even playing field, reduce existing compliance costs and regulatory arbitrage as well as the emergence of additional obstacles in the internal market for interest representation activities carried out on behalf of third countries, resulting from inconsistent development of national laws. Without action at Union level, this variety will be further aggravated with the adoption of new initiatives in some Member States addressing, in particular, interest representation carried out on behalf of third countries, whereas in other Member States the transparency of interest representation services will remain unaddressed.
In line with its internal market objective, this proposal provides that entities would need to register in the Member State of its main establishment, regardless of the Member State(s) where it seeks to carry out its interest representation activities. In addition, the proposal provides that in specific cases and in a proportionate manner, a supervisory authority would be able to request information that could be shared with supervisory authorities of other Member States.
In line with Article 2 TEU1, this initiative also aims to enhance the integrity of, and public trust in, the Union and Member State democratic institutions by ensuring the transparency of interest representation activities carried out on behalf of third countries, and by improving the knowledge of the magnitude, trends and actors of interest representation activities carried out on behalf of third countries. While the objective of ensuring transparency of activities whereby third countries seek to influence public decision-making in the Union is an important factor in the choices involved in the harmonisation measures contained in this proposal, the proposal has as its main objective the improvement of the conditions for the functioning of the internal market.
In view of the above, full harmonisation at Union level is necessary and Article 114 TFEU is the relevant legal basis for this initiative2.
• Subsidiarity
According to the principle of subsidiarity (Article 5(3) TEU), action at Union level should be taken only when the aims envisaged cannot be achieved sufficiently by Member States alone and can therefore, by reason of the scale or effects, be better achieved by the Union.
As Member States’ rules affecting interest representation on behalf of third countries diverge in their scope, content and effect, a patchy framework of national rules is appearing and risks to increase, especially when it comes to interest representation activities carried out on behalf of third countries. It undermines the internal market by creating an uneven playing field and unnecessary costs for entities that seek to carry out cross-border interest representation activities on behalf of third countries. It invites regulatory arbitrage to avoid transparency measures which in turn impacts the citizens’ confidence and trust in the effectiveness of regulation.
Only intervention at Union level can solve these problems, as regulation at national level already results in the creation of obstacles to cross-border interest representation activities in the internal market. In contrast, the effects of any action taken under national law would be limited to a single Member State and risk being circumvented or be difficult to oversee in relation to entities carrying out interest representation on behalf of third countries from other Member States. Furthermore, some Member States are currently considering legislative initiatives in the field of foreign influence that might not align with the proportionate and targeted approach of this initiative and that might not provide with a comprehensive system of safeguards. Only action at Union level can address this consistently across the internal market. Introducing common and proportionate standards for transparency of interest representation carried out on behalf of third countries at Union level is essential to ensure that such measures are established consistently across all Member States with respect to all fundamental rights and in particular subject to comprehensive safeguards including access to the courts.
Finally, interest representation activities carried out on behalf of third countries is a transnational issue with cross-border implications that need to be addressed at Union level. Influencing policy decisions and political processes in one Member State can have an impact beyond that Member State’s borders, in another Member State or at the European level. The absence of Union-level action may result in some Member States being less aware than others about interest representation activities carried out on behalf of third countries. It seems unlikely that Member States would converge on aligned standards on how to collect comparable data on interest representation activities carried out on behalf of third countries, or establish a systematic Union-wide cooperation mechanism to exchange information with each other and the Commission.
• Proportionality
Regarding proportionality, the content and form of the proposed action does not exceed what is necessary to achieve the goal of ensuring the proper functioning of the internal market.
The proposal builds on existing Union legislation and is proportionate and necessary to achieve its objectives. The envisaged measures are limited to what is necessary to tackle the current and expected fragmentation of the relevant regulatory framework.
The proposal is limited to transparency requirements addressed only to entities that are carrying out interest representation services on behalf of third countries. The proportionality of the transparency obligations has been carefully considered and is reflected in the limited requirements imposed (clearly limited information requirements, limited obligations in terms of record keeping, etc.). The proposal does not aim to restrict the provision of interest representation services, but rather to improve the functioning of the internal market and facilitate their provision across borders by making them more transparent in a coherent manner across the Union.
