Minutes of the Postal Directive Committee Meeting

EUROPEAN COMMISSION Internal Market and Services DG

Postal services

Brussels, 29 June, 2009 MARKT/E4 – ES/mt D(2009)

MINUTES OF THE POSTAL DIRECTIVE COMMITTEE MEETING

BRUSSELS, 27TH APRIL 2009

1. OPENING OF THE MEETING On behalf of the European Commission ("the Commission") Mr. Jörg Reinbothe ("the Chairman") welcomed members of the Postal Directive Committee ("PDC") and opened the meeting.

The Chairman also welcomed the Candidate Countries and EEA representatives who, he recalled, participate as observers and are subject to the same degree of confidentiality as Committee members themselves. Participants were also informed of the mechanism of the meeting being a formal Committee Plenary meeting and that it differs from that of the informal Working group meetings. In his opening address the Chairman informed those present that travel expenses were to be reimbursed. The Chairman also informed participants that the following documents had been prepared for the meeting and will be sent electronically to all participants after the meeting: (a) the correlation table for Directive 2008/6/EC in line with Recital 60 of Directive 2008/6/EC and the declarations of the Commission (NB: This table has already been provided and Member States are strongly encouraged to use this table), (b) a consolidated version in English, French and German of the Postal Services Directive that the Commission services have elaborated as an informal working tool, and finally c) the Power Point presentations of the meeting.

2. ADOPTION OF THE AGENDA The agenda was presented by the Chairman and was approved without comments.

3. MINUTES OF THE LAST MEETING The Minutes of the previous meeting of 24 October 2008 were approved without comments.

Commission européenne, B-1049 Bruxelles / Europese Commissie, B-1049 Brussel - Belgium. Telephone: (32-2) 299 11 11. Office: SPA2/10029. Telephone: direct line (32-2) 295.81.09. Fax: (32-2) 296.83.92.

E-mail: [email protected] 4. IMPLEMENTATION OF THE 3rd POSTAL DIRECTIVE Mr. Robert Pochmarski (RP) (European Commission, Directorate General Internal Market and Services, Postal Services Unit) gave a presentation on Implementation Tools. These are the more "technical" aspects of implementation and the means made available to Member States by the Commission according to Article 23a of the Postal Directive. The following three important tools were described. 1) PDC Working Groups were established during 2008, and four meetings have been organised; two last year and two this year at which several external experts have contributed. 2) As many as 13 bilateral meetings have so far been held, and with the implementation at hand by December 2010, some substantial issues were raised at these meetings, which will continue to be organized in the future. 3) A Consolidated version of the Postal Services Directive is now available in three languages and includes all recitals, footnotes, the annexes, and the Commission’s declarations to the European Parliament. The Commission will seek to provide all the other language versions.

4.1 APPROACH TO IMPLEMENTATION Under this title, the Chairman outlined a forward looking scenario and described the activities that are needed to implement the 3rd Postal Directive in a manner which is faithful to the text and the spirit of EU Postal Reform. On the one hand, the Commission continues to be determined to provide formal and informal assistance to Member States in the implementation of the postal acquis. To this end:  multilateral Working Groups of the Postal Directive Committee have been established. These tackle all the main regulatory issues and should eventually result in guidance and the identification of best practice;  bilateral meetings with Member States deal with specific regulatory issues of that Member State concerned by taking into account specificities of these Member States;  market monitoring is carried out, inter alia, by the Commission and provides an essential mechanism to help implementing the Directive; such market monitoring includes the screening of Member States' laws and practice, the collection of postal statistics, the continued commissioning of sector studies, continued reporting, and the organisation of Postal Conferences – particularly the latter three elements implying close liaising with all stakeholders; and  where needed, infringement procedures are/will be initiated.

