A spate of directives relating to motor vehicles have been proposed or ap­proved since the beginning of the year by the European Commission, with the latest culminating in a proposal directed at lessening the cumbersome cross-border registration process of lightweight vehicles.

Citizens who buy or sell a second hand car in another EU country will not have to face additional technical controls and administrative problems- Josette Grech

In a bid to dismantle the obstacles to free movement within the EU, in 2010 the Commission conducted an inquiry in order to identify car registration problems that ordinary citizens face when they move around from one member state to another for reasons varying from health, training, work and holiday. Business and citizens responded to the public consultation, the end-result of which showed that on average registration procedures took five weeks and an estimate of €400 incurred in the process. The need to improve the regulatory framework through the simplification of the formalities and conditions for the registration of vehicles was felt to be necessary.

All member states have a registration system of motor vehicles. It constitutes the administrative authorisation for their entry into service in road traffic, involving their identification and the issuing of a registration number. A registration certificate is issued and the registration data is used for the taxation of motor vehicles.

For this purpose a member state may only require the registration on its territory of a vehicle registered in another member state if the holder of the registration certificate has his normal residence on its territory.

Thus citizens who move to another member state, cross-border workers, car rental companies and people leasing a motor vehicle in another member state are often obliged to register it on the territory where they live or where the vehicle is used, although the motor vehicle is already registered in another member state.

With the introduction of the proposed directive, students, employees on definite contracts of employment and citizens who spend part of the year in a holiday residence abroad will be exempted from the obligation of re-registration. Citizens who buy or sell a second hand car in another EU country will not have to face additional technical controls and administrative problems.

These exemptions are in line with the new principle introduced in the proposed directive that cars should be registered in the EU country where their owner is domiciled, and consequently all other member states may not request their re-registration, independently of the period of time spent in such other member states. The obligation for re-registration remains where an owner of a vehicle moves domicile to another member state, in which case the owner has six months within which to carry out the re-registration.

In relation to intra-EU trade of second-hand vehicles, persons purchasing a motor vehicle in another member state will be able to drive the vehicle to their own member state in view of its final registration there under the new temporary registration system. When a person established in a member state purchases a car from another state, the seller will seek to deregister the motor vehicle at the moment that the vehicle is sold and thus not allow the buyer to drive the motor vehicle carrying the registration number of the former. Therefore, a temporary registration system will be introduced, which bridges the gap between the registration in the first member state and the member state of destination.

Administrative co-operation between member states’ registration authorities will take the place of direct citizens’ intervention when it comes to collection of necessary technical information for the purposes of re-registration. This will assist in the abolition of many controls hampering free movement.

Although the proposed directive is a step in the right direction, issues still need to be addressed. The directive falls short of proposing a single registration system that would be valid for the entire lifecycle of the car, independently of the member state of first registration. The Commission justified this on the basis of the probable negative impact on road security, criminality and registration tax.

It is envisaged that the proposed directive will be adopted in two years’ time.

jgrech@demarcoassociates.com

Dr Grech is an associate with Guido de Marco & Associates and heads its European law division.

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