Changes from plenary report to adopted text

25. Reiterates that the EU and the UK should cooperate closely on the subject of customs, including by ensuring an effective exchange of information and data through the creation of a joint database on e-commerce irregularities and fraud, and on non-EU and non-UK traders, in respect of goods coming from outside the EU and the UK; reiterates the importance of constructive dialogue and effective methods of cooperation between customs administrations, with the aim of simplifying, digitising and speeding up entry and exit clearance processes with sufficient customs officers and simplified customs procedures including wider access to trusted trader schemes and the deployment of smart digital solutions to streamline processes in order to minimise administrative and financial costs for all stakeholders in particular SMEs, and ensuring the uninterrupted cross-border flow of critical agricultural inputs, including veterinary medicines, seeds, and animal feed, particularly for Ireland and other border regions highly dependent on timely deliveries; urges the Commission to actively engage with the UK to simplify customs procedures through the development of trusted trader schemes and the introduction of ‘green lanes’ for low-risk goods;

26. Acknowledges the evolving collaboration between the EU and the UK in the field of e-commerce since the entry into force of the TCA; underlines that while the TCA includes important provisions to facilitate digital trade, post-Brexit custom procedures have created additional burdens for e-commerce operators, notably through mandatory customs declarations, import inspections, and complex rules of origin requirements; welcomes the recent EU-UK efforts to streamline trade logistics and reduce export restrictions, and emphasises that further efforts are required to improve regulatory alignment, simplify customs procedures, and ensure the smooth and secure transfer of data, in order to unlock the full potential of cross-border e-commerce and enhance digital trade;

27. Encourages the EU and the UK to explore possibilities for deeper cooperation on regional supply chains; stresses that such steps would support more flexible and resilient supply chains and help address tariff and non-tariff barriers linked to complex rules-of-origin requirements;

28. Stresses that the implementation of the UK’s new import regime, the border target operating model, has been causing difficulties as a result of frequent changes in risk categorisation without proper notification, inconsistent interpretation of import requirements, lengthy waiting times in carrying out controls and failure to recognise the EU as a single sanitary and phytosanitary entity; is concerned that the UK’s responses have not yet fully addressed the related problems;

29. Welcomes the commitment expressed at the EU-UK Summit to work towards establishing a common SPS area through a comprehensive EU-UK SPS Agreement; acknowledges that non-tariff barriers and regulatory divergence currently pose challenges for EU-UK trade, notably through increased compliance requirements, duplicative certification procedures, and diverging product standards; notes that such frictions affect a range of sectors, including agri-food, chemicals, motor vehicles and machinery, and can be particularly burdensome for SMEs; encourages both parties to make full and effective use of the TCA’s mechanisms for regulatory and customs cooperation to address these issues, with a view to reducing trade frictions ahead of the 2026 TCA review;

30. Welcomes the UK’s plans to legislate for the indefinite recognition of the CE marking across additional product regulations, which would further ease compliance challenges for EU manufacturers and facilitate the export of products that require such marking from the UK to the EU; urges the Commission to swiftly launch negotiations with the UK to ensure strong alignment of conformity assessments for products, particularly in highly integrated sectors, in order to remove redundant testing, reduce business costs and strengthen the internal market; encourages both parties to pursue pragmatic arrangements for the mutual recognition of conformity assessment results in product sectors that are clearly low-risk, with a view to reducing unnecessary compliance costs and administrative burdens, particularly for SMEs, while safeguarding and further strengthening consumer safety and protection; encourages the Commission to build on this development by seeking sector-specific mutual recognition arrangements where regulatory convergence already exists, thereby eliminating unnecessary duplication of certification procedures, where appropriate;