On the other hand, Member States will have to reflect on the following elements:  The implementation of the Postal Services Directive should be prepared with due respect to its text. It is essential that together we turn from supply-driven to demand-driven postal markets;  Assessments will have to be made of the existing national postal legislation;  Such assessments should include consultations with the wider postal sector with a view to establishing a sound and efficient regulatory framework that triggers market entry and contributes to the prosperity of the postal sector;  Transparent cooperation of Member States with the European Commission (including correlation tables, collection of postal statistics, bilateral meetings);  Proactive market monitoring;  Respecting the mandate and independence, and making best use, of National Postal Regulators;

2  There has to be a continued pressure on postal incumbent operators as part of active market monitoring in order for the former to become efficient and market- oriented players;  The implementation deadline of the Directive should be taken as this, namely as a deadline, and not as the appropriate timing for implementation and full market opening. In fact, both the implementation and full market opening should be achieved as soon as possible and in accordance with the jurisprudence of the European Court of Justice (notably the International Mail Spain case).

4.2 STATE OF PLAY - MEMBER STATES TOUR DE TABLE In order to have a better picture of the state of play regarding the implementation of the Postal Services Directive, the Chairman then asked Member States, including EEA and Candidate countries, to indicate progress and planning towards the transposition of the 3rd Directive.

Austria informed the Committee that a new postal law has been drafted and is in the consultation procedure. It is expected that the draft will be adopted by the government during summer 2009.

Belgium has performed ongoing analysis since 2008 and a political agreement was reached on 19 December 2008 on certain issues. The text of the proposed new law is published on the website of the regulatory authority for public consultation and has to be discussed and voted upon by the Belgium Parliament.

Bulgaria has introduced amendments to the postal law, and a public consultation has been carried out. The implementation of the 3rd Postal Directive will be carried out in two steps. The proposed new regulations, in the first step, are intended to strengthen the already existing NRA, to abolish any remaining barriers to entry, and to introduce a transparent licensing procedure. FMO will be accomplished by December 2010. Bulgaria has had bilateral meetings with the European Commission.

The Czech Republic is, through a working party, analysing calculation methods on costs etc and expects to conclude this work by the end of 2009 and to have amendments to the present postal law during the first half of 2010. A bilateral meeting with the Commission on best practices among Member States is envisaged by the Czech Republic.

Denmark indicated that the NRA has analysed the need for postal reform and that the legislative procedure will begin in the autumn of 2009. FMO is envisaged for the middle of 2010.

Estonia has adopted a new Postal law and abolished the reserved area of the postal market on 1 April 2009.

Finland indicated that a working group that was appointed in the autumn of 2008 will present draft legislation in January 2010. The proposal is to be considered by Parliament next spring for new legislation to be in place by autumn 2010. The main issues are the definition of universal service and the financing of any net costs of universal service, together with designation.

France is working actively since spring 2008 to prepare for implementation.

3 Germany's liberalisation took place in 2008. The 3rd Postal Directive requires slight legal modifications, e.g. concerning Article 4 and will come into force in autumn 2009. There is also a draft law on VAT to be reviewed in view of the preliminary ruling of the European Court of Justice (TNT UK case). Greece reported that postal reform is well under way and the Ministry will shortly appoint a committee. In March 2009, a conference was held with the participation of all stakeholders, to conclude on market analysis and the powers extended to the NRA.

Hungary indicated that assessments have been performed since 2007. The Government's postal market strategy covers issues such as which market model and financing mechanism to choose. Hungary is expecting input from the Commission. FMO will take place before the deadline.

Ireland reported that a consultation has taken place.

Italy stated that it envisages a delayed procedure concerning e.g. powers delegated to the NRA. A Governmental Working Party is responsible for suggesting a new postal legislation. VAT was mentioned as one example of important issues. Italy envisages keeping the deadline for FMO.

Latvia is expecting the Parliament to approve the new postal law by the end of May 2009 and new regulations to come into force in December 2010.

Lithuania has a new Government with a new action plan. This indicates FMO according to the extended deadline of 31 December 2012.

Luxemburg has started preparatory work for the implementation. Elections will take place in June 2009.

Malta reported on an ongoing review process with public consultation and FMO envisaged for January 2013.

