American Chamber of Commerce to the European Union

AmCham EU speaks for American companies committed to Europe on trade, investment and competitiveness issues. It aims to ensure a growth-orientated business and investment climate in Europe. AmCham EU facilitates the resolution of transatlantic issues that impact business and plays a role in creating better understanding of EU and US positions on business matters. Aggregate US investment in Europe totalled more than €3.4 trillion in 2021, directly supports more than 4.9 million jobs in Europe, and generates billions of euros annually in income, trade and research and development. American Chamber of Commerce to the European Union Speaking for American business in Europe Avenue des Arts/Kunstlaan 53, 1000 Brussels, Belgium • T +32 2 513 68 92 [email protected] • amchameu.eu • European Transparency Register: 5265780509-97 Consultation response Revision of the Union Customs Code Ref.

• European Transparency Register: 5265780509-97 Consultation response Revision of the Union Customs Code Ref. Ares(2022)6468953 - 19/09/2022 2 Customs Union legislation reform Consultation Introduction The EU's customs union is the foundation of its single market and its involvement in international trade. The EU agrees on a common set of rules and policies concerning goods crossing the EU borders, which national customs administrations implement and enforce. Customs' mission is to facilitate legitimate trade, collect customs revenue and protect European citizens against products that do not comply with EU food, health and environmental rules, and against security and safety risks including smuggling, crime and terrorism. Customs authorities supervise all goods entering or leaving the customs union.

…crime and terrorism. Customs authorities supervise all goods entering or leaving the customs union. They use risk management techniques to identify risks and carry out controls of the goods, to ensure that rules are respected and that imported goods are safe and secure for EU citizens. Often, this happens in close cooperation with authorities competent for enforcing sectoral legislation, for example on product safety or animal health. The EU applies a common customs tariff, which means the same way of calculating the duty for an import in all Member States, in line with the EU's trade agreements, and collects the customs duties for the EU budget. Once a good is in the EU single market, in technical terms 'released for free circulation', it can be moved freely from one Member State to another without customs controls.

'released for free circulation', it can be moved freely from one Member State to another without customs controls. Any port, airport or external border crossing point is therefore the entrance to the EU. The protection provided by a customs officer in one place, is at the service of all. However, there are significant differences in the capacity, risk analysis and resources of the national customs administrations. Furthermore, illegal activities can change routes from one entry point to another, making it more difficult to detect. Overall, global trade has evolved rapidly, with a significant increase in terms of volumes, including a rapid expansion of e-commerce. EU rules and standards have evolved as well, calling for an increasing role of customs in performing tasks going beyond revenue collection.

…have evolved as well, calling for an increasing role of customs in performing tasks going beyond revenue collection. Concerns for the protection of EU public interests, EU citizens and business have risen to the fore. Brexit, the Covid-19 pandemic and the Russian aggression of Ukraine have been accelerators of these changes. The Commission has engaged in a deep reflection to make the customs union fit for the future. This includes in particular a foresight study, which resulted in a report on the future of EU customs 2040, and the report and recommendations of the Wise Persons Group on the challenges facing the customs union. Evidence gathered by this Group shows that dangerous, non-compliant products still enter the EU market every day and that we leave billions of customs duties uncollected. As a result, it appears that customs in the EU do not yet function “as one” as they should.

…customs duties uncollected. As a result, it appears that customs in the EU do not yet function “as one” as they should. This leaves the customs union at the mercy of its weakest link. The European Commission is preparing a proposal to reform the customs union and is assessing its expected impacts. The aim of this consultation is to gather the views and experiences of interested parties (including businesses, trade associations, individuals, public authorities and other stakeholders) regarding the state of the customs union and possible reform elements. A summary of the responses to this consultation will be published after the end of the consultation period.

…elements. A summary of the responses to this consultation will be published after the end of the consultation period. 3 Customs Union legislation reform Consultation About you Language of my contribution - EN I am giving my contribution as - Business association First name – Michal Surname - Chvojka Email (this won't be published) – [email protected] Organisation name: American Chamber of Commerce to the EU Country of origin – BE Organisation size – Small (10 to 49 employees) Transparency registration number: 5265780509-97 The Commission will publish all contributions to this public consultation. You can choose whether you would prefer to have your details published or to remain anonymous when your contribution is published.

…whether you would prefer to have your details published or to remain anonymous when your contribution is published. For the purpose of transparency, the type of respondent (for example, ‘business association, ‘consumer association’, ‘EU citizen’) country of origin, organisation name and size, and its transparency register number, are always published. Your e-mail address will never be published. Opt in to select the privacy option that best suits you. Privacy options default based on the type of respondent selected X - I agree with the personal data protection provisions Information on your interaction with customs On average, how frequently are you involved in customs operations, procedures and/or declarations? Daily or almost daily Do you deal regularly with more than one customs office or Member State?