32. Reiterates the strategic need for enhanced cooperation between the EU and the UK to maintain and modernise the current, fair and rules-based international trade order and address shared global economic challenges; calls, in this regard, for additional joint efforts in working towards an inclusive and comprehensive reform of the WTO, answering current and future challenges in a deeply interlinked world, and actively working against any new danger of division to the global political and economic order, as well as unilateral and unjustified trade measures and tariffs that have hit both the EU and the UK recently; calls, therefore, on both sides to continue to support consumers facing strains linked to the cost of living; stresses that in this context reinforced EU-UK cooperation is essential to strengthen supply chain resilience and reduce strategic dependencies; underlines that both parties should intensify joint efforts to de-risk critical supply chains in line with EU priorities on economic security; while noting that cooperation on critical raw minerals was not part of the conclusions of the EU-UK Summit, encourages the EU and the UK to strengthen Europe’s autonomy in this regard; encourages the launch of structured dialogues and targeted initiatives to promote diversification, build mutual trust and enhance strategic autonomy, with a view to fostering sustainable growth and shared prosperity; calls on the Commission to examine the details of the agreement announced on 8 May 2025 between the UK and the United States (‘Economic Prosperity Deal’) to ensure that none of its provisions undermine the TCA or any potential agreement between the EU and the UK; notes that, while its content still has to be clarified, the Economic Prosperity Deal may have an impact on the level playing field between the EU and the UK in the context of the TCA as well as any dynamic alignment stemming from the conclusions of the EU-UK Summit, such as on a common SPS area; welcomes the agreement on tariff-free trade in steel products, recognising this as a positive development that provides much-needed stability and predictability for key industrial sectors; recalls that the TCA includes specific commitments to uphold international trade rules, cooperate in multilateral forums, and exchange information on trade remedies and global trade developments; welcomes the outcomes of the EU-UK Summit, where both parties reaffirmed their intention to strengthen coordination on WTO reform, support transparent and rules-based trade, and pursue joint approaches to pressing trade disputes and stresses that the effective implementation of these commitments is essential to reinforcing the EU-UK partnership as a force for stability and predictability in global trade governance; welcomes the UK Government’s recent announcement that it will join the WTO Multi-Party Interim Appeal Arbitration Arrangement, which will ensure the continued effectiveness of the dispute resolution system while broader reforms to the WTO are being negotiated; stresses that in the currently volatile global trade context, the unique position of Northern Ireland must be taken into account in the formulating of trade policy by both the UK Government and the Commission;

33. Welcomes the extension agreed on 21 December 2023 of the rules of origin for electric vehicles and batteries until 31 December 2026; stresses the importance of monitoring rules of origin to avoid circumvention of standards and rules by goods coming from countries with which the UK may have other trade agreements;

Services, digital trade and investment

34. Takes note of the Commission’s assessment that the implementation of the TCA in the areas of services and investment, digital trade, intellectual property, public procurement and SMEs has generally proceeded smoothly with no major issues, except for the application of the UK’s sponsorship system for work visas to EU service providers, which remains an obstacle, and notes that UK exports of services to the EU increased by 19 % in 2024 compared to 2019 demonstrating the services sector’s resilience and potential, ; stresses the need to address these barriers to short-term mobility for EU service providers, including those in cultural, scientific and agricultural advisory sectors, and the potential mutual benefit of enhanced and reciprocal short-term business mobility arrangements; calls for the simplification of the UK visa procedures for EU professionals and contractual service suppliers to reduce financial and administrative burdens; calls on the Member States and the UK to speed up the processing times and reduce application costs for work permits when required; welcomes the commitment by the UK and the Commission at the EU-UK Summit to set up dedicated dialogues on the entry and temporary stay of natural persons for business purposes, including the sponsorship scheme; calls on both parties to explore options for easing short-term mobility for service providers and entrepreneurs, particularly SMEs and liberal professions, through streamlined visa processes and mutual recognition of professional qualifications, with full respect for respective regulatory autonomy; calls on the UK Government to exempt services suppliers covered by the TCA from the sponsorship system; calls for deeper EU-UK cooperation on trade in services;

35. Urges the UK, the Commission and the Member States to persist in their efforts towards the mutual recognition of professional qualifications and calls for the acceleration of negotiations, alongside solutions to facilitate smoother short-term mobility and cross-border service provision across the EU and the UK markets; highlights the continuing barriers faced by EU and UK nationals in accessing regulated professions; stresses the need for clear, streamlined recognition procedures and the involvement of professional bodies and competent authorities on both sides; notes that, to date, only one recommendation for a possible mutual recognition arrangement under the TCA has been received, namely in relation to the architecture profession; calls on the Commission and the UK to accelerate the implementation of Article 158 of the TCA and prioritise additional sectors, such as healthcare, engineering, and legal and financial services; stresses the importance of helping young people develop future-proof skills by facilitating cross-border training and professional development opportunities, including targeted investment in digital, green and financial literacy; calls for EU-UK cooperation on mobility schemes and calls for the EU and the UK to negotiate an ambitious agreement on business mobility, recognising that the effectiveness of arrangements for the mutual recognition of professional qualifications is intrinsically linked to simplified short-term entry and temporary stay provisions; calls on the UK Government to continue to take all necessary measures to combat discrimination against citizens of Member States living in the UK;

