Trader confusion looms if 'country of origin' axed from EU proposal

The proposal came as the draft Directive on Unfair Commercial Practices was deliberated by European Ministers. First proposed in 2001, the Directive is intended to clarify consumers' rights and to simplify cross-border trade within the EU.

The Irish amendment was put forward after many Member States rejected the 'country of origin' principle around which the Directive was originally based. The 'country of origin' basically means that anyone trading within the EU need only comply with the laws of the country in which they were established – allowing them to largely ignore the laws of other EU Member States.

However, in response to serious opposition from a number of Member States, the President has suggested the removal of the principle. Only the UK and three other countries have continued to support the measure.

The UK's Advertising Association yesterday expressed its frustration. It is a federation of 26 trade bodies representing the advertising and promotional marketing industry, including advertisers, agencies, the media and support services in the UK. Andrew Brown, its Director General, said:

"The Directive must provide legal certainty for business through a strong 'country of origin' mechanism. Anything less than this would be unacceptable to the UK advertising industry. The European Commission must wholeheartedly oppose any designs that would further hamper the development of a true Internal Market."

Phil Murphy, the Advertising Association's Head of European Public Affairs, added:

"Rumours in the Brussels corridors of power point to the desire to reach a common position within the Member States 'at any cost', which could prove costly to the whole advertising business."

Negotiations are at a critical point as European Council moves towards agreeing a common position on the draft law at a meeting of its Competitiveness Ministers on 18th May. It then returns to the European Parliament for a second reading.

Murphy concludes:

"After it hooked its proposal firmly around the importance of a 'country of origin' clause, the European Commission must now prove that the last four years of discussions have not just been idle rhetoric. If the principle of 'country of origin' is ditched, then it will make a mockery of the drive towards an Internal Market. This is a very negative message to be sending out only a week after enlargement."