…declarations? Daily or almost daily Do you deal regularly with more than one customs office or Member State? Yes If yes, in your experience, do you find that Member States execute similar operations in different ways? Please provide details In terms of the interpretation and application of customs legislation, as well as intellectual property rights (IPR) enforcement for illegal and counterfeit goods, businesses are regularly confronted with a non-unified approach by the customs authorities of different Member States. Combined with a highly diverging risk perception across Member States, this results in very significant differences in pre- clearance and clearance processes as well as average lead times and inspection rates across Member States and among various customs offices within single Members States.

…lead times and inspection rates across Member States and among various customs offices within single Members States. The most recent changes (as of 1 July 2021) are the area where major differences exist, eg: application of H7 data set and requested data in H7 declaration. Also, the Authorised Economic Operators (AEO) program and associated simplifications for trusted companies and the customs representation, could be mentioned. Overall, COM should take stronger leadership role. There are also differences in storage and destruction costs and practices. Increased harmonisation and standardisation of customs processes across the EU are key to facilitate trade whilst ensuring that bad actors cannot direct their import flows towards countries with lower risk perception.

…whilst ensuring that bad actors cannot direct their import flows towards countries with lower risk perception. While moving towards more uniform application of customs law, the EU must aim for 4 Customs Union legislation reform Consultation the highest quality solutions that simultaneously allow meeting facilitation and control goals and that avoid by all means equalling to the common denominator among the Member States. If you import or export for your business, how do you submit customs declarations? You prepare and submit declarations directly into national customs systems Have your interactions with customs changed due to the UK's withdrawal from the European Union? Yes How has your experience changed in this respect?

…changed due to the UK's withdrawal from the European Union? Yes How has your experience changed in this respect? Please provide details Application of full import and export formalities for the shipments arriving and departing from/to Great Britain led to substantial increase in the volumes of clearances. At the same time, express carriers are facing customers who are used to delivering goods between the two countries without formalities, and who are not fully prepared for the changes. More extensive interaction is necessary both with the customers and the customs administrations. It is also unclear whether the UK is or may become a transit hub for IPR infringing goods including parallel imports. In your own experience, how important are the following customs issues in terms of the administrative workload they generate for business?

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AmCham EU speaks for American companies committed to Europe on trade, investment and competitiveness issues. It aims to ensure a growth-orientated business and investment climate in Europe. AmCham EU facilitates the resolution of transatlantic issues that impact business and plays a role in creating better understanding of EU and US positions on business matters. Aggregate US investment in Europe totalled more than €3.4 trillion in 2021, directly supports more than 4.9 million jobs in Europe, and generates billions of euros annually in income, trade and research and development. American Chamber of Commerce to the European Union Speaking for American business in Europe Avenue des Arts/Kunstlaan 53, 1000 Brussels, Belgium • T +32 2 513 68 92 [email protected] • amchameu.eu • European Transparency Register: 5265780509-97 Our position VAT in the Digital Age Ref.

• amchameu.eu • European Transparency Register: 5265780509-97 Our position VAT in the Digital Age Ref. Ares(2023)2444382 - 04/04/2023 2 VAT in the Digital Age Our position 4 April 2023 Introduction We welcome the opportunity to provide our feedback on the Value Added Tax (VAT) in the Digital Age proposal of the European Commission. We fully support the European Commission’s ambition to improve the VAT system through the use of digital tools, reducing VAT-related barriers for cross- border trade in the EU and making the VAT system better for businesses, while also more resilient to fraud. We believe the VAT in the Digital Age proposal is well placed to embrace digitalization, and effectively addresses the challenges faced by businesses (and in particular by SMEs) who trade, or have ambitions to trade, across EU borders.

…challenges faced by businesses (and in particular by SMEs) who trade, or have ambitions to trade, across EU borders. This is well reflected in the proposal through: • The expansion of the Union One Stop Shop (‘UOSS’) and the introduction of a transfer module allowing businesses to use one single VAT registration to report transfers of own inventory to locations across the EU, as well as the onward sales in those locations. We strongly encourage Member States to reach consensus on this pillar, as it would be a pivotal tool to reduce the need for costly, time-consuming and often prohibitive need for businesses wanting to sell products across the EU to maintain multiple VAT registrations. In this regard, we also welcome the introduction of a harmonized reverse charge mechanism for domestic business-to-business (B2B) supplies.

