Mutual Recognition of Licenses – Potential Simplification of Licensing Procedure of the Trading Activity
The purpose of this Issue Paper is to discuss the mutual recognition of licenses in the energy
sector as a mechanism for advancing regional markets.
Ideally, to avoid inconsistencies and unnecessary transactional costs, a participant in a regional
market would only have to obtain one license, instead of a separate license from each jurisdiction
participating in the market. A unitary, harmonized licensing regime would ensure license
monitoring and the enforcement of regulatory action against license holders throughout the entire
As a practical matter, however, the sovereignty of each jurisdiction must be respected, and
specific circumstances of each jurisdiction could support the application of differing criteria.
Section II, infra, of this Paper examines the balance between uniformity (harmonization) and
subsidiarity, and includes an overview of the current status of efforts to coordinate or otherwise
facilitate cross-border licensing and monitoring in the energy sector. Guidance in this area from
the European Commission and other authorities, both with respect to the energy sector and
analogous cross-border reciprocity efforts, is included.
In Section III, the Paper focuses on the treatment of this issue in three jurisdictions: Hungary,
Romania and Ukraine, in order to provide representative case studies.
The last section of the Paper, Section IV, includes a summary and proposes conclusions and next
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