EU pledges to crackdown on double taxation

Removing cross-border tax obstacles for EU citizens and businesses, as well as preventing tax fraud and increasing tax transparency a must for the European Union action in the fiscal field

European Parliament’s Economic and Monetary Affairs committee has approved a report by the Sweden’s Folkpartiet MEP, Olle Schmidt on the EU’s Annual Tax report. The report focuses on the tax initiatives taken by the Commission during 2011 and on areas where further initiatives are necessary in order to improve the functioning of the Single market and to create a more competitive Europe.

The report also addresses tax problems that EU citizens face in cross-border situations within the EU. For example, EU citizens working or investing in another EU Member State who encounter issues of double taxation and have difficulties with obtaining allowances, tax reliefs or deductions from foreign tax authorities.

Though taxation is mostly a national and not an EU competence, the financial and economic crisis has revealed the risks posed to the Single Market by contradictory tax policies and the need for closer coordination.

The EU Treaty foresees only simple consultation of Parliament and unanimity in the Council. The report just approved by the EP’s Economic and Monetary Affairs committee is a clear indication action is needed to coordinate Member states’ fiscal policies and avoid cases of double taxation.

"I welcome that the Commission recently adopted a Communication on Double Taxation, where concrete measures are announced, including the creation of an EU Forum to develop a code of conduct on double taxation and a binding dispute resolution procedure for unresolved double taxation cases. This is an area where the European Union can make a real and practical difference to EU citizens", commented Olle Schimidt.

A public consultation carried out by the Commission found that more than 20% of reported cases of double taxation of businesses were worth over €1 million, while for individuals, more than 35% of double taxation cases were worth more than €100 000.

EU Council extends Euratom program for nuclear research for 2012 and 2013

The European Council has extended the European Atomic Energy Community (Euratom) framework programme for nuclear research and training activities (17503/11+ COR) for a two-year period.

Due to expire at the end of 2011, the Euratom program is extended in order to align it with the end of the EU’s current financial cycle, set for end of 2013. Euratom programs are limited by the Euratom treaty to five years, whereas the general 7th framework program for research, which runs until end 2013, lasts for seven years.

The framework program comprises two types of activities:

1. Indirect actions

Indirect actions in fusion energy research and research on nuclear fission, safety and radiation protection (17504/11).

The fusion energy research activities include, as a central objective, to achieve the construction of ITER (International Thermonuclear Experimental Reactor), a major experimental facility to demonstrate the scientific and technical feasibility of fusion power.

Rules for the participation of undertakings, research centres and universities and for the dissemination of research results apply to this specific program (17506/11).

2. Direct actions

Direct actions for activities of the Joint Research Centre in the field of nuclear waste management, environmental impact, safety and security (17505/11).

The nuclear fission research activities are in line with the objective of enhancing the safety of nuclear fission and other uses of radiation in industry and medicine.

The activities of the JRC cover customer-driven scientific and technological support for the formulation, development, implementation and monitoring of the Union’s policies, with an enhanced focus on safety and security research. The JRC works as an independent reference center of science and technology in the Union.

A maximum amount of EUR 2.5 billion, including additional financing of the ITER project (18322/1/11), is allocated for the implementation of the Euratom programme for the years 2012 and 2013.

Its extension will continue to contribute to the implementation of the “Innovation Union” strategy (17165/10), by enhancing competition for scientific excellence and accelerating the deployment of key innovations in the nuclear energy field, notably in fusion and nuclear safety, and will contribute to tackling energy and climate change challenges.

Child sex abuse net crushed, 112 arrested in 26 European countries

Law enforcement agencies from 26 European countries, supported and coordinated by Europol, have carried out a major crackdown against online child sex abuse file-sharing networks. ‘Operation Icarus’ – that is the name of the joint actio – final results account for 112 individuals arrested and 269 more identified as suspects, spread across 22 out of the 26 involved countries.