…welcome the introduction of a harmonized reverse charge mechanism for domestic business-to-business (B2B) supplies. We highly welcome the obligation for Member States to apply a general reverse charge mechanism to domestic B2B supplies, irrespective the nature of the goods or services supplies. This will further reduce the need for VAT registrations. • Amendments to the text of the proposal should be in line with the ‘north star goal’ of reducing the VAT administrative burden for businesses. To achieve this, it is key that there is no (or very limited) negative VAT cash flow impact when businesses opt to report through the UOSS and the transfer module. Any newly introduced obligations for businesses and for electronic interfaces facilitating the transfer and/or the sale of goods should be proportional and ensure a level playing field.

…interfaces facilitating the transfer and/or the sale of goods should be proportional and ensure a level playing field. • A shift to real-time digital reporting based on e-invoicing for businesses that operate cross- border in the EU and a more harmonized framework for domestic transactions. We welcome the ambition to harmonize EU digital reporting requirements, as current fragmentation of digital reporting and e-invoicing standards around the EU is causing immense burden on businesses and is a threat to the Single Market. However, as the proposal focuses solely on creating a harmonised invoice format, it misses a key opportunity to harness the full business and economic benefits that could come from harmonization of transmission protocols and technical specifications for digital reporting.

…that could come from harmonization of transmission protocols and technical specifications for digital reporting. As technical discussions progress, we encourage the EU Commission and EU countries to consider a phased approach to adopt to the proposal. To strengthen the EU Single Market and remove blockers for crossborder trade, the most urgent action is needed to ensure the implementation of the single VAT registration concept, including the introduction of the transfer module and the expansion of the Union One Stop Shop scheme 3 VAT in the Digital Age Our position 4 April 2023 EU single VAT ID We are strongly supportive of the EU single VAT registration and we strongly encourage Member States to prioritize discussions on this pillar in order to reach consensus.

…and we strongly encourage Member States to prioritize discussions on this pillar in order to reach consensus. We strongly encourage Member States to ensure that any amendments to the proposal are in line with the ‘north star goal’ to reduce the administrative burden on businesses. The One-Stop Shop (OSS) in place since 1 July 2021 has already been a great step forward in simplifying VAT compliance for cross-border scenarios for B2C businesses. However, neither movements of retail inventory across EU countries for storage, nor the onward sale of that inventory are eligible for the OSS system. As such, businesses still face the burden of VAT registration requirements in every EU country of storage.

OSS system. As such, businesses still face the burden of VAT registration requirements in every EU country of storage. As indicated in the Commission’s Impact Assessment, the extension of the OSS combined with a transfer module as detailed in the proposal is hence a great improvement, as it will reduce burdens on hundreds of thousands of businesses operating across many industries throughout the EU, allowing them to store inventory closer to their customers, enabling faster and more sustainable delivery, without the requirement to VAT register outside their home country. This simplification will allow businesses and especially SMEs to take full advantage of the Single Market.

…country. This simplification will allow businesses and especially SMEs to take full advantage of the Single Market. National governments will also benefit from a more competitive EU market, leading to a boost for tax revenues at a time where Member States are dealing with the social and economic effects of recent energy price spikes and geo-political tensions. Simpler VAT obligations also leads to higher levels of VAT compliance and level the playing field across all sizes of businesses. We would also expect that the simplification of EU VAT obligations will encourage businesses to onshore inventory within the EU prior to sale, instead of shipping directly from non-EU locations – as well as reducing pressure on customs authorities, this should enhance tax authorities’ ability to audit and enforce.

…as well as reducing pressure on customs authorities, this should enhance tax authorities’ ability to audit and enforce. Finally, we are supportive of the measure to make the existing Import One Stop Shop mandatory for marketplaces acting as deemed supplier, as this will improve the collection and simplify the audit and enforcement of VAT, while ensuring a level playing field. Digital Reporting Requirements We support the introduction of Digital Reporting Requirements. We agree these will play a key role in the simplification of the EU VAT system and the fight against VAT fraud. We praise the ambition of the proposal and the effort to mitigate the risk of businesses facing a patchwork of requirements across EU countries, which currently act as an administrative barrier to cross-border trade.

…patchwork of requirements across EU countries, which currently act as an administrative barrier to cross-border trade. Our support for the proposal is grounded in the recognition that these requirements will play a vital role in streamlining the EU VAT system and combating VAT fraud, while simultaneously mitigating the current administrative burden on EU businesses. Notably, the implementation of Digital Reporting Requirements is anticipated to yield multiple benefits to tax authorities, primarily through the enhanced transparency provided by the expeditious transmission of information, leading to faster verification of taxpayer credit, more targeted audits and identification of VAT fraud. Such transparency should therefore also be accompanied by benefits for taxpayers, such as expedited VAT refunds and more efficient audit processes.

