Brussels To The Point - June 2013

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Edited by Elke Janssens and Maxime Colle

EDITORIAL

by Elke Janssens & Maxime Colle

After a long, gloomy winter, spring has finally arrived in Brussels, along with the latest issue of Brussels to the Point. In this issue, we cover a number of interesting topics, which we hope you enjoy reading about, either at work or, even better, outside in the sunshine!

Climate change is a hot topic. The new Brussels Air, Climate and Energy Code (COBRACE) reflects increasing awareness of the importance of and need for environmental protection. Environmental challenges are by definition both economic and social in scope and therefore require an integrated, consistent regulatory approach. Such an approach is adopted by COBRACE, which contains measures targeting a wide variety of sectors, from energy to real estate. Some of the most controversial provisions pertain to off-street parking restrictions and low-emission areas.

In March 2013, both the Brussels Court of Appeal and the Dutch Supreme Court rendered interesting decisions acknowledging that legal advice prepared by in-house counsel should benefit from the attorney-client privilege. These decisions derogate from the prevailing opinion in Europe (based for the most part on the Court of Justice's case law) that only practicing members of the bar - thus not in-house counsel - are sufficiently independent and can consequently rely on the attorney-client privilege.

Limited liability is not always limited. One of the main reasons to opt for a limited-liability company is that - in principle - business partners, competitors, the authorities and third parties can make claims against only the company's assets. However, the on-going economic crisis has prompted an intensified search for persons who can be held liable for corporate debts. In this context, shareholder liability is a cause for particular concern.

This past April, the European Court of Justice held that the Flemish language decree, which requires employers based in Flanders to enter into cross-border employment contracts in Dutch (rather than English, for example), violates the free movement of workers. While important, it should be noted that this decision by the Court of Justice has not put an end to Belgium's strict language requirements in employment relationships.

Tax regularisation,which appeared to be a never-ending story, is finally coming to an end. The current tax regularisation system has been extended until 14 July 2013. A new (transitional) system will apply until 31 December 2013. Although no official texts are available yet, this transitional system will be more expensive but will be extended to serious and organised tax fraud. Afterwards, tax regularisation will no longer be possible.

The European Commission recently issued proposals to amend the Trade Marks Directive and the Community Trade Mark Regulation. These proposals are expected to be adopted in the first half of next year; while the new regulation will have direct effect, the Member States will have two years to transpose the amended directive into national law. This issue contains a brief overview of the most relevant expected changes.

Finally, we are proud to announce that our 2013 report onthe Belgian Private Equity and Venture Capital Market willbe issued in the coming days. We wish you pleasant reading.

THE BRUSSELS CODE ON AIR, CLIMATE AND ENERGY MANAGEMENT: A CROSS-CUTTING APPROACH TO ENVIRONMENTAL CHALLENGES

by François Tulkens & Maxime Vanderstraeten

On 31 May 2013, COBRACE (Code of Brussels for Air, the Climate and Energy Control) entered into force, to a large extent.1 COBRACE consolidates and updates a number of environmental and energy-related regulations. It represents a small legislative revolution which aims to tackle the environmental challenges faced not only by the Brussels-Capital Region but by the world in general.

1. International challenges and objectives

The Brussels-Capital Region cannot escape the current energy crisis. Hence the need to reduce energy consumption while favouring renewable energy sources.

Moreover, in light of global warming, the Region has committed to meeting both global (the Kyoto Protocol and subsequent commitments) and European (the "3x20" Climate and Energy Package) targets in terms of the reduction of CO2 emissions.

Finally, the Region faces a public health issue due to poor air quality. In this regard, it should be noted that Brussels is unfortunately an area where fine particle emissions exceed EU thresholds.

2. A single regulatory framework - an integrated approach

COBRACE sets out to address these challenges by consolidating and amending a number of Brussels regulations on, for example, the energy performance of buildings (EPB), travel, air quality and the emissions trading system (ETS). At the same time, the Brussels legislature intends to implement a number of recently passed EU directives (including the recast EPB Directive, a new Energy Efficiency Directive, etc.).

The approach adopted by COBRACE is resolutely cross-cutting: air, climate and energy policies relate to the same sectors and involve the same players (buildings, transportation networks, the government, businesses and individuals) and should therefore be governed by a single regulatory framework.

This approach is also reflected in the new regional Air-Climate-Energy Plan. Belgium is already required to provide the European Commission with a series of plans on air quality, energy efficiency, etc. COBRACE now provides for a single five-year plan, incorporating various issues subject to the same strategic vision. The plan sets guidelines and measures to be taken to achieve at least the COBRACE objectives.

3. Environmental impact of the building sector

COBRACE includes measures specifically targeting buildings, which account for 59% of the final energy consumption in Brussels. In addition to the requirements of the current EPB ordinance, COBRACE establishes a system to evaluate the energy and environmental performance of buildings and sets out performance-based certification and labelling rules. It also creates an obligation for the owners and/or occupants of a building or group of buildings with more than 100,000 m² to prepare a local plan of action for energy management (PLAGE).

4. A controversial measure: off-street parking restrictions

With respect to transport, COBRACE includes new measures to improve the environmental performance of certain types of vehicles (taxis, shared vehicles, regional tour buses, rental cars, etc.).

However, another cornerstone provision of COBRACE, namely the restriction on off-street parking, has generated far more opposition. As Brussels regularly appears on lists of Europe's most congested cities, COBRACE aims to reduce the number of off-street parking spaces at office buildings, in order to encourage alternative means of transport to work. The system will be extended progressively to existing facilities through a system of environmental permits. Except in specific circumstances, a quota on parking spaces will be determined based on the availability and proximity of public transport. The environmental permit holder can make excess parking spaces available to the general public, reassign them to new activities, or pay an environmental tax.

5. Exemplary role of the public sector

As the public authorities are expected to play an exemplary...

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