These numbers are only a fraction of what the investigators hope to accomplish in the future: house searches have allowed seizing a lot of materials, expecially videos, and police officers are confident forensic examination will support follow-up investigations and possible prosecution of offenders. However, this operation has already uncovered previously unknown networks of child sex offenders operating on different internet channels.

This operation shows how the internet is helping offenders to develop better techniques for sharing images on a global basis and for protecting their identity.

The problems involved are becoming harder to police and call for sustained efforts by policy-makers and law enforcement agencies to ensure that society’s response remains strong and agile in this area. Europol is committed to playing a leading part in this work through its unique capabiliites to develop intelligence and digital forensic skills across Europe and through the coordination of major international operations.

“This is the latest major success in over 10 years of Europol supporting law enforcement agencies in Europe in their fight against child sex abuse online”, commented Rob Wainwright, Director of Europol. 

Investigations are ongoing and more arrests are expected. Special focus will be on identifying the producers of the material, the suspects and their victims. Among those arrested for downloading illegal material was one who is suspected of grooming a young child, and was arrested before being able meet ths child face to face.

Operation Icarus represents a first-timer after the signing of the new action plan of the COSPOL Internet Related Child Abuse Material Project (CIRCAMP), an initiative by EU police chiefs led by Belgium and funded by the European Commission. CIRCAMP includes countries like Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Malta, Netherlands, Norway, Spain, Sweden, plus the two European supranational police forces, Europol and Interpol.

The joint operation was actually initiated during a CIRCAMP meeting at the start of 2011. It was agreed that the National High Tech Crime Unit of the Danish Police (DK NITEC) should be the lead country and carry out the investigations because of its expertise in illegal material exchange through file sharing systems, known as peer-to-peer. After the collection of intelligence by the Danish National Police, an operational meeting was organised at Europol in September 2011, to disseminate intelligence packages to the involved EU Member States and countries with a Europol operational agreement.

The euro crisis: lessons for East Asia

The crisis of the European union common currency is threatening the well being of the whole world. Economists and analysts the world over are studying the mechanisms of the crisis in order to understand which particular lessons can be learned for the next future. One of these scholars is Stephen Grenville, Visiting Fellow at the Lowy Institute for International Policy ed anche ex Vice Governatore della Reserve Bank australiana.

The article has been published on the East Asia Forum website. An earlier version of this article was first published here on the Lowy Institute for International Policy website.

Only a few years ago, the European common-currency arrangements were held up as a possible model for Asia.

With the euro under serious threat, we do not hear much about this now, but the current mess in Europe could well contain a number of lessons for Asia.

Lesson one might be surprising at first sight: membership of a currency block is still seen as valuable. Ireland, Portugal and Greece seem ready to undergo years of wrenching austerity in order to stay in. Greece understands that in leaving the euro, it would be swapping one set of problems for another. And countries such as Turkey are still very ready to join.

Lesson two is more obvious: it is hard to make common currencies work. Currency blocks work smoothly only if the member economies have a lot in common. There was always the promise — or hope — that membership would be the catalyst to make Greece more like Germany. But for Greece, there has been neither economic nor political convergence, and continuing membership may prove to be unworkable.

Lesson three is an old one: financial markets are prone to radical changes of risk assessment and lemming-like herding. The markets initially treated Greek debt as more or less on par with German debt. But when they belatedly perceived the reality, they pulled the plug.

Lesson four is that support mechanisms are needed when markets lose confidence. Even countries like Spain and Ireland — which are trying harder than Greece to be good euro citizens — need external support. The euro arrangements are providing this through loans and the support of the European Central Bank (ECB). There is a further sub-lesson here: when the crunch comes and confidence is lost, the supportive response is always tentative, inadequate and chaotic. It is always too little, too late.

