Today the @EP_Legal votes on the Parliament's position on #CSDDD (still subject to a vote in the plenary). I am responsible for financial services: (1) there is no carve-out for any financial service provider and (2) they are subject to a continuous due diligence observation. 🧵
🐦🔗: https://n.respublicae.eu/repasi/status/1650760114427535360
1⃣ On scope: #CSDDD covers due diligence obligations for (1) own operations, (2) operations by subsidiaries and (3) operations carried out by other entities within their value chain. Only for the latter the defintion of the 'value chain' further defines the scope.
🐦🔗: https://n.respublicae.eu/repasi/status/1650760116965199873
2⃣ For finance: no limitations as to up- and downstream of the value chain for own operations (1) and (2), but a limitation with regard to clients of financial service providers (3): only "activities" of clients directly receiving financial services are covered by scope.
🐦🔗: https://n.respublicae.eu/repasi/status/1650760118856736769
Concretely, any own investment activity of financial undertakings is completely covered by #CSDDD, only when providing financial services to others, the due diligence obligation is limited to the activities (downstream & upstream) of this client.
🐦🔗: https://n.respublicae.eu/repasi/status/1650760120748441600
3⃣ Most importantly: no carve-out for any financial service from the scope (in stark contrast to the Council with it #BlackRock exemption). Financial undertakings are subject to the general scope which is lowered to 250 employees (but subject to a temporal phase-in).
🐦🔗: https://n.respublicae.eu/repasi/status/1650760122388316163
5⃣ Disinvestment can only be no option to sanction a company causing of contributing to human rights violations or environmental damages if this is strictly necessary to prevent bankruptcy.
🐦🔗: https://n.respublicae.eu/repasi/status/1650760127157264384
6⃣ Financial undertakings remain subject to the civil liability rule provided their activity caused or contributed to the damage. This is normally not the case. The directive establishes a presumption that financial services are "only" linked to damages, which can be rebutted.
🐦🔗: https://n.respublicae.eu/repasi/status/1650760129128587264
7⃣ Finally, the review clause requires from the Commission to assess whether an extension of the definition of 'value chain' for financial services must be included in the next revision of the #CSDDD.
🐦🔗: https://n.respublicae.eu/repasi/status/1650760131024437248
Next stop: plenary vote! Then: negotiations with the Council and the Commission. That will be a major challenge for financial services given how far the Council is away from the expected Parliament's position:
RT @repasi: The Member States have indeed made it to adopt a common position of the Council on the #DueDiligence Directive (#CSDDD). All in all, more light than shadow. Yet: There is finance! More about that in the thread 👇 https://t.co/VWEHIwnpPa
🐦🔗: https://n.respublicae.eu/repasi/status/1650760132647694337
To conclude: good to have no carve-out for financial services and the continuous due diligence obligations in the @EP_Legal position. The original @EP_Economics position was stronger. But we had to give in in order to get the EPP on board in the Legal Affairs committee.
🐦🔗: https://n.respublicae.eu/repasi/status/1650760134669336577
4⃣ On due diligence: we managed to keep the continuous due diligence in the final text (in contrast to the limitation to the pre-contractual phase in the COM proposal) but limited to defined action moments such as the release of instalments when executing credit agreements.
🐦🔗: https://n.respublicae.eu/repasi/status/1650760125290782720