…also be accompanied by benefits for taxpayers, such as expedited VAT refunds and more efficient audit processes. 4 VAT in the Digital Age Our position 4 April 2023 Consistency and interoperability across EU Member States Notwithstanding the above, we believe that the proposals do not go far enough to drive EU harmonization and should be more ambitious in this area. While the proposals seek to harmonize invoice format across the EU, this is only a single facet of a digital reporting system.

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AmCham EU speaks for American companies committed to Europe on trade, investment and competitiveness issues. It aims to ensure a growth-orientated business and investment climate in Europe. AmCham EU facilitates the resolution of transatlantic issues that impact business and plays a role in creating better understanding of EU and US positions on business matters. Aggregate US investment in Europe totalled more than €3.7 trillion in 2022, directly supports more than 4.9 million jobs in Europe, and generates billions of euros annually in income, trade and research and development. American Chamber of Commerce to the European Union Speaking for American business in Europe Avenue des Arts/Kunstlaan 56, 1000 Brussels, Belgium • T +32 2 513 68 92 [email protected] • amchameu.eu • European Transparency Register: 5265780509-97 Consultation response Anti-Tax Avoidance Directive Ref.

• amchameu.eu • European Transparency Register: 5265780509-97 Consultation response Anti-Tax Avoidance Directive Ref. Ares(2024)6447316 - 11/09/2024 2 Anti-Tax Avoidance Directive Consultation 11 September 2024 Executive summary The Anti-Tax Avoidance Directive (ATAD) evaluation is an opportunity for the European Commission to evaluate the adequacy of the architecture and implementation of anti-avoidance rules facing companies in the European Union. Multi-national enterprises (MNEs) are subject to multiple layers of anti-avoidance and tax transparency rules with more being developed at the Organisation for Economic Cooperation and Development (OECD), UN, EU and national levels. Since the 15% global minimum tax (Pillar 2) has made a large amount of ATAD provisions redundant for in scope companies, the European Commission should examine ways to exempt these companies from ATAD.

…redundant for in scope companies, the European Commission should examine ways to exempt these companies from ATAD. For non-Pillar 2 companies, the Commission should work to holistically declutter requirements between different anti-avoidance and tax transparency regimes as well as work closely with Member States to increase the consistency of ATAD implementation. These improvements would contribute to the Commission’s decluttering agenda and decrease the cost and complexity of doing business in Europe. Introduction The EU, US and other international organisations have spent the past few years negotiating and implementing a whole suite of anti-avoidance and transparency rules.

…have spent the past few years negotiating and implementing a whole suite of anti-avoidance and transparency rules. These include the Base Erosion and Profit Shifting (BEPS) project at the OECD level, various reforms to the US tax code, the negotiation of Pillar 2 at the OECD level and its implementation in the EU, and the Anti-Tax Avoidance Directive (ATAD) 1 & 2, Directive on Administrative Cooperation (DAC) and Public Country by Country Reporting (pCbCR) Directive at the EU level. These rules broadly address the same or similar behaviours, but were developed separately, piecemeal, and, accordingly, place duplicative and complicated administrative and reporting requirements on companies – particularly, multi-national enterprises (MNEs).

…complicated administrative and reporting requirements on companies – particularly, multi-national enterprises (MNEs). Discussions continue to advance at the OECD, EU, and now, the UN levels, to introduce new approaches and provisions relating to international taxation of MNEs. The OECD continues to discuss Pillar 1; the UN is now discussing the creation of a UN Framework Convention on International Tax Cooperation; and the EU continues to negotiate the Unshell Directive and Transfer Pricing Directive as well as commence discussions regarding the BEFIT proposal. Before agreeing to, and implementing a new suite of rules, lawmakers should take the opportunity to review and streamline existing requirements. This should begin with a review and assessment of duplicative provisions between EU rules and Pillar 2, and result in the removal of redundant provisions.