36. Encourages close cooperation between the EU and the UK on various aspects of digital trade regulation; appreciates, therefore, the administrative arrangement on the supervision of risk assessment and mitigation efforts by providers of large online platforms, signed by the EU and the UK on 30 April 2024; believes that regulatory convergence and dialogue on digital legislation should be promoted, in particular with regard to online platforms;

Level playing field and competition policy

37. Reiterates that the UK should acknowledge the complications that would stem from any unnecessary systematic regulatory divergence, in particular for the protection of employment and social rights, the environment, personal data, State aid, digital trade and taxation, which would only create additional issues as regards level playing field commitments in the TCA, as well as for EU and UK businesses and EU-UK trade;

38. Welcomes the finalisation of the EU-UK competition cooperation agreement under the TCA, allowing the Commission, the national competition authorities of the Member States and the UK Competition and Markets Authority to cooperate directly in competition investigations; notes that this is the first EU competition cooperation agreement that enables national competent authorities to cooperate directly with a non-EU-country competition authority; calls for its swift ratification to strengthen cross-border enforcement and coordination in competition cases, while safeguarding confidentiality through appropriate waivers;

39. Welcomes the efforts led by the EU and the UK to call for international cooperation in managing the challenges and risks posed by artificial intelligence (AI) in order to promote global AI governance based on democratic values, shared standards and robust safeguards; notes that the EU has adopted a comprehensive, risk-based regulatory framework through the Artificial Intelligence Act (AI Act), adopted in 2024, while the UK has so far taken a more light-touch regulatory approach, without introducing a horizontal AI law; calls for greater convergence of AI regulation between the EU and the UK in order to allow a dynamic sector to grow in a safe environment; regrets, in this regard, the fact that the UK did not sign the Statement on Inclusive and Sustainable Artificial Intelligence for People and the Planet at the international AI Action Summit in Paris on 11 February 2025; stresses the importance of structured EU-UK cooperation on AI governance, given the shared commitment to promoting safe, transparent and accountable AI systems, and in order to avoid regulatory fragmentation, participate in standard setting, and explore mutual recognition arrangements for conformity assessment; regrets the absence of a dedicated commitment to AI cooperation in the Common Understanding on a renewed agenda for EU–UK relations, despite the strategic importance of fostering transnational alignment on trustworthy AI development and recalls that Article 39 of the AI Act allows for the recognition of conformity assessment bodies established in third countries under specific conditions and subject to an agreement between the EU and the non-EU country concerned; underlines the risk of increasing regulatory divergence, particularly between the EU’s binding AI Act and the UK’s sector-led approach, despite converging priorities on risk-based classification, copyright protection and systemic risks; notes the UK-US memorandum of understanding on AI, which could lead to divergence in minimum standards between the EU and the UK and calls on the Commission to assess the impacts of this agreement and report back to Parliament; insists on the need to establish a common understanding of the benefits and challenges of AI; calls for enhanced technical dialogue between regulators to support regulatory interoperability and reduce compliance complexity for businesses; acknowledges the current discussions in the UK on changes to copyright law; expresses concern that such plans may impact negatively on European artists and creators, in particular with regard to the proposal to set up an opt-out system;

41. Recalls that the TCA recognises the importance of high standards of data protection and privacy, while allowing each party to maintain its own regulatory autonomy; finds that there are risks associated with potential regulatory divergence between the EU and the UK; notes that the UK’s data protection regime has remained broadly aligned with the EU’s General Data Protection Regulation (GDPR), enabling the continuation of the EU adequacy decision which facilitates frictionless data flows critical for cross-border services; notes the ongoing reform of the UK’s data protection framework through the Data (Use and Access) Bill, which introduces a range of substantive changes to existing UK GDPR provisions; reiterates the importance of maintaining high-level data protection standards for the transfer and processing of personal data between the two parties, including for individuals whose personal data is processed in the UK, particularly where data originates from the EU, and calls for regular information sharing between the EU and the UK; welcomes enhanced regulatory cooperation on digital issues, such as the administrative arrangement of 30 April 2024 between the Commission’s Directorate-General for Communications Networks, Content and Technology and the UK’s Office of Communications (Ofcom), which prioritises the exchange of information relating to the supervision of risk assessment and mitigation efforts by providers of large online platforms; calls for reinforced dialogue under the TCA’s Trade Specialised Committee on Services, Investment and Digital Trade to ensure stable conditions for data transfers and legal certainty for operators;

