EU legal council berates FTT as overreaching
13 September 2013 Brussels
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The Financial Transaction Tax as proposed will be levied not only on risky activities, but also on activities with genuine economic substance, said a document from the EU Council Legal Service.
The EU’s own counsel, which provides legal advice to European Union finance ministers, took particular umbrage at the compatibility of one article in the proposal with another.
The council said that Article 4(1) point f) of the proposal did not match up with Article 327 TFEU, which concerned equal treatment, proportionality and the principles governing the internal market, in particular the free movement of capital.
The imposition of FTT on non-participating member states pursuant to the counterparty principle in Article 4(1) would “constitute the exercise of jurisdiction over entities located outside the geographical area concerned by the legislation adopted under the enhanced cooperation,” said the report.
It added that where activities are covered that can indeed be considered to be liable to contribute to financial markets' risk, it has not been demonstrated that the interests of member states are endangered to a point that the Union should divert from its attitude in principle of restraint as to extraterritorial exercise of jurisdiction.
The EU’s own counsel, which provides legal advice to European Union finance ministers, took particular umbrage at the compatibility of one article in the proposal with another.
The council said that Article 4(1) point f) of the proposal did not match up with Article 327 TFEU, which concerned equal treatment, proportionality and the principles governing the internal market, in particular the free movement of capital.
The imposition of FTT on non-participating member states pursuant to the counterparty principle in Article 4(1) would “constitute the exercise of jurisdiction over entities located outside the geographical area concerned by the legislation adopted under the enhanced cooperation,” said the report.
It added that where activities are covered that can indeed be considered to be liable to contribute to financial markets' risk, it has not been demonstrated that the interests of member states are endangered to a point that the Union should divert from its attitude in principle of restraint as to extraterritorial exercise of jurisdiction.
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