The Netherlands introduced FMO on 1 April 2009 through a new Postal Act, which covers the requirements of the 3rd Postal Directive. An English version of the new legislation is available.

Poland is presently holding consultations and the Government's approval of the new Postal Act is expected during Q4/2009 for the introduction of FMO by the end of 2010.

Portugal is preparing a draft law and FMO is envisaged within the deadline.

Slovakia started its implementation process in 2008 with studies on the scope of the Universal Service, financing mechanism etc. Legal changes regarding hybrid mail will be presented to Parliament in July and in September 2009. FMO is envisaged for 1 January 2013.

Slovenia indicated that preparations have started and that the Government approved of the draft law in April 2009, and sent it to Parliament for adoption in June 2009. FMO is envisaged for January 2011.

Spain reported on the process of creating a well-functioning, independent regulator. Furthermore, the Ministry is working on the wording of the implementation law and

4 expects the new draft law in the Council of Ministers by late June or July 2009. The financing of the USO is also an important issue.

Sweden has started a Ministry Inquiry in December 2008 to examine the postal legislation and to issue a report by 30 September 2009, at the latest. This will then be followed by public consultation for two to three months. A Government Bill is envisaged to be presented in spring 2010 and the new legislation coming into force in December 2010.

United Kingdom has presented a Government Bill that is under consideration by Parliament and it contains e.g. rules on a compensation fund and licensing.

Croatia is currently amending its postal legislation and is taking part in bilateral meetings with the Commission in order to address the main issues in this process.

Iceland is following the EEA-agreement. There is still a reserved area in Iceland and they are now in the process of restructuring the incumbent with the aim of improving profitability.

Norway has made an assessment of the consequences of liberalisation but no decision has yet been taken on when FMO will take place. However, a new Postal Act is being prepared. Norway also reported that it introduced VAT already several years ago.

Turkey proposed new legislation in 2009 and an English version of the proposal was sent to the Commission. The following countries were not present: Cyprus, Liechtenstein and Romania.

The Chairman made the following observations from the tour de table on the state of play.  A distinction should be drawn between the preparation for full market opening and the legislative steps needed in this respect on the one hand, and the implementation of the (other) provisions of the 3rd Postal Directive (Directive 2008/6/EC) on the other;  A number of Member States is taking a proactive attitude to implementation and full market opening. With respect to the latter, the recent developments in the Netherlands are a case in point.  Excellent constructive contacts have already taken place between the Commission and many Member States;  Most Member States are well advanced in their preparatory work;  However, in some Member States, less speed and less transparency can be observed as far as their preparation for implementation and full market opening is concerned;  There are some cases of non-compliance with the current Postal Directive;  In some cases, the approach chosen for implementation as presented does not seem to comply with the text and/or spirit of the 3rd Postal Directive;  This tour de table should be continued so as to share, on a permanent basis, information on the state of play regarding implementation;  The state of play on implementation will also be a major issue at the Mid Term Review Conference that the European Commission plans to organise later this year.

5 4.3 POSTAL REFORM AGENDA 2009-2012 The Chairman stressed that the implementation process is a joint responsibility of all stakeholders. The success of EU Postal Reform should not be taken for granted. While the adoption of the 3rd Postal Directive presents a decisive step, it is essential now that the objectives of EU Postal Reform are transposed according to its spirit. The Commission is determined to provide assistance to Member States in the implementation phase and beyond. To this end, a medium-term Postal Reform Agenda (2009 – 2012) serves as an outline for the future activities of the Commission, of course in close cooperation with all stakeholders. In this context, the Commission would like to reiterate the importance of continuing the following actions:  Multilateral meetings in the framework of the Postal Directive Committee, including preparatory work in the informal setting of the Working Groups, so as to arrive at general guidance and identified best practice;  Bilateral meetings between the Commission and Member States with the objective to provide for individual assistance;  Continued Market Monitoring, including (a) the screening of Member States' laws and practice, (b) the collection of postal statistics, (c) the commissioning of sector studies addressing selected topics such as main developments in the postal sector, the external dimension of the postal Internal Market and EU Postal Reform, the implementation of the 3rd Postal Directive, or intra-Community cross border mail, (d) the regular presentation of Application Reports by the Commission, and (e) the organisation of Review Conferences as appropriate.