42. Recalls that the continued free flow of data between the EU and the UK hinges on data adequacy decisions by the Commission; notes that the Commission concluded that the UK’s legal framework continues to provide data protection safeguards that are essentially equivalent to those provided by the EU, following its assessment of the UK Data (Use and Access) Act; welcomes that the Commission has proposed to extend the current adequacy decision by six years; considers that this extension should provide regulatory certainty and prevent unnecessary compliance costs, and ensure the stability of cross-border data flows and digital trade, and ensure that EU citizens’ fundamental rights continue to be respected under the TCA; underlines that any permanent arrangement must remain conditional on the UK’s continued alignment with EU data protection standards under the UK’s new legal framework and its upholding a high level of protection for personal data, as required under EU law; calls on the UK Government to ensure that any UK legislative developments, such as the Data (Use and Access) Act 2025 does not lead to lower data protection standards than those in the EU;

43. Takes note of the European Data Protection Board’s Opinion 06/2025 which supports a technical and time-limited extension of the UK adequacy decisions until 27 December 2025, solely to allow the Commission time to assess the implications of the reform once adopted; recalls that the Commission is required to monitor all relevant developments in the UK during this period and to ensure that any future adequacy decision is based on a comprehensive and up-to-date evaluation of the UK’s data protection framework;

44. Highlights the importance of maintaining similar approaches to market reforms in the digital sector; asks that the UK avoid policies that diverge from the fundamental principles of the EU Digital Markets Act and the EU Digital Services Act;

45. Recalls the shared interest of the EU and the UK in digital connectivity; recommends that both parties establish a framework for information-sharing coordination for the monitoring of threats to critical connectivity infrastructure, including subsea cables and satellites;

46. Reiterates the need for the EU and the UK to uphold their commitment laid down in the TCA to cooperate on promoting transparent and reasonable rates for international roaming services, in order to lower costs for EU and UK consumers;

47. Recalls that the TCA requires that the economic partnership between the two parties be underpinned by a level playing field for open and fair competition, and that trade and investment take place in a manner conductive to sustainable development, including economic and social development and environmental protection; recalls that the protection of workers’ rights is essential in this context, as set out in, inter alia, Articles 355, 386, 387, 399 and 524 of the TCA; notes that under Article 355 both parties undertake to maintain and improve their respective standards in the areas covered by Title XI; recalls that the protection of workers’ rights is essential in this context, as set out in, inter alia, Articles 355, 386, 387, 399 and 524 of the TCA; notes that under Article 355 both parties undertake to maintain and improve their respective standards in the areas covered by Title XI;

48. Welcomes the proposals set out in the UK Government’s Employment Rights Bill 2024-2025 to expand collective bargaining rights, provide guaranteed hours for workers and repeal the Strikes (Minimum Service Levels) Act 2023; welcomes, in this regard, the ‘Good Jobs’ Employment Rights Bill, introduced by the devolved Northern Irish administration in Belfast, which fully upholds EU standards;

49. Notes that, with regard to the UK’s Retained EU Law (Revocation and Reform) Act 2023, in their official reply to the Commission and in a series of technical meetings, the UK authorities informed the Commission that the objective of the act is not to lower the levels of protection in, among other areas, labour matters under the TCA; calls, however, on the Commission to closely monitor the act to ensure compliance, in view of the wide-ranging empowerment granted to the UK authorities to modify retained EU law and the role of its courts in interpreting retained EU legislation;

50. Notes that in October 2024 the UK Government announced its intention to establish a new Fair Work Agency within the Department for Business and Trade, to replace existing state enforcement bodies for labour protection;

52. Calls for the EU and the UK to explore avenues for further cooperation and exchange of best practices in the areas of employment and social protection; recognises the potential for mutual collaboration to improve the implementation and enforcement of employment policies, ensuring fair competition, sustainable growth for companies and fair working conditions for workers in both the EU and the UK; recalls that social partners play a genuine role in both monitoring and enforcing the TCA, including the power to submit official complaints;

