Forthcoming Law for the Unity of Market.

The Secretariat of the Council of Ministers received a report on the preliminary draft of the forthcoming “Law of Guarantee of the Unified Market”, aimed at assuring the free movement of goods and services throughout the national territory. The contents of the report, to which we have had access, indicates that the law is inspired by the principles of “single license” and “law of origin”, already in effect within the European single market. In this way, any product or service produced under the regulations of any Autonomous Region will be offered throughout the national territory without the need for additional administrative approval burdens.

Once the Law is passed, manufacturers or distributors will have to apply for a single license, within only one Autonomous Region, and may thereafter market their products throughout the country. Service providers will also have to apply for a single license of activity and will have to meet, as it happens in Europe, the requirements of destination to pursue such activity.

The implementation of this single license principle eliminates the cost of having to comply with up to seventeen different regulations to operate in Spain.

Economic  Impact

The macroeconomic analysis made by the Ministry of Economy and Competitiveness estimates that the passing of this law will result in a 1.52 per cent increase in the GDP (Gross Domestic Product) over a period of ten years. The increase would be of approximately 0.15 per 100 annual GDP for the first ten years, involving around 1.500 million Euros each year.

The myriad of existing regulations represent a clear disincentive to foreign investment, while increasing legal uncertainty and preventing companies from benefitting from the economies of scale, which hinders the competitiveness of our economy and translates into job losses.

The Law will be the answer to a generalized claim of economic operators, corporate employers and investors, both domestic and foreign. Many agencies have highlighted the need to introduce greater administrative simplification in Spain. The last report of the European Council recommends Spain to "eliminate the numerous obstacles to the exercise of activities resulting from the existence of multiple and overlapping standards existing at various official levels".

The Law, which is included in the National Plan of Reforms, will allegedly allow Spain to improve its international competitive edge.

Administrative cooperation

This law is based on trust and mutual recognition between regional administrations, based on collaboration as well as on an ex-ante and ex-post control and supervision.

In particular, the Law will regulate mechanisms of cooperation between public administrations with regard to the preparation of regulatory projects with a view to preserving the coherence thereof. The usual administrative reports on the regulatory impact of new laws will have to take into consideration their impact on the Unity of Market.

The Law will implement a special and abbreviated information procedure to exchange information between administrations of origin and destination with a view to facilitating their exercise of oversight functions. It will also establishe the integration of a common database of the different records of public administrations.

Council for the unity of market

In addition, the Law will provide for the creation of the Council for the Unity of Market, a special body for administrative cooperation aimed at assuring overall compliance with the law. The Board shall be chaired by the Minister of Finance and Public Administrations and will be made up by the competent officials of the Autonomous Regions.

The Council will have the functions of streamlining the regulations and promote changes to the Elimination of obstacles to the unity of market. It will also follow up of cooperation mechanisms and in particular shall ensure the effective integration of regional records. It will also coordinate the activity developed by sector conferences in the field of market unit. The Secretariat of the Council, among other functions, will prepare a biannual report of analysis and assessment of the market regulatory situation.

Agile and economical solution to conflicts

This preliminary draft  empowers manufacturers and distributors, for the first time ever, to resort to the future National Commission of Markets and Competition in any situation where they will understand that given actions or sanctions of public administrations violate the unity of market and thus hinder the free national movement of their products or services.

The National Commission shall decide within a period of 5 days on the merits of the request. If it considers the petition to be not admissible, the interested party will be entitled to appeal to the judicial authorities, which will automatically imply that the appealed decision will be automatically suspended.

On the other hand, this law includes the principle of non-discrimination, intended to guarantee equal treatment for enterprises and professionals nationwide