Considerations on 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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| dossier | COM(2023)637 - Harmonised requirements in the internal market on transparency of interest representation carried out on behalf of third ... |
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| document | COM(2023)637 |
| date | December 12, 2023 |
(2) Interest representation is not only carried out on behalf of domestic stakeholders but increasingly also by third countries. Ideas from third countries can contribute positively to public debate and are a welcome part of international engagement. However, it is not always easy for public officials or individuals to recognise the involvement of third countries in interest representation activities in the context of their decision-making process, or understand the magnitude, trends and actors behind such activities. Third countries should be understood as countries that are not members of the Union or the European Economic Area.
(3) 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 market for interest representation also includes interest representation activities carried out by third country entities themselves in a way that is comparable to services and are linked to or substitute activities of an economic nature. These activities should be treated in the same way as interest representation services.
(4) Some Member States have adopted specific measures requiring transparency of interest representation activities, often in the framework of transparency registers linked to a public body. Such national measures often include the obligation for entities carrying out interest representation activities to register themselves or their activities or to obtain and retain specific information, for instance about their clients and the services they provide.
(5) Member States’ measures regulating transparency of interest representation activities are very divergent, in particular concerning the record-keeping and registration requirements which apply to entities carrying out interest representation. Some Member States have established mandatory registers aiming, in particular, at ensuring transparency. Others have established voluntary registers, whereas some Member States have no registers for interest representation. There are also considerable variations regarding the granularity of the information provided for transparency purposes, including the type of information required, for instance about the interests represented or about the client. In some Member States information about interest representation must be updated on a regular basis whereas in others the information must be updated every time there is a change in the scope of the interest representation activity carried out.
(6) Such divergences create an uneven playing field and increase compliance costs for entities seeking to carry out interest representation activities in more than one Member State, which may deter the development and provision of new interest representation activities in the internal market. Third countries are likely to seek interest representation in more than one Member State in order to ensure an overall positive policy in their favour across the Union. Such conditions negatively impact economic operators and constitute obstacles to the provision of cross-border interest representation within the internal market. This uneven playing field also directs cross-border interest representation activities away from more regulated Member States towards less regulated ones or where enforcement is limited. Such regulatory arbitrage also presents an opportunity for third-country actors seeking to evade transparency requirements.
(7) In the context of an increased awareness of attempts by certain third countries to influence democratic processes in the Union, some Member States are likely to develop new rules to ensure transparency of foreign influence exerted through interest representation. The obstacles to the provision of such services in more than one Member State created by the fragmentation of the internal market for interest representation activities carried out on behalf of third countries are therefore likely to increase.
(8) The existing national divergences in the measures regulating transparency of interest representation, affecting especially interest representation carried out on behalf of third countries, and the current context of increased awareness of the risks of foreign interference in democratic processes, highlight the need to act at Union level to regulate the provision of interest representation services and engage in interest representation activities carried out on behalf of third countries across the Union, while ensuring a high level of transparency of such activities.
(9) To avoid a situation where Member States seek to unilaterally address their concerns regarding transparency of foreign influence exerted through interest representation and to prevent the emergence of additional obstacles to the provision of cross-border interest representation activities carried out on behalf of third countries resulting from divergent and inconsistent development of national laws, it is necessary to provide for harmonised measures at Union level.
(10) By providing harmonised transparency requirements applicable across the internal market, this Directive aims to establish a coherent and systematic framework to ensure transparency as regards interest representation activities conducted on behalf of third countries with the objective of influencing the development, formulation or implementation of policy or legislation, or public decision-making processes, in the Union.
(11) Providing common transparency and accountability standards and common reporting standards also support democratic accountability and a better common knowledge of interest representation activities conducted with the objective of influencing the development, formulation or implementation of policy or legislation, or public decision-making processes, in the Union, addressing the need for reliable and consistent data. The need to ensure transparency of interest representation activities carried out on behalf of third countries is a legitimate public goal, 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) of the Treaty on the European Union (‘TEU’), in conformity with the values shared by the Union and its Member States pursuant to Article 2 TEU, also supporting the exercise of citizenship rights.