53. Welcomes the EU and the UK’s ongoing cooperation within the ILO, in particular on the development of a new instrument aimed at regulating platform work;

54. Welcomes the parallel implementation of the EU Digital Markets Act and the UK Digital Markets, Competition and Consumers Act as a step towards promoting fair and contestable digital markets; notes the shared regulatory objectives and stresses the need to avoid fragmentation through strengthened cooperation under the competition cooperation agreement; supports the development of a memorandum of understanding to facilitate regulatory dialogue, information exchange, and coordination on enforcement practices, notably in relation to gatekeeper platforms; underlines the value of aligning approaches to competition in digital markets to support cross-border business certainty and consumer protection;

55. Calls on the Commission to continue to closely monitor regulatory divergence in the UK that could pose a risk of non-compliance with the TCA, notably in areas relevant to the level playing field such as subsidy control, AI, taxation, labour and social standards, the environment and climate change rules, and to address identified cases of divergence, which can lead to lower social, labour and environmental protection standards for both EU and UK citizens and consumers; recommends the creation of an EU-UK regulatory divergence observatory to monitor and report on future legislative changes in the areas of transport safety, environmental standards and passenger rights; stresses the importance of proactive regulatory dialogue to avoid unnecessary divergence and market-fragmentation; calls on the Commission to provide Parliament with access to the data obtained by publishing annual reports; highlights the particular challenge that regulatory divergence poses for Northern Ireland, given its unique dual access to both the EU and UK markets under the Windsor Framework; stresses the need for tailored early-warning mechanisms and impact assessments of new legislation focused on Northern Ireland to ensure that divergence does not undermine legal certainty, business continuity, or the peace process, and to minimise its impact and prevent misalignment becoming a trade obstacle; calls for increased engagement with local stakeholders and the north/south bodies established under the Good Friday Agreement;

Financial services

56. Recognises the need for a high level of cooperation and forward-looking dialogue between the EU and the UK on financial services matters; notes that the Joint EU-UK Financial Regulatory Forum has held only three meetings since its establishment;

57. Encourages a forward-looking dialogue in the Joint EU-UK Financial Regulatory Forum that promotes a high degree of alignment of the respective regulatory regimes and helps to identify and address common matters with regard to financial stability, investor protection, anti-money laundering and prevention of terrorist financing, in order to facilitate cross-border investment, and to foster innovation in financial markets and cooperation in international forums and in the implementation of international standards; notes that this may include sharing information on regulatory developments, exchanges of views on respective policies, rules and processes with regard to deference regimes such as equivalence, and may also cover risk analyses, and the potential economic impacts of proposed measures, as well as topics relating to voluntary technical convergence, which make trade flows more stable and efficient; notes the forum’s potential to promote a consistent approach where possible and provide a framework for dispute resolution, and calls on the Commission to strengthen it and to build on this cooperation; calls on the Commission to inform Parliament fully and in a timely manner of the preparations for and outcome of the semi-annual meetings;

58. Considers that the efficiency and competitiveness of post-trade financial market services are vital to ensure a well-functioning savings and investments union (SIU), and welcomes the growing consensus between the UK and the EU on this matter; welcomes the provisional political agreement to shorten the settlement period for transactions in transferable securities to one day after the trade;

59. Points out that following the withdrawal of the UK from the EU, UK market participants no longer have automatic access to the single market for financial services; highlights that the EU has only granted a time-limited equivalence decision for one specific financial services subsector – central counterparties – while the EU’s equivalence framework in financial services allows non-EU firms access to the EU market, provided that their regulatory and supervisory framework is deemed equivalent to EU standards; recalls that the EU can unilaterally withdraw any equivalence decision at any time if the conditions for granting equivalence are no longer fulfilled; recognises the need to ensure that SMEs on both sides can benefit from closer financial cooperation between the EU and the UK; underlines the importance of facilitating cross-border access to finance; encourages the Commission to discuss further equivalence decisions in order to provide firms from both the UK and the EU with the benefits of greater market access;

