EU Expands Regulatory Exemptions for Companies... Delays Battery Due Diligence Implementation

The European Union (EU) announced on May 21 that it will significantly expand the range of companies eligible for regulatory exemptions.

On this day, the European Commission unveiled the "SME Omnibus Package." The goal of this package is to reduce administrative costs for companies by a total of 400 million euros (approximately 630 billion won), which is 25% of the current total.

Ursula von der Leyen, President of the European Commission, is presiding over the Commission meeting held on the 21st (local time) at the EU headquarters in Brussels, Belgium. Photo by AFP

According to the package, a new category called "Small Mid-Cap Companies" (SMC) will be created in addition to the existing small and medium-sized enterprises (SMEs) with fewer than 250 employees. SMCs are defined as companies with fewer than 750 employees, annual sales of 150 million euros or less, or total assets of 129 million euros or less. As a result, approximately 38,000 companies across the EU will receive additional regulatory benefits.

Battery regulations will also be eased. The Commission plans to postpone the supply chain due diligence requirement for battery companies, which was originally scheduled to take effect this year, to 2027, a delay of two years. In addition, the exemption from due diligence will be expanded from SMEs to SMCs, and the reporting period will be extended from one year to three years.

The General Data Protection Regulation (GDPR) will also be revised. SMCs will only be required to keep records of "high-risk" personal data processing, relaxing the previous requirements.

The Commission also announced the "Single Market Strategy" on this day. This includes the introduction of a "28th legal framework" to unify bankruptcy law, labor law, and tax law across the EU.

All plans must be approved by member states and the European Parliament before they can be implemented. The second von der Leyen Commission, which began in December last year, is pursuing regulatory easing and administrative simplification to restore Europe's competitiveness, which has lagged behind the United States and China. Next month, a package to foster the defense industry is scheduled to be announced.