Author: SME Chamber

The European Commission is inviting comments from
interested parties on commitments offered by Visa Europe. Visa Europe has
offered to significantly cut its multilateral interchange fees (MIFs) for
credit card payments, to a level of 0.3% of the value of the transaction (a
reduction of about 40 to 60%) and to reform its rules in order to facilitate
cross-border competition. The proposals by Visa follow the sending of a
supplementary statement of objections by the Commission in July 2012.

As
announced in May 2013 the Commission is now seeking feedback on these proposals
from interested parties through a market test. If the proposals address the
Commission's competition concerns, the Commission may decide to make them  legally binding on Visa Europe. Payments by
card play a key role in the EU internal market, in particular for purchases
across borders or over the internet. European consumers and businesses are
making more than 40% of their non-cash payments per year through payment cards.
Any competition distortions in this field may therefore hamper the good
functioning of the Single Market and harm European consumers through higher
prices.

What are interchange fees?

Interchange fees are charged by a cardholder's bank
(the 'issuing bank') to a merchant's bank (the 'acquiring bank') for each sales
transaction made at a merchant outlet with a payment card. The industry refers
to these multilateral interchange fees as "MIFs". A MIF can be a
percentage, a flat fee or a combined fee (percentage and flat fee).

When a customer uses a payment card to buy from a
merchant, the merchant receives from his bank (the acquiring bank) the sales
price less a 'merchant service charge', the fee a merchant must pay to his bank
for accepting the card as means of payment for that transaction. A large part
of the merchant service charge is determined by the interchange fee. The
customer's bank (the issuing bank), in turn, pays the acquiring bank the sales
price minus the MIF and the sales price is deducted from the customer's bank
account. The MIF is therefore an extra cost that is charged to the merchant,
who then passes it on to consumers in the final price of the good or service.

 The full version of the commitments is available
on the Commission's competition website at:

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=1_39398

GRTU President Paul Abela has this week actively
participated in a round-table discussion on the 2013 Country-Specific
Recommendations for Malta, organized by the European Commission Representation
in Malta. Malta saw the close of last month with the Commission
recommending that Malta be placed under an Excessive Deficit Procedure.

In his intervention Mr Abela emphasized that it is
important that the livelihood of SMEs is safeguarded during whatever transition
that will be required. SMEs are struggling continuously to safeguard the
viability of their enterprises and maintaining employment levels.

The European Commission expressed concerns on property
related bank loans which it said required analysis in view of the different categories.
Mr Abela pointed out that Real Estate needs to be looked at in two different
categories – business property and residences. He emphasised that the majority
business owners tend to buy their property rather than rent it from another
landlord so that they can dispose of it as they wish when they come to their
retiring age.

On Public finances and tax compliance the European Commission
has outlined that Malta has taken no relevant action to reduce indebtedness in
corporate taxation. Mr Abela stated that enterprises in Malta are already
heavily regulated. Penalties and interest rates are already very taxing on
enterprises. It is unjust and hard on SMEs to impose on them such high and
harsh tax penalties. Most SMEs suffer a lot on such issues which range from
business closures to imprisonment. Mr Abela pointed out that although tax dues
were reduced this factor is still a burden on small enterprises since for them
dues are still too high. He also added that such penalties are effectively red
tape on small business owners and are unjustified. Paul Abela reminded the
Commission officials that unlike them who have a fixed guaranteed monthly pay,
business have to struggle to earn a living on a daily basis and are subject to
many factors which they have to watch and take into consideration that can
affect the viability of their business. Mr Abela also mentioned the unfair
competition of illegal importation.

With regards to energy efficient measures Mr Abela
pointed out that he urges Government to achieve all the objectives mentioned in
the Electoral programme and also emphasized that the promise made to deduct 25%
on electricity bills should be kept since it will be the first step in the
right direction. Furthermore, if this promise will be kept Maltese businesses
will be more competitive in Europe since this measure will reduce a major
running cost to businesses. Mr Abela also referred to a suggestion GRTU had put
foreword on night tariffs which would be beneficial for businesses.

In the field of culture, the EU's ‘Culture' and ‘Media'
programmes foster cooperation between TV programme, film-makers, broadcasters
and cultural bodies from different countries. This encourages the production of
more European TV programmes and films.