4.4 FEEDBACK FROM PDC WORKING GROUP MEETINGS Following the tour de table the Chairman referred to the Working Groups of the Postal Directive Committee which were established by the PDC Plenary meeting of 7 April 2008. This is a new mechanism, designed to establish best practice amongst Member States' legislators and Postal Regulators and to give guidance on how best to implement the 3rd Postal Directive and to prepare for full market opening: together, i.e., with all Member States and the European Commission, and with the help of external experts and all Commission services concerned. The PDC Working Groups I (of 11 September 2008) and II (of 13 October 2008) saw an exchange of views, a kind of open-ended brainstorming, identifying the main regulatory challenges that we are engaged in together. The results of these meetings were referred to in the Postal Directive Committee Plenary meeting of 24 October 2008. With the PDC Working Groups III (of 13 March 2009) and IV (of 1 April 2009), we have entered into a new phase. While these meetings were still informal, the presentations and the discussions resulted in operational conclusions. These conclusions will be presented to the PDC Plenary meeting today. Subsequently, the (written) conclusions will be distributed as an annex to the minutes of the PDC Plenary meeting.

4.4.1 FEEDBACK FROM PDC WG III (13 MARCH 2009) Ms. Kristin Hentschel (KH) (European Commission, Directorate General Internal Market and Services, Postal Services Unit) provided feedback from PDC Working Group III (of 13 March 2009). The meeting focused on best practices on how to insure the universal services, the designation of universal service providers, licensing regimes, and access to the postal network and the postal infrastructure. Concerning Topic 1, Ensuring the Provision of Universal Postal Service from a competitive perspective, it is appropriate to leave the provision of universal service to market forces. A distinction was made between markets with different degrees of maturity. In a mature market, i.e. competitive domestic postal markets, the provision of

6 postal universal services should be left to market forces and no designation is needed. This is seen as the general rule, and as the desirable scenario which would make State Aids obsolete. Any market failure is however mitigated by the application of public procurement mechanisms. While for instance, in a less competitive domestic postal market with no other potential universal service provider than the incumbent operator, continued designation of the incumbent postal operator may be needed for a limited time. Initiating a public procurement procedure in that situation would not be useful and could present an excessive administrative burden. The operational conclusions on this Topic 1 are based on the presentations and discussions and are included in Annex I. Under Topic 2, Authorisation and Licensing, it was stated that licensing regimes are not an obligation under the Postal Services Directive. Instead they are a possibility and should be applied when appropriate in order to safeguard transparency, carry out market monitoring, foster competition, and to trigger market entry. Whenever a licensing procedure is applied, the requirements in Article 9 of the Postal Directive must be complied with. Very comprehensive contributions on best practice were made by external experts (PricewaterhouseCoopers and University of Linköping, Sweden) and these show that any parallel "play" obligations (obligations to provide postal universal services) imposed on several postal operators do not comply with Member States' obligations under the Postal Service Directive. Any protectionist effects or market entry barriers resulting from such conditions should be avoided. Moreover, their economic effects amount to restricting market access. Any "pay" obligations imposed on postal operators as part of an operating authorisation or license, e.g. in the form of mandatory contributions to a compensation fund, should regularly be re-assessed and reviewed. The operational conclusions on this Topic 2 are also included in Annex I. Access to the postal infrastructure and the postal network, Topic 3, was also addressed and discussed in the meeting of the third PDC WG Working Group. In order for Member States to comply with Article 11a of the Postal Directive, the National Regulatory Authorities (NRA) have to identify the relevant elements of the infrastructure, assure access, exercise its monitoring powers and apply remedies whenever necessary. This need became very clear also from the presentations by a competitor in the Swedish market and by the French regulatory authority, ARCEP. This is of high importance in the context of a multi-operator environment where it is necessary to ensure interoperability of postal networks and at the same time, prevent abuse of a significant market power in the form of refusal to deal. The operational conclusions on this Topic 3 are included in Annex I.