(12) Covert interest representation activities carried out on behalf of third countries are capable of affecting the development, formulation or implementation of the Union’s internal and external policies, including regarding its economic and security interests. This affects democracy more generally, which is a common value of the Union, the securing of which is of fundamental importance to the Union and its Member States. Providing for a harmonised level of transparency across the Union regarding such activities should contribute to enhancing public trust in the Union’s and Member States’ decision-making processes.
(13) While rules on openness and transparency of interest representation activities exist in certain third countries, these rules do not cover activities seeking to influence the development, formulation or implementation of policy or legislation, or public decision-making processes, in the Union. These rules are therefore not adequate to ensure the transparency of interest representation seeking to influence decision-making in the Union.
(14) The measures set out in this Directive are proportionate and limited to what is necessary to ensure transparency of a specific set of activities, namely interest representation activities carried out on behalf of third countries. They impose requirements related to those activities, and do not impose requirements on entities merely because they receive funding from abroad. This Directive focuses on increased transparency when entities carry out interest representation activities on behalf of third countries in the internal market. In particular, this Directive imposes obligations to ensure that the data made publicly available is presented in a factual and neutral way and to ensure that competent national authorities act in a way that no adverse consequence, such as stigmatisation, arises from the fact that an entity has registered in accordance with the provisions of this Directive. It provides for a comprehensive system of safeguards, including effective judicial review to ensure proportionality of the harmonised measures. The measures set out in this Directive are in full compliance with fundamental rights and observe the principles recognised in particular by the Charter of Fundamental Rights of the European Union (‘the Charter’), including the freedom of expression and information, freedom of assembly and association, freedom of scientific research, including academic freedom, the right to the protection of personal data, the right to an effective remedy and the freedom to conduct a business. By achieving a common level of transparency in relation to interest representation carried out on behalf of a third country, the measures set out in this Directive strengthen citizens’ democratic rights as referred to in the Charter.
(15) The harmonised transparency requirements of this Directive should not affect national rules on interest representation activities for entities other than third country entities, nor should they affect the substantive content of such activities nor the substantive rules applicable to public officials when they interact with entities carrying out interest representation activities. They should not affect rules applicable to criminal activities and their detection, investigation, prosecution supervision and sanctioning as established under national or Union law, such as those related to corruption.
(16) In order to harmonise transparency requirements, it is necessary to provide for a common definition of interest representation. To ensure the correct application of the harmonised transparency requirements, the concept of interest representation activities should have a broad meaning. It should cover activities carried out with the objective of influencing the development, formulation or implementation of policy or legislation, or public decision-making processes, including by impacting public opinion, in the Union and its Member States, including at regional and local levels.
(17) A clear and substantial link should exist between the activity and the likelihood that it would influence the development, formulation or implementation of policy or legislation, or public decision-making processes, in the Union. In order to determine the existence of such a link, account should be taken of all relevant factors, such as the content of the activity, the context in which it is conducted, its objective, the means by which it is carried out, or whether the activity is part of a systematic or sustained campaign. The activities covered should not be limited to activities with the objective to promote a change in a given policy, legislation or public decision-making process but should also cover activities aiming to maintain the status quo.
(18) Interest representation could, in particular, be performed through activities such as organising or participating in meetings, conferences or events, contributing to or participating in consultations, parliamentary hearings or other similar initiatives, organising communication or advertising campaigns including through media, platforms, use of influencers in social media, networks and grassroots initiatives, preparing policy and position papers, legislative amendments, opinion polls and surveys, open letters and other communication or information material.
(19) Interest representation could also cover activities carried out on behalf of a third country entity in the context of research and education, such as the dissemination by think tanks of papers recommending or favouring the adoption of a specific public policy. In accordance with the principle of academic freedom and freedom of scientific research, enshrined in Article 13 of the Charter, interest representation should not cover research pursued by researchers in a subject of their choice, the dissemination of the findings of that research, or teaching and education activities that are conducted in accordance with the principle of academic freedom and institutional autonomy, except where the clear purpose of these activities is to influence the development, formulation or implementation of policy or legislation, or public decision-making processes, in the Union and they are carried out on behalf of a third country entity. Where this is not the case, carrying out such activities should not give rise to registration requirements under this Directive.
