Aplicación de fuerza.

4.3.1.2 Recent and unplanned regulatory evolutions

4.3.1.2.2 Reforming financial institutions and markets to improve stability 4.3.1.2.2.2 Banks and insurance companies

Page 139, Paragraph 4.84

34. Has the EU undertaken any studies, or can the EU provide any information on, the impact that the Solvency II Directive, to be applied from 2014, will have on foreign insurance companies?

EU reply: Solvency II gives the Commission the authority to decide about the equivalence of third countries' solvency regimes. The need to recognise third countries as equivalent arises where either an insurer or reinsurer ((re)insurer) is headquartered in the EU, but has participations or subsidiaries in third countries or a (re)insurer is headquartered in a third country, but has participations or subsidiaries in the EU. For EU groups the issue is how to integrate third country entities into the calculation of group solvency (Article 227). For third country groups the issue is how supervision is carried out and by which supervisory authority (Article 260). Equivalence is also relevant for reinsurers headquartered outside the EU, as it allows reinsurance contracts concluded with third country reinsurers to be treated in the same way as reinsurance contracts concluded in the EU (Article 172).

Legal implication of a positive or negative equivalence finding by the European Commission, Reinsurance (Article 172)

Positive equivalence: reinsurance contracts with third country reinsurers will be treated in the same manner as those concluded with EU reinsurers. MS cannot require the pledging of assets to cover unearned premiums and outstanding claims provisions or the location of assets within the Community.

Negative equivalence: the treatment of reinsurance cessions will be a matter for Member States. MS cannot apply provisions to third country reinsurers than grant a more favourable treatment than that granted to domestic reinsurers.

No decision taken by EC: as with a negative equivalence decision. Group Solvency (Article 227)

Equivalence is only relevant when using the deduction and aggregation method for calculating group solvency, not when using the default method, which is based on accounting consolidation. The objective is to know whether the solo local calculations can be used to integrate the third country entity within the assessment of the group solvency position. The assessment only concerns the quantitative solvency requirements of Solvency 2 (Pillar 1).

Positive equivalence: the calculation of group solvency as regards the specific undertaking can be based upon the solvency calculated in accordance with third country requirements where the supervisory authority has allowed the use of deduction and aggregation method for calculating group solvency. However, the use of local solvency requirements is subject to a Member State option.

Negative equivalence: the Solvency II requirements must be used. The Commission's decision on equivalence is determinative, and supersedes any existing assessments/determinations by the Group Supervisor.

No decision taken by EC: the Group supervisor may carry out the verification of the equivalence of the third country regime, and shall do so at the request of the participating undertaking (parent undertaking).

Group Supervision (Article 260)

Equivalence is only relevant for groups with the head outside the EEA. The objective is to know whether group supervision has to be performed by EEA supervisors or whether EEA supervisors can rely on third country group supervision. The assessment concerns the quantitative and qualitative requirements.

Positive equivalence: MS must rely on the group supervision exercised by the third country insurance supervisor. The Commission's decision is determinative, and supersedes any existing assessments/determinations by the Group Supervisor.

Negative equivalence: MS may either apply group supervision at the level of the insurance holding company / third country undertaking or use alternative methods to ensure appropriate supervision of the EU group.

No decision taken by EC: the EU supervisory authority that would be the Group Supervisor absent the third country parent may carry out the verification of the equivalence of the third country regime, and shall do so at the request of the parent undertaking or any of the insurance or reinsurance undertakings authorised in the Community

There is no specific EU study of the impact of Solvency II on foreign insurances providers. 4.3.1.2.6 Planned next steps of financial services reform

Page 147, Paragraph 4.112

Australia welcomes the European Commissions' MiFID II proposal to expand the 'European passport' initiative to foreign companies' branches.

35. Does the EU have any information on the impact this expansion will have upon trade and investment?

EU reply: The proposed third country regime under the proposals for the review of MiFID will (once adopted by the legislative process and under discussions by the EU co-legislators) bring clarity and uniformity within the EU and, as a result, will give clear benefit to trade and investment in financial services. In particular, it will overcome existing fragmentation arising from 27 different national regimes by harmonising conditions for access to the EU market. Furthermore, it will give

the possibility to firms to benefit from a "passport" within the EU. It will also help improving reciprocal knowledge and cooperation between regulators and supervisors across the world thanks to the cooperation agreements that will be necessary for the implementation of the system.

Australia is interested in the EU's 'planned next steps for financial services reform'.

36. Has the EU created an implementation plan for these 'next steps'? If so, can the EU provide any further details on this?