The proposal includes necessary safeguards aimed at ensuring a proportionate transposition and enforcement and avoiding risks of stigmatisation. The proposal does not seek to prevent third countries from promoting their views but aims to ensure that this is taking place in a transparent and accountable manner. It does not impose requirements on entities merely because they receive funding from abroad, but instead focuses on ensuring increased transparency when they carry out interest representation activities on behalf of third countries that seek to influence the development, formulation or implementation of policy or legislation, or of public decision-making processes in the Union. For this reason, contributions to the core funding of an organisation or similar financial support, for example provided under a third country donor grant scheme to a non-profit organisation, should not be considered as remuneration for an interest representation service where they are unrelated to an interest representation activity, that is, where the entity would receive such funding regardless of whether it carries out specific interest representation activities for the third country providing such a funding.
In addition, the proposal includes a specific requirement that the information in Member States’ national registers is presented in a neutral and factual manner and in such a way that it does not lead to stigmatisation of registered entities. In particular, the information should not be presented with or accompanied by statements or provisions that could create a climate of distrust with regard to the registered entities or that are apt to deter natural or legal persons from Member States or third countries from engaging with them or providing them with financial support.
The powers of supervisory authorities to ask for information from entities within the scope of the initiative are carefully framed to ensure that the concerned entities are not subject to unnecessary or excessive requests. That framing is twofold: supervisory authorities may only require limited information additional to what is included in the national register and only in limited circumstances.
In order to ensure the proportionality of the sanctions, the proposal provides that supervisory authorities may only impose sanctions limited to administrative fines and below a certain ceiling based on the entity’s economic capacity for breaches of the proposed obligations. Criminal sanctions are explicitly excluded. Member States are responsible for ensuring that it is prohibited to participate in activities that circumvent the provisions of the Directive.
• Choice of the instrument
Article 114 TFEU grants the legislator the power to adopt regulations and directives.
A Directive providing for full harmonisation of the transparency requirements applicable to entities carrying out interest representation on behalf of third countries conducted with the objective of influencing the development, formulation or implementation of policy or legislation, or public decision-making processes in the internal market, is appropriate.
By imposing the full harmonisation of the transparency and accountability requirements, the initiative also prevents gold-plating. Member States would in particular, within the framework of the harmonised rules, be prohibited from imposing more extensive transparency requirements. Member States would maintain a limited discretion within the scope of the fully harmonised measures, and as expressly framed by the legal initiative. For instance, Member States would be free to provide for one or multiple national registers and supervisory authorities in their territory (e.g. several authorities in charge of different parts of the territory).
The competence of Member States to establish rules in full respect of Union law for the aspects not covered by the harmonised rules is not affected, for example, to establish rules for their public officials contacting entities carrying out interest representation activities on behalf of third countries.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Stakeholder consultations
This proposal is the result of extensive consultations with stakeholders, in which the Commission applied the general principles and standards for consultation of interested parties. A consultation strategy identified key relevant stakeholders. The Commission conducted a first wave of broad consultations of stakeholders between October 2022 and May 2023. The Commission conducted additional consultations with Member States authorities, commercial entities and CSOs including on potential policy options in the course of August and September 2023.
The Commission contracted an external specialised study to support the preparation of this proposal1. As part of this supporting study, the contractor conducted a series of individual consultations with key stakeholders.
A public consultation, accompanied by feedback on the Call for Evidence document2, was published on 16 February 2023 and ran until 14 April 2023. Feedback and contributions from stakeholders provided in particular information to develop the problem definition and policy options. The public consultation was promoted through a social media campaign as well as through the Commission’s website.
The Commission conducted two Flash Eurobarometer surveys, on Democracy and on Citizenship and Democracy respectively. The first one showed that over 1 in 5 Europeans considers propaganda and false or misleading information from a non-democratic foreign source and covert foreign interference in the policies and economy of their country, including through financing of domestic actors, to be among the most serious threats to democracy3. The second one showed that about 8 in 10 Europeans agree that foreign interference in European democratic systems is a serious problem that should be addressed4.
In addition, an Impact Assessment has been prepared presenting the rationale, analysis and evidence available to address the topic at stake5. The Impact Assessment contains a detailed presentation and analysis of the consultation strategy and its results.
The Commission organised several focus group meetings with key stakeholders to gather additional evidence and data on the specific problems addressed by the initiative, as well as on the policy approach and its impact. Such focus groups meetings gathered stakeholders engaged in public relations and lobbying such as representative organisations of relevant sectors of the business community, lobbying, consultancy and public relations firms, CSOs and legal professionals providing interest representation services. Focus groups also gathered subject matter experts in relevant fields, such as academia, relevant national authorities, including at local level, as well as international organisations and standard setting bodies. Additional meetings, including at high-level, took place with CSOs and Member States.