So, what are the implications for East Asia’s emerging economies? Despite strong international advice after the Asian crisis to adopt freely floating exchange rates, these countries are yet to adopt a pure free float. They are managing their exchange rates, not only to smooth out volatility, but also to resist appreciation pressures that would diminish their international competitiveness. And as their production structures are becoming increasingly integrated through supply-chain frameworks, maintaining competitive parities with neighbours is becoming more important.

So far, this maintenance of competitive parity has been an informal affair, and it could be given more regional structure. If each country maintained stability (perhaps within a band) vis-à-vis a common basket of currencies — including a heavy weighting of Asian currencies — this would have some of the characteristics of the early stages of Europe’s move to the euro.

While this sort of structure creates tighter relativities, it sets up potential vulnerabilities. In Europe, the euro’s precursors — the ‘snake’ and the European Exchange Rate Mechanism — both broke down. So support arrangements like those offered by the ECB would be an essential part of any tighter currency arrangements. Emerging East Asian economies might receive help from the IMF, but many still carry bitter memories of the Fund’s failures in 1997. And while the Chiang Mai Initiative is exactly the sort of arrangement that might do the job, it proved unusable when it was needed in 2008, and in its present form provides only trivial support.

Asia might also heed the lesson that currency blocks should choose their participants carefully. One suggestion is that a smaller yuan-based grouping of ASEAN, China, Hong Kong and Taiwan might make more sense than a region-wide linkage.

All this leaves Asian exchange rates in an awkward policy space. The managed rates of the post-1997 period are working well enough, but continued reserve accumulation is not sustainable, and running chronic current account surpluses is not optimal. Capital should be flowing ‘downhill’ to these emerging countries, not in the reverse direction. Establishing a stable range of relativities among a sub-set of the region might be a start in the right direction.

Hundreds of tonnes of fake food and drinks seized by Eu Police forces

Hundreds of tonnes of fake and substandard food and drinks have been seized in an INTERPOL-Europol coordinated operation across 10 EU countries.

Operation Opson (carried out between 28 November and 4 December), which involved local police forces in Bulgaria, Denmark, France, Hungary, Italy, The Netherlands, Romania, Spain, Turkey and the United Kingdom, has effectively disrupted the organized criminal gangs behind this high profit-low risk activity which undermines legitimate business and puts the safety of consumers at risk.

The number released by the Europol spokeperson are astonishing: more than 13,000 bottles of substandard olive oil, 30 tonnes of fake tomato sauce, around 77,000 kg of counterfeit cheese, more than 12,000 bottles of substandard wine worth EUR 300,000, five tonnes of substandard fish and seafood, nearly 30,000 counterfeit candy bars. Experts are also investigating he sale of fake/substandard caviar via the Internet.

The week-long operation involved police, customs and national food regulatory bodies in addition to partners from the private sector and saw checks carried out in airports, seaports, shops and flea markets across the 10 participating countries.

Consumers buying these goods, either knowingly or unknowingly, are putting their health at risk as the counterfeit food and drink are not subject to any manufacturing quality controls and are transported or stored without proper regard to hygiene standards.

“One of the main goals of this operation was to protect the public from potentially dangerous fake and substandard food and drinks, which is a threat that most people are not even aware of,” said Simone Di Meo, Criminal Intelligence Officer with INTERPOL’s Intellectual Property Rights programme and coordinator for Operation Opson.

“Criminals will take advantage of any and every opportunity open to them, and this type of operation demonstrates the determination by law enforcement and the private sector to stop this type of criminality,” added Mr Di Meo.

Besides assisting with the planning of the operation over the last six months, Europol provided operational support by deploying teams in the port of Rotterdam to assist Dutch customs and at the INTERPOL General Secretariat headquarters in Lyon.

“The high number of counterfeit and substandard food seized is worrying and it shows the need for close cooperation among law enforcement agencies to stop criminals active in this type of crime. We will now assist our cooperation partners with further investigations,” said Chris Vansteenkiste, project manager in the Intellectual Property Crime Team at Europol.