EU reply: Completing the banking union: After the agreement on the Single Supervisory Mechanism (SSM) and Capital requirements for banks (CRD IV), the next step is to agree on the proposals for a Recovery and Resolution Directive (BRRD) and for a Deposit Guarantee Scheme Directive (DGS).

Well advanced is the COM work on a proposal for single resolution mechanism to resolve banks' failures and coordinate by applying common tools directly to banks in Member States participating in the Banking Union.

Structural reform in the banking sector: The Commission is currently considering the need of structural reforms of the EU banking sector and would come up with a proposal by the end of the summer/early autumn 2013.

Shadow banking: The Commission plans to adopt a Communication on Shadow Banking in the near future, which will set out the roadmap for our initial approach in Europe, and a proposal for a Money Market Funds regulation.

A proposal on legislation on securities law is planned for the second half of 2013.

A crisis management framework for other important financial institutions: A legislative proposal on non-bank resolution (especially CCPs) is under preparation.

Payments: The Commission adopted on 8 May 2013 a proposal for a Directive on the transparency and comparability of payment account fees, payment account switching and access to a basic payment account. The Commission intends to adopt a proposal to revise the Directive on Payment Services ('PSD2') by end-July 2013.

37. Will there be a process for public consultations in the development of the specific policies for each of these 'next steps'?

EU reply: A number of public consultations have already taken place.

38. What does the EU envisage the impact of these planned 'next steps' will be on foreign financial services providers?

EU reply: The planned next steps of financial reform, including the establishment of a Banking Union, aim at providing an integrated response to the common problems faced by the countries sharing the single currency, and at increasing the stability and robustness of the financial system. An EU financial system which is more stable, better integrated and more uniform can only have a positive impact on the foreign financial services providers and in general on trade and investment. 4.3.3 Air transport services

4.3.3.1 Air transport services Page 155, Table 4.31

Australia welcomes the EU's ongoing initiatives to improve market access and competition in the air transport services sector. In particular, we note the EU's 'airport package'.

39. How did the EU determine which elements (i.e. ground-handling, slots and noise, "Airport policy in the European Union – addressing capacity and quality to promote growth, connectivity and sustainable mobility") would be included in the package?

EU reply: Commission's proposals on slots, ground handling services and noise restrictions at EU airports were designed to contribute to the completion of the Single European Transport Area and the move towards a smart, resource-efficient and competitive transport system.

They were tabled following continuous monitoring of the functioning of the existing legal framework and consultation of the interested parties. Also, an in-depth analysis was conducted on the challenges that lie ahead. Two key challenges were identified, capacity and quality, and conclusion was that if the objective is to address these two fundamental challenges, EU rules governing the use of airport infrastructure and the provision of ground handling services need to be revised.

As indicated in the Report by the Secretariat [Table 4.31 Regulatory framework for EU aviation services], the "airport package" was proposed by the Commission on 1 December 2011. The proposals of the package are still under discussion in the Council of the EU and the European Parliament.

40. Does the EU see any scope to expand the package in the future?

EU reply: The latest studies indicate that Europe would not be able to meet demand over the next twenty years because of capacity shortfalls on the ground [COM(2013) 408: "Accelerating the implementation of the Single European Sky]. This confirms previous forecasts as well as concerns highlighted in Commission's communication 'Airport policy: addressing capacity and quality to promote growth, connectivity and sustainable mobility': if no action is taken to increase capacity where it is needed, airport capacity will remain an issue for Europe.

In view of that, the Commission will explore possible avenues for action including requiring Member States to develop and provide national strategies on airport capacity in the future. A modern, European network of competitive and attractive airports is essential also to the successful delivery of the Single European Sky project.

The Commission will also give careful considerations to issues of airport charges in its report on the application of the 2009 Directive due by end of 2013.

4.3.3.4 Road transport services Page 169, Table 4.42

41. Can the EU provide an update on the report being produced by the European Commission in response to the June 2012 High-Level Group on the internal market for road transport? As the Secretariat's report states, first results from the Commission's report suggest that the situation seems to be appropriate for further opening of the domestic road-haulage market. Can the EU expand upon this statement?

EU reply: On the basis of the conclusions of the HLG report, the Commission is currently assessing the situation of the EU road haulage market. A report on the subject will be presented by the end of 2013. Depending on the conclusions of the report and in line with the requirements of Regulation (EC) No 1072/2009, a proposal to better enforce and simplify the provisions relating to the EU road haulage internal market could be presented alongside it.

WT/TPR/G/284