EUROPEAN COMMISSION 2020 WORK PROGRAMME
As reported in our last issue, the European Commission recently issued their work programme
for 2020. It sets out the most important initiatives the Commission intends to take in its first year, including the commitments set out by President von der Leyen for the new Commission’s first 100 days. Notably, the Action Plan includes a new SME strategy, the new Circular Economy Action Plan, a Strategy for Sustainable and Smart Mobility, and the Review of the CCD. Both the Circular Economy Action Plan and the Strategy for Sustainable and Smart Mobility will be key components in the Commission’s attempt to facilitate the green transition, an area where leasing has an important role to play. The CCD review will attempt to take into account the changes brought about by digitalisation, and how this impacts the consumer experience when applying for credit. Another notable initiative is the new Action Plan on anti-money laundering, which seeks to both improve the enforcement of existing AML rules, and make the supervisory system more effective.
Guidelines on the issue of personal DATA in connected veichles
The European Data Protection Board (EDPB) published draft Guidelines on processing personal data in the context of connected vehicles and mobility related applications
, which are subject to consultation until the end of March 2020. They aim to shed some light on personal data produced in the vehicle, clarifying the role of the data controller and the data processor, as well as the rules surrounding third party access. It also includes five case studies (pay-per-use insurance, e-Call, accidentology studies, auto theft and personal information stored on rental cars’ dashboard) to demonstrate the extent to which personal data is in use in connected vehicles, and how it should be treated. The Guidelines in their current form would hugely restrict the potential for this data to be used by automotive leasing and rental companies. Leaseurope will highlight the need for an approach which respects the use of personal data without leading to competitive imbalances and stifling of innovation.
UK to BAN SALE of all new petrol, diesel and hybrid cars by 2032
Earlier this month the UK government announced they will ban the sale of all new petrol, diesel and hybrid cars by 2032. This brings forward the timeline of their initial announcement of a 2040 ban, as well as extending the ban to cover hybrids. Whilst this is a UK initiative currently, similar bans are being discussed across Europe at both national and municipal level. While leasing is a supporter and facilitator of the green transition of Europe’s fleets, Leaseurope questions the rationale of forcing consumers and businesses across the board to switch to more expensive electric or hydrogen powered cars without ensuring essential pre-requisites, such as a well deployed charging infrastructure, have been put in place. In addition, incentives at national level should focus on reducing operating costs across the life cycle of the vehicle, thereby creating a healthy second-hand demand. A substantial part of Europe’s fleet is financed by Leaseurope’s members, therefore leasing will remain an essential part of any future green transition plans.
EBA pubblications on anti-money laudering
The European Banking Authority (EBA) has recently issued its first Report on competent authorities’ approaches to the anti-money laundering and countering the financing of terrorism (AML/CFT) supervision of banks. Additionally, they are currently consulting on revised guidelines on money laundering and terrorist financing (ML/TF) risk factors to be used when assessing a business relationship or an individual transaction, including guidance on how financial institutions can adjust their due diligence to mitigate the risks they have identified. Within these, the EBA is proposing changes for crowdfunding platforms, corporate finance, payment initiation services providers (PISPs) and account information service providers (AISPs), etc. The draft Guidelines are subject to a public consultation which will run until 5 May 2020.
European Commission Strategies for DATA and AI
The European Commission has recently announced their future strategies on data usage and artificial intelligence (AI), which are currently open for feedback. The Commission’s European strategy for data
aims to establish the right regulatory framework regarding data governance, access and reuse, with a major focus on data sharing. For example, the creation of a common mobility data space and other initiatives would open up the sector to more services based on car data, while a common financial data space would build on recent developments regarding open banking.
However, their approach to AI is a cautionary one, with the Commission planning new laws to include a ban on “black box” AI systems that cannot be well understood. They also plan to regulate the use of “high risk” technology, such as self-driving cars, and “high risk” sectors, like transport, which will require human oversight in order to make use of AI safely. In addition, the Commission will issue an Action Plan on how AI should be integrated into public services, including transport and healthcare. The White Paper on Artificial Intelligence
is open for public consultation until 19 May 2020.
Leaseurope issues letter on Basel IV to European Commission
As part of our advocacy action plan to achieve a preferential prudential capital treatment for leasing in Europe, last week Leaseurope sent a high-level letter outlining our key points to multiple relevant European Commissioners (incl. Frans Timmermans, Valdis Dombrovskis, Janusz Wojciechowski and Adina Vălean). Since the European Commission is currently drafting their recommendations to implement Basel IV within Europe, now is a crucial time to engage with them on this topic to ensure that credit risk rules take into account the specialised nature of both automotive and equipment leasing. As it stands today, the current proposals could significantly harm low risk sectors like leasing.
Helping SMES with their GREEN transition
Within the context of the new Green Deal, Leaseurope has been engaging with a variety of key stakeholders that depend on leasing as a driver for their businesses. At the latest Legal Committee meeting in Brussels, Leaseurope welcomed a representative from SME United in order to engage on the role leasing can play to help finance SMEs’ green transition. As a result of the meeting, Leaseurope shared information on various ways that leasing can play an important role in this area, including concrete examples relevant for SMEs, to be shared within SME United’s dedicated working group on sustainability.
Leasing to consumers
Leaseurope recently attended the European Commission’s annual consumer summit, which focused on two key challenges facing the leasing and rental industries, namely challenges regarding digital provision of services to consumers and green transitions. During the two day conference, attendees were split into different workshops, one of which involved a discussion on the role of renting models in promoting the circular economy. The discussions around consumer protection were also particularly relevant for the car rental sector.
Financing innovative CLEAN TECH
Financiers and industry representatives will gather in Brussels on 11 March to discuss how public and private investors can join forces with the Innovation Fund to deliver on the European Green Deal.
Forum Europe annual financial services conference
Forum Europe’s 18th Annual Financial Services conference will be taking place on 19 March in Brussels. During the conference policy makers and stakeholders will discuss a range of topics, including financing the low carbon economy and risks and opportunities in the global economy. Speakers include Valdis Dombrovskis, Executive VP of an Economy that Works for the People, and Emma Navarro, VP of the European Investment Bank.