…assessment of duplicative provisions between EU rules and Pillar 2, and result in the removal of redundant provisions. This review should happen before negotiating rules that would add further conflicting layers of complexity to the EU tax architecture – like BEFIT. This review is an opportunity to enhance effectiveness and consistency of anti-avoidance rules across Member States resulting in a more efficient Single Market and more stable international tax system. Likewise, minimising compliance costs and increasing certainty for companies complying with different layers of tax rules in the EU would make a concrete contribution to Europe’s competitiveness without requiring the introduction of new regimes. 3 Anti-Tax Avoidance Directive Consultation 11 September 2024 Comments on the Anti-Tax Avoidance Directive (ATAD)

…3 Anti-Tax Avoidance Directive Consultation 11 September 2024 Comments on the Anti-Tax Avoidance Directive (ATAD) 1. Pillar 2 has resulted in many ATAD provisions being redundant The implementation of the global minimum tax (Pillar 2) within the EU means that in-scope companies are paying at least an effective tax rate of 15% in all Member States in which they operate. In addition, due to the wide adoption of top-up taxes, they are also paying a minimum 15% rate in many jurisdictions outside the EU. Many ATAD provisions are costly and complex to administer and the perceived mischief they target are now efficiently dealt with through Pillar 2. Accordingly, many ATAD provisions (for instance, controlled foreign company (CFC) rules and interest limitation) would appear to be surplus and not required to protect the tax base. As such, they should be repealed. At the same time, Pillar 2…

…requirements in Belgium alone require the use of multiple global data points with associated resource and timing costs. 2. ATAD is inconsistently implemented The breadth of implementation options offered by ATAD has created a fragmented environment which increases costs, uncertainties and administrative burdens for taxpayers. This fragmentation was noted in a 2022 study commissioned by the FISC Subcommittee which noted that ‘a reduction of the number of options should be considered for a more homogenous anti-avoidance landscape across all Member States’1. This is well illustrated by the implementation of CFC rules, where Member States diverged in their application of model A or B, and within specific options within each model2. While the majority of Member States opted for either model A or B, the Netherlands chose a combination of the two models, and Bulgaria and Finland chose to…

…coherent and coordinated fashion” which “improve[s] the functioning of the internal market”. Recommendations 1. Exempt Pillar 2 companies from ATAD Large companies subject to the Pillar 2 Directive will pay a minimum 15% effective tax rate in each jurisdiction, making many of the ATAD provisions for these companies redundant. Exempting Pillar 2 companies from ATAD would relieve taxpayers and authorities from excessive ATAD burdens, free up resources for tax authorities and make Europe more competitive and attractive to 1 https://www.europarl.europa.eu/RegData/etudes/STUD/2022/703353/IPOL_STU(2022)703353_EN.pdf 2 https://www.pwc.nl/nl/dienstverlening/tax/documents/atad-1-and-2-overview-july-2021.pdf 4 Anti-Tax Avoidance Directive Consultation 11 September 2024 large investors. The Commission should also address the remaining issues and complexities associated with Pillar 2.

…investors. The Commission should also address the remaining issues and complexities associated with Pillar 2. 2. Holistically declutter anti-tax avoidance requirements With Pillar 2 taxpayers exempt from ATAD and Directive on Administrative Cooperation (DAC) requirements, the Commission should declutter duplicative anti-avoidance requirements. ATAD and DAC have numerous duplicative provisions which only add to the costs and administrative burdens incurred by both tax authorities and taxpayers. Aligning these requirements to prevent duplicative reporting would cut down on these costs with direct benefits to Europe’s competitiveness and attractiveness to investors.

…would cut down on these costs with direct benefits to Europe’s competitiveness and attractiveness to investors. 3. Increase consistency between national implementation As part of the review, to the extent elements of the ATAD are determined to still be required, Member States should be encouraged to harmonise their ATAD implementation. The Commission should prioritise increasing the consistency of ATAD implementation across the EU. Harmonised implementation would lead to increased compliance, reduce administrative burdens and facilitate an efficient Single Market. The Commission should also focus on increasing consistency by ensuring that Member States’ guidelines limit divergence within and between jurisdictions. Finally, the Commission should examine how to increase the adoption of EU dispute resolution and cooperation mechanisms within the context of ATAD. Harmonisation is vital in…

…for future EU policy initiatives to minimise any impacts they may bring in terms of complexity or destabilisation. 4. Unify reporting requirements At minimum, the Commission should take a holistic look at the reporting requirements and formats associated with multiple measures related to anti-avoidance and tax transparency (ie ATAD, Pillar 2, public Country by Country Reporting) to make them as consistent as possible. Conclusion Addressing the lack of consistency between national ATAD implementation and looking for ways to minimise overlap between different anti-avoidance and tax transparency regimes is vital in a period where taxpayers and authorities prepare for potential developments in the international tax system. In general, decluttering duplicative tax rules would decrease costs for companies and free up resources for tax authorities, making the EU a more competitive economy. 5…

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AmCham EU speaks for American companies committed to Europe on trade, investment and competitiveness issues. It aims to ensure a growth-orientated business and investment climate in Europe. AmCham EU facilitates the resolution of transatlantic issues that impact business and plays a role in creating better understanding of EU and US positions on business matters. Aggregate US investment in Europe totalled more than €3.4 trillion in 2021, directly supports more than 4.9 million jobs in Europe, and generates billions of euros annually in income, trade and research and development.

