The case for a common policy – Clifford Chance

While the efficient enactment of EU policy may present issues for national governments, it is important for lawyers to learn how to avoid them, say Miguel Odriozola and Michel Petite of Clifford Chance.

The way in which European Union (EU) policy is interpreted and enacted by national governments has long been an issue, and in an enlarged EU of 27 member states is even more so, says Michel Petite, Of Counsel at Clifford Chance in Paris, and formerly Director-General of the European Commission’s (EC) legal service. But clear and simple legislation that is straightforward to implement is an ideal that is not often met, he says.

“The quality of national legislation depends on the quality of the EU primary regulation. But EU policy is often formulated as a result of conflicting priorities and can produce ambiguous solutions, that are not always easy ato implement within a national framework.” National legislators also often add complications of their own to the EU legislation.

The transposing of EU Directives and regulations may purposely allow an extended implementation period, even where there is broad agreement on the legislative aims. But while an extended timeframe clearly presents the potential for delay in the implementation of important national legislation, it may however also bring positive effects, adds Miguel Odriozola, competition partner in Madrid.

“Spain is clearly among the last of the EU member states to enact domestic leniency rules, but an advantage of this is that the legislators have learnt the lessons of elsewhere.”

A recurring issue within the leniency rules of some countries was an early lack of clarity over the filing specificities of certain leniency applications, particularly where cartel activities extended across jurisdictions, he explains.

“Spain has been able to absorb and avoid such issues. While in any event cartel investigations and leniency applications have been made in the interim in Spain and by Spanish companies, albeit under the auspices of investigations carried out by the European Commission (EC).”

Frustration

One effect of an enlarged EU decision-making process, both acknowledge, is that the ability of individual governments to strongly influence policy along the lines of political or national interests has been weakened.

Nonetheless while there may be frustration with the formulation and subsequent enactment of particular EU policy, the intervention of governments on market events notably in the competition arena is declining they say.

“A number of the EC’s very early cartel investigations and sanctions, and merger decisions, were regarded as enormous political scandals in some of the member states involved, but all of this has now become increasingly routine,” says Petite. “Governments have learnt lessons, but they have also become much more sophisticated in the challenges that they do engage in.”

He highlights the example of mergers policy. “Competition regulators are relatively recent creations, but already have sufficient credibility to discourage governments exerting very obvious political pressure on their decisionmaking. The result is that governments may now choose however to exercise their views and interference through shareholdings. ”

Odriozola also notes the increased willingness of the international legal community to challenge interference. “Both private practice and in-house lawyers have learnt a lot also about community law. There is now a much greater willingness for parties to take direct recourse to competition law and the competition authorities, be it through the CNC (Comision Nacional de la Competencia) in Spain or the EC.”

This is particularly true among the most sophisticated and multinational operators, he believes. “It is now common for lawyers to seek the opinion of colleagues in other jurisdictions on national developments, and to receive a response highlighting similar issues and potential solutions.”

The way in which EU policy is formulated and interpreted may continue to present issues for governments, but lawyers are clearly proving increasingly adept at circumventing any artificial barriers presented by them.