Explanatory Memorandum to COM(2017)114 - European business statistics amending Regulation (EC) No 184/2005 and repealing 10 legal acts in the field of business statistics - Main contents
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| dossier | COM(2017)114 - European business statistics amending Regulation (EC) No 184/2005 and repealing 10 legal acts in the field of business ... |
|---|---|
| source | COM(2017)114  |
| date | 06-03-2017 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
The need for statistical information on businesses for policymaking and other purposes is growing. The European Statistical System (ESS) 1 is expected to provide high-quality statistical data in this area, in a timely way and with comparability across the Member States. The disseminated ESS business statistics should be the basis for decisions about the market economy based on knowledge and innovation, for improving access to the single market for small and medium enterprises, and for stimulating entrepreneurship and competitiveness.
The draft Regulation on European business statistics, amending Regulation (EC) No 184/2005 and repealing 10 legal acts in the field of business statistics (FRIBS) is part of the REFIT Programme, the European Commission's regulatory fitness and performance programme for making EU law simpler and reducing unnecessary regulatory costs, which has identified business statistics as one of its priority areas. The draft Regulation envisages the integration of statistical requirements and legal acts for business statistics by streamlining and simplifying them and reducing the burden on businesses.
The current system for producing European business statistics is fragmented into separate domain-specific regulations. This leads to inconsistencies in the data collected and inefficiencies in their production. FRIBS will provide a common legal framework for the production and compilation of ESS business statistics. It is expected to deliver: better quality ESS business registers, common definitions to be used in all the statistical domains it covers, the exchange of identifiable micro-data and an integrated data structure. This should lead to a rationalisation of national statistical production processes, better use of existing data sources, and a reduction of the statistical burden on respondents when ESS business statistics are compiled. In addition, FRIBS will create harmonised data structures and common data quality standards which will make it possible to link different business statistics, making the information collected even more valuable.
• Consistency with existing policy provisions in the policy area
Reliable and high-quality statistics are becoming increasingly necessary to enable policymakers and businesses to take evidence-based decisions. However, in the current context of mounting pressure on human and financial resources available for producing statistics, the ever-increasing amount of high-quality statistics needed has become a major challenge for the ESS. At the same time, the ESS is facing demands from data providers (respondents – businesses) to reduce administrative burden. In order to meet these challenges, the Commission (Eurostat) has recently taken a number of initiatives aiming to ensure more efficient production of European statistics and to reduce the burden on respondents by simplifying and improving coordination and collaboration within the ESS. One example is the 2015 amendment of Regulation (EC) No 223/2009 on European statistics, which clarified the governance of the ESS and strengthened coordination and collaboration instruments at both EU and national levels. Other similar initiatives, for example in the area of social statistics, are included in the Commission's REFIT programme and aim to simplify and streamline the production of European statistics within targeted domains.
Business statistics are one of the three ESS pillars in the European Statistical Programme for 2013-2017 2 . Each pillar covers a set of primary statistics which serves multiple needs and is the input for accounting systems (e.g. national accounts or the balance of payments) as well as the basis for indicators for different policy needs. The ESS Vision 2020, adopted by the ESS Committee in May 2014, is the ESS’ strategic response to the challenges related to official statistics. It states that it should be possible to use data across statistical domains to be able to better analyse emerging phenomena (e.g. globalisation) and to better serve high-impact EU policies. The data output should be based on efficient and solid statistical processes. The Programme for the Modernisation of European Enterprise and Trade Statistics (the MEETS programme) prepared the implementation of the ESS Vision 2020 in the area of business and trade statistics. Several actions were launched with the objectives of integration, simplification, data linking and the development of harmonised methodologies.
• Consistency with other Union policies
One of the aims of the FRIBS is to provide fit-for-purpose statistics that help formulate and monitor EU policies that affect businesses.
More specifically, monitoring progress towards the 10 priorities set by the European Commission, in particular related to jobs, growth and investment, the digital single market, the internal market and EU trade agreements, requires harmonised and comparable European statistics that:
• decision makers can use to design policy initiatives that meet Commission objectives and to monitor their implementation;
• the media can use when covering the areas identified in the 10 priorities.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
Article 338 of the Treaty on the Functioning of the European Union provides the legal basis for European statistics. Under this Article, the EU legislators shall adopt measures for the production of statistics where necessary for the performance of the activities of the Union.
