Review of the EU legislation for 05/12/2024

Here’s a comprehensive review of the legal acts mentioned:

Digital Identity Framework Regulations:

A series of interconnected regulations establishing the European Digital Identity Wallet ecosystem:

• Creation of a notification system for trusted entities and mechanisms
• Detailed certification rules for wallets ensuring high security levels
• Technical specifications for wallet integrity and core functionalities
• Rules for issuing person identification data and electronic attestations
• Requirements for protocols and interfaces in the framework

Central Counterparties (CCPs) Reform:

Two major legislative acts reforming the EU’s derivatives clearing framework:

• New requirements for financial counterparties to maintain EU CCP accounts
• Enhanced supervision through Joint Monitoring Mechanism
• Removal of counterparty risk limits for centrally cleared derivatives
• New concentration risk monitoring requirements

Plant Health Directive:

Amendments to EU plant pest control legislation:

• Zero tolerance threshold for Tobacco ringspot virus in soybean seeds
• Zero tolerance for Tomato brown rugose fruit virus in tomato and pepper plants
• New pest control requirements for vegetable seeds and propagating material

Trade Cases:

Two related judgments on anti-dumping and countervailing duties:

• Extension of duties on glass fiber fabrics from China to Morocco
• Confirmation that anti-circumvention measures can override preferential trade agreements

EFTA State Aid Investigation:

Investigation into potential unlawful state aid regarding:

• Cross-subsidization of commercial fiber network operations
• Preferential conditions in construction and operation agreements
• Assessment of compatibility with EEA rules

Review of each of legal acts published today:

Commission Implementing Regulation (EU) 2024/2980 of 28 November 2024 laying down rules for the application of Regulation (EU) No 910/2014 of the European Parliament and of the Council as regards notifications to the Commission concerning the European Digital Identity Wallet ecosystem

This Regulation establishes rules for notifications regarding the European Digital Identity Wallet ecosystem, which is a crucial component of secure and interoperable digital identity across the EU. It sets requirements for Member States to notify information about trusted entities and mechanisms that ensure the trustworthiness of the European Digital Identity Framework.The Regulation consists of 6 articles and 2 annexes that establish detailed requirements for both the Commission’s notification system and Member States’ notifications. The act introduces new provisions compared to previous regulations by creating a comprehensive framework for information sharing about wallet providers, providers of person identification data, and wallet-relying parties.Key provisions include:

• Establishment of a secure electronic notification system by the Commission within 12 months
• Requirements for Member States to submit notifications in English through this system
• Detailed specifications for information that must be provided about various entities in the ecosystem
• Rules for Commission’s publication of submitted information in both human-readable and machine-processable formats
• Technical requirements for certificates and security measures to ensure trustworthy data exchange

The most significant aspects for implementation are:

• Mandatory information requirements for registrars and registers, including contact details, URLs, and certificates
• Specific notification requirements for wallet providers, including solution details and validation mechanisms
• Detailed specifications for person identification data providers and their authentication mechanisms
• Requirements for providers of wallet-relying party access certificates

Commission Implementing Regulation (EU) 2024/2981 of 28 November 2024 laying down rules for the application of Regulation (EU) No 910/2014 of the European Parliament and the Council as regards the certification of European Digital Identity Wallets

This Implementing Regulation establishes detailed rules for certifying European Digital Identity Wallets (wallets) to ensure high levels of security and trust. It sets out requirements for national certification schemes, certification bodies, and wallet providers to verify that wallets meet cybersecurity, data protection and functional requirements.The Regulation creates a harmonized framework for wallet certification across EU Member States through:

• Establishing national certification schemes that must cover functional, cybersecurity and data protection requirements
• Defining roles and responsibilities of scheme owners, certification bodies, and wallet providers
• Setting requirements for incident/vulnerability management and maintenance of certification schemes
• Specifying evaluation activities and lifecycle management for wallet certification

Key provisions include:

• Certification must verify wallets meet ‘high’ assurance level requirements for security
• Detailed requirements for evaluating wallet secure cryptographic applications and devices
• Mandatory surveillance evaluations and vulnerability assessments every 2 years
• Maximum 5-year validity period for certificates of conformity
• Public disclosure requirements for wallet security information
• Comprehensive risk register identifying security threats that must be addressed

The Regulation contains 9 detailed annexes covering aspects like risk assessment methodology, evaluation procedures, certification documentation requirements, and surveillance schedules. It aims to create a robust and harmonized certification framework while allowing flexibility in implementation approaches.