(20) Activities carried out by officials of third country governments that are connected with the exercise of official authority, including activities related to the exercise of diplomatic relations between States or international organisations, should be excluded from the scope of this Directive. This Directive should also not cover activities carried out by lawyers consisting of the provision of legal advice or the representation in legal, conciliation or mediation proceedings of third country entities and safeguarding their fundamental rights, such as the right to be heard, the right to a fair trial, and the right of defence. Professional advice other than legal advice should also be outside the scope of this Directive, such as procuring a professional or expert study to serve as evidence in support of arguments in court; getting technical or scientific advice on complying with technical legislation or using mediation services of a professional as mediators who are not necessarily certified lawyers. Ancillary activities such as catering, the provision of a venue, the printing of brochures or policy papers, or the provision of online intermediary services within the meaning of Regulation (EU) 2022/20654, such as online platforms services, should not be covered by this Directive.
(21) In order to harmonise transparency requirements, it is necessary to provide for a common definition of providers of interest representation services. Providers of interest representation services could be legal persons governed by private law, natural persons who individually engage in a professional lobbying activity, as well as other natural or legal persons whose principal or occasional occupation is to influence the public decision-making process, including lobbying and public relations companies, think tanks, civil society organisations, private research institutes, public research institutes offering research services, individual researchers and consultants.
(22) For the purposes of this Directive, public officials should be understood as officials of the European Union and officials of Member States holding a legislative, executive, administrative or judicial office at national, regional or local level.
(23) The government or authorities of a third country may be behind the decision of an entity to seek interest representation. This may be as a result of control exercised by the government or public authorities of a third country over the entity, in particular where it has a decisive influence on that entity through economic rights, contractual arrangements, or any other means. It may also result from situations where a third country government or authorities were behind the decision of the entity, in particular by giving instructions or directives. In order to capture such instances, the concept of third country entities should be understood as covering not only the central government and public authorities of third countries but also public or private entities, including Union citizens and legal persons established in the Union, whose actions can be ultimately attributed to that third country. Whether the actions of a public or private entity are to be attributed to a third country government or authority should be determined on a case-by-case basis with due regard to elements such as the characteristics of the relevant entity and the legal and economic environment prevailing in the third country in which the entity operates, including the government’s role in the economy of that country.
(24) An interest representation activity should fall within the scope of this Directive if it is carried out on behalf of a third country entity. This means that it should cover interest representation services provided to third country entities. Furthermore, since a third country government may rely on entities whose actions can be attributed to it to carry out interest representation activities of an economic nature and thus comparable to an interest representation service, the Directive should also cover such activities. It may thus also cover in-house interest representation by third country entities. This Directive should cover interest representation activities carried out on behalf of third country entities directed to natural or legal persons or carried out or brought to the public domain in one or several Member States.
(25) This Directive should not cover activities supporting or aligned with the interests of a third country but without any link to that third country. This includes activities that constitute a manifestation of the freedom of expression and of the freedom to impart and receive information and ideas, or a manifestation of academic freedom, such as activities carried out by natural persons acting in a personal capacity, or journalists working for third country media whose actions cannot be attributed to a third country or do not qualify as interest representation as defined by this Directive. The provision of media services as defined in Article 2 of Regulation (EU) XXXX/XXXX of the European Parliament and of the Council5 and the provision of audiovisual media services as defined in Article 1 of Directive 2010/13/EU of the European Parliament and of the Council6 will not fall within the scope of application of this Directive. However, interest representation activities carried out on behalf of third country entities within the meaning of this Directive by media service providers will be covered.
(26) For the purpose of interest representation services provided to a third country entity, any consideration received in return for the interest representation service in question should be considered as remuneration for the purposes of this Directive. This could cover financial contributions, such as loans, capital injection, debt forgiveness, fiscal incentives or tax exemption, received in return of an interest representation activity. Remuneration could also include benefits in kind, such as the provision, construction and maintenance of office space in return for an interest representation service. In such situations, the interest representation services provider would be responsible for estimating the value of the benefit received, for example by using the market rate.
(27) The Court has held that the essential characteristic of remuneration lies in the fact that it constitutes consideration for the services in question. Contributions to the core funding of an organisation or similar financial support, for example provided under a third country donor grant scheme, 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.