4.4.2 FEEDBACK FROM PDC WG IV (1 APRIL 2009) Mr. Pavanjit Dhesi (PSD) (European Commission, Directorate General Internal Market and Services, Postal Services Unit) provided feedback from PDC Working Group IV (01/04/09). Under Topic 1, National Regulatory Authorities as essential pillars of EU postal reform, the key role of the NRAs was discussed. It was demonstrated during the meeting that their tasks under the postal acquis are numerous and it is essential therefore to provide sufficient resources, in order for them to efficiently carry out their tasks. From the telecom example, presented by the European Commission, DG INFSO, and ARCEP, the French NRA, it reveals that cooperation among NRAs and the establishment of best regulatory practices/recommendations are important elements of ex ante regulation activities on the market. The state of play with respect to compliance with the currant Postal Services Directive will be assessed by the European Commission, also on the basis of the sector study under preparation by WIK Consult, and appropriate action will be considered. Furthermore, the issue of NRAs will be discussed at the High Level Mid Term Conference that the Commission intends to organise during the Swedish 7 Presidency during the second half of 2009. The operational conclusions on this Topic 1 of the PDC WG IV, based as always on the presentations and discussions are included in Annex II. As Topic 2, the meeting also covered Calculating net costs of the universal service and the issue of the method of calculating net costs, if any, of universal postal services. Member States were informed about the principles of the 3rd Postal Services Directive (2008/6/EC), and notably its Annex I, for the calculation of any such net costs. In this regard, there was a presentation highlighting the useful example of net cost calculation in the telecoms sector. This specifically showed that intangible benefits (such as the brand image, mentioned in the presentations) are a fundamental component of the net cost calculation method used in telecoms. The meeting concluded that a clear definition of the universal service obligation and the efficiency of the universal service provider is fundamental and finally that obligation requirements should be limited and geared to customer needs. The operational conclusions on this Topic 2 are included in Annex II.

5. DEBRIEFING ON THE REGULATORY DIALOGUE The Chairman pointed out that a large part of the PDC Plenary meeting was dedicated to the implementation of the new (3rd) Postal Services Directive and to the preparation of full market opening – and for obvious reasons, as there are deadlines to respect in the final phase of EU Postal Reform. Even though the PDC is mainly in charge of assisting Member States in the implementation of the Postal Services Directive, the international developments and the external dimension of EU postal policy, is the flip side of EU Postal Reform. This has been discussed in the framework of the Council Working Group, but also in the PDC. The negotiations, as well as the outcome of the 24th UPU Congress were assessed at the previous PDC Plenary meeting on 24 October 2008. Further discussions on international postal matters are required because there is a distinct and pronounced Community interest: - In having a constructive influence on international postal policy in general; - In avoiding damage to, and promoting, the EU postal acquis in particular and EU interests in general abroad; - In promoting internationally the high quality of, and the free trade in, postal services; - To liaise with our main trading partners so as to identify a maximum of common ground and to tackle issues of mutual concern; - To cooperate in a constructive spirit, and share our experience with Developing Countries; - To speak internationally with one voice, wherever possible; - To avoid political damage to the EU in any postal fora; - To comply with the applicable rules of the EC Treaty in this respect.

The need for more EU coordination on international postal matters concerns in particular the work in the specialised international postal forum, the UPU. But it goes beyond the UPU. EU Member States and the European Commission present and discuss postal matters also in other fora, such as the WTO/GATS and with the World Bank, and with our main trading partners, such as the USA, China, Japan or India. The Chairman expressed hopes for a more permanent process of coordination and dialogue amongst EU Member States and with the Commission about international postal policy matters. After these introductory remarks the Committee was debriefed on the international activities and developments that the Commission has been involved in.

