Single market emergency instrument: Council and Parliament strike a provisional deal on crisis preparedness

Today, the Council and the European Parliament reached a provisional agreement on the regulation for a single market emergency instrument (SMEI), and on several accompanying legislative proposals (SMEI omnibus) to anticipate, prepare for and respond to the impact of future crises using the strength of the internal market.

Being prepared for the next emergency

The single market emergency instrument (SMEI) is intended to anticipate, prepare for and respond to the impact of future crises. It builds on lessons learned during recent emergencies such as COVID, Russia’s war in Ukraine and the energy supply crisis.

The SMEI provides for continuous monitoring for possible upcoming crises, establishes a vigilance or emergency mode to be activated whenever a threat becomes clear, and puts in place governance so that member states can coordinate their response.

It also creates an ‘advisory group’ formed by the Commission and the member states to assess a given situation and recommend responses.

As a last resort, the SMEI provides for emergency measures such as targeted information requests to economic operators, priority-rated requests for crisis-relevant products, a fast-track procedure to bring certain products onto the market and derogations from product-specific rules.

Together with the SMEI, the Commission presented a package of proposals (the ‘SMEI omnibus’) which updates the current legislation on conformity assessment rules and introduces common specifications and market surveillance rules to enable the SMEI to be operational in times of crisis.

Main elements of the provisional agreement

The provisional agreement reached today supports the general objectives of the regulation and the SMEI omnibus but introduces several amendments to improve the clarity, feasibility and legal certainty of the proposal.

Scope of the regulation

The agreement clarifies the scope of the regulation, which must respect its legal basis and therefore be limited to actions related to the internal market. The measures must be limited to crisis situations and should not affect areas of national competence (i.e. national security).

The single market emergency board

The agreement also reinforces the role of the ‘advisory group’, which will become the ‘internal market emergency and resilience board’. It will be responsible for assisting and advising the Commission in the contingency, vigilance, and emergency modes. In addition to Commission and member state representatives, the board will include a member of the European Parliament as an observer. The chair of the board will report to the European Parliament on a regular basis. The parliament will be informed every time that the board proposes or adopts any implementing act.

Resilience and crisis preparedness

The agreement proposes that the Commission should undertake stress tests and simulations to anticipate and prepare for crises and assess the possible impact on the free movement of goods, services and people. Economic operators will be encouraged to develop crisis protocols and conduct training and crisis simulations, on a voluntary basis.

Shortage of crisis-relevant goods and services

The provisional agreement provides for last-resort measures when a crisis threatens the supply of critical goods and services. In such circumstances, the Commission can request data from companies such as the stock level of certain products. If companies refuse to supply this information, they will have to explain the reasons why.

Member states should be transparent on the measures that they take to face the crisis situation and have an information-sharing platform to be aware of the measures taken by other member states.

In the event of serious and persistent crisis-related shortages, the Commission can issue priority-rated requests to purchase critical goods or services. Companies can accept these requests on a voluntary basis and will be legally covered for liability vis-à-vis their other trading partners if they do not meet other contract obligations. This order will have to be in compliance with competition rules and should not affect security or defense competences of the member states.

In these exceptional circumstances, the Commission and contracting authorities from member states may carry out a joint procurement procedure to acquire crisis-relevant or critical goods or services. Member states can also launch procurement for these kinds of goods, in coordination with other member states, and making sure to inform the Commission and the single market emergency board.

Ensuring free movement

If the vigilance or emergency mode is activated, the provisional deal proposes mitigation measures that member states can use to ensure the supply and movement of goods or services relevant to the crisis. For example, the Commission can make digital tools available to the member states to help identify individuals and verify facts related to the crisis and provide templates or digital forms to accelerate procedures affecting the crisis.

SMEI omnibus

The agreement the co-legislators reached today extends the scope of the legislative proposals affected by the SMEI to the general product safety regulation, and to non-harmonised products included under this legislation. On the other hand, the agreement excludes the regulations affecting products with particular safety specifications, such as fertilisers, pyrotechnic items, civil explosives and non-automatic weighing and measuring instruments.

Application dates

Finally, the co-legislators have agreed that member states will have a period of 18 months to implement the new rules, once the regulation comes into force.

Next steps

The provisional agreement reached with the European Parliament now needs to be endorsed and formally adopted by both institutions.

Background

On 19 September 2022, the Commission submitted to the European Parliament and to the Council a proposal for a directive on single market emergency instrument. The Council adopted its general approach on 6 June 2023, under the Swedish presidency.