One of Europe's essential characteristics is its diversity of
languages – and preserving that diversity is an important EU objective. Indeed,
multilingualism is fundamental to the way the European Union works. EU
legislation has to be available in all 23 official languages, and every MEP has
the right to use his or her own language in parliamentary debates.

V. The Ombudsman and your right to
petition Parliament

To help bring the EU closer to its citizens, the Treaty on
European Union created the post of Ombudsman. The European Parliament appoints
the Ombudsman, who remains in office for the duration of the Parliament. The
Ombudsman's role is to investigate complaints against EU institutions and
bodies. Complaints may be brought by any EU citizen and by any person or
organisation living or based in an EU country. The Ombudsman tries to arrange
an amicable settlement between the complainant and the institution or body
concerned.

VI. A sense of belonging

The idea of a ‘citizens' Europe' is very new. Some symbols of
a shared European identity already exist, such as the European passport, in use
since 1985. EU driving licences have been issued in all EU countries since
1996. The EU has a motto, ‘United in diversity', and 9 May is celebrated as
‘Europe Day'.

However, people cannot feel they ‘belong to' the European
Union unless they are aware of what the EU is doing and understand why. The EU
institutions and member states need to do much more to explain EU affairs in
clear and simple language. People also need to see the EU making a tangible
difference to their daily lives. In this respect, the use of euro notes and
coins since 2002 has had a major impact.

More than two thirds of EU citizens now manage their personal
budget and savings in euro. Pricing goods and services in euro means that
consumers can compare prices directly from one country to another. Border
checks have been abolished between most EU countries under the Schengen Agreement,
and this already gives people a sense of belonging to a single, unified
geographical area.

A sense of belonging comes, above all, with feeling
personally involved in EU decision-making. Every adult EU citizen has the right
to vote in European Parliament elections, and this is an important basis for
the EU's democratic legitimacy. That legitimacy is being increased as more
powers are given to the European Parliament, national parliaments have a
greater say in EU business and Europe's citizens become more actively involved
in NGOs and political movements. If you want to help shape the European agenda
and influence EU policies, there are many ways to do so. There are, for
example, online discussion forums dedicated to European Union affairs where you
can join in the debate, and you can post your views on Commissioners' or MEPs'
blogs. You can also contact the Commission or Parliament directly, online or
via one of their offices in your country. Europe Direct offices near you can
help you do this as well.

The European Union was set up to serve the peoples of Europe,
and its future must be shaped by the active involvement of people from all
walks of life. The EU's founding fathers were well aware of this. ‘We are not
bringing together states, we are uniting people', said Jean Monnet back in
1952. Raising public awareness about the EU and involving citizens in its
activities is still one of the greatest challenges facing the EU institutions
today.

A study is
being carried out by a student from the Buckinghamshire New University on
Business Continuity in Malta. Thus a survey is being circulated to business
owners in order to establish a clear snapshot on the local current situation of
Business Continuity Management.

Submissions
will be treated with the strictest confidence and participants who submit the
survey successfully will receive a Business Continuity Management Pack free of
charge (limited to one per business /organisation) provided that the survey is
completed in full.

To participate kindly click
on the underneath link

https://www.surveymonkey.com/s/Business_Continuity_in_Malta

The survey will be
available online till Friday the 14th of June 2013.

The largest and most important annual
trade show in the world for franchising, the International Franchise Expo, will
take place in New York, June 20 – 22, 2013. 
The U.S. Embassy is promoting the Franchise Expo and is actively
recruiting a Maltese delegation to attend. 
The expo will feature over 400 franchise exhibitors, with investments
ranging from $5,000 to over $1 million.

Maltese delegates that register
through the U.S. Embassy will receive:

Support and guidance from the U.S. Embassy
Commercial Section.

Complimentary registration.

Complimentary admission to exhibits and
seminars.

Discounted admission to symposia.

Matchmaking support pairing investors with
U.S. franchising systems.

Complimentary assistance arranging and
scheduling appointments with U.S. exhibitors and U.S. companies, both before
and during the show.

Complimentary access to the International
Business Center (IBC) where:

International visitors and exhibitors can meet
and discuss business collaboration.

Private meeting rooms may be reserved.

U.S. Department of Commerce Trade Specialists
will be available to provide matchmaking assistance and export trade
counseling.

International visitors can enjoy refreshments
and relax.

Complimentary assistance with travel and hotel
bookings, through our official travel center and accommodation partners.

Complimentary
assistance with logistics at the show.