The Commission also analysed positions and analytical papers and studies, received in the context of the preparation on the proposal. Finally, it also conducted bilateral consultations with stakeholders at their own initiative.
Overall, participants to focus groups expressed their support for an initiative addressing common transparency rules for interest representation activities carried out on behalf of third countries. They emphasised the challenges resulting from having to comply with different systems and rules across Member States and were in favour of harmonised rules at Union level.
In addition, the public consultation showed there was a general agreement amongst stakeholders that Union action is needed to increase transparency regarding lobbying, public relations activities and any other activity that, when carried out on behalf of third countries, significantly impacted the democratic sphere.
In particular, the vast majority of respondents to the public consultation stated that lobbying and public relations activities on behalf of third countries would trigger high risk that third countries covertly interfere with the Union democratic space and public debate and enabled corruption.
Union citizens are concerned about the impacts of foreign interference on Union democracies. The vast majority of them asked for more transparency regarding interest representation activities, and a coordinated response at Union level.
The Commission received 29 replies to the additional consultations with stakeholders carried out during August and September 2023: 11 replies from CSOs, 15 replies from Member States, and three replies from organisations representing the interest representation industry.
In their replies to the questionnaire, Member States broadly agreed that society has a fundamental interest to be informed about interest representation activities carried out on behalf of third countries. Five Member States specifically expressed the view that it is necessary to put in place harmonised measures enhancing the transparency of interest representation activities seeking to influence decision-making processes. Two Member States highlighted that the legislative proposal should be designed with due regard for fundamental rights. Seven Member States expressed that supervisory authorities should be permitted to ask for specific information from registered entities, subject to safeguards.
In their replies to the questionnaire, nine CSOs expressed a view that the legislative intervention should cover all types of interest representation activities and not be limited to those carried out on behalf of third countries. Three CSOs expressed the need to provide a clear definition of the notion of interest representation. Eight CSOs put an emphasis on the issue of avoiding stigmatisation, explaining that registration should not lead to stigmatisation but to normalisation of interest representation, as legitimacy of interest representation does not depend on whose interest is being represented, but on the ethical standards that are applied when carrying out interest representation activities. Three CSOs specifically referred to the need to ensure safeguards required by the right to an effective remedy and to a fair trial. Four CSOs called for exemptions from the requirement to register for smaller entities.
All industry representatives having replied to the questionnaire are in favour of registration and transparency requirements to be harmonised at Union level. Two industry representatives recommended the Commission to take into consideration all forms of interest representation activities and not to harmonise only those performed on behalf of third countries. All industry representatives agreed that no specific entity should benefit from exemptions for the scope of transparency requirements, in order to avoid risks of circumvention.
• Collection and use of expertise
The Commission has relied on a wide array of expertise to prepare this proposal.
The evidence base is drawn from internal and external research, extensive consultation activities, bilateral meetings with stakeholders, and was supported by an external study.
Relevant work in the European Parliament (including the Special Committee for foreign interference in all democratic processes in the Union, including disinformation6) and the Council7 constituted further input to the Commission analytical process.
In addition to the public consultation, the Commission has engaged in particular in several focus group meetings with relevant stakeholders, with questions specifically tailored for each category.
Guidance from international standard setting bodies, including the Council of Europe or the Organisation for Economic Co-operation and Development (OECD) were also taken into account8. They notably recommended the legal regulation of lobbying activities in the context of public decision-making, as well as transparency and integrity in lobbying and foreign funding, while recalling the importance of respect for fundamental rights.
The study underpinning the initiative includes a literature review confirming the prevalence of foreign interference in democratic processes, which is widespread and has increased over time.
• Impact Assessment
In line with its “Better Regulation” policy, the Commission conducted an Impact Assessment for this proposal9.
The Commission examined different policy options to achieve the general objectives of the proposal. Three policy options of different degrees of regulatory intensity were assessed:
The first option considered a non-legislative intervention. This policy option would have consisted in recommending to Member States a set of measures to be applied to interest representation activities carried out on behalf of third countries. Member States would have been encouraged to provide for similar and proportionate transparency measures aimed at facilitating accountability and oversight and addressing the challenges for democratic processes associated with such activities. Appropriate monitoring of implementation of the Recommendations would have been conducted. A report would have assessed the effects of the Recommendation and considered other measures including possible future legislation. This option was discarded because an intervention relying solely on non-legislative measures would not have prevented the development of further obstacles in the functioning of the internal market for interest representation activities carried out on behalf of third countries. In addition, in the absence of registration applicable Union-wide, this option would have implied higher compliance costs. This policy option would have also left very broad discretion at national level to implement transparency requirements and in particular would not have ensured the implementation of the safeguards provided by the retained option.