…4.9 million jobs in Europe, and generates billions of euros annually in income, trade and research and development. American Chamber of Commerce to the European Union Speaking for American business in Europe Avenue des Arts/Kunstlaan 53, 1000 Brussels, Belgium • T +32 2 513 68 92 [email protected] • amchameu.eu • European Transparency Register: 5265780509-97 Our position Proposal for a revision of EU legislation on Packaging and Packaging Waste Ref. Ares(2023)2868283 - 24/04/2023 2 Proposal for a revision of EU legislation on Packaging and Packaging Waste Our position March 2023 Executive summary The proposed Packaging and Packaging Waste Regulation (PPWR) presents a significant opportunity to improve the Single Market, align EU packaging regulations and decrease market fragmentation.

…significant opportunity to improve the Single Market, align EU packaging regulations and decrease market fragmentation. If well designed, this regulation can be a crucial driver for circularity by promoting economies of scale and ensuring a climate-neutral and circular Europe. To this aim, the legislation's main priorities should be to harmonise packaging rules across the EU by simplifying labelling and sorting instructions, improving separate waste collection and promoting large-scale recycling of packaging. A comprehensive and science-based approach is essential when evaluating any proposed solutions, and it is vital for lawmakers to use impact assessments and life cycle assessments for this purpose. The table below highlights key recommendations to strengthen the proposal, which are further outlined in this paper.

The table below highlights key recommendations to strengthen the proposal, which are further outlined in this paper. Table 1: Key recommendations Issues Recommendations Single Market The PPWR proposal should support Member States in establishing and upgrading recycling facilities, as well as infrastructure, effective separate collection and sorting of waste. The rules and requirements should be established at the European level and not at the national level to avoid regulatory fragmentation. The unnecessary and disproportionate restrictions on some packaging types in the PPWR could have negative impacts on international trade in products. However, rigorous implementation and enforcement of the Single Market principles would ensure harmonised legal requirements prevail, facilitating economies of scale and long-term investments for innovative products and technologies.

…prevail, facilitating economies of scale and long-term investments for innovative products and technologies. Timeline A generic transition period of 36 months would increase legal certainty and provide sufficient time for companies to implement the necessary changes. Waste prevention through reuse and packaging design Recyclability should be a requirement for placing packaging on the market. However, the proposal should not ban packaging formats that are already collected for recycling. Reuse should be introduced as an additional sustainable packaging solution on an equal footing with recycling. One should not undermine the other. Moreover, reusable packaging should be required only if it is scientifically proven through a life cycle analysis to be more environmentally friendly than single-use packaging.

…is scientifically proven through a life cycle analysis to be more environmentally friendly than single-use packaging. Reuse targets should account for geographical, environmental, economic and infrastructure factors. The regulation should clearly identify the entities responsible for meeting reuse targets and implement comprehensive reuse systems. 3 Proposal for a revision of EU legislation on Packaging and Packaging Waste Our position March 2023 Furthermore, the proposed one-size-fits-all metric and target for the empty space ratio (which has no empirical basis) could inadvertently hinder rather than help achieve the EU’s climate goals. Policymakers should consider exemptions to this requirement and/or incentivising solutions that are better for the environment.

…should consider exemptions to this requirement and/or incentivising solutions that are better for the environment. Circularity and packaging waste as a resource Packaging formats that are today collected for recycling should not be subject to the proposed bans because there is already a viable and effective way to manage the material. The proposed digital marking requirement supports more advanced sorting of waste and sends a positive signal that acknowledges packaging as a resource. It would allow for better identification of packaging in material recycling centres to help drive the integration of post-consumer recyclate (PCR) into new packaging. However, imposing mandatory and individual QR codes per packaging item is unrealistic, since insufficient technology exists for all packaging types. Labelling under the PPWR must be technology neutral.

…since insufficient technology exists for all packaging types. Labelling under the PPWR must be technology neutral. The envisaged PCR targets would be more attainable if the percentages were applied at the level of the economic operator/portfolio as a whole rather than per unit of packaging. Consideration should also be given to pre-consumer recyclate subject to appropriate safeguards. Packaging should be designed to be as minimal as possible without sacrificing its required functionality. The removal of 'marketing and consumer acceptance' from the packaging performance criteria list is worrying because it may result in packaging standardisation and an increased risk of counterfeiting. Packaging performance criteria should align with the functions listed in the definition of packaging while not compromising intellectual property rights.

