The approach outlined in the Commission's proposal on Feb. 9 is based on the principle that the trading rules applied to cross-border sale and purchase of financial services should be those of the member state where the service provider is established, the so-called country of origin principle.
John Mogg, the top civil servant in the internal market division of the Commission, said this plan should come into effect by 2005.
However, another division of the Commission, which deals with justice and home affairs issues is working on a separate, more powerful law that will say the exact opposite of what the new single market plan calls for. It wants to enshrine the laws of the country where the consumer or client is, the so-called country of destination principle.
Justice officials have already passed one law, called the Brussels I regulation, which recognizes the country of destination principle. The Rome II green paper, which will soon be put before the 20 commissioners for political approval, also takes this line.
Copyright February 2001, Crain Communications Inc.