The US Embassy will host an information
session for all delegates on Thursday, 30th May 2013

BBC News reports that China has launched an anti-subsidy and
anti-dumping investigation into wine imported from the EU. Some analysts claim that the move comes in
"retaliation" to the EU decision to impose anti-dumping measures on
Chinese solar panel imports.

Brussels announced yesterday that it would impose the
levies after an investigation found that photovoltaic technology from China was
being sold for less than its fair value. EU trade commissioner Karel De Gucht said the price of
Chinese solar products should be 88 per cent higher than current levels, but
Beijing insists that the EU's imposition of levies on the country's solar
exports is "unfair".

The Washington Post reports De Gucht as saying that
China's pricing of solar products could destroy photovoltaic production in the
EU, warning, "20,000 jobs in Europe are at stake".

According to the paper, the Chinese ministry of
commerce has openly rejected the EU measures and expressed hope that a
settlement can be reached through consultations.

The Wall Street Journal says a spokesperson for the
Chinese commerce ministry underlined the importance of trade relations between
China and the EU, but simultaneously announced an investigation into EU wine
imports.

"Wine imports from the EU enter our market via
dumping, subsidies and other unfair trade practices, and have hit our wine
production," said the spokesperson.

China's wine market has increased significantly in the
last few years, with two thirds of Beijing's 430 million litres of imported
wine in 2012 coming from EU suppliers.

Finance Minister Edward Scicluna has announced five measures
which will make it easier for those who are in default of VAT payments to
regularize their position. In the past, individuals or companies that were in
default found themselves caught in a system which quickly became unsustainable,
as interest accumulated and made it harder and harder for them to get back on
track.

The  measures
are aimed at encouraging those in the black economy to register for VAT by
making the system more "humane" for those who lapse, while still remaining firm
with those who repeatedly or stubbornly defaulted.

The main measure announced is that the interest rate
of tax due will go down from 9 per cent per year to between 6 per cent and 6.5
per cent. This will be introduced 
through an enabling law expected to be reviewed at regular intervals and
changed by means of legal notice, rather than through new legislation.

In order to reduce the accumulation of interest and
fines, any payment made by individuals or companies in default will be apportioned
towards  the tax due and only after that
has been settled will subsequent payments be made towards the fines and
interest, reversing the current system. 
The deadline for those eligible for amnesty were announced in the 2012
Budget.

Administrative fines on those who register late for
VAT would be also capped, reflecting the merger under way of the Government's
three revenue collecting departments (Inland Revenue, Customs and VAT) to form
the Department of Revenue headed by the Commissioner of Revenue Marvin Gaerty.

The merger will also mean that any companies being
investigated would only be put under scrutiny once- and not as is currently the
case when each department might have carried out its own investigation.

The Government will also be removing the €15-a-day
fine on payments imposed by court-which accumulated rapidly and often ended up
putting the defendant in jail for not having paid.

The European
Commission has yesterday decided to impose provisional anti-dumping duties on
imports of solar panels, cells and wafers from China. This
decision follows a thorough and serious investigation and extended contacts
with market players. As the market for and imports of solar panels in the EU is
very large, it is important for this duty not to disrupt it.

The
European Commission reiterates its readiness to pursue discussions with Chinese
exporters and with the Chinese Chamber of Commerce in order to find a solution
in line with Article 8 of the Basic Anti-Dumping Regulation so that provisional
duties can be suspended and a negotiated solution achieved.

Background

The
decision came after a nine month investigation, launched in September 2012,
during which the Commission found that Chinese companies are selling solar
panels to Europe at far below their normal market value, which causes
significant harm to EU solar panel producers. The fair value of a Chinese solar
panel sold to Europe should be 88% higher than the price to which it is
actually sold. The dumped Chinese exports exerted undue price pressure on the
EU market, which had a significant negative effect on the financial and
operational performance of European producers.

The
provisional duties are far lower than the 88% rate at which the panels are
being dumped because the EU applies the so-called 'lesser duty rule', imposing
only enough duty needed to restore a level playing field. The provisional duty,
in addition to restoring fair competition, will ensure the continued
development of an innovative green energy sector in the EU.

The
Commission will now continue its investigation and hear the views of all
interested parties. It remains ready to intensify talks with China to find
alternative satisfactory solutions through a negotiation.

On 5
December at the latest, the EU will have to decide if definitive anti-dumping
duties will be imposed for a duration of five years.

