A current proposal by the German Federal Government provides that sellers placing fewer than ten tonnes of packaging on the market per year should not be required to appoint an authorised representative; registration in the new system is to be suspended until mid-2028, when a central European registration system (the ‘One-Stop Shop’, or OSS for short) for producers is expected to become operational. From VERE’s perspective, suspending registration is a bit short-sighted, because such an EU One-Stop Shop has long been ready for use, including the solution offered by take-e-way GmbH and those offered by other specialised service providers. On average, the approximately 9,500 producers operating through take-e-way’s OSS are registered in only around two countries and for three waste streams and therefore do not require an EU OSS.
By developing its own OSS, the EU would enter into direct competition with established private-sector solutions that currently compensate, through well-designed approaches, for the digital interfaces still lacking in many Member States. A One-Stop Shop developed or commissioned by the EU is unlikely to become operational for years; in our view, 2028 is an unrealistic target date. It would also displace the many available solutions that are continuously being improved and in which EU companies have invested substantially for two decades. Most national registers are not state of the art, meaning that connectivity with enterprise resource planning systems and existing OSS systems is not possible. This cannot be resolved by adding another EU OSS above this level as an overarching registration platform. Rather, the EU OSS is bound to fail unless national registers clear their registration backlogs. Metaphorically, this would be comparable to building a G6 mobile network when no G6 mobile phones will be available for the foreseeable future: a high-speed data route with no access points. In the debate on the OSS, VERE therefore sees an urgent need for a technical examination of how such a system could actually be implemented as part of a constructive effort to find solutions, as set out in our statement on the EU initiative for the simplification of administrative burdens in environmental legislation.
In this context, VERE expressly advocates retaining the institution of the authorised representative as a gatekeeper to the EU internal market. The central problem for a prudent and conscientious business operator with a
viable cross-border EU business is not the annual cost of an authorised representative, amounting to tens or at most a few hundred euros per market, but the heterogeneous bureaucratic processes of individual EU Member States. The European Commission should address precisely this issue in relation to authorised representatives as well. If the authorised representative, who currently helps to combat free riders, is abolished, honest businesses within the reach of enforcement authorities will once again be more readily exposed than business from other Member States or third countries, because it cannot be assumed that full enforcement will take place within the European Union. This was precisely the rationale for introducing the authorized representative.
In this context, de minimis thresholds, such as 10 tonnes, create further inequities. It is difficult to justify why a supplier of essential goods, such as a bakery, with high packaging volumes and tight profit margins should be fully subject to extended producer responsibility, while a supplier of luxury goods with low packaging volumes and a highly profitable business model should be exempt.
Compliance with de minimis thresholds also has be monitored and enforced. In practice, however, whether such thresholds have been exceeded often only becomes apparent at the end of the year, when retailers discover, to their surprise, that sales have performed better than expected and that they should have appointed an authorised representative. But then what?
Splitting business activities in order to remain below de minimis thresholds is also likely to be considerably easier for Asian companies than most of the European bureaucracy would allow. An ordinary company can be established or registered in China as well as in certain Member States of the EU within a very short administrative period, provided that the documents are complete and formally compliant. Under Article 19 of China’s Regulations on the Administration of Market Entity Registration, registration must generally be completed immediately, or otherwise within three working days; in complex cases, this period may be extended by a further three working days. China has also substantially simplified and digitalised the company formation process in recent years. The resulting problem is that any simplifications we introduce will primarily create more advantages for Chinese companies, and do so more quickly, than for our domestic economy.
Instead, the EU Member States should show the same determination in enabling their authorities and/or registers to achieve greater digitalisation and harmonisation as they have so far shown in burdening domestic companies with excessive bureaucracy.
In the interests not only of our members, but of all sellers and producers established in the EU, it is essential to prevent justified criticism of excessive bureaucracy from resulting in the removal of precisely that part of the administrative framework which helps curb imports from outside the EU of unsafe, unregistered and unsustainable products.
We have no doubt that the extended producer responsibility framework is in considerable need of improvement in many respects. However, this should be the subject of constructive debate, and decisions should not be rushed where they would lead to solutions that will only be available years from now and are already unnecessary today or would make the situation even worse for our sellers and producers.
VERE e.V. is available as a constructive point of contact and will be pleased to answer any questions.