60. Welcomes the inclusion of exchanges of views on equivalence decisions in the remit of the TCA’s Forum on Regulatory Cooperation; calls for regular discussion and examination of such issues, particularly with respect to financial and investment services, in the interests of increased trade and cooperation; calls on the Commission to assess and take equivalence decisions in a strategic and conditional manner, ensuring that any market access granted to UK financial services companies is fully aligned with EU standards; believes that equivalence assessment should go beyond a strict sector-specific approach and should instead adopt a broader, forward-looking perspective to consider the non-EU country’s overall regulatory and supervisory framework, including its commitments to fair competition, anti-money laundering, tax cooperation, investor protection and financial stability, in order to safeguard the Union’s financial stability, preserve the integrity of the single market and prevent regulatory arbitrage;

61. Recalls that decisions on equivalence could benefit EU firms in terms of greater access to the UK market, including for banking, payment services, investment services and insurance, and emphasises that an open and well-structured financial relationship between the EU and the UK must help to foster a more competitive financing environment for SMEs;

62. Notes at the same time the UK’s stated desire for regulatory divergence from the EU in a number of areas; expresses concern that such divergence could undermine the level playing field with the EU; calls for close monitoring of these developments and their potential impact on EU markets, including through the strategic use of equivalence decisions;

63. Acknowledges that, although some crypto-assets are primarily speculative in nature, their utilisation in the financial sector is increasing, and calls for a coordinated approach to the regulation and supervision of such assets to effectively address the risks concerning consumer protection, market integrity and money laundering, as well as environmental impact concerns; notes with concern that stablecoin issuers will be allowed to operate in the UK under an exemption from the UK’s regulatory and supervisory framework, and underlines that if the UK were to pursue bilateral cooperation with the United States on a permissive regulatory model, EU efforts towards ensuring regulatory coherence, robust oversight, financial resilience across jurisdictions and global financial stability would be undermined; calls, therefore, on the UK to adopt legislation similar to Regulation (EU) 2023/1114 on markets in crypto-assets; cautions against the systemic risks that a less stringent supervisory framework may create and recommends not diverging from the Financial Stability Board’s recommendations on the regulation of crypto-assets, which could undermine global financial stability; considers that the EU and the UK should work together within the international community towards finding a common understanding of the benefits and risks of AI applied to financial services;

64. Supports and welcomes the swift development of the digital euro, complementing but not replacing cash; highlights the EU’s high level of dependence on foreign entities in the payments sector; recognises the urgent need for the EU to ensure its autonomy from foreign payment service providers as a matter of digital and financial sovereignty;

65. Considers that the possible introduction of central bank digital currencies in both the EU and the UK may have an economic impact on the relationship between the two parties and on strategic autonomy;

66. Strongly supports the continued cooperation between the EU and the UK on tackling international money laundering and terrorist financing, countering harmful tax regimes and implementing sanctions; welcomes the adoption of the anti-money laundering legislative package by the EU and the continuous commitment on the UK’s part to tackling money laundering and other financial crimes, in particular in its Overseas Territories and British Crown Dependencies;

67. Expresses concern at the UK’s establishment of new freeports, as national hubs to promote global trade and investment, offering extensive tax breaks, deregulatory regimes, and public subsidies;

68. Highlights the commitment of both parties to the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework’s Two-Pillar Approach; regrets the Executive Order issued by the US President on 20 January 2025 declaring that the OECD Global Tax Deal has no force and effect in the United States; calls on both parties to work jointly and constructively in international forums to safeguard multilateral tax cooperation, promote the global implementation of Pillar Two minimum tax standards and ensure consistency with evolving United Nations initiatives;

69. Acknowledges the TCA’s commitment to fostering cooperation on key global challenges while respecting respective powers in the field of direct taxation; welcomes therefore the first EU-UK Dialogue on Countering Harmful Tax Regimes held on 10 October 2024 as a forum for discussion on shaping and implementing international standards to combat harmful tax regimes; stresses the importance of maintaining momentum in EU-UK coordination on international tax reform;

70. Supports continued EU-UK cooperation on combating money laundering, terrorist financing, harmful tax practices, and fraud; stresses the need to closely monitor UK regulatory divergence to prevent regulatory arbitrage and financial risks to the EU and ensure a level playing field; encourages both parties, with full respect for national tax sovereignty, to cooperate proactively – through relevant bilateral and multilateral forums – in order to advance fair and sustainable tax systems;

71. Welcomes the full implementation in 2024 of the Protocol on Administrative Cooperation and Combating Fraud in the Field of Value Added Tax and on Mutual Assistance for the Recovery of Claims Relating to Taxes and Customs Duties (VAT Protocol); proposes that the EU and the UK conduct a joint annual review of the VAT Protocol’s implementation and effectiveness, provide a forum for discussion on the emerging trends in VAT fraud and challenges in cross-border VAT recovery, and assess the need for additional joint measures to address these issues;