(28) To ensure a comprehensive and transparent overview of the amounts used for an interest representation activity as a whole, annual amounts should, for the purpose of this Directive, include the total annual remuneration received from the third country entity for the provision of an interest representation service, and where no remuneration is received, the estimate of the annual costs related to the interest representation activity carried out. For the same reasons, these amounts should include the costs for subcontractors and ancillary activities.
(29) Subcontractors may qualify as an entity carrying out interest representation on behalf of third country entities and thus fall within the scope of the obligations set out in this Directive. To reduce administrative burden and to avoid double-counting of remuneration, as well as to ensure information throughout a chain of contracts, entities carrying out interest representation activities should ensure that their contractual arrangements with subcontractors include information that the interest representation activity is carried out on behalf of a third country entity, as well as an obligation to pass on that information in cases where the activity is further subcontracted. On that basis, subcontractors should be exempted from the obligation to register and keep records, and where applicable, designate a legal representative, laid down in this Directive.
(30) To facilitate compliance with the registration requirements of this Directive, providers of interest representation services should be entitled to ask the entity on whose behalf the service is provided to declare whether it is a third country entity. Providers of interest representation services should make the best possible use of this right in order to make an informed choice enabling them to fully comply with the requirements set out in this Directive when exercising their activities.
(31) In order to support accountability and promote awareness of the third country interests they represent, entities carrying out interest representation activities on behalf of a third country entity should be required to keep certain records. These records should include a description of the purpose of the interest representation activity, in particular the decision-making process it seeks to influence and the result it seeks to obtain. Records should also include the identity of the third country entity, which in cases where the entity is a natural person should be understood as the natural person’s full name. They should also include copies of contracts and key exchanges essential to understanding the nature, and purpose of, and financial arrangements behind the interest representation activity, as well as information or material constituting a key component of the activity, such as position papers shared with public officials.
(32) Entities carrying out interest representation on behalf of third countries should not be required to keep the personal data contained in those records longer than necessary to ensure that the supervisory authorities can carry out their supervisory and enforcement tasks. Any such records should be kept long enough to enable supervisory authorities to obtain, in justified cases, the records kept on the third country entity and the interest representation activity as well as the annually aggregated records.
(33) In order to allow for effective oversight, entities carrying out interest representation activities on behalf of a third country entity that do not have a place of establishment in the Union should be required to designate a legal representative established in the Union and ensure that their designated legal representative has the necessary powers and resources to cooperate with the relevant authorities.
(34) In order to provide for harmonised transparency requirements across the internal market, entities carrying out interest representation activities on behalf of a third country entity should be required to register in national registers at their place of establishment. Subsequent updates to an existing registration should also take place in that national register. These registers should be set up, operated and maintained by the Member States. Member States may make use of their existing national registers for the purpose of this Directive, provided that the requirements of this Directive are complied with. In order to respect national divisions of competence, Member States should be entitled to set up more than one such registers. In such cases, Member States should establish rules indicating in which national register entities carrying out interest representation activities on behalf of third countries should register. Logs of personal data processing activities within the national registers should not be kept longer than necessary to monitor the lawfulness of access to personal data and should therefore be limited to a year.
(35) Pursuant to Regulation (EU) 2018/1724 of the European Parliament and of the Council7, information on the registration obligations and formalities established by this Directive is available via the Single Digital Gateway which, through the Your Europe web portal, sets up a one-stop shop that provides businesses and citizens with information about rules and procedures in the Single Market, at all levels of government and direct, centralised, and guided access to assistance and problem-solving services as well as to a wide range of fully digitised administrative procedures. In addition, the procedure for registration is fully online and organised in accordance with the ‘once only’ principle to facilitate the reuse of data.
(36) Where the entity carrying out interest representation activities on behalf of a third country entity is established in several Member States, registration should only take place in the Member State where the entity has its main establishment. The main establishment of the entity should be understood as the place where the entity has its head office or registered office within which the principal economic activities and operational control are exercised.
