22 September 2011

FEE Comment Letter on EC Green Paper “Modernising the Professional Qualifications Directive”

FEE welcomed the European Commission's Green Paper “Modernising the Professional Qualifications Directive” and said that recognition of professional qualifications obtained in another EU Member State is indeed essential to establish an internal market for professional services.

FEE supports the European Commission’s objective of modernising and simplifying the existing rules to facilitate mobility for professionals where appropriate and help make the European economy more competitive while encouraging growth and job creation. FEE has for many years supported initiatives to increase mobility of professionals in the accountancy services sphere, including working with member bodies to explain the arrangements under EU legislation for mobility and to reduce barriers.

However, the large number of professions covered by the Professional Qualifications Directive is a challenge in itself for simplification. There is a need to be realistic about how far the recognition of professional qualifications could and should be simplified, also taking into account the aspects of consumer protection and trust. The maintenance of professional competences is important within different professions and to simplify and embed these within the Directive could prove challenging. Particular attention might need to be given to liberal professions, who are frequently either regulated or self-regulated and thus subject to disciplinary mechanism

Overall, simplification and promoting cross-border activities should not be seen isolated but rather from a holistic perspective, considering consumers’, clients’, employees’ and professionals’ perceptions simultaneously.

For the accountancy profession, recognition of professional qualifications is only one part of the rules that influence cross-border activities: the Services Directive and – for statutory audit services – the Statutory Audit Directive and their inter-relationship with the Professional Qualifications Directive also have to be considered.

For professionals providing accountancy services other than statutory audit, the situation for cross-border activities is generally complex because of (i) the wide range of activities carried out by professional accountants, (ii) differences in Member States’ rules regarding the pursuit of those activities and (iii) the existence of different regulatory approaches and market access rules at Member State level. However, FEE has no information showing that recognition of professional qualifications has effectively played a restrictive role on free movement. Differences in company law, social security law and tax regimes played, and continue to play a much more important role, reducing cross-border activities and movement of professionals.

The general idea of a European professional card is attractive. It has some potential to enhance recognition procedures, increase cross-border mobility as well as – where combined with appropriate control mechanisms to prevent misuse and if the system is developed under a holistic approach – transparency for consumers, professionals, clients and employers.

Regarding statutory audit services, the special requirements laid down in the Statutory Audit Directive prevail over the measures of the Professional Qualifications Directive. Considering for example the specific requirement in the Statutory Audit Directive that statutory auditors need to be entered into a public register, electronically accessible to the public, FEE does not see any additional benefit of a professional card for statutory auditors as long as it is not accompanied by further measures that are conducive to enhance cross-border mobility of professionals. Regarding a potential European Passport for auditors FEE refers to the FEE response to the EC Green Paper on Audit Policy and the FEE Briefing Paper. An additional subject that should be taken into account when modernising the Professional Qualifications Directive is to define the terms “temporary or occasional”, which was one of the questions asked in the European Commission’s consultation paper earlier this year. FEE acknowledges that it is challenging within the frame of the Professional Qualifications Directive that covers around 800 professions, whose services vary broadly. Definitions could however be developed on a sector-specific basis and outlined in guidance accompanying the Professional Qualifications Directive.

Full response

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