• Subsidiarity (for non-exclusive competence)
The subsidiarity principle applies insofar as the proposal does not fall within the exclusive competence of the EU. In the European Statistical System, Member States ensure the actual compilation of statistical information at national level. For the compilation of business statistics at European level, a harmonised methodology and the definition of a common output to be delivered by Member States are indispensable. Only the Commission can coordinate the necessary harmonisation of statistical information across Member States and produce business statistics at the European level on the basis of the data compilation carried out by the Member States. Consequently, the European Union may adopt measures in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union (TEU). Thus, the proposed EU action is fully justified. This can be fully achieved only by way of an EU action.
Moreover, the better monitoring of globalisation, based on a better knowledge of Multinational Enterprise Groups, can only be done at European level.
• Proportionality
Contents
- The proposal is compliant with the proportionality principle for the following reason(s):
- The main outcome of the respective consultations can be summarised as follows:
- The impact assessment identified two problem drivers:
- To address these problem drivers, the following options were assessed:
- While expressing a positive opinion, the Regulatory Scrutiny Board had three main recommendations for improvement of the Impact Assessment Report. Namely:
- The proposal covers other important elements of the modernisation of European business statistics in Chapter VII:
It will ensure the quality of European business statistics including their comparability, relevance and responsiveness in a harmonised manner across Member States by applying the same principles. It will lead to greater cost-effectiveness while respecting the specificities of Member States' systems.
The standardisation of concepts and methods, the removal of duplications, and the opportunity to make greater use of a combination of sources other than surveys, should reduce the financial and administrative burden on respondents. The FRIBS Regulation is to a large extent output-oriented meaning that the Member States are free in their choice of input (data sources) as long as they deliver the output (statistics) that comply with agreed definitions and agreed quality standards. Member States are encouraged to use, where possible, existing administrative sources or innovative sources such as big data to respond to the statistical needs. New data requirements introduced in the FRIBS Regulation have been tested by means of pilot studies in order to demonstrate their feasibility.
The current EU legislative acts on business statistics have been amended several times over the past years. This has showed that a Regulation establishing a common framework for the process of collecting, processing and disseminating statistical data on businesses can make these processes more efficient (cost/benefit) and effective.
Therefore, in accordance with the principle of proportionality, the proposed Regulation confines itself to the minimum required to achieve its objectives and does not go beyond what is necessary for that purpose.
• Choice of the instrument
Proposed instrument: a Regulation.
Given the objectives and content of the proposal, a Regulation is the most appropriate instrument.
The selection of the appropriate instrument depends on the legislative goal. Given the information needs at European level, the trend with European statistics has been to use regulations rather than directives as the basic acts. A regulation is preferable because it lays down the same law throughout the European Union, leaving the Member States with no leeway to apply it incompletely or selectively. It ensures the comparability of data within the EU for European statistics of high quality. It is directly applicable, which means that it does not need to be transposed into national law. The use of a regulation is in line with other European statistical basic acts adopted since 1997.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
As this initiative started prior to the adoption of the Better Regulation guidelines, there has been no such specific evaluation (along the five evaluation criteria) of the current situation done to support it. Based on Commission standards, Eurostat’s system for evaluating existing legislation, including the evaluation of the European Statistical Programme 3 was followed, and formed a central part of the whole process. In addition user surveys are conducted every year in order to obtain better knowledge about users, their needs and their satisfaction with the services provided by Eurostat. Evaluation results are used by Eurostat to improve the process of producing statistical information and its statistical output. They feed into various strategic plans, such as the work programme and the management plan.
• Stakeholder consultations
The main categories of stakeholders for European business statistics are data users (other Commission services, national statistical authorities monitoring the business sector, National Central Banks and the European Central Bank, professional associations and researchers), data compilers (National Statistical Institutes (NSIs), but also other compilers such as National Central Banks) and data provider (enterprises (including SMEs)).
The first round of stakeholder consultations covered the FRIBS infrastructural elements (such as the Business Registers, micro-data exchange, quality issues and confidentiality) and took place between July and October 2014. The second round was launched in the second half of 2015 and focussed on the changes to the data requirements to be introduced by FRIBS. The third round finally collected stakeholders' opinions on the modernisation of Intra-Union trade in goods statistics (Intrastat) and took place in autumn 2015 and in the first quarter of 2016. Each round consisted of a targeted consultation of the data compilers (National Statistical Authorities) and a public consultation of the data providers (businesses). The first two rounds included also a public consultation of the data users. The results of the public consultation are detailed in two reports 4 .