The second option considered and ultimately retained, is a targeted legislative intervention focusing on the transparency of interest representation activities carried out on behalf of third countries. Under this scenario, the legislative instrument would define the transparency and accountability requirements applicable to entities carrying out interest representation activities on behalf of third countries. It would require economic operators to keep limited records and provide, in a harmonised manner, limited information to national registers established by Member States on themselves, the activities they carry out, and on the third country entities on whose behalf they act. This option includes safeguards aimed at ensuring a proportionate transposition and enforcement and avoiding risks of stigmatisation.
The third option considered would have consisted of an extensive legislative intervention including enhanced reporting requirements as well as the creation of a prior authorisation or licencing system where Member States could refuse granting a licence on the ground of public security concerns. Such a system would have created an obligation for entities that carry out interest representation on behalf of third countries in the internal market to obtain a licence in order to be able to provide such services for third countries. This was considered likely to raise proportionality issues and could have led to negative impacts for business, in particular for affected smaller economic actors and non-commercial organisations. This option could have had a disproportionate impact on fundamental rights, in particular the freedom of association and the freedom of expression. Additionally, prior authorisation or licensing would have risked being detrimental to the geopolitical interests of the Union: it would have created a risk of retaliatory measures from countries currently engaging in influence activities in the Union if their activities are refused. Similarly, to the extent that this option might have included disproportionate restrictions to the right to freedom of association, the Union’s reputation could have also been negatively impacted.
The retained policy option appropriately addresses the regulatory gaps and differences between Member States while ensuring full compliance with the principles of proportionality and subsidiarity. This approach has also shown to be the most beneficial in terms of impacts.
First, economic impacts are expected to be very limited, with few compliance costs for the required record keeping and registration requirements (aligned as much as feasible with existing business process) and a limited number of concerned entities in the internal market, estimated at between 712 and 1,068 according to different scenarios, as well as limited enforcement costs for national administrations. The public registers to be established by Member States would be supported by publicly accessible IT tools, in line with the 2030 Digital Compass Communication and the need to promote “digital by default” policymaking in Union legislation. The costs incurred are expected to be offset by reducing and avoiding fragmentation across the internal market.
Second, taking into account the tailored nature of the requirements and the important safeguards embedded in the proposal, the social impacts of this proposal are expected to be positive, as the initiative will enhance the transparency and accountability of relevant market players and would improve knowledge about the magnitude, trends and actors of interest representation activities carried out on behalf of third countries. It is also anticipated that the initiative will strengthen public confidence and trust in decision-making and the nature of the regulated services, thereby contributing to the achievement of Sustainable Development Goal n°16 to “Promote peaceful and inclusive societies for sustainable development, access to justice for all and build effective, accountable and inclusive institutions at all levels”.
Specific options on the scope of the intervention were discarded from the outset. Covering only interest representation activities carried out on behalf of certain third countries was discarded due to the operational difficulties in establishing and agreeing on the relevant differentiating criteria, and the increased risk of stigmatisation for the entities carrying out interest representation on behalf of those countries. Covering interest representation activities seeking to influence decision-making in the Union carried out on behalf of any entity was discarded as it would not be targeted enough in view of the pursued aim of the initiative (transparency of covert influence by third country administrations), and would be disproportionate.
Lastly, the initiative is expected to have no environmental impacts, and will therefore respect the “do no significant harm” principle and is consistent with the climate neutrality objective, its intermediate targets and the adaptation objectives as set out in the European Climate Law.
On 17 November 2023, the Regulatory Scrutiny Board issued a ‘positive opinion with reservations’ on the draft Impact Assessment10. Its comments were focused on the narrative underpinning the initiative as well as the presentation of the policy options and their impacts (with an emphasis on the proposed governance structure and the Commission’s role in it). An explanation as to how the comment were implemented are included in the Impact Assessment accompanying this proposal.
• Fundamental rights
The measures are designed in full respect of fundamental rights and freedoms including freedom of expression and information, the right to vote, the right to good administration and the right to freedom to conduct business.