8 5.1 EU-CHINA SEMINAR ON POSTAL REFORM AND EXPRESS DELIVERY Mr. Denis Sparas (DES) (European Commission, Directorate General Internal Market and Services, Postal Services Unit) reported on the EU-China Seminar on Postal Reform and Express Delivery Services, which was held in Beijing, China on 11-12 February 2009. The event that was planned as a Regulatory Seminar turned into a big Regulatory Conference with more than 200 participants. A large number of topics were discussed including the regulatory framework and ensuring the provision of the universal postal service and the effects of industry and market developments in the postal sector. The EU delegation was composed of Member States, National Regulatory Authorities as well as external consultants. This proved to be an instrumental element in the discussion as it enabled a broad dialogue and exchange of views on various issues (e.g. the need for an independent National Regulatory Authority in the postal sector; quality of the universal postal service; licensing requirements imposed on market entrants etc.) There was a genuine interest between the EU and its Member States and the People's Republic of China (PRC) to continue with the established regulatory dialogue especially in view of the recently adopted postal legislation in the PRC and regulatory developments in the EU. A 2nd Regulatory Conference is planned for next year to be held in Brussels.

5.2 POSTAL REGULATORS' MEETING IN WASHINGTON D.C. Mr. Robert Pochmarski (RP) (European Commission, Directorate General Internal Market and Services, Postal Services Unit) debriefed the Committee on the Postal Regulators' meeting in Washington D.C., USA on 4-5 March 2009 as part of the Global Regulatory Dialogue. This was the first (global) Regulatory Dialogue of its kind with participants from the USA, China, Japan, Portugal, Ecuador and the European Commission. The initiative of the US Postal Regulatory Commission is based on the idea to provide a regular forum for (independent) postal regulators and policy makers to exchange views on key regulatory challenges. It is imperative to better present the, often misunderstood, regulatory principles of a liberalised postal market (the model adopted by the EU). In fact, the Portuguese regulatory authority (ANACOM) was the only, really independent regulator attending this informal meeting. RP informed the Committee on the issues of substance discussed at the meeting ranging from universal service, ratemaking and costing, quality of service to international roles and priorities. He emphasised the importance of the participation of a regulator from an EU Member State, which was of particular importance to explain to our trading partners the implications of the regulatory model chosen by the EU. China indicated its willingness to host the next global regulatory postal dialogue in spring 2010. Furthermore, a high level regulatory meeting will be arranged by UPU in November 2009. It will be important for the EU to be present on both occasions so as to express clearly the European perspective after the adoption of the 3rd Postal Services Directive.

The Chairman concluded that the international aspects of postal policy can be viewed from three different angles: from the UPU, the WTO, and from the bilateral Regulatory Dialogue angle. Obviously, all these different angles are connected, and, therefore, they should all be driven by EU postal policy considerations. He suggested that the dialogue on these international matters and developments continue in the framework of PDC and also of the Council Working Group. There should be a permanent mutual exchange of views and coordination. Member States were asked to share their work and contacts on international matters with all other Member States and with the Commission. EU Member States should elaborate more in depth on the strategy and concept of this coordination, especially in view of the preparation of the 25th UPU Congress. A specific PDC Working Group meeting on these issues is envisaged for the autumn 2009. 9 5.3 REPORT ON WTO ACTIVITIES ON POSTAL SERVICES Ms. PaulineWeinzierl, (European Commission, Directorate General Trade, Services and Investment Unit) provided an update on developments within WTO in relation to postal services. There are 50 WTO member countries that have undertaken commitments on courier services but only eleven on postal services. The current classification on postal and courier services was established under traditional assumptions that only postal administrations provide postal services and, therefore the EC is suggesting a new classification. Very little progress has been made over the last years and negotiations are now at a stand still. A series of meetings took place before Easter, e.g. a "friends of postal/courier" meeting and a services cluster is envisaged for late June 2009.