• Data users signalled problems as to the relevance of the currently available business statistics and more particularly difficulties in combining data from different business statistical domains due to inconsistencies and lack of information on issues such as the services sector and globalisation. A single harmonised regulation would in their view increase the consistency of the business statistics.
• Data producers (NSIs) are concerned with the increased production costs linked to fulfilling new data requirements resulting from FRIBS, but which respond to long-standing user needs.
• Data providers are concerned with an increase in burden as a result of additional data needs. The targeted consultations provided evidence that the modernisation of intra-Union trade statistics would more than offset this increase..
• Collection and use of expertise
The FRIBS project has been discussed in numerous meetings with national experts covering not only business statistics, but also macro-economic statistics, National Accounts and Balance of Payments statistics. Progress reports on the project have been regularly presented to the European Statistical System Committee (ESSC) established by Regulation (EC) No 223/2009.
The stakeholders' consultations, described above, which include data users and data providers have been an additional source of external evidence used.
• Impact assessment
This proposal is accompanied by an Impact Assessment Report which identifies the problems, envisages different policy options to address them and finally assesses the impact of the policy options.
The Regulatory Scrutiny Board gave a positive opinion of the Impact Assessment Report in June 2016 ( ec.europa.eu/smart-regulation/impact ).
Reduced relevance and responsiveness of European business statistics
Legal fragmentation in business statistics
• Option A - Baseline scenario – no EU policy change;
• Option B - Implement legislative actions limited to certain business statistics domains, including alternative options for the modernisation of Intrastat.
• Option C - Modernisation of business statistics in a single framework (FRIBS) using a mix of measures, including alternative options for the modernisation of Intrastat.
Based on the impact assessment Option A does not look acceptable as policy makers and users of data would be increasingly dissatisfied with the data disseminated and turn to other data sources.
Option B tackles the modernisation of the current system of European Business Statistics to a certain extent, in particular for the upgrading of the data production and data output for policy and other users. It is also true for the modernisation of the Intrastat system which should lower the burden on data providers. However, this option leaves a series of current deficiencies unsolved. First of all, keeping 10 separate legislative acts for Business statistics means that more efforts are needed to reduce inconsistencies and to preserve the coherence of data and indicators produced for policy users in the future and also creates a high work load for the management and updates of these pieces of legislation. The improvement actions proposed in this option do not really create more agility and responsiveness to changing policy and other user needs.
Option C is the most advanced and most forward-looking one as it modernises the European business statistics system in making them fit for the future. European business statistics will be put into one single legal framework FRIBS which will implicitly guarantee much higher consistency of business statistics (e.g. in terms of timing of changes and harmonisation of definitions etc.). This allows for the drawing of higher benefits from the ESS system as a whole and maximises the value added of the EU at the same time. The frontiers between the various statistical domains will diminish or even completely disappear. This alignment will make it possible to serve the policy needs much better as more streamlined indicators and combinations of indicators can be disseminated. It will also increase the agility of the system not possible under the two previous options. New policy needs can be accommodated with shorter delays and be embedded in a functioning and well-designed system. Moreover, in contrast with Option B the costs for adaptations of the statistics disseminated and of the underlying legal framework are minimised under this preferred Option C as all necessary revisions are introduced more easily in one go. Most importantly, Option C has – by far - the highest potential for reducing the burden on enterprises.
To conclude, all these advantages clearly favour Option C. It responds best to the objectives of the REFIT programme by simplifying, reducing unnecessary administrative burden and streamlining the heterogeneous and inconsistent legal texts currently governing business statistics into one coherent legal framework.
While expressing a positive opinion, the Regulatory Scrutiny Board had three main recommendations for improvement of the Impact Assessment Report. Namely:
1) The range of options initially presented and analysed was considered not complete because the consultation process on the possible sub-options concerning the modernisation of the intra-Union trade statistics continues after the initial submission of the impact assessment report to the RSB's scrutiny. Eurostat updated the list of the proposed policy options, reflecting the ESSC conclusions concerning the modernisation of the intra-Union trade.
2) The analysis regarding the possible budgetary implications in individual Member States was requested to be strengthened and defining if some of them would face more difficulties with implementation than others and whether any alleviating measures were planned for those Member States. Eurostat included further clarifications as to the countries most affected by the changes were given. Moreover, a number of examples were provided pertaining to foreseen simplifications for smaller countries and to the rationalisation and modernisation potential offered by FRIBS creating future cost reduction possibilities. It was also explained that financing was foreseen (within the limits of budget availability) for actions to develop new data collections.
