Simplification measures proposed to save EU bizs further €400 mn a yr

With a new category called small-mid caps (SMCs), i.e. companies with fewer than 750 employees and either up to €150 million in turnover or up to €129 million in total assets, the measures will ease compliance obligations and thus free resources for growth and investment across the single market.

The measures boost incentives for small and medium enterprises (SMEs) to scale up, digitise regulatory processes, reduce red tape and support the Commission's goal to cut administrative costs by 25 per cent overall and by 35 per cent for SMEs by the end of this mandate, an official release said.

When SMEs grow beyond 250 employees, they become large enterprises under the current rules, and face a sharp increase in compliance obligations. This ‘cliff-edge’ can discourage growth and limit competitiveness, the release observed.

These small mid-caps—nearly 38,000 in the European Union (EU)—will access for the first time certain existing SME benefits, such as specific derogations under the  General Data Protection Regulation (GDPR) or simplified rules, such as prospectus rules  making listing of SMCs on the stock market  simpler and less costly.

In 2026 alone, around 10,000 companies will no longer need to register in the EU fluorinated gas portal under proposed changes. At present, all importers and exporters of products containing fluorinated gas must register. The proposed change will reduce compliance burden for smaller firms handling limited trade volumes while maintaining the climate objectives of the Regulation.

Today's proposal simplifies the record-keeping obligation in the GDPR, taking into account the specific needs and challenges of SMEs and organisations, while ensuring that the rights of individuals are protected. The proposal exempts SMCs and organisations with fewer than 750 employees, in addition to SMEs.

The proposal will accelerate the digital transition, eliminating cumbersome paper-based requirements in product legislation. Current EU rules still require companies to provide paper-based declarations of conformity, instructions for use, and others. By digitising these requirements, companies can submit and distribute information more easily and national authorities can verify compliance more efficiently.

Companies, including SMEs and SMCs, will have a clear path to demonstrate that their products meet EU requirements, even when EU-wide harmonised standards are not available. This will offer them more legal certainty, reduce costs, and increase competitiveness.

To help the battery industry navigate the challenges of sourcing raw materials in uncertain times, the Commission is giving companies more time to prepare for new due diligence rules.

The deadline for complying with these rules will be pushed back by two years, from 2025 to 2027. This also offers more time for the setting up of third-party verification bodies.

In addition, the due diligence guidelines will be published one year before the obligations take effect. This will give timely guidance to businesses and help ensure a smoother implementation of the new rules.

This proposal is the fourth Simplification Omnibus package presented by the Commission under this mandate, in an effort across the entire institution to reduce unnecessary bureaucracy and create a regulatory environment that drives innovation, growth, quality jobs and investment.

ALCHEMPro News Desk (DS)