Europe threatened by lack of nanotechnology safety experts

Europe is bound to face a lack of experts and researchers in the field of nanotechnology safety. As a consequence, companies wishing to market a new nanoproduct could find themselves unable to explore carefully its entire life-cycle, from manufacturing through use of the item all the way to its final disposal or possible recycling. With possible fall out on public health and the environment.

After more than a decade of working on nanotechnology, there are hundreds, maybe thousands of products based on nanotechnological manufacturing processes available on the market today, ranging from sun cream and pigments all the way to clothing.

Right from the very start of the industrial use of nanothecnology in production processes the issue of safety has been in the frontline. A great number of projects on the risks associated with nanomaterials have been initiated and carried out.

Harald Krug, a toxicologist at Swiss Empa has, after a decade of research in the field of nanosafety, come to the conclusion that "To date no specific risks are known to exist in association with the use of nanoproducts – or rather free nanoparticles." But even if there are no concrete indications of serious problems with synthetic nanoparticles, Krug says that this is not a general "all clear". But just when there is more need for them, a large number of environmental toxicological institutes in Europe have been closed down. One aspect that particularly worries Harald Krug.

The threat the Swiss scientist sees in the next future is the lack of experts and specialists in the field of the environmental nanotoxicology.” Consequently, in countless scientific publications in the field the rules of toxicology are not being followed, usually through lack of knowledge. "And as a result there are these horror stories which create a great deal of uncertainty and unease."

A 60 page report recently published by the German Society for Chemical Engineering and Biotechnology (DECHEMA) and the Chemical Industry Association (VCI) offers an overview of research projects conducted during the last decade on the subject of nanosafety. It covers six Swiss, 40 German, one US and 25 EU projects. In one of these projects Empa, together with the Cantonal Hospital of St Gallen, investigated whether nanoparticles can pass through the human placenta and enter the circulatory system of an unborn baby. Toxicologists from Empa’s «Materials meet Life» laboratory studied human placentas (donated by mothers immediately after giving birth) to evaluate how good a barrier they represent. Their experiments showed that particles with diameters of less than 200 to 300 nm could pass through into the fetal bloodstream. The question is, does this damage placental tissue or possibly have an influence on the development of the unborn child? At the same time, looking on the positive side, it is possible to imagine the transport of nanovehicles through the placenta as a means of delivering targeted treatment to the baby while it is still in the womb.

In another report (to which Krug was also a significant contributor) which was recently presented in Brussels, the European Academies Science Advisory Council (EASAC) drew attention to the gaps in our scientific knowledge in this field and indicated very clearly the topics which need to be researched in the coming years in order that nanomaterials can be directly utilized without risks to our environment or to human health. "Looking at these results, I really wish that in future we would invest more in education and training in environmental toxicology. Only then is it possible to undertake responsible research in this field, and only then can we guarantee the sustainable development of these new technologies," says Krug.

EU, an extra half a billion euros to close old Soviet-type nukes

The European Commission has proposed to provide further EU assistance of €500 million to support the safe decommissioning of old Soviet-type nuclear plants in Bulgaria, Lithuania and Slovakia. The proposal foresees for Bulgaria additional €185 million until 2020, for Lithuania €210 million until 2017 and for Slovakia €105 million until 2017 (in 2011 prices).

This new financial assistance should support the efforts of the three Member States who are ultimately responsible for nuclear safety, including the financing of decommissioning. EU Commissioner for energy Günther Oettinger said: "It is in our citizens’ interest, that these reactors will be safely decommissioned and that they will never be restarted again. This additional financial support will help the three Member States to timely progress in defueling and decommissioning of these nuclear reactors. This is a clear expression of solidarity of the EU, which has put nuclear safety as a priority."

The Union assistance for decommissioning of nuclear power plants aims at reaching an irreversible state in the decommissioning process and eliminating the major source of radiological hazard.

