EUs

EU’s New Greenwashing Regulations Bring Sharper Penalties

New EU greenwashing regulations threaten hefty penalties and litigation for financial institutions and corporations that fail to verify their ESG marketing.

Under new EU greenwashing regulations, companies making false or misleading sustainability claims could face hefty penalties as the Empowering Consumers for the Green Transition Directive takes effect on September 27. The most brazen scofflaws should expect fines of up to a 4% of the company’s annual gross income, product recalls, and possible class-action lawsuits, under the directive.

Though the Directive sets a framework, it leaves the precise levels of those penalties to each European Union member state, Mateusz Leźnicki, a senior associate at global law practice Dentons’ Warsaw office, told Global Finance. “That said, the stakes are high — in a number of jurisdictions, penalties for large-scale greenwashing directed at consumers can reach up to 10% of a company’s annual turnover, with personal liability for individual managers on top.”

Related: Sustainable Finance Awards 2026: Environmental Rollbacks Ding Markets

The complete penalty landscape is still evolving as implementing the directive into local commercial regulations is an ongoing process. Germany and Italy already have implemented the enabling legislation, while France, Belgium, and Poland are in advanced stages of transposing the directive into national law.

Historically, France, Germany, the Netherlands, the Nordic countries, and Poland have been the most active enforcers in this space, while the Central and Eastern European markets have been less developed, Leźnicki said.

“The full penalty landscape will only become clear as member states complete their transposition, which remains ongoing in many jurisdictions,” he added. “We are closely monitoring developments across all EU jurisdictions for our clients, as the situation is highly dynamic.”

Prohibited Practices

The Directive’s list of 12 prohibited practices includes the use of “empty” marketing terms associated with sustainability, like “green,” “environmentally friendly,” “energy efficient,” and “biodegradable,” that cannot be demonstrated. It also now requires that any sustainability-related claim made by a company about its product be verified by an independent third party. Other issues addressed by the Directive include planned obsolescence and limitations on aftermarket repairs.

The blacklisted practices hit almost every aspect of a business, including marketing, sales and distribution channels, sales and product teams, product development, supply chains, finance and corporate communications, according to a joint Web posting by My Green Labs, a non-profit that supports sustainable scientific research, and global law firm Eversheds Sutherland.

Impact on Financial Services

Companies outside manufacturing should pay close attention, as the directive covers any commercial communications containing environmental claims, including those made by financial institutions.

“For financial products specifically, the picture is more nuanced: Retail-facing financial products marketed with sustainability or ESG claims may fall within scope where dedicated sector-specific regulation — such as SFDR [the E.U.’s Sustainable Finance Disclosure Regulation] — does not already cover the ground,” said Leźnicki. “The boundaries here are still being tested, and the interaction between the Directive and financial services regulation is exactly the kind of question companies should be seeking specific legal advice on before September 2026.”

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Travel expert Simon Calder predicts EU’s controversial EES system to be ‘put on hold’ for the whole summer

Simon Calder described the EU’s Entry Exit System (EES) as ‘passport roulette’

A leading travel journalist has suggested the European Union’s new Entry/Exit System (EES) could be put on hold for the entire summer following reports of chaos and significant delays at airports. Speaking on BBC Breakfast, Simon Calder – who has branded the system ‘passport roulette’ – acknowledged that while some locations had performed ‘really well’, others were ‘struggling’.

EES is an automated system gradually replacing the traditional passport stamp. It requires people from third-party nations such as the UK to have their fingerprints registered and photograph captured before entering the Schengen Area, which encompasses 29 European countries, predominantly within the EU.

For the majority of UK travellers, the procedure takes place at foreign airports. The system saw a soft launch in October 2025 and was meant to be fully operational across all borders by April 10, 2026.

Yet there have been numerous accounts of passengers missing flights and enduring lengthy queues at airports as systems buckle under the sheer volume of people attempting to register. Several countries have suspended EES at various points, with Greece postponing the system for UK travellers over the summer to enhance the travel experience.