Fundamental rights and freedoms can be restricted only where it is justified by the pursuit of a legitimate public interest under the condition that the restriction is proportionate to the objective pursued. The guarantee of transparency, fairness, impartiality and democratic accountability in the context of public decision-making and public administration, and the prevention of undue covert interference in such decision-making and administration are overriding reasons of public interest.
The proposal imposes limited restrictions to the following fundamental rights enshrined in the Charter of Fundamental Rights of the European Union (hereafter, ‘the Charter’): the right to private life (Article 7), the right to the protection of personal data (Article 8), the freedom of association (Article 12), the freedom of the arts and sciences (Article 13), the freedom of expression and information (Article 11) and the freedom to conduct a business (Article 16).
While these rights are not absolute and limitations may be introduced, any restriction must comply with the requirements set out in Article 52(1) of the Charter, including to be limited to what is necessary and respect the principle of proportionality.
Contents
The proposal imposes limited restrictions on the right to private life (guaranteed both under Article 7 of the Charter and Article 8 of the European Convention on Human Rights (‘ECHR’)) and the right to the protection of personal data (Article 8 of the Charter), insofar as it requires that entities keep and provide certain information to the national authorities and provides for the exchange of such information among competent national authorities as well as public access to a part of that information.
As noted by the Court of Justice of the European Union, provisions imposing or allowing the communication of personal data such as the name, place of residence, or financial resources of natural persons to a public authority must be characterised as an interference in their private life and therefore as a limitation on the right guaranteed in Article 7 of the Charter, without prejudice to the potential justification of such provisions. The same is true for provisions providing for the dissemination of such data to the public11. Furthermore, the Court of Justice has considered that making personal data available to the public in a manner where such data are accessible to a potentially unlimited number of persons constitutes a serious interference with the fundamental rights enshrined in Articles 7 and 8 of the Charter12. At the same time, as reiterated by the Court of Justice, the fundamental rights enshrined in Articles 7 and 8 of the Charter are not absolute rights, and must be considered in relation to their function in society. These rights may be restricted if such restriction is provided by law, it respects the essence of these rights and if it is strictly necessary and proportionate in relation to the objective of general interest recognised by the European Union. In this regard, Article 8(2) of the Charter requires that personal data must be processed for specified purposes and on the basis of consent or some other legitimate interest laid down by law13.
By providing for citizens’ access to information on entities active in the internal market carrying out interest representation activities on behalf of third countries, as well as the third country entities they represent, the proposal seeks to ensure that citizens, public officials and stakeholders such as journalists and CSOs can exercise democratic scrutiny over public administration and public decision-making to ensure that this is done fairly, impartially and transparently, in particular by being able to obtain information about the entities that have access to decision-makers, such as officials and elected representatives. Decision-makers also have special interest in being able to obtain information about the entities which seek to influence them. As voters, citizens are also important decision-makers in their own right, and can also be the target for certain interest representation services.
The proposal aims to enhance the integrity of, and public trust in, the Union’s and Member States’ democratic institutions by ensuring the transparency of interest representation activities carried out on behalf of third countries, and by improving available information and public awareness of the magnitude, trends and actors of interest representation activities carried out on behalf of third countries14. The Court of Justice has recognised that the objective of increasing transparency is an overriding reason in the public interest15. The aim pursued by this proposal therefore constitutes an objective of general interest that is capable of justifying interferences with the fundamental rights enshrined in Articles 7 and 8 of the Charter.
Public access to information on interest representation carried out on behalf of third countries is appropriate for contributing to the attainment of the objective of general interest pursued, since the public nature of that access and the increased transparency resulting therefrom contribute to the creation of an environment of democratic scrutiny and accountability.
The proposal also ensures that the interference with the fundamental rights enshrined in Articles 7 and 8 of the Charter resulting from public access to information on interest representation carried out on behalf of third countries is proportionate and limited to what is strictly necessary. Firstly, the set of data to be made available to the public is limited, clearly and exhaustively defined and fully harmonised throughout the Union. In addition, the personal data made publicly available is limited to the minimum required for citizens to be informed about the entity carrying out interest representation and the activity carried out on behalf of third countries. Information of relevance only to affected decisions makers and the competent national authorities supervising and monitoring compliance with the proposal, would not be made publicly available, to safeguard against the risks of abuse of the information provided.
Secondly, as an additional safeguard to avoid disproportionate disadvantages in individual cases, the principle that the public should have access to information on interest representation carried out on behalf of third countries may be derogated from. The proposal provides that registered entities may request that all or part of the information provided is not made publicly available where there are overriding interests justifying withholding publication.
