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Bob van der Made |
On June 12 2017, the European Parliament's joint ECON and Legal Affairs (JURI) Committee members adopted their joint report on the European Commission's draft directive on public country-by-country reporting (CbCR), with 38 votes in favour, nine against and no less than 36 abstentions, i.e. not exactly a slam dunk. The consolidated committee's compromise report will be published at the end of June or at the beginning of July.
The adopted report proposes to keep the European Commission's originally envisaged annual turnover threshold for large companies at more than €750 million ($845 million). However, a safeguard clause is introduced with the possible exemption for companies from disclosure on the grounds of "commercial sensitivity". This exemption would be annually renewable and will be monitored and reviewed each year by the EU Commission. Another new major feature in this in effect draft formal position of the European Parliament on public CbCR is the extension of the scope of the directive to non-EU countries as well (i.e. no longer only aggregate information would be required for a multinational group's activities in the rest of the world).
The ECON/JURI committee members of the European Parliament rejected the start of trilogue negotiations with representatives of the EU Council and of the EU Commission at this stage. Because of the many abstentions in the vote on this report, this approach makes perfect sense, also given that the public CbCR proposal is politically still going nowhere in the Council (the parallel track for the proposal) for now. No real progress is expected in the Council at the political level before the results of the German general elections to be held on September 24 2017 are known. The EU member states in the Council who are understood to oppose the Commission's public CbCR proposal, primarily but not only because of the key issue of the directive's legal basis, include Austria, Cyprus, Germany, Hungary, Ireland, Malta and Sweden.
As a first next step, the European Parliament's ECON/JURI committee report will be put to a confirmation vote in the European Parliament's Plenary Session (NB: new amendments to the report are possible) likely to be held in the Autumn of 2017.
Bob van der Made (bob.van.der.made@nl.pwc.com)
PwC EU Public Affairs-Brussels
Tel: +31 6 130 96 296
Website: www.pwc.com/eudtg