Commission Implementing Regulation (EU) 2024/2979 of 28 November 2024 laying down rules for the application of Regulation (EU) No 910/2014 of the European Parliament and of the Council as regards the integrity and core functionalities of European Digital Identity Wallets

This Regulation establishes detailed rules for the integrity and core functionalities of European Digital Identity Wallets (wallets). It is a crucial component of the European Digital Identity Framework that aims to facilitate secure and interoperable digital identity across the EU. The Regulation focuses on technical specifications and security requirements for wallet implementation.The Regulation consists of four chapters covering general provisions, wallet integrity, core functionalities, and final provisions. It includes five annexes with technical standards and specifications.Key provisions include:

• Detailed requirements for wallet unit integrity, including authentication, cryptographic security, and protection of critical assets
• Specifications for transaction logging, data formats, and embedded disclosure policies
• Requirements for qualified electronic signatures and seals functionality
• Rules for data export, portability and pseudonym generation
• Privacy-enhancing techniques and data protection measures

The most important provisions for implementation include:

• Mandatory support for specific data formats and selective disclosure of attributes
• Requirements for secure cryptographic applications and devices
• Detailed logging requirements for all transactions
• Rules for wallet unit attestation and validation
• Free access to signature creation applications for natural persons
• Support for pseudonym generation and privacy-preserving features

Commission Implementing Regulation (EU) 2024/2977 of 28 November 2024 laying down rules for the application of Regulation (EU) No 910/2014 of the European Parliament and of the Council as regards person identification data and electronic attestations of attributes issued to European Digital Identity Wallets

This Regulation establishes detailed rules for issuing person identification data and electronic attestations of attributes to European Digital Identity Wallets. It is a crucial component of the European Digital Identity Framework, aimed at creating a secure and interoperable digital identity ecosystem across the EU. The Regulation focuses on technical specifications, data protection, and harmonization of wallet functionalities.The act consists of 6 articles and an annex, covering definitions, rules for issuing person identification data and electronic attestations, revocation procedures, and technical specifications. The annex provides detailed tables of mandatory and optional identification data for both natural and legal persons.Key provisions include:

• Mandatory requirements for person identification data (family name, given name, birth date, birth place, nationality)
• Authentication and validation mechanisms for wallet units
• Privacy-enhancing features to prevent data combination
• Strict revocation procedures with 24-hour notification requirement
• Common standards for wallet-relying party access certificates
• High assurance level requirements for identity proofing
• Detailed specifications for data formats and encoding

The most significant aspects for implementation are:

• Member States must ensure uniqueness of person identification data for each wallet user
• Providers must cryptographically bind identification data to specific wallet units
• Electronic attestations must comply with specific standards listed in related regulations
• Providers must maintain public policies on validity status management
• Implementation of privacy-preserving techniques to ensure unlinkability where user identification is not required

Commission Implementing Regulation (EU) 2024/2982 of 28 November 2024 laying down rules for the application of Regulation (EU) No 910/2014 of the European Parliament and of the Council as regards protocols and interfaces to be supported by the European Digital Identity Framework

This Regulation establishes detailed rules for protocols and interfaces that must be supported by the European Digital Identity Framework, particularly focusing on the European Digital Identity Wallets. It sets technical requirements for secure and interoperable digital identity solutions across the EU, ensuring data protection and privacy while facilitating cross-border services access.The Regulation consists of 8 articles and an annex, covering definitions, general provisions, and specific requirements for wallet solutions. Key structural elements include rules for issuing person identification data, presenting attributes to relying parties, handling data erasure requests, and reporting mechanisms to supervisory authorities.The main provisions include:

• Requirements for wallet providers to ensure proper authentication and validation of relying parties and other wallet units
• Protocols for secure issuance of person identification data and electronic attestations
• Rules for presenting attributes to relying parties both remotely and in proximity
• Mechanisms for data erasure requests and reporting to supervisory authorities
• Privacy-enhancing features to prevent unauthorized data combination and ensure unlinkability between transactions
• Technical specifications for selective disclosure of attributes and cryptographic binding

Regulation (EU) 2024/2987 of the European Parliament and of the Council of 27 November 2024 amending Regulations (EU) No 648/2012, (EU) No 575/2013 and (EU) 2017/1131 as regards measures to mitigate excessive exposures to third-country central counterparties and improve the efficiency of Union clearing markets (Text with EEA relevance)

This regulation amends several EU regulations related to central counterparties (CCPs) and derivatives clearing. The key aspects include:1. The regulation aims to reduce excessive exposures to third-country CCPs and improve the efficiency of EU clearing markets. It introduces new requirements for financial counterparties to maintain active accounts at EU CCPs and clear a representative portion of certain derivatives through them.2. Major changes include:

• New requirements for financial counterparties to maintain active accounts at EU CCPs for clearing certain derivatives
• Enhanced supervision and monitoring of CCPs through a new Joint Monitoring Mechanism
• Simplified procedures for CCPs to extend services and modify risk models
• New rules on interoperability arrangements between CCPs
• Enhanced transparency requirements for CCPs and clearing members

3. Key provisions that may impact market participants:

• Financial counterparties must hold active accounts at EU CCPs for clearing euro and Polish zloty interest rate derivatives
• New requirements for CCPs to provide transparency on fees and risk models
• Restrictions on CCPs being clearing members of other CCPs
• Enhanced requirements for non-financial counterparties acting as clearing members
• New procedures for validation of CCP risk models and parameters

The regulation will generally apply from December 24, 2024, with some provisions having different application dates. It represents a significant reform of the EU’s derivatives clearing framework aimed at reducing reliance on third-country CCPs while improving the competitiveness of EU CCPs.

Directive (EU) 2024/2994 of the European Parliament and of the Council of 27 November 2024 amending Directives 2009/65/EC, 2013/36/EU and (EU) 2019/2034 as regards the treatment of concentration risk arising from exposures towards central counterparties and of counterparty risk in centrally cleared derivative transactions (Text with EEA relevance)

This Directive amends three existing EU directives to establish new rules for managing risks related to central counterparties (CCPs) in financial transactions. It introduces uniform rules for addressing counterparty risk in derivative transactions cleared by CCPs and establishes measures to monitor and mitigate concentration risk arising from exposures to CCPs.The Directive modifies three main legal acts:

• Directive 2009/65/EC (UCITS) – removes counterparty risk limits for centrally cleared derivatives and introduces new definition of CCP
• Directive 2013/36/EU – adds requirements for monitoring concentration risk from CCP exposures and new supervisory powers
• Directive (EU) 2019/2034 – introduces new provisions for investment firms regarding CCP risk management

Key provisions include:

• New requirements for financial institutions to develop specific plans and quantifiable targets for monitoring CCP concentration risk
• Enhanced supervisory powers allowing authorities to require institutions to reduce or realign exposures to CCPs
• Removal of counterparty risk limits for derivatives cleared through authorized CCPs
• New guidelines to be developed by EBA for stress testing of CCP concentration risk
• Requirements for management bodies to monitor and address risks from CCPs of substantial systemic importance

Commission Implementing Directive (EU) 2024/3010 of 29 November 2024 amending Council Directives 2002/55/EC and 2002/57/EC, and Commission Directive 93/61/EEC as regards the listing of pests of plants on seeds and other plant reproductive material

This Directive amends existing EU legislation regarding the control of plant pests in seeds and plant reproductive material. It specifically addresses two main pests: the Tobacco ringspot virus affecting soybean seeds and the Tomato brown rugose fruit virus (ToBRFV) affecting tomato and pepper plants. The Directive establishes a zero-tolerance threshold for these pests in seeds and plant material.The Directive modifies three existing legal acts: Council Directives 2002/55/EC and 2002/57/EC, and Commission Directive 93/61/EEC. The changes include new requirements for pest control in vegetable seeds, oil and fibre plant seeds, and vegetable propagating material. The amendments introduce specific measures for controlling Tobacco ringspot virus in Glycine max (soybean) and ToBRFV in tomato and pepper plants.Key provisions include:

• A 0% tolerance threshold for Tobacco ringspot virus in all categories of soybean seeds
• A 0% tolerance threshold for ToBRFV in tomato and pepper seeds and plants, except for varieties known to be resistant to ToBRFV
• New requirements for vegetable propagating and planting material regarding ToBRFV control
• Implementation deadline for Member States set at May 31, 2025

Judgment of the General Court (Tenth Chamber, Extended Composition) of 4 December 2024.PGTEX Morocco v European Commission.Subsidies – Extension of the definitive countervailing duty imposed on imports of certain woven or stitched glass fibre fabrics originating in China to imports of those products consigned from Morocco – Anti-circumvention investigation – Circumvention – Euro-Mediterranean Association Agreement EC-Morocco – Article 33(a) of Regulation (EU) 2016/1037 – Misuse of powers – Conditions which must be met in order to establish circumvention – Article 23(3) of Regulation 2016/1037 – Change stemming from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty – Assembly operations – Completion operations – Concept of ‘value added’ – Like imported product or parts of that product continuing to benefit from the subsidy – Error of law – Manifest error of assessment – Principle of non-discrimination – Equal treatment – Principle of good administration – Article 28(1) and (3) of Regulation 2016/1037 – Use of the facts available.Case T-246/22.