Portugal has halted EES for extended stretches to ease travel to and from the country, with speculation mounting that Italy may do likewise. Mr Calder indicated it was not beyond the realms of possibility. “It was always going to be really exciting to see what happens when you roll out a digital borders scheme and you ask 29 national governments to implement it,” Mr Calder said. “They have all gone their own way.

“Some of them have done it really well. Others, well, they are still struggling and we might find that, actually, the whole scheme gets put on a sort of hold for the rest of the summer.

“That’s certainly what a lot of airlines and train operators would like, not to mention the Port of Dover, where they haven’t even started taking biometrics from motorists yet.”

READ MORE: Ryanair issues plea to ‘suspend’ EES rollout amid ‘missing flights’ warningREAD MORE: Ryanair issues warning to customers – and it’s not down to fuel crisis

What’s the problem?

Headlines were made in April 2026 when passengers travelling with both Ryanair and easyJet missed their flights from separate Milan airports owing to EES complications. Footage from one incident revealed a crowd gathering at Milan Bergamo, with exasperated passengers informing staff they had been held at the gate for over an hour, demanding to know what action to take.

It’s understood that approximately 30 passengers were left behind. Ryanair said in a statement: “Due to passport control delays at Milan Bergamo Airport on 16 April, a number of passengers missed this flight from Milan to Manchester.” One passenger claimed they were kept waiting until the aircraft had departed, only to then be informed they would need to arrange their own return flights. A number of travellers on a Ryanair service from Tenerife South to East Midlands on 10 April also missed their homeward journey, once again blaming hold-ups at passport control.

Ryanair recently issued a blistering statement on social media, demanding the EES rollout be postponed until September. The low-cost carrier tore into France, Portugal, Poland, Italy, Spain, and Germany for their failure to ‘ensure that adequate staffing, system readiness, or kiosks are in place’.

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Branding the system as ‘half-baked’, the Ryanair statement said: “Despite knowing for over three years that EES would become fully operational from 10 April 2026, France, Portugal, Poland, Italy, Spain, and Germany have failed to ensure that adequate staffing, system readiness, or kiosks are in place.

“As a result, passengers are suffering long passport control queues and, in some cases, missing their flights.

“Ryanair calls on these EU Governments to suspend the rollout of the EU’s passport control Entry/Exit System (EES) until September to ensure that passengers are not needlessly forced to suffer long passport control queue delays at European airports during the peak summer season.”

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Can the EU’s Article 42.7 offer Europe NATO-like collective defence? | NATO News

European leaders are seeking to clarify a little-used mutual defence clause in the European Union treaty as questions grow over Washington’s long-term commitment to NATO during a deepening rift with the United States.

NATO, founded in 1949, is a military alliance of North American and European countries built on the principle that an attack on one member is an attack on all. But years of tension between Washington under President Donald Trump and its European allies have pushed European governments to place greater emphasis on their own defence capabilities.

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The shift has come as Trump has repeatedly criticised NATO members over their defence spending. He has also questioned the value of the alliance and clashed with European leaders over Ukraine and Iran while threatening to seize Greenland from NATO ally Denmark. The latest tensions escalated after the US and Israel began their war on Iran when Trump accused allies of failing to support Washington and dismissed NATO as a “paper tiger”.

Media reports have said that the Pentagon has also prepared a memo examining options to punish allies viewed as insufficiently supportive during the Iran war. Those options reportedly include exploring the suspension of Spain, which has been particularly critical of the war, from NATO and reviewing the US position on Britain’s claim to the Falkland Islands. NATO has no formal mechanism to expel a member, but the episode has cast doubt over the alliance’s unity and revived questions about Europe defending itself without Washington.

At the heart of Europe’s bid to look for alternative security arrangements beyond NATO is Article 42.7 of the European Union’s founding treaty.

What is Article 42.7?

Article 42.7 of the Treaty on European Union is the bloc’s mutual defence clause. It says that if an EU member state is the victim of armed aggression on its territory, the other member states are obliged to provide aid and assistance by all means in their power in line with the United Nations Charter.

By comparison, Article 5 in NATO’s North Atlantic Treaty states that an attack on one member is considered an attack on all. It is supported by common planning and joint exercises and is underpinned by the military weight of the US.