(37) The information to be included for the purpose of this Directive in the registration should be limited to what is necessary to ensure the transparency of the interest representation activities carried out on behalf of third countries and the effective enforcement of this Directive. Such information should include data concerning the entity carrying out interest representation activity itself, the third country on whose behalf the activity is performed, the identity of subcontractors as defined in this Directive carrying out interest representation activities, and information concerning the specific interest representation activity carried out. Where applicable, it should also include a reference to media service providers or online platforms where advertisements are placed as part of the interest representation activity. The registration should not concern information on the amounts or origin of financial support received that is unrelated to an interest representation activity.
(38) To ensure that the information provided for the purposes of registration continues to allow the authorities responsible for the national registers to correctly and precisely identify the third countries on whose behalf interest representation is being carried out and how much is being spent on those activities, the Commission should be empowered to adopt delegated acts adapting the standard set of information.
(39) Entities carrying out interest representation activities on behalf of third countries, registered in a national register, should update information in the national register at least once a year. However, in view of the importance of the accuracy of the information held in such national registers for the application and oversight of the Directive, any changes or additions to the contact information of the registered entity should be made more quickly, and in any event within a reasonable period of time.
(40) The authority responsible for each national register should ensure that the information provided is complete and does not contain manifest errors. That should not involve an in-depth evaluation of the accuracy or truthfulness of the information provided and should not be understood as an official endorsement of the accuracy of the information included in the national register. A refusal to include an entity in the register due to incomplete or manifestly incorrect information should not prevent that entity from submitting a new registration request.
(41) Entities carrying out an interest representation activity on behalf of third countries should be able to demonstrate that they have complied with the registration requirements. Once registered, an entity should be provided with a copy of the information included in a national register and a unique European Interest Representation Number (‘EIRN’). The EIRN should serve as a means to facilitate the identification across the Union of entities registered pursuant to this Directive. The composition of the EIRN should therefore allow the identification of the Member State of registration and the specific national register in which registration has taken place. The choice of the code identifying the national register of registration should appear logical to persons familiar with the organisation of the Member State concerned.
(42) Once they are registered in the Member State of their place of establishment, registered entities should not be required to register in other Member States, including when they launch an interest representation activity there. However, to facilitate the access by public officials to information on entities carrying out interest representation activities with whom they might interact, other Member States where such activities will be carried out should include, in their own national registers, the names of the registered entities concerned, their EIRN, and the link to the information contained in the national register of registration made publicly available.
(43) To ensure compliance with the registration requirement, supervisory authorities should, where they have reliable information that an entity failed to register, for example based on a report by a whistleblower, be able to ask the entity to provide the information strictly necessary to establish whether it falls within the scope of this Directive. Such information should typically not extend beyond information directly capable of demonstrating whether it falls within the scope of this Directive. It could consist of the information of the type covered by the record-keeping obligation, including any declarations obtained as to whether an entity on whose behalf an interest representation service is provided is a third country entity. Where possible, the request should be limited to information that should be in the possession of the entity. In addition, supervisory authorities should, where they have reliable information of possible non-compliance with the obligations flowing from registration, be able to ask an entity to provide the information necessary to investigate such possible non-compliance. Such information should typically not extend beyond information directly capable of demonstrating the completeness or accuracy of the information provided as part of the requirement to register and to update. Where possible, the request should be limited to information that should be in the possession of the registered entity. Any such requests should contain a statement of reasons, the information sought and the reasons for its relevance, and information on judicial review procedures available. Such requests should be without prejudice to national authorities’ powers to investigate any conduct liable to constitute criminal offences as provided in national law and Union law.
(44) Democratic accountability is a pillar of well-functioning democracies. By providing for citizens’ access to information on entities carrying out interest representation activities on behalf of third countries active in the internal market, as well as the third country entities they represent, this Directive enables citizens and other interested stakeholders to exercise their democratic rights and responsibilities, including their ability to exercise democratic scrutiny in full knowledge of whose interest are being served by the interest representation activities to which they, or their elected representatives, may be exposed. Public scrutiny by citizens and interested stakeholders on issues affecting the democratic sphere supports democratic checks and balances. Democratic accountability also supports citizens’ empowerment, allowing them to express and exercise their democratic choices, including when they vote. As voters, citizens are important decision-makers in their own right, and as such, they can be the target for certain interest representation services.
