Author: SME Chamber

The European Commission has adopted a comprehensive
package to step up its fight against illicit tobacco trade, especially
cigarette smuggling. The illicit tobacco trade is a global threat depriving
Member States and the EU of over €10 billion revenue every year in terms of
unpaid taxes and duties.

Despite record unemployment in Europe, 1.7 million
vacancies are unfilled in the EU. This is one of the main findings of the
European Vacancy Monitor published by the European Commission. The report shows
that both employment and hiring are increasing in the areas of administration,
teaching, business, health care as well as engineering. However, the number of
unfilled vacancies is 4% lower than at the same period last year.

Following the scientific opinion of EFSA, the European
Commission and Member States (MS) decided on 22th May that the flavouring
substance 3-acetyl-2,5-dimethylthiophene should be banned. EFSA stated in its
press release that 'the possible risk to consumers who may have been exposed to
this substance in food is expected to be very small'. No exposure assessment
was done.

Food additives are substances added intentionally to
foodstuffs to perform certain technological functions, for example to colour,
to sweeten or to help preserve foods. From 1 June 2013 the EU list of
authorised food additives takes effect and previous European directives are
replaced with a single regulation.

An annual report on Europe's Rapid Alert System for
Food and Feed – (RASFF) revealed that in 2012 almost 50% of
notifications related to food and feed rejections at EU borders due to the risk
they posed to food safety. Launched more than 30 years ago, RASFF is an IT tool
that facilitates the cross-border flow of information between national food
safety authorities and plays a key role in ensuring a high level of food safety
for Europe's citizens.

Further information
can be found at: http://ec.europa.eu/social/main.jsp?catId=333&langId=en&consultId=13&furtherConsult=yes

European citizens are entitled to live in freedom,
without fear of persecution or violence, anywhere in the European Union. Yet
international crime and terrorism are among the main concerns of Europeans
today.

Clearly, freedom of movement must mean giving everyone,
everywhere in the EU, the same protection and the same access to justice. So,
through successive amendments to the Treaties, the European Union is gradually
being made into a single ‘area of freedom, security and justice'.

Moving freely within the EU and protecting
its external borders

The free movement of people within the EU raises
security issues for the member states, since they no longer control internal EU
borders. To compensate for this, extra security measures have to be put in
place at the EU's external borders. Moreover, since criminals can also exploit
freedom of movement within the EU, national police forces and judicial
authorities have to work together to combat cross-border crime.

One of the most important moves to make life easier for
travellers in the European Union took place in 1985, when an agreement was
signed in a small Luxembourg border town called Schengen. They agreed to
abolish all checks on people, regardless of nationality, at their shared
borders, to harmonise controls at their borders with non-EU countries and to
introduce a common policy on visas. They thus formed an area without internal
frontiers known as the Schengen area. In 2010, the Schengen rules are fully
implemented by all EU countries except Bulgaria, Cyprus, Ireland, Romania and
the United Kingdom. Three non-EU countries – Iceland, Norway and Switzerland –
are also in the Schengen area.

Tightening up checks at the EU's external borders became
a priority when the EU expanded in 2004 and 2007. An EU agency known as Frontex,
based in Warsaw, is responsible for managing EU cooperation on external border
security. The member states can lend it boats, helicopters and planes for
carrying out joint patrols – for example in sensitive areas of the
Mediterranean.

Asylum and immigration policy

Europe is proud of its humanitarian tradition of
welcoming foreigners and offering asylum to refugees fleeing danger and
persecution. Today, however, EU governments face the pressing question of how
to deal with rising numbers of immigrants, both legal and illegal, in an area
without internal frontiers.

In recent years, large numbers of illegal immigrants
have been arriving on Europe's shores, and one of the EU's top priorities is to
deal with this problem. Member governments are working together to tackle
people smuggling and to agree common arrangements for repatriating illegal
immigrants. At the same time, legal immigration is being better coordinated
under EU rules on family reunification, on the status of long-term residents
and on admitting non-EU nationals who wish to come to Europe to study or to
undertake research.

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.