Cut regulation to improve investment, BusinessEurope tells EU

Regulatory burdens have emerged as one of the top two concerns for businesses operating in the European Union (EU) regarding the investment climate.

BusinessEurope supports the assessments by high-level reports from former Prime Ministers of Italy Enrico Letta and Mario Draghi, which highlight regulatory complexity and EU law simplification as urgent priorities.

Over 60 per cent of EU companies cite regulation as an obstacle to investment, with 55 per cent of small and medium-sized enterprises (SMEs) identifying administrative burdens as their greatest challenge.

The majority of BusinessEurope’s member federations report an increase in these burdens over the past year due to legislative changes by the European Commission, coupled with the mass influx of delegated and implementing acts.

BusinessEurope advocates for a decisive EU initiative to reduce regulatory burdens and improve the investment climate.

The organisation welcomes the European Commission’s renewed focus on competitiveness and burden reduction, as well as President Ursula von der Leyen’s initiative to:

• Reduce reporting requirements by at least 25 per cent, and by 35 per cent for SMEs.
• Conduct a “stress test” of the entire EU regulatory framework.
• Implement an “Omnibus” approach to address multiple legislative burdens in a single process.
• Simplify the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CS3D), and Taxonomy framework.
• Set an overall regulatory burden reduction target with a dedicated programme and clear deadlines.

It also urges policymakers to extend their focus beyond reporting requirements and reduce overall regulatory compliance costs, eliminate cross-border barriers in the Single Market, and cut excessive bureaucracy.

Identified Regulatory burdens and suggested improvements

BusinessEurope has identified 68 regulatory burdens across 11 key areas, structured under three primary sources of compliance costs:

1. Administrative burdens, including reporting requirements.
2. Excessive adjustment burdens, which create disproportionate costs for businesses.
3. Cross-border regulatory barriers, which hinder operations in the Single Market.

BusinessNow.mt identified the following as key regulatory burdens, and their proposed solutions;

1. Packaging and packaging waste regulation (PPWR)

• Burden: Divergent national requirements, discriminatory reuse targets for transport packaging, and market fragmentation create additional costs for businesses.
• Proposed solution: Remove provisions causing market fragmentation. Eliminate the 100 per cent reusable transport packaging requirement within a Member State and between EU company sites.

2. Single use plastics (SUP) directive

• Burden: Businesses ordering custom-branded packaging are deemed “producers” and subject to additional regulatory obligations. Frequent reporting requirements add to administrative complexity.
• Proposed solution: Introduce minimum packaging material thresholds for producer responsibility exemptions. Reduce reporting frequency from quarterly to annual.

3. General product safety regulation (GPSR)

• Burden: Mandatory risk assessments for every marketed product impose significant costs, especially for SMEs.
• Proposed solution: Simplify procedures with standardised digital risk assessment forms. Exempt low-risk products from extensive requirements. Recognise international certifications like ISO to avoid duplication of compliance efforts.

4. Late payment directive

• Burden: The proposed 30-day maximum payment term limits contractual flexibility and may create liquidity crises, especially for SMEs.
• Proposed solution: Withdraw the proposal and instead focus on enforcement, mediation, and transparency initiatives such as the European Observatory on Late Payments.

5. Intrastat/VAT reporting

• Burden: Businesses must submit multiple declarations for intra-EU sales, creating excessive administrative work.
• Proposed solution: Abolish Intrastat reporting and rely on VAT reporting obligations instead.

6. VAT in the digital age (ViDA)

• Burden: New requirements for rapid transaction reporting increase compliance costs and administrative strain.
• Proposed solution: Introduce practical guidelines on invoicing and reporting timeframes that consider business size and operational capacity.

7. Anti-money laundering (AML) rules

• Burden: Expanded obligations impose significant compliance costs on previously unregulated entities.
• Proposed solution: Introduce exemptions for small companies not operating in high-risk sectors. Establish minimum validity periods for registrations to reduce redundancy.

8. Market surveillance under the digital services act (DSA)

• Burden: Overlapping definitions between DSA and product safety laws create legal ambiguity.
• Proposed solution: Clearly define product safety obligations within the DSA framework. Ensure trusted flaggers report safety issues to the Market Surveillance Authority for coordinated enforcement.

9. Food safety regulations (IUCLID Data Format for Risk Assessments)

• Burden: Mandatory submission of dossiers using IUCLID software causes duplication of work and delays in regulatory approvals.
• Proposed solution: Make IUCLID fully compliant with legislative requirements and improve its usability for both submission and evaluation processes.

A call for urgent action

BusinessEurope calls on the European Commission to:

• Develop a clear action plan with a defined scope, timetable, and governance structure.
• Engage in regular dialogue with stakeholders to ensure reforms are practical and effective.
• Strengthen the application of better regulation principles, including impact assessments, post-implementation evaluations, and independent oversight.