Unlike NATO’s Article 5, however, the EU clause is not backed by an integrated military command structure, standing defence plans or a permanent force able to respond automatically and the US has no obligation to intervene.

That means it is often seen as less credible as a military guarantee in practice although it remains an important political commitment.

Who is calling for Europe to turn to Article 42.7?

Cyprus, which is an EU member but not a NATO member, has been especially eager to strengthen the clause after a drone struck a British airbase on the island during the Iran war last month. While such an incident may not have been enough to invoke NATO’s Article 5, it could raise questions about Article 42.7, particularly at a time of growing strain between the US and Europe.

Cypriot President Nikos Christodoulides said leaders had agreed it was time to define how the provision would work in practice if it were triggered.

“We agreed last night that the [European] Commission will prepare a blueprint on how we respond in case a member state triggers Article 42.7,” he said on Friday at an EU summit.

French President Emmanuel Macron has also stressed that the clause should be treated as a binding commitment rather than a symbolic gesture. “On Article 42, paragraph 7, it’s not just words,” he said during a weekend visit to Greece. “For us, it is clear, and there is no room for interpretation or ambiguity.”

Antonio Costa, president of the European Council, said the bloc was drawing up a “handbook” for the use of the clause.

And EU foreign policy chief Kaja Kallas said Europe must step up its defence efforts after Trump has “shaken the transatlantic relationship to its foundation”.

“Let me be clear: We want strong transatlantic ties. The US will remain Europe’s partner and ally. But Europe needs to adapt to the new realities. Europe is no longer Washington’s primary centre of gravity,” she said at a defence conference in Brussels.

“This shift has been ongoing for a while. It is structural, not temporary. It means that Europe must step up. No great power in history has outsourced its survival and survived.”

Has the article ever been invoked?

The clause has been used only once before when France invoked it after the 2015 Paris attacks claimed by ISIL (ISIS), in which 130 people were killed and hundreds wounded.

The attacks were the deadliest in France since World War II. After Article 47.2 was invoked, other EU states shared intelligence aimed at helping French authorities unravel the conspiracy that led to the attacks.

NATO’s Article 5 has also been invoked just once – after the September 11, 2001, attacks in the US.

But NATO’s help to the US wasn’t limited to intelligence sharing. Allies contributed tens of thousands of soldiers to the US-led war in Afghanistan. The operations lasted two decades, and more than 46,000 Afghan civilians were killed alongside 2,461 US personnel and about 1,160 non-US coalition soldiers, according to Brown University’s Cost of War project.

Can countries be kicked out or leave NATO?

Europe’s debate over its defence comes amid a string of disputes inside NATO. The reports that US officials have considered punitive measures against allies have revived questions over the alliance’s future cohesion.

Pablo Calderon Martinez, head of politics and international relations at Northeastern University London and a specialist in European affairs, told Al Jazeera that Spain cannot legally be removed from NATO.

“There is no legal mechanism to remove a member. There is, however, a mechanism through which a member can withdraw itself from the organisation,” he said.

He added that some countries have long fallen short of NATO commitments but that does not provide grounds for expulsion. A more likely scenario, he said, would be the US choosing to leave.

Carne Ross, a former British diplomat and founder of Independent Diplomat, a nonprofit diplomatic advisory group, said the deeper issue is whether Europe and Washington still share common values.

“It is abundantly clear that we do not. Trump is anti-democratic. He tried to subvert democracy, challenged the 2020 election result and whipped up a violent crowd to storm the Capitol,” Ross said.

“What more evidence do we need that the values of Europe are not shared in Washington?”

Is Europe preparing for a future without the US?

European countries have pledged to sharply increase their defence budgets with many aiming to spend 5 percent of their gross domestic products each year on their militaries.

Trump cannot withdraw the US from NATO without congressional approval, but doubts over Washington’s commitment have already unsettled many European capitals.

That has created new urgency around strengthening Europe’s own defence capabilities and building a more credible European pillar inside, or alongside, NATO.

Ross said Europe’s major powers should begin planning seriously for greater self-reliance.

“The Europeans themselves, particularly the most powerful countries – Britain, France, Germany and Italy – need to be talking about how to defend themselves without the US,” he said.

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