3) The analysis of the administrative burden impacts on data providers was requested to be strengthened and be more nuanced towards the SMEs, while indicating any measures to be taken for protecting SMEs from increased burdens. Eurostat clarified the administrative burden impacts on data providers. Some of the additional data requirements responding to long-standing specific user need to enable the monitoring of policy actions with regards to SMEs would indeed increase the burden on SMEs. A number of examples have been provided to illustrate that in many Business Statistics domains special measures are in place to guarantee that SMEs were protected from excessive burden and data compilers would make particular efforts to minimise the burden on SMEs for those new data requirements.
Since the approval of the impact assessment report the decision has been taken, following the opinion expressed by the Committee on Monetary, Financial and Balance of Payments Statistics in September 2016, to remove the Foreign Direct Investment Statistics (FDIs) from the coverage of the FRIBS Regulation because the business statistics dimension of the FDIs is less clear than for the International Trade in Services Statistics which are currently also covered in the Balance of Payments Regulation 5 . The FDIs requirements will therefore remain to be covered by the latter Regulation. This does however not change the conclusions of the impact assessment report.
• Regulatory fitness and simplification
The proposal meets the simplification objectives of the REFIT programme, in particular because it streamlines ten regulations into one single regulatory framework and reduces burden for businesses, especially SMEs. Implementing costs have also been fully considered and controlled.
Although Member States are encouraged to use as much as possible administrative and innovative sources other than surveys including new methods or innovative approaches, responding to the new user needs does increase the burden on respondents. However, this additional burden is more than off-set by simplifications particularly in the area of intra-Union trade statistics. Overall, the FRIBS Regulation is expected to generate an administrative burden reduction for businesses of at least 13,5% annually.
Some of the additional data requirements covered by the FRIBS Regulation might increase the burden on SMEs especially with regards to the extension of business statistics to cover services activities that were previously not covered. This is, however, partially a consequence of responding to a long-standing specific user need to enable the monitoring of European and national policy actions with regards to SMEs for which sufficient information is currently lacking as some services activities also provided by SMEs are not yet covered. In order to limit the additional burden, data compilers are encouraged to use as much as possible existing administrative data (e.g. from tax authorities) to respond to this data request and to minimise the use of surveys especially for SMEs.
The simplifications foreseen by FRIBS in the area of intra-Union trade statistics could reduce the burden for SMEs. There will, however, always be individual SMEs who may not benefit from burden reductions and may even face more burden. In fact, though usually one can expect to have some sort of correlation between the size of a company and its trade volume, small businesses can have large trade volumes while large companies have very little or no trade at all.
The proposal is consistent with the opinion of the REFIT Platform on environmental protection investment statistics, which contains a recommendation of the majority of the Government group and some of the Stakeholder group members that the Commission continues its assessment on overlapping reporting requirements under Commission Regulation (EC) No 250/2009 (in the SBS domain) and Regulation (EU) Nº 691/2011 on environmental accounts and replace the regulation on structural business statistics with the new Framework Regulation for integrating business Statistics (FRIBS).
The Platform opinion confirms the findings of the Commission that there is double reporting. To address this, the FRIBS proposal does not include the aspects of environmental protection expenditure accounts which will thus solely be covered by the Regulation on environmental accounts (Reg. 691/2011). There will therefore be no overlaps/double reporting.
The proposal is also consistent with the 'Digital Check', by promoting interoperability and reusability through the use of the same technical specifications of data sets and the same standards for transmission of data and metadata, exchange and sharing of information between Eurostat and the Member States.
• Fundamental rights
The proposal has no consequences for the protection of fundamental rights.
4. BUDGETARY IMPLICATIONS
The financial impact of the proposal is of unlimited duration with a start-up period of 3 years, from 2019 to 2021. Only the years of the current Multiannual Financial Framework (MFF) have been considered in the legislative financial statement. The continuation of the funding will be conditional to the agreements reached for the next MFF and to the continuation of the specific programmes from which funding is foreseen.
For years 2019 and 2020, funding will come from the existing allocations to programmes including EUR 19,5 million from the extension of the European Statistical Programme to 2019 and 2020 and no additional funding is required.
The total appropriations for 2019 and 2020 are estimated at EUR 46.453 million. Detailed budgetary implications are set out in the legislative financial statement.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
The proposed Regulation is expected to be adopted by the European Parliament and the Council in 2017 or 2018 with adoption of implementing measures by the Commission shortly afterwards. The first data transmission under the new Regulation is expected in 2019.