…align with the functions listed in the definition of packaging while not compromising intellectual property rights. Data-driven decisions Legislators need to consider all the factors that contribute to the environmental impact of packaging and the trade-offs involved. For example, reusable packaging may not always lead to better environmental outcomes when reverse logistics are factored in, especially for products traveling long distances and when imports use packaging intended for further transport in the EU. It is important that legislators rely on impact assessments and life cycle assessments to evaluate proposed solutions with a holistic and science-based approach. Chemical safety is already addressed in existing legislation, and proposed provisions on substances of concern may create legal uncertainty.

…addressed in existing legislation, and proposed provisions on substances of concern may create legal uncertainty. Regulating the presence of substances affecting recycling should be addressed in the proposal’s Design for Recycling criteria. 4 Proposal for a revision of EU legislation on Packaging and Packaging Waste Our position March 2023 Introduction A strong EU Single Market is a key enabler of circularity in the EU, creating greater economies of scale and ensuring a circular and climate-neutral Europe. The European Commission proposal to transform the Packaging and Packaging Waste Directive into a regulation provides an opportunity to further enhance the Single Market, better align EU packaging rules and reduce market fragmentation.

…an opportunity to further enhance the Single Market, better align EU packaging rules and reduce market fragmentation. Streamlining labelling and sorting instructions, enhancing separate waste collection – via mandatory deposit return schemes (DRS) accompanied by corresponding minimum requirements, and driving recycling of packaging, ideally at scale, would harmonise EU packaging rules around packaging at the EU level. This will enable consumers to make informed choices and become active participants in transitioning to circularity. Proposed changes, if adopted, should help turn packaging waste into a valuable resource. The provisions on harmonisation and use of eco-modulation fees in Europe are especially encouraging. Waste reduction can be tackled with different incentives and regulatory tools, as well as with new technologies.

Waste reduction can be tackled with different incentives and regulatory tools, as well as with new technologies. The proposed use of codes and digital marking is a positive step in advancing packaging sorting solutions. However, it is important to keep labelling technology neutral, as digital marking solutions are not always adaptable to all packaging formats. For example, currently it is not possible to apply QR codes to certain packaging formats, such as aluminium packaging. Improving packaging sustainability should take place in tandem with ensuring consumer safety and acceptance, promoting packaging innovation and improving the availability of high-quality secondary raw materials.

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AmCham EU speaks for American companies committed to Europe on trade, investment and competitiveness issues. It aims to ensure a growth-orientated business and investment climate in Europe. AmCham EU facilitates the resolution of transatlantic issues that impact business and plays a role in creating better understanding of EU and US positions on business matters. Aggregate US investment in Europe totalled more than €2 trillion in 2018, directly supports more than 4.8 million jobs in Europe, and generates billions of euros annually in income, trade and research and development.

…4.8 million jobs in Europe, and generates billions of euros annually in income, trade and research and development. American Chamber of Commerce to the European Union Speaking for American business in Europe Avenue des Arts/Kunstlaan 53, 1000 Brussels, Belgium • T +32 2 513 68 92 [email protected] • amchameu.eu • European Transparency Register: 5265780509-97 Consultation response Response from AmCham to the EU Consultation on the Revision of the Packaging & Packaging Waste Directive ‘Reducing packaging waste – review of rules’ Ref.

…on the Revision of the Packaging & Packaging Waste Directive ‘Reducing packaging waste – review of rules’ Ref. Ares(2020)7877094 - 22/12/2020 2 Reducing packaging waste – review of rules Consultation response December 2020 Introduction Commitment of AmCham EU Members AmChamEU members have embedded circularity in their business plans and recognise that more needs to be done in order to create well-functioning secondary raw materials markets and to improve efficiency in the use of resources. This includes reduction in use of virgin material, further removing unnecessary packaging, increasing reuse as well as use of recycled content in their products or packaging, which requires significant capital expenditure. AmChamEU members are also investing on packaging innovation at scale, on both product design and recycling technologies.

…members are also investing on packaging innovation at scale, on both product design and recycling technologies. Making progress on all those fronts will also contribute significantly to the climate neutrality objective Europe is aiming at. Review Aims The stated aim of the review is to “improve packaging design to facilitate its cost-effective recycling and reuse and reduce the generation of packaging waste”. Several points are advanced as the underlying rationale driving the need for the consultation. Namely, that (i) there has been “an overall increase in packaging waste generated” in the last three decades and (ii) “packaging design does not sufficiently consider the difficulties and costs of treatment of packaging waste (including collection and sorting). It thus increases the cost of recycling”.