5.4 REPORT ON UPU COMMITTEE I Mr. Jean-Luc Dutordoit, (Belgian Institute for Postal Services and Telecommunications – BIPT -, Brussels, Belgium, the Belgian NRA) made a presentation on UPU Committee I, which carries out several projects. These include a project group engaged in "Reform of the Union". It has commissioned a study and is examining the impact of new market players and their role within the UPU. Their involvement may create a need for UPU to develop and improve its structure and organisation related to Article 2 of the Convention. The next board meeting will be held in October 2009. A first report on the study will be delivered in April 2010 and the final report in October 2010. On the initiative of the USA, and with reference to proposal 10.0.1 of the 24th Congress, the very important issue of the mission of UPU is being examined and there are both legal and budgetary aspects to consider.

Mr. Etienne Defrance, (BIPT) described the further activities of the project group "Acts of the Union" which need to be reviewed and therefore are subject to a study proposed by the Council of Administration. The aim is to improve the structure and the readability of the Acts and in this context, their permanent character was discussed in some cases. Work is continuing on resolution C 22/2008 concerning the topical value of certain provisions and a questionnaire will be sent to all Member States. In view of instructions to the IB through resolution C 63/2008, of the 24th Congress, the IB has, through the "Interconnectivity Project Group", collected information on ETEO mail and provided case studies. Continued discussion is essential on these issues, as well as others, such as terminal dues.

Norway urged all ministries and regulators of Member States to participate and to take a more active part in the work of UPU.

6. AOB Mr. Denis Sparas (DES) informed the Committee about the European Court of Justice's (ECJ) decision on VAT. On 23 April 2009 the ECJ issued a long awaited preliminary ruling in case C-357/07 – TNT Post UK concerning the application of the VAT exemption in the postal sector as laid down in the 6th VAT Directive.

DES recalled that the Commission (DG TAXUD) proposed a legislative solution in 2003 amending Directive 77/388/EEC. This proposal is pending in the Council. In 2006 the Commission also launched infringement proceedings against Germany, Sweden and the UK. In July 2007 the UK High Court referred three questions about the interpretation of the 6th VAT Directive to the ECJ. These three questions were interpreted in the before mentioned judgement. In its interpretation, the ECJ said that the VAT exemption should 10 be interpreted strictly. The interpretation of the term "public postal service" however must be consistent with the objectives pursued by those exemptions and comply with the requirements of the principle of fiscal neutrality.

According to the ECJ, the objective of the said exemption is to offer postal services which meet the essential needs of the population at a reduced cost. According to the ECJ, such an objective is the same, in essence, as that of the Postal Services Directive to offer universal postal service. This exemption does not apply to supplies of services or goods identical thereto for which the terms have been individually negotiated. With the reference to the applicability of different legal regimes to "public postal service" and other postal service providers the ECJ stipulated that holders of individual licence, which provide services within the scope of universal service, cannot be VAT exempt as they are not subject to same legal (regulatory) obligations.

6.1 DISCUSSION The Chairman concluded that this issue will be discussed further after a thorough assessment of the said judgement in one of the forthcoming Working Groups, which will report back to the PDC.

Belgium commented on the Commission's studies and the large number of questions that the one of the on-going studies consists of, and the big workload that it represents.

Mr. Hughes de la Motte (HM) (European Commission, Directorate General Internal Market and Services, Postal Services Unit) made reference to a meeting with the consultants, WIK and the aim of getting useful results from the study. He confirmed that the Commission had taken note of the comment made by Belgium. HM took the opportunity to mention that unfortunately some Member States have not replied to the questionnaire sent out by the consultant, and even though the Commission is aware that resources are limited, it is worth making the effort to reply .

The Chairman confirmed the intention to discuss the findings of the studies with stakeholders later this year.

7. CONCLUSIONS The Chairman informed the Committee about future activities: the fifth PDC Working Group meeting to be held on 3 June, followed by three more during the autumn and the PDC Plenary scheduled for 12 November 2009.

The Minutes of this Plenary meeting will be circulated to participants for comments.

Jörg REINBOTHE Chairman of the Committee

Contact: Eva Samanta, Telephone: (32-2) 295.81.09, [email protected]