In view of the above, it must be concluded that the limitations on the right to private life and the right to the protection of personal data provided for by the proposal respect the essence of those rights, genuinely meet a general interest recognised by the Union, and are proportionate and limited to the minimum necessary.
The fundamental right to freedom of association is guaranteed both under Article 12 of the Charter and Article 11 of the ECHR to all associations, including CSOs, interest groups, trade unions and political parties. Freedom of association constitutes one of the essential pillars of a democratic and pluralistic society, in as much as it allows citizens to act collectively in fields of mutual interest and to contribute to the proper functioning of public life16.
Associations must be able to pursue their activities and operate without unjustified interference. The Court of Justice considered that legislation which renders significantly more difficult the action or operations of associations, whether by strengthening the requirements in relation to their registration, by limiting their capacity to receive financial resources, by imposing obligations of declaration and publications such as to create a negative image of them or by exposing them to the threat of penalties, in particular of dissolution, is to be classified as a limitation to the freedom of association17.
The Venice Commission of the Council of Europe considers that an outright ban on foreign funding or requiring prior authorisation from the authorities to receive or use such funds, is not justified18.
The proposal does not ban foreign funding or negatively label activities of CSOs, nor does it create a system of licensing or preauthorisation, requiring CSOs or other associations to apply at the Union-level for a licence to conduct interest representation activities on behalf of a third country entity.
The proposal is limited to providing common transparency and accountability standards regarding interest representation activities carried out on behalf of third country entities and seeking to influence decision-making processes in the Union.
While imposing transparency obligations, which may be considered as having a limited impact on the effective enjoyment of the right to freedom of association inasmuch as the concerned organisations would have to comply with the registration and reporting obligations and pay the related costs – the proposal does not affect the essence of that right.
The common transparency and accountability standards should strengthen democracy by increasing trust in public decision-making processes and institutions by ensuring the transparency of interest representation activities carried out on behalf of third countries, and by improving the information available about and public awareness of the magnitude, trends and actors of interest representation activities carried out on behalf of third countries. The Court has recognised that the objective of increasing transparency is an overriding reason in the public interest19. The Venice Commission of the Council of Europe has indicated that “lobbying activities fall (…) in between the political party activities and ordinary NGO activities. (…). The public has a clear interest in knowing the lobbying actors who have access to government decision-making process for the purpose of influence, including their financial sources whether domestic or foreign”20.
The proposal meets an objective of general interest, in the light of the principles of openness and transparency, which must guide the democratic life of the Union in accordance with the second paragraph of Article 1 and Article 10(3) TEU and in conformity with the democratic values shared by the Union and its Member States pursuant to Article 2 TEU.
Specific safeguards
In addition, as to the proportionality of the limitation, the proposal is limited to what is necessary to meet this objective, and specific safeguards have been introduced. It does not apply indiscriminately to any entity receiving financial support from abroad. First, the proposal focuses on specific interest representation activities carried out for third countries and does not cover funding given by a third country entity (such as a structural grant, donation, etc.) that is unrelated to such interest representation activities21. Second, it only covers interest representation for specific third country actors: third country governments and entities whose action can be attributed to them. By focusing on a specific type of activities carried out on behalf of a specific type of actors, the proposal only targets activities that are genuinely likely to have a significant influence on public life and public debate, the imposition of transparency requirements on which can be justified by the overriding public interest stated.
The proposal is carefully framed to avoid stigmatising CSOs or other non-profit associations. It regulates a specific type of activity – interest representation carried out in the internal market on behalf of third country governments – independent of the nature of the entity carrying out that activity. The transparency requirements apply equally to any organisation.
In addition, the proposal contains strong safeguards to further limit the possibility of stigmatisation. First, the national public registers would have to be presented in a neutral and factual manner and in a way that does not lead to the stigmatisation of the entities included in the national register. Second, Member States would need to ensure that when carrying out their tasks, the national authorities ensure that no adverse consequence arises from the mere fact that an entity is registered. Third, by imposing the full harmonisation of these transparency requirements, the proposal prevents their gold-plating and ensures that registered entities cannot be required to present themselves publicly on the basis of conditions which would have the effect of stigmatising them22. Finally, registered entities would be able to request that all or part of the information is not made publicly available where there are overriding interests justifying the withholding of publication.