Before the Union financial support will be provided, Bulgaria, Slovakia and Lithuania will have to meet certain conditions:

• EU legislation on nuclear safety and on the management of nuclear waste has to be fully implemented.

• The Member States have to create legal frameworks for the timely accumulation of national financial resources to cover the remaining financial needs. This will make sure that the Member States will be able to gradually take over the necessary financing responsibilities.

• Revised detailed decommissioning plans have to be submitted to the Commission. Those plans will be the basis for monitoring the implementation of the financial assistance from the Union.

Nuclear safety, EU: stress tests well on track

The European stress tests of nuclear power plants are well on track and will further enhance nuclear safety and security in the EU, the Commission says in its very first Communication on the stress tests. Following the nuclear accident in Fukushima, the EU reacted swiftly and agreed on voluntary tests for all of its 143 nuclear power plants based on a set of common criteria. In its Communication published today, the Commission looks at first findings of these stress tests and points to some policy areas where new the EU nuclear safety framework can be strenghened with common standards. Results of the stress tests will be known next year once the tests are finalised.

European Commissioner for energy Günther Oettinger said: “The stress tests are an essential step in our effort to enhance the safety and security of nuclear power plants in Europe. We cannot accept anything less than the highest possible technical standards. While each individual Member State has the right to decide whether to produce nuclear power or not, it must be made sure that citizens are not put at risk and that the highest safety standards are not only prescribed but also respected everywhere in the EU, and beyond."

All 14 EU Member States which operate nuclear power plants (Belgium, Bulgaria, Czech Republic, Finland, France, Germany, Hungary, the Netherlands, Romania, Slovak Republic, Slovenia, Spain, Sweden and United Kingdom) and Lithuania, which is currently decommissioning its last nuclear power producing unit, are taking part in the stress tests. EU neighbours such as Switzerland and Ukraine also participate actively in the exercise, whereas other neighbouring countries confirmed their commitment to participate.

Tests are on track according to the agreed schedule and deadlines have been kept. Nuclear operators had to send a first report to the national regulators by 15 August, and the national regulators sent their interim national reports to the EU Commission by 15 September.

The stress tests are carried out on a voluntary basis and conducted for the very first time in the EU. The comprehensive and transparent assessments currently underway will further enhance nuclear safety and security in the EU. Nuclear safety is indivisible. This is why, with the protection of EU citizens in mind, it is paramount to establish a process aiming for the highest possible common safety and security standards.

Security threats, namely the prevention of and response to intentional acts, are assessed in a parallel process run under the auspices of the Council of the EU. The progress report of the newly created Council Ad-hoc Group on Nuclear Security, annexed to the Commission interim report, highlights that Member States in their commitment to nuclear security are ready to go further, making full use of, and strengthening, relevant international regimes.

The European Commission is already now drawing the first lessons from the tests, although the final results of the stress tests will only be known next year, when the tests are completed. The Communication identifies a number of policy areas where further action is deemed necessary, either through better coordination among Member States or by proposing new EU legislation on nuclear safety:

• New EU legislation could define common criteria for the siting, the design, the construction and the operation of nuclear power plants. Legal provisions should also enhance the independence of national regulators which grant the licence and make controls on the spot.

• Member States could put cross-border nuclear risk management plans to prepare better for a nuclear emergency and to coordinate their response actions.

• A European approach to liability should be achieved. Victims should become the same compensation irrespective of their country of residence.

• EU Research Programmes should focus on nuclear safety.

Germany Makes a Move in the Smart Mind Global War

A country’s social and economical development depends by large on its capacity to keep its most brilliant minds at home and attract others from outside its borders. It is the globalization of brains and minds.

Researchers in all disciplines need find a comfortable environment for their work and studies, and that means labs with enough resources to help them in their researches, industries with the money it takes to invest in their work and in he industrializtion of their results and findings.

