Dear Mr Rettenmaier,

 

Thank you very much for submitting your query.

 

The European Economic and Social Committee (EESC) is a EU consultative
body that gives representatives of Europe's socio-occupational interest
groups and others (Employers, Employees, Civil Society Organisations) a
formal platform to express their points of view on EU issues via opinions.
Its opinions are addressed to the Council, the European Commission and the
European Parliament.

 

The [1]EESC opinion on the Regulation (EU) 2023/1115 on deforestation-free
products does address the issue of administrative burdens on small
enterprises. It recognizes the need for careful regulation to avoid
imposing unnecessary costs and bureaucracy on SMEs. The opinion
specifically recommends that the European Commission carefully evaluate
whether requirements such as geo-localisation and evidential obligations
are proportionate, particularly for smaller operators (Point 4.6 of the
Opinion).

 

The regulation introduces a simplified due diligence system for low-risk
countries and SME traders, which may help to reduce the regulatory burden
on small businesses. However, the EESC also stresses that such
simplifications should not create loopholes that could undermine the
regulation’s effectiveness​ (Point 2.8 of the Opinion).

 

The EESC calls for the Commission to balance the need for stringent
deforestation controls with the practical capacity of smaller enterprises,
emphasizing that penalties and administrative requirements should not
disproportionately impact them. Finally it recommends assessing the role
of smallholders and the potential cost of compliance on them before the
regulation takes effect (Points 1.6 & 4.5 of the Opinion).

 

So to summarize, the concerns of excessive bureaucracy for SMEs and
micro-enterprises are valid, but the Commission did include some
exemptions and simplified processes for SMEs in its regulation.

 

As you mentioned other pieces of EU legislations in relation to
administrative burdens for SMEs and, in general, the complexities of a
more articulated EU regulatory framework, especially with regards to the
green transition, we would like to inform you that the EESC addressed the
EU Commission and the co-legislators on such issues.

 

In the recent opinion on "[2]How to recalibrate the Green Deal that it
fits for purpose", the EESC calls on the European Commission to set up the
mapping of adopted measures within the Green Deal to avoid overlaps,
conflicts and a cumulative burden. Moreover, the opinion provides concrete
proposals about possible recalibration areas, including Energy Efficiency
Directive, EU ETS mechanism, Clean Mobility, Common Agricultural Policy
and others.

 

The problem of overregulation of EU law, especially in comparison with
other parts of the world, has been repeatedly pointed out by organisations
representing European entrepreneurs. The EESC is currently working on the
opinion "The competitiveness of the EU’s small and medium-sized
enterprises in light of new administrative burdens/obligations" which aims
at identifying the reasons for introducing excessive regulatory burdens in
EU law and the areas that restrain SMEs' competitiveness the most. The
opinion will also analyse the impact of the new sustainability reporting
obligations (both those already introduced and those planned) on the SMEs'
competitiveness, by indicating the actual benefits of this process.

 

Please, be aware that there are several EU Initiatives aiming at
supporting SMEs in the green and digital transitions launched by the EU
Commission. In this regard, you may be interested in consulting the
[3]Europe Enterprise Network Initiative which provides several types of
advice and support to SMEs, among others on how to navigate EU
legislations, policies and benefit from the opportunities offered by the
Single Market.

 

Best regards,

The European Economic and Social Committee

 

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