…and costs of treatment of packaging waste (including collection and sorting). It thus increases the cost of recycling”. It is also indicated that “Unrecycled packaging waste is disposed of in landfills or incinerated with negative consequences for the environment including air pollution and greenhouse gas (GHG) emissions.” There has undoubtedly been an increase in the amount of packaging placed on the market (which can perhaps in part be ascribed to demographic changes such as the proportion of single households, growth in consumption etc). However, we must also acknowledge the existence of a positive trends such as the increase in both the proportion and absolute amount of packaging waste recovered or recycled. In this respect, it is instructive to consult the Eurostat statistics on EU packaging waste management (see Annex).

In this respect, it is instructive to consult the Eurostat statistics on EU packaging waste management (see Annex). Amalgamated data for the EU- 28 is only available for the period 2005 until 2017). It is clear that that there has been an increase in the amount of packaging generated (i.e., +8.8% between 2005 and 2017). However, it must also be highlighted that the amount of packaging waste recovered or recycled (as material) has also increased (i.e., +30.6% and + 34.4% respectively over the same period). As a consequence, the amount of packaging that has not been recovered or not recycled has correspondingly decreased on a per capita basis since 2005. This would also imply that the amount of unrecycled packaging going to either landfill or incineration (along with the concomitant negative impacts) will likewise have also decreased on a per capita basis since 2005.

(along with the concomitant negative impacts) will likewise have also decreased on a per capita basis since 2005. This is a consequence of evolving waste policy and the success of existing EPR schemes that support the separation collection of packaging waste as financed by the packaging value chain at a cost of >€3 billion per annum. In the preamble, the Commission has therefore conflated packaging placed on the market, with packaging waste per se without an accompanying consideration of the ensuing ultimate post-consumer fate. High-level priorities While AmCham welcomes the opportunity to provide input to the European Commission work on the review of the P&PWD, we believe that the following principles need to be taken into account in the policy discussion.

…review of the P&PWD, we believe that the following principles need to be taken into account in the policy discussion. Respect for the Internal Market Basis of the P&PWD The internal market is one of the most significant achievements of the European Union. The internal market basis of the P&PWD (TFEU Article 114) allows for the free circulation of packaged goods within the EU. Likewise, 3 Reducing packaging waste – review of rules Consultation response December 2020 Article 18 (‘Freedom to place on the Market’) of the P&PWD precludes Member State actions that “impede the placing on the market of their territory of packaging which satisfies the provisions of this Directive”. AmCham believes that in order to retain the benefit of the EU internal market it is crucial to foster harmonization across Member States.

…in order to retain the benefit of the EU internal market it is crucial to foster harmonization across Member States. We believe that it is crucial that any measures proposed for the Essential Requirements should be implemented and enforced in a harmonised manner so as to provide a transparent and predictable guidance for business to comply with. The Essential Requirements should remain the legal requirement that all packaging must comply with in order to be permitted to enter and freely circulate throughout the EU internal market. Core provisions should ideally be clearly enshrined in the main EU legislative text or in its implementing acts in order to avoid differences in national interpretation at transposition or in practice.

…or in its implementing acts in order to avoid differences in national interpretation at transposition or in practice. Adequately account for the lack of implementation of existing and pending legislation relating to packaging There are multiple provisions within EU/2018/851 and EU/2018/852 in relation to packaging and that have yet to take effect. Ensuring the effective and consistent implementation of existing legislation across all Member States should always be a priority before any new provisions are added. The adoption of the SUP Directive left many key issues unresolved and effectively postponed for subsequent measures or guidance. It also provides great scope for divergent Member State measures. It is imperative that the Commission does not once again postpone considerations of the modality of key provisions in favour of expediency.

…the Commission does not once again postpone considerations of the modality of key provisions in favour of expediency. Better Enforcement of the Internal Market Divergent and disparate practices amongst Member States are always problematic as Member State measures on packaging can translate into restrictions on the free movement of packaged goods. There is currently a worrying trend for divergent national provisions that are inconsistent with Article 18 of the P&PWD (e.g., the French Triman provisions, unilateral restrictions on the placing of products on the French market). Such initiatives can only erode the integrity of the single market. We see a need for the better enforcement of the current P&PWD in respect of the Internal Market protections.

…market. We see a need for the better enforcement of the current P&PWD in respect of the Internal Market protections. It is of critical importance the regulatory framework be strengthened to deliver a well-functioning Single Market not just for packaging but also for Post Consumer Recyclate (PCR)/ SRM. The PPWD should address the regulatory barriers arising from insufficient harmonization and weak enforcement of existing EU provisions at the national level. In particular, key provisions must be clearly indicated in the text of the Directive for maximum harmonization across Member States. The Waste Shipments Regulation review should also be strengthened to allow intra-EU waste shipments of PCR.

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