03 June 2003

Results of ECOFIN Meeting 3 June

During the ECOFIN meeting a number of important issues on the Financial Services Action Plan were discussed. The Council took note of an interim report on possible indicators of progress in realising economic benefits, on the eighth Progress Report on the FSAP, on a report on Investment Services Directive on which an agreement shall be found during the Italian Presidency, and adopted the so-called tax-package and a declaration concerning the so-called Sarbanes-Oxley Act.

Mandatory registration of EU auditors with the US PCAOB
An over-riding concern of the EU has been to seek solutions to ensure that the application of the Sarbanes-Oxley Act will not have unintended, unnecessary or unjustified implications on EU companies listed in US and/or EU auditing companies whose securities are traded in the US.

The Council adopted the following declaration:

'The ministers of Finance of the European Union firmly oppose the obligatory registration of European Union audit firms with the United States Public Company Accounting Oversight Board (PCAOB).

“The PCAOB's registration process is burdensome, costly and unnecessary given that, within the EU, all Member States already have in place, or are putting in place, arrangements for auditor regulation and enhanced corporate governance which offer an equivalent level of protection for investors to that provided for under the Sarbanes-Oxley Act.

“The European Union therefore requests a full exemption for its audit firms from the PCAOB registration process as permitted under section 106(c) of the Sarbanes-Oxley Act.

“Ministers note that the PCAOB's revised registration system for public accounting firms reflects some of the concerns raised by the EU, and elsewhere around the world, during consultation. We welcome those elements.

“However, the potential implications of the PCAOB's audit registration procedure (e.g. PCAOB oversight of EU audit firms, PCAOB inspection, PCAOB sanctions and PCAOB access to confidential EU audit working papers) are unacceptable given the major conflicts of law that may ensue. Ministers urge the SEC and PCAOB to reconsider, urgently, this draft policy in its entirety and accept a moratorium to negotiate with the European Union, a mutual recognition agreement based on home country control . which is the only way to achieve an effective system of public oversight to protect investors. To this end, the ECOFIN requests the European Commission on behalf of the European Union to continue discussions with the SEC and the PCAOB.'

Tax Package
The Council adopted the 'Tax Package' - the Directive on taxation of savings, a Resolution on taxation of savings, the Directive on interests/royalty payments and the Code of Conduct.

The Council decided to enter a number of statements in the minutes of this meeting. With regard to the Directive on Savings the council stated among others that chapter III with the exception of Articles 14 and 15 of the Directive shall not be granted to the new Member States.
Commission press release on tax package

The texts are to be found, following finalisation by legal/linguistic experts, in docs 7242/03 FISC 37 + COR 1 (it), 7248/03 FISC 38 + COR 1 (it) and 5926/3/03 REV 3 FISC 13 + REV 3 COR 1 (it) + REV 4 (da).

Provisional Version ECOFIN results
Commission press release
Provisional version Directive on Taxation of Savings

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