IPSG Meeting, Paris, 25th November 2008 Reduction of Administrative Burdens: Presentation of the EU Project & French Position Denis Besnainou, Michael Vychytil, DGME, France 1

Contents Global Presentation of the European AB Project Findings Presented in the Recent Reports The French Position on the Findings Outlook

1. Global Presentation of the European AB Project

The European AB Project Launched by the decision of the European Council in March 2007 A part of the broader Better Regulation initiative, which is an element of the Lisbon Strategy The Commission mandated a consortium of consultancies: Capgemini – Deloitte – Ramboll, to carry out the project

The Goals of the European AB Project Measure the administrative cost of European legislation in order to identify both most burdensome and most irritating information obligations Identify the most promising simplification suggestions Achieve a 25% reduction in administrative burden stemming from the examined legislation by 2012

The Scope of the European AB Project 43 European Regulations & Directives… …in 13 “Priority Areas” (PA): Agriculture Company Law/Annual Accounts Working Environment Tax Law (VAT)‏ Environment Public Procurement Fisheries Cohesion Policy Pharmaceutical Legislation Food Safety Financial Services Statistics Transport

Project Timeline

2. Findings Presented in the Recent Reports

Measurement Results (1/3) Total approximate administrative cost of Company Law (Annual Accounts) & Financial Services Priority Areas: € 24 billion, of which € 23 billion for Company Law Total administrative cost of the 11 remaining PA: € 126 billion, of which € 106 billion for VAT PA

Measurement Results (2/3) – Breakdowns 11 PA Included Source: Capgemini – Deloitte – Ramboll

Measurement Results (3/3) – the 11 PAs Source: Capgemini – Deloitte – Ramboll

Administrative costs (€ x1,000)‏ Most Burdensome IOs 2.2% 2,550,533 Tax Law (VAT)‏ Submission of a summarizing annual VAT return 5 2.6% 2,947,910 3,025,599 Transport Recording of time spent and time spent driving a vehicle 4 9.9% 11,419,412 9.8% Issuance of an invoice 3 18.6% 21,473,625 18.4% Submission of a periodical VAT return 2 56.0% 64,506,384 55.2% VAT bookkeeping in sufficient detail for inspection by tax authorities 1 Share of Total AB Admin. burdens (€ x1,000)‏ Share of Total AC Administrative costs (€ x1,000)‏ Priority Area EU IO Rank Source: Capgemini – Deloitte – Ramboll

Simplification Proposals Most simplification suggestions focus on the use of electronic administration: online forms, electronic data sharing, keeping records in electronic instead of material form… Focus on SMEs: simplified regimes proposed under certain thresholds, with feasibility varying across Pas Regrouping obligations and reducing necessary steps in the procedures is another frequent point…

3. The French Position on the Findings

A Prudent Attitude towards the Measurement In the national project, France proceeds by “waves” (groups of 200 IO). We have not completed the baseline, but implemented simplification solution at the end of each IO. For some IO and some countries, the European project uses a method of extrapolation. This methodology invites to a prudent handling/interpretation of the results in general – with 5 companies involved per measurement and lack of statistical validity These objections do not compromise the value of the project as such – important to bear in mind that simplification, not measurement, is the goal

Supporting Most Simplification Proposals France is quoted as a model of efficient electronic administration in various PA and we firmly support further development of these tools Some specific simplification proposals may be problematic due to important legal implications or impact on fraud control (esp. in the VAT PA)‏ Standards in areas like Food Safety or Working Environment should be kept (even by SMEs)‏ Reduction of the frequency of submission or declarations can be inadequate (statistics)‏

French Goals in the Next Phases Adjustment of the measurement’s results and integration of our remarks by the Consortium Discussion on new domains Coordination of reactions with other member states Fast adoption of consensual simplification proposals Fast development of electronic procedures

4. Outlook

Agenda for the Coming Months Completing the reporting by the Consortium Integration of Feedback (Member States, DGs, DG Entr)‏ Update of Data (esp. Financial Services & Company Law)‏ Final Reports in December Long list of recommendations (400 – 500) Short list of recommendations (100) 12 + 12 detailed recommendations External Method Manual

Beyond the 2009 European Elections…? Adoption of simplification proposals before the end of the legislature? What will be the new Commission’s priorities? (Autumn 2009) How to proceed with the project? (Extension to further areas, further reduction in current PAs, ongoing exercise…)

Thank you for your attention! Denis Besnainou, Michael Vychytil Chargés de mission Direction générale de la modernisation de l’État Bâtiment Sully, 64, allée de Bercy 75572 PARIS CEDEX 12, France Tél.: 0033.(0)1.53.18.55.02 denis.besnainou@finances.gouv.fr