Germany has made another move toward further enhancement and promotion of early-career researchers. The Deutsche Forschungsgemeinschaft (DFG, German Research Foundation) has approved the establishment of 16 new Research Training Groups, bound to enable doctoral researchers to complete their training at a high, specialised level within a structured research and qualification programme.

The decision is not German-only: globalization and internationalization of Science means that no country can do it on its own, collaboration with like-minded partner countries is a must, maybe for one project only. Four of the new units are International Research Training Groups that cooperate closely with universities in Canada, the USA and Austria. Internationality increases the attractiveness of completing a doctorate within the scope of a Research Training Group. In addition, interdisciplinarity promotes cross-border cooperation with universities and other research institutions. Diverse types and forms of cooperation also contribute towards the structural development of the programme.

The DFG will provide approximately 50 million euros during the initial 4.5-year funding period, including a programme allowance for indirect project costs. In addition to establishing the 16 new collaborations, the Grants Committee also approved the continuation of one International Research Training Group. The DFG currently funds 199 Research Training Groups, 45 of which are international.

Food labels are good, but consumers do not read them

Food labels host a whole lot of meaningful nutrition informations, yet European consumers seldom pay attention to them. Main reasons? Lack of motivation and attention,and that prevents labels from impacting positively on food choices.

These are the final results from the Food Labelling to Advance Better Education for Life (FLABEL ) project, providing state-of-the-art research on consumer behaviour and nutrition labels, andalso guidelines for research, industry and policy-makers.

Nutrition labelling may be a quick guide to inform consumers about the nutritional value of different products, however use and actual effects on shopping basket composition have been largely unknown. Additionally, the different formats already in place (Nutrition table, Traffic Light scheme, Guideline Daily Amounts (GDA), Health Logos, etc.) may stimulate different responses. FLABEL’s goal was to fully examine what aspects and factors actually lead from label availability to effects on dietary intake.

The project’s experts carried out an EU-wide nutrition labelling audit. Eighty-four  retail stores and more than 37,000 products of five product categories – sweet biscuits, breakfast cereals, chilled pre-packed ready meals, carbonated soft drinks, and yoghurts-  were examined. Results indicate that 85% of all products carried nutrition information on the back of the pack, and 48% on the front of the pack. The most widespread back of pack format was the tabular or linear listing of calorific value and nutrient composition at 84%; whereas nutrition claims and GDA were the most prevalent forms of front of pack nutrition information, both averaging 25%.

When information was provided on key nutrients (i.e. fat, saturated fat, sugar and salt) and energy, most consumers were able to correctly rank products according to healthiness. Additional information, such as Health Logos, GDA or Traffic Lights, only marginally improved the accuracy of this ranking.

Consumers in the study said they preferred labels that provide complete information, but consumer liking and intention to use these labels, was not translated into actual product choices.

A big issue affecting the impact of nutrition labels on actual food purchases made by consumers was lack of attention to the nutrition information. FLABEL found that food packages held consumers’ visual attention for very short periods, with the average attention to elements of nutrition labels being between 25 and 100 milliseconds, as measured by sophisticated eye-tracking equipment.

FLABEL Scientific Advisor Professor Klaus Grunert , of Aarhus University in Denmark, suggests that “the FLABEL research shows the most promising option for increasing consumers’ attention to, and use of, nutrition information on food labels, is to provide information on key nutrients and energy on the front of the pack, in a consistent way. Complementing this information with a health logo can also increase attention to, and use of, the information, especially when the consumer is under time pressure. Similarly, use of colour coding can increase attention and use in certain situations, although the effects of both are not strong.”

Motivation was a major factor affecting the impact of nutrition labels on the choices made by consumers. Grunert explains that “when prompted, consumers were able to identify which products were healthier, but they did not use this information to choose which product they prefer. A lack of consumer motivation, therefore, is one factor standing in the way of healthy food choices resulting from nutrition labelling.