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On the 14th of May 2020, the European Commission decided to refer Cyprus to the Court of Justice of the European Union due to its failure to implement a national register of road transport companies.

Why is a national register of road transport companies needed?

The European Commission has adopted rules for linking national electronic registers of road transport undertakings via a system called ERRU (European Registers of Road Transport Undertakings), which has been operational since 1 January 2013. ERRU allows a better exchange of information between Member States, so that the competent authorities can better monitor the compliance of road transport undertakings with the rules in force. Undertakings that do not respect the rules when operating abroad will face the consequences in the Member State where they are based. This creates fairer competition conditions in the road transport market. The set-up of the national registers and their interconnection are required under the legislation on the access to the profession of road transport undertakings (Regulation (EC) No 1071/2009) (the Regulation). According to the Regulation, Member States of the EU are under an obligation to keep a national electronic register of road transport undertakings which have been authorised by a competent authority to engage in the occupation of road transport operator. Furthermore, the Regulation provides that the relevant data contained in the national electronic registers should be made accessible to all competent authorities of the other Member States.

What was Cyprus required to do and by when?

A new and enhanced version of the ERRU system was introduced by the Commission Implementing Regulation (EU) 2016/480, according to which all Member States should have upgraded the connection between their registers and the revised ERRU system by 30th of January 2019. Furthermore, according to the Regulation, as amended by the Commission Implementing Regulation (EU) 2017/1440, the upgrade should begin with the completion of the connection, integration and performance tests by the Member States, in accordance with the instructions and under the Commission’s supervision. Cyprus failed to perform the preliminary tests as required by the Implementing Regulation, and, as a result, its national system has not been upgraded to the new version of the ERRU system within the prescribed legal deadline, namely the 30th of January 2019.

What is the referral procedure?

The EU Commission initiated an infringement procedure, as provided by Article 258 of the Treaty on the Functioning of the European Union (TFEU) against Cyprus. The Commission began the procedure by sending a letter of formal notice to the national authority of Cyprus by July 2019, which was followed by a reasoned opinion in November 2019.  According to Article 260 of the TFEU, if the Court decides that a Member State has failed to fulfill an obligation under EU law, the Member State concerned must take the appropriate measures to comply with judgment of the Court. In addition, if the Commission believes that the Member State concerned has not taken the appropriate measures to comply with the judgment of the Court, it may bring the case before the Court and it shall specify the amount of the lump sum or penalty payment to be paid by the Member State concerned which it considers appropriate in the circumstances.On that basis, if the Court finds that the Member State concerned has not complied with its judgment it may impose a lump sum or penalty payment on it.

How Cyprus can benefit from implementing the Regulation

The ERRU system allows the exchange of information between Member States on road transport companies established in the European Union. It is an important instrument to maintain the enforcement of EU legislation and fair competition among operators in the sector of road transport.

Better organised administrative cooperation between Member States would improve the effectiveness of the monitoring of undertakings operating in several Member States and would reduce administrative costs in the future. Electronic registers of undertakings interconnected throughout the Community, which comply with the Community rules on the protection of personal data, would facilitate such cooperation and reduce the costs involved in checks for both undertakings and administrations. National registers already exist in several Member States. Infrastructure has also been set up with a view to promoting interconnection between Member States. A more systematic use of electronic registers could therefore make a significant contribution to reducing the administrative costs of checks and to improving their effectiveness.

It is essential to gradually interconnect national electronic registers so as to enable information to be exchanged rapidly and efficiently between Member States and to guarantee that road transport operators are not tempted to commit, or to take the risk of committing, serious infringements in Member States other than their Member State of establishment. Interconnection of this kind entails the joint definition of the precise format of the data to be exchanged and the technical procedures for the exchange of that data.

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