(45) To ensure proportionality, when personal data is made publicly available, it should be limited to what is strictly necessary to the purpose of informing citizens, their representatives and other interested parties about interest representation activities carried out on behalf of third countries. In addition, information on the annual amounts declared should be made publicly available using more general ranges than the ones used for the submission of information to national registers, to ensure the level of detail necessary for the purpose of informing citizens, their representatives and other interested parties. Information that is of relevance only to supervisory authorities, such as the contact details of the persons responsible for a registered entity, should not be made publicly available.
(46) To facilitate access by citizens, the information should be presented in a format which is easily accessible and machine readable, clearly visible and user friendly, including by using plain language. Information should be considered machine readable if it is provided in a format that software applications can automatically process, without human intervention, in particular for the purpose of identifying, recognising and extracting specific data from it. Information should be made available in accordance with the accessibility requirements under Union law to ensure accessibility for persons with disabilities, and in particular, via more than one sensorial channel when technically feasible. Registration may take place in a Member State different to the one in which an interest representation activity is carried out. The accessibility of information to citizens across the Union is substantially improved where that information is made available in at least one official language of the Union broadly understood by the largest possible number of Union citizens. Member States should be encouraged to use technical solutions which would allow translation of as much information as possible into such a language. Member States should however not be required to translate the information provided by registered entities.
(47) To ensure the protection of individuals that may be exposed by the publication of specific information to a violation of their fundamental rights, such as retaliations against individuals working for a registered entity operating in a third country, Member States should ensure that supervisory authorities are able, upon request, to restrict the publication of whole or part of the information entered in the national register. The registered entity should demonstrate that, taking into account all the relevant circumstances of the individual cases, publication should be restricted due to legitimate interests such as a serious risk that the publication would expose an individual to a violation of their fundamental rights in particular as protected by Articles 1 (Right to human dignity), 2 (Right to life), 3 (Right to the integrity of the person), 4 (Prohibition of torture and inhuman or degrading treatment or punishment) or 6 (Right to liberty and security of the Charter, such as kidnapping, blackmail, extortion, harassment, violence or intimidation), or such as trade secrets. The analysis should take into account risks to the physical integrity of employees, or any individuals working for or affiliated to a registered entity. Legitimate interests should also cover risks to individuals that benefit from the activities of the registered entity. Any decision by the supervisory authority should take into account the objectives of this Directive and should be subject to judicial review procedures in the Member State of registration. The decisions by the supervisory authority and where applicable judicial jurisdiction, should be taken promptly. To enable the public to know that the registered entity has complied with the registration requirement established by this Directive where a restriction of publication is granted, the data field in the national register should be replaced by a mention indicating that the publication has been limited on grounds of legitimate interest.
(48) To support the identification by public officials of interest representation activities carried out on behalf of third countries, registered entities and their subcontractors should provide the EIRN in their direct contacts with such persons. The EIRN should be presented proactively in each contact with public officials.
(49) Member States should designate one or more authorities or bodies in charge of setting up and maintaining the national registers and processing requests for registration submitted by entities carrying out interest representation activities on behalf of third countries. They should also designate one or more supervisory authorities in charge of supervising the compliance with and enforcing the obligations laid down in this Directive as well as of the exchange of information with the supervisory authorities of other Member States and the Commission. To support the upholding of fundamental rights and freedoms, the rule of law, democratic principles and public confidence in the oversight of these entities, it is necessary that supervisory authorities are impartial and independent from external intervention or political pressure and are appropriately empowered and resourced to effectively monitor and take the measures necessary to ensure compliance with this Directive.
(50) In order to prevent stigmatisation of the registered entity, the data made publicly available should be presented in a factual and neutral way. In addition, when carrying out the tasks assigned to them under this Directive, competent national authorities should ensure that no adverse consequences arise from the mere fact that an entity is a registered entity. In particular, the publication should not be presented with or accompanied by statements or provisions that could create a climate of distrust with regard to the registered entities, apt to deter natural or legal persons from Member States or third countries from engaging with them or providing them with financial support. Examples of such stigmatising actions include negatively labelling the registered entities or making disparaging statements seeking to undermine registered entities’ credibility and legitimacy by implying that registered entities are seeking to unlawfully influence democratic processes.