Further, the requirements are proportionate and limited to simple record keeping and registration requirements. Member States would be required to transpose and supervise the implementation of these requirements in a manner that is proportionate and does not overburden concerned entities.
- In terms of record-keeping, the concerned entities would be required to keep, for a limited period, information on the identity of the third country entity on whose behalf the activity is carried out, a description of the purpose of the interest representation activity, contracts and key exchanges with the third country entity to the extent that they are essential to understand the nature and purpose of the interest representation carried out as well as information or material constituting key components of the interest representation activity.
- In terms of registration, the concerned entities would only be required to provide limited information on themselves, the activities conducted, and the third country entities they conduct the activities for. The registration would include an approximation23 of the annual amounts received covering all the tasks carried out with the objective of influencing the development, formulation or implementation of the same proposal, policy or initiative. Only the information necessary for the application and oversight of the Directive would need to be updated regularly. Other information would only need to be updated annually.
- Apart from the cases where it is necessary to examine non-compliance with the registration requirements, registered entities can only be requested to share their records with the supervisory authority where, based on objective factors, they are particularly likely to have a significant influence on public life and public debate.
Finally, the proposal contains a comprehensive system of safeguards. Supervision would be entrusted to independent supervisory authorities with clearly established powers, whose requests for further information would need to be motivated and subject to effective judicial remedy. Sanctions would be designed in a way that would avoid a chilling effect on the concerned entities and be subject to appropriate safeguards, including the right to effective judicial review. They would be fully harmonised and limited to administrative fines under a specific ceiling based on the entity’s economic capacity. The proposal would thus ensure that CSOs and other non-profit associations would not be exposed to the threat of criminal penalties or dissolution. Furthermore, sanctions would only be imposed following a prior early warning, except when such infringement amounts to a violation of the prohibition of circumvention.
It follows from the elements above that while the proposal could impose limited restrictions on the freedom of association, these restrictions would follow the legitimate aim of improving the transparency of interest representation activities carried out on behalf of third countries entities and would be strictly limited to the measures that are necessary to meet that objective.
The freedom of the arts and sciences is guaranteed under Article 13 of the Charter. It protects freedom of scientific research, including academic freedom. It ensures the freedom of academic staff and students to engage in research, teaching, learning and communication in and with society without interference or fear of reprisal. Freedom of scientific research encompasses the right to freely define research questions, choose and develop theories, gather empirical material and employ academic research methods, to question accepted wisdom and bring forward new ideas. It entails the right to share, disseminate and publish the results thereof, including through training and teaching. It is the freedom of researchers to express their opinion without being disadvantaged by the institution or system in which they work or by governmental or institutional censorship. It is also the freedom to associate in professional or representative academic bodies24. This proposal does not regulate the freedom to define research questions, nor the right to disseminate and publish the result. The proposal does not contain any ban on international collaboration, including on teaching, research and education activities. It does not affect the institutional autonomy of Union Higher Education Institutions to take independent decisions on their internal governance, including on financial, staffing (ability to recruit independently) and academic matters.
Therefore, none of the proposed measures would affect the essence of the right.
With regards to the freedom of expression and information (Article 11 of the Charter and Article 10 of the ECHR), the proposal would positively contribute to the right of individuals to receive and impart information and ideas without interference by public authority. Citizens would gain fair access to information on interest representation activities carried out for third countries affecting public decision-making, to support their understanding of such activities, strengthen their confidence in the integrity of public decision-making processes and deter manipulative foreign interference, on the basis of safeguards for the rights to personal data of natural persons providing information to national registries, and also in specific situations where organisations registered have an overriding interest justifying publication of information exceptionally to be withheld. In this regard, the legislative measures in the proposal would improve the transparency and accountability of entities that carry out interest representation activities on behalf of third countries and the knowledge about the magnitude, trends and actors of such activities. The fundamental right to receive information would be reinforced as citizens would gain useful information to exercise their democratic rights and hold their public officials accountable.
The proposed measures would not regulate the content or subject of the interest representation activities covered. It does not require transparency in terms of funding of operating expenditure unrelated to an interest representation activity, such as structural grants or donations.
The provision of transparency measures could have a chilling effect on the decision to carry out the interest representation activities covered and could restrict the freedom of expression of entities whose action can be attributed to a third country government (such as a private entity controlled by a third country). As explained with regards to the right to private life, the right to the protection of personal data and the freedom of association, these measures pursue an objective in the general interest capable of justifying interference with this freedom. As noted, safeguards are provided to ensure that interference is proportionate and necessary in all cases.