72. Underlines that EU market participants rely heavily on clearing houses based in the UK, with over 90 % of euro interest rate derivatives processed at clearing houses based in the City of London; considers that this massive concentration could present a strategic risk to EU financial stability; believes that the right balance should be struck between substantially reducing overreliance on UK-based clearing houses, on the one hand, and providing clarity to EU financial market participants, on the other; takes note of the updates to the European Market Infrastructure Regulation, as adopted in December 2024, which aim to address this overreliance by introducing an active account requirement;

73. Expresses concern, however, that the Commission’s decision to extend the equivalence for UK central counterparties for a further period of three years until 30 June 2028 risks a delay to the development of the active account requirement;

74. Calls on the Commission in the meantime to provide a permanent and stable solution to reduce the overreliance on UK central counterparties, in line with the EU’s strategic objective of reducing excessive exposures to non-EU central counterparties of substantial systemic importance; recalls that Parliament has consistently stressed the need to relocate clearing activities to the EU, and that prolonged equivalence in a context of regulatory divergence undermines financial stability, weakens EU market autonomy and sends conflicting signals to market participants;

75. Notes that as a consequence of the withdrawal of the UK from the EU, UK service suppliers in the area of financial services no longer benefit from the ‘country-of-origin’ principle or from ‘passporting’ for direct access to the EU single market, while the integrated global economy requires close cooperation between authorities, including in the area of financial services and payments; notes also that while the TCA is underpinned by provisions that ensure a level playing field, this is not sufficient, in particular with regard to rules on subsidies, and calls for strong and transparent State aid controls, with effective domestic enforcement and with a binding dispute settlement mechanism that can help prevent distortions of competition and ensure fair trading conditions;

76. Takes note of the UK’s upcoming financial services growth and competitiveness strategy, unlocking investment across the economy; calls for the EU and the UK to closely align their respective competitiveness strategies for the financial services sector;

77. Expresses concern at the UK Payments Systems Regulator’s plans to implement a price cap on UK-European Economic Area (EEA) card-not-present consumer cross-border interchange fees specifically for EU banks, card providers and other payment providers; stresses that two of the three alternative levels of price caps are markedly lower than the equivalent price cap set for UK banks, giving rise to concerns about adherence to the principle of non-discrimination under the TCA; emphasises, therefore, the importance of ensuring that all regulatory measures respect the principle of non-discrimination; calls on the Payment Systems Regulator to ensure that the work begun on interchange fees continues, with a view to avoiding any regulatory setbacks and ensuring a fair environment for European providers;

78. Recognises, beyond the legally binding framework of the TCA, the importance of greater cooperation in the financial services field to address shared challenges and explore avenues for closer and continuous collaboration, in particular through engagement at the highest level, so that the benefits of globally interconnected financial systems can be reaped, against the background of the creation of a SIU and of the thriving hub for financial services that the City of London represents;

79. Stresses that heightened transatlantic tensions make improved EU-UK economic relations more important than ever; calls on the Commission and the UK Government to cooperate closely in international financial services forums in order to leverage the European perspective; recognises the need to ensure that SMEs on both sides can benefit from closer financial cooperation between the EU and the UK; highlights that standards agreed in international forums such as the International Organization of Securities Commissions, the Financial Stability Board, Financial Action Task Force or the Basel Committee on Banking Supervision should remain the baseline for EU-UK cooperation and that deviations must be duly justified;

80. Is concerned by the UK’s decision to delay the implementation of the Basel III framework for banks until 1 January 2027; calls on the Commission and the Member States to ensure the implementation of the Basel III standards adopted by the co-legislators and calls on the Commission to continue monitoring the implementation of the internationally agreed Basel III standards in other major non-EU jurisdictions;

81. Takes note of the substantial growth of non-bank financial intermediaries (NBFIs) in the EU and the UK, and of the major vulnerabilities identified by the European Systemic Risk Board (ESRB) in this sector, particularly with regard to leverage and liquidity mismatches; shares the concerns about the resilience of NBFIs, especially under market stress, as expressed by the ESRB and the UK’s Financial Policy Committee in this respect, and calls for enhanced monitoring and regulation of these entities;