The proposed legislative instrument will be subject to a complete evaluation, along the five evaluation criteria of the Better Regulation Guidelines, in order to assess, amongst other things, how effective and efficient it has been in terms of achieving its objectives and to decide on whether new measures or amendments are needed. A list of key performance indicators for business statistics will be monitored in that respect.
It is important to refer to the existing monitoring and evaluation tools in place currently, and valid for the whole of the statistical production of Eurostat, that already allow for good analysis of the evolution of the effectiveness and the efficiency of the new statistical initiative and the quality of the data produced. They consist of the systematic mid-term and final evaluation of the European Statistical programme, along the five evaluation criteria of the Better Regulation Guidelines. Business statistics are an integral part of these reporting mechanisms, the follow-up of key performance indicators of the Eurostat management plan and the regular users' satisfaction surveys.
Each statistical domain is also monitored through quality reports, regularly produced by Member States and analysed by Eurostat, as part of the statistical quality insurance framework.
In addition, costs elements will be monitored. It will require improved and harmonised costs reporting framework for the whole ESS that identifies the statistical production phases. Work is underway in this respect, which is planned to be finalised on time to allow for the monitoring of the costs related to the FRIBS Regulation once it enters into force.
• Detailed explanation of the specific provisions of the proposal
The proposed Regulation consists of 23 Articles and three Annexes.
In the Chapter I covering Articles 1 to 3 comprises the general provisions. Article 1 lays down the subject matter of the Regulation. The main concepts used in the regulation are defined in Article 2. Article 3 further defines the scope of both the business statistics and the European network of statistical business registers.
Chapter II includes Articles 5 and 6 and concerns the data sources to be used for business statistics and statistical business registers. The proposal allows and promotes the use of new data collection forms and use of alternative data sources that includes administrative data and other sources like estimation through modelling or use of big data. The role of the latter is further defined in Article 4.
Chapter III concerns the business statistics. Business statistics cover the subject areas and the topics listed in Article 6 for which the Commission is empowered in Article 7 to adopt implementing measures concerning the required technical specifications of the data sets. Subject areas, topics and detailed topics to be provided are listed in Annex I. Annex II lays down the periodicity with which the topics need to be provided. The Commission will be able to detail the subjects and characteristics of the dynamic topics 'ICT-usage and e-commerce', 'Innovation' and 'Global value chains' by delegated acts. The detailed topics included in Annex I may also be amended by delegated act within the limits laid down in safeguard clauses.
Chapter IV covers 3 articles related to the business registers. The European network of statistical business registers is established in Article 8. Article 9 lays down the requirements for the European network of statistical business registers. Annex III further specifies the elements of the European network of statistical business registers (the register characteristics, unique identifier, the time reference and periodicity). The register characteristics can be further detailed by implementing acts. Article 10 includes the provisions regarding the exchange of and access to confidential data for the purpose of the European network of statistical business registers. The Commission is empowered to adopt implementing measures concerning the exchange of confidential data for the purpose of the European network of statistical business registers.
Chapter V includes 5 articles related to the exchange of confidential data for the purpose of intra-Union trade in goods statistics. Article 11 lays down the principle of the data and metadata exchange for these statistics. Article 12 specifies the statistical information to be exchanged and Article 13 gives the statistical data elements. The provisions of Article 14 regulate the protection of exchanged confidential data and Article 15 the access to exchanged confidential data for scientific purposes.
Chapter VI regroups three Articles on quality, transmission and dissemination: data quality and metadata reporting (Article 16), data and metadata transmission (Article 17) and confidentiality regarding statistical data dissemination on international trade in goods (Article 18).
The proposal covers other important elements of the modernisation of European business statistics in Chapter VII:
• the establishment of pilot studies, in order to assess the relevance and feasibility of carrying out new data collections and making improvements to data sets (Article19),
• the provisions for financially supporting the Member States, under conditions (Article 20),
In its final Chapter, the Regulation contains the provisions concerning the exercise of the delegation (Article 21) according to the Interinstitutional Agreement on Better Law-Making of April 2016, the Committee procedure (Article 22), the cooperation with other Committees (Article 23), the provisions for derogations that would give more time for adaptation to the new requirements in some Members States (Article 24). In this Chapter also the amendment of one Regulation (Article 25) of which the details are included in Annex IV and the repeal of ten existing acts replaced by the proposed Framework Regulation (Article 26) are included.