On the
solar panel market

Highly
innovative EU companies are currently being exposed to immediate threats of
bankruptcy because of unfair competition from Chinese exporters, who have taken
over more than 80% of the EU market and whose production capacity currently
amounts to 150% of global consumption. In 2012, China's excess capacity was
almost double total EU demand. The Commission's assessment indicates that
imposing provisional measures will not only secure the existing 25,000 jobs in
EU solar production, but also create new jobs in the sector.

In the
short term, some jobs could be lost among companies installing solar panels.
However, as the situation of EU producers improves and imports from other
countries increase, these jobs could be recreated.

Any job
losses would in any case be substantially less than the 25,000 jobs in the EU
solar production industry that are likely to be lost forever if measures are
not imposed.

The
decision should also contribute to creating a level playing field for Europe's
renewable energy industry, which is essential to the EU's renewable energy
targets. Unfair trade in solar panels does not help the environment and is not
compatible with a healthy global solar industry.

The
Commission believes that a market that faces dumped imports will drive local
producers out of business and discourages EU producers from developing
cutting-edge technologies in the renewable energy sector.

On the
investigation

During
the investigation, the Commission assessed the level of duty needed to
counteract the injurious effects of dumping. This means the level of the duty
is never punitive in nature: it was fixed at the strict minimum necessary to
restore a level playing field for the EU industry concerned. By systematically
applying the 'lesser duty rule', the EU goes beyond its WTO obligations. This
is in contrast to other WTO members like China and the US which always apply
the full dumping found.

As in
every other investigation, the Commission carried out the so-called "Union
interest test". The EU is the only WTO Member to systematically carry out
such tests. The Commission provisionally considered that any potential negative
effects of the measures would be outweighed by the economic gains for the Union
producers.

The
investigation will continue and definitive measures, if any, would have to be
imposed within 15 months of initiation, i.e. 5 December 2013.

In
parallel, the Commission is open to discuss alternative forms of measures which
would be equivalent to the 47% duty. Both WTO and EU law offer this possibility
in the form of a price undertaking – a commitment not to sell below an agreed
price.

A
parallel anti-subsidy investigation on the same product is on-going, following
a complaint lodged by the same complainant. It was initiated on 8 November
2012. Provisional anti-subsidy measures, if any, should be imposed by 7 August
2013. The decision on definitive anti-subsidy measures will be due in December
2013.

GRTU declared publicly that the European
Commission's decision to place Malta again under Excessive Deficit Procedures
(EDP) merely six months after Malta's successful exit from the previous EDP
imposition, was an unjust treatment of Member State Malta and a highly uncalled
for decision by the EU.

Official statistics show that 2012
closed with a 3.3% government Deficit as ratio of GDP. A mere 0.3% above the 3%
ceiling imposed by the EU. This is a ceiling whose relevance to Malta is itself
arguable. But these are Malta Government's own Statistics. The Central Bank of
Malta's figures showed a more trustworthy 2.7% deficit to GDP ratios – well
below the EDP limit.

Malta during 2012 was one of the very
few Member States whose economy showed positive growth yet unlike other Member
States who in their majority had negative GRP growths.  This positive trend continued even in the
first quarter of 2013 with Malta's economy growing by 1.6%. Yet it has been
little Malta that was targeted by the EU Commission for highly negative
criticism.

The potential for Malta to continue to
stay within the acceptable Deficit targets exist and Maltese entrepreneurs are
fully supportive of all Government's initiatives to boost GDP growth and
maintain stable Government finance. EU Commission Economic analysts have very
little economic grounds on which to stand on in their pessimistic assessment of
Malta.

GRTU believes that the Commission owes
Maltese investors and entrepreneurs an explanation. It was bad enough for Malta
to be highlighted in the Press Conference announcing the Country Specific
Recommendations of the Commission. Hopefully, the EDP decision will not hamper
Malta's economic prospects.

Malta deserves better. Maltese
entrepreneurs strive hard to invest and make the Maltese economy grow and
establish an excellent name in international economic performance analysis. It
was bad enough that the Chairman of the EU Finance Ministers only some months
ago blemished Malta's good name by comparing falsely Malta with Cyprus. Now the
EU Commission has put its foot in it also by declaring Malta under EDP when
there was no need for such a harsh and negative imposition. We simply did not
deserve all this.