Article 16 of the Charter recognises the freedom to conduct a business in accordance with Union law and national laws and practices. The harmonised requirements would facilitate and reduce the obstacles for the cross-provision of services by entities carrying out interest representation activities on behalf of third countries, which would support such entities in the exercise of their freedom to conduct business.
Due to the wording of Article 16 of the Charter, the freedom to conduct a business differs from the other fundamental freedoms laid down in Title II of the Charter, such as the freedom of association, the freedom of expression and information and the freedom of the arts and sciences, and may be subject to a broader range of interventions on the part of public authorities to limit the exercise of economic activity in the public interest25.
The proposal imposes limited restrictions on economic activities, insofar as it imposes on the entities the obligation to comply with certain requirements when carrying out interest representation on behalf of third countries. The transparency measures for interest representation activities carried out on behalf of third countries are measures which pursue an objective in the general interest capable of justifying interference with this freedom.
4. BUDGETARY IMPLICATIONS
This proposal has implications in terms of costs and administrative burden for the Commission relating to two expenditure categories. The recurrent costs of staff within the Commission would be in principle covered under the heading “Administrative expenditure” while costs for the necessary extension of the IMI system would be covered under the Citizens, Equality, Rights and Values Programme.
The financial and budgetary impacts are explained in detail in the legislative financial statement annexed to this proposal.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
The Commission will assess the implementation of the initiative at the latest one year after the deadline for transposition of the Directive. At the latest four years after the transposition deadline, the Commission will carry out an evaluation of the Directive, including of its effectiveness and proportionality. This evaluation will explore in particular the need for changes to the scope of the initiative.
• Explanatory documents
To ensure the proper implementation of this Directive, explanatory documents in the form of correlation tables are necessary.
• Detailed explanation of the specific provisions of the proposal
Chapter I sets out general provisions, including the object and purpose of the Directive (Article 1), definitions of the key terms used (Article 2), the scope of the Directive (Article 3) and level of harmonisation (Article 4).
Chapter II contains provisions on the transparency and registration obligations applicable to interest representation activities carried out on behalf of third country entities. In particular, it provides for a possibility to identify third country entities on whose behalf interest representation service is carried out (Article 5), a provision on subcontracting (Article 6), an obligation to keep relevant records (Article 7), and the obligation on entities not established in the Union to appoint a legal representative (Article 8).
In addition, this Chapter also provides for the setting up and maintaining of the national registers to be used for registrations under the Directive (Article 9). Article 10 sets out rules on registration, including the information to be provided (with the detailed list included in Annex I). Article 11 sets out the procedure following registration. In this context, registered entities are to be provided a unique European Interest Representation Number (‘EIRN’) (whose format is established in Annex II), and the competent authorities in other Member States concerned are to be notified of the registration. Article 12 establishes which parts of the information provided by registered entities are to be publicly available (with the bracket sizes for the publication of the annual amounts included in Annex III), as well as a mechanism allowing registered entities to request that all or part of the information provided is not made publicly available where there are overriding legitimate interests preventing publication. Article 13 establishes a yearly publication of data by Member States and the Commission. Article 14 establishes the obligation that registered entities as well as their subcontractors must provide their EIRN when in direct contact with public officials.
Chapter III sets out rules on supervision and enforcement. Article 15 provides information on the competent national authorities for the purposes of the Directive and the independence criteria of the supervisory authority. Article 16 lays down the conditions for information requests by supervisory authorities and the accompanying safeguards, including the applicable thresholds. Article 17 lays down rules on cross-border cooperation and Article 18 lays down rules on cross-border information requests between supervisory authorities. Article 19 sets up an advisory group of representatives of the supervisory authorities assisting the Commission in certain tasks.
This chapter also contains a prohibition of activities intended to circumvent obligations in the Directive (Article 20) and obliges Member States to ensure the applicability of Directive (EU) 2019/19371 to the reporting of breaches of the Directive and the protection of persons reporting such breaches (Article 21). Finally, this chapter provides that Member States are to lay down rules on sanctions for infringements of national provisions adopted to transpose certain provisions of the Directive (Article 22).
Chapter IV contains final provisions, such as rules on the adoption of delegated acts (Article 23), amendments to Directive (EU) 2019/1937 regarding the list of areas covered by whistleblower protection (Article 24), and the reporting and review clause (Article 25). Finally, the remaining provisions in this Chapter concern the transposition of the Directive (Article 26) and its entry into force (Article 27).