This judgment concerns a case where PGTEX Morocco challenged the EU Commission’s decision to extend countervailing duties on glass fiber fabrics (GFF) from China to imports from Morocco. The key points are:1. The Commission found that PGTEX Morocco was circumventing Chinese countervailing duties by assembling GFF in Morocco using Chinese materials that benefited from subsidies.2. The main issues were whether:

• The EU-Morocco Association Agreement prevented extending duties to Moroccan origin goods
• There was sufficient economic justification for PGTEX’s Moroccan operations beyond avoiding duties
• The manufacturing in Morocco constituted assembly operations
• The Chinese subsidies still benefited the Moroccan products

3. The Court upheld the Commission’s decision, finding that:

• The Association Agreement does not prevent anti-circumvention measures
• The timing and circumstances suggested PGTEX’s Moroccan operations were mainly to avoid duties
• The manufacturing constituted assembly/completion operations
• The Chinese subsidies continued benefiting the products through related company transactions

The case is important for Ukraine as it demonstrates how the EU can extend trade defense measures to prevent circumvention through third countries, even those with preferential trade agreements. This could affect Ukrainian companies involved in processing/assembly of goods subject to EU trade measures.

Judgment of the General Court (Tenth Chamber, Extended Composition) of 4 December 2024.PGTEX Morocco v European Commission.Dumping – Extension of the definitive anti-dumping duty imposed on imports of certain woven or stitched glass fibre fabrics originating in China to imports of those products consigned from Morocco – Anti-circumvention investigation – Circumvention – Euro-Mediterranean Association Agreement EC-Morocco – Article 22(a) of Regulation (EU) 2016/1036 – Misuse of powers – Conditions which must be met in order to establish circumvention – Article 13 of Regulation 2016/1036 – Change stemming from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty – Assembly operations – Completion operations – Concept of ‘value added’ – Like imported product or parts of that product continuing to benefit from the subsidy – Error of law – Manifest error of assessment – Principle of non-discrimination – Equal treatment – Principle of good administration – Article 18(1) and (3) of Regulation 2016/1036 – Use of the facts available.Case T-245/22.

This judgment concerns a case where PGTEX Morocco challenged the EU Commission’s decision to extend anti-dumping duties on glass fiber fabrics (GFF) from China to imports from Morocco. The key aspects are:The judgment examines whether the Commission was entitled to extend anti-dumping duties imposed on Chinese GFF imports to imports from Morocco, despite an EU-Morocco Association Agreement that generally prohibits customs duties between the parties. The Court found that:

• The Commission was justified in extending the duties as an anti-circumvention measure, as this was not prohibited by the Association Agreement
• The Commission correctly determined that PGTEX Morocco’s establishment was primarily motivated by avoiding anti-dumping duties rather than legitimate business reasons
• The manufacturing process in Morocco constituted an ‘assembly operation’ within the meaning of EU anti-circumvention rules
• The Commission’s calculation of value added during assembly was appropriate

The Court rejected all of PGTEX Morocco’s arguments and upheld the Commission’s decision to extend the anti-dumping duties. The judgment clarifies that anti-circumvention measures can be applied even where there are preferential trade agreements, if evidence shows circumvention of legitimate trade defense measures.

EFTA Surveillance Authority – Decision No 143/24/COL of 25 September 2024 to open a formal investigation into the alleged unlawful State aid to Bane NOR – Invitation to submit comments pursuant to Article 1(2) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice concerning the abovementioned measure

This is a decision by the EFTA Surveillance Authority (ESA) to open a formal investigation into potential unlawful State aid provided to Bane NOR, the Norwegian railway infrastructure operator, and its contractual partners.The investigation focuses on two key measures: 1) Alleged aid to Bane NOR through using state financing of its public railway mission to cross-subsidize its commercial fiber network operations, and 2) Alleged aid to Bane NOR’s contractual partners through better-than-market conditions in construction, operation and capacity swap agreements.The decision’s structure includes detailed sections on the procedural background, description of the measures under investigation, preliminary assessment of whether they constitute State aid under Article 61(1) of the EEA Agreement, and analysis of their potential compatibility with EEA rules.The main provisions include:

• Analysis of whether Bane NOR’s commercial fiber network activities constitute economic activities separate from its public railway infrastructure mission
• Assessment of whether the measures involve State resources and are imputable to the Norwegian State
• Evaluation of whether the arrangements confer undue economic advantages on Bane NOR and its partners
• Analysis of the selectivity of the measures and their effects on competition and trade
• Preliminary conclusion that ESA cannot exclude that the measures constitute unlawful State aid

The decision invites the Norwegian authorities and interested parties to submit comments within specified deadlines. The investigation will examine whether the measures qualify as State aid and if so, whether they can be considered compatible with EEA rules.