During their summit on Thursday 24 March and Friday 25 March in Brussels, EU leaders agreed to quickly adopt new robust sanctions against Russia and new countermeasures to face the consequences from the Ukraine-Russia war. Among other things, EU leaders agreed to set up a Solidarity Trust Fund for Ukraine and to make common gas purchases on a voluntary basis in order to strengthen their bargaining power and try to obtain better prices from suppliers. On Wednesday 23 March, the European Commission also adopted a new temporary state aid framework allowing EU countries to support businesses hit by the crisis in Ukraine, similar to the one adopted for the COVID-19 pandemic. As part of the framework, Member States will be able to grant up to 400,000 € to businesses affected by the crisis or the sanctions and countersanctions, the Commission said. The framework will be in place until the end of 2022 and might be extended. On the same day, the Commission announced in a communication that it will also take new measures to help Member States meet the needs of Ukrainian refugees, including developing new guidelines to facilitate the recognition of professional qualifications obtained in Ukraine.
EU leaders decided on Thursday 24 March to renew Charles Michel’s mandate at the head of the European Council for two and a half years, from 1 June 2022 to 30 November 2024. In office since December 2019, the former Belgian Prime Minister had indicated his willingness to continue in office and was not facing any alternative candidate. The President chairs European Council meetings and drives forward its work. He also ensures the external representation of the EU at his level on issues concerning its common foreign and security policy.
The European Parliament’s Committee on Economic and Monetary Affairs (ECON) discussed on Monday 21 March the draft report for opinion on the Implementing Directive for Pillar II drafted by MEP Aurore Lalucq (S&D, France). During the debate, political groups highly disagreed on her proposal to increase the minimum tax rate from 15% to 21%. The EPP and Renew Europe groups wish to stick to the OECD agreement as much as possible and oppose changing the fundamental elements of the text. The draft report also adds some safeguards around the domestic top-up tax, reduces certain transitional periods for the carve-outs, asks for an ex-post study and for a review clause. MEPs have until 29 March to table their amendments. The report will be voted on in committee at the end of April and in plenary in June.
On Tuesday 22 March, MEPs from the ECON and the LIBE committees of the European Parliament quizzed several experts on the AML package, published in July 2021. Margarete von Galen, former President of the Council of Bars and Law Societies of Europe (CCBE), notably outlined that there is no evidence that European supervision would be better and more effective than national supervision, especially supervision by the bars. Self-regulated bodies have much better understanding of the profession than the future EU authority (AMLA), she argued. Roland Papp, Senior Policy Officer at Transparency International, agreed that no direct supervision is necessary for the non-financial sector but he said that the AMLA should know what is happening on the ground, including if self-regulated bodies are doing their job or not. After the presentations, MEPs asked the experts about the role of beneficial ownership registries, the implications for data protection, co-operation and trust-building between stakeholders and crypto-assets. MEP Luis Garicano (Renew Europe, Spain) assured that the EP is not trying in any way to interfere with the work of lawyers and confirmed that legal remedies will be foreseen against AMLA’s decisions. MEPs Eero Heinäluoma (S&D, Finland) and Damien Carême (Greens/EFA, France) published just this week their draft report on the AML Regulation, which proposes several changes and will be discussed in the relevant European Parliament’s committees on 31 March. The work on the AMLA and on the AML Directive are still ongoing.
EU countries should impose a windfall profits tax on oil and gas companies, argued a group of MEPs in a letter published recently. They welcome the EU Commission Communication on “RePowerEU”, where the Commission suggested to Member States to consider temporary tax measures on windfall profits for the purpose of mitigating the high energy prices and possibility to partially offset higher energy bills. In order for those measures to be highly effective and in order to provide a level playing field, they call for a profound coordination between the Member States. “Only if the measures are similar in all 27 Member States of the EU and the windfall profits can be taxed equally, the companies will not have a chance to avoid taxes in European countries, where the measures are lightly imposed and implemented”, they say.
The OECD opened on Tuesday 22 March a public consultation on a new global tax transparency framework for crypto-assets (Crypto-Asset Reporting Framework - CARF). The G20 has mandated the OECD to develop a framework to provide for the reporting and exchange of information with respect to crypto assets. The framework proposed covers crypto assets that can be held and transferred in a decentralised manner, without the intervention of traditional financial intermediaries, as well as asset classes relying on similar technology that may emerge in the future. Alongside the CARF, the OECD has also developed proposals as part of the first comprehensive review of the Common Reporting Standard (CRS) for the automatic exchange of financial account information between countries. The proposal extends the scope of the CRS to cover electronic money products and Central Bank Digital Currencies and adds new provisions to avoid a duplicative reporting as well as to improve the due diligence procedures. Interested parties have until 29 April 2022 to send their comments. On the basis of the input received, the OECD plans to finalise the rules and to report back to the G20 in October 2022.