EU opens Ukraine accession talks and implements corporate due diligence requirements

Mon 18 Dec 2023
Posted by: Benjamin Roche
Trade News

It was a tumultuous end to last week for the EU. On Friday (15 December), as Hungarian prime minister Viktor Orban blocked the release of €50bn in funding for Ukraine, the bloc opened accession negotiations with the war-torn country, as well as neighbouring Moldova.

Accession talks

The BBC notes that president of the European Council, Charles Michel, expressed that he was “confident and optimistic” the bloc would support Ukraine, despite Hungary’s veto of the aid package, which requires the unanimous agreement of EU member states to be signed off.

The opening of accession talks does, however, mark a significant compromise from Orban, who has spoken against Ukraine’s entry into the EU.

Politico reports that the EU was able to bypass the need for a unanimous decision on accession talks, as Orban chose to leave the room in which the vote on the issue took place, surrendering his veto in something of a compromise on the issue.

But Orban did take to X (Twitter) to say it was a “bad decision” and there remain other steps in the process of accession at which Hungary could still choose to block it.

Due diligence

The EU has also agreed new rules on supply chain due diligence, detailed by the European Parliament.

The new rules will apply to any company, whether based entirely in the EU or with a parent company outside of it, that has global turnover of €150m or more. It will also apply to smaller companies in certain industries, such as textiles.

The measures are intended to ensure that firms “identify, assess, prevent, mitigate, bring an end to and remedy their negative impact” as well as that of others in their supply chain. Doing so, the European Parliament suggests, will require them to “make investments, seek contractual assurances from the partners, improve their business plan or provide support to their partners from small and medium-sized enterprises”.

‘Cowboy companies’

Member countries will establish national bodies to supervise adherence to the rules, and companies that don’t comply could face fines up to 5% of global turnover.

Lead MEP on the legislation, Lara Wolters, said:

“[It is] a starting point for shaping the economy of the future – one that puts the well-being of people and the planet before profits and short-termism. It ensures honest businesses do not have to participate in the race against cowboy companies.”

Chambers chat

Institute of Export and International Trade (IOE&IT) director of EU public affair Fergus McReynolds was in attendance on Monday last week (11 December) at a meeting between the British Chambers of Commerce and Maroš Šefčovič, executive vice-president of the EU Commission for the European green deal, interinstitutional relations and foresight.

After the event, held under the Chatham House rule, McReynolds noted that the event emphasised “the importance of ensuring that, following the EU elections in June next year, free and fair trade is at the heart of EU policy-making” in what was described as “an increasingly difficult geopolitical environment”.