(51) Where a third country spends particularly large amounts on interest representation, or where an entity receives particularly large amounts of remuneration from one or several third country entities, there is heightened likelihood that the interest representation activities carried out would successfully influence the political choices of a Member State or of the Union as a whole. In such cases, supervisory authorities should be able to request additional information from entities carrying out interest representation activities carried out on behalf of such third countries in order to exercise greater scrutiny.
(52) To ensure a proportionate oversight of this Directive, supervisory authorities should be able to ask an entity carrying out interest representation activities on behalf of third country entities to provide the records necessary to investigate possible non-compliance with the registration requirement set out in this Directive. For that purpose, supervisory authorities should be able to act on their own motion or on the basis of a report by a whistleblower or the supervisory authority of another Member State.
(53) Supervisory authorities should cooperate both at national and at Union level. Such cooperation should facilitate the swift, secure exchange of information. For the purpose of exercising their supervisory tasks, supervisory authorities should be able to request, from the supervisory authority in the Member State of registration, information provided in the registration, including that which is not public, and in specific cases the records kept by the entity, as well as analyses carried out. Supervisory authorities and the Commission should cooperate to ensure the implementation of the Directive. To better understand the size and the distribution of the overall interest representation activities that are carried out on behalf of third countries in the Union. The Commission should be able to request, from supervisory authorities, aggregate data based on the information provided by entities carrying out interest representation carried out on behalf of third country entities in their registration. In order to comprehensively monitor the modalities and the features of the interest representation activities carried out on behalf of third countries that are carried out in the Union, such aggregate data may include information that is not publicly available in the registers including personal data to the extent that is necessary to ensure an effective monitoring.
(54) To further limit administrative burden, administrative cooperation and exchanges of information between the national authorities, as well as the supervisory authorities and the Commission takes place through the Internal Market Information System (‘IMI system’) established by Regulation (EU) 1024/2012 of the European Parliament and of the Council8 for administrative cooperation between Member States’ competent authorities in Single Market related policy areas. The interoperability of the IMI system and the national registers should be ensured in line with the European Interoperability Framework.
(55) For the purposes of assisting the Commission in its task to ensure effective cooperation among competent national authorities, and the complete and effective implementation of this Directive, an advisory group should be established. The advisory group should include a representative from the supervisory authorities of each Member State. The advisory group should advise on the implementation of the Directive, including on the requirement to avoid that adverse consequences arise from the mere fact that an entity is registered pursuant to the requirements laid down in this Directive. It should adopt opinions, recommendations or reports that should be made public by the competent national authorities designated by Member States. In order to ensure legal certainty for entities that may fall in the scope of the Directive, the advisory group should, in particular, advise the Commission on possible guidance on the scope of the Directive, the notion of third country entity, and activities whose object or effect of which is to circumvent obligations in this Directive. Cooperation should be ensured as appropriate with the EU network against corruption.
(56) Whistleblowers can bring new information to the attention of supervisory authorities that can help them detect infringements of this Directive, including attempts to circumvent its obligations. In order to ensure that whistleblowers are able to alert the supervisory authorities to actual or potential infringements of this Directive and to protect the whistleblowers from retaliation, Directive (EU) 2019/1937 of the European Parliament and of the Council9 should be applicable to the reporting of breaches of this Directive and to the protection of persons reporting such breaches.
(57) Reporting of breaches by whistleblowers can be key to prevent, deter, or detect breaches of rules in the area of transparency and supervision of the provision of services provided in the internal market with relevance to public decision-making, such as interest representation services. Given the public interest in shielding public decision-making from such breaches, and the possible harm to citizens’ trust in democratic institutions that can be caused by such breaches, and in view of the fact that the provisions of this Directive do not fall within the policy areas set out in Article 2(1)(a) of Directive (EU) 2019/1937, it is necessary to adapt those areas. Article 2 and the Annex to Directive (EU) 2019/1937 should therefore be amended accordingly.
