European Union: European Commission Forces Business To Go Public In New Lobbying Transparency Move

Last Updated: 4 October 2016
Article by Mark Clough

The European Commission has proposed yesterday a mandatory Transparency Register covering all three main EU institutions – the European Parliament, the Council of the EU and the Commission. The proposal aims to strengthen and extend the current voluntary scheme which covers only the European Parliament and the Commission.

The European Transparency Register, better known as the EU lobbyists register, has been introduced by the European Commission and European Parliament's Interinstitutional Agreement (IIA) on the transparency register for organisations and self-employed individuals engaged in EU policy-making and policy implementation. The first Agreement was signed in June 2011 and reviewed after two years. The revised Agreement was adopted in April 2014.

The Transparency Register is a system of registration for entities and professional individuals seeking to influence, directly or indirectly, the EU decision-making process. For the time being, the system is voluntary. The European Commission, however, published in February 2015 a roadmap proposing the establishment of a mandatory Transparency Register.

The policy behind registration is to increase transparency of the EU decision-making system and of any actual or potential outside influence. This appears to mainly benefit EU institutions themselves, as it might help them improve their "accountability" in the eyes of the public and better defend themselves against allegations of favoritism. At the moment, a registration made on the EU Transparency Register is available only for the European Commission and the European Parliament. It triggers binding transparency obligations for the registered person when dealing with these two EU institutions,  under a "Code of Conduct".

The registration is done through an online registration form, consisting of 14 parts, available on the official EU website. In addition to other sensitive financial data, professional lobbyists registering are required to publish and keep updated a full list of clients on whose behalf they conduct lobbying activities covered by the IIA. Therefore, the names of the clients as well as the revenue received for lobbying activities would be public. The revenue is declared either as an absolute (precise) amount or as a range, with the lowest range being from €0 to €9.999 and the highest above €1.0 million. The companies or other qualifying interests also have to register.

Yesterday's proposal is intended to ensure high standards of transparency in all three EU institutions by moving from a voluntary system to one where registration becomes a precondition for interest representation at EU level, by making certain interactions, in particular meetings with decision-makers in the EU institutions conditional upon prior registration.

The Commission has also proposed a number of changes to strengthen the monitoring and control of the data in the Register, with enhanced human and IT resources and better controls and enforcement of the rules. "The new rules will make access by interest representatives to decision-makers, premises, policy forums or information subject to prior registration in the Register and acceptance of the Code of Conduct, making it a precondition for interest representation." – explains the website of the Registry.

According to the European Commission press release, the other changes promise to establish:

  • Clearer definition of 'lobbying': The new Agreement streamlines the broad definition of activities covered by the Register, which is one of the main strengths of the current EU system compared to many national lobbying regulation regimes. At the same time, the activities not covered by the Register are more clearly set out.
  • Exemption for local and regional governments: The current Register does not apply to certain specified entities, for example, churches and religious communities, political parties, Member States' government services, third countries' governments, international intergovernmental organizations and their diplomatic missions. In addition to these, the new Agreement will also exclude local and regional authorities as well as their representative associations from the scope of the Register. This reflects feedback received during the public consultation and is based on the fact that these public and democratically elected structures have a special status in the European multi-level system of governance. Representation of their interests cannot be equated with lobbying activities.
  • Simplified data disclosure requirements: The new data disclosure requirements will strike a more appropriate balance between the need for transparency and the need to reduce the administrative burden of compliance. The data requirements now focus on the most relevant information as regards efforts to influence law-making. This includes costs of such activities for those who pursue their own interests, the relevant revenues for intermediaries, and the budgets of not-for-profit entities and their main sources of financing.
  • Effective enforcement: Overall data quality will be improved by introducing systematic ex-ante checks on new registrations and simplifying the data reporting requirements. The Code of Conduct which sets out the principles of behavior for interactions with the EU institutions will also be reinforced and made more precise. A more robust mechanism to handle breaches of the Code of Conduct and apply proportional measures when appropriate will be introduced. Registrants who do not respect the rules could face suspension from certain types of interaction (e.g. meetings with institutions) and removal from the Register.
  • Creating stronger management structures: A well-functioning Register requires adequate resources, in particular to control the quality of data and enforce the rules. The new Agreement foresees a new management structure for the Register Secretariat with a view to achieving efficient decision-making. It defines the tasks of the Register Secretariat and its Coordinator and foresees a Management Board composed of the Secretaries-General of the three institutions.

Dentons Brussels office will track the progress of the new lobbying regulation proposed yesterday by the European Commission. The shape of the new rules will have a major impact on both global and local business.  Dentons can help advise how to ensure that the new proposals do not result in a system of institutional transparency that is more challenging than necessary.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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