(58) The participation, knowingly and intentionally, in activities the object or effect of which is to circumvent obligations in this Directive, notably registration requirements, should be prohibited. Such activities include covert remuneration for a representation service, the setting up of companies with a view to obfuscating links to third country governments, or the artificial distribution of activities across multiple entities with a view to falling short of the thresholds established by this Directive.
(59) In order to deter non-compliance with the requirements of this Directive and to sanction the same, Member States should ensure that any infringements of the obligations laid down in this Directive are accompanied by effective, proportionate and dissuasive administrative fines. Sanctions should not be criminal in nature. Sanctions should take into account the nature, recurrence and duration of the infringement in view of the public interest at stake, the scope and kind of activities carried out, and the economic capacity of the entity carrying out interest representation activities. Sanctions should in each individual case be effective, proportionate and dissuasive, with due respect for fundamental rights including freedom of expression, association, academic freedom and freedom of scientific research, safeguards and access to effective remedies, including the right to be heard. They should follow a prior early warning issued by a supervisory authority, except when such infringement amounts to a violation of the prohibition of circumvention.
(60) In order to amend the thresholds for requesting further information, to modify the list of information to be provided when submitting a request for registration, and to modify the list of information to be included in the reports published by Member States, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making10. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States’ experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.
(61) In order to ensure the effective monitoring of the application of this Directive, the Commission should report on its implementation at regular intervals, where relevant in connection with reports on other relevant Union legislation. In accordance with paragraphs 22 and 23 of the Interinstitutional Agreement of 13 April 2016 on Better Law-Making, the Commission should evaluate this Directive in order to assess its effects and the need for any further action.
(62) Since the objectives of this Directive, namely the contribution to the proper functioning of the internal market for interest representation activities, cannot be sufficiently achieved by the Member States and can rather be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 TEU. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve those objectives.
(63) In particular, a Union-level system supports competent national authorities in their oversight functions and other stakeholders to exercise their role in the democratic process and increases the overall resilience of democracies in the Union against interference by third countries. There is an added value from addressing the transparency of interest representation activities carried out on behalf of third countries to influence at Union level, as the likely cross-border nature of such activities requires a coordinated approach across multiple levels and sectors. By collaborating and sharing information, Member States are able to obtain a better understanding of the extent of the phenomenon, which helps to avoid that third countries are able to exploit regulatory differences or loopholes.
(64) When implementing this Directive, Member States should seek to minimise the administrative burden on the entities concerned, and in particular those of micro, small and medium-sized enterprises within the meaning of Article 3 of Directive 2013/34/EU of the European Parliament and of the Council11.
(65) Regulations (EU) 2016/67912 and (EU) 2018/172513 of the European Parliament and of the Council apply to the processing of personal data carried out in the context of this Directive, including the processing of personal data to maintain the national register or registers on entities carrying out interest representation activities on behalf of third country entities, to access personal data in such national register or registers and to exchange personal data in the context of administrative cooperation and mutual assistance between Member States under this Directive, including the use of IMI, and the keeping of records in accordance with this Directive’s record-keeping obligations. Any processing of personal data for such purposes should amongst others comply with the principles of data minimisation, data accuracy and storage limitation and fulfil the requirements of data integrity and confidentiality. Member States should establish the measures ensuring lawful and secure processing as regards the processing of personal data contained in their national register or registers, in accordance with applicable legislation on the protection of personal data.
(66) This Directive does not affect in any way the application of Union restrictive measures adopted pursuant to Article 29 TEU and Article 215 TFEU. In particular, it 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.
(67) This Directive should not affect the prerogatives of the Commission to initiate and conduct investigations of distortive foreign subsidies within the meaning of Regulation (EU) 2022/2560 of the European Parliament and of the Council14.
(68) In accordance with the Joint Political Declaration of 28 September 2011 of Member States and the Commission on explanatory documents15, Member States have undertaken to accompany, in justified cases, the notification of their transposition measures with one or more documents explaining the relationship between the components of a directive and the corresponding parts of national transposition instruments. With regard to this Directive, the legislator considers the transmission of such documents to be justified.
(69) The European Data Protection Supervisor was consulted in accordance with Article 42(1) of Regulation (EU) 2018/1725 and delivered an opinion on XXXX16.